ORGANIZATIONAL STUDY OF KERALA AUTOMOBILE LTD

AN ORGANIZATIONAL STUDY AT KERALA AUTOMOBILE LTD….
Prepared by Sandeep Nair
INTRODUCTION
The main aim of organizational study is familiarization & in depth knowledge of the
functioning of various departments. For this purpose a study has been carried out in Kerala
Automobiles Ltd. The KAL has primary position to auto industry. For that purpose a study
has been carried out in Kerala Automobiles Ltd. The KAL has a decent position in the
auto industry which manufactures three wheelers with high power, fuel efficiency, strong
chassis, metal body, high load carrying capacity, and with trouble free operation. The
better the organization greater will be the achievement of common objective. Organization
structure is an indispensible means to the end of business performance. This fact makes
appropriate a thorough organization study of an industrial unit.
1.1 Objectives Of The Study

• Getting organizational exposure.
• To see and understand the actual working condition of an organization.
• To understand the organization on the basis of departmentation.
• To understand the functions of each and every departments.
• To look in to the working conditions of the employees in an organization.
• To learn the basic HR functions in the organization.
• To make the evaluation about the performance of the organization.
• To know about the organizational objective and scope.
• To know the extend with which management theories matches with the practice.
• To do the ‘SWOT’ analysis of the company.
• To suggest recommendations for improving the overall performance of the

organization.
• To get clear view of the day to day functioning of the industrial establishment.
1.2 Scope Of The Study

• To study working environment
• To study the employer-worker relationship.
• To study the profit making of the organization.
• How man, material, money influence on the achievement of company.
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AN ORGANIZATIONAL STUDY AT KERALA AUTOMOBILE LTD…. Prepared by Sandeep Nair
• To learn the HR functions of the organization.
• To learn the Industrial Relations functions in the company.
1.3 Methodology
The study the study pays more attention on the process that takes place in the various
departments of KAL, organizational structure and operations management of various
departments of KAL.
Data sources
Data source is the source form where the data are collected and arranged. There
are two kinds of sources. Primary source and secondary source.
Primary source:- Primary data are collected for the first time. It’s is obtained through
the personal interview with the manager as well as some employees. Observation was
systematically planned and recorded. The personal interview was direct and was a
mixture of direct, structured and unstructured questions. The type observation used
was structured and controlled one. The opinion of the different people may be
different for a question. So, a keen observation and extraction of fact has carried out
with the help of the formal authorities.
Secondary data:-These are data collected from the various journals, brochures,
websites, newspaper etc. The company details and data have been personally gathered
from company profile, annual report documents and other published booklets.
1.4 Duration Of The Study
The duration of study was one month starting from 3-5-2010 to 31-5-2010.
1.5 Limitations Of The Study

• Time was limited for a deep study analysis of the organization.
• Some personal interviews may be affected by the personal bias.
• Some company documents are confidential in nature. So, it was not possible to
include all those items.
• Organizational environment was very busy, which limits the data collection,
learning. All the information couldn’t be involved because of this factor.

2.1 INDUSTRIAL PROFILE OF AUTOMOBILES
In 1769, the self propelled vehicle was a military tractor invented by French engineer
and mechanic, Nicholas Joseph Cugnot. He built a steam powered tricycle that carried
4 passengers. But in 1832-39 Robert Anderson of Scotland invented the first electric
carriage.
The history of the automobile begins as early as 1769, with the creation of steam-
powered automobiles capable of human transport. In 1806, the first cars powered by
internal combustion engines running on fuel gas appeared, which led to the
introduction in 1885 of the ubiquitous modern gasoline- or petrol-fueled internal
combustion engine. Cars powered by electricity briefly appeared at the turn of the
20th century but largely disappeared from commonality until the turn of the 21st
century, when interest in low- and zero-emissions transportation was reignited. As
such, the early history of the automobile can be divided into a number of eras based
on the prevalent method of automotive propulsion during that time. Later periods
were defined by trends in exterior styling and size and utility preferences.
Pioneer Inventors
German engineer Karl Benz, inventor of numerous car-related technologies, is
generally regarded as the inventor of the modern automobile. The four-stroke petrol
(gasoline) internal combustion engine that constitutes the most prevalent form of
modern automotive propulsion is a creation of German inventor Nikolaus Otto. The
similar four-stroke diesel engine was also invented by a German, Rudolf Diesel. The
hydrogen fuel cell, one of the technologies hailed as a replacement for gasoline as an
energy source for cars, was discovered in principle by yet another German, Christian
Friedrich Schönbein, in 1838. The battery electric car owes its beginnings to
Hungarian Ányos Jedlik, one of the inventors of the electric motor, and Gaston Planté,
who invented the lead-acid battery in 1859.

Modern Automobile Industry

The automotive industry crisis of 2008–2010 was a part of a global financial
downturn. The crisis affected European and Asian automobile manufacturers, but it
was primarily felt in the American automobile manufacturing industry. The
downturn also affected Canada by virtue of the Automotive Products Trade
Agreement.
In 2008, with rapidly rising oil prices, industries such as the automotive industry, are
experiencing a combination of pricing pressures from raw material costs and changes
in consumer buying habits. The industry is also facing increasing external competition
from the public transport sector, as consumers re-evaluate their private vehicle usage.
Roughly half of the US's fifty-one light vehicle plants are projected to permanently
close in the coming years, with the loss of another 200,000 jobs in the sector, on top
of the 560,000 jobs lost this decade.
The global automotive industry is a highly diversified sector that comprises of
manufacturers, suppliers, dealers, retailers, original equipment manufacturers or
OEMs, aftermarket parts manufacturers, automotive engineers, motor mechanics, auto
electricians, spray painters or body repairers, fuel producers, environmental and
transport safety groups, and trade unions.
The automobile and automotive parts & components manufacturers constitute a
major chunk of automotive industry throughout the world. The automotive
manufacturing sector consists of automobile and light truck manufacturers, motor
vehicle body manufacturers, and motor vehicle parts and supplies manufacturers. This
sector is engaged in manufacturing of automotives and light duty motor vehicles,
motor vehicle bodies, chassis, cabs, trucks, automobile and utility trailers, buses,
military vehicles, and motor vehicle gasoline engines.
The Top Automaking Nations

United States, Japan, China, Germany and South Korea are the top five automobile
manufacturing nations throughout the world. The United States of America is the
world's largest producer and consumer of motor vehicles and automobiles accounting
for 6.6 million direct and spin-off jobs and represents nearly 10% of the $10 trillion

US economy. Automobile is one of the important industries in the world, which

provides employment to 25 million people in the world.
Major Manufacturing Regions
Northeastern United States and Southern Great Lakes Region, Northwestern Europe,
Western Russia and the Ukraine, and Japan are the major manufacturing regions of
automotive in the world.
In North America, the prominent automotive manufacturing regions are New

England, New York and the Mid-Atlantic, Central New York, Pittsburgh/Cleveland,
Western Great Lakes, St. Lawrence Valley, Ohio and Eastern Indiana, Kanawha and
middle Ohio Valley, St. Louis, the Southeastern region, Gulf Coast, Central Florida,
and the West Coast.
The European Union has the largest automotive production regions in the World. The
key automobile manufacturing regions are United Kingdom, Rhine-Ruhr River
Valley, Upper Rhine - Alsace - Lorraine region, and the Po Valley in Italy.
In the Western Russian and Ukraine Region, the leading industrial regions are
Moscow, the Ukraine region, the Volga region, the Urals regions, and the Kuznetsh
Basin Region.
Major Segments Of Automotive Industry

Auto components amount to 31.5% share of the global automobiles and components
industry group's value. The global automotive component industry is highly diverse
and comprises of various product segments like engine parts, drive transmission and
steering parts, suspension & braking parts, electrical parts and other auto components
parts.
Engine Parts segment in the automotive component industry comprises of different
parts like engine parts, fuel delivery system and products such as pistons, piston rings,
engine valves, carburetors, and diesel-based fuel delivery systems. Engine parts form
one of largest product segment of the automotive components industry and have a
production share of 31%. A technology intensive segment, engine parts are moving
towards improved designs for optimal fuel consumption and lesser emission. The
latest trend in this sector is of outsourcing a part of the engine from vendors.

Electrical Parts segment comprises of generators, starter motors and spark plugs. An
important and relatively larger product segment - engine parts are gaining popularity
at a faster pace in the global automotive parts & components industry. Electric start
mechanism in different scooter and motorcycles is the latest concept in the automobile
industry. Electrical parts sector contribute around 9% to the auto components
industry.
Drive Transmission and Steering Parts segment has sub segments like gears,
wheels, steering systems, axles, and clutches. Having 19% share, this segment is
considered the largest product segment after engine parts segment. The emergence of
different leading automotive manufacturers is intensifying the competition in the
sector especially for products like gears and clutches
Suspension and Braking Parts segment comprises of automobile components like
brakes, brake assemblies, leaf springs, shock absorbers, brake linings. Suspension and
braking parts segment has around 12% share in the global auto component industry.
Body and Chassis Parts segment comprises of body and chassis, sheet metal
components, and plastic-molded parts. The global sourcing of automotive
components comprise of chassis, frames, brakes, steering and much more has reached
to US $ 185 billion in 2008-09. This product segment has 12% share in the global
automotive component and parts industry.
Market Forecasts
Global Auto Components Forecast Value - USD billion 2004 -

2009
Year USD billion % Growth
2004 515.5 2.30
2005 526.2 2.10
2006 538.9 2.40
2007 553.4 2.70
2008 569.1 2.80
2009 585.9 3.00
CAGR 2004 - 2009 : 2.6%
World 3 wheeler market

It is not only the cars, consumer vehicles and two wheelers that are sold in these
various countries in large numbers, but the three wheeler market is also quite big in
these nations. You will get to see innumerable three wheelers running on the roads of
various Southeast Asian countries like India, Thailand, Sri Lanka, Pakistan,
Philippines, Nepal, and Bangladesh etc.
There are a number of reasons that have resulted into the proliferation of the three
wheelers in umpteen countries. Three wheelers are quite economical in terms of
manufacturing and maintenance. They have also earned huge popularity due to their
easy maneuvering capabilities through the narrow lanes that are prevalent in most of
the developing countries.It is not that three wheelers are used only in the developing
nations.
Three Wheeler Companies

You will also get to see various brands of three wheeler in different parts of US, UK
and some of the European nations. Reliant and Morgan Motor Company are the two
major three wheeler manufacturers in UK. One of the US based three wheeler
manufacturers; ZAP has even come up with eco-friendly three wheelers that operate
with battery. Bajaj Auto, Piaggio is the leading players in the three wheeler industry in
most of the Southeast Asian nations.
The vehicles have also given rise to the three wheeler accessory industry in many
countries. It is believed that numerous people have got employed in various countries
due to these three wheelers. Apart from serving the daily need of the commuters the
three wheelers also play commendable role in the transportation of several
commodities. Seeking the increasing demand of three wheelers, more automobile
companies are considering manufacturing these vehicles.
INDIAN AUTOMOBILE INDUSTRY

