“AN ORGANISATION STUDY AT MRF LTD.

IN NOIDA”

SUMMER TRAINING PROJECT

(Submitted in partial fulfillment of the requirements for

MBA
By

Submitted By:

VISHAL SHARMA

Roll No.21017207000281

Batch of 2021-23

Under The Guidance of :

Proff. Rajul Gupta
Professor

LLOYD INSTITUTE OF MANAGEMENT & TECHNOLOGY

PLOT NO 11, KNOWLEDGE PARK-2, GREATER NOIDA-201306 (UP)

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 CERTIFICATE OF ORIGINALITY

(To be filled in by the student in his / her handwriting)

I VISHAL SHARMA a Roll No.21017207000281 of Batch 2021-2023 is a fulltime

bonafide student of second year of MBA Program of Lloyd Institute of Management
& Technology , Greater Noida. I hereby certify that this project work carried out by
me at “AN ORGANISATION STUDY AT MRF LTD. IN NOIDA” the report submitted in
partial fulfillment of the requirements of the program is an original work of mine under
the guidance of the faculty mentor Proff. Rajul Gupta and is not based or
reproduced from any existing work of any other person or on any earlier work
undertaken at any other time or for any other purpose, and has not been submitted
anywhere else at any time

(Student's Signature)
Date: ________________

(Faculty Mentor's Signature)

Date: ___________________

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 DECLARATION

I hereby declare that the project report titled “AN ORGANISATION STUDY AT MRF LTD. IN
NOIDA” Submitted for the Award of Master of Business Administration (MBA) at Dr. A.P.J. Abdul
Kalam Technical University, Lucknow is my original work and the dissertation has not formed the
basis for the award of any degree, associate ship, fellowship or any other.

The material borrowed from similar titles other sources and incorporated in the dissertation has been
duly acknowledged.

I understand that I myself could be held responsible and accountable for plagiarism, if any, detected
later on.

The research papers published based on the research conducted out of the course of the study are also
based on the study and not borrowed from other sources.

Name of Student

VISHAL SHARMA

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 ACKNOWLEDGEMENT

This project is the outcome of sincere efforts, hard work and constant guidance of not only
me but a number of individuals. First and foremost, I would like to thank Lloyd Institute of
Management & Technology, Greater Noida.

I am thankful to my guide Proff. Rajul Gupta for providing me help and support
throughout the Project Report period.

I owe a debt of gratitude to my faculty guide who not only gave me valuable inputs about the
industry but was a continuous source of inspiration during these months, without whom this
Project was never such a great success.

Last but not the least I would like to thank all my Faculty members, friends and family
members who have helped me directly or indirectly in the completion of the project.

Name of Student

VISHAL SHARMA

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 TABLE OF CONTENTS

Chapter Title Page No:

Chapter 1 Introduction 1

Chapter 2 Company Profile 4

Chapter 3 Organization Structure & Functional Areas 21

Conclusions

Chapter 4 58

Chart Title Page No:

Chart-2.1 Site Map 18

Chart3.1 Organisation Chart of MRF Corporate Office 22

3.2 Organisation Structure of MRF Noida UnitStructure 23
3.3
of Production Department 26
3.4
Structure of Quality Assurance Department 30
3.5
Structure of Technical department 34
3.6
Structure of Engineering Department 40
3.7
Structure of Industrial EngineeringDepartment 42
3.8
Structure of Security Department 45
3.9

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 3.10 Structure of HR Department 47

3.11 Structure of Accounts & Finance Department 49

Structure of Marketing Department 51

3.12
Financial Performance:
3.13
Profit 54
3.14
Reserves 55
3.15
Sales 55

Net Worth 56

Chart – 4.1

Structure of Porter’s five force analysis

62

Table Title Page No:

Table – 2.4 Noida Unit-Facts & Figures 20

Table -3.1 Product Volume 26

3.2 MRF Sales Network 51

3.3 Financial Performance 54

3.4 10 years Financial Summary 57

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 CHAPTER-1

INTRODUCTION

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 INTRODUCTION

About The Tyre Industry:

The tyre industries in India come into existence with establishment of trading outlets by U S

based Fire Stone Tyre and Company in1922 and followed by Dunlop Rubber Company in

1926.The Indian Tyre industry has witnessed a Cumulative Annual Growth Rate (CAGR)

7.7% over the last decade. Economic expansion, investments and road developments have all

contributed to this

Increase in demand for vehicles. This has helped the growth in the tyre industry. The tyre

industry is the major consumer of the domestic rubber production. The tyre industry is mainly

dominated by organized sector; the unorganized sector holds in bicycle tyres. The major

players in the organized sector consist of MRF, Apollo tyres, Ceat, and J K Industries, which

account of the 63% of the organized tyre market.

About The Company:

MRF Ltd was established in the year 1946. The company name is an acronym for “Madras

Rubber Factory”. It was started by KM MammenMappilai at Thiruvattiyur Chennai. In the

year 1951, the company took up the manufacture of trade rubber. MRF Ltd was incorporated

towards the end of 1960 and was converted into Public Limited Company in 1961. Since then

it has emerged as the largest tyre manufacturer in India and 12 th largest in the world with

turnover of Rs 10637 Cr. with capacity of six million tyres from six production units in India.

With a profit margin of 1.3% in tyre manufacturing sector, MRF hold 24% of market share.

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 MRF tyres are rolled out of six interdependent facilities, which are built over 450 acres and

with over 15,000 dedicated people. MRF has over 3000 strong dealer network with 180

offices. What this means is that the company boasts of the largest range of tyres in India -

from heavy duty truck tyres to 2-wheeler tyres, The MRF Pace Foundation is synonymous

with training and teaching the world's best fast bowlers.

Objective of the Study

The study was conducted at Madras Rubber Factory Limited (MRF Ltd), Vadavathoor, Noida,

Kerala. MRF Ltd. is one of the well known, most advanced and leading manufacturers and

exporters in tyres. The organization study was conducted in order to understand the

functioning of the various departments and activities undertaken by them; organizational

structure; roles and functions of different departments; the vision, mission, and objectives of

the company, its product profile, rules and regulations in the company etc. Organizational

study covered all functional aspects of the organization.

Scope of the study

By doing this we can get a basic idea how Organizational activities are going out in the real

world and we can see how they are managing every activity, procedures and policy. As an

MBA student I also get a chance to know how organizational activities are going on and have

a real experience.

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 CHAPTER- 2

COMPANY PROFILE

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 COMPANY PROFILE

Madras Rubber Factory, popularly known as MRF, is a major tyre manufacturing company

located in India. MRF is mainly involved in making vehicle tyres. It is India's largest

tyremanufacturing company.

The company was established in the year 1946. The company name is an acronym for Madras

Rubber Factory. MRF Ltd was started by a young pioneer called K.M.MAMMEN

MAPILLAI as small toy balloon manufacturing unit in a small shed at Thiruvattiyur in

Chennai. Since then over this long 67 years it has emerged as the largest tyre manufacturer in

India. It is also the world’s 12th largest tyre manufacturing company. It is one of the largest

rubber companies both worldwide and in Indian private sector. MRF holds more than 20% of

the market share. It is the only tyre company to straddle the continent with giant

manufacturing facilities at Chennai, Arkonam, Noida, Goa, Medak, Pondicherry, and

Tiruchirappalli.

The company carters to all vehicle segment from commercial vehicle and passenger cars to 2 -

3 wheelers and tractors and has a strong presence in both radial and cross ply segments. It is

also involved in a range of other activities via subsidiaries. Funskool India, a joint venture

between Hasbro and MRF LTD. is a major toy manufacturing company in the country. MRF

Pre-treads offers world class procured is presently under the leadership of VinuMammen, son

of the Late K.M.MammenMappilai.

It has a distribution network of more than 2500 outlets in the country, overseas offices in

United Arab Emirates, Bangladesh and Vietnam and export tyres in over 75 countries

globally. MRF LTD. enjoys of manufacturing the largest range of tyres in India and it has the

highest brand preference for superior quality, appearance and wearability. It manufactures the

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 largest range of tyres in the country and is the market leader with the largest market share in

almost every segment of the tyre industry.

MRF Ltd. is the 1st Indian company to export tyres to the U.S., the very birth place of the tyre

technology. It is also the 1st company in India to manufacture and market Nylon tyres and

passenger tyres commercially. In 2011, the company’s turnover crossed INR 100 billion

mark.

MRF Ltd. is the pioneer in motor racing tyres in India. MRF tyres are made to run at speeds

exceeding 150 km/h, at which they are exposed to extreme conditions of speed and traction.

The molecular stability of the rubber compounds is tested against severe gravitational stress.

