Description
Plant Training On Apollo Limited
A REPORT ON INPLANT TRAINING AT APOLLO TYRES LIMITED Submitted by Jacob Kalloor Antony (US No: 1EW06MBA18) In partial fulfillment of the requirement for the award Of the degree of: “MASTER OF BUSINESS ADMINISTRATION” Guides: Prof. R.G. Patil (Internal Guide) Mr. Abi C Simon (External Guide)
To VISVESVARAYA TECHNOLOGICAL UNIVERSITY, BELGAUM
EAST WEST INSTITUTE OF TECHNOLOGY, nd Bharath Nagar 2 Stage, Anjana Nagar Banglore – 91 October 2007
Declaration
I hereby declare that, this “Inpant Training Report” is prepared by me based on a original study conducted by me at Apollo Tyres Ltd (Kalamasserry plant) under the guidance of Prof.R.G.Patil, Director, East West Institute of Technology, Banglore and Mr.Abi C Simon ( HR-Safety) of Apollo Tyres Ltd, during the period 20-07-2007 to 16-08-2007. I declare further that this report has not been submitted to any other university or institution for the award of any other degree or diploma.
Date: Jacob Kalloor Antony Place: Banglore. U.S.Number (1EW 06MBA18)
01-09-07.
ACKNOWLEDGEMENTS The inplant training is one of the most important ingredients in the successful completion of an MBA course. My stint at Apollo Tyres ltd has been one such enriching experience. Working in one of the oldest and most well known brands across India, Apollo has given me an excellent platform both in terms of knowledge and practical experience, which I will cherish throughout my career. The training at Apollo tyres ltd was perfect mix of the right nurturing as the liberty to think and act creatively, allowing me to use our imagination and ideas to the fullest extent so as to make the most of this opportunity here. People I like to thank are plenty. Starting with Prof.R.G.Patil (Director-EWIT), Prof.N.C.P.Kumar (PrincipalEWIT), and Mr.James Joseph (Co-coordinator, Apollo tyres ltd, Kalamasserry Plant), who gave me the opportunity to work at Apollo tyres ltd.
My guide Prof. R.G. Patil, who was always in contact with me to guide, mentor and encourage. I would also like to thank Mr. Abi C Simon (Executive- Safety, HR Dept., Apollo Tyres Ltd.) for his guidance in writing report. I truly thank you for listening all my ideas and giving me all the help that I could ask for. I am truly grateful to you for making my project more focused and help me achieve my objective to the greater extent. Thank you for all guidance and teaching, which was invaluable both to the project as well as to the subject itself. I would like to thank my seniors colleagues at Apollo who have also been of great help with there valuable suggestions, and making the stay in Indoor extremely fruitful both in terms of learning and feeling at home
TABLE OF CONTENTS SL.NO: 1. 2. PARTICULARS. PAGE NO: 5 12 15 17
Industry Profile. PART-A Company Profile. a). Background and Inception of the Company. b). Nature of the Business Carried.
c). d). e). f). g). h). i). j). 3. 4. 5. 6. 7. 8.
Vision, Mission and Quality Policy. Product/Service Profile. Area of Production. Ownership Pattern. Competitors Information. Infrastructure Facilities. Work Flow Model. Future growth and Prospects. PART-B Mckinsey’s 7’ S Model PART-C SWOT Analysis PART-D Summary of Latest Annual Report PART-E Learning Experience. Bibliography. Weekly reports.
18 20 21 23 24 25 27 28 30 55 58 65 66 67
EXECUTIVE SUMMARY
The four weeks inplant training of VTU is all about learning an organization and the corporate processes in it. This program is designed with the intention of colligating the organizational context
with reference to the operational definition and to apply the concepts already learnt to solve management decisions situations. The executive summary of this study was assorted into five sections, wherein sec A pertained to the study of industry profile and company profile, B pertained to the study of mckensy’s 7’ S framework with special references to organization study structure, skill, style, strategy, system, staff, shared value, Sec C pertained to SWOT analysis of the company’s , Sec D pertained to the study of the latest annual report of the company and finally Sec D pertained to the overall learning experience. The study was dedicated by conceiving the research design of observing, interviewing and undergoing through both primary as well as secondary data. The study mainly concentrates on the study of Mckensy’s 7s model. The collected data were analyzed and the findings, suggestions, and recommendations were summed up. Based on the findings the suitable suggestions were provided so as to make some success in the organization, which would aid in directing the company towards Organizational Effectiveness and Organizational Excellence.
INDUSTRY PROFILE
Millennia ago the primitive man discovered the rudimentary wheel; it was probably just a circular disc with a space for a spoke. Man in to the modern day tyre eventually developed this rough stone circle. Later, R.W. Thomsoo invented and patented the pheumatic tyre in 1845. His first design used a rubber inflated tubes instead of leather cover. His design actually had its advantages over later
designs. It would take more than one puncture to deflate the whole tyre and varying the pressure could alter the ride conditions. In 1988, John Boyd Dunlop invented rubber pheumatic tyre. Despite these, technologies break through the solid rubber tyre continued to be the dominant tyre. Man has created in the tyre highly sophisticated instruments designed to take us to our desired destination, smoothly and safely. Without the tyre, we can’t imagine our every day life.
Even the most insignificant journey can today the pleasurable with the help of vehicles and tyres. All these journeys are tension-free because of this reason. New technologies have helped to make the tyre capable of protecting man difficult condition like rain, sleet and snow.
TYRE INDUSTRY IN INDIA The Indian Tyre Industry dates back to 1930 when multinationals like Firestone, Good Year and Dunlop entered the market. MRF, Premier and Ceat at various locations in the country carried out the domestic production of the tyres. The tyre industries were classified under three heads. The first generation industries viz., Dunlop and Firestone (New Bombay Tyre International Limited) were setup in the last
30’s and early-40. The second generation companies then come up in 60’s are MRF Tyres, Ceat, Good Year Tyres and Premier Tyres. The third generation that was setup in 70’s is JK Tyres, Vikrant Tyres, Apollo Tyres and Modi Rubber. The first Indian Company Dunlop Rubber was incorporated in 1926 the tyre industry is growing rapidly and today its turnover is 1, 00,000 million and earning an income of Rs. 1,000 crore per annum for exports. The industry had a growth rate of 11% over last decade. Market for tyres can be broadly classified or segmented into 3 categories. In the present scenario, the Indian tyre industry is two tired. The tier I players account for around 85% of the industries turnover with a well diversified product mix and presence in all three major segments of the replacement market, original equipment manufacturers and exports. Tier two companies are smaller in size, with a focus only on one or two categories of tyres, plus tubes and flaps primarily for the replacement market. The commercial vehicle tyres market is the largest segment of the industry accounting for approximately 70% of industry turnover in terms of value. Steep rise in raw material prices, particularly natural rubber, impacted the profit margins of all the players. This was the fourth consecutive year of raw material cost-push, both for natural
rubber which increased by approximately 24% as compared to 200506 and crude oil linked raw material basket, particularly carbon black. Consistent rise in major raw materials costs (natural rubber, carbon black, synthetic rubber) have resulted in pressure on the margins of the tyre companies despite good topline growth. However the ability to pass on the increased cost to customers to some extent, facilitated by the tight demand – supply situation has resulted in margin improvement for the industry in the second half of the year. The year ahead looks tough with no significant respite in raw material prices. The cost push continues and profitability would depend on the ability of the players to take large price increases. The story on the demand front though looks good in the medium term with the economy continuing to do well.
ENVIRONMENT ANALYSIS – PORTER’S MODEL
Entry barriers: High
The entry barriers are high for the tyre industry. It is a highly capital intensive industry. A plant with an annual capacity of 1.5 million cross-ply tyres costs between Rs:4000/- and Rs:5000/million. A similar plant producing radial tyres costs Rs: 8000/- million.
Bargaining power of the buyers: High
The OEM’s have total control over prices. In fact, the OEM’s faced with declining profitability have also reduced the number of component. Suppliers to make the supply chain more efficient.
Bargaining power of the suppliers: High Inter firm rivalry : Low
The tyre industry in India is fairly concentrated, with the top eight companies accounting for more than 80% of the total production of tyres. The tyre industry consumes nearly 50% of the natural rubber produced in the country. The price of natural rubber is controlled by Rubber Control Board and the domestic prices of natural rubber have registered a significant increase in recent times.
Threat of substitutes : Low but increasing.
During the FY 2002, over 1,10,000 passenger car tyres were imported. This constitutes over 2% of total radial passenger car tyre production in the country. However, with the reduction of peak custom duty, the import of tyres is likely to increase.
Industry of Tyre Company Comprises of: Industry turnover Total number of companies Industry capacity utilization Major Players
Rs. 14,500 crores tyre 43 Estimate 89 % MRF, JK, Apollo Tyres and CEAT
Highlights of Indian Tyre Industry:
The fortune of this industry depends on the agricultural and industrial performance of the economy, the transportation needs and the production of the vehicles. • While the tyre industry is mainly dominated by the organized sector and the unorganized sector holds away in bicycle tyres. • In the last five years the industry managed to achieve a compound annual growth of only 4.40%. However in the last fiscal years, the industry registered a growth of 7%. • The Indian tyre industry is estimated to be an Rs: 14500 cr industry. • The ratio of natural rubber content to synthetic rubber contents is 80:20 in Indian tyres whereas world wide, the ratio is 30:70. Ranking of Indian Tyre Companies on the basis of production; 1. 2. 3. 4. 5. 6. 7. 8. MRF Tyres Limited Apollo Tyres Limited JK Tyres Limited Ceat Tyres Limited Modi rubber tyres limited Birla tyres limited Good year India limited Vikrant tyres limited
INDIAN SCENARIO Indian tyre industry comprises of 12 major companies, 13 minor companies and 34 minor plants manufacturing low technology products such as small tubes and flaps. There are top players in the filed having 69 % of market share.
Company MRF Apollo JK Ceat Birla Good Year Others
Market Share 21.2 % 20.1 % 14.5 % 13.2 % 7.0 % 6.0 % 7.0 %
EXPORT MARKET The major segments are Truck, Bus and Car tyres. Value share of truck and bus segment is about 73 %. Replacement market forms largest segment about 58 %, OEM is about 22 % and Export market for about 5 %.
The major exporting countries of Apollo Tyres; 1) Germany 2) Japan 3) Italy 4) USA 5) South Africa 6) Brazil 7) Canada 8) Ireland 9) UAE 10) 11) 12) Singapore Malaysia Nigeria
SECTOR TRENDS
Cross ply tyres has been used in India for several decades. In these tyres, the ply cords run across each other or diagonally to outer surface of the tyre Rayon and Nylon tyre cords are used as the reinforcing medium. These tyres can be rethreaded twice during their life time and are hence preferred by Indian transport operators who normally overload tones is usually loaded with double the capacity. Moreover one also has to content with suspensions and bad road conditions. No wonder, 95 % of the tyres used in India are cross plies.
Radial tyres have their cords running rapidly from bead at 90 degree angles to the rim or along the outer surface of the tyre. The reinforcing mediums used in these are polyester, nylon, fiberglass and steel. Hence these tyres are 40 % more expensive than cross piles. But they have a longer life and provide lower fuel consumption. The unhealthy condition of the Indian roads has resulted in radial tyre accounting for only 5 % of the tyre industry as against a global trend of 60% with two-third of all major tyre manufacturers being reserved for radials, this is a real cause for concern.
OUTLOOK Globally the OEM segment constitutes only 30 % of the tyre exports 10 and the balance from the replacement market. In India, the scenario is quite different. Nearly 85 % of the total tyre demanded in
the country is for replacement. This anomaly has placed the retraders in a better position than the tyre manufacturers. Retreading is looming over the tyre industry as a colossal threat. Indian tyre exports cater to over 40 countries. Approximately 20 % of total truck and bus tyres produced domestically the US. As far as exports are concerned, the demand in the export market is a function of factors such as exchange rate of domestic currency against US Dollar. The export benefits to the Indian tyre industry cost competitive of other major exporting countries and the subsidies granted by respective governments. The exports and the average exports prices of bus, truck and LCV tyres from India are under threat from the cheaper Chines exports. The improved performance of Chinese tyres coupled with 40-50 % lower prices is threatening the market share of Indian companies in the export market. The industry is also facing severe threat of dumping of cheap tyres by South Korea. 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 off shoots of petrochemicals. Thus the future of the industry will swing with the supply of crude oil. The biggest threat will be from global majors like Bridgestone and Michelin, which control 36 % of the global tyre market. The vast growth potential of the Indian market is becoming them towards
India. The industry is driven more by volume than by margins and each of the big five in the global tyre industry; Continental, Michelin, Good year; Pirelli and Bridgestone generate an annual tyre production equivalent to the total demand of the Indian market.
THE GLOBAL TYRE INDUSTRY In FY 2005, the global tyre industry was estimated to be worth US$ 101 billion. In the last five years, the global tyre market has been growing at a CAGR of 10.2%. To be more specific, during the last 2 years (2004-2005) it has grown at a rate of 15.5% and 9.0% respectively. Apart from that, the tyre industry is highly concentrated and is characterized by the dominance of a few large companies. The top three players (Bridgestone, Michelin, & Goodyear) account for 53% of the market share while the top 7 account for 70% of the market share. Moreover, if you look at the global tyre market, passenger cars and light trucks account for 63% of the tyre sales. Considering this statistic, many global manufacturers have entered developing & growing markets like China and India either through direct entry or joint ventures / technical collaborations.
Global Ranking of Apollo: YEAR 2003 2005 2007 RANK 17 16 18
COMPANY PROFILE
Apollo Tyres Limited is the second largest tyre company in the country. Apollo Tyres Ltd is the flagship company of the Raunaq Group. The company is the leading manufacturer in the truck tyre segment in the country with a market share of nearly 30 percent.
Other product of Apollo Tyeres Ltd includes tubes and flaps for heavy duty trucks, passenger cars, tractors, light commercial vehicles. GROUP APOLLO PROFILE Backed by three decades of excellence, group Apollo is a significant global player with a turnover of over 2700 crores / USD 625 million. A professionally managed group, it comprises of two main companies.
Apollo Tyres Limited An established market leader in the tyre manufacturing industry, Apollo Tyres Limited has grown to become one of India’s most well known manufacturers of tyre since inception in 1972. Backed by a vast network of 5000 dealers across India, Apollo Tyres Limited is the fastest growing name in the tyres today. The first ISO 9001 certified company, it entered in to a joint venture with another world leader Michelin Tyres in November 2003, symbolic of its aim of becoming a total tyre company catering to the world market.
