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Organization Study at Rado Tyres Ltd

INTRODUCTION

In modern business organization research has an important role.

Research findings help in various decision makings. Research means a search for

facts- answers to questions and solutions to problems. It is an organized inquiry seeks

to find explanations to unexplained phenomenon, to clarify doubtful propositions and

to correct the misconceived facts.

This report is based on an organization study. The main

objective of the study is to analyze various activities carried out in each department in

an organization. The study has been conducted in RADO TYRES LTD situated in

Kothamangalam. Production of tyres depends up on the production of vehicles. In

India usage of vehicles increased in day by day. So tyre manufacturers have important

role in Indian economy.

1.1 OBJECTIVES OF THE STUDY

The main objective of the study is to understand the functioning

of an organization. That is, to understand the functioning of each department and the

interdependence of these departments.

To familiarize with a business organization.

To study the functioning of different departments in an organization.

To know the influence of various internal and external factors in the

functioning of an organization.

To study the performance of a company.

To know the scope of the tyre industry.

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1.2 RESEACH METHODOLOGY

Methods of data collection

Primary data

1. Observation

Data were collected by moving around the company and observing every

department and analyzing each department function.

2. Unstructured Interviews

Various department heads as well as assistants were contacted and by asking

questions adequate information was collected.

Secondary Data

Secondary data for the study was collected from various books, journals,

annual reports, company website etc….

1.3 SCOPE OF THE STUDY

This study helps to understand about the functions of various levels of management,

departments and the organization as whole. It helps to study about the organizational

structure. The study helps to analyze the company policies and their implications in

the organization. It helps to analyze the various activities carried out in each

department and how it helps for the smooth running of the organization by achieving

its key goals.

1.4 LIMITATIONS

Busy schedule of officers and employees prevented lengthy discussions.

Since RADO Tyres ltd is one of the conversion units of CEAT Tyres ltd and

the marketing of RADO Tyres products are done directly by CEAT Tyres, the

detailed study of marketing department was not possible.

The company was not ready to disclose various confidential details, thus it

affected the study.

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CHAPTERISATION

Chapter I: Gives an introduction to the study. This chapter includes statement of the

problem, scope and objectives of the study, research methodology and limitations of

the study.

Chapter II: Deals with the profile of Tyre industry.

Chapter III: Company Profile.

Chapter IV: Organization structure

Chapter V: Data Analysis

Chapter VI: Deals with the Findings, suggestions conclusion of the study

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2.1 INDUSTRY PROFILE

The origin of Indian Tyre Industry dates back to 1926 When

Dunlop Rubber ltd set up the first Tyre Company at Sahaganj in West Bengal. MRF

followed suit in 1946. Since then, the Indian Tyre Industry has grown rapidly. During

the early period the overseas tyre manufacturing companies were having major equity

participation in the Indian manufacturing companies. After 1970’s there was a change

in the government policy and it decided not sanction any foreign equity. The setting

up of joint sector projects with multiple foreign collaboration was considered feasible.

The tyre industry sector is providing direct employment to over 50000 people and

indirect employment to lakhs of people. The tyre industry is now considers as one of

the core industries.

The Indian Tyre Industry is characterized by its raw material intensity (raw material

costs account for approximately 70% of operating income), capital intensity and

cyclicality, fierce competition among the top players, low bargaining power and

resulting low margins. The fortune of the industry is linked to the trend in the

domestic auto industry, retreading, trend in total transportation and spending on road

infrastructure. The Indian Tyre Industry produced 736 lakh units of tyres (11 lakh

tones) garnering Rs. 19000 crores in February 2007 and is expected to register a

growth of 9-10% in the next five years.

2.2 Major Players in Indian Tyre Industry

The Indian Tyre industry is dominated by four players, MRF,

ApolloTyres, JK Industries and CEAT and enjoys more than 70% of the total market

share. The top players are now focusing on branding their products and strengthening

their distribution network so as to increase their market share. The companies have

lined up further expansion plans to meet the increasing demand. Modi Rubber, Metro

Tyres, Malhotra Rubbers ltd, Govind Rubber ltd, Royal Tyres, Speedways Rubber

Co., Birla Tyres, etc…. are the other companies in the Indian tyre industry.

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MRF TYRES

MRF Tyres is the market leader of the tyre industry in India holding 22% of the total

market share. MRF Tyres is the manufacturer of tyres and conveyor belts at the same

time the NO.1 exporter in the Indian Tyre Industry.

APOLLO TYRES

Apollo Tyres comes just behind MRF Tyres in the Indian Tyre Industry on the size of

the market share it holds, 21%. Apollo Tyres manufactures tyres for trucks, passenger

cars and farm vehicles. It manufactures both bias and radial tyres. Apollo Tyres has

set up a joint venture with Michelin for manufacture and sale of bus and truck radials.

It is the first tyre company to get ISO 9001 certificate for tyre manufacturing facility.

JK TYRES

JK Tyres comes third in the Indian Tyre Industry with holding 18% of the total

market share. It is the market leader in the truck and bus tyre segment with 25%

market share. JK is expanding its Mysore truck and bus radial facility along with

eyeing acquisitions of smaller units. JK Tyres is the first company to receive ISO

14001 in recognition of its environmental management system.

CEAT TYRES

CEAT Tyres comes fourth in the major tyre companies in the Indian Tyre Industry

with holding 13% of total market share. CEAT Tyres was primarily to the

replacement market. Due to strong competition in the sector, the share of the

company’s local revenue in this sector has fallen. However the production growth in

the automobile over the past few years will boost the replacement market in the

coming years. CEAT has increased its offtake by 3 times more than Pirelli.

