1.

INTRODUCTION ABOUT INTERNSHIP AND INDUSTRY PROFILE

1.1 INTROODUCTION ABOUT THE INTERNSHIP
This report is a short portrayal of my 4 weeks entry level position as the segment of the
MBA Program, VTU. The internship was done in P.M. TOOLS AND COMPONENTS,
Harohalli Road. Toward the start of the entry level position I figured a few learning
objectives, which I needed to accomplish.
This project is taken to obtain insights of “AN ORGANIZATION STUDY AT P.M.
TOOLS AND COMPONENTS, HAROHALLI”
The duration of the internship was 4 weeks and the number of days visited was 24 days.
The main aim of the company is to improve customer base.
Through practical training, on observation of working process at P.M. Tools and
Components, the few things which I noticed are, the customers are highly valued and the
staff were coordinative, friendly and provide support to customers, trainees and interns. I
also observed the staff at P.M Tools and components work at their best without their time
or being idle, instead were efficient and very much determine in their work to achieve the
organization goals. The workers in the organization have a lot of experience and were
mould to the work culture. They were assigned to different departments and different
activities based on the skills and the staff have knowledge about their department and
aware of other departmental activities.
The amount of learning and experience gathered last month is incomparable. It gave me
an insight to working culture in an organization. The experience will go a long way
building a better future and career for me. The level of interaction I had with management
while gathering information is very high. It helped me to interact with people
professionally and to improve my communication skill. It taught me the areas for
improvements in term of knowledge relating to system and other software which are used
in companies.

1.2 INDUSTRY PROFILE

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The term industry refers to the part of business activity which concerns itself with the
raising production, processing or fabrication of products. Ordinarily the term industry is
used to refer to those manufacturing industries that are engaged in the conversion or
transformation of raw materials or semi-finished products. Industries are considered the
backbone of the economy. Establishment of industries demands much facility nearest to
the market, and availability of other sources like raw material, labour and several other
facilities.
P M Tools & Components are manufacturing concern established in 18th January 2010.
PMTC is professionally managed, young innovative company promoted by a group of
technicians who have put up decades of service in the manufacturing industry with
sufficient engineering qualifications, working knowledge, exposure to the international
standards and ‘Quality’ standards with expertise in the field of design, development and
manufacturing of press components, Wire formed components, Flat springs, Multi-side
components with sound knowledge of these products. To know the activities of
organization it is very much essential to understand the functioning of the entire
functional departments of the organization which helps to know how the theoretical
knowledge is implemented in the functioning of the organization. In this organization
study I have studied different department in an organization and relationship between
different departments, duties and responsibilities, problems, conclusions, suggestions,
recommendation etc., and also type of organization structure. Finally, it was a nice
experience during my entire training period in PMTC. I felt, it was a great opportunity for
me to work with this company as if being a part of the company.
The company has 6 Power Press, 1 Drilling Machine, 2 Surface Grinder, 1 Lathe, 1Bench
Grinder, 6 Hand Presses, 1 Milling Machine, 2 Multi Slide Machines and 2 Spot Welding
Machines. Which are adequate for carrying out necessary operation? PMTC is a
Partnership organization and Mr. Papanna Reddy and Mr. Manju G.R. Are the two
partners and the company is managed by general manager Mr. Sathish R.B
Our quality policy is formulated with a conscious commitment for customer satisfaction
through continual improvement processes and cost effectiveness. The main objective of
this venture is to pioneer in carrying press tool components and maintaining high level of
“customer satisfaction”.

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Manufacturing to customers specification and measuring the pressed parts needs
measuring instruments, we have accommodated the same by strengthening our quality
assurance department, by providing almost all ranges in Micrometers, vernier caliper and
gauges.
The employees are highly skilled and carryout intricate setting in virtually no time.

2. ORGANIZATION PROFILE
PM Tools & Components (An ISO 9001:2015 certified company)

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PM Tools & Components as a professionally managed, young innovative company
promoted by a group of technicians who have put up decades of services in the
manufacturing industry with sufficient engineering qualification, working knowledge,
exposure to the international standards and ‘Quality’ standards with expertise in the field
of design, development and manufacturing of press components, wire formed
components, flat springs, multi-slide components with sound knowledge of these
products.

ORGANIZATION PROFILE

Name : P.M. Tools & Components

Address : # 325-E, 2ND Phase, KIADB Industrial Area, Harohalli,

Kanakapura Taluk, Ramanagara District – 562 112 Karnataka, India

E-mail ID : pmtoolings@gmail.com

Website : WWW.pmtools.co.in

Logo :

Founders : Mr. GR Manju & Mr. Papanna Reddy

Founded : 2010

Contacts : 1) Mr. G.R Manju (Partner) -9880454838

2) Mr. Sathish RB (General Manager) -9845057408

2.1 BACKGROUND

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P.M. Tools and Components have procured recognition in the manufacturing and
marketing industry under the brand name ‘PMTC’. It has bagged reputation not only in
Karnataka but also, other states.
A synonym to superior quality, it offers a wide array of customer and their products using
in different applications like Automobiles assemblies, Mechanical assemblies,
Photocopiers, Washing machines, Automobiles seat assemblies, Electrical appliances,
Electrical apparatus, Relays, Circuit breakers, switches, Computer keyboards, Monitors,
Toys, Locks, communication equipment, Cassette recorders, Cameras, Watches and
Clocks etc.

2.2 NATURE OF BUSINESS

We are pleased to introduce ourselves as a professionally managed, young innovative
company promoted by a group of technicians who have put up decades of services in the
manufacturing industry with sufficient engineering qualification, working knowledge,
exposure to the international standards and ‘Quality’ standards with expertise in the field
of design, development and manufacturing of press components, wire formed
components, flat springs, multi-slide components with sound knowledge of these
products.

2.3 VISION, MISSION AND QUALITY POLICY

VISION
To become highly effective company to provide our customers with the best value for our
product/services on time for all types of industries through continual improvement.

