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CHAPTER - I
INTRODUCTION
An organization is a social group which distributes tasks for a collective goal. Theword itself is derived from the Greek word organon, itself derived from the better-known
word ergon - as we know `organ` - and it means a compartment for a particular job.
Organization is an identifiable group of people contributing their efforts towards
attainment of goals. An organization begins when people combine their efforts for some
common purposes. The organizational objective is considered to be more important in the
organizational context. Thus, the individual efforts need to be directed and coordinated
towards the organizational objectives. Since the organization comprises of a combination of
individual efforts, it is necessary to understand how the individual behaves in the
organization, how the individuals efforts coordinated to the success of the organization.
Organizational study is the systematic study and careful application of knowledge about how
people as individuals and as groupsact within an organization. It studies about the various
departments in an organization, how it is connected towards the organizational goal.
Organizational structures developed from the ancient times of hunters and collectors intribal organizations through highly royal and clerical power structures to industrial structures
and today's post-industrial structures. In the 21st century, organizational theorists such as
Lim, Griffiths, and Sambrook (2010) are proposing that organizational structure development
is very much dependent on the expression of the strategies and behaviour of the management
and the workers as constrained by the power distribution between them, and influenced by
their environment and the outcome.
An organizational structure consists of activities such as task allocation, coordination
and supervision, which are directed towards the achievement of organizational aims. It can
also be considered as the viewing glass or perspective through which individuals see their
organization and its environment. Organizations are a variant of clustered entities. An
organization can be structured in many different ways, depending on their objectives. The
structure of an organization will determine the modes in which it operates and performs.
Organizational structure allows the expressed allocation of responsibilities for differentfunctions and processes to different entities such as the branch, department,workgroup and
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individual. Organizational structure affects organizational action in two big ways. First, it
provides the foundation on which standard operating procedures and routines rest. Second, it
determines which individuals get to participate in which decision-making processes, and thus
to what extent their views shape the organizations actions.
Apollo Tyres Ltd. is one of the largest tyre manufacturing companies in India. The
company was incorporated in 1972 and commenced its production in 1977. It was the first
company to receive ISO 9001 accreditation in Indian tyre industry. In 2006, Apollo acquired
Dunlop tyres of South Africa. The company has its operations in India, Zimbabwe,
Netherland, Korea and South Africa with a network of over 4000 dealerships in India alone.
Scope of the study
Organisation structure of companies varies from company to company and it is
complex to understand. A study of this kind will facilitate in knowing the organisation
structure prevalent in Apollo Tyres Ltd. and the factors related to it.
Objectives of the study
1. To study the organization structure of Apollo Tyres Limited.2. To understand the various key functional areas of the company.3. To get an idea about existing business operations at Apollo tyres.4. To interact with managers at various levels of the organizational hierarchy.5. To analyze the practical aspect in relation to the theoretical aspect of the organization.6. To gain a clear picture about the challenges and activities faced by the organization.7. To observe the work culture existing in the organization.8. To identify the strength and weakness of the organization.9. To analyse competition within the industry.
Methodology
The study has been conducted in Apollo Tyres Ltd., Kalamassery. The study is
undertaken by visiting the plant. The study is based on both primary and secondary data.
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1. Primary Sources Direct interview with the department heads Discussion with the divisional heads Interaction with workers in the company Data collected by observing the function of the organization2. Secondary Sources Annual reports of the company Department manuals Periodicals, books, etc. published materials by the company Internet websites (www.apollo.com, www.google.com)
Tools of study
The data collected are systematically presented in tables, charts and diagrams. Further
analysis is done using ratio, trend and SWOT analysis.
Period of study
The study is done for 30 days at Apollo Tyres Ltd., Kalamassery.
Limitations of the study
1) The time period available for the study was limited2) The study was conducted only during the day shift and hence the working
conditions of those employees working during the evening and night shifts could not be
examined.
Chapterisation
The study includes eight chapters.
I. First chapter begins with an introduction of organization and organization structure,scope of study, objectives of study, methodology, tools of study, period of study,
limitations and chapterisation.
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II. Second chapter is industry profile consisting of International and Indian scenario oftyre industry.
III. Third chapter gives a description of Apollo Tyres Limited consisting of the history,mission, objectives, goals, product profile and future growth plans of ATL.
IV. Fourth chapter deals with the organisation structure and design, explaining the type,approach and factors of organisation structure adopted in Apollo Tyres.
V. Fifth chapter is the departmental profile describing the functions, role and structure ofvarious departments in Apollo Tyres Limited, Kalamassery.
VI. Sixth chapter shows the financial highlights of Apollo Tyres Limited for last threeyears.
VII. Seventh chapter is the SWOT (Strengths Weaknesses Opportunities Threats) Analysisof Apollo Tyres Limited.
VIII. Eighth chapter explains the findings, conclusions and suggestions derived from thestudy.
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CHAPTERII
INDUSTRY PROFILE
INTERNATIONAL SCENARIO
The world tyre industry is worth around US$70bn. The industry is marked by a
presence of around half a dozen major players who together occupy 70% of the world market
share. The table below indicates the individual market share of the major players.
Companies Market share (%)
Michelin 19.4
Bridgestone 19.4
Goodyear 16.6
Continental 7.1
Sumitomo 4.9
Pirelli 3.9
Yokohama 3.5
Kumho 1.7
Others 23.5
Source: The Financial Times
The worldwide tyre industry is likely to witness more restructuring efforts after the
deal between Goodyear and Sumitomo of Japan. Analysts are speculating that there will be
only six to seven major players across the globe. The 'big three' of the industry i.e. Michelin,
Bridgestone and Goodyear (before its alliance with Sumitomo) each had annual sales of
US$12bn. Inevitably, the alliance has increased the competitive pressure on second-tier
majors, notably Continental of Germany, Pirelli of Italy and Yokohama of Japan. They would
also have to go on the acquisition route in order to survive. The structural developments are
taking place against a background of continuing overcapacity in the industry, estimated at
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around 30% and slow growth in Latin America and the Asia-Pacific region in the wake of
their financial crises.
Worldwide Sales of Tyres
Mn nos. Cars % of totalTruck % of totalTotal % of total
OEM 217.7 31.10 50.6 20.3 268 28.3
Replacement 482.4 68.90 198.2 79.7 681 71.7
Total 700.1 100.00 248.8 100.0 949 100.0
Source: The Financial Times
One striking feature, which comes out prominently from the above table, is that major
part of world sales of car and truck tyres is to the replacement market. The replacement
market is self-perpetuating and has inbuilt growth despite short-term setbacks from time to
time. As the worldwide automotive sales are rising by a marginal 2% per annum, sales to the
replacement segment will continue to dominate.
However, some recent trends in new vehicle manufacturing will go to help the OEM
segment. World over the time needed to bring a car from the drawing board stage to the
market place has shrunk from six to two years in the last decade. Today, tyres are being
purpose-developed for each new model with technicians working alongside car suspension
engineers. Secondly, new markets like India and China offer the world major tyre producers a
large market to exploit.
In its latest industry analysis, the Economic Intelligence Unit (EIU) forecasts that
sheer muscle in terms of marketing and technical development will enable the three biggest
players to continue to take an ever-larger share of the global market, reaching 70% by 2005
from little more than 50% now.
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Review of the Tyre Industry
MRF is a market leader in the Indian Tyre Industry with a market share of ~30%. It
has total turnover of Rs. 8589.68 Cr. with average margin of 3.37% which is lower than
industry average of ~4%. Its Net Sales has grown strongly with a 5 year CAGR of close to
18%. It also has one of the highest Net Profit growth rates with a growth of 68.3% CAGR
over the last 5 years.
