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CONTENT
CHAPTER 1
Profile of the Industry
Prospects
Association
Quality
Exports
Profile of Hi-Tech Arai Pvt Ltd Madurai
Mission
Vision
Quallity & Environmental Policy
Milestones
Company Products
Profile of Products
Competitors of Hi-Tech Arai
CHAPTER 2
Introduction to Financial Performance Analysis
Investments in Industry
Industry Turnover
Accounts Department
Function
CHAPTER 3
Marketing Department
Sales Department
Purchase Department
CHAPTER 4
Human Resource Department
Training Measures
HRD measures
SWOT Analysis
CHAPTER 5
Systems Department
EDP/ ERP department
Internet and Intranet
Development Center
Excise Department
Engineering Department
Quality Management Department
CHAPTER 6
5s Quality Principle
Seiri
Seiton
Seiso
Seiketsu
Shitsuke
CHAPTER 1
PROFILE OF THE INDUSTRY
THE INDIAN AUTO ANCILLARY INDUSTRY
The Indian auto ancillary industry is one of India's sunrise industries with tremendous
growth prospects. The automotive industry is an important segment of the economy in any
country as it links many industries and services. The Indian auto industry has the potential to
emerge as one of the largest in the world.
Presently, India is:
The largest two-wheeler manufacturer in the world.
The largest three-wheeler market in the world.
The second-largest two-wheeler market in the world.
The fourth –largest commercial vehicle market in the world.
The fortunes of the automotive components segment are linked to the performance of the
auto industry. The auto ancillary industry gives support to sectors such as metals that includes
steel, aluminum, copper and also to many other machine tools, plastics, rubbers, polymers, glass,
surface transport. As per Indian Suppliers’ report, The automotive sector in India contributes to
5% of the nation’s GDP and 17% of the indirect taxes as a result of which the government last
year charted a 10-year blueprint for the sector’s growth. This envisages the automotive sector
“output reaching a level of $145 billion accounting for more than 10% of the GDP” by
2016.Indian auto industry has evolved around three major clusters: Mumbai-Pune-Nasik-
Aurangabad (west); Chennai-Bangalore-Hosur (south); and Delhi-Gurgaon-Faridabad
(north).Export-oriented companies have formed base in the west/ south regions, due to proximity
to port.
PROSPECTS
Looking forward, the industry displays tremendous potential in generating employment
and boosting entrepreneurship in the country. The spate of new investment plans announced by
global and domestic automobile manufacturers promises the emergence of India as a global hub
for auto components. The industry is transforming, and the boost in demand will see the
emergence of several new players in the industry. The vast market for auto components, and the
diverse products and technology involved ensures a place and role for many. At the same time,
the entry of several global automobile manufacturers will bring in more regulation into the
industry and see a pruning of the spurious market. Among the smaller players in the unorganized
segment, this implies moving away from being standalone companies, to entering into either
contract manufacturing or being ancillary units. The newly defined rules are specialization,
development and delivery that hold the key to success in the auto component industry.
ASSOCIATION
The Automotive Component Manufacturers Association of India (ACMA) is the nodal
agency for the Indian Auto Component Industry. It's active involvement in trade promotion,
technology up-gradation, quality enhancement and collection and dissemination of information
has made it a vital catalyst for this industry's development.
Its other activities include participation in international trade fairs, sending trade delegations
overseas and bringing out publications on various subjects related to the automotive industry.
ACMA is represented on a number of panels, committees and councils of the Government of
India through which it helps in the formulation of policies pertaining to the Indian automotive
industry. ACMA represents over 600 Companies, whose production forms a majority of the total
auto component output in the organized sector. In the domestic market, they supply components
to vehicle manufacturers, Tier-1 Suppliers, to state transport undertakings, defense
establishments, and railways and even to the replacement market. A variety of components are
being exported to OEMs and aftermarket worldwide.