Apollo International Limited Set up in 1994 with the aim of leading the diversification forays of group Apollo into new, emerging business opportunities, Apollo International Limited acts as a gateway for all international operations of the group namely, product exports, service exports and knowledge management. Today Apollo International Limited has earned for itself an enviable reputation in the global arena through its forays into international tyre trading with Tyre Tech Global, International trading with International Business Division, the manufacture and export of leather garments and accessories with Tag Fashions, and more recently in the domestic Indian entertainment business with lotteries through its wholly owned subsidiary Encorp E-Service Limited.
Apollo an ISO 9001 Company: Apollo tyres limited is the 7th in the India and the 18th largest tyre company in the world. It is the 1st tyre company in India to obtain ISO 9001 certificate for all its operations on 25th November 1994. Vendor Companies Of Apollo
Trucks Radials LCV Farm
: Telco, Ashok Leyland. : Maruthi, M&M, Telco. : Eicher, Telco, Bajaj, Swaraj Mazda. : M&M, Punjab Tractors.
a) APOLLO TYRES BACKGROUND AND INCEPTION The history of Apollo Tyres Ltd is about a company’s passion , determination and will to surpass all obstacles and emerge as a leader in the Indian tyre industry. Named after the radiant Greek Sun God Apollo, the company has created a niche for itself in the Indian tyre market. Apollo Tyres Ltd’s history dates back to the early 70’s.It was Ruby Rubber works, which was given the license to start a tyre factory (at Chengnassery , Kerala) and It was thus registered and incorporated in 1972.In 1975, the Raunaq Group of companies under the chairmanship of Mr. Raunaq Singh purchased the license and thus the first manufacturing unit was started at Perambra near Cochin in 1977. The Kalamassery unit of Apollo tyres was earlier Premier Tyre Ltd. Premier tyre belonged to the second generation tyre industry in India,
which was incorporated on 19th October 1959 in Kerala at Kalamassery. The foundation stone was laid on 18th January 1960 by the Prime Minister Jawaharlal Lal Nehru. It was established with Uni Royal, USA. The factory started its commercial production in May 1962 and was owned by Desai group of companies, Mumbai. This company was setup as a joint venture ie, public and private sector. During initial stages the company has to face several obstacles. There was severe competition, shortage of raw materials, labour problems etc but after this brief period it got well established in 1960’s. The situation changed in 1980’s, the company set back from 1985 to 1989 due to financial problems and consequent loss of production and market share. The company has to declare lockout on 24 February 1993. The government of Kerala and Board of Directors finally implemented BIFR schemes under sec. 19(3) of Sick Industries Company Act 1985. The company was taken over by M/S Apollo tyres ltd and had given 45.5 crores.
Key Milestones:
1972: The company's license was obtained by Mr. Mathew T
Marattukalam, Jacob Thomas and his associates 1974: The company was taken over by Dr. Raunaq Singh and his
associates 1975: April 13, Perambra Plant Foundation stone was laid down. 1976: Apollo Tyres Ltd. was registered. 1977: Plant commissioned in Kerala with 49 TPD capacities. 1982: Manufacturing of Passenger Car Radial Tyres in Kerala. 1991: The second plant commissioned in Baroda. 1995: Acquired Premier Tyres Ltd. in Kalamassery, Kerala. 2000: Exclusive Radial capacity established at Baroda. 2003: Radial Capacity expanded to 6600 tyres per day. 2003: November 17, Joint Venture with Michelin 2004: Launch of Apollo Acelere- ‘H’ Speed Rated Car Radials. 2006: Launch of Dura Tread, traditional material and solutions. 2006: January 30, Dunlop South Africa is acquired 2007: Launch of regal truck and bus radial tyres. 2007: Launch of Dura tyre, rethreaded tyres from Apollo 2007: Launch of the Apollo tennis initiative and mission 2018
b) NATURE OF THE BUSINESS CARRIED OUT APOLLO TYRES Ltd is one of the leading manufacturer of automobile tyres. Apart from tyre they produce tubes and flaps for heavy duty trucks, passengers cars , tractors , light commercial vehicle and new generation vehicle. The company is also involved in the sales and services of tyres. There are 3000 exclusive outlets under the brand name Apollo tyre world and Apollo radial world for Apollo Tyres. Their quick response mechanism enables prompt product delivery and after sales services to provide holistic solution for customers. Set up in 1994 with the aim of leading the diversification forays of group Apollo into new, emerging business opportunities, Apollo International Limited acts as a gateway for all international operations of the group namely, product exports, service exports and knowledge management. Today Apollo International Limited has earned for itself an enviable reputation in the global arena through its forays into international tyre trading with Tyre Tech Global, International trading with International Business Division, the manufacture and export of
leather garments and accessories with Tag Fashions, and more recently in the domestic Indian entertainment business with lotteries through its wholly owned subsidiary Encorp E-Service
c) VISION, MISSION AND QUALITY POLICY VISION “A leader in the Indian Tyre industry and a significant global player, providing customers delight and enhancing shareholders value”. It is their vision to nurture and cherish Apollo Tyres Ltd in the position of
a leader of the industries in India, who is also recognized and respected as a manufacturer of the world class product. They shall create in Apollo Tyres Ltd a company of people who enjoy working as a team and with their customers to create superior and distinct product and services, focused fast and flexible, they seek never ending improvement in order to create an enterprise that is dynamic, ever expanding, profitable, constant pursuit and customer satisfaction. The one word that symbolizes all that they believe is “C R E A T E” C- CARE FOR CUSTOMER R- RESPECT FOR ASSOCIATES E- EXCHANGE THROUGH TEAM WORK A- ALWAYS LEARNING T- TRUST MUTUALLY E- ETHICAL PRACTICES
? ? ? ? ? ?
MISSION “ It is our mission and cherish Apollo tyres ltd in the position of a leader of the industry in India, who is a recognized and respected, as a manufacturer of world class products.”
“ We shall create, in Apollo tyres ltd, company of people who enjoy working as a team and with our custom to create superior and distinct products and services.”
“Focused, fast and flexible we seek never ending improvement in order to create an enterprise that is dynamic, ever expanding, profitable and in constant pursuit of custom satisfaction.” QUALITY POLICY Quality is the first pillar of the organizations “passion in motion” journey. The objective is to weave quality completely into the fabric of Apollo tyres. Consistently, measurability and reliability are fundamental to enhancing process efficiency and effectiveness in terms of flexibility to customer requirements, effective deliveries of products and services and increased profits. The six sigma quality process introduced and followed across the organization prepare it to be at par with ( or better than ) the best in the world. Employees imbibe the quality process in “quality awareness programmes” across all manufacturing locations. Infact, around 400
people across all locations are inducted into quality programmes through more than 50 workshops. With all this and more, Apollo dares towards world class processes with self reliance in high – end technology. QUALITY PLEDGE “We the people of Apollo Tyres Ltd will create an enterprise committed to quality. It is our policy to manufacture, design and service our products to provide the level of quality and value that meet every customer need. We will aim to create customer enthusiasm through continuous improvements in our product and services. We are committed to excellent in the way we work together with in the organizations well as outside aimed at total customer satisfaction”
d) PRODUCT PROFILE
PRODCT CATEGORY Truck Tyres
PRODUCT NAME Loadstar super ,Load star super herculies, Load star super gold, Humsafer Xeplus, Kaizen 50 L, KZ 77-R, MXL-1,Commando, Haulug,X T-7, XT 9,Amar
PASSENGER CAR Anduxt-9, Amardlx, Strom, armour TYRES Gripper, Hunter, Celebrity. LCV TYRES Amazer Steel,Panther,Lancer, Mile star, BHIM, AMAR Blackcat, ACE
Two-wheeler tyres
Tractor Tyres Krishak, Power Haul Tractor Trailer SAPANC, HTF, Kissan TF, Rider System TT, Super Amar TT, Truck PIAGTT, Dharv TT.
Ingredients to make a tyre:
Rubber Carbon Black Fabric Process Oil Bed Wire Zinc Oxide Steeric Acid Anti Oxidant Sulphur
50% 23% 11% 5% 4% 3% 1% 1% 2%
e) AREA OF OPERATION Apollo Tyres Ltd is the first multinational Tyre manufacturer in India. The corporate office of Apollo Tyres Ltd is at the Gurgoan. The production houses of the company in India are located at, • • • • Perambra (kerala) Limda (Gujarat) Pune ( Maharashtra) Kalamassery (kerala)
International production houses of Apollo Tyres Ltd are located at: • • • Durban ( South Africa) Lady smith(South Africa) Bulawayo(Zimbabwe)
Distribution Network: Aiming to make the most of ongoing growth in the promising world tyre market, Apollo tyres is expanding its operations by fortifying local production capacity, product line ups and depth into the market. With over 120 sales and service stock points, 5 zonal offices, 18 state offices and 11 redistribution centers, Apollo tyres is poised to penetrate its presence to the farthest corners of the country. A 4032 strong dealership network along with 2138 Apollo tyre world, 194 Apollo radial worlds and 61 Apollo Pragati Kendra’s ensures that Apollo tyres is never very far from its customers. The over 3000 exclusive Apollo tyre world and Apollo tyre radial outlets have initiated a quick response mechanism by enabling prompt product delivery and after sales service to customers through the country carrying forward a similar spirit are the Apollo Pragati Kendra’s. This initiative not only provides the latest form technologies to our customers through our tie up with domain specialists in this area but also help our customers to choose the best suited products for their application.
On the global forefront, Apollo tyres has firmly grounded its feet in South Africa by integrating Dunlop’s operations.
The manufacturing facilities at Durban, Ladysmith and Zimbabwe have helped Apollo in consolidating its position in the highly competitive tyre market. With 5 sales, service and branch offices, 9 regional offices and 3 distribution centers at Ladysmith, Durban and Jet park (Johannesburg) the company is all set to meet the demands of a plethora of its international clients. In the current scenario, its total dealer count stands at 936 out of which 193 are Dunlop accredited dealers. Apollo is the only company to have a chain of independent dealers (DAD’s), retaining the flavour of entrepreneurship. Zone 1) Delhi, Haryana, Punjab, Utter Pradesh. Zone 2) Rajasthan, Gujarat, Madhya Pradesh. Zone 3) West Bengal, Bihar, Orissa, Assam. Zone 4) Tamil Nadu, Karnataka, Kerala.
f) OWNERSHIP PATTERN Apollo Tyres Ltd. is a public limited company in the private sector. The share holding pattern of the company is as follows: Shareholding Pattern: Category Promoter's Holding Promoters Indian Promoters Sub Total Non Promoter's Holding Institutional Investors Mutual Funds and UTI Banks, Financial Institutions, Insurance Companies FIIS Sub Total Others Private Corporate Bodies Indian Public No. of Shares % of Share Held Holding
15047065 15047065
39.25 39.25
5971859 2006901 3379257 11358017 1589701 3872658
15.58 5.23 8.81 29.63 4.15 10.10
NRIs/OCBs Any Other Government of Kerala Companies Financier Michelin Sub Total Grand Total
258036
0.67
500000 5712500 11932895 38337977
1.30 14.90 31.13 100.00
Total Foreign Shareholding is 93,49,793 equity shares representing 24.38% of the total capital.
g) COMPETITORS INFORMATION In this world of highly competitive and technology, Apollo has also suffering from strong competition from its competitors. There are Indian and global competitors for Apollo.
In Indian Market: There are so many competitors for Apollo in Indian market, they are …… a) MRF Tyres Limited b) JK Tyres Limited
c) Ceat Tyres Limited d) Modi Rubber Tyres Limited e) Birla Tyres Limited f) Good Year India Limited g) Vikrant Tyres Limited
In Global Market:
Some the global competitors of Apollo is, a) Bridgestone b) Michelin c) Continental d) Cooper tire e) Sumitomo f) Pirelli g) Yokohama rubber
h) INFRASTRUCTURAL FACILITIES The Apollo house at Kalamassery has the following facilities,
1. 2. 3. 4. 5. 6. 7.
SECURITY OFFICE ADMINISTRATIVE BLOCK TWO- WHEELER PARKING AREA TIME OFFICE CANTEEN WEIGHING BRIDGE WORK BLOCK • • • • • • • • • • • • • • • • Utility Raw material store Finished goods store Engineering stores Cement house First aid centre Quality Assurance center Pulley wheel center Electrical workshop Mechanical workshop Instrumentation lab Calibration lab Laboratory Research & Development lab Fire station Diesel power house
For transportation of raw materials and finished goods company is mainly depending on road ways (No railways transportation is used and shipping is done from the Cochin seaport)
ACHIEVEMENTS AND AWARDS A bird’s eye view of Apollo’s achievements since their incipient days: • • • • • • • • Fastest growing Tyre company in India , 5th in the world The first tyre company in India to obtain ISO 9001 certificate for all its operations The first multinational tyre manufacturers in India Sixteenth largest tyre company in the World The first tyre company to introduce packing for tubes, two wheeler tyres and car tyres The first tyre company to have the concept of exclusive showrooms for truck tyres called Apollo Tyre world The only tyre company with more than 100 sales & services offices in India Leading company in Indian truck tyre segment
•
Largest distribution network in India
Apart from these achievements Apollo Tyres Ltd got various awards from National Safety council, pollution control department and many others.
i) WORK FLOW MODEL
Raw Material Purchase
Compound Mixing
Mills
Tube/Air Balance Air Bag Ageing Air Bag Building Air Bag Curing
Calendars
Tread/ Flap Huggs
Fabric Processing
Bias Cutter Slitter Band Building Tyre Building Bagging Tyre Curing De Bagging Flap Curing
Tube Building
Tube Curing
Final Inspection
Ware Housing
j) FUTURE GROWTH AND PROSPECTUS
Company has plans for period expansion in passenger car and light radial tyre categories in near future; increasing the capacity of the passenger car radials to three lakh units per month and light truck radials to 5 lakh units per month at company’s radial facility at Baroda and Kochi plant to reach to achieve capacity of 360 ton per day and 270 ton per day respectively. Company is also planning for more acquisitions globally. In the future era the company is planning to diversify its business into new businesses. They are, • Tyre re-treading plant • Tyre manufacturing machinery • Logistics and financial services The company is planning to explore the potential of the Russian tyre market. China • Capitalizing on the country’s immense potential as a manufacturing base.
• Diversifying into new related products such as new sizes in tyres and variety of end uses from the perspective of China as the end market. • Expansion of existing capacities through acquisition of tyre plants in China. • Building an extensive marketing network all over China for tyre supply.
MCKENSY’S 7 S FRAME WORK WITH SPECIAL REFERENCE TO APOLLO TYRES LIMITED.