However, in terms of net sales growth and highest profit margins, Balkrishna Industries Ltd.
is far ahead from other industry players. Its Net Sales has grown strongly with a 5 year
CAGR of 27.87%. It also has highest profit margin of 10.55% (5 year average) in the
industry. This is because it operates in Off-the-Road tyres, a niche segment. Other major
players are Apollo Tyre, JK Tyre & Industry, CEAT and Goodyear India.
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and now it is a profit earning unit. The fourth plant was commissioned in 1996 at Pune for
manufacturing tubes. The entire requirement of tubes for all plants of Apollo is done here.
History of Apollo Tyres Ltd. through years1972 The companys license was obtained by Mr. Mathew T. Maratukalam, Jacob
Thomas and associates.
1974 The company was taken over by Dr. Raunaq Singh and his associates.
1975 April 13, foundation stone of the Perambra plant was laid.
1976 Apollo Tyres was registered
1977 Plant commissioned in Kerala with 49 TPD capacities
1982 Manufacturing of passenger car radial tyres in Kerala
1991 Second plant commissioned in Baroda
1995 Acquired Premiere tyres in Kerala
2000 Exclusive radial capacity established in Baroda
2003 Exclusive radial capacity expanded to 6600 tyres per day, November 17, a
joint venture with Michelin
2004 Launch of Apollo AclereH speed rated car radials
2005 April 13, Perambra plant completes 30 years
2006 January 30, acquires Dunlop South Africa
August 7, announced the launch of new plant in Chennai
2008 Announce possible green-field in Hungary ready by 2010 for European
market; announce plant in Chennai(Tamil Nadu), India
2009 Acquired Vredestein Banden B V in Netherland
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Vision
A significant player in global tyre industry and a brand of choice providing customer delight
and continuously enhancing stakeholder value. The one word that symbolizes all that Apollo
believe is CREATE.
C - Care for customers
RRespect for associates
E - Excellence through team work
A - Always learning
T - Trust mutually
E - Ethical practices
Mission
To create the first Indian Singles Grand slam Champion by the year 2018.
Objectives
High volume, high market share, cost effectiveness in all segments. High quality, technically superior products. Consistent production through harmonious industrial relations. Achievements of customer delight through benchmarking global practices. Strengthen supply chain management. Revenue growth Operating margin improvements. Employee satisfaction
Goals
Employee safety Employee satisfaction Customer delight
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Revenue growth Operating margin requirements Responsibility
Learning & Development. Family Focus. Hygienic Factors. Employee Involvement & Cultural Building.
Apollo key Differentiation to Other Firms
Superior product Quality. Strong Brand Equity. Committed Marketing Team. High Consumer Loyalty Product Segmentation in Truck Tyres. Benched marked for planning efficiency parameters. Power consumption. Quick response to market needs. Fuel efficiency. Least scrap generation
Profile of products
The company manufactures and sells a range of tyres of both Bias and Radial, tubes
and flaps. The major products are trucks and bus tyre and trailer tyres. Besides these, Apolloalso produces passenger tyres, light commercial vehicles tyres etc.
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Nirvana Frost Quest
Multispoke Sphere Cinco
Tubeless Radials
Acelere Amazer XL
Hawkz
Conventional Tyres (Bias Tyres)
Car Armour Panther
Jeep Gripper Maha Trooper
Farm Pure Cultivation Segment
Sarpanch Krishak Super
Pure Haulage Segment
Powerhaul
Mixed Application Bias Segment
Krishak Premium
Mixed Application Radial Segment
Farmking
Jeep Gripper Maha Trooper
Future plans for growth of the organization
In 2011, Apollo Tyres had realized its dream of becoming a US$2 billion company by
venturing into the global markets. Apollo, a family-run business, went through changing
leaderships over generations. It eventually emerged as the leading player in the industry.
Apollo Tyres had big plans for the future. Some of the future growth plans are as follows:
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1. AGILE (Apollo Growth Innovation Leadership Excellence) 6*16After tasting success with the overseas ventures, fulfilling aspirations, and making a
mark in the global market, the company set out to become a US$6 billion company by 2015-
2016. To lead the company toward achieving its goals, the company executives were keen on
further expansion into China and the ASEAN region. Apollo planned to grow three times to
US$6 billion by 2015-2016 and aimed to break into the league of the global top 10 tyre
companies. "We have set our 'vision' to be a $6-billion company by 2015-16," said Satish
Sharma (Sharma), Chief, India operations.
2. Apollo Tyres Mission 2018The Apollo Tyres Mission 2018 is a programme to identify, nurture and create world-
class tennis players in India who will challenge, perform and win on the world stage, with at
least one becoming a Singles Grand Slam champion by the year 2018. Thus Apollo becomes
one of the largest corporate investors in developing sporting talent through its Mission 2018,
which is focused on nurturing and training youngsters in the sport of tennis to enable an
Indian to win a Singles Grand Slam Championship by the year 2018.
At the grassroots level of schools, academies and the tennis loving population, Apollo
is encouraging youngsters to actively take up the sport with the full support of their parents.
On the talent level, company conduct selection camps every year in four cities (called the
Mission 2018 Challenge) to identify, nurture, train and groom talent from across the country.
Aged between 6 and 14 years of age, they are given national and international exposure and
facilities, to enable them to realise their potential and become future champions. The four
cities change every year to ensure the Mission spreads far and wide in the task of encouraging
participation from all corners.
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CHAPTER - IV
ORGANISATION STRUCTURE & DESIGN
An organization can be structured and designed in many different ways, depending ontheir objectives. The structure of an organization will determine the modes in which it
operates and performs. Organizational structure allows the expressed allocation of
responsibilities for different functions and processes to different entities such as the branch,
department, workgroup and individual. On the other hand organization design is the process
of defining and coordinating organizational structure elements. This is an architectural task.
The purpose is to create a design that will coordinate organizational tasks & motivate people
to achieve objectives.
Organizational structure affects organizational action in two big ways. First, it
provides the foundation on which standard operating procedures and routines rest. Second, it
determines which individuals get to participate in which decision-making processes, and thus
to what extent their views shape the organizations actions.
The set organizational structure may not coincide with facts, evolving in operational
action. Such divergence decreases performance, when growing. E.g., a wrong organizationalstructure may hamper cooperation and thus hinder the completion of orders in due time and
within limits of resources and budgets. Organizational structures shall be adaptive to process
requirements, aiming to optimize the ratio of effort and input to output.
The organization design process is often defined in phases. Phase one is the definition
of a business case, including a clear picture of strategy and design objectives. This step is
typically followed by "strategic grouping" decisions, which will define the fundamental
architecture of the organization - essentially deciding which major roles will report at the top
of the organization. The classic options for strategic grouping are to organize by:
Behavior Function Product or category Customer or market Geography
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MatrixOrganization Structure of Apollo Tyres Limited
From the study, it is understood that organization structure of Apollo Tyres Ltd. is
designed on the basis of functions. So Apollo follows functional organization structure.
Functional Organization Structure
The functional structure group positions into work units based on similar activities,
skills, expertise, and resources. Production, marketing, finance, and human resources are
common groupings within a functional structure. As the simplest approach, a functional
structure features well-defined channels of communication and authority/responsibility
relationships. Not only can this structure improve productivity by minimizing duplication of
personnel and equipment, but it also makes employees comfortable and simplifies training as
well.
Employees within the functional divisions of an organization tend to perform a
specialized set of tasks, for instance the engineering department would be staffed only with
software engineers. This leads to operational efficiencies within that group. However it could
also lead to a lack of communication between the functional.
Functional Organization Structure in Apollo Tyres Ltd.
The functional organization structure is best suited for Apollo since it is a producer of
standardized goods and services at large volume and low cost. Coordination and
specialization of tasks are centralized in a functional structure, which makes producing a
limited amount of products or services efficient and predictable. Moreover, efficiencies
groups within an organization, making the organization slow and inflexible.
