TAFE PROFILE

INTRODUCTION

Tractors and Farm Equipment Limited (TAFE) is a unit company of the Amalgamations group, one of
India's largest light engineering groups with diverse interests in diesel engines, automobile components,
tractors and related farm machinery, lubricants, panel instruments, hydraulic pumps, engineering tools,
storage batteries, paints, engineering plastics, automobile franchises and printing apart from interests in
agribusiness, book selling and publishing. The group's leadership technology, built on foreign know how has
been nurtured through indigenous efforts. (1)

TAFE was established in 1961 to manufacture and market a range of Massey Ferguson tractors and related
farm equipment in India. One of the largest tractor manufacturers in India, TAFE's vision is to be the first
choice of customers in India and to also move towards a growing presence in the international markets.
TAFE has collaboration with AGCO Corporation, headquartered in Duluth, Georgia, which is one of the
largest manufacturers, designers and distributors of agricultural equipment in the world. Its products are sold
in more than 140 countries. With a network of more than 500 dealers, branches, service outlets as well as its
own sales offices and depots covering the entire width and breadth of India, TAFE is committed to
providing complete farming solutions to its customers and empowering them to work towards increased
farm productivity, prosperity and profits.

Tractors and Farm Equipment Limited (TAFE), has been a pioneer in the mechanization of the Indian farms.
Beginning with the popularizing of tractors in agriculture in the early 60s, TAFE has many firsts to its
credit.

TAFE was the first company to market a total package of Tractors and farm equipment to not only provides
farm power but also interfaces to transform the farm power to increased farm productivity. TAFE was also
the first to introduce the Direct Injection technology in India, thereby initiating considerable fuel saving and
the resulting economies in tractor operations cost to its customers.

TAFE was also the first Indian manufacturer to launch a 75 HP tractor to cater to the emerging needs of
very large farms and agri-businesses. With three manufacturing locations at Chennai (Sembiam), Madurai

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(Kallidaipatti) and Bangalore (Doddaballapur), TAFE has a large manufacturing base. Its Madurai plant, the
latest and possibly the largest such plant in the country is specially tailored to take on short run production
batches to the exacting standards demanded by advanced countries. All its plants and sales offices are linked
by VSAT links providing fast and efficient communications and data linkage another first of its kind in
India.

Tractors and Farm Equipment Limited (TAFE), is also involved in the following areas, apart from its core
business of manufacturing and marketing tractors.

1. TAFE has developed a range of matching trailers, implements and accessories. These are marketed
through TAFE's dealer network by a totally owned subsidiary,

2. TAFE, through TAL is also involved in the marketing and distribution of lubricants and greases for
tractors through its dealer network.

3. TAFE is also involved in the packaged power industry through its Power Source Division.

4. TAFE has in-house facilities for the manufacture of hydraulic pumps and gears for tractors. A
related facility for the manufacture of panel instruments, not only for captive use but also for the
growing automobile industry in India is an integral part of the company.

5. TAFE has also diversified into Engineering plastics and production of tools and dies for this
industry.

6. TAFE's vision is not just wishful thinking but based on recognized engineering, marketing and
financial strengths, built up over the past four decades. In all that it does, TAFE pursues excellence.

7. To achieve the distinction of the first choice among the farming community of India and ensure a
growing presence in international markets through setting leadership standards of performance and
customer care in the agricultural machinery business.

"To us in TAFE, excellence is not something that we engineer, input or inspect into our products. It is
an innate desire that inspires our hearts at work and at home and ripples out into the world around
us. "

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 TMTL

Amalgamations Group

TAFE

TMTL

Tractor Division, Engine Division, Transmission

Bhopal Alwar Division, Parwanoo

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TMTL - A wholly owned subsidiary of TAFE (Tractors and Farm Equipment Limited). TAFE is a unit company of
the Amalgamations Group, one of India's largest Light Engineering Groups with diverse interests in Diesel
Engines , Automobile components , Tractors and related farm machinery, lubricants, panel instruments,
hydraulic pumps, Engineering Tools , Storage Batteries, Paints , Engineering Plastics , Automobile
franchises and Printing apart from interests in Agribusiness , book selling and publishing. The group's
leadership technology, built on foreign know how has been nurtured through indigenous efforts.

TMTL has in turn three divisions in India –

 Tractor Division, Bhopal – Manufacture and Assembly of Tractors

 Engine Division, Alwar – Manufacture and Assembly of Auto & Stationary Engines

 Transmission Division, Parwanoo – Manufacture of various Transmission

Components like Spur Gears, Helical Gears, Spline Shafts, Crown Wheel Pinion, Cam Shaft and Housings.

Tractor Division at Bhopal viz. Eicher Tractors is a leading Tractor manufacturer in India and manufacturing and
selling “EICHER” brand of tractors. Eicher Tractors, a pioneer in Tractor manufacturing in India, rolled out its first
Indian Tractor in 1959 with the collaboration of Gebr-Eicher, Germany in 1960. The other group company TAFE too is
amongst the oldest tractor manufacturer in India and is manufacturing and selling Massey Ferguson and TAFE range
of Tractors. TAFE and TMTL as a group is the second largest Tractor manufacturer in India. Jointly, we have more
than 25 tractor models and 100 variants, which is the largest range being offered by any Tractor manufacturer in
India.

Eicher Tractors has manufacturing and design facilities in Mandideep in Madhya Pradesh and producing 13 base
models ranging from 24 HP to 50 HP. We are the only company, which offers a choice to the customers between Air-
cooled, and Water cooled technology.

Eicher range of tractors enjoys unique advantages in terms of phenomenal fuel efficiency, it’s easy maintenance,
higher pulling capacity, reliability and suitability for farm & commercial applications.

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 TAKE OVER EICHER TRACTORS: BIGGEST IN TRACTOR INDUSTRY

The Chennai based tractor major, Tractors and Farm Equipment Limited has been taking over of Eicher’s
tractor division near Bhopal, engine division at Alwar and gears division at Parwanoo, in the biggest such
acquisition in the history of the Indian tractor industry. TAFE, already the second largest manufacturer of
tractors in India, with this approval, comes within striking distance of market dominance in the domestic
tractor industry.