It’s all very well devising a strategy, but you have to be able to implement it if it’s to do any good. The 7 S framework first appeared in “The Art of Japanese Management” by Richard Pascale and Anthony Athos in 1981. They had been looking at how Japanese industry had been so successful, at around the same time that Tom Peters and Robert Waterman were exploring what made a company excellent. The seven S model was born at a meeting of the four authors in 1978. It went on to appear in “In search of excellence” by Peters and Waterman, and was taken up as a basic tool by the global management consultancy McKinsey: it’s sometimes known as the McKinsey 7S model. Managers, they said, need to take account of all seven of the factors to be sure of successful implementation of a strategy- large or small. They’re all interdependent, so if you fail to pay proper attention to one of them, it can bring the other crashing down around you. Like a lot of these models, there’s a good dose of common sense in here, but
the 7S Framework is useful way of checking that you’ve covered all the bases. To better represent the challenges of service marketing McKinsey developed a new framework for analyzing and improving organizational effectiveness, the 7S model:
SOFT S’s: The 4 S’s across the bottom of the model are less tangible, more cultural in nature, and were termed ‘Soft S’s by McKinsey: Skill: The capabilities and competencies that exist within the company. Shared values: The values and beliefs of the company. Ultimately they guide employees towards ‘valued’ behavior. Staff: the Company’s people resources and how they are developed, trained and motivated.
Style: The leadership approach of top management and the company’s overall operating approach. HARD S’s: The 3 S’s across the top of the model are described as ‘Hard Ss’: Strategy: The direction and scope of the company over the long term. Structure: The basic structure of the organization, its department, reporting lines, areas of expertise and responsibility (and how they inter-relate). System: The formal and informal procedure that govern everyday activity, covering everything from the management information system, through to the systems at the point of contact with the customer (retail systems, call centre systems, online systems etc).
STRUCTURE
BOARD OF DIRECTORS Chairman Joint Managing Directors Omkar S Kanwar K.Jacob Thomas M.R.B. Gupta O.P.Gupta Robert Steinmetz Anil Kumar Nikesh N Kanpani Neeraj Kanwar Company Secretary Kerala Govt. Nominee P.N. Wahar K.Jose Cyriac Raja Kanwar T.Balakrishnan Chief (Strategy & Business Operation) Chief (Project & Corporate Affairs) Auditors Suman Sarkar U.S. Oberoi Frazer & Ross
REGISTERED OFFICE 6TH Floor Cherupushpam Building, Shanmugham Road, Kochi-682031, Kerala.
ORGANISATION STRUCTURE AT APOLLO
Organizations structure differs from one another in the way responsibility – authority and instructional relationships are established among job, Personnel and physical factors. The chief
Satish Sharma advantage of functional structure is that it makes it possible to have Chief India Operations
uniform
policies,
systems
and
procedures
throughout
the
N. Sreekumar organization. It also acts, as a preventive measure by ruling out Head Kerala
problems, which would arise if every unit or department of company
James Joseph had its own unique way of handling Co- matters that are common to other
part of organization.
coordinator, Kalamassery plant
Production Group Mgr.
Engineering Group Manager
Technical Div. Head
Quality Control Group Manager
Human Resource Manager
Commercial Div. Head
PCTR Manager
PPC, IE & System Div. Head
DEPARTMENTATION
Departmentation represent the pattern of grouping activities. Similar activities intimately related with a distinct function are grouped together to form departments. It aims at achieving unity of direction, effective communication, coordination and control. Departmentation should be based on the needs of the enterprise, including its objective,
strategies, policies, technologies and environment. Apollo has adopted the method of departmentation by function, which promotes specialization and operational efficiency. The department at Apollo can be categorized as follows:
1) Commercial Department 2) Production Department 3) Technical Department 4) Quality Assurance Department 5) Engineering Department 6) Human Resource Department 7) Production Planning Control 8) Industrial Engineering 9) Systems Department
1) COMMERCIAL DEPARTMENT Commerce means interchange of good on a large scale. Every business transactions are commonly called commerce. Commercial department of ATL is concerned with various activities and functions which are crucial for the company’s smooth working. This department includes financial and non-financial divisions. Financial division consist of accounts, costing, payroll and central excise. Nonfinancial divisions include purchase, raw material stores, finished goods store and engineering stores. There exists inseparable relationship finance on the one hand and production, marketing and other functions on the other. Almost all business activities, directly or indirectly, involve the acquisition and use of funds. Finance is a process of acquiring money, using money and distribution of money by a business enterprise. Finance section of ATL is concerned with planning and controlling of the firms financial resources. The divisional head controls the functions and duties which include, providing information to formulate accounting and costing policies, preparation of financial reports and direction of internal auditing and budgeting.
The financial activities include purchase of raw materials, storage of finished goods, logistics and scrap disposal. Marketing department forecast the potential demand in various segments and informs the head office. The head office depending on the plant capacity assigns production targets to different plants. When production ticket is received, the production and planning department estimates the raw material required. The estimates then send to head office for approval; once it is approved purchase is made from various suppliers. After the raw material procurement is on, production takes place and the finished goods are stored in warehouse. The scrap, which is the outcome of power failure or machine flow, is disposed off to a scrap contractor. Quality check is performed at each level to reduce the scrap. Later on the finished goods are distributed to dispatch centers in various zones, dispatch centre supplies tyres to various dealers, who do the retailing for Apollo tyres limited.
James Joseph Co-coordinator A.N.Lakshmanan Div. Head
Commercial Group Mgr.
Excise Exe.
Accounts Manager
Costing Associate Mgr.
Stores & Purchase Group Mgr.
2) PRODUCTION DEPARTMENT Production is the process by which raw materials and other inputs are converted into finished products. Production system receives inputs in the form of materials, personnel, capitals, information and utilities. Production department is concerned with allocation of raw materials to various divisions and aligning the entire manufacturing process. Under the production department of Apollo there are three production divisions. This department takes care of all the day to day production activities. This department consists of production head, manager, associate manager, shift supervisors, and executives of various
divisions. Production department is responsible for the timely production of tyres as per the production plan and its efficiency. They should meet the production target in every shift and should ensure whether the target in every shift and should ensure whether the target is achieved by each division.
James Joseph Co-coordinator P.K.Mohandasan Group Mgr.
Div. I Assct. Mgr.
Shift Supervisors Assct. Mgr.
Div.II Assct. Mgr
Div.III Manager
Assct. Mgr.
PCTR
Stock Prepare. Asst. Mgr.
Tyre Building
Tyre Curing Assct.Mgr.
3) TECHNICAL DEPARTMENT Technical department plays a very crucial role in the organization. This department is concerned with the implementation of technology
for manufacturing cost effective quality products. The activities undergone are development of compound, development of new products and improving engineering standards. This department also provides technical support for the production of compound, treads, and other components. Technical department supports manufacturing functions for achieving corporate goals and efficiencies. They are also concerned in improving quality of tyres by adopting methods like reduction in curing cycle, reducing tyre shaping problem etc. The main functions include development of new design, modification of existing design and comparing competitors design. This department involves in every aspect of tyre production. Technical department is headed by divisional head technical. Under him there is a group manager for compounding, and manager for tyre engineering. Executives are there, for each process for providing technical assistance. They provide technical support for compounding, stock preparation, drawing, inspection & testing moulds and design. This department is also having shift in charge officers.
James Joseph Co-coordinator T.N.Vijayan Div. Head
K.P.Santhosh Group Mgr.
P.Mohanan Mgr. Tyre engg.
4) QUALITY ASSURANCE DEPARTMENT Quality assurance is concerned with the prevention of defects in manufacturing. So that items may be make right at the first time and not to be rejected later. Quality is the totality of features and characteristics of a product or service that on its ability to satisfy stated and implied needs. Quality assurance is the well planned and systematic activities implemented within the quality system and demonstrated as needed to provide adequate confidence that an entity will fulfill requirements for quality. Quality assurance department is concerned with assuring quality in every manufacturing process and controlling the production process.
Management representatives both at corporate and unit level, with the involvement of heads of the department are responsible to develop, implement and maintain the quality system in the plant. The quality assurance department in Apollo tyres checks the components for the production from the receipt of raw materials till the production process is completed and finished goods are stored. The department also tries to establish and maintain procedure for inspecting and listing equipments as well as the output in each process. In tyre inspection all cured tyres are physically inspected for visual defects and excess rubber flashes are removed. The tyre is then checked in the balancing machine. Once the process of inspection and classification are completed they are taken to the ware house. For international trade transaction ISO certification has become an inevitable factor. ISO 9001, certification which covers the quality system and model for quality assurance in design, development, production and installation servicing has obtained by Apollo tyres ltd.
Quality assurance tests done by Apollo tyres Ltd is : ? Rheostat Test ? Specific Gravity Test ? Compound Tensile Test ? Viscosity Test ? Cord Par Test Apollo tyres ltd Kalamassery has a well functional Quality assurance department headed by group manager. Under his position there are 4 divisions, namely process control, laboratories, statistics and finished products. Process control division is headed by associate manager and under him there are 5 shift in charge officers. Laboratories division consists of 7 executives finished products and statistics division are controlled by these executives.
James Joseph Co-coordinator M.S.Das Group Mgr.
Process / Product Audit Shift in charge
F P, TTF & OE Services Exe.(3)
Quality System Capability Studies,Exe.(2)
Laboratories Exe. (6)
5) ENGINEERING DEPARTMENT Engineering is the science of the use of machines or technology for the control and use of power. Engineering development is a pre caring business, and many tasks are started which never reach the market place. This management repairs the ability to shift rapidly from one task to the next, from one person to another, often in the space of a few minutes. As maintenance is the primary function of this department, should verify all the maintenance and provide guidance for the improvements. Pneumatic maintenance, breakdown
maintenance, operation of generators are done through this department. Engineering department determines the incentives for the workers who are working under them. According to their evaluation, report should be send to the payroll section in commercial department. Heat allowances and carbon allowances are therefore employees working in the respected areas. Engineering department is headed by group manager, under him there is a manager for mechanical engineering and manager for electrical and electronics. There are executives for each process in production to provide technical assistance. Heat engineering and trucks section heads are associate managers. 2 divisions are having shift in charge officers.
6) HUMAN RESOURCE DEPARTMENT Human resource is of paramount importance for the success of any organization. It is a source of strength and aid. Human resources are the wealth of an organization which can help it in achieving its goals. Human resource management is concerned with the human beings in an organization. It reflects a new outlook which views organization’s manpower as its resources and assets. Human resources is the total knowledge, abilities, skills, talent and aptitudes of an organization workforce. The values, ethics, beliefs, of the individuals working in a organization also form part of human resources. The resource plans of various categories of people and other people available to the organization can be treated as human resource. In the present complex environment no business or organization can exist and grow without appropriate human resource. So human resources have become the focus of attention of every progressive organization. According to institute of personnel management (UK) “personnel management is an integral but distinctive part of management concerned with people at work and their relationships within the
enterprise. The men and women who working in the organization, enabling each to make his/her best contribution to its success both as a number of a working group and as an individual. The manpower planning process of Apollo tyres is directly linked to the large business plans of the business organization. The manpower planning process once rise, is conducted annually to assess the manpower requirements of the organization. At the beginning of each calendar years, corporate human resource interacts with each department or function in each unit or division to collect their manpower requirements in the conjunction with the annual projected business plans.
The following form the basis for manpower planning exercise. 1) Product mix. 2) Optimum equipment capacities. 3) Existing manpower. 4) Envisaged organization structure. 5) Comparison of actual versus expected productivity.
6) Inter unit comparisons for common functions. Keeping in mind these factors, each department function is expected to make an estimation of the human resources requirement phase at each locations, along with the profile of people needed and sources from where they can be obtained. The manpower plan covers all levels, viz workmen, staff, officers and managers. The HR department is concerned with recruitment, training, promotion, transfer and reservation guideline concerning executives, staff and workers. Functions: 1) Designing and implementation of HR policies. 2) Human resource development. 3) Induction of apprentices, appointment of trainees under the company scheme. 4) Performance appraisal system and maintaining reports.
7) PRODUCTION PLANNING AND CONTROL Product planning and control consists of the organization’s overall manufacturing system to produce a product. PP&C function essentially consists of planning production in the organizations before actual production activities start and exercises central activities to ensure that the planned production is realized in terms of quality, quantity, delivery, schedule and the cost of production. The main function of this department is to ensure optimum utilization of resources as well as capital locked up in work in progress inventory. The planning process is done with the help of supply chain management. 8) INDUSTRIAL ENGINEERING Industrial engineering is concerned with the design, improvement and installation of integrated system of men, materials and equipment to improve productivity. This department is responsible to strategize, plan, guide and make use of optimum utilization of resources ie, 5 m’s (man, material, machine, money, and moment) resulting into the maximum production for the organization. The main function of this department is to plan, design, implement and manage integrated
production and service delivery system that assure productivity, reliability, quality and cost control to keep Apollo globally competitive. Maintainability of SAP and capacity calculations comes under this department. Method study, time study, and motion study are conducted when new norms are developed or when new systems are implemented. This department is also concerned with setting norms by discussing with unions.
9) SYSTEMS DEPARTMENT Information system plays a vital role in the success of a business enterprise. It can provide the information a business needs for efficient operations, effective management and competitive advantage. Therefore, management information system enjoys much practical significance in the management of highly complicated
business enterprises. An information system is an organized combination of people, hardware, software, communications, networks and data resources that collects, transfers and disseminates information in an organization. Systems department is responsible for implementing all the IT services at the plant. The main function of this department is operation and co-ordination of all systems in the organization. Company has adopted a number of people and adequate systems for internal control and security in data to ensure that all assets are safe guarded and protected against lose from unauthorized use or disposition and so that all transactions are authorized, recorded and reported directly. The company uses System Administration Protocol (SAP), an IT enabler across the company to develop an integrated database.
SKILL Apollo provides training for both managers and workers. Training programs for managers consist of both internal and external programme. This workers undergo internal training programme conducted by the experts. External training is done by deputation to professional training centers. The training agencies intimate the HR department about their training schedules. All those employees who have not undergone that are sent for the training. Training programme for employees include both on the job training & off the job training. For workers this is two day introduction training is conducting for management staff the number of days for introduction training is fifteen. A separate register is kept for recording the training activity of the employee has undergone. The HR department selects candidates for training based on the advice of department heads. For this performance appraisal reports are considered. The effectiveness of the training programme can be adjusted by providing the trainees with as feedback format. The company spends Rs. 20,00,000 in this training process.
The managers were given training for four man days every year. They will be given training according to the changing condition. OBJECTIVE:
?
To equip the personal conceptual, functional and behavior skills are necessary to perform the job at hand.
?
To keep the employee abreast of the emerging and upcoming trends in various spheres of industrial activities to better quality of work and output.
?
To provide rostrum for the in to development of an individual wherein he/she can explore and optimally use his or her innate and latent potentialities leading to his/her individual growth and development.
