ORGANISATION STUDY OF MRF LTD, VADAVATOOR, KOTTAYAM, KERALA

Submitted in partial fulfillment of the requirements for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

of the Mahatma Gandhi University.

Submitted by; ARUN K MATHEW Regn No:

Under the guidance of Mr. Balakrishnan Menon

JUNE - 2011 DC School of Management and Technology

Pullikkanam, Vagamon, Idukki 685503 Tel: 04869 248322,

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DECLARATION

I hereby declare that the organisation study of MRF LTD, VADAVATHOOR, KOTTAYAM, KERALA is a bonafied study carried out by myself, in partial fulfillment of the requirement for the award of degree in Master of Business Administration from Mahatma Gandhi University or recognition in any university or institution. is a record of the original work done by me and no part of it has been submitted earlier for any Degree, Post Graduation, title

Place: Pullikkanam Date

Signature: Name:

CERTIFICATE OF THE INSTITUTION

ORGANISATION STUDY Page 2

This is to certify that the organisation study titled ORGANISATION STUDY OF MRF LTD, VADAVATHOOR, KOTTAYAM, KERALA is a bonafide record of the work done by Ms ARUN KMATHEW, 3rd semester MBA Student of DC School of Management and Technology, submitted in partial fulfillment of the requirements for the award of the Masters Degree in Business Administration of Mahatma Gandhi University, Kottayam, Kerala.

Faculty Guide

Principal

Date: Place: Pullikkanam

Examiner I

Examiner II

Signature Name Date

Signature Name Date

CERTIFICATE FROM THE COMPANY

ORGANISATION STUDY Page 3

ACKNOWLEDGEMENT ORGANISATION STUDY Page 4

If the words are considered as symbols of approval and of gratitude then the following words play the heralding role of expressing gratitude. A great time and much effort have gone into developing this organisation study.

First and Foremost, I wish to express my sincere thanks to the Almighty God for giving me strength and guidance in completing this project. I also wish to express my sincere thanks and heartfelt gratitude to Brigadier Ashok Kumar, our esteemed Director,DC School Of Management And Technology for providing me with such an opportunity.

I am especially thankful to my guide Mr. Balakrishnan Menon Sir, for his esteemed guidance, expert advice and for inspiring us throughout the phases of this project. His unfailing guidance and continuous support rendered at every stage of my work has helped me to complete my endeavor successfully.

I proudly take this opportunity to express my thanks to Ms.Premela.P.Skariah, Assistant Manager, Welfare, MRF Ltd Kottayam for permitting me to conduct my study. I express my thanks to Ms.Deepthi Mol K.M, MRF Ltd,Kottayam for her support and help. I am thankful to all the officials of MRF Ltd, Kottayam for providing a good environment that helped me to complete this study within the specified time.

Above all, I thank almighty God, my family, friends and others for their support ARUN K MATHEW

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CONTENTS

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CHAPTER

TITLE

PAGE NO.

INTRODUCTION

INDUSTRIAL PROFILE

13

COMPANY PROFILE

20

PRODUCT PROFILE

30

MRF KOTTAYAM UNIT

33

ORGANISATIONAL STRUCTURE

39

DEPARTMENT PROFILE

40

(a)

PRODUCTION DEPARTMENT

42

(b)

PRODUCTION PLANNING DEPARTMENT

44

(c)

QUALITY ASSURANCE DEPARTMENT

44

(d)

TECHNICAL DEPARTMENT

48

(e)

PLANT PURCHASE DEPARTMENT

52

(f)

RAW MATERIALS STORE DEPARTMENT

52

(g)

SHIPPING DEPARTMENT

53 Page 7 54

ORGANISATION STUDY (h) ACCOUNTS DEPARTMENT

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 Mammen Mappillai at Thiruvottiyur 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 12th largest in the world with turnover of Rs 5800 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. 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.

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Production units of MRF are located at:

1. Tiruvittiyur ,Tamil Nadu

2. Kottayam, Kerala

3. Medak, Andhra Pradesh

4.

Arkonam, Tamil Nadu

5.

Pondicherry

6.

Ponda, Goa

7. Sri Lanka.

The main objective of the company is to attain global standard through continuous improvement in the quality products and service in order to maintain market leadership. The main strategy of the company in todays competitive world is cut cost and win the battle.

IMPORTANCE OF THE STUDY ORGANISATION STUDY Page 10

The study was conducted at Madras Rubber Factory Limited (MRF), Vadavathoor, Kottayam. MRF Ltd. is one of the well known, most advanced and leading manufacturers and exporters in tyres. The organisation study was conducted in order to understand the functioning of the various departments and activities undertaken by them; organisational 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. Organisational study covered all functional aspects of the organisation. The study gives us some corporate working exposure. It helps to know about the rubber, and tyre industry which is very important as far as the Indian economy is concerned. It also gives a clear picture of working of a manufacturing organisation and importance of industry in the economic development of a country. The study mainly concentrates on the important functions of the organisation. The activities of each area are carefully studied. OBJECTIVES OF THE STUDY

To study about the operations performed at various levels of departments.

To know the quality standards of the products.

To know about MRF Ltd as an organisation

To know the functioning of the various departments

To observe the routine activities of the workers in various level

To understand the organisation structure.

METHODOLOGY
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Research cannot be contacted abruptly; the researcher has to plan the research process systematically. The research process includes a number of steps. If all the steps are taken in systematic manner the research conducted become quite effective.

Types of Data
There are two types of data; Primary data Secondary data

Primary data
Primary data is those data collected by the researcher for the first time, it is fresh in nature. This data do not exist in records or publications. Here primary data is collected through departmental study through interactions with different department heads and staffs.

Secondary data
Secondary data comprises of the data which have already been collected by another researcher for some other purpose and currently available. The secondary data was collected from the internal records of the company, library reference and internet.

