DISSERTATION

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INDIRA SCHOOL OF CAREER STUDIESSR.NO 85/5 B, Tathwade, Off New Pune Mumbai Highway,

Wakad, Pune-411033, India.Tel :   020-66759485, 020-66759486 Fax no. 020-66759445.

COMPANY PROFILE

History

Continental was founded in Hanover in 1871 as the stock corporation “Continental-

Caoutchouc- und Gutta-Percha Compagnie”. Manufacturing at the main factory in

Hanover included soft rubber products, rubberized fabrics, and solid tires for carriages

and bicycles.

In 1898, initial successes in development and production were celebrated with the

production of automobile pneumatic tires with a plain tread. At the turn of the century

Continental balloon fabric was used to seal the gas cells of the first German airship. In

1904 Continental became the first company in the world to develop grooved tires for

automobiles, in 1905 we commenced production of rivet anti-skid tires, similar to the

later studded tires, and three years later we invented the detachable wheel rim for

touring cars. In 1909, French aviator Louis Blériot was the first person to fly the

English Channel. The flying surfaces of his monoplane were covered with Continental

Aeroplan material.

In the late 1920s, the company merged with major companies in the rubber industry to

form “Continental Gummi-Werke AG”.

In 1951 they commenced production of steel cord conveyor belts. In 1955, they were

the first company to develop air springs for trucks and buses. Series production of

belted tires began in 1960. Around 30 years later they brought the first environmentally

friendly tires for passenger cars onto the market.

In 1995 the Automotive Systems division was established to intensify the systems

business with the automotive industry. They presented the key technology for hybrid

drive systems back in 1997.

Today, Continental ranks among the top 5 automotive suppliers worldwide and holds

the number 2 spot in Europe.

As a supplier of brake systems, systems and components for powertrains and chassis,

instrumentation, infotainment solutions, vehicle electronics, tires and technical

elastomers, Continental contributes to enhanced driving safety and global climate

protection. Continental is also a competent partner in networked automobile

communication.

With 163,788 employees (Status: December 31, 2011) in 46 countries, the Continental

Corporation is divided into the Automotive Group and the Rubber Group, and consists

of five divisions:

Chassis & Safety embraces the company’s core competence in networked driving

safety, brakes, driver assistance, passive safety and chassis components.

Powertrain represents innovative and efficient system solutions for vehicle

powertrains.

Interior combines all activities relating to the presentation and management of

information in the vehicle.

Tires

Passenger and Light Truck Tires develops and manufactures tires for compact,

medium-size, and full-size passenger cars, as well as for SUVs, vans, motorcycles,

and bicycles.

Commercial Vehicle Tires offers a wide range of truck, bus, industrial, and off-road

tires for the most diverse service areas and application requirements.

ContiTech develops and produces functional parts, components, and systems for the automotive industry and for other key industries.

2011 2010

Sales (millions of euros) 30,504.9 26,046.9

EBIT1 (millions of euros) 2,596.9 1,935.2

Adjusted EBIT2 (millions of euros) 3,043.0 2,521.1

Employees 163,788 148,228

1 Earnings before interest and taxes2 Before amortization on intangible assets from purchase price allocation,  changes in the scope of consolidation, and special effects.

CONTINENTAL TYRES IN INDIA

Continental, the fourth largest tyre manufacturer in the world, recently acquired Modi

Tyres India to form Continental India Limited. At present, Continental India has two

manufacturing plants located in Modipuram and Partapur. The Modipuram plant

manufactures tyres for buses and trucks while tubes are manufactured in Partapur plant.

Continental India Limited is set to witness huge investments by its parent company to

the tune of INR 330 Crores which is more than double the amount that Continental

spent on acquiring Modi tyres India Limited. The investment is planned to double its

truck and bus tyre capacity and begin the manufacturing and production of radial tyres

for passenger cars. Continental believes that radial tyres will drive the Indian truck

market in the coming future and investments would help Continental build a strong

base in India and become a strong competitor in the Indian tyre market. The production

for radial tyres for passenger cars and commercial vehicles is slated to start in 2013 in

India. This year, the Modipuram plant will see an increase in its production to more

than half a million truck and bus tyres. Continental India Limited plans to increase its

strength from 1600 employees to close to 2400 employees in the coming years. The

company also recently announced plans to begin production of radial tyres from its

Modipuram manufacturing plant. Continental will be able to provide radial and bias ply

tyres to the Indian market with locally manufactured tyres. This would give Continental

a significant cost advantage and lower manufacture-to-market time.

