Download - Organisation study on KAR Mobiles
ORGANISATION STUDY ON KAR MOBILES LIMITED 1
ORGANIZATION STUDY
ON
Kar mobiles limited
Submitted in Partial fulfillment of the requirement for the award of the Degree of
Master of Business Administration
SUBMITTED BY,
Name : Anjali. Gangadharan
Reg. No : 09P35J0119
Specialization : HUMAN RESOURCES
Partner Institution : ACHARYA LEADERSHIP AND RESEARCH INSTITUTE
Under the guidance of
INTERNAL GUIDE EXTERNAL GUIDE
Prof. ANIL KUMAR Mr. V. MURALIDHAR
Centre for Participatory and Online Programs
Bharathiar University
Coimbatore – 641 046
(Month & Year) : DECEMBER 2010
ORGANISATION STUDY ON KAR MOBILES LIMITED 2
DECLARATION
I hereby declare that this project work titled ORGANIZATION STUDY is a record of
Original work done by me under the guidance of Prof. ANIL KUMAR and that this project
work has not formed the basis for the award of any Degree / Diploma / Associate ship /
Fellowship or similar title to any candidate of any University.
Signature of the candidate
Name : Anjali. Gangadharan
Reg No. : O9P35J0119
Course with Specialization: MBA, (Human resource)
Date : Signature of the Guide
ORGANISATION STUDY ON KAR MOBILES LIMITED 3
ACKNOWLEDGEMENT
I would like to express my gratitude to Acharya Bangalore B-school and my teachers and my guide
Prof. ANIL KUMAR also thankful to my external guide Mr. .V. MURALIDHAR, of KAR
MOBILES LIMITED (Bangalore) whose direction, assistance, and guidance have been invaluable
for the project. I wish to thank staff for their constant support.
I particularly like to extend my thanks to my seniors and colleges and friends who
supported me during the project.
Anjali. Gangadharan
ORGANISATION STUDY ON KAR MOBILES LIMITED 4
ORGANISATION STUDY ON KAR MOBILES LIMITED 5
The industry is transforming and the boost in demand will see the emergence of several new
players in the industry. The vast market for auto components, and the diverse products and
technology involved ensures a place and a role for many. At the same time, the entry of several
global auto mobiles manufacturers. Will bring in more regulation into the industry and see
pruning of the spurious market. Among the smaller players in the unorganized segment, this
implies moving away from being standalone companies, to entering into either contract
manufacturing or being ancillary units. The newly defined rules are specialization, development
and delivery that hold the key to success in the auto component industry.
According to the investment commission of India, India is among the most competitive
manufacturers of auto components in the world. India is also becoming a global hub for research
and development (R&D) .Companies like Daimler Chrysler, Bosch, Suzuki and Johnson controls
have set up development centers in India.
Auto manufacturers including GM, Ford, Toyota, etc. as well as auto component manufacturers
have set up international purchasing offices (IPOs) in India to source for their global operations.
ORGANISATION STUDY ON KAR MOBILES LIMITED 6
ORGANISATION STUDY ON KAR MOBILES LIMITED 7
INDEX
S.NO TOPICS PAGES NO
1 INDUSTRY PROFILE 8
2 INDUSTRY GROWTH 10
3 FOREIGN AQUISITION 13
4 PROSPECTS 14
5 COMPANY PROFILE 16
6 HISTORY 17
7 NATURE OF BUSINESS 19
8 OBJECTIVES OF KAR MOBILES
20
9 VISION 21
10 MISSION 21
11 ORGANIZATION STRUCTURE
22
12 DEPARTMENT DETAILS 25
13 SWOT ANALYSIS 67
14 FINDINGS 72
15 SUGGESTIONS 74
BIBLEOGRAPHY 76
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Indian auto component industry is estimated at US $ 9 billion in 2006. Industry has the resources
to manufacture the entire range of auto products required for vehicle manufacturing,
approximately 20000 components; here the entry of global manufacturers into India during the
1990’s enabled induction of new technologies new products improved quality and better
efficiencies in operations which effectively acted as a catalyst to the local development of the
component industry.
Estimates by the department of heavy industries, government of there are over 400 large firms
who are part of the organized sector and cater largely to original equipment manufacturers
(OEM).
10000 firms exist in unorganized sector that operates in a tier format.
Firms in this segment operate in low technology products and cater to tier 1 and tier 2 suppliers
and also serve the replacement market.
Around 4 % of the company operating in the auto component segment cater to 80 % of the
demand emanating from (OEM’’s).
This auto component industry manufacturer’s components fall into six broad product categories:
1. Engine parts = (piston ,piston rings , engine valves , fuel pumps ,carburetors and
bimetal bearings )
2. Electrical parts =(starter motors ,generators and spark plugs)
3. Transmission & steering = (gears, steering gears, & systems, wheels, clutch plate & disc).
4. Suspension & braking = (leaf springs, shock absorbers, brake assembly & facing).
5. Equipments = (head light ,& dashboard instruments)
6. Others = (sheet – metal parts, pressure disc castings).
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Auto components product segments
Engine parts 23%
Others 36% Electrical parts 7%
Steering parts 23%
Equipments 8 %
Suspension and braking parts 11%
Revolutions
Automobile revolution began with the appearance of automobile manufacturing, about the year
1890. By that time Europeans and North Americans possessed the technology required to
produce and successfully operate a mechanically powered road vehicles.
A taste & a demand for such a device could than be created building not only on two generations
of public acceptance of railways , but also on the widespread interest in a more recent
mechanical device ,the bicycle .
ORGANISATION STUDY ON KAR MOBILES LIMITED 11
The opening stages of automobiles production and marketing required nothing new in the form
of business organization, factory operation, or selling methods. Nor did it require large sums of
capital of large numbers of workers .yet, ultimately the growth of this industry would bring
amazing changes in all these areas. Revolutions usually do not announce themselves at their first
manifestations.
Industry Growth
The production of auto ancillaries was estimated at us $10 billion in 2005-2006 and as been
growing at a robust 20 % per annum, since 2000.
Exports of auto components have been strong growing at 24% per annum since 2000.This
growth in exports is sustained for another 5 yrs will see India’s auto components exports will
touch us $ 5 billion by 2011 from us $ 2billion at present.
Till the 1990’s the auto component industry was solely dependent on the domestic automobiles
industry to drive the demand for ancillary products. This composition of the market how ever is
undergoing radical changes with global outsourcing gaining momentum. In recent times, exports
has emerged as a significant driver of growth and the demand emanating from global OEM’s and
tier 1 manufacturers has opened now opportunities for the auto component industry in India .At
the same time a bright out look for the domestic automobiles industry also offers significant
growth potential given the fast rising Income levels with a rapidly growing middle and high
income consumers.