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TWO WHEELER TYRES

Two wheeler tyres is one among the fastest growing tyre

segment although there has been a bit of reversal in the current fiscal. The RPG group

which had been a major player in the two wheeler segment through its joint venture

with South Asia Tyres, lost its grip on the product category after CEAT sold off its

stake in the joint venture to GOODYEAR. CEAT has decided to focus on two

wheeler tyres which is among the fastest growing tyre segment, by striking supply

alliances with like Hero Honda, TVS Motors and Kinetic Honda Motors.

CEAT has initiated talks with Honda’s wholly owned

subsidiary, Honda motor cycle and scooters, to supply scooter tyres. CEAT, which

has no longer focused on radial and truck tyres will source motor cycle tyres from its

captive suppliers, which have manufacturing facilities at Baroda and Hyderabad.

Besides Kerala based RADO Tyres, which is owned by the RPG group also

manufactures tyres for CEAT. MRF, the country’s largest tyre manufacturer has a

significance presence in the two wheeler tyre segment.

The two wheeler segment accounts for around 20 lakhs units

per month out of which almost half comprises of sales to original equipment

manufacturers while the balance to the replacement market. Due to decreasing

demand in the motorcycle, the two wheeler tyre category, which was among the

fastest growing tyre segment last year, has been facing a bit of reversal with growth

during the current fiscal period.

TRUCK AND BUS TYRES

The truck and bus tyre segment accounted for 18% of tyres

produced in India in feb.2008. Every truck/ bus manufactured generates a demand for

seven tyres as against two in the case of two wheelers and five for passenger cars.

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PASSENGER CAR TYRES

The passenger car tyre segment accounted for 19% all tyres

produced in India in feb.2008, with passenger car production witnessing a growth of

15% in feb.2008.

MOTORCYCLE TYRES

Motor cycle tyres accounted for 63% of tyres in produced in

feb.2008. Motor cycle tyres constitute the largest segment of the domestic tyre

industry. The replacement market accounted for around 49% of the total motor cycle

tyres produced in feb.2008.

2.3 RANKING OF INDIAN TYRE COMPANIES ON THE BASIS

OF PRODUCTION

1. MRF TYRES LTD.

2. APOLLO TYRES LTD.

3. JK TYRES AND INDUSTRIES.

4. CEAT TYRES LTD.

5. MODI RUBBER TYRES LTD.

6. BIRLA TYRES LTD.

7. GOODYEAR INDIA LTD.

8. VIKRANT TYRES LTD.

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3.1COMPANY PROFILE

RADO Tyre ltd is located at Kothamangalam, Ernakulam

district, Kerala in a plot of over 3 acres by the side of Alwaye-Munnar state highway

at a distance of about 40 KMs from Ernakulam and engaged in the manufacturing of

two wheelers and three wheelers tyres for CEAT Tyres ltd.

RADO Tyre ltd was registered in 1986. It was incorporated in

the year 1988 with Mr.M.V.Pylee as chairman and Mr.V.V.Augustine as the

managing director. The board of directors of 8 members included a vice chairman,

technical director and nominee of IFCI, company secretary and other two directors.

Although the company was established in 1988, it did not show

much progress for the first four years. By 1992 the company was in a state of sickness

with several lock outs and layoffs and it was facing difficulties in achieving targets in

production. It could not find sources of working capital and there were marketing

problems too. The board of directors realized that the company was slowly dying and

thought of remedial measures.

In 1993 the company entered into an agreement (for one year)

with Apollo Tyres LTD. According to which the company was given on lease. Apollo

Tyres supplied all the raw materials. Hence Rado Tyres was acting only as a

production unit, during this period.

In 1994 the company entered into a similar agreement with

CEAT Tyres, one of the leading tyre manufacturers in India. The contract was signed

for 2 years (1994-1996). During this period the company was acting only as a

production unit of CEAT Tyres LTD. CEAT supplied the raw materials and marketed

the tyres.

In 1996 the contract with CEAT ended and CEAT showed

interest in the company. As a result of discussions it was agreed that the majority of

the shares would be given to CEAT while the 48% was retained. Thus the ownership

of the company was transferred to CEAT Tyres with the takeover.

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CEAT Tyres brought several changes in the company. There

were radial changes in the managerial structure, marketing strategy and financial

policies. The company did not show much progress for one year that followed. From

the second year onwards the company’s financial statements showed clear signs of

recovery from sickness. The company’s performance was better when compared with

that of the previous year. Production was consistent at around 1,05,000 tyres/month.

CEAT was carrying out their development programmes in the company which was

necessary for its survival in the industry. In 2004 the company obtained ISO 9001-

2000 certificate. RADO Tyres completed 20 years in 2006. It started manufacturing

big size tyres like ape, maruti, etc… in 2007.

3.2 MANAGEMENT

The company is managed by a group of 8 directors. The

directors are appointed through the annual general meeting. The directors are

appointed for a period of 5 years. From 1996 onwards CEAT possess the ownership

of the company by acquiring 52% shares of it. In the annual general meeting the

company secretary and the company auditors are appointed. After retirement they are

eligible for being re-appointed. The remuneration is fixed in the meeting.

There are various departments such as:

Production Department

Human Resource Department

Finance Department

Maintenance Department

Stores Department

Lab and Quality Department

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RADO TYRES Ltd.

COMPANY AT A GLANCE

Name : RADO Tyres Ltd.

Industry : Tyre manufacturing

Chairman : Shri.P.K.Chowdhary

Board of Directors

Shri.P.K.Chowdhary : Chairman

Dr.M.V.Pylee : Director

Shri.V.V.Augustine : Director

Dr.C.K.Balan : Director

Shri.K.J.Rao : Director

Shri.K.N.Mathew : Director

Shri.Tom.K.Thomas : Director

Shri.John.M.John : Director

Shri.B.Ramachandran : Alternate Director to Shri.P.K.Chowdhary

Shri.M.K.Kothari : Nominee Director of IVCF Ltd.

