apollo os fair copy

7/31/2019 Apollo Os Fair Copy

1/67

1

CHAPTER - I

INTRODUCTION

An organization is a social group which distributes tasks for a collective goal. Theword itself is derived from the Greek word organon, itself derived from the better-known

word ergon - as we know `organ` - and it means a compartment for a particular job.

Organization is an identifiable group of people contributing their efforts towards

attainment of goals. An organization begins when people combine their efforts for some

common purposes. The organizational objective is considered to be more important in the

organizational context. Thus, the individual efforts need to be directed and coordinated

towards the organizational objectives. Since the organization comprises of a combination of

individual efforts, it is necessary to understand how the individual behaves in the

organization, how the individuals efforts coordinated to the success of the organization.

Organizational study is the systematic study and careful application of knowledge about how

people as individuals and as groupsact within an organization. It studies about the various

departments in an organization, how it is connected towards the organizational goal.

Organizational structures developed from the ancient times of hunters and collectors intribal organizations through highly royal and clerical power structures to industrial structures

and today's post-industrial structures. In the 21st century, organizational theorists such as

Lim, Griffiths, and Sambrook (2010) are proposing that organizational structure development

is very much dependent on the expression of the strategies and behaviour of the management

and the workers as constrained by the power distribution between them, and influenced by

their environment and the outcome.

An organizational structure consists of activities such as task allocation, coordination

and supervision, which are directed towards the achievement of organizational aims. It can

also be considered as the viewing glass or perspective through which individuals see their

organization and its environment. Organizations are a variant of clustered entities. An

organization can be structured in many different ways, depending on their objectives. The

structure of an organization will determine the modes in which it operates and performs.

Organizational structure allows the expressed allocation of responsibilities for differentfunctions and processes to different entities such as the branch, department,workgroup and
http://en.wikipedia.org/wiki/Social_grouphttp://en.wikipedia.org/wiki/Goalhttp://en.wikipedia.org/wiki/Organizationshttp://en.wikipedia.org/wiki/Business_clusterhttp://en.wikipedia.org/wiki/Branch_%28banking%29http://en.wikipedia.org/wiki/Departmentalizationhttp://en.wikipedia.org/wiki/Working_grouphttp://en.wikipedia.org/wiki/Working_grouphttp://en.wikipedia.org/wiki/Departmentalizationhttp://en.wikipedia.org/wiki/Branch_%28banking%29http://en.wikipedia.org/wiki/Business_clusterhttp://en.wikipedia.org/wiki/Organizationshttp://en.wikipedia.org/wiki/Goalhttp://en.wikipedia.org/wiki/Social_group


2/67

2

individual. Organizational structure affects organizational action in two big ways. First, it

provides the foundation on which standard operating procedures and routines rest. Second, it

determines which individuals get to participate in which decision-making processes, and thus

to what extent their views shape the organizations actions.

Apollo Tyres Ltd. is one of the largest tyre manufacturing companies in India. The

company was incorporated in 1972 and commenced its production in 1977. It was the first

company to receive ISO 9001 accreditation in Indian tyre industry. In 2006, Apollo acquired

Dunlop tyres of South Africa. The company has its operations in India, Zimbabwe,

Netherland, Korea and South Africa with a network of over 4000 dealerships in India alone.

Scope of the study

Organisation structure of companies varies from company to company and it is

complex to understand. A study of this kind will facilitate in knowing the organisation

structure prevalent in Apollo Tyres Ltd. and the factors related to it.

Objectives of the study

1. To study the organization structure of Apollo Tyres Limited.2. To understand the various key functional areas of the company.3. To get an idea about existing business operations at Apollo tyres.4. To interact with managers at various levels of the organizational hierarchy.5. To analyze the practical aspect in relation to the theoretical aspect of the organization.6. To gain a clear picture about the challenges and activities faced by the organization.7. To observe the work culture existing in the organization.8. To identify the strength and weakness of the organization.9. To analyse competition within the industry.

Methodology

The study has been conducted in Apollo Tyres Ltd., Kalamassery. The study is

undertaken by visiting the plant. The study is based on both primary and secondary data.
http://en.wikipedia.org/wiki/Employeehttp://en.wikipedia.org/wiki/Employee


3/67

3

1. Primary Sources Direct interview with the department heads Discussion with the divisional heads Interaction with workers in the company Data collected by observing the function of the organization2. Secondary Sources Annual reports of the company Department manuals Periodicals, books, etc. published materials by the company Internet websites (www.apollo.com, www.google.com)

Tools of study

The data collected are systematically presented in tables, charts and diagrams. Further

analysis is done using ratio, trend and SWOT analysis.

Period of study

The study is done for 30 days at Apollo Tyres Ltd., Kalamassery.

Limitations of the study

1) The time period available for the study was limited2) The study was conducted only during the day shift and hence the working

conditions of those employees working during the evening and night shifts could not be

examined.

Chapterisation

The study includes eight chapters.

I. First chapter begins with an introduction of organization and organization structure,scope of study, objectives of study, methodology, tools of study, period of study,

limitations and chapterisation.
http://www.google.com/http://www.google.com/


4/67

4

II. Second chapter is industry profile consisting of International and Indian scenario oftyre industry.

III. Third chapter gives a description of Apollo Tyres Limited consisting of the history,mission, objectives, goals, product profile and future growth plans of ATL.

IV. Fourth chapter deals with the organisation structure and design, explaining the type,approach and factors of organisation structure adopted in Apollo Tyres.

V. Fifth chapter is the departmental profile describing the functions, role and structure ofvarious departments in Apollo Tyres Limited, Kalamassery.

VI. Sixth chapter shows the financial highlights of Apollo Tyres Limited for last threeyears.

VII. Seventh chapter is the SWOT (Strengths Weaknesses Opportunities Threats) Analysisof Apollo Tyres Limited.

VIII. Eighth chapter explains the findings, conclusions and suggestions derived from thestudy.


5/67

5

CHAPTERII

INDUSTRY PROFILE

INTERNATIONAL SCENARIO

The world tyre industry is worth around US$70bn. The industry is marked by a

presence of around half a dozen major players who together occupy 70% of the world market

share. The table below indicates the individual market share of the major players.

Companies Market share (%)

Michelin 19.4

Bridgestone 19.4

Goodyear 16.6

Continental 7.1

Sumitomo 4.9

Pirelli 3.9

Yokohama 3.5

Kumho 1.7

Others 23.5

Source: The Financial Times

The worldwide tyre industry is likely to witness more restructuring efforts after the

deal between Goodyear and Sumitomo of Japan. Analysts are speculating that there will be

only six to seven major players across the globe. The 'big three' of the industry i.e. Michelin,

Bridgestone and Goodyear (before its alliance with Sumitomo) each had annual sales of

US$12bn. Inevitably, the alliance has increased the competitive pressure on second-tier

majors, notably Continental of Germany, Pirelli of Italy and Yokohama of Japan. They would

also have to go on the acquisition route in order to survive. The structural developments are

taking place against a background of continuing overcapacity in the industry, estimated at


6/67

6

around 30% and slow growth in Latin America and the Asia-Pacific region in the wake of

their financial crises.

Worldwide Sales of Tyres

Mn nos. Cars % of totalTruck % of totalTotal % of total

OEM 217.7 31.10 50.6 20.3 268 28.3

Replacement 482.4 68.90 198.2 79.7 681 71.7

Total 700.1 100.00 248.8 100.0 949 100.0

Source: The Financial Times

One striking feature, which comes out prominently from the above table, is that major

part of world sales of car and truck tyres is to the replacement market. The replacement

market is self-perpetuating and has inbuilt growth despite short-term setbacks from time to

time. As the worldwide automotive sales are rising by a marginal 2% per annum, sales to the

replacement segment will continue to dominate.

However, some recent trends in new vehicle manufacturing will go to help the OEM

segment. World over the time needed to bring a car from the drawing board stage to the

market place has shrunk from six to two years in the last decade. Today, tyres are being

purpose-developed for each new model with technicians working alongside car suspension

engineers. Secondly, new markets like India and China offer the world major tyre producers a

large market to exploit.

