PROJECT REPORT ON ORGANIZATION STUDY
First and foremost, I thank the Lord Almighty for his perpetual showers of blessings, which led to the successful completion of my project. I take this opportunity to express my deep sense of gratitude to all those who have helped me throughout this organizational study. It gives me immense pleasure to acknowledge all those who have rendered encouragement and support for the successful completion of this work. I would like to convey my sincere thanks for giving me proper directions and suggestions and make use of this opportunity to express my heartfelt gratitude to Mr Subhas Tiwari, (HR manager, ESCORT) for providing me all the faculties for making my project a successful one. I express my deep sense of gratitude to Dr. Sudharshan the faculty member of MATS for encouraging and inspiring me for developing the project. Our project work involved many people at different stages. We would like to thank all those who have directly or indirectly contributed to the success of our project. We also take this opportunity to express profound gratitude to our parents, family members and several people who have contributed for the successful completion of the project. It is our duty and pleasure to acknowledge them.
I hereby declare that the project report entitled “Organizational Study of ESCORT Railway Division”. Submitted in partial fulfilment of the requirements for the award of the degree of PGDM is a record of bonafide research carried out by me under the guidance of Dr Sudharshan, MATS- Bangalore and no part of it has been submitted for any other degree or diploma.
Place: Bangalore Date:
1. INTRODUCTION TO THE STUDY AND INDUSTRY PROFILE • Global scenario • Indian scenario • Key players in the industry • PEST analysis • Porter 5 force analysis 1. COMPANY PROFILE • Background and history • The vision, mission, objectives, goals, SWOT analysis • Products and markets 1. ORGANISATIONAL DESIGN 2. BUSINESS LEVEL FUNCTIONS • Operation Department • Human resource department • Marketing department • Personnel Department • Finance department • Technical and service department • Materials department • Engineering department 1. FINDINGS, SUGGESTION AND CONCLUSION
1.1 INTRODUCTION OF THE STUDY:
Organizational Functioning is an important factor for any Organization to achieve the desired goals and Objectives. This requires Co-ordination at all levels to smooth functioning. This report aims to understand the Function of ESCORT relation to different departments.
As a part of two year MBA program at the end of 1 s t semester, we had to carry on a project in an organization in order to understand the organization structure and their functions. This was a great opportunity to get the first hand information and understand the functioning of the various departments. I did my Organization Study at ESCORT LTD,. It was a great learning experience as it is quite necessary for all the management students. The main purpose of doing the organization study was to study the various departments of the organization and understand their basic functions, their purpose, achievements, competitors and the mission and vision of the company and their progress towards that. All general information we get in course is all book knowledge, on which we entirely cannot depend. It is very important to observe the actual working of an organization and the overall structure of an organization. The actual professionalism can be studied only through experience.
CONCEPT OF ORGANIZATION
Organization is the process of; 1. Identifying and grouping the work to be performed 2. Defining and delegating responsibility and authority 3. Establishing the relationship for the purpose of enabling people to work efficiency together in accomplishing objectives.
PRINCIPLES OF ORGANIZATION
Principle means the theoretical basis on which something is built up. The theoretical basis is formulated from fundamental truth. Some of the important principles to be followed for developing round and efficient organizations are: • • • • • • • • • • Principle of unity of objective. Principle of specification. Principle of co-ordination. Principle of unity of command. Principle of span of control. Principle of exception. Principle of flexibility. Principle of simplicity. Principle of communication. Principle of efficiency.
REQUSITIES OF A GOOD ORGANISATION
• • • • • • • The objective are to be clear, candid and well defined and the organization must have a capacity to achieve it. All activities therein must be implemented easily and effectively. All activities therein must be properly coordinated. Organization must be complete; it should include all essential activities. The communication system within the organization must be effective. The span of control at all level must be reasonable. There should be provisions for future expansion, whenever needed.
• • •
All activities and functions should follow defined procedures. The organization must be such that it promotes the morality of employees. There should be a proper diversion of authority and responsibility.
Importance of an organization
Significance of the organization in any institution may be discussed as below: (i) It ensures optimum use of human resources: It establishes persons with different interest’s skills, knowledge and viewpoints. (ii) It stimulates creativity: A sound and well conceived organization structure is the source of creative thinking and initiation of new ideas. (iii)Use of improved technology: A good organization provides for optimum use of technological improvements. (iv)Co-ordination in the enterprise: In a good organization, the different departments perform their functions in a closely related manner. (V)Executive development: The pattern of an organization structure has strong influence on the development of executives. (v) It ensures cooperation among workers: A good organization promotes mutual goodwill and cooperation among workers also.
SCOPE OF ORGANISATIONAL STUDY
The study focus on the overall structure of the organization. In this study, the researcher analyzed the overall functioning of the firm and also the financial performance of the enterprise. The researcher made a moderate attempt to have the SWOT analysis of the study.
METHODOLOGY OF ORGANISATIONAL STUDY
1. PRIMARY DATA- Primary data were collected from discussions with the
Managerial head of the various departments.
2. SECONDARY DATA- Secondary data were obtained from the annual report, from
the website and other concerned books.
LIMITATIONS OF ORGANISATIONAL STUDY
➢ Difficulty in meeting with all the Top level Officials. ➢ Certain areas are restricted, so a detailed study is not possible. ➢ Time allotted for the study is insufficient.
In the Global Market Place of today, Escorts is fast on the path of an internal transformation, which will help it to be a key driver of excellence in manufacturing, globally. For this, it is going
beyond just adhering to the prevailing norms of today, but is instead setting its own standards and is relentlessly pursuing them to achieve their desired benchmarks of excellence. To consolidate their presence in the overseas markets, the company has acquired Long Agribusiness LLC, a tractor distributing company in the USA, recently christened as Farmtrac North America LLC. Over 5000 tractors have been exported to the USA in the last three years. Another overseas joint venture Pol-Mot Escorts Spolka Z.O.O., Poland, (between Escorts and Pol-Mot Holding S.A., Poland), recently christened as Farmtrac Tractors Europe Sp. Z.o.o., takes care of the assembly and marketing of tractors in Poland and other East European countries. Our tractors in Europe have been homologated for marketing them in all EU nations besides others. Besides USA and Poland, Escorts is firmly based in Turkey, Australia, Bangladesh, Sri Lanka, Nepal, Tanzania, Chile, Ghana, Zambia, and Zimbabwe. Recently we have received a 3rd Time Repeat Order for 400 tractors from Ghana, which would take the Farmtrac population to 1,000 nos. Similarly in Senegal, we have successfully executed an order of 410 Farmtrac tractors. Escorts have very ambitious plans to expand the dealers network in other potential countries in the current year. In this context, we seek to join hands with leading Agricultural Machinery / Automotive Dealers to market our tractors in their respective countries. Indigenously developed cost effective 65 HP & 75 HP engines meeting Tier-4 interim/Euro stage 3A emission norms applicable in USA/Europe and certifi ed by EPA/ VCA. Productionised engine & parts sent to FTES, Poland for tractor Homologation for Europe. Opportunity for export models manufactured at FTES Poland to be very competitive in the global market.