Quality
The industry has been making rapid strides towards achievement of world-class Quality
Systems by imbibing ISO 9000/ISO14001/QS 9000/TS16949 Quality Systems. Till now 562
companies in ACMA membership have been certified to ISO 9000, 208 companies awarded to
ISO14001, 445 companies have been certified with TS16949, 99 companies have been certified
with OHSAS18001, 15 Companies have won TPM Award, 11 Companies won the Deming prize
1company won Japan Quality Medal, 1company won Shingo Silver Medallion and 3 companies
won the JIPM Excellence award.
Exports
The industry has been exporting around 13% of its output. In the year 2009-10, industry has exported US$ 3.8 billion. Principal export items include replacement parts, tractor parts,
motorcycle parts, piston rings, gaskets, engine valves, fuel pump nozzles, fuel injection parts, filter & filter elements, radiators, gears, leaf springs, brake assemblies & bearings, clutch
facings, head lamps, auto bulbs & halogen bulbs, spark plugs and body parts.
PROFILE OF HI-TECH ARAI PVT LTD MADURAI
Hi-Tech Arai Ltd is a Madurai based oil seals and automobile components manufacturing
company. Having joint venture with Arai Seisakusho co Ltd Japan and Mitsubishi Corporation,
Japan. The company previously called as Hi-Tech ancillaries’ ltd after joint venture with Arai
Seisakusho co ltd, the company name has changed to Hi-tech Arai ltd. The company was
established to produce rubber components and oil seals for the world famous companies’
likeMaruti Suzuki, Bajaj, TVS, Honda, Yamaha, Toyota, etc. The company was founded by
Mr.R.Lakshmi Narayanan, with the capital of Rs.4.5 lakhs and with the manpower of 75 as a
family owned concern. Mr. B.T.Bangera and Mr.R.Lakshmi Narayanan both were the ex-
employees of Fenner (India) ltd. Their good relationship made them to form this great venture in
1985. Later the company entered into technical collaborations with m/s Mitsubishi Japan and
with Arai Seisakusho ltd
Japan for manufacture of oil seals, O-rings, reed valves, molded rubber product, valves stem
seals etc in1987. The percentage of collaboration is 88.84% for Arai Seisakusho Ltd and14.29%
for Mitsubishi Corporation.
Growing and achieving excellence through people is the motive of the organization. The core
belief is that it is possible to achieve zero defects and achieve leadership in the market. The
company also owns 23 wind mills each with the capacity of producing 11 MW power. Hi-Tech
Arai is the only manufacturer of reed valves in India. I-Tech Arai is controlled by 9 boards of
directors. Among them
3 Promoter Directors
5 Directors from Arai Seisakusho Ltd
1 Director form Mitsubishi Corporation
MISSION:
To produce high quality products
At competitive prices
Combined with on-time delivery
Strictly adopting environmental friendly processes.
VISION:
1993: Market leader in the country in 5 years
1997: One of the top 3 in the world and in the field of Oil Seals
2007: To become the preferred supplier of all customers
2010: Aims to touch 400 corore turn over by overtaking the past one of 294 corore
QUALITY & ENVIRONMENTAL POLICY
Strive for continual improvement of our quality performance by meeting the changing requirements of our customers and our environmental performance by prevention of pollution and maintenance of wastes.
Manufactures high quality products at competitive prices by adhering to the system, processes and procedures and continually improving the same.
Promote energy savings and conservation of resources.
Comply with all applicable legislative, regulation and other requirements including those that apply to environmental aspects governing our activities.
Achieve the above by creating awareness among our employees through proper training and providing conductive work environment.
MILESTONES:
1985: Hi-Tech Ancillaries was registered.
1986: First unit in Tanakkankulam was started.
1987: Technical collaboration with Arai Seisakusho Company Ltd, Japan.
1990: Totally professionalized.
1991: Second unit in Trichy was started.
1991: Awarded best SSI unit in the District.
1992: Awarded best SSI unit in the State.
1993: Third unit in K Pudur was started.
1994: Joint venture with Arai Seisakusho & Mitsubishi Corporation, Japan.
1994: Hi-Tech Ancillaries changed to Hi-Tech Arai Ltd.
1995: New compounding unit in Kappalur.
1995: Fourth unit in K Pudur.
1997: Fifth unit in K Pudur (dedicated to MUL)
1999: Most modern factory at K Pudur.