In its latest industry analysis, the Economic Intelligence Unit (EIU) forecasts that

sheer muscle in terms of marketing and technical development will enable the three biggest

players to continue to take an ever-larger share of the global market, reaching 70% by 2005

from little more than 50% now.


7/67


8/67


9/67

9

Review of the Tyre Industry

MRF is a market leader in the Indian Tyre Industry with a market share of ~30%. It

has total turnover of Rs. 8589.68 Cr. with average margin of 3.37% which is lower than

industry average of ~4%. Its Net Sales has grown strongly with a 5 year CAGR of close to

18%. It also has one of the highest Net Profit growth rates with a growth of 68.3% CAGR

over the last 5 years.

However, in terms of net sales growth and highest profit margins, Balkrishna Industries Ltd.

is far ahead from other industry players. Its Net Sales has grown strongly with a 5 year

CAGR of 27.87%. It also has highest profit margin of 10.55% (5 year average) in the

industry. This is because it operates in Off-the-Road tyres, a niche segment. Other major

players are Apollo Tyre, JK Tyre & Industry, CEAT and Goodyear India.
http://stockshastra.moneyworks4me.com/learn/balkrishna-industries-stock-price-and-fundamental-analysis/http://stockshastra.moneyworks4me.com/learn/balkrishna-industries-stock-price-and-fundamental-analysis/


10/67


11/67

11

and now it is a profit earning unit. The fourth plant was commissioned in 1996 at Pune for

manufacturing tubes. The entire requirement of tubes for all plants of Apollo is done here.

History of Apollo Tyres Ltd. through years1972 The companys license was obtained by Mr. Mathew T. Maratukalam, Jacob

Thomas and associates.

1974 The company was taken over by Dr. Raunaq Singh and his associates.

1975 April 13, foundation stone of the Perambra plant was laid.

1976 Apollo Tyres was registered

1977 Plant commissioned in Kerala with 49 TPD capacities

1982 Manufacturing of passenger car radial tyres in Kerala

1991 Second plant commissioned in Baroda

1995 Acquired Premiere tyres in Kerala

2000 Exclusive radial capacity established in Baroda

2003 Exclusive radial capacity expanded to 6600 tyres per day, November 17, a

joint venture with Michelin

2004 Launch of Apollo AclereH speed rated car radials

2005 April 13, Perambra plant completes 30 years

2006 January 30, acquires Dunlop South Africa

August 7, announced the launch of new plant in Chennai

2008 Announce possible green-field in Hungary ready by 2010 for European

market; announce plant in Chennai(Tamil Nadu), India

2009 Acquired Vredestein Banden B V in Netherland


12/67

12

Vision

A significant player in global tyre industry and a brand of choice providing customer delight

and continuously enhancing stakeholder value. The one word that symbolizes all that Apollo

believe is CREATE.

C - Care for customers

RRespect for associates

E - Excellence through team work

A - Always learning

T - Trust mutually

E - Ethical practices

Mission

To create the first Indian Singles Grand slam Champion by the year 2018.

Objectives

High volume, high market share, cost effectiveness in all segments. High quality, technically superior products. Consistent production through harmonious industrial relations. Achievements of customer delight through benchmarking global practices. Strengthen supply chain management. Revenue growth Operating margin improvements. Employee satisfaction

Goals

Employee safety Employee satisfaction Customer delight
http://www.apollotyres.com/corporate/core-values.aspxhttp://www.apollotyres.com/corporate/core-values.aspx


13/67

13

Revenue growth Operating margin requirements Responsibility

Learning & Development. Family Focus. Hygienic Factors. Employee Involvement & Cultural Building.

Apollo key Differentiation to Other Firms

Superior product Quality. Strong Brand Equity. Committed Marketing Team. High Consumer Loyalty Product Segmentation in Truck Tyres. Benched marked for planning efficiency parameters. Power consumption. Quick response to market needs. Fuel efficiency. Least scrap generation

Profile of products

The company manufactures and sells a range of tyres of both Bias and Radial, tubes

and flaps. The major products are trucks and bus tyre and trailer tyres. Besides these, Apolloalso produces passenger tyres, light commercial vehicles tyres etc.


14/67


15/67

15

Nirvana Frost Quest

Multispoke Sphere Cinco

Tubeless Radials

Acelere Amazer XL

Hawkz

Conventional Tyres (Bias Tyres)

Car Armour Panther

Jeep Gripper Maha Trooper

Farm Pure Cultivation Segment

Sarpanch Krishak Super

Pure Haulage Segment

Powerhaul

Mixed Application Bias Segment

Krishak Premium

Mixed Application Radial Segment

Farmking

Jeep Gripper Maha Trooper

Future plans for growth of the organization

In 2011, Apollo Tyres had realized its dream of becoming a US$2 billion company by

venturing into the global markets. Apollo, a family-run business, went through changing

leaderships over generations. It eventually emerged as the leading player in the industry.

Apollo Tyres had big plans for the future. Some of the future growth plans are as follows:


16/67

16

1. AGILE (Apollo Growth Innovation Leadership Excellence) 6*16After tasting success with the overseas ventures, fulfilling aspirations, and making a

mark in the global market, the company set out to become a US$6 billion company by 2015-

2016. To lead the company toward achieving its goals, the company executives were keen on

further expansion into China and the ASEAN region. Apollo planned to grow three times to

US$6 billion by 2015-2016 and aimed to break into the league of the global top 10 tyre

companies. "We have set our 'vision' to be a $6-billion company by 2015-16," said Satish

Sharma (Sharma), Chief, India operations.

2. Apollo Tyres Mission 2018The Apollo Tyres Mission 2018 is a programme to identify, nurture and create world-

class tennis players in India who will challenge, perform and win on the world stage, with at

least one becoming a Singles Grand Slam champion by the year 2018. Thus Apollo becomes

one of the largest corporate investors in developing sporting talent through its Mission 2018,

which is focused on nurturing and training youngsters in the sport of tennis to enable an

Indian to win a Singles Grand Slam Championship by the year 2018.

At the grassroots level of schools, academies and the tennis loving population, Apollo

is encouraging youngsters to actively take up the sport with the full support of their parents.

On the talent level, company conduct selection camps every year in four cities (called the

Mission 2018 Challenge) to identify, nurture, train and groom talent from across the country.

Aged between 6 and 14 years of age, they are given national and international exposure and

facilities, to enable them to realise their potential and become future champions. The four

cities change every year to ensure the Mission spreads far and wide in the task of encouraging

participation from all corners.


17/67

17

CHAPTER - IV

ORGANISATION STRUCTURE & DESIGN

An organization can be structured and designed in many different ways, depending ontheir objectives. The structure of an organization will determine the modes in which it

operates and performs. Organizational structure allows the expressed allocation of

responsibilities for different functions and processes to different entities such as the branch,

department, workgroup and individual. On the other hand organization design is the process

of defining and coordinating organizational structure elements. This is an architectural task.

The purpose is to create a design that will coordinate organizational tasks & motivate people

to achieve objectives.

Organizational structure affects organizational action in two big ways. First, it

provides the foundation on which standard operating procedures and routines rest. Second, it

determines which individuals get to participate in which decision-making processes, and thus

to what extent their views shape the organizations actions.

The set organizational structure may not coincide with facts, evolving in operational

action. Such divergence decreases performance, when growing. E.g., a wrong organizationalstructure may hamper cooperation and thus hinder the completion of orders in due time and

within limits of resources and budgets. Organizational structures shall be adaptive to process

requirements, aiming to optimize the ratio of effort and input to output.

The organization design process is often defined in phases. Phase one is the definition

of a business case, including a clear picture of strategy and design objectives. This step is

typically followed by "strategic grouping" decisions, which will define the fundamental

architecture of the organization - essentially deciding which major roles will report at the top

of the organization. The classic options for strategic grouping are to organize by:

Behavior Function Product or category Customer or market Geography
http://en.wikipedia.org/wiki/Branch_%28banking%29http://en.wikipedia.org/wiki/Departmentalizationhttp://en.wikipedia.org/wiki/Working_grouphttp://en.wikipedia.org/wiki/Employeehttp://en.wikipedia.org/wiki/Employeehttp://en.wikipedia.org/wiki/Working_grouphttp://en.wikipedia.org/wiki/Departmentalizationhttp://en.wikipedia.org/wiki/Branch_%28banking%29


18/67

18

MatrixOrganization Structure of Apollo Tyres Limited

From the study, it is understood that organization structure of Apollo Tyres Ltd. is

designed on the basis of functions. So Apollo follows functional organization structure.