LIMITATIONS

1. Less time available for an interview or conversation with the workers. 2. Only limited persons could be covered under the study

3. The workers were busy with their work 4. Sensitive information was not shared by the company.

CHAPTERISATION
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The Organisation Study has been presented in the following format:

The first chapter deals with the introduction of the study which includes; introduction about the industry and company, importance of the study, objectives of the study, methodology, limitations and chapterisation.

The second chapter highlights the industry profile

The third chapter deals with company profile. It consists of the study of the company, organisation chart, different operations, products and departments of the company.

The fourth chapter contains the SWOT analysis.

The fifth chapter gives the findings, suggestions and conclusions of the study.

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CHAPTER 2 INDUSTRY PROFILE

INDUSTRY PROFILE
RUBBER INDUSTRY ORGANISATION STUDY Page 14

Rubber is an organic substance from natural resources or synthesized artificially which has the prescribed properties of extensibility, strechability and toughness. The scientific name of Rubber is Heaven Brasiliensis. It acquired this name because of its ability to erase.

Nearly 85% of the plantations are in the hand of small farmers. The industry pays highest wages to its workers more than those who can earn from other plantations. A rubber tree can help tap regularly throughout the tree remains productive for 30 to 40 years. Indians per hector yield of rubber is the highest in the world (about 1500 kg)

The natural rubber from just 25%of the world requirements the rest is made up with synthetic rubber items from petroleum. But natural rubber is still essential for certain products-nearly 50%to60% of auto and track tyres is natural rubber where synthetic rubber is used for production of tubes. The Indian Tyre Industry

The foreign companies dominated the Indian tyre industry till 1960; however in the latter part of 60s and early 70s the Indian industrial, Entrepreneurs made a stylish entry into the market alongside collaboration with the automobile sector foundation with in the country. The tyre industry saw the entry of players and with the winds and liberation blowing a midst hue and cry, swept the entire land in 1992 and brought about the role of joint ventures within the industry.

Ever since the first Indian tyre company, Dunlop Rubber Company (Indian) was incorporated in 1926, the type industry has grown rapidly and today it is an Rs.9000 crore industry. The Indian tyre industry produce the complete range of tyres required by the Indian automotive industry, except for aero tyres and some specialized tyres. Domestic manufactures produce for trucks, buses, passenger cars, jeeps, light trucks, tractors (front, rear, and trailer), animal drawn vehicles, scooters, motorcycle, mopeds, and bicycles and off the road vehicle and special defense vehicle.

Indian has 2.61 lakh vill ages, connected by 6.23 lakh kms to metal led roads and 9.81 lakhs kms of unmetalled roads. These villages are linked to small town and cities. There exists a vast potential for the tyre industry in India. The fortune of the tyre industry depends on the agricultural and industrial performance of ORGANISATION STUDY Page 15

the economy, the transportation needs and the production of vehicles. Hence, this is a very sensitive industry, which has to adapt itself to a highly volatile environment. While the tyre industry is mainly dominated by the organized sector, the unorganized sector holds away in bicycle tyres. The major players in the organized tyre segment consist of MRF Tyres, Apollo Tyres, Ceat, and Jk Industries, which account for 63 percent of the organized tyre market. The other key players include Modi Rubber, Kesoram industries, and Goodyear India, with 11 percent, 7 percent and 6 percent respectively. Dunlop, Falcon, lyre Corporation of India Limited (TCIL), TVS Srichakra, Metro tyres and Bal Krishna Tyres are some of the other players in the industry.

The Indian tyre industry evolves itself around some silent features like: Adaptability Innovation Export Technology progression Wide product range for divers usage.

The Original Indian tyre market can be categorized into three. They are; equipment market Replacement market Export market

MRF, the largest tyre manufacture in the country, has strong brand equity. While it rules supreme in the industry, other players have created richest markets of their own. The tyre industry is a major consumer of the domestic rubber production. Natural rubber constitutes 80% of the material content in Indian tyres. ORGANISATION STUDY Page 16

Synthetic rubber constitutes only 20% of the rubber content of the tyre in India. Worldwide, the ratio of natural rubber to synthetic rubber is 30:70. Apart from natural and synthetic rubber, rubber chemical are also widely used in tyres. Most of the RSS- 4 grade natural rubber required by the Indian tyre industry is domestically sourced, with only a marginal amount being imported. This is an advantage for the industry, since natural rubber constitutes 25% of the total raw material cost of the tyres.

The two types of synthetic rubber used in tyres are Poly Butadiene Rubber (PBR) and styrene Butadiene Rubber (SBR). The former is used in most of the tyres, while the latter is mainly used in the radials for passenger cars. Synthetic rubber accounts for 14% of the raw material cost. Unlike in the case of natural rubber, India imports 60% of its synthetic rubber requirements.

On the export front, the Indian tyre companies need to explore newer markets as the existing market for bias truck tyre which accounts for about 45% of the total export volume is nearing saturation. This apart, with rationalization caching up in the foreign markets, the Indian tyre companies need to graduate to radial tyres so as to protect their share in the export market.

At present, radicalization of tyre is low in India except of the car tyre market where 95% of the tyres are radicalized while cross ply tyres is preferred in all other categories. Cross ply tyres are preferred owing to poor road conditions, overloading in trucks, higher cost of radial tyres and poor awareness among the tyre users in the country.

The tyres basically produced in India are

Crossply Radial tyre ORGANISATION STUDY Page 17

Raw materials
The main raw materials for tyre are;
Rubber Carbon black Nylon cord Chemicals.

GLOBAL SCENARIO

Thailand, Indonesia, China, Malaysia, Vietnam are the major producers of rubber in the world. The global production fluctuates between 6-8 million tons, with the production of Million tons in 2003, of which Asian countries have produced 6.76 million tons. On the consumption front, global natural rubber consumption is 7.89 million tons of which 1.9 million ton was consumed in India and China alone. The total synthetic rubber consumption was 1.13 million ton. Around 60% of the global rubber production is used by the transportation sector. In this sector, natural or synthetic rubber cannot be used individually and has to be blended.