It can further be realized as functional organizations integrate their activities vertically
so that products are sold and distributed quickly and at low cost. For instance, a small
business could make components used in production of its products instead of buying them.
This benefits the organization and employees faiths. Like the two sides of a coin, organisation
structure of ATL is also characterised by both merits and demerits. They are as follows:
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Advantages
Since the people are arranged on the basis of their common interests, they can learn alot from each other.
Problem solving becomes easier in a functional organizational structure. Skilled employees of the same group can find more skilled employees for the
company.
Control in functional structure is increased because people will try to supervise eachother work.
Team work is more found in a functional organizational structure.
Disadvantages
It has few downsides that may make it inappropriate for Apollo. Here are a few
examples:
The functional structure can result in narrowed perspectives because of theseparateness of different department work groups.
Decisions and communication are slow to take place because of the many layersof hierarchy.
Authority is more centralized. Measurement problems are created like it becomes difficult to analyze which
person is more efficient and which is not.
Strategic problems are not given significant focus in this structure becausecoordination the top management is always busy in finding the solutions of
problems.
Factors Affecting Organizational Design
Although many things can affect the choice of an appropriate structure for an
organization, the following five factors are the most common: size, life cycle, strategy,
environment, and technology.
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Organizational size
The larger an organization becomes, the more complicated its structure. When an
organization is small such as a single retail store, a two-person consulting firm, or a
restaurantits structure can be simple.
In reality, if the organization is very small, it may not even have a formal structure.
Instead of following an organizational chart or specified job functions, individuals simply
perform tasks based on their likes, dislikes, ability, and/or need. Rules and guidelines are not
prevalent and may exist only to provide the parameters within which organizational members
can make decisions. Small organizations are very often organic systems.
As an organization grows, however, it becomes increasingly difficult to manage
without more formal work assignments and some delegation of authority. Therefore, large
organizations develop formal structures. Tasks are highly specialized and detailed rules and
guidelines dictate work procedures. Inter organizational communication flows primarily from
superior to subordinate, and hierarchical relationships serve as the foundation for authority,
responsibility, and control. The type of structure that develops will be one that provides the
organization with the ability to operate effectively. That's one reason larger organizations are
often mechanisticmechanistic systems are usually designed to maximize specialization and
improve efficiency.
Organization life cycle
Organizations, like humans, tend to progress through stages known as a life cycle.
Like humans, most organizations go through the following four stages: birth, youth,
midlife, and maturity. Each stage has characteristics that have implications for thestructure of the firm.
Birth: In the birth state, a firm is just beginning. An organization in the birth stagedoes not yet have a formal structure. In a young organization, there is not much
delegation of authority. The founder usually calls the shots.
Youth: In this phase, the organization is trying to grow. The emphasis in thisstage is on becoming larger. The company shifts its attention from the wishes of
the founder to the wishes of the customer. The organization becomes more
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organic in structure during this phase. It is during this phase that the formal
structure is designed, and some delegation of authority occurs.
Midlife: This phase occurs when the organization has achieved a high level ofsuccess. An organization in midlife is larger, with a more complex and
increasingly formal structure. More levels appear in the chain of command, and
the founder may have difficulty remaining in control. As the organization
becomes older, it may also become more mechanistic in structure.
Maturity: Once a firm has reached the maturity phase, it tends to become lessinnovative, less interested in expanding, and more interested in maintaining itself
in a stable, secure environment. The emphasis is on improving efficiency and
profitability. However, in an attempt to improve efficiency and profitability, the
firm often tends to become less innovative. Stale products result in sales declines
and reduced profitability. Organizations in this stage are slowly dying. However,
maturity is not an inevitable stage. Firms experiencing the decline of maturity may
institute the changes necessary to revitalize.
Although an organization may proceed sequentially through all four stages, it does not
have to. An organization may skip a phase, or it may cycle back to an earlier phase. An
organization may even try to change its position in the life cycle by changing its structure.
As the life-cycle concept implies, a relationship exists between an organization's size
and age. As organizations age, they tend to get larger; thus, the structural changes a firm
experiences as it gets larger and the changes it experiences as it progresses through the life
cycle are parallel. Therefore, the older the organization and the larger the organization, the
greater its need for more structure, more specialization of tasks, and more rules. As a result,
the older and larger the organization becomes, the greater the likelihood that it will move
from an organic structure to a mechanistic structure.
Strategy
How an organization is going to position itself in the market in terms of its product is
considered its strategy. A company may decide to be always the first on the market with the
newest and best product (differentiation strategy), or it may decide that it will produce a
product already on the market more efficiently and more cost effectively (cost-leadership
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strategy). Each of these strategies requires a structure that helps the organization reach its
objectives. In other words, the structure must fit the strategy.
Companies that want to be the first on the market with the newest and best product
probably are organic, because organic structures permit organizations to respond quickly to
changes. Companies that elect to produce the same products more efficiently and effectively
will probably be mechanistic.
Environment
The environment is the world in which the organization operates, and includes
conditions that influence the organization such as economic, social-cultural, legal-political,
technological, and natural environment conditions. Environments are often described as
either stable or dynamic.
In a stable environment, the customers' desires are well understood and probablywill remain consistent for a relatively long time. Examples of organizations that
face relatively stable environments include manufacturers of staple items such as
detergent, cleaning supplies, and paper products.
In a dynamic environment, the customers' desires are continuously changingthe opposite of a stable environment. This condition is often thought of as
turbulent. In addition, the technology that a company uses while in this
environment may need to be continuously improved and updated. An example of
an industry functioning in a dynamic environment is electronics. Technology
changes create competitive pressures for all electronics industries, because as
technology changes, so do the desires of consumers.
In general, organizations that operate in stable external environments find mechanistic
structures to be advantageous. This system provides a level of efficiency that enhances the
long-term performances of organizations that enjoy relatively stable operating environments.
In contrast, organizations that operate in volatile and frequently changing environments are
more likely to find that an organic structure provides the greatest benefits. This structure
allows the organization to respond to environment change more proactively.
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Technology
Advances in technology are the most frequent cause of change in organizations since
they generally result in greater efficiency and lower costs for the firm. Technology is the way
tasks are accomplished using tools, equipment, techniques, and human know-how.
In the early 1960s, Joan Woodward found that the right combination of structure and
technology were critical to organizational success. She conducted a study of technology and
structure in more than 100 English manufacturing firms, which she classified into three
categories of core-manufacturing technology:
Small-batch productionis used to manufacture a variety of custom, made-to-
order goods. Each item is made somewhat differently to meet a customer's
specifications. A print shop is an example of a business that uses small-batch
production.
Mass production is used to create a large number of uniform goods in anassembly-line system. Workers are highly dependent on one another, as the
product passes from stage to stage until completion. Equipment may be
sophisticated, and workers often follow detailed instructions while performing
simplified jobs. A company that bottles soda pop is an example of an organization
that utilizes mass production.
Organizations using continuous-process production create goods bycontinuously feeding raw materials, such as liquid, solids, and gases, through a
highly automated system. Such systems are equipment intensive, but can often be
operated by a relatively small labour force. Classic examples are automated
chemical plants and oil refineries.
Woodward discovered that small-batch and continuous processes had more flexible
structures, and the best mass-production operations were more rigid structures.
Organizational design depends on the type of business. The small-batch and continuous
processes work well in organic structures and mass production operations work best in
mechanistic structures.
