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Organizational study In


Department of MBA, ASIET.


Organizational study In1.1 INTRODUCTION The Organizational Structure Study at Apollo Tyres Ltd is a humble effort to understand and comprehend about the organization. Here I have tried to make a study on its success, particularly trying to concentrate on the structure of the organization and the role of its various departments. The SWOT analysis and the financial analysis are also enclosed in the report. Apollo Tyres (ATL) is engaged in the manufacture of automobile tyres and tubes at Perambra, Kerala; Vadodara, Gujarat and Pune, Maharashtra. Mahindra and Mahindra and TAFC are its major OEM clients. The company was incorporated in 1972 and commenced its production in 1977. It was the first to receive the ISO 9001 accreditation in the Indian tyre industry for its entire range of brands. ATL took over Premier Tyres in Apr.'95 in which its sick Stallion Tyres came under the Apollo brand name. In 1999-2000, the projects of radial passanger capacity of 2000 tyres per day at Vadodara plant and 50000 two/three wheeler tyres at conversion unit have been successfully implemented, this has resulted in improving market shares in the respective segment.



The requirement to undergo training in an organization is a dynamic exposure to the management students during their course of study. The objective of the study is to: 1. Understand the structure and function of Apollo Tyres, Perambra. 2. Understand how the different departments function and the internal activities between them. 3. To know the strength & weakness of the company The study is to have an exposure into the functioning of the organization and its different departments.

Department of MBA, ASIET.


Organizational study In1.3 SCOPE OF THE STUDY

The study was done during the month of May 2006. The organization selected by me to conduct the study is Apollo Tyres Limited, Perambra.


METHODOLOGY OF THE STUDY The study was undertaken personally visiting the plant at Perambra Plant,

Thrissur and was done over a period of 14 days. Both primary and secondary data are used for the completion of the organizational study. Primary data were collected through personal interview and secondary data were collected from the organizational manual and different department manuals.

1.4.1 DATA COLLECTION1.4.1.1 PRIMARY DATA COLLECTION Direct personal interview with manager of concerned departments, detailed interview with department heads and lower level workers in the company.

SECONDARY DATA COLLECTION 1. Official records 2. Annual reports 3. Organizational manuals 4. Department manual. All these were put together in the preparation of this report.

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Organizational study In1.5 LIMITATIONS OF THE STUDY

The Major Limitations are

1. The time allowed for completing the organizational study is 15 days. It was not possible to do an in depth study into the organization.

2. Confidential Documents The company was reluctant to reveal some official reports and documents as it is kept confidential.


Working Hours The study could be conducted only on the day working hours. Ideally the working conditions of the employees during the evening and night shifts could also have been studied

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Organizational study In


HISTORY OF TYRES The most important application of rubber relates to the transport sector, of

which the tyre Industry consumes over 60% of the total rubber produced. After the invention of the wheel by the Sumerians 5000 years ago it was refined over the ages. In the year 1846, R.W. Thomson invented the predecessor of the pneumatic tyres of the modern age. From there, the tyre industry has grown to be one of the largest industry of today. During the last 20 years tyre has been virtually reinvented with most modern technologies like steel radial tyres, a milestone in the tyre technology. Tyre sector is experiencing a rapid improvement with the advent of newer technologies. A tyre is an annular round shaped container made of elastic material, reinforced by textile materials and tightened by metal rings. Geometrically it is a torus, mechanically it is a pressure container, chemically a tyre consists of materials from long chain macromolecules usually different types of rubber. A pneumatic tyre is a fabricated structure, which holds air that carries the load of the vehicle with which it is attached to. 2.2 INDIAN TYRE INDUSTRY Indian tyre industry is two tier. The Tier-I players (top six tyre companies) account for over 85% of industry turnover containing a well diversified product-mix and presence in all three major segments i.e. replacement market, original equipment manufacturers (OEMs) and exports. Tier-II companies are small in size, mainly concentrating on production of small tyres (for two/three-wheelers etc.), tubes and flaps and the replacement market. The demand and growth for the industry depends on primary factors like the overall GDP growth, agricultural & industrial production,growth in vehicle demand and secondary factors like the infrastructure development, prevailing interest rates and financing options etc.

Department of MBA, ASIET.


Organizational study InThe truck and bus market is the largest segment of the industry accounting for approx. 70% of industry turnover in terms of value and tonnage - a segment in which Apollo Tyres has maintained the leadership position amongst the industry players for quite a few years. In the year 2005-06, the truck and bus tyres segment volumes witnessed a healthy growth of approx. 8%. Passenger car segment tyres volumes grew by approx. 13% in the year under review. Steep rise in raw material prices with limited pricing flexibility impacted the profit margins of all the players. This was the third consecutive year of raw material cost- push both for natural rubber and crude oil linked raw material basket .Consistent rise in major raw materials costs (natural rubber, nylon tyre cord, carbon black, synthetic rubber) have resulted in pressure on the margins of the tyre companies despite good topline growth. In fact some of the major tyre companies are operating at break even situation. Tyre exports are increasing consistently and the industry saw a growth of approx. 9 % in this area in the year under review. The radialisation in the important commercial vehicle segment is still at a mere 2%. This has not really picked up pace. Going forward, we expect it to gather some momentum but still levels of radialisation in this segment are predicted to be around 10% in five years time. The year ahead still looks tough with no respite in the raw material prices. The cost- push continues unabated and with the industry players reluctant to take large price increases, the challenge on profit margins will stay. The story on the demand front though looks good in medium term with the economy continuing to do well. 2.2.1 HIGHLIGHTS

1. The fortune of this industry depends on the agricultural and industrial performance of the economy, the transportation needs and the production of vehicles. Department of MBA, ASIET.-7-

Organizational study In2. While the tyre industry is mainly dominated by the organised sector, the unorganised sector holds sway in bicycle tyres. 3. In the last five years (1994-95 to 1998-99), the industry managed to achieve a compounded annual growth of only 4.40 per cent. However in the last fiscal the industry registered a growth of 7 per cent. 4. Natural rubber constitutes 25 per cent of the total raw material cost of the tyres. 5. The ratio of natural rubber content to synthetic rubber content is 80:20 in Indian tyres, whereas world wide, the ratio of natural rubber to synthetic rubber is 30:70.


KEY INDUSTRY DATA Industry Turnover : Rs. 14,250 crs Total No. of Tyre Companies : 43 Industry Capacity Utilization : Estimate: 89% Major Players : Apollo Tyres, Ceat, JK, MRF Commercial Vehicles : approx. 67% by Revenue (INDUSTRY DATA: SOURCE ATMA FOR FY 2004 05)

Department of MBA, ASIET.


Organizational study In CHART NO: 1 2.3THRISSUR


Main Gate

Chief Security officer Administrative Office Reception Parking Area

Time Office Diesel Storage Canteen Main Office Static Water Tank Boiler Utility First Aid & Ambulance Fire Station Scrap

Diesel Storage

Shop Floor

Diesel Power Plant

RFL Storage O/E Storage



Department of MBA, ASIET.


Organizational study InAPOLLO TYRES LTD. is currently th the 16 largest tyre manufacturer in the world and the second largest in India. It is also one of the fastest growing tyre companies in the world. A Poised for an undisputed leadership position in the very near future, Apollo currently enjoys the largest market share in heavy commercial vehicle and light truck tyres. For the past few years, Apollo has registered not only the highest sales and turnover growth in the industry but is also by far the most profitable. Innovative marketing practices and cost control at every level have made a considerable difference to the company's bottom line. Apollo Tyres is also the first tyre manufacturer to have obtained an ISO 9001 certification for all its facilities in October 1994. The company believes in maintaining strict quality control standards to enhance customer satisfaction at all times. These have resulted in recognition in terms of awards and certifications for introducing some of the best quality management systems in the industry. Apollo was also one of the few tyre manufacturers to obtain the QS 9000 certification in March 2001.All Apollo products conform to the standards prescribed by the Government of India (DGS&D) and to at least one or more of the following standards: the Indian Defence Ministry (CQAV), the Department of Transport, USA (DOT), the European Economic Commission (ECE), the Saudi Arabian Standards Organisation (SASO) and Covenin of Venezuela. BUSINESS ACTIVITY: Manufacture and sale of tyres ALLIED BUSINESSES: Tread rubber for commercial vehicle tyres and distribution of alloy wheels for passenger cars FINANCIAL YEAR: April 1 to March 31 NET SALES TURNOVER FY 2005-05: Rs3002.12 Crs as on March 31, 2006