Investments
Since 2000 the auto component industry was recorded an investment level of Rs 18 billion and
attracted us $ 530 million in terms of foreign direct investment.
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Investments in this sector have been growing at 14 % per yrs. In 2005- 06, investments touched
us $ 4.4 billion, and are expected to grow significantly in future. The investment commission set
a target of attracting foreign investment worth us $ 5 billion for the next 5 yrs to increase India’s
share in the global auto component market from the amount of FDI currently coming into the
industry. The changing perception of global auto makers is however fast altering the scenario.
With less than 1 % share in the global market, India has tremendous potential to emerge as a
supply base. This changing business scenario’s is leading to an inevitable out consolidation with
in the industry .The take over of Kar mobiles by RANE Engine and of Gero auto by Uma
precision is few instances.
How ever, such mergers & take over’s will be few and far in between in the auto components
industry unlike the churn out anticipated in other emerging industries – the principle factor being
the vastness of the market and the range of products that need to be delivered .Rather than
domestic consolidation, the general trend at present is for the large auto component
manufacturers to establish a global presence. Top auto components manufacturers have already
set up base in the global markets, especially in Europe. Overall there have already been 16
acquisitions; with 6 made in 2005.The industry is the third highest, among the Indian industry
after IT and Pharma, in acquiring oversea assets. These acquisitions have largely been in Europe
and the USA. This trend has been possible as the auto ancillary industries in these countries have
been collapsing thus making it affordable to acquire these companies.
Nevertheless, this will provide a base for Indian companies to access the European &American
markets.
Indian auto component companies are also setting up bases in other emerging economies, who
are potential competitors, for instance, Sundaram fasteners green field facility in Zhejiang and
Bharat forge’s joint venture with the Chinese automotives major FAW Corporation. Another
auto component manufacturer’s with pla
ns to enter china is PMP components which intend to set up a sourcing base to establish it as a
low cost supplier.
ORGANISATION STUDY ON KAR MOBILES LIMITED 13
Foreign acquisitions by Indian companies
Indian co Acquired Country
Bhart forge Carl Dan peddling laves Germany
Federal forges imatra kilsta ab Sweden
CDP alumni umtechnik Germany
Scottish stampings ltd Scotland
Mother son woco group
Sumi G&S kunststofftech Germany
Gmbh
Armtek Auto GWK UK
New smith Jones Inc USA
Zelter Germany
Sundaram Bleisthal productions Germany
Fasteners Gmbh
Cramlington forge UK
CDP Gmph Germany
EL forges Shakespeare forgings UK
TVS Autolec RBI Auto parts SND Malaysia
BHD
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Looking forward the industry displays tremendous potential in generating employment &boosting entrepreneurship in the country. The spate of new investment plans announced by
ORGANISATION STUDY ON KAR MOBILES LIMITED 15
global and domestic automobiles manufacturers promises the emergence of India as a global and domestic automobiles manufacturer and promises the emergence of India as a global hub for auto components.
The industry is transforming and the boost in demand will see the emergence of several new
players in the industry .The vast market for auto components and the diverse products and
technology involved ensures a place and role for many.
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Kar mobiles limited manufacturer’s valves for internal combustion engines. The company manufacturer’s valve of all sizes and ranges used in various vehicles like motorcycles , cars, trucks, railway engines , defense tanks , generator sets and marine engines.
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HISTORY
Kar valves limited was been out of an electric supply under taking in the old Maharaja’s state of cochin under the name of cochin state power & light corporation limited .This company was started in the year 1936 & was engaged in distribution of electricity .In 1971 this business was nationalized so the company received compensation from the government and the share holders decided to invest in a new business activity.
The company was named as “Kar valves limited” and incorporated in the year 1972 under the Indian companies Act with a licensed capacity of 1.5 million valves per annum .Mr.LL.narayan laid the foundation stone on 30 th Aug 1973 and established as private sector organization and started as a manufacturing unit.
Sri. V.p Aghoram was appointed as the managing director of the company in 1972. The company commenced its commercial production in the year 1975 and the first invoice was made on 12-3- 1975 to m/s convest private ltd, Delhi. Large valves for diesel loco applications and export came into focus .This success led the company to expend its licensed capacity from 1.5 millions to 5 millions per annum .In 1981 , the company set up a 100% export oriented unit at Tumkur on 08.9.1983 the name changed as Kar mobiles ltd.
In the year 1997 the company entered into technical collaboration with TRW Inc; USA to upgrade its product and process technology.
Rane group of companies:
Inception in the year 1929as a trading house. Strategic technical alliance.
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Access to best technologies. Group turnover of 273 million usd for the year 2008-09. Serves a variety of industry segments: passenger cars, multi utility. Vehicles, light commercials vehicles, medium & heavy commercial vehicles. Farm tractors, three wheelers, two wheelers, stationery engines.
Why the name Kar mobiles
Some interpreted that since the factory is situated in Karnataka the first 3 letters were taken. Later there were other assumptions like as it deals with automobiles so this names suits better than the others, but this names stand for a different meaning all together like;
Kar mobiles stand for:
K = knowledge
A= application
R= reliability
M=motivation
O= opportunity
B= brilliance
I= innovation
L=leadership
E= excellence
S= service
Nature of the business carried
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Kar mobiles ltd manufacturer’s valves for all internal combustion engines. The company is one of the diesel oriented unit which supplies valve for all engines both petrol and diesel and diesel and is fully equipped to support the developing market needs .A valve is a product Rarely noticed by the average person, yet it plays an important role in the quality of our life. Valves are made from chrome silicon, alloy steel and exhaust from chrome – nickel silicon, alloy steel to operate under high temperature and high stress conditions. The valves commonly used in piping systems are gate valves, usually operated closed or wide open and seldom used for throttling globe valves frequently fitted with a renewable disk and adaptable throttling operations check valves for automatically limiting flow in piping system.
Background and inception of the company
It is the second largest manufacturers of valves for internal combustion engines in India. It is a public ltd company .KML was established in 1974 currently it has two manufacturing plants at Bangalore and other in Tumkur with a combined capacity of 6.5 million valves per annum.KML has a technical collaboration with m/s TRW inc. USA for of product and process technologies .KML is QS 9000 and ISO 14001- certified company. Current turnover of KML is about Rs 833.90(million) with employee strength of about 998. Exports constitute 50% of turnover. Kar mobiles, it is the first vendor from India approved by General Motors electromotive division U.S.A. Kar mobiles enhanced preferred supplier to OEM’s in India and abroad.KML specializes in supply of valves to manufacturers of large engines like:
M.A.N Mirrless black stone Pielstick Ruston Wartsila diesel
In India approx 26 million engine are sold every year and the major contribution are REVL,KML and Sriram .Kar mobiles company is one of the domestic supplier of valves for all engines both petrol and diesel driven and is fully equipped to support its developing market needs. It works on product and route card concept of production. The product KML is presently being exported to U.K, U.S.A, Germany and Australia.