Continental has been able to increase its sales in Asian countries by an amazing 50

percent. In Europe, Continental is the leading manufacturer for passenger car tyres with

over 30 percent of all cars manufactured using Continental tyres. India, however, is a

different story for Continental as it is a recent foreign player in the Indian tyre market.

The company concedes that it has to face competition from local tyre manufacturers

who are big entities in their own rights.

Continental India Limited has braced itself for the stiff competition it is likely to face

from JK tyres, Apollo and CEAT and is investing to create a wider base in the Indian

market. Continental India will also focus on the huge replacement tyre market thriving

in India.

In 2010, Continental recorded sales of €26 billion worldwide. Continental is among the

leading automotive suppliers and tyre manufacturers for radial tyres for truck and

heavy commercial vehicles. Apart from tyres, it also supplies brake systems, power-

trains and chassis systems and related components, instrumentation equipments,

infotainment solutions, electronics for use in vehicles and technical elastomers. As a

global company it has contributed significantly towards enhancing road safety and

global climate protection. Continental is committed to the Indian market and has been

investing heavily in the growing Asian markets for its core businesses.

With the development of infrastructure and roadways in India, the demand for heavy

vehicle tyres is set to rise from the current 18 million to 25 million in 2015. There is a

demand in India for quality tyres and hi-tech methods for the manufacturing of tyres.

As the demand for commercial and heavy vehicle tyres grows, more and more foreign

tyre companies are expected to set up shop in India in the lines of Continental India

Limited.

One of the largest automotive suppliers globally, Continental announced the expansion

of their Indian division and with the acquisition of Modi Tyres Company Limited,

Continental will run as an individual entity – Continental India. Adding to this,

Continental India will also look at expandiing their automotive division in the country,

which will include the replacement market and Original Equipment Manufacturer

(OEM) section.

 Currently, more than 19 millon tyres are consumed on a yearly basis and this is just the

commercial section. By 2015, the projected demand will go more than 25 million units.

As of now, 18 percent of the commercial vehicle market is running on radial tyres and

the rest on bias tyres. And the passenger car market runs on 99 percent radialised tyres.

In India, there is a rising demand for vehicles with high quality tyres as well as

premium technology. Thus, they are convinced that radialisation will be the driving

force in the Indian truck tyre market, and therefore our further investments of more

than 50 million Euros in radial truck tyre production will prepare a solid base in order

to meet that demand. In future, Continental plans to manufacture radial tyres from the

Modipuram plant.

 

Globally, Continental is Europe's market leader for passenger car tyres. In the Original

Equipment sector, over 30 percent of all new European cars leave the factory on

Continental tyres. For commercial vehicle tyres, Continental is one of the world’s

largest manufacturers of premium truck, bus and industrial tyres. With this legacy and a

long-term vision for the industry, we start this first direct initiative of the Tyre Division

here in India with full strength and dedication to make it a success – for our customers,

for Continental and our employees, and for the region.

 

PEOPLE AT CONTINENTAL

Employees by Country and Region

Employees at Continental numbered 163,788 worldwide on December 31, 2011

Continental's employees stand for the success and the reputation of the company. As a

dynamic and creative company with flat hierarchical structures and flexible decision-

making channels, they offer students, career beginners and professionals an exciting

environment for professional success.

At Continental the atmosphere is warm, friendly and a culture of mutual respect &

trust. The inductions to the central functions were detailed and elaborate which

enabled me to start delivering right from the word ‘go’.

If you want to have a challenging assignment willing to explore the un- explored

areas of technological edge. The place is Continental.

Continental personifies trust, passion to win, freedom to act and above all the sprit

of ones. Here they achieve together and that is compelling enough.

The Opportunities to work in a matrix organization with a cross disciplinary

functions & experts enables people to multiskill and to work in their area of

interest.

There is nothing more rewarding to see a successful team together achieving the

goals.

The Corporate Entry Conference (CEC)

At CEC, you experience our corporate spirit up close, beyond the boundaries of

function and region. You get to know members of the board and top managers, come

face to face with their visions, strategies and latest initiatives and you catch a glimpse

or two of what awaits you in your personal career. During the numerous events and

group activities, you can build up your own personal network early on.