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NO OF EMPLOYEES: Approximately 7,000 REGISTERED- OFFICE: 6th floor, Cherupushpam building Shanmugham road Kochi-682 031, Kerala


Apollo House Gurgaon Haryana


1. Onkar S Kanwar (Chairman & Managing Director, Apollo Tyres Ltd) 2. T Balakrishnan (Principal Secretary, Industries, Government of Kerala) 3. K Jose Cyriac (Principal Secretary, Finance, Government of Kerala) 4. Jean Marc Francois (President, Asia-Pacific, Groupe Michelin) 5. Nimesh N Kampani (Chairman, J M Morgan Stanley Pvt Ltd) 6. Neeraj R S Kanwar (Chief Operating Officer, Apollo Tyres Ltd) 7. Raaja Kanwar (Managing Director, Apollo International Limited) 8. Dr S Narayan (Former Principal Secretary to the Prime Minister of India) 9. M R B Punja (Former Chairman, Industrial Development Bank of India) 10. K Jacob Thomas (Managing Director, Vaniampara Rubber Co Limited) 11. Sunam Sarkar (Chief, Strategy & Business Operations, Apollo Tyres Ltd)

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Organizational study In12. Shardul S Shroff(Advocate & Managing Partner, Amarchand & Mangaldas and Suresh A Shroff & Co) 13. Robert Steinmetz(Former Chief of Intl Business, Continental AG, Germany) 14. U S Oberoi (Chief, Corporate Affairs, Apollo Tyres Ltd) 2.4.2 BANKERS

SBI, SBM, SBP, BANK OF INDIA, ICICI BANK LTD, UNION BANK OF INDIA AND THE FEDERAL BANK LTD, CANARA BANK, CITI BANK, IDBI BANK LTD, STANDARD CHARTERED BANK 2.5 MANUFACTURING FACILITIES Overall Capacity: Over 700 tonnes per day (250,000 tonnes per annum) Total tyres produced in 2005-06: Over 6.7 million units 2.5.1 PERAMBRA PLANT (Perambra, Cochin, Kerala) Year of operation: 1977 Perambra plant is the largest employer of people amongst the private sector companies in Kerela. Products manufactured Truck bias Light ruck bias Farm radial and bias 2.5.2 KALAMASSERY PLANT (Kalamassery, Cochin, Kerala) Year of operation: 1962 Kalamassery Plant commenced its operations in September 1962 It is acquired in 1995

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Organizational study InProducts manufactured Truck bias Light ruck bias Farm bias 2.5.3 PUNE PLANT (Ranjangaon, Pune, Maharashtra) Year of operation: 1996 Apollo Tyres built a new plant at Ranjangaon at Pune in 1997 to manufacture tyre tubes Products manufactured Automotive tubes 2.5.4 LIMDA PLANT (Limda, Baroda, Gujarat) Year of operation: 1991 The Limda plant came into operation in 1991. It is now the hub for Apollo's radial tyre production. Products manufactured Truck bias Light truck radial and bias Farm radial and bias Passenger car radial 2.6 PRODUCT RANGE Truck and Bus Bias, Light Truck Bias and Radial, Passenger Car Radial, Farm Bias and Radial 2.6.1 TRUCK

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Organizational study In1. High Load Technology Brands: Loadstar Super, Loadstar Super Gold, Loadstar Super Hercules, Kaizen 50L 2. Load & Mileage Technology Brands: XT7 Gold, XT7, XT7 Haulug, Amar Deluxe, Amar, Kaizen 36 L, Kaizen 99R Plus,Kaizen 77 R, Kaizen Commando 3. Premium Mileage Technology Brands: XT9 Gold, XT 9, Amar Gold,Kaizen XDT 4. Mileage Technology Brands: Champion Gold, Champion, Amar AT Rib, Kaizen 27L, Champion DXL



1. High Load Technology Brand: Loadstar 2. Load & Mileage Technology Brand: Milestar 3. Premium Mileage Technology Brands: Amar Deluxe & Amar Gold (rib),XT9 & XT-9 Gold (lug), Duramile (radial) 4. Regular Mileage Brand: Champion



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Organizational study In1. Passenger Car Radial Tubeless Brand: Acelere 2. Passenger Car Radial Tube Type Brand: Amazer XL 3. 4x4 Tubeless Brand: Hawkz 4. 4x4 Tube Type Brands: Amazer XL, Hawkz, Storm 5. Van Tubeless Brand: Quantum 6. Van Tube Type Brand: Quantum 2.6.4 FARM

1. Cultivation Brands: Krishak Super, Sarpanch 2. Haulage Brand: Power Haul 3. Mixed Application Brands: Farm King (radial), Krishak Premium (bias) 2.6.5 INDUSTRIAL 1. Mining Brand: Y-Lon


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2.8 2.8.1

APOLLO TYRES VISION & VALUES VISION: A leader in the Indian tyre industry And a significant global player, Providing customer delight And enhancing shareholder value. Though Apollo is presently one of the leading tyre companies, the continued success will depend on its future plants. The company is laying steps for increasing production capacity. In the future there is a plan to

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Organizational study Inmanufacture tyres with matching colors to the vehicles according to the needs of the customers. 2.8.2 CORE VALUES CREATE It means C- Care of Customers R- Respect for Associates E- Excellence through Teamwork A- Always Learning T- Trust Mutually E- Ethical Practices 2.8.3 OBJECTIVES OF APOLLO TYRES LTD

The corporate objectives of Apollo Tyres Ltd are as follows. 1. Employee satisfaction. 2. Customer delight. 3. Revenue growth. 4. Operating margin improvements. 2.8.4 STRATEGIC VISION Apollo Tyres Ltd. aims to be the supplier of choice for its entire customer base. To achieve this we invest in Research & Development, Technology Enhancement and Quality to ensure the superiority of our offerings in all aspects. We have already commenced on the journey to going beyond being a mere tyre supplier to our consumers to becoming a complete solution provider for all their transportation needs.

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Organizational study InWe see growth along two paths: Offering a wider suite of products to our current customers and ensuring that an ever-widening circle of consumers gets to enjoy the benefits of an Apollo experience. On the first path we have already launched a range of alloy wheels for new generation tyres that complement our high performance tyre offerings. More such related products and services are on the way. To reach out to newer customers we are constantly on the lookout for new products and fresh markets where we can make a difference. These markets could be serviced out of our existing facilities or new ones could be acquired or built, to ensure customer proximity.


COMPANYS PHILOSOPHY ON CORPORATE GOVERNANCE At Apollo Tyres Ltd., corporate governance is all about the processes, which

involve direction and control of affairs of the Company in a fashion that ensures optimum returns for the stakeholders. Corporate governance is a broad framework, which defines the way a corporate body functions and interacts with its environment. It is a combination of voluntary practices and compliance with laws and regulations leading to effective control and management of the organisation. Your Company is sincerely following the philosophy of good corporate governance by creating and holding strong business fundamentals and delivering high performance through relentless focus on the following: 1. Transparency by classifying and explaining the Companys policies and actions to those towards whom it has responsibilities, i.e. maximum possible disclosures without hampering the Companys and shareholders interests. 2. Accountability whereby even though the management has the executive freedom to drive the enterprise towards growth, it chooses to use this freedom within the framework of effective accountability and full responsibility.

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Organizational study In3. Professionalisation ensures that the management teams at all levels are qualified for their positions, have a clear understanding of their roles and are capable of exercising their own judgement, keeping in view the Companys interest, without being subject to undue influence from outsiders. 4. Trusteeship brings into focus the fiduciary role of the management to align and direct the actions of the organization towards creating wealth and shareholder value. 5. Corporate Social Responsibility ensures the promotion of ethical values and setting up exemplary standards of ethical behaviour in our conduct towards our business partners, colleagues, shareholders and general public, i.e. abiding by the laws, showing mutual respect and acting with honesty and responsibility. Corporate social responsibility ensures that the Company contributes to societys overall welfare by undertaking not-for-profit activities, which could benefit all or any of its stakeholders in society. 6. Safeguarding Integrity ensures independent verification and truthful presentation of the Companys financial position. For this purpose, the Company has also constituted Audit Committee, which pays particular attention to the financial management process. 7. Continuous focus on training & development of employees and workers to achieve the overall corporate objectives. Your Company is open, accessible and consistent with communication and shares long-term perspective and firmly believes that good Corporate Governance practices underscore its drive towards competitive strength and sustained performance. Thus, basic Corporate Governance norms have been institutionalized as an enabling and facilitating business process at the Board, Management and operational levels.