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ORGANISATION STRUCTURE OF APOLLO TYRES
LIMITED
CHAIRMAN &
MANAGING DIRECTOR
VICE-
CHAIRMAN
CHIEF INDIANOPERATIONS
UNIT HEAD
KALAMASSERY
DIVISIONHEAD
ENGINEERING
DIVISIONHEAD
COMMERCIAL
DIVISION HEADQ - TECH
GROUPMANAGER
PRODUCTION
GROUPMANAGER
HUMAN
RESOURCE
ASSOCIATE
MANAGER
SYSTEM
ASSOCIATE MANAGER
PRODUCTION
PLANNING & CONTROL
ASSOCIATE MANAGER
INDUSTRIAL
ENGINEERING
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CHAPTER - V
DEPARMENTAL PROFILE
Production Engineering Commercial Systems
Human Resource Industrial Engineering
Production Planning &Control Q-Tech
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HUMAN RESOURCE DEPARTMENT
The human resource departments main function is to manage people. It facilitates
smooth working of the organization by looking into the human resource side and also the
overall administration of organisation.
Key functions:
To design and implement procedures, policies and systems those aretransparent and help in achieving company goals.
Industrial relations To boost productivity and improve quality through internal customers Developing people and teams Managing change Integrating people into the companys vision, culture and philosophy Manpower planning, recruitment, employee orientation Induction, conformation, campus recruitment and internal recruitment Travel, transfer, ambulance room, statutory compliances Compensation policies, attendance and leave administration, payroll advice,
performance appraisal, training and development, benefit administration, disciplinary
action and safety
HR Mission
To create HR policies and processes which are employee friendly. To build a culture which has warm forthcoming and is professional with a sense of
ownership & pride.
To encourage innovative thinking.
To encourage transparency & teamwork. To develop leaders at all levels with general management skills. To create a learning organization. To develop competencies & skills through training and development. To constantly raise levels of employee productivity. To be a change agent. To create HR brand. To work towards attaining & sustaining the best employer status.
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HR Philosophy of Apollo Tyres Ltd.
Aims to play an active role in enabling the success and growth of the organization Continuous improvement in the quality of people and their approach towards
customer service
Providing newer and more effective methods of managing and leading HR oriented growth strategies guide towards top level decisions Strives to maintain a balance between qualitative and quantitative results Creation of an organization wide involvement with the concept of HR Commitment of the top management, which is the backbone for the success of all new
HR initiatives
Organization Structure of HR Department
Focus areas of HR functions
The main functions of the HR department involve:
Manpower planning Recruitment and Selection Performance appraisal Training and development Welfare Safety Industrial Relations Security Career planning and promotion policy of employees
GROUP MANAGER
HR
ASSOCIATE MANAGERSECURITY
EXECUTIVETRAINING & DEVELOPMENT
EXECUTIVEWELFARE
ASSOCIATE MANAGERSAFETY
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MANPOWER PLANNING PROCESS
The manpower planning process is directly linked to the long term business plans
of the organization. The manpower planning exercise is conducted annually to assess themanpower requirements of the organization. At the beginning of each calendar year, HR
department interacts with each department to collect their manpower requirements in
conjunction with the annual projected business plan.
The following factors form the basis for the manpower planning exercise:
Product Mix
Optimum equipment capacities Existing manpower Envisaged organization structure Comparison of actual versus expected productivity ( measured in terms of Kg/man-
hour)
Inter-unit comparisons for common functions.
Keeping in mind these factors, each Department/Function is expected to make an
estimation of the human resource requirement phase wise at each location, along with the
profile of people needed and the sources from where they can be obtained. The manpower
plan covers all levels viz., workmen, staff, officers, and managers. The total manpower
requirement is discussed with the president/VC & MD. After the formal sanction has been
given, HR incorporates the manpower requirements into its Annual Requirement Schedule.
Attempts are made to look into possibilities of relocation and redeployment for filling up the
vacant positions before resorting to recruitment from external sources. Once the annual
manpower plan has been frozen, the norm is to ensure that no deviations are there in terms
of requisition for additional vacancies at a later stage during the year.
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PERFORMANCE APPRAISAL
Performance Appraisal is the process of evaluating the performance of the employees
in comparison to a set of standards and then communicating that information to the
employees. Such appraisal is also known as performance review, performance evaluation,
employee rating, employee evaluation or result appraisal.
Objectives
To review the performance of the employees over a given period of time and rewardfor good performance.
To judge the gap between the actual and desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior-subordinate
and management employees.
To diagnose the strengths and weaknesses of individuals so as to identify the trainingand development needs for the future.
To provide feedback to the employees regarding their past performance. Provide information to assist in the other personnel decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be
performed by the employees.
To judge the effectiveness of the other HR functions of thee organisation such asrecruitment, selection, training and development.
To reduce the grievances of the employees.Performance Appraisal in Apollo Tyres Ltd.
Employees
The performance of employees is evaluated on the basis of:
1. Daily attendance monitoring system.2. Performance management for the performance appraisal.3. Promotion policy.
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Executives
Apollo conducts an efficient performance appraisal system for their executives. It is a
centralized appraisal system. The online appraisal is known as PACE (Performance Appraisal
& Career Enhancement). It is done in every quarter and the annual review time period will be
from April 1st to March 31st.
The appraisal process begins with goal setting. Goal setting process starts with
corporate goal setting, department and individual goal setting. Key Result Area (KRA) has to
set by each executive. KRA is the particular area or responsibility or target area for an
executive along with their manager.
At the time of appraisal, the reporting supervisor along with the section manager
assesses the attained performance of the executive and evaluates the performance in the light
of set standards for performance.
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Process of Performance Appraisal
Establishing performancestandards
Communicating standards &
expectations
Measuring the actual
performance
Decision making and taking
corrective actions
Discussing results (providing
feedback)
Comparing with standards
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RECRUITMENT & SELECTION
Recruitment is done through advertisement and a good opportunity is given to the child
of worker. This increases family loyalty towards the company. They are called for the
interview and the chief executive take final decision.
1. Management Staff
TechnicalB.Tech, Graduate Engineer Trainee
Non Technical - CA/ICWA/MSW/MBA/MA (PM); Executive Trainee
After training, they are absorbed as officer. Criteria include:
a) Consistency in academic performanceb) Group Discussionc) Personal interview
2. Employee children skill development scheme
a) One year training in productionb) Dependant of employeesc)
Physical fitness [height -165 cm, weight50 kg]
d) Minimum qualification- 10th standard
INDUSTRIAL RELATIONS
Union management relation:-
Mutual trust + Understanding = Teamwork.
A good industrial relation exists in the organization. The management and the
employees jointly find the solutions for the problems. There exists a well relation between
employer and employees. There are four main trade unions recognized by the company are:
ATSWN (Apollo Tyres Staff and Worker Union) ATEU (Apollo Tyres Employees Union) ATMS (Apollo Tyres Mazdoor Sangh) ATWM (Apollo Tyres Workers Movement)
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Jyothirgamaya
On each working day about 10 employees are selected for training in a classroom
atmosphere, about the productivity, quality and scrap reduction. The employees are provided
training specialty about the company and the tyre industry in general. Jyothirgamaya provide
information regarding the changes happening in the industrial field. Its objective is to give
training for all the employees in the unit within a period of 1 year.
SIX SIGMA: (introduced on April 16th
2007)
Six sigma is basically meant for increased production and for running the organization
profitability. I t is for finding out areas where unneeded expenses are occurring and for
reducing. It uses scientific techniques with a disciplinary approach. A six sigma organization
means the defects in the production of 10 lakh parts must be below 3.34%. When the
employees become aware of six sigma and they come into contact with the machineries used
for this, then the organization will achieve an unexpected growth. This helps to find out the
defects in production and for finding out remedy. It also helps to understand the fact that
consumers are the owners and also to produce quality products.
WELFARE MEASURES
The organization provides good welfare services to its employer. The company runs a
subsidized canteen on contract basis. Rest rooms with locker and washing facility, arts and
sports club, well maintained library are other facilities provided.
A well transportation facility is given to all the employees from different destinations
from which they have to pay a very less amount. All employees drawing a salary below
Rs.6000 are covered under group accidental policy and medi claim policy.
The welfare department ensures proper blend in the mental and physical health of the
employees. Positive measures are taken in maintaining the health of the employees.