Registered office : Building No: 39/3B-3B1

: Opp. Krishna Hospital

: Chittoor Road, Cochin-682011

Head Office : RPG Group, Mumbai

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Factory : Alwaye-Munnar Road

: Kothamangalam

: PIN: 686691

Registered Year : 1986

Incorporated Year : 1988

Land Area : 3 acres

Production Capacity : 11 tones per day

Auditors : M/S Paulson and Company

: Chartered Accountants

: Cochin-682017

Bankers : Federal Bank Ltd.

: M.G.Road

: Ernakulam

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3.3 PRODUCT PROFILE

RADO TYRES manufactured tyres for CEAT. They mainly

concentrate two wheelers & three wheelers segment. RADO TYRE LIMITED

manufacture 4.00-8, 3.00-10, 3.00-18, 3.5-8, 2.75-18 are the different size of the two

wheeler and three wheeler tyres. The main raw materials used for the production of

tyre are natural rubber, nylon tyre strong and it comprises 34% while carbon black

account for 13% and is responsible for the color of the tyre.

Tyres made in India can be broadly classified as – ply and

radial. Cross-ply tyres account for 90 - 95% of tyres sold in India. The body of the

tyre , called carcass, is made up of layers of rubber coated nylon or rayon fabric called

piles.

The main difference between these two tyres is the direction in

which ply cords are arranged and the type crises across each other and the major

reinforcing materials used are rayon and nylon tyre cords.

Radial tyres have more flexible side walls and the reinforcing

medium include polyester, nylon, fiberglass and steel. As such, there is a substantial

price difference between cross ply and radial tyres. Radial tyres are 10 – 15% costlier

compared to the cross ply ones.

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CHART NO.1

ORGANISATION STRUCTURE

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ADMINISTRATOR ASST. MANAGER

STAFFS DIVISIONAL IN CHARGE

SECURITY CHARGE HANDS

STAFFS

Skilled workers

Unskilled workers

13

PLANT HEAD

PDN.MANAGER

DIVISIONAL IN CHARGE

CHARGE HANDS

STAFFS

Skilled workers


4.1 DEPARTMENTAL DETAILS

RADO TYRES KOTHAMANGALAM has ventured its functioning into various

departments. The study mainly carried on its six departments namely;

1. PRODUCTION DEPARTMENT

2. HUMAN RESOURCE DEPARTMENT

3. TECHNICAL DEPARTMENT

4. MAINTANANCE DEPARTMENT

5. STORES DEPARTMENT

6. FINANCE DEPARTMENT

7. MARKETING DEPARTMENT

4.2 PRODUCTION DEPARTMENT

To optimize the manufacturing process and better control key assets, RADO TYRES

started to look for possibilities to deploy automated machines solutions and

technologies in their production process. The implementation of the new solution has

led to clear increase in productivity. Real time reporting and control, assembly line

efficiency and greater flexibility are advantages of the new system.

Adopting a new system can be risky, especially in the context of a well-developed

manufacturing process. It is important to plan the development carefully and test the

solution properly. We turn cutting edge technology in to enriching end-user

experiences. It is specialized in demanding embedded software and hardware

solutions for automotive and wireless industries. It is a technology powerhouse with

superior technology competence, wide experience and unique development culture.

We master the most complex technologies and deliver value that cannot be found

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anywhere else. Pushing the limits and solving close to impossible challenges drive us.

We are passionately customer intimate. Our long history with the best in the market

enables us to be the trusted partner for those who will not accept the ordinary. Now it

claims to have adopted these processes for the manufacturing of the motorcycle tyres.

The company believes it can improve the market segmentation of this high profit

business by changing the manufacturing process using modern technology. The

production technology mainly deals with the production of various types of tyres. It

converts the raw materials (natural rubber, synthetic rubber and other chemicals) into

finished goods (tyres). The production activities are engaged in the factory. The

production is as follows,

Chart No.2

PRODUCTION FLOW CHART

→

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Raw Material

Raw Material

Batch Weighing

Mixing

15

Compounds

Lab Testing

In process inspection

Tread

Calendaring

In process Inspection

Scrap

Raw material

Compound

Scrap

Extrusion

Calendered fabric

Bias Cutting


Cut Plies


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Ply Cushioning

Cushioned ply

Bead Winding


Wound Bead

Bead WrappingCut ply Covered Bead

Tread

Cushioned ply

Cut Plies

Covered Board

Tyre building


Green tyre

Tyre Painting and Poking

Tyre Curing


Scrap

OK

TrimmingIn process inspection

Scrap

Tyre Repair


Scrap

OK

Stocking

Dispatch


MIXING

Mixing is the initial process of tyre manufacturing. Mixing

process is carried out in a closed chamber of carbon with two rotters in middle. The

machine in which mixing process is carried out is called banbury or intermix.

In this process rubber is combined with oil and chemicals,

called a compound. The compound is mixed very well at high temperature,

approximately around 160 Celsius. The chemicals and carbon gets uniformly

dispersed throughout the compound. The mixing process lasts for around 4 minutes.

From intermix, the compound is then moved to the mill through a conveyer. The

compound is warmed in the mill. Then the compound is moved through a conveyer

with soap solution. At last the compound is moved through a cooling conveyer to the

stock. The compound is of three types as thread compound, carcass compound and

bead compound.

The intermix machines in RADO TYRES Ltd has a capacity to

mix 65 kg of compound at a time. After the mixing process the compound is rolled

out in the form of black sheets. The size of the sheets is determined as per the

specification prescribed by CEAT.

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Chart no. 3

160*Celsius, 4 minutes

Warming

Cooling conveyer

→←

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INTERMIX

FINAL COMPOUND

MILSOAP SOLUTION

MASTER COMPOUND ACCELERATORS

CARBON CHEMICALS SYNTHETIC RUBBER


CALENDARING

Calendaring process is carried out in a 4- roll calendar

consisting of 4 rollers. The adjacent rollers rotate in the opposite direction. The

distance between the rollers is very low (only 1 mm). When the rubber compounds

produced in intermix is passed on between the rollers a nylon fabric is coated into it

which is then rolled out into the rollers. Then the compounds coated with nylon fabric

are rolled out into rolls. They are known as ply. They form the basis of tyre.

