TABLE OF CONTENTS

I. Maruti Udyog Limited – The Genesis

II. Company Vision

III. MUL’s Gurgaon Plant

I. MARUTI UDYOG LIMITED – THE GENESIS

INTRODUCTION

The automobile industry in India was established about 45 years ago.

Till 1981, the automobile scenario, in India was characterized by
stagnant technology and outmoded vehicle-design.

The era of modernization in the automobile industry in India began

with the launch of the Maruti Project in February 1981.

OBJECTIVES

When Maruti entered the Indian car market, it sought to fill what it perceived as two very
glaring needs. One, to provide fuel efficient, low-cost vehicles, which were reliable and of
high quality. Two, to offer customers a friendly sales and after sales service, total automobile
value and customer satisfaction. Additionally, the absence of an efficient public
transportation system was leading to a growing demand for passenger cars. A burgeoning
work force and growing middle class population meant that personal transport had become a
necessity. To attract good managerial talent, the corporate world had started to offer cars even
to junior executives. Since the cars that Maruti manufactured were mainly entry-level cars,
the company successfully fulfilled this demand in the market. The main objective of setting
up the Maruti plant was to fulfill the following objectives:

• Modernization and upliftment of Indian Automobile Industry from its current disheveled
shape.

• Production of fuel-efficient vehicles to conserve the scarce resources of petroleum.

• Production of large number of motor vehicles, which are necessary for the economic
growth of any country.
A BRIEF HISTORY OF THE COMPANY

Maruti Udyog Limited was incorporated as a Public sector company on February 24,1981
and given a mandate to bring about expansion and technological modernization of the
automobile industry. The industry was undergoing technological stagnation and was
characterized by low production volumes, high cost and low productivity.

One of the foremost tasks before Maruti Udyog Limited was to determine the most suitable
product mix and to select the most suitable foreign partner who would be willing to accept
MULs' requirements in terms of product mix, technology transfer and equity participation.
After extensive discussions with several major European and Japanese car manufacturers,
MUL chose Suzuki Motor Company of Japan as its partner.

A License and a Joint Venture agreement was signed with Suzuki Motor Company of Japan,
in October 1982, by which Suzuki acquired 26% share of the equity, with an option to
increase it to 40%. Suzuki exercised this option in 1987 by increasing its equity to 40%;
Suzuki further increased its equity share to 50% in 1992, thereby converting Maruti Udyog
limited into a Non-Government company. and further Suzuki motor corporation increased
it's equity upto 54.2% in the year2002.Indian government stake comes down to 20.8% from
the present 45.8%. The rest is meant to be floated in public. Maruti’s total equity is Rs.
1322.92 million. A new plant is under construction at Manesar.

COMPANY PERFORMANCE – NOW & THEN

MUL went into production in 1983 and the first cars rolled out for sales on Dec. 14, 1983.
Currently it is producing 9 basic models with different variations –
MARUTI 800, OMNI, GYPSY, ESTEEM, ZEN, BALENO,WAGONR, ALTO & Versa.
Two models named GRAND VITARA & ALTURA are being imported directly from
SUZUKI MOTOR CORPORATION(SMC),Japan
At present it is India's largest automobile co. with an installed capacity of 5,00,000 vehicle
per annum and manufactures of wide range of passengers car covering all major segments.
It has a monopoly in segment A ( cars priced below Rs. 3 lakh) i.e. a 100% market share with
M800 & Omni. In segment B (priced between Rs. 3 to 5 lakh) it has a 36% market share with
Zen, WagonR & Alto. In segment C (priced between Rs. 5 t o10 lakh) it has a 16% market
share with Esteem, Baleno & Versa.
It has an overall market share of 58.6% which is 3 times larger than the second placed
company & sells more car than all its competitors put together.
MUL has revolutionised the Indian automobile and component industry and has set standards
in quality of products and service.
The Company sold about 3,40,000 passenger cars in the domestic market in 2001-02. It also
exported over 12,200 vehicles during the year. The company's turnover touched Rs. 9295.3
crore (unaudited) with a net profit of 55 crore (unaudited) in 2001-02 compared to a loss of
295 crore in 2000-01. MUL also has the largest dealer and service network in India, which
include 188 dealers, 255 sales outlets across 157 Indian cities and 1900 (1567 Maruti
authorized and 333 dealer workshops) authorized service outlets across 808 Indian cities and
26 spare parts (Stockists) outlets and 11 Maruti Genuine part outlets.
The company has been ranked number one in customer satisfaction in the J D Power Survey
2001. Maruti is the only market leader in the world to be ranked number one in customer
satisfaction, and the only company to top the customer satisfaction rankings for two years in a
row. Maruti's quality systems and practices have been rated as a "benchmark for the
automotive industry worldwide" by A V Belgium, global auditors for International
Organization for standards.