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Welfare measures
Canteen: Companies normally provides canteen facilities for its employees. Itis running in a one year contract based level. The company pays a monthly subsidy of
Rs.1225000 to the canteen contractor. An amount of Rs.20 is collected monthly from
employees.
Transportation Facility: Company provides transportation facility to all itsemployees working in night shifts, they provides bus and tempo for travelling
Locker room: It is provided for safe deposit to personal documents and money Toilets Hot water Cooler Rest room Waiting room Uniforms Shoe allowances
SAFETY
The organization follows all the provision under the factories Act 1948, the plant is
well equipped with safety machines and directions are given for the same. Safety directions
are placed at noticeable points in and around the plant premises. Fire extinguishers are placed
reachable points and employees are well trained to use if necessity comes. Those who work
in the production unit are given masks, safety gowns and shoes.
In Apollo a separate book is given to each employee, which prescribes certain rules and
procedures in order to create a working environment free of accidents. No major accident has
occurred in the plant for past ten years.
The following are some of the safety policies of Apollo Tyres Ltd.
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Accidents resulting in personal injury and damage to property and equipmentrepresent needles human to economic waste, which must be prevented by every
reasonable means available.
All personal injuries are prevented. The protection of human life demand a completeand continuing to eliminate accidents.
Officers of all level have a primary responsibility for the safety and well being of allpersons who report of him.
Safety motto: ABC- Always Be Careful
Safety Measures
Medi-claim policy Mock drill practice 24 hours ambulance facility Firefighting facility Personal protective measures Shoes, face mask
Ear phones for reducing sound Water pollution checked by Kerala Pollution Control Board Air pollution check-up Periodic safety check-up Safety training programs License renewal Two medical officers for 24 hours First aid training
SECURITY
The security is concerned with the physical movement of men and material. Security
staff headed by the associate manager works at all the shifts. To facilitate the security
measures, single point entry is adopted to control visitors. For materials, separate gate passes
are issued.
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Culture of Career Promotion Apollo
An online, matrix-driven performance management system called PACE or
Performance And Career Enhancement, allows for objective goal-setting and performance
evaluation. Quarterly appraisals and bonus payouts, in accordance with corporate and
individual achievements, ensures a tracking of each individual's performance and training
need-fulfillment over a career span at Apollo Tyres. PACE provides greater objectivity in
measuring performance by providing metrics for tracking the performance, growth and
potential of each individual. Annually, the basket of competencies at each level is evaluated.
All training programmes are consolidated under the Apollo Laureate Academy. In
collaboration with leading institutes like the Indian Institutes of Management, Management
Development Institute, IMD, Dale Carnegie Training and knowledge partners like Mercer
and Thomas Profiling, domain-specific training needs are identified and programmes are
developed.
The Apollo Laureate Academy encourages individuals to attend seminars, meets,
conferences and workshops taking place in the public domain, to ensure both professional
growth and learning, as well as to build relationships and network with similar communities
across industries. For the vital sales and marketing and manufacturing teams, specialized
programmes have been developed to enhance skills, and identify individual areas of strength.
Promotion Policy
Each section has a channel of promotion. An executive can be promoted step by step
and have the opportunity to become a division head. The promotion policy for executives is
as follows:
E1 E2 E3 Associate Manager Manager Group Manager
Division Head
Normally, promotions for regular workers from L-2 to L-11 grades are given based on
seniority in the concerned promotion channel. However, in the case of certain selection posts
such as Junior Asst., Senior Asst., Grader, Green Tyre Inspector, Technician-Test Wheel,
Instrument Technician, Machinist-B, Leading Hand-RMS applications will be invited from
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the eligible employees. Selection for promotion will be based on the performance in the
written test and interview. Usually, promotions are based on following factors:
1. Experience2. Qualification3. Marks for Attendance
Marks for Attendance
Percentage of attendance
Marks
100 20
99 19
98 1897 17
96 16
95 15
94 12
93 or less than 93 9
PRODUCTION PLANNING AND CONTROL DEPARTMENT
The production planning and control department is responsible for fixing
monthly production levels, meeting production targets, scheduling machines as per the
requirements, employees, developing subordinates and the preparation of raw material
requirements based on monthly production ticket.
Structure of PPC Department
UNIT HEADKALAMASSERY
ASSOCIATE MANAGER PPC
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Other function of the PPC Department includes:
Conduct work studies, improvement studies in various equipments and fixing ofnorms.
Capacity calculation in various equipments for time to time inquest to variouschanges.
Design, implementation and follow-up scheme in various zones. Planning and assessment of manpower requirement in various
departments periodically.
Study plant layout and material handling systems and suggest for improvements
Explore the possibilities of capacity expression and prepare the report Visit other industries for industries for getting information regarding new
developments.
Suggest various cost reduction programmes. Conduct improvement of methods and equipment design compatible to best economic
standards
Evolve various strategies to optimize inventory levels at various stages such asengineering stores.
Preparation of monthly production plans Communication of organizational goals down the line Prepare adjust and issue of different operations based on the programs,
inventories, programs of work and specifications
Follow up programs of work in all sections Report relevant details and assist to maintain steady progress of work
Take physical inventories from the stores of finished goods and raw materials Maintain records of inventories Report shortage, rejection and delay in the operations and take corrective measures Maintain good housekeeping Ensure that no material is leftover when size changes occur Keep record of non moving material, unidentified material ,scrap generated, obtained
disposal instruction, report follow up actions and to clean up materials
Preparation of raw material requirement based on monthly production ticket
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INDUSTRIAL ENGINEERING DEPARTMENT
The main objective of this department is to plan, design, implement and manage
integrated production and service delivery systems that assure productivity, quality,
reliability, maintainability and cost control to keep Apollo globally competitive.
Structure of Industrial Engineering Department
Major Functions
1. Bench marking2. Key result area identification3. GAP Analysis4. Incentive Planning
Other Functions
Conduct work-studies, improvement studies in various equipment and fixation ofnorms.
Capacity calculation of various equipment from time to time consequent to changes. Design, Implementation and follow up of incentive schemes in various zones. Planning and assessment of manpower requirements of various departments
periodically.
Studying plant layout and material handling systems and suggesting improvements. Explore the possibilities of capacity expansion and prepare project reports.
UNIT HEADKALAMASSERY
ASSOCIATE MANAGER
INDUSTRIAL ENGINEERING
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Negotiations with unions regarding various issues like incentive schemes,productivity and expansion and labor issues.
Analysis of capital expenditure request from various departments and makerecommendations to Senior Management Committee
Prepare budgetary planning for capital and cash flow requirement Prepare documents for long-term settlements, bonus settlements etc. and represent the
management in the meetings with the Unions / Labor Departments.
Visit other Industries for getting information regarding LTS methods, practices andother developments.
Conduct various training classes for workmen, supervisors, other officers and newrecruits.
Apply various Industrial Engineering techniques such as job evaluation, O & M(Organization & Methods) studies, Kaizen, Line Balancing etc.
Suggest various cost reduction programs and implementation. Associate with professional bodies like Productivity council, NITTIE, and Institution
of Engineers etc.
Conduct daily audit of manpower, productivity, lost time, scrap details, absenteeism,overtime etc.
Furnish various other management information reports to the top management. Evolve best practices and processes through global benchmarking in the context of
global competitions and intense customer focus.
Optimize inventory levels at various stages such as engineering stores, work inprogress are finished goods.
Continuous improvement of methods and equipments design compatible to the besteconomic standards
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SYSTEMS DEPARTMENT
The systems department is responsible for computerization of different departments of
Apollo Tyres Limited. It operates and co-ordinates all systems in the organization. At Apollo
Tyres Ltd., Kalamassery an associate manager is in charge of systems department. He
directly reports to the unit head.