Functional Organization Structure

The functional structure group positions into work units based on similar activities,

skills, expertise, and resources. Production, marketing, finance, and human resources are

common groupings within a functional structure. As the simplest approach, a functional

structure features well-defined channels of communication and authority/responsibility

relationships. Not only can this structure improve productivity by minimizing duplication of

personnel and equipment, but it also makes employees comfortable and simplifies training as

well.

Employees within the functional divisions of an organization tend to perform a

specialized set of tasks, for instance the engineering department would be staffed only with

software engineers. This leads to operational efficiencies within that group. However it could

also lead to a lack of communication between the functional.

Functional Organization Structure in Apollo Tyres Ltd.

The functional organization structure is best suited for Apollo since it is a producer of

standardized goods and services at large volume and low cost. Coordination and

specialization of tasks are centralized in a functional structure, which makes producing a

limited amount of products or services efficient and predictable. Moreover, efficiencies

groups within an organization, making the organization slow and inflexible.

It can further be realized as functional organizations integrate their activities vertically

so that products are sold and distributed quickly and at low cost. For instance, a small

business could make components used in production of its products instead of buying them.

This benefits the organization and employees faiths. Like the two sides of a coin, organisation

structure of ATL is also characterised by both merits and demerits. They are as follows:


19/67

19

Advantages

Since the people are arranged on the basis of their common interests, they can learn alot from each other.

Problem solving becomes easier in a functional organizational structure. Skilled employees of the same group can find more skilled employees for the

company.

Control in functional structure is increased because people will try to supervise eachother work.

Team work is more found in a functional organizational structure.

Disadvantages

It has few downsides that may make it inappropriate for Apollo. Here are a few

examples:

The functional structure can result in narrowed perspectives because of theseparateness of different department work groups.

Decisions and communication are slow to take place because of the many layersof hierarchy.

Authority is more centralized. Measurement problems are created like it becomes difficult to analyze which

person is more efficient and which is not.

Strategic problems are not given significant focus in this structure becausecoordination the top management is always busy in finding the solutions of

problems.

Factors Affecting Organizational Design

Although many things can affect the choice of an appropriate structure for an

organization, the following five factors are the most common: size, life cycle, strategy,

environment, and technology.


20/67

20

Organizational size

The larger an organization becomes, the more complicated its structure. When an

organization is small such as a single retail store, a two-person consulting firm, or a

restaurantits structure can be simple.

In reality, if the organization is very small, it may not even have a formal structure.

Instead of following an organizational chart or specified job functions, individuals simply

perform tasks based on their likes, dislikes, ability, and/or need. Rules and guidelines are not

prevalent and may exist only to provide the parameters within which organizational members

can make decisions. Small organizations are very often organic systems.

As an organization grows, however, it becomes increasingly difficult to manage

without more formal work assignments and some delegation of authority. Therefore, large

organizations develop formal structures. Tasks are highly specialized and detailed rules and

guidelines dictate work procedures. Inter organizational communication flows primarily from

superior to subordinate, and hierarchical relationships serve as the foundation for authority,

responsibility, and control. The type of structure that develops will be one that provides the

organization with the ability to operate effectively. That's one reason larger organizations are

often mechanisticmechanistic systems are usually designed to maximize specialization and

improve efficiency.

Organization life cycle

Organizations, like humans, tend to progress through stages known as a life cycle.

Like humans, most organizations go through the following four stages: birth, youth,

midlife, and maturity. Each stage has characteristics that have implications for thestructure of the firm.

Birth: In the birth state, a firm is just beginning. An organization in the birth stagedoes not yet have a formal structure. In a young organization, there is not much

delegation of authority. The founder usually calls the shots.

Youth: In this phase, the organization is trying to grow. The emphasis in thisstage is on becoming larger. The company shifts its attention from the wishes of

the founder to the wishes of the customer. The organization becomes more


21/67

21

organic in structure during this phase. It is during this phase that the formal

structure is designed, and some delegation of authority occurs.

Midlife: This phase occurs when the organization has achieved a high level ofsuccess. An organization in midlife is larger, with a more complex and

increasingly formal structure. More levels appear in the chain of command, and

the founder may have difficulty remaining in control. As the organization

becomes older, it may also become more mechanistic in structure.

Maturity: Once a firm has reached the maturity phase, it tends to become lessinnovative, less interested in expanding, and more interested in maintaining itself

in a stable, secure environment. The emphasis is on improving efficiency and

profitability. However, in an attempt to improve efficiency and profitability, the

firm often tends to become less innovative. Stale products result in sales declines

and reduced profitability. Organizations in this stage are slowly dying. However,

maturity is not an inevitable stage. Firms experiencing the decline of maturity may

institute the changes necessary to revitalize.

Although an organization may proceed sequentially through all four stages, it does not

have to. An organization may skip a phase, or it may cycle back to an earlier phase. An

organization may even try to change its position in the life cycle by changing its structure.

As the life-cycle concept implies, a relationship exists between an organization's size

and age. As organizations age, they tend to get larger; thus, the structural changes a firm

experiences as it gets larger and the changes it experiences as it progresses through the life

cycle are parallel. Therefore, the older the organization and the larger the organization, the

greater its need for more structure, more specialization of tasks, and more rules. As a result,

the older and larger the organization becomes, the greater the likelihood that it will move

from an organic structure to a mechanistic structure.

Strategy

How an organization is going to position itself in the market in terms of its product is

considered its strategy. A company may decide to be always the first on the market with the

newest and best product (differentiation strategy), or it may decide that it will produce a

product already on the market more efficiently and more cost effectively (cost-leadership


22/67

22

strategy). Each of these strategies requires a structure that helps the organization reach its

objectives. In other words, the structure must fit the strategy.

Companies that want to be the first on the market with the newest and best product

probably are organic, because organic structures permit organizations to respond quickly to

changes. Companies that elect to produce the same products more efficiently and effectively

will probably be mechanistic.

Environment

The environment is the world in which the organization operates, and includes

conditions that influence the organization such as economic, social-cultural, legal-political,

technological, and natural environment conditions. Environments are often described as

either stable or dynamic.

In a stable environment, the customers' desires are well understood and probablywill remain consistent for a relatively long time. Examples of organizations that

face relatively stable environments include manufacturers of staple items such as

detergent, cleaning supplies, and paper products.

In a dynamic environment, the customers' desires are continuously changingthe opposite of a stable environment. This condition is often thought of as

turbulent. In addition, the technology that a company uses while in this

environment may need to be continuously improved and updated. An example of

an industry functioning in a dynamic environment is electronics. Technology

changes create competitive pressures for all electronics industries, because as

technology changes, so do the desires of consumers.

In general, organizations that operate in stable external environments find mechanistic

structures to be advantageous. This system provides a level of efficiency that enhances the

long-term performances of organizations that enjoy relatively stable operating environments.

In contrast, organizations that operate in volatile and frequently changing environments are

more likely to find that an organic structure provides the greatest benefits. This structure

allows the organization to respond to environment change more proactively.


23/67

23

Technology

Advances in technology are the most frequent cause of change in organizations since

they generally result in greater efficiency and lower costs for the firm. Technology is the way

tasks are accomplished using tools, equipment, techniques, and human know-how.

In the early 1960s, Joan Woodward found that the right combination of structure and

technology were critical to organizational success. She conducted a study of technology and

structure in more than 100 English manufacturing firms, which she classified into three

categories of core-manufacturing technology:

Small-batch productionis used to manufacture a variety of custom, made-to-

order goods. Each item is made somewhat differently to meet a customer's

specifications. A print shop is an example of a business that uses small-batch

production.

