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PDF Millat Tractors
PDF Millat Tractors
methodically and rapidly. The company’s history and it went about the
task methodically and rapidly. The company undertook this new role
with
enthusiasm and in the spirit of national development and proved its
engineering capabilities by surpassing the deletion targets set by the
Government.
In 1982, MTL took a giant step towards self-reliance by setting u
the first engine assembly plant in Pakistan. The company made strategic
decision right in the beginning to bring those manufacturing facilities in
house for which capabilities did no exist in the country and for parts
which required high investment and precision. Therefore, in 1984,
sophisticated manufacturing facilities for the machining of intricate
components were set up. These were previously not available in
Pakistan. Currently, critical components like engine block, hydraulic lift
cover, front axle support and center housing are being machined
successfully in house at MTL from local sourced castings.
that the company will keep marching forward in service of the nation
and the valued customers.
Millat Tractors Limited (MTL), an over Pak. Rs. 5.5 billion company, is
ISO 9002 certified for its operations has been a regular recipient of “Top
Company” and “Management Excellence” awards. The leading
engineering concern in the automobile sector. MTL manufactures a range
of Massey Ferguson (MF) tractors under technical collaboration with
AGCO of USA (Massey Ferguson Ltd. U.K.) and diesel engines with the
caterpillar USA (Perkins engines, U.K.), Diesel generating sets only.
Recently, an agreement for technical collaboration has also been signed
with. Anhui Heli of people’s republic of china for manufacturing of
forklift trucks.
The company founded in 1964, the company was acquired by its
employees in 1992 with 51% shareholding. Subsequently, the company
also acquired Bolan casting Limited, one of the largest foundries in the
country. Over the years, the company is maintaining a wide field
network spread all over the country. Its tractor dealers are 69, 46 spare
parts dealers and 312 lone shops.
So the company has spread its products throughout the length and
breadth of the country.
Organization Hierarchy
Company Secretary
Chief Director
Financial Officer Marketing
For the extra ordinary problem or defect the claim procedure is different
and as follows:
DEPARTMENT AT MTL
In order to have maximum efficiency, Millat Tractors Limited functions
are very structured. The division of work and labor is done in a very
designed manner and all the work requirements have been distributed
properly among the various departments.
Every department fulfill its own requirements and done its own work.
There are following department on Millat Tractor Limited.
Human resource development and training department (HRD)
Marketing department
Administration department
Finance department
Auditing department
EDP (electric data processing) department
Total number of employees are 1000, among them 185 are executives,
workers are 815, engineers are 74, qualified accountants are 8 and MBAs
are 16.
Once it hires employees, it does not fire them because of hiring cost and
image will hurt. MTL hires employees on basis of following factors.
Nature of job
In order to motivate the employees they offer reward system just like
production bonus scheme and profit sharing planes.
There is also promotion system at MTL. Employees are promoted on the
basis of job duration. They are not promoted before 5 years. But if
employees show extraordinary performance then 1st their performance is
PRODUCTION PLANT
There is only one production plant located in Lahore. Its working
capacity 70-120 tractors per day.
PRODUCT LINES
➢ MF 240 (50 hp) Tractor
➢ MF 260 Turbo (60 hp) Tractor
➢ MF 375E (75 hp) Tractor
➢ MF 385 (85 hp) Tractor
➢ MF 385 4WD (85 hp) Tractor
➢ Generating Sets (15-42 KVA)
➢ Prime Movers
➢ Forklift Trucks (3-Ton Capacity)
prime movers are generating high profits. These products have less
market share but have the more opportunity for market growth. So
on the basis of these qualities we can categories as the problem
child.
➢ Local manufacture of agricultural implements erodes its
profitability in agricultural implement. These products have the
low growth market and low market share so we consider these
products as dogs.
Mission Statement
“To be market leader in agricultural tractors and machinery building
company’s image through innovation and compositeness, grow by
investing into group of companies, ensuring satisfaction to customers
and stakeholders and to fulfill social obligation”.
Proposed
Goals
“Establish dealer’s network all over Pakistan to ensure the
availability of their products”.
“To completely satisfy the customers”
“Manufactures farm equipment and other engineering goods that
conform to the specified standards to enhance farm mechanization
for achieving self-sufficiency in against agricultural products,
saving of foreign exchange and developing technical and
engineering capabilities in the country”.
“Ensure customer satisfaction by providing quality products at
competitive prices with the warranty coverage and ensuring after
sale service.”
“Constantly endeavor to be market leader in terms of market share
and technology pace-setters in area of operations and to
continuously improve e ficiency and competitive strength”.
Objectives
Millat tractor limited held monthly and annual based meetings to set the
targets. There are different types of targets just like, production related,
import related, supply related, quality maintenance, delivery, finance,
manpower related targets. proper budget is allocated to achieve these
target. There are some factors which considered at the time of setting
targets.
What is the current sale level and what it was in past?
What is company’s current profit level and what it was in past?
What is the company’s current growth and what it was?
Business success and failure.
How many complaints company receive and among these how
much it accept.
Also consider how much time and cost it will take?
There are two-way communication in order to set the targets. In this
communication session two parties are involve. Top management and
middle management . These targets are split in di ferent targets and
spread them to make these targets operationalize. Again monthly
Production Bounces
Production standards are set, i.e. 28000 tractors / annum. On meeting and
exceeding these targets they are given production bonuses. In order to
meet the sales targets, MTL also give the incentives to dealers but
Its true that Millat Tractors Limited is producing new products (generating sets,
fork lift trucks and prime movers) and modifying its available products
(Tractors) but t should modify tractors by introducing those features which
customer requires and create a sustainable competitive advantage.
Now the question arise, why people in lower Punjab prefer 480 model (Fiat
Tractors) rather than models introduce by Millat Tractors?