Structure of Systems Department
Apollo uses Enterprise Resource Planning (ERP) as an IT enabler across the
company to develop integrated database. The ERP package implemented in ATL is SAP R/3,
which stands for System, Application and Products in data processing. Since ATL is
following SAP system in all its departments, system department plays a pivotal role in the
day to day smooth functioning of the company.
In collaboration with IBM, SAP was successfully implemented at ATL on 1 st
February 2004. ATL was the first manufacturing concern in India to implement SAP for the
whole organisation without defects within a short span of time. Since the implementation in
2004, till today no major problems were reported. That shows the efficiency of systems
department of ATL.
UNIT HEAD
KALAMASSERY
ASSOCIATE
MANAGER SYSTEMS
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Primary functions
The two primary functions of systems department are as follows:
1. Monitoring functionSecurity problems in the SAP were solved using central virus scanning system and
firewall at the head office (Gurgaon and Haryana). HCL solve all problems related to the
network connection.
2. Maintenance functionThe systems department in the plant solves the network problems as well as the
computer problems. Regular backups were taken daily and monthly for providing reliability
in the SAP system. All the computers were connected using both point to point and star
topology to form an intranet inside the plant. Proper authentication was given to each
department members using a user ID and password.
PRODUCTION DEPARTMENT
Kalamassery plant with an installed capacity of 100 MT/day contributes approx. 300
Cr to the total turnover of the Apollo group. The daily production target of the Kalamassery
unit is 100.81 metric tons. Production is carried out in three shifts. Every month end,
production intends are obtained from the marketing department of Apollo tyres Ltd, Delhi
stating how much tyres need to be manufactured. Kalamassery plant primarily focuses on the
bias tyres production.
The production department is divided into three main divisions based on the various
stages of tyre manufacturing:
The main functions of Division 1 are:
1. Mixing2. Dipping3. Calendaring4. Extrusion
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Division 2 has the following functions:
1. Bias cutting2. Band building3. Stock preparation4. Tyre building
Division 3 mainly deals with:
1. Tyre curing2. Final inspection
ENGINEERING / MAINTENANCE DEPARTMENT
The engineering department is the service department and provides its service to
various departments such as production, technical, quality, assurance and engineering. The
major function of the engineering department is manufacturing, installation, maintenance and
repair of machines. All machines are checked regularly. The machine history is recorded so
that the life of a particular machine can be known and used respectively. Maintenance is the
key function of this department, and is classified as:
1. Preventive maintenance2. Breakdown maintenancePreventive maintenance means preventing the machines from any possible
breakdown and breakdown maintenance means repairing the faulty machines.
Engineering department undertakes periodic checking of all machines. Shift
engineers study the problem in detail and the required repair work is done. The required
spares are available from various engineering stores. The machine is then checked and
production officers close the notification.
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COMMERCIAL DEPARTMENT
Organization Structure of Commercial Department
PURCHASE SECTION
The main function of purchase department is to provide right material at right time in
right place at right quantity. This department is concerned with the purchase of both
indigenous and imported materials. It covers procurement of indigenous. Engineering spares,
general engineering and miscellaneous items other than raw materials. This department is
headed by senior manager and under him there are a number of officers and staff. The
department is provided with the latest communication facilities and computers.
DIVISION HEAD
COMMERCIAL
MANAGER COMMERCIAL
(RMS, FGS, EXCISE, ACCOUNTS, FINANCE & COSTING)
EXECUTIVES
EXECUTIVE
RMS
ASSOCIATE MANAGER
EXCISE
GROUP MANAGER
ENGINEERING STORES & PURCHASE
MANAGER
FGS
ASSOCIATE MANAGERS (3)
ACCOUNTS, FINANCE & COSTING
EXECUTIVE
PAYROLL
ASSOCIATE MANAGER
EMS
EXECUTIVES (2)
PURCHASE
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The main items of purchase are:
Engineering spares Consumables Furnace oil Diesel Chemicals Lubricants Some raw materials
The purchase may be corporate purchase of plant purchase. Under corporate purchase
the raw material is purchased after considering what the market require for the month. Underplant purchase, purchase may be of stock item or of non stock item.
Stock items are purchased for regular use. They are having material codes. They are
purchased after considering the reordering level, reorder quantity, lead time etc. For non
stock items there is no regular purchase.
Different departments have to prepare purchase requisitions. The items purchased are
engineering item, oils, & lubricants, local raw material, import of spares etc.
Vendor Selection
This includes a list of steps involved in selecting the right vendor for stack items
identified as critical by the department to enable a smooth functioning of the plant. Vendors
are generally identified as:
1. Manufacturers2. Dealers3.
Firms offering various services
Manufacturers are divided into two
1. OEM (Original Equipment Manufacturers)
The OEM shall be identified as a vendor for the supply of equipment, spares,
components etc.
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2. OEM (Original Component Manufacturers)
For all spares, components and consumables, attempts are made to identify the
manufacturer and source the items directly from them so as to get quality products or services
at optimum cost. Information available on supplier's manuals, catalogs, details available on
the nameplates of machines etc. shall be used for the purpose.
PURCHASING RECORDS
1. Purchase Order Record: POs of all materials bought.2. Vendor Record: List of all vendors & their complete mailing addresses.3. Blue print and specification record Drawing:- Many items are purchased by
blue print specification are kept in separate files with index showing their
location and where the copies have been sent. Thus for repeat order to old
supplier it is not necessary to send new copies of the specification.
4. Contract file: Certain goods may be bought under a term contract if so, thepurchasing department must maintain a record of such contract.
RAW MATERIAL STORES:
Process: Receipt, handling, storage, packaging, forwarding & delivery of material to internal
and external customers with proper documentation to meet their requirements.
Purpose: To supply right material in right time to produce right quality product without any
interruption.
Scope: Receipt, handling, storage & issue of raw materials & to the customer.
(a) Raw material handling process:
Activity description
1. Upon receipt of the raw material, the document related to transporter, supplies areverified for authenticity of the supply.
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2. Identification of the supply with full details of material code, date of receipt, suppliersname & truck no: will be carried out and transferred to the pre identified location.
Upon receipt of the raw materials GR will be prepared.
3. Based on the GR, Quality assurance will collect the samples as per the pre-determinedfrequency and OK the material if the results are meeting the requirement by releasing
the GR.
4. The materials if rejected from lab will be sent back to supplier and all acceptedmaterial will be accounted in the inventory.
5. Issue of raw material will be carried out to internal customers & external customers
(b) Receipt of raw materials:
1. Verification of Documents at Security Gate:
The security inspector at main gate shall verify all documents pertaining to the
consignments brought to the factory before allowing entry in to factory premises and note thefollowing details. Serial no, suppliers name, description of item, challan quantity, challan no
and date or LR no and date, truck reg. no., date and time of arrival, date and time of
departure.
2. Weighment (By the Computerized Weigh Bridge)
Security shall inform raw materials stores about the arrival of the vehicles at the gate.
The security guard and a representative from RMS shall record weighment of trucks jointly.
The weighment slip shall indicate the following.
Serial no, time and date of receipt, suppliers name, gross weight with materials, SIR no
and date. After recording the above details in the computerized weighing balance the vehicles
shall be directed to the respective unloading bay. In ATL weighment will be done in a
weighbridge closer to the factory under the supervision of security and RMS personnel after
ensuring that the weigh bridge posses a valid certificate from weight and measure
department.
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Both security and RMS personal shall sign on the computerized weighment slip. One
copy of the weighment slip will be filed in RMS along with concerned delivery challan and
the second copy will be returned by security department.
