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1. INTRODUCTION An organizational study refers to the complete understanding of an organization in all dimensions. Ashok Leyland is a well known automobile manufacturing company in India. Ashok Leyland believe that its historical success and future prospects are directly related to combination of strengths. The referred unit is a core limb of Ashok Leyland, the nation’s pioneering automobile manufacturer. The study includes the brief study of the core departments of Ashok Leyland, Chennai. Different officials working in various departments have provided very important data in this report. Every effort has been made to understand the functions and activities of various departments as well as the manufacturing process. 1

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Page 1: Summer internship-Organizational Study At Ashok Leyland, Chennai

1. INTRODUCTION

An organizational study refers to the complete understanding of an organization in all dimensions.

Ashok Leyland is a well known automobile manufacturing company in India. Ashok

Leyland believe that its historical success and future prospects are directly related to

combination of strengths. The referred unit is a core limb of Ashok Leyland, the nation’s

pioneering automobile manufacturer.

The study includes the brief study of the core departments of Ashok Leyland, Chennai.

Different officials working in various departments have provided very important data in

this report. Every effort has been made to understand the functions and activities of

various departments as well as the manufacturing process.

1.1. OBJECTIVES OF THE STUDY

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Page 2: Summer internship-Organizational Study At Ashok Leyland, Chennai

To familiarize with business organization.

Getting practical experience regarding the organizational function.

To understand the functions of HR, Finance, Production and Marketing

departments.

To understand the culture in the organization and its effect on employees.

To get industrial exposure and experience.

1.2. SOURCES OF DATA

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The methodology used for the study is through the collection of primary and

secondary data.

Primary data

Direct observation

Live discussion with the managers and the staff members.

Secondary data

Annual Reports

Business Journals

Existing Records

Website of the company.

2. PROFILE OF THE STUDY

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2.1. INDUSTRY PROFILE:

AUTOMOBILE INDUSTRY HISTORY:

In the year 1769, a French engineer by the name of Nicolas J. Cugnot invented the first

automobile to run on roads.

This automobile, in fact, was a self-powered, three wheeler, military tractor that made use of

steam engine. The range of the automobile, however, was very brief and at the most, it could

only run at a stretch for fifteen minutes. In addition, these automobiles were not fit for the

roads as the steam engines made them very heavy and large, and required ample starting

time. Oliver Evans was the first to design a steam engine driven automobile in the U.S.

The automobile industry finally came of age with Henry Ford in 1914 for the bulk

production in cars. This lead to the development of the industry and it first begun in the

assembly lines of his car factory. The several methods adopted by Ford, made the new

invention ie) car, popular amongst the rich as well as masses.

According to the history of automobile industry U.S, dominated the automobile markets

around the globe with no notable competitors. However, after the end of Second World War

in 1945, the automobile industry of other technologically advanced nations such as Japan

and certain European nations gained momentum and within a very short period, beginning

in the early 1980s, the U.S automobile industry was flooded with foreign automobile

companies, especially those of Japan and Germany.

The current trends of the Global automobile industry reveal that in the developed countries

the automobile industry are stagnating as a result of the drooping car markets, whereas the

automobile industry in the developing nations, such as India and Brazil, have been

consistently registering higher growth rates every passing year for their flourishing

automobile markets.

INDIAN AUTOMOBILE INDUSTRY:

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India is one of the fastest growing automobile industries in the world. After 1960, the

automobile industry saw rapid growth and many automotive manufacturers started

production.

The automobile industry in India is the seventh largest in the world with and annual

production of over 2.6 million units in 2009. In 2009, India emerged as Asia’s fourth largest

exporter of automobiles, behind Japan, South Korea and Thailand. By 2050, the country is

expected to top the world in car volumes with approximately 611 million vehicles on the

nation’s roads.

A well developed transport network indicates a well developed economy. For rapid

development a well-developed and well-knit transportation system is essential. As India’s

transport network is developing at a fast pace, Indian automobile industry is growing too.

Also, the automobile industry has strong backward and forward linkages and hence provides

employment to a large section of the population. Thus the role of automobile industry

cannot be overlooked in the Indian economy. Indian automobile industry includes

manufacture of trucks, buses, passenger cars, defence vehicles ,two wheelers etc.., The

industry can be broadly divided into the car manufacturing, two-wheeler manufacturing and

heavy vehicle manufacturing units.

The major car manufacturers are Hindustan Motors, Maruti Udyog, Fiat India Pvt. Ltd, Ford

India Ltd., General Motors Pvt. Ltd., Honda Siel Cars India Ltd., Hyundai Motors India

Ltd., Skoda India Pvt. Ltd., Toyota Kirloskar Motor Ltd., to name a few.

The two wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle &

Scooter India Pvt. Ltd., Hero Honda, Yamaha, Bajaj etc..,

The heavy motors like buses, trucks, defence vehicles, auto rickshaws and other multiutility

vehicles are manufactured by Tata-Telco, Ashok Leyland, Eicher Motors, Bajaj, Mahindra

and Mahindra etc..,

INDIAN AUTOMOBILE MARKET:

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Many foreign companies have been investing in the Indian automobile market in various

ways such as technology transfers, joint ventures, strategic alliances, exports and financial

collaborations. The auto market in india can boast of attractive finance schemes, increasing

purchase power and launch of latest products.

Some vital statistics regarding the automobile market in India has been mentioned below:

India ranks 2nd in the global two-wheeler market

India is the 4th biggest commercial vehicle market in the world

India ranks 11th in the international passenger car market

India ranks 5th pertaining to the number of bus and truck sold in the world.

HEAVY VEHICLES MARKET:

Heavy vehicles market in India comprises of trucks, machines, ambulances and school

buses. The popular heavy vehicle brands in India are Volvo, Eicher, Tata, Telco, Ashok

Leyland and Swaraj Mazda.

Following are the major players in the Indian Heavy Vehicles Market:

Tata Motors is the largest automobile manufacturing company in India that

manufactures a wide range of heavy vehicles adhering to world class standards. It is

the market leader in commercial vehicles in all the segments, be it heavy vehicles,

medium size vehicles, small vehicles, buses or defence vehicles. The heavy vehicles

manufactured by Tata Motors have highly developed braking structure, high ground

authorization, better direction competence and a muscular body. The advanced

engine imparted to these heavy vehicles makes them a class apart from the other

heavy vehicles running on the Indian roads and Highways. Tata Motors leads this

segment with a market share of 61%.

Ashok Leyland is an exclusively heavy vehicle manufacturing company situated in

Chennai and was initiated in the year 1948. It is one of India’s biggest producers of

heavy vehicles such as trucks, buses, military vehicles and also the second biggest

commercial vehicle firm in India heavy vehicle division with a market share of

around 27%. Ashok Leyland is also renowned for producing auto spare parts and

engines for marine and industrial submission.

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Eicher Motors was initiated in 3rd September, 1960. The first firm to manufacture the

first tractor in India. The indigenously manufactured tractor was introduced in the

Indian market straight from Eicher’s Faridabad factory. The history of the firm can

be traced back to 1948, when Goodearth Company was established for vending and

repairs of imported tractors in the nation.

Swaraj Mazda, a tie up between Mazda and Swaraj Enterprise, Swaraj Mazda

represents advanced Indian expertise and manufacturing. The firm has Research and

Development improvement edge on international scale. The firm manufactures

various products such as Bus, Ambulance, Trucks etc.

The modern automobile market in India has been considering key issues in the process of

growth:

Customer care, and not just service

Domestic as well as multi-national investments

Searing through cut-throat competition

Road safety

Anti-pollution norms

Co-ordination with government to enable advancement

Used vehicle trade

The future of Indian automobile market is bright as it looks forward to manufacturing and

implementing new innovations such as electric cars as provided by Reva, alternate fuels like

CNG and LPG and probably customized internet automobile orders.

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2.2. COMPANY PROFILE:

Ashok Leyland has been a major presence in India’s commercial vehicle industry since

1948, the year it was born. The origin of Ashok Leyland can be traced to the urge for

self-reliance, felt by independent India. Pandit Jawaharlal Nehru, India's first Prime

Minister persuaded Mr. Raghunandan Saran, an industrialist, to enter automotive

manufacturing.