Maruti has a strong international presence with sales in over 70 countries worldwide
spanning Europe, South and Central America, Africa, Oceania and Asia. Total exports of
Maruti till the end of last financial year were 2,47,200 vehicles. Over 75% of these vehicles
have been exported to Europe. Zen (Alto) is very popular in Europe and South America. The
M800 has successfully positioned itself as an economical, small car in Chile, Uruguay,
Algeria, Egypt, Sri Lanka, Yugoslavia and Malta among others. Omni is popular in countries
like Kenya, Mozambique, Cyprus and Nepal. The Gypsy is a front runner in the four-wheel
drive segment of many African and some Asian markets. The orders for export cars are not
directly received but come through SMC (Japan). They are sold in the foreign market under
the Suzuki brand name. The export cars are also different in some aspects from the cars made
for domestic market. For e.g. Export cars are left hand drive, have tubeless tyres and are
necessarily MPFI with a 32-bit
 PRODUCT RANGE

Maruti has successfully introduced the following models in the last 18 years:

S.No. Models Specs Year Of Launch

1 MARUTI 800 797cc, hatchback Dec. ’83

2 OMNI 796 cc, MUV Nov. ’84
3 GYPSY 970 cc, 4WD off-road vehicle Dec. ’85
4 MARUTI 800 New Model- 796 cc, hatchback Apr. ’86
5 MARUTI 1000 970 cc, 3 Box car Oct. ’90
6 ZEN 973 cc, hatchback car Oct. ’93
7 ESTEEM 1.3L LX 1298 cc, 3 Box car Nov. ’94
8 ESTEEM 1.3L VX 1298 cc, 3 Box car Nov. ’95
9 ESTEEM 1.3L AX 1298 cc, 3 Box car Jun. ’96
10 ZEN AUTOMATIC 993 cc, hatchback car Oct. ’96
11 GYPSY KING 1298 cc, 4WD off-road vehicle Nov. ’96
12 OMNI (E)) 796 CC, MUV, 8 seater Dec. ’96
13 GYPSY (E) 970 cc, 4WD, 8 seater Dec. ’96
14 NEW MARUTI 800 796, hatchback car (Std & Dx) Sept. ’97
15 ESTEEM 98 1298cc, 3 box car (LX, VX & AX) Oct. ’97
16 NEW OMNI & OMNI-E 796 cc, MUV Feb. ’98
17 ZEN VX & ZEN VX 973 cc, hatchback car Jul. ’98
AUTOMATIC
18 ZEN D 1527 cc diesel, hatch back car Aug. ’98
19 MARUTI 800 EX 796 cc, hatch back car Jan. ’99
20 Zen LX 993 CC, hatch back car Jan. ’99
21 ZEN CLASSIC 993 CC, hatch back car Aug. ’99
22 ZEN Vxi 993 CC, hatch back car with power Oct. ’99
steering
23 OMNI XL 796 cc, MUV, high roof Oct. ’99
24 BALENO 1600 cc, 3 box car Dec. ’99
25 WAGON R 1061 cc Jan. ’2000
26 ALTO LX 800cc, VX 1061cc Sep. ’2000
II. COMPANY VISION

THE PHILOSOPHY

The company’s vision for the future is to become an internationally competitive company in
terms of production volume, quality, cost and profits.

The vision is a realistic, credible and attractive future that the company visualizes for its
organization and all its employees. It is an articulation of a destination towards which the
organization is moving, a future that is substantially better than the current state. The vision
helps the company in moving consciously, continuously and in a focused manner towards the
desired state.