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Kar mobiles ltd Bangalore
The Bangalore based Kar mobiles (KML) set up its factory to manufacture valve for internal combustion engines in 1973- 74. Commercial production commenced in 1974. In 1978-79, it implemented a project to expand its capacity from 1.5 million to 3 million per annum which was again increased to 5 million per annum in 1980- 81.Having successfully established itself in the domestic market as a quality manufacture of valves for internal combustion engines, it entered the export market in 1977.Its first customer was Lister petter U.K with whom it started business in 1977. Currently it enjoys nearly 90 % of Lister pitter’s business. It started expanding its customer network In the U.K and added customer like Kelvin diesel, Villars, Gardner sons etc & started exporting valve to France and Germany.
Objectives of Kar mobiles
The company in its continuous quest for excellence seeks new frontiers delivering best of breed products that meet global quality standard and adopts innovative techniques to further improve customer service.
1. To be punctual to work to reduce absenteeism, not wasting time. 2. To be punctual at work.3. Sorting tools and documents at right place in a clean way.4. Helping others in work and other aspects.5. Work efficiently or effectively.6. Think constructively.7. Act friendly.8. Risk cautiously.9. Dress nicely.10. Talk sensibly.11. Invest prudently.12. Judge wisely.13. Maintaining cleanliness in work.14. Increasing productivity.
Vision
The vision of Kar mobiles ltd is to achieve 2000 million sales by 2013 by strengthening global presence in large engine valve market. To increase our global presence in medium & large engine valve market.
ORGANISATION STUDY ON KAR MOBILES LIMITED 21
Mission
The mission of Kar mobiles ltd is to provide:
Superior products and service to customers and maintain market leadership. Evolve as an institution that serves the best interest of all stake holders. Pursue excellence through TQM. Ensure the high standards of ethics and integrity in all actions.
Quality policy
Kar mobiles ltd is committed to comply with ISO/TS 16949 system requirement and improve customer satisfaction by:-
1. Identifying & fulfilling all requirements of the clients /customers,2. Complying with all applicable statutory and regulatory requirements.3. Providing training to practice TQM and achieve continual improvement in all areas.
Internal control system and risk management
The company continues to engage the service of an independent agency to carry out internal audit of all the company locations .The audit committee of the board approves the audit plan in the beginning of the financial year in consultation with the internal auditors, the statutory auditors and the operating management .The findings of the internal auditors are placed before the audit committee for review. The response of the operating management and counter measures proposed are discussed at the audit committee meetings. The process not only seeks to ensure the reliability of control systems and compliances with laws and regulations but also covers resources utilization and system efficacy. Risk management is an integral part of the business process. The company has mapped the risks at the business processes and enterprise levels and has evolved a risk management frame work. Metigative measures have been put in place in respect of these risks. These would be periodically reviewed by the board of directors.
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The company follows line and staff organization. The executive vice chairman who is nominated
by the board of directors, who takes decisions, regarding policy making and decisions in other
important fields, manages the company .The company is headed by Chairman under him comes
the President who in turn reports to the chairman .
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Organization chart – corporate
Various functioning departments of Kar mobile ltd:
1. Marketing.
2. Finance
3. Human resources.
Business head
Head marketing
Head finance Plant head P1&TQC
Head IS &MRP Head engineering
Head corp.HR
Plant head P2Head materials
Secretaries
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4. Information technology.
5. Productions & planning & control
1. Quality assurance.
2. Maintenance
6. Material
7. Engineering
The main departments in Kar mobiles are marketing department, Finance department, Materials
department, Productions department, Information’s systems and Personal departments. The head
of the department heads each department. The HOD directly reports to the president
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Marketing department : =The Kar mobiles ltd. has three types of customers and
there are separate marketing heads for these customers.
Structure of marketing department
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The HOD of marketing, reports directly to the president. Below him there are three managers
who are in charge of OEM, replacements and exports. There are managers and executives below
the three managers of respective departments. Original equipment manufacturers marketing or
OEM markets deals with customers like TATA, MARUTHI, and MAHINDRA etc.
Replacements marketing deals with the dealers of KML. Exports fully take care of the exports
and foreign customers of the company. The company supplies:
1. New product to existing customers.
2. Existing products to new customers.
3. New products to new customers.
HOD – MAARKETING
OEM marketing
Replacement marketing
Exports
Rail and defense
STU’S and trading
OEM and replacement
ORGANISATION STUDY ON KAR MOBILES LIMITED 27
The functioning of the marketing departments of KML takes place as follows :
The customers give a drawing of a particular product to the company. The drawing is then
forwarded to the engineering departments. They will decide the process and cycle time for the
product .Then it is send to the costing department where the cost of product is fixed. This will be
forwarded to marketing department to fix the profit margin of the product .The president, HOD
marketing and respective functional heads will be the final decision makers. After that a quote is
given to the customer. And if it satisfies the customer they will release a purchase order for the
product. The company participate in various international exhibitions, meetings people at higher
levels by DGM, various magazines are the different Medias used by KML to market the
company.
2006-07 2007-08 2008-09 % Increase
2007-08
% Increase
2008-09
Sales valves
Volume increase
Price
Increase
/(decrease)
670,354 670,354
35,210
149,950
855,514
(46,088)
126,130
-
5.25
22.37
-
(5.39)
14.74
Total sales 670,354 855,514 955,556
smj
1. Volume increase
2. Sales valves.
3. Price increase/decrease
ORGANISATION STUDY ON KAR MOBILES LIMITED 28
Country wise export valve
Countries 2006-07 2007-08 2008-09
USA
UK
SINGA/MALAYSIA/HONG
GERMANY
UAE
THAILAND
Others
171210
21224
826
92910
9296
458
37264
251213
31378
0
122009
6802
757
45820
290955
22278
364
83157
10735
3159
59738
Total 333,188 457,979 470,386
2006-07 2007-08 2008-09
ORGANISATION STUDY ON KAR MOBILES LIMITED 29
2006-07(24%)
2008-09(41%)
2007- 08(35%)
Clients / customers:
DOMESTIC OVERSEAS
ORGANISATION STUDY ON KAR MOBILES LIMITED 30
Ashok Leyland
Bajaj Tempo Ltd
Bharat Earth Movers Ltd
Cummins India Ltd
Diesel Locomotive Works
Escorts Tractors Ltd
L&T John Deere
Mahindra& Mahindra Ltd
Maruti Udyog Ltd
Same greaves Ltd
Tata Engg.&Locomotives Co .Ltd
VST Tillers & Tractors Ltd
GM EMD,USA
HATZ, Germany
Lister Petter Ltd, U.K
Lombardi SRL, Italy
Mirrless Blackstone, U.K
Steyr, China.