Speaking at a media meet, TAFE’s Director, Mrs. Mallika Srinivasan said, “This move was a well-
deliberated strategic move on our part. This acquisition will provide strong synergies of growth in the future
to help achieve market dominance”.

‘TAFE motors and tractor limited’ company’s director Mrs. Mallika Srinivasan decided to take over
Eicher tractors. She went on to add “TAFE has long held a significant presence in the 30-40 HP segment and
the Eicher brand holds substantial market shares in the below 30 HP segment.

The respective brands have a strong brand presence and equity in the customers’ minds. This coming
together of the brands with strengths in individual segment forms a perfect fit to take on the tractor market
which is currently on an upswing. It is in this scenario that this coming together of two major brands in the
industry becomes highly significant. This also represents a giant leap for us in our vision to become the
farmers’ first choice”.

With this acquisition, TAFE’s combined market share is 22 per cent and a combined volume of about
53,000 tractors. TAFE already has large number of products and variants to suit the changing demand
patterns of tractor customers across the country. With the addition of the portfolio of products offered under
the Eicher Brand, this new venture will offer to its customers the best in terms of product range, value for
money, quality, and innovation in design and assured post sales product support. The move will also result
in TAFE having a combined distribution network of over 2000 dealers, branches, service and parts outlets
and customer contact points which is the largest in the industry.

TAFE and Eicher tractors will retain their individually strong identities at the brand level and distribution
level. The potential synergies of growth made possible by this move will translate into positive benefits to
the employees, vendors and dealers and provide them ample growth opportunities. With its major focus
being on the tractor business, TAFE aspires to be the number one player in the domestic market and the
growing presence in the international market. TAFE buys Eicher's tractor, engine & gear businesses for Rs

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310 crore. The Eicher Motors board has cleared the sale of the company’s tractor, engine and gear
businesses to Tractors and Farm Equipment’s, TAFE, for Rs 310 crore. TAFE will purchase the Eicher
facilities through an SPV called TAFE Motors & Tractors.

The SPV, a 100% subsidiary of TAFE, will run the Eicher tractor unit and the gear & engine businesses as a
separate entity with separate brand identity but operational financial control. The acquisition would improve
TAFE’s geographical spread across markets like MP, UP and Bihar where Eicher is strong — alongside
Rajasthan, Gujarat, AP and Karnataka where TAFE or stable mate Massey Ferguson are strong.

"In fact, the board of directors of EML granted approval for the sale on a going concern basis of the tractors,
engines and gears divisions of the company at Mandideep, Alwar and Parwanoo to TAFE Motors and
Tractors for a total consideration of Rs. 310 crore," With the acquisition of the Eicher unit, TAFE — the
second largest manufacturer of tractors in India — will eye market dominance. According to industry data
available for the April-December 2004, TAFE registered sales of 24,191 units, while Eicher sold 13,670
tractors.

Brief description of the units of this take over is as follows:

Eicher Tractors

1. Pioneer Manufacturer in India since 1960.

2. Technology from GEBR Eicher, Germany & Valtra, Finland.

3. Over 3, 50,000 satisfied owners.

4. Market leader in <30 HP segment.

5. First Tractor Company to produce Air cooled as well as water cooled tractors.

6. Current range 24, 30, 35, 42, 51 & 61 HP - Annual capacity is over 40,000 numbers.

7. 51, 61 and 70 HP-New products under introduction.

8. Exported to Europe, U.S.A., Africa & South Asia.

9. First Indian company to be awarded with ISO 9001 certificate

10. Fully integrated R&D Center

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Eicher Demm

1. QS 9000, ISO 14000 & ISO 9002 certified facilities.

2. Manufacturing unit Parwanoo

3. Manufactures a wide range comprising:

4. Spur Bevel & Helical Gears

5. Crown Wheel Pinion

6. Transmission Shift & Rear Axle Gears

7. Caters to OEM & Replacement Market.

8. Exports to Europe, Asia & US.

Eicher Engines

1. Manufacturers of automotive and stationery engines from 22HP to 42 HP

2. Gensets from 12.5KVA to 30 KVS

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 Eicher Tractors
Mr. R C Banka is the President of the TMTL group and Mr. Hari is the chief operating Officer and the
Mr. Anil Sharma is Plant Head of the Eicher Tractor, Bhopal. Eicher tractor is the Indian first tractor
manufacturing company.

TECHNICAL TIE UP

1. Technology transfer from Ricardo of UK for developing air-cooled engines

2. Technology transfer from SISU (VELMET) Finland, for higher horsepower tractors.

EICHER TRACTORS – SOME AWARDS & RECOGNITION

1992 — ’93 Second Best Productivity Performance Awarded by National Productivity

Council (NPC) to EICHER Tractors Faridabad

1993 1. GKD-NIQR (National Institute of Quality & Reliability) Outstanding

Organization Award.

2. Second Best Working Condition award of Haryana safety &

Welfare, Govt. of Haryana to EICHER Tractors, Faridabad

1994 — ’95 Certificate of Merit for Productivity Performance Awarded by National

Productivity Council (NPC) to EICHER Tractors, Alwar.

1996 — ’97 Certificate of Merit for Productivity Performance Awarded by National

Productivity Council (NPC) to EICHER Tractors, Alwar

1998 Haryana’s Greenest and Cleanest Plant to EICHER Tractors, Faridabad.

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 Research & Development

Comprehensive facilities for development of new tractor models including diesel engines. Facilities at ETE
include - State of art Design officers with fully networked CAD / CAE environment, own Prototype /
Tooling manufacturing facilities. Various Labs for Design verification, Field Simulation, Product Testing
and validation and Information Center with facilities of Technical Library, Internet and Archives.

EXPORT- U.K., SRI LANKA, BANGLADESH, NIGERIA and NEPAL.

SALES & SERVICE NETWORK

Gears are sold through a network of 16 distributors each having over 250 stockiest and retailers mainly
entering to the replacement market. Company depots are located at Calcutta, Madras, Vijayawada,
Bangalore, Ahmadabad, Indore and Delhi for supplying to distributors.