STYLE
Apollo Tyres Ltd. has a top down styles of functioning. Decisions are taken by the top management and conveyed to the down. Some decision making are participative others are authorities. An illustration for participative style of decision making is their method of scrap reduction. Scrap reduction is an important factor of the company because it will increase the profit. Air and water are the main enemy of the tyre. Presence of a little amount of air and water in tyre will make it scrap. Company has a target of scrap reduction to less than .135 % of the total output. If the cured tyres in the final inspection found damaged they will keep them aside. These tyres are inspected by a group of people called seconds committee on a daily basis. Seconds’ committee comprises of persons from Technical department, production department, quality department, mechanical department, electrical department and division B (where the green tyre is build). They together analyses the reason for scrap and take corrective measures. There will be monthly review by a high level committee comprising of heads of the department. In that they consider the suggestions by second committee report for reducing the scrap and decision will be taken. By this style of participative style decision making the company is maintaining the scrap below the target.
STRATEGY STRATEGY FOR COST REDUCTION Competition in tyre industry is increasing year by year. As a reason profit is also decreasing. In order to sustain in tight competition and to maintain the profit company has to reduce the cost of production. The cost that a company can reduce is its variable cost for production. This includes cost of direct materials, indirect materials and labors. But the cost of direct material cannot be reduced because reduction of raw materials affects the quality of tyre. Cost of labour too cannot be reduced that will create labour problems. So in Apollo for reducing the cost of production they are reducing the strategy they are adopted is reduction in the amount of indirect material. Naphtha is one of the direct materials in the production of tyre. Earlier quantity of Naphtha used for production one ton was 20 litres. They have reduced that quantity of Naphtha used for tyre building to 17 litres per ton. The reduction of Naphtha will not affect the quality of the tyre.
SYSTEM Organization decision making system can range from management `intuition, to structure computer systems to complex exert systems & artificial intelligence. Thus systems include procedures & process such information systems, manufacturing process, budgeting & control process. The systems are the process & procedures followed like controlling process. The company has its own set rules & regulations. All the work is done in a very systematic way. Each department has its own set of comprehensive set of instructions. By this each department employees should know where is their area of operations, their duties & responsibilities. System of inventory management at the engineering stores: The engineering stores of Apollo tyres Ltd., Perambra, holds the inventory of spare parts, engineering materials and other consumable items required for the smooth functioning of the Unit. Around 8000 items are stored in the Engineering Stores. The number of employees in the stores is nine.
The engineering store is employing ABC classification, VED analysis and XYZ classification for selective inventory control. The
entire items in the stores are classified into A class B class and C class based on the consumption value. Based on the vitally aspect, they are classified into vital, essential and desirable. And based on the stock value, they are classified as X, Y, Z items. Items are reviewed frequently. Non-moving items and excess stock items are identified. An item which does not move for a period of 30 months is classified as non-moving item. All there are done with the help of the computer. Recorder level and recorder quantity are determined for each item. The consumption and demand patterns over the years, reliability of the items and its value are considered while determining the recorder level and recorder quantity. When an item reaches re order level, on automatic indent is produced based on the Material Requirements Plan. The Engineering Store is trying hard to strike a balance between lower level of stock out and lower investment in aggregate inventory of spares and parts. The store makes a comparison between the cost of stocking an item and its stock-out cost and gives less importance to stock-out cost, if the cost of inventory is higher. VED analysis is done to determine the criticality of spares. 1. Vitals are those items for want of which there would be heavy losses or compete closures of the plant.
2.
Essentials are those items for want of which there would be
expensive damage resulting in temporary cessation of work and their procurement and carrying costs are also high. 3. Desirables are those items, which involve nominal entailing
both little procurement and carrying cost. Even though these problems are there, the Engineering Stores has been able to optimize the inventory to a great extent.
STAFF Staffs of Apollo Tyres are mainly of two categories. They are workmen and management staffs.
All these employees who are protecting under industrial (ID) act are workmen and the rest are management staffs. Workmen category includes (1) clerical and service staffs (2) engineering workmen and (3) production workmen. (1) Clerical and service staffs
Senior Assistant Assistant Senior Clerk Junior Clerk Attender Punes (2) Engineering work man
Multi skilled 1st grade 2nd grade 3rd grade 4th, 5th, 6th
(3)
Production workmen
Grade I Grade II Grade III Grade IV Grade V Grade VI LRW Industrial casual Production apprentice Management staff includes (1) First line supervisor Executive – I Executive – II Executive – III (2) (3) (4) (5) (6) Associate Manager Manager Group Manager Divisional Heads Head
The main duties of the clerical and service staffs are to assist management staffs in the office work and other duties. Engineering
work men assist the engineering department executives in their work. Production workmen operate the machineries for production and other work related to production. Among the management category first line supervisors directly involved in the supervision of work in all departments. Associate managers co-ordinate activities in each department.
SHARED VALUE Social Values: Apollo tyres is resolute in creating a brand that fosters social responsibility and goodwill while assisting stakeholders in making a difference. The company has identified health and education as platforms to work on. Apollo partnered with DFID in the year 2000 and set up its first clinic through a trust. Today, the trust is operating three clinics in partnership with Care India in Delhi, Udaipur and Kanpur and the 4 th clinic is in partnership with Voluntary Health Services (VHS) in Ukkadam, Coimbatore. The objective of these centers is to evolve a comprehensive programme for the mobile population to provide high quality general and sexual health treatment to truckers and the transport community. At Limda village, the company doctor visits nearby villages once in a week and an adult literacy programme has also been undertaken with the Talluka authorities. The company also support the war wounded foundation, actively engaged in providing alternative sources of livelihood.
With all these and more, Apollo is all set on a journey of the sour unafraid and unstoppable.
SWOT ANALYSIS OF APOLLO TYRES LTD.
STRENGTHS • Continued Market Leadership in the dominant industry segment i.e. Truck/Bus Tyres. • Global presence with acquisition of Dunlop Tyres International (Pty) Ltd in South Africa. • Robust Operation Centre for managing IT operations across 140 Locations supported by – ERP/Dealer Portal/Information Systems Security Control etc. • • • Presence in technology products in car radial segment. Dynamic & Progressive Leadership. Responsive to changes in market conditions and product profiles. • • • Product innovation and technical superiority. Strong Brand recall in price sensitive market. Economies of transportation cost on account of closeness to natural rubber growing belt.
WEAKNESSES • • No presence in two/three wheeler segment. Declining profit margins due to raw material cost push.
OPPORTUNITIES • Continuous thrust in infrastructure and construction of expressways & national highways. Creation of road infrastructure has given, and will increasingly give a tremendous fillip to road transportation in the coming years. Tyre industry will play an important role in this changing product mix of transport. • Leadership position in the commercial vehicle segment will enable the company to leverage new and related business opportunities. • Access to global sources for raw materials at competitive prices due to economies of scale. • Steady growth in vehicle production in the immediate future leading to growing demand.
THREATS • An increase in the flow of tyres from competitive sources like China. • Cheaper import on account of import from countries which are signatories to Regional Trading Agreements (RTA’s). • With crude price scaling upwards, pressure on raw material prices can be expected.
•
Continuous increase in the price of natural rubber, which accounts for nearly one third of total raw material cost.
FINANCIAL PERFORMANCE
Turn over of Apollo Tyres Ltd during 2000-01 to 2006-07 Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Turn over( Rs in Crores) 1458.7 1710 2025.10 2240.7 2314.3 2656.8 3000.1
Net profit of Apollo Tyres Ltd during 2000-01 to 2006-07
Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Net profit (Rs in Crores) 25.42 36.81 120.02 70.42 67.63 72.37
2006-07
78.17
ANNUAL REPORT OF ATL FOR THE YEAR 2006-07 Financial Performance: Year Ended 31.03.200 31.03.2006 7 Sales & Other Income Profit Before Depreciation, Tax & Exceptional Items Less : Depreciation Provision for Tax – Current Provision for Tax --Deferred Fringe Benefit Tax Profit After Tax Before Exceptional Items Add : Exceptional Items Net Profit Add : Debenture Redemption Reserve Written Back Surplus Brought Forward From Previous Year Profit Available for Appropriations Appropriations General Reserve Dividend to Equity Share Holders (Rs./Million) 37,773.14 30,033.01 2596.45 1733.60
742.26 445.56 238.32 36.00 1,134.22 0.00 1,134.22 16.70 1,259.30 2,410.22 500.00 208.81
727.86 217.90 18.63 45.50 723.71 57.98 781.69 61.10 1,113.23 1,956.02 500.00 172.52
Dividend Tax Balance Carried Forward
29.29 1672.12
24.20 1259.30
BALANCE SHEET OF ATL, As on 31st March 2007 Schedule As at 31st March, 2007 Rs/Million. Sources of funds : Shareholder’s Funds Share Capital Equity Share Warrants Reserves and Surplus Loans : Secured Unsecured Deferred Tax Liability (Net) (Note – B9) Total Application of Funds : Fixed Assets Gross Block Less : Depreciation Net block Capital work in progress Investments Current Assets, 5 6 10,313.10 2,581.14 9,186.04 5.30 4 14,925.12 5,416.57 9,508.55 804.55 13,106.06 4,699.36 8,406.70 779.34 1 2 3 4,737.63 1,449.40 6,187.03 1,290.57 17,266.02 3,810.03 3,690.00 7,500.03 1,052.25 14,892.47 464.09 117.20 9,207.13 9788.42 383.40 5,956.79 6340.19 As at 31st March 2006 Rs./Million.
Loans and Advances : Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less : Current Liabilities and Provisions : Current Liabilities Provisions Net Current Assets Deferred Revenue Expenditure (Note B 10) Total 17,266.02 14,892.47 5,422.01 553.75 5,975.76 4,370.54 1.24 3,886.25 520.46 4,406.71 5,698.57 2.56 7 4,519.49 2,030.55 1,720.02 139.14 1,937.10 10,346.30 4,194.18 1,751.44 2,313.60 2.14 1,843.92 10,105.28
PROFIT & LOSS ACCOUNT OF ATL, For the year ended 31st March, 2007 Schedule Year ended 31st March, 2007 Rs./mill. INCOME Gorss Sales Less : Excise Duty Other income 8 37,743.4 3 4,820.15 32,923.2 8 29.71 32,952.9 9 EXPENDITURE Manufacturing and 9 Other Expenses (Increase)/Decrease 10 30,143.6 7 (313.61) 24,795.81 (768.01) 30,021.1 9 3,765.99 26,255.20 11.82 26,267.02 Year Ended 31st March, 2006 Rs./million.
in Work Process and finished goods Interest 11 526.48 30,356.5 Profit before depreciation, tax & exceptional items Depreciation Transfer from revaluation reserve Profit before tax & exceptional items Provision for tax – current Deferred Fringe Benefit Tax Profit after tax before exceptional items Add : Exceptional items NET PROFIT Add: Profit brought forward from previous year Transfer from Debenture Redemption 16.70 61.10 12 1,134.22 1,259.30 57.98 781.69 1,113.23 445.65 238.32 36.00 743.78 (1.52) 729.38 (1.52) 4 2,596.45 505.62 24,533.42 1,733.60
742.26 1,854.19
727.86 1,005.74
217.90 18.63 45.50
719.97 1,134.22
282.03 723.71
Reserve 2,410.22 Deduct Appropriations : General Reserve Interim dividend/Proposed Dividend tax Surplus carried to schedule 2 Basic earnings per share (Face value of Rs. 10/- each) (Rs.) Before exceptional items After exceptional items Diluted Earnings Per Share (Face value of Rs:10/-each)(Rs.) Before exceptional items After exceptional items 27.08 27.08 18.88 20.39 13 27.14 27.14 18.88 20.39 500.00 208.81 29.29 738.10 1,672.12 500.00 172.52 24.20 696.72 1,259.30 1,956.02
LEARNING EXPERIENCE
What I learned in ATL? The inplant training at APOLLO TYRES LTD was very much useful for me for knowing about organizational structure and formations. It helped me to gain practical knowledge about different functions of various departments of the company. All the staffs in the company was very much cooperative and very keen to explain each and every aspect. Thus by the training I am able to make a thorough study of the company’s activities in each sections and was able to acquire practical knowledge in this field. This study was of great benefit for me to our future career. Four weeks inplant training in Apollo Tyres Ltd. gave me an opportunity to know about the industrial world. In the company I learned about how the management theories and concept applied in an organization. I saw how a few managers managing a large number of employees and machines to run the company with a profit. More over the inplant training was a good exposure for me to the working conditions of the organization. Some points, which attracted me towards the organization, are: Professional responsibilities:
• All the employees are punctual in time. • General meetings every month’s first Saturday and second Monday. • Regular training and development programs. • Team Building and Work in-group. • Counseling is the best method of solving problem, that I learned in ATL.
What all I have learned in this four week would be of great help for me for my personal growth it was an life time achievement for me to work and learn some thing practical. Lets take example of Mckinsey’s 7s: Structure: I learned different structures in the departments, which give an superficial view of structures in different organizations. Skills: I learned different management skills, especially decision making in pressure.
Shared Values: Values of the organization is very important aspects, I learned companies value. Strategy: To survive in competitive market, a person or an organization make an effective strategy, it plans the future aspects.
BIBLIOGRAPHY:
1. www.apollo.com
2.
www.indianindustries.com
3. Annual reports of Apollo tyre ltd 4. Secondary data from Apollo 5. Marketing book – Philip Kotler 6. www.indiantyreindustry.com
7.
www.globaltyreindustry.com
Inplant Training Weekly Report
Name of student: K.A. Jacob U. S. Number: 1EW06 MBA 18 Name of the Organization: Apollo Tyres Limited For the period: From: 20-07-07 to: 26-07-07.
Work covered during the week: • Joined the company on 20th July 2007. • Met the company guide and discuss about the project.
Signature Signature of the guide Date: 01-09-07
of
the
student
Inplant Training Weekly Report
Name of student: K.A. Jacob U S Number: 1EW06 MBA18 Name of the Organization: Apollo Tyres Limited. For the period: From: 27-07-07 to: 02-08-07.
Work covered during the week: • Studied about the Industry profile. • Studied about the Company profile.
Signature Signature of the guide Date: 01-09-07
of
the
student
Inplant Training Weekly Report
Name of student: K.A.Jacob. U S Number: 1EW06MBA 18. Name of the Organization: Apollo Tyres Limited. For the period: From: 03-08-07 to: 09-08-07.
Work covered during the week: • Studied about the Mckinsey’s 7s model of the organization. • Studied about the latest annual report of the company.
Signature Signature of the guide Date: 01-09-07.
of
the
student
Inplant Training Weekly Report
Name of student: K.A.Jacob. U S Number: 1EW06 MBA 18 Name of the Organization: Apollo Tyres Limited. For the period: From: 10-08-07 to: 16-08-07.
Work covered during the week: • Studied about the practical work of the organization. • Prepared the report.