The Escorts Group, is among India's leading engineering conglomerates operating in the high growth sectors of agri-machinery, construction & material handling equipment, railway equipment and auto components. Having pioneered farm mechanization in the country, Escorts has played a pivotal role in the agricultural growth of India for over five decades. One of the leading tractor manufacturers of the country, Escorts offers a comprehensive range of tractors, more than 45 variants starting from 25 to 80 HP. Escort, Farmtrac and Powertrac are the widely accepted and preferred brands of tractors from the house of Escorts. A leading material handling and construction equipment manufacturer, we manufacture and market a diverse range of equipment like cranes, loaders, vibratory rollers and forklifts. Escorts today is the world's largest Pick 'n' Carry Hydraulic Mobile Crane manufacturer. Escorts has been a major player in the railway equipment business in India for nearly five decades. Our product offering includes brakes, couplers, shock absorbers, rail fastening systems, composite brake blocks and vulcanized rubber parts. In the auto components segment, Escorts is a leading manufacturer of auto suspension products including shock absorbers and telescopic front forks. Over the years, with continuous development and improvement in manufacturing technology and design, new reliable products have been introduced. Throughout the evolution of Escorts, technology has always been its greatest ally for growth. In the over six decades of our inception, Escorts has been much more than just being one of India's largest engineering companies. It has been a harbinger of new technology, a prime mover on the industrial front, at every stage introducing products and technologies that helped take the country forward in key growth areas. Over a million tractors and over 16,000 construction and material handling equipment that have rolled out from the facilities of Escorts, complemented by a highly satisfied customer base, are testimony to the manufacturing excellence of Escorts. Following the globally accepted best manufacturing practices with relentless focus on research and development, Escorts is today in the league of premier corporate entities in India. Technological and business collaboration with world leaders over the years, Globally competitive indigenous engineering capabilities, over 1600 sales and service outlets and footprints in over 40 countries have been instrumental in making Escorts the Indian multinational. At a time when the world is looking at India as an outsourcing destination, Escorts is rightly placed to be the dependable outsourcing partner of world's leading engineering corporations looking at outsourcing manufacture of engines, transmissions, gears, hydraulics, implements and attachments to tractors, and shock absorbers for heavy trailers and armored tanks.
In today's Global Market Place, Escorts is fast on the path of an internal transformation, which
will help it to be a key driver of manufacturing excellence in the global arena. For this we are going beyond just adhering to prevailing norms, we are setting our own standards and relentlessly pursuing them to achieve our desired benchmarks of excellence.
KEY PLAYERS IN THE INDUSTRY:
Building on the success that it reaped in the light-truck segment, TATA Motors introduced a passenger vehicle version of its one-toner - “Ace”. The new Multi Purpose Vehicle (MPV) is positioned against Maruti’s “Omni” and has been aggressively priced so as to open up the competition in that domain. The Omni is priced between Rs. 2.3 lakh and Rs. 2.5 lakh (exshowroom Mumbai). “TATA Motors is following almost the same strategy that it used with Indica - launching multiple variants built-up on the same platform. The platform being used for “Ace” is versatile and it is exploring innovations on that platform”, confirmed a source close to TATA Motors. The source also indicated that the launch, of the same, was strategically slated for a year before TATA Motors’ much-hyped people’s car gets on to the roads. The new MPV will target the same market segments, semi-urban and rural, where the Rs. 1 lakh car is expected to make a big uproar. The Ace will be used to test the potential of the market and the distribution network of TATA Motors’ in these specific regions. A spokesperson was also found to say: “At any given point in time TATA Motors is working on various innovations. We cannot comment any further.” Also spotting the potential in the MPV segment is - Bajaj Auto, which is also working on similar lines, to attain faster-than-industry-average growth, BAL has identified MPVs as a potential growth segment. Bajaj Auto’s managing director Rajiv Bajaj had said, “The middle ground (between two and four-wheelers) can spawn a range of ‘lite’ vehicles — a diet version if you will — and that’s something we will look at. We are intending to get into a family of ‘lite’ four wheelers, both for people and goods. We will get into that business first with a goods carrier.” Another possible player in the same segment could be “Hero”, which also plans to foray into the four-wheeler segment. Hero Honda MD Pawan Kant Munjal said that – “The group would get
into four-wheelers as a natural extension of its bike business”, but he declined to specify whether it would be passenger cars, light commercial vehicles or other passenger vehicles. Maruti’s Omni, presently, the only player in the MPV segment, has sold around 65,350 units in the April-January period, depicting an astounding growth of 27 percent. This pips the 21 to 22 percent growth in the overall passenger car segment. The Omni is popularly viewed as a people mover in small towns and as a freight vehicle in cities. Maruti has also introduced some cheaper, fuel-efficient versions of Omni that run on “Environment-friendly” gases - LPG and CNG, considerably reducing the operational and maintenance costs to the consumer. The success of “Ace” opened up a whole new segment in the market of commercial vehicles and has led to other players like Bajaj Auto, Ashok Leyland and M&M queuing up to acquire a chunk of the ultra-light truck market.
A PEST analysis is concerned with the environmental influences on a business. The acronym stands for the Political Economic Social Technological issues that could affect the strategic development of a business. Identifying PEST influences is a useful way of summarizing the external environment in which a business operates.