FINANCIAL STATUS:

EICHER TRACTORS had a turnover of 1300 Crores in the last financial year which ended in 2010. But
for this financial year the proposed turnover is 1600 Crores for EICHER Tractors.

EICHER MARKETING:

The tractor operations are located at Bhopal plant. The combined production capacity is about 45000
0tractors per annum. Eicher tractors manufacture and markets tractors from 24 HP to 61 HP range. Company
has its own distribution network in most agrarian states and has 350 dealers. Marketing network is spread
across the country and there are 35 area offices in smaller cities of the country. Eicher offers 2 years
warranty on the tractors against any type of manufacturing defect & efforts are made to upgrade the service
network by providing doorstep service to the farmers.

The Marketing team consists of 52 executives and staff members. The group shall strive to become truly
global in its operations.

Global does not merely mean exporting our products. It means being present in all relevant parts of the
world for each product as seller and wherever practical & economical as manufacturer.

It requires that we start thinking globally from now on while making any important decision. It necessary
assumes that global competitiveness, sound financial health, customer orientation, superior technology,

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global brand recognition, outstanding employee motivation, as well as several other vital skills and
attributes. It should result in rapid growth, both domestically and internationally.

Corporate Social Responsibility:

TMTL has always contributed its bit towards the improvement and conservation of environment, education,
hospitals, population control, culture & heritage conservation and upliftment of the society.

The Company has maintained very harmonious industrial relations all through. The company is recognized
as being one of the best companies which provides housing, mess, education and free medical facilities (with
an ambulance) at its sites for its all employees.

The company has been actively contributing to the social upliftment and development of the region. TMTL
has also donated significantly to district level hospital. Adult and computer education is regularly provided
to nearby villagers under literacy mission. The company assisted nearby schools in building constructions,
drinking water, books etc. It is also the member of the Mutual Aid at district level.

TMTL has planned many programs for fulfillment its social obligation for spreading the importance and
need of Environment Protection amongst its personnel and nearby villagers and these programs are now
being implemented.

Sites are selected in and around factory boundary and scheme for long life plants is drawn.

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EICHER WORK FORCE:

The company gives high thrust to its employees, which are encouraged to acquire knowledge in their work
area and are given ample freedom. There are about 1400 employees in Eicher Tractors. There are 172
executives, 350 staff and 580 operators in the company. Eicher offers equal opportunities to learn perform
and grow to all employees. Employees are encouraged to acquire knowledge are permitted for job diversity
within organized units of work. Specific care is exercised for ensuring safety and health of the employees
including contract employees.

MANPOWER DETAILS FOR PLANT

PDD - Mkt -
S# LEVEL Mfg - Bhopal Trans Engine
Bhopal Tractor

1 Executives 55 19 98 17 75

2 Staff (Including Trainees) 134 24 187 94 145

3 Permanent Workmen 67 - - 262 185

Total Permanent
256 43 285 373 405
Employees

Floating Labor 531 12 234 153 344

Grand Total All Employees 787 55 519 526 749

TECHNOLOGY IN EICHER:

Eicher has state of art R&D center at Bhopal facility, which has Pro/E, Adams, Hyper mesh work stations,
simulation rigs, mechanical test beds and mock shop for developing new products. The manufacturing plants
have very good paint shops and assembly lines, Co-ordinate Measurement Machines and conveyers for
various product lines. These plants are very flexible to roll out any of 68 variants within a short time as low
as one week after putting an order of customized tractor. Eicher puts a lot of emphasis on technology up
gradation of its service network as well. Company uses IT as a business excellence enabler and its home

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portal EPIC is widely used for all in-house daily management processes of information sharing, leave
planning, performance appraisal and progress tracking etc. ERP package of SAP was established in 1999,
which helps smooth transactions in supply chain management processes from supplier raw material planning
to tractor delivery at sales outlets and demand forecasting.

EICHER SALES

Key customer groups of Eicher Tractors have typically included the small land holding farmer, which
wanted a small tractor in past 3 decades. The company has changed its perception now and offers tractors
from smaller 24 HP to 55 HP. The selling price of the products varies from Rs 2 lacs to 5.5 lacs depending
upon the specifications. Today 50 % revenue comes from higher horsepower models. Customers specifically
for the low cost of maintenance like Eicher’s tractors as Eicher’s tractors consume minimum fuel in Indian
farming and driving conditions.

EICHER SALES AND SERVICES

Eicher Tractors Bhopal being basically tractor assembly operations, most items except a few critical engine
parts are bought from outside suppliers to design made by Eicher. The heavy dependence on bought out
items puts a very high focus on the supplier quality management processes, which we will discuss in detail
later. Suppliers play a valuable role in the value creation process and Eicher R&D takes suppliers input on
cost as well as manufacturability of new designs from the suppliers in concurrent engineering environment.

Eicher has a strong supplier and customer relationship and communication mechanism. Suppliers can access
the ERP system on line and can get knowledge of their inventory levels, production schedule adherence and
tentative future production levels apart from quality inspection status and bill payment processes.
Customers have access to 24-hour help line and special service desks spread across India to serve them
better..

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 PRODUCT RANGE:

• Tractor Models:

241 Xtrac 24 HP Tractor Single Cylinder Air Cooled

242 Xtrac 24 HP Tractor Single Cylinder Air Cooled

312 SDI 30 HP Tractor 2 cylinder Air Cooled

333 SDI 30 HP Tractor 3 Cylinder Water Cooled

364 SDI 35 HP Tractor 2 Cylinder Air Cooled

368 SDI 35 HP Tractor 3 Cylinder Air Cooled

380 SDI 35 HP Tractor 3 Cylinder Water Cooled Engine

485 SDI 42 HP Tractor 3 Cylinder Air Cooled

480 SDI 42 HP Tractor 3 Cylinder Water Cooled Engine

5150 SDI 47 HP Tractor 3 Cylinder Water Cooled Engine

5660 52 HP Tractor 3 Cylinder Water Cooled Engine

• Stationary Engines:

222ES / 222HS 18 HP SINGLE CYL, 1500 RPM Rating

322 ES 24 HP TWO CYL, 1500 RPM Rating

422 ES 34 HP THREE CYL, 1500 RPM Rating

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EICHER’S
PRODUCT

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 TRACTOR ASSEMBLY PROCESS FLOW SHEET