If the vision is the destination, the mission is the means by which the company is moving
towards it. If the vision is a goal, the mission is the tool for achieving the vision. A mission
defines what the organization has been established to accomplish. It determines the purpose
of its operations.

THE PROCESS OF REALIZATION

Maruti aims to realize its vision in the following ways:

 Team work and recognition that each employee’s future growth and prosperity is totally
dependent on the company growth and prosperity.
 Organizational and individual discipline.

 Constant increase of productivity of labor and capital.

 Steady improvement of quality and reduction of costs. All employees contribute towards
this goal.

 Respect for laws, ethics and human beings.

With the economic liberalization, where human process requiring quality of output, and trans-
national companies vying for introducing similar popular models of cars, the goodwill of
customers and workers alike keeps the performance of the company at a consistently high
level.

COMPANY MISSION

 To provide a wide range of modern, high quality fuel-efficient vehicles in order to meet
the need of different customers, in both domestic and export markets.
 To be an internationally competitive company in terms of its products and services.

 To retain the leadership in India and aspire to be amongst the topmost industrial player.

 The main focus will be upon:

1) Building a continuously improving organization adaptable to quick changes.

2) Providing value and satisfaction to the customer.

3) Aligning and fully involving its suppliers, employees, dealers to face the
completion.

4) Maximizing shareholders value.

5) Being a responsible corporate citizen.

QUALITY POLICY

Quality policy of Maruti Udyog Limited is "consumer satisfaction through quality of our
products and services, achieved by consistent adherence to procedures and systems".

ORGANISATIONAL STRUCTURE

MUL is a functional organization. The company is divided into different divisions according
to the various functional areas. A Divisional Manager heads each division. Divisions are
further divided into departments, which are headed by Department Managers who report to
their respective Divisional Managers. Designation in the company is based on the functional
responsibility in terms of the company's philosophy of de-linking designation and functional
responsibility from the salary level.

The total operations of the company are divided into Divisions like Marketing and Sales,
Spares, Engineering and QA, Production, Production Engineering, Materials, Information
Services, Finance, Personnel etc. Each division is further divided into departments

The hierarchy diagram in MUL is as follows:

 C H A I R M A N

M A N A G I N G D I R E C T O R

J O I N T M A N A G I N G D I R E C T O R

D I R E C T O R

P A R T T I M E D I R E C T O R

D V M

D E P A R T M E N T M A N A G E R

M A N A G E R

D E P U T Y M A N A G E R

S E N I O R E X E C U T I V E

E X E C U T I V E

S U P E R V I S O R

A S S I S T A N T S U P E R V I S O R

T R A I N E E

W O R K E R
SOME SALIENT FEATURES OF THE COMPANY ORGANISATION CULTURE

At Maruti, manpower is seen as a unique resource, in the sense

that optimal productivity of other resources depends largely on
the way human resources are utilized. The basic philosophy of
management that underlies the Maruti culture is that all
employees of the company should be molded into a team, which
then strives as one, to achieve commonly shared company goals
and objectives. To make this philosophy tenable, the Company
takes several initiatives. Inputs are sought from employees at all
levels. Secondly, Maruti, encourage leadership in the best sense of the word i.e. a leader is
one who must be impartial, must have the ability to rise above his own subjectivity.

The company understands that the process of creating a sense of belonging that all employees
can identify with is a lengthy one. This leads to the introduction of a common uniform for all
employees. Another measure is the creation of a common canteen where all employees have
lunch. Common toilets, common transport and similar facilities for all levels of employees
are other measures that reinforce our emphasis on genuine equality. Maruti does not believe
in the notion of organizational hierarchies. In fact, the management structure and systems in
Maruti have been designed to promote decentralization of authority. Maruti has a horizontal
management structure with only four functional levels of responsibility to facilitate quicker
decision-making.