The major risk associated with the Tractor Industry continues to be dependence on monsoon and availability of finance from the Banks. The second monsoon was lower than the normal in more than half of the areas across India leading to reduced Rabi sowing by 3% in comparison to last year. However, this is likely to be compensated by more productivity and better realization of the produce in the coming months. Credit flow to the agricultural sector has been slow than anticipated because of the settlement of the debt waiver cases by the Banks and the release of fresh loans to the farmers. Govt. has directed the PSU Banks to increase their lending to achieve the enhanced target of financing fixed for the agricultural sector. The continued slow down of demand in the American and European countries may have ripple effect on export of tractors and realisation of proceeds from these countries
The Company continues to focus on its Agri Business. However, it has changed its focus from the high volume, low profit products to high margin products to create a niche in the higher HP Models. At the same time, the Company is pursuing Value Engineering in the low margin tractors to improve its margin and re-launch the same. AMG has constituted a Forward Planning Group within the Company to envisage its strategy and vision for the next 5 years. Your Company has an appropriate internal control system for business processes with regard to effi ciencies of operations, financial reporting and compliance with applicable laws and regulations etc. Your Company has appointed Grant Thornton International as our Internal Auditors which works under the directions of an Audit Committee constituted as per the guidelines. The Internal Audit Reports are reviewed by the senior management and placed before the Audit Committee of the Board of Directors.
The Company, in its endeavor, to serve community continued to contribute in the various activities around the Units. The Company, during the year, organized Eyes/Health Check up Camps, Blood Donation Camps, sponsored Sports activities at the District and State level in the State of Haryana. It carried out the Career Counseling Session for the children of the employees of Escorts. The Company has a Scholarship Scheme for the deserving children of the Employees of Escorts and gives scholarships. The Company has spent Rs. 68 lakhs on the same during the year.
TECHNOLOGICAL FACTORS To keep pace with competition and advances in technology, Escorts Knowledge Management Center (KMC) established in 1976 is a world class R&D with facilities for design and product evaluation to deliver quality and trouble-free products. The entire tractor system, from the engine to transmission and hydraulic systems as also vehicle design from body work to controls and accessories is developed at the KMC. We are the fi rst Indian company with in-house R&D capabilities to certify engines for US EPA and EURO-VCA. The quest for technological excellence is further proven through the modern R&D centre and Quality and Testing laboratories set up at various plants of our Engineering Division deploying latest servo-hydraulic testing systems (MTS) and cam drum rigs for durability and life tests
PORTER’S 5 FORCES ANALYSIS:
Five Forces Analysis helps the marketer to contrast a competitive environment. It tends to focus on the single, stand alone, business or SBU (Strategic Business Unit) rather than a single product or range of products. Five forces analysis looks at five key areas namely: • • • • • THE THREAT OF ENTRY THE POWER OF BUYERS THE POWER OF SUPPLIERS THE THREAT OF SUBSTITUTES THE COMPETITIVE RIVALRY.
Rivalry among the Existing Firms:
THE POWER OF BUYERS
BACKGOUND AND HISTORY:
The founding Philosophy
Over 60 years ago, two young men set out on a journey together armed with little beyond intelligence, business acumen and determination and dreams aplenty. They believed that India could only achieve total freedom with a breakthrough in the field of agriculture and mechanization would have to rule the fields. They wanted to establish a mark of their own and leave behind their footprints in the dunes of history. They were in fact writing the first chapter of what has come to be widely recognized as one of the greatest success stories in the Indian industry. Escorts came into being with a vision, one that avoided the easy paths to profitability, and sought instead for ways to make a contribution. A vision that led two young brothers, Yudi and Hari Nanda, to branch out of their family's prospering transport business and institute ventures that were to become the foundations of Escorts Limited. On 17th of October 1944, Escorts Agents Limited was born at Lahore (now in Pakistan) with Mr. Yudi Nanda as Managing Director and Mr. Hari Nanda as Chairman. It was a trendsetting marketing house driven by the same business philosophy, which had given their family enterprise an unparalleled reputation: Customer Concern. Not long after, this ambition to surpass the expected led the brothers to discover the great business potential that lay in the rural parts of the country. This led to the establishment of Escorts (Agriculture and Machines) Limited, in 1948, with Mr. Y. Nanda as the Director. Even after the tragic demise of Mr. Y. Nanda, in an accident in 1952, the foundations of the company remained embedded with his undying spirit. Mr. H P Nanda then took on the mantle to realize the dreams which he had seen with his brother. Escorts (Agents) Ltd. and Escorts (Agriculture and Machines) Ltd. merged in 1953 to create one single entity - Escorts Agents Private Limited. Having initially started with a franchise for Westinghouse domestic appliances, by this time the Company had already expanded its marketing and service operations, representing internationally known German and American organizations such as MAN, AEG, Haniel & Leug, Knorr Bremse, MIAG and BMA for sophisticated electrical and mechanical engineering equipment and Minneapolis Moline and Wisconsin for agricultural tractors, implements and engines. Escorts made a major push into the agricultural arena by taking up the marketing and service franchise for Massey Ferguson tractors in Northern India, which soon ended up comprising 75% of Massey Ferguson's All-India Sales. Its first industrial venture came in 1954, in the form of a partnership with Goetzewerke of Germany for the manufacture of piston rings and cylinder liners. This partnership was followed by the production of pistons in collaboration with MAHLE, also of Germany, in 1960. The company's incorporation in its present name, Escorts Limited, came under effect from the 18th of January, 1960.
Escorts' next major industrial activity was the assembly of tractors, in 1961, in technical cooperation with URSUS of Poland. Subsequently this led to the manufacture of the country's first set of indigenous tractors under Escorts' own brand name, which were to play a pivotal role in the Indian Green Revolution. This went on to lay the foundation, which even today are the Company's core strengths - relevant, world-standard technology through strategic international alliances. Mr. H. Nanda pioneered the revolutionary concept of 'interdependence' between the ancillary and large industries, institutionalizing vendor development and, thereby, in the process building Faridabad and the entire belt of townships in the same region. He also introduced the discipline of service going before marketing, reassuring the customer that Escorts would stay with them and that they were here, in the industry, for the long run. He built long lasting alliances with a wide variety of the world's most respected names in tractors, industrial equipment, two-wheelers, construction equipment and telecommunications. He also created institutions that were specifically devoted to value engineering and training. His concern extended to the society, as well, in which he worked, and he manifested it by establishing the Escorts Medical Centre at Faridabad, Escorts Heart Institute and the Research Centre at New Delhi. He also conducted numerous village development programs. The present state of Escorts is testimony to the vision and leadership of the Nanda’s.