3.Verification of Documents at RMS
The receipt in charge shall verify the documents to ascertain the no. of packages,
description of materials code and weight of the material. If any discrepancy is found the same
shall be orally reported to the officer concerned before unloading. He in turn will take
decision suitably. The dispatch documents include: Delivery challan/invoice, sales tax papers,
packing list and duplicate copy for transporter of invoice for availing MODVAT credit. In
case of non receipt of any of the above documents the consignment will not be unloadedunless and otherwise instructed by the competent authorities after compliance of all
conditions stated above, the materials will be unloaded as instructed by the receipt in charge
and lead to the respective area.
(c) Handling storage and preservation
All the incoming materials except the materials coming in tankers will be unloaded
manually or with the help of forklift as instructed by the receipt in charge. Caged pallets or
platform pallets are used for storing of materials so far as possible to facilitate easy handling
at the time of issue. Each caged pallets will carry a maximum of 1500 kg of materials. Caged
pallets will be stacked one over the other.
ENGINEERING GOODS STORES
Engineering goods stores is responsible for storing the necessary spare parts,
components required for smooth functioning of the plant. On receipt of indent from
production department, the engineering stores arranges for its release. The inventory
management technique used is VED Analysis. Almost all the activities of this department are
computerized. The purchase department is initiated whenever re order level is reached. A
buffer stock is always maintained in the store.
Another system followed in engineering stores is VMI-Vendor Maintain Inventory. In
this the vendors supply the raw material in large quantities and payment is made only for
consumed items.
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1. Consumables (General stores items) are standard engineering items (bearing, belt,etc). It is decided to identify common codification scheme for all consumable items.
All the items shall be brought under this codification scheme.
2. Spares: Spares are part of equipments. Equipments are varying from plant to plant bymake and model.
It is decided to,
1. Identify common equipments by same make and model.2. Assign uniform code to equipment make and model wise, which is common across
plants.
3. Assign respective plant spares with code of equipment.In general;
1. Item code for consumables will be common across all plants.2. Item code for spares will be plant specific with respect to common equipment
code.
However, material classification in SAP will be used to trace the spares to commonmachines. Material Master Codification will follow the external; numbering.
FINISHED GOODS STORE
(a) Receipt of Finished Goods
All finished goods after final inspection are kept at the transferring are in each shift.
(b) Removal of Finished Goods
The finished goods required for dispatch kept at the transferring area, after preparing
the transferring-notes, will be removed to the loading bay and balance will be removed to
stores for storage, after completing packing for required item .
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FINANCE & COSTING SECTION
Finance Department of ATL is concerned with the planning and controlling of the
financial resources. In ATL the statement is prepared in accordance with the requirement of
companies ACT 1956 and applicable accounting standards issued by the institute of
Chartered Accounts in India. The management of ATL accepts that the integrity and
objectivity of their financial statement has been made on a prudent and reasonable basis in
order that the financial statements retain the forms of transactions. Companies state of affairs
and profit of the year.
The corporate office does most of the accounting jobs of ATL. At Kalamassery Plant,
they have separate department that deals with salary, costing, excise duty on raw material.
1. Payroll SectionIt involves the handling of wages, salaries, keeping records of employees including
information about their basic allowances maintaining their attendance etc. for the
convenience of employee, payments and dispersed through banks of ATM's. Basic
allowances are provided by HR dept. and absenteeism rate are given by time office dept.
2. CostingThe process of costing is based on the financial accounts. The price of a single tyre is
determined by taking into consideration the actual cost involved in making tyres. The
company follows the rate of having only 0.5 less percentage of scrap and this helps in
minimizing cost.
3.
Control
It includes monitoring the electricity charges, wastage scrap and other avoidable
expenses. Distribution of payment through it is step also taken under this function. This has
helped in reducing manpower security requirements and also other risks to be taken by the
company. It maintains the maximum inventory of 6-7 days as this is required for again time
of tyre. A total 1,32 hours is needed to make a tyre, make it heat resistant, strong, loud etc.
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4. PricingPricing is done as per the change in price of raw material and on basis oaf
competitors pricing policy.
5. Control exciseAll has to pay 16% excise duty for dutiable items of domestic purposes to the central
government for exports on excise duty has to be paid at gives about 2.3 crores excise duty in
spite of all these measures.
6. Basis of accountingThe financial statements are prepared on historical cost convention with the exception
of certain fixed asset which was revalued based on occurred method of accounting and in
accordance with the accounting principle generally accepted in internationally.
7. Sources of fundThe major source of funds is from shareholders funds, share capital, reserves and
surplus and loans are funds either secured or unsecured. But the unit of Kalamassery receives
funds from head office New Delhi.
8. BudgetingBudgeting is done on the basis of production. Here no sales takes place hence budgeting is
done on the basis of production.
9. Applications of fundsFunds are used for purchasing of fixed assets, meeting depreciation, making new
investments, purchase of inventories and meeting current liabilities. Apollo Tyres Ltd. of
Kalamassery uses its funds for making payments tax payments and purchasing raw material.Rest all the funds are allocated by the head office for other needs and requirements.
Management of accounts receivables
Every firm likes to sell its goods or services for cash. But competitive pressure force
most firms to sell goods or services on credit. Another motive for selling goods or services on
credit is to attract more business. When goods are sod on credit, inventories are reduced, but
receivables are created .Receivable constitute on important portion of current asset of several
firms.
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Q TECHDEPARTMENT
Q-Tech department is a recently introduced department by merging the technical and
quality assurance department.
Organization Structure of Q-Tech Department
TECHNICAL DEPARTMENT
Technical department looks after tyre engineering and related matters and the
department has close contracts with production department. Technical department plays a
crucial role in the organization.
DIVISION HEAD
COMMERCIAL
GROUP MANAGER
TYRE ENGINEERING
MANAGER
COMPOUNDING
GROUP MANAGER
LAB & QUALITY SYSTEM
ASSOCIATE MANAGER
HEAT ENGINEERING
MANUFACTURING MANAGEMENT
ASSOCIATE MANAGERZONE 1
ASSOCIATE MANAGER (3)ZONE 2
CELL MANAGEMENT
SHIFT A SHIFT B SHIFT C
ASSOCIATE MANAGER
LAB
ASSOCIATE MANAGER
QUALITY ENGINEERING
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Functions
1. To issue specification to the production plant2. Develop compound Fabric standard3. Accessories drawing4. Processing machine specification5. Processing and curing of new design6. To inspect all the production activity7. To test the tyre8. To stop production if there is any unconformity found during analysis9. To make appropriate changes in production process and specification if necessary10.Initiate and implement corrective measure.
Technical Department is divided into
1. Compounding Department: This department holds all the specification concernedwith compounding and ensures all processes as per specification
2. Tyre engineering department: This department holds all the specifications withbuilding and curing. This department can make any changes in the specifications as
required and is concerned with conducting various tests on the final production.
QUALITY ASSURANCE DEPARTMENT
The main duty of the quality assurance department in the determination of the quality
standards, measurements of the actual quality, compares it against standard controls measures
are tables.
Functions
1. Inspection of incoming raw material.2. Auditing involving the control of non-confirming material or process.3. Auditing of finished products4. Solving customer complaints5. Testing process
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Tools of quality Assurance Dept.
1. Quality Manual- It states the policies and principles of the quality s/m use.
2.
S/m procedure- It functions as guidelines to units ensuring uniformity in the qualityS/M.
3. Quality meetings- Such meetings are held every month and each departmentgives suggestions for the scope of improvement. Internal quality credit is held
every 6 months.
4. Quality policy- ATL follows strict quality control policy to enhance customer delightand also pays special attention to retain quality of products. At present is department
has been integrated with the technical department under manufacturing.
Functions
1. Raw material testingQuality of all the raw material as tested in lab in 3 different section.
a.
Fabric laboratory
The laboratory test all fabric and steel wires received and at all stage of the process.
b. Chemical laboratoryThis laboratory carries out test for all polymers, fillers and chemicals.
c. Physical laboratoryAll rubber compounds in process are tested in the lab each stage i.e., after mixing in the
Banbury, after extrusion and calendaring and after curing.