2000: Won 1stprize on quality circle convention at state level & regional Level.
2000: Madurai jasmine quality circle (National level)
2000: Initiation of Environment Management System certification Program &obtained
the certification in July
2001: White rose quality control won1st prize in state level & national Level.
2001: Quality award from Lucas TVS Ltd.
2002: Award from Keihin Lie Ltd Pune for cost optimization.
2003: Awarded best SSI unit in the State Level.
2003: The Company was accredited ISO 9001:2000
Certification
2005: CII & APAC awarded ³Best Industry practicing the HIV/AIDS Prevention´ for its
Aids prevention and control project.
2006: First Export order from China.
2008: Received ISO TS-16949:2002.
2010: Himalaya quality circle of Hi-Tech Arai ltd won the ³Par Excellence Award´ in the
national convention on quality concepts-2010held at Visakhapatnam.
Company products:
Oil seal
‘O’ Rings
Reed valve Assembly
Joint carburetor
Moulded Rubber Products
PROFILE OF PRODUCTS
a) Oil Seal:
- Oil seal is a micro precision product.
- Oil seals are especially meant for preventing oil leakage particularly in two wheelers & four wheelers like wheel hubs, front fork, transmission, and gear shift arm etc.,
- Failure of oil seal in engine parts may lead to a serious damage to the vehicle.
b) O Rings:
- Circular products having round cross-section or any customers
specified sectional from which just fits in assemblies (pumps,
carburetors etc) to avoid or stop leakage of fluid gas from the
system.
c) Reed Valve Assembly:
- Reed valve assembly is used in all modern two stroke engines as
a device to control over air fuel mixture sent into the engine
combustion chamber.
- It is used for fuel efficiency and optimum output.
- Reed valve assembly ensure complete combustion of fuel inside
the engine combustion chamber for avoiding emission of
unburned gases thereby contributing towards pollution control.
c) Join carburetor:
• It is a device that blends air and fuel for an internal combustion
engine
• The carburetor works on Bernoulli's principle: the faster air moves, the lower its static pressure, and the higher its dynamic pressure.
d) Moulded Rubber Products:
- Moulded rubber products are the products developed to suit
the specifications and design of customers, so as to meet the
exact working conditions of particular model of vehicles.
- Usually the moulded rubber products reduce the noise, stroke
vibrations and protect certain other components from dust,
water, oil etc.
- The company is the single source of supply for moulded products throughout the country.
COMPETITORS OF HI-TECH ARAI:
o Fenner India
o C.R. Seals
o Sigma Freudenburg NOK Seals.
CHAPTER 2
INTRODUCTION TO
FINANCIAL PERFORMANCE ANALYSIS
The performance of the firm can be measured by its financial results, i.e., by its size of
earnings Riskiness and profitability are two major factors which jointly determine the value of
the concern. Financial decisions which increase risks will decrease the value of the firm and on
the other hand, financial decisions which increase the profitability will increase value of the firm.
Risk and profitability are two essential ingredients of a business concern. There has been a
considerable debate about the ultimate objective of firm performance, whether it is profit
maximization or wealth maximization. It is observed that while considering the firm
performance, the profit and wealth maximization are linked and are effected by one-another. A
company’s financial performance therefore is normally judged by a series of ratios or figures,
however there are following three ratio parameters which can be used to evaluate financial
performance, they are:
a) Return on Equity
b) Earnings Per Share and
c) Price Earnings Ratio.
All three parameters are discussed in detailed along with various other ratios. However, it
is to be noted that fundamentally, the balance sheet indicates the financial position of the
company as on that point of time. However, profit and loss account is a statement, which is
prepared for a particular financial year. In Indian context, where an analyst has to rely upon the
audited financial statement for a particular company, the performance is to be judged from the
financial statement only. This chapter, however indicates some of the techniques, which can be
used for such analysis of financial performance.
INVESTMENTS IN INDUSTRY
Foreign Investments:
India enjoys a cost advantage with respect to casting and forging as
manufacturing costs in India are 25 to 30 per cent lower than their western counterparts. Seeing
the growing popularity of India in the automotive component sector, the Investment
Commission has set a target of attracting foreign investment worth US$ 5 billion for the next
seven years to increase India’s share in the global auto components market from the existing 0.9
per cent to 2.5 per cent by 2015.