MISSION

To help our customer by providing sustained and innovative products/services through

value added activities.

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AIM
 To develop and manufacture quality components.
 To satisfy supply of quantity for requirements whether it is minimum or
maximum.
 To cater individual industrial needs.

QUALITY POLICY
PM TOOLS AND COMPONENTS are committed to manufacture and supply precision
products that consistently conform and fulfill our customers’ expectations.
We shall become a Leading and Trustworthy Business partner to all our customers. We
will achieve this by reviewing and continually improving our quality management
systems and at the same time creating an environment of team work among all our
people.
In order to become the excellent manufacturer and we follow the quality policy and to
achieve the customer satisfaction by continually improving the quality of our products
and services.
QUALITY OBJECTIVES
 Conversion of enquiries into order.
 On time delivery.
 Reduce rejection.

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THE EIGHT DIMENSIONS OF QUALITY

ESCALATION POLICY
PMTC is committed to assist Employees by adopting the best reporting methods to
ensure proper evaluation and escalation for external and internal incidents or violations
that are not contemplated by existing policies, procedures or guidelines.
The conflicts committee is responsible to address the issue being reported, the committee
shall perform a brief assessment to determine the appropriate channel and resources for
further evaluation, management and remediation. The committee will determine and co
ordinate remediation of the issue, with all relevant information, to the relevant parties.
Issues escalated according to this policy will be treated as sensitive and will be discussed
on a need-to-know basis as appropriate.

ANTI BRIBERY POLICY

We at PMTC conduct all of our business in an honest and ethical manner. We take a
zero-tolerance approach to bribery and corruption. We are committed to perform
professionally, fairly and with integrity in all our business processes and relationship by
implementing and enforcing effective systems to counter bribery.

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EMPLOYEE CODE OF CONDUCT
We at PMTC promote freedom of expression and open communication. We expect all
employees to follow our code of conduct. Employees should avoid offending,
participating in serious disputes and disputing workplace. We ensure that employees to
foster a well-organized, respectful and collaborative environment.

2.4 WORKFLOW MODEL

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2.5 PRODUCT/SERVICE PROFILE
PM Tools and Components are used raw materials like Spring Steel, Stainless Steel, C.R
Steel, H.R Steel, Copper, Brass and Aluminum, Etc. for making components such as
follow
PRODUCTS

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AIR & OIL FILTER ASSEMBLE PART

TOYOTA-SUS PLATES

PRESS COMPONENTS

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 TOYOTA-SEAT BASE & STOP DOOR WONDOW

RAW MATERIAL USED (BOTH INDIAN AND INTERNATIONAL

STARDARDS)
 Spring steel wires.
 Spring steed strips.
 Stainless steel.
 C.R steel.
 H.R steel.
 Non ferrous metals.

SURFACE TREATMENT OUTSOURCED

 Phosphate
 Blackening (Black Oxide)
 Zinc Plating (Black, Blue, Green and Yellow Color)
 Tin Plating
 Copper Plating

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  Rust Preventive Oil Treatment

APPLICATION

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INFRASTRUCTURE FACILITIES
In-House Tool Manufacturing: -
Basic tool room machines like Milling, Surface grinding, Shaping, Drilling, Pedestal
Grinding, Universal Tool & Cutter Grinding, Lathe etc.
Component Manufacturing:
 Power presses 5 Ton to 100 Ton
 Hydraulic Press
 Spring Coiling Machine
 Spring End Grind Machine
 Multi-slide Automatic Stamping &Forming Machine (DS-15-220 Korea)
 Multi-slide Automatic Stamping &Forming Machine (Thailand)
 Multi-slide Semi-Automatic Forming Machine
 Wire Straightening Machine
 Wire Forming Machine (Korea)
 Wire Bending Machine (Korea)
 Manual Press / Fly Press 1Ton to 6Ton
 Stress relieving / Air Circulated Tempering Furnace
 CNC Lathe Genie 165-T

MAJOR CUSTOMERS
 Sogefi MNR Engine Systems India Pvt, Ltd. (Unit - II), Bangalore.
 Sogefi MNR Engine Systems India Pvt, Ltd. (Unit - III), Pune.
 JBM Ogihara Automotive India Ltd., Bidadi.
 Aditya Auto Products & Engineering India Pvt. Ltd., Doddaballapura.
 AVO Carbon India Pvt. Ltd., Chenni.
 Micro Plastic Pvt. Ltd., Harohalli.
 Sundram Fasteners Ltd. Hosur.
 Schunk Metal & Carbon India Pvt. Ltd., Bangalore.
 Trigno Engineering Pvt. Ltd., Doddaballapura
 Danish Steel Cluster Pvt. Ltd., Bangalore.

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MAJOR COMPETITORS
 Yesdior Tools and Components
 Hi Tech Tools and Components
 Guru Priya Tele Auto Pvt. Ltd.
 Ujjwal Tools and Components

RAW MATERIAL SUPPLIER

 Choudhary Steel Syndicate
 Deccan Steel Agency
 Jainex Steel & Metal
 Maruthi Steel Wire
 Steel Corporation
 Steel Centre
 Strips Suppliers
 Jainex Limited
 CSN Steel
 Bombay Metal Corporation
 Mugil Steel Industries
 SOGEFI-MNR
 Star Trading Company
 Team Concept Pvt. Ltd.
Product Safety
Within PMTC’s documented processes, PMTC has addressed product safety related
products and manufacturing processes, which includes but is not limited to the following,
where applicable:
 Identification of any legal product safety requirements.
 Customer notification of requirements concerning identification of any legal
product safety requirements.
 Identification of product safety related characteristics.