MAJOR WORLD MARKETS

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Tokyo Commodity Exchange, Singapore Commodity Exchange, Osaka Mercantile Exchange are the major exchange undertaking futures trading of rubber. Kurla Lampur, London, New York is the major physical markets.

Government policy (Tyre policy)

Tyre Industry Delicensed since in 1987 All categories of new tyre can be exported freely. All categories of new tyre can be imported freely. No wto bound rates for tyres and tubes. All raw materials required for the manufacture of tyres can be imported freely

Custom duties: Tyres

Normal rates of basic custom duty 10%

Concessional customs duty under trade agreements Asian Pacific Trade agreement (Formerly known as Bangkok agreement) Indo Sri Lanka free trade agreement SAPTA India Singapore comprehensive Economic Cooperation Agreement Excise Duty: Tyres When imported from Bangladesh, Bhutan, Maldives, Nepal is 10% 8.60% nil duty 5% nil duty

Predicted scenario of the industry

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Globally, the original Equipment Manufacturer segment constitutes only 30 percent of the tyre market, exports 10 percent and the balance from the replacement market. In India, the scenario is quite different. Nearly 85 percent of the total tyre demand in the country is for replacement. This anomaly has placed the retreaders in a better position than the tyre manufacturers. Retreading is looming over the tyre industry as a colossal threat. The Coimbatore based Elgi Tyres and tread Ltd., the largest retreader in India, is giving the tyre barons sleepless nights. Retreading is replacing the worn-out tread of the old tyre with a new one. The popularity of retreading stems from the fact that it costs only 20 percent of a new tyre but increases its life by 70 percent to 80 percent. Most of the transporters in India retread their tyres twice during its lifetime, while a few fleet owners even retread thrice. In their zealousness to economize costs, they overlook the reality that retreading reduces the quality of the tyre. It is highly popular in the south unlike in the north where the transporters overload their trucks and have to ply their vehicles in a rough terrain, an environment in which buying a new tyre is the best option.

THREATS
The industry, already bogged by over capacity, is facing a severe threat of dumping of cheap tyres by South Korea. Under the Bangkok agreement, signed between India and South Korea in 1976, import of tyres from the latter into India would attract a concessional duty of 33 percent as against the normal tariff of 40 percent. Two years ago, the industry estimated the growth in the passenger car radial demand at 20 percent per annum. However, the auto recession has hit them badly. But South Korea made a killing by dumping cheap car radial tyres and walked away with 11 percent of the tyre market. Another threat to the industry is the price of its raw materials, most of which are petroleum by-products. Carbon, synthetic rubber and nylon tyre cord are offshoots of petrochemicals. Thus, the future of the industry will swing with the supply of crude oil. The biggest threat, however, is yet to fully materialize. It will be from global majors like Bridgestone and Michelin, which control 36 percent of the global tyre market. These players have set up their bases in Southeast Asia and the slump of the markets in this region coupled with the vast growth potential of the Indian market, is beckoning them towards India. Bridgestone has tied up with ACC for a 100 percent radial tyre unit and Michelin is also marketing its products through retail outlets. The industry is driven more by volumes than by margins and each of the big ORGANISATION STUDY Page 20

five in the global tyre industry Continental, Michelin, Goodyear India, Pirelli and Bridgestone generate an annual tyre production equivalent to the total demand of the Indian market.

Major Market Player s and Their Market Share

Last Price Apollo Tyres MRF Balkrishna Ind JK Tyre & Ind Ceat TVS Srichakra

Market Cap.
(Rs. cr.)

Sales Turnover 5,490.74 7,463.74 1,394.30 4,831.22 3,516.33 706.39

Net Profit

Total Assets

72.50 6,956.00 155.50 100.75 102.05 306.00

3,654.18 2,950.14 1,503.04 413.67 349.46 234.31

198.25 353.98 208.73 61.32 22.28 29.82

2,859.55 2,643.17 1,125.10 1,553.60 1,058.11 260.29

Some of the major players in the Indian tyre industry are MRF, Ceat, JK industries, Apollo tyres, Bridgestone India, Goodyear India, Falcon Tyres and TVS Srichakra.

Name of the company

Market Share

MRF Ltd (Market Leader)

24%

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Apollo Tyres Ltd.

21%

JK Tyre & Industries

18%

Ceat Ltd.

13%

Others

24%

The prospectus of tyre exports from India appears healthy; following efforts by Indian companies to increasing entering into out sourcing agreement with tyre producers in South-east Asia, Eastern Europe and Latin America. Overall, tyre manufacturers are likely to tap the export market in an effort to boost sales. The increasing exports of bus and truck tyre from India to developing countries is because of the fact that developing countries is because of the fact that developing countries are unable to source them from developed countries as these are no more produced there. Tyre imports are unlikely to pose a threat to the domestic industry, given that domestic prices are lower than international tyre prices. In the domestic market, tyre manufacturers are expected to increasingly focus on expanding their dealership networks and explore possibilities of tie-ups among themselves to penetrate the growing customer base. They are also likely to pursue innovative measure to improve customer awareness. The consolidation of the Indian tyre industry is likely to continue in the coming years through mergers among existing players. The industry is likely to expand through a combination of organic and inorganic growth. While organic growth would come from raising efficiency levels, inorganic growth would be achieved through alliances and mergers & acquisitions.

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CHAPTER - 3

COMPANY PROFILE

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COMPANY PROFILE

Madras Rubber Factory, popularly known as MRF, is a major tyre manufacturing company located in Chennai, Tamil Nadu, and India. MRF is mainly involved in making vehicle tyres. It is India's largest tyre manufacturing 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 Thiruvottiyur in Chennai. Since then over this long golden 60 years it has emerged as the largest tyre manufacturer in India. It is also the worlds 13 th 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, Arakonam, Kottayam, Goa, Medak, and Pondicherry.

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 Pretreads offers world class procured tyre retreading service, and MRF Muscleflex is involved in making conveyor belts. It is presently under the leadership of Vinoo Mammen, son of the Late K.M.Mammen Mappillai.