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Organizational study In2.9 KEY MILESTONES

TABLE 11972 The company's license was obtained by Mr Mathew T Marattukalam, Jacob Thomas and his associates 1974 The company was taken over by Dr. Raunaq Singh and his associates 1975 April 13, Perambra Plant Foundation stone was laid down. 1976 Apollo Tyres Ltd. was registered. 1977 Plant commissioned in Kerala with 49 TPD capacity. 1982 Manufacturing of Passenger Car Radial Tyres in Kerala. 1991 The second plant commissioned in Baroda. 1995 Acquired Premier Tyres Ltd. in Kerala. 2000 Exclusive Radial capacity established at Baroda. 2003 Radial Capacity expanded to 6600 tyres per day. November 17, JointVenture with Michelin 2004 Launch of Apollo Acelere- H Speed Rated Car Radials. 2005 April 13, Perambra Plant completes 30 Years. 2006 January 30, Dunlop South Africa is acquired

CHART NO: 3 2.10 ORGANISATION STRUCTURE OF ATLManager Purchase Department of MBA, ASIET.- 20 -

Purchase, RMS, FGS, Engg goods

Organizational study In

Manager Systems Manager PPC


PPC Mech.maint, Electrical&electroni cs insrumentation, Design & projects civil, utilities Production

Division head Engg.

Division head production Unit Head Division head Technical Division head HR Assoc. manager (Industrial engg. Dept) Division head commercial Manager (Quality assurance)

Tyre Engg, heat engg, compounding HR, IR, time office, security, safety,welfare.admin Industrial Engg

Accounts, finance, costing, excise

Quality assurance, ISO-9000, QS-9000

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HUMAN RESOURCES DEPARTMENTHuman resources play a crucial role in the development process of the present

economy. Though the exploitation of natural resources, availability of physical and financial resources and international aid play prominent roles in the growth of modern economies, none of these factors is more significant than efficient and committed manpower.

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Recruitment is done through advertisement and employment exchange. Candidates are called for interview and final decision is with the chief executive. As of now there are no major constraints in attracting the right talent since the organisation is a reputed one and the compensation package is really attractive. TRAINING Department of MBA, ASIET.- 24 -

Organizational study InAs jobs have become more complex, the significance of employee training has increased. The modern complex society has created intense pressure for organisation to readapt the produce and services produced as a competitive product. This has necessitated raising the skill level and adaptability of employees. Apollo provides training for both managers and workers. Training program for managers consists of both internal and external program. The workers undergo internal training programmes conducted by experts. External training is done by deputation to professional training centers. A separate register is kept for recording the training activity the employee has undergone. The human resource department selects candidates for training based on the advice of department heads. For this performance appraisal reports are considered. Sometimes random selection of the candidates for training is also done. The effectiveness of the training program can be adjudged by providing the trainees with a feedback format. However employees are of the view that personal interview should be conducted to assess the effectiveness of the training program. TIME OFFICE

The department, is concerned with registering the time in and time out of the workers. Other activities related are; payment of wages, incentives, leaves etc. A separate register is kept for different shifts. A leave book is maintained and it contains: 1. Leave balance 2. Leave credited 3. Leave awaited The daily attendance report for employees specifies the following: 1. Section department. 2. Shift 3. Date 4. Clock no. Current Working Time

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Organizational study In5. Grade 6. Human resource worked 7. Clock no. 8. Scheduled shift 9. Human resources worked The daily attendance report is verified by the supervisor, shift engineer and shift superintendent/department head. Working Hours 6 a.m to 2 p.m 2 p.m to 10 p.m 10 p.m to 6 a.m 9 a.m to 5 p.m Over Time

A Shift B Shift C Shift G Shift

* Trainees will be generally put in general shift. Salary Payment

All supervisory personnel are required to open SB account with the South Indian Bank Ltd, Perambra and intimate the account number to accounts department who in turn will remit the salary. In case of non-supervisory personnel cash payment is done in the following dates: Staff and service staff: Last working day of the month Production/engineering workmen: Seventh working day of succeeding month Entry and Exit

All employees are given photo identity badge and all outsiders entering are issued a Visitor badge. The security section regulates the entry and exit of the personnel and material to the factory. In case of materials, gate pass is necessary for

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Organizational study Inboth entry and exit. Out-pass system is also there, where the time for INS and OUTS are recorded by the security officer at the gate. Attendance Procedure

Identity badges with the photo of the respective personnel are supplied to the employees. On arriving for duty at the factory each person punches his/her attendance by inserting the badge in the electronic punching system provided at the time office. This process is repeated while leaving the factory also. Attendance is crosschecked with the attendance report of the workman and the attendance register maintained at the various sections for the staff and managerial persons. INDUSTRIAL RELATIONS A good industrial relation exists in the organization. The management and the employees jointly find the solutions for the problems. There exists a good relation between employer and employee. There are four main trade unions recognized by the company. 1. ATEU (Apollo Tyres Employee Union) with the political influence of CPM 2. ATSWU (Apollo Tyres Staff and Worker Union) with the political Influence of INTUC 3. ATMS (Apollo Tyres Mazdur Sangh) with the political influence of BMS 4. ATWM (Apollo Tyres Workers Movement) The trade union which get at least 20% of vote of total strength are recognized by the management. The management has introduced a long-term settlement (LTS) plan, which is nothing but a collective bargaining agreement. The decisions taken jointly by the trade union and the management. Also as part of the HR initiatives employee involving them in productivity related issues such as quality circles and professional circle, a social gathering such as factory day and other celebrations encourages Participation. SAFETY

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Organizational study InThe organisation follows all the provisions under the Factories Act 1948. The amendment there in is also being followed here. The personnel are given the safely equipment and the directions are given for the same. There are safety directions displayed at noticeable points and around the plant premises. In Apollo tyres a separate safety book is given to each employee, which prescribe certain rules and procedures inorder to create a working environment free of accidents. No major accident has occurred in the plant for the past ten years. The following are safety policy of ATL: 1. Accidents resulting in personal injury and damage to property and equipment represent needless human and economic waste, which must be prevented by every reasonable means available. 2. All personal injuries are prevented. The protection of human lives demands a complete and continuing effort to eliminate accident injury.

3. Officers of all levels have as a primary responsibility for the safety and well being of all persons who report to him.

SECURITY The security division of ATL is very well managed. It controls the

movement of both material and men into the organisation. Security staff headed by a chief security officer, work under 3 shifts. To facilitate the security measures, single point entry is adopted to control visitors and material. Separate gate passes are issued for materials section-wise. The various sections to which gate passes are issued: 1) Raw material stores Department of MBA, ASIET.- 28 -

Organizational study In2) Engineering goods stores 3) Finished goods scores Visitors passes are also issued. Further more there are periodical checks around the plant and security lights are provided at vantage points. The personnel are allowed to leave the factory only at the end of the shift except for other demanding reasons. WELFARE

The aim and objective of welfare fund shall be to render financial assistance and to encourage cultural, sports, social, games and other welfare activities among the members and to foster among them a spirit of mutual friendship, co-operation and understanding. Welfare activities are of two types namely, 1. Statutory 2. Non-Statutory or settlement grievances STATUTORY ACTIVITIES

(a) Employee Provident Fund and Family Pension Scheme The employee contribution towards PF (provident fund) and FPF (family pension fund) is 12% of monthly salary (Basic+DA) with monthly contribution by the company. The employees are eligible for interest @ 12% on total contribution. It is calculated monthly. The member in the event of permanent disability, super annuation or retrenchment can withdraw the amount accumulated in PF. In the event of dying in harness the amount will be paid to the nominee. The coverage of FPF, which extends to employee, spouse, minor sons, and unmarried daughters, provides for pension at specified rates to the family of the deceased member. (b) Employee State Insurance (ESI)

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Any employee drawing a salary less than 6500 per month (excluding the conveyance and washing allowance) will be covered by this scheme. It is applicable for both accidents and sickness. The employees will get free treatment and compensation for the days they are absent due to illness or accidents. Employees have to contribute 1.75% of his wages to ESI fund. Employer will contribute 4.75%. Medical assistance will be given to the employee and his family. (c) Gratuity An employee is entitled to receive gratuity if he has completed 5 years of continuous service with the company. The qualifying period of 5 years is not necessary in case where the termination of service is due to death or total disablement. It is computed by dividing monthly salary/wage by 26 working days and multiplying the quotient by 15 days and no of years. SETTLEMENT GRIEVANCES

(a) Group Savings Linked Insurance Scheme (GSLIS) The employee pays the premium and the employer will only act as a Coordinator by deducting the monthly contributions from the salary/wage of the employees and remitting them to the LIC. In the unfortunate event of death of an employee the Insurance amount will become due for payment. On cessation of service the entire accumulated amount with interest standing to the credit of the employee in his savings account will be refunded. (b) Group Personal Accident Insurance Scheme (GPAIS) All employees outside the purview of ESI are insured for an amount equal to 48 months salary (Basic+DA). The company in the event of death or permanent total disablement due to accident pays the insurance premium. The amount of compensation payable will be equal to 100% of the capital sum insured.