The Corporate Entry Program (CEP)

With CEP, you get to know the practical foundation of our mutual success: On target

processes, effective executions and how to flexibly deal with intercultural challenges

and the global market demands right from the start. The first step is for you to attend

the two basic modules, Project Management and Employee Dialogue Bottom Up. Then,

in optional modules of a program scheduled for up to four years, you learn, for

instance, everything about business decisions, effective presentations and team

excellence.  As the “manager of your own talents”, you can establish and nourish

competencies to last a lifetime.

A balanced relationship between professional and personal life not only helps to reduce

stress for an individual. It in itself is what greases the wheels for a company’s long-

term economic success. Active, fit and motivated employees are the prerequisite for a

“healthy”, a better company.

So, the intention of Continental’s activities in this area are by no means altruistic.

Everyone benefits from a balance between work and life. It is the basis for creating a

classic win-win situation. And, the programs we offer to this end are just as extensive

and varied. For example:

Sports events such as the international Conti-Running-Day, Intra company

Criket Matches, Football matches´

Family Days

Fun Days

Wellness events for health topics

Children’s day care

Social services

SWOT ANALYSIS

STRENGTH

Continental Tyres has continued to maintain its lead in the global market within

the dominant segment of truck and bus tyres.

Quick response to changes in market conditions and product profiles has resulted

in superior product innovation and technical expertise.

The company has an extensive distribution network across the globe.

Substantial brand recall in a price sensitive Indian market.

Global quality standards, international processes and system certifications

Dynamic and progressive leadership, willing to implement change.

Global sourcing of raw materials.

Within its physical boundaries, the company propagates extensive use of

information technology systems, so as to hasten the flow of information and

leverage opportunities across its multiple locations.

WEAKNESS

Continental has no presence in the two and three wheeler segments.

The capital intensive nature of the business in this segment also has its

drawbacks.

OPPURTUNITIES

The government’s increased spending in road infrastructure in current budget gives

ample opportunities for the company to capture the space of new vehicles on road

with better infrastructure.

THREATS

Fluctuating price of raw-materials is a major concern. The price of major raw-

material, especially natural rubber volatiles backed by the signals arising from

international market. Besides there is an import duty on natural rubber at 20%.

There is a need for multi-brand strategy for all its products.

The industry faces tough competition from China. China’s emerging economy is

backed by stimulus packages and government policies, making it more competitive

at cost-levels.

POSITTION OF COMPANY

TYRE AND THEIR TYPES

Modern automobiles would have been and impossibility without pneumatic tyres. The

tyres contribute to the speed and safety in addition to the comfort. The tyre is band of

iron, steel, rubber etc. placed round the rim of the wheel to strengthen it and reduce

vibration. In addition to the absorption of vibrations and irregularities of the road

surface without transferring them to the vehicle,. They also provide traction for it. In

short, a tyre is to carry the load, cushion the vehicle and passengers and loads from the

shocks. And vibrations caused by road irregularities and inequalities, produce minimum

noise and resist the tendency for the car to over steer or turn into the band by their

misalignment. The necessary adhesion for the acceleration and breaking and wet grip

which should be as nearly equal as possible to that of the dry condition is provided by

the thread, depending upon the thread pattern and the synthetic rubber. To provide

grater comfort, the tendency has been for smaller wheels and larger sectioned tyre with

low inflation pressure during the last few years. The protection of unsparing parts and

unit like the wheels, axle assemblies and the brake mechanism as the wheels entirely

depend upon the resiliency of the tyres.

Tyres are in general of two types.- solid and pneumatic or air filled. Solid tyres

generally confined to specialist industrial applications have very limited usage.

PNEUMATIC TYRES

These tyres employ air as a cushioning medium confined in an inner tube. They are

classified into three types according to pressure and volume.

High pressure tyres.

Balloon or conventional tyres

Super cushion tyres

High pressure tyres use pressure into 4.2 kg/cm2. They are heavier in construction. As

compared to other two tyres, they have more plies. Balloon tyres are provided pressures

ranging from 1.68 to 2.8 kg/cm2 and are generally used on most of the American cars

as original equipment. These tyres are considerably larger in cross-section as compared

to corresponding high pressure tyres because it requires a grater volume of air in the

tyre to carry the same load or decreased pressures. Super cushion tyres generally

operate at pressure ranging from 1.4 to 1.68 kg/cm2. they are provided with passenger

cars driving and extra soft ride as an optional equipment. As compared to similar

balloon tyres, the super cushion tyres are considerably larger in cross-section.

The pneumatic tyres are also classified as tube tyres and tub less tyres Tube tyres.