Another focus area of the Maruti culture is the maintenance of a smoothly functioning
communication network. Maruti believes that communication channels between labor and
management cannot simply consist of having a labor representative on the Board of the
Company. There is a thorough dissemination of information at all levels, through newsletters
or via a letter from the Chief Executive to all employees. Meetings with the Union are held
regularly, and programs being contemplated by the Company are discussed with the Union.
The Sahyog Samiti is a collection of representatives of non-unionized employees. Training
programs in Japan, Quality Circles, productivity-linked incentive schemes, are ethos of
discipline and teamwork.
Several measures of performance have made amply clear that Maruti has established a truly
healthy work culture. They have met all project and performance targets since inception. The
productivity levels are constantly improving. The Company has had good labor relations with
employees from the very beginning, and has been successful in the export market. Yet, the
Maruti culture is one that does not believe in resting on its laurels. It adheres to the spirit of
Kaizen, which states that constant improvement is always possible. The most basic tenet of
productivity that it holds dear is that " Today should be better than Yesterday and Tomorrow
should be better than today.”

WORK CULTURE

The employees endeavor for treating the whole MUL as a single team and they strive to
strengthen the following areas: -

 Work culture in a big organization means a philosophy, which guide’s actions and
behavioral patterns of the employees, thus determining the extent of efficiency

 Interaction between them: - It also defines the working environment. That's why building
a distinctive organizational culture whereby a we feeling dominates among employees
and each member feels that he/she is a part of the family. All the employees wear same
uniform, eat in the same canteen, travel by same busses and sit in the same open offices
irrespective of the nature of their work or position in the companies’ hierarchy.

 Participative working

 Equity participation of employees

 Smooth interaction among the employees

 Open-minded approach

 Stress on team-building

 Effective communication among the employees

Certain forums are established for the benefit of the employees namely Maruti Sahyog
Samiti, Suggestion Scheme, Small group activity, Kaizen and Quality Circles, which help in
promoting team spirit and information sharing among the employees.

KAIZEN in Japanese loosely means continuous improvement. At Maruti, beautification of

working place, reduction of waste, system and process improvements are done through
Kaizen.

The employees are given the scope of improvement by arranging Quality Circles, which
encourage enthusiasm and commitment within the department to improve the quality of work
done.
The work strength of Maruti is 5848 employees with an average age of 35.5 years. Of them
128 are female. A crèche has also been provided for their children. The no. of
workers/technician is 4309, supervisors/executives is 1808 & that of managers & above is
451.

In keeping with the world standards, the whole plant has been Industrially air-conditioned to
improve the productivity of the employees.

TEAM WORK

In an organization, each individual and group has a definite function to perform. This
performance should add to the overall performance of the company and not detract from
it. ‘Victory’ and achievement have to be viewed from the point of view of the company
as a whole, and not of any individual department or employee within the company.

SIGNIFICANCE OF WEARING IDENTICAL UNIFORMS

The significance of wearing identical uniforms does not merely lie in being identified as a
Maruti employee. It symbolizes a new culture of working together as a team, a team, which
will be playing successfully in the world league.

The Maruti Philosophy is that all employees must be enabled to realize their full potential
during their career in the company. Company policies of training, job rotation, etc. will be
directed towards this end. At the same time, an employee has also to contribute towards the
realization of his own potential. For this, he must always have an open mind, and the
learning process should never stop. New experiences and analyzing mistakes are important
ways of learning. One should never try to cover up a mistake, but should learn from it and
improve the system. Reading, asking questions and taking part in discussions are other ways
of enlarging one’s knowledge and mental caliber. Above all, employees must have a sense of
pride in their

work, and should be able to hold their head high and own the job done by them. Equally,
employees must respect the work done by their colleagues, and realize that it is the sum total
of the contribution made by every employee which determines the extent of success of the
company.

HRD strategy is a course of action, planned to be under- taken, to achieve desired goals. The
objective of any HRD effort is to build human competencies, to build a climate for innovative
development. Human competencies are very critical for those working in services. HRD is a
growing field- the thrust of HRM strategies to manage structural changes effectively.
Creating an atmosphere, which promotes learning and provides opportunity to the employees
in MUL can successfully meet the challenges effectively.

Human-resource constitutes a key input in any organization. Unlike other resources, they are
not standardized, interchangeable or passive. Human beings differ from one another in their
basic mental abilities, skills, attitude and behavior. Their complex behavioral and
psychological making gets multiplied when they interact with one another in an organization.

Today, with the growing realization of the role and importance of human resources, the study
of motivation has assumed importance. This project report explains the role of HRM in
fulfilling MUL aims, present status of HRM activity, industrial relation, situation,
absenteeism and work culture in MUL.

