A REPORT ON ORGANIZATION STUDY AT

MRF Ltd,KOTTAYAM

PRINCE JOSE
REG NO: B4GMBA2609

Under the Guidance of

Mr.PRINCE T.C
Submitted in Partial Fulfillment of the Requirement for the award of degree

Master of Business Administration

to the Kannur University

P.K RAJAN MEMORIAL CAMPUS

PALATHADAM
1 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

2014 - 2016

DECLARATION

I Prince Jose, 3rd semester MBA student of P.K Rajan Memorial Campus,
Palathadam, hereby declare that this report on ORGANISATIONAL STUDY AT
MRF Ltd. Kottayam, under the guidance of Mr,Prince T.C, P.K Rajan Memorial
Campus, Palathadam, in partial fulfilment of the requirement for the award of the
degree of Master of Business Administration is a bonafide work done by me. I also
declare that this report has not been previously formed the basis of award of any
Degree, Diploma, Associate ship, Fellowship or any other similar title of this or
any other University or Institution.

Place:

PRINCE JOSE

Date:

2 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

ORGANISATION CERTIFICATE

3 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Date: ..
Place: .

CERTIFICATE

This is to certify that the Organization Study Report entitled AN

ORGANISATION STUDY AT MRF Ltd. Kottayam submitted to Kannur
University in partial fulfilment of the requirements for the award of the degree
Master of Business Administration is a bonafide work done by Mr.Prince Jose,
(Reg. No.B4GMBA2609), 3rd Semester MBA Student, P.K Rajan Memorial
Campus Palathadam,from 1st Sep 2015 to 30th May 2015 under my supervision
and guidance.

Head of the department

4 -

Faculty guide

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Date: ..
Place: .

ACKNOWLEDGEMENT
On completion of my Organizational Study Report , I feel deeply indebted to
many. Let me

avail this opportunity to express my deep sense of

gratitude.
Let me put on my head my deep appreciation for Mr.Balakrishnan,Head of the
department,for permitting me to undertake this organization study as a part of the
Curriculum
With profound gratitude,I wish to convey my sincere thanks to Mr.Prince T.C
Faculty Mentor, P.K Rajan Memorial Campus, Palathadam , for his kind
guidance and encouragement given to me during the preparation of this report.
Thankfully I express my gratitude to Mrs. Prameela Skariah, Asst. Manager,
Welfare, MRF Ltd, Vadavathoor, Kottayam, Kerala for her help in collecting the
data and valuable suggestions required for the study.

5 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

My special thanks to Mr.Lal Varghese,Training Oficer, MRF Ltd, Vadavathoor,

Kottayam, Kerala for her support and help.
I am thankful to all the officials of MRF Ltd, Vadavathoor, Kottayam, Keralafor
providing a good environment that helped me to complete this study within the
specified time.
I take this opportunity to extend my gratitude to my parents and other family
members for their encouragement on completing this work.
My sincere thanks to the God Almighty for having showered all the blessing to
complete this work.
Prince Jose

TABLE OF CONTENTS
Chapter

Title

Page No:

Executive summary

Chapter 1

Introduction

11

Chapter 2

Profile of the industry

17

Chapter 3

Profile of the Organisation

29

6 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Chapter 4

94
Data Analysis and Interpretaion

Chapter 5

103
Findings,Recommendations and conclusions
108

Bibliography

LIST OF TABLES
Table
Table 3.1

Title

Page No:
49

Kottayam Unit-Facts & Figures

7 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

3.2

Product Volume

54

3.3

MRF Sales Network

85

3.4

Financial Performance

3.5

89

92

10 years Financial Summary

LIST OF CAHRTS & FIGURES

Chart

Title

Chart-3.1

Page No:

Site Map

46

3.2

Organisation Chart of MRF Corporate Office

50

3.3

Organisation Structure of MRF Kottayam

51

UnitStructure of Production Department

55

Structure of Quality Assurance Department

60

Structure of Technical department

65

Structure of Engineering Department

72

Structure of Industrial EngineeringDepartment

74

3.4
3.5
3.6
3.7
3.8

8 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

3.9

3.10
3.11
3.12

3.13
3
.14

Structure of Security Department

78

Structure of HR Department

80

Structure of Accounts & Finance Department

82

Structure of Marketing Department

85

Financial Performance:
Profit

89

Reserves

90

Sales

90

Net Worth

91

3.
15
3.

Structure of Porters five force analysis

99

16

Chart4.1

EXECUTIVE SUMMARY

9 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

The objective of this study entitled An Organizational Study of MRF LTD.,

Kottayam is to highlight the real life situations under the domain of business and
organizational world of MRF LTD., Kottayam.
The report covers the overall organizational structure, departments, functions,
procedures and functions, procedures and policies of the company. The functional
areas, products, services of the company have been well studied and documented
in the report. The study also includes the SWOT (Strength, Weakness, Opportunity
and Threats) analysis of the company in the present situation which is an output of
the 6week observational study at the company. IT is intended to analyze
comprehensively and understand thoroughly the various departments, services,
functions and company`s approach towards using technology, Corporate Social
Responsibility and work environment.
In the present business world, manufacturing industry has grown significantly
since last few decades and is also faced by cutthroat competition in every area.
MRF, established in 1946, is one of the largest tyre manufacturing companies in
the world.
During the study information was gathered relating to Organizational structure,
various departments, and their functions, products, quality policies, procedures and
SWOT analysis of the company. The study is based on the relevant data and
materials obtained from the organization. Also direct interviews were held with
high authorities and staff members to get more accurate and up to date

10 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

information. Each activity of the company was studied carefully with the available
data and material.
Nowadays the competition in tyre industry has increased. Foreign and domestic
players have come into picture. The management of MRF is concerned with
keeping in touch with the customers and non-customers expectations and provides
better quality of services.

Four main attributes like Quality, Cost effectiveness, responsiveness and being
customer centric/sensitiveness

are the major attributes one considers to identify

ones attitude towards the company.

11 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

CHAPTER-1

INTRODUCTION

12 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

INTRODUCTION
About The Tyre Industry:
The tyre industries in India come into existence with establishment of trading
outlets by U S based Fire Stone Tyre and Company in1922 and followed by Dunlop
Rubber Company in 1926.The Indian Tyre industry has witnessed a Cumulative
Annual Growth Rate (CAGR) 7.7% over the last decade. Economic expansion,
investments and road developments have all contributed to this
Increase in demand for vehicles. This has helped the growth in the tyre industry.
The tyre industry is the major consumer of the domestic rubber production. The
tyre industry is mainly dominated by organized sector; the unorganized sector holds
in bicycle tyres. The major players in the organized sector consist of MRF, Apollo
tyres, Ceat, and J K Industries, which account of the 63% of the organized tyre
market.

About The Company:

13 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

MRF Ltd was established in the year 1946. The company name is an acronym for
Madras Rubber Factory. It was started by KM MammenMappilai at
Thiruvattiyur Chennai. In the year 1951, the company took up the manufacture of
trade rubber. MRF Ltd was incorporated towards the end of 1960 and was
converted into Public Limited Company in 1961. Since then it has emerged as the
largest tyre manufacturer in India and 12th largest in the world with turnover of Rs
10637 Cr. with capacity of six million tyres from six production units in India.
With a profit margin of 1.3% in tyre manufacturing sector, MRF hold 24% of
market share. MRF tyres are rolled out of six interdependent facilities, which are
built over 450 acres and with over 15,000 dedicated people. MRF has over 3000
strong dealer network with 180 offices. What this means is that the company boasts
of the largest range of tyres in India - from heavy duty truck tyres to 2-wheeler
tyres, The MRF Pace Foundation is synonymous with training and teaching the
world's best fast bowlers.

Objective of the Study

The study was conducted at Madras Rubber Factory Limited (MRF Ltd),
Vadavathoor, Kottayam, Kerala. MRF Ltd. is one of the well known, most
advanced and leading manufacturers and exporters in tyres. The organization study
was conducted in order to understand the functioning of the various departments
and activities undertaken by them; organizational structure; roles and functions of
different departments; the vision, mission, and objectives of the company, its
14 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

product profile, rules and regulations in the company etc. Organizational study
covered all functional aspects of the organization.