Mass production is used to create a large number of uniform goods in anassembly-line system. Workers are highly dependent on one another, as the

product passes from stage to stage until completion. Equipment may be

sophisticated, and workers often follow detailed instructions while performing

simplified jobs. A company that bottles soda pop is an example of an organization

that utilizes mass production.

Organizations using continuous-process production create goods bycontinuously feeding raw materials, such as liquid, solids, and gases, through a

highly automated system. Such systems are equipment intensive, but can often be

operated by a relatively small labour force. Classic examples are automated

chemical plants and oil refineries.

Woodward discovered that small-batch and continuous processes had more flexible

structures, and the best mass-production operations were more rigid structures.

Organizational design depends on the type of business. The small-batch and continuous

processes work well in organic structures and mass production operations work best in

mechanistic structures.


24/67

24

ORGANISATION STRUCTURE OF APOLLO TYRES

LIMITED

CHAIRMAN &

MANAGING DIRECTOR

VICE-

CHAIRMAN

CHIEF INDIANOPERATIONS

UNIT HEAD

KALAMASSERY

DIVISIONHEAD

ENGINEERING

DIVISIONHEAD

COMMERCIAL

DIVISION HEADQ - TECH

GROUPMANAGER

PRODUCTION

GROUPMANAGER

HUMAN

RESOURCE

ASSOCIATE

MANAGER

SYSTEM

ASSOCIATE MANAGER

PRODUCTION

PLANNING & CONTROL

ASSOCIATE MANAGER

INDUSTRIAL

ENGINEERING


25/67

25

CHAPTER - V

DEPARMENTAL PROFILE

Production Engineering Commercial Systems

Human Resource Industrial Engineering

Production Planning &Control Q-Tech


26/67

26

HUMAN RESOURCE DEPARTMENT

The human resource departments main function is to manage people. It facilitates

smooth working of the organization by looking into the human resource side and also the

overall administration of organisation.

Key functions:

To design and implement procedures, policies and systems those aretransparent and help in achieving company goals.

Industrial relations To boost productivity and improve quality through internal customers Developing people and teams Managing change Integrating people into the companys vision, culture and philosophy Manpower planning, recruitment, employee orientation Induction, conformation, campus recruitment and internal recruitment Travel, transfer, ambulance room, statutory compliances Compensation policies, attendance and leave administration, payroll advice,

performance appraisal, training and development, benefit administration, disciplinary

action and safety

HR Mission

To create HR policies and processes which are employee friendly. To build a culture which has warm forthcoming and is professional with a sense of

ownership & pride.

To encourage innovative thinking.

To encourage transparency & teamwork. To develop leaders at all levels with general management skills. To create a learning organization. To develop competencies & skills through training and development. To constantly raise levels of employee productivity. To be a change agent. To create HR brand. To work towards attaining & sustaining the best employer status.


27/67

27

HR Philosophy of Apollo Tyres Ltd.

Aims to play an active role in enabling the success and growth of the organization Continuous improvement in the quality of people and their approach towards

customer service

Providing newer and more effective methods of managing and leading HR oriented growth strategies guide towards top level decisions Strives to maintain a balance between qualitative and quantitative results Creation of an organization wide involvement with the concept of HR Commitment of the top management, which is the backbone for the success of all new

HR initiatives

Organization Structure of HR Department

Focus areas of HR functions

The main functions of the HR department involve:

Manpower planning Recruitment and Selection Performance appraisal Training and development Welfare Safety Industrial Relations Security Career planning and promotion policy of employees

GROUP MANAGER

HR

ASSOCIATE MANAGERSECURITY

EXECUTIVETRAINING & DEVELOPMENT

EXECUTIVEWELFARE

ASSOCIATE MANAGERSAFETY


28/67

28

MANPOWER PLANNING PROCESS

The manpower planning process is directly linked to the long term business plans

of the organization. The manpower planning exercise is conducted annually to assess themanpower requirements of the organization. At the beginning of each calendar year, HR

department interacts with each department to collect their manpower requirements in

conjunction with the annual projected business plan.

The following factors form the basis for the manpower planning exercise:

Product Mix

Optimum equipment capacities Existing manpower Envisaged organization structure Comparison of actual versus expected productivity ( measured in terms of Kg/man-

hour)

Inter-unit comparisons for common functions.

Keeping in mind these factors, each Department/Function is expected to make an

estimation of the human resource requirement phase wise at each location, along with the

profile of people needed and the sources from where they can be obtained. The manpower

plan covers all levels viz., workmen, staff, officers, and managers. The total manpower

requirement is discussed with the president/VC & MD. After the formal sanction has been

given, HR incorporates the manpower requirements into its Annual Requirement Schedule.

Attempts are made to look into possibilities of relocation and redeployment for filling up the

vacant positions before resorting to recruitment from external sources. Once the annual

manpower plan has been frozen, the norm is to ensure that no deviations are there in terms

of requisition for additional vacancies at a later stage during the year.


29/67

29

PERFORMANCE APPRAISAL

Performance Appraisal is the process of evaluating the performance of the employees

in comparison to a set of standards and then communicating that information to the

employees. Such appraisal is also known as performance review, performance evaluation,

employee rating, employee evaluation or result appraisal.

Objectives

To review the performance of the employees over a given period of time and rewardfor good performance.

To judge the gap between the actual and desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior-subordinate

and management employees.

To diagnose the strengths and weaknesses of individuals so as to identify the trainingand development needs for the future.

To provide feedback to the employees regarding their past performance. Provide information to assist in the other personnel decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees.

To judge the effectiveness of the other HR functions of thee organisation such asrecruitment, selection, training and development.

To reduce the grievances of the employees.Performance Appraisal in Apollo Tyres Ltd.

Employees

The performance of employees is evaluated on the basis of:

1. Daily attendance monitoring system.2. Performance management for the performance appraisal.3. Promotion policy.


30/67

30

Executives

Apollo conducts an efficient performance appraisal system for their executives. It is a

centralized appraisal system. The online appraisal is known as PACE (Performance Appraisal

& Career Enhancement). It is done in every quarter and the annual review time period will be

from April 1st to March 31st.

The appraisal process begins with goal setting. Goal setting process starts with

corporate goal setting, department and individual goal setting. Key Result Area (KRA) has to

set by each executive. KRA is the particular area or responsibility or target area for an

executive along with their manager.

At the time of appraisal, the reporting supervisor along with the section manager

assesses the attained performance of the executive and evaluates the performance in the light

of set standards for performance.


31/67

31

Process of Performance Appraisal

Establishing performancestandards

Communicating standards &

expectations

Measuring the actual

performance

Decision making and taking

corrective actions

Discussing results (providing

feedback)

Comparing with standards


32/67

32

RECRUITMENT & SELECTION

Recruitment is done through advertisement and a good opportunity is given to the child

of worker. This increases family loyalty towards the company. They are called for the

interview and the chief executive take final decision.

1. Management Staff

TechnicalB.Tech, Graduate Engineer Trainee

Non Technical - CA/ICWA/MSW/MBA/MA (PM); Executive Trainee

After training, they are absorbed as officer. Criteria include:

a) Consistency in academic performanceb) Group Discussionc) Personal interview

2. Employee children skill development scheme

a) One year training in productionb) Dependant of employeesc)

Physical fitness [height -165 cm, weight50 kg]

d) Minimum qualification- 10th standard

INDUSTRIAL RELATIONS

Union management relation:-

Mutual trust + Understanding = Teamwork.

A good industrial relation exists in the organization. The management and the

employees jointly find the solutions for the problems. There exists a well relation between

employer and employees. There are four main trade unions recognized by the company are:

ATSWN (Apollo Tyres Staff and Worker Union) ATEU (Apollo Tyres Employees Union) ATMS (Apollo Tyres Mazdoor Sangh) ATWM (Apollo Tyres Workers Movement)


33/67


34/67

34

Jyothirgamaya

On each working day about 10 employees are selected for training in a classroom

atmosphere, about the productivity, quality and scrap reduction. The employees are provided

training specialty about the company and the tyre industry in general. Jyothirgamaya provide

information regarding the changes happening in the industrial field. Its objective is to give

training for all the employees in the unit within a period of 1 year.

