School of Management Studies, CUSAT: 1 - Page

School of Management Studies, CUSAT
CHAPTER 1
INTRODUCTION
This organization study is aimed at creating an opportunity for us to observe, learn,
assimilate, and analysis the objective and vision of the organization and functioning of its various
departments. This would enable me to get a practical and real time feel of various aspects.
Concerned with the organization and to relate to the concept studied in the classroom. This exercise
would enable the future managers to face the challenges laying a head.
With the permission and consent from the company management and our departmental co-
coordinator, we got an opportunity to undertake an organization study in Kerala Agro Machinery
Corporation Limited (KAMCO) Athani.
KAMCO was established in the year 1973 as a wholly owned subsidiary of Kerala agro Industries
Corporation limited (KAIC) Trivandrum for the manufacturing of agriculture machinery especially
power tiller, and diesel engines. KAMCO has technical collaboration with Kubota, Osaka, Japan.
Subsequently KAMCO become a separate government of Kerala undertaking in 1986. KAMCO
has four production plants that are situated in Mala, Palakkad, Kalamassery and Athani. Now it
ssupplies the best quality tillers and reapers to the entire domestic and international markets.
Agriculture is considered to be the major activity of most of people. Moreover 200 million farmers
and farm workers have been the backbone of Indian's agriculture. In the beginning, the farmers
adopted ancient method. The entire process that is from the sowing the seed till harvesting were all
done by the farmer itself. It was a really time consuming one which required lot of labor work. The
cost of production was very high and the benefits are not promising. Kerala Agro Machinery
Corporation LTD (KAMCO) has become the light of the fast changing agriculture operations in our
country. There is a wide scope of in these industries. The agriculture has to show a study growth.
The government of India has tries hard to improve the total productivity though out the year of
agriculture and allied industries. So the scope is that high.
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CHAPTER 2
INDUSTRY PROFILE
Agriculture is very important sector of the Indian companies. It contributes sizably to the
domestic product as also to exports. More than two-third of the work force work in agriculture and
large may depend upon it, being engaged in agricultural products, agro based industries etc. India
being an agricultural based economy provides livelihood to more than 75% of the population.
Major portion of our income that is, about 70% is earned from agriculture; it is depressed
industry because of the low productivity. in agriculture small size of farms, finance and defective
equipment. Once government believed that only large land holdings were the most efficient and they
could use the latest techniques in cultivation. However in recent years the emphasis has been shifted
from large land holdings to small landholdings.
After achieving her Independence in 1947, India found herself to be badly lacking the means to
meet the food demands of her vast population. The existing agriculture scenario presented a dismal
picture traditional farming methods, low yielding seeds and primitive implements wholly unsuited to
large scale cultivation. The only solution lay in mechanized farming which could turn around the
virtual fortune of India. In order to achieve this objective, indigenous agro machinery units were to be
set up. Without resorting to imports which undoubtedly passed a heavy burden on the nations need.
Agriculture is way of life, a tradition that for centuries has shaped the thought, the outlook, the
culture and the economic life of the people of India. Agriculture is considered to be the major activity
of most of the people. Moreover 200 million farmers and farm workers have been the backbone of
Indian’s agriculture. In the beginning, the farmers adopted ancient method. The entire process that is
from the sowing the seed till harvesting were all done by the farmers itself. It was a really time
consuming one which required lot of labor work. The cost of production was very high and the
benefits are not promising.
In the view of the spectacular success in the production and productivity achieved in developed
countries through mechanization of agriculture, it was being agreed that India also should fall in line
with these countries. Though India was backward in the use of machines for agricultural operations,
yet in the past few years there has been an increase in the case of modern implements. The phase of
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mechanization of farming in the country was slow during1950’s. Thereafter particularly since the mid
1960’s with the coming of the new agricultural technology, this has increased. An associated effect of
the new agricultural practices the preparation of land, the sowing of seeds, the watering of land, the
control of seeds, the use of pesticides, the quick harvesting of crops etc., are now done more
scientifically than even before.
2.1 WORLD SCENARIO
The backbone of Indian economy is Agriculture. About 70% of population depends upon
agricultural sector for their lively hood. Many countries are now available to produce excess food
grains, is mainly because, they use high yielding variety of seeds and modern agricultural machineries
with a view to increase their productivity and then they are able to produce excess food grains in the
present scenario.
After the Industrial revolution even the agriculture sector all over the world witnessed a drastic
change. A number of revolution occurred during the 19th century. Higher productivity and greater
output are the two major contributions in farm mechanization. Tillers form an integral part of farm
mechanization and have a crucial role to play in increasing agricultural productivity. Tiller is a highly
versatile piece of machinery having a multitude of uses, used in agriculture both for land reclamation
and for carrying out various crop cultivation and also employed for carrying out various operations
connected with raising the crops by attaching suitable implements and to provide the necessary energy
for performing various crop production operations involved in the production of agricultural crops.
Tillers are capital intensive, labour displaying used as a mode of transport, in electricity
generation, in construction industry and for haulage operation. It has now become an integral part of
farm structure .The application of tiller for agricultural activities which swept India during the last
twenty years have erased the problem of farmers. Farm mechanization program in India aims to
integrate the use of available human and animal farm power with mechanical sources of power for
increasing the productivity.
A rapid major change in the economy was noticed by the general introduction of power driven
machineries. The entry of engineering technologies in agricultural sector for the purpose of
large production of crops using technological know-how, Kerala Agro Machinery Corporation Limited
is the leading company in India trying for establishing engineering green revolution in India.
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2.2 INDIAN SCENARIO

The agriculture Industry is on the brink of a revolution that will modernize the entire food
chain as the total food production in India is likely to double in the excellent export prospects,
competitive pricing of agricultural products and standards that are internationally comparable has
created trade opportunities in the agro industry. This further has enabled the Indian agriculture
industry ported to serve as a means by which every export and import of India and aboard, can fulfill.
This Indian agro industry revolution brings along the opportunities of profitable investment in
agriculture industry. The company provides b2B platform with agro related catalogue, trade exporters
and importers directory etc. that help to make a way to production.
India being an agricultural based economy provides livelihood to more than 75% of
the population. Major portion of our income that is, about 70% is earned from agriculture; it is
depressed industry because of the low productivity, in agriculture small size of farms, finance and
defective equipment.
After achieving her Independence in 1947, India found herself to be badly lacking the means to
meet the food demands of her vast population. The existing agriculture scenario presented a dismal
picture traditional farming methods, low yielding seeds and primitive implements wholly unsuited to
large scale cultivation. The only solution lay in mechanized farming which could turn around the
virtual fortune of India. In order to achieve this objective, indigenous agro machinery units were to be
set up. Without resorting to imports which undoubtedly passed a heavy burden on the nations need.
Agriculture is way of life, a tradition that for centuries has shaped the thought, the outlook, the
culture and the economic life of the people of India. Agriculture is considered to be the major activity
of most of the people. Moreover 200 million farmers and farm workers have been the backbone of
Indian’s agriculture. In the beginning, the farmers adopted ancient method. The entire process that is
from the sowing the seed till harvesting were all done by the farmers itself. It was a really time
consuming one which required lot of labor work. The cost of production was very high and the
benefits are not promising.
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2.3 STATE SCENARIO

Kerala Agro Machinery Corporation Ltd., Government of Kerala Undertaking was formed with
the intention of manufacturing Power Tiller operated by Diesel Engine. The company came into
existence in Athani in Ernakulam District in 1973 when it started assembling Power Tillers under
Technical Collaboration from M/s. Kubota Ltd., Japan. The product is now made in India and is
suitably designed to meet the Indian conditions. There are more than 1.5lakh of KAMCO Power
Tillers operating in various States in India.
Transport Corporation of India Ltd. has been associated with KAMCO for about 25years and
transports material to all parts of the country. The machines have to move direct to the concerned
destinations in the same truck. It is here that TCI plays a major role in the movement of the machine
and also ensures availability of spare parts with all the dealers. An endorsement of excellent service
from TCI has come by way of certificate of appreciation from KAMCO. Mr Sarvjeet Shukla
(Controlling Manager – Ernakulam) is managing the relationship and keeping a watchful eye on
service level for the customer.
KAMCO Kubota Combine Harvester and KAMCO Kukje Paddy Transplanter are the latest
introduction in the country from KAMCO. The Transplanter takes away the burden of dreary manual
labour of transplanting the seedlings thus taking away the human fatigue in the transplanting
operation.
KAMCO has got 4 Assembling Units located at Athani and Kalamassery in Ernakulam
District, Kanjikode in Palakkad District and Mala in Thrissur District of Kerala State provides direct
employment to approx. 600 persons in its various units. It will be endeavor of TCI to continuously
enhance operational efficiency and value adds its services to strengthen the professional bond with
KAMCO.
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CHAPTER 3
COMPANY PROFILE
3.1 KERALA AGRO MACHINERY CORPORATION LIMITED
KAMCO was established in the year 1973 as a Wholly owned subsidiary of Kerala Agro
Industries corporation limited, Thiruvananthapuram for manufacture of agricultural machinery
specifically Power Tiller. Subsequently KAMCO becomes a separate Government of Kerala
undertaking in 1986.The objectives if the company is to manufacture in India, either in collaboration
with or otherwise or import and trade agricultural machinery like Power Tiller, Power Reaper,
Combine harvesters, Harvester, transplanted accessories or spares there to. The objective also include
establishment of engineering workshop, repair shops to undertake repair and servicing of agricultural
machinery or other machinery, equipment, implements and tools.
Assembly unit was established in 1970 at Athani by Kerala Agro Industries Corporation for the
assembly of KUBOTA Power Tillers in technical collaboration with KUBOTA Ltd Japan, The
world’s leading manufacturers of Tillers and Other Agricultural machinery. On the expiry of
collaboration KAMCO manufactured Power Tillers with their own facilities.
KAMCO manufacturing facilities include special purpose machines and imported machines.
The inspection facilities include modern inspection and testing equipment KAMCO have their own
methodology, calibration and engine testing lab.
KAMCO an ISO 9001:2000 is fully owned Government of Kerala under the ministry
of agriculture. KAMCO is engaged in manufacturing small agricultural machine mainly indented for
small and marginal farmers in the country in the country established in 1973; the company has now
completed 30 years of services. Company has got for manufacturing units now in Athani,
Kalamassery, Mala and Kanjikode. Athani unit is also the Registered Office of the company. At
present company employees approximately 750 persons in four units. The company is working
profitably for the past fifteen years. The company was incorporated with the intention of
manufacturing and marketing agricultural machines useful for small and marginal farmers. Company’s
products are 9 to 12 HP kerosene. Athani, Palakkad and Kalamassery units manufactures Power
Tillers and Mala unit manufactures Power Tillers and Power Reapers.
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The company enjoys the position of premier manufacture in its fields. The products
manufactured are fully indigenized and there are no imported items in any content in any of the items.
The machines have acquired a reputation for quality, providing products at reasonable price to the
satisfaction of the customers. Company enjoys all India sales through a network of about 60 dedicated
dealers. Products are sold at premium prices. KAMCO is also exporting products to certain countries.
Power Tillers is equipment suitable for small farm holding for basic tilling operations instead
of conventional plugging, the tiller breaks the soil into fine parts which is highly suited for paddy and
wheat cultivation, originally of Japanese design, the machines have been modified later to perfectly
suit Indian conditions. The company plans to diversify its activities further in acquiring technical
know-how and going into regular manufactures, under license of machines suitable for other
agricultural purposes with the small and marginal farmers in mind.
3.2 VISION
KAMCO with over 3 decades of engineering excellence stands as the number one power tiller
manufactures in India. Not surprising, with four state of the art products, an innovation R and D and
stringer quality control systems rated as one of the best in the country. The technically competent,
dedicated management and workforce will go on to ensure that KAMCO shall be leader for several to
come.
3.3 MISSION
 To be an innovative, resourceful and profitable company.
 To meet customer requirements of quality, service and price consistently.
 To make “doing business with us easy” and delightful to our customers.
 To provide a congenial and entrepreneurial work environment in which employees can respond
to the needs of business and service earn fair reward and can be satisfied.
3.4 ORGANISATION GOALS
KAMCO with 3 over decades of engineering excellence stands as the number one power tiller
manufactures in India. Not surprising, with four state of the art products, an innovation R and D and
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stringer quality control systems rated as one of the best in the country. The technically, dedicated
management and workforce will go on to ensure that KAMCO shall be leader for several years to
come.
 To be an innovative, resourceful and profitable company.
 To meet customer requirements of quality, service and price consistently.
 To make “doing business with us easy” and delightful to our customers.
 To provide a congenial work environment in which employees can respond to the needs of
business and service earn fair reward and can be satisfied.
3.5 ACTIVITIES OF THE COMPANY
KAMCO manufacturing facilities include special purpose machines, especially built general
machines and imported machines. The inspection facilities include modern inspection and existing
equipment. KAMCO has their own metrology, calibration and engine test lab. The following are the
main activities of the company.
 Manufacturing and marketing of agricultural machines like power tillers, Tractors, Power
reapers, Diesel engine etc.
 Power tiller product at Athani and Palakkad units. Major components for power tiller are
manufactured at Athani and all other component bought out from dedicated vendors in India.
There are around 250 vendors now.
 Kalamassery unit produce engine for power tiller.
 Power Reaper products at Mala.
 Trading and manufacturing other farm machines.
3.6 FUTURE PLANS