They are one of the India’s leading manufactures of commercial vehicles and special

vehicles, engines for industrial purpose, gen sets and marine requirement equipments. For

over five decades, Ashok Leyland has been the technology leader in India’s commercial

vehicle industry, molding the country’s commercial vehicle profile by introducing

technologies and product ideas that have gone on to become industry norms.

Ashok Leyland at the time of its inception was known as Ashok Motors. It was

assembling Austin cars at the first plant, at Ennore, near Chennai. In 1950, the company

started assembly of Leyland commercial vehicles and soon the local manufacturing under

license from British Leyland, participation in the equity capital, in 1954, the company

was re christened Ashok Leyland.

In 1987 the overseas holding by LRLIH (LAND ROVER LEYLAND

INTERNATIONAL HOLDINGS LIMITED) was taken over by a joint venture between

the Hinduja group, the Non Resident Indian Transnational group and IVECO Fiat SPA

part of the Fiat group and Europe’s leading truck manufacturing company. Ashok P

Hinduja is the chairman of the company. The Hinduja group also associated with Ennore

Foundries Limited, Automotive Coaches and Components Limited, and Gulf Ashley

Motors Limited.

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Page 9: Summer internship-Organizational Study At Ashok Leyland, Chennai

The subsidiary holdings are Ashley Holdings Ltd., Ashley Investment Ltd., and Ashok

Leyland Project Services. The chief competitors of the company are;

Mahindra

Volvo

Tata Motors

With a commanding strength of the about 12,000 employees the company is looking

forwards to enhance the scope of its action. It is aiming at expanding its production

operation overseas to make it a more globally accessible company. It is looking to

acquire a small to medium sized commercial vehicle manufacturers in China and other

developing nations, which have an established product line. An example would be the

2007 acquisition of the Czech based Avia’s truck business rechristened Avia Ashok

Leyland Motors.

Since its inception, Ashok Leyland has been a major presence and these years have been

punctuated by a number of technological innovations which went to become industry

standard. This tradition of technological innovations and leadership was achieved through

years of vigorous in-house research and development.

From 18 seater to 82 seater double-decker buses, from 7.5 tonne to 49 tonne in haulage

vehicles, from numerous special application vehicles to diesel engines for industrial,

marine and genset applications, Ashok Leyland offers a wide range of products.

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Ashok Leyland has seven manufacturing plants -

Ennore Plant, Chennai.

Hosur Plants Unit I, Unit II and Unit II A.

Alwar, Rajasthan.

Bhandara, Maharashtra.

Pantnagar, Uttarakhand

Early products of Ashok Leyland included the Leyland Comet bus chassis sold to many

operators including Hyderabad Road Transport, Ahmedabad Municipality, Travancore

State Transport, Bombay State Transport and Delhi Road Transport Authority.

In the popular metro cities, four out of five state transport undertaking buses come from

Ashok Leyland. Some of them like the Double Decker and Vestibule buses are unique

models from Ashok Leyland, tailor made high-density routes.

Statistics reveal that the company is India’s largest exporter of medium and heavy duty

trucks. It sells close to 83,000 medium and heavy vehicles each year. The company has a

near 98.5% market share in the Marine Diesel engine markets in India. At 60 million

passengers a day, Ashok Leyland buses carry more people than the entire Indian Railway

network.

The Five AL Values are:

1. International

2. Speedy

3. Value Creator

4. Innovative

5. Ethical

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GROWTH MILESTONES OF ASHOK LEYLAND:

1966 – Full air brakes introduced

1967 – Double Decker buses introduced.

1968 – Power steering offered.

1979 – Multi-axle trucks introduced.

1980 – Integral bus with air suspension.

1992 – Self-certification status for defence supplies.

1994 – ISO 9001 Certification

1997 – India’s first CNG powered bus.

1998 – QS 9000 Certification

1999 – CNG (Compressed Natural Gas) introduced.

2000 – Euro-I, Engines/vehicles introduced.

2002 – ISO 14000 Environment Management System Certification.

2002 – Exclusive Machine line – 2 for Hino cylinder.

2003 – E-Comet launched.

2004 – 50,000 mark vehicle produced.

2006- ISO/TS 16949 Corporate Certification.

ASSOCIATE COMPANIES:

Automotive Coaches & Components Ltd (ACCL) Lanka Ashok Leyland Hinduja Foundries IRIZAR – TVS Ashok Leyland Project Services Ltd Gulf Ashley Motors Ltd Ennore Foundries Ltd

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FACILITIES:

The company has seven manufacturing locations in India

1) Ennore, Tamilnadu

2) Hosur: Unit 1, Tamilnadu

3) Hosur: Unit 2, Tamilnadu

4) Hosur: Unit 2A, Tamilnadu

5) Alwar, Rajasthan

6) Bhandara, Maharashtra

7) Pantnagar, Uttarakhand

Ashok Leyland’s Technical Centre, at Vellivoyalchavadi in the outskirts of

Chennai, is a state-of-the-art product development facility, that apart from modern

test tracks and component test labs, also houses India’s one and only Six Poster

testing equipment.

The company has an Engine Research and Development facility in Hosur.

The new plant in the North Indian state of Uttarakhand at Patnanagar is set up at

an investment outlay of Rs.1200 crores. This plant is expected to go on stream in

the year 2010 to cater mainly to the North Indian market taking advantage of the

excise duty and other tax concessions. The facilities have been so designed as to

accommodate further expansion in terms of capacity and future models. At full

capacity utilization, 75000 vehicles will roll out of the Patnanagar plant.

The company has signed an agreement with Ras Al Khaimah Investment

Authority (RAKIA) in UAE for setting up a bus body building unit in the Middle

east.

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CLIENTS (Not exhaustive):

Indian Army.

US Army.

Honduras Armed Forces (HAF).

Tamilnadu State Transport Corporation (TNSTC).

Metropolitan Transport Corporation (MTC), Chennai.

State Express Transport Corporation (SETC), Tamilnadu.

Kerala State Road Transport Corporation.

Maharashtra State Road Transport Corporation (MSRTC).

Andhra Pradesh State Road Transport Corporation (APSRTC).

Parveen Travels.

Sharma Transport.

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VISION

Achieving leadership in the medium/heavy duty segments of the domestic commercial

vehicle market and a significant presence in the world market through transport solutions

that best anticipate customer needs, with the highest value -to-cost ratio.

MISSION

-Identifying with the customer.

-Being the lowest cost manufacturer.

-Global benchmarking our products, processes and people, against the best in the

industry.

QUALITY POLICY

Ashok Leyland is committed to achieve customer satisfaction by anticipating and

delivering superior value to the customer in relation to their own business, through the

products and services offered by the company and comply with statutory requirements.

Towards this, the quality policy of Ashok Leyland is to make continual improvements in

the processes that constitute the quality management system, to make them more robust

and to enhance their effectiveness and efficiency in achieving stated objectives leading to

1. Superior products manufactured as also services offered by the company.

2. Maximum use of employees potential to contribute to quality and environment by

progressive up gradation of their knowledge and skills as appropriate to their

functions.

3. Seamless involvement from suppliers and dealers in the mission of the company

to address customers changing needs and protection of the environment.

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2.3. ORGANIZATION CHART OF M/s. ASHOK LEYLAND LTD.

MAMANGIN

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CFO EDINTERNAL AUDIT

EDPRODUCTDEVELOPM-ENT

ED HR

ED &COMPANYSECRETARY

SPECIALDIRECTOR

BUSINESSPLANNING

EDCONSTRUC-TION & ALLIEDBUSINESS

SPECIALDIRECTOR

PLANNING & PORTFOLIOMGMT

WHOLETIMEDIRECTOR& COO

ED MFG

ED MKTG

ED PRODUCTPLANNING

ED INTER- NATIONAL OPERATIONS

ED SALES & SERVICE

MANAGING DIRECTOR

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ORGANIZATION STRUCTURE OF M/s. ASHOK LEYLAND LTD. (AUTHORITY FLOW)

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MANAGING DIRECTOR

WHOLE TIME DIRECTOR

EXECUTIVE DIRECTOR

GENERAL MANAGER

ASST. GENERAL MANAGER

DEPUTY GENERAL MANAGER

ASST. MANAGER

SENIOR OFFICER

DIVISIONAL MANAGER

MANAGER

SENIOR MANAGER

SPECIAL DIRECTOR

DEPUTY MANAGER

Page 17: Summer internship-Organizational Study At Ashok Leyland, Chennai

3. FUNCTIONS OF THE MAJOR DEPARTMENTS SELECTED

The major functional areas of the unit and the major departments which oversee those

areas are catalogued as follows:

a) HR Department

b) Finance Department

c) Marketing Department

d) Production Department.