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  Identification and controls of safety related characteristics of product and at the
point of manufacture.
 Special approval of control plan and processes FMEAs.
 Changes to product or processes approved prior to implementation, including
evaluation of potential effects on product safety from process and product change.
 Transfer of requirements with regard to product safety throughout the supply
chain, including customer designated source.
Customer Satisfaction
PMTC monitors customer perception of the degree to which their needs and expectations
have been fulfilled. The organization determines method for obtaining, monitoring and
reviewing the information.
The organization carries out customer satisfaction surveys once a year in February –
March to understand customer perception. It also analyzes the customer complaints,
delays in deliveries product quality and other feed backs on monthly basis. These are
discussed in periodic review meetings.
The customer satisfaction is monitored by obtaining periodical feedback from the
customer through customer satisfaction survey form. Based on the feedback, corrective
actions are initiated to improve the satisfaction levels.
Customer satisfaction is monitored through continual evaluation of performance of the
realization processes. Performance indicators are based on objective data and include, but
not be limited to:
 Delivered part quality performance
 Recalls and warranty where applicable
 Customer notification related to quality / Delivery issues including special
status
In addition to the above, manufacturing process performance also will be monitored to
demonstrate compliance with customer requirements for the product quality and
efficiency of the process. Monitoring includes review of the customer performance data
and including online customer portals and customer score cards if provided.

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Customer Focus
MD and Core team of PMTC adopts a customer-first approach which ensures that
customer needs and expectations are determined, converted into requirements and are met
with the aim of enhancing customer satisfaction.
 This accomplished by assuring: Customer and applicable statutory and regulatory
requirements are determined, understood and consistently met.
 By translating the requirements into specification and ensuring that it is met by
concerned function.
 The focus on enhancing customer satisfaction is maintained.
 By providing cost effective solution to the customer for their needs.
 By providing effective and prompt service to solve customer complaints.
Customer Notification
PMTC has established a system to inform customer promptly in the event of shipment of
NC products through e-mail.
Process Owners
Management has identified process owners for all the process in the organization who are
responsible for managing the processes and related outputs. The competency of the
process owners are ensured and made understand their roles in the organization.
RESPONSIBILITY AND AUTHORITY
This section describes the functional responsibilities and commensurate authority of the
key management personnel involved in the maintenance of this documented quality
system. The functional organizational chart for the same illustrates the hierarchical
authority of the persons who manage, perform and verify work affecting quality. It gives
the inter-relationship of responsibility of the functional heads.
MD and CEO responsibilities:
 Plan and Approve Resources Requirement based on the Business Plan.
 Review and approve training program for the employees.
 Fund flow management and liaison with financial institution.
 Coordinating with the plan to ensure that customer needs are met on time.
 Marketing, review of enquiries / orders and their acceptance after ensuring that
the company met all customer requirements.

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  Business expansion and guidelines formulation for smooth functioning of the
organization.
 Handling of amendments to the purchase orders whose value is more than one
lakh.
MD and CEO authorities:
 Review, modify and clear Quality System Manual, procedure and other
documents.
 Authorize training program for employees.
 Signing of appointment letters to employees.
 Authorized training need for the departmental staffs.
 Decision maker for non-conformities.
 Releasing payments to suppliers.
 Responsible for identifying and maintaining relevant legal and regulatory
requirements.
 Authorization to approve quality plans.
 Give necessary direction in management review meeting.
 Give clearance to any resources requirements.
 Authorize purchase order whose value is more than one lakh.

Main departments are as follows:

 Human resource department
 Financial department
 Marketing department
 Production department
 Quality department
 Store department
 Purchase department

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HUMAN RESOURCE DEPARTMENT (Personnel & Administration Process)
Objective:
 To recruit personnel & position them to suit the requirements and needs of all
department and carry out personnel management function.
 To identify training needs and impart training and development program for
employees for a resourceful environment.
 To have a system of general administration, in matters concerning Mail
management, receiving visitors, Booking Tickets, Travel & Transportation,
security and accommodation.
Responsibilities:
 Plan and prepare training program for the employees.
 Participate in the management review meeting.
 Plan and recruit personal based on the business plan.
 To handle manpower related issues such as welfare housekeeping etc.
 Responsible for maintaining relevant legal & regulatory requirements.
Authorities:
 Review, modify along with HR and approve quality manual, procedure and other
internal documents including form / formats and registers.
 Identification of training need for all the departmental staffs.

FINANCE DEPARTMENT (Finance & Accounts Process)

Objectives:-
 To have full- fledged system of accounting of revenue expenses.
 To comply with statutory norms with regards to finances.
 To provide finance and manage them effectively
 To assist and supplement other divisions with regards to finance taking decision.
Scope:-
 All financial and accounting activities undertaken by PMTC.
 Revenue collection and follow up with head of commercial.

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Statutory and legal requirements:-
Head of Finance is to maintain a list of all legal and licensing requirements along with all
necessary details. Head of Finance is to ensure that all statutory and legal requirements
and licenses are compiled with, in order and up-to-date.
Records:
 Voucher
 Journal Stock Register
 Cash / Cheque Payment Voucher
 Petty Cash Book
 Invoice File
 Debit / Credit Note
 Petty Cash Payment Voucher
 Cash Receipt Voucher

MARKETING DEPARTMENT (Commercial Process)

Objective:-
 To ensure that customer needs are clearly identified, understood and documented
for proper co-ordination of the contract or order, submission of tender / proposal.
 Enquiries and contract reviews are carried out without any contradiction from the
accepted terms.
 To ensure resolving of customer complaints.
 To ensure customer satisfaction.
Scope:-
 All verbal enquiries, telephonic enquiries and orders, written enquiries, tenders.
Contracts & orders.
 Review of all contracts or orders and amendments.
Responsibilities
 Get Clarification and other necessary documentation from customer based on
requirement from Purchase, Quality and Production.
 Discuss and finalize Quotation with MD for new enquires.