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Organizational study In(c) Group Mediclaim Insurance Policy (GMIP) The mediclaim policy coverage was revised from the existing Rs 15000 to Rs 20000 per member per year. It is also agreed to extend the coverage of this scheme. It is also agreed to extend the coverage of this scheme to the parents of the employees. The management agrees to reimburse 50% of the insurance premium per year payable for employees, spouse, children and parents of the employees subject to a maximum number of six persons per family. These changes will be effective from 1st January 2000 onwards. (d) Two Wheeler Loan Interest Subsidy Scheme Management agrees to reimburse 70% of interest on Two wheeler purchased and owned by the employees as subsidy for a maximum loan amount of Rs 50,00,000 (maximum price of Rs 50,000/ Two wheeler) each in every year till next settlement. This interest subsidy will be given only for the un-defaulted payments. Interest accrued on defaulted payments will not be subsidised. Priority for this benefit will be based on service seniority and loan liabilities /repaying capacity. Workmen who have not put in a minimum physical attendance of 240 days per year in three years during the immediate previous 5 calenders will not be entitled to this benefit. The subsidy will be withdrawn in cases where the loan repayment is defaulted for 6 months continuously in any year. The subsidy will stand withdrawn on leaving the services of the company. The subsidy re-imbursement will be applicable only for loans obtained from established agencies approved by the management. No subsidy is payable for the period of strike/lock-out. Preference will be given to those employees who are not availing the company bus service. 3.1.3 HR INITIATIVES In order to motivate employees and to increase productivity HR department has initiated a number of steps, which include: VISION

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'APOLLO VISION' is the in-house newsletter published by Apollo Tyres Ltd. This newsletter is aimed at the families of the employees of ATL. It covers the important events that has taken place in the company like training programmes, meetings etc. SPEAKSIt is a bulletin board that is placed in the company, which gives information about the various activities of the HR department.


It has been formed to curb absenteeism in the company. There are around 12 task forces in the company. They visit the houses of employees who are habitual absentees and provide counseling to such employees.


These are used to help employees plan their leaves without affecting the activities of the organisation adversely.


It consists of members from the management staff who meet regularly to sort out problems that are faced by them in the day-to-day operations of the company. ARTS AND SPORTS CLUB

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Organizational study InHR department regularly organizes programs in the company. Factory day is celebrated on 26th January every year. SUGGESTION BOX

Employees are encouraged to give their suggestions, which would help the company to improve its operations.

3.1.4 QUALITY CIRCLE CONCEPTThe concept of quality circles was first introduced in Perambra plant as far back as 1988. However due to the lack of adequately trained facilitators and other teething problems the initial activities of the quality circles was carried on a rather modest scale. As on today Apollo has 30 active QC in operation covering about 10% of total workforce and the number is increasing every month. The system is very much vibrant, and at least 7 circles have presented full-fledged case studies to the top management so far. Apollo has been able to achieve considerable financial savings and also improve general discipline as a result of the QC. Some of the notes worthy achievements of the QC are given below: "Rose Circle", is the first QC of the company from bead winding section, evolved a system for the reduction of scrap which will fetch a saving of more than Rs.15 Lakhs, when the suggestions are fully implemented. In August 1992, they presented this case study in the all Kerala competition conducted by the QCFORUM OF India. In April 1993) "Diamond Circle", from the mechanical maintenance section participated in the all Kerala case study presentation competition conducted by National Institute for Quality and Reliability. One of the major problems faced by Apollo in 4-roll calender was 'derailment of wind up stand' in the calendering

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Organizational study Inoperations. The diamond circle members solved this problem effectively and saved Rs.80, 000/-per annum. This study was adjudged as the best case study in 1993 in the state level and second best in the national level. Surya Circle in vertical bias cutter section presented recently another case study to the top management. This study was rated as the best so far. The circle members eliminated the problem of "improper ply cut" in vertical bias cutter, which was one of the major scrap-contributing factors for the last 16 years. In this case the financial saving will be to the tune of Rs.18 Lakhs/annum. This case study was rated as the second best in the zonal competition conducted in March 1995.

Department of MBA, ASIET.

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Organizational study In


Group manager security Manager personal & IR

Manager Admin



Assoc. manager IR Executives

Assoc. manager Time office Executives

Assoc. manager Executives

Department of MBA, ASIET.

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Organizational study In


Department of MBA, ASIET.

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Organizational study In 3.2 PURCHASE DEPARTMENTThis department is concerned with the purchase of both indigenous and imported materials. It covers procurement of indigenous engineering spares, general engineering and miscellaneous items other than raw materials. This department is headed by senior manager and under him there are a number of officers and staff. The department is provided with the latest communication facilities and computers. 3.2.1 OBJECTIVES 1. Continuous availability of materials 2. Make purchase competitively and wisely at the most economical price. 3. Purchase in reasonable quantities to keep investment in materials at minimum. 4. Purchase proper quality of materials to have minimum possible wastage of materials and loss in production. 5. To develop good supplier relationship, this will ensure the best terms of supply of materials. 6. To develop alternative sources of supply. 7. Adopt most advantageous method of purchase to ensure smooth delivery of materials. 8. To act as an information centre on the materials knowledge. 9. To sum up, the basic objective of setting up a separate purchase department is to ensure continuous availability of requisite quality of materials, to avoid hold up of production and loss in production and at the same time reduce the ultimate cost of finished product.


ACTIVITIES OF PURCHASE DEPARTMENT 1. A. 1. B. 1. C. Receipt of Purchase Requests Review of Pending Indents for Ordering (FOR STOCK ITEMS) Review of Normal Indents for Ordering (FOR NON-STOCK ITEMS)- 37 -

Department of MBA, ASIET.

Organizational study In2. 3. Requests for Quotations and Receiving Quotations. Indigenous Purchase Order Generation.

4. Import Purchase Order Generation: 5. The indigenous Purchase Orders shall be categorized as follows: a. Normal Purchase Orders: b. Capital Goods Purchase Order c. Annual Rate Contract 6 7 8 9 10 11 3.2.3 Review of Purchase Order Authorization of Purchase Orders Amendment to Purchase Orders Logistics for Material Delivery at EMS: Insurance of Goods in Transit Payment to Suppliers

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

items identified as critical by the department to enable a smooth functioning of the plant. Vendors are generally identified as 1. Manufacturers 2. Dealers 3. Firms offering various services Manufacturers are divided into two: OEM (Original Equipment Manufacturers): The OEM shall be identified as a vendor for the supply of equipment, spares, components etc. OCM (Original Component Manufacturers): For all spares, components and consumables, attempts are made to identify the manufacturer and source the items directly from them so as to get quality products or services at optimum cost. Information available on supplier's manuals, catalogs, details available on the nameplates of machines etc shall be used for the purpose.



Department of MBA, ASIET.

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Organizational study In3.2.3.1 APPROVAL OF VENDORS All OEM vendors who have supplied the machinery equipments and instruments are approved vendors for sourcing the respective components and spares. All original components manufacturers are treated as approved vendors. Further consideration for approval includes Vendors supplying goods satisfactorily for last 5 years All authorised dealers of OEM/OCM shall be treated as approved vendors For the order of finished goods specified brands are approved. 3.2.4 PURCHASING RECORDS

1. Purchase Order Record: POs of all materials bought 2. Vendor Record: List of all vendors & their complete mailing addresses 3. Blue print and specification record Drawing: Many items are purchased by blueprint specification are kept in separate files with index showing their location and where the copies have been sent. Thus for repeat order to old supplier it is not necessary to send new copies of the specification. 4. Contract file: -Certain goods may be bought under a term contract if so, the purchasing department must maintain a record of such contract.

Department of MBA, ASIET.

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Organizational study In 3.3 STORES DEPARTMENTInventory department is responsible for storing the raw materials, finished goods and spare parts required for the smooth functioning of the organisation. In this era of cutthroat competition companies cannot survive without a well-managed inventory. A number of Inventory control techniques like ABC, VED etc are used for maintaining an optimum level of inventory 3.3.1 ENGINEERING STORES The efficiency of the manufacturing operations largely depends on the efficient functioning of the receiving and stores operations. The important functions of stores department are receipt, storage, retrieval, issue records, house keeping, surplus stock, verification, co-ordination and co-operation.