History of Escorts:
The genesis of Escorts dates back to the 1940’s when two brothers, Mr. H. P. Nanda and Mr. Y. Nanda launched a small agency house, Escorts Agents Ltd. in Lahore. Over the years, Escorts has moved ahead of those times and has evolved into one of India’s largest conglomerates. In this journey of over six decades, Escorts has had the privilege of being associated with some of the world’s leading engineering and manufacturing spaces like Minneapolis Moline, Massey Ferguson, Goetze, Mahle, URSUS, CEKOP, Ford Motor Company, J. C. Bamford Excavators, Yamaha, Claas, Carraro, Lucky Goldstar, First Pacific Company, Hughes Communications, Jeumont Schneider, Dynapac etc.. These valued relationships, be it technological or marketing, are one of Escorts’ highly cherished experiences treasures, which have helped it inculcate best in class manufacturing practices and also enabled it to emerge as a technologically independent world class engineering organization.
The chronological events that took place over the years are highlighted as follows: 1944 - The launch of Escorts (Agents) Limited. 1948 - Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Limited, with a franchise from the U.S. based Minneapolis Moline, for marketing tractors, implements, engines & other farm equipment.
The launch of Escorts (Agriculture and Machines) Limited. 1949 - Franchise of Massey Ferguson tractors for northern India 1951 - Escorts established India’s first private Institute of Farm Mechanization at Delhi. 1953 - Escorts (Agents) Limited and Escorts (Agriculture and Machines) Limited merged to form Escorts Agents Private Limited. 1954 - First industrial venture of Escorts to manufacture piston rings in collaboration with Goetze of Germany, in an era when joint ventures of Indian firms with foreign companies were virtually unheard of. 1958 - Started importing Massey Ferguson tractors from Yugoslavia for marketing them in India. 1959 - Collaboration with Mahle, of Germany, to manufacture pistons. Soon, Escorts became the largest producer of piston assemblies in India. 1960 - Set up of Escorts Limited. 1961- Setting up of manufacturing base at Faridabad for manufacture of tractors in collaboration with URSUS of Poland and 50% indigenous components. Launch of Escort brand of tractors. Collaboration with CEKOP, of Poland, for manufacture of motorcycles and scooters. Escorts moves into high gear by nurturing the two wheeler culture. The first Rajdoot motorcycle rolls off the assembly line. 1969 - Escorts Tractors Limited was instituted. A technical and financial joint venture with the global giant Ford Motor Company, USA, to manufacture Ford tractors in India. The years ahead saw Escorts grow as the largest tractor manufacturer in India. Escorts Institute of Farm Mechanization (EIFM) established at Bangalore. Escorts Employees Ancillaries Ltd. (EEAL), a unique venture in industrial democracy comes into being. 1971 - 1st February, the first tractor FORD 3000 rolled out of the Escorts factory. Escorts diversify and start manufacturing construction equipment. 1974 - Crossing national boundaries, Escorts exports for the first time. After winning a global tender, 400 tractors were exported to Afghanistan, which was perhaps the
worlds largest ever airlift of tractors. 1976 - FORD 3600, advancement in Farm Mechanization launched. Trial production of in-plant manufacturing of engine parts (Block & Head). 1977 - Escorts enters the domain of self-developed technology by setting up its first independent R&D Center. Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own Engines for E-27 and E-37. Due to constant technology absorption, indigenization level touched 72% for FORD tractors. Second plant set up at Bangalore for manufacturing piston assemblies. 1979 - Collaboration with JCB Excavators Ltd., UK, for manufacture of excavators. 1980 - Forays into healthcare, Escorts Hospital and Research Center set up in Faridabad. 1983 - Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre to spearhead newer breakthroughs in Farm Mechanization. Line concept introduced for engine block machining. 11,000 ton floating dry-dock Escorts I launched. 1984 - Signing of agreement with the Japanese bike giant Yamaha to manufacture motorcycles with Yamaha technology. Collaboration with Jeumont Schneider, France, to manufacture EPABX systems. Collaboration with Dynapac of Sweden to manufacture vibratory road compactors 1985 - Escorts Tractors Limited (ETL) offered its first Bonus Issue (1:1). 1988 - Escorts Heart Institute and Research Centre (EHIRC), a world class cardiac care facility launched in New Delhi. 1989 - Joint Venture with Claas of Germany to manufacture harvester combines. 1990-91 - First Public Issue in February 1991, over-subscribed four times. Shares listed on Delhi and Bombay Stock Exchanges. 1993 - FORD 3620 tractor launched. 1996 - Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC Tractor. 1997 - Joint Venture with Carraro of Italy for manufacturing and marketing of
transmission and axles. Joint Venture with First Pacific Company of Hong Kong - Escotel Mobile Communications. 1998 - POWERTRAC series of tractors launched. Memorandum of Understanding (MoU) was signed with Long Manufacturing Company, USA for setting up a Joint Venture in USA. 1999 - MoU for Joint Venture with a Polish Company POL-MOT was signed for assembly, manufacturing and marketing of Farm Machinery. 2004 - Divested Escotel Mobile Telecommunications to Idea Cellular. TS16949 certification for the Agri Machinery Group. 2005 - Divested Escorts Heart Institute and Research Centre (EHIRC) to Fortis Healthcare. 2006 - Divested in Carraro India Limited. Set up new manufacturing facility in Rudrapur for manufacture of new range of railway equipment
THE VISION, MISSION, OBJECTIVES AND SWOT ANALYSIS: VISION: “GO GLOBAL”
The Escorts Group, is among India's leading engineering conglomerates operating in the high growth sectors of agri-machinery, construction & material handling