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  Prepare and send quotation and get feedback from new customers.
 Get Purchase Order and delivery schedule from customer.
 Get customer approval in the case of sample submission.
 Give delivery schedule to customer in consultation with operations head.
 Identify and get New Customer Enquires.
 Get Purchase Order and delivery schedule from customer.
 Communicate with customer in the case of any delay in delivery schedule.
Authorities:
 Review and decide on taking up a new customer enquiry based on customer
profile, P.M. TOOLS capability etc. in consultation with MD.
 Decide on the Product Price in consultation with MD.
 Decide and give priority on the production schedule for the customer products
handled.
 Decide on giving clearance to any deviation to products in consultation with
customer.

PRODUCTION DEPARTMENT (Product Realization)

Objectives:-
 To have planned production process, ensuring availability of items to enable
production process and achieve production target.
 To reduce rejection, rework and scrap while manufacturing.
 To provide suitable working environment for quality production.
 To ensure proper identification and traceability of items.
Responsibilities:
 Plan Production as per Production plan schedules released by CEO/MD.
 Allocate man power as per production plan.
 Plan on manpower requirements for new products and workout the stages
required for the same.
 Carrying out preventive and breakdown maintenance.
 Processes validation and Monitoring Process control parameters.

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  Interacting with subcontractors for out sourced products.
 Prepare work instruction and standard operating procedures for various stages.
 Identify and inform top management for any additional requirements for
resources.
 Monitor daily productivity and sent report to top management.
 Maintain housekeeping, planning and conducting self-internal quality audits.
 Managing production activities and labor.
 Maintaining identification and traceability of processed and finished material.
 Maintaining records to ensure continued adherence to documented requirements.
Authorities:
 Release of finished product to final quality after inspection.
 Plan additional production hour requirements based on production demand.
 Change processes flow as required either to improve Quality or Productivity on
consultation with Quality and Operation head.
 To approve permission/leave requirement of operators based on the policy.

QUALITY DEPARTMENT (Monitor measure and improvement process)

Objectives:-
 Conversion of enquiries into order.
 On time delivery.
 Reduce rejection
Scope:-
 Application to monitoring and measurement of purchased and products of PMTC.
 Application to all measurement / test equipment, instruments and gauges used at
PMTC.
 Improvement process is applicable in all areas of operation of PMTC.
Responsibilities:
 Update, document and release any processes or product changes due to customer
input or internal input, through PCN-Processes change note and ECN-Engineering
change note.

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  Maintain and update master list PCN, ECN and drawing released.
 Plan and conduct new product introduction meeting and record the proceedings
and circulate it to all concerned.
 Responsible for preparing quality plans for incoming quality and final quality.
 Responsible for carrying out incoming and final inspections.
 Receive customer inputs such as drawing etc from marketing and verify and
release it to concerned departments.
 Monitor in processes and collect rejection data.
Authorities:
 Authorized to release Final finished product for dispatch..
 Give disposition to Non-Conforming Part/Product n consultation with MD, CEO
and Customer on case by case basis.
 Approve Corrective and Preventive Action proposed by production.
 Authorized to plan and conduct Internal Quality Audits.
 Approve and give disposition on processes rejection part sand products in
consultation with MD and CEO on case by case basis.
 To generate Non-Conformity report on any processes or product deviation.

STORE DEPARTMENT (Store Process)

Objectives:-
 To establish a procedure for storage of items at PMTC with a view to prevent
damage & deterioration.
 To have procedure for issue from stores against authorized requisition and
controlling the product surpluses returned to the stores.
 To ensure the availability of components to facilitate production.
Scope:-
 All the activities involved in the stores process which are performed at PMTC.
Responsibilities:
 Generate a product wise Shortage Report based on the production schedule and
give it to Purchase for releasing Purchase Order.

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  To Receive Material from supplier and verify against Purchase order and check
quality.
 To inform Incoming Quality for verification and approval.
 Maintaining store records and stock register.
 Update and issues store stock to Top management at the end of every month.
Authorities:
 Approving and issue of materials to production as per production plan.
 Issuing of Sub-Contractor material as per production plan.
 Accept and forward supplier Invoices to Finance.
 Sending Rejected materials to Supplier.

PURCHASE DEPARTMENT (Procedure for purchase process)

Objectives:-
 To establish a procedure to ensure that the purchased products conform to the
specified requirements.
 To ensure that quality components / raw material are procured and are cost
effective.
 To ensure that materials are purchased as per minimum stock level/indents/
Specification.
Scope:-
 This procedure is applicable to all the direct materials purchased to be used in
components.
 This procedure not applicable to capitals goods procurement and for consumables.
Responsibilities:
 To receive Customer order requirement from marketing and production
departments.
 To get material availability and shortage report from stores / production.
 Plan and release Purchase Orders on Suppliers for shortage items.
 Get delivery schedule from Suppliers and give material receipt schedule to
operation along with the Shortage report.

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  Co-Ordinate with HR – admin and CEO on payment requirements
 Release payments to supplier.
 Identify new suppliers and carryout necessary evaluation before placing an order
on him.
Authorities:
 Authorized to release Purchase Orders based on the shortage report for the
products which are planned for production in co-ordination with CEO.
 Can black list a supplier based on Quality and Delivery performance.
 Recommending payments to suppliers.