Scope of the study

By doing this we can get a basic idea how Organizational activities are going out in
the real world and we can see how they are managing every activity, procedures
and policy. As an MBA student I also get a chance to know how organizational
activities are going on and have a real experience.

METHODOLOGY
Research cannot be contacted abruptly; the researcher has to plan the research
process systematically. The research process includes a number of steps. If all the
steps are taken in systematic manner the research conducted become quite
effective.
Types of Data
There are two types of data;
Primary data
Secondary data
15 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Primary data
Primary data is those data collected by the researcher for the first time, it is fresh in
nature. This data do not exist in records or publications. Here primary data is
collected through departmental study through interactions with different
department heads and staffs.
Secondary data
Secondary data comprises of the data which have already been
collected by another researcher for some other purpose and currently available.
The secondary data was collected from the internal records of the company, library
reference and internet.
LIMITATIONS

1. Less time available for an interview or conversation with the workers.

2. Only limited persons could be covered under the study

3. The workers were busy with their work

4. Sensitive information was not shared by the company.

16 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

CHAPTERISATION

The Organisation Study has been presented in the following format:

17 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

The second chapter highlights the industry profile

The third chapter deals with company profile. It consists of the study of the
company,

organisation

chart,

different

operations,

products

and

departments of the company.

The fourth chapter contains the SWOT analysis.

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

18 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

CHAPTER- 2

INDUSTRY PROFILE

19 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

INDUSTRY PROFILE
RUBBER INDUSTRY

Rubber is an organic substance from natural resources or synthesized artificially

which has the prescribed properties of extensibility, strechability and toughness.
The scientific name of Rubber is Heaven Brasiliensis. It acquired this name
because of its ability to erase.

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

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

20 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

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

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

21 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

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

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

22 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 equipment market
Replacement market
Export market

MRF, the largest tyre manufacture in the country, has strong brand equity.
While it rules supreme in the industry, other players have created richest markets
of their own. The tyre industry is a major consumer of the domestic rubber
production. Natural rubber constitutes 80% of the material content in Indian tyres.
Synthetic rubber constitutes only 20% of the rubber content of the tyre in India.
Worldwide, the ratio of natural rubber to synthetic rubber is 30:70. Apart from
natural and synthetic rubber, rubber chemical are also widely used in tyres. Most
of the RSS- 4 grade natural rubber required by the Indian tyre industry is
domestically sourced, with only a marginal amount being imported. This is an
advantage for the industry, since natural rubber constitutes 25% of the total raw
material cost of the tyres.

The two types of synthetic rubber used in tyres are Poly Butadiene Rubber
(PBR) and styrene Butadiene Rubber (SBR). The former is used in most of the
tyres, while the latter is mainly used in the radials for passenger cars. Synthetic

23 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

rubber accounts for 14% of the raw material cost. Unlike in the case of natural
rubber, India imports 60% of its synthetic rubber requirements.

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

At present, radicalization of tyre is low in India except of the car tyre

market where 95% of the tyres are radicalized while cross ply tyres is preferred in
all other categories. Cross ply tyres are preferred owing to poor road conditions,
overloading in trucks, higher cost of radial tyres and poor awareness among the
tyre users in the country.
The tyres basically produced in India are
Crossply
Radial tyre

Raw materials
The main raw materials for tyre are;
24 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 Rubber
Carbon black
Nylon cord
Chemicals.

GLOBAL SCENARIO

Thailand, Indonesia, China, Malaysia, Vietnam are the major producers of

rubber in the world.
The global production fluctuates between 6-8 million tons, with the
production of
Million tons in 2003, of which Asian countries have produced 6.76 million
tons.

On the consumption front, global natural rubber consumption is 7.89

million tons of which 1.9 million ton was consumed in India and China
alone. The total synthetic rubber consumption was 1.13 million ton.

Around 60% of the global rubber production is used by the transportation

sector. In this sector, natural or synthetic rubber cannot be used individually
and has to be blended.
25 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

MAJOR WORLD MARKETS

Tokyo Commodity Exchange, Singapore Commodity Exchange, Osaka
Mercantile Exchange are the major exchange undertaking futures trading of rubber.
Kurla Lampur, London, New York is the major physical markets.
Government policy (Tyre policy)
Tyre Industry Delicensed since in 1987
All categories of new tyre can be exported freely.
All categories of new tyre can be imported freely.
No wto bound rates for tyres and tubes.
All raw materials required for the manufacture of tyres can be imported freely
Custom duties: Tyres
Normal rates of basic custom duty

10%

Concessional customs duty under trade agreements

Asian Pacific Trade agreement
(Formerly known as Bangkok agreement)
Indo Sri Lanka free trade agreement
26 -

8.60%
nil duty
ORGANISATION STUDY

AT MRF LTD,KOTTAYAM

SAPTA

5%

India Singapore comprehensive Economic

nil duty

Cooperation Agreement
Excise Duty: Tyres
When imported from Bangladesh, Bhutan, Maldives, Nepal is 10%

Predicted scenario of the industry

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

27 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

that retreading reduces the quality of the tyre. It is highly popular in the south
unlike in the north where the transporters overload their trucks and have to ply
their vehicles in a rough terrain, an environment in which buying a new tyre is the
best option.

THREATS
The industry, already bogged by over capacity, is facing a severe threat of dumping
of cheap tyres by South Korea. Under the Bangkok agreement, signed between
India and South Korea in 1976, import of tyres from the latter into India would
attract a concessional duty of 33 percent as against the normal tariff of 40 percent.
Two years ago, the industry estimated the growth in the passenger car radial
demand at 20 percent per annum. However, the auto recession has hit them badly.
But South Korea made a killing by dumping cheap car radial tyres and walked
away with 11 percent of the tyre market.
Another threat to the industry is the price of its raw materials, most of which are
petroleum by-products. Carbon, synthetic rubber and nylon tyre cord are offshoots
of petrochemicals. Thus, the future of the industry will swing with the supply of
crude oil.
The biggest threat, however, is yet to fully materialize. It will be from global
majors like Bridgestone and Michelin, which control 36 percent of the global tyre
market. These players have set up their bases in South-east Asia and the slump of
28 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

the markets in this region coupled with the vast growth potential of the Indian
market, is beckoning them towards India.
Bridgestone has tied up with ACC for a 100 percent radial tyre unit and Michelin is
also marketing its products through retail outlets. The industry is driven more by
volumes than by margins and each of the big five in the global tyre industry
Continental, Michelin, Goodyear India, Pirelli and Bridgestone generate an annual
tyre production equivalent to the total demand of the Indian market.

Major Market Player s and Their Market Share

Last Price

Market Cap.

Sales

Net Profit Total Assets

(Rs. cr.)

Turnover

72.50

3,654.18

5,490.74

198.25

2,859.55

6,956.00

2,950.14

7,463.74

353.98

2,643.17

155.50

1,503.04

1,394.30

208.73

1,125.10

100.75

413.67

4,831.22

61.32

1,553.60

102.05

349.46

3,516.33

22.28

1,058.11

306.00

234.31

706.39

29.82

260.29

Apollo
Tyres
MRF
Balkrishn
a Ind
JK Tyre &
Ind
Ceat
TVS
Srichakra

29 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

Name of the company

Market Share

MRF Ltd (Market Leader)

24%

Apollo Tyres Ltd.

21%

JK Tyre & Industries

18%

Ceat Ltd.

13%

30 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Others

24%

The prospectus of tyre exports from India appears healthy; following

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

31 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

CHAPTER 3

PROFILE OF THE ORGANISATION

32 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

COMPANY PROFILE
Madras Rubber Factory, popularly known as MRF, is a major tyre manufacturing
company located in India. MRF is mainly involved in making vehicle tyres. It is
India's largest tyremanufacturing company.
The company was established in the year 1946. The company name is an acronym
for Madras Rubber Factory. MRF Ltd was started by a young pioneer called
K.M.MAMMEN MAPILLAI as small toy balloon manufacturing unit in a small
shed at Thiruvattiyur in Chennai. Since then over this long 67 years it has emerged
as the largest tyre manufacturer in India. It is also the worlds 12 th largest tyre
manufacturing company. It is one of the largest rubber companies both worldwide
and in Indian private sector. MRF holds more than 20% of the market share. It is
the only tyre company to straddle the continent with giant manufacturing facilities
at Chennai, Arkonam, Kottayam, Goa, Medak, Pondicherry, and Tiruchirappalli.