Chart No. 4

BIAS CUTTER

The rubberized fabric produced from the calendaring process is

then cut with certain angles. The angles are different for scooter and bike tyres. This

is done on specification received from the CEAT authority. The cut plies are then sent

to the tyre building section.

BEAD WINDING

Beads are combinations of many coppers or brass coated steel

wires (10-150 wires) with high tensile strength. Their function is to rigidly fasten the

tyre on the rim and keep it there under all loading conditions.

The wires are wrapped with rubberized textile and disposed as

layers into the bead, the latter operations being carried out by extrusion as well. The

wire layers are shaped into a ring and the free wire ends are stuck together by means

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FABRIC FINAL COMPOUND

TYRE PLY


of strips of rubberized textile around a drum chuck. This is called bead winding

process.

The bead is then wrapped with rubberized textile (bead wrap)

in order to avoid slippage of rubberized wires in service. The bead’s products are

covered with cotton fabric. The machine in which this process is done is called bead

wrapping machine. All materials in this zone should be flexible and temperature

resistant. The bead is then sent to the tyre building section for the next process.

In tread extrusion process, treads are produced from rubber mixture compound.

Treads are produced in different pattern and size according to the specification

provided by CEAT. The tread produced is passed on the tyre building section.

TYRE BUILDING

Tyre building is the process of making of the green tyre. Green

tyre is not a complete tyre. It is an intermediate product in the tyre manufacturing

process. At first the cut plies and cut beads are combined together. This is done to

push the air in between the tyre. The tyre thus produced is called the green tyre. The

green tyre is vulcanized by applying heat and pressure in special machines to produce

the finished tyre.

Chart No.5

Tyre building

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CUT FABRIC ROLLS TREADS BEADS

GREEN TYRE

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TYRE CURING

Tyre curing is the process of converting green tyre into

finished/complete tyre. This is done through vulcanization process. This

process takes approximately 11 to 13 minutes for scooter/motorcycle tyres and

11 to 14 minutes for auto rick tyres. After this process the tyre is sent for

inspection.

Chart No. 6

Tyre curing

G T PREPARATION

1. Green tyre painting

2. Green tyre punching

INSPECTION

The tyre is first trimmed to remove the unwanted spikes

or projections to give it a perfect shape. Then a visual inspection is conducted

to identify whether any defects exist in the tyre. If the tyre is fine it is sent to

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CURED TYRE

POST CURING

INFLATION

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the technical department for quality checks up. After that the tyre is sent for

dispatch.

4.2 HUMAN RESOURCE DEPARTMENT

Human resource is the backbone of every organization. It is a

fact that the people are vital for the effective operation of a company as human minds

and efforts are the main driving force behind any business or industry. Managers often

say that the people or work force is their most important asset. Without a human

resource department, an organization can be compared with that of a ship without

rudder. To a large extent the success of an organization depends upon the efficiency

and effectiveness of the human resource department

FUNCTIONS

I. RECRUITMENT

Recruitment is the process of searching for prospective

employees and inspiring them to apply for the job in the organization. In RAO

TYRES, the recruitment is done based on reporting of vacancies by departmental

heads.

a) External sources

Advertisements through news papers

Recommendations

b) Internal sources

Promotion:- In RADO TYRES promotion takes place on the basis of both

experience and performance.

II. SELECTION

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Selection is the process of picking up individuals with required

qualifications and competence to fill job vacancies in an organization. The selection

process is a tool in the hands of management to differentiate between the qualified

and unqualified applicants by applying various techniques such as interviews, tests,

etc.

In RADO TYRES selection process consist of the following steps;

Bio-data of candidates are invited

Scrutinizing the applications

Qualified applicants are invited for interview

Medical examination

Appropriate candidates are selected based on their skill and experience

III. INDUCTION

Induction means introducing the candidates to the organization. An

induction manual along with training from the H.R. department is given to the newly

placed persons to familiarize with the organization, its policies, rules and regulations,

work responsibilities, co-workers, etc.

In RADO TYRES the H.R. department gives one day induction.

IV. PERFORMANCE APPRAISAL

Performance appraisal means evaluating the performance of the

employees. RADO TYRES follows 90-degree appraisal system. They conduct

performance appraisal yearly. Performance is appraised by fixing the target for

workers and giving incentives to those who achieve the target. For managerial staff

appraisal is done by evaluating their supervisory skills and approach towards the

workers. If an employee performs well it will lead to an increase in the annual

increment of the particular employee.

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V. TRAINING AND DEVELOPMENT

Training is the act of increasing the knowledge, skills and abilities of an employee for

doing a particular job better. In RADO TYRES training is given through the methods

of on the job training and of the job training.

On the job training

Training is given to all the employees for 90 days from their date of

placement.

Training is carried out by KSPC every year.

Training by experts for creating good attitude among the workers.

Multicast system- To improve the efficiency of workers in areas of work.

Safety classes are provided for all employees.

Off the job training

SAP training is given to selected employees in the H.R. department.

VI. COMPENSATION

Compensation is administered on the basis of employees’ attendance,

leave and holidays. Salary increment is given to all the employees having 1 year

experience. Increment is not given to employees if they have attendance shortage,

unauthorized absenteeism, irregularity, etc. The stoppage of increment provision for

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an employee is called Baring of increment. Besides the basic salary following benefits

are provided to the employees;

Bonus

According to Bonus commission bonus can be defined as, “the sharing

by the workers in the prosperity of the organization in which they are employed.” The

company is providing bonus of 8.33% of wages and salary in every year to all the

employees having minimum basic pay of R.S.2500.