In Apollo Tyres Engg stores follows a centralized storing procedure for the spares. The main advantages of centralized storing are: 1. Reduced investment in inventories 2. Reduction in administrative cost 3. Possibility of standardization of materials reducing the variety of items stored 4. Reduction in requirements of personnel 5. Reduced storage space and other incidental expenses Greater safeguard against pilferage and theft

Department of MBA, ASIET.

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Receipt of Materials

Automatic indent for items that reach re-order level

Verification of the Stores items Generation of S.I.R

Issue of materials to production on MR

Inspection of items Accept quantity Identified by tags & stored in respective location Posting of GR

ERP (SAP) is implemented in all the factories of Apollo Tyres. . These had become a great help in engineering stores for tracking of materials, to find out it's location, its-order level etc. Once items reached its re-order level automatic indent is generated. When the material is arrived stores receipt the materials. After the receipt of materials the stores department does physical verification of the materials. If any problem is there with the material then it send back to the supplier. Once the material is accepted three copies of the SIR is made. Once for purchase department, once for Accounts and finance department and one for stores. If it is PR items (Items which are purchased on the request of respective departments) them it is directly issued to the respective user. If it is stock items then the next step is coding. ENGINEERING MATERIALS At present, total number of item codes in Engineering store are 38500 approximately. Out of this 23500 items are spares and 15000 items are consumables.

Department of MBA, ASIET.

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Organizational study In

1. Consumables (General stores items) Consumables (General stores items) are standard engineering items (bearing, belt, etc).It is decided to identify common codification schema for all consumable items. All the items shall be brought under this codification schema. 2. Spares Spares are part of equipments. Equipments are varying from plant to plant by make and model. It is decided to 1. Identify common equipments by same make and model 2. Assign uniform code to equipment make and model wise, which is common across plants 3. Assign respective plant spares with code of equipment. In general 1. Item code for consumables will be common across all plants 2. Item code for spares will be plant specific with respect to common equipment code. However, material classification in SAP will be used to trace the spares to common machines. Material Master Codification will follow the external numbering.


FINISHED GOODS STORES RECEIPT OF FINISHED GOODS All finished goods after final inspection are kept at the transferring area in each shift. The staff of final finishing will prepare a finished goods transfer-note in

Department of MBA, ASIET.

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Organizational study Intriplicate which will be countersigned by the staff of FGS/TTF After verification, finished goods transfer-note will be serially numbered and have the following details. 1. Material code 2. Description 3. Quantity. The original copy of the transfer-note will be issued to central excise wing after entering the details in stock statement, duplicate will be given back to production as their file copy and triplicate will be issued to Production planning. One staff each from production and FGS/TTF will separately verify the quantity, size, ply rating of the finished goods and compare against the entry in the transfer-note. REMOVAL OF FINISHED GOODS: The finished goods required for despatch kept at the transferring area, after preparing the transferring-notes, will be removed to the loading bay and balance will be removed to stores for storage, after completing packing for required item. HANDLING AND STORAGE Finished goods store is fully covered and protected from sunlight and rainwater. The floor is cleaned to remove dust. Proper passage is left for access for periodical inventory. All the tyres to be stored are rolled from transferring area to stores and stored size-wise. A stock statement is made as of the closing of the day. After preparing the stock-statement, finished goods transfer-notice handed over to factory excise wing for recording and filing. DISTRIBUTION OF FINISHED GOODS Marketing coordinator gives despatch schedule on day-to-day basis. The destination to which trucks are required is arranged by marketing coordinator one day in advance. Load slips are prepared as per the plan made. Store-man will keep the loads as per the load slip at the loading bay. Staff of FGS, TTF, Security and Department of MBA, ASIET.- 43 -

Organizational study Inrepresentative of transporter will check the load, kept separately for size, ply and quantity. After checking the load-slip will be signed by the staff and given for preparing transport documents and goods will be loaded on to the lorries. ASSEMBLING TYRES, TUBES AND FLAPS (TTF) Upon receipt of goods for TTF, FGS shall prepare a brought-out goods receipt report (BGRR) and it shall be forwarded to the head of QA department. QA department shall organise for sampling and inspection of the goods received. Upon acceptance/rejection of the consignment, QA department will return the BGRR with status of inspection marked on the same. A consignment of goods shall be used for packing after obtaining approval for use from QA department. In case a consignment is rejected, the same shall be tagged as "Rejected" by QA department. PACKING HDPE (High Density Poly Ethylene) bags containing tubes and flaps shall be identified with month of production. Tyre, tube and flap shall be packed as a set, as per the specification applicable for domestic supply. Procedure Clean the inside of the tyre properly and insert the tube and flap inside the tyre. Inflate the tube carefully up to the pressure just sufficient to hold the tube inside the tyre. Ensure that the flap does not come out from the assembly. Fit the dust caps on the tube valve stem. Strap the assembled tyre as per packing specifications. Inspect the TTF assembly for correct tyres and any loose flap/tube during despatch. 3.3.3 RAW MATERIAL STORES

Various raw materials used in the manufacture of tyres are as follows 1. Polymers: - natural rubbers, synthetic rubber, (SBR, PBD, BUTYL etc)

Department of MBA, ASIET.

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Organizational study In2. Fillers, carbon black, reinforcing clays 3. Process oil, plasticizers /tackifiers 4. Curing agents/sulphur 5. Accelerators/activators 6. Antioxidants/antiozonents (waxes) 7. Retardors 8. Pepticers for natural rubber mastication 9. Fabrics: nylon cord, i-ayon cord 10. Bead wire spools 11. Solvents for cements and solutions 12. Miscellaneous items like paints, colours, crayon, scrap flakes etc RECEIPT OF RAW MATERIALS VERIFICATION OF DOCUMENTS AT SECURITY GATE

The security inspector at main gate shall verify all documents pertaining to the consignments brought to the factory before allowing entry in to factory premises and note the following details. Serial no, suppliers name, description of item, challan quantity, challan no and date or LR no and date, truck reg. no, date and time of arrival, date and time of departure. WEIGHMENT (BY THE COMPUTERISED WEIGH BRIDGE)

Security shall inform raw materials stores about the arrival of the vehicles at the gate. The security guard and a representative from RMS shall record weighment of trucks jointly. The Weighment slip shall indicate the following: Serial no, time and date of receipt, suppliers name, gross weight with materials, SIR no and date. After recording the above details in the computerised weighing balance the vehicles shall be directed to the respective unloading bay. In ATL weighment will be done in a weighbridge closer to the factory under the supervision of security and RMS personnel after ensuring that the weigh bridge posses a valid certificate from weight and measure department.

Department of MBA, ASIET.

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Organizational study InBoth security and RMS personnel shall sign on the computerized weighment slip. One copy of the weighment slip will be filed in RMS along with concerned delivery challan and the second copy will be returned by security department. VERIFICATION OF DOCUMENTS AT RMS

The receipt in charge shall verify the documents to ascertain the no of packages, description of materials code and weight of the material. If any discrepancy is found the same shall be orally reported to the officer concerned before unloading. He in turn will take decision suitably. The despatch documents include: Delivery challan /invoice, LR/GC note, sales tax papers, packing list and duplicate copy for transporter of invoice for availing MODVAT credit. In case of non receipt of any of the above documents the consignment will not be unloaded unless and otherwise instructed by the competent authorities after compliance of all conditions stated above, the materials will be unloaded as instructed by the receipt in charge and lead to the respective area. HANDLING STORAGE AND PRESERVATION

All the incoming materials except the materials coming in tankers will be unloaded manually or with the help of forklift as instructed by the receipt incharge. Caged pallets or platform pallets are used for storing of materials so far as possible to facilitate easy handling at the time of issue. Each caged pallets will carry a maximum of 1500 kg of materials. Caged pallets will be stacked one over the other. PRESERVATION

Carbon black and chemicals are stored in the 2'"1 floor, natural rubber /SBR, wax etc in the 1st floor and fabric, bead wire, latex etc in the ground floor. In case of space constraints in the respective floors, the materials may be kept in the ground floor and other places as directed by the storage incharge. Materials received in cankers, after checking the seal and dip reading and sample test by QA will be directly pumped into the storage tank. Before unloading the receipt incharge will make sure the availability in the storage tank.

Department of MBA, ASIET.

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Organizational study InRejection items are identified by displaying a rejection tag by technical department. In the case of rejection of voluminous quantities the materials are kept in respective areas till disposal, while small quantities will be removed and stored in the rejection area duly displayed with the rejection tag.