A brief review of each department and its activities as follows:

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OFFICER

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a) HUMAN RESOURCE DEPARTMENT OF ASHOK LEYLAND

LTD.

HUMAN RESOURCE MANAGEMENT

Human resource management is defined as the managing function of employees,

developing and compensating HR resulting in creation and development of human

relations with the view to contribute proportionately to the organizational,

individual and social goal.

VALUE STATEMENT

“We consider our employees as our most valuable asset and are committed to

provide full encouragement and support to them, to enhance their potential and

contribution to the company’s business”.

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DEPARTMENTAL STRUCTURE:

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ED- HR

DIRECTOR-MGMT DEVELOPMENTCENTRE-HOSUR

GM-MANAGEMENTDEVELOPMENT

DGM-HR

AGM- OFFICE SERVICES

DIVISIONALMANAGER- IR

-MANAGER-ASST. MANAGER-OFFICERS

SR.MANAGER- HR

- ASST.MANAGER- MGMT TRAINEE

MEDICAL OFFICER

CHIEF SECURITYOFFICER

OFFICER

Page 20: Summer internship-Organizational Study At Ashok Leyland, Chennai

FUNCTIONS OF HR DEPARTMENT:

1) HR ACQUISITON

Recruitment

Selection

2) HR DEVELOPMENT

Training and development

Organization development

3) PERFORMANCE AND COMPENSATION

Performance appraisal

Incentives and benefits

4) MOTIVATION

Creating motivation environment

Empowerment and participation

HR Mobility

1) HR ACQUISITION

RECRUITMENT

Recruitment is the process of ‘finding and attracting capable applicants for employment.

The process begins when new recruits are sought and ends when their applications are

submitted. The result is a pool of applicants from which new employees are selected.

SOURCES OF RECRUITMENT

The following are various external sources of recruitment:

1. Consultancies

2. Campus recruitment

3. Lateral entries

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1. CONSULTANCIES

The department heads where requirements are needed informs to the HR department

about the requirement. The concerned persons for recruitment gets approval for filling the

vacancies. Then the consultancies are approached telling the requirements. The fit

applications are mailed to attend the interview. If satisfied, they are called for the

personal interview.

2. CAMPUS RECRUITMENT

The recruitment panel goes to the reputed colleges to select the candidates.

On the following basis they recruit the candidates

GETs - Graduate Engineer Trainees

DETs - Diploma Engineer Trainees

ITI- Industrial Training Institute

3. LATERAL ENTRIES

They pick the experience candidates or people from other companies. The

following is the process of lateral entry recruitment:

1. Sourcing

2. Interview

a. Written test

b. Technical round interview

c. Personal Interview

PROCEDURE FOR LATERAL RECRUITMENT

Pre-Selection

Selection

Post-Selection

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PHASE 1: PRE-SELECTION

REQUIREMENT

REQUISITION

HR

IDENTIFICATION OF

PROSPECTIVE CANDIDATE

Job site search

Internal references

Hiring consultants

Direct applicants

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FUNCTIONAL HEAD

APPROVING AUTHORITY

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PHASE 2: SELECTION

SCREENED RESUMES

SENT FOR FURTHER

SHORT-LISTING TO THE

FUNCTIONAL HEAD

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INITIAL HR SCREENING

PERSONAL INTERVIEW

DISCUSSION AND FINAL

INTERVIEW BY THE

INTERVIEW PANEL

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PHASE 3: POST SELECTION

OFFER NOT ACCEPTED OFFER ACCEPTED

HR INFORMS THE

FUNCTIONAL HEAD AND

CLOSES THE CASE

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SALARY AND GRADE FIXATION

BY APPROVED AUTHORITY

INITIAL OFFER COMMUNICATED

TO THE CANDIDATE

NEGOTIATION WITH THE

CANDIDATE

HR ISSUES OFFER LETTER

HR INFORMS THE

FUNCTIONAL HEAD

ABOUT PROBABLE DOJ

JOINING FORMALITIES

NEW HIRES

Page 25: Summer internship-Organizational Study At Ashok Leyland, Chennai

SELECTION

The selection procedure is concerned with selecting the right candidate at right time for

right place. The selection procedure saves a lot of time and money by eliminating

candidates who are not eligible for the post.

STEPS IN SELECTION

Receiving of application

Preparing of shortlist by the department

Verification of resume by department head

Interview (one round)

Psychological test

Reference/Background information

Final selection

Placement

2) HR DEVELOPMENT

TRAINING

Training is an on-going process aimed at capability-building of the employees at all

levels. In today’s competitive mileu, organizations are increasingly turning to training to

capture the cutting edge. As they manage growth in a constantly changing environment.

Purposive training and planned re-training have an acquired priority status on the

corporate agenda. Centre stage in Ashok Leyland training endeavours is the management

development centre, at Chennai and Hosur. Training programme is classified into

Skill

Knowledge

Attitude

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TRAINING PROCESS OF ASHOK LEYLAND LTD.

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Training Need Input Sources

Business Plan Priority Needs

of depts./ units

Competency Mapping

Yes Initiative

Competency Mapping

Performance Appraisal

3600

Feedback

Quad 1 Executives

Climate Survey

Training Plan

Training Objectives

Learning Outlines

Programme Design & Methodology

Identification of Faculty Resource

Effective Measures

Schedule of Training

Schedule of Training

Training Effectiveness

On- The – Job Evaluation

Evaluation of Faculty Resource

Evaluation of Training Programme

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Training programs in Ashok Leyland are:

Quad 1 executives

Competencies and priority needs of departments/ units

E-learning

Induction for DET (2 years) GET (1 year), Laterals (7 days)

GENMOD training program.

General-Planning for retirement

Budget spent for training (8hrs- 1day) middle managers (3 to 4 persons) is 3-4 lakhs

WORKMEN CAPABILITY BUILDING

Training & Development for the unionized employees at the manufacturing units is

focused on skill development. Both internal and external training is given for associates.

Guest lectures of external faculty and various other industrial visits will be arranged for

associates. In addition to some programmes like engineering drawing and waste

elimination are also conducted.

TRAINING FOR SENIOR/ MIDDLE LEVEL MANAGEMENT

Both external and internal training is given for the executives. Faculty from outside

agencies will be arranged for training them. They also get faculty from corporate level.

Training for senior/middle level management is done on the following basis:

1. Technical

2. Behavioral

3. Functional

MANAGEMENT DEVELOPMENT PLAN

Management development plan of Ashok Leyland focuses on the following competencies

People leadership

Transformational leadership

Project management capability

Result orientation

Entrepreneurial perspective

HR processes such as job evaluation and competency mapping will be dovetailed into the

development plan to enhance objectivity and effectiveness.

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DEVELOPMENT ACTIVITIES

The following are the developmental activities:

TEI – Total Employee Involvement

CFG – Cross Functional Group

QC – Quality Circles

SS – Suggestion Scheme

Re-deployment

3) PERFORMANCE AND COMPENSATION

PERFORMANCE APPRAISAL

“Performance appraisal is the systematic evaluation of the individual with regard to his or

her performance on the job and his potential for development”

In Ashok Leyland graphical scale method is followed, it is also known as linear rating

scale. In this, a printed appraisal form is used for each appraise. The form consists of

various employee characteristics and his job performance. Various characteristics include

initiative, leadership, dependability, creative ability, analytical ability etc..,

The rating is done on the basis of scale which is in continuum representing various

degrees of particular quality. Ashok Leyland use numbers say 5, 4, 3, 2 and 1 to denote

points for various degrees of excellent-poor, high-low, good-bad and so on.

The appraisal form is divided into 8 parts where under each part separate sections are

being covered.

Part I- Performance in the present job (Employees achievements, goals)

Part II- Work behavior (Plans, objectives, activities, execution of plans)

Part III- Abilities (Job knowledge, commitment to achieve results at work)

Part IV- Potential ( Areas of interest, personality traits, strength, weakness)

Part V- Overall performance rating ( Based on assessment of part I, II III)

Part VI- Training need (To improve performance in present job, to assume higher

responsibility)

Part VII- Development plan (Job rotation, job enlargement, special assignment/

reputation)

Part VIII- Other comments

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Five point scale of Ashok Leyland showing levels of performance:

5- Exceptional - Consistently outstanding performance.