These tyres have an inner tube and a tyre casing or an outer cover with a special inner

lining. The inner tube retains the air and inflates the tyre while the outer cover makes

contact with the road and takes the wear and weight of the vehicle. Both the tube and

the tyre casing are mounted on the wheel rim. The inflated inner tube makes the tyre

casing to resist any change of shape. The casing is made up of layers of cord

impregnated with rubber. The rubber side walls and trade are applied over them. The

layers of cord called plies are formed over a spacing device.

TUBELESS TYRES

These tyres are a recent addition as basic equipment to the most of the new passenger’s

motor vehicles. These tyres do not require inner tube. They are mounted on the rim

with the air retained between the rims and casing. The amount of air pressure required

for inflating the tyres depends upon the type of tyre and operation. Passenger car tyres

are inflated to about 1.54 to 2.1 kg/cm2 while heavy duty tyres used on trucks and

buses are inflated up to pressure of 7kg/cm2.

The tubeless tyres consist of outer cover with a special inner lining. The edge of cover

is sealing against the wheel rim. These tyres are lighter and run cooler than the tubed

tyres. In these tyres, valve is a separate unit and is fitted in a hole in the wheel rim.

They are constructed in such a way that the air will be retained in than even after being

penetrated if the object is left in position of penetration.

If the cover is properly and correctly sealed to the rim they would provide good air

sealing qualities. A puncture sealing is provided by the soft inner liner cones. Care

should be taken while fitting or removing these types of tyre so that the bead is not

damaged.

HIGH PRESSURE TYRES

These are the tyres used in certain commercial vehicles and cars. They operate at

[pressures ranging from 1.96 to 5.6 kg/cm2. these tyres having a square section tread

provide a flat surface to the road. These help them to hold their cross -sectional shape

even when the tyre is under load. These tyres can be used boath with soft and hard

springs without giving much deflection. In relation to the wheel rim, they have almost

no side ways movements.

NORMAL TYRES

These tyeres have more flexible walls allowing side ways movement of the tread in

relation to the wheel. They have square treads. These tyres operating at pressures

ranging from 1.54 to 1.96 kg/cm2 have limited sideways movement.

LOW PRESSURE TYRES

These tyres operating at pressures between 0.84 kg/cm2 and 1.54 kg/cm2 are the round

section tyres. The tare pattern extends round the walls of the tyre without providing a

square edge. The tyre tread provides undersides loads. It takes up a fresh path gently

instead of slipping side ways or skidding as usually happens with square section trades

on breakaway. Although these system is conflicting with most of the concepts of tyre

adhesion yet it work quite efficiently. Most of radial ply tyres are of these types.

RADIAL PLY TYRES

These tyres have considerably varying construction and manufacturer recommendations

regarding pressures. Incase radial ply tyres are fitted to the front of a vehicle with cross

ply tyres at the rear or there are mixed tyres on the same axle, there always chances of

loss of stability. But these combinations are now not allowed by the law.

MARKET DYNAMICSProduct

Based on the technology, the automotive tyres can be broadly classified into traditional

cross-ply tyres and technically superior radial tyres. The usage of the radial tyres is

picking up steadily, especially in the passenger car segment. Radial constitute about

50% of the total market for passenger car tyres. However the usage of radials is

negligible in other segments.

Though the host of the radial facilities has been set up in the recent past, India is still a

major producer of cross-ply tyre has India’s forte. Globally the cross-ply tyre is a

fading concept characterized by relatively low vale addition. Radial tyre production

involves a highly technology intensive process as a result the price of a radial tyre is

about 30% more than cross-ply.

Realizing growing importance and reference for radial tyres, domestic majors are

gearing up to exploit the opportunities. Almost all companies such as CEAT,

Goodyear, MRF and JK Industry has set up facilities for radial tyres. Apollo which had

hitherto confined itself to the truck and bus segment has turned its attention to the radial

market.

Price

The tyres are available in different price according to it’s size and quality of the tyre.

The price of the tyre is mostly depending on the price of the raw material used. In the

tyre Industry significant portion of the buyers are organized, so prices are more

competitive in the Industry. It is very difficult to charge premium price for the product

as there is no significant difference in the quality of product.

The two wheelers and three wheelers are available in the price range of 1000 to 2500

rupees, small car and big car tyres are available in the price range of 2500 to 5000 and

the trucks, tractor and LCVs, a type available in the price a range of 10,000 to 40,000.