MATERIAL

RECEIPT & INSPECTION

STORE

PAINT SHOP GEAR BOX ASSEMBLY

TRACTOR ASSEMBLY
TESTING OF
FINAL
DISPATCH

RAW MATERIAL IN FORM OF CASTING AND FORGING SHALL BE INSPECTED

FOR PARAMETER AS PER SPECIFICATION / DRAWING AND SENT TO STORE.
COMPENENT VIZ. MUD GUARD, RIM, BONNET, ETC. SHALL BE PAINTED WHILE
OTHER COMPENENT SHALL BE SENT FOR GEAR BOX, SUB ASSEMBLY PRIOR TO
TRACTOR ASSEMBLY. THE ASSEMBLY TRACTOR SHALL BE TESTED PRIOR TO
ITS DISPATCH AS FINAL PRODUCT.

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Following is broad structure of operations in EICHER Tractors:

Marketing Manufacturing Research & Corporate Functions

Development

HQ at Bhopal Plants at Bhopal Unit at Bhopal Personnel

12 regional and 13 area Finance

offices
Strategic Planning

Sub Functions

Sales Materials Current Products

group
Service Production
Tractor
Product Management Stores
Group Transmission
Engineering
Hydraulics
Development
Testing Rigs
Quality Assurance
Field testing and
regulatory

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 AN OVER LOOK INTO THE SYSTEM OF EICHER TRACTORS

There are following basic departments in EICHER Tractors.

1. EICHER TRACTORS ENGINEERING CENTER

This department is responsible for designing the products to be manufactured by the different vendors. The
department has been divided into different areas like transmission, which looks after the gear designing,
tractor, which looks after general parts of the tractor, hydraulics, which is responsible for looking after the
ADDC and the components related to hydraulics, product development, which looks after the various field
issues and improving the present products.

2. FINANCE AND ACCOUNTS DEPARTMENT

This Department is responsible for all the financial transforms that are carried out in the company such
as payments for all the incoming material, salaries of all the employees, all the records for expenditures
and Credits to the company are maintained by this department.

3. SALES AND MARKETING DEPARTMENT

This Department is responsible for consolidating the position of the company in the market every year.
Every year these people get some new strategies so as to increase the share of the company in the market.
Most of the Sales of the company are dependent on the working of this department thus being one of the
most important departments.

4. MATERIALS/VENDOR DEVELOPMENT

This department is responsible for all the incoming material from the vendor. This department is further
divided into two departments

a) Vendor Development.

All the new samples and in fact all the new components are developed by this department. All the
components developed are not consumed as a part of the regular production but implemented as a trial only
and consumed in regular production only after these components are regularized.

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b) Purchase Department

This department is responsible for all the incoming material brought in that is used in regular production.

5. STORES DEPARTMENT

This department is responsible for the handling of the incoming material, supplying the material on to the
line and also the dispatch the rejected materials back to the vendors. Thus stores have got a huge task to do

and that can’t be performed as a single association and thus has been divided into different sections as per
the need such as Incoming Material Stores named as Group 1,2,3 Stores, main stores, ETE Stores, Rejection
Stores etc. of

6. QUALITY ASSURANCE DEPARTMENT.

This department is responsible for overall Quality Control of the incoming components and Assurance about
the Quality of the Tractor to the customer. This department is further divided into Sub-Departments, which
is discussed separately later on.

Quality can be defined’ as ‘fitness for use’ when we talk of quality it means that product should be fit for
use and it is the user who judges and decides what qualities he wants in the product.

The quality characteristics can be grouped into 4 categories:

1. Quality of design

2. Quality of conformance

3. Availability

4. Customer service

Quality of design

The design must meet all the requirements of the customer. If he wants a motor of say 5 HP, you
can’t design your motor for 4.5 HP. The designer should aim at a design which fulfills all the qualities, or
almost all the qualities desired by the customer. He should also make a product, which would become more
competitive.

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Quality of conformance

The degree or extent to which a product actually conforms to in accordance with the specification and
drawing is called the ‘Quality of Conformance’.

Availability

This includes such characteristics as reliability, maintainability and length of life. All these indicate as to
what extent the product will be available for use.

Customer Service

This includes the extent to which customer can get assistance from the manufacturer or to keep the product
in continuous use.

The quality policy of Eicher tractor is to design, develop, manufacture and service products of such quality
which ensure the customer satisfaction, this is achieved through.

 Continuously identifying customers needs communicating the same within the organization.

 Focus on design for reliability, ease of manufacture and cost effectiveness.

 Production and delivery of zero defect products of competitive prices in the model mix required by the
customers.

 Timely and responsive service after sales.

The objective of a quality assurance system is to maintain the necessary standards of quality. The important
components of the quality assurance system are:

 Monitoring quality assurance program of suppliers.

 Checking the accuracy of test measuring equipment.

 Evaluating and controlling the quality of product in the field.

 Establish a feedback link about the quality-related information to the management.

 Evaluating, planning and controlling product quality.

 Conducting special quality studies and managing the entire quality system.

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The various sub departments of quality assurance department are:

(a) Metallurgical Lab

(b) Standard Room

(c) Development Cell

(d) Receipt Quality Control

(e) Manufacturing Quality Control

Sample validation

If there are some changes to be made or any new component is to be install a lot of five samples is to be
brought to the sample room for verification purposes. Then the sample is passed on depending upon its
dimensional and other required characteristics. The department purpose is to check the components of new
vendor.

The objectives of sample validation department are

 To assure the dimensional and other characteristics of new sample are conforming to the specification.

 To make quality standards along with materials department to ensure the characteristics of
components over long period of time.

Metallurgical Lab

This lab has all facilities to determine the chemical composition of the raw material used for the production
of various components. This lab includes Universal testing machine, Rockwell Machine, Brinnel Hardness
Tester, Rubber Testing Machine, Chemicals for determine the microstructure of the raw material, Rubber
tensile testing equipment.

The objectives of metallurgy lab

To ensure all components should be free from any sort of non-conformance relate4d to physical chemical
aspects per relevant standards. To ensure the quality of paints rubber items.