33 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

The company carters to all vehicle segment from commercial vehicle and
passenger cars to 2 -3 wheelers and tractors and has a strong presence in both radial
and cross ply segments. It is also involved in a range of other activities via
subsidiaries. Funskool India, a joint venture between Hasbro and MRF LTD. is a
major toy manufacturing company in the country. MRF Pre-treads offers world
class procured is presently under the leadership of VinuMammen, son of the Late
K.M.MammenMappilai.
It has a distribution network of more than 2500 outlets in the country, overseas
offices in United Arab Emirates, Bangladesh and Vietnam and export tyres in over
75 countries globally. MRF LTD. enjoys of manufacturing the largest range of tyres
in India and it has the highest brand preference for superior quality, appearance and
wearability. It manufactures the largest range of tyres in the country and is the
market leader with the largest market share in almost every segment of the tyre
industry.
MRF Ltd. is the 1st Indian company to export tyres to the U.S., the very birth place
of the tyre technology. It is also the 1st company in India to manufacture and market
Nylon tyres and passenger tyres commercially. In 2011, the companys turnover
crossed INR 100 billion mark.
MRF Ltd. is the pioneer in motor racing tyres in India. MRF tyres are made to run
at speeds exceeding 150 km/h, at which they are exposed to extreme conditions of
speed and traction. The molecular stability of the rubber compounds is tested
against severe gravitational stress. MRFs tyre experts and rubber technologists are

34 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

present at every stage to observe, analyze and gather information at the pits and the
dirt track, which they pass on to the R & D department. This is then reviewed and
used to safer and better quality tyres, not only for the formula cars and racing bikes,
but also for cars that rough it out on the tough Indian roads every day.
MRF brands are the market leaders in almost every segment. MRF brands are:
Super Lug (truck tyre)
Shakthi (tractor tyre)
Zigma (radial car tyre)
Nylogrip (2 wheeler tyre)
Legend (conventional car tyre)

Evolution of MRF
A race from the birth to success . . .
It was in late 1946, a period that was characterized by the indomitable spirit
of freedom and the will to win among Indians. A young pioneer called
K.M.MammenMappilai started a small toy balloon manufacturing unit in a
small shed at Thiruvattiyur in Chennai. There were no machines in the unit
but it had an employee with bubbling enthusiasm, innovative ideas and a
great vision he was owner himself.
Any product that could be made from rubber, without machine was produced.
From balloons to latest cast squeaking toys, industrial gloves and
contraceptive, the list is very long.
1949-Established 1st office at 334, ThambuChetty Street, Chennai.

35 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 1952-1st machine (a rubber mill) was established at the factory and ventured
into manufacture of tread rubber.
1955-Started competing with foreign companies operating in India by
becoming the only Indian company to manufacture superior, extruded, nonblooming and cushion backed tread rubber.
1956-Becomes the market leader in tread rubber with 50% share of Indian
market.
1961-Becomes a public limited company. Entered into a technical
collaboration with MansfieldTyre Company of USA and a pilot plant for
tyre manufacturing was established at Thiruvattiyur.
1963-Full fledgedtyre plant and rubber research centre were inaugurated by
Indias 1st Prime Minister Pandit Jawaharlal Nehru.
1964-Started an overseas office in Beirut (Lebanon) to develop export
market.
1967-Becomes the 1st Indian company to export tyres to USA, the birth place
of tyre technology.
1970-Kottayamplant becomes operational.
1971-Goa plant was built in record time of 18 months.
1972-With the setting up or Arkonam plant, MRF becomes the only tyre
company in India with four manufacturing facilities.
1973-Launched Indias 1st Nylon car tyre.
1978-Launched Super Lug 78 which later became the largest selling truck
tyre in India.
1979-Turnover crossed Rs.100 crores.
1980-Entered into a technical collaboration with BF Goodrich Tyre
Company of USA.
1984-Becomes the 1sttyre to be selected for fitment on Maruthi-800.
1986-Won 6 awards for quality improvement from BF Goodrich; pitted
against 20 tyre companies worldwide. Also won the National Institution for
Quality Assurance award.
36 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

crores turnover. Since then MRF has maintained its No: 1 position.
1988-MRF Pace Foundation was set up with Dennis Lillie as its Director.
1989-Collaborated with the worlds largest toy maker, Hasbro International
and launched Funskool India, the most modern toy project in Asia.
MRF collaborated with Vapocure of Australia to produce poly-urethane
paint formulations.
MRF Zigma Radials were launched along with MRF World Series Cricket
which was one of the countrys most spectacular cricketing and marketing
events.
The 5th unit for manufacturing tyres and tubes was opened at Medak in
Andhra Pradesh.
MRF TyreDrome became Indias 1sttyre company owned wheel care
complex.
MRF collaborated with Pirelli to manufacture conveyor belts called Muscle
Flex. The same year MRF brought the World Boxing Championship to
India.
MRF bagged Visweswarayya Award for the Best Business House in South
India. It also bagged the Harvard Business School Award for the Best
Corporate Performance.
1991-Moved into its own corporate office which soon became a land mark in
Chennai.
1993-Beacame the 1st Indian tyre company to cross a turnover of Rs.1000
crores. With this the company found a place among the 10 most respected
corporate groups in India.
It was a proud moment

for

the

company

when

its

founder

K.M.MammenMappilai was honoured with the Padmashree for his

37 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

contribution to industry, the only industrialist from South India to be

accorded with this honour.
1996-In the Golden Jubilee year the company crossed a turnover of
Rs.2000crores and also setup a new plant at Pondicherry for manufacturing
radial tyres.
1999-Was declared as the Most Ethical Company by the Business World in
its survey.
2004-Crossed a turnover of Rs.3000 crores.
2006-Turnover crosses Rs.5000 crores.
2007-Launched Super Lug F5 and Super Lug 505, a premium mileage rear
fitment truck tyre.
MRF launches ZSLK tyres.
2008-Won JD Power Award for the 6th time.
2010-Ranked highest in the JDPower Asia-Pacific 2010 India Original
Equipment TyreCustomer Satisfaction Index (TCSI) Study. This is for
the 7th time that MRF has been awarded this honour.
Won the Top Export Award from Chemicals & Allied Products Export
Promotion Council(CAPEXIL) for 2009-10.
2011-MRF launches Revz, Indias 1st radial for 2 wheelers.
MRF inaugurated its 7th manufacturing facility at Ankenpally at Medak
District in Hyderabad, Andhra Pradesh exclusively for radial tyres.
Turnover crosses Rs.10000 crores mark.
Rankedhighest in theJDPower Asia-Pacific 2010 India Original
Equipment TyreCustomer Satisfaction Index (TCSI) Study for the 8th
time.
2012-New plant at Perambalur, near Tiruchirappalli in Tamil Nadu will
be operational. This will be MRFs 8th independent plant in India.
2013-Won the JD power award for the 10th time.
MRF's Aero Muscle becomes the only Indian tyre to be chosen for the
legendary fighter jet - Sukhoi 30 MKI
38 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 Team MRFs Guarav Gill wins his first Asia-Pacific Rally Championship

The Muscle Man

The corporate ethos is perfectly represented by the brand symbol The MRF
Muscleman-embodying strength, reliability and durability; the very qualities of the
tyres it represents.
The mere mention of the world MRF is bound to bring the muscleman to the
mind of Indians. The muscleman has evolved in 1964 soon after MRF began
exporting tyres. Over the past 33 years it has evolved from a mere corporate mascot
to a symbol of strength, reliability and durability. Now the muscleman grew to
become Indias most trusted and well recognized symbol for tyres.
In the 1960s the Indian tyre market was completely controlled by the large
multinational companies.