Signature Signature of the guide Date: 01-09-07.
of
the
student
ATL:- A GLOBAL VIEW.
doc_497971245.doc
Plant Training On Apollo Limited
A REPORT ON INPLANT TRAINING AT APOLLO TYRES LIMITED Submitted by Jacob Kalloor Antony (US No: 1EW06MBA18) In partial fulfillment of the requirement for the award Of the degree of: “MASTER OF BUSINESS ADMINISTRATION” Guides: Prof. R.G. Patil (Internal Guide) Mr. Abi C Simon (External Guide)
To VISVESVARAYA TECHNOLOGICAL UNIVERSITY, BELGAUM
EAST WEST INSTITUTE OF TECHNOLOGY, nd Bharath Nagar 2 Stage, Anjana Nagar Banglore – 91 October 2007
Declaration
I hereby declare that, this “Inpant Training Report” is prepared by me based on a original study conducted by me at Apollo Tyres Ltd (Kalamasserry plant) under the guidance of Prof.R.G.Patil, Director, East West Institute of Technology, Banglore and Mr.Abi C Simon ( HR-Safety) of Apollo Tyres Ltd, during the period 20-07-2007 to 16-08-2007. I declare further that this report has not been submitted to any other university or institution for the award of any other degree or diploma.
Date: Jacob Kalloor Antony Place: Banglore. U.S.Number (1EW 06MBA18)
01-09-07.
ACKNOWLEDGEMENTS The inplant training is one of the most important ingredients in the successful completion of an MBA course. My stint at Apollo Tyres ltd has been one such enriching experience. Working in one of the oldest and most well known brands across India, Apollo has given me an excellent platform both in terms of knowledge and practical experience, which I will cherish throughout my career. The training at Apollo tyres ltd was perfect mix of the right nurturing as the liberty to think and act creatively, allowing me to use our imagination and ideas to the fullest extent so as to make the most of this opportunity here. People I like to thank are plenty. Starting with Prof.R.G.Patil (Director-EWIT), Prof.N.C.P.Kumar (PrincipalEWIT), and Mr.James Joseph (Co-coordinator, Apollo tyres ltd, Kalamasserry Plant), who gave me the opportunity to work at Apollo tyres ltd.
My guide Prof. R.G. Patil, who was always in contact with me to guide, mentor and encourage. I would also like to thank Mr. Abi C Simon (Executive- Safety, HR Dept., Apollo Tyres Ltd.) for his guidance in writing report. I truly thank you for listening all my ideas and giving me all the help that I could ask for. I am truly grateful to you for making my project more focused and help me achieve my objective to the greater extent. Thank you for all guidance and teaching, which was invaluable both to the project as well as to the subject itself. I would like to thank my seniors colleagues at Apollo who have also been of great help with there valuable suggestions, and making the stay in Indoor extremely fruitful both in terms of learning and feeling at home
TABLE OF CONTENTS SL.NO: 1. 2. PARTICULARS. PAGE NO: 5 12 15 17
Industry Profile. PART-A Company Profile. a). Background and Inception of the Company. b). Nature of the Business Carried.
c). d). e). f). g). h). i). j). 3. 4. 5. 6. 7. 8.
Vision, Mission and Quality Policy. Product/Service Profile. Area of Production. Ownership Pattern. Competitors Information. Infrastructure Facilities. Work Flow Model. Future growth and Prospects. PART-B Mckinsey’s 7’ S Model PART-C SWOT Analysis PART-D Summary of Latest Annual Report PART-E Learning Experience. Bibliography. Weekly reports.
18 20 21 23 24 25 27 28 30 55 58 65 66 67
EXECUTIVE SUMMARY
The four weeks inplant training of VTU is all about learning an organization and the corporate processes in it. This program is designed with the intention of colligating the organizational context
with reference to the operational definition and to apply the concepts already learnt to solve management decisions situations. The executive summary of this study was assorted into five sections, wherein sec A pertained to the study of industry profile and company profile, B pertained to the study of mckensy’s 7’ S framework with special references to organization study structure, skill, style, strategy, system, staff, shared value, Sec C pertained to SWOT analysis of the company’s , Sec D pertained to the study of the latest annual report of the company and finally Sec D pertained to the overall learning experience. The study was dedicated by conceiving the research design of observing, interviewing and undergoing through both primary as well as secondary data. The study mainly concentrates on the study of Mckensy’s 7s model. The collected data were analyzed and the findings, suggestions, and recommendations were summed up. Based on the findings the suitable suggestions were provided so as to make some success in the organization, which would aid in directing the company towards Organizational Effectiveness and Organizational Excellence.
INDUSTRY PROFILE
Millennia ago the primitive man discovered the rudimentary wheel; it was probably just a circular disc with a space for a spoke. Man in to the modern day tyre eventually developed this rough stone circle. Later, R.W. Thomsoo invented and patented the pheumatic tyre in 1845. His first design used a rubber inflated tubes instead of leather cover. His design actually had its advantages over later
designs. It would take more than one puncture to deflate the whole tyre and varying the pressure could alter the ride conditions. In 1988, John Boyd Dunlop invented rubber pheumatic tyre. Despite these, technologies break through the solid rubber tyre continued to be the dominant tyre. Man has created in the tyre highly sophisticated instruments designed to take us to our desired destination, smoothly and safely. Without the tyre, we can’t imagine our every day life.
Even the most insignificant journey can today the pleasurable with the help of vehicles and tyres. All these journeys are tension-free because of this reason. New technologies have helped to make the tyre capable of protecting man difficult condition like rain, sleet and snow.
TYRE INDUSTRY IN INDIA The Indian Tyre Industry dates back to 1930 when multinationals like Firestone, Good Year and Dunlop entered the market. MRF, Premier and Ceat at various locations in the country carried out the domestic production of the tyres. The tyre industries were classified under three heads. The first generation industries viz., Dunlop and Firestone (New Bombay Tyre International Limited) were setup in the last
30’s and early-40. The second generation companies then come up in 60’s are MRF Tyres, Ceat, Good Year Tyres and Premier Tyres. The third generation that was setup in 70’s is JK Tyres, Vikrant Tyres, Apollo Tyres and Modi Rubber. The first Indian Company Dunlop Rubber was incorporated in 1926 the tyre industry is growing rapidly and today its turnover is 1, 00,000 million and earning an income of Rs. 1,000 crore per annum for exports. The industry had a growth rate of 11% over last decade. Market for tyres can be broadly classified or segmented into 3 categories. In the present scenario, the Indian tyre industry is two tired. The tier I players account for around 85% of the industries turnover with a well diversified product mix and presence in all three major segments of the replacement market, original equipment manufacturers and exports. Tier two companies are smaller in size, with a focus only on one or two categories of tyres, plus tubes and flaps primarily for the replacement market. The commercial vehicle tyres market is the largest segment of the industry accounting for approximately 70% of industry turnover in terms of value. Steep rise in raw material prices, particularly natural rubber, impacted the profit margins of all the players. This was the fourth consecutive year of raw material cost-push, both for natural
rubber which increased by approximately 24% as compared to 200506 and crude oil linked raw material basket, particularly carbon black. Consistent rise in major raw materials costs (natural rubber, carbon black, synthetic rubber) have resulted in pressure on the margins of the tyre companies despite good topline growth. However the ability to pass on the increased cost to customers to some extent, facilitated by the tight demand – supply situation has resulted in margin improvement for the industry in the second half of the year. The year ahead looks tough with no significant respite in raw material prices. The cost push continues and profitability would depend on the ability of the players to take large price increases. The story on the demand front though looks good in the medium term with the economy continuing to do well.
ENVIRONMENT ANALYSIS – PORTER’S MODEL
Entry barriers: High
The entry barriers are high for the tyre industry. It is a highly capital intensive industry. A plant with an annual capacity of 1.5 million cross-ply tyres costs between Rs:4000/- and Rs:5000/million. A similar plant producing radial tyres costs Rs: 8000/- million.
Bargaining power of the buyers: High
The OEM’s have total control over prices. In fact, the OEM’s faced with declining profitability have also reduced the number of component. Suppliers to make the supply chain more efficient.
Bargaining power of the suppliers: High Inter firm rivalry : Low
The tyre industry in India is fairly concentrated, with the top eight companies accounting for more than 80% of the total production of tyres. The tyre industry consumes nearly 50% of the natural rubber produced in the country. The price of natural rubber is controlled by Rubber Control Board and the domestic prices of natural rubber have registered a significant increase in recent times.
Threat of substitutes : Low but increasing.
During the FY 2002, over 1,10,000 passenger car tyres were imported. This constitutes over 2% of total radial passenger car tyre production in the country. However, with the reduction of peak custom duty, the import of tyres is likely to increase.
Industry of Tyre Company Comprises of: Industry turnover Total number of companies Industry capacity utilization Major Players
Rs. 14,500 crores tyre 43 Estimate 89 % MRF, JK, Apollo Tyres and CEAT
Highlights of Indian Tyre Industry:
The fortune of this industry depends on the agricultural and industrial performance of the economy, the transportation needs and the production of the vehicles. • While the tyre industry is mainly dominated by the organized sector and the unorganized sector holds away in bicycle tyres. • In the last five years the industry managed to achieve a compound annual growth of only 4.40%. However in the last fiscal years, the industry registered a growth of 7%. • The Indian tyre industry is estimated to be an Rs: 14500 cr industry. • The ratio of natural rubber content to synthetic rubber contents is 80:20 in Indian tyres whereas world wide, the ratio is 30:70. Ranking of Indian Tyre Companies on the basis of production; 1. 2. 3. 4. 5. 6. 7. 8. MRF Tyres Limited Apollo Tyres Limited JK Tyres Limited Ceat Tyres Limited Modi rubber tyres limited Birla tyres limited Good year India limited Vikrant tyres limited
INDIAN SCENARIO Indian tyre industry comprises of 12 major companies, 13 minor companies and 34 minor plants manufacturing low technology products such as small tubes and flaps. There are top players in the filed having 69 % of market share.
Company MRF Apollo JK Ceat Birla Good Year Others
Market Share 21.2 % 20.1 % 14.5 % 13.2 % 7.0 % 6.0 % 7.0 %
EXPORT MARKET The major segments are Truck, Bus and Car tyres. Value share of truck and bus segment is about 73 %. Replacement market forms largest segment about 58 %, OEM is about 22 % and Export market for about 5 %.
The major exporting countries of Apollo Tyres; 1) Germany 2) Japan 3) Italy 4) USA 5) South Africa 6) Brazil 7) Canada 8) Ireland 9) UAE 10) 11) 12) Singapore Malaysia Nigeria
SECTOR TRENDS
Cross ply tyres has been used in India for several decades. In these tyres, the ply cords run across each other or diagonally to outer surface of the tyre Rayon and Nylon tyre cords are used as the reinforcing medium. These tyres can be rethreaded twice during their life time and are hence preferred by Indian transport operators who normally overload tones is usually loaded with double the capacity. Moreover one also has to content with suspensions and bad road conditions. No wonder, 95 % of the tyres used in India are cross plies.
Radial tyres have their cords running rapidly from bead at 90 degree angles to the rim or along the outer surface of the tyre. The reinforcing mediums used in these are polyester, nylon, fiberglass and steel. Hence these tyres are 40 % more expensive than cross piles. But they have a longer life and provide lower fuel consumption. The unhealthy condition of the Indian roads has resulted in radial tyre accounting for only 5 % of the tyre industry as against a global trend of 60% with two-third of all major tyre manufacturers being reserved for radials, this is a real cause for concern.
OUTLOOK Globally the OEM segment constitutes only 30 % of the tyre exports 10 and the balance from the replacement market. In India, the scenario is quite different. Nearly 85 % of the total tyre demanded in
the country is for replacement. This anomaly has placed the retraders in a better position than the tyre manufacturers. Retreading is looming over the tyre industry as a colossal threat. Indian tyre exports cater to over 40 countries. Approximately 20 % of total truck and bus tyres produced domestically the US. As far as exports are concerned, the demand in the export market is a function of factors such as exchange rate of domestic currency against US Dollar. The export benefits to the Indian tyre industry cost competitive of other major exporting countries and the subsidies granted by respective governments. The exports and the average exports prices of bus, truck and LCV tyres from India are under threat from the cheaper Chines exports. The improved performance of Chinese tyres coupled with 40-50 % lower prices is threatening the market share of Indian companies in the export market. The industry is also facing severe threat of dumping of cheap tyres by South Korea. 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 off shoots of petrochemicals. Thus the future of the industry will swing with the supply of crude oil. The biggest threat will be from global majors like Bridgestone and Michelin, which control 36 % of the global tyre market. The vast growth potential of the Indian market is becoming them towards
India. The industry is driven more by volume than by margins and each of the big five in the global tyre industry; Continental, Michelin, Good year; Pirelli and Bridgestone generate an annual tyre production equivalent to the total demand of the Indian market.
THE GLOBAL TYRE INDUSTRY In FY 2005, the global tyre industry was estimated to be worth US$ 101 billion. In the last five years, the global tyre market has been growing at a CAGR of 10.2%. To be more specific, during the last 2 years (2004-2005) it has grown at a rate of 15.5% and 9.0% respectively. Apart from that, the tyre industry is highly concentrated and is characterized by the dominance of a few large companies. The top three players (Bridgestone, Michelin, & Goodyear) account for 53% of the market share while the top 7 account for 70% of the market share. Moreover, if you look at the global tyre market, passenger cars and light trucks account for 63% of the tyre sales. Considering this statistic, many global manufacturers have entered developing & growing markets like China and India either through direct entry or joint ventures / technical collaborations.
Global Ranking of Apollo: YEAR 2003 2005 2007 RANK 17 16 18
COMPANY PROFILE
Apollo Tyres Limited is the second largest tyre company in the country. Apollo Tyres Ltd is the flagship company of the Raunaq Group. The company is the leading manufacturer in the truck tyre segment in the country with a market share of nearly 30 percent.
Other product of Apollo Tyeres Ltd includes tubes and flaps for heavy duty trucks, passenger cars, tractors, light commercial vehicles. GROUP APOLLO PROFILE Backed by three decades of excellence, group Apollo is a significant global player with a turnover of over 2700 crores / USD 625 million. A professionally managed group, it comprises of two main companies.
Apollo Tyres Limited An established market leader in the tyre manufacturing industry, Apollo Tyres Limited has grown to become one of India’s most well known manufacturers of tyre since inception in 1972. Backed by a vast network of 5000 dealers across India, Apollo Tyres Limited is the fastest growing name in the tyres today. The first ISO 9001 certified company, it entered in to a joint venture with another world leader Michelin Tyres in November 2003, symbolic of its aim of becoming a total tyre company catering to the world market.