SIX SIGMA: (introduced on April 16th

2007)

Six sigma is basically meant for increased production and for running the organization

profitability. I t is for finding out areas where unneeded expenses are occurring and for

reducing. It uses scientific techniques with a disciplinary approach. A six sigma organization

means the defects in the production of 10 lakh parts must be below 3.34%. When the

employees become aware of six sigma and they come into contact with the machineries used

for this, then the organization will achieve an unexpected growth. This helps to find out the

defects in production and for finding out remedy. It also helps to understand the fact that

consumers are the owners and also to produce quality products.

WELFARE MEASURES

The organization provides good welfare services to its employer. The company runs a

subsidized canteen on contract basis. Rest rooms with locker and washing facility, arts and

sports club, well maintained library are other facilities provided.

A well transportation facility is given to all the employees from different destinations

from which they have to pay a very less amount. All employees drawing a salary below

Rs.6000 are covered under group accidental policy and medi claim policy.

The welfare department ensures proper blend in the mental and physical health of the

employees. Positive measures are taken in maintaining the health of the employees.


35/67

35

Welfare measures

Canteen: Companies normally provides canteen facilities for its employees. Itis running in a one year contract based level. The company pays a monthly subsidy of

Rs.1225000 to the canteen contractor. An amount of Rs.20 is collected monthly from

employees.

Transportation Facility: Company provides transportation facility to all itsemployees working in night shifts, they provides bus and tempo for travelling

Locker room: It is provided for safe deposit to personal documents and money Toilets Hot water Cooler Rest room Waiting room Uniforms Shoe allowances

SAFETY

The organization follows all the provision under the factories Act 1948, the plant is

well equipped with safety machines and directions are given for the same. Safety directions

are placed at noticeable points in and around the plant premises. Fire extinguishers are placed

reachable points and employees are well trained to use if necessity comes. Those who work

in the production unit are given masks, safety gowns and shoes.

In Apollo a separate book is given to each employee, which prescribes certain rules and

procedures in order to create a working environment free of accidents. No major accident has

occurred in the plant for past ten years.

The following are some of the safety policies of Apollo Tyres Ltd.


36/67

36

Accidents resulting in personal injury and damage to property and equipmentrepresent needles human to economic waste, which must be prevented by every

reasonable means available.

All personal injuries are prevented. The protection of human life demand a completeand continuing to eliminate accidents.

Officers of all level have a primary responsibility for the safety and well being of allpersons who report of him.

Safety motto: ABC- Always Be Careful

Safety Measures

Medi-claim policy Mock drill practice 24 hours ambulance facility Firefighting facility Personal protective measures Shoes, face mask

Ear phones for reducing sound Water pollution checked by Kerala Pollution Control Board Air pollution check-up Periodic safety check-up Safety training programs License renewal Two medical officers for 24 hours First aid training

SECURITY

The security is concerned with the physical movement of men and material. Security

staff headed by the associate manager works at all the shifts. To facilitate the security

measures, single point entry is adopted to control visitors. For materials, separate gate passes

are issued.


37/67


38/67

38

Culture of Career Promotion Apollo

An online, matrix-driven performance management system called PACE or

Performance And Career Enhancement, allows for objective goal-setting and performance

evaluation. Quarterly appraisals and bonus payouts, in accordance with corporate and

individual achievements, ensures a tracking of each individual's performance and training

need-fulfillment over a career span at Apollo Tyres. PACE provides greater objectivity in

measuring performance by providing metrics for tracking the performance, growth and

potential of each individual. Annually, the basket of competencies at each level is evaluated.

All training programmes are consolidated under the Apollo Laureate Academy. In

collaboration with leading institutes like the Indian Institutes of Management, Management

Development Institute, IMD, Dale Carnegie Training and knowledge partners like Mercer

and Thomas Profiling, domain-specific training needs are identified and programmes are

developed.

The Apollo Laureate Academy encourages individuals to attend seminars, meets,

conferences and workshops taking place in the public domain, to ensure both professional

growth and learning, as well as to build relationships and network with similar communities

across industries. For the vital sales and marketing and manufacturing teams, specialized

programmes have been developed to enhance skills, and identify individual areas of strength.

Promotion Policy

Each section has a channel of promotion. An executive can be promoted step by step

and have the opportunity to become a division head. The promotion policy for executives is

as follows:

E1 E2 E3 Associate Manager Manager Group Manager

Division Head

Normally, promotions for regular workers from L-2 to L-11 grades are given based on

seniority in the concerned promotion channel. However, in the case of certain selection posts

such as Junior Asst., Senior Asst., Grader, Green Tyre Inspector, Technician-Test Wheel,

Instrument Technician, Machinist-B, Leading Hand-RMS applications will be invited from


39/67

39

the eligible employees. Selection for promotion will be based on the performance in the

written test and interview. Usually, promotions are based on following factors:

1. Experience2. Qualification3. Marks for Attendance

Marks for Attendance

Percentage of attendance

Marks

100 20

99 19

98 1897 17

96 16

95 15

94 12

93 or less than 93 9

PRODUCTION PLANNING AND CONTROL DEPARTMENT

The production planning and control department is responsible for fixing

monthly production levels, meeting production targets, scheduling machines as per the

requirements, employees, developing subordinates and the preparation of raw material

requirements based on monthly production ticket.

Structure of PPC Department

UNIT HEADKALAMASSERY

ASSOCIATE MANAGER PPC


40/67

40

Other function of the PPC Department includes:

Conduct work studies, improvement studies in various equipments and fixing ofnorms.

Capacity calculation in various equipments for time to time inquest to variouschanges.

Design, implementation and follow-up scheme in various zones. Planning and assessment of manpower requirement in various

departments periodically.

Study plant layout and material handling systems and suggest for improvements

Explore the possibilities of capacity expression and prepare the report Visit other industries for industries for getting information regarding new

developments.

Suggest various cost reduction programmes. Conduct improvement of methods and equipment design compatible to best economic

standards

Evolve various strategies to optimize inventory levels at various stages such asengineering stores.

Preparation of monthly production plans Communication of organizational goals down the line Prepare adjust and issue of different operations based on the programs,

inventories, programs of work and specifications

Follow up programs of work in all sections Report relevant details and assist to maintain steady progress of work

Take physical inventories from the stores of finished goods and raw materials Maintain records of inventories Report shortage, rejection and delay in the operations and take corrective measures Maintain good housekeeping Ensure that no material is leftover when size changes occur Keep record of non moving material, unidentified material ,scrap generated, obtained

disposal instruction, report follow up actions and to clean up materials

Preparation of raw material requirement based on monthly production ticket


41/67

41

INDUSTRIAL ENGINEERING DEPARTMENT

The main objective of this department is to plan, design, implement and manage

integrated production and service delivery systems that assure productivity, quality,

reliability, maintainability and cost control to keep Apollo globally competitive.

Structure of Industrial Engineering Department

Major Functions

1. Bench marking2. Key result area identification3. GAP Analysis4. Incentive Planning

Other Functions

Conduct work-studies, improvement studies in various equipment and fixation ofnorms.

Capacity calculation of various equipment from time to time consequent to changes. Design, Implementation and follow up of incentive schemes in various zones. Planning and assessment of manpower requirements of various departments

periodically.

Studying plant layout and material handling systems and suggesting improvements. Explore the possibilities of capacity expansion and prepare project reports.

UNIT HEADKALAMASSERY

ASSOCIATE MANAGER

INDUSTRIAL ENGINEERING


42/67

42

Negotiations with unions regarding various issues like incentive schemes,productivity and expansion and labor issues.

Analysis of capital expenditure request from various departments and makerecommendations to Senior Management Committee

Prepare budgetary planning for capital and cash flow requirement Prepare documents for long-term settlements, bonus settlements etc. and represent the

management in the meetings with the Unions / Labor Departments.

Visit other Industries for getting information regarding LTS methods, practices andother developments.

Conduct various training classes for workmen, supervisors, other officers and newrecruits.

Apply various Industrial Engineering techniques such as job evaluation, O & M(Organization & Methods) studies, Kaizen, Line Balancing etc.

Suggest various cost reduction programs and implementation. Associate with professional bodies like Productivity council, NITTIE, and Institution

of Engineers etc.