equipment, railway equipment and auto components. Having pioneered farm mechanization in the country, Escorts has played a pivotal role in the agricultural growth of India for over five decades. One of the leading tractor manufacturers of the country, Escorts offers a comprehensive range of tractors, more than 45 variants starting from 25 to 80 HP. Escort, Farmtrac and Powertrac are the widely accepted and preferred brands of tractors from the house of Escorts. A leading material handling and construction equipment manufacturer, we manufacture and market a diverse range of equipment like cranes, loaders, vibratory rollers and forklifts. Escorts today is the world's largest Pick 'n' Carry Hydraulic Mobile Crane manufacturer. Escorts has been a major player in the railway equipment business in India for nearly five decades. Our product offering includes brakes, couplers, shock absorbers, rail fastening systems, composite brake blocks and vulcanized rubber parts. In the auto components segment, Escorts is a leading manufacturer of auto suspension products including shock absorbers and telescopic front forks. Over the years, with continuous development and improvement in manufacturing technology and design, new reliable products have been introduced. Throughout the evolution of Escorts, technology has always been its greatest ally for growth. In the over six decades of our inception, Escorts has been much more than just being one of India's largest engineering companies. It has been a harbinger of new technology, a prime mover on the industrial front, at every stage introducing products and technologies that helped take the country forward in key growth areas. Over a million tractors and over 16,000 construction and material handling equipment that have rolled out from the facilities of Escorts, complemented by a highly satisfied customer base, are testimony to the manufacturing excellence of Escorts. Following the globally accepted best manufacturing practices with relentless focus on research and development, Escorts is today in the league of premier corporate entities in India. Technological and business collaboration with world leaders over the years, Globally
competitive indigenous engineering capabilities, over 1600 sales and service outlets and footprints in over 40 countries have been instrumental in making Escorts the Indian multinational. At a time when the world is looking at India as an outsourcing destination, Escorts is rightly placed to be the dependable outsourcing partner of world's leading engineering corporations looking at outsourcing manufacture of engines, transmissions, gears, hydraulics, implements and attachments to tractors, and shock absorbers for heavy trailers and armored tanks. In today's Global Market Place, Escorts is fast on the path of an internal transformation, which will help it to be a key driver of manufacturing excellence in the global arena. For this we are going beyond just adhering to prevailing norms, we are setting our own standards and relentlessly pursuing them to achieve our desired benchmarks of excellence.
SWOT ANALYSIS: STRENGTH:
Escorts Limited has proven through its performance in fi scal 2007-08 that the efforts to strengthen the fundamentals of the company, sharpen focus on core strengths, build value for customers and drive operational efficiencies have put the company on a profitable track. Of the many initiatives that were undertaken, the biggest contributor has certainly been the initiatives in revamping the economics of the business by focussing on cost compression. A slew of initiatives has resulted in a saving of over Rs. 100 crore by eliminating waste, working more efficiently, right-sizing the work force, reduction of held stock and negotiating better prices from our suppliers. Company engineering strength built over several decades gives us this competitive advantage to continuously develop new products, advance our processes and develop customerfriendly solutions. WEEKNESS: 1. Diversified Products on the list and the concentration each product receives
decreases accordingly. 2. Huge customer base has made the online services slow.
3. High reliance on imported raw material imports creating potential price / Quality available issues. 4. Realization per metre is still lower than competition
5. Flexibility in organization.
There is data available in case of registered motor vehicles, but for carts and bicycles, there is no published information. Also, no reliable source of information is available regarding vehicle penetration into rural areas. A few studies have been found to indicate the following: a) 50% of villages have a population less than 500. b) 60% of villages do not have access to AWRs. c) Smaller the village, lesser the economic activity, and therefore, lesser the number of vehicles. Carts ferry only about 15 percent of the tonne-km of goods whereas trucks carry about 83 percent. India is highly under-motorized. The penetration levels of cars, two-wheelers, buses and other commercial vehicles stand at 7, 45, 0.7 and 4 per thousand persons, respectively. These levels of penetration only signify an even lesser extent of the same in rural areas. Railways, good roads and reasonably taxed vehicles, all together, would enable the transport of goods between rural production bases and urban centers of consumption. It definitely is not a question of either but is one that has to consider both. Public transport needs to be enhanced and taxes need to be reduced. Taxes add to about 50 percent of the vehicle cost, in India. Export schemes have been withdrawn, Multi-Utility Vehicles (MUVs) are taxed at a uniform rate of 16 percent and some other cars at 24 percent.
THREATS: World Bank has projected world output to grow by a mere 0.9% in 2009 compared to 2.5% in 2008 and a high of 4% in 2006. Growth in the developing countries as a whole is expected to fall from 6.3% in 2008 to 4.5% in 2009, only to recover to 6.1% in 2010. This is mainly due to China and India. India, being largely domestic dependent economy, is expected to show a growth of 6% to 7% during 2008-09 and 2009-10. Major effect of the decline in growth is coming in the manufacturing sector and the services sector. It is expected that the decline in these sectors will be compensated by high growth in the agricultural sector.
PRODUCT AND MARKET:
Farmtrac brand are the most powerful premium range of tractors that give maximum productivity to the farmers. Premium range - Powerful premium brand, 35 - 75 HP range • • • • • Exported to the most advanced markets in the world. Well accepted internationally for its versatility. Designed for the demanding requirements of progressive farmers. Machine with powerful features for maximum efficiency. A status symbol.
FT HERO Superior technology Enhanced 34 Hp.
FT CHAMPION Most powerful tractor in 39 Hp category
FT - 45 Powerful performance Optimum cost 42 Hp.
FT – 60 Versatile. World Class 50 Hp.
FT – 50 EPI Best in class for puddling and soil ploughing 45 Hp.
FT – 60 DX Power pride and performance 50 Hp.
FT – 65 EPI Toughest tractor for Hardest soil. 55 Hp. Power track
FT - 70 Unparalleled in his class 60 Hp.
Powertrac brand of tractors are the most fuel-efficient tractors in their respective categories that offer excellent value for money and have helped the farmers improve their quality of life. Value range – Value for money, Fuel efficient, 30 - 55 HP range
• • •
India's No.1 Economy Range - "Diesel Savers" Engineered to give spectacular diesel economy. The Diesel Saver technology - Great savings.
PT-434 Best fuel efficiency in its class. 34 Hp category.
PT-439 Best fuel efficiency, Lowest maintenance. 39 Hp category.
PT-445 Utility and Economy 45 Hp category.
PT-455 Fuel efficiency and Power 55 Hp category.
Escort – 27 Hp.
Escort – 35 Hp.