OPERATING DEPARTMENT
Operator’s responsibilities:
 Following the instruction of production in charge.
 Giving feedback to production in charge regarding in process and final product
quality.
 Machining and storing of products as per work instructions.
 Loading and unloading of raw materials, finished items.
Authority:
 Housekeeping

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2.6 OWNERSHIP PATTERN

PAPANNA REDDY K G MANJU G R

MD MD

SATHISH R B CEO & MARKETING

HEAD

PRODUCTION/TOOL QUALITY HEAD & HR & STORES & MAINTENCE

ROOM
CO ORDINATOR MARKETING ASST ACCOUNTS I/C DESPATCH I/C I/C

PRODUCTION TOOL ROOM QUALITY QUALITY QUALITY DESPATCH STORE OPERATOR

I/C
I I/C ENGG ENGG ENGG ASST ASST

OFFICE

OPERA OPERA LINE LINE FINAL ASSISTANT

TORS TORS INSPE INSPEC INSPE
CTORS TORS CTORS HELPERS
HELPERS

HELP
HELP
ERS
ERS

2.7 ACHIVEMENT AND AWARDS

 2011 – ISO 9001: 2011 CERTIFICATE TUV INDIA
 2013 – APPRECITION CERTIFICATE FROM JBM OGIHARA
AUTOMOTIVE INDIA LIMITED
 2017 – ISO 9001: 2015 CERTIFICATE TUV NORD
 2016 – SUPPLIER APPRECITION AWARD FROM STAINLESS STEEL
FABRICATED PARTS

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  2018 – SUPPLIER APPRECITION AWARD FROM SOGEFI-MNR ENGINE
SYSTEMS INDIA PVT LTD

2.8 FUTURE GROWTH PROSPECTUS

 To increase good reputation.
 To increase Employment Opportunities.
 Expand the Organization worldwide.
 To introduce new products.
 Export the goods to the foreign country.
 To maintain the quality of products.

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3. MCKINSEY 7S MODEL
MCKENSY’S 7S FRAMEWORK WITH SPECIAL REFERENCE TO
ORGANIZATION UNDER STUDY
The 7’s model for management analysis was developed by MCKINSEY and company in
the late 1970s to help managers address the difficulties of change. The model shows the
organizational immune system may inter-connect variables involved in making change
complex in which an effective change effort must address May of this issue
simultaneously. This is often a daunting managerial challenge.
According to ‘Richard Pascal’ these factors are called “The Art of Japanese
Management” Richard defined that it was because of these factors the Japanese
companies excelled over American firms. A very important feature of this Model is that
MCKINSEY consultant in their studies of several firms has extensively tested it.
The MCKINSEY 7’s model is only a tool available to the managers to study the
organizations. A major premise of the model is that many performance - related issues
are rooted among 7 factors outlined. These 7’s are inter-connected and aligned.
 The goal of the model is to show how 7 elements of the company - Structure,
Strategy, Skill, Style, Staff, system and Shared values can be aligned together to
achieve effectiveness in a company.
 All seven areas are inter-connected.
 A change in one area requires change in the rest of a firm for it to function
effective.

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The 7’s Models Applied to P.M. Tools and Components as Follows :
1) Structure:-
It represents the way business division and units are organized and include the
information of who is accountable to whom.
PMTC is a divisional structure. It refers to the formal relationships among various
positions and activities performed in the organist. Organization structure involves
arrangements about reporting relationships, line of communication, and procedure which
exist to guide the various activities performed by various hierarchical position in the
organizational structure.

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 Partner 01 Partner 02

General Manager

Production Quality Office

Department Inspector Assistan
t

Tool Operator Store Helpers

Keeper
Maker

2) SKILL:-
Usually in foundry industry, two types of skills are required. They are as follows:
a) Administrative skills
b) Technical Skills
a) Administrative skills :-
In PM Tools & Components, when the candidates are selected, he will be given,
on the job training to make him familiar with the organization. Training program will be
conducted wherein experts from various fields give lectures.
b) Technical skills:-
Technical skills are those skills which they are directly concerned with the production.
Factory employees are expected to possess these skills to carry out the production activity
smoothly.
In PMTC, they give more importance to technical knowledge. Different training
programs are conducted to develop the technical skills among the employees. When a
candidate is selected, he will be subjected to an on-the-job training. Guest lecturers are
arranged to update the knowledge of workers.

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3) STYLE:-
PMTC follows a centralized system in decision - making. Only the top management takes
decisions but suggestions from lower level employees are taken into consideration.
The particular departmental heads have the right to take part to solve any problem
relating to their department. Only the Board-of-Directors takes decisions, other follows
their decisions. The decision-making is restricted to only top level management.

4) STRAGERY:-
The strategy of PMTC regarding waste elimination is by ensuring that the quality of raw
materials purchased is good. By using good quality of raw materials, the company can
produce quality output, without any damages thus reducing wastage.

5) SYSTEM:-
PMTC uses complete systemized processes in all fields of its operations. Inventories
constitute the most significant part of current assets of an organization. Inventories are
stock of the product, the organization is manufacturing company are as follows.
 Raw materials
 Work-In-Progress
 Finished goods
PMTC has implemented first-in-first-out method, which is popularly known as FIFO
method. In this method, raw materials bought first will be sent to production department
first. The inventory system of this company has very effective control over maintenance
of its raw materials. It follows just-in-time method in its raw material maintenance. This
method voids both over-stocking and under-stocking.

6) STAFF:-
It is an element is concerned with what type and how many employees an
organization will need and how they will be recruited, trained, motivated and
rewarded.
They are 150 employees working in P.M. Tools and Components has been
providing a way for future and also they have a good infrastructure facilities:

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  Canteen
 Medical care
 Disposal waste
 Training

7) SHARED VALUES:
 PMTC is always conscious about its responsibility towards protection of nature
and in this regard several initiatives have been taken to protect and preserve the
environment.
 PMTC has been working in the implementation of small scale environmental
programs in the region.
 These programs are designed both to demonstrate and to educate children and
villagers in alternative method of waste treatment, water purification, re-
forestation and habitat preservation.
 Often the environmental aspects of PMTC projects are an integral part of a rural
development initiative.

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 PORTER’S FIVE FORCE MODEL

Porter Five Force Analysis is a strategic management tool to analyze industry and
understand underlying levers of profitability in given industry. P.M. tools and
components, managers can use Porter Five Force to understand how the five
competitive force influence profitability and develop a strategy for enhancing PMTC.
Competitive advantage and long term profitability in industrial PMTC industry.
In his revolutionary article – “Five Force that shape strategy”, Michael Porter
observed five forces that have significant impact on a firm’s profitability in its
industry. These five force analysis today in business world is also known as – Porter
Five Force Analysis. The Porter Five Forces are:

1) Threat of New Entrants

New entrants in industrial tools and components bring innovation, new ways of doing
things and put pressure on PMTC. Through lower pricing strategy, reducing costs,

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and providing new value propositions to the customers. PMTC has to manage all
these challenges and build effective barriers to safeguard its competitive edge.
 By innovating new products and service. New products not only bring new
customers to the fold but also give old customer a reason to buy PMTC products.
 By building economies of scale so that it can lower the fixed cost per unit.