VEGE, Germany
Wiscon, U.S.A
Federal mogul, U.S.A
Strategic goals
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By 2008- 2013:-
SG1 -Achieve sales 15% CAGIR
SG2- Achieve 15% PBT
SG3- Increase Export Turnover to 60% of sales
SG4- Reduce internal rejections
Premachining < 1 %
Machining < 1000 PPM
Strategic Initiatives (SI)
SI 1 Enhance NPD Capability
SI 2 Reduce Cost
SI 3 Improve Quality and delivery performance
SI 4 Enlarge Export Business
SI 5 Challenge Deming Prize
ORGANISATION STUDY ON KAR MOBILES LIMITED 32
Finance departments: - Finance who reports directly to the president
there are two departments under finance department. These departments are headed by Sr. Asst –
costing and senior manager – accounts. Under these there are executives for the consent works.
Overall Finance department structure
Head finance corporate
Head finance plant
In charge payroll &treasury
In charge excise & customs
In charge bills payable
In charge costing TA bills
In charge society
In charge fitment coupons
ORGANISATION STUDY ON KAR MOBILES LIMITED 33
The finance department structure in detail:
The main functions of the department are to:
Daily routine accounting.
Preparation of statutory compliance.
Issue of payment.
Monthly P&L.
Review with AOP.
Quarterly preparation of P&L.
Quarterly audit as per SEB and published in the results in newspapers.
Preparation of P&L and balance sheet and arrange for yearly audit.
Replying for internal audit queries.
Filing of IT returns.
Business head
Head corp. finance
Head finance P1 In charge bills payable &TDS
In charge bills receivable & reconciliation
In charge liaison
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When the raw materials are purchased the stores department will hand over the Chelan and bill
along with materials receipt number to the finance department. The bill will be verified with
purchase order and if there is any difference a debit note/ credit note will be raised the payment
will be released to the suppliers on or after the due date.
For meeting expenses of various departments there is an expense format and it has to be filed and
get signed by HOD then forwarded to finance department where it is verified and sends to
cashier for release of cash.
Accounting policies:
During the year , company has exercised the option to adjust to the cost of fixed assets / foreign
currency monetary items translation difference account as contemplated in the amended
Accounting Standard 11 in respect of exchange differences relating to long term monetary items.
Impacts on the accounts for the year due to the change are NIL.
Human resources department :-
Human resource development : - Training programs are conducted throughout the year for
employees on
Attitudinal changes.
Skills development.
Quality control.
Cost consciousness.
Behavioral changes.
ORGANISATION STUDY ON KAR MOBILES LIMITED 35
Purpose :-To achieve attendance management and welfare.
Roles: -
To maintain time office activities.
To provide temporary operators/ apprentices as per plan.
Ensure employees relations.
To comply with all legal compliances.
To handle the operators performance appraisal.
Allowances /benefits to workmen / employees
Dearness allowances
House rate allowances
Conveyance allowances
Hazard allowances
Special allowances
Heat allowances
Helper allowances
Staff allowances
Lunch allowances
Attendance allowances
Leave travel allowances
Uniform allowances
Stitching allowances
Washing allowances
Canteen allowances
Children education allowances
Leave facilities
National and festival holidays
ORGANISATION STUDY ON KAR MOBILES LIMITED 36
Festival advance
Salary advance
Educational facilities
Annual award for attendance
Man of the year award
Long service award
Annual gift for production
Medical reimbursement
Incentive scheme
Promotion policy
Death relief fund
Meritorious award
Accident benefit
Incentive for family planning
Retirement benefit
Dearness allowances
It has been agreed continue the existing FDA of Rs 1450 for the settlement period without any
change or modification per month corresponding to cost of living index of 2300 points which
will be treated as irreducible dearness allowance the existing personal pay (i.e. 2000 + 1550) will
continue for those workmen/ employees confirmed on or before 30.06.1996.
Workmen or employees who confirmed after 1.7.1996 will be entitled for personal pay of Rs
1550 /- only. The variable dearness will be paid at the neutralization rate of Rs. 2.50 per point
from 2301 points.
ORGANISATION STUDY ON KAR MOBILES LIMITED 37
Shift allowances
Shift allowances be paid in the respective shifts provided by the workmen have worked for a
minimum period of half a day ( 3 hours 45 min) in the said shift.
Shift allowances payable will be as follows:
For shift commencing at 2.00p.m to 10.00 p.m Rs 7 / per shift worked.
For shifting commencing at 10.00 p.m to 6.00a.m Rs 22/ per shift worked.
Shift allowances will not be taken in to account for the purpose of calculating provident fund,
gratuity and bonus.
Staff
Total number of employees – 770
Management staff – 138
Temporary operators – 205
Apprentices – 107
Diploma operators- 52
Contract lab our – 90
Operators- 178
Staff allowances: -
Staff allowances Rs. 4.00 is not taken into account for the.
ORGANISATION STUDY ON KAR MOBILES LIMITED 38
Eligibility conditions of employees:-
Regular attendance with late coming of maximum of 3 occasions not exceeding
cumulative total of 20 minutes in a month.
Leave taken even with prior permission such as authorized leave, special leave etc, are
not eligible.
Uniform allowances:-
All confirmed employees covered by this settlement would be provided with uniforms of good
quality, detailed as below:
Workmen/ staff employees: - Providing 3 sets of uniform per annum.
Canteen: - Canteen facility provided on concession – and mutually agreed to deducted Rs .1/- per
day of attendance of employees from their salary.
Employment opportunity
It is agreed that in the matter of fresh recruitment the management will have absolute right to
make recruitments from whatever source it may deem fit. However , due regard will be given to
the application of one direct dependent (son /daughter )of this existing workmen / deceased
workmen ,provided subject to availability of vacancy and the candidate satisfying all the
requirements for the job and qualification as laid down by the management. Further no
contemporaries will be employed concurrently at any point of time.
Leave facilities: -
Leave facilities are:
Earned leave.
Casual leave.
Sick leave.