The organization has a number of diversification plans on the anvil. It is proposed to setup
research and development activities which will hopefully help it to develop new products in the future
and live up to its promise, that its products will be “A boon for farmer and a gain for the nation”. The
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quality policy of KAMCO is “Total customer satisfaction through quality products and services with
improved technology and employee participation.
3.7 UNIT WISE BUSINESS OPERATION

The business areas operating in KAMCO are indicated in the matrix given below;
Sl. No. Division /Department Corporate Location

Set up Athani Palakkad Kalamassery Mala
1.0 Corporate Office * *
1.1 Marketing * *
1.2 Materials * *
2.0 Purchase * * * *
3.0 Production
3.1 Assembly * * * *
3.2 Pretreatment & Ptg. * * * *
3.3 Machine Shop *
4.0 Maintenance * * * *
5.0 Quality Assurance * * * *
6.0 Engineering *
7.0 Store * * * *
8.0 Human Resource * * * * *
Management
8.1 Human Resource * *
Development
9.0 Finance * * * * *
10.0 Internal Audit * *
11.0 Systems * *
* Applicable in the unit location
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3.8 BOARD OF DIRECTORS
 Charupara Ravi - Chairman
 N K Manoj - Managing Director
 K S Anil - Director
 P.K.Mohanan - Director
 K Babu - Director
 R Ajith Kumar - Director
 K P Chandran- Director
 M M Hameed - Director
 Ramapuram V K Sivanandan - Director
 Kottiyam Rasheed - Director
3.9 AWARDS AND RECOGNITON
KAMCO has been awarded ISO 9001: 2008 certification for its management system. The
company has established quality standards for each and every component which are well documented.
 Safety Award 2009– First prize for outstanding performance in Industrial Safety issued
by Dept.of Factories & Boilers.
 Certificate of Industrial Safety Award 2002– Issued by National Safety Council of India
 Industry Excellence Award 1999– Issued by the Institution of Engineers [India]
 Industry Excellence Award 1998– Issued by the Institution of Engineers [India]
 Productivity Award 1989-90– By Kerala State Productivity Council
 Productivity Award 1987-88– Issued by Kerala State Productivity Council
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 KAMCO’s policy is to equip itself with modern inspection and testing equipments.
 Quality standards for each and every components and products have been established and
ensured by close inspection at factory as well as at our vendor sites.
 Vendor performance and their manufacturing facilities are also being periodically assessed.
 The components are being checked for Quality Assurance by well-trained and dedicated
inspectors.
 100% final product inspection is carried out.
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CHAPTER 4
KAMCO PRODUCTS
 KAMCO POWER TILLER

 KAMCO POWER REAPER
 KAMCO BARBIERI GARDEN TILLER
 KAMCO BRUSH CUTTER
 KAMCO PUMPSET
4.1 POWER TILLERS AND ITS FEATURES

From the very word “power tiller”, one can make out that there is a tiller which is powered. In
this case the tiller is powered by an internal combustion engine and so is the name derived. A power
tiller is a tractor with a difference. It is not a four-wheel tractor but a two wheel tractor with a rotary
tiller more commonly known as rotavator. The power from the engine is transmitted to the drive
wheels and the rotavator through “V”belts, chains and sprockets and gear trains. Because of two
wheels, an operator generally has to walk behind the power tiller to guide the direction of travel for
various operations. There are hand clutches to engage and disengage power to the wheels and the
rotavator unit.
4.2 TILLERS AT KAMACO
Today KAMCO’s well-known product range includes the KAMCO power tiller. KAMCO power
reaper, KAMCO Agria Garden tiller and last but not the least, KAMCO Diesel Engine, each Of these
products are time tested and have proven their worth many times over for their owners.
Popular as the complete farming unit it is just that it can deal with a host of farming operations like
tilling, ploughing, and pudding etc. single handedly. Also it has been designed to function equally well
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in both wet and dry soil conditions. No wonder, it has retained its market positions as the number 1
power tiller in India for the last 3 decades, after marketing its debut in the year 1973
KAMCO Power tiller is a versatile machine primarily used for preparation of land for farming
operations with suitably designed accessories the machine can be used for a large number of specific
operations like tilling, ploughing, pumping, pudding, leaching, hulling, ridging etc.
Benefits
 The power tiller appears to be replacing the animal power more effectively and help in
increasing demand for human labour.
 The power tillers are cost effective source of farm power as the power tiller owner are able to
recover even the fixed cost and earn handsome margin from custom hiring unlike the tractor
owner. Economics of a power tiller put to annual use of 800 hundred custom hiring has been
worked out. Power tiller helped in reducing the seasonal fallows and thereby substantially
increasing cropping intensity.
 The power tiller enables farmers to diversify cropping pattern and increase in yield of crops.
They also adopt High Yielding Varieties.
 The power tillers are more effective in the areas having high concentration of small and
marginal farmers and highly fragmented holdings.
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4.2.1 KAMCO Super DI Power Tiller
Figure 1: KAMCO Super DI Power Tiller
It has been well received in the market owing to its virtually trouble-free performance. KAMCO ER90
Engine is equipped with radiator and specially designed die cart multi-blade axial fan. The engine can
operate continuously for several hours. It can be used as a prime mover either for stationery or for
moving applications.
 More power for heavy duty operations -

This compact engine is designed to generate continuously 12hp of power for the most
demanding jobs, and with a lower weight - per output rating.
 Low Emission -
The engine is perfected for low smoke level to satisfy Emission norms conforming to even
TREM-III norms.
 Less fuel consumption -

Reduced fuel consumption per horse power output.
Specifications:
Model : KMB 200 DI
Horse Power : 12
Wheel Track
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Maximum : 930 mm
Minimum : 690 mm
Tyre size : 6.00*12
Ground
: 203 mm
Clearance
No.of speeds
Forward :6
Reverse :2
Tilling :4
Travelling
: 15 kmph (Max.)
speed
Tilling width : 600 mm
Tilling depth : 190 mm
No.of blades : 20
Tilling capacity : 1 hectare/8hrs.
Overall
: L : 2250 x W : 820
dimensions
Height : 1030 mm
Weight : 485 Kg
Engine
Model : DI 120
Direct Injection, Horizontal, Four stroke, Diesel, Single