CHART 63.3.4













Department of MBA, ASIET.

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Organizational study In


Department of MBA, ASIET.

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Organizational study In


The entire production system has been broadly divided in to three sections, namely Division A, Division B and Division C. DIVISION A BANBURY

All polymers are mixed with filler, process oil and other chemicals to give different grades of rubber compounds in the Banbury. The mixed batch is then dropped on a batch off mill for further mixing to form the rubber compound and then in to a sheet form. The rubber in sheet form is then passed through a conveyor and stacked on skids. Each type of rubber compound is specifically compounded for tyre performance. Tyre meant for high way services and fast speed have different rubber formulation as compared to tyres for mining service, agricultural service etc, large bales of natural rubber are cut into smaller parts by a bale cutter, prior to mixing in the Banbury. Carbon black, process oil, and other chemicals are mixed in the Banbury along with rubber under specified temperature and time. An essential characteristic of the Banbury is to give a good mix of fillers and chemicals with the rubber polymer. Normally all rubber compounds are mixed in to two stages and natural rubber compounds in three stages, as natural rubbers being tough, requires mastication. The final stage in the Banbury is a critical stage when the sulphur and other curing agents are added. CORD DIPPING UNIT

Rayon and nylon cord requires treatment in order to make them suitable for adhesion of rubber compounds. These cord fabric are passed through a liquid rubber solution called 'latex' and is heated under tension through special ovens. Each type of fabric like rayon, Nylon, Polyester etc should be coated with specific amount of rubber latex in the cord-dipping unit. Fabric after passing through cord dipping unit is

Department of MBA, ASIET.

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Organizational study Inwound up in rolls and wrapped and packed in polyethylene in order to prevent absorption of moisture from the atmosphere. CALENDER

All fabric is coated with specific compounds in the calendar. Cord fabric is coated on both sides with rubber layer, where as square woven fabrics are normally frictioned and then they are coated on one side or both sides. Coating consists of applying a rubber layer to top and bottom surface of the cords. Calenders are of various types. 3 roll calender makes a layer of rubber compound between the top and middle roll and squeezes the rubber layer on to the fabric on one side between the middle and bottom roll. The fabric is then to be run again through the three-roll calender in a similar process to get a coat on either side. The 4-roll calender can coat on both sides of the fabric with rubber layers simultaneously. After calendering, fabrics are wound in cotton liners in order to prevent sticking. Calenders are also used to produce rubber layers to different widths and gauge that are required in the process of tyre manufacturing. dual type. a) SINGLE EXTRUDER Rubber compounds after being broken down and warmed up on Mills, are fed in to the screw of the extruders from which with the help of dies, produces a green shape of treads, side walls, and other strips as per specified dimensions and contours, width, gauge and weights. These strips are cooled in water sprayed conveyors and then cut out in to specified lengths with the help of skiver (rotary cutting knife) and booked in metal trays or wrapped in cotton liners. The word green denote uncured rubber (i.e., non vulcanized) b) DUAL EXTRUDER Two separate set of mills on which two different types of compounds are broken down and heated and fed separately to two different screws. The two Department of MBA, ASIET.- 50 -


Extruders are distinguished by the diameter of their screws and are a single or

Organizational study Incompounds after extrusion are extruded together in a common head and with the help of performer and final dies, emerge in to a pre-determined shape. The advantage of dual extruder is that two rubber compounds of completely different composition can be extruded. DIVISION B BEAD WINDING SECTION

The bead building machine manufacturers beads for all types of tyres. Beads consists of a number of strands of copper coated steel wire which is coated with a layer of rubber compound and then wound to specified diameter depending on each tyre. Bead building machine consists of a lot of strands, for each strand of wire spools, which is brought together and coated on an extruder with a layer of rubber compound and then wound on a check which determines the final diameter. These rubber coated wire spools are then covered with rubberised cotton sq. woven fabric with necessary fillers or rubber compounds. The functions of beads in a tyre are to anchor the tyre while mounting rims of vehicles. BIAS CUTTER

Fabric after coating from the calender is run through bias cutter, which cuts the fabric to, specified widths and angles. The width depends on the type of tyres and the angle of-the cut depends on the type of tyre services required. The regular bias angle tyre, the angle of the cords varies from 35inches to 45 inches from bead to bead. This is the basic difference between the radial and biased angle tyres. TYRE BUILDING MACHINE

All the necessary compounds like beads, plies (cord fabric), breakers, treads, sidewalls, chafer etc are brought to the tyre-building machine. The tyre-building machine have a turret for holding different numbers of plies, breaker fabric, chafer rolls besides tread applying conveyor. Tyre building machine itself consists of a shaft, which can rotate at different speeds. The direction of rotation can also be changed. Department of MBA, ASIET.- 51 -

Organizational study InAccording to the size of the tyre to be built specified building drum is mounted in the shaft of the tyre-building machine. The fabric layers are then applied to the drum along with the bead wire bundles, which are compressed together with the help of different types of sticher wheels. After building cord carcass on the drum, in the final stage the green tread, sidewall and chafers are applied. The green tyres, which are in cylindrical form, are removed from the drum by collapsing the same. DIVISION C TYRE CURING

The green tyre from the tyre-building machine is prepared for vulcanization by the application of lubricants on the inner and outer surfaces for better moulding. The Bagomatic curing press which is the latest design (no separate air bags are required) consists of a thin synthetic cured bladder positioned in the center of the bottom half of the mould over which the green tyres are placed. As the press starts to close, steam pressure is applied in to the bladder, which gives the tyre a press shape, and the pressure is increased till the full shape of the tyre reached when the press is closed. (I.e., both the top and bottom halves of the moulds are in contact with each other). At this stage when the press is fully closed under high internal pressure and temperature, curing media like steam and hot water are passed through the bladder while the outer surface of the mould is heated by the steam. The internal pressure in the bladder is critical for the purpose of obtaining good moulding effects. The heat or temperature applied to different locations of the eyre compounds has to be as per the specifications. Less heat or temperature will cause an under cure condition and excess heat or temperature will cause deterioration in the rubber compounding fabric. After vulcanization, the tyre is removed from the press and in the case of nylon truck tyres, as additional process of post cure inflation may be required. This process consists of mounting the tyre on specially designed rim and inflating the tyre to the required pressure while it is still hot for a period of time in order to help final process of vulcanization and maintain a proper shape.

Department of MBA, ASIET.

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Organizational study In3. TYRE INSPECTION

All cured tyres are then physically inspected for visual defects and excess rubber flashes are removed. The tyre is then checked in the balancing machine. The tyre after inspection and classification are taken to ware houses.


Banbury mixer Mills Calendar Dip unit Bias cutting Band building Bead building unit Tyre building Tyre curing Post cure inflation Extruder Thread skiver

Final inspection



Department of MBA, ASIET.

Organizational study In
















Department of MBA, ASIET.

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Organizational study InPPC is an important department of the company headed by a senior manager. The department consists of a senior officer, one officer, 4 junior officers and 4 production assistants. For administrative purpose plant is divided into 3 divisions A, B, C. Banbury mixer, dip chord unit, 4 roll and 3 roll calendering units, dual extruder and cement house come under division A. The horizontal and vertical bias cutters, Bead winding units and tyre building units come under division B. Division C covers tyre curing section. 3.5.1 FUNCTIONS OF PPC The main function of PPC is to plan production in such a way as to make the best use of available resources so as to meet the target set by the Management. Importance is given to best possible capacity utilisation in terms of manpower, raw materials and equipment. The PPC department receives monthly ticket from the management. This is converted to monthly production plan which in turn is distributed into a daily plan on the basis of the number of working days and lead time required for making each component. The daily plan is made on the basis of factors like 1. Output of each press in a shift 2. Output of each building machine in a shift 3. Mould and machine availability\curing cycles and no of presses 4. Current lineup and manning 5. Priority based management decisions 6. Availability of feeding materials The daily plan will be received everyday and plan for 3 shifts are made. It takes 2 to 3 days to convert raw materials to finished goods. Hence all the decisions on the components to be made in the next 3 shifts would depend on what is going to be the cured tyre production 2 to 3 days hence. Since there is a buffer for green tyres, the inventory of green tyres should also be considered. This would shift the focus from cured tyres to inventory of green tyres available.

Department of MBA, ASIET.