2) Bargaining Power of Suppliers

Suppliers in dominant position can decrease the margins P.M. Tools and Components
can earn in the market. Powerful suppliers in industrial goods sector use their
negotiating power to extract higher price from the firm’s industrial tools and
components field. The overall impact of higher supplier bargaining power is that it
lowers the overall profitability of industrial tools and components.
 By building efficient supply chain with multiple suppliers.
 By experimenting with product design using different materials so that if the
prices go up of one raw material then company can shift to another.

3) Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by
paying the minimum price as possible. This put pressure on PMTC profitability in the
long run. The smaller and more powerful the customer base is of PMTC the higher
bargaining power of the customers and higher their ability to seek increasing
discounts and offers.
 By building a large base of customers. This will be helpful in two ways. It
will reduce the bargaining power of the buyers plus it will provide an
opportunity to the firm to streamline its sales and production process.
 New products will also reduce the defection of existing customers of PMTC
to its competitors.

4) Threats of substitute Products or Services

When a new product or service meets a similar customer needs in different ways,
industry profitability suffers. For example services like Dropbox and Google Drive

Page | 33
are substitute to storage hardware drives. The threat of a substitute product or service
is high if it offers a value proposition that is uniquely different from present offerings
of the industry.
 By being service oriented rather than just product oriented.
 By understanding the core need of the customer rather than what the customer
is buying.
 By increasing the switching cost for the customers.

5) Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive
down price and decrease the overall profitability of the industry. PMTC operates in a
very competitive industrial tools and components industry. This competition does
take toll on the overall long term profitability of the organization.
 By building a sustainable differentiation.
 By building scale so that it can compete better.
 Collaborating with competitors to increase the markets size rather than just
competing for small market.

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4. SWOT ANAYLSIS

In-depth strategic analysis of the company’s business and operations, the profile has been
compiled to bring to a clear and an unbiased view of the company’s key strengths and
weaknesses and the potential opportunities and threats. The profile helps you formulate
strategies that argument your business by enabling you to understand your partners,
customers and competitors better.

STRENGTHS
 Less cost of production in the company.
 Consistent and compressive quality in production.
 Implementation of advanced technology for manufacturing product.
 Set and review all the objective and targets.
 Better product life and durability.
 Management is committed and confident.

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  Keeps costs below competitors cost.
 Benchmark for producing the quality product.
 Effective cost maintenance through productivity in the company.
 On time delivery to customers.
 Good sources of supply of raw materials to production.
 Using more safety measures in the organization.

WEAKNESS
 More turnovers of skilled and capable employees in the company.
 Location issues.
 As customer expectation is increasing day by day it has become difficulty to
satisfy them completely.
 Absence of Research and Development department.

OPPORTUNITIES
 Come up with new innovative ideas and development.
 Utilizing human resources and his knowledge effectively in the work
environment.
 They can improve own transportation.
 They can enter into global also.

THREATS
 High competition among other similar companies.
 Strategic and wide advertisement and publicity by the competitors.
 Price variation from the competitors.
 Foreign companies are collaborating with the existing companies with latest
technology.
 High political influence in local area.

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5. ANALYSIS OF FINANCIAL STATEMENT
PROFIT AND LOSS ACCOUNT OF P.M.TOOLS AND COMPONENTS FOR
THE YEAR…..
(Rs. In Lakh)
PARTICULAR 31/03/2016 31/03/2017 31/03/2018
INCOME
Sales Turnover 25,252.98 23,768.11 25,275.47
Excise Duty 1,666.18 0 0
Net Sales 23,586.80 23,768.11 25,275.47
Other Income 347.46 398.38 446.38
Stock Adjustments 94.03 0 -8.36
Total Income 24,028.29 24,166.49 25,713.49
Expenditure
Raw Materials 17,485.65 17,470.73 18,320.46
Power & Fuel Cost 112.66 129.18 137.46
Employee Cost 735.52 820.92 930.04
Other Manufacturing Expenses 51.62 0 0
Selling and Administration
Expenses 1,257.84 0.00 0.00
Miscellaneous Expenses 389.52 2,025.33 2,339.09
Preoperative Exp Capitalized 0.00 0.00 0.00
Total Expenses 20,032.81 20,446.16 21,727.06

Operating Profit 3,648.02 3,321.95 3,540.06

PBDIT 3,995.48 3,720.33 3,986.44
Interest 33.43 11.91 11.82
PBDT 3,962.05 3,708.42 3,974.62
Depreciation 1,097.34 1,141.75 1,107.37
Other Written Off 0.00 0.00 0.00
Profit Before Tax 2,864.71 2,566.67 2,867.25

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Extra-ordinary items 0.00 0.00 0.00
PBT(Post Extra-ordinary items) 2,864.71 2,566.67 2,867.25
Tax 486.58 411.04 758.17
Reported Net Profit 2,378.13 2,118.18 2,109.08
Total Value Addition 2,547.16 2,975.43 3,406.59
Preference Dividend 0.00 0.00 0.00
Equity Dividend 898.59 1,198.13 1,299.13
Corporate Dividend Tax 145.77 203.62 220.79
Per Share Data (annualized)
Shares in issue (lakh) 1,996.88 1,996.88 1,996.88
Earning Per Share(Rs) 119.09 106.07 105.62
Equity Dividend (%) 2,250.00 3,000.00 3,252.70