Place

Most of the companies have their own exclusive dealers in the country for the

distribution of their products. Some of them also have replacement centre for the

replacement facility to the customers. The distribution network is very with the kind of

buyers’ viz. OEM, Replacement and Export Market. The typical distribution network in

the industry is as follows.

OriginalCompany C & F Agent Equipment

Manufacturer

Dealers ReplacementCompany Exclusive, Buyers

Show rooms

Promotion

The Indian tyre Industry is become more competitive than before in such a competitive

market sales promotion plays very important role for remain present and enhance sale

the various tools of sales promotion are used by different players in the market viz.

exclusive show room for attract customer, offering discount, offers services like

computerized wheel aligning, balancing and tyre fitting, besides selling plain vanilla

tyres and providing physical ambiences.

Most important perhaps, though exclusive showrooms, tyre companies can directly

influence purchase in fever of the labels they make.

High-voltage advertising that a few tyre companies do, word of mouth counts for a lot

and is usually a very important purchase influencer. Little wonder that it makes sense to

directly influence your customers buying habits by creating an ambience where he feels

happy about buying the product.

Exclusive ambience is required, given the technologically upgraded cars available

today.

Indian Tyre Industry

The Indian tyre industry is about 25,000 crore and is growing at a compounded annual

growth rate (CAGR) of 6-8 per cent. In terms of volume, about 1.2 million commercial

tyres and 1.5 million passenger vehicle tyres are manufactured annually. The industry

is dominated by 4 players-MRF, APOLLO, J.K and CEAT.

Ranking of Indian tyre companies on the basis of production

1. MRF Tyres Limited

2. Apollo Tyres Limited

3. JK Tyres Limited

4. CEAT Tyres Limited

5. Birla Tyres Limited

6. Good Year India Limited

7. Vikrant Tyres Limited

Indian tyre manufacturing companies are re-engineering their business and looking at

strategic tie-ups world wide. The future is expected to see many strategic alliances

among the domestic and global players. They include the OEM segment with vehicle

manufacturers looking for fresh tie-ups or strengthening of existing partnerships. The

tyre industry has evolved from the more basic cross ply products to the more

sophisticated radial tyres. Radial tyres have shown significant increase in usage every

year. Most of the automobile segment have shifted to radial tyres and the usage of

cross-ply is restricted to trucks and buses only.

Tyres and tubes, the strategic rubber products and basic supplements to the automotive

vehicles are of utmost importance to the country's economy. The tyre industry sector is

providing direct employment to over 40,000 people and indirect employment to lakhs

of people. This industry sector is now being considered as a core industry sector.

The interesting feature of the tyre industry in India is that starting from its inception to

the present day its progress has been influenced by repeated import of technical

collaborations. There is an urgent need to build up indigenous capabilities for tyre

technology including the tyre machinery. In view of this, it was thought desirable to

undertake the review of present status of this industry and to identify and analyze the

critical inputs required for absorption and up gradation of imported technology.

While the tyre industry is mainly dominated by the organized sector, the unorganized

sector holds sway in bicycle tyres. The major players in the organised tyre segment

consist of MRF, Apollo Tyres, Birla, Ceat and JK Industries, which account for 63 per

cent of the organized tyre market.

International players in Indian market are: Bridgestone, Pirelli, Goodyear and Michelin

ROLE IN COMPANY

HUMAN RESOURCE: PERFORMANCE MANAGMENT SYSTEM

INDUSTRIAL ENGINEERING DEPARTMENT

Objective

To plan, design, implement and manage integrated production and service delivery

systems that assure productivity, quality, reliability, maintainability and cost control to

keep the continental tyres globally competitive.

Functions

Conduct work studies ,improvement studies in various equipment and fixation of

norms

Capacity calculations in various equipment from time to time consequent to various

changes

Design ,implementation and following incentive schemes in various zones

Planning and assessment of manpower requirement in various departments

periodically

Studying plant layout and material handling systems and suggesting improvements

Explore the possibilities of capacity expansion and prepare the project reports

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.

Other functions of the PPC Department include:

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

PRODUCTION DEPARTMENT

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. Mixing

2. Dipping

3. Calendaring

4. Extrusion

Division 2 has the following functions:

1. Bias cutting

2. Band building

3. Stock preparation

4. Tyre building

Division 3 mainly deals with:

1. Tyre curing

2. Final inspection

QUALITY ASSURANCE DEPARTMENT

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

standards, measurements of the actual quality, compares it against the standard and

controls whether established standards are maintained and practiced.

