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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
• • • • •
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
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. Annual Reports Business Journals Existing Records Website of the company.
2. PROFILE OF THE STUDY
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:
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:
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.
• 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.
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 selfreliance, 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.
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.
Ashok Leyland has seven manufacturing plants 9
• • • • •
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
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
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.
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.
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.
2.3. ORGANIZATION CHART OF M/s. ASHOK LEYLAND LTD.
MANAGING DIRECTOR MAMANGIN
CFO INTERNAL AUDIT
PRODUCT DEVELOPM -ENT
SPECIAL DIRECTOR BUSINESS PLANNING
CONSTRUCTION & ALLIED BUSINESS
PLANNING & PORTFOLIO MGMT
WHOLE TIME DIRECTOR & COO
SALES & SERVICE
ORGANIZATION STRUCTURE OF M/s. ASHOK LEYLAND LTD. (AUTHORITY FLOW) MANAGING DIRECTOR
WHOLE TIME DIRECTOR
DEPUTY GENERAL MANAGER
ASST. GENERAL MANAGER
SENIOR MANAGER MANAGER DEPUTY MANAGER
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:
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.
“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”.
DIRECTORMGMT DEVELOPMENT CENTRE-HOSUR
DIVISIONAL MANAGER- IR
CHIEF SECURITY OFFICER
-MANAGER -ASST. MANAGER -OFFICERS
- ASST.MANAGER - MGMT TRAINEE
FUNCTIONS OF HR DEPARTMENT: 1) HR ACQUISITON • • • • • • • • • Recruitment Selection Training and development Organization development Performance appraisal Incentives and benefits Creating motivation environment Empowerment and participation HR Mobility
2) HR DEVELOPMENT
3) PERFORMANCE AND COMPENSATION
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
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
PHASE 1: PRE-SELECTION
HR APPROVING AUTHORITY
IDENTIFICATION OF PROSPECTIVE CANDIDATE Job site search Internal references Hiring consultants Direct applicants
PHASE 2: SELECTION
INITIAL HR SCREENING
SCREENED RESUMES SENT FOR FURTHER SHORT-LISTING TO THE FUNCTIONAL HEAD
DISCUSSION AND FINAL INTERVIEW BY THE INTERVIEW PANEL
PHASE 3: POST SELECTION
SALARY AND GRADE FIXATION BY APPROVED AUTHORITY
INITIAL OFFER COMMUNICATED TO THE CANDIDATE
NEGOTIATION WITH THE CANDIDATE
OFFER NOT ACCEPTED HR INFORMS THE FUNCTIONAL HEAD AND CLOSES THE CASE HR INFORMS THE FUNCTIONAL HEAD ABOUT PROBABLE DOJ
HR ISSUES OFFER LETTER
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
TRAINING PROCESS OF ASHOK LEYLAND LTD. Business Plan
Priority Needs of depts./ units
Quad 1 Executives
Training Need Input Sources
Training Plan Training Objectives
On- The – Job Evaluation
Learning Outlines Programme Design & Methodology Identification of Faculty Resource Effective Measures Schedule of Training Schedule of Training 26
Evaluation of Faculty Resource
Evaluation of Training Programme
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. 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) 28
Part VII- Development plan (Job rotation, job enlargement, special assignment/ reputation) Part VIII- Other comments - Consistently outstanding performance. - Performance which is consistently significant beyond job requirements contributes in related area also. - Performance which adequately meets job requirements and occasionally produces good over and above requirements
Five point scale of Ashok Leyland showing levels of performance: 5- Exceptional 4- Superior 3- Good
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
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 29
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. 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 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: purchase of books is allowed upto 75% of amount spent per academic year subject to a maximum
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. 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/ Exgratia. 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: 31
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 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 32
7. Quality 8. Safety.
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. RISE The 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: 33
Better opportunities Lack of growth
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
b) FINANCE DEPARTMENT OF ASHOK LEYLAND LTD.
Finance is considered as the life blood of business. This is because in the modern moneyoriented 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. 35
DEPARTMENTAL STRUCTURE: MANAGING DIRECTOR
CFO Pricing Manufacturing Units
Treasury Ennore Direct Taxation Indirect Costing and Budgeting Hosur-2 Hosur-1
( Finance account Service Group)
Bhandara Explore finance Pantnagar
DEPARTMENTAL STRUCTURE (AUTHORITY FLOW) MANAGING DIRECTOR
CHIEF FINANCING OFFICER
SENIOR MANAGER MANAGER DEPUTY MANAGER
SENIOR OFFICER 37
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: 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
a) Financial Accounts
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 - Raising of Funds - Funds Management - Debt Servicing - Risk Management • • • Financial instruments for Funds raising would depend on end use of funds; derisking 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 Long Term / WC CRISIL ICRA AA (-) LAA(-) Short Term P1+ 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 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. 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. 40 f) Investor Relations
• • •
Dissemination of data relating to company’s performance and developments very important and sensitive. Handled through presentations in periodic investor meet, web-cast, teleconferences, individual meets, address in TV etc. Presentations made are hosted in company’s website
PLANNING & MANAGING CASH FLOWS: 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. 41
Maintain excellent relations with international investor community through effective communication for international offerings.