Incentives

The company gives performance linked compensation for motivating

the workers when they achieve more than the targeted production.

Shift allowances

If any worker is substituting for absenteeism during any shift

operations, the management pays shift allowances for the substituted worker.

Salary is calculated by;

Basic - ***

V.D.A - ***

Personal pay - ***

Conveyance allowance - ***

Medical allowance - ***

Washing allowance - ***

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H.R.A - ***

Shift allowance - ***

Incentives - ***

Bonus - ***

Salary - ****

Other details about H.R. department

Number of employees

Shift charge - 3

Charge in hand - 19

Staff - 12

Work men - 146

H.O. Staff - 5

Total - 185

Working Hours and Working Norms

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The company is working on shift basis. The company has three

shift in a day for the workmen and general shift for the officers and the staff. They

are;

Table No.1

Shift timings

SHIFT TIME

General shift 9am to 5pm

First shift 8am to 4pm

Second shift 4pm to 12pm

Third shift 12pm to 8am

If any individual fails to fails to work on the work norms during

his particular shift, may be proportionate wage cut and other actions will be taken.

The management has the right to reallocate the work for any worker or transfer a

worker from one section to another.

ATTENDANCE

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As per clause (7) of the standing orders, all workmen all

workmen can register their attendance at least 5 minutes before the stipulated shift

time. Attendance is recorded using punching card system. Each worker is inserting his

card in electronic punching clock at the time of arrival and departure.

Workmen attending late shall be liable to wage deductions on

pro rata basis. Workmen attending late by more than 10 minutes will be treated as

absent, unless admitted to work at the sole discretion of the management.

IDENTITY BADGE AND DRESS CODE

Every workman, except substitutes and casuals, are provided

with identity badge showing his name, number, photograph and other classification.

Every workman is bound to wear it. It is the property of the company and should be

surrendered to the company when one resigns his job.

There are two types of uniforms for employees, one for

workers and other for staff. The uniform for workers is dark blue shirt and pants. The

uniform for staffs is ash color shirt and pants. Workmen except clerical staff, should,

during work hours, wear such tight fitting clothes or the company may prescribe

uniform.

WAGE SCALE

RADO TYRES follows time wage rate system. As per the

revised wage agreement all the workmen will get an additional sum of R.S.2000 per

year.

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LEAVES AND HOLIDAYS

Employees other than trainees will be given leave in accordance with the provision of

the factories Act 1948. The details about the leaves and holidays are as follows;

1 year - 365 days

Less Festival holidays - 9 days

National holidays - 4 days

Weekly holidays - 52 days

Total holidays - 65 days

Working days - - 300 days

Less Casual leave - 10 days

Actual Working Days - 290 days

Privilege leave - 10 days

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(Having 200 days attendance)

E.S.I leave - As per the requirement

Sick leave - 8 days

(Employees who have no E.S.I leave)

If an employee has 200 attendances, he will get 10 days privilege leave. If an

employee takes privilege leave, it will be at least 2 days and above. The employees

are allowed to take privilege leave only 5 times a year. If an employee takes privilege

leave continuously, he will lose the benefit of weekly off. That means weekly off will

be considered as privilege leave.

In case of privilege leave the application form for leave must be

given in advance. But in the case of casual leave the above condition is not necessary.

If any emergency arises, a workman can take casual leave.

Provision for sick leave is regulated by the Employees State

Insurance Act 1948. A workman who intends to go on leave for more than three days

must submit the leave application at least 10 days before the leave.

REGISTERS AND FORMS

Kept by personal department.

Registers:

o Leave Register

o Pay Roll

o Muster Roll

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Forms:

o Casual Leave form

o Privilege Leave form

o Out-pass form

o Compensatory Off form

WELFARE MEASURE

Welfare measure means faring well. Labor welfare denotes

various services provided by the employers to the employees in addition to the wages.

It includes other facilities, services and amenities provided to workers for improving

their health, efficiency, economic betterment and social status.

These are classified into two; Statutory and Non- Statutory.

RADO TYRES provide both of these welfare measures to employees.

STATUTORY MEASURES

1) Canteen

RADO TYRES provide canteen facility to its employees within

the factory. It gives nutritious food to its employees. Its share owned 65% by

employers and 35% by employees.

2) First Aid

RADO TYRES gives readily accessible first aid boxes with

the prescribed contents during the working hours.

3) Washing and Drying cloth facilities

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In RADO TYRES employees are getting the adequate and

suitable washing and drying cloth facilities.

4) Rest room and Shelters

Rest room and shelters are provided to the employees for taking

rest and changing their clothes.

NON-VOLUNTARY FACILITIES

1) Transportation and Conveyance Allowance

The company provides car, jeep service for the benefit of the employees

working in the second and third shift for the distant workers.

2) Vehicle van

Company provides vehicle loans to the workers in subsidy.

3) Accommodation facility

The company provides accommodation facility or H.R.A to the employees.

4) Educational facility

The children of the employees get 3500 per annum as educational loans.

Co-Operative Society

The company has a Co-Operative Society for the benefit of the employees.

It provides loans to the employees.

The Co-Operative Society provides R.S. 25000 to the dependant at the

time of employee’s death.

It grants R.S. 1000 to the employees at the time of his/her marriage.

5) Washing Materials and Allowance

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The company is providing washing allowance of R.S. 428 to

the employees on a monthly basis. Besides these washing allowances, the

company gives washing materials like 4 bar soaps, 1 life buoy and 2 lux.

Health Measures

The company had taken several health measures for the

employees. They are;

Drinking water facility.

Latrines and urinals.

Adequate ventilation and temperature.

Proper lighting.

Safety Measures

The company is providing shoes, mask and glouse for the

safety of workers. Fire alarm is also there in the plant.

Safety instruction class.