2. Tyre TestingSamples of cured tyres are tested indoors on a test wheel. The wheel stimulates the
running condition of a tyre/primarily used to detect carcass strength and heat generation.
Tyres are fitted on different vehicles to study the effects of different types roads, load and
climate.
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For international trade transaction ISO certification has become inevitable. Apollo
Tyres Limited got the privilege to have ISO 9001 certification. ISO 9001 covers the quality
system and model for QA in design, development, installation and servicing.
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CHAPTER - VI
FINANCIAL HIGHLIGHTS
Statement showing the trend of Working Capital
Particulars Rs. in millions Trend Percentage
2009 2010 2011 2009 2010 2011
Current Assets:
Inventories
Sundry Debtors
Cash & Bank
Other Current Assets
Loans & Advances
Total(A)
Current Liabilities:Current Liability
Provisions
Total(B)
6302.15
2247.35
3620.91
5.33
2053.90
9928.72
7869.00
3489.82
44.18
2372.23
17537.51
9501.80
1908.86
-----
3947.67
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
157.55
350.15
96.38
828.90
115.50
166.58
223.91
204.81
220.79
278.28
422.80
52.72
0.00
192.20
231.18
292.25
350.85
301.80
14229.64
5860.44
1141.00
23703.95
13122.16
2336.92
32895.84
17127.32
4003.25
7001.44 15459.08 21130.57
Working Capital(A-B) 7228.20 8244.87 11765.27 100.00 114.07 162.77
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1.4
6.5
4.4
0
1
2
3
4
5
6
7
RsBillion
NET PROFIT
2009 2010 2011
4.4
12.8
10
0
2
4
6
8
10
12
14
RsBillion
EBIDTA
20092010 2011
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3.1
7.9
11.7
0
2
4
6
8
10
12
14
RsBillion
CAPITAL EXPENDITURE (Capex)
2009 2010 2011
49.8
81.288.7
0
10
20
30
40
50
60
70
80
90
100
RsBillion
NET SALES
2009 2010 2011
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14
32.4
16
0
5
10
15
20
2530
35
%Return
Return on Capital Employed
2009 2010 2011
950
1160
1395
0
200
400
600
800
1000
1200
1400
1600
MT/DAY
CAPACITY
2009 2010 2011
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BSE STOCK PRICE FOR LAST 3 YEARS
NSE STOCK PRICE FOR LAST 3 YEARS
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CHAPTER - VII
SWOT ANALYSIS
Strengths
1. Apollo Tyres' diversified market base across 3 continents has enabled it to reduce itsdependence, and thereby, the inherent risks of banking on a single market, as
compared to its Indian competitors.
2. The presence of strong and established brands in the Company's portfolio, in each ofits country operations, lends credence to its growth plans. The key brands areApollo in India, Dunlop in South Africa and Vredestein in Europe.
3. An extensive distribution network supporting Apollo Tyres' brands and products in allits 3 key operations.
4. Continued leadership position in the commercial vehicle tyre segment in India,including price leadership in the cross ply segment.
5. A leading position in the fast-growing passenger car tyre segment in India, reachingthe #1 position in production and #2 in market share.
6. Strong player in the ultra high performance (UHP) passenger car tyre segment inEurope, particularly in high margin winter tyres.
7. Dynamic and progressive leadership.
Weakness
1. Absence in the two-wheeler and three-wheeler tyre segment in India, which is largeand continues to show good growth.
2. Sub-optimal production facilities in terms of economic size in South Africa.3. Market dynamics and intense competition in some key markets do not allow passing
on cost pressures as and when reasonably required.
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Opportunities
1. Apollo Tyres' enjoys an early mover advantage, with a large production capacity inthe rapidly growing truck-bus radial segment in India, well ahead of key competitors.
2. Entry into truck-bus radial retreading segment in India, by further leveraging itsleadership position in the commercial segmentthis enables the Company to provide
a complete solution to its customers and thus, enhance its brand equity.
3. Cultivating a sizable market for brand Apollo in Europe by capitalising on theexisting European distribution network. This further improves brand recognition and
enhances profitability.
4. Increased sales of brand Vredestein tyres by providing competitive cost productionbase out of India and/or sourcing tyres from other players.
5. Entry into the off-highway tyre segment in India.6. Introduction of truck-bus and off-highway tyres in Europe.7. Penetrating newer markets in Africa, including tapping into the potential of the
Dunlop brand.
8. Entry into high potential markets like South America, Australia and Eastern Europe.
Threats1. Potential growth slowdown in the Indian economy due to rising interest rates.2. Increased competition from global players like Michelin and Bridgestone as they
enter the truck bus radial segment in India.
3. Degrowth in the truck cross ply segment faster than anticipated.4. Extreme raw material price volatility and cost pressures.5. Exposure to the South African market which continues to face both a country and
currency risk.6. Economic downturn in Europe leading to decline in demand.
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CHAPTER - VIII
FINDINGS, CONCLUSIONS & SUGGESTIONS
FINDINGS
ATL is the first tyre company to receive ISO 9001 certification and one the few tyremanufactures to obtain QS 9000 certification.
Workers health and safety are given prime importance A good co-ordination exists between different departments. Trade unions play vital role as bargaining agents. The management is sometimes
forced to accept demands made by the unions.
The products of the company are known for its high quality standards. The workers are not completely satisfied with the wages they are paid. Employees are provided with facilities such as subsidized canteen, transportation etc. Safety posters and slogans are exhibited inside the plant and various safety awareness
programs are also conducted.
The factory premises are kept clean which comes under a dedicated system known asEnvironment Management System (EMS)
Factory is located at an ideal location that allows easy access to land, air and seatransportation.
All departments at the plant are being connected through SAP which gives real timeconnectivity with each other.
All the plants of Apollo tyre group are being connected with the headquarters throughWAN and SAP which critical decision making easy
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CONCLUSION
Apollo tyres Ltd is the 7th fastest growing tyre company in the world. A fair wage
system prevails in ATL. The company provides better working condition for employees.
Proper training to workers and efficiency of the workers must be increase to increase
production. The industrial relation with the local union is fairly good and satisfactory at
Apollo Tyres Ltd., Kalamassery unit.
The Company is facing a cut throat competition in Indian market and international
market. Despite of all these challengers Apollo has done well in the past and with a booming
economy and a focused progressive leadership at the top. The employees enjoy working as a
team and with customers to create superior and distinct production and services. Apollo is
focused on fast and flexible, never ending improvement in order to create an enterprise that is
dynamic, ever expanding and profitable and in constant pursuit of customer satisfaction is
Apollo policy to design, manufacture and service our products to provide the level of quality
and value that meets ever customer needs.
Apollo stands first in the production of truck tyres. In spite of recession the company
is still making sufficient profit. There are good working conditions and industrial harmonyamong the employees. Proper and adequate training is given to the employees, which leads to
higher productivity,. The company is facing cut throat competition from Indian market as
well as foreign market. In spite of fierce competition and local problems the Kalamassery
plant thrives and move forward to its target of 310 MT/day and thereby achieve their 9000
crore goals by the end of 2010. Apollo tyres boast a vibrant and dynamic, profession and non
hierarchical culture. Transparency and communication are cornerstones of corporate practice,
across levels, to ensure that each individual employee is aligned with the goals and aspiration
of the company. At Apollo Tyres the three corporate pillars of People, Quality and
Technology underpin all activities and processes. These are the companys stated areas of
corporate excellence, in its journey towards becoming a best in class global manufacturer.
Apollo Tyres, they are always looking out for new opportunities. If opportunities do not
come their way, they go ahead and create opportunities. Over the years they have created
opportunities for growth, opportunities for success and also opportunities for a bright future.
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SUGGESTIONS
Maintain the relationship between employees and employers
There should be training program for better understanding of