MRF’s tyre experts and rubber technologists are present at every stage to observe, analyze

and gather information at the pits and the dirt track, which they pass on to the R & D

department. This is then reviewed and used to safer and better quality tyres, not only for the

formula cars and racing bikes, but also for cars that rough it out on the tough Indian roads

every day.

MRF brands are the market leaders in almost every segment. MRF brands are:

 Super Lug (truck tyre)

 Shakthi (tractor tyre)

 Zigma (radial car tyre)

 Nylogrip (2 wheeler tyre)

 Legend (conventional car tyre)

Evolution of MRF

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 A race from the birth to success . . .

 It was in late 1946, a period that was characterized by the indomitable spirit of freedom

and the “will to win” among Indians. A young pioneer called K.M.MammenMappilai

started a small toy balloon manufacturing unit in a small shed at Thiruvattiyur in

Chennai. There were no machines in the unit but it had an employee with bubbling

enthusiasm, innovative ideas and a great vision he was owner himself.

 Any product that could be made from rubber, without machine was produced. From

balloons to latest cast squeaking toys, industrial gloves and contraceptive, the list is very

long.

 1949-Established 1st office at 334, ThambuChetty Street, Chennai.

 1952-1st machine (a rubber mill) was established at the factory and ventured into

manufacture of tread rubber.

 1955-Started competing with foreign companies operating in India by becoming the

only Indian company to manufacture superior, extruded, non-blooming and cushion

backed tread rubber.

 1956-Becomes the market leader in tread rubber with 50% share of Indian market.

 1961-Becomes a public limited company. Entered into a technical collaboration with

MansfieldTyre Company of USA and a pilot plant for tyre manufacturing was

established at Thiruvattiyur.

 1963-Full fledgedtyre plant and rubber research centre were inaugurated by India’s 1 st

Prime Minister Pandit Jawaharlal Nehru.

 1964-Started an overseas office in Beirut (Lebanon) to develop export market.

 1967-Becomes the 1st Indian company to export tyres to USA, the birth place of tyre

technology.

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  1970-Noidaplant becomes operational.

 1971-Goa plant was built in record time of 18 months.

 1972-With the setting up or Arkonam plant, MRF becomes the only tyre company in

India with four manufacturing facilities.

 1973-Launched India’s 1st Nylon car tyre.

 1978-Launched Super Lug 78 which later became the largest selling truck tyre in India.

 1979-Turnover crossed Rs.100 crores.

 1980-Entered into a technical collaboration with BF Goodrich Tyre Company of

USA.

 1984-Becomes the 1sttyre to be selected for fitment on Maruthi-800.

 1986-Won 6 awards for quality improvement from BF Goodrich; pitted against 20 tyre

companies worldwide. Also won the National Institution for Quality Assurance award.

 1987-Becomes the No: 1 tyre company in India by crossing the Rs.300 crores

turnover. Since then MRF has maintained its No: 1 position.

 1988-MRF Pace Foundation was set up with Dennis Lillie as its Director.

 1989-Collaborated with the world’s largest toy maker, Hasbro International and

launched Funskool India, the most modern toy project in Asia.

 MRF collaborated with Vapocure of Australia to produce poly-urethane paint

formulations.

 MRF Zigma Radials were launched along with MRF World Series Cricket which was

one of the country’s most spectacular cricketing and marketing events.

 The 5th unit for manufacturing tyres and tubes was opened at Medak in Andhra

Pradesh.

 MRF TyreDrome became India’s 1sttyre company owned wheel care complex.

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  MRF collaborated with Pirelli to manufacture conveyor belts called Muscle Flex. The

same year MRF brought the World Boxing Championship to India.

 MRF bagged Visweswarayya Award for the Best Business House in South India. It also

bagged the Harvard Business School Award for the Best Corporate Performance.

 1991-Moved into its own corporate office which soon became a land mark in Chennai.

 1993-Beacame the 1st Indian tyre company to cross a turnover of Rs.1000 crores. With

this the company found a place among the 10 most respected corporate groups in India.

 It was a proud moment for the company when its founder K.M.MammenMappilai was

honoured with the “Padmashree” for his contribution to industry, the only industrialist

from South India to be accorded with this honour.

 1996-In the Golden Jubilee year the company crossed a turnover of Rs.2000crores and

also setup a new plant at Pondicherry for manufacturing radial tyres.

 1999-Was declared as the Most Ethical Company by the Business World in its

survey.

 2004-Crossed a turnover of Rs.3000 crores.

 2006-Turnover crosses Rs.5000 crores.

 2007-Launched Super Lug F5 and Super Lug 505, a premium mileage rear fitment

truck tyre.

 MRF launches ZSLK tyres.

 2008-Won JD Power Award for the 6th time.

 2010-Ranked highest in the JDPower Asia-Pacific 2010 India Original Equipment

TyreCustomer Satisfaction Index (TCSI) Study. This is for the 7th time that MRF has

been awarded this honour.

 Won the Top Export Award from Chemicals & Allied Products Export Promotion

Council(CAPEXIL) for 2009-10.

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  2011-MRF launches Revz, India’s 1st radial for 2 wheelers.

 MRF inaugurated its 7th manufacturing facility at Ankenpally at Medak District in

Hyderabad, Andhra Pradesh exclusively for radial tyres.

 Turnover crosses Rs.10000 crores mark.

 Rankedhighest in theJDPower Asia-Pacific 2010 India Original Equipment

TyreCustomer Satisfaction Index (TCSI) Study for the 8th time.

 2012-New plant at Perambalur, near Tiruchirappalli in Tamil Nadu will be

operational. This will be MRF’s 8th independent plant in India.

 2013-Won the JD power award for the 10th time.

 MRF's Aero Muscle becomes the only Indian tyre to be chosen for the legendary

fighter jet - Sukhoi 30 MKI

 Team MRF’s Guarav Gill wins his first Asia-Pacific Rally Championship

The Muscle Man

The corporate ethos is perfectly represented by the brand symbol The MRF Muscleman-

embodying strength, reliability and durability; the very qualities of the tyres it represents.

The mere mention of the world “MRF” is bound to bring the muscleman to the mind of

Indians. The muscleman has evolved in 1964 soon after MRF began exporting tyres. Over the

past 33 years it has evolved from a mere corporate mascot to a symbol of strength, reliability

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 and durability. Now the muscleman grew to become India’s most trusted and well recognized

symbol for tyres.

In the 1960’s the Indian tyre market was completely controlled by the large multinational

companies. Around this time MRF opened tyre factory at Thiruvattiyur in Tamil Nadu. With

that came a task of recognizing an appropriate corporate brand symbol. In this process of

developing suggestions for the symbol, some enterprising employees conducted an informal

market survey by interviewing people from all over the country about their expectations from

a god tyre. One day a truck driver at a road side dhabha (tea stall) somewhere in Western

India hit upon the rigid idea when he said “a good tyre should have all the qualities of a

pehelwan(strongman). And by this simple statement, the muscle man was born.

Organizational Goal

The organizational goal of MRF Ltd. is “to maintain global standardsthrough continuous

improvement in the quality of product and services in order to maintain market

leadership.”

The main strategy of the company in today’s competitive world is “cut cost and win the

battle.” As the number of accidents in similar factories is comparatively more, the emphasis

of the company is “accidentfree safe production.”

MRF Ltd achieves the objectives by taking the following actions;

 Product/process improvement by performance monitoring and prompt service to the

customers.

 Upgradation of all the machinery to meet the increasing needs of customer.

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 Continuous training is given to all employees in order to acquire necessary skills and

knowledge and improve the quality of work life

Mission & Vision

MRF is a leader in the Indian tyre industry and a significant global player providing customer

delight and enhancing shareholder value. MRF has well defined quality environmental safety

and health training and human resource policies. The vision of MRF is “to realize their

policies and implement the contents letter and spirit.”

It is the vision of MRF to emerge as prominent global player in the field of polymers (plastic

and rubber) and make India a global super power in terms of technology and quality of life.

It is the mission of MRF to realize zero defects, zero break-downs, zero accidents, zero

pollution and thereby to have zero losses.

Values

 Customer: We will be responsive to the needs of our customers.

 Learning: We will continuously improve our service innovatively & expeditiously.

 People: We will trust and respect our employees.

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  Community & Partners: We will be transparent and sensitive in our dealings with all

stake holders.

Policies of MRF

1. Quality Policy

The main quality objective of the company is “tomaintain market leadership through

continuous quality performance”

2. Safety Policy

Safety and health of the employees shall be the first priority of the company. It is the

responsibility of each and every individual in the organization, regardless of the position he

occupies, to ensure that everyone in the factory returns home without any injury. The

company offers “accident free safe production” not only in letter but also in spirit, for the

benefit of one and all through this policy.