The automobile industry in India is the ninth largest in the world with an annual
production of over 2.3 million units in 2008. In 2009, India emerged as Asia's fourth
largest exporter of automobiles, behind Japan, South Korea and Thailand.
Following economic liberalization in India in 1991, the Indian automotive industry
has demonstrated sustained growth as a result of increased competitiveness and
relaxed restrictions. Several Indian automobile manufacturers such as Tata Motors,

Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and
international operations. India's robust economic growth led to the further expansion
of its domestic automobile market which attracted significant India-specific
investment by multinational automobile manufacturers. In February 2009, monthly
sales of passenger cars in India exceeded 100,000 units.
Embryonic automotive industry emerged in India in the 1940s. Following the

independence, in 1947, the Government of India and the private sector launched
efforts to create an automotive component manufacturing industry to supply to the
automobile industry. However, the growth was relatively slow in the 1950s and 1960s
due to nationalization and the license raj which hampered the Indian private sector.
After 1970, the automotive industry started to grow, but the growth was mainly driven
by tractors, commercial vehicles and scooters. Cars were still a major luxury.
Japanese manufacturers entered the Indian market ultimately leading to the
establishment of Maruti Udyog. A number of foreign firms initiated joint ventures
with Indian companies.
In the 1980s, a number of Japanese manufacturers launched joint-ventures for
building motorcycles and light commercial-vehicles. It was at this time that the Indian
government chose Suzuki for its joint-venture to manufacture small cars. Following
the economic liberalization in 1991 and the gradual weakening of the license raj, a
number of Indian and multi-national car companies launched operations. Since then,
automotive component and automobile manufacturing growth has accelerated to meet
domestic and export demands

2.2 COMPANY PROFILE
Kerala Automobiles Limited (KAL) incorporated in 1978 as a Government of

Kerala undertaking, is set up in the picturesque back drop, 16 kilometers south of
Thiruvananthapuram in a tiny village called Aralumoodu, in Neyyattinkara taluk. The
Company manufactures Three Wheelers (Diesel, Petrol & CNG) suitable for
passengers and goods traffic in the brand name of KERALA and are considered as
most Eco-friendly vehicles.
KAL started production with 164 employees where capacity of production was 52
vehicles per year. Initial technology of production was in collaboration with API
Mumbai and from 1987 it has developed its own tehnology of production.
KAl staretd with a production of petrol engine three wheelers from 1988 it began
to produce ‘diesel engine’ three wheelers.KAL is the first company to introduce
diesel engine three wheelers in the country.At present company is concentrating
in the diesel versions only.
The present product range comprises of Autorickshaw (Three/Six seater), Pickup/

Delivery Van, Three Wheeler Tipper of Diesel version and Pollution free CNG fitted
Auto and Load carriers etc. The strong, highly motivated work force in the Technical
and Management cadres are working hand in hand for the progress of the Company.
The ancillary units developed by the Company around the factory complex provide
livelihood for hundreds of families.
Since commencement of production in 1984, the Company has manufactured and
marketed more than 1,20,000 Three Wheelers. KAL has distinguished itself as a force
worth reckoning in the Automobile industry in India. The Company has also exported
a number of Three Wheelers to Bangladesh, Sri Lanka, Nepal, Sudan, Botswana,
Nigeria, South Africa,Egypt and Guatemala (Central America). The Company could
turn the corner for the first time in 1993-94 and continued to keep the same trend at a
higher level. The acceptability of KAL Three Wheelers in the Third World countries
speaks for its utility and quality. KAL is also manufacturing sophisticated components
to be used in space programs of VSSC/ISRO.The company has the capacity to produce
nearly 7500 vehicles per year.

The Company is getting all kind of support from the Government of Kerala, without
which it would not have been possible to achieve the present level of promising state
of affairs. KAL is awarded with ISO 9001:2000 Certification envisaging total quality
management (TQM). It is the unflinching faith of our customers, which has powered
KAL into the path of progress and looking forward for continued patronage at a higher
rank.
Date of incorporation: 15th March 1978
Address & registration: Athiyanoor,
Aralumoodu,
Thiruvananthapuram-
(dist),PIN:695123
Phone & website: 2222640, www.keralaautomobilesltd.com
Name of chairman: Divakaran
Name of MD: K P Vijayakumar
Vision
“To become top three wheeler manufacturer in 10 years.”
Mission
“To provide value added service and product to the customers and to earn
reasonable profit.”
Quality Policy
The management and employee are committed to develop, manufacture, market
and service three wheelers enhancing customer satisfaction through a process of
continual improvement of its quality management style.
Products
1) Kerala GL 400 V2 electric start chassis- Rs 76,000
2) Kerala GL 400 V2 rope start chassis – Rs 74,000
3) Kerala Gl 400 V2 MX 400 electric start chassis- Rs 83,000
4) Kerala GL 400 V2 rope start - Rs 77,000
New products
1) Self start (340cc) petrol engine [CNG]
2) Self start (340cc) gas engine
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2.3 ORGANISATIONAL CHART
The board of directors manages the affairs of company. The government

of Kerala determines the members of the board.The members are
determined by the government in a conservative way. The number shall
not be less than two and not more than nine. The government appoints the
director including the full time directors.The directors need not hold
shares. They frame policies requires for the company to achieve its goals.
The managing director will execute the affairs of company through the
managers in different departments. It consists of
I. Chairman
II. Managing directors
III. A nominee from finance department
IV. A nominee from industries department
V. A nominee from the government
The MD is always responsible for the conduct of managers of the

company subject to overall control and supervision by board of directors.
The general shall be in charge of company where MD is not present. In
such cases, he or she shall take decision on financial matters in
consultation with financial controllers.

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ORGANISATIONAL HIERARCHY
BOD
CHAIRMAN
MANAGING DIRECTOR
DEPT .GENERAL
MANAGER
ASSISTANT MANAGER
SENIOR ENGINEER
SALES EXECUTIVE
JUNIOR ENGINEER
COMPUTER PROGRAMER
WORKERS

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Page MOUNT ZION COLLEGE OF ENGINEERING
Asst MGR GMF Fin dept
Jr.ExecutiveAccounts Officer
Asst. MGR
Marketing
GMM Mkt dept
Workmen Jr. EngineerSr. EngineerAsst. MGRM/C Shop
TR.Executive
Service&Spar
Manager
Asst MGR H.R dept
Workmen Jr. EngineerEngineer FABRI TR.Executive
Asst MGR Plang dept
Jr.Personnel
Asst.Personnel
Officer Officer
Asst MGR Manager QA dept MD CHAIRMANBOD
ASSEMBLY
Workmen Jr. EngineerSr. Engineer
Sr.Engg Manager Store dept
Manager PDN dept
Workmen Jr. Engineer
PAINTING
Sr.Officer Supplier
Jr.Engg Sr.Engg R&D dept
Devlop
GMF Purc dept
Workmen Sr. Engineer
TOOL ROOM Asst.Mgr
Purchase
Sr.Engg Manager Maintance
Sr. Engg
Subcontract
Workmen Jr. Engineer
HEAT TREA Administration
Asst MGR Manager
ORGANISATIONAL STRUCTURE
2.4 PRODUCT PROFILE
Petrol models
P1 petrol autorishaw, regular three seater (1984)
P2 Newlook Autorishaw (1988)
P3 petrol delivary van (1984)
P4 petrol pickup van (1984)
P5 petrol three wheeler chassis (1985)
Diesel models
D1 Diesel pick up van (1984)
D2 Diesel auto trailors (1988)
D3 Diesel chassis come under three models
1. 4360 Chassis- Self start
2. 4325 Shorter rope start
D5 Kerala MX 4000
D6 LGA 340 (ELECTRIC START)
Current moving products
Kerala MX 4000
Kerala V2 Diesel chassis ( Self & electric)

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ANALYSIS OF DEPARTMENTS AND WORKING
There are approximately 20 departments in KAL.The size of the department depends

on the importance and complexity of the function of department. The various
departments of KAL are as follows:
1) Human Resources Department
2) Administrative department
3) Sub-contract department
4) Research and development department
5) Purchase department
6) Finance department
7) Marketing department
8) Production department
9) Planning department
10) Machine shop department
11) Quality assurance department
12) Stores department
13) Maintenance department
14) Service and spare parts

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3.1 HUMAN RESOURCE DEPARTMENT

Department structure
HR DEPARTMENT
MANAGER
Asst. MANAGER
Asst. PERSONNEL OFFICER Jr. PERSONNEL OFFICER

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Objectives
• Reduce absenteeism from 10% to 5% in the course of one year.
• Improve employee satisfaction by 10% using a survey of current situation at

the end of one year.
• To enable individual employee to improve their efficiency by 5% in the course of
1 year.
Manpower planning
The number of employees in an organization is decided by the number of
products delivering.The Government decides the number of employees to be worked
for the company to achieve the targeted production It is called Employee Sanction
Strength.
The capacity of the plant is 7200 units/year.i.e, 600 per month.
Number of workers needed to make 1 vehicle is 20 workers per day.
Employee sanction strength= 20*(600/25)=480 workers.
The current sanction strength of employees of KAL is 495(shop floor wokers +
managerial category)
But since the current production rate is set as 300 units per month, the employee
strength is maintained as 250-260.
A problem that KAL facing : The 1/3rd of employees in the company are unskilled
workers, who were inducted at the beginning of the ompany.
Recruitement is a very carefull process to be done. Otherwise it will make
unnecessary losses in future.
Current manpower planning: the number of contract employees are checked based up
on the production.The work is being outsourced to the outside parties, if there arises
an immediate shortage.After getting the preffered output of production,the machinery
is used for the manufacturing of other products like coir spinning machines etc.
Its current plan is to maintain the level of production with minimum input.