Conduct daily audit of manpower, productivity, lost time, scrap details, absenteeism,overtime etc.

Furnish various other management information reports to the top management. Evolve best practices and processes through global benchmarking in the context of

global competitions and intense customer focus.

Optimize inventory levels at various stages such as engineering stores, work inprogress are finished goods.

Continuous improvement of methods and equipments design compatible to the besteconomic standards


43/67

43

SYSTEMS DEPARTMENT

The systems department is responsible for computerization of different departments of

Apollo Tyres Limited. It operates and co-ordinates all systems in the organization. At Apollo

Tyres Ltd., Kalamassery an associate manager is in charge of systems department. He

directly reports to the unit head.

Structure of Systems Department

Apollo uses Enterprise Resource Planning (ERP) as an IT enabler across the

company to develop integrated database. The ERP package implemented in ATL is SAP R/3,

which stands for System, Application and Products in data processing. Since ATL is

following SAP system in all its departments, system department plays a pivotal role in the

day to day smooth functioning of the company.

In collaboration with IBM, SAP was successfully implemented at ATL on 1 st

February 2004. ATL was the first manufacturing concern in India to implement SAP for the

whole organisation without defects within a short span of time. Since the implementation in

2004, till today no major problems were reported. That shows the efficiency of systems

department of ATL.

UNIT HEAD

KALAMASSERY

ASSOCIATE

MANAGER SYSTEMS


44/67

44

Primary functions

The two primary functions of systems department are as follows:

1. Monitoring functionSecurity problems in the SAP were solved using central virus scanning system and

firewall at the head office (Gurgaon and Haryana). HCL solve all problems related to the

network connection.

2. Maintenance functionThe systems department in the plant solves the network problems as well as the

computer problems. Regular backups were taken daily and monthly for providing reliability

in the SAP system. All the computers were connected using both point to point and star

topology to form an intranet inside the plant. Proper authentication was given to each

department members using a user ID and password.

PRODUCTION DEPARTMENT

Kalamassery plant with an installed capacity of 100 MT/day contributes approx. 300

Cr to the total turnover of the Apollo group. The daily production target of the Kalamassery

unit is 100.81 metric tons. Production is carried out in three shifts. Every month end,

production intends are obtained from the marketing department of Apollo tyres Ltd, Delhi

stating how much tyres need to be manufactured. Kalamassery plant primarily focuses on the

bias tyres production.

The production department is divided into three main divisions based on the various

stages of tyre manufacturing:

The main functions of Division 1 are:

1. Mixing2. Dipping3. Calendaring4. Extrusion


45/67

45

Division 2 has the following functions:

1. Bias cutting2. Band building3. Stock preparation4. Tyre building

Division 3 mainly deals with:

1. Tyre curing2. Final inspection

ENGINEERING / MAINTENANCE DEPARTMENT

The engineering department is the service department and provides its service to

various departments such as production, technical, quality, assurance and engineering. The

major function of the engineering department is manufacturing, installation, maintenance and

repair of machines. All machines are checked regularly. The machine history is recorded so

that the life of a particular machine can be known and used respectively. Maintenance is the

key function of this department, and is classified as:

1. Preventive maintenance2. Breakdown maintenancePreventive maintenance means preventing the machines from any possible

breakdown and breakdown maintenance means repairing the faulty machines.

Engineering department undertakes periodic checking of all machines. Shift

engineers study the problem in detail and the required repair work is done. The required

spares are available from various engineering stores. The machine is then checked and

production officers close the notification.


46/67

46

COMMERCIAL DEPARTMENT

Organization Structure of Commercial Department

PURCHASE SECTION

The main function of purchase department is to provide right material at right time in

right place at right quantity. This department is concerned with the purchase of both

indigenous and imported materials. It covers procurement of indigenous. Engineering spares,

general engineering and miscellaneous items other than raw materials. This department is

headed by senior manager and under him there are a number of officers and staff. The

department is provided with the latest communication facilities and computers.

DIVISION HEAD

COMMERCIAL

MANAGER COMMERCIAL

(RMS, FGS, EXCISE, ACCOUNTS, FINANCE & COSTING)

EXECUTIVES

EXECUTIVE

RMS

ASSOCIATE MANAGER

EXCISE

GROUP MANAGER

ENGINEERING STORES & PURCHASE

MANAGER

FGS

ASSOCIATE MANAGERS (3)

ACCOUNTS, FINANCE & COSTING

EXECUTIVE

PAYROLL

ASSOCIATE MANAGER

EMS

EXECUTIVES (2)

PURCHASE


47/67

47

The main items of purchase are:

Engineering spares Consumables Furnace oil Diesel Chemicals Lubricants Some raw materials

The purchase may be corporate purchase of plant purchase. Under corporate purchase

the raw material is purchased after considering what the market require for the month. Underplant purchase, purchase may be of stock item or of non stock item.

Stock items are purchased for regular use. They are having material codes. They are

purchased after considering the reordering level, reorder quantity, lead time etc. For non

stock items there is no regular purchase.

Different departments have to prepare purchase requisitions. The items purchased are

engineering item, oils, & lubricants, local raw material, import of spares etc.

Vendor Selection

This includes a list of steps involved in selecting the right vendor for stack items

identified as critical by the department to enable a smooth functioning of the plant. Vendors

are generally identified as:

1. Manufacturers2. Dealers3.

Firms offering various services

Manufacturers are divided into two

1. OEM (Original Equipment Manufacturers)

The OEM shall be identified as a vendor for the supply of equipment, spares,

components etc.


48/67

48

2. OEM (Original Component Manufacturers)

For all spares, components and consumables, attempts are made to identify the

manufacturer and source the items directly from them so as to get quality products or services

at optimum cost. Information available on supplier's manuals, catalogs, details available on

the nameplates of machines etc. shall be used for the purpose.

PURCHASING RECORDS

1. Purchase Order Record: POs of all materials bought.2. Vendor Record: List of all vendors & their complete mailing addresses.3. Blue print and specification record Drawing:- Many items are purchased by

blue print specification are kept in separate files with index showing their

location and where the copies have been sent. Thus for repeat order to old

supplier it is not necessary to send new copies of the specification.

4. Contract file: Certain goods may be bought under a term contract if so, thepurchasing department must maintain a record of such contract.

RAW MATERIAL STORES:

Process: Receipt, handling, storage, packaging, forwarding & delivery of material to internal

and external customers with proper documentation to meet their requirements.

Purpose: To supply right material in right time to produce right quality product without any

interruption.

Scope: Receipt, handling, storage & issue of raw materials & to the customer.

(a) Raw material handling process:

Activity description

1. Upon receipt of the raw material, the document related to transporter, supplies areverified for authenticity of the supply.


49/67

49

2. Identification of the supply with full details of material code, date of receipt, suppliersname & truck no: will be carried out and transferred to the pre identified location.

Upon receipt of the raw materials GR will be prepared.

3. Based on the GR, Quality assurance will collect the samples as per the pre-determinedfrequency and OK the material if the results are meeting the requirement by releasing

the GR.

4. The materials if rejected from lab will be sent back to supplier and all acceptedmaterial will be accounted in the inventory.

5. Issue of raw material will be carried out to internal customers & external customers

(b) Receipt of raw materials:

1. Verification of Documents at Security Gate:

The security inspector at main gate shall verify all documents pertaining to the

consignments brought to the factory before allowing entry in to factory premises and note thefollowing details. Serial no, suppliers name, description of item, challan quantity, challan no

and date or LR no and date, truck reg. no., date and time of arrival, date and time of

departure.

2. Weighment (By the Computerized Weigh Bridge)

Security shall inform raw materials stores about the arrival of the vehicles at the gate.

The security guard and a representative from RMS shall record weighment of trucks jointly.

The weighment slip shall indicate the following.

Serial no, time and date of receipt, suppliers name, gross weight with materials, SIR no

and date. After recording the above details in the computerized weighing balance the vehicles

shall be directed to the respective unloading bay. In ATL weighment will be done in a

weighbridge closer to the factory under the supervision of security and RMS personnel after

ensuring that the weigh bridge posses a valid certificate from weight and measure

department.