3. Environmental Policy

The environment Policy of MRF Ltd. is “to manufacture the company’s products in an

environmentally friendly and safe manner.”

This is to maintain products in an environmentally friendly and safe manner. To achieve this

goal, all the MRF plants, together with corporate office shall:

 Minimize the impact of our manufacturing activities on the environment especially the

air, water, and soil.

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  Comply with all applicable regulatory requirements

 Develop environmental performance evaluation procedures for continuous monitoring

 Optimizes the consumption of resources (water, energy and raw materials) by

minimizing wastage, recovering and recycling where ever possible.

 Up gradation of the machinery and pollution control equipment when required

 Train all our employees to perform their activities in an environmentally responsible

land safe manner

 At the plant level, the respective Senior General Managers/ General Managers are

assigned the responsibility of carrying out the environmental system by collaborating

with corporate functions..

4. Training Policy

The training policy of MRF LTD. is “to provide and develop knowledge, skills and

behavior of the company’s employees to continuously improve their performance.”

MRF plants along the corporate office join hands to accomplish the following:

 Competency evaluations conducted each year identify and document the training needs

of the employees.

 Design and publish the training calendar and schedule.

 Monitor and evaluate training process and out come to asses and to decide the next

training cycle requirement.

 Collaboration of the activities along with the activities of human resource department
plants.

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 Management

The success or failure of a company is determined by the performance of its management. It

has to play a major role in many crucial functions. Management of MRF is lead by

Mr.K.M.Mammen, son of Mr.MammenMappilai who started this company about 66 years

ago.

Board of Directors

 K.M.Mammen - Chairman & Managing Director

 ArunMammen - Managing Director

 K.M.Philip - Whole Time Director

 Rahul MammenMappilai - Whole Time Director

 Dr.K.C.Mammen - Director

 K.D.Parakh - Director

 Ashok Jacob - Director

 V.Shridhar - Director

 Vijar.R,Kirloskar - Director

 N.Kumar - Director

 Ranjith.I.Jesudasen - Director

 S.S.Vaidya - Director

 Dr.Salim Joseph Thomas - Director

 Ravi Mannath - Secretary

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 Production Units

1) Thiruvattiyur, Tamil Nadu (for automobile tyres)

2) Arkonam, Tamil Nadu (for bicycle, scooter and auto rickshaw tyres)

3) Goa (for automobile tyres and procured tread rubber)

4) Noida, Kerala (for automobile tyres, tubes, procured tread rubber)

5) Medak, Andhra Pradesh (for automobiles)

6) Pondicherry (for radial tyres)

7) Gummidippondi, Tamil Nadu (for radial tyres)

8) Perambalur, Tamil Nadu (for future requirements)

Awards & Achievements

 FORD WORLD EXCELLENCE AWARDS

MRF won the silver award and is the only Indian company to win this excellence award.

 TNS

MRF voted the "Most Trusted"Tyre Company in India by TNS 2006 global CSR study.

 J D POWER ASIA PACIFIC

MRF won the award for customer satisfaction not once but 10 times till date.

 CAPEXIL

MRF won the award for exports.

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 Brand Ambassadors

Former brand ambassadors

Indian batting maestro Sachin Tendulkar, cricketing legends Bryan Lara & Steve Waugh.

Current brand ambassadors

The young Indian batting stars GautamGambhir, Rohit Sharma &Ashrafull (Bangladesh)

Subsidiaries

 Funskool India Ltd.

 Product-o-Drome

 Paint & Specialty coatings.

 MRF Pre-treads

 MRF Pace Foundation

 MRF Power House

 MRF TyreDrome

 MRF Muscle flux Conveyor Belting

Sister Concerns

 MalayalaManorama

 Manorama Vision

 MM Foam

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  Philip’s Coffee

 Devon Machines

 Plantation

 COLT Computers

 MazhavilManorama TV channel

Product Range

Automotive tyres are the main products of the company.

 Truck tyres-tube type and tubeless type

 Light truck tyres

 Special tyres for defence

 Tyre for industrial applications

 Agricultural tractor and tiller tyres

 Off the road tyres-solid tyres and earth mover tyres

 Passenger tyre-bias ply and radial

 2/3 wheeler tyres

 Specialized tyre for motor rallies

Non Tyre Products:

 Automotive tubes

 Toys

 Flaps

 Conventional tread rubbers

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  Pre-cured tread rubber

 Vulcanizing solution

 Tyre repair materials

 Conveyor belts

 MRF Wood coat

 MRF metal coat

 MRF glass coat

 MRF velour

 MRF auto coat

MRF Noida Unit

MRF limited, Noida are one of the most modern plants that was setup in 1969 at Vadavathoor

about 7km from Noida town in the state of Kerala, a hamlet lying on the outskirts of Noida

district. About 10 crores of land was purchased in Vadavathoor village during 1968 and the

foundation stone for the factory building was made by late Sri. K.M.Cherian. Availability of

intelligent and motivated labor, natural rubber in large quantity (Noida is the land of 3 L’s-

Latex, Letters & Lakes), cheap power etc. Tariffs, tax concession and transportation facilities

were the main reason behind the choice of Noida as the 2nd manufacturing facility of MRF.

A factory building with in the area of 34200 sq. ft was constructed during the period of 1968-

69 and Ban-Bury (internal mixer) of 3A size with a capacity to mix of 10 meter per day was

erected and commissioned on 21st July 1969, with strength of 7 workmen. Presently it is the

most advanced technology mixing unit and a fully fledged manufacturing unit providing truck

and tractor tyres.

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 In the view of high productivity and very good performance in general, the mixing capacity

was enhanced by installing a second Ban-Bury of 11A size with a capacity to mix 48 meter

per day during march 1970, with the permission of Goa government. A license to manufacture

400000 automotive tubes per annum was transferred and started production of tubes with 7

quarrying presses. To enhance the mixing capacity, Ban-Bury of 11 D size were installed in

1978 to meet the increasing demand for mixing. At present 6000 tones of various compounds

are dispatched to different units.

Another new product introduced in MRF Noida unit during 1993 was flap production. The

management also decided to start tyre production Noida unit taking amount of various

incentives on tax and power announced through a new industrial policy by the Kerala

Government. The tyre plant with an initial plan to produce 200 numbers of tractor rears and

600 numbers of tractor front tyres per day was inaugurated by Chairman Sir

K.M.MammenMappilai on 30th May 1994. Commissioning of tyre plant was the beginning of

a new era in the history of Noida unit. Initially tractor front tyres were produced and then it

diversified into passenger tyres, tractor rear and truck tyres of various sizes. Cement house

was also built to prepare various cements and paints required at tyre plant and also for the

production of vulcanizing solution.

A new plant, mainly for PCTR (Pre-Cured Tread Rubber) production was commissioned in

the year 2000. This new plant now houses a 6” cold feed extruder for extruding re-threading

materials and PCTR slugs, PCTR curing presses, 48” calendar for production of tyre repair

materials, 68” fabric calendar, German tuber for flap slug extraction, flap curing presses, tyre

finishing and repair, tyre clinic, textile lab, finished goods storage and shipping.

With the growth in the number of tyre presses and subsequent increase in the requirement of

bladders (which were being supplied by other units of MRF) Noida unit started producing

26 -
 bladders for its use and also for supplying to other units. The bladder press is located in the

tube plant.

As a new product, solid tyre production was introduced at Noida unit in 2004. This solid tyre

curing presses are located in tube plant.

Site Map

MIXING PLANT

TYRE PLANT PCTR PLANT

RM BD
GODOW MIXING
N
TUBE PLANT

ENGG.
STORE

CANTEEN

ADMINISTRATION
OFFICE

27 -
 Chart-2.1

Employee Details

 Office Managers - 29

 Management Staffs - 159

 Clerical Staffs - 58

 Sub-staffs - 8

 Watchman & Fireman - 52

 Workers - 1079

 Trainees - 78

 Casuals - 17

 Temporary Workmen - 155

 Canteen Contractor’s Workmen - 40

 Total - 1738

Working hours at Noida Plant (24 hours)

There are 3 shifts of 8 hours each.