ORGANISATION STUDY ON KAR MOBILES LIMITED 39
Earned leave: - It can be availed at the rate of 1 day each on 7 occasions / 2 days each on 3
occasions in calendar year, with at least one day’s prior notice.
Casual leave:- Casual leave entertainment will be 9 days per annum who have completed 6
months continuous service in a year.
Sick leave: - Sick leave entitlement for non – ESI covered employees will be 7 days per year and
4 days special sick leave per year will be granted to all the employees.
Awards
LONG SERVICE AWARDS
SERVICE AWARD
10 years continuous service Titan watch with service certificate
15 years continuous service 140gms silver plate with service certificate
20 years continuous service 4gmsgold coin with service certificate
25 years continuous service 8 grams gold coin with service certificate
30 years continuous service 10 grams gold coin with service certificate
35 years continuous service 12grams gold coin with service certificate
Promotion policy
Employees / unionized staff will continue to be considered for promotion as per the existing
promotion policy. Fitment in the new grade consequent on promotion will be subject to the
conditioned that the promoted workman / employees do not cross the senior employees in the
new grade, except for employees who have got converted to staff/ reclassified .In such cases, the
existing practice of maintain the wage parity between the junior and senior workman / employees
ORGANISATION STUDY ON KAR MOBILES LIMITED 40
will continue till disparity is rectified. In case of promotion, the decision and placement will be at
the discretion of the management.
Management has also informed the union it will come out with new promotion policy within 3
months from date of signing of this settlement for discussion and conclusion.
Maintenance of discipline at the workplace
The workmen and the union have agreed to work for the shift hours excluding lunch
break.
The workman shall not stop their machines in between the working hours.
They honestly and sincerely work for the entire shift hours without wasting time.
Workmen shall also work any where within the line or any line wherever he is deployed
by the supervisor.
Workmen shall adhere to multi skills and multi machines manning
The workmen shall not get out of the factory premises without prior notice.
Workmen shall not loiter within the factory premises unnecessarily and waste their time.
Operators shall set their machines.
Operators shall do tool grinding / forming, when ever necessary supervisors will also
assist.
Operators have to do regular optimal checks, TPM/KAIZEN .Suggestion scheme multi
machines manning, 5s and safety.
Retirement benefit
It has been agreed to hand over a gift cheque of Rs. 6000/- to the employee who retires from the
services of the company.
ORGANISATION STUDY ON KAR MOBILES LIMITED 41
Human resources process and various policies
There are various policies and process followed in Kar mobiles, they are as follows;
Man power planning.
Sourcing of candidates.
Recruitment &selection.
Offer &appointment.
Joining formalities.
Induction.
Probation.
Special situations.
Promotions /increment.
Resignation.
Retirement.
Transfer.
Relocation for new recruits.
Compensation and benefits.
Business & travel rules.
In detail the functions of various topics in the following:-
Man power planning: - Creation of new position at all levels is done & approved by CHRM/VC.
Sourcing of candidates: - It will be done first internally for all position with in company / group.
Services of only approved recruitment consultants will be used for all recruitment.
Recruitment & selection: - Women candidates will be considered on par with male candidates for
all positions.
- Relatives of employees will not be employed in the same company.
- Internal candidates will be treated on par with external candidates for all positions.
ORGANISATION STUDY ON KAR MOBILES LIMITED 42
Joining formalities: - A comprehensive database will be created for all new employees and will
be updated regularly as it is essential for all administrative requirements.
Induction: - Structural orientation program me will be organized for all new employees.
Probation: - Here probation period is for 6 months for all the new employees.
Promotions / increments: - All promotions will be subject to vacancies existing in organization.
Resignation: - Exist interviews will be conducted in respect of all employees initiated
separation.
Retirement: - I t will be with the prior specific approval of CHRM/ VC and as per established
procedure in exceptional cases.
Compensation & benefits: - It will comply with the laws of the land.
Higher education: - It is permitted in the organization if any employee is interested to go for
higher education but issue of NOC is required for pursuing.
Various steps followed in the various processes are as follows
Recruitment & selection
Standard: - Recruitment & selection practices will be consistent fair transparent merit based and
stand up to objective external scrutiny.
Process: -
Understand job requirements.
Shortlist candidates.
Schedule interview.
Conduct interview.
ORGANISATION STUDY ON KAR MOBILES LIMITED 43
Offer and appointment
Standard: - As this represent the final and most critical stage of selection. Objective information
will be obtained through references from external sources to confirm internal evaluation of
candidates fit to the job.
Process:-
Reference checks.
Medical tests.
Verification of certificates.
Letter of appointment.
Induction
Standard: - It will be such as to instill commitment, enable new employee to network with
colleagues and settle down quickly.
Process:-
Induction.
Briefing and orientation.
Induction kit.
Mentor / guide.
Resignation
Standard: - Process will be in place to collect, analyze and constructively use the feed back
obtained from employees at the time of separation.
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Process:-
Notice period.
Treatment of employees, who leave without giving notice.
Exit interviews.
Leaving formalities.
Full & final settlement.
Service certificate.
Withdrawal of email ID
Retirement
Standard: - It is a major shift in an employee’s professional life.
Process:-
Retirement.
Notice of retirement.
Token of appreciation.
Counseling & assistance.
Exit interview.
Leaving formalities.
Union
There is a union functioning in the organization with which every 4 years they do settlement for
this they conduct meetings with the management . Even if they have any disagreement with any
of the employees or operators/ workers/ with management policies they solve these issues when
these meetings happen.
Generally these unions are formed for the over all development and to take care of the welfare
activities of the employees (workers) here management staffs are not included. Here no as such
ORGANISATION STUDY ON KAR MOBILES LIMITED 45
counseling department is functioning under HR head but they handle all the problems during
meeting with the union.
Various other tools used in Kar mobiles are as follows:-
They have a suggestion committee.
QC (quality control) circles.
QC stories.
QIT ( idea generation which is based on team performance )
Every year team performance assessment systems are their.
IT department: - This is one of the main departments of KER mobile ltd.
Without which the functioning of all the other departments may come to stand still. This
department helps in various functions. The structure of IT department is as follows;
IT department structure :
President
Senior manager
In charge IT
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The various applications used here are as follows
SAP
OFFICE 2002
OFFICE 2007
OFFICE 2010
ADOBE READER
Various operating systems are:
SAP
WINDOWS XP
WINDOWS VISTA
Functions performed here are:
Functions
Data base server AD server
Payroll TDS Mis MRP Common portal (Collection of data of all users)
Semantic back up (For storage purpose of data)
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Functions in various departments
Accounts
Engineering
Human resources
Is department
Electrical maintenance
Purchase department
NPD (New product development)
PPC (production planning & control)
Production
Quality
Sales (marketing)
IS helps in various cases like:
Time saving
Fires
Flexibility creation
Data storage
Cost of reduction to an extend
Safety
Company’s centralized data center is at Chennai.