Functions

1. Inspection of incoming raw materials

2. Auditing involving the control of non conforming materials or processes

3. Auditing of finished products

4. Solving customer complaints

5. Testing process

Tools of Quality Assurance Department

Quality manual: It states the policies and principles of the quality system in use.

System procedure: It functions as guidelines to units ensuring uniformities in the

quality system.

Quality meeting: Such meetings are held every month and each department gives

suggestions for the scope of improvement. Internal quality audits are held every 6

months.

Quality policy: CONTINENTAL TYRES follows a strict quality control policy to

enhance customer delight and also pays special attention to retain quality of

products.

R&D, TECHNICAL DEPARTMENT

R&D, Technical department monitors market needs for new product development. The

result specifications are passed on to the production department for simulation.

The R&D, Technical department is divided into two divisions:-

Tyre engineering section: decides upon the suitable specification of the tyre, and

designs it. Then they further see to the fact that the tyre is produced according to the

specifications issued by them.

Tyre compounding section: decides upon the chemical composition of the product,

dealing with the chemistry of mixing, calendaring and dipping.

ENGINEERING 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 maintenance

2. Breakdown maintenance

Preventive 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.

HUMAN RESOURCE AND ADMINISTRATIVE DEPARTMENT

Structure of HR department

Group manager leads HR department of CONTINENTAL TYRES, HR manager deals

with working life of a worker, from the time of his entry in to the organization until he

leaves. It basically includes activities such as HR planning, job design, performance

appraisal and job evaluation and motivation, welfare, safety and multi facts of

Industrial Relations.

Key functions:

To design and implement procedures, policies and systems those are transparent

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 company’s 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

Focus areas of HR Functions

HR philosophy of Continental Tyres

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

The main functions of the HR department involve

1.1. Manpower planning

2.2. Recruitment

3.3. Selection

4.4. Performance appraisal

5.5. Training and development

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 the

manpower requirements of the organization.

At the beginning of each calendar year, Corporate HR interacts with each

Department/Function in each Unit/Division 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

Kgs/man-hour)

Inter-unit comparisons for common functions

RECRUITMENT POLICIES

A well designed and pre-planning recruitment policy, based on corporate goals, study

of environment and corporate needs is essential for implementing the organization

mission and objectives.

The recruitment policy asserts the objectives of the requirement process and provides a

framework of implementation of the recruitment programme in the form of procedures.

Recruitment is carried out in accordance with the annual manpower plan. Broadly,

requirement activities are done at either entry level or lateral level to cater to:

Replacement vacancies (occurring due to resignation, retirement or transfer)

Additional vacancies ( created due to company’s expansion / diversification)

SELECTION

The job profile is communicated to the consultants and bio-data of candidates are

invited. The screening of bio-data is completed first by the concerned HR department

and then by the concerned Functional Head. An application blank is filled is filled up

by the candidate to facilitate the interview process. The preliminary interview is

conducted by the HR department. The final interview is conducted by a panel

consisting of the concerned Functional Head, and in case of key positions, also by the

president and/or VC&MD.

PERFORMANCE APPRAISAL

Objectives

The performance appraisal system has the following objectives:

1. Assessing past performance

2. Providing rewards for performance

3. Goal setting for the future

4. Assessing training needs

5. Assessing potential for growth

Eligibility

All employees are to be covered under the annual appraisal, however, the trainees and

probationers are eligible for appraisal only before their due date of confirmation.

Performance appraisal is to be done by the immediate superior to whom the appraisee

is directly reporting, and the review is to be done by the department Head. In cases

where the functional and administrative reporting are separate, both the appraisers are

to asses independently and arrive at a joint decision (if location factors are a constraint,

then two separate forms are to be given to both the appraisers and information collected

is to be summarized by the HR department.

TRAINING AND DEVELOPMENT

Objective

The training and development procedure of Continental Tyres has the following broad

objectives:

To porn up identified functional skill areas of personnel for more effective

contribution to the organization.

To provide platform for personal growth and exploration leading to overall

organizational health and quality of life.

To develop human resource in consonance with broader corporate horizon and long

range vision of the organization.

The head of the corporate human resource is responsible for overseeing the

implementation of the training methodology. Respective Divisional HR is responsible

for implementing of the training procedure for the employee under their purview.