The answer of this question is that the farmers of these areas mostly use rota-
wheater which do not work well with the 240hP Model of MTL. it efficiently
work with the 480 hP of Al-Ghazi Tractors. So in order to capture this market
MTL should introduce those models of tractor which efficiently work with the
rota-wheater.
DEMAND MANAGEMENT
Marketing personnel have a view in their minds that when any customer comes
to the market to buy tractors knowing already what they have to buy either
invested in marketing.
UNSATISFIED DELIVERY PROCEDURE
Proper Delivery
No Team 2ork
Basically all the decisions are made by higher authority regarding all the
procedures in the office e.g. purchase, sales, production etc. all the
decisions regarding employees are taken by the top management and
they are not allowed to participate in any decision. Most of the time first
line employees know better than middle and top level management.
Early and premature launch of 260 model has created the problem for
Millat Tractors Limited. This model is not well appreciated by the
market. This problem again indicate the flaws of marketing department
and lack of marketing research. Through the proper market research
they could launch this model at appropriate time so, Millat Tractor is
thinking to launch this model with some modification.
If we go by the text, then corporate strategy answers the question that “in
what business the company should be in”
Diversification
Forms Of Diversification
Vertical Diversification
Horizontal Diversification
in that business when the risk is low in the sense of less competitive
business and also acquire those business which the Govt. has disinvested.
Global Diversification
Middle East, Sudan, and Nigeria. But Al-Ghazi is not in this position to
export their products.
Means Of Diversification
There are two sources which are used by MTL to diversify its business.
Internal development
Acquisition
Internal Development
Acquisition
Bolan Castings
Differentiation
Recommended Strategies
Com&etiti1e En1ironment
cost. But Alghazi has also make the delivery procedure more prompt.
S2OT ANALYSIS
The swot analysis consist of analyzing the organizational strength and weaknesses,
and its opportunities and threats which are related to external environment. it helps to
identify a strategic niche that the organization might exploit. Here is a swot analysis
of Millat Tractors Limited.
Strength
Millat tractors limited is strong organization as for as its competitor is
concerned. Basically the activities the firm does well or the resources it
has or it controls are referred to as its strength.
Following are the strengths of MTL.
Market Share
Re&air Facility
A1ailability Of Parts
Millat tractors parts are readily available all over Pakistan that is another
strength.
There are 69 tractor dealers, 46 spare parts dealers and 312 workshops all
over Pakistan.
Di1ersification
E>&erience
2EAKNESSES
Weakness are the activities the firm does not do well or the resources it
does not fully utilized or the resources it needs but does not have.
Though Millat Tractors Limited in a successful organization but it has
following weaknesses.
Job Staticness
There is lack of job rotation in MTL which has created the staticness and
reduce the productivity and efficiency of the employees.
Indis&ensability
High market share another strength has mad Millat Tractors to think that
they are leaders so they do not put its efforts to those areas which are
weak and need its attention.
long.
Di1ersion Of Concentration
The marketing department has good workers but they are not good at
public dealing and less interaction with the customers.
There are long decision making procedure. Not quick decision are taken
so these long procedures are time consuming.
O&&ortunities
If the crop yield is high and the farmers are going to get good price for it
so this wills increase the demand of the tractors.
EBCommerce
MTL can established B2B e-commerce application with its dealers, spare
parts and workshops. This will help them to make true “MANAGEMENT
INFORMATION SYSTEM”
THREATS
Political Instability
MTL has face a very strong competition not only in tractors but in
agriculture implements as well. In tractors the major competitor is Al-
Gahzi Tractors Limited and in agricultural implements all the local
manufacturers are its competitors .AGTL has achieved a major portion of
the market share so rapidly by reducing per unit cost of tractor by
switching from Italy (FIAT) technology to Turkish technology
(TUMOSAN) and by managing its delivery period.
Pest Analysis
POLITICAL
In 1979, Zia government imply the ordinance for the automobile
industry. According to this ordinance the formers are indicated to
produced all the imported items at local level. MTL acted upon this
ordinance in 1981. Uptill now all the government policies are in favour of
farmers. Banazeer Government had introduced Awami Tractor scheme
and Nawaz Shareef Government had introduced Green Tractor Scheme.
According to this schemes prices of the tractors declined. MTL also gave
the sacrifice by reducing the profit margins and on the other hand
government reduced the taxes but this reduction was not so much
supportive.
Compliance with the spirit of laws, timely payment of all govt. Taxes and
dues. Obligations, the Company continued to promote various welfare
schemes, organizations and charitable institutions. The Company
provides financial assistance for promoting education, health and social
activities to schools,
(85 HP) and MF-385 4 Wheels Drive. We are now well placed in the
market by offering a wide range of products meeting all pocket needs.
This also places us in a comfortable position to meet future WTO
conditionalties. We are confident that our current products quality will
The Company expects that the tractor industry will grow further due to
restructuring of ADBP recently being taking place, formation of politic
Government in October, 2002 and Afghan potential i.e. participation of
Pakistan in the rehabilitation of Afghanistan.
Habib Bank Ltd. and The Bank of Punjab are already extending tractor loans
and improving their share in the tractor industry which shall reduce dependence
on ADBP
Suggestions
We gave following suggestions for Millat Tractor Ltd. By acting upon these
MTlL will not only profitable itself but also play an important role in the
development of the economy.
2. They should change their thinking that they will always remain leader of
tractor industry but they should understand that every business has to face
the decline stage as well in order to remain at maturity, it is necessary they
should capture those markets in which they still did not penetrate & The
4. They also are allowed the operational level employee in decision making
process especially when the decision are taken about the labour force
because most of the time they better know about what is beneficial and
suits to them.