 1st shift - 7 am to 3 pm

 2nd shift - 3 pm to 11 pm

 3rd shift - 11 pm to 7 am

 General shift - 8 am to 4:30 pm

Trade Unions

 MRFEU - MRF Employers Union

28 -
  MRFEA - MRF Employees Association

 MRFES - MRF Employees Sangh

Plants in MRF Noida Unit

1) Tube Plant

2) Tyre Plant

3) Mixing Plant

4) PCTR Plant

Products at Noida Plant

1) Automotive Inner Tube

2) Automotive Tyre

3) Retreading and repair material

4) Flap

5) Bladder

6) Pre-cured tread rubber

7) Vulcanizing solution

8) Curing Bags/Envelope

9) Mastication

International Certifications for Noida Plant

 ISO 9001:2000 Quality Management System

 ISO 14001:1996 Environment Management System

 ISO TS:6949 Technical Standards

29 -
  CQC

Noida Unit-Facts & Figures

Built-up area Six lakh square feet

Management staff 252

Regular workmen 1115

Casual workmen 399

Total finished goods production 3400 MT/ month

Total turnover of finished goods Rs.42 crores/ month

Mixed stock sent to other units 7000 MT/ month

Tyre production 52000 tyres/ month

Total production of tubes, envelopes 263000/ month

and curing bags

Flap production 82000/ month

Tread Rubber Production 160 MT/ month

(conventional)

PCTR production 330 tonnes/ month

Table – 2.1

30 -
 CHAPTER-3

GENERAL MANAGEMENT PRACTICES

31 -
 Organisation Structure

Organisation Chart of MRF Corporate Office

Chairman &
Managing
Director

Joint
Managing
Director

Director
Marketing

Director
Engineering

Whole Time Director

Director Accounts

Director R & D

Director
Manufacturing

Director
Material &
Export Division

Manufacturing Units

32 -
Thiruvattiyur Kottayam Goa Arkona Medak Pondicher Gummidippondi Perambalur
m ry
Chart3.1

Organisation Structure of MRF Noida Unit

GM

Plant Plant Plant HR Plant Plant Quality Plant Plant Senior Plant
Production Accounts Manager Technical Assurance Industrial Security Engineerin
Manager Manager Manager Manager Engineering Officer g Manager
Manager

Manager Assistant General Technical Quality Assistant Security Electrical

Officer Assurance Officer Maintenanc
Plant I Manager Supervisor Time Officer Manager e Civil
office Engineering
Plant II Accounts Planning Mechanical
Maintenanc
Plant III e

Plant IV Technical Quality

Supervisor Assurance
Supervisor Guards
Staff Operators
Supervisor
Foreman

Staff Workers Operators Operators Workers Supervisor

Supervisor

Workers
Workers

33 -
 Chart-3.2

FUNCTIONAL AREAS

DEPARTMENTS

MRF Ltd gives an insight about the functioning of the different departments. Each department

is headed by the general manager who possesses expertise, knowledge in the area under his

supervision. There always exists an ergonomic atmosphere which is often made possible by

the close interaction between all members in each department. The top management moulds

the strategies and policies that make sure that the middle management implements them.

Weekly interdepartmental meeting aims at bringing coordination between the different

departments. Open forums are held once in a week in all plants where the employees can raise

their concerns, suggestions etc.

The various departments headed at MRF Ltd Noida can be enlisted below:

1. Production department

2. Production Planning Department

3. Quality Assurance Department

4. Technical Engineering Department

5. Plant Purchase Department

6. Raw materials Stores Department

7. Shipping (dispatch) Department

8. Engineering Department

34 -
 9. Industrial Engineering Department

10. Safety Department

11. Security Department

12. Human Resource Department

13. Accounts Department

14. Marketing Department

1. Production Department

Production is the primary function of the company and hence all other functions are support

functions. Production is carried out in four plants at Noida unit. They are:

 Tube plant Plant1

 Tyre plant Plant2

 Mixing plant Plant3

 PCTR plant Plant4

The following are the main functions of production department.

 Planning for production processEvery month, a monthly plan is given to the plant by

central planning. Based on the monthly plan- planning department will prepare a simulation

plan by dividing the month into 3 segments of 10 day each.

 Material indent and receipt

35 -
 The daily requirement of raw material is calculated at each plant after considering the

available inventory and the schedule production for the next day raw material indented is

made to raw material store.

 Processing

Processing is carried out per the technical specification.

 Product identification and traceability

 Inspection

Product Volume

Product Volume

Tyres 2437 no./day

Tubes 8433 no./day

Flops 2677 no./day

PCTR 16 mts./day

Table – 3.1

Structure of Production Department

36 -
 Production Manager

Asst. Manager Asst. Manager Asst. Manager Asst. Manager

Production Production Production Production

Plant - I Plant - II Plant - II
Plant - III

Supervisor Supervisor Supervisor Supervisor

Operatives Operatives Operatives Operatives

Chart-3.3

2. Production Planning Department

37 -
 Production plan for the coming month will be issued form the Central Planning at Corporate

office. Based on this, plant planning in-charge will issue the monthly simulation plan to

central planning, plant production and to shipping. Based on the monthly plan and the

inventory norms the monthly requirements of raw materials and consumables will be prepared

by plant planning and is sent to central planning, Corporate purchase and to Raw material

stores. Monthly requirement of raw materials is calculated from software and it is validated

every six months.

Based on the monthly simulation plan for the whole of Noida unit, each plant make its own

simulation plan and indents required materials from raw materials stores. The simulation plan

for 3 segments of 10 days each is prepared and micro planning is done based on that.

Since the plant sends work-in-process materials to other plants, a simulation plan is also

prepared for work-in-process material production and is send to concerned departments of

MRF units to which these in process materials are sent. In case of any revision in monthly

plan, the revised requirements and plan will be sent to the concerned parties.

Production details report is sent to central planning on a daily basis for the previous day’s

production. Plan Vs Production report is published every 10 days and also on a monthly basis.

38 -
 3. Quality Assurance Department

Quality is considered as the most effective tool to improve productivity, to achieve cost

effectiveness, to improve profitability and market share and to remain competitive in the

global market. In the business environment of today, quality impacts not only the products

and services but also many other relevant entities such as process, systems, people and

organization.

A low level quality can be caused by the weakness either in the design of the product, or in its

manufacture. It is therefore appropriate to distinguish between quality of design and quality of

manufacture. Two products which have the same use but which are designed in different ways

can be of different quality of design. Quality of design is evident in the specifications to

which the product will be manufactured. A product may confirm in varying degrees to the

specification. This varying degree of confirmation to the specification will lead to varying

degree of quality of manufacture.

Functions of Quality Assurance Department

 Quality assurance department’s primary aim is customer satisfaction. Hence its prime

duty is to ensure that all customer complaint should be taken seriously and is to be

communicated to all concerned. Problem solving tools are employed to ensure that the

problem is solved and error proofing methods are adopted to ensure that such problems don’t

occur again.

39 -
  Improve the profitability of the company by reducing defects and waste generation.

This is done by initiating projects for waste reduction and forming task forces for close follow

up. Specific targets are fixed in each area for waste reduction and forming task forces for

close follow up. Specific targets are fixed in each area for waste reduction and quality

improvement and it is done in co-ordination with all other connected departments.

 The main function of quality assurance department is process audit and final product

inspection. This will include monitoring the inspection status of incoming materials, in-

process materials, process parameters and finished product inspection. Ensuring identification

and traceability of all materials is also the function of QA.

 Educating workmen on Quality Standards and the consequences of not following

quality norms is also done.

Audits on suppliers and outside godowns are conducted periodically to ensure the materials

are of the required quality and also to ensure that they are stored in the proper manner.

Whenever a finished product is returned to the factory due to any defect those products are

inspected, the reasons found out and communicated to everybody concerned. It is then

disposed in a suitable manner and recorded.

Slow moving and non-moving items are tracked at regular intervals to avoid material getting

deteriorated due to prolonged storage and to avoid producing material which is not needed by

the market.

Quality Policy of MRF

40 -
 The quality policy of MRF is to maintain market leadership through continuous quality

improvement. To achieve this goal, all the MRF plants and the corporate office shall pay

particular attention to the following:

 Product process improvement by field or plant performance monitoring and prompt

service to the customer

 Upgradation of machinery to meet the increasing needs of the customer.

 Continuous training of all employees in order to acquire necessary skills and

knowledge.

41 -
 Structure of Quality Assurance Department

Manager Quality Assurance

Quality Quality Quality Assurance Quality Assurance

Assurance in Assurance in in Charge Plant III in Charge Plant IV
Charge Plant I Charge Plant II

Supervisor Supervisor Supervisor Supervisor

Operators Operators Operators Operators

Chart-3.4

4. Technical Department

42 -
 Technical department at the corporate level carries out R&D activities and the results of

those activities are transferred to the plants. Some of the activities carried out at corporate

technical are new moulds, selection and evaluation of new and alternative sources, selection

and evaluation of alternative materials, finished product testing and analysis, heat engineering

and assisting plants in problem solving.

The results of research and developments are translated into practical applications at the plant

level. At the same time, other routine functions like testing of incoming materials, process

monitoring and product testing at each stage is also carried out.