HR department also has the following functions:

WELFARE MEASURES

The aim and objective of the welfare fund shall be to render financial assistance to

encourage cultural, sport, social and other welfare activities among the members and to

foster among them a spirit of mutual friendship, cooperation and understanding. The

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

subsidized canteen on a contract basis. Rest rooms with lockers and washing facilities,

arts and sports club, library, etc are other facilities provided. Transportation facilities

are also provided to all employees. Company buses will take the employees from

different destinations for which they have to pay a nominal amount. All the employees

drawing a salary below 6000 are covered under ESI and those who are exempted to ESI

are covered under group accident policy and MEDICLAIM policy. The welfare

department also includes insurance schemes, policies managing the welfare fund

activities.

SAFETY

Safety section facilitates safe working conditions to all employees. The organization

follows all the provisions under the Factories Act 1948. All workers are bound to

observe safety precautions as directed and notifies from time to time and use safety

equipments or clothing as may be required by the management. All accidents should be

reported at once by the workmen concerned to his immediate supervisor and in his

absence to department head. Workmen should engage themselves only to the operations

at the machine to which they have been appointment. Fire extinguishers are placed at

reachable points and the employees are trained to use them.

TIME OFFICE

The functions of the time office are as follows:

Maintain attendance record of the workers., staff and all employees

Calculation of incentives

Calculation of man-day, absenteeism, and maintain leave records

Security executives

Maintain security of properties, personnel and information

Looks into the arrival and departure of employees, punching, control of shifts,

allotment of gate passes and movement pass of worker, visitors pass etc.

PERSONNEL

Matters connected with recruitment, career promotions, transfers and posting,

retirement and reservation guidelines concerning executives, staff and workmen

Design and implementation of HR policies

Matters connected with annual performance, assessment report of all employees

and all development activities.

Matters related to the appointment of employees, induction of apprentices,

appointment of trainees under company scheme, etc.

Promotion

Promotion is purely based on attendance, seniority and performance. They are all

recorded in a systematic way. There is Computerised punch card system followed in

the company. Each entry and exit to the plant is recorded. Apart from this is a

well maintained payroll system too. Absenteeism is being found out and proper

reasoning is obtained. The attendance of the workers also account for their

promotion.

Thus HR department is the strongest department of organization, which have

seven subsections which are mentioned above. It has a well established industrial

relation and this department gives more important to the welfare and safety of

the employees , also the time management is very good here. All these sections

are under the direct control of the HR Manager.

COMMERCIAL DEPARTMENT

a)Raw material store

The main function of the raw material store is to receive, store and issue goods that are

essential in the production of tyres .The raw materials are produced from both local and

international agencies .The natural rubber required is purchased from local agencies.

The steel beads wires required for the beads are supplied by reputed firms. The

processing oil is obtained by the Indian Oil Corporation.

The chemicals required for the rubber production includes sulphur, naptha, and

ammonium formaldehyde .These are ordered from countries such as China, Thailand,

and Russia. The placing of orders for the production requires a proper coordination

with other departments such as the production and marketing department.

b) Engineering stores:

These stores are responsible for storing necessary spare parts, components required for

smooth functioning of the plant. It includes

1. General spares

2. Insurance spares

3. Furnace oil

4. Lubricants

5. Chemicals

6. Building Materials

On receipt of production department requirement the engineering stores arranges for its

release. The inventory management technique used in VED (Vital, essential, and

Desirable) analysis. A buffer stock is always maintained in the store.

c) Finished goods store: the main function of this store is to receive, store and dispatch

the goods. There are two dispatch centers, Replacement market and Expert market.

Their following go downs are used to store the finished goods .All the finished

goods .After their final inspections are kept till transferred as required. Finished goods

store has the function of receiving, storing and dispatching as perm the supply chain

management requirement and communicating daily stock levels MIS to the Head

office.

FINANCIAL SECTION:

Financial section of the Continental Tyres, which is concerned with the planning and

controlling of the firms financial resources .The divisional head controls the functions.

The duties include providing information to formulate accounting and costing policies,

preparation of financial reports and the direction of internal auditing budgeting. The

company has to maintain records including quantitative details and situation of fixed

assets.

Payroll section: It 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 are dispersed through banks

or ATM’s.

Costing: The 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 rule of having only 0.5 or less percentage of scrap. This

helps minimizing loss.

Control: It includes monitoring the electricity charges, wastages scrap and other

avoidable expenses .Distribution of payment though is a 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 minimum inventory of 6-7 days ,as

this is required for aging time of tyres. A total of 1.32 hours is needed to make a tyre,

make it heat resistant, strong, load resistant etc.