The various SAP services are:
Email internet
ORGANISATION STUDY ON KAR MOBILES LIMITED 48
Isms
Facility management
Material management
Sales and distribution planning
Production planning
Quality management
Plant maintenance
Finance and costing
HR payroll
For marketing coupon monitoring system for sales promotion
Databases of employees are maintained
At company level each person as a head called CHAMPIONS
SAP- logical storage location etc
Production, planning & control
Production process:
It is used to determine production levels for product groups. This is based on sales forecasting
and is used to raise or lower inventories, stabilize production & planning and allow the launching
of new products on to the manufacturers range of products. Process planning determines the
sequences of operations required in the manufacture of a product or its components. Estimating
is to determine prices and predicting costs including manufacturing lead times and production
ORGANISATION STUDY ON KAR MOBILES LIMITED 49
costs. Production costs include materials, labor and general overhead costs needed to
manufacture the end product. The data for this is supplied from purchase files, route sheets and
accounts records.
Production department structure
Senior manager- engineering
President
Managers Engineers Executives
Line supervisors
Operators / workers
ORGANISATION STUDY ON KAR MOBILES LIMITED 50
The main functions of these departments are as follows:-
Design and development of valves according to the requirement of the customer.
Optimization to aid in meeting customer expectation / requirements.
Design and development of samples and submission in time.
New process development change in Engineering.
Process improvements, documentation of process, cost inputs for plant 1.
Carry out process improvements for quality improvements and cost reduction.
carry out design reviews to enhance operational
Product profiles:-
Range: -More than 600 types of valves developed over a wide range of applications.
Product: - KML specializes in supply of valve to manufacturers of large engines like
M.A.N
Mirrless Blackstone
Pielstick
Ruston
Wartsila diesel
Product classification
Engine parts Piston , piston rings, engine valves, fuel
pumps, carburetors, and bimetal bearings
Electrical parts Steering gearings gear and systems, wheel,
clutch plate and disc.
Transmission and steering Gears, steering gears and systems, wheel ,
clutch plate and disc
Suspension and braking Leaf springs, shock absorbers , brake assembly
and facings
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Equipment Head light and dashboard instruments
Others Sheet –metal parts, pressure disc castings.
The range of products manufactured, with each broad product segment having different market
structure and technology, has negated any possible concentration of the market in a few hands.
The market is so large and diverse that a large number of players can be absorbed to
accommodate buyer needs. However, there are a selected few companies that have integrated
their operations across the value chain. The key to competing in this industry is though
specialization by product –type, and integrating operations across the related area of
specialization.
The regional base of auto components manufacturers is mostly concentrated in the west, north
and south of India. The regional concentration of auto component manufacturers has been
dictated by the emergence of auto mobile manufacturers in these regions. The setup of Tata
motors, Bajaj, Mahindra & Mahindra and TVS in the 1950s & 1960s laid the foundation for the
auto component manufacturers in the west and south, whilst the entry of Maruti during the 1980s
created the base in the north.
Valve:-
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It is an ancillary unit. It is used in internal combustion engine. An engine holds a pair of valves,
one inlet and one exhaust. Every four stroke engine whether petrol or diesel, one requires
internal combustion called IC valves. In any engine per cylinder two valves to be there, one for
admitting the combustible charge into cylinder knows as the inlet valve and the other to dispel
the burnt gases to the atmosphere through the silencer knows as exhaust valve.
The valve is alloyed steel forging, the most usual alloying element being Nickel, Cobalt,
Chromium and Silicon. Some of the most popular valve steels are as follows:-
1. EN-52
2. FN-59
3. EN-51 etc.
Are martens tic valve steel and 21-4N, 21-N etc, are austenitic valve steels.
Valves material:-
Low carbon
Martens tic valve steel
Austenitic valve steel
Stainless steel
Nickel alloys
Surface management
Hard chrome plated
Tuff tried
Phosphate
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Production process : - The company manufacturers valve only after receiving the orders from its
customers. The production departments start its work when it receives order from marketing
department. According to customer requirement engineering department make sketch or model
with measurements. After customer satisfaction they fix the deal and the process begins in
material departments.
Bar cut De bur Bar grinding End touch
Forging
Heat treatment
Oil treatmentHear-treatment Straightening
Machine shop
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Bar cut:
At first, the raw materials are taken from the stores, in bar cut process they cut according to
customer’s requirement. It includes thickness of the product, size, length etc.
De bur process :
Bar cut process level some extra edges that are removed by De bur process.
Bar grinding:
In BG process an angle is made on the top of the bar.
End touch :
Next process includes the finishing of both the surfaces; this process is called END TOUCH.
Forging process:
In FG process a high voltage will be applied to one end of the bar. Due to voltage and force, a
bulb will be formed at this end and it will be pressed to give required share.
Heating treatment :
After FG process valve will be given heating for hardening tempering.
Oiling treatment:
Then OT will be applied for softening and increasing the durability of valve.
Straightening: In heating process valve becomes bend due to distortion but vehicles require
only straight valve so for becoming straight the valve, straightening process will be applied.
Above all procedure is done in forge shop. After forge shop valve will go into the machine shop
for final finishing, cleaning, polishing, marking, correct measurement and packing.
ORGANISATION STUDY ON KAR MOBILES LIMITED 55
Product development facilities : Significant portion of the group’s turnover invested in
research development simulation techniques and exhaustive testing mechanisms implemented
regarded as the industry standards.
Bar to bar process (BIMETAL):- Bimetal is used for increasing the length of the valve.
If any vehicle requires a long length then starting material of valve will be high alloy and ending
material will be of long alloy. The main aim of this process is to reduce the cost of valve;
ORGANISATION STUDY ON KAR MOBILES LIMITED 56
The following will be explained with the help of a flow chart which is as follows
Head pin Stem pin
Bar cut
Debur
Bar grinding
End touch
Friction welding
Bar grinding
Wet end
Deep de bur
Bar cut
Debur
Bar grinding
End touch
ORGANISATION STUDY ON KAR MOBILES LIMITED 57
Quality assurance department:-
Structure of the department:
Quality objectives:-
Company level data, customer requirements and business requirements are the basis for
finalizing quality objectives. A CROSS FUNCTIONAL TEAM consist of members from every
department will discuss based on the various inputs, company quality policy and finalizing the
year objective, during every financial year – end.