4- Superior - - Performance which is consistently significant beyond job

requirements contributes in related area also.

3- Good - Performance which adequately meets job requirements

and occasionally produces good over and above requirements

2- Barely satisfactory - Just meets minimum job requirements

1- Unsatisfactory - Does not meet job requirement at all.

The appraisal form also consists of customer satisfaction survey where the need, service

provider and period of assessment are all identified. It also follows graphical scale

method using a five point scale based on the criteria

1)Quality ( Customer needs, service information, quality works, complaints etc..,).

2)Delivery (Delivery time, point of use, use or parts/service information)

3)Communication (Interaction with customers, listening to customer views, timely

feedback, and review changes with the customer)

4)Responsiveness (Responding to customer complaints, changes to customer needs)

5)Improvement (Positive attitude for improvement, implementation & effectiveness of

improvement and improvements at the customer end)

Overall Customer Rating = 1+2+3+4+5

5

EMPLOYEE RETENTION

Performance linked pay

The company has an annual appraisal system in place and pursuant to this system,

performance linked pay, annual variable pay and/or commission is paid to the employees.

Employee motivation

Ashok Leyland targets 100% of its employees to be involved in its continuous

improvement activities. Reward systems such as IMPROVE, RISE, BITES, 100% CLUB

and GEMBA passport scheme motivates people to contribute their ideas.

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INCENTIVES

1) Surcharge on Direct Booking Incentive.

2) Special Incentive Scheme.

Employee welfare schemes

The following are the welfare schemes available to the employees.

Canteen facilities

Medical claims

Transport facilities

Ashok Leyland school for their children

Scholarship schemes

Recreation facilities

BENEFITS

1) Tuition fee refund:

Reimbursement of expenses related to course fees, examination fees and purchase of

books is allowed upto 75% of amount spent per academic year subject to a maximum

amount as given by personnel administration.

2) Major medical plan:

Benefits will be available within the laid down overall limits for self dependants viz.

reimbursement of medical expenses and interest free loan

3) Medical reimbursement:

Domiciliary expenses incurred on domiciliary medical treatment shall be reimbursed

subject to the annual limits fixed from time to time.

4) Domestic travel:

Boarding and lodging expenses per diem allowance, when an employee opts to makes his

own arrangements , out of pocket expenses, other expenses such as local conveyances,

office phone calls.

5) Conveyance reimbursement:

It is made on self certification of expenses by the executives. This will stand withdrawn

in the event of company transport being provided.

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6) Vehicle loan:

Interest free loan upto 100% of the cost of a new two wheeler subject to a maximum

limit stipulated from time to time.

7) Group term insurance:

It is in addition to the accident insurance cover provided by the company for executives.

In the event of accidental death, the beneficiaries will receive benefit under both policies.

8) Sixth day compensation (ie. Saturday):

Executives in CG 25 (Corporate Grade) and below will be paid 7.5% of basic salary for

every 6th day (optional) worked. The 6th day compensation as indicated above will be

considered as salary for the purpose of contribution to PF and eligibility for bonus/ Ex-

gratia.

9) Maternity leave:

Total period: 12 weeks leave with pay (6 weeks before delivery and 6 weeks immediately

following the delivery) for lady executives.

10) Leave:

All executives are eligible for privilege leave (PL)-30 days, sick leave (SL)- 7 days,

casual leave (CL)- 7 days, national and festival holidays. All leave will be credited in

January, every year.

11) Retirement age:

The age of retirement from company’s service will be the last day of the calendar month

in which the executive attains the age of fifty eight years.

3) MOTIVATION

CREATING MOTIVATING ENVIRONMENT

GEMBA:

Gemba is a Japanese word meaning “Real Place” where the real action takes place.

In the manufacturing business, Gemba is the shop floor; in a service business, the place

where the customer and the service come together. It is also the quality of human

interaction in the workplace between co-workers, with customers and business partners.

Launched in June 2005 as a company- wide initiative, Mission Gemba’s objective is to

provide information, develop skills and empower employees to reach world-class levels

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in quality, cost and delivery. The logic is simple and undisputable: value is created at the

Gemba and the Gemba knows its work best.

GEMBA KAIZEN:

Three ground rules for practicing kaizen in Gemba.

1. House Keeping

2. Muda Elimination [Waste Elimination]

Waste of over production

Waste of inventory

Waste of waiting

Waste of Motion

Waste of transportation

Waste of Producing Rejects

Waste of processing

3. Standardization.

GEMBA MISSION:

N7i+1

New 7 initiatives

1. Increase in the number of GEMBA

2. 5s [SEIRI,SEITON,SEISO.SEIKETSU,SHITSUKE]

3. EEI (Effort and Ergonomy index)

4. CMI (Cost management initiative)

5. Inventory Initiative

6. Critical machine uptime

7. Quality

8. Safety.

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EMPOWERMENT AND PARTICIPATION

IMPROVE Improve is an annual company- wide event to record, recognize and award employees for their positive involvement in organizational growth innovation and customer satisfaction.

RISEThe expansion for RISE is Reward For Individual Search For Excellence. It is an integrated award and is given to the associates. If an employee does some good activity or work apart from his usual one he is being awarded with RISE.

TQM – Total Quality Management The main objective of the TQM cell is to set human in a good manner to achieve the goals. The quality circle includes 6 people which include 5 associates and 1 executive. Their main function is to identify the problem, find the solution and to implement it.

HR MOBILITY

PROMOTION OPPORTUNITIES

Promotions is based on the seniority, eligibility for post , efficiency, skill, qualification

etc.., The management decides whether to fill a post of outside recruitment or through

promotion. Workman shall be considered for promotion to a post based on certain rules.

He has rendered a minimum period of qualification service of five years.

He possesses the qualification prescribed for the post to which he is to be

considered.

Fulfills prescribed attendance.

SEPARATIONS

Separation involves cessation of services of personnel from an organization. When

people leave the organization, Exit interviews are usually conducted to know the reasons

for leaving. The common reasons given are:

Better opportunities

Lack of growth

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ALLOWANCES

House rent allowance

Washing allowance

Uniform and stitching allowance

Night shift allowance

Conveyance allowance

Milk and vitamins allowances

Flexibility allowance

Quality certification allowance

Direct production allowance

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b) FINANCE DEPARTMENT OF ASHOK LEYLAND LTD.

Finance is considered as the life blood of business. This is because in the modern money-

oriented economy, finance is one of the basic foundations of all kinds of economic

activities. Finance function may be defined as the procurement of funds and their

effective utilization.

RESPONSIBILITIES OF FINANCE DEPARTMENT:

The pricing department is responsible for the fixing of prices for sales of the

vehicles and for buying of raw materials and semi finished goods.

Treasury section is responsible for all kinds of funding managements such as

investments.

Taxation section is responsible for remittance of tax, filing of returns, handling of

litigations etc..,

Costing and Budgeting department is responsible for the unit costing of each

product in particular, such as spare parts and a vehicle as whole.

The FSG (Finance account Service Group) deals with the payables and

recievables at regional offices.

The Explore finance department deals with the FSG exporting of items.

The same functions and responsibilities are allotted to the accounting and finance

department of the manufacturing plants in Ennore, Hosur-1, Hosur-2,

Hosur-2A, Alwar, Bhandara, Pantnagar.

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DEPARTMENTAL STRUCTURE:

MANAGING DIRECTOR

CFO

Pricing Manufacturing Units

Treasury

Ennore

Direct

Taxation Hosur-1

Indirect

Costing and Budgeting Hosur-2

Corporate Consolidation Hosur-2A

FSG Alwar

( Finance account Service Group)

Bhandara

Explore finance Pantnagar

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DEPARTMENTAL STRUCTURE

(AUTHORITY FLOW)

37

MANAGING DIRECTOR

CHIEF FINANCING OFFICER

GM-FINANCE

AGM-FINANCE

DGM-FINANCE

ASST. MANAGER

SENIOR OFFICER

OFFICER

DIVISIONAL MANAGER

MANAGER

SENIOR MANAGER

DEPUTY MANAGER

Page 38: Summer internship-Organizational Study At Ashok Leyland, Chennai

ROLE OF FINANCE:

Recorder (accounting) of all Financial Transactions

Reporting of Financial Performance

Arranging long and short term funds – Capital and Debt

Working Capital Management

Compliance of tax and other corporate laws

Risk Management

Controllership function

Audit coordination

Investor Relations

PROCESS & ACTIVITIES OF FINANCE:

a) Financial Accounts

Quarterly, Half-yearly and annual results published as per listing requirements

Limited Review / audit coordination.