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Recruitment and selection

There are three methods of recruitment
1) Direct Recruitment
2) Employment exchange
3) Public Service Commission
1) Direct Recruitment: Direct recruitment is done through advertisement in

newspaper.
2) Public Service Commission: The post of helpers, typist, office assistants, stenos,
clerical staff, drivers etc are done through PSC. Whenever there arise a need for
employees on such posts, it will be reported to PSC. But there is no such recruitment
in recent times since there is no need for such posts.
3) Employment exchange: This is done through the employment exchanges. This is
because of the Compulsory Notification act. The required number of candidates and
their qualifications are informed at the employment exchanges. The eligible
candidates are recruited and selected.
4)For higher posts, there will be interview only. In the interview board, there will be
members from board of directors, HR manager and the domain/subject expert
sometimes as per the direction from the government. Then the merit list is
published .Then fixed list is published for selected candidates.
Selection procedure
The first step to selection is written test, applicable to all category of
workmen. An interview is conducted for those who succeed in it. Applicants to
technical post undergo a trade test also.
Apprentices: Apprentices are selected from three sources.
• Related Instruction Centre(RIC) - To recruit ITI candidates
• VHSE board
• Central Apprentice - For graduation & B.Tech (office is at Chennai)
• Diploma holders are selected through supervisory development centre

kalamassery.
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Induction
An induction program will be given to all the candidates who join the KAL as
a fresher. They will be provided on the job training. Most of the time, their probation
period will be from six months to one year. After that, if the candidate’s performance
is satisfactory, he will be appointed as permanent.
Training and Development

After the intake of a permanent employee, he will be given training for 1
year. Permanent appointment is given after that. The training can be inside or outside
the organization. During the period of training, the basic pay alone is given. After
appointing the employee as permanent, he will be paid salary with all the kind of
benefits.
Apprentices and management trainees are appointed based on contract basis to get
trained in their domain areas. They will be given stipend only.
Employee Profile
Workmen re classified in to permanent workers, probationary, temporary and casual
workers. At present there are 255 permanent employees.
Employees can be classified based up on two norms, they are:

1) Based up on Standing order
2) Based up on wages of employees/wage settlement.
In KAL the employees are classified up on wage segment. They are
• Officer category/managerial
• Technical category/workmen
In KAL, the employees are classified in to two categories based on wage settlement.
They are :
1) Officer/managerial
2) Technical/Workmen
The detailed categorization is given in the pay scale structure below
Number of employees in various departments
19
Department Permanent Trainees Apprentice

Employees
Sub-contract 2 - -
department
Marketing 8 - 2
Maintenance 11 - 3
Store 15 - 3
Quality Assurance 18 - 4
Heat Treatment 2 - -
Tool Room - - -
Painting 9 - 3
Assembly 26 - 9
Fabrication 30 - 8
Machine Shop 55 3 19
Planning 5 - 1
Design & Drawing 7 2 4
Service & Spares 8 -
Administration 14 - -
HRD 15 3 2
Purchase 12 1 3
Accounts 15 2 2
General 4 - -
TOTAL 254 11 63
Working time
The working time in KAL is 8 hours per day. There are maximum 5 shifts in the
company.
(1) Executives : 9 am – 5 pm
(2) Ministerial staff: 9.30 am – 5 pm
(3) Workmen : 9 am-5pm (general shift)
6 am – 2 pm (1st shift)
2 pm – 10 pm (2nd shift)
Attendance
The attendance of KAL is calculated through the punching system. The
employees punch their attendance card and the attendance will be registered in the
server. The salary is calculated based on this. For every minute late, the belated time

20
will be calculated and respective salary will deduct and causes ‘loss of pay’. Such
exception is only for the entry time of first 30 minutes. If the employee is late more
than 30 minutes, he has to take half day leave.
Wages and salary administration

There are two scale of pay. They are:
1) For officer segment( every 4 year revision)
2) For workmen segment( every 5 year revision)
Stipend
The trainees & apprentices are given stipend every month. Its as follows.
• ITI - Rs 1440
• Diploma - Rs 1850
• Degree - Rs 2600
• Management trainee - Rs 3000
SALARY RELATED TERMS
Dearness allowance(DA)
There are two type of DA.
1) Fixed DA /Government DA:
This is for the people of the managerial category. Fixed DA varies every
quarter. The current government DA is 123% of the basic scale of pay. This DA is
fixed by the government and is based on the salary point scale. It is as follows:
Fixed DA = (basic ×123) /100
2) Variable DA:
This DA is for workmen category. This is fixed by the government based on
Cost of Living Index/ Consumer Price Index (CLI/CPI). ‘Economic and
Statistics Department’ (Trivandrum, www.ecostat.kerala.gov.in) prepares

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Consumer Price Index. This DA percentage varies according to the inflation

every month.
Calculating Variable DA (VDA)
To calculate Variable DA the following are necessary.

1 Base Point: It is determined at pay revision and it varies at every pay
revision. The current base point of KAL is 950.
2 Indices : It is the cost of living index of the month as in CLI
3 Points for each scale of pay. It is as follows:
Basic pay scale Points

Up to Rs 2950 3.95
Rs 2950-3500 4.20
Rs 3500-4001 4.75
Above Rs 4001 4.90
Steps to calculate VDA
Index of month(CLI) – Base point = Result

Point × Result = VDA of the month
Example:
Base Point of KAL = 950
CLI (of February 2010 is) = 1839
Result = 1839-950
= 889
VDA of a work man having basic Rs 2950 = 889 × 3.95
= 3511.55 Rs
VDA of a work man having basic Rs 2950 upto 3500 = 889 × 4.20
=3733.8

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About base point: Every pay revision, the base point is merged to the basic. Here
the base point is 950 and is already merged in the basic and the extra money
coming is calculated by subtracting 950 from CLI. In the next pay revision, the
authorities will decide up to what amount should be merged to the basic.
House Rent Allowance(HRA)

This is decided by the management with the understanding of labour unions. This
is revised every 5 years and further change in HRA is made.The current DA rate
are
Work men : Rs 350
Officer category : Rs 260
Adhoc pay
This is give to thoe employees who are eligible for promotion and not promoted yet
even after the time bound within which they have to be promoted. When adhoc pay is
added to the salary, the respective DA of adhoc pay is also given to the employee.
That is adhoc pay is added to the basic salary and its DA is calculated. When he got
promoted, the adhoc pay is removed and the new scale of pay to the promoted
position will be given.
Attendance bonus
If the employee takes only one leave in the month of 26/27 working days, he
will be eligible for Rs 25 attendance bonus.But if there are two leaves or ‘loss of
pay’, he won’t be eligible for the attendance bonus.
Gratuity
The employee will get 15 days’ salary as gratuity for one year’s work. The
employee will eligible to receive gratuity, when he completes minimum 5 years
service. As per gratuity act, in KAL while in service if any employee passes away, he
will get full gratuity amount up to his retirement age.
The base for calculating PF is 26 (working days a month).The amount used to

calculate gratuity is the ‘basic pay +DA(if exists)’.
Gratuity=15 day’s salary= [(basic+DA)/26] × 15

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(This is equal to the 4.8% of annual salary[basic + DA(if exists)])
Gratuity amount at a particular year of service =

[(basic+DA)/26] ×15×Number of years of service*
*- Number of years of service : More than 6 months service will be counted as full
year of service.
i.e; 1 year 7 months will be counted as 2 years.
Incentives
Incentive is given to all the employees from top to bottom of the
organization, when extra production takes place. But since the current production is
limited, there is no incentive the employees.
Production (vehicles) Amount
300-325 Rs 2.00
326-350 Rs 2.50
351-510 Rs 3.00
Above 511 Rs 4.00
Washing allowance: Rs 30 per month is given to work men as washing allowance.

Stitching allowance: Rs 250 per year is given to workmen those who have uniform
and Rs 35 for women.
Risk allowance: Rs 50 per month is given to work assistants and helpers who
undertake operations like painting, heat treatment, ammonia pointing welding etc.
Special allowance: Rs 25 per month to senior tradesman.
Shift allowance: First shift – Rs.2.50
Second shift – Rs 3
Shoe allowance: Administrative department provides Rs 300 as shoe allowance in
every 8 months to every employee.
Provident Fund (as per PF act 1952)

24
12% of the salary (Basic + DA) is paid to Provident Fund account from the
salary of the employee. The same amount will be provided by the employer to the PF
account. The 12 % of both employee and employer is statutory. But the employee can
voluntarily pay additional amount more than 12% to the PF account. But the
employer don’t have to pay accordingly as the employee pays, other than employer’s
12% share.
Around 8.33% of the 12% of PF share of the employer will go to the Pension fund
of the employee.
The interest of the Provident Fund is 8%.
An employee can take money(as loan having no interest) from PF
account(employee share) twice in an year. He can also take money for education,
marriage(up to 60%), home construction(up to 90%) etc. The proof of such things
should be provided such as building plan, approval from authorities, engineer etc
for construction, marriage certificate copy, invitation etc for marriage after the
function and statement from bank etc for education. The employee may or may
not repay the amount taken from the PF account (as loan).Generally there is no
need to pay back the money. This loan amount is permitted from the employees
share of 12% of basic salary that he pays every month. The employee cannot take
money from the 12% of the employer’s share to PF.
The account section pays the PF in the bank with the ‘common PF account
number’ of the company and gives the chellan to HR section. The company has its
own single PF account number as whole for all the employees.Each and every
individual employee has their own personal PF account numbers. The HR
department prepare the list of employees with their individual PF account
numbers and sends it to the PF office along with the chellan.
If the monthly PF of an employee is not paid by the company, the MD of the
company may get imprisonment.
Leave
Casual leaves - 20
Medical leave - 10 full day leave/20 half day leave
Earned leave/annual leave : The employees have the right to take 1 earned leave
for every 20 working days(20:1)(based on factories act). But the management has
the right to put forward attractive plans in front of the employees to motivate
25
them. Earned leave can be encashed. The maximum number of earned leaves that
can be encashed are 300 days.
In KAL the earned leave ratio is as:
Managerial category - 11:1
Workmen category -13:1
Holidays
KAL follows a systematic method for deciding holidays in an year. There can be up to
13 holidays in an year. Out of these 4 days are national holidays-jan26, may1, aug15,
oct2.The remaining festival holidays are decided by the management and workers
committee.
Total number of leaves in an year

Annual - 30
Casual - 20
Medical - 10
Holidays - 13
Week Sundays - 52
________________________
TOTAL LEAVES- 125 /year.
Promotion opportunities and appraisal
Promotional policy
50% recruitment is through direct method and the rest id through promotion.
The promotional levels are:
Technical
Engineer, Senior engineer, Ass.manager,manager, Deputy general manager, general
manager.
Nontechnical
(1) Accountant, junior personnel officer, junior law officer, superintendant, sales
executive.
26
(2) Ass.accountant officer, Assistant administrative officer, Ass.personnel

officer, Ass.welfare officer.
(3) Account officer, Personnel officer, administrative officer etc
In KAL promotion is based on

• Seniority
• Qualification
• Performance
If a person won’t get promotion till 10 years due to lack of qualification, poor
performance etc he will be given a grade. It is called upgradation.
Difference between up gradation and promotion:

The upgraded person will get salary hike only. He won’t be given authority according
to the salary increment. But in the case of promotion, the employee have both salary
hike and authority.
Performance appraisal policy