Type :
Cylinder, Water Cooled
Horse Power : 12
RPM : 2000
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Fuel tank
: 10.7 Litre
capacity
4.2.2KAMCO Power Tiller Model ER90 / KMB 200
Figure2: KAMCO Power Tiller Model ER90 / KMB 200
Item Code : 1100002
The petrol-engine, eco-friendly power tiller ideal for paddy, wheat cultivation, inter cultivation
applications, landscaping or gardening, potato harvesting and for land preparations at horticultural
farms. A highly fuel-efficient and powerful equipment with easy-to-control operations. It is ideal for
small and medium farmers.
KAMCO Power Tiller is a versatile machine primarily used for preparation of land for farming
operations. With suitably designed accessories the machine can be used for a large number of specific
operations like tilling, ploughing, weeding, pumping, puddling, leveling, hulling, ridging etc. It is
designed to function in both wet and dry soil condition. KAMCO Power Tiller has retained its No: 1
position in the market in India over the last 3 decades. Currently, it manufactures B 30 Garden Tiller,
Tiller ER 90 and Tiller Super DI 120.
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Use: KAMCO Power Tiller is a versatile machine primarily used for preparation of land for farming
operations. With suitably designed accessories the machine can be used for a large number of specific
operations like tilling, ploughing, weeding, pumping, puddling, leveling, hulling, ridging etc.
Specifications:
Model
Engine : ER 90
Tiller KMB 200,Rotary, diesel-powered,water-cooled,
Type :
with radiator
HP : Continuous 9
RPM : 2000
Fuel consumption : 1.5 litres per hour
Fuel tank capacity : 10.70 litres
No.of speeds
Forward :6
Reverse :2
Tilling :4
Wheel track
Maximum : 930 mm
Minimum : 690 mm
Tyre size : 6.00 x 12
Ground clearance : 203 mm
Travelling speed : 15 kmph (Max.)
Tilling width : 600 mm
Tilling depth : 190 mm
No.of blades : 20
Tilling capacity : 1 hectare/8hrs.
CHAPTER 5
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ORGANIZATIONAL STRUCTURE
KAMCO Organizational Chart at Corporate Level
Figure 3: KAMCO Organizational Chart
DEPARTMENTS IN KAMCO
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There are 11 Departments. They are as follows:-
 Marketing Department
 Finance Department
 Human Resource Department
 Materials Department
 Purchase Department
 Stores Department
 Quality Assurance Department
 Production Department
 Maintenance Department
 Research Development Department
 System Department
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5.1 MARKETING DEPARTMENT
Figure 4: Marketing Department Hierarchy

Survival of any company depends upon marketing strategies adopted. This
is p a r t i c u l a r l y i m p o r t a n t i n t h e c o m p e t i t i v e e r a . S u r v i v i n g f r o m a l o t o f d i f f i c u
lties KAMCO became no:1 brand in the agricultural machinery market. Due
t o g l o b a l i z a t i o n K A M C O products have to compete with the international product.
The product from China is the major treat for the company because of its low price. But
KAMCO is not ready to compromise with the quality of its products for reducing price. The
marketing strategy wins the target. Considering the Indian market now there is only one
competitor that now there is only one competitor that is VST tillers and tractors, Bangalore.
Even facing all these competitions companies marketing department plays a better role
for getting good result. The strength of marketing department is25.H e a d o f t h e
m a r k e t i n g i s t h e r e s p o n s i b l e t o e n s u r e t h a t a l l t h e i n d i v i d u a l s i n t h e marketing
department follow all the marketing procedures. Entire marketing departments are
functioning as a team. Main duties of the marketing departments are presales and after
sales services and these are looked upon by everyone in the department. So everyone is aware of that
happens in the marketing section. In the absence of one person other can looking to the problem. The
Company has 45 dealers all over India.
 New Dealers appointed to cover selected districts in Tamil Nadu, Karnataka, Maharashtra,
Orissa and Andhra Pradesh.
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 Regular demonstrations and service camps are being organized in various States.
 Close interaction with the Govt. of India in the formulation of new schemes & policies for farm
mechanization.
 Kamco Power Reaper has been exported to Iran and Sri Lank recently. These Machines has
been well accepted by the customers.
ISO 9001 – 2000 VERSION
 Improvement in the systems and improved Customer/Dealer satisfaction
 Comply with the requirement of Customers and applicable statutory/regulatory requirements
 Improvement in the effectiveness of the established quality systems
 Addresses Customer, Dealer, Vendor, Society, Employees &Share holders – for their
requirement & satisfaction
5.1.1 Major Activities

Head of the marketing department on receipt of any order or enquiry passes it to concern offers
for further verification. All the orders including credit sales and entered into the computer as order
booking.
 All details such as purchase order no: date, model, quality ordered, delivery
schedule, payments terms are verified.
 Incase delivery schedule cannot be met as per the requirements of order it

is brought to the notice of the head of the department.
 Schedule amendments if any are informing to the dealer or customer.
 The divisional head carries out one-month wise order position review.
 When no: of pending orders exceed available stock or production number

tiller allotment register is updated and maintained.
 Records of tiller transfer notes maintained by stores are available in the computer
and the department generates dispatch advice.
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5.1.2 Duties and responsibilities

DGM (Marketing)
 Presenting marketing strategy to the board
 Obtain management approval for periodical target
 Developing or implementing or Customer loyalty or retention
 Reporting performance to board for review
 Arranging press conference periodically(annually)
Manager (Marketing)
 Preparation and implementation of product/segment wise marketing plan
 Setting targets to managers reporting to him
 Implementation of marketing plan
 Arranging dealer meets
 Preparing of MIS reports
A c o m p a n y’ s s u r v i v a l d e p e n d s u p o n b e t t e r m a r k e t i n g s t r a t e g i e s a d o p t e d
b y t h e company. Surviving from a lot of difficulties KAMCO became No:1 brand in the agricultural
machinery market. Due to globalization KAMCO products have to compete with the
International products. The products from China is a major threat for
the company because if it’s lower price. But KAMCO is not ready to compromise with
the quality of its products for reducing their price. This marketing strategy won the target market.
In the previous year company sold more than 7600 units. Considering the
Indian market6 0 % o f t h e m a r k e t s h a r e i s i n t h e h a n d s o f K A M C O . K A M C O c o u l d
a c h i e v e t h i s b y d u e t o Globalization, Foreign countries like China and Korea could introduce
their products in Indian markets.Their products are very cheep. But in terms of quality, KAMCO
is first.
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 Competitors
In India VST, Bangalore is the major competitor of KAMCO firms from. Japan, Korea and
china are also competing with KAMCO in the same market.
 International market
KAMCO’s Power Reaper has been exported to Iran and Srilanka recently. The
export quantity is not a huge on but still they getting orders from those countries. These
machines have been well accepted by the customers.
 Dealers
Sales of the products are made only through dealers. In each state there are 2
dealers. One in g o t . I n s t i t u t i o n a n d o t h e r i s a P v t f i r m . T h e c o m p a n y h a s 4 5
d e a l e r s a l l o v e r I n d i a . N e w dealers are appointed to cover selected districts in Tamil Nadu,
Karnataka, Maharashtra, Orissa and Andra Pradesh and in the other states where the
company has dealerships.
The dealers target is depending upon the area. If a dealer exceeds their target they
get
incentivesdependingu p o n t h e e x c e s s q u a n t i t y s o l d t h r o u g h t h e m . T h e t r a n s p o r t i n
g f a c i l i t i e s a r e p r o v i d e d b yK A M C O i t s e l f . T h e s a l e s a r e m a d e a g a i n s t c a s h
a d v a n c e s e x c e p t i n f e w c a s e s ; i t i s m a d e against bank guarantee if the payment period
does not exceed 30 days.
Major Dealers in India are,
 West Bengal Govt. - West Bengal Industries CorporationPvt -

Friends machinery and spares Ltd
 Assam Govt. - Assam Agro Industries Development GroupPvt - ChemTrade India Pvt Ltd,
Tripura
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 Govt. - Tripura horticulture group Pvt - Krishishilpa Udyog ,MeghalayaPvt -

Stanley Roy Construction
 Sales promotion
In the International market the sales promotion of the company is only through
website. In India all the state govt.’s has their own dealerships to sell the products. The
company gives dealerships to the private parties as well company’s main product is
power Tiller. Company h a s i n v e n t e d a n e w e n g i n e , w h i c h i s a d i e s e l e n g i n e w i t h
d i r e c t i n j e c t i o n . F o r t h e s a l e s promotion of this engine company selling the KAMCO
Super D1 Power Tiller with the same price of the ordinary Power Tiller Advertising is also a
part of sales promotion. In every budget company allocate nearly 50lakhs for advertising.
Company also provides some financial help to the dealers for advertisements.
Major markets of tillers and reapers are,
Tillers - Kerala, Tamil Nadu, West Bengal & North Eastern States
Reapers- Chattisgarh, Orissa, Andra Pradesh, Kerala & Tamil Nadu.
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5.2 FINANCE DEPARTMENT
Figure 5: Financial Department Hierarchy
Financial performance of an organization is very important factor for the long

term survival profitability of any organization. Finance is defined as the provision of
money at the time when it is required. Every enterprise whether big, medium, or small needs finance
to carry on its operations to achieve its targets. It is livelihood of an enterprise. Without adequate
finance no enterprise can possibly accomplish its objective. This department controls the overall
financial transactions of the company. It controls the receipts and payments of each and every
activity for all the divisions.
In KAMCO, finance department plays a major role because in public sector only
very few companies and earning profit KAMCO is a multistoried multiunit organization. It means
KAMCO have more than one unit established with their own fund. Surprising thing is that
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KAMCO is giving dividend and c a r r yi n g s p r o f i t f o r 2 2 ye a r s .

T h e d e p a r t m e n t k e e p s a r e c o r d o f e v e r y t h i n g c o n c e r n i n g a n y expenses or income.
5.2.1The important functions are follows:
 Budget and Budgetary control