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Standard room

This department houses all the measuring instruments and their records. It is a fully air conditioned room
with dust free environment. The room is specially made dust proof for avoiding any measurement
anomalies. CMM machine is installed here which is used to check the components for better accuracy.

Objectives of standard room

 To perform calibration of the various instruments in various department.

 To demonstrate the confidence level of measurement system to the customer.

 Gauge planning and procurement from the vendor for calibration.

Design release department

This department deals with product development of new tractors as was valtra when it was developed last
year. Basically this department coordinates between design and various divisions.

Objectives of DR department

 New design implementation

 To coordinate different department while new design is to be implemented

 Review of components according to quality aspects and design review.

Receipt quality control (RQC)

RQC may be defined as the sum of the measures taken by the receivers to assure the quality or material
offered by vendor. This department receives the components from the vendor and assures mainly the
dimensional aspect and also the appearance of the component. This department has a very large list of
gauges and instrument, which are duly calibrated according to date; adherence and tractability to the IS
there. The clearing of components includes evaluating the sample size from each lot, the components are
checked for various aspects and then send for confirmation or rejection.

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Objective of RQC

 To assure the quality of a particular unit or group of units submitted for acceptance.

 To assure quality characteristics over the long term will meet with the quality standards.

The RQC department is sub divided into four sections as/materials these are

a) Sheet metal

b) Casting

c) Forging

d) Bar stock

Manufacturing quality control

This department deals with the manufacturing quality. To ensure this quality, various audits are conducted
like FIFO (first in first out), torquing, washing, sealant application, functional audit, settings and various
alignments, bearing, final product audit etc.

 Judging the conformity/ of the process to the established standard and taking suitable action
when deviations are noted.

 To assure that these standards are implemented by conducting daily audits and upgrading the standards
as and when required.

7. PRODUCTION DEPARTMENT

This Department is responsible for carrying out all the assembly operations. This department is further sub-
divided into some of the parts as per different assembly lines such as Hydraulics Assembly line,
Transmission line, Pre-painting line, Paint kitchen, Post painting line, PDI etc.

(a) Maintenance department

For regular & preventive maintenance of machines & any other equipment used for assembly this
department provides its services.

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(b) Store

Store assures regular and continuous supply to avoid line stopping. All the materials purchased are
stored here systematically and items that can be rusted are applied with rust preventive oil once in a week
and in season twice in a week.

8. MFG. ENGINEERING & PROJECTS

This department deals with the shop floor problems and identifies the potential areas for improvement by
studying the existing facilities which leads to layout modification, structure modification and also lead to the
designing of trolleys and tackles. It also participates in discussion for selection and finalization of new
machine tools, which involves the studying of tooling requirement and then makes the tooling available and
establish them.

Capacity enhancements like building new storages, new assembly areas, and offices as per the future plan
of the plant are also one of the works done by our deptt. Nearly all kinds of machines, presses, wrenches etc
are handed over by Engg. Department.

9. MAINTENANCE DEPARTMENT

This department is responsible for carrying out all the maintenance work to be carried out in the plant. Any
kind out of repair work or maintenance such as electrical maintenance, this department carries out working
of equipment on the assembly line etc.

10. SERVICES

This department is responsible for providing all the services and repair works to the customers after tractors
have been sold. Many new methods and strategies have been adopted in the past to provide need full
service to the customers and full care has been taken to take care of their valuable suggestions and feedback.

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11. HUMAN RESOURCES DEPARTMENT:

This is the most important department of any organization. As we all know that 3 M’s are most vital for any
production unit. These 3 M’s are Men, Materials, and Machines. Out of all the, Men or Human Resource is
the most complicated or important resource for any organization, the department which performs all the
functions relating to the human resources is known as HUMAN RESOURCE MANAGEMENT. Human
resource department is divided into 3 parts:

 Corporate HR
 Plant HR
 Marketing HR

The department is responsible for each and every function regarding the human resources.

12. IR (Industrial Relationship)

The department main function is arranging the workmen for the company, also look for the factory act, take
care of the canteen, First Aid Box etc.

13. ADMINISTRATION

The department look for the reception of the company, Security of the plant, greenery of the plant, transport
facilities etc.

14. MANUFACTURING & BUSINESS EXCELLENCE

The function of the department is creating the work culture in the company. Look for the
certification of the company. Currently have TS 16949:2002 and ISO 14001:2004 and going for the
OHSAS 18001:2007 and the vision of the department is to get Deming Prize in 2014.

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Plant Layout & Departments

Eicher Tractors, Mandideep is an assembly plant and R&D center of Eicher. The layout is given below in
figure (fig. 1).

4
3 2

1
5
O
6 7 8

C B
O2 A

D
E

Figure 1: Plant Layout

Departments

O1 & O2: Office

1. Store: Store Department & Storage of all types of Parts, accessories and tools is stored here in bins,
arranged in numbered racks for easy and fast access.

30
2. ADDC Line Assembly: Hydraulics System is assembled here & tested for its performance.

3. Transmission Line Assembly: Transmission System (Gear Box & axle shaft system) is assembled here.

4. Quality Control Department: This section works for the Total Quality Management and inspection for
maintaining the quality

5. Metallurgy Control Department

1. Collection of Pre-Fabricated Components: Pre-Fabricated Components (Metal Sheets, Body Covers,

Mudguards, etc.) are collected from here and Primarily Inspected for any damage. And prepared and
cleaned for further processing.

2. Dip Pre-Painting: Fabricated components are prepared for painting by dipping them in Treatment
Tanks of various chemicals.

3. Components Painting Zone: Treated components are painted with primer and subsequent coatings
of paint and then baked for drying off paint.

4. Engines Procurement: Pre-assembled Engine Blocks are procured here according to assembly schedule
of various models.

5. Engine Testing: Procured Engines are joined with transmission system & tested for their performance
and proper working. Combined engine and transmission forms a chassis on which further assemblies are
done.

6. Chassis Painting Zone: Chassis is painted with primer coating and topcoats of paint & heating the chassis
dries off Paint in this zone.