French type major, Michelin, has gained clearance from the Foreign Investment
Promotion Board (FIPB) for its US$2.26 billion foreign direct investment (FDI) proposal to set
up a manufacturing facility in Tamil Nadu.
Ford motor car is investing about 500$ million (Rs. 2,445 crores) to double
capacity at its India plant, which will become a strategic global production hub.
Bosch will continue to maintain its focus in India in spite of global recession as it
is planning to set up manufacturing units for electronic control units (ECU) by investing US$
26.76 million.
Renault in association with Nissan is to source USD 440 million worth of auto
components from India in the coming years.
Italian car manufacturer Fiat is planning to increase sourcing to USD 330 million
by 2010 and make India its global sourcing center.
Volkswagen has set target to capture 8-10 percent of market share in the
passenger car segment in India by 2014with a series of launches and by doubling the number of
dealers.
Domestic Investments
The market is so large and diverse that a large number of players can be absorbed
to accommodate buyer needs. The sector not only has global players looking to invest and
expand but leading domestic component companies are also pumping in huge sums into
expanding operations. Indian tyremakers are rolling out investment plans worth US$ 1.24
billion, due to the rising popularity of radial tyres in the commercial vehicles segment. Some
other investments include:
Hero Motors will invest US$ 19.84 million in association with Austrian firm BRP
Power train for manufacturing automotive transmissions in India.
Indian arm of Swedish automotive component maker SKF is investing US$ 30
million in a new ball bearings manufacturing plant at Haridwar.
Mahindra & Mahindra will invest approx US$ 400 million for setting up an
integrated auto facility in Tiruvannamalai (Chennai).
An auto park is coming up near Hyderabad with investments worth over US$
409.30 million from around 34automotive ancillary units. Lower labour costs give Indian auto
ancillary companies an absolute cost advantage. ACMA numbers suggest that wage cost
accounts for 3% to 15% of revenues for Indian manufacturers as compared to 20% to 40% for
US players. Historically, India’s strength in exports lies in forgings, castings and plastics. But
this is changing with more component manufactures investing in up gradation of technology in
recent years.
INDUSTRY TURNOVER
The Indian organized auto ancillary industry revenue grew 6% yoy to INR720bn in
FY09. Exports increased by 6% yoy to INR150bn. The recent financial performance of auto
ancillary companies with a greater reliance on OEMs and exports has been inferior to those with
a larger focus on the replacement market. Yet, replacement stocks haveunderperformed.
Despitethe recent rise in commodity prices, the average price for FY10f to be lower yoy. This
would provide little benefit to theOEM dependent stocks, while the stronger INR is likely to hurt
exports.Replacement stocks are likely to retain the savings from decreased material prices and a
risingINR. Profitability may improve for both groups, but replacement stocks are more likely to
outperform over the medium term as the market appreciates their stronger position.
CHAPTER 3
ACCOUNTS DEPARTMENT
In British English included United Kingdom company law, financial statements are often referred to as accounts although the term financial statement is also used, particularly by accounts. The accounts department records, processes and maintains various financial aspects and activities of the organization. This department is headed by Senior Manager, Mr.Lakshmanan. Financial statement provides an overview of a business financial condition in both short and long term. There are four basic financial statements
Balance sheet.
Income statement.
Statement of retained earnings.
Statement of cash flows.
The major functions are as follows.
Accounts Receivables.
Accounts Payables.
Purchase Accounting.
Sales Accounting.
General Accounting.
Fixed Assets Register.
Activity Base Costing.
All general cash flow movements.
Maintaining cash flow movements in both Purchase and Sales.
Deciding mode of payments.
Capitalization, Machinery accounts progress.
Processing of Sales Tax & Excise Duty.
Filing of Quarterly TDS returns.
Processing Salary & Labour contract accounts.
In HI- TECH ARAI they are following three main function is
General accounts.
Purchase accounts.
Sales accounts.