Annual budget is prepared for both capital and revenue, based on the requirements
furnished by various units and departments. The departmental requisitions are analyzed and
after consultation with the departmental heads and corporate divisional management
group and it are finalized bases on the disposition of funds.
Consolidated budgets are presented to management or board for approval. Budgetary

control of the company is exercised by the costing department of various departments.
The budget is reviewed half yearly and revised if found required based on the deviations
of actual from budget. Such changes are submitted to management or board through
ar e v i s e d b u d g e t f o e a p p r o v a l . T h i s r e v i s i o n i s i n t i m a t e d t o c o n c e r n e d
d e p a r t m e n t f o r implementation.
 Management of Receipts
A p a ym e n t f r o m d e a l e r s o r c u s t o m e r s r e v i e w e d t h r o u g h m a r k e t i n g d e p a r t
m e n t i s acknowledged by issuing proper receipts. Customer wise or dealer wise
accounting is adopted. Debits outstand department are informed to marketing department
once in a month for further actions.
Insurance, freight out ward, bank negotiations etc are accounted and maintained to revise the
cost of sales, daily sales proceeds in the sales counter and other receipts are verified
anda c c o u n t e d . H a l f y e a r l y r e c o n c i l i a t i o n o f p a ym e n t s a n d r e c e i p t s w i t h d e a l e r
i s p r e p a r e d b yaccounts department and settled with dealer.
 Management of Payments
Subject to the availability of funds, payment commitments are honored on due dates. All the
payments are passed mainly on the basis of IGRR. Advance payments are settled within
a time of 45 days. Non-receipts or delayed receipts extra are brought to the notice of
stress for remedial actions. Payments are usually done by cheque or DD.
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 Auditing
Internal audit is mainly based on corporate functioning. Internal audit mainly takes carefor the
‘CARO’ requirements of company’s act. ‘Watch Dog’ for an entire organization. The
main function of this department is to ensure that policy decisions of the management are strictly
followed by the functional departments and is verified by the internal audit.
 Costing
Costing records are maintained as per cost accounting rules. They are
m a i n l ys u b j e c t e d t o c o s t a u d i t o r d e r e d b y c o m p a n y l a w b o a r d . C o s t i n g d e p a r t m
e n t a l s o a d v i c e s management and departments, which are the potential areas of cost
reduction. Mainly costing departments analyzes cost of productions on a yearly basis. Costing
department advices accounts departments the cost of rejection as per warranty claims
 Statutory Transactions
Sales tax, Income tax etc are issued and properly accounted and timely settlements are
made. Salary and other payments, recoveries and their remittance etc in the case of
employees are done in time.
5.2.2 Management Information System
 Revenue and Expenditure
 Salary period and disbursement
 Non-financial schemes
 Allowances given
 Cash Management
 Pay roll
 Capital Structure
5.2.3 Duties and Responsibilities
DGM(Finance)
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 Submission of strategic matters regarding to finance to board of decision
 Submission of quarterly and annual audit accounts to the board.
 Presentation on dividend decision (final and interim dividend).
 Financial concurrence on corporate investment decisions.
 Overall supervision of day to day functions of departments as HOD.
Manager (Cost/Audit)
 Maintenance of cost record and arranging for cost audit.
 Preparing MIS reports on pricing and costing, leading to cost control.
 Internal audit of various activities and submission of periodical internal audit report.
 Preparation of product wise, segment wise cost records.
 Preparation of quarterly, half yearly, annual financial statement.
 Treasury functions
The finance department deals with the procurement and managem

e n t o f f u n d s . T h i s department controls the receipts and payments of each and every activity
for all the divisions. In KAMCO, finance department plays a major role because in public
sector only very few companies are earning profit.
KAMCO have more than one unit established with their own fund. Surprising thing is
that KAMCO is giving dividend and making profit for 22 years. The surplus money is invested in
the treasury and gets an interest of 7-8% from the treasury .The finance department keeps
record of everything concerning income or expenses.
5.2.4 Functions of Finance Department
 Budget & budgetary control
The annual budget of the company is prepared both for the capital and revenue expenses based
on the requirements furnished by various units and departments. The request of the department
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are analyzed only after consulting with various departmental heads and corporate
divisional management group and finalized only on the basis of disposition of funds. The
budget review is carried out half yearly. If some changes are required the details are submitted
to management/board for the revision and approval
 Management of receipts
Payments from dealers /customers are received only through marketing department. They
keep proper receipts customer wise and dealer wise. If t h e r e is
a n o u t s t a n d i n g d e p t . i t m u s t b e i n f o r m e d t o t h e m a r k e t i n g department
once in a month. Insurance, freight outward, bank negotiation etc are accounted and
maintained to arrive at the cost of sale.
 Management of payment
Due to the availability of funds, payments commitments are honored on the due dates. All
the payments are supported by approved vouchers. Payments are passed mainly on the basis
of IGRR. Advance payments are settled with in a time of 45 days. Non receipts/delayed receipts extra
is brought to the notice of store for remedial action payments are usually done by cheque.
 Auditing
Internal audit is an essential part of corporate functioning. Internal audit mainly

takes care for the “CARD” requirements of companies act. It act as a “WATCH DOG” for an entire
organization. The main function of department is to ensure that policy d e c i s i o n o f t h e
m a n a g e m e n t i s s t r i c t l y f o l l o w e d b y t h e f u n c t i o n a l d e p a r t m e n t a n d i s verified by
the internal audit.
 Costing
Costing reports are maintained as per the cost accounting rules. They ma
i n l ys u b j e c t e d t o c o s t a u d i t o r d e r e d b y c o m p a n y l a w b o a r d . C o s t i n g d e p a r t m e n t
a l s o a d v i c e management and department which are the potential areas of cost reduction. Mainly
costing d e p a r t m e n t s a n a l ys e s c o s t o f p r o d u c t i o n o n a y e a r l y b a s i s . C o s t i n g
d e p a r t m e n t a d v i c e accounts department the cost of rejection as per warranty claims.
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 Statutory transactions
Sales tax/income tax/TDS certificate/C- form/form-18 etc are issued are properly
accounted and settlements are made at the appropriate time Salaries and other payments, remittance
and recovery etc in the case of employees are done in a time.
The other functions are: -
1.Cash management
2.Bill Processing
3.Bank receipts
4 . B a n k p a ym e n t s
5.Sales accounting and costing
KAMCO has shares of 50 lakhs in International Airport, Nedumbassery and shares of about
1.5 Cr. in Kerala feeds Ltd. KAMCO is a multi-crore, multi-unit organization. It means that KAMCO
have m o r e t h a n o n e u n i t o r t h e i r o w n f u n d w i t h o u t a n y e x t e r n a l f u n d s . K A M C O
h a s n o loaned fund and hence the finance charge is nil. KAMCO has fixed deposits of about 20
crores, which earns interest to the company. Company raises the working capital with the help of
the customer advances and fixed assets. KAMCO is paying dividend ranging from 10-30% for the last
15 years without any fail. KAMCO’s finance department deals with the procurement and management
of funds. This department controls the overall financial transaction of the company. It controls the
entire receipts and payment of all divisions. KAMCO is running on profit for the last 23 years. It is a
unique feature of KAMCO. No other organizations are like this. Finance department concentrates
more on the cycle of flow of funds ie.,i n f l o w a n d o u t f l o w o f f u n d s a n d i t a l s o
e n s u r e s t h a t w h e t h e r t h e r e i s a p p r o p r i a t e volume of funds needed for efficient
business transactions. It also takes great care in allocating the funds needed for efficient
business transactions.
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5.2.5 Bankers of KAMCO
1) Union Bank of India
2) State Bank of India
3) Federal Bank
4) Canara bank
5) State Bank of Travancore
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5.3 HUMAN RESOURCE DEPARTMENT
Figure 6: HRM Department Hierarchy
Human recourse department deals with all the functions related to the human recourses in an
organization.
 Identify human recourses requirements, job specifications, skill needs.
 Evaluate and select suitable personnel.
 Maintain the competence of personnel through HRD method.
 A personnel record sheet is prepared of very personnel.
 New appointments are put on orientation training for one or two weeks’ duration.
 Service training is given to permanent employees.
 Department head will assess the training needs and forward it to HRD unit
head.HRD committee will examine the training requirement forwarded to the
HRD head.H R D c o m m i t t e e w i l l p r e p a r e t r a i n i n g c a l e n d a r .
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 A t t h e e n d o f t h e y e a r H R D department will submit details of the training arranged

to the MD and MR.
 On receiving training each employees of unit are required to submit the training report to HRD.
 Heads of the units prepare an evaluation sheet every six months and is send to the HRD head.
 HRD or personnel and administration maintain personnel record sheet periodically assesses by
the HRD committee assess employee competence.
 Evaluation of new employees after evaluation training is initiated by HRD.
In KAMCO,
 Total employee strength is 567 persons.
 Periodic training is being conducted to improve the performance levels of workmen.
 Mainly management development programmers conducted for officers.
 Training programmers designed to specific requirements based on individual.
5.3.1 Record Maintained in HRD

 Personnel record sheet
 Oriented training report
 Training report
 Evaluation sheet
 Report to MR
KAMCO has been running on profit for the past 22years.Behind these
achievements;
there l i e s t h e c o o p e r a t i o n a n d h a r d w o r k i n g m e n t a l i t y o f i t s e m p l o ye e s . W i t h o u t
t h e s e dedicated employees, KAMCO would have never reached the peak of success and
achievements. About 15 employees are working in this department.
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5.3.2 Workman classification
Workman shall be classified as:-
 Permanent
 Probationers
 Temporary
 Trainees
 Apprentices
5.3.3 Leave
The following are the leaves granted to the workmen in KAMCO:
 Earned Leave (Leave with wages)
 Casual Leave
 Sick Leave (for those who are not covered under the ESI scheme)
 Special Leave – Leave without wages
 Maternity Leave will be granted as per the provisions of the Maternity Benefit Act
to those not covered under the ESI Act.
 The administration of leave will be done as provided under the long-term

settlements between the management and the workmen in force from time to time. The
Human Resource Department of KAMCO is concerned with the recruitment
&selection, training and development, promotion, welfare of workers and cultural activities.
5.3.4 Recruitment and Selection
For KAMCO, there is a specific procedure for Recruitment and Selection. We can see two
types of recruitment in KAMCO:-
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1. PSC Recruitment
2. Company Recruitment
 Recruitment
For the posts like Accountants, Office Staffs, Typists, Stenographers etc the people are hired
through PSC recruitment. Executive and Technical post are filled through Company
recruitment. Employment Exchange forwards a list of candidates for the required posts in the
u n i t o n t h e i r n o t i f i c a t i o n t o t h e D i s t r i c t E m p l o ym e n t O f f i c e r , E r n a k u l a m . V a c a
n c i e s a r e advertised in major newspapers or notified to the Employment Exchange in
accordance with the Govt. rules. There is no discrimination based on colour, religion,
race etc. Appointments a r e p u r e l y b a s e d o n m e r i t . T h e D y. M a n a g e r i s i n c h a r g e
o f R e c r u i t m e n t a n d S e l e c t i o n , Promotion, Performance Appraisal, PF etc.
 Selection
After obtaining applications, initial screening is done on the basis of the specifications g i v e n
for the job. Short listed candidates considered matching the profile, go
throughtheselection process. The selection process consists of written test, gr
o u p d i s c u s s i o n a n d interview.
5.3.5 Training and Development
Awareness training or orientation training is given to the new employees for a period of one
week or one month. After this training, orientation report will be collected from each
department. After analyzing this orientation report they will give placement as a trainee
under probation. Probation period is for two years. For the workers, Workers Education Programmed
is conducted under the supervision of the worker’s education center. For this purpose, a 2-3
months training classes are provided to the trade union leaders of the organization who
act as the worker’s teachers. After attending the training program, conducted at the
worker’s education centre, they conduct classes to all workers in the organization by forming
them into different batches. For the officers at the top level, middle level and supervisory level,
Management Development Programs are conducted.
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ISOawareness training classes are also conducted; the subjects handled