FINANCIAL CHALLENGES AHEAD: • • • • • • • • • • 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
Rs. in Lakh
2007-08 Sales Volume: Vehicle (numbers) Engine (numbers) Spare parts and others Net sales/Income from operations Gross operating margin Financial expenses Other income Gross profit (PBDT) Depreciation Profit before tax Profit after tax Paid up equity share capital (face value per share Re.1 each) Basic earnings per share (Rs.) Dividend per share (Rs.) Comments: Significant reduction in material and operating costs supported by pricing action has improved margins in the year 2009-10 83307 11757 79124 774258 82038 4974 5760 82824 17736 65088 46931 13303 3.53 1.5 2008-09 54431 21447 79969 598107 46944 11871 4962 40035 17841 20845 19000 13303 1.43 1.0 2009-10 63926 19050 88506 724471 76284 8113 7045 75216 20411 54477 42367 13303 3.18 1.5
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 tractortrailers. 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
CHIEF OPERATING OFFICER HEAD-DEFENCE SBU
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-AMC RECON VEHICLES
DGMCUSTOMER SUPPORT GROUP
HEAD- KEY ACCOUNT STU & PROJECT SALES
HEAD DISTRBUTION & INVOICE
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 the 46
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 lifemore 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.
DELIVERING Sales Service Network Planning
UNDERSTANDING Customer /Markets Marketing Initiatives
SUPPORTING Parts AMC Used Vehicles Transport Exchange
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: • • • • • • 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 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:
REGIONAL SALES OFFICE
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 South-1 South-2 South-3 West-1 West-2 Central North-1 North-2 North-3 East
REGIONAL OFFICE Chennai Bangalore Secunderabad Mumbai Ahmedabad Nagpur Delhi Jaipur Chandigarh Kolkata
AREA OFFICE Chennai, Madurai, Eranakulam Bangalore, Hubli Secunderabad Mumbai Ahmedabad Nagpur, Indore Delhi, Lucknow Jaipur Chandigarh Kolkata, Bhubaneswar, Jamshedpur, Guwahati
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 Cheetah (Front engine) Airport Tarmac Coach Cruiser Stag BS-II TRUCKS 4x2 Haulage models 4x2 and Multi-axle Tipper Multi Axle vehicles DEFENCE VEHICLES Short Chassis Bus Topchi field Artillery tractor Stallion 6x6 SPECIAL VEHICLES Hippo tractor Beaver tractor Beaver Haulage ENGINES Genset application Industrial application Marine application DG sets for exports 52 Stallion Mk III Tipper Rapid Intervention Vehicle Hippo Haulage Hippo Tipper Field artillery tractor Long Chassis Bus Stallion truck fire fighting Comet 4x4 Ecomet Tractor Viking BS-II Viking BS-III Vestibule Bus Viking CNG BS-III Double Decker 12 M Bus-BS II Viking AL Panther (Rear engine) Falcon (Front engine)
VEHICLE SALES: SALES in Units YEAR 2006-07 2007-08 2008-09 2009-10 DOMESTIC EXPORTS 77069 6025 76022 7285 47619 6812 57947 5979 TOTAL SALES In Units 83094 83307 54431 63926
SALES TURNOVER & PROFIT:
YEAR 2006-07 2007-08 2008-09 2009-10 •
SALES TURNOVER Rs.Crore 7168.17 7729.12 5981.07 7244.71
NET PROFIT Rs.Crore 441.28 469.31 190 423.67
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.
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. Location and layout. Product selection and technology. Capital selection and investment. Flexible strategy of production. Standardization of design. Economy of size and variety.
Short range strategies
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.
EXECUTIVE DIRECTOR - MANUFACTURING
GENERAL MANAGER - MANUFACTURING
DGM –MFG SERVICE
DIV -MGR DIV –MGR MECHATRONIC S
DIV –MGR MECHANICAL
DIV –MGR ELECTRICAL
SENIOR -MGR EXECUTIVES EXECUTIVES
EXECUTIVES ASSOCIATES & DAILY RATED WORKERS ASSOCIATES & DAILY RATED WORKERS ASSOCIATES & DAILY RATED WORKERS
ASSOCIATES & DAILY RATED WORKERS
ASSOCIATES & DAILY RATED WORKERS
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
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.