Apollo International Limited Set up in 1994 with the aim of leading the diversification forays of group Apollo into new, emerging business opportunities, Apollo International Limited acts as a gateway for all international operations of the group namely, product exports, service exports and knowledge management. Today Apollo International Limited has earned for itself an enviable reputation in the global arena through its forays into international tyre trading with Tyre Tech Global, International trading with International Business Division, the manufacture and export of leather garments and accessories with Tag Fashions, and more recently in the domestic Indian entertainment business with lotteries through its wholly owned subsidiary Encorp E-Service Limited.
Apollo an ISO 9001 Company: Apollo tyres limited is the 7th in the India and the 18th largest tyre company in the world. It is the 1st tyre company in India to obtain ISO 9001 certificate for all its operations on 25th November 1994. Vendor Companies Of Apollo
Trucks Radials LCV Farm
: Telco, Ashok Leyland. : Maruthi, M&M, Telco. : Eicher, Telco, Bajaj, Swaraj Mazda. : M&M, Punjab Tractors.
a) APOLLO TYRES BACKGROUND AND INCEPTION The history of Apollo Tyres Ltd is about a company’s passion , determination and will to surpass all obstacles and emerge as a leader in the Indian tyre industry. Named after the radiant Greek Sun God Apollo, the company has created a niche for itself in the Indian tyre market. Apollo Tyres Ltd’s history dates back to the early 70’s.It was Ruby Rubber works, which was given the license to start a tyre factory (at Chengnassery , Kerala) and It was thus registered and incorporated in 1972.In 1975, the Raunaq Group of companies under the chairmanship of Mr. Raunaq Singh purchased the license and thus the first manufacturing unit was started at Perambra near Cochin in 1977. The Kalamassery unit of Apollo tyres was earlier Premier Tyre Ltd. Premier tyre belonged to the second generation tyre industry in India,
which was incorporated on 19th October 1959 in Kerala at Kalamassery. The foundation stone was laid on 18th January 1960 by the Prime Minister Jawaharlal Lal Nehru. It was established with Uni Royal, USA. The factory started its commercial production in May 1962 and was owned by Desai group of companies, Mumbai. This company was setup as a joint venture ie, public and private sector. During initial stages the company has to face several obstacles. There was severe competition, shortage of raw materials, labour problems etc but after this brief period it got well established in 1960’s. The situation changed in 1980’s, the company set back from 1985 to 1989 due to financial problems and consequent loss of production and market share. The company has to declare lockout on 24 February 1993. The government of Kerala and Board of Directors finally implemented BIFR schemes under sec. 19(3) of Sick Industries Company Act 1985. The company was taken over by M/S Apollo tyres ltd and had given 45.5 crores.
Key Milestones:
1972: The company's license was obtained by Mr. Mathew T
Marattukalam, Jacob Thomas and his associates 1974: The company was taken over by Dr. Raunaq Singh and his
associates 1975: April 13, Perambra Plant Foundation stone was laid down. 1976: Apollo Tyres Ltd. was registered. 1977: Plant commissioned in Kerala with 49 TPD capacities. 1982: Manufacturing of Passenger Car Radial Tyres in Kerala. 1991: The second plant commissioned in Baroda. 1995: Acquired Premier Tyres Ltd. in Kalamassery, Kerala. 2000: Exclusive Radial capacity established at Baroda. 2003: Radial Capacity expanded to 6600 tyres per day. 2003: November 17, Joint Venture with Michelin 2004: Launch of Apollo Acelere- ‘H’ Speed Rated Car Radials. 2006: Launch of Dura Tread, traditional material and solutions. 2006: January 30, Dunlop South Africa is acquired 2007: Launch of regal truck and bus radial tyres. 2007: Launch of Dura tyre, rethreaded tyres from Apollo 2007: Launch of the Apollo tennis initiative and mission 2018
b) NATURE OF THE BUSINESS CARRIED OUT APOLLO TYRES Ltd is one of the leading manufacturer of automobile tyres. Apart from tyre they produce tubes and flaps for heavy duty trucks, passengers cars , tractors , light commercial vehicle and new generation vehicle. The company is also involved in the sales and services of tyres. There are 3000 exclusive outlets under the brand name Apollo tyre world and Apollo radial world for Apollo Tyres. Their quick response mechanism enables prompt product delivery and after sales services to provide holistic solution for customers. Set up in 1994 with the aim of leading the diversification forays of group Apollo into new, emerging business opportunities, Apollo International Limited acts as a gateway for all international operations of the group namely, product exports, service exports and knowledge management. Today Apollo International Limited has earned for itself an enviable reputation in the global arena through its forays into international tyre trading with Tyre Tech Global, International trading with International Business Division, the manufacture and export of
leather garments and accessories with Tag Fashions, and more recently in the domestic Indian entertainment business with lotteries through its wholly owned subsidiary Encorp E-Service
c) VISION, MISSION AND QUALITY POLICY VISION “A leader in the Indian Tyre industry and a significant global player, providing customers delight and enhancing shareholders value”. It is their vision to nurture and cherish Apollo Tyres Ltd in the position of
a leader of the industries in India, who is also recognized and respected as a manufacturer of the world class product. They shall create in Apollo Tyres Ltd a company of people who enjoy working as a team and with their customers to create superior and distinct product and services, focused fast and flexible, they seek never ending improvement in order to create an enterprise that is dynamic, ever expanding, profitable, constant pursuit and customer satisfaction. The one word that symbolizes all that they believe is “C R E A T E” C- CARE FOR CUSTOMER R- RESPECT FOR ASSOCIATES E- EXCHANGE THROUGH TEAM WORK A- ALWAYS LEARNING T- TRUST MUTUALLY E- ETHICAL PRACTICES
? ? ? ? ? ?
MISSION “ It is our mission and cherish Apollo tyres ltd in the position of a leader of the industry in India, who is a recognized and respected, as a manufacturer of world class products.”
“ We shall create, in Apollo tyres ltd, company of people who enjoy working as a team and with our custom to create superior and distinct products and services.”
“Focused, fast and flexible we seek never ending improvement in order to create an enterprise that is dynamic, ever expanding, profitable and in constant pursuit of custom satisfaction.” QUALITY POLICY Quality is the first pillar of the organizations “passion in motion” journey. The objective is to weave quality completely into the fabric of Apollo tyres. Consistently, measurability and reliability are fundamental to enhancing process efficiency and effectiveness in terms of flexibility to customer requirements, effective deliveries of products and services and increased profits. The six sigma quality process introduced and followed across the organization prepare it to be at par with ( or better than ) the best in the world. Employees imbibe the quality process in “quality awareness programmes” across all manufacturing locations. Infact, around 400
people across all locations are inducted into quality programmes through more than 50 workshops. With all this and more, Apollo dares towards world class processes with self reliance in high – end technology. QUALITY PLEDGE “We the people of Apollo Tyres Ltd will create an enterprise committed to quality. It is our policy to manufacture, design and service our products to provide the level of quality and value that meet every customer need. We will aim to create customer enthusiasm through continuous improvements in our product and services. We are committed to excellent in the way we work together with in the organizations well as outside aimed at total customer satisfaction”
d) PRODUCT PROFILE
PRODCT CATEGORY Truck Tyres
PRODUCT NAME Loadstar super ,Load star super herculies, Load star super gold, Humsafer Xeplus, Kaizen 50 L, KZ 77-R, MXL-1,Commando, Haulug,X T-7, XT 9,Amar
PASSENGER CAR Anduxt-9, Amardlx, Strom, armour TYRES Gripper, Hunter, Celebrity. LCV TYRES Amazer Steel,Panther,Lancer, Mile star, BHIM, AMAR Blackcat, ACE
Two-wheeler tyres
Tractor Tyres Krishak, Power Haul Tractor Trailer SAPANC, HTF, Kissan TF, Rider System TT, Super Amar TT, Truck PIAGTT, Dharv TT.
Ingredients to make a tyre:
Rubber Carbon Black Fabric Process Oil Bed Wire Zinc Oxide Steeric Acid Anti Oxidant Sulphur
50% 23% 11% 5% 4% 3% 1% 1% 2%
e) AREA OF OPERATION Apollo Tyres Ltd is the first multinational Tyre manufacturer in India. The corporate office of Apollo Tyres Ltd is at the Gurgoan. The production houses of the company in India are located at, • • • • Perambra (kerala) Limda (Gujarat) Pune ( Maharashtra) Kalamassery (kerala)
International production houses of Apollo Tyres Ltd are located at: • • • Durban ( South Africa) Lady smith(South Africa) Bulawayo(Zimbabwe)
Distribution Network: Aiming to make the most of ongoing growth in the promising world tyre market, Apollo tyres is expanding its operations by fortifying local production capacity, product line ups and depth into the market. With over 120 sales and service stock points, 5 zonal offices, 18 state offices and 11 redistribution centers, Apollo tyres is poised to penetrate its presence to the farthest corners of the country. A 4032 strong dealership network along with 2138 Apollo tyre world, 194 Apollo radial worlds and 61 Apollo Pragati Kendra’s ensures that Apollo tyres is never very far from its customers. The over 3000 exclusive Apollo tyre world and Apollo tyre radial outlets have initiated a quick response mechanism by enabling prompt product delivery and after sales service to customers through the country carrying forward a similar spirit are the Apollo Pragati Kendra’s. This initiative not only provides the latest form technologies to our customers through our tie up with domain specialists in this area but also help our customers to choose the best suited products for their application.
On the global forefront, Apollo tyres has firmly grounded its feet in South Africa by integrating Dunlop’s operations.
The manufacturing facilities at Durban, Ladysmith and Zimbabwe have helped Apollo in consolidating its position in the highly competitive tyre market. With 5 sales, service and branch offices, 9 regional offices and 3 distribution centers at Ladysmith, Durban and Jet park (Johannesburg) the company is all set to meet the demands of a plethora of its international clients. In the current scenario, its total dealer count stands at 936 out of which 193 are Dunlop accredited dealers. Apollo is the only company to have a chain of independent dealers (DAD’s), retaining the flavour of entrepreneurship. Zone 1) Delhi, Haryana, Punjab, Utter Pradesh. Zone 2) Rajasthan, Gujarat, Madhya Pradesh. Zone 3) West Bengal, Bihar, Orissa, Assam. Zone 4) Tamil Nadu, Karnataka, Kerala.
f) OWNERSHIP PATTERN Apollo Tyres Ltd. is a public limited company in the private sector. The share holding pattern of the company is as follows: Shareholding Pattern: Category Promoter's Holding Promoters Indian Promoters Sub Total Non Promoter's Holding Institutional Investors Mutual Funds and UTI Banks, Financial Institutions, Insurance Companies FIIS Sub Total Others Private Corporate Bodies Indian Public No. of Shares % of Share Held Holding
15047065 15047065
39.25 39.25
5971859 2006901 3379257 11358017 1589701 3872658
15.58 5.23 8.81 29.63 4.15 10.10
NRIs/OCBs Any Other Government of Kerala Companies Financier Michelin Sub Total Grand Total
258036
0.67
500000 5712500 11932895 38337977
1.30 14.90 31.13 100.00
Total Foreign Shareholding is 93,49,793 equity shares representing 24.38% of the total capital.
g) COMPETITORS INFORMATION In this world of highly competitive and technology, Apollo has also suffering from strong competition from its competitors. There are Indian and global competitors for Apollo.
In Indian Market: There are so many competitors for Apollo in Indian market, they are …… a) MRF Tyres Limited b) JK Tyres Limited
c) Ceat Tyres Limited d) Modi Rubber Tyres Limited e) Birla Tyres Limited f) Good Year India Limited g) Vikrant Tyres Limited
In Global Market:
Some the global competitors of Apollo is, a) Bridgestone b) Michelin c) Continental d) Cooper tire e) Sumitomo f) Pirelli g) Yokohama rubber
h) INFRASTRUCTURAL FACILITIES The Apollo house at Kalamassery has the following facilities,
1. 2. 3. 4. 5. 6. 7.
SECURITY OFFICE ADMINISTRATIVE BLOCK TWO- WHEELER PARKING AREA TIME OFFICE CANTEEN WEIGHING BRIDGE WORK BLOCK • • • • • • • • • • • • • • • • Utility Raw material store Finished goods store Engineering stores Cement house First aid centre Quality Assurance center Pulley wheel center Electrical workshop Mechanical workshop Instrumentation lab Calibration lab Laboratory Research & Development lab Fire station Diesel power house
For transportation of raw materials and finished goods company is mainly depending on road ways (No railways transportation is used and shipping is done from the Cochin seaport)
ACHIEVEMENTS AND AWARDS A bird’s eye view of Apollo’s achievements since their incipient days: • • • • • • • • Fastest growing Tyre company in India , 5th in the world The first tyre company in India to obtain ISO 9001 certificate for all its operations The first multinational tyre manufacturers in India Sixteenth largest tyre company in the World The first tyre company to introduce packing for tubes, two wheeler tyres and car tyres The first tyre company to have the concept of exclusive showrooms for truck tyres called Apollo Tyre world The only tyre company with more than 100 sales & services offices in India Leading company in Indian truck tyre segment
•
Largest distribution network in India
Apart from these achievements Apollo Tyres Ltd got various awards from National Safety council, pollution control department and many others.
i) WORK FLOW MODEL
Raw Material Purchase
Compound Mixing
Mills
Tube/Air Balance Air Bag Ageing Air Bag Building Air Bag Curing
Calendars
Tread/ Flap Huggs
Fabric Processing
Bias Cutter Slitter Band Building Tyre Building Bagging Tyre Curing De Bagging Flap Curing
Tube Building
Tube Curing
Final Inspection
Ware Housing
j) FUTURE GROWTH AND PROSPECTUS
Company has plans for period expansion in passenger car and light radial tyre categories in near future; increasing the capacity of the passenger car radials to three lakh units per month and light truck radials to 5 lakh units per month at company’s radial facility at Baroda and Kochi plant to reach to achieve capacity of 360 ton per day and 270 ton per day respectively. Company is also planning for more acquisitions globally. In the future era the company is planning to diversify its business into new businesses. They are, • Tyre re-treading plant • Tyre manufacturing machinery • Logistics and financial services The company is planning to explore the potential of the Russian tyre market. China • Capitalizing on the country’s immense potential as a manufacturing base.
• Diversifying into new related products such as new sizes in tyres and variety of end uses from the perspective of China as the end market. • Expansion of existing capacities through acquisition of tyre plants in China. • Building an extensive marketing network all over China for tyre supply.
MCKENSY’S 7 S FRAME WORK WITH SPECIAL REFERENCE TO APOLLO TYRES LIMITED.