i n t h e s e c l a s s e s a r e Personality development, Personal Relationship, Transactional Analysis and
Productivity. For all the employees from the lower level to assistant engineers, the initial 2 years is
their training period for which they get the consolidated pay. Apart from these, a fifteen
days’computer awareness training program is conducted with the changing techniques at
regular intervals. Training and Development is taken care by HR Manager who is assisted by
Personnel Secretary. Training charges are born by the company itself.
5.3.6 HRD Activity
It gives cardinal importance to HRD activities. Company follows a pre-planned

trained calendar covering all areas and the training is imparted with the help of various
institutions. Effectiveness of the training programs is periodically reviewed fo
r f u r t h e r improvement.
5.3.7 Promotion
As per the promotion policy of KAMCO, an employee will be eligible for promotion if hehas
served in a particular post for at least 3 years, or he will be given promotion when the
vacancy occurs. Another aspect is Grade promotion, ie, promotions is based on grades
of employees. In worker category there will be a grade change after a period of 5 years.For officer
level, grades allotted are as follows:-
G8 -Asst. Engineer, Superintendent
G9 -Asst. Manager
G10 -Deputy Manager
G11 -Manager
G12 -Senior Manager
G13 -Deputy General Manager
G14 -General Manager Promotion ratio 1:1 is applicable toG3andG4employees i.e., technical assistants
and operators/mechanics respectively. Transfers are mainly for officers only.
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5.3.8 Wages and Performance Appraisal
Wages of the workers are settled for 4 years. It is mainly a long term settlement.
Salary settlement is based on the Kerala Government Employee Salary of Pay. Performance Appraisal
is conducted once in a year fir officers and for workers, it is conducted when grades are given.
There is a prescribed form for conducting Performance Appraisal.
Benefits Provided by KAMCO to its Employees
Benefits can be classified as Statutory and Non Statutory
Statutory benefits are,
 Esi
 Pf
 Gratuity
 Canteen
 Restroom
 Light
 Ventilation
 Safety measures like Glouse, Boots etc.
Non Statutory benefits are,
 Conveyance facility
 Allowances
 Incentives
 Loan Facility
 Vehicle Loan Facility etc.
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5.3.9 Kamco’s Welfare Programs
Welfare Programs can be classified in 6 categories. They are: -
Essentials: -
It includes items directly needed by employees during production and incase of
emergency. ex- Goggles, Draught relief fund, funeral expenses etc.
Work Security:- It refers to items of support given by the company for

i m m e d i a t e protective element while performing a job. These benefits are given
individually,
sectionw i s e o r c o m p a n y a s a w h o l e . E g : L I C S c h e m e s , a c c i d e n t b e n e f i t s , p e r s o n
n e l a c c i d e n t benefits, insurance, first aid etc.
Health care facilities: - It involves canteen and medical facilities. Example – ESI, Medical
Reimbursement etc.
Wellbeing and Motivation: - It is aimed at developing a sense of loyalty and boosting

morale. Example – House building advance, loans, contribution to recreation etc.
Work surrounding facilities: - KAMCO provides spittoons, latrines, canteen facilities,

reading room, television, recreation etc.
Training and education: - It helps the employees to perform better in work place and attain self
actualization. It includes expert training expenses and counseling charges.7. Cool drinking water,
Welfare officer, washing allowances, Occupational safety, first aid boxes, canteens etc.
Shift allowances are as follows:
 First shift – Rs 5/day.
 Second shift – Rs 7/day.
 Third shift – Rs 8/day.
Attendance bonus: For no absence during a month 3 days wages is given. For half day,1
½ days wage will be given.
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Special allowance Rs. 60 given to all employees.
Missed meal allowance:
Rs 18 given to security staff coming for 3rdshift i.e. 12 am to 8pm
Rs 24 given to workman on Sundays/holidays, when canteen is not functioning.
Milk allowance: ¼ litre of milk given to welders and workmen engaged in painting/phosphate plant.
School advance of Rs 1800/- is given to employees.
Conveyance allowance for purchasing cycle, scooter, cars, loans are given to employees above Deputy
Manager grade. For minimum 5 years of experience is required to avail car and scooter loans. Interest
is 10%.
E m p l o ye e s are given festival allowances of Rs 5 0 0 0 / - e v e r ye a r i n

c o n n e c t i o n w i t h onam, ramzan, Christmas etc. The amount is recovered in 10 equal installments.
Transport subsidy of Rs 70/- given to all employees. KAMCO is not having vehicles for
transportation. Second shift employees are provided with vehicles on contract basis and subsidized
coupons.
Medical check-up:- For selected employer in the technical department they provide
medical check-up in a year. It depends upon the nature of work.
First aid during the work, if any accident occurs first aid will be provided to workers.
The other allowances are cash handling allowances, house rent allowances, overtime
allowances, uniform stitching allowances etc. A full-fledged canteen is functioning at
KAMCO. It provides healthy and hygienic food at subsidized rates to the workers and
employees working at various shifts.
5.3.10 Wages for workmen:
All workmen are employed on monthly wages and will be paid on a monthly basis.
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5.3.11 Attendance:
Every workman shall be given an attendance card containing his name, number etc. Similarly
every permanent and probationary workmen shall be provided with an identity card containing his
stamp size photo, name, number, date of joining, etc.Assistant Manager Security is in charge of
maintaining attendance and also maintaining discipline in work environment.
5.3.12 Incentive:
A production incentive scheme is followed in KAMCO for the benefit

o f employees, which constitute quarter of the pay packet. It aims at increased output,
productivity and utilisation of resources. This scheme covers all the permanen
t employees. In KAMCO, incentives are mainly of 3 types
 Direct incentives
 Semi direct incentives
 Indirect incentives
5.3.13 Shift Timing:
For Plant Working:
 7 am to 3 pm - 1stshift
 3 pm to 11 pm – 2ndshift
 9 am to 5 pm – General shift
For Security Staff:
 8 am to 4 pm - 1stshift
 4 pm to 12 am – 2ndshift
 12 am to 8 am – 3rdshift
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For Office Staff:
 9.30 am to 5 pm
General shift
 9.30 am to 1.30 pm – Saturday
5.4 MATERIALS DEPARTMENT

It deals with the Purchase of materials, which include purchase planning and selection
of vendors.
Figure 7: Material Department Hierarchy
5.4.1 Functions
Purchase planning
 In purchase planning first of all, based on production target annual budget is prepared.
 After this, worksheet is prepared.
 Based on the worksheet, purchase proposal is made. f purchase proposal is for more than
1lakhs, signature of managing director should be made on it.
 If it is more than 75000, purchase committee should be signed unit.
 The purchase and DGM finance. If the amount is more than 35000the signature of senior
manager is there.
Selection of Vendors
For the suppliers approaching for registration, following will be applicable.
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 The registration Form is issued to the supplier for filling up the details
 These details are preceded and approved, to proceed further by Vendor development
committee.
 Technical personnel designated by HOD assess premises of the supplier.
 The personnel who visit the premises fill up the vendor evaluation report.
 After taking decision on the capability of the vendor based on vendor evaluation report they
requested to supply samples for approval.
 Then the samples are submitted to the Quality Assurance department at head office and based
on their recommendations regarding samples, decision is taken on ordering on them. They are
registered as vendors by the purchase or materials department at head office. as vendors by the
purchase or materials department at head office.
 The first purchase order is released on trial basis for small quantity. After satisfactory supply of
trial order, they are included in the approved vendor list and regular purchase order is released
depending on requirement of materials.
 The head of materials department approves the vendor list.
5.5 PURCHASE DEPARTMENT
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Figure 8: Purchase Department Hierarchy
All other function other than the purchase planning and vendor selection is done
by the purchase department. After approving the vendor list by the materials department, the purchase
department then issues a purchase order containing department, the purchase department
then issues a purchase order containing details like material quality, rate payment terms,
supply schedule etc.
For the purchase of other materials or office equipment’s, each department has to submit
a purchase intend. The board of directors approves the purchase budget for each department at
the beginning of the year. All purchase has to be limited to the budget and are subject to
approved by finance department. Based on the requirement, an enquiry is made Quotations are
obtained from all suppliers and a comparative statement is prepared. Once a supplier has been chosen,
the purchase details are sent for intending and financial commitment is made for purchase of
budgetary control.
5.5.1 Other functions performed by Purchase Department
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 Ensuring that all raw materials, semi-finished, fully

f i n i s h e d c o m p o n e n t s i s p r o c u r e d from approved vendors.
 Ensuring that the procurement action is taken in time by processing

r e p e a t o r d e r s o r tender enquires whenever applicable.
 Assessing vendor capability to effect supplies in accordance with purchase order

meeting acceptable quality and delivers so that they can be listed as approved vendors.
 Ensuring that the goods received are of consistent quality conforming to the
standards or specifications of the purchase order.
 Providing feedback to the vendors for improving quality of supplies and materials.
 Ensuring that the vendor’s performance is recorded monitored and suitably

graded.
 If the inventory goes up beyond the permitted value, purch

a s e d e p a r t m e n t t a k e s appropriate actions to bring down the inventory.
 Purchase department should take appropriate actions in order to maintain the

minimum stock level.
5.6 STORES DEPARTMENT
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The materials that received from the vendors are stored in the stores department.
19 employees working under this department. When the materials have been received by
the goods clerk according to the purchase order. It is passed on the store, along with the
goods inspection report. The store is a service department, headed by the general, who receives the
materials and issues them. They duty of the staff members I is not on by the receipt and
issueof materials but also many other functions to be compiled with as his position is that notof
managerial level.
Figure 9: Store Department Hierarchy

5.6.1 Important Functions
 Store material for a company
 Receipt and accounting of materials including stationary
 Product delivery
 Spare parts dispatch
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 Issue of product in FIFO
5.6.2 It keeps the following documents

 Inspection and goods received report.
 Inter location stock transfer receipt stock issue or transfer note.
 Stock return note.
 Inter location stock transfer issue.
 Stock issue cum delivery note.
 Bin card
 Master record index for department quality manual amendments
 Material presentation Tag
 Material gate pass
 Delivery note
 Report to MRM or Management Review meeting
 Tock issue or transfer request
 Stick return request
 Packing Slip
5.6.3 The stores parts