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 ORGANISATION STUDY Page 24

quality, appearance and wearability. It manufactures the 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 first Indian company to export tyres to the U.S., the very birth place of the tyre technology. It is also the first company in India to manufacture and market Nylon tyres and passenger tyres commercially. In 2007, the companys turnover crossed INR 50 billion mark. MRF LTD. is the pioneer in motor racing tyres in India. MRF tyres are made to run at speeds exceeding 150 kmph, 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. MRFs 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.

OBJECTIVES OF THE COMPANY

The main objective of the company is to attain global standard through continuous improvement in the quality products and service in order to maintain market leadership. The main strategy of the company in todays 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 accident free safe production.

MRF Ltd achieves the objectives by taking the following actions;

Product / process improvement by performance monitoring and prompt service to the customer. Upgradation of all the machinery to meet the increasing needs of customer.

Continuous training is given to all employees in order to acquire necessary skills and knowledge and improve the quality of work life ORGANISATION STUDY Page 25

MRF MISSION
To continue developing an aggressive, independent national advocate for the advancement of motorcycling and its associated lifestyle which is financially stable and exceeds the needs of motorcycling enthusiasts.

MRF VISION
MRF will be a significant global player delighting customers worldwide through Leadership in technology Excellence in manufacturing World class systems

Driven by a team of motivated by high performers to achieve profitable growth.

Major brands.
Superlug Shakthi Zigma Nylogrip Legend country largest selling truck tyre. country largest selling tractor tyre. country largest selling radial car tyre. country largest selling two wheeler tyre. country largest selling conventional car tyre.

The six production units of MRF are located in:1.Tiruvottiyur, Tamilnadu. For automobile tyres. 2.Arkonam, Tamilnadu. For bicycle, scooter, auto rickshaw tyres. 3.Goa for automobile tyres and procured tread rubber. 4.Kottayam, Kerala. For automobile tyres, tubes, procured tread rubber. 5.Medak, Andrapradesh. For automobiles. 6.Pondicherry for radial tyres.

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EVOLUTION OF MRF A race from the birth to success

1946 A young entrepreneur, K. M. Mammen Mappillai, opened a small toy balloon manufacturing unit in a shed at Tiruvottiyur, Madras (now Chennai). 1949 Although the factory was just a small shed without any machines, a variety of products, ranging from balloons and latex-cast squeaking toys to industrial gloves and contraceptives, were produced. During this time, MRF established its first office at 334, Thambu Chetty Street, Madras (now Chennai), Tamil Nadu, India. 1952 MRF ventured into the manufacture of tread rubber. And with that, the first machine, a rubber mill, was installed at the factory. This step into tread-rubber manufacture was later to catapult MRF into a league that few had imagined possible. 1956 The quality of the product manufactured was of such a high standard that by the close of 1956, MRF had become the market leader with a 50% share of the tread-rubber market in India. So effective was MRF's hold on the market, that the large multinationals had no other option but to gradually withdraw from the tread rubber business in India. 1961 With the success achieved in tread rubber, MRF entered into the manufacture of tyres. MRF established a technical collaboration with the Mansfield Tire & Rubber Company of USA. Around the same time, it also became a public company. It set up a pilot plant for tyre manufacture at Tiruvottiyur, Madras (now Chennai). The Chief Minister of Madras Mr. K. Kamaraj released the first tyre from the tyre plant.

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1963 On June 12, 1963, India's first Prime Minister, Late Pandit Jawaharlal Nehru laid the foundation stone for the Rubber Research Centre at Tiruvottiyur to commemorate the inauguration of the Tiruvottiyur factory. 1964 With the commissioning of the main plant in 1964, MRF also made progress in the export of tyres. An overseas office at Beirut (Lebanon) was established to develop the export market, and it was amongst India's very first efforts on tyre exports. This year also marked the birth of the now famous MRF Muscleman. 1967 MRF became the first Indian company to export tyres to USA - the very birthplace of tyre technology. 1970 MRF inaugurates its Kottayam unit 1971 MRF opens its factory in Goa 1972 MRF's Arakkonam plant is inaugurated 1973 MRF scored a major breakthrough by being among the very first in India to manufacture and market Nylon passenger tyres commercially. 1978 MRF developed the MRF Superlug-78, a sturdy tyre for heavy-duty trucks. The tyre was a significant improvement over its existing products, and went on to become the country's largest selling truck tyre in later years.

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1979 MRF's turnover crossed INR one billion. 1980 MRF entered into a technical collaboration with the B.F. Goodrich Tyre Company of USA, which was involved with the development of tyres for the NASA space-shuttle. With this began a significant exercise in quality improvement and new product development. 1984 Sales crossed INR two billion. MRF tyres were the first tyres selected for fitment onto the Maruti Suzuki 800 - India's first small, modern car. 1985 MRF Nylogrip tyres for two-wheeler vehicles were launched. 1986 MRF was selected by the National Institution of Quality Assurance for their most prestigious award. Pitted against 20 tyre companies worldwide, MRF also won 6 Quality Improvement Awards instituted by the B.F. Goodrich Tyre Company from USA. 1987 MRF crossed the INR three billion mark and also became the No. 1 tyre company in India. MRF Legend, the premium nylon car tyre was introduced. 1988 The MRF Pace Foundation was set up, with international pace bowler, Dennis Lillee as its Director. Not long thereafter, pace bowlers trained at the Foundation were selected for the Indian Cricket Team. 1989 1989, MRF was the clear market leader in every tyre segment. Once again, in recognition of excellence, MRF was awarded the Visvesvaraya Award for the Best Business House in South India. MRF collaborated with Hasbro International USA, the world's largest toy makers, and launched Funskool India. Company also entered into collaborations with Vapocure, Australia to manufacture polyurethane ORGANISATION STUDY Page 29