• It should be in prescribed form.
• The performance appraisal shall be conducted annually in the case of

workmen. In the case of supervisors and above, the appraisal shall be
conducted half yearly during the period from January to june and july to
December.
• The entries in the performance appraisal form shall be clear and precise and
shall be based on the officer’s personal observation of the work and conduct of
workmen.
• The entries shall be made by the officer in his own hand or type written by
him and shall be kept confidential ad the report shall be under the safe custody
of the personnel department.
• If there are any adverse of such nature that the workmen needs an advice or
admonition only, the concerned Head of Department shall render such advice

27
of admonition. In more serious cases, the head of department shall give

opportunity to the concerned to submit explanation. The intimation to the
workman together with his reply, if any, shall be kept in the personal file.
• The confidential record shall be prepared by the officer under whom an
employee is working and shall be submitted to the head of the department who
shall countersign it, adding his own remarks, if any.
Performance appraisal process
It includes the appraisal from the immediate head of each employee.
Performance appraisal is done on the basis of certain factors such as job knowledge,
job responsibility, quality of work, cost consciousness, organizing ability, punctuality,
problem solving ability etc. Performance appraisal goes through the steps as follows:
(First appraisal by employee, then appraisal by the rater (immediate next head) and
reviewed by the head of the department. Calculation of appraisal score of employee
done based on five point rating system. The final rating is done by the rater.
Counseling is also given for low level performers).
Steps
• Issue performance appraisal form to employees.
• Self appraisal by the employee.
• Appraisal by the rater.
• Review by the rater.
• Review by Department head. Calculation and appraisal score of each

employee in personal interviews.
• Counsel employees for improving performance.
The five point rating method is used for performance appraisal. Grading are
given below in two tables. Five point rating method is used:
Grade A B C D E
Performance Excellent Very good average Poor
good
Point 90-100 70-89 50-69 30-49 10-29
Disciplinary procedure

28
Discipline is a watch word maintained in KAL. Disciplinary actions are

strictly followed. There has not any instances of dismissed at KAL till date. As usual,
the worker is given a show cause notice and a time limit is given to produce his
explanation. If the explanation is satisfactory, no further action will be taken. But if it
is not satisfactory, he will be given a charge sheet and thereafter enquiry. A workman
can be suspended for enquiry. He will be paid a subsistence allowance according to
the kerala payment subsistence act 1972. If the explanation is convincing, then the
suspension is withdrawn and wages for the period of suspension will be paid in full. If
no explanation is received, the management may proceed with action.
Enquiry may be held by enquiry officers appointed by the higher authorities.
Enquiry officers will make recordings and forward it to the concerned authority. Then
charge sheet and the recordings of the enquiry will be given to the concerned
authority and the decision is communicated to the workman. If the charges are proved
by the enquiry action will be taken, if not the worker will be called on duty and his
wages for the suspended period will be paid in full.
Grievance procedure
The company has an open door policy as far as grievance handling is
concerned. Workmen are true to take their grievance to their superior authority and
seek a redressal. The usual procedure for handling of grievances is given below:
(1) Grievance report to immediate supervisor.
(2) If workman is not satisfied/ not receive reply within 7 days he can go to next
immediate supervisor.
(3) If that decision is not satisfactory/ doesn’t receive reply with in 7 days, he can
send the grievance to the head of department in written with signature.
(4) If the decision of head department is unsatisfactory/ doesn’t receive reply with
in 7 days he can present a copy of grievance not to the Head of HRD department who
will make necessary entries to grievance register. He will then conduct investigation
of all relevant facts and endeavor to settle the grievance satisfactorily shall be final.
The head of HRD department will implement the final decision if any and will inform
the response in writing.
Industrial Relations

29
According to the referendum, the union having 15% membership will only be
recognized. Now in KAL there are 3 unions.
Name of union Reg. No. Affiliation

Kerala Automobiles 126/82 INTUC
Limited Employees Union
Kerala Automobiles 102/84 STU(Swathanthra
Employees Organization Thozhilali Union)
Kerala Automobiles 325/84 CITU
Employees Association
From the discussion with HR manager

• Now there are 257 permanent employees in KAL
• Company was in loss before some years and is slowly coming to profit.
• Employees are given training in different areas for the expansion program.
• As a part of product diversification, coir spinning machine is made and handed

over as per demand. By providing training, the management is trying to impart a
change in the work culture. The work culture that KAL follows is a traditional
one. It needs to accept the change according to market and time as the other public
sector companies are also changing.
• In Department Performance Appraisal (DPC), HRD department has the plan to
implement a written test for the officer category. But due to the opposition from
the side of employees, it became unsuccessful.
• Absenteeism: For lateness, the proportional amount of salary will be reduced. A
regular attendance is kept. There is a time keeper to make sure that employees are
on time. He is responsible and checks the duties on time.
• Situation analysis is a must for a HR manager. One has to stay calm and listen to
the problem/issue first. HR has to stand independent in taking the decisions, with
out any biases
• Exit interview: Usually there is no exit interviews done in KAL at the time of
retirement.

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3.2 ADMINISTRATION DEPARTMENT

DEPARTMENT STRUCTURE
MANAGING DIRECTOR
ADMINISTRATION MANAGER
JUNIOR EXECUTIVE
WORKER
The main functions of administration department are as follows:

 Committees
The committees in KAL are formed by the unions elected each year. Each
union nominate one person to each committee. Equal number of persons from the side
of labour unions will be nominated from the management side. The committees in
KAL are canteen committee, safety committee, magazine committee, estate
committee, scrap committee.
Committees are under administration department. Election is also carried out
by administration department. The union which wins election undertakes club and
society. Usually the election is carried out in 3 years.
Labour welfare committee: It provides Rs 62,000 to family on death of personnel. It is
by aggregating the salary of 1% of employee plus 1% by the management. It gives
awards to the children who tops in exams like SSLC, B.Tech, +2 etc. The price
money varies as Rs 1000, Rs 750, Rs 500.
 Punching card and ID card are issued by the administration department. In turn, an
employee has two cards.
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 Security: Managing the security people is done by the administration department.

Fresh quotation is invited every year for the security people. ‘Ex- service league’,
an association of ex-service men carries out security job nowadays.
Total number of security = 18
Supervisor salary - Rs 200(improved from Rs 160)
Security Guard - Rs 160 (improved from Rs125)
 Uniform for the workmen are issued by the administration department- Pista green
shirt and black trousers for men and Pista green saree and black blouse for
women. Stitching allowance of Rs 250 is given for men and Rs. 100 for women.
 Canteen: every year new quotation invited in dailies like malayala manorama,
mathrubbhumui, kerala kaumudi etc to undertake canteen. Canteen committee
votes and selects the best quotation. Management given Rs 300 subsidy for each
employee every month. Coupon is given to employees for food. Water, building,
utensils etc are free for canteen undertakers. There is a ration permit of 3500 Kg
rise and 2000kg sugar for KAL canteen.
 Stationery: administration department buys and stores he stationery items like
calculator, files, glue, paper, pen etc. In every 2-3 months it is bough wholesale
from Triveni shop, for an amount up to Rs 40,000. It is supplied to each respective
department as per the need and it makes sure that the items are not manipulated.
 Letter dispatch: Every outgoing letter is sent via administrative department.
There is a machine called ‘Franking Machine’ to seal the letters, which is issued
from the postal department. The parcel weight is measured and the respective
stamp rates are printed.
 Advertisement: Some organizations demands for advertisement as promotion for
programs, in magazines, diaries etc. The photos that are advertised is brought to
the organization, and then only the money is paid. To print the KAL diary,
administration department approaches different firms for advertisement to reduce
cost. It has a long time regular advertisement providers.
 Furniture: It is bought and supplied by the administrative department. The repair
work is also done by this department.

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 Retirement: Administration department arranges a send off function in the

portico on the day of retirement of an employee. The company car is arranged to
take him home. He will be given a gift and a party will be arranged.
 Supplying the government calendar from collecting it from the government press
is the duty of administrative department.
 Funeral arrangement: In the case of demise of an employee, Rs 5000 will be
given to the family to carry out funeral function. Rs 3000 will be given to the
close relative of the died person.
 Garden: the garden is maintained by the administration department.
 Head load workers: The wage of head load workers is paid by the administration
department.
 License Renewal: It’s the job of the administration department to renew the
license of company every year. If the license is not renewed, the company cannot
work. The industrial license application is given in the form-2. It is according to
the rules – 4 , 12. The application for renewal is sent along
with the duly filled in ‘form-2’ and the chellan of Rs. 75,000 and the names and
details of Board of Directors. Original factories license will also be sent along
with this and it is renewed and a new license is issued back to the company. The
license is renewed from :
“The inspector of Factories and boilers
Grade-2 , near vanchiyur police station, Thiruvananthapuram”

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6.3 PURCHASE & SUB-CONTRACT DEPARTMENT
Manager (materials)
Assistant manager
Supplier
development
Senior engineer
Junior engineer
Clerical staff
Attender
PURCHASE DEPARTMENT
Objectives:-
 Satisfy the supplier by giving regular order
 Reduction in rate of rejection in materials
 Vendor rating up graduation

34
The main function of the purchase department is to purchase the raw materials which
are necessary for the production process.
The products purchased are divided in to 5 divisions – A,B,C,D,E.
Product type A: includes – tyre, engine, tube, sheet etc
Product type B : includes – upper cone, horn, speedometer, cable for gear control,
heel cylinder assy, brake lever assy, mango lever, spring etc.
Product type C : includes – shaft with support, clip cables, shim adjusters, petrol
tank neck, rear break adjuster, spacer for head lamp, cable for clutch, support
bracket, rivet, wiper fitting, screw etc.
Product type D : includes – div. beeding, overflow pipe, speedometer cable,
ignition switch, decompression cable, main electrical loom, DC horn, battery
cable assy, BULB – B 53, tail lamp assy, reflex reflector, indicator (green),
silencer mountings, stop bush spring.
Product type E : includes – sheet (MICA/PVC), tape (cotton), paint(INC golden,
yellow) , primer, putty, thinner, rubbing compound, polish wax, seal 101 chemi,
react chemi, additives, welding glass, button mop, emergency powder.
Purchase cycle
• Calls quotation
• Negotiation
• Checks quality
• Purchase development

35
Purchase department ensures the availability of right material at right tie at right place
at the right quantity. The department is under the control of purchase manager. All the
activities regarding purchase are under gone in this department. This department is
responsible the procurement of raw, materials. Its supply and service the raw
materials and purchase parts in the finished goods must be the information from the
marketing department, planning department prepare the sales plan and send the
production plan & material plan to the purchase department Based that requirement.
The department purchases both raw materials and semi finished goods. Prepare the
purchase order and then it scheduled to making purpose. Then give the order the
company purchase mainly from Haryana, Uttar Pradesh and almost 25% is form
Mumbai. The purchase of materials from vendors and they rate vendors and evaluate
them on the basis of parameters like quality, price, time. The department is following
ABC analysis for purchasing of products. They do have a PDCA cycle of doing
things.
ABCDE analysis is used to follow for the purchase. The order that is placed for ‘A’
category is before the week, for ‘B’ before one month and for ‘C’ items. The order is