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Organizational study InPPC department also consider the following factors for visualising the next 3 shift production plan: 1. Cured tyre production for 3 shifts 2. Projected green tyre inventory for next 2 to 3 days. 3. Latest component wise inventory 4. Comparison of planned and actual production for the previous 3 shifts; 5. Production up to the day of the week and target for the remaining days. 6. Machine availability data First the schedule for the finished tyres is made, based on this, the schedule for the green tyres for that shift is made. Since the tyre building process requires assembly of large number of components namely: tread, sidewall, squeegee, plies, braker, chaffer and beads. Each of these components has to be scheduled separately. Tread and sidewall are extruded from the dual extruder. So depending on the no of tyres to be made, a schedule is made for the dual extruder. Similarly the number of plies required for each shift in each category is arrived from the tyre-building schedule. A tyre requires different plies of different sizes and width. Since the requirement of plies is in the form of cuts, a conversion factor is used. The requirement of each component is directly related to the stock on hand. The components with least inventory are given high priority on the basis of their requirement. The plies are cut in horizontal or vertical bias cutters. Certain plies have restriction with respect to the choice of bias cutter. Thus schedules for the bias cutters have to be made on the basis of bias option and priority of ply. Plies are made from calendered fabric that in turn is made by coating sides of the dipped fabric with rubber compound. This is done in 4-roll calender. So a schedule for the 4-roll calender is made on the strength of the inventory of the calender roll. The plies cut in the bias cutters also need to go through a process called squeegee application in which a thin layer of rubber compound is pressed against the inner surface of each ply. This is done in 3-roll calender. Besides a schedule for 3 roll and 4 roll calender machines, a schedule is prepared for the dip unit from where dipped fabric is obtained which is used for calendering. Similarly schedules are made for the bead preparation, which includes bead winding, tillering and flipping. Here we can see that bottom up approach has been used in generating Department of MBA, ASIET.- 56 -

Organizational study Inthe schedule i.e. based on the requirement of each preceding step the schedule for the next step is made. This is because whatever is made in step 1 is consumed in step2 and so on. To prepare schedules the personnel of PPC department have to take the physical inventory of the work in progress and finished goods everyday for each component involved in the tyre manufacture. Besides the PPC department has to maintain the RM inventory from the RM store. Other functions include communicating mould changes to production department, generating reports on production, stock of raw material, working progress, finished goods, experimental tyres, outside mixing and scrap. The schedules that are prepared are given to various production departments for deciding the final layout of the machines for production. The factors that are crucial to the success of the schedule are 1. Mould and Machine availability 2. Accuracy of daily physical inventory 3. Computerisation 4. Timely receipt of ticket The management requires vital information relating to mould and machine availability, shift wise production details (scheduled and actual), daily inventory of finished goods and green tyres etc


Group Manager

Assoc. Manager

Assoc. Manager

Assoc. Manager


Department of MBA, ASIET.

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Organizational study In




Department of MBA, ASIET.

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Organizational study InThe Technical department plays a very crucial role in the organisation. It is basically an R&T (research and technology) department. Technical department is mainly concerned with improving quality of tyres by methods like reduction in curing cycles, reducing tyre shape problems etc. Technical coordination meetings take place once in every 3 months. The Technical coordination committee will consist of members from marketing field also. 3.6.1 MAIN SUBGROUPS OF TECHNICAL DEPARTMENT: DESIGN GROUP The main functions are development of new design, modification of existing design and comparing with competitor's designs. Design part is mainly concerned with mould design R&D GROUP It is concerned with compound development, testing, and RM development. PRODUCT GROUP CONCEPT The main function is to find out the needs of the market, problems of the tyre, replacement of damaged tyres. The main market includes original equipments manufactures, STU (state transport units), LCV, Exports, Passenger Car Tyres, tubes and flaps development. It involves developing products according to the requirements of the market. PLANT TECHNOLOGY GROUP This group implements the technology required for producing tyres according to the needs of the market at the plant level. According to the marketing needs quality products are delivered by strict quality procedures. It also includes troubleshooting.


Department of MBA, ASIET.

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Division Head




Assoc. Manager

Assoc. Manager

Assoc. Manager




Technical Department looks after tyre engineering, heat engineering and related matters and this department has close contacts with the production department.

Department of MBA, ASIET.

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Organizational study In




Department of MBA, ASIET.

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Organizational study In

Quality is the totality of characteristic of an entity that bears on its ability to satisfy, stated and implied needs. Quality is referred to as 'fitness for use' or 'fitness for purpose' or 'customer satisfaction' or 'conformance to requirements'. QA is the well-planned and systematic activities implemented within the quality system and demonstrated as needed to provide adequate confidence that an entity will fulfill requirements for quality. For international trade transaction ISO Certification has become inevitable. ATL has got the privilege to have ISO 9001 Certification. ISO 9001 (1994) covers the quality system and model for QA in design, development, production, installation and servicing. ATL Perambra has a well-functioned QA department. They divided the whole plant in to three divisions. Each division comes under a Quality Auditor, says Supervisor. For each process there is an audit form. Quality audit is taken by quality Auditor. It is a systematic and independent examination to determine whether quality activities and related results comply with planned arrangements and whether these arrangements are implemented effectively and are suitable to achieve objectives. One of the purposes of quality audit is to evaluate the need for improvement or corrective action. Audit should not be confused with inspection activities performed for the purpose of process control. If any deviation is there, then they will take corrective action to eliminate the causes of an existing non-conformity with the concerned people or department (technical). In order to prevent defect or undesirable deviation, it will be marked as 'HOLD'. HOLD point is a point beyond which the activity must not proceed without the approval of the designated department 3.7.1 OTHER FUNCTIONS RAW MATERIAL TESTING Quality of all the raw materials received are tested in the laboratory consists of three different sections. 1. Fabric laboratory

Department of MBA, ASIET.

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Organizational study InThe laboratory tests all fabric and steel wires received, and at all stage of the process i.e. after dipping, after calendering, and in the cured stage etc. 2. Chemical laboratory This laboratory carries out tests for all polymers, fillers and chemicals. 3. Physical laboratory All rubber compounds in process are tested in the laboratory on each stage i.e., after mixing in the Banbury, after extrusion, and calendering and after curing. TYRE TESTING Samples of cured tyres are tested indoors on a test wheel. The wheel simulates the running condition of a tyre, primarily used to detect carcass strength and heat generation. Tyres are also fitted on different vehicles to study the effects of different types of roads, loads and climate conditions.


Manager Process control & Audit Laboratory

Assoc. Manager Quality Engg. Systems product testing

Assoc. manager





Department of MBA, ASIET.

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Organizational study In




Department of MBA, ASIET.

Organizational study InGroup manager is the head of this department and there are associate manager and executives under him. The main objective of this department is to plan, design, implement and manage integrated production and service delivery systems that assure productivity, quality, reliability, maintainability and cost control to keep Apollo globally competitive.



1. Conduct work-studies, improvement studies in various equipment and fixation of norms. 2. Capacity calculation in various equipment from time to time consequent to various changes. 3. Design, Implementation and follow up of incentive schemes in various zones. 4. Planning and assessment of manpower requirements of various departments periodically. 5. Studying plant layout and material handling systems and suggesting improvements. 6. Explore the possibilities of capacity expansion and prepare project reports. 7. Negotiations with unions regarding various issues like incentive schemes, productivity, expansion and labour issues 8. Analysis of capital expenditure request from various departments and make recommendations to Senior Management Committee. 9. Prepare budgetary planning for capital and cash flow requirement.

Department of MBA, ASIET.

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Organizational study In10. Prepare documents for long-term settlements, bonus settlements etc. and represent the management in the meetings with the Unions /Labour Departments. 11. Visit other Industries for getting information regarding LTS methods, practices and other developments. 12. Conduct various training classes for workmen, supervisors, other officers and new recruits. 13. Apply various Industrial Engineering techniques such as job evaluation, O&M (Organisation & Methods) studies, Kaizen, Line Balancing etc. 14. Suggest various cost reduction programmes and implementation. 15. Associate with professional bodies like Productivity Council, NITTIE, and Institution of Engineers etc. 16. Conduct daily audit on manpower, productivity, lost time, scrap details, absenteeism, overtime etc. 17. Permit various other management information reports to the top management. 18. Evolve best practices and processes through global benchmarking in the context of global competitions and intense customer focus. 19. Optimise inventory levels at various stages such as Engineering Stores, work in progress and finished goods. 20. Continuous improvement of methods and equipments design compatible to the best ergonomic standards.

CHART NO: 12Department of MBA, ASIET.- 66 -

Organizational study In


Group Manager

Assoc. Manager


Department of MBA, ASIET.

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ENGINEERING DEPARTMENTThis department consists of Electrical, Mechanical and utility division.

Department of MBA, ASIET.