paint formulations and with Pirelli for MUSCLEFLEX Conveyor & Elevator Belting. MRF opens its MDK unit MRF launched the MRF ZIGMA CC Radial. Synchronizing with the MRF World Series Cricket Tournament for the Jawaharlal Nehru Trophy sponsored by the company. MRF also opened the MRF Tyredrome, India's first tyre company-owned wheel care complex at Madras (now Chennai). 1990 MRF brought the 6th World Cup Boxing Championship to Mumbai - the first of its kind - with 39 countries participating. 1993 K. M. Mammen Mappillai was awarded the Padmashri Award of National Recognition for his contribution to industry - the only industrialist from South India to be accorded this honour until that time. MRF became the first tyre company in India to cross the INR 10 billion mark. In 1993 and 1995, the company was voted by the Far Eastern Economic Review, as one of the ten leading Corporate Groups in India and a Leader in Asia. During the same time MRF was selected as one of India's most admired Marketing Companies by the readers of the A & M magazine. 1995 The company's turnover crossed INR 15 billion. MRF was chosen for fitment on the Daewoo Cielo. 1996 In the Golden Jubilee year, Mr & Mrs. Mammen Mappillai received gold medal for being the first 2 employees of the company. A special factory dedicated entirely to the manufacture of radials was started at Pondicherry. MRF Tyres were also chosen for fitment on the Ford Escort, Opel Astra and Fiat Uno. Further proof of its superior quality. 1997 MRF launches its first ever F3 car 1998 MRF launches its Super Lug tyre for trucks ORGANISATION STUDY Page 30

2000 MRF Launched ZVTS tyres for passenger cars. MRF launched the Smile campaign on Indian roads. 2001 The MRF rally team wins the APRC rally 2002 MRF wins the JD Power award. The MRF Nylogrip Zapper for two-wheelers is launched 2003 MRF wins the JD Power award. MRF registers its second APRC victory. 2004 MRF's turnover crossed INR 30 billion mark 2005 MRF wins its third APRC rally 2006 MRF's turnover crosses the 5000 crore mark 2007 MRF launches ZSLK tyres. MRF launches the Super Lug FS which many users claim to have provided them fuel savings. MRF launches the Super Lug 505 - A premium mileage, rear fitment truck tyre for national highway operations on rated roads. MRF wins the JD Power award. Australian PM visits the MRF Pace Foundation. 2008 MRF wins the JD Power award again for the 6th time

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Present It is also involved in a range of other activities via subsidiaries. Funskool India, a Joint venture between Hasbro and MRF, is a major toy manufacturing company in the country. MF Pretreads offers world class procured tyre retreading service, and MRF Muscleflex is involved in making conveyor belts. It is presently under the leadership of Vinoo Mammen, son of the late K.M. Mermen Mapp illai

POLICIES OF MRF 1. QUALITY POLICY The main quality objective of the company is to maintain 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 organisation, 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. ENVIRONMENT POLICY The environment Policy of MRF LTD. is to manufacture the companys products in an environmentally friendly and safe manner. This is to maintain our 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.

Comply with all applicable regulatory requirements

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ORGANISATION STUDY

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 responsibility of carrying out the environmental system by collaborating with corporate functions.. 4. TRAINING POLICY

the

The training policy of MRF LTD. is to provide and develop knowledge, skills and behavior of the companys 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.

MANAGEMENT The success or failure of a company is determined by the performance of its management. It has to play a major role in functions such as decision making. Management of MRF LTD. is lead by

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Mr. K.M.Mammen, son of Mr. Mammen Mappillai who started this company almost 60 years ago.

BOARD OF DIRECTORS K.M. Mammen Chairman & Managing Director Arun Mammen Joint Managing Director K.M. Philip Whole Time Director Dr. K.C.Mammen Director C.G.Rangabashyam Director K.D. Parakh Director Ashok Jacob Director S. Nandagopal Director V. Shridhar Director Vijay R. Kiriloskar Director N. Kumar Director Ranjith I. Jesudasen Director D.M. Choksi Secretary

INDIAN COMPETITORS OF MRF LTD. 1. CEAT 2. APOLLO 3. J K TYRES 4. MODI 5. GOOD YEAR ORGANISATION STUDY Page 34

6. DUNLOP 7. BRIDGESTONE.

ORGANISATIONAL GOAL To maintain global standards through continuous improvement in the quality of products and services in order to maintain market leadership

AWARDS AND ACHIEVEMENTS

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 6 times in the last 7 years. CAPEXIL MRF won the award for exports.

(MRF, 2010)

BRAND AMBASSADORS Former brand ambassadors

Leading batsmen in world cricket Sachin Tendulkar, Steve Waugh, and Brian Lara.

Current brand ambassadors

India - Gautam Gambhir, Rohit Sharma Bangladesh Ashrafull. ORGANISATION STUDY Page 35

COMPANYS PRODUCT PROFILE

Automotive tyres are main products of the company

Truck tyre Tube tyre and Tubeless tyre Light Truck tyre Special tyre for defense Tyre for industrial application Agricultural tractor and tiller tyre Off the road tyres Solid tyres and earth mover tyres Passenger tyre Bias ply and radial Two/ Three wheeler tyres Specialized tyre for motor rallies

Non tyre products Automotive tubes Flaps Conventional tread rubber Pre- cured tread rubber Vulcanizing solution Tyre repair materials Conveyor belts Toys MRF metal coat MRF wood coat
ORGANISATION STUDY Page 36

 MRF glass coat MRF velour MRF auto coat

BEYOND TYRES Paint & Specialty Coatings MRF LTD. manufactures specialist coatings for a wide range of applications. Major MRF paints and specialist coatings are: MRF Metal Coat MRF Wood Coat MRF Glass Coat MRF Vapocure MRF Brass Coat MRF auto Coat

FUNSKOOL TOYS Funskool India Ltd. is a joint venture between MRF LTD. and Hasbro Inc., USA, the worlds largest toy company. This plant is at Goa. The plant produces various models of toys.

MRF MUSCLE FLEX CONVEYOR BELTING MRF LTD.s collaboration with Pirelli came at a time when the Indian conveyor belting industry was seeking technological momentum. MRF Muscle Flex offers several advantages to buyers of belting in India. The conveyor belt is made from superior rubber compounds with better ageing characteristics.