It’s all very well devising a strategy, but you have to be able to implement it if it’s to do any good. The 7 S framework first appeared in “The Art of Japanese Management” by Richard Pascale and Anthony Athos in 1981. They had been looking at how Japanese industry had been so successful, at around the same time that Tom Peters and Robert Waterman were exploring what made a company excellent. The seven S model was born at a meeting of the four authors in 1978. It went on to appear in “In search of excellence” by Peters and Waterman, and was taken up as a basic tool by the global management consultancy McKinsey: it’s sometimes known as the McKinsey 7S model. Managers, they said, need to take account of all seven of the factors to be sure of successful implementation of a strategy- large or small. They’re all interdependent, so if you fail to pay proper attention to one of them, it can bring the other crashing down around you. Like a lot of these models, there’s a good dose of common sense in here, but
the 7S Framework is useful way of checking that you’ve covered all the bases. To better represent the challenges of service marketing McKinsey developed a new framework for analyzing and improving organizational effectiveness, the 7S model:
SOFT S’s: The 4 S’s across the bottom of the model are less tangible, more cultural in nature, and were termed ‘Soft S’s by McKinsey: Skill: The capabilities and competencies that exist within the company. Shared values: The values and beliefs of the company. Ultimately they guide employees towards ‘valued’ behavior. Staff: the Company’s people resources and how they are developed, trained and motivated.
Style: The leadership approach of top management and the company’s overall operating approach. HARD S’s: The 3 S’s across the top of the model are described as ‘Hard Ss’: Strategy: The direction and scope of the company over the long term. Structure: The basic structure of the organization, its department, reporting lines, areas of expertise and responsibility (and how they inter-relate). System: The formal and informal procedure that govern everyday activity, covering everything from the management information system, through to the systems at the point of contact with the customer (retail systems, call centre systems, online systems etc).
STRUCTURE
BOARD OF DIRECTORS Chairman Joint Managing Directors Omkar S Kanwar K.Jacob Thomas M.R.B. Gupta O.P.Gupta Robert Steinmetz Anil Kumar Nikesh N Kanpani Neeraj Kanwar Company Secretary Kerala Govt. Nominee P.N. Wahar K.Jose Cyriac Raja Kanwar T.Balakrishnan Chief (Strategy & Business Operation) Chief (Project & Corporate Affairs) Auditors Suman Sarkar U.S. Oberoi Frazer & Ross
REGISTERED OFFICE 6TH Floor Cherupushpam Building, Shanmugham Road, Kochi-682031, Kerala.
ORGANISATION STRUCTURE AT APOLLO
Organizations structure differs from one another in the way responsibility – authority and instructional relationships are established among job, Personnel and physical factors. The chief
Satish Sharma advantage of functional structure is that it makes it possible to have Chief India Operations
uniform
policies,
systems
and
procedures
throughout
the
N. Sreekumar organization. It also acts, as a preventive measure by ruling out Head Kerala
problems, which would arise if every unit or department of company
James Joseph had its own unique way of handling Co- matters that are common to other
part of organization.
coordinator, Kalamassery plant
Production Group Mgr.
Engineering Group Manager
Technical Div. Head
Quality Control Group Manager
Human Resource Manager
Commercial Div. Head
PCTR Manager
PPC, IE & System Div. Head
DEPARTMENTATION
Departmentation represent the pattern of grouping activities. Similar activities intimately related with a distinct function are grouped together to form departments. It aims at achieving unity of direction, effective communication, coordination and control. Departmentation should be based on the needs of the enterprise, including its objective,
strategies, policies, technologies and environment. Apollo has adopted the method of departmentation by function, which promotes specialization and operational efficiency. The department at Apollo can be categorized as follows:
1) Commercial Department 2) Production Department 3) Technical Department 4) Quality Assurance Department 5) Engineering Department 6) Human Resource Department 7) Production Planning Control 8) Industrial Engineering 9) Systems Department
1) COMMERCIAL DEPARTMENT Commerce means interchange of good on a large scale. Every business transactions are commonly called commerce. Commercial department of ATL is concerned with various activities and functions which are crucial for the company’s smooth working. This department includes financial and non-financial divisions. Financial division consist of accounts, costing, payroll and central excise. Nonfinancial divisions include purchase, raw material stores, finished goods store and engineering stores. There exists inseparable relationship finance on the one hand and production, marketing and other functions on the other. Almost all business activities, directly or indirectly, involve the acquisition and use of funds. Finance is a process of acquiring money, using money and distribution of money by a business enterprise. Finance section of ATL is concerned with planning and controlling of the firms financial resources. The divisional head controls the functions and duties which include, providing information to formulate accounting and costing policies, preparation of financial reports and direction of internal auditing and budgeting.
The financial activities include purchase of raw materials, storage of finished goods, logistics and scrap disposal. Marketing department forecast the potential demand in various segments and informs the head office. The head office depending on the plant capacity assigns production targets to different plants. When production ticket is received, the production and planning department estimates the raw material required. The estimates then send to head office for approval; once it is approved purchase is made from various suppliers. After the raw material procurement is on, production takes place and the finished goods are stored in warehouse. The scrap, which is the outcome of power failure or machine flow, is disposed off to a scrap contractor. Quality check is performed at each level to reduce the scrap. Later on the finished goods are distributed to dispatch centers in various zones, dispatch centre supplies tyres to various dealers, who do the retailing for Apollo tyres limited.
James Joseph Co-coordinator A.N.Lakshmanan Div. Head
Commercial Group Mgr.
Excise Exe.
Accounts Manager
Costing Associate Mgr.
Stores & Purchase Group Mgr.
2) PRODUCTION DEPARTMENT Production is the process by which raw materials and other inputs are converted into finished products. Production system receives inputs in the form of materials, personnel, capitals, information and utilities. Production department is concerned with allocation of raw materials to various divisions and aligning the entire manufacturing process. Under the production department of Apollo there are three production divisions. This department takes care of all the day to day production activities. This department consists of production head, manager, associate manager, shift supervisors, and executives of various
divisions. Production department is responsible for the timely production of tyres as per the production plan and its efficiency. They should meet the production target in every shift and should ensure whether the target in every shift and should ensure whether the target is achieved by each division.
James Joseph Co-coordinator P.K.Mohandasan Group Mgr.
Div. I Assct. Mgr.
Shift Supervisors Assct. Mgr.
Div.II Assct. Mgr
Div.III Manager
Assct. Mgr.
PCTR
Stock Prepare. Asst. Mgr.
Tyre Building
Tyre Curing Assct.Mgr.
3) TECHNICAL DEPARTMENT Technical department plays a very crucial role in the organization. This department is concerned with the implementation of technology
for manufacturing cost effective quality products. The activities undergone are development of compound, development of new products and improving engineering standards. This department also provides technical support for the production of compound, treads, and other components. Technical department supports manufacturing functions for achieving corporate goals and efficiencies. They are also concerned in improving quality of tyres by adopting methods like reduction in curing cycle, reducing tyre shaping problem etc. The main functions include development of new design, modification of existing design and comparing competitors design. This department involves in every aspect of tyre production. Technical department is headed by divisional head technical. Under him there is a group manager for compounding, and manager for tyre engineering. Executives are there, for each process for providing technical assistance. They provide technical support for compounding, stock preparation, drawing, inspection & testing moulds and design. This department is also having shift in charge officers.
James Joseph Co-coordinator T.N.Vijayan Div. Head
K.P.Santhosh Group Mgr.
P.Mohanan Mgr. Tyre engg.
4) QUALITY ASSURANCE DEPARTMENT Quality assurance is concerned with the prevention of defects in manufacturing. So that items may be make right at the first time and not to be rejected later. Quality is the totality of features and characteristics of a product or service that on its ability to satisfy stated and implied needs. Quality assurance is the well planned and systematic activities implemented within the quality system and demonstrated as needed to provide adequate confidence that an entity will fulfill requirements for quality. Quality assurance department is concerned with assuring quality in every manufacturing process and controlling the production process.
Management representatives both at corporate and unit level, with the involvement of heads of the department are responsible to develop, implement and maintain the quality system in the plant. The quality assurance department in Apollo tyres checks the components for the production from the receipt of raw materials till the production process is completed and finished goods are stored. The department also tries to establish and maintain procedure for inspecting and listing equipments as well as the output in each process. In tyre inspection all cured tyres are physically inspected for visual defects and excess rubber flashes are removed. The tyre is then checked in the balancing machine. Once the process of inspection and classification are completed they are taken to the ware house. For international trade transaction ISO certification has become an inevitable factor. ISO 9001, certification which covers the quality system and model for quality assurance in design, development, production and installation servicing has obtained by Apollo tyres ltd.
Quality assurance tests done by Apollo tyres Ltd is : ? Rheostat Test ? Specific Gravity Test ? Compound Tensile Test ? Viscosity Test ? Cord Par Test Apollo tyres ltd Kalamassery has a well functional Quality assurance department headed by group manager. Under his position there are 4 divisions, namely process control, laboratories, statistics and finished products. Process control division is headed by associate manager and under him there are 5 shift in charge officers. Laboratories division consists of 7 executives finished products and statistics division are controlled by these executives.
James Joseph Co-coordinator M.S.Das Group Mgr.
Process / Product Audit Shift in charge
F P, TTF & OE Services Exe.(3)
Quality System Capability Studies,Exe.(2)
Laboratories Exe. (6)
5) ENGINEERING DEPARTMENT Engineering is the science of the use of machines or technology for the control and use of power. Engineering development is a pre caring business, and many tasks are started which never reach the market place. This management repairs the ability to shift rapidly from one task to the next, from one person to another, often in the space of a few minutes. As maintenance is the primary function of this department, should verify all the maintenance and provide guidance for the improvements. Pneumatic maintenance, breakdown
maintenance, operation of generators are done through this department. Engineering department determines the incentives for the workers who are working under them. According to their evaluation, report should be send to the payroll section in commercial department. Heat allowances and carbon allowances are therefore employees working in the respected areas. Engineering department is headed by group manager, under him there is a manager for mechanical engineering and manager for electrical and electronics. There are executives for each process in production to provide technical assistance. Heat engineering and trucks section heads are associate managers. 2 divisions are having shift in charge officers.
6) HUMAN RESOURCE DEPARTMENT Human resource is of paramount importance for the success of any organization. It is a source of strength and aid. Human resources are the wealth of an organization which can help it in achieving its goals. Human resource management is concerned with the human beings in an organization. It reflects a new outlook which views organization’s manpower as its resources and assets. Human resources is the total knowledge, abilities, skills, talent and aptitudes of an organization workforce. The values, ethics, beliefs, of the individuals working in a organization also form part of human resources. The resource plans of various categories of people and other people available to the organization can be treated as human resource. In the present complex environment no business or organization can exist and grow without appropriate human resource. So human resources have become the focus of attention of every progressive organization. According to institute of personnel management (UK) “personnel management is an integral but distinctive part of management concerned with people at work and their relationships within the
enterprise. The men and women who working in the organization, enabling each to make his/her best contribution to its success both as a number of a working group and as an individual. The manpower planning process of Apollo tyres is directly linked to the large business plans of the business organization. The manpower planning process once rise, is conducted annually to assess the manpower requirements of the organization. At the beginning of each calendar years, corporate human resource interacts with each department or function in each unit or division to collect their manpower requirements in the conjunction with the annual projected business plans.
The following form the basis for manpower planning exercise. 1) Product mix. 2) Optimum equipment capacities. 3) Existing manpower. 4) Envisaged organization structure. 5) Comparison of actual versus expected productivity.
6) Inter unit comparisons for common functions. Keeping in mind these factors, each department function is expected to make an estimation of the human resources requirement phase at each locations, along with the profile of people needed and sources from where they can be obtained. The manpower plan covers all levels, viz workmen, staff, officers and managers. The HR department is concerned with recruitment, training, promotion, transfer and reservation guideline concerning executives, staff and workers. Functions: 1) Designing and implementation of HR policies. 2) Human resource development. 3) Induction of apprentices, appointment of trainees under the company scheme. 4) Performance appraisal system and maintaining reports.
7) PRODUCTION PLANNING AND CONTROL Product planning and control consists of the organization’s overall manufacturing system to produce a product. PP&C function essentially consists of planning production in the organizations before actual production activities start and exercises central activities to ensure that the planned production is realized in terms of quality, quantity, delivery, schedule and the cost of production. The main function of this department is to ensure optimum utilization of resources as well as capital locked up in work in progress inventory. The planning process is done with the help of supply chain management. 8) INDUSTRIAL ENGINEERING Industrial engineering is concerned with the design, improvement and installation of integrated system of men, materials and equipment to improve productivity. This department is responsible to strategize, plan, guide and make use of optimum utilization of resources ie, 5 m’s (man, material, machine, money, and moment) resulting into the maximum production for the organization. The main function of this department is to plan, design, implement and manage integrated
production and service delivery system that assure productivity, reliability, quality and cost control to keep Apollo globally competitive. Maintainability of SAP and capacity calculations comes under this department. Method study, time study, and motion study are conducted when new norms are developed or when new systems are implemented. This department is also concerned with setting norms by discussing with unions.
9) SYSTEMS DEPARTMENT Information system plays a vital role in the success of a business enterprise. It can provide the information a business needs for efficient operations, effective management and competitive advantage. Therefore, management information system enjoys much practical significance in the management of highly complicated
business enterprises. An information system is an organized combination of people, hardware, software, communications, networks and data resources that collects, transfers and disseminates information in an organization. Systems department is responsible for implementing all the IT services at the plant. The main function of this department is operation and co-ordination of all systems in the organization. Company has adopted a number of people and adequate systems for internal control and security in data to ensure that all assets are safe guarded and protected against lose from unauthorized use or disposition and so that all transactions are authorized, recorded and reported directly. The company uses System Administration Protocol (SAP), an IT enabler across the company to develop an integrated database.
SKILL Apollo provides training for both managers and workers. Training programs for managers consist of both internal and external programme. This workers undergo internal training programme conducted by the experts. External training is done by deputation to professional training centers. The training agencies intimate the HR department about their training schedules. All those employees who have not undergone that are sent for the training. Training programme for employees include both on the job training & off the job training. For workers this is two day introduction training is conducting for management staff the number of days for introduction training is fifteen. A separate register is kept for recording the training activity of the employee has undergone. The HR department selects candidates for training based on the advice of department heads. For this performance appraisal reports are considered. The effectiveness of the training programme can be adjusted by providing the trainees with as feedback format. The company spends Rs. 20,00,000 in this training process.
The managers were given training for four man days every year. They will be given training according to the changing condition. OBJECTIVE:
?
To equip the personal conceptual, functional and behavior skills are necessary to perform the job at hand.
?
To keep the employee abreast of the emerging and upcoming trends in various spheres of industrial activities to better quality of work and output.
?
To provide rostrum for the in to development of an individual wherein he/she can explore and optimally use his or her innate and latent potentialities leading to his/her individual growth and development.