7. Assembly of Other Parts & Accessories: Assembly of Parts (i.e. Steering, Air filter, Wheels, Seat,
Electrical instrumentation, etc.) & other accessories (Lamps, Stickers, etc.)

8. Final Inspection: Final Inspection of Tractor is done against various attributes and defects & test run is
taken here.

9. Proto Assembly Area: This area is used for assembling and testing of proto of new tractor.

31
 MATERIALS

Material department is the heart of any assembly unit. This department requires people with extreme passion
for their work and those who can get things done at the lowest cost. The basic function of material
department is to provide the production unit with all the components required for assembly. People in this
department have to make sure that whatsoever material is required for day’s production is provided. At
Eicher thousand of components have to be provided from a network of around 600 vendors from different
states. Material department usually works overtime to see that they get material from this vast vendor
network despite rain, strikes and delays in transportation due to breakdown of transport vehicles etc. Here
everybody works as a part of a team because even if a single component is not in adequate quantity then
despite the presence of all other components line will stop and this will not be the failure of an individual but
failure of materials department as a whole. I worked with the Logistic Department.

32
About Logistic Management

Logistics management is a component of supply chain management that is used to meet customer demands
through the planning, control and implementation of the effective movement and storage of related
information, goods and services from origin to destination. It helps companies reduce expenses and enhance
customer service. The logistics management process begins with raw material accumulation to the final
stage of delivering goods to the destination. By adhering to customer needs and industry standards, logistics
management facilitates process strategy, planning and implementation. (2)

Logistics management involves numerous elements, including:

1. Selecting appropriate vendors with the ability to provide transportation facilities.

2. Choosing the most effective routes for transportation.
3. Discovering the most competent delivery method.
4. Using software and IT resources to proficiently handle related processes.

Inbound Logistic
Inbound logistics is an integral element of business operations for a manufacturing firm, involving the
processes of receiving, storing and distributing raw materials for use in production. It is the first stage in
value chain. (3)

Materials Receiving

Receiving and storing raw materials is a massive undertaking for large manufacturers, but it is a main part of inbound
logistics for any business. Smaller companies often maintain receiving areas within the same plant in which
manufacturing and production takes place. Larger companies may have separate facilities for storing raw materials.
Typically, manufacturers have warehouse staff that receive materials, confirm accuracy and organize it for easy
access.

Materials Distribution

The organizational element of the materials receiving process is significant because it greatly affects the
efficiency with which staff can distribute materials to manufacturing as requested. Once requests for
materials come in, warehouse staff tracks down the materials, load them, check them out of materials
inventory and distribute them to the requested area. Delays in this process because of poor organization or
response can set back production and cost the company money or opportunities

33
 PROJECT 1

IMPROVEMENTS IN
WAREHOUSE

34
  Purchase of New Pallets

250 new wooden pallets have been purchased by the management for the storage of materials. All these
pallets are painted with dark brown colour to maintain the uniformity of the godown. These pallets are now
placed at the high racks and materials are also loaded over it.

As number of pallets earlier ordered was not sufficient for the fulfilment of godown, further new pallets
have been ordered and whenever it comes, it will be painted and placed at the racks.

35
  100% Mechanised Handling

Before After

To attain 100% mechanised handling, certain different trolleys have been purchased for the movement of
materials due to which less human work is put into the effort for the loading and unloading of the materials.

Certain following machines have been purchased for Mechanized Handling:-

Trolleys

These trolleys are used for safe keeping and transportation of commercial equipments, components and
other accessories

36
Hydraulic Pallet Trolleys

It is used for carrying and movement of ground pallets over which material is loaded. Pallets are raised
above with the mechanism of hydraulics. The handle is continuously pushed down to lift the trolley and
there is a release valve on pressing of which lifted trolley comes down.

Stacker

It is used for placing the pallets over the high racks. It also allows the operator to work without having to
perform extreme body movements

37
Hoist Crane

It is used for loading and unloading of heavy materials like flywheel, Bumper axle and many more.
A hoist is a device used for lifting or lowering a load by means of a drum or lift-wheel around which rope or
chain wraps. It may be manually operated or electrically driven and uses chain as its lifting medium. The
load is attached to the hoist by means of a lifting hook.

38
  Floor of the Godown

Before Before
Earlier at some places of the godown, there were some patches on the floor due to which there was chances
of topple of trolley which could lead to an accident. If the wheel of loaded trolley get stuck into this patch, it
becomes very difficult for the worker to take it out from this patch.

After

39
  Implementation of Stickers

According to Item Wise

According to Party Wise

40
According to Shelf Wise

These are done for improving the traceability system of the warehouse. Now it is very easy to find out the
given item of particular vendor with the implementation of these stickers. Now workers keep new items
according to item code wise instead of keeping it anywhere.

41
  Hidden Eyes are still BLIND

The Surveillance System is not in working condition. The management must take action regarding the
surveillance system otherwise the investment done on this is a complete waste.

42
  Implementation of Instructions board

With the implementation of these boards, everyone have to follow the instructions given on the board. The
person who is responsible for loading and unloading of material has some responsibility given on the
board which he has to follow by any cost.

43
  But Boards are just for Formality

Workers and staff are not following what are written on the boards. They are very regular in wearing
slippers and sandals which may lead to severe accident. During my training period, one worker got
injured when a heavy item fell over his toe and it took around 20 days to heal it.

44
  When it comes to RAIN

Whenever there is a rainfall, water enters inside the godown and accumulates there for a long time until it is
removed manually. With the incoming rain water inside the godown, it may damage the packaging of the
materials and could also lead to rusting of the material,

45
  Visiblity of Instruction Boards are Improved

Before
Earlier the height of instruction board was very high due to which it was very difficult to read what was
written on it. Reader had to look very high which becomes painful sometimes. Now its height is lowered and
is easily readable.

After

46
  Gangways

It is a passage for the movement of material and human either side of which materials are stored. The
materials stored on the side of gangway must not cross its line as it is completely designed for the
movement.

47
Redefining the Warehouse

Before
Earlier in the godown, the material had no place to store. These were stored at any random places with no
defined space. Now each supplier has their own place in the warehouse and now their item is being stored at
defined space only.