36
placed before six months. The responsibility for ‘A’ quality is with materials
manager, ‘B’ quality with Asst. Manager and ‘C’ is with Asst. Engineer (purchase).
There is a purchase committee formed for the purpose of bulk purchase of products.
This department also uses vendor rating and vendor evaluation techniques. If the
rating of the vendor ‘C’ grade they will encourage the vendor to promote to ‘B’ grade.
Of they are not living up to their expectation. The company will delete the vendor
names from the vendor list.
The company purchasing more than 2200 components for a single product. The
categories into A,B, C, D, E and subcontract.
Most of the suppliers are from outside of the state. Mode of transmission is by truck
or railway or airways, based on the time and need. Some of the main transportation
agencies in the company are Kerala Transport Corporation. Sourashtra Roadways,
ABT purchase etc. If the mode of transportation is through truck then thee
consigner(vendor) give the consigner copy (CC) of the lorry receipt(LR) to the
consignee forwards the CC of Ir to the agency and collects the goods. If the
transportation is through railway then the documents in Rail receipt and for airways it
is always bill.
The Procedure for a purchase

 Enquiry for question
 Receive the quotation
 Negotiation of the quotation
 Revise the quotation
 Compare the statement
 Proposal for the purchase
 Place purchase order
 Follow up the material
 Collect the material
 Quality inspection
 Raising GNR or GRJ (Good receipt note/Goods rejection note
 Payment to vendors

37
Payment for vendors is in 3 ways

 Direct Credit – forwarding original GRN & invoice to the accounts
department for the payment, usually within 30days.
 Direct advance - against Performa invoice
 Through bank – the vendor will sent the original invoice and CC to Lr
to purchaser’s short bank. The bank sent BLSC (Bank Letter for Short
Credit) After the payment, the bank will forward the Lr documents &
invoice to the purchaser.
There is a purchase committee. It includes DGM, manager- production, manager-
purchase and one member from accounts section.
Local purchase: Small and the products of urgent shortage are brought locally by
paying money instantly. This is to avoid production held-up.
• The purchase up to 15000 is controlled by the manager
• Between 15000-100000, by the purchase committee
• Above 100000 controlled by MD with recommendation of purchase

committee through GM
List of the purchase schedule:-
 Register for the copy of invoice
 LR forwarding register
 Comparative study
 Procurement data analysis
 Purchase order
 Enquiry notice
 Annual purchase plan
 List of approval suppliers
 Bank document
 GRN receipt
 Supplier rating document
Supplier satisfaction is one of the main aims of the department. The department keeps
good relation with the suppliers and pays money on time. It also makes sure that the

38
products purchased are of good quality and keep motivating the suppliers to provide
good quality stuff.
SUPPLIER DEVELOPEMENY SECTION
The section finds out the goods and fair source of supply.
Procedure for supplier development:-
This section looks for the potential source of suppliers by referring the journals,
attending exhibitions, seminar and trade fair. After making contract with suppliers, the
section will prepare a supplier list form. Applications are received from the supplier
and the committee evaluates and selects the good one. After the section a written
letter will be sent to the approval supplier for the issue of required raw materials. The
department is responsible to keep the supplier list and approval records. Performance
of every supplier in the approval list will be reversal once in every six months.
Functions:-
 They act for the development of existing suppliers and identify their problem,
then come out with good solution.
 Develop fresh parties for their requisition by R&D department
 Identify quality supplier from
 Provide alternatives solution for quality products.

39
SUB- CONTRACT DEPARTMENT

MATERIALS MANAGER
SENIOR ENGINEER
ENGINEER
JUNIOR ENGINEER
CLERICAL STAFF
In KAL many of the terms such as differential cage, axel, shaft etc are sub
contracted from outside.
This department has the same function as the purchase department. In this
department the details regarding outsourcing products or materials are stored and
updated. This department is functioning under the purchase manager. Sub
Contracting materials are given inside and outside Kerala for work. Materials
manager is in contract of sub contract department.
Objectives:-
 Supplier Satisfaction
 To reduce rejection in sub contract items of differential cage from 10% to
20%
 To reduce rejection of axel, shaft from 20% to 2%. The sub contract
department follows PDCA cycle in this activity.
Main Sub Contract areas are:
Cluster gear, main gear with bush, hand chassis etc.
Activities:
40
 Receive production plan from planning department

 Make purchase enquiry
 Invite quotations
 Prepare comparative statements
 Send negotiation letter
 Receive negotiation letter from vendors
 Prepare work order proposals.
 Proposal approval
 Issue work order
 Place loan note for approval
 Deliver materials
 Follow up note for approval
 Receiving inspection of sub contract items
 Receive GRN
 Check GRN to account department
 Forwarding of GRN to account department
 Sending payment with copy of GRN to work contracts
 Request to store for returning of rejected materials

41
3.4 MARKETING DEPARTMENT

GENERAL MANAGER
ASSISTANT MANAGER
ACCOUNT OFFICER
SENIOR ENGINEER
ASSISTANT SALES EXECUTIVE
CLERICAL STAFF
North India is the main market of KAL. In 3 wheeler industry KAL has only 1 %
market share.KAL mainly produce 3 wheeler chassis and send it to the godown I
north India. Then it is supplied to the dealers as per their demand. The dealers
make the body for the vehicle as the customer demands and sells the product. The
dealers will get a significant amount in body building.It can be up to 1.4 lakh. This
is because different people have different interest and they use this vehicle for
different purposes. In kerala KAL cannot compete because there are a lot of
manufacturers who gives super-finished goods to the customers. KAL is
sharpening the edge to get in to the market. An another reason that the north

42
Indian customers buy the product is that its performance. It have a good mileage
and high power that it can run in any conditions of road.KAL is producing fully
built vehicles as per demand.
Marketing means making available products suitable for sales. The efficient
making department is the corner stone for success for every organization. In KAL
marketing department is under the control of GM (marketing). The activities of
this department are directly reported to the MD. This department identifies the
customers, interact with them and find out their needs and thus figure out the
market potential of various products.
Marketing management is a pre-requisite for the successful Operation of any
business enterprise. Marketing management shall be responsible for the after
service activities of the company. The marketing department shall maintain a
register showing details of the warranty claims against each vehicle. Marketing
determines the needs of the customer and sets out the pattern of production of
goods and service necessary to satisfy their needs.
Quality objective:-
 Extend awareness about MX400 vehicle among all dealers.
 Locate more dealer outlets in Karnataka and Tamil nude.
 Appoint dealers in the unrepresented areas in the northern states.
 Making available vehicle according to demand of the customers.
Function:-
 The marketing department ensures that the company’s products are marketing
to various outlets, taking in to consideration the demand for various types of
vehicles at the various outlets.
 Appointment of dealers
 Dispatch of vehicles
 Preparation of sales and dispatch plan
 Collecting feedback information of the product.
 Termination of dealers
 Advertisement and sales promotion

43
 Transportation management
 Contract review
 Procurement and sales of spare parts
 Warranty settlement
 Free service coupon settlement
 Customer complaints
 Pre-delivery inspection and provide free service at dealer point
 Acceptance of order for special purpose products
 Procedure for contract amendment
 To co-ordinate the function of material production and sales department.
4 P’S OF MARKETING:-
PRODUCT:-
KAL produces mainly 3 wheeler auto rickshaws of diesel as well as petrol versions.
At present it is mainly concentrating on the diesel version under the brand name
“KAL”.
Products
1) Kerala GL 400 V2 electric start chassis- Rs 76,000
2) Kerala GL 400 V2 rope start chassis – Rs 74,000
3) Kerala GL 400 V2 MX 400 electric start chassis- Rs 83,000
4) Kerala GL 400 V2 rope start - Rs 77,000
New products
1) Self start (340cc) petrol engine [CNG]

2) Self start (340cc) gas engine
Other products: KAL manufactures rocket components for ISRO from 1990. It worths
up to Rs 50,00000. It has started manufacturing coir spinning machine and it has
become successful. more and more machines are supposed to be manufactured in
KAL.
PRICE:-

44
KAL follows cost plus pricing strategy in which the margin is included for its
products. It also considers the price of competitor’s vehicles while fixing price.
Market price of its products is kept comparatively lower than the competitor’s model.
Before making the crucial pricing policy KAL conducts forecasting for its products
mainly by
• Feedback from dealers
• Conducts market survey
• Compare the sales of competitors similar products.
• Company also conducts market research with the help of some external
agencies
The various products of KAL having different price in various locations and the
detailed market price list of the various products are given below
PLACE:-
The marketing of vehicles is done through dealers and agents. The main market of the
products of KAL is north India. The main markets include Haryana, Uttaranjal,
Punjab, Rajasthan, Uttar Pradesh, and Gujarat. Here are also small markets in Kerala
and tamilnadu.
Exports:- a major portion of annual production is exported. KAL earning through
foreign exports in last financial year were. Its major destinations include Bangladesh,
Srilanka, Nepal, Sudan, Nigeria, Gautimala, South Africa, and Botswana etc. recently
KAL has signed a memorandum for the export of 1500 diesel 3 wheeler vehicles with
meders Liberty Techo Company and it was one of the biggest orders received by the
company. The last time export worths $ 1600.
Dealers are selected on the basis of show room facilities, service and man power etc.
Company gets in to contract with dealers for a minimum of 2 years. Company has
liaison officers at Delhi to co-ordinate the north Indian operations. The main dealers
in Kerala are marikar and Kerala state agro industries.
PROMOTION:-
KAL Mainly uses customer promotion and trade promotion techniques to enhance
sales. Main sales promotion techniques are:

45
 Company participates in auto shows

 Advertisement in local channels
 Gifts in all seasons
 Incentives to dealers making maximum sales
 6 free services are given at crossing 500,1000,2000,3500,4500 and 5250 kms
 Warranty of spare parts. The warranty is for a period of 6 month from the date
of purchase or crossing 5000 km which ever is earlier
 Sales incentives to the dealers as sales promotion
Sales In Last 9 years

No Year Sales
1 2001-2002 6858
2 2002-2003 6185
3 2003-2004 6756
4 2004-2005 5091
5 2005-2006 5900
6 2006-2007 4900
7 2007-2008 2917
8 2008-2009 1605
9 2009-till 2605
Total number of 3 wheelers sold out til now is : 1,20,000 vehicles.
Competitors:-
 Bajaj auto ltd
 Piaggio auto
 Atul auto industry
 Sitarn auto industry
Dealers:-
STATE NUMBERS
Haryana 12
Punjab 10
Rajasthan 15
Uttar Pradesh 8
Dealers are given special incentives on achieving the more target and on selling more
product. Dealers are given special offers to keep a good relationship with them. KAL

46
provides all the support both technically and in management level. But nowadays
there are no high sales.
Special orders: sometimes KAL receives special order from Travancore dewaswom
board. KAL manufacture special purpose tippers for them.
Other activities:.
3.5 FINANCE DEPARTMENT

DEPARTMENTAL STRUCTURE
GENERAL MANAGER
ACCOUNT OFFICER ASSISTANT MANAGER (FINANCE)
ASSISTANT ACCOUNT
CASHIER COMPUTEROPERATOR
ACCOUNTANT
INTERNAL AUDITOR
ASSISTANT ACCOUNTANT
CLERICAL STAFF
Seven persons are enough to start a public limited company.a company is started by
contributing money. The capital of KAL is contributed by Government of kerala
when it started. The initial investment was 4 crores when the company started. It was
in loss till 1992.then a revival package was allowed by BIFR.It was approached to
banks to get money and to government for grand. In 1994-95, it started making profit.
It continued up to 2004-05. Its accumulated loss was wiped out and it snet worth
became positive. There was a surplus in the balance sheet. From 2005-06, it again
came to loss and continues till now.This is because the production and sales is not
enough to meet the target.