7 QC TOOLS ADOPTED BY THE ORGANIZATIONFOR CONTROLLING QUALITY
OF THEIR PRODUCT
Pareto chart
Plant 1
Head plant
Product audit Process audit Raw material
Gauge Materials lab Customer complaints
ORGANISATION STUDY ON KAR MOBILES LIMITED 58
Cause and effect diagram
Histogram
Stratification
Scatter diagram
Control charts
Check sheets
Quality assurance facilities:-
Hardness testers – Rockwell & Vickers
Automatic specimen polishing machine
Spectrophotometer
Metallurgical microscope
Tensile testers
Micro profile projectors
Tool- maker’s microscopes
Roundness testers
Surface roughness testers
Dial calibration testers
Cylindricity testers
Magnetic particle inspection
Ultrasonic testers
Hardness testers
Maintenance department: This department also comes under
production head only. Here for assets there is civil maintenance .There are various activities
performed here. Now the structure of maintenance department is as follows;
Maintenance department structure:-
ORGANISATION STUDY ON KAR MOBILES LIMITED 59
Department is headed by a manger. In KML they follow both breakdown and predictive
maintenance these are time based maintenance and condition based maintenance.
In KML they do sewage treatment where in the segregate the chemicals with water and these
waters are reused for gardening purpose. The max breakdown so far recorded is 4 hrs and above
and they are trying to the keep the machinery up time by 98%.
Costs incurred are:
1. Repair and maintenance cost
2. Reconditioning of old machines
Plant head
Plant head maintenance
Utilities Shop in charge
Forge shop Machine shop
ORGANISATION STUDY ON KAR MOBILES LIMITED 60
3. Machinery spares and services
4. New machine procurement
Preventive maintenance is based on manufacturer’s recommendation and also based on past
experience.
OEE (overall equipment efficiency) are calculated losses can be predicted.
Procedures for tool maintenance system are:
The objective of this procedure is
1. To maintain tooling’s properly
2. To support the production to achieve the targets on time
3. To provide valuable service to the production department.
Purchases /Materials department : This is one of the departments in Kar mobiles ltd. This
department deals with the overall dealings of raw materials in the organization.
Structure of purchase department
Purchase manager
President
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The purchase department or materials department is headed by senior manager – materials who
reports to the president. There are two plants (plant 1 and plant 2).There are also four
departments under materials department on each plants. Senior executives are responsible for
each activity. The purchase department is in – charge of all purchases made by the company.
Head of the concerned department will inform purchase department about the requirements. It is
in charge for the purchases of raw materials for the manufacturing of valves.
Corporate head
Plant 1 Plant 2
Purchases
Consumable stores
Raw materials
Sub contracting Sub contracting
Raw materials
Consumable stores
Purchase
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They will be given a three month prior intend by the production, planning and control
department which includes the require quantity of raw material and days with in which it as to be
available. Then the department will place the purchase requisition to the suppliers. When the
goods are received it is given a GR number (goods receipt number) and is transferred to stores.
The user will raise the indent in the system about the quantity required and given reservation
number for the required raw materials. Based on the order the materials will be issued. The
company has a storage capacity of 7000 items in their department.
The lead time for imported materials is 6 months and materials reorder level is calculated using
SAP. Approximately there will be 80- 90 tons of order is placed. Materials are released based on
first – in – first out basis.
Major suppliers are:
Star ware India ltd.
Kalyani carpenters.
Jigar marketing pvt ltd.
Hall mark steel pvt ltd.
Carpenter technology (us).
Thyssen Krupp (Germany).
Mitsui (Japan).
In canal pvt ltd.
The stores consist of direct materials i.e. raw materials and indirect materials which consist of
consumables, mechanical and electrical spares.
Engineering department: Engineering department in KAR
mobiles as various functions. This is one particular department which takes care of the whole
ORGANISATION STUDY ON KAR MOBILES LIMITED 63
technical functions of the organization. It is headed by president followed by many other
functional heads to carry out their activities .Now the structure of engineering department is as
follows;
Structure of engineering department
President
Head engineering
ORGANISATION STUDY ON KAR MOBILES LIMITED 64
The main responsibilities of this department are as follows:-
1. Translation of customer drawing into plan.
2. Assess capacity of the machine.
3. New product development.
4. To procure equipments/ machinery from local/overseas.
5. To handle the equipments.
6. Method of manufacturing.
7. Machine building.
8. Designing and drafting of tools.
In charge ME forge shop
In charge ME Machine shop
In charge capex and machine build projects
In charge tooling
In charge Machine building and tryouts mechanical
In charge design and drafting
In charge tool room In charge tool crib design & drafting
In charge new product development
Design & dep’t
Testing capabilities
ORGANISATION STUDY ON KAR MOBILES LIMITED 65
9. Capital expenditure.
Based on the customer requirements the engineering department translates the customer drawing
in to plan and they try to assess the present capacity and method of manufacturing and try to
procure the required equipment and design the dice which are designed in – house/ procured
outside. The company uses the normal drafting software for designing the product .Nearly 230-
240new products are developed in a year.
NEW PRODUCT DEVELOPMENT – KML
Dedicated team of engineers
Structured NPD process in place
CFT approach
Design reviews
Design & process FMEA
CAD software – CAD 2000. pro E
Capability to co – design
Can leverage REVL’s facilities and capabilities.
Design and development capabilities:
Centralized R&D and product engineering function responsible for customer interaction
and product design.
Specialists in IC engines, CAE & CAD application.
NPD process aligned to ISO /TS 16949:2002 requirements.
Concepts like QFD, design reviews adopted from Japanese practices.
ORGANISATION STUDY ON KAR MOBILES LIMITED 66
Software capabilities – AUTOCAD, PRO –E & analysis.
Testing capabilities:
Endurance test done for concept proving and design validation.
Power , SFC in the engine and wear &distortion on the product are measured
Valve temperature measurement can also be done based on customer requirement.
ORGANISATION STUDY ON KAR MOBILES LIMITED 67
S= strengths
1. Recognized as a medium &large valve manufacturer.
2. Strong presence in locomotives segments.
3. High brand equity in served markets.
4. Excellent relationship with key customers.
5. Vast dealer’s network & field force.
ORGANISATION STUDY ON KAR MOBILES LIMITED 68
6. Technical collaboration with TRW Inc U.S.A.
7. Export oriented plant at Tumkur.
8. Specialization in valves.
9. Practice of TQM resulting continuous productivity gains.
10. Capability to manufacturer large valves.
11. Skilled manpower.
12. Wide range of products at industry level.
13. Experience in handling overseas customers.
14. The company as wide dealers network and field force spread across around the
world.