The store is divided into two parts
 Receiving Store
 Stores for accepted parts or materials after inspection
5.7 QUALITY ASSURANCE DEPARTMENT
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Figure 10: Quality Assurance Department Hierarchy
Quality assurance Department inspects the quality of materials or parts,

w h i c h w a s received from the vendors. Quality management is becoming a key variable
in the strategic business policy of the organization at present.
 Well-equipped latest inspection and testing facilities as per ISO standards for all the products
at factory and vendors’ sites.
 Third party audit at Vendors’ site to ensure manufacturing process as per quality plan, process
lay out etc. which improves quality of components and self-certification status to Vendor.
 Power Tiller variants are tested as per norms from approved Govt. institutions like SRFMTTI
and CFMTTI for minimum performance test standards, emission norms, safety regulations etc.
 Engines are tested at ARAI as per latest exhaust gas emission norms according to CMVR
regulations.
 Well defined quality system procedures adopted covering all activities to ensure quality of
products & customer satisfaction.
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 Improvements are made on regular basis based on the feedback from the customers& dealers.
 Regular interactions with all Venders including site visits to maintain and improve the
acceptance level of components.
Quality management is an important area

whichw i l l r e q u i r e m a x i m u m a t t e n t i o n o f t o p m a n a g e m e n t . T h e a t t i t u d e s
o f q u a l i t y s u c h a s performance, features, conference, reliability, should be constantly
evaluated and upgraded so as to cope with the current and future market demands. Quality assurance
clarifies the components into two critical component and non-critical components. Critical
components are crank shaft, all engine parts, gear wheels etc. Non critical components are nuts, bolts
and screws etc. The clarification is mainly for ignoring the practical d i f f i c u l t y i n c h e c k i n g n o n
critical components and only sample inspection in non critical components.
Practical difficulty in checking the non-critical component is the problem there
from here the production department as their requirements takes the components. After getting
finished product from the assembly department for the final checking. If getting a
finished product from the assembly department for the final checking. If it is Ok it is
gone to the store. From these the machine will enter into marker through dealers.
 Ensure the quality of line procedures.
 Purchased products quality is assessed by quality assurance department.
 Assembly line inspection done at each work centre.
 Final inspection of the finished products is done.
 Calibration is done by the Quality Assurance.
A standard committee consisting of the following officers will meet in the beginning of the
year upon approval of the budget and as end when required to assess the metrology or measuring or
testing equipment’s.
5.8 PRODUCTION DEPARTMENT
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Figure 11: Production Department Hierarchy
KAMCO has five state-of-the art plants in Kerala, South India. Its registered office and works
at Athani, is the prime centre for the manufacture of Power Tillers and Tractors. The Kalamassery unit
was commissioned in 1992 for the production of Diesel Engines. The third unit was set up at
Kanjikode in Palakkad and the fourth unit at Mala, Thrissur has been operational since 2000 to meet
the demands of Power Reaper. The fifth unit for manufacturing tractors is also setup at Athani, near
Nedumbassery International Airport.
 Dedicated small and medium scale industries supply raw materials for critical components.
 Critical manufacturing operations are carried out in house at Machine Shop.
 Machine Shop is equipped with special purpose machineries to perform critical machine
operations like milling, grinding, drilling etc. for mass production of components.
 Inspection at various stages of manufacturing to reduce process rejection rate
 Installed with a modern painting booth system for components and assemblies where Poly
Urethane paints are used.
 The components are being painted after proper Pre-Treatments with required quality standards
in our well-equipped Paint Shop.
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Production Department is also known as works department. It is divided into Assembly shop,
Machine shop, and a small sub unit for painting which is a sub unit of assembly shop. Annual
production is based on the budget this production figure is broken down into monthly
targets. Assembly of power tiller is done in separate assembly line viz, engine line,
transmission line, tiller line.
Parts required for assemblies are got through stock issue notes. Parts req
u i r e d f o r assembly at each work center is located in bines at appropriate work section
with indication standard parts required by different work centers are kept in centralized places.
Painted parts are obtained from the painting section.
 Assembly is carried out as per process chart.
 Work carried out in each work centers is recorded. In an assembly line record each
assembly line where chassis or engine number of each assembly is noted.
 After completion of each assembly line concerned machine verifies the assembly and sign the
assembly tags with date.
 At the end of each assembly chief mechanic of that line clears the assembly for the next
assembly line.
 Assembly rejections are removed from the work center.
 Tillers are offered for inspection to QA department along with tiller completion report.
 Engine after inspection are handed back with finished tiller inspection report.
5.8.1 Three sections

 Assembling
 Pre-treatment and Painting
 Machine Shop
5.8.2 Functions
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 Assembly Shop
Assembly is one of the major section in production department. The finished components are
taken from the stores and it is sent to assembly as required. The engine assembly is one
of the main works in the assembly. After testing the assembled engines, it is sent to the painting
section. Through different transmission in the assembly we get the finished products. In the power
tiller here using two types of engines (Diesel engines and DI engines)
Assembly line consists of:
1. Engine Assembly Line
2. Transmission Assembly line
3. Tiller assembly line.
 Transmission and Engine assemblies are converged to the tiller assembly line where finished
final power tiller is produced.
 Stage inspection and testing in between different work stations, engine testing etc are
effectively monitored for extensive quality checks at each stage, to produce excellent quality
products as per standards.
 All sub-assemblies of Power Tillers are inspected for conformity with specifications. All the
Engines are tested at assembly for RTA norms to ensure engine emission standards.
 Automated Modern Conveyor system Assembly line for Tractor Production.
 Well-trained mechanics and supervisors ensure the quality in various stages of assemblies.
 The management is thoroughly monitoring and co-coordinating the works to achieve maximum
performance without any compromise in quality of the product.
 The Reaper is assembled in four Assembly stages.
 Engine Assembly: At this stage Engine and Gear Box are assembled and running tests are
done.
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 Assembly line-1: This is the first stage of Reaper chassis assembly where Engine-gear box
assembly, Bevel gear box assembly and conveyor chains are fitted to the main frame. Then
whole assembly is tested for running before passing for the next stage.
 Assembly line-2: At this stage the sheet metal components, guide rods, Star wheels, cutter
assembly are fitted and tests are carried out.
 Assembly line -3: This is the final stage of Reaper production. Here the Chain Case for
transmission of power and Wheels are fitted and required tests are done.
 KAMCO an efficient network comprising of 50 dealers catering to the needs of customers.

Commitment of the workers to make a difference is what sets KAMCO apart.
 Painting Booth
In KAMCO they are using a good advanced booth. After cleaning the components, it will go
for painting through a conveyer belt and after painting it will go over through the belt. Mainly they are
using two color for painting one is Ash and other is Post office red.
 Machine Shop
Company has a machine shop which is producing 15 components. These

are critical components. Company has a modern machine shop with special
p u r p o s e m a c h i n e s w h i c h ensures conformity with prescribed quality standards. The materials
purchased by the purchase department, then sent to the stores from the materials to the QA
department, it sent to the Machine shop. In the machine shop the process like milling,
drilling, boring etc are doing on material to get the product which is used in the
assembly. From the machine shop the finished products are directly sent to the assembly only
for the inspection in QA. From the QA it will be sent to the stores.
5.8.3 Duties and responsibilities of production manager

Production Manager is in charge of production department.
 Fixing the parameters of production department.

 Responsible for solving problems relating to production.
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 Ensuring whether production is as per order and fixation of monthly target

according to requirements.
 Optimization of production costs.
 Inspection of incoming materials.
 Modification of production plans.
The production department submits a Stores Issue Request to get the materials needed
for production.
After production, the department splits the material into:
 Final products and damages

 Assembly rejected parts.
Damaged parts are considered as scarps and put for auction. After assembling,
final products with the help of finished product transfer note is move
d t o m a r k e t i n g department
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5.9 MAINTENANCE DEPARTMENT

Maintenance Department deals with the maintenance of machine tools and equipment used
for production.
Figure 12: Maintenance Department Hierarchy
5.9.1 Types of Maintenance followed in KAMCO

Mainly there are 4 types of Maintenance Management: -
 Preventive Maintenance
 Breakdown Maintenance
 General Maintenance
 Spare parts management
Spares and consumables required are procured as and when required. Review of
spare parts and consumables is carried out once in a year. Shift arrangements are done
by HOD of maintenance.
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In Preventive maintenance, schedule is prepared by head of the department and is

givent o c o n c e r n e d d e p a r t m e n t a n d e l e c t r i c a l o r m e c h a n i c a l m a i n t e n a n c e s e c t i o n
Electrician or m e c h a n i c u n d e r t h e s u p e r v i s i o n o f c h a n g e h a n d t a k e s u p t
h e m a c h i n e s f o r p r e v e n t i v e maintenance.
All the machines and equipment’s are attended once in every month; defects
notice if any rectified. Head of the department carries out final checks. After carrying out preventive
maintenance work the preventive maintenance checklist are filled up by the electrician or
mechanic and counter signed by charge hand or chief mechanic departments head reviews
the reports every month.
Monthly report is given to divisional head. Maintenance schedules are reviewed every 6months
by divisional head. I n B r e a k d o w n M a i n t e n a n c e , m a i n t e n a n c e o r r e p a i r o r d e r i s
made by the concerned department indicating the location of nature of faults
a n d s i g n e d b y t h e r e p o r t i n g o f f i c e r . Maintenance order is received by the section
head and handed over to the concerned charge h a n d f o r e x e c u t i o n .
A f t e r c o m p l e t i o n o f t h e w o r k t h e o p e r a t i o n i s d e m o n s t r a t e d a n d t h e mecha
nic hand over the equipment to the concern department. Repair completion report is given to the
concerned department.
 Maintenance work is also done through outside agencies and the transactions are
recorded.
 Machine breakdown data is analyzed using Pareto’s principle.
 Spare parts maintenance is done once in a year
 Areas covered by the maintenance department are electrical, substation, telephone