First aid instruction class is taken by experts from outside in order to prevent

electrical shock consequences.

SOCIAL SECURITIES

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International labor organization has defined the social security

as “the security that society furnishes, through appropriate organizations, and against

certain risks to which its members are exposes”. These risks are ignorance, want,

disease, squalor, and unemployment. Social security means the security, as provided

by the society to its members, against the contingencies they cannot meet out of their

small means effectively. Social security is a very comprehensive term includes in its

schemes of social insurance and social assistance, as well as some schemes of

commercial insurance. Social insurance scheme protects an individual from failing to

the depths of poverty while social assistance is one of the device according to which

benefits are given as legal to workers who are eligible for such assistance.

RADO TYRES Ltd. secures its employees by;

1. Gratuity

For permanent workers who have 5 years of experience.

Gratuity = (Basic + D.A.) * (Number of years)

2. E.S.I

This coverage is applicable to those employees who have salary

up to R.S. 10000. E.S.I fund is contributed by 1.75% from employee and 4.75% from

employer. The benefits under E.S.I are:

a. Sickness benefit

b. Dependant’s benefit

c. Funeral expenses

d. Medical benefit

3. E.P.F

P.F. is provided to all employees. It is calculated by;

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E.P.F = (Basic + D.A.) * 12% (from the part of employer and

employee)

Employees can take loan from P.F. after 5 years except the

amount to the pension scheme.

4. Maternity Benefit

RADO TYRES give maternity benefit to its employees

according to Maternity Benefit Act 1961.

INDUSTRIAL RELATIONS

There are three trade unions in the company. They are;

a. INTUC

b. CITU

c. BMS

The company follows closed-door system.

LOCK OUT and LAY-OFF

The company faced lock outs and lay-off. Lock out for a period

of 8 months and lay-off for a period of 20 days. The main reason for the lock out is

that the disagreement of workers due to the absence of renewal of agreement. The

agreement is for the period of 4 years. But the management was not ready to renew

the agreement. The reason for the lay-off is unavailability of raw material.

Grievance Settlement

Any worker having a grievance shall first refer to his immediate supervisor.

If the worker is not satisfied with the decision, he can give his complaint in

writing to the head of the department.

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If the head of the department fails to solve the problem, it will

be handled by the H.R. manager. He will take decision within two weeks consulting

the matter with the conflicting parties.

4.3 TECHNICAL DEPARTMENT

Good products are key to success. Quality of a product is very

important for consumer satisfaction. RADO TYERS provides a good quality control

department. Senior officer technical heads in the department. This group checks

quality of raw material of a product and carryout the check up of each stage of

manufacturing process and it ends only when the final product is come out.

Raw materials checkup is mainly for find any damage is caused during

transportation. Production department carryout various processes like mixing,

calendaring, bias cutter, bead winding, tread extrusion, tyre building, tyre curing and

inspection.

In the initial stage process they check whether the mixing of

raw materials has been made in a right promotion or not. Rheometer is used kind of

check up. If the mixing of sulphur is not a right proportion it will affect the entire

quality of product and the products get damaged.

In extrusion process bead winding process and calendaring

process checkup is done to identify the correctness of weight, length, width of tread,

perimeter of the bead and gauge of the rubberized fabric. A building to see weather

green tyre weight meets specification. In flatted tyre dimension and cut tyre

dimension and tyre dimension is checked periodically.

QUALITY POLICY

We at RADO TYRES are committed to be customer-centric by

consistently delivering excellent products. It will be our endeavor to continually

improve all business processes ensure conformance to the established quality systems.

We intended to accomplish this through constantly upgrading skills of our employees.

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4.4 MAINTENANCE DEPARTMENT

In simple words maintenance means a set of activities, which

help keep plant, machinery and other facilities in good condition. It is an essential

activity in every manufacturing establishment, because it is necessary to ensure

availability of machines, building and services needed by other departments in the

organization for the performance of which at an optimum return on investment,

whether the investment is in machine, material or employees.

Scope of Maintenance

Every manufacturing organization needs maintenance because

of machines break down, wear and tear of machines, tools and building over a period

of usage. All segments of a factory, buildings, machinery, equipment, tools, waste

disposal system, air conditioners and so on need attention.

The superintendent of maintenance heads maintenance

department of RADO TYRES and under him there are the charge hand and workmen.

The work in the department has been categorized into 3 divisions.

Mechanical Maintenance

There are separate charge hands and workmen for each division

of work. RADO TYRES have 5 tyre building and 16 tyre curing machines. Here,

maintenance is concerned with various mechanical machines, bias cutter, etc.

Electrical Maintenance

Electrical maintenance is another important division of

maintenance department. Proper maintenance is necessary in this department

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otherwise it causes major damage to machines. Thus periodical inspection is carried

out for electrical maintenance.

Utility Maintenance

Utility division conducts regular check on the boiler and the

compressor. This helps to maintain supply of cold water and steam into the terminal

and create vacuum, air, provide supply of steam, cold water to the curing machines.

For preventing breakdown of machines RADO TYRES

conducts regular check up of the machines.

4.5 STORES DEPARTMENT

Like production, storage is very important function of physical

distribution. Even in the primitive days human beings learned to preserve food and

essential items for the future. Storage is the process of holding and preserving the

goods.

In a manufacturing organization, storage function starts from

supply of raw materials till the distribution of finished goods to various sales outlets.

Latest storage facilities are essential to protect the goods from natural calamities,

theft, etc. In RADO TYRES the stores department has 3 divisions. They are;

Raw materials store

Work-in-progress goods store

Finished goods store

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Chart No.7

Stores department

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RAW MATERIALS STORE

WORK-IN-PROGRESS

GOODS STORE

FINISHED GOODS STORE

STORES DEPARTMENT


RADO TYRES has a good stores department to maintain stock. Stores Manager heads

the stores department. The department is concerned with procurement, storage of raw

materials and supply of raw materials to the production department, maintaining the

stores department and dispatch of the finished goods.