Activities

1) New product development.

2) New compound development.

3) Designing and inspection of new moulds.

4) Selection & Evaluation of new alternative source.

5) Selection and evaluation of alternative.

6) Finishes product listing and analyzing.

7) Arresting plants in problem solving.

Raw Material Testing

All raw materials are tested and released if they confirms to the specifications. When the

material is received, raw material stores personnel arrange for collection of samples from the

received material as per sampling plan. The sample is given to raw material testing lab along

with sample transfer note/ visual inspection report.

43 -
 Raw materials are tested as per BSP (Basic Standard Practices), standard test procedure and

are compared with the specification issued by corporate technical. If the material does not

confirm to specification, more samples are tested and released if it is OK. If any of the re-

tested samples are not OK, then the samples are sent to corporate lab and the material is

accepted or rejected based on corporate advice. If the material is rejected, then raw material

rejection note is prepared and the material is returned to the supplier by raw material stores.

In-Process Material Testing

In process materials are tested by technical as per the plan to check whether any deviation

from the specification has happened either in the material used or in the process.

Finished Product Testing

Finished product testing is done both in the plant and at corporate technical departments. This

is done to ensure that the product produced confirms to the required standards. In case of

tyres, ply adhesion, mounted tyre dimension, and cut tyre analysis are done in the plant. For

PCTR and flap, cured dimensions and weight are checked.

Process Control

Process control is effected by checks or tests conducted regularly. The data generated during

tests and audits are used to control the process. Changes are made if required in the

specifications to achieve process ability targets, the changes are documented through plant

44 -
 changes letters. If there is any problem, the process / product will be analyzed for variations

in raw materials, or process conditions. Any deviation found will be corrected or alternative

source of raw material will be tried. Process will be repeated to check whether it is OK.

New Product Introduction

Whenever a new product is introduced, a TPOR (Technical Program Opening Report) is

received from corporate technical along with corporate specification, project schedule and

new size production plan. Based on the TPOR, a micro plan will be prepared by Head- plant

technical and it will be approved by the originator of TPOR. This is then given to the

concerned technical in-charge who prepares the activity plan. Plant specification is generated

based on the corporate specification.

Analysis of the finished products is done and necessary corrections if any are incorporated

into the specification. The product is released for re-evaluation or for completion of the

project schedule. The product is sent for in-plant testing, corporate testing and performance

report is published. The performance during bulk evaluation is published. Then if it is

satisfactory, the product is released for regular production in consultation with corporate

technical, and is documented through a TA (Technical Authorization) or PLC (Plant Change

Letter).

Control of Non-Conforming Product

It is the responsibility of technical department to dispose of the non-conforming materials in

suitable manner. Non conforming materials are tied with a red tag (non conforming material

45 -
 tag) which contains all the relevant details like the MRF code of the held material, quantity,

reason for holding, date and shift of production, date and shift of holding etc.

Technical in-charge reviews the non-conformance and takes a decision on the method of

disposal and this is recorded on the non conforming material tag. The disposal is then

followed up by production.

Tool Change

Whenever there is a tool change the concerned specification is given by plant technical

department. In case of a new size tool, it has to be Okayed by technical before being put in

production.

Finished Product Re-Classification

Finished products which don’t confirm to first quality norms are kept separately are jointly

inspected by production, technical and quality assurance. Based on joint decision, the material

is either sent as seconds, repaired or scrapped.

46 -
 Structure of Technical department

Manager Plant Technical

Technical in Charge Technical In charge Technical in Charge Technical n

Plant I Plant II Plant III Charge Plant IV

Supervisor
Supervisor Supervisor Supervisor

Workmen Workmen Workmen Workmen

Chart- 3.5

5. Plant Purchase Department

47 -
 The items purchased by the plant can be categorized as follows:

 Items which come under the head capital expenditure.

 Items which come under engineering spares (non-capital expenditure)

 Stationary and miscellaneous items (items which don’t come under the preview of raw

materials)

 Services (repairing for machinery)

Procedure followed for purchasing

Any person who needs a material can make a purchase on request but it has to be authorized

by the department head. This has to be routed through engineering store.

In case of items involving capital expenditure, it should be capital authorization number. In

case of engineering spares of non-capital nature, this is not required.

Based on the indent, necessary quotations are invited and purchase order is released. The copy

of purchase order is sent to the supplier, intender, accounts, stores, corporate office PEM and

a file copy for plant purchase.

Procedure followed for repairing

For repair and maintenance of equipment or machinery, indent is raised and it is authorized by

PEM and item is sent to the party from engineering stores via gate pass. The item is

dismantled and the exact nature of work to be done is finalized and quotation is raised by the

outside party. This is communicated to the intender. Further clarifications and follow up is

done by the intender. After getting the approved repair quotation from the indent/department,

necessary work order is released by purchase department. Copies are distributed as in case of

48 -
 spares, indenter has to follow up the repair machinery and again when it comes back after

repair; it is routed through engineering store.

6. Raw Material Stores

Raw material stores will receive a copy of the raw material requirement for the month which

is prepared and sent by the plant planning. This is also sent to the central planning and central

purchase by plant planning. Based on the requirement, central purchase arranges for

procurement of materials and issues a delivery schedule to the plant. Delivery schedule is the

schedule by which the supplier will release the specified quantity of raw materials at the

specified dates to the plant.

Raw materials, consumables, fuel etc are received at the factory gate in line with the delivery

schedule and plant purchase orders. The documents are verified to ensure that the materials

are from approved sources and the correct quality as ordered is delivered.

Weighing of the load is done. GAE (Goods Arrival Entry) is made and the load is re-directed

to the unloading point through the security department. The unloading point is usually the raw

material warehouse, but sometimes the materials are unloaded at the plants where it is

consumed. In case of fuel, oil etc. it is unloaded at the storage area.

At the unloading point, visual inspection is carried out and then the materials are stored with

the proper identification tags showing the primary status of the material (Hold/Pending fir

Test). Each material has a specified storage and it is placed in that storage area.

49 -
 Sample transfer/visual inspection report is prepared and samples are collected for testing as

per the documented sampling plan. The sampled bag is identified and the sample is sent to

technical department for testing. GRN (Goods Received Note) is prepared at this point.

After testing the samples, technical department informs the test result through the material

releases/rejection/hold note printed at the bottom portion of the sample transfer/visual

inspection report. Based on the test result green color sticker captioned “OK” is affixed if the

material is OK, RED color sticker captioned “REJECTED” is affixed if the material is not fit

for use and ORANGE color sticker captioned “HOLD” is affixed if it needs further test to

arrive at a concrete decision.

Materials are issued to the production as per the indent raised by the production in each plant.

Stock inventory and stock status reports are prepared every month. Rejected materials are sent

back to the supplier and the cost is recovered. Transferring of materials to other plants is also

monitored.

7. Shipping (Dispatch) Department

 Finished goods will be received from inspection/ packing area size wise, batch wise or

lot wise on the basis of production Transfer Note. Physical verification of goods is done at the

time of receipt and receipt tags are put. Proper storage and identification of finished goods is

the responsibility of shipping department.

50 -
  Finished goods will be stored size wise on pallets with transfer slips showing the size,

quantity, date of receipt etc. Tractor rear tyres .truck tyres and such others will be stacked on

floor. Stacking norms for finished goods, where ever specified will be followed.

 Shipping will publish Daily Dispatch Simulation Plan and copies of it will be sent to

plant planning, central planning and QAD. Daily Dispatch plan is prepared based on

simulation plan, allocation plan and urgency as intimated by central planning /marketing,

transportation time required, availability of truck, shelf life of the product etc. Trucks are

checked before loading to ensure that damages will not occur to goods.

 Daily production Receipts and transfer are fed into computer and reports are generated.

Daily details are transmitted to central planning /EDP/Marketing and data are consolidated

for report generation and monitoring .Dispatch report is published for every 10 day period

.Non moving /slow moving items report is published monthly and distributed to central

planning ,plant planning ,QA ,plant head, marketing etc.

 Shipping coordinates with central planning to get allocation for none moving and slow

moving items. Tread rubber/cushion which exceeds the shelf life of 3 months and damaged

products/tyres packed with wrong tubes will be given to production.

 Statutory registers and returns as required are properly maintained and submitted. New

defective tyres are brought for tyres for repairs from outside godowns and inspections by

central exercise authorities are arranged .Statutory registers and returns as required are

properly maintained and submitted

51 -
 8. Engineering Department

Engineering department functions are divided into Mechanical, Electrical, Instrumentation,

Civil & Environmental engineering. The main functions are new machinery lay out

preparation ,erection and commissioning of new machinery ,preventive maintenance,

breakdown maintenance, condition monitoring and over hauling of machinery and other

related equipments.