Book Value(Rs) 214.83 250.70 280.43

Page | 38
BALANCE SHEET OF P.M.TOOLS AND COMPONENTS AS ON……
(Rs. In Lakh)
PARTICULAR 31/03/2016 31/03/2017 31/03/2018
SOURCE OF FUNDS
Total Share Capital 39.94 39.94 39.94
Equity Share Capital 39.94 39.94 39.94
Share Application Money 0 0 0
Preference Share Capital 0 0 0
Reserves 4249.89 4966.3 5,559.93
Revaluation Reserves 0 0 0
Net Worth 4289.83 5006.24 5599.87
Secured Loans 994.85 302.16 0
Unsecured Loans 0 0 0
Total Debt 994.85 302.16 0
Total Liabilities 5284.68 5308.4 5599.87
Application of Funds
Gross Block 6308.26 4427.29 3761.52
Less: Accumulated Depreciation 2522.75 1356.31 1518.27
Net Block 3785.51 3070.98 2243.25
Capital Work in Progress 193.95 62.09 854.11
Investment 3964.26 3623.83 4088.77
Inventories 675.57 636.76 669.55
Sundry Debtors 272.31 665 920.58
Cash and Bank Balance 56.1 181.04 117.5
Total Current Assets 1003.98 1482.8 1707.63
Loans and Advances 926.99 1401.95 1203.54
Fixed Deposit 20.72 0 0
Total current Asset , Loan & Advances 1951.69 2884.75 2911.17
Deferred Credit 0 0 0
Current Liabilities 3520.66 2893.39 2903.12

Page | 39
Provisions 1090.07 1439.86 1594.31
Total Current Liabilities & Provisions 4610.73 4333.25 4497.43
Net Current Assets -2659.04 -1448.5 -1586.26
Miscellaneous Expenses 0 0 0
Total Assets 5284.68 5308.4 5599.87

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 RATIO ANALYSIS
5.1 CURRENT RATIO:
Current ratio is defined as the link between current assets and current liabilities. It is also
called as working capital ratio, generally it helps to measure liquidity and it is widely
used to make analysis of short term financial position or liquidity of firm.
Current Ratio= Current assets / Current liabilities
TABLE 5.1
Current Ratio
Years Current assets Current liabilities Current ratio
2016 1003.98 3520.66 0.29
2017 1482.80 2893.39 0.51
2018 1707.63 2903.12 0.90

CHART NO 5.1: CURRENT RATIO

1
0.9
0.9
0.8
0.7
0.6
0.51
0.5
0.4
0.29
0.3
0.2
0.1
0
2016 2017 2018

INTERPRETATION:
There is a fluctuation in the current ratio, in the year 2016 the current ratio is 0.29 times
which is increased in 2017 i.e. 0.51 times. In the year 2018 is increased to 0.9 times. It
shows that the current assets have been fluctuated during the period 2016-2018.
The standard current ratio is 2:1, hence it’s not satisfactory.

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5.2 OPERATING PROFIT RATIO:
Operating profit is an accounting figure that measures the profit earned from a company’s
ongoing core business operations, thus excluding deductions of interest and taxes. This
value also does not include any profit earned from the firm’s investments, such as
earnings from firms in which the company has partial interest.
Operating profit ratio= Operating profit /Net sales
TABLE 5.2
OPERATING PROFIT RATIO
Years Operating profit Net sales Operating profit ratio

2016 3648.02 23586.8 0.15

2017 3321.95 23768.11 0.13
2018 3540.06 25275.47 0.14

0.155
CHART NO 5.2: Operating profit ratio
0.15 0.15

0.145

0.14 0.14

0.135

0.13 0.13

0.125

0.12
2016 2017 2018

INTERPRETATION:
There is a changes in the operating profit ratio, in the year 2016 the operating profit ratio
shows 0.15 times in which it is decreased to 0.13 times in the year 2017 and further
increased in the year 2018 is 0.14 times. It shows that the operating profit was being
continuously fluctuated in the period 2016-2018.
There is no fixed standard ratio, higher the efficiency. By this it is concluded that in the
year 2016 it was good and the company needs to improve to meet the standard ratio.

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5.3 NET PROFIT RATIO:
Net profit ratio expresses the relationship between net profit after taxes and sales. This
ratio is a measure of the overall profitability net profit is arrived at after taking into
accounts both the operating and non-operating items of incomes and expenses. The ratio
indicates what portion of the net sales is left for the owners after all expenses have been
met.
Net profit ratio= Net profit / Sales*100
TABLE 5.3
NET PROFIT RATIO
Years Net profit Sales Net profit ratio
2016 2378.13 23586.8 10.08
2017 2118.18 23768.11 8.91
2018 2109.08 25275.47 8.34

CHART NO 5.3: NET PROFIT RATIO

12
10.08
10 8.91
8.34
8

0
2016 2017 2018

INTERPRETATION:
There is a variation in the net profit ratio during the year 2016 is 10.08%, which is
decreased in 2017 i.e.8.91% and further decreased in the year 2018 is 8.34%.
The net profit ratio of the company is being decreased year after year. But it is concluded
that, the company profitability need to improve.

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5.4 PROPRIETARY RATIO:
The proprietary ratio (also known as the equity ratio) is the proportion of shareholders
equity to total assets, and as such provides a rough estimate of the amount of
capitalization currently used to support a business.
Proprietary ratio=Proprietary funds / Total assets
TABLE 5.4
PROPRIETARY RATIO
Years Proprietary funds Total assets Proprietary ratio
2016 5599.87 5599.87 1
2017 5006.24 5308.40 0.94
2018 4289.83 5284.68 0.81

CHART NO 5.4: PROPRIETARY RATIO

1.2

1 1
0.94
0.81
0.8

0.6

0.4

0.2

0
2016 2017 2018

INTERPRETATION:
There is a continuous decreases in the proprietary ratio, in the year 2016 the proprietary
ratio is 1, 2017 i.e. 0.94 and in the year 2018 it is 0.81. It shows that the total assets are
decreased between the periods 2016 – 2018.
The proprietary ratio of the company is gradually decreasing year after year.