47
Current status:
Companies accumulated loss – 15 crore.
Companies net worth is negative.(net worth = asset – liability)
Production less that 300 vehicles a month will make liability. So, R&D is to be
developed to get it manage. They have to give quality product. Nowadays company
suffers the lack of sufficient amount of fund for the day to day operations.The
government should provide more money to meet working capital. There are crores of
rupees as current liability.
Money is the life blood of any organization as it is required to purchase raw materials
and machines, to pay wages and salary etc. the financial statement of the company is
prepared under the convention accrual basis as a going concern. Complying with the
accounting standards prescribed under the companies act 1986. Documents for
original entry are prepared directly in the computer and a copy is sent to the
appropriate authority for further verification and approval. If any entry is to be
certified, it can only be done through an adjustment document. This ensures security
of documentation against any accidental errors or manifestation. The ultimate
responsibility of carrying out the finance functions lies with the top management.
Thus a department to organize the financial function should be under the direct
control of the Board Of Directors.
MAIN FUNCTIONS:
Cashier collects cash receipt . If any payment is taken place, a bank payment
voucher is prepared. Every voucher is prepared by the debit and credit system through
the computer. When transaction takes place, a sales invoice is prepared by the
marketing department for the dealer. When invoice is prepared, the computer database
is used to create debit and credit and which is sent to dealers. From sales list, a trial
balance is prepared. When payment is taken place, payment voucher is prepared.
Every transaction is prepared by clerk. It is send to the finance manager. Then the
payment is given by the cahier.
 Cash receipt/payment
 Bank receipt
 Finalization.

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 Capital structure
 Purchase.
 Sales
 Managing computer.
 Preparation of VSR
 Withdraw/receive/payment of cash.
 Position and filling of VRS.
 Settlement of tax, temporary salary, interest advance.
 Payment of retainer fee.
 Physical verification of cash.
 Verification/approval of all cash /bank receipt and payment vouchers.
Bank receipts/payments
 Preparation of RT vouchers.
 Amount transfer vouchers.
 Writing of cheque.
 Generation bank books.
 Preparation of bank reconciliation statement.
 Verification of checklist of sales bills, stipend etc.
 Remittance of all recoveries made from salary.
 Settlement of canteen account etc.
Finalizations
 Analysis of ledger.
 Ratification of errors.
 Adjusting and clearing entries.
 Preparation of trial balance, P&L accountant & balance sheet.
 Assisting internal audit.
 Assisting statutory audit.
 Preparation of annual reports.
Capital structure

49
Capital structure is a major aspect of financial planning. The capital or funds

come in the form of long term and short term departments, preferences and equiy
shares. The company has no share holders other than loan from Kerala government.
The company’s other financial support is only from the financial institution SBI.
Debt-equity ratio of the company was 6.7:1 I n2001-02, .44:1 in 2002-03, .38:1 in
2003-04.
Purchase
 Opening tenders
 Posting and filling GRN
 Preparation of payment vouchers
 Analysis of supplier vouchers
 Analysis of supplier account.
Sales
 Arrange follow-up invoice.
 Preparation of sales tax return.
 Payment of incentives.
 Warranty claim statement.
 Attending sales tax hearing.
 Verification of account.
Managing computer
 Salary bill processing.
 Arrears calculations.
 Keeping the accounts database.
 Calculating the employee benefits, credits, debts etc.
 Preparing the documents of transactions.
 Maintenance of computer system is done by finance department.

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3.6 PLANNING DEPARTMENT

ASSISTANT MANAGER
JUNIOR ENGINEER
OFFICER
Planning department is under the control of GM(production). This is the base of all
production, marketing, storing and all other managerial functions of the management.
All the major functions are performed within the framework of plans done by the
planning department.
This department mainly concentrating on production, marketing, storing and
all other managerial functions of the management. It is mainly concentrating on scales
planning. But also maintenance the material planning and production planning. They
are taking the decision on market targeting, market mix, priority of raw materials (A,
B, C, D, E ) etc. Based on the information from the marketing department, they
produce monthly target. Then the target will send to the concerned department. If any
faults happen, then make correction after discussing with the GM.
Functions
In KAL planning takes in 3 phases.
• Planning phase
• Executing phase
• Control phase.
This department gives the information about the allocation and utilization of machines
and materials required for production. Incoming raw materials are delivered to the
quality assurance department after that collect in store and then distribution. It also
does the controlling function. The day to day works are sent to this department to
check whether the production is in accordance with the planned level or not.

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3.7 RESEARCH & DEVELOPMENT DEPARTMENT
MANAGER
Sr. Engineer
Jr. Engineer
This department designs the model of products and provides information about
various items, which the company can produce. This department is under the control
of the marketing manager.
In KAL, R&D department provides information about the various products which
can be provided by the company.
Design section:
Based on the market study done by the marketing department and competitors, the
marketing section decides the design for the product.
Italian design is the basic design adopted for the Indian 3 wheeler industry. In
KAL, they designed the petrol model in 1984. In 1985 they designed the diesel
engines vehicles. KAL designed the tipper, bottle carrier, jumbo, 4 stroke petrol
engine vehicle etc.
KAL product engineering section has the computerized design system and
testing equipment to ensure the international standards. Experienced engineers have
transformed the basic Italian model.
The latest trends in production are to provide fuel efficient and eco-friendly vehicles.
Company is introducing engines of bharat stage-3.
Major achievements
 Introduced diesel engine 3 wheeler in the market for the first time.
 Introduced 6 seater diesel engine 3 wheelers.
 Development of aerodynamic design.

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 Introduced TRIMO which is a 3 wheeler micro car with round steering. It had
good market potential. But the production became unsuccessful due to
financial, legal and red tape constraints.
 Design, development and introduction of KERALA 360 pick-up van with
hydraulic system.
 Introduction of KERALA MX400 chassis.
R&D in wheeler functional area

 Improving riding control
 Aerodynamic body design.
 Re-design seating capacity.
 Development of AF series of gearbox, resulting in the increase of maximum
speed from 4 kmph to 50 kmph.
 Fixation of quality grade for present gear components.
 Analysis of low clutch life period and introducing necessary modifications.
 Research and analysis to reduce rolling friction of existing models.
 Research for the modification of present engine to upgrade to next bharat stage
level.
Future plans:
• Improve the quality and reliability of products.
• Design and development of high-tech 4S petrol engine.
• Improve the quality of the components used for production.
• Improve the quality of sophisticated precision components for space

application of VSSC.
• Plan to develop hybrid electric vehicle as a combined project with KELTRON.

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3.8 PRODUCTION DEPARTMENT
PLANT PROCESS
Supplies raw materials
( through suppliers
Stores raw materials
Fabrication Machine shop

Paint department
Quality inspection Quality inspection

Sub assembly
Final assembly
Quality inspection
Stores department
PROCESS:
In the first step, the materials are purchased from the supplier and sent to the
manufacturing process. The manufacturing is done according to the specifications
given by the product design section. The marketing department will be involved in the
work of collecting the design specifications from the market. Once these
specifications are collected from the market, the design department will design the
product and send it to the approval of the purchase department. Once the purchase
department approves the design, then the planning department prepare the production

54
plan. Using this plan, the materials are taken from the stores department and products
are made by the production department. Each and every step of production process
will undergo a quality check. The finished product is also undergone a quality check
and is sent to the stores to hand over to the dealers.
The entire work flow is divided into 3 major processes
1) MOP(management oriented process)
2) COP(customer oriented process)
3) SOP(support oriented process)
(1)MOP deals with the market representative(MR) and IQA. In order to achieve the
targeted profit, (2)required steps are taken by them. It is concerned with providing
good of good quality at a competitive price. For this purpose the quality assurance
department is established.
(3)COP deals with making the customer satisfied by providing all the services they
require. Various departments are covered under COP. They are marketing, designing,
planning etc.
SOP is concerned with providing necessary services that supports the MOP and COP.
SOP do also play an important role in the organization. Unless SOP is not working at
100% efficiency, it is not possible to provides quality goods on time. SOP covers
various departments like – stores, HRD, QA etc.
About the department:
Production department is the main department in which certain ideas and
technologies are adopted for purchasing the quality products. The employees crew
includes industries at engineers, machine operators, plant maintenance etc. The
production department is mainly classified into 5 sub Units. Each sub units have
separate manager
KAL has the capacity of producing 600 units per month. The production department
is mainly concerned with manufacturing of various parts of the vehicle monthly
production is fixed on the basis of target demanded in the market available of raw
materials and the financial capacity of the company.
In earlier days, production of KAL in some month was 750-800, now. It is around
300. This is because of some financial crisis and some sales promotion techniques.
There is no separate using for promoting in advertisement and the authorities do not

55
take any such promotional activities. Non- advertisement is one of the failures of the
competition among others such as piaggio, Ape, Bajaj Auto etc.
The sub units under the production department are
• Machine shop
• Heat treatment
• Tool Room
• Fabrication
• Assembly
• Paint
KAL receiving the projects from the organization in sub contract base such as VSSC,
KELTRON etc.
Objectives:-
o Minimize the rejection rate
o Reduce the network of material
o Improving the utilization of material
o Rejection of material if nay to the store.
o Undergoing machining operations of accepts material
o Ensure the quality of the products.
Machine Shop:-
GENERAL MANAGER
ASSISTANTGENERAL
SENIOR ENGINEER
ENGINEER
MOUNT ZION COLLEGE OF ENGINEERING