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CORPORATE GOVERNANCE

MRFs philosophy on corporate governance envisages the attainment of the highest level of transparency, accountability and equity in all facts of its operations and all its interaction with its stakeholder. In furtherance to the above company has compiled with the cores. MRF KOTTAYAM UNIT

MRF tyres, Kottayam are one of the most modern plants that were established in 1969 at Vadavathoor about 7 km from Kottayam town in the state of Kerala. About 10 crores of land was purchased in Vadavathoor village 1968 and the foundation stone for the factory building was made by late Sri.K.M. Cherian, a factory building with in the area of 34200 sq.ft flat was constructed during the period of 1968 69 and Ban- bury of 3A size with a capacity of to mix of 10 meter per day was erected and commissioned on 21st July, 1969, with the strength of seven workmen, but presently it is most advanced technology mixing 10 and a full- fledged manufacturing unit providing work and technologies.

In the view of high productivity and very good performance in general, the mixing capacity was enhanced by installing a second Ban-bury of 11 A size with a capacity to mix 48 meter per day during March 1970, with the permission of Goa Government A license to manufacture 4 lacks of automotive tube per annum was transferred and started production of tubes with seven quarrying presses.

To enhance the mixing capacity Ban-bury of 1 ID size with a capacity of 54 meter per day was established in 1972. The number of tube presses was increased to 45 presses. A fourth Ban-bury of 1 id size was installed in 1978 to meet the increasing demand for mixing. At present 6000 tones of various compounds are dispatched to different units. The level of the tube production has been increased technology and now it has touched a level of 3 lakh number per month.

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Another new product introduced in MRF Kottayam unit during 1993 was flap production. The management also decided to stilt tyre production in Kottayam unit taking amount of the various incentives on tax and power announced though a new industrial policy by the Kerala Govt. the tyre plant with an initial plan to produce 200 numbers of tractors rear to 600 numbers of tractors front tyres per day inaugurated by Chairman Sri. K.M.Mammen Mappilai on 30th May 1994.

The present turnover of finished goods of kottayam units is Rs. 350 crores per annum. Kottayam units also started procured tread rubber (PCTR) production in August 1993. Their fourth place started in 1998. The present lack of production is 450 mt of PCTR per month. Regarding repair materials accrued 70 mt of PCTR cushions ZEG cushions are manufactured and sent all over India. The working capital required per month by the Kottayam unit constitutes more the Rs. 20 Crores. The company mainly goes for credit transaction and the payment is made within one month time duration. TRADE UNION

MRFEU - MRF Employees Union(CITU) MRFEA MRF Employees Association(INTUC)

PLANTS WITHIN KOTTAYAM UNITS. The kottayam production unit of MRF has got four plants mainly

1. Tube Plant 2. Tyre Plant 3. Mixing Plant 4. PCTR Plant

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Products at Kottayam Plant Automotive tyres, tubes, conventional tread rubber, pre-cured tread rubber, repair materials, vulcanizing solution, flap, bladder, envelope, curing bags and solid tyre.

1. AUTOMOTIVE TYRES This is the basement on which the whole super structure of automobile rests. Here only conventional or bias tyres of passenger, jeep, truck and farm tyres are manufactured.

2. AUTOMOTIVE INNER TUBE This component is kept inside the tyre and when inflated, renders strength and impacts profile to the tyre.

3. RETREADING RUBBER It is the material used for retreading the tyre when it gets worn out on usage. These are of two types, conventional and pre-cured tread rubber (PCTR).

4. TYRE REPAIR AND PCTR REPAIR MATERIALS These include PCTR cushion, tread backing cushion. E.g. cushion used for the repair of tyre and PCTR.

5. VULCANIZING SOLUTION This is an aid for vulcanization and is used for retreading of tyres.

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6. FLAP This is kept in between the tubes and tyres. This serves as a protective sheath for the tube from the external damages of the tyre and also as isolation medium, which filters the passage of the heat from the tyre to the tube. This is generally used for bigger tyres.

7. BLADDER This is an element used for curing of tyres, which carries the internal media and is mainly used for captive consumption.

8. CURING BAGS / ENVELOPE It is also used for retreading of tyres. It is spread as a layer over the tyre after application of PCTR and it retains thermal input processes of manufacturing tubes and tyres.

9. MASTICATION The Kottayam plant caters the stock requirement of all the other MRF LTD. units. Mastication is one of the principal activities of the Kottayam unit. The stock generated is also used for captive consumption. The main ingredients for mastication are polymer (rubber), carbon, chemicals and oils. The process of making a homogeneous mixture is carried out in banburies and mills.

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INTERNATIONAL CERTIFICATIONS

The Kottayam unit of MRF LTD. has got four different categories of International certifications from the respected authorities. They are as follows:

1. ISO 9001-2000 QUALITY MANAGEMENT SYSTEM This is the quality management system and quality assurance standard brought into force by the International Standard Organisation (ISO), a certification comprising of the state of the world facility which aims at the standardization of the quality of the products and services to cater to the complete satisfaction of the customer.