An ISO: 9001-20000 certified company, Escorts manufactures railway equipment as per international standards specified by UIC, AAR and Indian Railways. Asia’s largest manufacturer of air brake systems, the conversion of vacuum brake stocks to air brakes and installation and commissioning of complete brake systems on new builds are also undertaken by Escorts.
Diverse product range: Shock Absorbers (Oil Dampers) for coaches, locomotives, EMUs, MEMUs, DMUs, Metro and Rail Cars Air brakes for coaches, Freight cars, DMU and OHE Cars Automatic/Semi Permanent Couplers for EMUs, DEMUs, MEMUs
Electro Pneumatic Brake Systems for EMUs and MEMUs Composition brake blocks for coaches, locomotives, freight cars and EMUs Rail fastening systems for wooden, steel and concrete sleepers Direct Admission Valves for vacuum braked coaches Testing equipment for brake systems and shock absorbers
Air brake accessories for passenger coaches, freight cars, locomotives and self propelled vehicles Metal to rubber bonded vulcanized components Automatic twist locks for container freight cars
Air Brake Hose Couplings
Brake Beam Mounted Brake System
An organization structure refers to the determination of organization system of the enterprise it determines the programs and procedures by which the administrative relations of an enterprise are defined and established. No activity of the organization can go out of this structure. As the policy of the enterprise determines the limits within which the enterprise has to work. In the same manner organization structure determines and defines the shape and size of the enterprise according to which the administrative and organization decisions have to be taken. It is also the framework of activities of the enterprise, it may also be considered as the map of the building to be constructed. Organization structure can be defined, as the organization structure of an organization deals with its organizational arrangements. TYPES OF ORGANIZATIONS STRUCTURE FORMAL ORGANIZATION:It refers to the planned structure of jobs and positions with clearly defined objectives and functions. It is consciously created by top management for the accomplishment of enterprise objectives. It is made up of official relationships and channels of communication. Formal structure is governed by established rules and procedures. Formal organization tends to be stable and predictable. Thus, it is represented in the organization chart and manual of the enterprise.
INFORMAL ORGANIZATION:Informal organization arises from the personal and social relations of people. It is not formally designed but develops spontaneously out of interactions between persons. It is influenced by personal attitudes, likes and dislikes. Informal relations cut across formal channels. People working together in an enterprise frequently come into contact and develop personal or social relations outside the formal structure.
Advantages of the organization structure:The organization structure has the following advantages in the enterprise:-
Necessary for the management:- it is necessary for the management of the business and industrial enterprise. In the absence of a clearly defined organization structure, the management cannot discharge its duties properly because the structure defines and defines the relation between all the departments of the enterprise and the rights and duties of all the in the enterprise. It also tells us about the managerial approach.
It reveals the drawback of an organization:- organization structure is an important document of an enterprise. It serves as the guidelines to explain what should be done in the enterprise. Actual performance of the enterprise is compared with this document. The way it reveals the drawback of an organization
Helpful in delegation:- it is also helpful in providing the suitable training to the employees of the organization and defining their duties. It helps in delegating proper authority to the employees so that they can discharge their duties effectively and efficiently.
Helpful in training:- It is also helpful in providing suitable training to the employees and defining their duties like mentioned in the above. It defined the requirements of all the suitable postages and it also determines the need, nature, and the from of the training required.
Disadvantages of organization structure:The organization structure follows from the certain defects:• It is difficult to change it: - Management is a dynamic science. To make is a real science, must be practical, no hard and fast line can be drawn in the activities of enterprise, organization structure is the definite determination of activities. Therefore, it develops rigid ness in the activities and becomes difficult to make any changes easily. • It reveals only the formal relations:- A very important drawback of the organization structure is that it is only a formal document. It defines only the formal relations among the employees of an enterprise. But in practice, there are two types of relations among them. Formal and informal and organization structure does not define informal relations. • It creates conflicts:- Organization structure makes clear difference in the rights and duties of all the employees of the enterprise. It is the feeling of boss and subordinate
among them. It also develops the feeling of superior and inferior. It also develops the feeling of senior and junior. TYPES 1. Pre-bureaucratic structure- This structure is most common in smaller organizations and is best used to solve simple tasks. They follow a flat hierarchy system. 2. Bureaucratic structure- They are suited for complex or larger scale operations. Under this structure:• Functional structure- This structure groups specialize in similar skills in separate units. It is well suited to organizations with a single or dominant core product because each subunit becomes extremely adept at performing its particular portion of the portion. • Divisional structure- It is formed when an organization is split up into a number of self-contained business units, each operating as a profit centre. 3. Line organization- It is also known as scalar or military organization. In this structure, there is a vertical line of authority running from the top to the bottom of the organization. Here, the command is through a straight and unbroken line. All persons at the same level are independent of each other. The authority and responsibility of each position is specified. The man at the top has the highest authority and it is reduced at each successive level down the hierarchy. Every person is in direct chain of command. Line organization can be of two types. In pure line organization all individuals at a given level perform the same type of work and they are grouped into divisions only to facilitate effective supervision and control. In a departmental line organization work performed in each department is of a different type.
4. Functional organization:Under functional organization, the organization is divided into a number of functional areas. Each function is managed by an expert in that area. Every functional area serves all other areas in the organization. Thus, an individual in the organization receives instructions from several functional heads. Every functional expert enjoys
functional authority over subordinates in other departments. Within a functional department every operating executive receives orders from several functional specialists.
5. Line and staff organizationLine and staff organization is a combination of line and functional structures. Under it, line authority flows in a vertical line in the same manner as in the line organization. In addition, staff specialists are attached to line positions to advise them on important matters. These specialists do not have power of command over subordinates in other departments. They are purely of advisory nature. Thus, staff positions are created to support the line managers. Every staff specialist, however, has line authority over the subordinates in his own department. 6. Matrix organizationMatrix organization is a hybrid grid structure wherein pure project organization is superimposed on a functional structure. It is a two-dimensional pattern developed to meet the problems of growing size and complexity of undertakings. Such undertakings require an organization structure more flexible and technically oriented. Matrix structure has been defined as “any organization that employs a multiple command system that includes not only the multiple command structure but also related support mechanism and an associated organizational culture and behavior pattern”. Thus, a matrix organization is characterized by an overlapping of command, control and behavior patterns. In this organization, there is a permanent functional set up. In addition, temporary project groups are created to handle infrequent short-term projects.