1. General Accounts:
The main functions of general accounts is
Accounts receivabl
Accounts payable
In general accounting they have the details about insurance, E.B, petty cash, allocation &
reimbursement of petty expenses also made.
Functions:
Cash flow statement
Taxation
Final account
PURCHASE DEPARTMENT:
Based on the terms and conditions specified by the suppliers in the voucher, the payments
are cleared by the accounting department by issuing cheque for the specified dates.
Function:
To purchase the raw material in two ways
1. Indigenous purchase
2. Import purchase
1. Indigenous Purchase:
These items are purchased within India. Vendor payment is done 2 times per month & 30
to 40 days of credit period is given for purchased materials.
2. Import Purchase:
In HI- TECH ARAI more than 70% raw materials used for production are imported and
for that credit period given to Mitsubishi Corporation is 4 to 6 months, payment is made on
weekly basis.
Import Suppliers:
Arai
Mitsubishi Japan
Singapore
German
Purchase Order:
Before purchase the raw material they give quotation or analyze the supplier (i.e.)
their quality, quantity, price, timely delivery based on that they give the order to purchase.
Goods Received Notes (GRN):
First they verify the delivery Chalan. If the raw materials are entered the industry, then
they have to entered the details of the raw material to the goods received note. The HI-
TECHARAI pays the payment for the importers through the bank only.
Tax Details for Import as well as Indigenous purchase:
BED (Basic Excise Duty)
VAT (Value Added Tax)
Based on the quantity of the Material/Product 8%
Based on the Value of the Material/Product 10%
Educational Cess 2%
Higher Educational Cess 1%
3. Sales Account:
Original equipment sales
Raw material sales
Export sales
Export oriented sales The 92% of sales done through OE market. For sales 30-45 days
were given as credit period. They export only 2 % of total production; the turnover of exported
materials comes to 70 to 80 lacks per year. They also update the payment cheque received from
sales department Their one of the major function is receiving order & schedules it. They also
find whether the payment is made or not and also handle the pending bills.
1.Original Equipment Sales:
According to the requisition (drawing) of the customer the HI- TECH ARAI company
design and produce the goods.
2. Raw Material Sales:
To replace the sales against the dealers. The dealers only responsible for the payment.
3. Export Sales:
They export their product to other countries. Ex: Japan, Indonesia, China for exporting
items no need to pay any customs duty.
CHAPTER-4
MARKETING DEPARTMENT
Purchase Department:
Purchasing refers to a business organization attempting to acquire goods or service to
accomplish the goals of the enterprise. Through there are several organizations that attempt to set
standards in the purchasing process. Processes can vary greatly between organizations. Typically
the word ³PURCHASING´ is not used inter changeably with the word ³PROCUREMENT´since
procurement typically include expediting, supplier quality, traffic and logistic (T&C) in addition
to purchasing.
Functions:
- Identify the needs and wants.
- Select the suppliers.
- Place the order.
Activity:
There are two types of purchase activity.
- Centralized Purchase Activity
- Decentralized Purchase Activity
Kinds Of Purchase:
o The purchase unit is a centralized unit responsible for the purchase of all materials
required for production. The purchase can be classified into 4 categories based on
nature of purchase.
- Indigenous - Purchase of locally made material
- Imports - Import of required material
- Engineering Purchase - Purchase of machinery
- Packing Material Purchase - Purchase of material required for Packing.
Raw Material Purchase:
The company is very keen that all the raw material should be purchased from approved
suppliers. The detailed steps involved in Raw Material Purchase are as follows
Based on the Sales forecast of the current financial year the quantity of sales is arrived
and it is converted into compound and compound is converted into raw material thus
theraw material requirement for the year is arrived.
Raw material requirement will be compared with the existing stock position at stores.
Compounding & Respective production Units and also at bounded ware houses at
Chennai (Imported items).
Minimum ordering quantity and period is arrived by ABC analysis hand currently they
have the following purchase schedule.
Type of purchase/
ClassA B C
Imports 1.5M 4M 6M
Indigenous 10D 1M 3M
A - Goods having around 80% in terms of value.
B - Goods having around 15% in terms of value.
C - Goods having around 05%in terms of value.
D - Days.
M - Months.