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 2006-07 2007-08 2008-09 2009-10 PRODUCTION In Units 83558 84006 54049 64673
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.
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 V- Vital E- Essential D- Desirable
DURATION 6 months 9 months Once in a year
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, 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 cooperation 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.
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.
5. SWOT ANALYSIS
1. Good Training System. 2. Good Organizational Climate. 3. High Market Share 4. Skilled Employees 5. Standard Quality Product
WEAKNESSES 1. 2. High price Sales representatives are less OPPORTUNITIES 1. 2. Demand for heavy vehicle have steeped up all over the globe. Company provides better credit facility to dealers. THREATS
1. 2. 3.
High competition Promotional programmes of other brands Complicated national market
New players entering the market.
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.
INDUSTRY MONITORING BODIES
ASSOCIATE PARTNERS TRADE ORGANISZATIONS
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
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 67
The Annual General Body Meeting
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
• • • 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.
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.
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
Gemba = Workplace Gembutsu = The tangible objects in gemba: machines, equipment, tools, jigs, fixtures, rejects etc A process of continuously Going to the workplace (where problem/abnormality is) Identifying the problem and it's root causes Reducing and eliminating muda (waste), mura (inconsistency) and muri (strain) Solving the problem or improving the situation Three Segments of Kaizen or Gemba Kaizen Practice Management oriented kaizen or gemba kaizen Group oriented kaizen or gemba kaizen Individual kaizen or gemba kaizen Five Principles of Gemba Kaizen When a problem/abnormality/opportunity occurs, go to gemba (the workplace) first Check with gembutsu like machines, equipment, tools, jigs, fixtures or rejects etc Take immediate or even temporary counter-measures on the spot
Find out the root cause and remove the root cause of the abnormality Implement the solution and standardize to prevent further trouble/recurrence Gemba Kaizen: Doctor and Patient Analogy (As enunciated by Shyam Bhatawdekar: copy right with the author) Doctor attends to the illness/sickness of the patient immediately. He never asks the patient, “come back to me later, we will see then (which often time happens in a business/industrial organization). He immediately treats the patient and with limited and fresh of symptoms/causes, starts the treatment. He may ask for more information (tests etc) but that information always is the most recent. He finds out the real cause(s) (diagnosis) and administers the final treatment accordingly. In gemba kaizen, it is more appropriate to follow this analogy for better and early results. Gemba Kaizen: Operation Theater Analogy (As enunciated by Shyam Bhatawdekar: copy right with the author) Patient’s sickness is determined by checking the patient based on the most recent information regarding the ailment (though some previous information may also be referred/gone through). An earliest possible date is fixed for the operation (surgery). Patient is brought to the operation theater. All types of specialist doctors, nurses, paramedic staff etc (many of whom have not seen each other earlier) reach operation theater on the appointed time punctually.
They follow prescribed procedures and techniques which are understood by each and every body present there (and not present there but who are connected with the operation). They are locked up in the operation room till the entire operation has been performed. In gemba kaizen it is more appropriate to follow this analogy for better and speedy results. Gemba Kaizen: Learn from Medical Profession (As enunciated by Shyam Bhatawdekar: copy right with the author) Ascertain problem/opportunity. Meet that problem/opportunity at the gemba (workplace) at the earliest possible time. Measure the latest data/information available at the gemba (don’t say that we will look into it and come back at a later date or let us dig out the previous data/information etc). Size up the problem/opportunity and quantify the possible benefits and they are your targets to be achieved. It can be tackled individually or by a well selected and well trained cross functional group of experts from various fields. Concerned people work on it together using the systems/procedures and techniques, work out the alternate solutions and implement them immediately. They measure the results and continue following the above-mentioned steps (also find out the root level causes in the process) till they achieve the targeted results. Innovations/Breakthroughs and Daily Continuous Improvements Through Gemba Kaizen
Innovations/breakthroughs are brought about in any organization occasionally or intermittently. There is a high jump in improvements. These high jump improvements are incorporated in the new practices/systems/processes. Then, after one innovation/breakthrough, there may be a lull. During this lull period and in absence of daily management or continuous improvements through kaizen or gemba kaizen etc, these dramatically improved processes start degrading or deteriorating. And the processes become inefficient/ineffective. Lots of advantages of innovation disappear or are lost. This is where daily management through continuous improvements comes in. It insists on daily performance and also, daily improvements. It keeps on maintaining and further improving the processes. The fall or degradation of processes is now just not possible. Therefore, daily management and daily improvements through kaizen, gemba kaizen, quality circles etc is in fact a management imperative. You cannot do without it (you may occasionally do without an innovation/breakthrough). It may not be as stunning or exciting as an innovation, yet, effective daily management and daily improvements are the foundation on which maximization of advantages due to innovation and company viability firmly stay.
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