Annual Reports – Disclosures made are comprehensive; complied much before

they become mandatory

Early completion of accounts, audit process; forefront in adherence to accounting

standards & other guidelines.

Audit Committee – comprises of Stalwarts from the profession.

Automation of processes

b) Financial Planning & Control

Financial Planning includes estimating the amount of capital to be raised and

laying down the policies as to administration of the financial plan.

Monthly MIS: Very Comprehensive with wider coverage and highly informative.

Monthly review covers business volumes, market share, physical and financial

parameters including alerts on laggards, exceptions in all fronts.

Exception reporting and Profit management measures form integral part of this

process

c) Treasury Management

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- Raising of Funds

- Funds Management

- Debt Servicing

- Risk Management

• Financial instruments for Funds raising would depend on end use of funds; de-

risking is an important consideration in deciding the instrument.

• Capex and long term working capital requirements are funded through share

capital and long-term debt.

• Financial Instruments used include

- Long term funds: Shares, GDR, ECBs, Debentures, term loans etc.

-Short term Funds: Cash credit, Demand Loans, Commercial paper, FCNR,

etc.

• Major funds raising in AL include GDR of US$134 Mn. in 1995 & ECB of

US$315Mn incl. US$ 200 Mn. in Dec 2007.

• Level of debt (Long-term): Rs. 2280.44 cr as on 31/3/10

• Banking relationships for working capital is managed through Consortium of

banks comprising of 14 banks – Fund based Rs.600 cr & Non-fund based Rs.750

cr.

• Funds Management includes managing collections and outflows and

surplus/deficit management. Closer working with Marketing and Units is vital.

• Surplus management includes investment in Fixed Deposits, Mutual Funds, etc.,

Direct investment in equity avoided.

• Debt Servicing includes repayment of principal and payment of interest on due

dates and ensuring that commitments made are adhered to.

• Risk Management is vital since organization is exposed to both currency as well

interest rate risks. Risks offer both threats and opportunities (can increase income

or reduce expenditure). Results depend on how well they are managed.

• Credit rating

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Long Term / WC Short Term

CRISIL AA (-) P1+

ICRA LAA(-) A1+

d) Costing & Pricing

• Strategic pricing of products, quotes for various tenders.

• Special pricing for export contracts.

• Monitoring of cost of production of various models and for make or buy decisions

• Project / capex evaluations for optimization and for making commitment

decisions

e) Taxation

• Compliance with Direct (Income Tax Act, Wealth Tax) & Indirect Taxes (Excise,

Customs, Service Tax, Sales tax etc).

• Tax planning is an important component of business decisions.

• Recent major developments include introduction of Service Tax legislation and

VAT across many States.

• Aligning the business process across the organization and maximizing the benefits

against such legislations is a major task handled by Finance.

• Regular tasks include remittance of tax, filing of returns, handling of litigations

etc.

f) Investor Relations

• In AL, Mutual Funds, FII etc.., hold 32% of shareholding besides public who hold

10%.

• FII & Mutual Funds represent investment community who track company’s

performance continuously very closely.

• Dissemination of data relating to company’s performance and developments very

important and sensitive.

• Handled through presentations in periodic investor meet, web-cast, tele-

conferences, individual meets, address in TV etc.

• Presentations made are hosted in company’s website

PLANNING & MANAGING CASH FLOWS:

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1. Planning cash flows

Rolling Quarterly cash forecast prepared and monitored weekly seeking

explanation for variance in order to control and direct operations.

2. Management of daily funds

• Collections from 49 locations pooled under cash management system in to

centralized accounts with consortium banks at Chennai.

• Various payments reported are collated and funded for in the various bank

accounts depending on the expected debits.

• Surplus for the day, if any, invested for tenor which is based on requirement of

funds back in to the system.

• Deficit funded through short term loans from banks, availed based on best

product available / rate offered

STRATEGIC GOALS:

• Raise resources to the tune of roughly US$ 1.8 billion for funding expansion plans

of AL, Nissan and other JVs over the next 3 years

• Achieve optimum funding mix / restructuring of companies to minimize the cost

of raising of funds.

• Maximize tax efficiencies to improve cost competitiveness of products and

improve viability of projects.

• Make globalization a reality through acquisitions and setting up of new ventures

abroad by leveraging AL’s strengths.

• Bench mark financial processes to the best in the world and improve the bar;

maintain high standards of financial discipline.

• Maintain excellent relations with international investor community through

effective communication for international offerings.

FINANCIAL CHALLENGES AHEAD:

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• Global slow down challenging break even.

• Decrease in Margins due to inability to pass on cost increases due to competitive

pressures – partially compensated by increase in volumes.

• Profitability pressures due to changes in business mix and commodity price

movements.

• Forex management – unforeseen volatility in major currencies; particularly

important with forex loans

• Supporting inorganic growth – evaluation & funding of emerging options.

• Need to fund major capex & investments – Rs.2400 cr in the next 3 years; major

investments in JVs

• Tackling financial covenant breaches.

• Increase in interest rates

• Business integration of overseas units.

• Managing expectations of stakeholders

FINANCIAL RESULTS:

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Rs. in Lakh

2007-08 2008-09 2009-10

Sales Volume:

Vehicle (numbers) 83307 54431 63926

Engine (numbers) 11757 21447 19050

Spare parts and others 79124 79969 88506

Net sales/Income from operations 774258 598107 724471

Gross operating margin 82038 46944 76284

Financial expenses 4974 11871 8113

Other income 5760 4962 7045

Gross profit (PBDT) 82824 40035 75216

Depreciation 17736 17841 20411

Profit before tax 65088 20845 54477

Profit after tax 46931 19000 42367

Paid up equity share capital (face

value per share Re.1 each)

13303 13303 13303

Basic earnings per share (Rs.) 3.53 1.43 3.18

Dividend per share (Rs.) 1.5 1.0 1.5

Comments:

Significant reduction in material and operating costs supported by pricing action has

improved margins in the year 2009-10

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c) MARKETING DEPARTMENT OF ASHOK LEYLAND LTD.

Marketing is concerned with the people and the activities involved in the flow of goods

and services from the producer to the consumer.

Ashok Leyland has been offering world class products to millions of customers to 40

countries across the world.

Its main product line include Trucks, Buses, Defence vehicles and special vehicles and

engines for Indian and Overseas market.

Ashok Leyland is

The market leader in Indian bus market offering CNG, Double decker and

Vestibule bus variants.

The market leader and pioneer for multi-axle trucks and tractor-

trailers.

Enjoys market supremacy in diesel engines for Industrial, Gen-set and

Marine applications .

Largest supplier of logistic vehicles to the Indian Army.

Offers “Total Maintenance Solutions” through maintenance contracts for its

products, relieving the customers of all maintenance worries.

KEY ASPECTS OF APPROACH:

SALES & SERVICE

MARKETING CUSTOMER SUPPORT

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DEPARTMENTAL STUCTURE:

45

CHIEF OPERATING OFFICER

HEAD-DEFENCE SBU

HEAD- ENGINE BUSINESS

ED- MKTG

HEAD- FULLY BUILT SOLUTIONS

HEAD- MKTG & CUSTOMER GROUPS

HEAD- PARTS & CUSTOMER SUPPORT

HEAD- VEHICLE SALES & SERVICE

HEAD ( CG LCV ) HEAD – MARKETING SERVICE

HEAD – TQM

HEAD-PARTS HEAD-AMC RECON VEHICLES

DGM- CUSTOMERSUPPORT GROUP

HEAD-LCV

HEAD-PROJECTS

HEAD- TECH .SERVICE

HEAD- KEY ACCOUNT STU& PROJECT SALES

HEAD- PRICING

HEAD- SALES ADMIN

HEADDISTR-BUTION &INVOICE

REGIONALMANAGERS

Page 46: Summer internship-Organizational Study At Ashok Leyland, Chennai

ADVERTISING:

The need for advertising was felt by Ashok Leyland in 2006-07 when they had to project

the transformation that has occurred within Ashok Leyland, but as yet not communicated

to the public. They came up with a product related Ad campaign and a Corporate

campaign. Their aim was to let their target audience perceive their brand as International,

Innovative and Speedy, which has always been their core brand value. At the All India

PR awards 2007 conducted by the Public Relations Society of India (PRSI). Ashok

Leyland won the second prize for their corporate campaign. They gave a prelude to the

campaign by exhibiting their product range and their field of pioneering.