STYLE
Apollo Tyres Ltd. has a top down styles of functioning. Decisions are taken by the top management and conveyed to the down. Some decision making are participative others are authorities. An illustration for participative style of decision making is their method of scrap reduction. Scrap reduction is an important factor of the company because it will increase the profit. Air and water are the main enemy of the tyre. Presence of a little amount of air and water in tyre will make it scrap. Company has a target of scrap reduction to less than .135 % of the total output. If the cured tyres in the final inspection found damaged they will keep them aside. These tyres are inspected by a group of people called seconds committee on a daily basis. Seconds’ committee comprises of persons from Technical department, production department, quality department, mechanical department, electrical department and division B (where the green tyre is build). They together analyses the reason for scrap and take corrective measures. There will be monthly review by a high level committee comprising of heads of the department. In that they consider the suggestions by second committee report for reducing the scrap and decision will be taken. By this style of participative style decision making the company is maintaining the scrap below the target.
STRATEGY STRATEGY FOR COST REDUCTION Competition in tyre industry is increasing year by year. As a reason profit is also decreasing. In order to sustain in tight competition and to maintain the profit company has to reduce the cost of production. The cost that a company can reduce is its variable cost for production. This includes cost of direct materials, indirect materials and labors. But the cost of direct material cannot be reduced because reduction of raw materials affects the quality of tyre. Cost of labour too cannot be reduced that will create labour problems. So in Apollo for reducing the cost of production they are reducing the strategy they are adopted is reduction in the amount of indirect material. Naphtha is one of the direct materials in the production of tyre. Earlier quantity of Naphtha used for production one ton was 20 litres. They have reduced that quantity of Naphtha used for tyre building to 17 litres per ton. The reduction of Naphtha will not affect the quality of the tyre.
SYSTEM Organization decision making system can range from management `intuition, to structure computer systems to complex exert systems & artificial intelligence. Thus systems include procedures & process such information systems, manufacturing process, budgeting & control process. The systems are the process & procedures followed like controlling process. The company has its own set rules & regulations. All the work is done in a very systematic way. Each department has its own set of comprehensive set of instructions. By this each department employees should know where is their area of operations, their duties & responsibilities. System of inventory management at the engineering stores: The engineering stores of Apollo tyres Ltd., Perambra, holds the inventory of spare parts, engineering materials and other consumable items required for the smooth functioning of the Unit. Around 8000 items are stored in the Engineering Stores. The number of employees in the stores is nine.
The engineering store is employing ABC classification, VED analysis and XYZ classification for selective inventory control. The
entire items in the stores are classified into A class B class and C class based on the consumption value. Based on the vitally aspect, they are classified into vital, essential and desirable. And based on the stock value, they are classified as X, Y, Z items. Items are reviewed frequently. Non-moving items and excess stock items are identified. An item which does not move for a period of 30 months is classified as non-moving item. All there are done with the help of the computer. Recorder level and recorder quantity are determined for each item. The consumption and demand patterns over the years, reliability of the items and its value are considered while determining the recorder level and recorder quantity. When an item reaches re order level, on automatic indent is produced based on the Material Requirements Plan. The Engineering Store is trying hard to strike a balance between lower level of stock out and lower investment in aggregate inventory of spares and parts. The store makes a comparison between the cost of stocking an item and its stock-out cost and gives less importance to stock-out cost, if the cost of inventory is higher. VED analysis is done to determine the criticality of spares. 1. Vitals are those items for want of which there would be heavy losses or compete closures of the plant.
2.
Essentials are those items for want of which there would be
expensive damage resulting in temporary cessation of work and their procurement and carrying costs are also high. 3. Desirables are those items, which involve nominal entailing
both little procurement and carrying cost. Even though these problems are there, the Engineering Stores has been able to optimize the inventory to a great extent.
STAFF Staffs of Apollo Tyres are mainly of two categories. They are workmen and management staffs.
All these employees who are protecting under industrial (ID) act are workmen and the rest are management staffs. Workmen category includes (1) clerical and service staffs (2) engineering workmen and (3) production workmen. (1) Clerical and service staffs
Senior Assistant Assistant Senior Clerk Junior Clerk Attender Punes (2) Engineering work man
Multi skilled 1st grade 2nd grade 3rd grade 4th, 5th, 6th
(3)
Production workmen
Grade I Grade II Grade III Grade IV Grade V Grade VI LRW Industrial casual Production apprentice Management staff includes (1) First line supervisor Executive – I Executive – II Executive – III (2) (3) (4) (5) (6) Associate Manager Manager Group Manager Divisional Heads Head
The main duties of the clerical and service staffs are to assist management staffs in the office work and other duties. Engineering
work men assist the engineering department executives in their work. Production workmen operate the machineries for production and other work related to production. Among the management category first line supervisors directly involved in the supervision of work in all departments. Associate managers co-ordinate activities in each department.
SHARED VALUE Social Values: Apollo tyres is resolute in creating a brand that fosters social responsibility and goodwill while assisting stakeholders in making a difference. The company has identified health and education as platforms to work on. Apollo partnered with DFID in the year 2000 and set up its first clinic through a trust. Today, the trust is operating three clinics in partnership with Care India in Delhi, Udaipur and Kanpur and the 4 th clinic is in partnership with Voluntary Health Services (VHS) in Ukkadam, Coimbatore. The objective of these centers is to evolve a comprehensive programme for the mobile population to provide high quality general and sexual health treatment to truckers and the transport community. At Limda village, the company doctor visits nearby villages once in a week and an adult literacy programme has also been undertaken with the Talluka authorities. The company also support the war wounded foundation, actively engaged in providing alternative sources of livelihood.
With all these and more, Apollo is all set on a journey of the sour unafraid and unstoppable.
SWOT ANALYSIS OF APOLLO TYRES LTD.
STRENGTHS • Continued Market Leadership in the dominant industry segment i.e. Truck/Bus Tyres. • Global presence with acquisition of Dunlop Tyres International (Pty) Ltd in South Africa. • Robust Operation Centre for managing IT operations across 140 Locations supported by – ERP/Dealer Portal/Information Systems Security Control etc. • • • Presence in technology products in car radial segment. Dynamic & Progressive Leadership. Responsive to changes in market conditions and product profiles. • • • Product innovation and technical superiority. Strong Brand recall in price sensitive market. Economies of transportation cost on account of closeness to natural rubber growing belt.
WEAKNESSES • • No presence in two/three wheeler segment. Declining profit margins due to raw material cost push.
OPPORTUNITIES • Continuous thrust in infrastructure and construction of expressways & national highways. Creation of road infrastructure has given, and will increasingly give a tremendous fillip to road transportation in the coming years. Tyre industry will play an important role in this changing product mix of transport. • Leadership position in the commercial vehicle segment will enable the company to leverage new and related business opportunities. • Access to global sources for raw materials at competitive prices due to economies of scale. • Steady growth in vehicle production in the immediate future leading to growing demand.
THREATS • An increase in the flow of tyres from competitive sources like China. • Cheaper import on account of import from countries which are signatories to Regional Trading Agreements (RTA’s). • With crude price scaling upwards, pressure on raw material prices can be expected.
•
Continuous increase in the price of natural rubber, which accounts for nearly one third of total raw material cost.
FINANCIAL PERFORMANCE
Turn over of Apollo Tyres Ltd during 2000-01 to 2006-07 Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Turn over( Rs in Crores) 1458.7 1710 2025.10 2240.7 2314.3 2656.8 3000.1
Net profit of Apollo Tyres Ltd during 2000-01 to 2006-07
Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Net profit (Rs in Crores) 25.42 36.81 120.02 70.42 67.63 72.37
2006-07
78.17
ANNUAL REPORT OF ATL FOR THE YEAR 2006-07 Financial Performance: Year Ended 31.03.200 31.03.2006 7 Sales & Other Income Profit Before Depreciation, Tax & Exceptional Items Less : Depreciation Provision for Tax – Current Provision for Tax --Deferred Fringe Benefit Tax Profit After Tax Before Exceptional Items Add : Exceptional Items Net Profit Add : Debenture Redemption Reserve Written Back Surplus Brought Forward From Previous Year Profit Available for Appropriations Appropriations General Reserve Dividend to Equity Share Holders (Rs./Million) 37,773.14 30,033.01 2596.45 1733.60
742.26 445.56 238.32 36.00 1,134.22 0.00 1,134.22 16.70 1,259.30 2,410.22 500.00 208.81
727.86 217.90 18.63 45.50 723.71 57.98 781.69 61.10 1,113.23 1,956.02 500.00 172.52
Dividend Tax Balance Carried Forward
29.29 1672.12
24.20 1259.30
BALANCE SHEET OF ATL, As on 31st March 2007 Schedule As at 31st March, 2007 Rs/Million. Sources of funds : Shareholder’s Funds Share Capital Equity Share Warrants Reserves and Surplus Loans : Secured Unsecured Deferred Tax Liability (Net) (Note – B9) Total Application of Funds : Fixed Assets Gross Block Less : Depreciation Net block Capital work in progress Investments Current Assets, 5 6 10,313.10 2,581.14 9,186.04 5.30 4 14,925.12 5,416.57 9,508.55 804.55 13,106.06 4,699.36 8,406.70 779.34 1 2 3 4,737.63 1,449.40 6,187.03 1,290.57 17,266.02 3,810.03 3,690.00 7,500.03 1,052.25 14,892.47 464.09 117.20 9,207.13 9788.42 383.40 5,956.79 6340.19 As at 31st March 2006 Rs./Million.
Loans and Advances : Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less : Current Liabilities and Provisions : Current Liabilities Provisions Net Current Assets Deferred Revenue Expenditure (Note B 10) Total 17,266.02 14,892.47 5,422.01 553.75 5,975.76 4,370.54 1.24 3,886.25 520.46 4,406.71 5,698.57 2.56 7 4,519.49 2,030.55 1,720.02 139.14 1,937.10 10,346.30 4,194.18 1,751.44 2,313.60 2.14 1,843.92 10,105.28
PROFIT & LOSS ACCOUNT OF ATL, For the year ended 31st March, 2007 Schedule Year ended 31st March, 2007 Rs./mill. INCOME Gorss Sales Less : Excise Duty Other income 8 37,743.4 3 4,820.15 32,923.2 8 29.71 32,952.9 9 EXPENDITURE Manufacturing and 9 Other Expenses (Increase)/Decrease 10 30,143.6 7 (313.61) 24,795.81 (768.01) 30,021.1 9 3,765.99 26,255.20 11.82 26,267.02 Year Ended 31st March, 2006 Rs./million.
in Work Process and finished goods Interest 11 526.48 30,356.5 Profit before depreciation, tax & exceptional items Depreciation Transfer from revaluation reserve Profit before tax & exceptional items Provision for tax – current Deferred Fringe Benefit Tax Profit after tax before exceptional items Add : Exceptional items NET PROFIT Add: Profit brought forward from previous year Transfer from Debenture Redemption 16.70 61.10 12 1,134.22 1,259.30 57.98 781.69 1,113.23 445.65 238.32 36.00 743.78 (1.52) 729.38 (1.52) 4 2,596.45 505.62 24,533.42 1,733.60
742.26 1,854.19
727.86 1,005.74
217.90 18.63 45.50
719.97 1,134.22
282.03 723.71
Reserve 2,410.22 Deduct Appropriations : General Reserve Interim dividend/Proposed Dividend tax Surplus carried to schedule 2 Basic earnings per share (Face value of Rs. 10/- each) (Rs.) Before exceptional items After exceptional items Diluted Earnings Per Share (Face value of Rs:10/-each)(Rs.) Before exceptional items After exceptional items 27.08 27.08 18.88 20.39 13 27.14 27.14 18.88 20.39 500.00 208.81 29.29 738.10 1,672.12 500.00 172.52 24.20 696.72 1,259.30 1,956.02
LEARNING EXPERIENCE
What I learned in ATL? The inplant training at APOLLO TYRES LTD was very much useful for me for knowing about organizational structure and formations. It helped me to gain practical knowledge about different functions of various departments of the company. All the staffs in the company was very much cooperative and very keen to explain each and every aspect. Thus by the training I am able to make a thorough study of the company’s activities in each sections and was able to acquire practical knowledge in this field. This study was of great benefit for me to our future career. Four weeks inplant training in Apollo Tyres Ltd. gave me an opportunity to know about the industrial world. In the company I learned about how the management theories and concept applied in an organization. I saw how a few managers managing a large number of employees and machines to run the company with a profit. More over the inplant training was a good exposure for me to the working conditions of the organization. Some points, which attracted me towards the organization, are: Professional responsibilities:
• All the employees are punctual in time. • General meetings every month’s first Saturday and second Monday. • Regular training and development programs. • Team Building and Work in-group. • Counseling is the best method of solving problem, that I learned in ATL.
What all I have learned in this four week would be of great help for me for my personal growth it was an life time achievement for me to work and learn some thing practical. Lets take example of Mckinsey’s 7s: Structure: I learned different structures in the departments, which give an superficial view of structures in different organizations. Skills: I learned different management skills, especially decision making in pressure.
Shared Values: Values of the organization is very important aspects, I learned companies value. Strategy: To survive in competitive market, a person or an organization make an effective strategy, it plans the future aspects.
BIBLIOGRAPHY:
1. www.apollo.com
2.
www.indianindustries.com
3. Annual reports of Apollo tyre ltd 4. Secondary data from Apollo 5. Marketing book – Philip Kotler 6. www.indiantyreindustry.com
7.
www.globaltyreindustry.com
Inplant Training Weekly Report
Name of student: K.A. Jacob U. S. Number: 1EW06 MBA 18 Name of the Organization: Apollo Tyres Limited For the period: From: 20-07-07 to: 26-07-07.
Work covered during the week: • Joined the company on 20th July 2007. • Met the company guide and discuss about the project.
Signature Signature of the guide Date: 01-09-07
of
the
student
Inplant Training Weekly Report
Name of student: K.A. Jacob U S Number: 1EW06 MBA18 Name of the Organization: Apollo Tyres Limited. For the period: From: 27-07-07 to: 02-08-07.
Work covered during the week: • Studied about the Industry profile. • Studied about the Company profile.
Signature Signature of the guide Date: 01-09-07
of
the
student
Inplant Training Weekly Report
Name of student: K.A.Jacob. U S Number: 1EW06MBA 18. Name of the Organization: Apollo Tyres Limited. For the period: From: 03-08-07 to: 09-08-07.
Work covered during the week: • Studied about the Mckinsey’s 7s model of the organization. • Studied about the latest annual report of the company.
Signature Signature of the guide Date: 01-09-07.
of
the
student
Inplant Training Weekly Report
Name of student: K.A.Jacob. U S Number: 1EW06 MBA 18 Name of the Organization: Apollo Tyres Limited. For the period: From: 10-08-07 to: 16-08-07.
Work covered during the week: • Studied about the practical work of the organization. • Prepared the report.
Signature Signature of the guide Date: 01-09-07.
of
the
student
ATL:- A GLOBAL VIEW.
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