50/67

50

Both security and RMS personal shall sign on the computerized weighment slip. One

copy of the weighment slip will be filed in RMS along with concerned delivery challan and

the second copy will be returned by security department.

3.Verification of Documents at RMS

The receipt in charge shall verify the documents to ascertain the no. of packages,

description of materials code and weight of the material. If any discrepancy is found the same

shall be orally reported to the officer concerned before unloading. He in turn will take

decision suitably. The dispatch documents include: Delivery challan/invoice, sales tax papers,

packing list and duplicate copy for transporter of invoice for availing MODVAT credit. In

case of non receipt of any of the above documents the consignment will not be unloadedunless and otherwise instructed by the competent authorities after compliance of all

conditions stated above, the materials will be unloaded as instructed by the receipt in charge

and lead to the respective area.

(c) Handling storage and preservation

All the incoming materials except the materials coming in tankers will be unloaded

manually or with the help of forklift as instructed by the receipt in charge. Caged pallets or

platform pallets are used for storing of materials so far as possible to facilitate easy handling

at the time of issue. Each caged pallets will carry a maximum of 1500 kg of materials. Caged

pallets will be stacked one over the other.

ENGINEERING GOODS STORES

Engineering goods stores is responsible for storing the necessary spare parts,

components required for smooth functioning of the plant. On receipt of indent from

production department, the engineering stores arranges for its release. The inventory

management technique used is VED Analysis. Almost all the activities of this department are

computerized. The purchase department is initiated whenever re order level is reached. A

buffer stock is always maintained in the store.

Another system followed in engineering stores is VMI-Vendor Maintain Inventory. In

this the vendors supply the raw material in large quantities and payment is made only for

consumed items.


51/67

51

1. Consumables (General stores items) are standard engineering items (bearing, belt,etc). It is decided to identify common codification scheme for all consumable items.

All the items shall be brought under this codification scheme.

2. Spares: Spares are part of equipments. Equipments are varying from plant to plant bymake and model.

It is decided to,

1. Identify common equipments by same make and model.2. Assign uniform code to equipment make and model wise, which is common across

plants.

3. Assign respective plant spares with code of equipment.In general;

1. Item code for consumables will be common across all plants.2. Item code for spares will be plant specific with respect to common equipment

code.

However, material classification in SAP will be used to trace the spares to commonmachines. Material Master Codification will follow the external; numbering.

FINISHED GOODS STORE

(a) Receipt of Finished Goods

All finished goods after final inspection are kept at the transferring are in each shift.

(b) Removal of Finished Goods

The finished goods required for dispatch kept at the transferring area, after preparing

the transferring-notes, will be removed to the loading bay and balance will be removed to

stores for storage, after completing packing for required item .


52/67

52

FINANCE & COSTING SECTION

Finance Department of ATL is concerned with the planning and controlling of the

financial resources. In ATL the statement is prepared in accordance with the requirement of

companies ACT 1956 and applicable accounting standards issued by the institute of

Chartered Accounts in India. The management of ATL accepts that the integrity and

objectivity of their financial statement has been made on a prudent and reasonable basis in

order that the financial statements retain the forms of transactions. Companies state of affairs

and profit of the year.

The corporate office does most of the accounting jobs of ATL. At Kalamassery Plant,

they have separate department that deals with salary, costing, excise duty on raw material.

1. Payroll SectionIt involves the handling of wages, salaries, keeping records of employees including

information about their basic allowances maintaining their attendance etc. for the

convenience of employee, payments and dispersed through banks of ATM's. Basic

allowances are provided by HR dept. and absenteeism rate are given by time office dept.

2. CostingThe process of costing is based on the financial accounts. The price of a single tyre is

determined by taking into consideration the actual cost involved in making tyres. The

company follows the rate of having only 0.5 less percentage of scrap and this helps in

minimizing cost.

3.

Control

It includes monitoring the electricity charges, wastage scrap and other avoidable

expenses. Distribution of payment through it is step also taken under this function. This has

helped in reducing manpower security requirements and also other risks to be taken by the

company. It maintains the maximum inventory of 6-7 days as this is required for again time

of tyre. A total 1,32 hours is needed to make a tyre, make it heat resistant, strong, loud etc.


53/67

53

4. PricingPricing is done as per the change in price of raw material and on basis oaf

competitors pricing policy.

5. Control exciseAll has to pay 16% excise duty for dutiable items of domestic purposes to the central

government for exports on excise duty has to be paid at gives about 2.3 crores excise duty in

spite of all these measures.

6. Basis of accountingThe financial statements are prepared on historical cost convention with the exception

of certain fixed asset which was revalued based on occurred method of accounting and in

accordance with the accounting principle generally accepted in internationally.

7. Sources of fundThe major source of funds is from shareholders funds, share capital, reserves and

surplus and loans are funds either secured or unsecured. But the unit of Kalamassery receives

funds from head office New Delhi.

8. BudgetingBudgeting is done on the basis of production. Here no sales takes place hence budgeting is

done on the basis of production.

9. Applications of fundsFunds are used for purchasing of fixed assets, meeting depreciation, making new

investments, purchase of inventories and meeting current liabilities. Apollo Tyres Ltd. of

Kalamassery uses its funds for making payments tax payments and purchasing raw material.Rest all the funds are allocated by the head office for other needs and requirements.

Management of accounts receivables

Every firm likes to sell its goods or services for cash. But competitive pressure force

most firms to sell goods or services on credit. Another motive for selling goods or services on

credit is to attract more business. When goods are sod on credit, inventories are reduced, but

receivables are created .Receivable constitute on important portion of current asset of several

firms.


54/67

54

Q TECHDEPARTMENT

Q-Tech department is a recently introduced department by merging the technical and

quality assurance department.

Organization Structure of Q-Tech Department

TECHNICAL DEPARTMENT

Technical department looks after tyre engineering and related matters and the

department has close contracts with production department. Technical department plays a

crucial role in the organization.

DIVISION HEAD

COMMERCIAL

GROUP MANAGER

TYRE ENGINEERING

MANAGER

COMPOUNDING

GROUP MANAGER

LAB & QUALITY SYSTEM

ASSOCIATE MANAGER

HEAT ENGINEERING

MANUFACTURING MANAGEMENT

ASSOCIATE MANAGERZONE 1

ASSOCIATE MANAGER (3)ZONE 2

CELL MANAGEMENT

SHIFT A SHIFT B SHIFT C

ASSOCIATE MANAGER

LAB

ASSOCIATE MANAGER

QUALITY ENGINEERING


55/67

55

Functions

1. To issue specification to the production plant2. Develop compound Fabric standard3. Accessories drawing4. Processing machine specification5. Processing and curing of new design6. To inspect all the production activity7. To test the tyre8. To stop production if there is any unconformity found during analysis9. To make appropriate changes in production process and specification if necessary10.Initiate and implement corrective measure.

Technical Department is divided into

1. Compounding Department: This department holds all the specification concernedwith compounding and ensures all processes as per specification

2. Tyre engineering department: This department holds all the specifications withbuilding and curing. This department can make any changes in the specifications as

required and is concerned with conducting various tests on the final production.

QUALITY ASSURANCE DEPARTMENT

The main duty of the quality assurance department in the determination of the quality

standards, measurements of the actual quality, compares it against standard controls measures

are tables.

Functions

1. Inspection of incoming raw material.2. Auditing involving the control of non-confirming material or process.3. Auditing of finished products4. Solving customer complaints5. Testing process


56/67

56

Tools of quality Assurance Dept.

1. Quality Manual- It states the policies and principles of the quality s/m use.

2.

S/m procedure- It functions as guidelines to units ensuring uniformity in the qualityS/M.

3. Quality meetings- Such meetings are held every month and each departmentgives suggestions for the scope of improvement. Internal quality credit is held

every 6 months.

4. Quality policy- ATL follows strict quality control policy to enhance customer delightand also pays special attention to retain quality of products. At present is department

has been integrated with the technical department under manufacturing.

Functions

1. Raw material testingQuality of all the raw material as tested in lab in 3 different section.

a.