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5.5 ABSOLUTE LIQUIDITY RATIO:
Absolute liquidity ratio extends the logic further and eliminates account receivable
(sundry debtors and bills receivables) also. Through receivables are more liquid as
comparable to inventory but still there may be doubts considering their time and amount
of realization. Therefore, absolute liquidity ratio relates cash, bank and marketable
securities to the current liabilities.
Absolute liquidity ratio= Cash /Current liabilities
TABLE 5.5
ABSOLUTE LIQUIDITY RATIO
Years Cash Current liabilities Absolute liquidity ratio
2016 117.50 2903.12 0.41
2017 181.04 2893.39 0.63
2018 56.10 3520.66 0.02

CHART NO 5.5: ABSOLUTE LIQUIDITY RATIO

0.7
0.63
0.6
0.5
0.41
0.4
0.3
0.2
0.1
0.02
0
2016 2017 2018

INTERPRETATION:
There is variation in the Absolute liquidity ratio, in the year 2016 the absolute liquidity
ratio is 0.41 which is increased in 2017 i.e.0.63 and then decreased in the year 2018 is
0.02.
It shows that the absolute liquidity ratios are variation in the period of 2016-2018.

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5.6 FIXED ASSETS TURNOVER RATIO:
The fixed turnover ratio is an efficiency ratio that measures a company’s return on their
investment in property, plant and equipment by comparing net sales with fixed assets. It
calculates how efficiently a company is a producing sale with its machines and
equipments.
Fixed assets turnover ratio=Net sales / Fixed assets
TABLE 5.6
FIXED ASSETS TURNOVER RATIO
Years Net sales Fixed assets Fixed assets turnover ratio
2016 25275.47 2243.25 11.26
2017 23768.11 3070.98 7.74
2018 23586.8 3785.51 6.23

CHART NO 5.6:FIXED ASSETS TURNOVER

11.26
RATIO
12
10 7.74
8 6.23
6
4
2
0
2016 2017 2018

INTERPRETATION:
There is instability in the fixed asset turnover ratio, in the year 2016 the fixed assets
turnover ratio is 11.26 times which is decreased in 2017 i.e. 7.74 times and in the next
year it is decreased in the year 2018 is 6.23 times. It shows that the fixed assets are
varied in the year 2016-2018.
The standard fixed assets turnover ratio is 5 times or more, hence it does not match with
the set standard ratio.

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5.7 WORKING CAPITAL TURNOVER RATIO:
Working capital turnover is a ratio that measures how efficiently a company is using its
working capital to support a given level of sales. Also referred to as net sales to working
capital, working capital turnover shows the relationship between the funds used finance a
company’s operations and the revenues a company generates as a result.
Working capital turnover ratio=Net sales / Working capital
(Where, Working capital=Current assets-Current liabilities)
TABLE 5.7
WORKING CAPITAL TURNOVER RATIO
Years Net sales Working capital Working capital turnover ratio
2016 25275.47 1195.49 21.14
2017 23768.11 1410.59 16.85
2018 23586.8 2516.68 9.37

CHART NO 5.7: WORKING CAPITAL

TURNOVER RATIO
25
21.14
20
16.85
15

10 9.37

0
2016 2017 2018

INTERPRETATION:
There is instability in the working capital turnover ratio, in the year 2016 the working
capital turnover ratio is 21.14 times which is decreased in 2017 i.e. 16.85 times and in
the next year it is decreased in the year 2018 is 9.37 times. It shows that the working
capital is varied in the period 2016-2018.
The proprietary ratio of the company is gradually decreasing year after year.

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5.8 DEBT EQUITY RATIO:
Debt/Equity ratio is a debt ratio used to measure a company’s financial leverage,
calculated by dividing a company’s total liabilities by its stockholders equity. The D/E
ratio indicates how much debt a company is using to finance its assets relative to the
amount of value represented in shareholders’ equity.
Debt equity ratio = Debt / Equity
TABLE 5.8
DEBT EQUITY RATIO
Years Debt Equity Debt equity ratio
2016 0 5599.87 0
2017 302.16 5006.24 0.06
2018 994.85 4249.89 0.23

CHART NO 5.8: DEBT EQUITY RATIO

0.25
0.23
0.2

0.15

0.1
0.06
0.05

0 0
2016 2017 2018

INTERPRETATION:
There is a increase in the debt equity ratio, in the year 2016 the debt to equity ratio is 0
times which is increased in the year 2017 i.e. 0.06 times and further increased in the year
2018 is 0.23 times.
The standard debt equity ratio is 2:1, hence it is satisfactory.

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5.9 CURRENT ASSETS TO PROPRIETORS FUNDS RATIO:
Current asset to proprietors fund ratio establishes the relationship between current assets
and shareholder’s funds. The purpose of this ratio is to calculate the percentage of
shareholders funds invested in current assets.
Current assets to proprietors funds ratio = Current assets / Shareholdersfunds*100
TABLE 5.9
CURRENT ASSETS TO PROPRIETORS FUNDS RATIO
Years Current assets Shareholdersfunds Current assets to proprietors
funds ratio
2016 1003.98 4289.83 23.40
2017 1482.80 5006.24 29.62
2018 1707.63 5599.87 30.49

CHART NO 5.9: CURRENT ASSETS TO

PROPRIETORS FUNDS RATIO
35 30.49
29.62
30
25 23.4
20
15
10
5
0
2016 2017 2018

INTERPRETATION:
There has been continuous increasing in the current assets to proprietors’ funds ratio,
from 2016 – 2018 the current assets to proprietors funds ratio is 23.4, 2017 i.e. 29.62 and
in the year 2018 it is 30.49. It shows that the Shareholdersfunds are increased in the
period 2016-2018.
The current assets to proprietors’ funds ratio of company are gradually increasing year
after year.

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