system, water supply system, welding operations and general maintenance.
Shift arrangements of the work are done by the HRD maintenance. The maintenance motto of
maintenance department is to minimize the down time and make available all the machinery
promptly. The main responsibility of electrical section is uninterrupted power supply and
total preventive maintenance.
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5.10 RESEARCH AND DEVELOPMENT DEPARTMENT
Figure 13: R&D Department Hierarchy
KAMCO has a very intelligent research and development team. The R and D activities of the
company are now being attached to the engineering departments. Government of India
had stipulated certain norms to meet the minimum performance standard for the power tiller in view
of the complaints of farmers on the performance of power tillers especially after the introduction of
Chinese tillers. According all the power tiller manufactures have been advised to company withs the
minimum performance standards to consider subsidy for the power tiller at the end of the
final year. The modifications are implemented by delivering safety cover with in the record time and
the tiller got tested and approved by central farm testing and training institute, Budni
during May-July 2001, Government of India had
clearedt r a i n i n g i n s t i t u t e , B u d n i d u r i n g M a y -
J u l y 2 0 0 1 , G o v e r n m e n t o f I n d i a h a d c l e a r e d KAMCO power tiller meeting minimum
standards in July 2001 for eligibility of subsidy.
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5.10.1 Functions :-
 Revise drawings for correction or improvement based on feedbac
k f r o m c u s t o m e r , feedback from production, purchase and Quality assurance
departments.
 This covers activities with regard to modifications for improvement
t o p r o d u c t s a n d consequent changes to the relevant drawings.
 Keeping all drawings in safe custody, maintain them promptly
a n d i s s u e c o p i e s t o indenting department
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5.11 SYSTEM DEPARTMENT
Figure 14: System Department Hierarchy
T h i s i s t h e yo u n g e s t d e p a r t m e n t i n t h e c o m p a n y. K A M C O i s s t i l l i n t h e
p r o c e s s o f developing a system whereby it can make optimum usage of IT recourses. At present
KAMCO makes use of a customized ERP package based on ORACLE. The package was developed
and is implemented in 2001-2002. The system department does not play a role in production planning.
The module incorporated in ERP package used are the Finance Module,
M a r k e t i n g Module, Purchase processing, and Inventory Module, Human Resource
Management and the Maintenance Module.
Finance Module
 Payroll and incentive administration
 Material purchases
 Sales
 Payables and Receivables
 Day to Day cash position reporting
 Individual bank wise balance reporting
 DGM (F & CS) Manager System Manager Security & Networking Programmer
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Marketing Module
 Order booking
 Invoicing
 After sales service
Purchase Processing and Inventory module
 Purchase processing
 Material requirements
 Inventory transactions
 Finished goods evaluation
 Material rejection
Human Resource Management Module
 Personal history including employee details and service details
 Payroll processing
 Training
 Attendance and incentives including Office time, leave etc
Maintenance Module
 Equipment maintenance
 Calibration
In KAMCO, the systems in all department is connected through LAN.
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CHAPTER 6
ANALYSIS ON KAMCO
6.1 ANALYTICAL TOOLS& TECHNIQUE

For the successful spare parts management, it is essential to analyze the spare parts inventory
based on various characteristics such as the frequency of issues, the annual consumption value, the
criticality, the lead time and the unit price. This is essential as it would not be possible to exercise the
same type of control for all items and it may not really be effective. Inventory analysis aids selection
of policies for selective control.
Commonly used inventory analyses are:
 ABC Analysis
 Trend Analysis
 Ratio Analysis
6.1.1ABC Analysis
The ABC analysis is an inventory categorization technique often used in material management
wherein accuracy and control decreases from A to C.
 A items: very tight control and accurate records; B items: less tightly controlled and good records; C
items: simplest controls possible and minimal records.
 The ABC analysis provides a mechanism for identifying items that will have a significant impact on
overall inventory cost, while also providing a mechanism for identifying different categories
of stock that will require different management and controls.
 The ABC analysis suggests that inventories of an organization are not of equal value.
The ABC analysis is a business term used to define an inventory categorization technique often used
in material management. It is also known as “Selective Inventory Control.” Policies based on ABC
analysis:
 A ITEMS: very tight control and accurate records
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 B ITEMS: less tightly controlled and good records
 C ITEMS: simplest controls possible and minimal records
The ABC analysis provides a mechanism for identifying items that will have a significant impact on
overall inventory cost, while also providing a mechanism for identifying different categories of stock
that will require different management and controls.
The ABC analysis suggests that inventories of an organization are not of equal value. Thus, the
inventory is grouped into three categories (A, B, and C) in order of their estimated importance.
A items are very important for an organization. Because of the high value of these A items, frequent
value analysis is required. In addition to that, an organization needs to choose an appropriate order
pattern (e.g., “Just- in- time”) to avoid excess capacity.
B items are important, but of course less important, than A items and more important than C items.
Therefore, B items are intergroup items.
C items are marginally important.
6.1.2 Trend Analysis

Trend analysis is the process of comparing business data over time to identify any consistent
results or trends. You can then develop a strategy to respond to these trends in line with your business
goals.
Trend analysis helps you understand how your business has performed and predict where
current business operations and practices will take you. Done well, it will give you ideas about how
you might change things to move your business in the right direction.
You can use trend analysis to help improve your business by:
 Identifying areas where your business is performing well so you can duplicate success
 Identifying areas where your business is underperforming
 Providing evidence to inform your decision making.
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6.1.3 Ratio Analysis

Quantitative analysis of information contained in a company’s financial statements. Ratio
analysis is based on line items in financial statements like the balance sheet, income statement and
cash flow statement; the ratios of one item – or a combination of items – to another item or
combination are then calculated. Ratio analysis is used to evaluate various aspects of a company’s
operating and financial performance such as its efficiency, liquidity, profitability and solvency. The
trend of these ratios over time is studied to check whether they are improving or deteriorating. Ratios
are also compared across different companies in the same sector to see how they stack up, and to get
an idea of comparative valuations. Ratio analysis is a cornerstone of fundamental analysis.
For a specific ratio, most companies have values that fall within a certain range. A company
whose ratio falls outside the range may be regarded as grossly undervalued or overvalued, depending
on the ratio. As well, ratios are usually only comparable across companies in the same sector, since an
acceptable ratio in one industry may be regarded as too high in another. Ratio analysis can provide an
early warning of a potential improvement or deterioration in a company’s financial situation or
performance. Analysts engage in extensive number-crunching of the financial data in a company’s
quarterly financial reports for any such hints.
Successful companies generally have solid ratios in all areas, and any hints of weakness in one
area may spark a significant sell-off in the stock. Certain ratios are closely scrutinized because of their
relevance to a certain sector, as for instance inventory turnover for the retail sector and days sales
outstanding (DSOs) for technology companies.
The important ratios relating to inventory management are s follows.
Inventory Turnover Ratio: A ratio showing how many times a company’s inventory is sold and
replaced over a period. The days in the period can then be divided by the inventory turnover formula
to calculate the days it takes to sell the inventory on hand or “inventory turnover days.”
Inventory Conversion Period: The inventory conversion period is the time required to obtain
materials for a product, manufacture it, and sell it. The inventory conversion period is essentially the
time period during which a company must invest cash while it converts materials into a sale.
Raw Material Turnover Ratio: Raw material inventory turnover provides a measurement between
the amounts of raw materials turned over versus the average amount of raw material in the inventory at
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any given time. In particular, it measures a company’s ability to convert raw materials into finished
goods.
Raw Material Conversion Period: The raw material conversion period is the average time period
taken to convert material into work in progress.
Work In Progress Turnover Ratio: It is a measurement comparing the depletion of working capital
to the generation of sales over a given period. This provides some useful information as to how
effectively a company is using its working capital to generate sales.
Work In Progress Conversion Period: The work in progress conversion period shows the time
required to convert work in progress into finished stock.
Finished goods Turnover Ratio: The turnover rate of finished goods is the ratio of the annual sales of
your business to the average inventory of your business. A high turnover rate can mean your business
is effectively selling the products it has in its inventory or that its inventory levels are too low; a low
turnover rate can mean the inventory levels of your business are too high or that the products in its
inventory are outdated.
Finished goods Conversion period: It is the number of days for which finished goods await delivery
to customers. Equal to the average value of finished goods in stock divided by the average goods sold
per day.
Total Inventory to Current Assets Ratio: The total inventory to current assets ratio is calculated by
dividing the inventory balance at the end of the year by the current assets for that year. The inventory
to current assets ratio helps you identify whether inventory is growing unnecessarily.
Total Inventory to Working capital ratio: The Inventory to Working Capital ratio measures how
well a company is able to generate cash using Working Capital at its current inventory level. An
increasing Inventory to Working Capital ratio is generally a negative sign, showing the company may
be having operational problems.
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6.2 SWOT ANALYSIS

The overall evaluation of the company’s Strength, Weakness, Opportunities, and Threats is
called SWOT ANALYSIS. It is the key element influences the survival and development of the
organization. It will helpful for the improvement of organizational strategies.
6.2.1 Strength
 Good production facility
 No loan capital
 Dedicated work force
 Good incentive scheme
 Qualified and skilled labors
 Environment friendly
 Good management
 Strong and accepted products
 Fully computerized
 Good budgetary control system
 Good brand name and image
 Financially sound
 Good Industrial relations
 Extensive marketing network through dealers
 Good working atmosphere.
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6.2.2 Weakness
 Only limited number of products are there of technological up gradation and automation
 Legally dependable on slow sales growth
 Political interference
 Trust in IT application is not adequate
 All products are mainly based on agricultural goods
 The agricultural field become dull it will strongly affect the business
 For the recruitment time delay will come
 Aging work force
6.2.3 Opportunities
 Dominating shares
 Good brand image
 Government support
 Boom in the farm mechanization
 Collaboration can be made by reputed agro
 Machineries manufactures all over the world
 Good exporting opportunities
 Safe internal market
 Diversification programs
6.2.4 Threats
 Competition from Chinese manufactures
 Political interference
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 Government policies
 Liberalization, Privatization and Globalization
 Anybody can enter into the market which will increase the competition
 Growth of private enterprises in the sector
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CHAPTER 7
PROBLEM STUDY/PROBLEM STATEMENT
This study is focused on the study of inventory management of KAMCO Limited, Athani. The main
aim of the study is to measure the effectiveness of the company and study of the inventory system.
Hence, the problem can be stated as “A study to access the inventory management of the Kerala Agro
Machinery Corporation, Athani.
GOALS
The major goal is to develop an inventory management plan to streamline ordering and thereby
reducing wastage of time on inventory control.
The goals include ensuring the safety of inventory, tracking sales, ensuring accuracy of inventory
systems and eliminating excess products
PROBLEM ANALYSIS
 A study of inventory management is of major importance of internal and external analysis