Around this time MRF opened tyre factory at

Thiruvattiyur in Tamil Nadu. With that came a task of recognizing an appropriate

corporate brand symbol. In this process of developing suggestions for the symbol,
some enterprising employees conducted an informal market survey by interviewing
people from all over the country about their expectations from a god tyre. One day
a truck driver at a road side dhabha (tea stall) somewhere in Western India hit upon
the rigid idea when he said a good tyre should have all the qualities of a
pehelwan(strongman). And by this simple statement, the muscle man was born.

39 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Organizational Goal
The organizational goal of MRF Ltd. is to maintain global standardsthrough
continuous improvement in the quality of product and services in order to
maintain market leadership.
The main strategy of the company in todays competitive world is cut cost and
win the battle. As the number of accidents in similar factories is comparatively
more, the emphasis of the company is accidentfree safe production.
MRF Ltd achieves the objectives by taking the following actions;
Product/process improvement by performance monitoring and prompt service to the
customers.
Upgradation of all the machinery to meet the increasing needs of customer.
Continuous training is given to all employees in order to acquire necessary skills
and knowledge and improve the quality of work life

Mission & Vision

MRF is a leader in the Indian tyre industry and a significant global player
providing customer delight and enhancing shareholder value. MRF has well
defined quality environmental safety and health training and human resource
policies. The vision of MRF is to realize their policies and implement the
contents letter and spirit.

40 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

polymers (plastic and rubber) and make India a global super power in terms of
technology and quality of life.
It is the mission of MRF to realize zero defects, zero break-downs, zero accidents,
zero pollution and thereby to have zero losses.

Values
Customer: We will be responsive to the needs of our customers.
Learning: We will continuously improve our service innovatively &
expeditiously.
People: We will trust and respect our employees.
Community & Partners: We will be transparent and sensitive in our
dealings with all stake holders.

Policies of MRF
1. Quality Policy
The main quality objective of the company is tomaintain market leadership
through continuous quality performance

2. Safety Policy
41 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Safety and health of the employees shall be the first priority of the company. It is
the responsibility of each and every individual in the organization, regardless of the
position he occupies, to ensure that everyone in the factory returns home without
any injury. The company offers accident free safe production not only in letter
but also in spirit, for the benefit of one and all through this policy.

3. Environmental Policy
The environment Policy of MRF Ltd. is to manufacture the companys
products in an environmentally friendly and safe manner.
This is to maintain products in an environmentally friendly and safe manner. To
achieve this goal, all the MRF plants, together with corporate office shall:
Minimize the impact of our manufacturing activities on the environment
especially the air, water, and soil.
Comply with all applicable regulatory requirements
Develop environmental performance evaluation procedures for continuous
monitoring
Optimizes the consumption of resources (water, energy and raw materials) by
minimizing wastage, recovering and recycling where ever possible.
Up gradation of the machinery and pollution control equipment when
required
Train all our employees to perform their activities in an environmentally
responsible land safe manner
At the plant level, the respective Senior General Managers/ General
Managers are assigned the responsibility of carrying out the environmental
system by collaborating with corporate functions..
42 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

4. Training Policy
The training policy of MRF LTD. is to provide and develop knowledge, skills
and behavior of the companys employees to continuously improve their
performance.
MRF plants along the corporate office join hands to accomplish the following:
Competency evaluations conducted each year identify and document the
training needs of the employees.
Design and publish the training calendar and schedule.
Monitor and evaluate training process and out come to asses and to decide the
next training cycle requirement.
Collaboration of the activities along with the activities of human resource
department plants.

Management
The success or failure of a company is determined by the performance of its
management. It has to play a major role in many crucial functions. Management of
MRF is lead by Mr.K.M.Mammen, son of Mr.MammenMappilai who started this
company about 66 years ago.

Board of Directors
43 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 K.M.Mammen

Director
ArunMammen
K.M.Philip
Rahul MammenMappilai
Dr.K.C.Mammen
K.D.Parakh
Ashok Jacob
V.Shridhar
Vijar.R,Kirloskar
N.Kumar
Ranjith.I.Jesudasen
S.S.Vaidya
Dr.Salim Joseph Thomas
Ravi Mannath

Chairman & Managing

Managing Director
Whole Time Director
Whole Time Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Secretary

Production Units
1)Thiruvattiyur, Tamil Nadu (for automobile tyres)
2)Arkonam, Tamil Nadu (for bicycle, scooter and auto rickshaw tyres)
3)Goa (for automobile tyres and procured tread rubber)
4)Kottayam, Kerala (for automobile tyres, tubes, procured tread rubber)
5)Medak, Andhra Pradesh (for automobiles)
6)Pondicherry (for radial tyres)
7)Gummidippondi, Tamil Nadu (for radial tyres)
8)Perambalur, Tamil Nadu (for future requirements)

Awards & Achievements

FORD WORLD EXCELLENCE AWARDS
MRF won the silver award and is the only Indian company to win this
excellence award.
TNS
MRF voted the "Most Trusted"Tyre Company in India by TNS 2006 global
CSR study.
44 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 J D POWER ASIA PACIFIC

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

Brand Ambassadors
Former brand ambassadors
Indian batting maestro Sachin Tendulkar, cricketing legends Bryan Lara & Steve
Waugh.
Current brand ambassadors
The young Indian batting stars GautamGambhir, Rohit Sharma &Ashrafull
(Bangladesh)

Subsidiaries

Funskool India Ltd.

Product-o-Drome
Paint & Specialty coatings.
MRF Pre-treads
MRF Pace Foundation
MRF Power House
MRF TyreDrome
MRF Muscle flux Conveyor Belting

Sister Concerns
45 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 MalayalaManorama
Manorama Vision
MM Foam
Philips Coffee
Devon Machines
Plantation
COLT Computers
MazhavilManorama TV channel

Product Range
Automotive tyres are the main products of the company.

Truck tyres-tube type and tubeless type

Light truck tyres
Special tyres for defence
Tyre for industrial applications
Agricultural tractor and tiller tyres
Off the road tyres-solid tyres and earth mover tyres
Passenger tyre-bias ply and radial
2/3 wheeler tyres
Specialized tyre for motor rallies
Non Tyre Products:
Automotive tubes
Toys
Flaps
Conventional tread rubbers
Pre-cured tread rubber
Vulcanizing solution
Tyre repair materials
Conveyor belts
MRF Wood coat
MRF metal coat
MRF glass coat
MRF velour
46 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 MRF auto coat

MRF Kottayam Unit

MRF limited, Kottayam are one of the most modern plants that was setup in 1969
at Vadavathoor about 7km from Kottayam town in the state of Kerala, a hamlet
lying on the outskirts of Kottayam district. About 10 crores of land was purchased
in Vadavathoor village during 1968 and the foundation stone for the factory
building was made by late Sri. K.M.Cherian. Availability of intelligent and
motivated labor, natural rubber in large quantity (Kottayam is the land of 3 LsLatex, Letters & Lakes), cheap power etc. Tariffs, tax concession and transportation
facilities were the main reason behind the choice of Kottayam as the 2 nd
manufacturing facility of MRF.
A factory building with in the area of 34200 sq. ft was constructed during the
period of 1968-69 and Ban-Bury (internal mixer) of 3A size with a capacity to mix
of 10 meter per day was erected and commissioned on 21 st July 1969, with strength
of 7 workmen. Presently it is the most advanced technology mixing unit and a fully
fledged manufacturing unit providing truck and tractor tyres.
In the view of high productivity and very good performance in general, the mixing
capacity was enhanced by installing a second Ban-Bury of 11A size with a capacity
to mix 48 meter per day during march 1970, with the permission of Goa
government. A license to manufacture 400000 automotive tubes per annum was
transferred and started production of tubes with 7 quarrying presses. To enhance the