After

48
 Further Much Needed Improvements

1. Gloves must be given to the workers while handling the materials and pallets.
Without using gloves there is a high probability of getting injured.

2. Instructions must be given to labours for handling materials. Instead of placing items, they throw it.
Even they overload the pallets which can damage it.

3. There are still patches on the floor which needs to be filled immediately.
4. There should be the nomenclature of godown, like if there are 4 godowns in a Warehouse, each one
can be numbered from 1 to 4.

5. Implementation of stickers should not be stopped. If any sticker gets damaged, it must be replaced by
the new one.

6. The concrete road must be constructed as early as possible.

7. Fire Extinguisher much be placed in the Warehouse.

49
PROJECT 2

LAYOUT OF
WAREHOUSE

50
Purpose of Layout

The purpose of layout is to distribute the amount of space in warehouse to different vendors according to
the area required to them. Each vendor has to pay according to the area they required in the warehouse. The
logistic company has fixed rate for per unit area. The areas allotted to different vendors are marked with the
stickers so that it wouldn’t be difficult for any person to find it by his own. All the materials from the same
vendor have to store at the specified place so that at the time of delivery it wouldn’t be difficult to find that
particular item. Laying out the warehouse is done to improve the traceability.
Creating the perfect warehouse layout design requires careful planning when running an effective and
efficient business. If done incorrectly you may find it actually costs your business more money.
This space needs to be efficiently allocated to receive merchandise. Space should be allocated for goods
receipts, order preparation, order loading and shipping, order picking and packing, order assembly, and also
to the warehouse back office.
In a well-organized warehouse merchandise can be picked up and put away quickly and easily. One
technique is segregating the warehouse into different zones. This way employees can ensure that
merchandise in certain zones or bins need to be picked first and also put away first. (4)

Increasing Warehouse Space

It is not an easy task to change or expand the existing warehouse. It costs both time and capital for the
organization.

Here are some basic steps for optimizing the use of available storage space.

1. Office can be set somewhere else if possible, they shouldn’t be in the warehouse itself
2. Return or discard any outdated, expired, damaged and defective items.
3. Store Empty pallets on the racks built over the doors or outside the warehouse if there is space.
4. Don’t store unnecessary materials or junk in the warehouse.
5. Every centimetre in the warehouse should be effectively used. Any activities or tasks that can
be performed out of the warehouse should be moved out.
6. Keep the inventory levels to minimum, still achieving service levels.
7. Ensure that slots are allocated as per the size, weight, and height of the merchandise. Product
should correctly fit the slot, without wasting any space horizontal or vertical space.
8. Make use of wall space available above the doors, walls, load, aisles, space above works and pick
areas, and above docks. (5)

51
Considerations for Layout

1. Maximum area needs to be covered for material storage.

2. Gang ways are required for the movement of materials.

3. Around 40% of the allotted area is given in Gang Way.

4. Gang Way should be wide enough for trolley movement.

5. Enough space should be left in front of Gate of the warehouse.

Different Vendors with Allotted Area

 Osho Tools (300 sq. feet)

 Dawn Motors (500 sq. feet)

 Happy Steels (300 sq. feet)

 Bajaj Sons(200 sq. feet)

 Metal Craft (100 sq. feet)

 Knitfab (200 sq. feet)

 Uttam Foundry (300 sq. feet)

 Precise (300 sq. feet)

 Milestone (1500 sq. feet)

 Neera (300 sq. feet)

52
Figure 1: Complete Layout of Bansal Warehouse 1

53
Figure 2: Complete Layout of Bansal Warehouse 2

54
Figure 3: Complete Layout of Bansal Warehouse 3

55
Figure 4: Complete Layout of Bansal’s Warehouse 4

56
Figure 5: Complete Layout of Mahalakshmi Warehouse 1

57
Figure 6: Complete Layout of Mahalakshmi Warehouse 2

58
Figure 7: Complete Layout of Mahalakshmi Rooftop

59
 PROJECT 3

INSPECTION OF
PACKAGING

60
Packaging and Labelling
Packaging is the technology of enclosing or closing of products for distribution, storage, sale and use.
Packaging also refers to the process of design, evaluation and production of packages. Packaging can be
described as a coordinated system of preparing goods for transport, warehousing, logistics, sale and end use.
Labelling is any written, electronic or graphic communication on the package or on a separate but associated
label.

Need of Good Packaging and Package Labelling

The purpose of product packaging is to protect the product from damage. Product packaging not only
protects the product during transit from the manufacturer to the retailer, but it also prevents damage while
the product sits on retail shelves.
Packaging is also now generally regarded as an essential component of our modern life style and the way
business is organized. Packaging is the enclosing of a physical object, typically a product that will be offered
for sale. It is the process of preparing items of equipment for transportation and storage and which embraces
preservation, identification and packaging of products. Packing is recognized as an integral part of modern
marketing operation, which embraces all phases of activities involved in the transfer of goods and services
from the manufacturer to the consumer. Packaging is an important part of the branding process as it plays a
role in communicating the image and identity of a company.
An inefficient layout of warehouse can have a negative effect on business. Decreasing productivity, creating
inventory control issues, errors in shipping and posing safety risks. When it comes to laying out warehouse,
it is important to exploit its full space. Everything should be accessible and in the right location, allowing
staff to carry out their duties in the most efficient way. Ensuring every square foot of space is properly
utilized within warehouse will keep overhead costs to a minimum and increases productivity. (6)

Functions of Packaging

 Protective Function

The protective function of packaging essentially involves protecting the contents from the
environment and vice versa. The inward protective function is intended to ensure full retention of the
utility value of the packaged goods. The packaging is thus intended to protect the goods from loss,
damage and theft.
In addition, packaging must also reliably be able to withstand the many different static and dynamic
forces to which it is subjected during transport, handling and storage operations.

61
  Storage Function
The packaging materials and packaging containers required for producing packages must be stored in
many different locations both before packaging of the goods and once the package contents have
been used. Packaging must thus also fulfill a storage function.

 Loading and Transport Function

Packaging has a crucial impact on the efficiency of transport, handling and storage of goods. Packaging
should therefore be designed to be easily handled and to permit space-saving storage and stowage. The
shape and strength of packages should be such that they may not only be stowed side by side leaving
virtually no voids but may also be stowed safely one above the other.