because of its close relationship with the current day to day operations.
 In this study, I took an effort to analyze the inventory management and its component in
KAMCO.
 The problem is about the effectiveness of inventory management in KAMCO, Athani and
giving special reference to understand the different tools and techniques of inventory
management practiced in KAMCO to measure the effectiveness of these tools and techniques.
The major factors which affect the supply of raw materials to KAMCO where the non-availability of
the materials at the required time even though they had a backup plan, the payment delay of the buyers
may also act as a barrier, bad purchases resulting in rejection of lots by Quality Assurance, the lack of
technological updating and another factor is the delay in the procedures as KAMCO is a Governmental
organization– it takes up a lot of processes which may affect the easy flow of the supply. As we can
see these factors negatively affect the supply chain and thereby the production of the company. Even
overbuying and carrying excess inventory could also lead to overstocked inventory reaching the end of
its product lifecycle and becoming obsolete. When there occurs a breakage in these supply chain, the
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company could not be able to continue their assembling process of Tiller as per schedule and this may
delay the supply of the final product. When the company fails to meet the customer demand on time, it
may lead to unsatisfactory customer relationship.
In the current scenario when customer satisfaction and service have become a prime reason for a
business to stand apart from its competition, the need for effective inventory management is largely
seen more as a necessity than a mere trend. So some of the ways through which we can achieve is that
are follows:
 First, a mismanaged inventory can lead to an unnecessary increase in the working capital. The
excess funds could have been fruitfully directed to fuel the company’s growth initiatives or
research and development efforts.
 Second, effective inventory management would lead to low storage costs, which will in turn
lead to an increase in the company’s profits. Storage space is expensive; if you are able to
manage your inventory well and able to reduce the amount of goods that you need to store,
then you will require less space, which will in turn lead to low warehouse rental costs.
 Third, it can help you satisfy your customers by providing them with the products they need in
the swiftest manner. Poor inventory management leads to lower availability of goods and
higher delivery time. Hence, if you want to gain those service satisfaction stars, you need to
manage your inventory well.
 Fourth, goods stored in inventory over a long period may spoil. This leads to unnecessary
overheads in operating a business. Hence, proper inventory management can help you reduce
those costs greatly.
 Fifth, if you have inventories scattered in various locations, you need a proper system to
manage those inventories on the basis of demand and supply. Inventory management
techniques can help you go a long way in managing multiple inventories.
ACTION PLAN
The ABC analysis is a business term used to define an inventory categorization technique often used
in material management. It is also known as “Selective Inventory Control.” Policies based on ABC
analysis:
A ITEMS: very tight control and accurate records
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B ITEMS: less tightly controlled and good records
C ITEMS: simplest controls possible and minimal records
The ABC analysis provides a mechanism for identifying items that will have a significant impact on
overall inventory cost, while also providing a mechanism for identifying different categories of stock
that will require different management and controls.
The ABC analysis suggests that inventories of an organization are not of equal value. Thus, the
inventory is grouped into three categories (A, B, and C) in order of their estimated importance.
A items are very important for an organization. Because of the high value of these A items, frequent
value analysis is required. In addition to that, an organization needs to choose an appropriate order
pattern (e.g., “Just- in- time”) to avoid excess capacity.
B items are important, but of course less important, than A items and more important than C items.
Therefore, B items are intergroup items.
C items are marginally important.
JUST-IN-TIME ANALYSIS
The just-in-time (JIT) inventory system is a management strategy that aligns raw material
orders from suppliers directly with production schedules. Companies use this inventory strategy to
increase efficiency and decrease waste by receiving goods only as they need them for the production
process, which reduces inventory costs. This method requires producers to forecast demand accurately.
Therefore this method can be implemented for the efficient working of the company.
VED ANALYSIS
VED- vital, essential and desirable analysis is used primarily for control of spare parts. The
spares, the stock-out of which even for a short will stop the production for quite some time and where
the cost of stock-out is very high, are known as vital spares. The spares, the absence of which cannot
be tolerated for more than a few hours or a day and the cost of the lost production is high and which
are essential for the production to continue, are known as essential spares. The desirable spares are
those spares which are needed but their absence for a week or so will not lead to stoppage of
production. Some spares, though negligible in monetary value, may be vital for the production to
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continue and require constant attention. Such spares may not receive the attention they deserve if they
are maintained according to ABC analysis because their value of consumption is small. So, in their
cases, VED analysis is made to get the effective results. As VED analysis analyses items based on the
criticality of production, it can also be used for those items of materials which are difficult to procure.
ECONOMIC ORDER QUANTITY
EOQ refers to the number (quantity) ordered in a single purchase so that the accumulated costs
of ordering and carrying costs are at the minimum level. In other words, the quantity that is ordered at
one time should be so, which will minimize the total of (i)cost of placing orders and receiving the
goods, and (ii)cost of storing the goods as well as interest on the capital invested.
EOQ is the order size at which the total cost, comprising ordering cost, is the least.
 Ordering cost: This includes the cost of placing orders for purchase of raw materials and
components. The fewer the orders, the lower will be the ordering costs incurred on typing,
mailing etc.
 Carrying cost: This comprises the expenses for storing goods. Its components are godown
rent. Insurance of goods, cost of funds tied up in inventory, spoilage costs, decline in the price
of goods etc.
EOQ can be calculated using the following formula:
√2𝐷𝐶𝑂
EOQ = 𝐶𝐼
Where, D = Annual consumption of material

CO = Cost of placing one order
CI = Annual carrying cost of one unit
CONCLUSION
70 | P a g e
From the analysis we can conclude that the company can follow the EOQ for optimum
purchase and it can maintain safety stock for its components in order to avoid stock-out condition.
This could reduce the cost and enhance the profit. Also there should be tight control exercised on stock
levels based on ABC analysis.
The KAMCO can therefore introduce new selling techniques that will help to fast moving of
finished goods which helps better inventory conversion period and to meet minimum requirements.
Although the company is progressing, there are many problems like lack of use of newer technologies.
Hence, KAMCO should try to utilize its strengths to overcome its weakness and advantage of
opportunities by avoiding threats.
71 | P a g e
CHAPTER 8
CONCLUSION
KAMCO was established in the year 1973 as a wholly owned subsidiary of Kerala Agro machinery
Corporation Limited KAIC Trivandrum, for manufacture of agricultural machinery specifically power
tillers and Diesel engines. It is an ISO 9001-2000 company. KAMCO has different units situated at
Athani, Kalamassery, Palakkad, and Mala. The main products of the company KAMCO Power tillers,
power reapers and Diesel engine.
KAMCO Athani, has a good production facility, it has high demand of products, good industrial
relationship, qualified skilled workers etc. In spite of threat from imported and makes of power tillers
continue to be the preferred choice of farmers attaining the market share for the year. Power reapers
also had been able to catch the imagination of small farmers the response for the newly launched DI
super Power tiller is very encouraging of products and services is an essential prerequisite for success.
KAMCO is the profit making company in the state government.
The organization study was helpful in getting an understanding of the organization structure, various
departments and their functions in a factory and overall operations of organization. The study enabled to
collect much more information about the organization and helped in knowing the practical situation in the
company.
72 | P a g e
Bibliography
Philip kotler - Marketing Management, Prentice Hall Of India, Private Limited.

Kothari C.R. Research Methodology, new age international publishers
KAMCO Brochure
KAMCO ISO Document
Websites
http://www.kamcoindia.com/html/companyinfo.html.
http://www.kamcoindia.com/html/kamco index.html.
http://www.en.wekipedia.org/wiki/agriculture in India.
73 | P a g e

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School of Management Studies, CUSAT

2.1 WORLD SCENARIO

2.2 INDIAN SCENARIO

2.3 STATE SCENARIO

 To meet customer requirements of quality, service and price consistently.

 To make “doing business with us easy” and delightful to our customers.

3.4 ORGANISATION GOALS

 To be an innovative, resourceful and profitable company.

 To meet customer requirements of quality, service and price consistently.

 To make “doing business with us easy” and delightful to our customers.

3.5 ACTIVITIES OF THE COMPANY

 Kalamassery unit produce engine for power tiller.

 Power Reaper products at Mala.

 Trading and manufacturing other farm machines.

3.6 FUTURE PLANS

3.7 UNIT WISE BUSINESS OPERATION

Sl. No. Division /Department Corporate Location

3.8 BOARD OF DIRECTORS

 Charupara Ravi - Chairman

 N K Manoj - Managing Director

 R Ajith Kumar - Director

 Ramapuram V K Sivanandan - Director

 Kottiyam Rasheed - Director

3.9 AWARDS AND RECOGNITON

 Industry Excellence Award 1999– Issued by the Institution of Engineers [India]

 Industry Excellence Award 1998– Issued by the Institution of Engineers [India]

 Productivity Award 1989-90– By Kerala State Productivity Council

 Productivity Award 1987-88– Issued by Kerala State Productivity Council

 100% final product inspection is carried out.

 KAMCO POWER TILLER

4.1 POWER TILLERS AND ITS FEATURES

4.2 TILLERS AT KAMACO

4.2.1 KAMCO Super DI Power Tiller

Figure 1: KAMCO Super DI Power Tiller

 More power for heavy duty operations -

 Less fuel consumption -

Tyre size : 6.00*12

Tilling width : 600 mm

Tilling depth : 190 mm

Tilling capacity : 1 hectare/8hrs.

Direct Injection, Horizontal, Four stroke, Diesel, Single

4.2.2KAMCO Power Tiller Model ER90 / KMB 200

Figure2: KAMCO Power Tiller Model ER90 / KMB 200

Item Code : 1100002

Figure 3: KAMCO Organizational Chart

There are 11 Departments. They are as follows:-

 Human Resource Department

 Quality Assurance Department

 Research Development Department

5.1 MARKETING DEPARTMENT

Figure 4: Marketing Department Hierarchy

ISO 9001 – 2000 VERSION

 Improvement in the systems and improved Customer/Dealer satisfaction

 Comply with the requirement of Customers and applicable statutory/regulatory requirements

 Improvement in the effectiveness of the established quality systems

5.1.1 Major Activities

 Incase delivery schedule cannot be met as per the requirements of order it

 Schedule amendments if any are informing to the dealer or customer.

 When no: of pending orders exceed available stock or production number

5.1.2 Duties and responsibilities

 Presenting marketing strategy to the board

 Obtain management approval for periodical target

 Developing or implementing or Customer loyalty or retention