Stores department maintain daily stock position and stock department. It contains the

opening balance of stock. The receipt for the month, closing stock and the coverage

days, RSS-4 grade rubber and crumbed rubber is procured from rubber purchasing

department in Ernakulam CEAT Company.

The stock statement also shows the critical list, which indicates

the danger level of the stock in the company. Materials entering the company undergo

various documentations before they reach the production shop floor and get converted

into finished products.

Initially the materials are weighted in a weighing bridge. The

weight is compared with weight recorded in the receipts. Raw materials are checked

at the factory gate. The materials received report is prepared. Following information

are included in this report.

a. Supplier’s Name

b. Invoice No.

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c. Truck No.

d. Goods Consignment No.

e. Material Code

f. Description

g. Substandard

h. Unit

i. Excess

j. Shortage

k. Quantity Accepted

l. Quantity Rejected

m. Rate

n. Invoice Value

The materials in the stores are then sent to the production

department as per the need. This involves a little documentation procedure and for

this a stock card is maintained. Raw materials requisition note is made from the

production plant to the stores. As per this the materials are issued. First in First out

method inventory control is followed to issue raw materials.

Stores department is necessary for an industry to store raw

materials, to store finished products, etc. There are certain situations that require

storage. They are as follows;

Storage is always necessary for easy transportation arrangement.

Production is always in anticipation of demand. So the produced goods must

be preserved safely.

Storage is necessary to carry out other functions such as grading, clearing,

mixing, etc.

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4.6 FINANCE DEPARTMENT

Finance plays a key role in every activities of business. It may

be defined as the service of money. It deals with the principles and methods of

obtaining control over money from those who saved it and administering it by those

who control it. The success of finance function depends on how finance is planned at

the various levels of administration under the management.

Importance of Finance Department

Finance department has an impact on all activities of the firm.

Finance department aims to discharge the finance functions successfully.

The main aim of finance department is to use business funds in such a way

that the earnings are maximized.

Finance department is necessary to every type of organization, irrespective of

its size, kind and nature.

Objectives of Finance Department

The main objective of Financial Management or the goals of

business finance is to maximize the company’s profit and improve the economic

welfare. There are mainly two steps for achieving these specific objectives. They are;

Profit Maximization

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Profit earning is the main aim of every economic activity. No

business can survive without earning profit. Profit also serves as a protection against

risks which cannot be measured. Thus, profit maximization is considered as the main

objective of the business.

Wealth Maximization

When the firm maximizes a stockholder’s wealth, the

individual stock holder can use this wealth to maximize his individual utility. This

objective helps in increasing the value of shares in the market.

Functioning of Finance Department

The success of finance function depends on how finance is

planned. The inflow of funds should be properly matched so that funds become

available for payments when it becomes fall due. Karl Davtin has observed that

“planning the finance to pay all the bills is the heart of financial function”.

Finance Department of the company constitutes the accounts

and administration and cash management.

Functions of Finance Department

a. Preparation of corporate plans, annual plans and budgets.

b. Management of fund creation and its implementation on advertisement and

other activities.

c. Evolve an audit manual.

d. Monitoring the process of budgets achievement.

e. Providing Taxation pinning and advisory services to the company.

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f. Preparation of financial statements and thus identifying the financial strengths

and weaknesses of the firm by properly analyzing and interpreting the

financial statement.

Financial Manager heads the finance department of RADO TYRES. The department

is placed at Ernakulam.

RADO TYRES Ltd. have an authorized share capital of R.S.9 crores, ie; 90 lakhs

equity shares of R.S. 10 each. Of this, 52% of the shares are owned by CEAT Ltd. and

remaining rests with RADO TYRES. The issued share capital is R.S.85,790,500.

RADO TYRS being a conversion plant, is paid by the CEAT for its activities in the

form of conversion charges.

The company has borrowed long term loans from KSIDC. It is

being paid back on quarterly basis. This is borrowed by keeping mortgage the

company’s immovable assets. RADO TYRES have occurred unsecured loans from

CEAT for rehabilitation purpose. Depreciation for the company is calculated for the

year on straight-line method on pro-rata basis, corresponding to the rates prescribed

under schedule XIV to the Companies Act 1956. The accounts are prepared under the

historical cost convention on accrual basis and are in accordance with the relevant

reference of the Companies Act 1956. The fixed assets of the company have not been

revalued for the year. Therefore the fixed assets are valued at historical costs. The

company conducts a physical verification of stock and valuation of inventories is done

at cost.

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Chart No. 8

The Structure of Finance Department

VICE-PRESIDENT (FINANCE)

GENERAL MANAGER (FINANCE)

UNIT MANAGER (FINANCE)

JUNIOR OFFICERS

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Chart No.9

DIRECTOR’S REPORT ON 2009-2010

INCOME 54009908

OPERATING EXPENDITURE 42562094

OPERATING PROFIT(PBDIT) 1447814

INTEREST 3947814

DEPRECIATION 7105030

FRINGE BENEFIT(FBT) 354367

P/L BEFORE TAXATION 40494

NET PROFIT CARRIED FORWARD

TO BALANCEHEET

354367

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4.7 MARKETING DEPARTMENT

Marketing is the core of all management functions. One of the

important reasons behind the success of the company is its differentiated marketing

strategy compared to their rivalries. They deal with the wholesalers and retailers

directly at their door step. Since RADO TYRES Ltd. is one of the conversion unit of

CEAT TYRES Ltd. the raw materials supplied to the company and the marketing

activities of RADO TYRES products are done directly by CEAT TYRES. So a

detailed study of marketing department was not possible.

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5.1 SWOT ANALYSIS

. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.

STRENGTHS

Ownership

Brand Name

Careful selection of raw material

Quality product

ISO 9001-2000 Certification

WEAKNESSES

Factory is not located in an industrial area.