- After considering the stock % the actual requirement for the month,
enquiry for required materials will be sent to suppliers.
- Quotations received from the suppliers will be compared in respect of
the price charged, Lead time, quality & the credit period offered.
- Sample lots are ordered & on approval from the Quality Assurance
Department the source is finalized.
- After finalizing the source confirmed Bulk purchase order will be
issued to the supplier with the indication of delivery schedules.
- Regular follow up for getting the material will be made based on the
emergencies.
- Materials required for development purpose (Small Quantity) will be
procured based on the indents by the Technical Centre.
Other Major Functions:
Obtaining purchase indent from every unit.
Scheduling purchase.
Selection of suppliers based on quality & quantity Marketing.
Cost estimation & Negotiation.
Allotment of scheduled order to supplier.
Decision of Mode of Transport.
Receiving & Dispersion goods to required units.
Vendor development activities.
Cost saving at sources.
SALES DEPARTMENT:
The Sales Department is classified into two based on the nature of customer they handle.
They are Original Equipment (OE) Sale & Replacement Marketing (RM) Sales.
1. OE Sales
The major part of the turnover (around 90%) is through OE market. The company gets
into a legal binding with OE customers (new product) which states that the parts supplied to OE
should not be released in the replacement market for the next 2-3years, etc. and the major
customers are.
Hero Honda
Maruti Udyog Ltd.
Bajaj Group
TVS Motor
Endurance
2. RM Sales
The Replacement Marketing Sales is done to the retail end Customers and is headed by
Mr.C.V.Chidambaram, Manager, RM sales;
this is done through authorized regional distributors. This department runs the business in
complete cash and carry method. The packing & dispatch activities of the RM sale is done
through a depot. This RM Sales department has been recently shifted to Kappalur Unit. Other
major customers are:
Piagio (Italy)
Indore (France)
Ashok Leyland Limited
Birla Yamaha(Japan, India)
Automotives Axles Ltd
Escort Ltd
Gabriel India Ltd
CHAPTER 5
HUMAN RESOURCE DEPARTMENT
The HR department is headed by Mr. N. Sankaravelayudham, DGMHR, controls and
monitors the processes involving the human resource related activities throughout the
organization. HR activities include:
Recruitment and training for new employees.
Allocation of employees for various departments and units.
Process any employee related problem.
Employee performance management.
Culture Building.
Formulating Organizational Strategy.
Library maintenance.
Promote learning circles.
Maintain audit and process employee related data like attendance, salary and
other specific functions related to HR management.
Man Power Planning:
There are two types of man power involved in the Company they are,
Company Staff
Contract Labor
In both the cases the man power request is made by the concerned UNIT HEAD and the
HRD HEAD would sanction the same with the approval of the Managing Director. For contract
labour the interview is made by the unit persons but for the company staff in addition to unit
persons the head office persons will also conduct interview. One important aspect is that the
company would give preference to the people who are approaching with the reference of the
existing employees. The company started its operations with manpower of around 75 and now it
has manpower of around 1000.
Training Measures:
The first and the fore most of the Training measures are to identify the training needs of
the employees in systematic manner and provide relevant training. The same is done in the
following method.
Training requirements are identified with performance appraisal form.
Training need of the operators is identifies by the supervisors.
List of required training is received by the HRD from various sources.
Training Budget is made by HRD and is approved by the MD.
Then Training Schedule is prepared.
List of Internal & External faculties is maintained by the HRD and is approved by the
MD.
All the employees of the company should attend at least 32 hours of training program in a
year.
In case a particular employee is not able to attend the given schedule of training an
alternate schedule would be given.
On completion of the training program Training Feed Back Questionnaire is circulated to
arrive at various decisions regarding the next training program.
Training evaluation questionnaire is made to assess the impact on the employees and it is
filed in the employees’ personal file and is maintained till their presence in the
organization.
HRD measures:
1. HRD Practices:
Team Building.
Transparency in decision making
Developing Leadership.
Facilitating Team Work.
Counseling for Addicts.
2.Culture Building:
Transparency.
Change in attitude toward the self & work to unfold the inner potentials.
Committed work force.