MD DF GMT AGM HR - Managing director. Director Financer -Asst.General Manager (HR) -General Manager Technical.
AGM OP CSO M (P&W) APO PRO DO AGMM SM SSO DFC SAO (CASH) SAO (E&EDP) processing) SAO (MA) SAO (Co) SAO (PF) AAO AGM MT MP MS MIC SPO APO SY&IA DMIA SE MO PLM DMPR AGMTS CEPC
-Asst.General Manager operations. -Chief Security Officer. - Manager (personnel and welfare) -Assistant Personnel Officer. -Public Relations Officer. - Duty Officer. -Asst. General Manager Marketing. - Sales Manager. - Senior Sales Officer. - Deputy Finance Controller. -Senior Accounts Officer Cash. - Senior Accounts Officer (Establishment & Electronic data - Senior Accounts Officer (marketing accounts). -Senior Accounts Officer (confidential) -Senior Accounts Officer (Provident fund) - Assistant Accounts Officer. - Asst. General Manager Materials - Manager purchase. - Manager Stores. - Manager Inventory Control. - Senior Purchase Officer. - Assistant Purchase Officer. - Company Secretary and Internal Auditor. - Deputy Manager Internal Audit. - Senior Engineer. - Medical officer - Plant Manager. - Deputy Manager Production - Asst. general Manager (Technical Services). - Chief Engineer Pollution Control.
SAO (GA&F) -Senior Accounts Officer (General Accounts & Finance)
DMTS CE(S) SE(PC) OQC AGME CEM CE(U&S) DGMP DME DM(U&S) AGMP AGP(S&P) DM(S) DGME&I AGM(E&I) CEE CEI SEE DM (HT) DM (LT)
- Deputy manager (Technical Services). - Chief Engineer Safety. - Senior Engineer Pollution Control - Officer Quality Control - Asst. General Manager (Engineering). - Chief Engineer Maintenance - Chief Engineer Utilities & Statutes. - Deputy general manager (Projects) - Deputy Manager Engineering. - Deputy manager Utilities and Statutes. - Asst. General Manager (Project). - Asst. General Manager (Systems & Project). - Deputy Manager (Systems) - Deputy General Manager (Eletricals & instrumentation) - Asst. General Manager (Eletricals & instrumentation) - Chief Engineer Eletricals - Chief Engineer Instrumentation - Senior Engineer Electrical - Deputy Manager High Tension - Deputy Manager Low Tension
Level Function And Process
The main functional departments of ESCORT are:-
➢ OPERATIONS DEPARTMENT ➢ HUMAN RESOURCE DEPARTMENT ➢ MARKETING DEPARTMENT ➢ FINANCE DEPARTMENT ➢ TECHNICAL and SERVICE DEPARTMENT
Operational department is the most important department of ESCORT. This department carries out the manufacturing of all the products. The company carries out continuous production system; hence this department plays a very crucial role in ESCORT.
DUTIES AND RESPONSIBILITIES OF OPERATIONS MANAGER
1. MOP is the head of the operation department. 2. MOP fixes the monthly target according to the market operations 3. MOP is responsible for the modification of the production process and is responsible for efficient discharges. 4. MOP is the designated emergency controller during any hazardous incidents. 5. MOP has the administrative control over the operations department.
OBJECTIVES OF OPERATIONS DEPARTMENT
1. Reduce non confirming products. 2. Maximize the availability of electrolyze operation. 3. Optimizing the specific consumption of electricity, raw materials and resources.
DUTIES AND RESPONSIBILITY OF PLANT MANAGER 1. PLM is the custodian of the plant. 2. PLM plans production activities to meet the production target 3. PLM is responsible for the material consumption. 4. PLM plans the shutdown activities and carry maintenance work of the plant
5. PLM coordinates the operational functions with other departments for the smooth functioning of the plan.
HUMAN RESOURCE DEPARTMENT
Human resource is considered as the most vital asset of an organization. ESCORT has a well defined employee power. It helps the organization to perform well in the market. Human resources department is headed by manager, HRD, who organizes the training programs for workers and managerial staff. The manager HRD is responsible only for training and development. MHRD does not come under the personnel department for workers and managerial staff.
MAIN FUNCTION OF THE DEPARTMENT
• • • Identifying training needs Impacting the required training Maintaining the training records
HRD organizes training programs using internal faulty or engaging faculties from reputed organizations. The department in consultation with concerned department heads to organize house training programs.
VARIOUS TRAINING PROGRAMMES
GENERAL TRAINING In order to provide this type of training, one has to determine what would be the trainee’s growth potentials, up to what level he can grow in the organization etc. A performance appraisal has to be done to evaluate his present performance. Training is given on the basis of appraisal.
NEED BASED TRAINING Need based training will be done o the basis of determining the level of knowledge and skill one requires for a particular job. Next is to find out how many employees have to be given this training. On the basis of these needs training is given to the employees.
CUSTOMER TRAINING Customers are given training on handling of machines and other equipments in various situations.
INDUCTION TRAINING It is the training provided to the newly recruited employees to familiarize with the activities, rules, policies of the organization. It is also done to introduce the new employees to the other employees of the organization. TECHNOLOGY TRAINING
Company provides advanced training for workers to cope up with the technological changes. Feed back is obtained from employees and the effectiveness of the training programme is ascertained after a period of 2-3 months.
PERSONALITY DEVELOPMENT PROGRAMES Personality development programmers are conducted in a regular time period for the development of both workers and manager.
Escort Railway Division, Rudrapur has an efficient finance department headed by the finance manager and he is assisted by the deputy manager. Finance manager is responsible for shaping the fortunes of the company, preparing budgets, raising funds, keeping different accounts etc. ESCORT is having management information system to assist the finance department. The
finance department itself is divided into different sections like general accounts, costing bills, establishment and provident fund accounts sections each having its own functions.