No other supporting industries.

No space for expansion.

OPPORTUNITIES

Growth in the industry in the near future.

Opportunity for presence in big size tyre manufacturing.

THREATS

High competition in the domestic, national and international market.

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Liabilities in terms of loan.

High cost of raw materials.

Time delay in maintenance.

Power failure.

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5.2 PESTLE Analysis

PESTLE analysis is a useful strategic tool for understanding

market growth or decline, business position, potential and direction for operations.

PESTLE also ensures that company’s performance is allied positively with the

powerful forces of change that are affecting business environment. In conducting

PESTLE analysis, it is required to consider each PESTLE factor as they all play a part

in determining the overall business environment.

POLITICAL : (includes legal and regulatory)

Elections, employment law, consumer protection,

environmental regulations, industry-specific regulations, inter-country

relationships/attitudes, war, terrorism, political trends, governmental

leadership, taxes, and government structures affects the working of a tyre

company in the tyre industry.

ECONOMIC

Economic growth trends, taxation, government spending levels,

disposable income, job growth/unemployment, exchange rates, tariffs,

inflation, consumer confidence index, import/export ratios, and production

levels.

SOCIAL

Demographics (age, gender, race, family size, etc.), lifestyle

changes, population shifts, education, trends, fads, diversity,

immigration/emigration, health, living standards, housing trends, fashion,

attitudes to work, leisure activities, occupations, and earning capacity.

TECHNOLOGICAL

Inventions, new discoveries, research, energy

uses/sources/fuels, communications, rates of obsolescence, manufacturing

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advances, information technology, internet, transportation, bio-tech, genetics,

agri-tech, etc.

LEGAL

The company is complying with all the legal acts. It is registered in 1986 and

incorporated in 1988. Wages and salaries are paid according to wages and salaries

Act.

ENVIRONMENTAL

No environmental issues are persisting in the company as the waste materials

are properly recycled and used for further processing.

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5.3 PORTER’S FIVE FORCES MODEL

Porter’s five forces is a framework for the industry analysis and business strategy development developed by Michael E. Porter. It uses concepts developed in Industrial Organization Economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. The five forces are;

A. The threat of substitute products

The existence of close substitute products increases the propensity of customers to switch to alternatives in response to price increases.

Buyer propensity to substitute

Relative price performance to constitute

Buyer switching costs

Perceived level of product differentiation

B. The threat of the entry of new competitors

Profitable markets that yield high returns will draw firms. This result in many new entrants, which will effectively decrease profitability.

The existence of barriers to entry (patents, rights, etc.)

Economies of different products.

Brand equity

Switching costs or sunk costs

Capital requirements

Access to distribution

Government policies

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C. Competitive rivalry within an industry

For most industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc.

Number of competitors

Rate of industry growth

Exit barriers

Diversity of competitors

Level of advertising expenses

D. The bargaining power of customers

Also described as the market of outputs. The ability of customers to put the firm under pressure and it also affect the customer’s sensitivity to price changes.

Buyer concentration to firm concentration ratio

Degree of dependency upon existing channels of distribution

Buyer information availability

Buyer price sensitivity

E. The bargaining power of suppliers

Also described as market of inputs. Suppliers of raw materials, components, labor, and services to the firm can be a source of power over the firm. Suppliers may refuse to work with the firm or charge excessively high prices for unique resources.

Supplier switching costs relative to firm switching costs

Degree of differentiation of inputs

Presence of substitute inputs

Threat of forward integration by suppliers

Labor unions

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6.1 FINDINGS

The major findings are;

The productivity of the company is increasing.

The company has enough human resources.

A major portion of the tyre market is left untouched by the company.

Absenteeism is one of the major problems facing by the company.

Another problems facing by the company is power failure and delay time

in maintenance of machines.

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6.2 SUGGESTIONS

The major suggestions are;

It would be a turning point if the company enters into big size tyre market.

It would be helpful if the company introduces a grievance handling system.

The company may try to reduce the wastage of raw materials and other costs.

The company has to establish a suggestion box for collecting various ideas

from its employees.

It would motivate the employees and thereby increase the productivity if the

company provides a good rest room for the employees.

The company needs to implement better motivational technique and provide

shift allowance to reduce the rate of absenteeism.

The company has to take measures to prevent noise arising at the time of

production.

The company has to adopt measures to reduce temperature while working.

The company has to find the space for expansion.

It would help to avoid mixing up of checked and unchecked tyres if the

company makes a separate store room for keeping the finished goods.

The company may try to reduce the liabilities in terms of loan.

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6.3 CONCLUSION

RADO TYRES after its establishment in 1988 remained as a

sick unit for 4 years after which it was given for lease to APOLLO TYRES and

CEAT TYRES subsequently. Later on in 1996 CEAT absorbed its majority of shares

to take control of its ownership. RADO TYRES now is a conversion plant for CEAT

TYRES Ltd. A major rehabilitation work was stepped up by CEAT increasing the

plant capacity to 1 lakh tyres /month (of two wheelers and three wheelers). After that

the company has seen steady growth in the production capacity. Thus showing of

recovery 1 lakh tyres/month and is expected to show positive growth in the future

under the strong brand name CEAT “secura “.

The company should make a strategic approach to the

weaknesses and threats. The predicted increase in the raw materials price would affect

the opening margin of the company. Counter product should be introduced in the

market against the Chinese and Malaysian products, so as to reduce the market share

of other players. The company has a long way to travel to achieve success and enter

the top player category.

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BIBLIOGRAPHY

1) C.R. Kothari :Research Methods in Business

2) I.M. Pandey :Financial Management

3) Websites : www.google.com

: www.ceatyres.com

: www.atmaindia.org

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http://www.atmaindia.org/

http://www.ceatyres.com/

http://www.google.com/


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