More emphasis on team work to get maximum outputs.
Own the whole family.
3. Welfare Measures:
Twice Coffee or Tea is provided to their workers in each shift but in
summer additionally buttermilk is provided.
Two uniforms per year for each confirmed workers.
In case of family planning operation Rs 500 is provided.
Two soaps to be provide for workers
Accident compensation is provided.
Conducting sports & games program once in a year.
Forming quality circles for their workers & providing counseling to their
familymembers.
Sudden visit by the MD to the production units to know the workers grievances.
4. Quality Circle:
Its main function is to facilitate Process Control, Mutual & Self Development
of Employees, Improvement of their Workplace & Productivity by full
participation of allmembers. QC is conducted regularly once in a week and they
will conduct this meeting.
To contribute to the improvement and development of the organization.
To respect humanity and to build worthwhile lives and cheerful work areas.
To give fullest recognition to human capabilities and to draw out each
individual’s finite potential.
SWOT Analysis:
1. Strength:
This company is the Indian Market Leader in oil seal manufacturing.
The company has a very good reputation for its products.
The company has a very good internal customer satisfaction.
Japanese technological collaboration is the biggest strength of the company.
2. Weakness:
In case of shell manufacturing around 50 to 60 percent of the input (steel) wasted.
In case of moulding the company wastes around 30 to 40
percent of the rubber compound which is an imported one.
2. Opportunities:
The company can become the World Market Leader in the near future.
The rubber waste can be converted into a motor belt with slight modifications
inthe mould design.
4. Threats:
There is very less promotion opportunity for the operations people.
The starting pay package offered is very low.
Still the company has not entered into new projects to expand by diversification.
CHAPTER 5
SYSTEMS DEPARTMENT
EDP/ ERP department:
The Electronic Data Processing (EDP) department handles all activities
regardingHardware and software throughout the organization. The Enterprise
Resource Planning (ERP)unit is responsible for coordinating various departments
and plants like Purchasing, DiscreteManufacturing, Inventory, Finance & Order
Management and the technical highlights are as follows.
Main functions of ERP:
Software development and maintenance.
Procurement of hardware and breakdown services.
System management including allocation of memory and providing
access.
File maintenance.
Virus protection, system crash etc.
Back-up services.
Purchase of computer related consumer goods.
Other functions of ERP:
Working towards profit.
Ensure cost saving from scratch through ABC analysis (activity based
costing)
Internet and Intranet:
Department has both internet and intranet facility.
Limited control is imposed on access.
Transparency is ensured.
Development Center:
The DC is the most important unit in the organization under the direct administration
of the Chairman.
To monitor all progress & process in all the units of the organization
To act as a window to customer.
Development of new products.
Customer supportive marketing
Solving customer related queries.
To monitor purchase, manufacturing, sales & dispatch activities.
To maintain the quality state of the organization DC is divided into four main
sections.They are
Arai Communication
Drawing Section
Material Section
Marketing Section
1) Arai Communication:
This section is solely responsible for communication activities with Arai Seisakusho
Ltd. The communication regarding Design, Engineering & Technology of the moulds
and moulding processes are done by this department.
2)Drawing Section:
This section is solely responsible for drafting various design regarding the
productmould and maintaining the same. It is also responsible for recording
engineering changeover activities.
OE Drawing.
Arai Drawing.
Internal Production Drawing.
Shell Drawing.
Profile Drawing.
Customer Reference Drawing.
Spring Drawing.
A3 Drawing.
3) Material Section:
This section handles all the material related aspects related to the
Manufacturingdepartment. The term material means the Compound (Rubber) used for
manufacturingthe end product. Its main functions are as follows.
Deciding the compound for manufacturing.
Analysis of compound used for manufacturing.
Analysis of sample products.
Inspection of quality at all stages.
Auditing test reports of compound used for producing end products
4) Marketing Section:
This section headed by DGM marketing & manager customer support controls allthe
marketing activities of the organization. This section handles all the
customer oriented activities too. The functions of this Department can be described as
follows:
Receiving enquiry from customer end.
Analysis of enquiry and related data.
Feasibility Study.
Quotation preparation.