Erection ,commissioning ,operation and maintenance of utility items like generator ,boilers,

compressors, pumps, freezer lines and cooling towers and maintenance of material handling

systems like lift, hoist and gantry are done by engineering. The maintenance of equipments at

pump house and training centers are also done.

Mechanical Maintenance

Preventive maintenance schedule for the particular week is taken and the necessary materials

,tools, manpower and spares are arranged .The scheduled maintenance activities are carried

out based on work instructions and experience.

Based on the number and nature of breakdowns in each machine during the year, the

preventive maintenance schedule is reviewed and a new schedule is prepared for the next

year.

Breakdown Maintenance

52 -
 The defective machinery is identified either by production or by engineering and a

maintenance request is generated and arranges for the tools, maintenance personnel and spare

parts. The machine is then released for maintenance. The required maintenance jobs are

carried out and the machine is thoroughly checked. If the machine is OK, then it is handed

over to production. Otherwise necessary corrections are again done.

Every month, down time analysis is done and permanent corrective actions are initiated in

case of recurring failures. Mean time between failure and mean time to repair are the

measures adopted to track the improvement.

Electrical Engineering

MRF Noida unit falls under the EHT (Extra High Tension) consumer category. The incoming

power supply for this unit is 110 KV. The total connected load of the unit is roughly 30000

HP. The maximum demand is 10000 KVA. For backup power supply, the unit has 3

generators of 1000 KVA each and 1 generator of 5000 KVA capacity.

Civil Engineering

Civil Engineering department does the work of project proposals, drawings and estimates as

per requirements for construction and extension of factory buildings, equipment foundation,

plant offices and construction of cable and pipeline trenches, storm water drains and site

development work.

53 -
 Environmental Engineering

This branch is mainly concerned with monitoring of factors which affect the environment and

finding ways by which they are minimized or eliminated. Water, air & sound pollution are the

main factors which come under preview of environmental engineering.

Structure of Engineering Department

Plant Engineering Manager

Civil Engineer Manager

Manager
Mechanical
Electrical
Maintenance
Maintenance

Supervisors Supervisors
Instrumentation
Engineer

Electricians

Mechanics

Chart – 3.6

54 -
 9. Industrial Engineering

Major Activities:

 Conducting studies for fixing Standards and Crew Strength in all areas.

 Negotiating of disputes by participating.

 Participating in discussions for setting labor disputes

 Manpower requirement assessment

 Planning o Factory Layout

 Expansion Project Coordination

 Preparation and publication of MIS Reports

 Works related to long term agreement.

 computation of production bonus

 Resource planning – manpower, machinery and equipments

 Long term agreement related works

 Calculation of chairman’s award

 Calculation of production bonus

 Connectivity between factories, head office and others plants, maintenance of network

connectivity in all areas of the plant, administration of local e-mail service, maintenance of

computers, printers other accessories.

ERP Activities – Maintenance of leased line connectivity between factory and head office and

other plants, maintenance of network connectivity in all areas of the plants, maintenance of

network connectivity in all areas of the plant, administration of local e mail service

,maintenance of computers printers and other accessories.

ERP SYSTEMS in MRF Ltd was replaced by SAP systems in 2009

55 -
 Structure of Industrial Engineering Department

Plant Industrial Engineering Manager

Assistant Manager Industrial Engineer

Recourse Panning in
Charge

Chart – 3.7

56 -
 10. Safety Department

Responsibility of this department is to ensure the working ambience to all the personnel

within the factory and the premises. The safety officer through the mechanism of audits and

subsequent reporting – Feedback, builds in the safety consciousness and the safety culture

within the personnel.

Safety policy of MRF

 “It is the policy of the company that the safety & health of the employees shall be our

1st priority”

 “It is the responsibility of everyone in this organization, regardless of the position he

occupies, to ensure that everyone in the factory returns home to his beloved ones without any

injury today and every day”

 “We shall observe this policy not only in letter but also in spirit and offer “ACCIDENT

FREE SAFE PRODUCTION” for the benefit of one and all.

Procedures and guidelinesNecessary procedures, rules and guide lines for the effective

implementation of this policy, without prejudice to the statutory requirements, are formulated

by Chief Safety officer and Plant Safety officer. They will also render necessary advice and

assistance to all management staff in the effective implementation of these policy respective

sections, plants departments and the unit as a whole.

Methodology for Prevention of Accidents

57 -
 1. Training

2. Enforcement of safety rules and guidelines.

3. Safety audit

4. Corrective and preventive action

5. Safety awareness promotional activities

11. Security Department

Industrial safety in the public and private sector can be defined as protection of men,

materials, machines, buildings, classified information, and the company operations and to

provide protective services against fire, theft, damage to the company assets and the

installation. Protect the valuables of the company as well of the employees.

The main functions of security department are:

 Control over accessibility

 Check against theft, pile rages

 Control over the movement of personnel and materials at the gate

 Checking in/out raw materials, empty vehicles, carrying finished goods, vehicles

carrying scrap items etc.

 Control and checks on the company hired taxes and security of bills.

 Co-ordination of security duties with private security agencies and preparation of bills.

 Control and check over the entry of contract works.

58 -
 In case of an accident in the factory, it is the responsibility of the security department to

provide the victim with first aid. The security department should also take them to the

appropriate place by using the ambulance if necessary. The inflow and outflow of inventory,

personnel are regulated and monitored by the security department.

Search Operation

All workmen is liable on entering, leaving or while remaining inside the factory premises and

searches by the security personnel. The search clause is made applicable to the workmen only.

The following are subjected to search at the gate:

 Workmen

 Contract Casual Labor

 Suppliers

 Drivers, Cleaners and Private Vehicles

 Commercial Vehicles

 Company Vehicles

Important documents to be maintained:

 Standing Orders/Security Manual

 Duty Register (Staff & Watchmen)

 General Diary

 Key Register

 Visitors Register

 Material Movement Register

 Vehicle Register

 Telephone Message Book

59 -
 Structure of Security Department

SENIOR SECURITY OFFICER

Officer Security

Watchmen Firemen

Chart – 3.8

12. Human Resource Department

The Human Resource Department is known as the heart of an organization. It performs a

number of activities concerned with the employees of their organization. It interacts with

other departments to ensure effectiveness of the company.

Functions

Any employee newly recruited will be exposed to the following areas.

 Introduction about the company

60 -
  Evolution of the concept of quality and its relevance to the contemporary industrial

production.

 Safety

 External competitive environment and organizational culture

 Factory discipline

 Basic process flow in the plant in which they are place.

Activities

1) Recruitment and Selection of employees

2) Performance Appraisal

3) Welfare activates

4) Training

5) Industrial relation and labor management

6) Canteen service

7) File management.

Other activities controlled by HR Department are:

 Medical insurance scheme

 Family welfare canteen

 Co-operative Society

 Recreation club

Time Keeping

61 -
 The office time is also come under the HR Department. The office time carries out the

following function.

 Attendance detail

 Leave details

 Wage calculation

 Daily reports.

Working hours (24 hours)

 1st shift : 7am-3pm

 2nd shift : 3pm-11pm

 3rd shift : 11pm-7am

 General shift : 8am-4.30pm

Structure of HR Department

Plant Human Resource

Manager

Deputy Manager –

Human Resources

Canteen Welfare Time Officer Training

HR Officer
Supervisor Coordinator officer
62 -
 Chart -3.9

13. AccountsDepartment

This department keeps account of all the financial transactions of the company. The

accounting period of MRF is from October 1st of one year to September 31st of the next year.

MRF has a fully computerized accounting system that facilitates fast operations of its various

functions. All the transactions of production unit starting from the issue of goods received to

the final documentation is computerized. The strategy that the company has adopted is to go

for credit transaction and payment will be made in one month of time.

The Functions of accounts department at the plant level has been divided into:

1. Financial account

2. Cost account

3. Wages and Salaries

4. Sales tax

Financial Accounts

This branch deals with all types of cash payments and receipts. This will include payment for

engineering and raw materials purchase, petty cash payments, operation and reconciliation of

bank accounts ,payment to the government in the form of taxes and levies ,payment of PF

,deduction from salary and payment of loan outstanding and insurance premium of employees

,fright payments, payment in lieu of travel allowance ,medical re imbursement etc. Cash

63 -
 receipts in the case of scrap sales and any other cash receipt will also come under this branch

of accounts.

Cost Accounts

This branch deals with forecasting ,budgeting, analyzing and reporting the income and

expenditure of the company .The budget for expenditure is prepared using standard costing

principles and it is compared with the actual expenditure .Any variation from the budget is

analyzed to find the exact reason and it is reported to the top management.