 Promotional Function

Promotional material placed on the packaging is intended to attract the potential purchaser's attention
and to have a positive impact upon the purchasing decision. Promotional material on packaging plays
a particularly important role on sales packaging as it is directly addressed to the consumer.

 Service Function

The various items of information printed on packaging provide the consumer with details about the
contents and use of the particular product.
The package may also perform a further function once the contents have been used (e.g. storage
container, toy). (7)

Conclusion

The significance of packaging has come to be increasingly recognized in export as well as in marketing of a
wide range of consumer goods and industrial products within the country. The volume of exports depends
not only on the quantity of the production and prices, but also to a substantial extends on the standards of
packaging adopted for the products. Goods damaged in transit or arriving at the destination in an
unacceptable condition tarnishes the reputation of the manufacturer. In the recent past packaging has been
increasingly recognized as a significant factor in the nations export promotion effort. Effort should be there
to understand the importance of packaging there by to avoid the loss and damage cost incurred during
transport and delivery. Keep in mind that a conscious effort on the part of marketing managers can increase
the volume of sales and there by improve the reputation of the product and organization. (8)

62
Some following packages were found whose packing was not up to the mark.

Supplier: Atop Fastener

Transporter: Bansal Roadways
Item Code: All Items
Proper Packing Slip: Packing Slip is Not Available
Packing Standard: Good

Supplier: GNA Duraparts

Transporter: Bansal Roadways
Item Code: All Items
Proper Packing Slip: Packing Slip Not Available

Packing Standard: Good

63
Supplier: Milestone
Transporter: Bansal Roadways
Item Code: 93653511
Proper Packing Slip: Invoice No. is Missing on Packing Slip
Packing Standard: Good

Supplier: Sunline Auto Industries

Transporter: Bansal Roadways
Item Code: All itmes
Proper Packing Slip: Invoice No. and Item Code are Missing on Packing Slip
Packing Standard: Good

64
Supplier: Uttam Foundry
Transporter: Bansal Roadways
Item Code: 93626854 and 93419812
Proper Packing Slip: Packing Slip is Not Available

Packing Standard: Need Improvement

Supplier: Happy Steel/Milestone/Gna Duraparts

Transporter: Bansal Roadways
Item Code: Rear Shaft
Proper Packing Slip: Packing Slip is Not Available
Packing Standard: Need Improvement

65
Supplier: Sangam Engg.
Transporter: Bansal Roadways
Item Code: RG Housing
Proper Packing Slip: Packing Slip is Not Available
Packing Standard: Good

Supplier: Knitfab
Transporter: Bansal Roadways
Item Code: Footstep
Proper Packing Slip: Packing Slip is Not Available
Packing Standard: Need Improvement

66
Supplier: Bajaj Sons
Transporter: Bansal Roadways
Item Code: All Items
Proper Packing Slip: Packing Slip is Available

Packing Standard: Need Improvement

Supplier: Asian Wire

Transporter: Mahalakshmi Logistics
Item Code: All Items
Proper Packing Slip: Packing Slip is Not Available
Packing Standard: Good

67
Supplier: Devki Auto
Transporter: Mahalakshmi Logistics
Item Code: 93716338
Proper Packing Slip: Invoice No. on Packing Slip is Missing
Packing Standard: Good

Supplier: JS Industries
Transporter: Mahalakshmi Logistics
Item Code: 1298002
Proper Packing Slip: Packing Slip is Not Available
Packing Standard: Need Improvement

68
Supplier: Jayem Auto
Transporter: Mahalakshmi Logistics
Item Code: 93334880
Proper Packing Slip: Packing Slip is Not Available
Packing Standard: Need Improvement

Supplier: JBM Industries

Transporter: Mahalakshmi Logistics
Item Code: All Items
Proper Packing Slip: Packing Slip is Not Available
Packing Standard: Need Improvement

69
Supplier: Laxmi Precision
Transporter: Mahalakshmi Logistics
Item Code: 93716338
Proper Packing Slip: Invoice No. on Packing Slip is Missing
Packing Standard: Good

Supplier: R B Automotive
Transporter: Mahalakshmi Logistics
Item Code: 93716338
Proper Packing Slip: Invoice No. and Item Code are Missing on Packing Slip
Packing Standard: Good

70
Supplier: Sebros Industries
Transporter: Mahalakshmi Logistics
Item Code: All Items
Proper Packing Slip: Poor Packing Slip
Packing Standard: Need Improvement

71
Serial Packing
Supplier Item
No. Transporter Availability of Proper Packing Slip Standard

1 Atop Fastener Bansal All items NO OK

2 GNA Duraparts Bansal All Items NO OK
3 Milestone Bansal 93653511 Invoice No. is Missing OK
4 Sunline Auto Bansal All items Invoice No. and Item Code are Missing OK
5 Uttam Found. Bansal 93626854 NO NOT OK
6 Uttam Found. Bansal 93419812 NO NOT OK
7 Sangam Engg. Bansal All Items NO OK
8 Knitfab Bansal Footstep NO NOT
9 Bajaj Sons Bansal All Items OK NOT OK
10 Happy Steel Bansal Rear Shaft NO NOT OK
11 Milestone Bansal Rear Shaft NO NOT OK
12 GNA Bansal Rear Shaft NO NOT OK
13 Asian Wire MLPL All Items NO OK
14 Devki Auto MLPL 93716338 Invoice No. is missing OK
15 JS Industries MLPL 1298002 NO NOT OK
16 Jayem Auto MLPL 93334880 NO NOT OK
17 JBM Industries MLPL All Items NO NOT OK
18 Laxmi Precision MLPL 93716338 Invoice No. is missing OK
19 RB Automotive MLPL 93716338 Invoice No. and Item code are Missing OK
20 Sebros Industries MLPL All Items NO NOT OK

72
 References
(1) Eicher’s Manual

(2) www.techopedia.com

(3) www.inboundlogistics.com

(4) www.logisticsbureau.com

(5) www.supplychainbrain.com

(6) www.wikipedia.org

(7) www.interpack.com

(8) www.indianmba.com

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