This was followed by a three ad campaign.

“ONLY AN ASHOK LEYLAND ENGINEER WILL BE INSPIRED BY RAAG

MADHUVANTI TO CREATE QUIETER LUXURY COACHES”.

“ONLY AN ASHOK LEYLAND ENGINEER WILL CALCULATE THE RPM OF

THE BALL, WHEN A ‘DOOSRA’ IS BOWLED”.

“ONLY AN ASHOK LEYLAND ENGINEER WILL WATCH ‘TITANIC’ TO

SPOT THE DESIGN FLAW IN THE SHIP”.

Also a television commercial was aired in 2007. The commercial was made in two

languages- Hindi and Tamil. It was broadcast on mainline news channels for wider

coverage. There were translites placed at airports for greater visibility.

ASHOK LEYLAND- THE BRAND:

“ENGINEERING YOUR TOMMOROWS” has been Ashok Leyland’s Brand promise.

The tag line finds expression at two levels: on the hard core strategy level, that is the sum

total of the essential values of vehicle technology-safety, comfort, economy and ecology;

on the aspirational level, it denotes a warm and caring relationship with each stake holder

in a unique way.

Brand values

The two most visible- and recognized- components of the brand are the dynamic “L” logo

and the name of Ashok Leyland. The name has historic reasons- and time less meanings.

Ashok meaning Happy is the name of the company’s founder Raghunandan Saran’s son.

The second part of the company’s name has come to cue the international aspect while

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the first part, so unmistakably Indian, has un-declined the custom built relevance of the

company’s products and operations in the Indian context.

Brand Ashok Leyland is essentially and experiential brand, its values felt in day to day

life- more palpably by its immediate customers and end users. The core of the brand has

always been innovative, international, speedy, moving with times- and often-even ahead

of it. The innards of Ashok Leyland vehicles have always been contemporary. The core is

now being matched by contours of the new, modern, future ready range of vehicles.

In 2006, Ashok Leyland felt a need for change in perception of image among its public

after its research feedback by its brand study. Though the company has pioneered many

product concepts, and technologies, it was perceived to be a slow, elderly and not modern

brand. This made it necessary for Ashok Leyland to bring about a shift in perception and

reinforce the fact that the company was fundamentally strong, masculine, traditional,

sincere, transparent, financially managed and innovative. As per the research, the

company was a fairly strong brand with good recall value. It was seen as an experiential

brand, where the public related to it thought very high of it but those away from the brand

has only a fuzzy image of it.

Thus emerged the new Ashok Leyland with a new face. The tangible shift began with a

change in the typeface of the brand name along with a baseline. Also the company came

up with a corporate identity manual which was strictly to be followed by all. The content

specified brand name usage in various areas. Various advertisements were aired to

promote the brand. The launch of a new website opened to doors to the world outside.

Also screening of its corporate film helped them gain publicity.

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MARKETING PROCESS:

CUSTOMER

MARKETING ENVIRONMENT:

Legislative changes related to commercial vehicles.

Improving efficiency in railway operations.

Customers demanding more from manufacturers.

Service products becoming important buying decision.

Entry of multi-national players.

Higher growth rate in LCV segment.

Directly competing with railways.

Road vs Rail share stabilizing

Shift towards Hub and Spoke model

BUSINESS INTEREST:

48

DELIVERINGSalesServiceNetwork Planning

UNDERSTANDINGCustomer /MarketsMarketing Initiatives

SUPPORTINGPartsAMCUsed VehiclesTransportExchange

Page 49: Summer internship-Organizational Study At Ashok Leyland, Chennai

Medium & Heavy commercial vehicles.

Defence

Exports

Industrial applications

Spare parts

Service products

MARKETING STRATEGIES AND PLANS OF ASHOK LEYLAND:

NEW PRODUCT LAUNCHES

The company is expected to launch a slew of new products in the markets which is

expected to propel the demand for its products.

INCREASING GLOBAL FOOTPRINT

The company is now targeting new strategic markets with increased thrust on the

Asian and African countries.

PLANS TO MEET THE GROWING NEEDS OF THE MARKET

The company is constantly reviewing their strategies. They are moving into higher

value added jobs because it becomes very important to engage workmen fully and

also their efficient utilization.

FACTORS AFFECTING GROWTH:

Infrastructure development

Overall economic growth

Restrictions on overloading

Better operating economy of new trucks

Restrictions on the age of vehicles

Replacement demand due to changes in emission norms

CURRENT PLAYERS IN THE COMMERCIAL VEHICLE INDUSTRY:

Ashok Leyland

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Tata Motors

Eicher Motors

Swaraj Mazda

Volvo

Tatra Udyog

Force-MAN

Asia Motor Works

Mercedes Benz

Scania

Hino Motors

Daimler -Chrysler

New entrants on the anvil- Mahindra Navistar,URAL

ASHOK LEYLAND- DISTRIBUTION NETWORK:

50

PLANT

MARKETING

REGIONALSALES OFFICE

DEALERSHIP

CUSTOMER

CUSTOMER GROUP

Page 51: Summer internship-Organizational Study At Ashok Leyland, Chennai

ASHOK LEYLAND- MARKETING NETWORK:

Regional offices- 10

Areas offices- 18

Regional sales offices-19

Parts warehouse-7

Main dealers- 43

Dealer outlets- 177

Authorized service centres- 145

Service bays- 2352

DISTRIBUTION CHANNEL – SALES:

REGION REGIONAL OFFICE AREA OFFICE

South-1 Chennai Chennai, Madurai, Eranakulam

South-2 Bangalore Bangalore, Hubli

South-3 Secunderabad Secunderabad

West-1 Mumbai Mumbai

West-2 Ahmedabad Ahmedabad

Central Nagpur Nagpur, Indore

North-1 Delhi Delhi, Lucknow

North-2 Jaipur Jaipur

North-3 Chandigarh Chandigarh

East Kolkata Kolkata, Bhubaneswar,

Jamshedpur, Guwahati

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PRODUCT PROFILE (Not Exhaustive):

Ashok Leyland offers a comprehensive product range with trucks from 7.5 tons GVW to

49 tons GVW(Gross Vehicle Weight). From 19 to 80 seaters in passenger transport, a

host of special application vehicles and diesel engines for industrial gensets and marine

application. Product profile can be broadly split into five categories viz. Buses, Trucks,

defence vehicles, special Vehicles and Engines.

BUSES

LYNX BS-II Viking BS-II 12 M Bus-BS II

Cheetah (Front engine) Viking BS-III Viking AL

Airport Tarmac Coach Vestibule Bus Panther (Rear engine)

Cruiser Viking CNG BS-III Falcon (Front engine)

Stag BS-II Double Decker

TRUCKS

4x2 Haulage models Ecomet

4x2 and Multi-axle Tipper Tractor

Multi Axle vehicles

DEFENCE VEHICLES

Short Chassis Bus Field artillery tractor Comet 4x4

Topchi field Artillery tractor Long Chassis Bus

Stallion 6x6 Stallion truck fire fighting

SPECIAL VEHICLES

Hippo tractor Stallion Mk III Tipper Hippo Tipper

Beaver tractor Rapid Intervention Vehicle

Beaver Haulage Hippo Haulage

ENGINES

Genset application Marine application

Industrial application DG sets for exports

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VEHICLE SALES:

YEAR

SALES in Units

DOMESTIC EXPORTS

TOTAL SALES

In Units

2006-07 77069 6025 83094

2007-08 76022 7285 83307

2008-09 47619 6812 54431

2009-10 57947 5979 63926

SALES TURNOVER & PROFIT:

YEAR SALES TURNOVER

Rs.Crore

NET PROFIT

Rs.Crore

2006-07 7168.17 441.28

2007-08 7729.12 469.31

2008-09 5981.07 190

2009-10 7244.71 423.67

Ashok Leyland registered a sales turnover of Rs.7729.12 crores during 2007-08

compared to Rs. 7168.17 Crore in 2006-07 showing an improvement of 7.8%

After a sluggish start in 2008, the sales turnover improved by 21% touching

Rs.7244.71 crores in 2009-10 compared to Rs.5981.07 crores in the 2008-09.