2. ISO 14001-1996 ENVIRONMENT MANAGEMENT SYSTEM This is the quality assurance standard prepared for the automobile and related companies. Through this certification, MRF LTD. is to manufacture their products in an environment friendly and safe manner. 3. ISO TS: 16949 Up gradation of ISO 9000 from 1 July 2000. It is more customers oriented and works in plan-docheck-act policy. TS 16949 is awarded for certification of technical standards in this industry. 4. CQC

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KOTTAYAM UNIT FACTS AND FIGURES Built-up area Six lakh square feet

Management staff Regular workmen Casual workmen Total finished goods production Total turnover of finished goods Mixed stock sent to other units Tyre production Total production of tubes, envelopes and curing bags

252 1115 399 3400 MT/ month Rs.42 crores/ month 7000 MT/ month 52000 tyres/ month 263000/ month

Flap production Tread Rubber Production (conventional) PCTR production Repair materials Vulcanizing solution

82000/ month 160 MT/ month 330 tonnes/ month 83 tonnes/ month 32500 liters/ month

Work timings ORGANISATION STUDY Page 43

Work is carried out at the company 24 hours a day. There are three shifts in a day consisting of eight hours each. Besides those shifts there is also a general shift for the management staff of the company. The shift timings are as follows: First shift Second shift Third shift General shift MARKETING Tyre and tyre related products are sold under the brand mane MRF, and distributed in domestic markets through sales offices, dealers, and franchisees. Conveyor Belts are sold under the brand name MRF Muscle Flex to customers directly from Conveyor Belting plant at Arkonam. : : : : 7 am to 3 pm 3 pm to 7 am 11 pm to 7 am 8 am to 4.30 pm

The major OEM (Original Equipment Manufactures) customers of MRF tyre and Re Ford India Ltd., General Motors India Ltd., Maruti, Hindustan Motors, TATA Motors, Ashok Leyland, Honda Siel, Hero Honda, Bajaj, LML Ltd, Honda Motors & Scooters India Ltd., Mahindra & Mahindra, Eicher Motors, New Holland Volvo, etc. The major Conveyor Belting customers are Cement/ Steel / Fertilizer / Thermal Power plants, mines and ports. MRF exports tyres and tubes through authorized agents representing countries such as USA, Canada, Mexico, Brazil, Chile, Australia, Philippines, Bangladesh, Sri Lanka, Korea, Egypt, Nigeria, South Africa, Ghana, Kenya, Mauritius, UAE, Afghanistan, Pakistan, Iran, Iraq, Bahrain,-Qatar, Oman, Lebanon, Greece, Turkey, Malta, UK, Uzbekistan etc. MRF conveyor belts are exported to Australia, South Africa, Europe, Canada, Middle East etc.

ORGANISATION CHART OF MRF KOTTAYAM UNIT ORGANISATION STUDY Page 44

EMBED Excel.Chart.8 \s

General Manager

Plant Production Manager

Plant Account s Manage r

Plant HR Manager

Plant Technical Manager

Plant Quality Assurance Manager

Plant Industrial Engineerin g Manager

Plant Senior Security Officer

Plant Engineer ing Manager

Manager Plant I Plant II Plant III Plant IV Staff Foreman

Assistant Manager Accounts

General Supervisor Time office

Technical Officer

Quality Assuranc e Officer

Assistant Manager Planning

Securit y Officer

Operator s

Technical Supervis or

Quality Assuranc e Supervis or

Electrical Maintena nce Civil Engineeri ng Mechanic al Maintena nce

Supervis or

Guards

Staff Supervisor

Workers

Operator s

Operator s

Workers

Supervis or

Workers

Worker s

ORGANISATION STUDY

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DEPARTMENTS

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 ORGANISATION STUDY Page 46

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 Kottayam can be enlisted below;

Production department Production Planning Department Quality Assurance Department Technical Engineering Department Plant Purchase Department Raw materials Store Department Shipping (dispatch) Department Accounts Department Industrial Engineering Department Safety Department Security Department Human Resource 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 kottayam unit. They are ORGANISATION STUDY Page 47

Tube plant Tyre plant Mixing plant PCTR plant

plant 1 plant 2 plant 3 plant 4

The following are the main functions of production department. Planning for production process Every 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 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

Structure of Production Department

ORGANISATION STUDY Production Manager

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Asst.Manage r Production Plant - I

Asst.Manage r Production Plant - II

Asst.Manager Production Plant - III

Asst.Manage r Production Plant - II

Supervisor Supervisor

Supervisor

Supervisor

SHAPE Operatives Operatives

\* Operatives

MERGEFORMAT Operatives

2. PRODUCTION PLANNING DEPARTMENT

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 ORGANISATION STUDY Page 49

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

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 organisation.

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

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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 departments 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 dont occur again.

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 coordination 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.

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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

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.

Structure of Quality Assurance Department

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Manager Quality Assurance

Quality Assurance in Charge Plant

Quality Assurance in Charge Plant

Quality Assurance in Charge Plant III

Quality Assurance in Charge Plant

Supervisor

Supervisor

Supervisor

Supervisor

Operators

Operators

Operators

Operators

TECHNICAL DEPARTMENT

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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 analysing. 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.

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 ORGANISATION STUDY Page 54

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 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 ORGANISATION STUDY Page 55

Whenever a new product is introduced, a TPOR (Technical Programme 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 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 ORGANISATION STUDY Page 56

Finished products which dont 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.

Structure of Technical department

Manager Plant Technical

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Technical in Charge Plant I

Technical In charge Plant II

Technical in Charge Plant III

Technical n Charge Plant IV

Supervisor

Supervisor

Supervisor

Supervisor

Workmen

Workmen

Workmen

Workmen

PLANT PURCHASE DEPARTMENT

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

a) Items which come under the head capital expenditure.

b) Items which come under engineering spares(non capital expenditure) ORGANISATION STUDY Page 58

c) Stationery and miscellaneous items (items which dont come under the preview of raw materials)

d) Services (Repairing of machinery)

Procedure followed for purchase

Any person who needs a material can make a purchase requision 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 have 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 orders are released. The copy of purchase order is sent to the supplier, intender, accounts, stores, corporate office PEM and a file copy for plant purchase.

RAW MATERIAL STORES DEPARTMENT

Raw material stores will receive a copy of the raw material requirement for the month prepared and sent by plant planning. This is also sent to 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 dates to the plant. Raw materials, consumables, fuel etc are received at the factory gate in line with the delivery schedule and purchase orders. The documents are verified to ensure that the materials are from approved sources and the correct quantity as is delivered. ORGANISATION STUDY Page 59

Weighment of the load is done. 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 godown, 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 proper identification tags showing the primary status of the material (hold/ pending for test).Each material has a specified storage place and it is placed in that storage area. 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 material release / rejection / hold note printed at the bottom portion of the transfer /visual inspection report. Based on the test result ,green color sicker 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 tests to arrive at a concrete decision. Materials are issued to production as per the indent raised by production in each plant .Stock inventory and stock back to the supplier and the cost recovered .Transferring of materials to other plants is also monitored.