47 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

mixing capacity, Ban-Bury of 11 D size were installed in 1978 to meet the

increasing demand for mixing. At present 6000 tones of various compounds are
dispatched to different units.
Another new product introduced in MRF Kottayam unit during 1993 was flap
production. The management also decided to start tyre production Kottayam unit
taking amount of various incentives on tax and power announced through a new
industrial policy by the Kerala Government. The tyre plant with an initial plan to
produce 200 numbers of tractor rears and 600 numbers of tractor front tyres per day
was inaugurated by Chairman Sir K.M.MammenMappilai on 30 th May 1994.
Commissioning of tyre plant was the beginning of a new era in the history of
Kottayam unit. Initially tractor front tyres were produced and then it diversified
into passenger tyres, tractor rear and truck tyres of various sizes. Cement house was
also built to prepare various cements and paints required at tyre plant and also for
the production of vulcanizing solution.
A new plant, mainly for PCTR (Pre-Cured Tread Rubber) production was
commissioned in the year 2000. This new plant now houses a 6 cold feed extruder
for extruding re-threading materials and PCTR slugs, PCTR curing presses, 48
calendar for production of tyre repair materials, 68 fabric calendar, German tuber
for flap slug extraction, flap curing presses, tyre finishing and repair, tyre clinic,
textile lab, finished goods storage and shipping.
With the growth in the number of tyre presses and subsequent increase in the
requirement of bladders (which were being supplied by other units of MRF)

48 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Kottayam unit started producing bladders for its use and also for supplying to other
units. The bladder press is located in the tube plant.
As a new product, solid tyre production was introduced at Kottayam unit in 2004.
This solid tyre curing presses are located in tube plant.

Site Map

MIXING PLANT

TYRE PLANT

RM
GODO
WN

PCTR PLANT

BD
MIXIN
G
TUBE PLANT

ENGG.
STOR
E

CANTEE

N
ADMINISTRATION
OFFICE

49 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Chart-3.1

Employee Details

Office Managers
Management Staffs
Clerical Staffs
Sub-staffs
Watchman & Fireman
Workers
Trainees
Casuals
Temporary Workmen
Canteen Contractors Workmen
Total

29
159
8
1079
78
17
40
1738

58
52

155

Working hours at Kottayam Plant (24 hours)

There are 3 shifts of 8 hours each.
1st shift
2nd shift
3rd shift
General shift

7 am to 3 pm
3 pm to 11 pm
11 pm to 7 am
8 am to 4:30 pm

MRF Employers Union

MRF Employees Association

Trade Unions
MRFEU
MRFEA
50 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 MRFES

MRF Employees Sangh

Plants in MRF Kottayam Unit

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

Products at Kottayam Plant

1)Automotive Inner Tube
2)Automotive Tyre
3)Retreading and repair material
4)Flap
5)Bladder
6)Pre-cured tread rubber
7)Vulcanizing solution
8)Curing Bags/Envelope
9) Mastication

International Certifications for Kottayam Plant

ISO 9001:2000
ISO 14001:1996
ISO TS:6949
CQC

Quality Management System

Environment Management System
Technical Standards

Kottayam Unit-Facts & Figures

Built-up area

Six lakh square feet

51 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Management staff

252

Regular workmen

1115

Casual workmen

399

Total finished goods production

3400 MT/ month

Total turnover of finished goods

Rs.42 crores/ month

Mixed stock sent to other units

7000 MT/ month

Tyre production

52000 tyres/ month

Total production of tubes, envelopes 263000/ month

and curing bags
Flap production
Tread

82000/ month

Rubber

Production 160 MT/ month

(conventional)
PCTR production

330 tonnes/ month

Table 3.1

Organisation Structure
Organisation Chart of MRF Corporate Office
Chairman &
Managing
Director
52 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Joint
Managing
Director

Director
Marketing
Director
Engineering
Whole Time
Director

Director
Accounts
Director R &
D

Director
Material &
Export
Division

Director
Manufacturi

Manufacturing Units

53 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Thiruvattiy Kottaya

Goa Arkon

Meda

Pondich

Gummidippon Perambal

Chart3.2

Organisation Structure of MRF Kottayam Unit

GM
Chart3.3

Plant ProductionPlant
Manager
Accounts Manager
Plant HR Manager
Plant Technical
Plant
Manager
Quality Assurance
Plant Industrial
Manager
Engineering
Plant Senior
Manager
Security
Plant Engineering
Officer
Manager

Manager
Plant I
Plant II
Plant III
Plant IV

Assistant
Manager
Accounts

General
Technical Officer
Quality Assurance Officer
Assistant
Electrical Maintenance
Security Officer
Civil Engineering Mechanical Maintena
Manager
Supervisor Time office
Planning

Technical Supervisor
Quality Assurance
Supervisor
Supervisor

Guards

Staff Foreman Operators

Staff Supervisor

Workers

Operators

Operators

Workers

Supervisor

Workers
Workers

54 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

FUNCTIONAL AREAS
DEPARTMENTS
MRF Ltd gives an insight about the functioning of the different departments. Each
department is headed by the general manager who possesses expertise, knowledge
in the area under his supervision. There always exists an ergonomic atmosphere
which is often made possible by the close interaction between all members in each
department. The top management moulds the strategies and policies that make sure
that the middle management implements them. Weekly interdepartmental meeting
aims at bringing coordination between the different departments. Open forums are
held once in a week in all plants where the employees can raise their concerns,
suggestions etc.
The various departments headed at MRF Ltd Kottayam can be enlisted below:
1.

Production department

2.

Production Planning Department

3.

Quality Assurance Department

4.

Technical Engineering Department

5.

Plant Purchase Department

6.

Raw materials Stores Department

7.

Shipping (dispatch) Department

8.

Engineering Department
55 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

9.

Industrial Engineering Department

10.

Safety Department

11.

Security Department

12.

Human Resource Department

13.

Accounts Department

14.

Marketing Department

1. Production Department
Production is the primary function of the company and hence all other functions are
support functions. Production is carried out in four plants at Kottayam unit. They
are:

Tube plant

Tyre plant

Plant2

Mixing plant

Plant3

PCTR plant

Plant4

Plant1

The following are the main functions of production department.

56 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Planning for production processEvery month, a monthly plan is given to

the plant by central planning. Based on the monthly plan- planning department will
prepare a simulation plan by dividing the month into 3 segments of 10 day each.
Material indent and receipt

The daily requirement of raw material is calculated at each plant after considering
the available inventory and the schedule production for the next day raw material
indented is made to raw material store.
Processing

Processing is carried out per the technical specification.

Product identification and traceability

Inspection

Product Volume
Product
Tyres
Tubes
Flops
PCTR

Volume
2437 no./day
8433 no./day
2677 no./day
16 mts./day

57 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Table 3.2

Structure of Production Department

Production Manager

Asst.
Manager

Asst.
Manager

Asst.
Manager

Asst.
Manager

Production
Plant - I

Production
Plant - II

Production

Production
Plant - II

58 -

Plant - III

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Supervisor

Supervisor

Supervisor

Supervisor

Operatives
Operatives

Chart-3.4

2. Production Planning Department

Production plan for the coming month will be issued form the Central Planning at
Corporate office. Based on this, plant planning in-charge will issue the monthly
simulation plan to central planning, plant production and to shipping. Based on the
monthly plan and the inventory norms the monthly requirements of raw materials
and consumables will be prepared by plant planning and is sent to central planning,
Corporate purchase and to Raw material stores. Monthly requirement of raw
materials is calculated from software and it is validated every six months.
Based on the monthly simulation plan for the whole of Kottayam unit, each plant
make its own simulation plan and indents required materials from raw materials

59 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

stores. The simulation plan for 3 segments of 10 days each is prepared and micro
planning is done based on that.
Since the plant sends work-in-process materials to other plants, a simulation plan is
also prepared for work-in-process material production and is send to concerned
departments of MRF units to which these in process materials are sent. In case of
any revision in monthly plan, the revised requirements and plan will be sent to the
concerned parties.
Production details report is sent to central planning on a daily basis for the previous
days production. Plan Vs Production report is published every 10 days and also on
a monthly basis.