The net profit rose by 6.4% in 2007-08 to touch Rs.469.31 crores compared to

Rs.441.28 crore in 2006-07.

Similarly the net profit improved to 123% to touch 423.67 crores in 2009-10

against Rs.190 crores in 2008-09.

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d) PRODUCTION DEPARTMENT OF ASHOK LEYLAND LTD.

Production is an organized process of manufacturing/producing goods and services

through the use of input resources of men, materials, money, machine, methods.

PRODUCTION MANAGEMENT STRATEGIES:

Long range strategies

Effective management of technology.

Innovation in product management and process technology.

Globalization in industry.

Goodwill inside and outside the organization.

An aggressive marketing strategy and risk taking ability.

Short range strategies

Location and layout.

Product selection and technology.

Capital selection and investment.

Flexible strategy of production.

Standardization of design.

Economy of size and variety.

PRODUCTION SYSTEM:

Ashok Leyland employs a continuous production system, making use of special purpose

machines and produces standardized items in large quantities.

Characteristics

Standard products are manufactured.

Small work in progress in involved.

More maintenance is required.

Minimum cost of production per unit

Division of labour is made more efficient.

DEPARTMENTAL STRUCTURE:

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55

EXECUTIVE DIRECTOR - MANUFACTURING

PLANT DIRECTOR

GENERAL MANAGER - MANUFACTURING

DGM -MFG

AGM-ENGINES

DIV -MGR

SENIOR -MGR

EXECUTIVES

ASSOCIATES &DAILY RATEDWORKERS

DGM -CHASSIS

AGM-CHASSIS

DIV -MGR

SENIOR -MGR

EXECUTIVES

ASSOCIATES &DAILY RATEDWORKERS

DGM –MFG SERVICE

AGM-MECHANICAL

DIV –MGRMECHANICAL

SENIOR -MGR

EXECUTIVES

ASSOCIATES &DAILY RATEDWORKERS

DIV –MGR ELECTRICAL

SENIOR -MGR

EXECUTIVES

ASSOCIATES &DAILY RATEDWORKERS

DIV –MGRMECHATRONICS

SENIOR -MGR

EXECUTIVES

ASSOCIATES &DAILY RATEDWORKERS

Page 56: Summer internship-Organizational Study At Ashok Leyland, Chennai

PLANT LAYOUT:

Product layout is employed in chassis assembly and engine assembly where in the

facilities are arranged in a line as per the process sequence of the component

manufactured.

Characteristics

Mechanized material handling.

Lesser work in progress.

Special purpose machines are used.

ENGINE ASSEMBLY:

The engine case arrives at the first section and it is fitted with cam shaft

and flywheel.

The pistons are attached one by one to the crankshaft.

Later fuel filters, oil coolers are attached.

Belt and gears for the running came is attached in the next section.

Finally the engine timing is set and sent for mounting on the body of a

truck or a bus.

FRAME ASSEMBLY:

STAGE 1: Mounting of side members and cross members

STAGE 2: Mounting of Front Spring-rear, Front Spring-rear, Rear spring-front, Rear

spring-middle, Rear spring-rear.

STAGE 3: Fitting of Engine mounting brackets and FES mounting brackets

STAGE 4: Side members fastening to torque limit, Steering box bracket, Side Members

reaming, Front tie channel mounting

STAGE 5: Fitment of FES rear brackets, Shock absorber brackets and Torque checking

PASSING STAGE: Checking and tilting

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STAGES OF CHASSIS ASSEMBLY:

Stage 1: Lay down regular

Stage 2: Fixing of I & U bolt.

Stage 3: Brake chamber.

Stage 4: Steering gear.

Stage 5: Silencer.

Stage 6: Fuel / water separator.

Stage 7: Air tank.

Stage 8: Fuel tank.

Stage 9: Engine mounting.

Stage 10: Air/fuel piping.

Stage 11: Propeller shaft.

Stage 12: ACE link assembly

Stage 13: Exhaust piping.

Stage 14: Radiator.

Stage 15: Tyre mounting.

Stage 16: Lubrication.

Stage 17: Front end structure (FES) Cab mounting.

Stage 18: Bumper.

Stage 19: Steering.

Now the cockpit of the truck is mounted on the body of the truck correctly and then it is

sent for a drive or to the storage area. For every 13 minutes a truck rolls out from the

factory and 135 chassis are assembled per day as per agreement.

Both these sections have a conveyor belt on which each process is carried on. The belt

keeps on moving and the operator has to complete his designated job or else its nothing

but an error.

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PDI (PRE DELIVERY INSPECTION):

Testing of vehicle on real road conditions

The following are the various tests done to test the vehicle:

1. Speed test

2. Acceleration test

3. Vibration test

4. Torque tightening

5. Oil level and water level checking

6. Electrical components checking

7. Air leakage test

8. Grease level checking

9. Power steering hose routing and clamping

10. Road test

PRODUCTION PERFORMANCE:

YEAR PRODUCTION

In Units

2006-07 83558

2007-08 84006

2008-09 54049

2009-10 64673

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PLANT ENGINEERING:

Plant engineering is responsible for proper functioning of the plant by carrying out

maintenance operations such as electrical and electronics equipments maintenance, fork

lift charging and its repairing, repairing of pneumatic circuits etc.. It is also responsible

for maintenance works carried out in the organisation. The following are the various

types of maintenance:

Predictive maintenance

Preventive maintenance

Breakdown maintenance

Routine maintenance

1. PREDICTIVE MAINTENANCE:

Predictive maintenance is done on assumption by experience before the occurring

or by any symptoms of occurring.

2. PREVENTIVE MAINTENANCE:

Preventive maintenance is work directed to the prevention of failure of a facility

3. BREAKDOWN MAINTENANCE:

Breakdown maintenance is work which is carried out after a failure, but for which

advanced provision has been made in the form of spares, material , labour and

equipment

4. ROUTINE MAINTENANCE:

Routine maintenance is done on even time or on routine basis. It includes machine

lubrication, replacement of bulbs throughout plant to arrest building deterioration.

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DIVISIONS:

Plant engineering is divided into 4 divisions to carry out its functions. The following are

divisions of plant engineering:

Electrical

Mechanical

GWE(General Works Engineering)

Civil

PERIOD OF MAINTENANCE:

Period of maintenance is done on the basis of VED analysis. It is also known as time

based maintenance. Here VED stands for

V - Vital

E - Essential

D – Desirable

ANALYSIS DURATION

V- Vital 6 months

E- Essential 9 months

D- Desirable Once in a year

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4. CORPORATE SOCIAL RESPONSIBILITY

Ashok Leyland defines CSR as: "Our commitment to improving the quality of life of our

employees, their families, the driver and the local communities around our units, and the

society."

With CSR as an integral part of Ashok Leyland’s activities, all social initiatives are

structured and focused to enhance the commitment of employees and stake –holders.

CSR initiatives in Ashok Leyland are aimed at impacting positively, making a difference

and sustaining them, all efforts are focused upon livelihood enhancement, health,

education and environment.

Ashok Leyland encourages employee involvement, engaging the families of the

employees, and involving local, experienced and credible resources in all its CSR

activities.

CSR ACTIVITIES:

1) Fun Bus

Fun Bus is a gift from Ashok Leyland exclusively for free users round the year by

children of orphanages, corporation primary schools and physically/ mentally

challenged children in Chennai.

The seating layout reckons the requirements of physically challenged children.

The bus is equipped with a hydraulic lift for the convenience of wheel chair –

bound children.

2) Green Mission

In 2002, all the vehicle manufacturing units of Ashok Leyland were ISO 14001

certified with Environmental Management System.

The Ennore unit was recently identified as one of the model energy- efficient

units by a CII-TNEB organized Energy Conservation (ENCON) mission.