WORKMAN Page
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Machine shop producers the sub pairs which are required for the production of the
finished goods. Tool room is a part of this. The maintenance of the tool room is done
at tool room for production. As per the planned schedule. The store issue the material
required for the production in a weekly manner, Gear selector, steering road etc are
produced in the plant. The shop is under the control of the Sr. Engineer .
machines in the machine shop
o Capston lathe CD1
o Capston lathe CD 2
o High speed lathe H22
o Turrent lathe
o Enterprise centre lathe
o Copying lathe hidustan.
o Facing & catering machine.
o CVC turning lathe (weiler)
o CVC turning lathe
o 2D capston lathe New 2D2
o Redial drilling RD 50.
o Radial drilling RD6
o Radial drilling – Balitiboi RD 25
o Drilling machine – baltiboi RD-32
o Drilling machine new Baltiboi RD322
o Column drilling machine New CD 402
o Accumax pillar drill
o Bench drill.
o Automatic tapping machine.
o HMT Horizontal milling machine (FN1 EH1)
o HMT Horizontal milling machine (FN2 EH2)

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o Horizontal milling.(BFW)
o Universal milling
o HMT Vertical milling (FN2V1)
o HMT Vertical milling new (FN2V2)
o Milling machine(MTR)
o HMT Horizontal cylindrical grinder(K1300)
o HMT cylindrical grinder(K1300-300p)
o Cylindrical grinder(K1300)
o AWH grinder(GT)
o New Spin Surface GH (GVS30)
o Surface grinder pranga
o Internal grinder(GIF -80)
o Gear Shaper Old
o Gear shaper HMT New
o Gear Hobbing Cutter
o HMT Broaching Machine
o HMT Vertical Milling VTC
o Fine Boaring Machine 734
o Fine Boaring Machine 375
o Honing Machine
o VMB-8
o Rolling Machine
Heat Treatment:-
Here the components are heat treatment this station includes.
• Muffler furnace
• Gas car building furnace
• Induction hardening etc.

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These are under high temperature. Pallet trucks are used to transport the material since
the temperature is very high. The tempered and hardened units are tested by the
quality control unit
JUNIOR ENGINEER
WORKMAN

59
Tool Room:-
The maintenance of tool is done in the tool room department. The consumable tools
requires frequent maintenance. KAL also receive products from organization such as
VSSC, KELTRON etc. These projects include of certain components and are carried
out here
SENIOR ENGINEER
WORKMAN
Fabrication:-
ENGINEER
JUNIOR ENGINEER
WORKMAN
It comes uncer the asst. manager engineer is the head. The main functions are welding
cutting etc. Some machines are used;-
 Bending machine
 Pressing machine
 Welding machine
 Shearing machine
 Lythe enterprises
 Nimbling machine
160 ton is the capacity pressure

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The initial worries like bending , pressing, welding etc are doing here after that they
will forward to the other sections like machine shop, assembly etc. The fabricated
body parts are then thoroughly checked by the QA department.
Welding Process
There are 4 type of welding.
• Mig welding (using Metal + CO2)
• Arc welding( using rads)
• Spot welding (carbide point)
• Gas welding- this method is used to weld the diesel tank or petrol tank.
Assembly:-
SENIOR ENGINEER
JUNIOR ENGINEER
WORKMAN
Production manager is the head of thisdepartment. Gear assembly, engine assembly

vehicle assembly, handle assembly etc are the main fuctions. It holds sub assembly,
Doom Aasembly etc.
Some types of assembles are-
 Rear break plate assembly
 Tire assembly
 Rear axle assembly
 Differential assembly
 Hub assembly
 Chassis assembly
 Handle bar assembly
 Propeller shaft assembly

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 Fork assembly
 Front hub assembly
 Gear box assembly
 Electrical assembly
 Diesel assembly
Line Assembly :-
Line assembly is one of the main assembly section. There are main two stages in line
assembly.
Stage A: Join chassis & differential (rear axle assembly). It includes the assembling of
foor break, hand break, propeller shaft. The front fork is also fixed.
Stage B: differential oil is filled. Back and front tires are fitted in this section. The
handle bar is also fixed.
From this department, it goes to the doom section to assemble doomshield, glass,
diesel tank and from there, it goes to Engine assembly.
Engine Assembly:-
Greeves GL 400 engine is used to manufacture 3 wheeler. It is a single cylinder diesel
engine. It’s a 4 stroke engine( low pollution, more mileage)
Specifications of engine – 400cc, 3600rpm at maximum and 1000 rpm at minimum,
HP-7.5, air cooling system.multi plate clutch,
Engine price – around Rs. 24,000
Engine oils:- 20-40 grade (1.25)
SAE 90 grade(1.45 litres)
140 grade filer oil , this is for filler plug at the rear part
When the grade of the oil increases, its viscosity decreases.
Filering devices: there are 3 filtering processes. They are -Air filter, diesel filter, Oil
filter.
Gear Box section
Gear box section manufactures the gear. Torque and speed of the engine is
determined by the gearbox. Engine’s uncontrolled power is controlled by gearbox.

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The teeth of gear box needs very sharp attention in its manufacturing process. Small
teeth have high regulation and large teeth have low regulation.
Paint shop-
JUNIOR ENGINEER
WORKMAN
Junior engineer is the head of this department. The painting works of the finished
goods are done here, before the painting the products are sending to the pre-
treatment section. It is called as tank process.
The various steps:klean chemi -> water -> blast chemi(de-rusting) ->water ->
seal chemi -> De-act chemi.
It is done to avoid the resting. A crane is used for cleaning. A pre-treatment is

done before painting. Small components are spray painted using conveyer belt.
After that the components are sending to the locator for drying.
Two Types
• Spray Painting
• Dip Painting

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3.9 QUALITY ASSURANCE DEPARTMENT

The main aspect of these departments to check and maintain the quality of finished as
well as incoming materials. The finished goods go through three stages of inspection.
They are:-
• Vehicles inspection
• Test running
• Final inspection
ASSISTANT MANAGER
SUPERINTENDENT
WORKMEN
Objectives:-
• Cost reduction
• Quality- checking
• Providing all suggestions
• Wastage control
• Higher productivity
• Reduce defects of implant items by10%
• Create a cultural among the employees of the company towards” total quality”
concepts and higher productivity through planned training for all employees
• Direct and prevent non conformance defects as early as possible and climate
them through appropriate change to the quality management system.
• To reduce the percentage of vehicle with break pedal problem. 30% to 5%
• To reduce the defects of following components in the production department

to less them 10%
Differential Cage
Tramission Staff

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Differential Bush
Crown wheel pinior
KAL is an ISO 9001-2000 affiliated company.
Quality Policy:-
The management and employees of KAL are committed to development,
manufacture, marketing & service three wheelers, meeting customer needs through a
proves of continual improvement of its quality management system.
Functions:-
In order to maintain the quality policy and objectives the incoming materials an in
plant materials and finished goods under go several inspections in different stages.
Chemical lab is also plays a major are in Quality Assurance Department.
The critical activities:-
• Incoming inspection
• In process inspection
• Fabrication
• Finished vehicle calibration
• Calibration.
Incoming inspection
• Receive provisional GRN from stores department.
• Conduct inspection as per QAD plan.
• Rejected items with GRM given to stores
• Accepted items with GRN are given to stores department and provide tags in
process inspection
• Conduct spot inspection
• Conduct stage inspection
• After machine operation are inspected
• Defective items are given to final inspector after doing work
• Accepted items are given to sub-store
• Defective items are given to sub store after rework.

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Fabrication
• Spot inspection: done at each step of production. It is done by setting an
approved model each material and compared the original with it
• Stage inspection: Done to check whether any operation is missed or is there
any errors in operation
• Final inspection: there final products are inspected for quality. The
compatibility of that products is also checked
Finished vehicle calibration

• Vehicle testing of the accepted vehicles
• Vehicles testing after rework
• Transferring accepted vehicles to the finished goods store
Calibration
• In house calibration in their standard room
• Invite quotations from external agencies to calibrate
• Prepare comparative study and take decision
• Give work to external agency
• Calibrated
• Place stickers on the calibrated items

The finished goods are passes through four another stages to ensure quality
• Vehicles inspection
• Testing running
• Final inspection
• Inspection before dispatch

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3.10 STORES DEPARTMENT

The success of the business largely depends up on efficient and effective stores.
Stores are the place where the raw materials. Semi finished goods and finished goods
are kept after the production. Stores department comes under GM (production). KAL
follows ABC analysis for inventory storage.
According to the nature of items stores are kept:-
Store I: hardware items, painting items, rubber parts, gear items etc.
Store II: Bearing components, location assembly battery
Store III: Casting, forging, sheet metal items.
Store IV: Raw materials, pipe wool.
ASSISTANT MANAGER
JUNIOR TRADESMAN JUNIOR TRADESMAN
WORKMAN
It follows ABC analysis for the inventory

• Inventory Control:
A. Items will store only before one week

B. Items will store only before one month
C. Items will store before 6 month
A- Required 70% of the total price, B- items required the 20% and C- items
required to 10%
The main items is store are , hardware items, rubber parts, gear items, sheet metal
items, raw materials, pipe wood etc

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Classification & codifications:-

Materials stored are classified according to their nature& usage. All the items are
given part no. as cod and having tag.
In addition to then\ main store there is a sub unit also. The store keepers record the
data of materials on the bin card and adjust the store balance. The entire information
is entered in to the computerized store ledger system called card-x, which give
systematic and accurate record. Verification is done at every end of the final year.
Actual stock is compare with the stock shown the ledger. Store keeper are the
concerned authority are responsible for any difference in stock level.
Functions:-
 Receive the raw material and store it
 Dispatch of rejected raw materials
 Rejected material will be returned to party within 45 days after clearing
provision GRN.
 Reduce the stock o non-moving item
 Control the inventory as the level fixed for maximum and minimum stock
 Improve the storage facility for bearing battering rear back plate assembly
tool items
 Preparing documents for central excise department.
Critical Activities:-
 Receiving of raw materials and storage of item
 Issuing of materials
 Dispatch of rejected materials
 Receiving, dispatch and storage of finished goods
 Disposal of scraps
 Periodic stock verifications
 Preparing of documents for central department