SHIPPING (DESPATCH) 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. 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 ORGANISATION STUDY Page 60

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.

ACCOUNTS DEPARTMENT

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

1, Financial account 2,Cost account 3, Wages and Salaries ORGANISATION STUDY Page 61

4, Sales tax

Internal source
share capital Reserves and surplus

External source
Banks.

Application of funds
Fixed asset Investment Current asset. Loans & Advance.
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 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.

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STRUCTURE OF ACCOUNTS AND FINANCE DEPARTMENT

Plant Account Manager.

Manager Asst .Mgr Raw Plant ORGANISATION STUDY Materials Accounts

Asst. Mgr. Engineeri ng Stores

Officer Shipping

Officer Engineerin Page 63 g Purchase

Supervisors

Supervisors

Supervisors

Supervisors

Wages Officer

Costin g Officer

Auditin g

Sales tax & Excise

Materials Handling Workmen

Supervisors

Supervisors

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.

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 ORGANISATION STUDY Page 64

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

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.

INDUSTRIAL ENGINEERING.

Major Activities ORGANISATION STUDY Page 65

 Conducting studies for fixing Standards and Crew Strength in all areas. Negotiating of disputes by participating. Participating in discussions for setting labour 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 chairmans 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

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STRUCTURE OF INDUSTRIAL ENGINEERING DEPARTMENT

Plant Industrial Engineering Manager

Assistant Manager

Industrial Engineer

Recourse Panning in Charge

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.

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MRF has a well defined SAFETY AND HEALTH POLICY which is as follows.

It is the policy of our company that the SAFETY AND HEALTH of our employees shall be our FIRST priority

It is the responsibility of everyone in this organisation, 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.

Safety policy of MRF It is the policy of the company that the safety and health of all employees shall be given the FIRST priority. It is the responsibility of everyone in the organisation, 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. They 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 guidelines Necessary 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. 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 ORGANISATION STUDY Page 68

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. 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.

Structure of Security Department

SENIOR SECURITY OFFICER

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Officer Security

Watchmen

Firemen

HUMAN RESOURCE DEPARTMENT

The Human Resource Department is known as the heart of an organisation. It performs a number of activities concerned with the employees of their organisation. It interacts with other departments to ensure effectiveness of the company. ORGANISATION STUDY Page 70

ORGANISATION STRUCTURE OF HR DEPARTMENT

Plant Human Resource Manager

Deputy Manager Human Resources

Officer of Human Resource.

Canteen Supervisor

Welfare Office& Family Welfare Co-ordinate

Time Officer

Training officer

The function of the Human Resource Department includes:

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

Introduction about the company Page 71

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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.

The following are the various activities being undertaken in taken in HR Department

1. Recruitment and Selection of employees 2. Performance Appraisal 3. Welfare activates 4. Training

5. 6.

Industrial relation and labour management Canteen service

7. File management.

Other activities controlled by HR Department are Medical insurance scheme Family welfare canteen Co-operative Society ORGANISATION STUDY Page 72

 Recreation club

OFFICE TIME 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 First shift Second shift Third shift General shift : : 7am-3pm : 3pm-11pm : 11pm-7am 8am-4.30pm

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CHAPTER 4

SWOT ANALYSIS

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SWOT ANALYSIS

The SWOT Analysis have revealed the strength, weakness, opportunities, and threats of the company. It has been detailed below:

STRENGTH Unique Brand Name.

Good infrastructure.

Computerized system.

Locally available raw material.

Environment certification (ISO 14001)

Quality product (ISO 9000 certification)

Highly evolved Research and Development wing

Training to all the employees.

Aggressive marketing Policies.

Latest technology and concepts. Page 75

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Experienced work force.

Wide spread recognition.

Quality control.

Harmonious relations between workers.

Largest tyre manufacturers in India.

Strong financial support.

Good and efficient distribution network.

WEAKNESS Lack of speedy communication.

highly motivated Union problems.

High rate of absenteeism.

Marketing department is only at corporate office.

Lack of individual initiative.

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Less interaction between manufacturing and marketing department.

Lack of commitment.

OPPORTUNITIES

Modernization of tubeless tyres.

World class products.

Joint ventures or tie-up with foreign automobile companies.

More opportunities for diversification.

Global standards and competition.

Improvement in market share both in India and outside.

Availability of latest technology

THREATS Competitions.

Market Risks.

Cheap import from China. Page 77

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rupee depreciation resulting in lower export realization

Changing technology.

Entrance of new players.

Cost of raw materials.

Increasing transportation cost.

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CHAPTER 5

FINDINGS, SUGGESTIONS AND CONCLUTION

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FINDINGS, SUGGESTIONS AND CONCLUSION

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.

SUGGESTIONS

The management must take sufficient step to install a grievance settlement machinery with sufficient participation of workers

Improve employee relation.

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Open a show room at factory itself.

The company need to move and update itself according to new technologies in the market to maximize quality production.

The company should utilize railways to transport its materials which would reduce the overall logistics cost.

More attractive advertisements in Visual Media would help in Marketing

More investment has to be made in Research and Development.

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CONCLUSION

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.

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BIBLIOGRAPHY

1. Kothari C R, Research Methodology, Vishwa Prakashan, New Age International(P)Ltd ,New Delhi, Second Edition

2. Dr. D D Sharma, Marketing Research, Sultan Chand and Son, Educational Publishers, New Delhi. 3. L M Prasad, Organisational Behavior, Sultan Chand and Sons, Educational Publishers, New Delhi.

Company Website; HYPERLINK "http://www.mrftyre.com" www.mrftyre.com www.fadaweb.com/indiantyresindustry.htm

http://www.mrftyres.com/aboutus/awards.html

Company journals and magazines.

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