Systematic management of all energy resources from the 1980’s through better

house keeping and awareness has made this possible. The 1980’s also saw Energy

audit being introduced. Improvement in machine tools, furnace-loading pattern,

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design of heating elements and an energy efficient lighting system has all led to

energy savings of 30,782 units per day.

For Ennore, practicing the 3Rs of Reduce, Reuse and Recycle has surely paid off.

Recently, an opinion survey conducted in the neighbourhood reveals that both

industries and the public are happy to have Ashok Leyland as their neighbor.

Building on the eco friendly measure over the years, Ennore has received ISO

14001 certification for Environmental management Systems.

3) Effluent Treatment

The plant can do primary, secondary and tertiary treatment operations. About

55,000 liters of effluents flow into the plant everyday. Five kilograms of solid

hazardous waste is stored as per Pollution Control Board standards and the rest

water portion is treated and used for organic farming. On an average, 2,50,000

liters of recycled water is pumped into garden saving Rs.1.5 million per annum.

4) Greening

The Ennore unit is known for its lush green cover. Almost 10% of the total

ground area 53.41 hectares is covered by greenery creating an oasis in the arid

zone of Ennore.

5) Aids Awareness

In the mid-90’s, the department of International Development, British High

Commission, formed the Truckers Interim Coordination Unit (TICU) for a

focused programme among truck drivers. Ashok Leyland was one of the first

organizations to associate itself by becoming an intervention centre.

Outside the factory camps, and health education programs like lectures, cycle

rallies, film shows, exhibitions etc. are conducted through our volunteers in co-

operation with AIDS prevention and control project. They also provide

counseling services at our Medical center. Cases which require support service are

sent to ‘Seva Kendra’ in Bangalore (an NGO backed by rotary- TTK), RIDS (an

NGO) in Hosur, Kingsley Community Centre- (an associate of Bill and Melinda

Gates Foundation) in Krishnagiri.

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6) Driver Training Centre

Ashok Leyland’s Namakkal Driver Training Centre near Salem in Tamil Nadu

was started in 1995 “ to ready a driver for life on he road and off the road”. From

the very beginning, the curriculum had included, besides functional subjects,

health education including yoga and AIDS awareness along with the education on

the vehicle and traffic rules cum sessions on physical fitness, personality

development and health risks like smoking. The drivers also attend awareness

sessions on Sexually Transmitted Diseases.

Ashok Leyland has reached out to 90,000 truckers during its training programme

in Tamil Nadu. A training centre is also located at Alwar.

7) Community Welfare

Started in 1994, the Dharam Hinduja Matriculation and Higher Secondary School,

Thiruvottiyur, Chennai, is managed by a Board of Trustees consisting of senior

executives and workmen of the company.

The company contributed one crore rupees in aid of relief operations for the

Tsunami victims. In addition, employees contributed another 15 lakhs separately.

Ambulances are donated for worthy causes. Free medical camps are held in

neighbourhood. Employees participate in large numbers at periodic blood

donation camps held at the Units.

Substantial relief material was distributed in the worst affected districts of

Tamilnadu through NGOs. The Company is also working with the Confederation

of Indian Industry (CII) for long-term solutions like fishing equipment and

community centers to the fishermen communities.

8) Sludge disposal

A natural by-product of the painting process, sludge disposal has always been a

problem faced by the auto industry. At Ashok Leyland various actions have been

initiated over the years towards safe storage of sludge, ultimately leading to the

construction of secured landfills within the campus. Since paint had a high

calorific value, its use as a fuel was explored. The effort yielded positive results.

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5. SWOT ANALYSIS

STRENGTHS

1. Good Training System.

2. Good Organizational Climate.

3. High Market Share

4. Skilled Employees

5. Standard Quality Product

WEAKNESSES

1. High price

2. Sales representatives are less

OPPORTUNITIES

1. Demand for heavy vehicle have steeped up all over the globe.

2. Company provides better credit facility to dealers.

THREATS

1. High competition

2. Promotional programmes of other brands

3. Complicated national market

4. New players entering the market.

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6. COMMUNICATION SYSTEM AT ASHOK LEYLAND LTD.

The Corporate Communication department in Ashok Leyland started in 1997. Previously,

a part of marketing communications, the department has come a long way. It came into

existence when the management realized the need for a media friendly department to

communicate with its external public. Also there was a need to communicate extensively

to its internal public.

Publics

CUTcustomersmmmmmmmmmm

sfsdfsfs

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EMPLOYEES MEDIA

CUSTOMERS SHARE HOLDERS

SUPPLIERS FINANCIAL INSTITUTIONS

ASSOCIATE PARTNERS INDUSTRY

TRADE ORGANISZATIONS MONITORING BODIES

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INTERNAL COMMUNICATION:

Employees form a vital part of any organization, thus it is required to establish and

maintain mutual understanding with them. This will help the organization to increase

efficiency and productivity in the long run. Continuous communication with the

employees will facilitate the organization to keep them updated on the current

happenings.

Downward Communication:

MD’s Letter

This letter is addressed to the internal public of the company by the Managing

Director, This letter is drafted by the Corporate Communications Department with

inputs from the MD and is circulated only internally once in three months.

Managing director holds a meeting with the executives of the company every year

in a 5-Star Hotel

Communication Meet

The communication meet is one of those events where the top management

communicates directly with various departments of the company. Here the top

management addresses the employees and makes a presentation which discusses

the future plan.

Circulars.

E-mail

Telephone.

Ashley News

Upward Communication:

AL PORTAL INTRANET-MD’s Portal

This link allows employees to post queries to the Managing Director. The MD

then goes through them and either replies to it or forwards it to a functional head.

A copy of the reply by the functional head is sent to the MD. Any employee can

ask any question related to the company and its functions.

Soap box

It is a raised platform on which employees can give in suggestions and feed back

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such as cost saving techniques, new technologies etc., and discuss over it. Any

employee having company’s e-mail id can access to this link through AL-Portal.

Counselling

Informal communication:

Oral communication

Improve

An annual company wide contest for employee team projects which gives them a

chance to think, innovate and improve. The teams are divided into Workmen, open

and Executive league. These teams compete under three different streams based

based on the theme of their project.

AL-quiz

The main aim of the quiz is to inculcate the five values of Ashok Leyland ie)

International, Ethical, Speedy, Innovative and Value Creator among the

employees.

EXTERNAL COMMUNICATION:

External communication is the exchange of information and messages between an

organization and other organizations, groups, or individuals outside its formal structure.

The goals of external communication are to facilitate co-operation with groups such as

suppliers, investors and shareholders, and to present a favorable image of an organization

and its products or services to potential and actual customers and to society at large.

Communication media

Website

Annual Report

Customer Journal-Moving Force

Operator’s Meet

Vendors & Suppliers Meet

Dealer’s Meet

Exhibitions

Media Relations

Shareholder Relations

The Annual General Body Meeting

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7. FINDINGS

1. In this organization there is good employer-employee relationship.

2. It targets 100% of its employees to be involved in its continuous improvement

activities by motivating them through various financial and non-financial

incentives.

3. There is a well integration of all the functional departments which facilitates the

use of software like ERP .

4. To solve work related problems, QC (Quality Circle) and cross functional team are

made effective.

5. Ashok Leyland has not got a foothold in the luxury trucks segment in its domestic

market.

6. Advertisement is not given much importance.

7. The company is increasing its global foot print by entering Asian and African

markets.

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8. SUGGESTIONS

The company should concentrate more on the luxury truck segments to keep a

strong hold in the market

The company should earmark more money for the advertisement and sales

promotion of its products. It helps to increase the brand awareness and image.

The company should concentrate on markets in the international arena where its

competitors are less powerful.

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9. CONCLUSION

The summer internship and the resulted report have been of great help to the researcher,

as an aspirant manager, to understand the functioning of a major establishment like

Ashok Leyland. The summer internship has also revealed many unknown facts about the

working of a manufacturing unit and familiarize about the assembling of commercial

vehicles.

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10. BIBLIOGRAPHY

1) L.M. Prasad, Human Resource Management, 2nd edition, New Delhi, Sultan

-Chand & Sons. Yr.2005.

2) Philip Kotler, Marketing Management, Millennium edition, New Delhi,

Prentice Hall of India (P) Ltd., Yr. 2001

3) Ashok Leyland In- House Journal – Ashley News

4) www.ashokleyland.com

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