Receiving purchase order from customer end.
Ordering mould.
Sample submission to customer with related documents.
Receiving customer end report.
Initiate mass production based on customer report
EXCISE DEPARTMENT
Excise can be defined as an indirect tax imposed and levied by the Central
Governmentof India. It is under the control of Central Board of Excise
& Customs (CBEC).Any goods purchased, manufactured, and sold excise toward the
CBEC.
Functions:
Calculating and maintaining the excise duty.
To file the excise return documents yearly.
To support the periodic audit done by authorities.
The Excise department act in co-ordination with all the other departments in
thematter of excise duties.
ENGINEERING DEPARTMENT
Engineering department is the only department responsible for engineering
maintenanceactivities in the organization.This is done on the basis of
Breakdown maintenance
Preventive maintenance
Predictive maintenance
Functions:
Solving maintenance problems.
Machine installation, design and production of required spares, jigs &
fixtures.
Spare maintenance and fabrication of required parts.
New plant development.
QUALITY MANAGEMENT DEPARTMENT
This department checks the quality and quantity of the raw material. The
QADepartment is responsible for validation, problem solving & maintaining the
quality aspects of the products and processes. This department is controlled by SGM
Technical and SM qualityassurance. Major functions are.
Inspection of Moulds, raw materials and finished goods.
Technical specification validation.
Statistical process control.
Issuing & auditing of various parameters.The general processes of quality
assurance department are as follows.
Input inspection shells
Input inspection springs
Technical specification validation
Re-Validation
Moulding process sheet
Metal treatment process sheet
Calibration
Quality & Environmental Policy
Strive for continual improvement of our quality performance by meetingthe
changing requirements of our customers and our environmental performance
by prevention of pollution and maintenance of wastes.
Manufactures high quality products at competitive prices by adhering to
thesystem, processes and procedures and continually improving the same.
Promote energy savings and conservation of resources
Strategies
The Organization strives to excel by strictly adopting the following aspects.Growing
and achieving through people, by Training, Bench Marking, Employee
Involvement,Employee Empowerment, Root Cause Corrective Action, Team Work,
Universal Responsibility,Statistical Thinking, Organizational Culture Building &
Sustained Management Methods.
Quality Excellence is achieved by adopting the two major strategy:
Kaizen
Kaizen is a Japanese word meaning ‘Change for better’ or ‘Improvement’ .
The common English usage is ´Continual improvement´.
Kaizen refers to a work place
Quality strategy and related to various quality control systems.
Kaizen aims to eliminate waste. This often followed by standardization of
this better way with others through standardized work.
CHAPTER 6
5s Quality Principle
5S is a method of organizing a workplace and keeping it organized. The 5S are,
SEIRI
Sort and dispose unwanted items.
Follow red tag system.
Fixed point photograph.
Standard for deciding the required things.
SEITON
Organizing.
Proper lay out.
Tools shadow board cupboard/ racks.
Proper arrangements.
Filing in cabinet.
SEISO
Cleaning.
Set time for cleaning and checking standard.
Development cleaning and checking standard.
Follow standards.
SEIKETSU
Standardizing.
Develop check list and display.
Position mark.
Jewellery box system.
Visual control.
SHITSUKE
Training and discipline
Train men at all level
Planned audit
Motivation by recognition .The above mentioned quality aspects are being
followed throughout the organization to uphold its quality. These are followed
by its employees as ³their way of life´.
Quality Circle:
Quality Circle is a small group of 6 to12 employees doing similar work,
whovoluntarily meet together on a regular basis to identify improvements in their
respective work areas using proven techniques for analyzing and solving work related
problems coming in theway of achieving and sustaining excellence leading to mutual
upliftment of employees as well asthe organization.It is ³a way of capturing the
creative and innovative power that lies within thework force´.
The modern concept of quality control is designed in such a manner that,employees
of an organization have the opportunity to perform effectively and mesh well with
the plan and activities of the management, thereby facilitating a very conducive work
environment.
Certifications:
The company has got the following certifications.
For Quality management system
o ISO 9001:2000
o ISOTS 16949:2002
o For Environment management system ISO 14001:2004