15. Specialization in valves.
16. The company has a capacity to produce 8 million valves per annum.
17. Provide effective information support.
18. Research & development to efforts to upgrade products /process have continued to
yield good results.
19. Adhere to strict quality controls.
W=weakness
1. Inadequate focus on cost reduction.
2. Lack of process robustness.
3. Limited knowledge of large valve manufacturing.
4. Limited knowledge of large valve markets.
5. Low investment in technology up gradation.
6. Highly sensitive raw materials.
ORGANISATION STUDY ON KAR MOBILES LIMITED 69
7. Inability to meet the requirements.
8. Low productivity.
9. Inadequate failure.
10. Communication gap/increasing low volume requirements.
11. Changing product or market mix.
12. Poor process capability.
13. Inadequate focus on exports.
14. Poorly maintained machines.
15. Weak in technological innovations.
16. Lack of pride in workmanship.
17. Insensitivity to customers.
18. High wage cost.
19. Inadequate systems.
20. Low competencies.
21. The company is exposed to cyclical downturns in the automotive industry.
22. Dependence on original equipment manufacturer’s.
23. The company is lacking up funds in idle assets there by resulting in improve cash
management.
24. Longer operating cycle resulting in increased working capital requirements.
25. Due to increased competition and pressure from OEM customers especially in
passenger car segments, the company product prices may come down in future which
may have an adverse effect on profits of the company.
O= opportunities
1. India has accreted the effects of global slump and continues to grow at a healthy 7.8 %.
2. More and more multinational company is now targeting India as the hub for
manufacturing and exporting.
ORGANISATION STUDY ON KAR MOBILES LIMITED 70
3. Many global automobiles manufacturers have set up bases here and actively pursuing
sourcing from here .This provides good opportunity to component manufacturer for
accelerated growth.
4. Outsourcing by valve manufacturers in high cost countries.
5. Increased outsourcing by international customers.
6. Growth opportunities in after market.
7. The continued attraction in Indian auto component industry as an outsourcing hub
presents immense opportunities of growth.
8. Win market share from high cost competitors in over seas market
9. Exploit large & growing domestic two wheeler market.
10. Participations in global out sourcing.
11. Manufacturing /trading of related engine components.
12. CNC machining.
13. The company is exploring growth opportunities while retaining current customers who
are likely to recover once economic scenario recovers in U.S.A. and Europe.
14. Significant export opportunities may be realize through diversification of export basket.
T= threats
1. Dumping from china & cheaper imports from other low cost countries.
2. More competition since there are no growth opportunities for MNC’s elsewhere.
3. The presence of large counterfeit components markets poses a significant threat.
4. Volatility in commodities and exchange rates.
ORGANISATION STUDY ON KAR MOBILES LIMITED 71
5. Price competition from other emerging countries.
6. Increasing domestic competition.
7. Volatility in commodities & exchange rates.
8. Limited growth rate in the after market as a result of enhanced durability of engine
valves.
9. The presence of superior products in the replacement market.
10. Volatility in commodity prices steel and other inputs.
11. Currency fluctuations.
12. Competition from Italy, Argentina, China, Taiwan.
13. Imports pose price based competition in the replacement market.
14. Due to increased competition and pressure from OEM customer. Especially in passenger
car segments. The company’s product prices may come down in future which may have
an adverse effect on profits of the company.
15. The major portion of the company export receivables are denominated in US dollars
while most of the input costs are incurred in Indian rupees & Japanese Yen .The
strengthening of Indian rupee with respect to USD could adversely impact the
profitability of export sales and this situation could continue if the Indian rupee continues
to appreciate against USD.
16. Further slowdown in the domestic economy may reach in lower off take by OES and
institutional customers.
ORGANISATION STUDY ON KAR MOBILES LIMITED 72
The First Indian Company to sign a vendor partnership with General Motors Manufacturing in
technical collaboration with TRW Inc, USA Client list featuring reputed brands like Miff less
Blackstone, Pielstick, Ruston, Wartsila Diesel We are looking for experts to drive our global
excellence further.
ORGANISATION STUDY ON KAR MOBILES LIMITED 73
Kar Mobiles Limited is part of the RANE Group, a world class automotive components
manufacturer recognized as a preferred supplier to major OEMs in India and Overseas. With
over 3 decades in the manufacture and supply of Internal Combustion Engine Valves, Kar
Mobiles is TS16949 certified, practicing TQM as a way of life. At present we are looking for
experienced professionals with a passion for leadership to drive operations at our manufacturing
plants in Peenya and Tumkur.
Some measures to improve the current scenario of the organization:
Need to improve its investment strategy
Need to improve the marketing strategies of the company
Need to promote export import for hike in profits.
Need to bring lot more innovative strategies into action.
Need to develop the functional skills of the employees with lot more training and
developmental activities.
ORGANISATION STUDY ON KAR MOBILES LIMITED 74
The Quest towards Profitability
While capital and management needs for manufacturers of different sizes differ, the basic principles
applicable to every business remain true for manufacturing processes both large and small. The common
ORGANISATION STUDY ON KAR MOBILES LIMITED 75
challenge for any manufacturer is to find a way of producing as many items at the lowest cost possible to
ensure maximum profitability, which is what sustains the continued operation of any business.
Economies of Scale
Large-scale operations benefit from economies of scale. By buying raw materials in bulk, a business
could get contracts for a lower price, reducing the cost of material per unit of goods produced. Expanding
the scale of one’s operation has the same result – lower cost of production for each product made.
Economies of scale can also be obtained in the area of marketing. The more products are sold, the wider
the range at which advertising cost can be spread over.
Technology and Competition
Having lower cost of production is an edge against competitors, particularly for a business that produces
goods whose price factors much on their appeal to customers. Competition in this category of goods has
the effect of lowering the price of the merchandise. In general, competition can also drive innovation, and
encourage efficiency resulting to newer products that are better and more diverse. For any business, it is a
constant challenge to capture a part of the market, and keep or increase that share relative to competitors.
Many factors can lead to the failure of a business; one of these is failing to keep up with technology.
With all these measure an organization like KAR MOBILES LIMITED can achieve its desired
goals and success and can also sustain in the market in the long run …..
ORGANISATION STUDY ON KAR MOBILES LIMITED 76
1. KAR MOBILES JOURNALS.
2. ANNUAL REPORTS OF KAR MOBILES LIMITED.
3. GOOGLE WEBSITE
4. BUSINESSS MAGAZINES.
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5. BUSINESS TIMES NEWS PAPRES ETC...
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