FUNCTIONS OF FINANCE DEPARTMENT
● Purchase bills passing and payment to suppliers ● Sales invoice records ● Debt collection ● Budgeting and costing ● Statutory auditing ● Finance control ● Handle all auditing and taxes ● Sales accounting ● Generation and utilization of funds ● Treasury operations
TECHINCAL AND SERVICE DEPARTMENT
Technical service department is headed by MTS and has 4 sections, 1. 2. 3. Technical service section; Fire and safety section; Quality control section;
1. Technical service section
This section is headed by CETS and concerned with technical aspects of the plant. The main functions of the technical services department are: 1. Daily production calculation and reporting. 2. Collection of daily data from plant control room. 3. Overtime calculation. 4. Feeding data to the computer regarding the plants. 5. Production slips at daily production report generation. 6. Monthly reports preparation, both internal and external. 7. Maintaining reports of production loss due to various reasons. 8. Calculation of monthly production bonus.
2. Fire and safety section
Functions: 1. Provide training regarding fire, safety and first aid. 2. Conducting safety mock drills. 3. Regular maintenance of fire, water pumps and tanks. 4. Issue of work permits. 5. Providing safety awareness programmes. 6. Providing safety incentives schemes.
7. Accident reporting and investigation. 8. To prepare for emergency situation.
3. Quality control section
The section is headed by SOQC and reporting to CETS. The main functions of quality control section are to maintain the quality of the products in each stage of operations. Quality of raw material, in process fluid and finished goods are also checked. The products have to satisfy ISO specifications. Raw materials, mainly bushes, cover regular, control chamber railway parts, P.T.O. nave, casine eye, tee block, MS-ring, socket flange and socket flange pipe fitting have to meet certain requirements specified by the company itself.
FINDINGS AND CONCLUSION:
FINDINGS: Escorts Railway Division is on a steady growth path. Escorts Engineering Division has played a significant role in the growth and modernisation of rail transportation and continuously builds products to ensure comfort and safety using Indian technology with global standards. The Railways as a business opportunity was recognised way back in the early 60s by Escorts. They were among the first to introduce products and technology for modernization of Indian Railways to ensure safer and faster trains. They have been associated with the Indian Railways since last 45 years, and are one of their oldest and most trusted partners.
Escorts in-house R&D and state-of-the-art manufacturing facility for advanced product design, development, testing & validation all play a critical role in bringing about a high level of customer satisfaction, reliability and safety of products that cater to the various needs of the Indian Railways. Their fully equipped labs for complete testing of products have enabled us to develop products in compliance with Indian and international standard specifications as laid out by the Indian Railways. Escorts has been a pioneer in bringing technology from international suppliers into India and indigenously developing products like Air Brakes, Couplers – EMU/ Semi-Permanent, and Shock Absorbers to name a few. Escorts was the first company to bring international standard manufacturing to India. Escorts has also been the pioneer in changing over from Vaccum Brakes to Air Brakes that ensure safe and reliable journeys. We were the first supplier of the Air Brakes and made the largest number of installations of the Air Brakes. Today, when the Indian Railway modernization is moving at a fast pace, we are not only able to innovative and develop reliable products but also capable of developing new product mix. Escorts latest and important rail projects are Main line Couplers, Panel Mounted Brake Systems, Beam Mounted Brake Systems, Disc Brake systems, LHB Shock Absorbers, Bio Toilets, and Fire retardant Vestibules. The focus is High Throughput Systems with ease of operation and maintenance, and most of all reliability and service. Escorts Railway Equipment Business has two manufacturing plants, one in Faridabad, Haryana and another in Rudrapur, Uttaranchal. Shock Absorbers, Air Brakes, and Composite Brake Blocks are manufactured both in Faridabad and Rudrapur. Electro-pneumatic brakes, bio-toilets and rex-locks are exclusively manufactured in Faridabad. And assembly of Semi-permanent couplers, manufacture of Rubber-parts and E-parts is wholly at Rudrapur. Escorts Railway Equipment Business is on a steady growth path and in the short term (within two - three years) we have a target of doubling growth. They plan to expand both our existing product portfolio and add new ones too. With a 40 per cent year-on-year growth, Escorts Railway Division is on a steady growth path. Our order book position is healthy and with new projects in the pipeline it will look even better over a period of time. As their Railway Business is expanding with more and more products lines, there is no shortage of demand. To meet this demand, Escorts has augmented its manufacturing facilities with latest technologies and skilled workmen.
We have increased capacities of all existing products by 50-100 percent in the last one year. We have also built up capacities to roll out new projects in intended numbers. Escorts in-house research, design and development competencies, world-class manufacturing facilities, continuous training, skilled labour and professional management give them an edge over competition. They are continuously investing in upgrading our quality systems and culture to meet all international standards and requirements of manufacturing to be at par with competition. International competition helps us understand global requirements and will give them the window of opportunity for competing in wider global markets.
CONCLUSION: Indian Railways is in need of world-class infrastructure to compete with other modes of transportation. The need to move large volumes of freight through dedicated corridors is of immense importance. They are happy that Indian Railway is working aggressively in this area. Indian Railway needs to introduce innovative ways of technology to meet the requirements for moving large volumes of freight and passenger traffic with highest priority on safety. Overall connectivity within the country too is imperative. Connectivity is limited and there is a great need to connect our rail link to newer areas and create multimodal transportation systems. This will bring the development to remote and far flung areas of our vast country. A leading manufacturer of critical railway components since 1964, Escorts is one of the oldest and the most trusted partner of the Indian Railways. Over the last 45 years Escorts has built a long term relationship and committed partnership with the Indian Railways, pioneering and
indigenizing many critical products. Certified for ISO:9001-2000, the Railway Equipment Division (RED) under the Engineering Division of Escorts Ltd. is known for developing worldclass products with Indian Technology having Global Standards. The Railway Division’s key focus is to develop products that provide High throughput for the customer, Safety, Comfort and are Environment-friendly. Escorts’ fully equipped labs for complete design, development and testing of products are in compliance with national and international standard specifications as laid out by the Indian Railways. The in-house R&D, state-of-the-art manufacturing facilities at Faridabad, Haryana and Rudrapur, Uttaranchal for advanced product development, design, testing & validation play a critical role in bringing about a high level of customer satisfaction, reliability and safety. Air Brake Systems, Electro Pneumatic Brakes, Composite Brake Blocks, Semi Permanent Couplers, shock absorbers, rail fastening systems are among the Safety products Escorts manufactures.
1. CMIE PROWESS 2. EBSCOHOST
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