Wages & Salary

Computation of wages and salary is done by this section of accounts department. Wages of

workmen are fixed in the long term agreement and are calculated on a daily basis depending

on various factors like grade, working hours, output achieved etc.

Sales Tax

All matters related to sales tax are handled by this section. Monthly returns for sales tax are

filed on behalf of sales depots. VAT (Value Added Tax) system has been introduced and all

matters related to this are also looked after by this branch of accounts. “C” forms for

purchases from outside the stare and “F” forms are issued for receipt of goods from depots.

64 -
 Structure of Accounts & Finance Department

Plant Account Manager

Manager Asst .Mgr Asst. Mgr. Officer Officer

Raw Plant Engineering Shipping Engineering
Materials Accounts Stores Purchase

Supervisors Supervisors Supervisors Supervisors

Wages Costing Auditing Sales tax

Officer Officer & Excise

Materials
Handling
Supervisors Supervisors Workmen

Chart – 3.10

14. Marketing Department

MRF Noida doesn’t have a marketing department. Marketing management is the functional of

management concerned with planning, organizing, directing and controlling the activities

65 -
 related to the marketing of goods and services to satisfy the customer’s needs which are ever

changing.

Objectives

 Creating demand

 Customer satisfaction

 Increasing the goodwill of company

 Increasing the market share

 Raising the standard of living of the consumer community

Marketing Strategy & Network

MRF has emerged as one among the market leaders in the tyre manufacturing sector in the

world. It was awarded J.D. Asia Pacific for customer satisfaction 8 times. This achievement is

possible only because of MRF’s marketing strategies, product quality and after sales service

to customers. MRF has a wide marketing network, which hosts 68 sales centers, 2500

distributors and exports to over 75 countries. Tyre and tyre related products are sold under the

brand name “MRF” and distributed in domestic markets through sales offices, dealers and

franchises. The Corporate Executive Director, based in Chennai, guides the marketing

activity. In Kerala, the district office is at Ernakulam.

66 -
 MRF Sales Network

NORTH SOUTH EAST WEST

New Delhi Chennai Kolata Mumbai

Agra Ananthpur Asansol Ahmedabad

Bareilly Bangaluru Cuttack Aurangabad

Bikaner Belgaum Dhanbad Baroda

Chandigarh Calicut Guwahati Bhopal

Faridabad Combatore Muzaferpur Goa

Haldwani Ernakulam Patna Indore

Hissar Hubli Ranchi Jabalpur

Jaipur Hyderabad Siliguri Jodhpur

Jalandhar madurai Nerul

Table – 3.2

Structure of Marketing Department

Corporate

Corporate Executive
Director (Marketing)

Regional Sales
Manager

67 -
 District Office

Sales
Department

Chart – 3.11
Dealers &
Agents

INTERDEPENDENCE OF DEPARTMENT

MRF Ltd gives an insight about the functioning of the different departments. Each department

is headed by the general manager who possesses expertise, knowledge in the area under his

supervision. There always exists an ergonomic atmosphere which is often made possible by

the close interaction between all members in each department. The top management moulds

the strategies and policies that make sure that the middle management implements them.

Weekly interdepartmental meeting aims at bringing coordination between the different

departments. Open forums are held once in a week in all plants where the employees can raise

their concerns, suggestions etc.

All the different activities that go on in a business are interdependent and work together to

create value for the customer and wealth for the business. The different departments of the

business are interdependent; that is, they rely on each other and work together to achieve the

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 objectives of the business. Within a business, it is the role of management to coordinate all

the organizational departments and ensure that they work together for the overall success of

the business. These departments support the main goals of the business. They are very

dependent on each other, and it is very important to understand the interrelationships between

them. The way that one functions might decide to achieve its goals could affect the whole

business, so considerable cross-functional coordination is required.

In MRF Ltd there is a functional interdependence between different departments as different

functions communicate with each other in order to meet the business aims and objectives.

In MRF Ltd., the purchase function is carried out by the purchase department of the

respective unit or plants and is responsible for procurement of the unit requirement.

The heads of the material department and purchase department are accountable for

effective discharge of purchase functions within the framework of purchase policy of

the company.

The production planning department is the most vital link between product design and the

production department. The production planning department provides the necessary facilities

and technical know- how for the manufacture of the product.

Human Resource department is directly related to all the other departments as it controls all

the manpower requirements in the organization.

1Production is the functional area where the raw materials are converted into finished

products through a series of production process. It is done by keeping quality conscious in

mind. The quality assurance department ensures the quality right from the procurement of raw

materials, at each stage of production and just before packaging. Production department also

functions by collecting information both from materials as well as marketing department.

Production department checks the quality of the raw materials and if it does not meet the

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 standards report it to the purchase department. The material department deals with the

purchase of raw materials and supplies the raw materials to the production department.

The interdependence of quality control department with the production, finance, quality

assurance and HR department is necessary as it deals with products, its quality, payments and

man power. They check the quality of product packed before dispatch.

The interrelation of finance department is between materials, production, marketing,

advertising, export, quality assurance and HR departments. In addition to the major functions

of budgeting, raising funds internally and from financial institutions and utilization of funds

for growth of performance, it deals with all the internal and external cash and payment

transactions.

Public relation has to be thought of as a long term strategy and to implement this long term

strategy in a phased manner. Appropriate short term strategy are to be evolved and

implemented to build up and maintain the tempo.

Sales and servicing activity is one of the most important function in fulfilling the objectives of

the organization and needs of the customers. It has the activity of selling the product as per

customer requirement and maintain the customer satisfaction.

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 Financial Performance Trends

During the years under review, the company achieved the following financial results:

(In crores)

Heads/Years 2013 2012 2011

Total Income 13482.15 13093.76 10670.17

Profit before Tax 1226.80 833.12 893.65

Provision for Taxation 424.59 260.76 274.23

Net Profit 802 572 619.42

Table – 3.3 Source: Secondary Data.

Chart – 3.12

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 Chart – 3.13

72 -
 Chart – 3.14

Chart -3.15

Company has crossed a sales turnover of Rs.13000 crores in the year 2012 which is a

landmark achievement. This reflects a sales growth of 32%. The growth was primarily driven

by a remarkable turnaround in the automobile market, lower interest rates and the general

recovery of business. During the year, there was an unprecedented increase in the price of

natural rubber and other key raw materials, which has impacted the performance of the

company. Despite the above, the company could achieve improved results due to better

operating efficiencies, value systems and cost cutting measures which the company has

undertaken over a period of time.

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 10 years Financial Summary

(Rs. in

Crores) 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Sales 13444.75 13054.03 10637.03 8080.45 6141.94 5715.52 5036.75 4233.66 3437.13 2989.43

Other Income 37.40 39.73 33.14 29.13 34.40 40.83 24.17 27.07 44.96 58.54

Total Income 13482.15 13093.76 10670.17 8109.58 6176.34 5756.35 5060.92 4260.73 3482.09 3047.97

Profit Before

Taxation 1226.80 833.12 893.65 534.66 398.48 211.39 260.96 99.81 55.34 42.90

Provision for

Taxation 424.59 260.76 274.23 180.68 145.45 66.83 89.18 19.90 15.03 14.10

Profit after

Taxation 802.21 572.36 619.42 353.98 253.03 144.56 171.78 79.91 40.31 28.80

Share Capital 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24

Reserves 3640.90 2853.56 2293.53 1686.44 1357.18 1116.55 981.91 820.05 749.81 719.17

Net Worth 3645.14 2857.80 2297.77 1690.68 1361.42 1120.79 986.15 824.29 754.05 723.41

Fixed

AssetsGro. 5834.14 5477.16 4967.07 3865.62 3020.57 2866.24 2289.77 1955.99 1787.85 1534.47

Table –3.4

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 CHAPTER-4

CONCLUSION

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 SWOT Analysis

The SWOT Analysis has revealed the strength, weakness, opportunities, and threats of the

company. It has been detailed below:

Strengths

 Market leader in the industry.

 Unique and high brand image.

 Major raw material (natural rubber) locally available.

 Strong channels of distribution (wide range of sales office for each zone)

 Optimum capacity utilization of plants.

 Strict quality measures.

 Use of modern technologies and concepts.

 Harmonious and cordial employer-employee relationship.

 Great reserves and surpluses.

 Good infrastructure.

 Computerized system.

 Environment certification (ISO 14001)

 Quality product (ISO 9000 certification)

 Highly evolved Research and Development wing

 Training to all the employees.

 Aggressive marketing Policies.

 Experienced work force.

 Wide spread recognition.

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  Quality control.

 Strong financial support.

Weaknesses

 High operational cost due to the use of modern and costly machinery for production.

 Company is highly capital intensive.