QUALITY CIRCLES

Quality circles are a forum for people within a section or department to voluntarily come
together and work towards making improvements in their field of work through group
discussions. Although it bears the name of quality, this is a movement that is not linked to
the improvement of the product quality alone but also quality of work in general resulting in
increase in efficiency, productivity, cost saving, safety, cleanliness, orderliness etc., all of
which ultimately contribute to making a stimulating work environment. To promote this
activity an attractive reward system has been initiated for a Quality Circle’s group suggestion.
The best quality circle is sent to Japan generally every year. The objective of such group
activity is not only to benefit the company by way of work-related improvements, but also to
enable each employee to develop his analytical skills, the spirit of team work and train
himself to assume greater responsibilities on the job as well as in his personal life.

Once the members of a quality circle learn to perceive what is good quality and what is not,
they recognize those problems which were previously taken for granted and these would
become their target for improvement through group discussions. The members would
gradually learn to conduct their meeting in such a way that logical and feasible solutions
emerge.

SUGGESTION SCHEME

Maruti Udyog Limited attaches a great value to its human resources. It believes that every
employee is capable of thinking up ideas, which can result in significant improvements in all
spheres of the organization’s activity.
However, in the normal course of working, the employees do not have an opportunity to
participate in management to share their ideas. Consequently, this hidden potential remains
un-utilized. One way of realizing this potential is through a Suggestion Scheme, which is a
formal way of expressing ideas. It provides an opportunity to the employees to participate in
the management. The employees can express their ideas in the form of suggestions,
individually or as a group and submit to their Dept. Managers, who in turn evaluate the
suggestion. If found useful, these ideas get implemented. A successful suggestion scheme
can go a long way in building employees involvement with the company’s objectives and its
growth. The company too can derive benefits in terms of improved quality, efficiency in
working, reduction in cost and greater customer satisfaction.

In the current system, the suggestion makers fill a form and submit it to their Dept. Managers
through suggestion co-coordinators who are responsible for evaluating it.The tear off slip is
sent to the suggestion maker after the suggestion is registered at the suggestion cell.
Departments send reports (weekly and monthly), that show various parameters such as
number of suggestions generated, implemented, and rejected, cost saving, etc. After the
suggestion is evaluated, the rejected suggestions are returned to the suggestion maker and all
implemented suggestions sent to Suggestion Cell for making payments of the rewards. The
suggestions are rewarded based on cost saving accruing from it.
III. MUL’S GURGAON PLANT

The manufacturing plant, located about 25-km south of New Delhi in Gurgaon, has an
installed capacity of 5,00,000 units per annum. The total area of the plant is 12,02,256 m2
with a total covered area of 2,95,293 m2. The average daily production is around 1500
vehicles a day.
The whole production facility has been divided into 3 plants: -
1. Plant I (M800, Omni, Esteem, Gypsy, Versa)
2. Plant II (Zen, Alto, Wagon R, Baleno, M800)
3. Plant III (M800, Alto, Wagon R, Baleno, this plant is currently shutdown)
The other activities include research & development and utilities (captive power plant, water
and effluent treatment plant, compressor house, boiler house, air washers and incinerator
facilities)

DIVISIONS & DEPARTMENTS

CORPORATE SERVICES

 Corporate Services Division

 Legal & Secretarial Department (provides legal aid and services to all operating
divisions)
 Corporate Communication Cell (liaison and coordination with press, electronic media,
advertising)
 Protocol (coordination with travel agents, hotels, airlines, embassies)
 Strategic Initiative Group (manages day-to-day activities of Maruti website)
 Recruitment and Management Compensation (deals with recruitment of executives
and employees)

PERSONNEL AND ADMINISTRATION

 Employee Relations Department

 Establishment & Time office
 Factory Administration Department
 Organization Development Department
  The Role of the ORGANIZATION DEVELOPMENT DEPARTMENT is to orient
new employees into our organization and work culture. Equip employees with the
requisite knowledge and skills that would help them improve their productivity.
 Orientation Programme
 Apprenticeship Training
 Workman Training
 Foreign Training
 Short-term Trainees
 External Training