3. Quality Assurance Department

Quality is considered as the most effective tool to improve productivity, to achieve
cost effectiveness, to improve profitability and market share and to remain
competitive in the global market. In the business environment of today, quality
impacts not only the products and services but also many other relevant entities
such as process, systems, people and organization.
60 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

A low level quality can be caused by the weakness either in the design of the
product, or in its manufacture. It is therefore appropriate to distinguish between
quality of design and quality of manufacture. Two products which have the same
use but which are designed in different ways can be of different quality of design.
Quality of design is evident in the specifications to which the product will be
manufactured. A product may confirm in varying degrees to the specification. This
varying degree of confirmation to the specification will lead to varying degree of
quality of manufacture.

Functions of Quality Assurance Department

Quality assurance departments primary aim is customer satisfaction. Hence

its prime duty is to ensure that all customer complaint should be taken seriously
and is to be communicated to all concerned. Problem solving tools are employed to
ensure that the problem is solved and error proofing methods are adopted to ensure
that such problems dont occur again.

Improve the profitability of the company by reducing defects and waste

generation. This is done by initiating projects for waste reduction and forming task
forces for close follow up. Specific targets are fixed in each area for waste
reduction and forming task forces for close follow up. Specific targets are fixed in
each area for waste reduction and quality improvement and it is done in coordination with all other connected departments.

61 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

The main function of quality assurance department is process audit and final
product inspection. This will include monitoring the inspection status of incoming
materials, in-process materials, process parameters and finished product inspection.
Ensuring identification and traceability of all materials is also the function of QA.

Educating workmen on Quality Standards and the consequences of not

following quality norms is also done.
Audits on suppliers and outside godowns are conducted periodically to ensure the
materials are of the required quality and also to ensure that they are stored in the
proper manner.
Whenever a finished product is returned to the factory due to any defect those
products are inspected, the reasons found out and communicated to everybody
concerned. It is then disposed in a suitable manner and recorded.
Slow moving and non-moving items are tracked at regular intervals to avoid
material getting deteriorated due to prolonged storage and to avoid producing
material which is not needed by the market.
Quality Policy of MRF
The quality policy of MRF is to maintain market leadership through continuous
quality improvement. To achieve this goal, all the MRF plants and the corporate
office shall pay particular attention to the following:

Product process improvement by field or plant performance monitoring and

prompt service to the customer
62 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

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

knowledge.

63 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Structure of Quality Assurance Department

Manager Quality
Assurance

Quality
Assurance in
Charge Plant
I

Supervisor

Operators

Quality
Assurance in
Charge Plant
II

Supervisor

Operators

Quality
Assurance in
Charge Plant III

Quality
Assurance in
Charge Plant
IV

Supervisor

Supervisor

Operators

Operators

Chart-3.5

64 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

4. Technical Department
Technical department at the corporate level carries out R&D activities and the
results of those activities are transferred to the plants. Some of the activities carried
out at corporate technical are new moulds, selection and evaluation of new and
alternative sources, selection and evaluation of alternative materials, finished
product testing and analysis, heat engineering and assisting plants in problem
solving.
The results of research and developments are translated into practical applications
at the plant level. At the same time, other routine functions like testing of incoming
materials, process monitoring and product testing at each stage is also carried out.
Activities
1)New product development.
2)New compound development.
3)Designing and inspection of new moulds.
4)Selection & Evaluation of new alternative source.
5)Selection and evaluation of alternative.
6)Finishes product listing and analyzing.
7)Arresting plants in problem solving.

Raw Material Testing

All raw materials are tested and released if they confirms to the specifications.
When the material is received, raw material stores personnel arrange for collection

65 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

of samples from the received material as per sampling plan. The sample is given to
raw material testing lab along with sample transfer note/ visual inspection report.
Raw materials are tested as per BSP (Basic Standard Practices), standard test
procedure and are compared with the specification issued by corporate technical. If
the material does not confirm to specification, more samples are tested and released
if it is OK. If any of the re-tested samples are not OK, then the samples are sent to
corporate lab and the material is accepted or rejected based on corporate advice. If
the material is rejected, then raw material rejection note is prepared and the
material is returned to the supplier by raw material stores.

In-Process Material Testing

In process materials are tested by technical as per the plan to check whether any
deviation from the specification has happened either in the material used or in the
process.

Finished Product Testing

Finished product testing is done both in the plant and at corporate technical
departments. This is done to ensure that the product produced confirms to the
required standards. In case of tyres, ply adhesion, mounted tyre dimension, and cut
tyre analysis are done in the plant. For PCTR and flap, cured dimensions and
weight are checked.
66 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Process Control
Process control is effected by checks or tests conducted regularly. The data
generated during tests and audits are used to control the process. Changes are made
if required in the specifications to achieve process ability targets, the changes are
documented through plant changes letters. If there is any problem, the process /
product will be analyzed for variations in raw materials, or process conditions. Any
deviation found will be corrected or alternative source of raw material will be tried.
Process will be repeated to check whether it is OK.

New Product Introduction

Whenever a new product is introduced, a TPOR (Technical Program Opening
Report) is received from corporate technical along with corporate specification,
project schedule and new size production plan. Based on the TPOR, a micro plan
will be prepared by Head- plant technical and it will be approved by the originator
of TPOR. This is then given to the concerned technical in-charge who prepares the
activity plan. Plant specification is generated based on the corporate specification.
Analysis of the finished products is done and necessary corrections if any are
incorporated into the specification. The product is released for re-evaluation or for
completion of the project schedule. The product is sent for in-plant testing,
corporate testing and performance report is published. The performance during
67 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

bulk evaluation is published. Then if it is satisfactory, the product is released for

regular production in consultation with corporate technical, and is documented
through a TA (Technical Authorization) or PLC (Plant Change Letter).

Control of Non-Conforming Product

It is the responsibility of technical department to dispose of the non-conforming
materials in suitable manner. Non conforming materials are tied with a red tag (non
conforming material tag) which contains all the relevant details like the MRF code
of the held material, quantity, reason for holding, date and shift of production, date
and shift of holding etc.
Technical in-charge reviews the non-conformance and takes a decision on the
method of disposal and this is recorded on the non conforming material tag. The
disposal is then followed up by production.

Tool Change
Whenever there is a tool change the concerned specification is given by plant
technical department. In case of a new size tool, it has to be Okayed by technical
before being put in production.

Finished Product Re-Classification

68 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Finished products which dont confirm to first quality norms are kept separately are
jointly inspected by production, technical and quality assurance. Based on joint
decision, the material is either sent as seconds, repaired or scrapped.

Structure of Technical department

Manager Plant
Technical

Technical in
Charge Plant I

Supervisor

Workmen

Technical In
charge Plant II

Supervisor

Workmen

69 -

Technical in
Charge Plant III

Supervisor

Technical n
Charge Plant
IV
Supervisor

Workmen

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Workmen

Chart- 3.6

5. Plant Purchase Department

The items purchased by the plant can be categorized as follows:
Items which come under the head capital expenditure.
Items which come under engineering spares (non-capital expenditure)
Stationary and miscellaneous items (items which dont come under the preview of
raw materials)
Services (repairing for machinery)
Procedure followed for purchasing
Any person who needs a material can make a purchase on request but it has to be
authorized by the department head. This has to be routed through engineering store.
In case of items involving capital expenditure, it should be capital authorization
number. In case of engineering spares of non-capital nature, this is not required.
Based on the indent, necessary quotations are invited and purchase order is
released. The copy of purchase order is sent to the supplier, intender, accounts,
stores, corporate office PEM and a file copy for plant purchase.
Procedure followed for repairing
For repair and maintenance of equipment or machinery, indent is raised and it is
authorized by PEM and item is sent to the party from engineering stores via gate

70 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

pass. The item is dismantled and the exact nature of work to be done is finalized
and quotation is raised by the outside party. This is communicated to the intender.
Further clarifications and follow up is done by the intender. After getting the
approved repair quotation from the indent/department, necessary work order is
released by purchase department. Copies are distributed as in case of spares,
indenter has to follow up the repair machinery and again when it comes back after
repair; it is routed through engineering store.