Fabric laboratory

The laboratory test all fabric and steel wires received and at all stage of the process.

b. Chemical laboratoryThis laboratory carries out test for all polymers, fillers and chemicals.

c. Physical laboratoryAll rubber compounds in process are tested in the lab each stage i.e., after mixing in the

Banbury, after extrusion and calendaring and after curing.

2. Tyre TestingSamples of cured tyres are tested indoors on a test wheel. The wheel stimulates the

running condition of a tyre/primarily used to detect carcass strength and heat generation.

Tyres are fitted on different vehicles to study the effects of different types roads, load and

climate.


57/67

57

For international trade transaction ISO certification has become inevitable. Apollo

Tyres Limited got the privilege to have ISO 9001 certification. ISO 9001 covers the quality

system and model for QA in design, development, installation and servicing.


58/67

58

CHAPTER - VI

FINANCIAL HIGHLIGHTS

Statement showing the trend of Working Capital

Particulars Rs. in millions Trend Percentage

2009 2010 2011 2009 2010 2011

Current Assets:

Inventories

Sundry Debtors

Cash & Bank

Other Current Assets

Loans & Advances

Total(A)

Current Liabilities:Current Liability

Provisions

Total(B)

6302.15

2247.35

3620.91

5.33

2053.90

9928.72

7869.00

3489.82

44.18

2372.23

17537.51

9501.80

1908.86

-----

3947.67

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

157.55

350.15

96.38

828.90

115.50

166.58

223.91

204.81

220.79

278.28

422.80

52.72

0.00

192.20

231.18

292.25

350.85

301.80

14229.64

5860.44

1141.00

23703.95

13122.16

2336.92

32895.84

17127.32

4003.25

7001.44 15459.08 21130.57

Working Capital(A-B) 7228.20 8244.87 11765.27 100.00 114.07 162.77


59/67

59

1.4

6.5

4.4

0

1

2

3

4

5

6

7

RsBillion

NET PROFIT

2009 2010 2011

4.4

12.8

10

0

2

4

6

8

10

12

14

RsBillion

EBIDTA

20092010 2011


60/67

60

3.1

7.9

11.7

0

2

4

6

8

10

12

14

RsBillion

CAPITAL EXPENDITURE (Capex)

2009 2010 2011

49.8

81.288.7

0

10

20

30

40

50

60

70

80

90

100

RsBillion

NET SALES

2009 2010 2011


61/67

61

14

32.4

16

0

5

10

15

20

2530

35

%Return

Return on Capital Employed

2009 2010 2011

950

1160

1395

0

200

400

600

800

1000

1200

1400

1600

MT/DAY

CAPACITY

2009 2010 2011


62/67

62

BSE STOCK PRICE FOR LAST 3 YEARS

NSE STOCK PRICE FOR LAST 3 YEARS


63/67

63

CHAPTER - VII

SWOT ANALYSIS

Strengths

1. Apollo Tyres' diversified market base across 3 continents has enabled it to reduce itsdependence, and thereby, the inherent risks of banking on a single market, as

compared to its Indian competitors.

2. The presence of strong and established brands in the Company's portfolio, in each ofits country operations, lends credence to its growth plans. The key brands areApollo in India, Dunlop in South Africa and Vredestein in Europe.

3. An extensive distribution network supporting Apollo Tyres' brands and products in allits 3 key operations.

4. Continued leadership position in the commercial vehicle tyre segment in India,including price leadership in the cross ply segment.

5. A leading position in the fast-growing passenger car tyre segment in India, reachingthe #1 position in production and #2 in market share.

6. Strong player in the ultra high performance (UHP) passenger car tyre segment inEurope, particularly in high margin winter tyres.

7. Dynamic and progressive leadership.

Weakness

1. Absence in the two-wheeler and three-wheeler tyre segment in India, which is largeand continues to show good growth.

2. Sub-optimal production facilities in terms of economic size in South Africa.3. Market dynamics and intense competition in some key markets do not allow passing

on cost pressures as and when reasonably required.


64/67

64

Opportunities

1. Apollo Tyres' enjoys an early mover advantage, with a large production capacity inthe rapidly growing truck-bus radial segment in India, well ahead of key competitors.

2. Entry into truck-bus radial retreading segment in India, by further leveraging itsleadership position in the commercial segmentthis enables the Company to provide

a complete solution to its customers and thus, enhance its brand equity.

3. Cultivating a sizable market for brand Apollo in Europe by capitalising on theexisting European distribution network. This further improves brand recognition and

enhances profitability.

4. Increased sales of brand Vredestein tyres by providing competitive cost productionbase out of India and/or sourcing tyres from other players.

5. Entry into the off-highway tyre segment in India.6. Introduction of truck-bus and off-highway tyres in Europe.7. Penetrating newer markets in Africa, including tapping into the potential of the

Dunlop brand.

8. Entry into high potential markets like South America, Australia and Eastern Europe.

Threats1. Potential growth slowdown in the Indian economy due to rising interest rates.2. Increased competition from global players like Michelin and Bridgestone as they

enter the truck bus radial segment in India.

3. Degrowth in the truck cross ply segment faster than anticipated.4. Extreme raw material price volatility and cost pressures.5. Exposure to the South African market which continues to face both a country and

currency risk.6. Economic downturn in Europe leading to decline in demand.


65/67

65

CHAPTER - VIII

FINDINGS, CONCLUSIONS & SUGGESTIONS

FINDINGS

ATL is the first tyre company to receive ISO 9001 certification and one the few tyremanufactures to obtain QS 9000 certification.

Workers health and safety are given prime importance A good co-ordination exists between different departments. Trade unions play vital role as bargaining agents. The management is sometimes

forced to accept demands made by the unions.

The products of the company are known for its high quality standards. The workers are not completely satisfied with the wages they are paid. Employees are provided with facilities such as subsidized canteen, transportation etc. Safety posters and slogans are exhibited inside the plant and various safety awareness

programs are also conducted.

The factory premises are kept clean which comes under a dedicated system known asEnvironment Management System (EMS)

Factory is located at an ideal location that allows easy access to land, air and seatransportation.

All departments at the plant are being connected through SAP which gives real timeconnectivity with each other.

All the plants of Apollo tyre group are being connected with the headquarters throughWAN and SAP which critical decision making easy


66/67

66

CONCLUSION

Apollo tyres Ltd is the 7th fastest growing tyre company in the world. A fair wage

system prevails in ATL. The company provides better working condition for employees.

Proper training to workers and efficiency of the workers must be increase to increase

production. The industrial relation with the local union is fairly good and satisfactory at

Apollo Tyres Ltd., Kalamassery unit.

The Company is facing a cut throat competition in Indian market and international

market. Despite of all these challengers Apollo has done well in the past and with a booming

economy and a focused progressive leadership at the top. The employees enjoy working as a

team and with customers to create superior and distinct production and services. Apollo is

focused on fast and flexible, never ending improvement in order to create an enterprise that is

dynamic, ever expanding and profitable and in constant pursuit of customer satisfaction is

Apollo policy to design, manufacture and service our products to provide the level of quality

and value that meets ever customer needs.

Apollo stands first in the production of truck tyres. In spite of recession the company

is still making sufficient profit. There are good working conditions and industrial harmonyamong the employees. Proper and adequate training is given to the employees, which leads to

higher productivity,. The company is facing cut throat competition from Indian market as

well as foreign market. In spite of fierce competition and local problems the Kalamassery

plant thrives and move forward to its target of 310 MT/day and thereby achieve their 9000

crore goals by the end of 2010. Apollo tyres boast a vibrant and dynamic, profession and non

hierarchical culture. Transparency and communication are cornerstones of corporate practice,

across levels, to ensure that each individual employee is aligned with the goals and aspiration

of the company. At Apollo Tyres the three corporate pillars of People, Quality and

Technology underpin all activities and processes. These are the companys stated areas of

corporate excellence, in its journey towards becoming a best in class global manufacturer.

Apollo Tyres, they are always looking out for new opportunities. If opportunities do not

come their way, they go ahead and create opportunities. Over the years they have created

opportunities for growth, opportunities for success and also opportunities for a bright future.


67/67

SUGGESTIONS

Maintain the relationship between employees and employers

There should be training program for better understanding of