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3.11 MAINTENANCE DEPARTMENT

Department structure
ENGINEER
JUNIOR ENGINEER
WORKER
Maintenance department functions under the control of manager (production). This

department undertakes the work of electrical, mechanical, and civil maintenance. The
maintenance procedure is done as team work of supervisors and technicians.
Maintenance work, which can’t be settled by the department, is done by licensed
contractors and outside exports.
Functions:-
There are mainly two types of maintenance are conducted at KAL
 Preventive Maintenance
 Breakdown Maintenance
Preventive maintenance:-
It is carries out to increase the lifespan of the machine. It is classified as daily,
weekly, quarterly and yearly maintenance.
Initial activities in preventive maintenance includes
 Prepare schedule for preventive maintence
 Check availability of machines for planned data
 If the machine is not available for planned data reschedule it.
 Check availability of spares
 Place indent with purchase department
 Stores spares in sub store
 Allocate technicians
 Do the preventive maintenance
 Check the completeness of preventive Maintenance
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 Prepare the monthly report

Break down maintenance:-
It is carried out at the time of breakdown of machines, when the breakdown of
machines is informed by the concerned trade man. If a number of machines are
breakdown at a same time then the machines are prioritized on the basis of loss of
breakdown per hour
Activities in breakdown maintenance
 Check the nature of complaints whether the complaints is mechanical. Civil or
electrical
 Check minimum stock level spares
 Check spare parts procurement through purchase department
 Allocate the technicians for repair work
 If the maintenance department can’t rectify it obtain the service of engineers
from others
 Complete maintains and repair work handover the machine

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3.12 SERVICE & SPARES DEPARTMENT

It’s function is to provide quality services to the customer. It I under the control of
marketing department.
Functions:
• Collect feedback report from marketing department about the products.
• Collecting the field complaints.
• Pre-delivery inspection.
• Framing customer satisafaction.
The company providing free service campaigns along with dealers once in 6 months
or annually.
Coupon service: It is done as an after sales service this service is based on particular
period or kilometers whichever is earlier. The coupons are received from the customer
and send the accounts department and credit note is prepared.
The service based on service period is as follows:
Distance Period(within days) Amount(Rs.)

500 30 75
1000 60 75
2000 90 100
3500 120 100
4500 150 100
5250 180 100
Warranty settlement
A warranty settlement is given to the vehicle for 6 month from the date of
purchase or till 6000km, whichever is earlier. Warranty is not valid for the rubber
parts. In case of damages, dealer will fill up warranty service claims. Maintaining
chassis number, engine number and the date of sale will send to the company. KAL
identifies the batch number and accept it if the case is genuine.
Spare parts maintenance
The department has a spare parts store. The sale of spare is through the dealers. The
dealers will be having a store of fast moving spares.
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SWOT ANALYSIS
SWOT is a system approach to understand the environment of the company. SWOT

simply strength, Weakness, Opportunity, Threat. Strength is the inherent capacity
which organization can use to gain strategic advantage over competitions. Weakness
is an inherent limitation or constraint which creates strategic disadvantage opportunity
is a favorable condition in the environment creates risk.
Like any other company KAL is also having its own strength, Weakness,
Opportunity, Threats. They are mentioned below. The sources of data’s are from
employees and from my own observation
STRENGTH:
 ISO 9001-2000 certified company

 Product quality
 Major market share at north Indian states
 Enter into new product line
 Introduction of LPG models
 Low cost and well disinclined staff
 Launch of suggestion box for constructive suggestion from employees
 Company is keen in providing salaries and other monitory benefits
 Good training and induction program for workers
WEAKNESS:-
 Outdated product design

 Lack of sales promotion activities
 Manual working
 No petrol models since 2000
 Lack of proper financing for R&D when compared with competitors
 Less market share in south India
 Lack of new technology
 Low level salary for apprentice daily wages
 Absenteeism
 Lack of promotional activities based on performance
 Political interference

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 Slow decision making process
OPPORTUNITIES:-
 Joint venture with other companies to earn more market share

 Opportunity to explore new foreign market
 New trade promotional tools can be used
 Concentrating more on sophisticated precession components for space
application of VSSC or ISRO
 Ability to grow rapidly because of growing demands
 Support from government helps to tackle certain legal obstacles
 Introduction of new petrol models that BS-II norms will surely helps KAL to
capture major market share
 Emergence of new technology available in the market
 The company is in the process of implementing new Strategies to achieve
quantum jump in customer satisfaction
 Establishes market in foreign country
 Major market share in north India
 Good industrial Relation
 A good dealership network which ensures that products reach customers on
time
THREATS:-
 Competition
 High growth in vehicles production
 Resistance to change
 Emergence of most modern technique to the globalization
 Political interference
 Out dated production techniques
 Competitors are having major market share
 Less market share in South India
 More involvement of trade unions

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FINDINGS AND SUGGESTIONS
5.1 FINDINGS
Positives:
• Company posses the entire basic factory infrastructure.
• Company has its own specific customers.
• Skilled workers.
• Availability of manufacturing machines.
• Availability of contract workers all the time, when necessary.
• The location of the company near highway and close to city, with railway and
other mode of transportations near with gives an advantage.
• Presence of experienced employees in their respective domains.
• Well managed recruitment system.
• A well maintained factory working time and attendance system, affordable to

employees.
• HR department gives training to the various employees as per the chances
available.
• Government pay scale for employees.
• Implementation of disciplinary procedure.
• KAL has its own exclusive customers and dealers.
• A powerful vehicle having enough mileage in any road condition.
• Comparatively good and affordable canteen.
• Good insurance scheme is provided for employees.

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Negatives:
• Absence of modern office management system.
• Gloomy working atmosphere inside the office.
• Lack of employee energy.
• Lack of motivation in employees.
• Lack of implementation of modern concepts of management in some areas.
• Need a change in the attitudes of employees towards work and company. Need
to avoid lazy attitude in employees.
• Though absenteeism could have reduced, there exists necessity of employee
engagement programs. Make sure that employees do either their job or some
assigned job when they are inside the office.
• The need to renovate the drinking water facility and toilet facilities and its
maintenance after renovation.
• Need to manage unskilled employees in some way so that they can be
assigned some job which will be productive for the company.
• Need to re-structure the incentive plan based on production.
• Problem making labors and unions are burden to the management.
• Lack of safety measures of workmen is to be re-checked.
• Lack of young, creative minds in some domain areas.
• Low profit is an obstacle on the way to development.

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5.2 Suggestions:
The first step in striving the organization is to find maximum profit and make the
net worth positive. For that a collective effort is necessary. Marketing is to be
done efficiently. Find out new dealers, make more promotions in rural areas, give
creative, brilliant youngsters ( in the form of trainees) place in company in the
marketing department.
Product diversification is another source by which revenue can be generated.
Find out more potential products that can be manufactured in the company using
the infrastructure in the plant. It will be useful to avoid the idleness of machines in
the factory, thus by utilizing the resources maximum. After collecting the
maximum fund, the further proceedings can be done effectively. Company can be
develop step by step, only after achieving money as profit for further
development process.
• Can provide employee motivation in KAL. This is to be done along with the
other development activities towards making profit. Support the employees
who have positive attitude, high energy, aspiration to grow etc.
• KAL can think of providing a pleasant work atmosphere, after getting enough
revenue.
• KAL can think of optimizing the use of paper documents and can shift to e-
documents, which will help to reduce the paper use and file storing burden,
helps to access data easily. An analysis/study can be carried out.
• Production based incentive scheme can be re-structured.
• Marketing department can work more actively in finding more market and
dealers in north India.
• It can think of developing exclusive products for south India.

76
• Employees in technical sections need to be motivated to make new

innovations and creative employees should be awarded.
• The need to renovate the drinking water facility and toilet facilities and its
maintenance after renovation
• It’s the time to replace canteen furniture and renovation.

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CONCLUSION
KAL is one of the first three wheelers manufactures of India. The products are KAL
are sold under the brand name “KAL”. KAL was established in 15 th march 1978 and
was officially inaugurated in 1984. KAL is a public sector company. As that of any
public sector enterprises KAL’s gestation period was long with many ups and down.
But a committed skillful work force and efficient teams of management as help KAL
to overcome all the obstacles. Company has already entered into the international
market and it has strong hold market in north India states with a slide improvement in
technological aspects and challenge to its competitors like Bajaj Auto. Ltd., Piaggio,
TVS etc. the only draw back is that presently the company is not able to meet its
demanded production to inadequate resources.

78
BIBLIOGRAPHY
 Company Journals
 Department Files
 Direct Interview
 www.threewhelersindia.com
 www.keralaautomobiles.com
 www.keralapublicsectorindusty.com
 Research Paper help
 https://www.homeworkping.com/

79

ORGANIZATIONAL STUDY OF KERALA AUTOMOBILE LTD

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ORGANIZATIONAL STUDY OF KERALA AUTOMOBILE LTD

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AN ORGANIZATIONAL STUDY AT KERALA AUTOMOBILE LTD….

Prepared by Sandeep Nair

1.1 Objectives Of The Study

• To see and understand the actual working condition of an organization.

• To understand the organization on the basis of departmentation.

• To understand the functions of each and every departments.

• To look in to the working conditions of the employees in an organization.

• To learn the basic HR functions in the organization.

• To make the evaluation about the performance of the organization.

• To know about the organizational objective and scope.

• To do the ‘SWOT’ analysis of the company.

• To suggest recommendations for improving the overall performance of the

1.2 Scope Of The Study

• To study the employer-worker relationship.

• To study the profit making of the organization.

• How man, material, money influence on the achievement of company.

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• To learn the HR functions of the organization.

• To learn the Industrial Relations functions in the company.

1.5 Limitations Of The Study

• Some personal interviews may be affected by the personal bias.

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2.1 INDUSTRIAL PROFILE OF AUTOMOBILES

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Modern Automobile Industry

The Top Automaking Nations

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US economy. Automobile is one of the important industries in the world, which

In North America, the prominent automotive manufacturing regions are New

Major Segments Of Automotive Industry

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Global Auto Components Forecast Value - USD billion 2004 -

World 3 wheeler market

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Three Wheeler Companies

INDIAN AUTOMOBILE INDUSTRY

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Embryonic automotive industry emerged in India in the 1940s. Following the

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2.2 COMPANY PROFILE

Kerala Automobiles Limited (KAL) incorporated in 1978 as a Government of

The present product range comprises of Autorickshaw (Three/Six seater), Pickup/

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2.3 ORGANISATIONAL CHART

The board of directors manages the affairs of company. The government

II. Managing directors

III. A nominee from finance department

IV. A nominee from industries department

V. A nominee from the government

The MD is always responsible for the conduct of managers of the

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2.4 PRODUCT PROFILE

P1 petrol autorishaw, regular three seater (1984)

P2 Newlook Autorishaw (1988)

P3 petrol delivary van (1984)

P4 petrol pickup van (1984)

P5 petrol three wheeler chassis (1985)

D1 Diesel pick up van (1984)

D2 Diesel auto trailors (1988)

D3 Diesel chassis come under three models

1. 4360 Chassis- Self start