6. Raw Material Stores

Raw material stores will receive a copy of the raw material requirement for the
month which is prepared and sent by the plant planning. This is also sent to the
central planning and central purchase by plant planning. Based on the requirement,
central purchase arranges for procurement of materials and issues a delivery
schedule to the plant. Delivery schedule is the schedule by which the supplier will
release the specified quantity of raw materials at the specified dates to the plant.
Raw materials, consumables, fuel etc are received at the factory gate in line with
the delivery schedule and plant purchase orders. The documents are verified to
ensure that the materials are from approved sources and the correct quality as
ordered is delivered.

71 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Weighing of the load is done. GAE (Goods Arrival Entry) is made and the load is
re-directed to the unloading point through the security department. The unloading
point is usually the raw material warehouse, but sometimes the materials are
unloaded at the plants where it is consumed. In case of fuel, oil etc. it is unloaded at
the storage area.
At the unloading point, visual inspection is carried out and then the materials are
stored with the proper identification tags showing the primary status of the material
(Hold/Pending fir Test). Each material has a specified storage and it is placed in
that storage area.
Sample transfer/visual inspection report is prepared and samples are collected for
testing as per the documented sampling plan. The sampled bag is identified and the
sample is sent to technical department for testing. GRN (Goods Received Note) is
prepared at this point.
After testing the samples, technical department informs the test result through the
material releases/rejection/hold note printed at the bottom portion of the sample
transfer/visual inspection report. Based on the test result green color sticker
captioned OK is affixed if the material is OK, RED color sticker captioned
REJECTED is affixed if the material is not fit for use and ORANGE color sticker
captioned HOLD is affixed if it needs further test to arrive at a concrete decision.
Materials are issued to the production as per the indent raised by the production in
each plant. Stock inventory and stock status reports are prepared every month.

72 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Rejected materials are sent back to the supplier and the cost is recovered.
Transferring of materials to other plants is also monitored.

7. Shipping (Dispatch) Department

Finished goods will be received from inspection/ packing area size wise, batch wise
or lot wise on the basis of production Transfer Note. Physical verification of goods
is done at the time of receipt and receipt tags are put. Proper storage and
identification of finished goods is the responsibility of shipping department.
Finished goods will be stored size wise on pallets with transfer slips showing the
size, quantity, date of receipt etc. Tractor rear tyres .truck tyres and such others will
be stacked on floor. Stacking norms for finished goods, where ever specified will
be followed.
Shipping will publish Daily Dispatch Simulation Plan and copies of it will be sent
to plant planning, central planning and QAD. Daily Dispatch plan is prepared based
on simulation plan, allocation plan and urgency as intimated by central planning
/marketing, transportation time required, availability of truck, shelf life of the
product etc. Trucks are checked before loading to ensure that damages will not
occur to goods.
Daily production Receipts and transfer are fed into computer and reports are
generated. Daily details are transmitted to central planning /EDP/Marketing and
data are consolidated for report generation and monitoring .Dispatch report is
published for every 10 day period .Non moving /slow moving items report is
73 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

published monthly and distributed to central planning ,plant planning ,QA ,plant
head, marketing etc.
Shipping coordinates with central planning to get allocation for none moving and
slow moving items. Tread rubber/cushion which exceeds the shelf life of 3 months
and damaged products/tyres packed with wrong tubes will be given to production.
Statutory registers and returns as required are properly maintained and submitted.
New defective tyres are brought for tyres for repairs from outside godowns and
inspections by central exercise authorities are arranged .Statutory registers and
returns as required are properly maintained and submitted

8. Engineering Department
Engineering department functions are divided into Mechanical, Electrical,
Instrumentation, Civil & Environmental engineering. The main functions are new
machinery lay out preparation ,erection and commissioning of new machinery
,preventive maintenance, breakdown maintenance, condition monitoring and over
hauling of machinery and other related equipments.
Erection ,commissioning ,operation and maintenance of utility items like
generator ,boilers, compressors, pumps, freezer lines and cooling towers and
maintenance of material handling systems like lift, hoist and gantry are done by
engineering. The maintenance of equipments at pump house and training centers
are also done.

Mechanical Maintenance
74 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Preventive maintenance schedule for the particular week is taken and the necessary
materials ,tools, manpower and spares are arranged .The scheduled maintenance
activities are carried out based on work instructions and experience.
Based on the number and nature of breakdowns in each machine during the year,
the preventive maintenance schedule is reviewed and a new schedule is prepared
for the next year.

Breakdown Maintenance
The defective machinery is identified either by production or by engineering and a
maintenance request is generated and arranges for the tools, maintenance personnel
and spare parts. The machine is then released for maintenance. The required
maintenance jobs are carried out and the machine is thoroughly checked. If the
machine is OK, then it is handed over to production. Otherwise necessary
corrections are again done.
Every month, down time analysis is done and permanent corrective actions are
initiated in case of recurring failures. Mean time between failure and mean time to
repair are the measures adopted to track the improvement.

Electrical Engineering

75 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

MRF Kottayam unit falls under the EHT (Extra High Tension) consumer category.
The incoming power supply for this unit is 110 KV. The total connected load of the
unit is roughly 30000 HP. The maximum demand is 10000 KVA. For backup power
supply, the unit has 3 generators of 1000 KVA each and 1 generator of 5000 KVA
capacity.

Civil Engineering
Civil Engineering department does the work of project proposals, drawings and
estimates as per requirements for construction and extension of factory buildings,
equipment foundation, plant offices and construction of cable and pipeline
trenches, storm water drains and site development work.

Environmental Engineering
This branch is mainly concerned with monitoring of factors which affect the
environment and finding ways by which they are minimized or eliminated. Water,
air & sound pollution are the main factors which come under preview of
environmental engineering.

76 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Structure of Engineering Department

Plant Engineering Manager

Manager
Electrical
Maintenanc
e
Superviso
rs

Civil Engineer

Instrumentat
ion Engineer

Manager
Mechanical
Maintenanc
e
Supervisor
s

Electrician
s
Mechanic
s

77 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Chart 3.7

9. Industrial Engineering
Major Activities:
Conducting studies for fixing Standards and Crew Strength in all areas.
Negotiating of disputes by participating.
Participating in discussions for setting labor disputes
Manpower requirement assessment
Planning o Factory Layout
Expansion Project Coordination
Preparation and publication of MIS Reports
Works related to long term agreement.
computation of production bonus
Resource planning manpower, machinery and equipments
Long term agreement related works
Calculation of chairmans award
Calculation of production bonus
Connectivity between factories, head office and others plants, maintenance of
network connectivity in all areas of the plant, administration of local e-mail service,
maintenance of computers, printers other accessories.
ERP Activities Maintenance of leased line connectivity between factory and head
office and other plants, maintenance of network connectivity in all areas of the
plants, maintenance of network connectivity in all areas of the plant, administration
of local e mail service ,maintenance of computers printers and other accessories.
78 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

Structure of Industrial Engineering Department

Plant Industrial Engineering Manager

Assistant
Manager

Industrial
Engineer

Recourse Panning
in Charge

Chart 3.8

79 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

10. Safety Department

Responsibility of this department is to ensure the working ambience to all the
personnel within the factory and the premises. The safety officer through the
mechanism of audits and subsequent reporting Feedback, builds in the safety
consciousness and the safety culture within the personnel.

Safety policy of MRF

It is the policy of the company that the safety & health of the employees shall be
our 1st priority
It is the responsibility of everyone in this organization, regardless of the position he
occupies, to ensure that everyone in the factory returns home to his beloved ones
without any injury today and every day
We shall observe this policy not only in letter but also in spirit and offer
ACCIDENT FREE SAFE PRODUCTION for the benefit of one and all.

Procedures and guidelinesNecessary procedures, rules and guide lines for the
effective implementation of this policy, without prejudice to the statutory
requirements, are formulated by Chief Safety officer and Plant Safety officer. They
will also render necessary advice and assistance to all management staff in the
80 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

effective implementation of these policy respective sections, plants departments

and the unit as a whole.