 High rate of absenteeism.

 Strong trade union activities sometimes create problems among employees and also

disturb the smooth functioning of plant.

 Lack of marketing department at the plants. It is at the corporate office.

 Lack of speedy communication.

 Lack of individual initiative.

 Less interaction between manufacturing and marketing department.

 Lack of commitment.

Opportunities

 Growth in the economy, especially automobile industry.

 Fast growing automobile sector provides good opportunities for MRF, as it is the

leading tyre manufacturer in the sub-continent.

 Increased access to global source for raw material at competitive price as a result of

various trade agreements by the country.

 The modernization of tubeless tyres.

 World class products.

 Joint ventures or tie-up with foreign automobile companies.

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  More opportunities for diversification.

 Global standards and competition.

 Improvement in market share both in India and outside.

 Availability of latest technology

Threats

 Continuous rise in price of natural rubber and other raw materials.

 Steady competition from other leading tyre manufacturers.

 Changing technology.

 Threat of cheap import of tyres, especially from China.

 Market Risks.

 Rupee depreciation resulting in lower export realization

 Entrance of new players.

 Increasing transportation cost.

PORTER’S FIVE FORCE ANALYSIS

Porter’s five forces is the frame work for the industry analysis and business strategy

development developed by Michael. E. Porter of Harvard Business School in 1979. It draws

upon Industrial Organization economics to derive five forces that determine the competitive

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 intensity and therefore attractiveness of a market. Attractiveness in this context refers to the

overall industry profitability. An "unattractive" industry is one in which the combination of

these five forces acts to drive down overall profitability. Three of Porter's five forces refer to

competition from external sources. The remainders are internal threats.

Porter referred to these forces as the micro environment, to contrast it with the more general

term macro environment. They consist of those forces close to a company that affect its

ability to serve its customers and make a profit. A change in any of the forces normally,

requires a business unit to re-assess the marketplace given the overall change in industry

information. The overall industry attractiveness does not imply that every firm in the industry

will return the same profitability. Firms are able to apply their core competencies, business

model or network to achieve a profit above the industry average. Porter's five forces include -

three forces from 'horizontal' competition: threat of substitute products, the threat of

established rivals, and the threat of new entrants; and two forces from 'vertical' competition:

the bargaining power of suppliers and the bargaining power of customers. The following

figure gives the structure of Porter’s five force analysis.

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 Structure of Porter’s five force analysis

Potential entrants
(Threat of mobility)

Suppliers Industry Buyers (buyer

(supplier power) Rivalry power)

Substitutes
(Threat of
substitutes)

Chart – 4.1

The five forces of Porter’s five forces are:

o The threat of the entry of new competitors

o The threat of substitute products or services

o The bargaining power of customers (buyers)

o The bargaining power of suppliers

o The intensity of competitive rivalry

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 PORTER’S FIVE FORCE ANLYSIS ON TYRE INDUSTRY

The threat of entry of new competitors

In tyre Industry the threat of entry of new competitors is very high. Potential entry for new

competitors is also the factor to intense the competition in the industry. A larger pool of new

entrants results in more changes of intense competition. Barriers to entry, however can restrict

the firms from entering the market, more number of entry barriers will make it difficult for the

new entrants to exploit the opportunity of new market. Government policy creates hurdles for

new entrants by heavy taxes and interest rates. New firms must get to know the Government

regulations and policies before making an entry decision into the country.

The intensity of competitive rivalry

In tyre Industry the intensity of competitive rivalry is high. The ongoing war between the

firms competes in the same industry for gaining customer share in order to increase their

revenues and profits. The tyre industries which engaged in the production of various types of

utensils and vessels compete each other to achieve more market share. The competition is

more intense if the firm pursues strategies that give it a competitive advantage over the

strategies pursued by its rivals. Developing new strategies is easier than retaining the

uniqueness of the strategies so as to gain a competitive edge over the rivals in the industry.

Changes in strategy by one firm may be met with retaliatory countermoves, such as lowering

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 the prices, enhancing quality, adding features, providing services, extending warranties and

increasing advertising.

The threat of substitute product or services

Firms mostly monitoring the trends within the industry to track the strategies but competition

not only arise within the similar industry but also in different industry. Companies in other

industry offer products with similar features and functionality or even better act as substitute

for the products. MRF tyre face heavy competition with other tyre manufacturing alternatives

such as Ceat, Appoloinrespect of price, models distribution channel etc...

Bargaining power of customers

Consumers are the final users of the product; performance of the companies totally depends

upon the consumers. Bargaining power of consumers is more especially when they are huge

in number and consumers purchase in large quantity. Rival firms offer discounts, warranty

and services to switch the consumer from one brand to another in the same industry. As the

satisfaction level of consumer goes up more the intensity level of competition increases.

Bargaining power of suppliers

Supplier and producer relation always matters especially in manufacturing industries.

Suppliers play an important role in the production of goods and services, making the raw

material better and till the final product are made. Bargaining power of suppliers affect the

intensity of competition especially if there are huge number of suppliers, less availability of

raw material and the cost of switching between suppliers or raw material is high. These

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 attributes in the industry give power to the supplier to enforce terms and conditions on

manufacturers and charge high cost on raw materials.

This chapter gives the clear picture of strengths, weaknesses, threats and opportunities of

MRF. Ltd through SWOT analysis, and Porter’s five force analysis is the framework for the

industry analysis and business strategy development.

Findings

 MRF ltd. Is the no. 1 largest tyre manufacturer in the country and the 12th largest in the

world.

 MRF exports its products to more than 75 countries worldwide.

 MRF is the first Indian company to export tyre to the US.

 The company is providing good working environment.

 MRF is the first company in India that manufacture and market Nylon tyres, passenger

tyres commercially.

 Profit is comparatively low because of the rapid variations in the cost of the raw

materials.

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 Suggestions

 Technology is changing so the company should update new technologies in the market

to maximize quality production.

 The company can utilize the railways to transport its materials to reduce the overall

logistics cost

 More attractive advertisements should be given through the Medias.

 Introduce new brand ambassadors.

 Monthly entertainment programs for employees must be arranged to avoid absenteeism.

 Locally available raw materials can be used for production so that the cost of production

can be substantially reduced.

 The management must take sufficient step to install a grievance settlement machinery

with sufficient participation of workers

 Improve employer-employee relation.

 Open a show room at factory itself.

 More investment has to be made in Research and Development.

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 Conclusions

Madras Rubber Factory mobilized itself as the market leader. The strong performance of

MRF is because of combined efforts of management and employees. MRF provides high

quality and technologically superior products to its customers. The company has the provision

to find out which tyre is manufactured by which worker. The effective management along

with successful workers is very dedicated and is aware of new developments taking place in

the industry. There is “no compromise on the quality policy” makes them King of Kings in

tyre industry. If they implement the suggestion put forward, will help them to improve profit

and helpful for the workers. So the company can attain global standard through continuous

improvement in the quality products and service in order to maintain market leadership and

can be the king in tyre industry for many years.

 MRF Noida unit is one of the 6 production units of MRF India.

 Its location is ideal as the major raw material -natural rubber- is locally available.

 The factory has different specialized plants for the production of various products.

 Work is done 24 hours a day.

 Work runs smoothly with non interference from outsiders.

 Each department in the company plays a crucial role in the smooth running of the

factory and they all work together to achieve the common goal of maintaining market

leadership and making products that meet global standards.

 The unit offers vast employment opportunities to skilled workers of the area.

 The HR department takes excellent care of its workers through various welfare

schemes.

 The company meets all the statutory requirements and runs non-statutory works also.

 Rights are fulfilled and demands are met.

85 -
 Bibliography

Books

 Human Resource Management – by Gary Dessler&BijuVarkey, Publisher – Dorling

Kindersley (India) Pvt. Ltd, licensees of Pearson Education in South Asia. 12 th Edition, year

of publishing 2012

 Organizational Behavior - by Stephen P. Robbins &Thimothi A. Judge, Publisher -

Dorling Kindersley (India) Pvt. Ltd, licensees of Pearson Education in South Asia. 14 th

Edition, year of publishing 2012

 Principles of Management – by T.N Chhabra, Publisher – DhanpatRai& co. 9th

Edition, year of publishing 2012

 Marketing Management – PHILIP KOTLER, 12th edition, year of publication

 MRF Records - MRF Ltd.,

 MRF Magazines - MRF Ltd.,

 MRFJournals - MRF Ltd.,

 MRF Manuals - MRF Ltd.,

 MRF Annual Reports - MRF Ltd., MRF accounts department.

Websites

 http://www.mrftyres.com

 http://www.moneycontrol.com

 http://www.fadaweb.com/indiantyresindustry.htm

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