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UTILITY DIVISION The Utility division is the source of steam, power, water and compressed air.

The main functions of this division include: DEMINERALISATION OF WATER The water pumped from Chalakudi River is demineralised by a series of operation like filtration, passing through an ion exchange matrix etc. This is done to remove dissolved oxygen and minerals. It is then stored in a storage tank. BOILER AND UTILITY There are 3 boilers running to fulfill the present demand of steam. The capacity of two boilers is 10 TPH(Tonnes Per Hour) and 14 TPH. The Boilers are flat tube type and furnace oil is used as fuel. The steam generated has a pressure of 15.5 Kg/cm2 CHILLED WATER PLANT There are 4 chillers and the medium used is FREON. The capacity of each chiller 115TR. The temperature of the chilled water 55F. Sections which required chilled water are: TCU, Dual extruder, Banbury, Mill etc. COMPRESSOR HOUSE There are total seven compressors. It is again divided into high pressure(HP), low pressure(LP), and medium pressure(MP). All these are passed through the dryers to remove any moisture content. LP is used for instrument purpose (60psi), MP is used for Banbury, Tyre building, and Bias cutter sections(90psi) and HP is bused for Tyre curing unit and post cure inflation unit (150psi). Total electricity consumption is 105000 units. A stand by generator is available to met the emergency. Department of MBA, ASIET.- 69 -

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ELECTRICAL WORK SHOP The main job of this department is electrical maintenance including electronic

instrumentation. The main management hierarchy is given below. Total strength of this department is around 50. The maintenance activities mainly include break down maintenance and preventive maintenance. In the case of break down maintenance, a maintenance slip is given from the respective department to this department including the date and the type of maintenance work required, so that it is possible to take necessary actions. Preventive maintenance includes developmental activities. Here pre-checking and necessary actions are done in order to avoid the break down. Spare keeping function also included under preventive maintenance. There is a programmable logic array (PLL) circuit for controlling the production process. It is actually a computer system with out the monitor and keyboard. It contains a processing unit, control unit and memory unit. The purpose of the control unit is to initiate a series of sequential steps of micro operations. During any given time, certain operations are to be initiated while all others remains idle. Thus the control variable at any given time can be represented by a string of 1's and 0's. The control memory is assumed to be ROM, with in which all control information is permanently stored. The design of a control circuit includes the following steps 1. 2. 3. 4. The problem is stated An initial equipment configurations is assumed An algorithm is formulated The data processor part is specified

Department of MBA, ASIET.

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Department of MBA, ASIET.

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Department of MBA, ASIET.

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Organizational study In 3.10 ACCOUNTING AND FINANCE DEPARTMENTThe corporate office situated at Gurgaon does most of the accounting and taxation jobs of ATL. At Perambra plant there is a separate accounting and finance department. This department deals with salary, wages and costing. Excise duty of the raw materials also comes under this department. 3.10.1 CURRENT FINANCIAL POSITION

Sales from operations during the financial year ended March 31, 2006 amounted to an all time high of Rs. 3,002.12 crore as against Rs. 2,656.81 crore during the previous year, recording a growth of approx.13%.

Operating profit, before interest and depreciation, amounted to Rs. 223.92 crore as against Rs. 184.64 crore during the previous year, registering an increase of approx. 21.27%. Net profit, after providing for interest, depreciation, tax and exceptional items amounted to Rs. 78.17 crore, as against Rs. 67.63 crore during the previous year. The strong performance of Apollo is a combination of high growth in sales alongwith enhanced operations management, better working capital management, aggressive marketing and overall cost reduction measures adopted by the Company. During the year, your Company realigned its relationship with Michelin and exited from the Joint Venture Company Michelin Apollo Tyres (P) Ltd., as radialisation in commercial vehicle tyres segment in Indian markets had not reached anticipated levels. The Company recovered almost its entire investment in the JV through sale of its 49% stake back to Michelin. This re-alignment would enable the Company to utilise the available resources better towards other growth opportunities in short to medium term.

Department of MBA, ASIET.

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Organizational study In3.10.2 PRODUCTION During the year 2005-06, your Company has achieved 12.2% growth in production tonnage by recording production of 2.52 lac MT as against 2.24 lac MT in the previous year. As a result of successful implementation of expansion programme, the total capacity across the plants has increased to 704 MT/day from 628 MT/day. 3.10.3 DIVIDEND

Your directors recommend for your approval a dividend of Rs. 4.50 per equity share for the financial year 2005-06. There will be no tax deduction at source on dividend payments, but your Company will have to pay tax on dividend @ 14.025%, inclusive of surcharge. The dividend, if approved, shall be payable to the shareholders registered in the books of the Company and the beneficial owners as per details furnished by the depositories, determined with reference to the book closure from 23-8-2006 to 25-82006 (both days inclusive). 3.10.4 TURNOVER AND NET PROFITS TABLE NO:3 Apollo Tyres Ltd Turnover Apollo Tyres Ltd- Net Profits Year Rs. in Crs Year Rs. in Crs 1998-99 1154.02 1998-99 31.08 1999-00 1368.75 1999-00 76.06 2000-01 1458.70 2000-01 25.42 2001-02 1710.00 2001-02 42.40 2002-03 2003-04 2004-05 2005-06 2025.10 2314.31 2656.8 3002.12 2002-03 2003-04 2004-05 2005-06 120.02 70.42 67.63 78.17

Department of MBA, ASIET.

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Department of MBA, ASIET.

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Department of MBA, ASIET.

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Organizational study In 3.11 SYSTEMS DEPARTMENTThe system department is responsible for computerisation of different departments of ATL. The main function of this department, operates and co ordinates all systems in the organization. The simple structure of department facilitates speedy communication 3.11.1 SAP R/3 The third generation set of highly integrated software modules that perform common business function based on multi-national leading practices. Takes care of any enterprise however diverse it may be in operations, spread over the world geographically. SAP was founded in 1972 by 5 people Wellen Reuthor, Hopp, Hector, Plattner & Tchira . SAP was installed in Perambra Plant in the year 2004. IBM is the implementation partner. There are around 250 computers and 100 printers were placed in different departments, which are connected to a Central Server in the Head-office (Gurgaon, Haryana). HCL is the service provider of Apollo Tyres. They provide VPN (Virtual Private Network) network through BSNL leased line. The bandwidth capacity of the leased line is 2Mbps by using OFC. 3.11.2 MONITORING FUNCTION Security problems in the SAP were solved using Central Virus Scanning System and Firewall at the head office (Gurgaon, Haryana). HCL solve all the problems related to the network connection. 3.11.3 MAINTENANCE FUNCTION The system department 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. flow with in the department.

Department of MBA, ASIET.

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Organizational study InAll the computers were connected using both point-to-point and star topology to form an Intranet inside the plant. department members using Proper authentication was given to each a user ID and a password.



Division Head



Department of MBA, ASIET.

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3.12 MARKETING DEPARTMENTDepartment of MBA, ASIET.- 79 -

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Sustained growth of ATL in the recent period of time is the result of planned and focused marketing initiatives. There is no separate department for marketing in Kalamassery plant and in Perambra. ATL has three corporate offices in Kerala (Cochin (Main office), Trivandrum, and Calicut which does the market functions for company. 3.12.1 FUNCTIONS 1. To fix a reasonable price for the product. 2. To satisfy customers by providing high quality products. 3. Carry out promotional activities. 4. To identify new segments. 5. To carry out market research to collect information regarding price variations, export and analyzing the current market situations. 3.12.2 SEGMENTATION ATL market segmentation is use based segmentation. ATL segregate the market as commercial and personal. Commercial constitutes light trucks, heavy trucks and jeeps, which constitutes 90 per cent of the entire tyre market of India. The rest constitutes the personal transportation, primarily cars driven for personal reasons. In fact, even taxis come under the commercial segment.

3.12.3 TYRES Amazer Quantum Tracto LCV Truck LCV - Traditional cars (Ambassador and Premier padmini) - Van (Mahindra Voyager and Toyota Qualis) - Krishak, Krishak super andPower haul - Amar anchor. Rider Mile star and Tropper - supreme, Cargo miller Cargo express, Marathon and Guard. - Cargo Rib and Amar

Amazer XL - Hyundai Santro, Accent Ford ikon, Fiat sienna,Tata indigo.

ADV(Animal Driven Vehicles) - BHIM and ADV plus Tubes


Department of MBA, ASIET.

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Organizational study In

ATL mainly focus on truck segments (truck tyre market (replacement and OEMs), light truck commercial market and in the farm category, which are the rear tractor tyres. Due to the increased competition