Control Excise: Continental Tyres has to pay 16% excise duty for dutiable items for

domestic purposes to the Central Government .For exports no excise duty has to be

paid. Continental Tyres gives about 2-3 crore excise duty in spite of all these measures.

PURCHASE SECTION:

Continental tyres sees vendors as strategic partners and constantly endeavors towards

building and strengthening long term relationships with its partners .The setup of

procurement functions in Continental Tyres is as follows:

Centralized procurement cell for raw material is based in the Head office

De centralized procurement cell for engineering spares & consumables ,based at

respective manufacturing location

The basic purchase items are:

1. Capital item purchase

2. Raw material purchase

3. Service purchase

4. Store purchase

USE OF ITSYSTEMS DEPARTMENT

It deals with computing all activities. The systems department is a network of around

100 PC’s which are interconnected in a LAN with the use of optical fibers. The head of

this department monitors all of the software requirements of all the departments with

the help of the executives under him.

All the IT initiatives in Continental Tyres are integrated with the overall corporate

strategy. Integration of the company is achieved by the implementation of the

commonly used ERP software; SAP enables Continental Tyres to connect a vast

network of 140 centers by converting them into a single source of data centre.

The system department is responsible for computerized of different departments of

Continental Tyres. The main function of this department, operates and co – ordinates

all systems in the organisation. The simple structure of department facilitates speedy

communication flow with in the department.

EXECUTIVE -

SYSTEMS

GROUP MANAGER –

SYSTEMS,PPC & IE

MONITORING FUNCTIONSecurity problems in the SAP (Systems Application and Products) were solved using

Central Virus Scanning System and Firewall at the head office. HCL solve all the

problems related to the network connection.

MAINTENANCE FUNCTIONThe systems departments in the plant solved network problems as well as computer

problems. Regular backups were taken daily, weekly 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 Internet inside the plant. Proper authentication was given to each department

members using ID and a password.

Continental makes 250 different types of tyres today. IT helps them to keep track of

every product, its demand forecast and production cycle. The way the automobile

sector is growing, they will need IT to map their production and ensure they don’t lose

new or present customers.

SUGGESTIONS

The growth of the tyre industry is dependent on economic growth, infrastructure

development and also growth in the automobile industry which is cyclical in nature.

Most of the raw materials are petroleum based and their prices are linked to the

movement in crude oil prices. Natural rubber which is one of the major components of

the total raw material cost is an agricultural product and is subject to price and

production volatility resulting from speculative activities and natural causes. The

inverted duty structure between tyres and natural rubber puts further pressure on the

industry's revenue and profitability. The industry may also come under pressure if the

radialisation level in the commercial vehicle segment increases faster than expected,

necessitating larger investments.

The organization study at Continental Tyres Limited was a great opportunity to gain

first hand information about the functioning of the company. The study was very

informative and the experience of working in the organization, interaction with the staff

was very educating. The training measures employed are satisfactory. Following the

rules and regulations and strictly maintaining discipline was also a great learning curve.

LEARNING EXPERIENCE

In this competitive world it is very much important to have experience of working in an

organization and only class room teaching is not enough. Doing this project lot of

learning has occurred. Learning of practical applications of theoretical knowledge by

exposing to company has occurred. The learning experience is enlisted below.

The company is managing good industrial relations wherein good relation between

workers and the superior managers. Is visible in terms of performance in the

company & Industrial peace

The company is well managed with timely business strategies.

I have studied the organization of the company, the strategy adapted by the

company, the organization hierarchy and the way it works.

The company gets the products of other competitors such as Bridgestone tyre to

their testing labs and makes comparison with their product and adopts the

technology of their competitors and attempts to give better product than their

competitors.

The company has adopted “The participative leadership style” so it encourages to

its workers to show more interest in managerial activities.

In production department, the process of the production is divided into different

shops. It has safety measures at the work place. It has used advanced technology

like automated machine in order to minimize cost of production. They produce

quality product. Main strategic intention of the department is recycling the wastage.

If any wastage comes after the recycling it is send to other company for making the

rubber better.

During the adoption of new technology, management provides more training skills

to the workers for the efficient work and the work position.

In order to motivate the employees, the company follows an internal recruitment

process through promotions. If there is any vacant job the company first searches

within the organization and if right employee is not available internally then it goes

for external recruitment.

BIBLIOGRAPHY

www.indiantyreindustry.com

http://www.conti-online.com/generator/www/start/com/en/index_en.html

www.apollotyre.com

www.mrf.com

www.jktyre.com

www.ceat.com