PRODUCTION

Production is divided into 2 divisions

Production-I, This division comprises of

 Plant 1 Division,
 Plant Common Division
 PKC Department
 PQC Department
 MX-ENGG Department
 Materials Control Department
 Paint Auxiliary and Special assignment

Production-II, This division comprises of

 Plant 2 Division,
 Plant 3 Division,
 Maintenance Division

Other shops in the Production Department are:

 Press Shop & Blanking Line

  Weld shop (I, Ii & Iii)
 Paint shop (I, Ii & Iii)
 Engine Assembly Shop (I, Ii)
 Assembly Shop (I, Ii & Iii)
 Machine Shop (I, Ii & Iii)
 Materials-X (I, Ii & Iii)
 MX-Engineering
 PQC
 Maintenance I & II & Maintenance Plant Common
 PKC (Productivity & Kaizen Control)
 Special Assignments

PRODUCTION ENGINEERING

 Production Engg. Division

 Production Services Division
 Tool Room, Die Design Division

ENGINEERING DIRECTORATE

 QAIN Division
 Service Division
 Parts Inspection Division
 Engineering Division

MATERIAL DIVISION

MATERIALS I, II & III

Supply Chain - 1
Supply Chain - 2
Supply Chain - 3
Supply Chain - 4
Supply Chain - 5

VARIOUS SHOPS INVOLVED IN PRODUCTION

1) Blanking line

Coils of steel sheets are cut into blanks of requisite size on the blanking Line. Main
facilities include large blanking dies, 4000T blanking Press, stack reverses, EOT crane etc.
2) Press shop

Blanks produced in the blanking line are pressed into body panels in the Press shop.
Among the important devices used are 2000T fully Automated transfer press,
1500T semi-automatic press line, sheet Cleaning machine, 100T die spotting
press, EOT cranes etc.

3) Weld shop

The body panels produced in the press shop and smaller sheet metal parts, which are
procured from vendors/joint ventures, are welded together to form white body. Main welding
techniques used are spot Welding, CO2 welding and brazing

4) Paint shop

The white bodies produced in the weld shop are painted in the paint shops. The most
advanced technology is being used here which ensures high paint adhesion to the body, high
degree of corrosion resistant and glossy finish of the body.

5) Machine shop

Important components machined in the machine shop are:

 Cylinder head

 Cylinder block

 Cam shaft

 Crank shaft

 Transmission case
 The flow lines consist of CNC machines integrated with manual and transfer conveyer.

6) Assembly shop

The assembly shop consists of:

a) Engine Assembly Shop: Engine components taken from the machine

shop/bought from outside are assembled and tested here.

b) Final Assembly Shop: This shop consists of conveyer lines where final
assembly is completed, after which car goes for the vehicle inspection.

PRODUCTION ACTIVITIES

1) Production

2) Quality

3) Discipline

4) Suggestion/KAIZEN

5) Safety
6) 5S, 3M, 3K

PRODUCTION

1) PRODUCTION PLANNING-Target setting for different models.

2) CONTROL OF RESOURCES- Like fuel, electricity, water etc., and control of line
rejection.

3) MAN POWER PLANNING

4) PREVENTIVE MAINTENANCE

5) The 4Ms -MAN, MACHINE, MATERIAL, METHOD.

QUALITY

1) M.O.S. / M.I.S.

2) I.S.O./C.O.P.(confirmation of product)

3) Quality index/demerit point

4) Process quality control

5) Feedback/follow up

DISCIPLINE

1) Bye - laws

2) Punctuality / Absenteeism

SUGGESTION/KAIZEN

1) Small group activities (QC)

2) Improvements

3) Team work

FIVE ‘S’ (5 - S) THREE ‘M’ (3-M)

4)1).Cost
SEIRI
saving ORDERLINESS
MURI INCONVINENCE
2). SEITON ARRANGING
MUDA WASTAGE
PROPERLY
3). SEISO CLEANING MURA INCONSISTENCY
4). SEIKETSU CLEANLINESS
5). SHITSUKE DISCIPLINE

THREE ‘K’ (3 –K)

KIMERARETA KOTO O WHAT HAS BEEN DECIDED

KIMERARTEA TORI WHAT MUST BE FOLLOWED
KICHINTO MAMOURU KOTO AS PER STANDARDS