Methodology for Prevention of Accidents

1. Training
2. Enforcement of safety rules and guidelines.
3. Safety audit
4. Corrective and preventive action
5. Safety awareness promotional activities

11. Security Department

Industrial safety in the public and private sector can be defined as protection of
men, materials, machines, buildings, classified information, and the company
operations and to provide protective services against fire, theft, damage to the
company assets and the installation. Protect the valuables of the company as well of
the employees.
The main functions of security department are:
Control over accessibility
Check against theft, pile rages
Control over the movement of personnel and materials at the gate

81 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 Checking in/out raw materials, empty vehicles, carrying finished goods, vehicles
carrying scrap items etc.
Control and checks on the company hired taxes and security of bills.
Co-ordination of security duties with private security agencies and preparation of
bills.
Control and check over the entry of contract works.
In case of an accident in the factory, it is the responsibility of the security
department to provide the victim with first aid. The security department should also
take them to the appropriate place by using the ambulance if necessary. The inflow
and outflow of inventory, personnel are regulated and monitored by the security
department.
Search Operation
All workmen is liable on entering, leaving or while remaining inside the factory
premises and searches by the security personnel. The search clause is made
applicable to the workmen only. The following are subjected to search at the gate:

Workmen
Contract Casual Labor
Suppliers
Drivers, Cleaners and Private Vehicles
Commercial Vehicles
Company Vehicles
Important documents to be maintained:

82 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Standing Orders/Security Manual

Duty Register (Staff & Watchmen)
General Diary
Key Register
Visitors Register
Material Movement Register
Vehicle Register
Telephone Message Book

Structure of Security Department

SENIOR SECURITY
OFFICER

Officer Security

Watchmen

Firemen

Chart 3.9

12. Human Resource Department

The Human Resource Department is known as the heart of an organization. It
performs a number of activities concerned with the employees of their
83 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

organization. It interacts with other departments to ensure effectiveness of the

company.

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

Introduction about the company

Evolution of the concept of quality and its relevance to the contemporary

industrial production.

Safety

External competitive environment and organizational culture

Factory discipline

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

Activities

1)Recruitment and Selection of employees

2)Performance Appraisal
3)Welfare activates
4)Training
5)Industrial relation and labor management
6)Canteen service
7)File management.
Other activities controlled by HR Department are:
Medical insurance scheme
Family welfare canteen
84 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 Co-operative Society
Recreation club
Time Keeping
The office time is also come under the HR Department. The office time carries out
the following function.
Attendance detail
Leave details
Wage calculation
Daily reports.
Working hours (24 hours)
1st shift

7am-3pm

2nd shift

3pm-11pm

3rd shift

11pm-7am

General shift

8am-4.30pm
Structure of HR Department
Plant Human
Resource Manager

85 -

HR Officer

ORGANISATION
STUDY
Deputy Manager

AT MRF LTD,KOTTAYAM
Human Resources
Time
Canteen
Welfare
Officer
Supervisor
Coordinator

Training
officer

Chart -3.10

13. AccountsDepartment
This department keeps account of all the financial transactions of the company. The
accounting period of MRF is from October 1st of one year to September 31st of the
next year. MRF has a fully computerized accounting system that facilitates fast
operations of its various functions. All the transactions of production unit starting
from the issue of goods received to the final documentation is computerized. The
strategy that the company has adopted is to go for credit transaction and payment
will be made in one month of time.
The Functions of accounts department at the plant level has been divided into:
1. Financial account
2. Cost account
3. Wages and Salaries
4. Sales tax

86 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Financial Accounts
This branch deals with all types of cash payments and receipts. This will include
payment for engineering and raw materials purchase, petty cash payments,
operation and reconciliation of bank accounts ,payment to the government in the
form of taxes and levies ,payment of PF ,deduction from salary and payment of
loan outstanding and insurance premium of employees ,fright payments, payment
in lieu of travel allowance ,medical re imbursement etc. Cash receipts in the case of
scrap sales and any other cash receipt will also come under this branch of accounts.

Cost Accounts
This branch deals with forecasting ,budgeting, analyzing and reporting the income
and expenditure of the company .The budget for expenditure is prepared using
standard costing principles and it is compared with the actual expenditure .Any
variation from the budget is analyzed to find the exact reason and it is reported to
the top management.
Wages & Salary
Computation of wages and salary is done by this section of accounts department.
Wages of workmen are fixed in the long term agreement and are calculated on a
daily basis depending on various factors like grade, working hours, output achieved
etc.
87 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Sales Tax
All matters related to sales tax are handled by this section. Monthly returns for
sales tax are filed on behalf of sales depots. VAT (Value Added Tax) system has
been introduced and all matters related to this are also looked after by this branch
of accounts. C forms for purchases from outside the stare and F forms are
issued for receipt of goods from depots.
Structure of Accounts & Finance Department
Plant Account
Manager

Manager
Raw
Materials

Asst .Mgr
Plant
Accounts

Supervisors

Wages
Officer

Supervisors

Asst. Mgr.
Engineeri
ng Stores

Supervisors

Costin
g
Officer

Auditin
g

Supervisors

88 -

Officer
Shipping

Officer
Engineerin
g Purchase

Supervisors

Supervisors

Sales
tax &
Excise
Materials
Handling
Workmen

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Chart 3.11

14. Marketing Department

MRF Kottayam doesnt have a marketing department. Marketing management is
the functional of management concerned with planning, organizing, directing and
controlling the activities related to the marketing of goods and services to satisfy
the customers needs which are ever changing.
Objectives

Creating demand
Customer satisfaction
Increasing the goodwill of company
Increasing the market share
Raising the standard of living of the consumer community

Marketing Strategy & Network

MRF has emerged as one among the market leaders in the tyre manufacturing
sector in the world. It was awarded J.D. Asia Pacific for customer satisfaction 8
times. This achievement is possible only because of MRFs marketing strategies,
product quality and after sales service to customers. MRF has a wide marketing
network, which hosts 68 sales centers, 2500 distributors and exports to over 75
countries. Tyre and tyre related products are sold under the brand name MRF and
distributed in domestic markets through sales offices, dealers and franchises. The

89 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Corporate Executive Director, based in Chennai, guides the marketing activity. In

Kerala, the district office is at Ernakulam.

MRF Sales Network

NORTH
New Delhi
Agra
Bareilly
Bikaner
Chandigarh
Faridabad
Haldwani
Hissar
Jaipur
Jalandhar

SOUTH
Chennai
Ananthpur
Bangaluru
Belgaum
Calicut
Combatore
Ernakulam
Hubli
Hyderabad
madurai
Table 3.3

EAST
Kolata
Asansol
Cuttack
Dhanbad
Guwahati
Muzaferpur
Patna
Ranchi
Siliguri

WEST
Mumbai
Ahmedabad
Aurangabad
Baroda
Bhopal
Goa
Indore
Jabalpur
Jodhpur
Nerul

Structure of Marketing Department

Corporate
Corporate Executive
Director (Marketing)
90 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Regional Sales
Manager

District Office

Sales
Department

Chart 3.12

Dealers &
Agents

INTERDEPENDENCE OF DEPARTMENT

MRF Ltd gives an insight about the functioning of the different departments. Each
department is headed by the general manager who possesses expertise, knowledge
in the area under his supervision. There always exists an ergonomic atmosphere
which is often made possible by the close interaction between all members in each
department. The top management moulds the strategies and policies that make sure
that the middle management implements them. Weekly interdepartmental meeting
aims at bringing coordination between the different departments. Open forums are
91 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

held once in a week in all plants where the employees can raise their concerns,
suggestions etc.
All the different activities that go on in a business are interdependent and work
together to create value for the customer and wealth for the business. The different
departments of the business are interdependent; that is, they rely on each other and
work together to achieve the objectives of the business. Within a business, it is the
role of management to coordinate all the organizational departments and ensure
that they work together for the overall success of the business. These departments
support the main goals of the business. They are very dependent on each other, and
it is very important to understand the interrelationships between them. The way
that one functions might decide to achieve its goals could affect the whole business,
so considerable cross-functional coordination is required.
In MRF Ltd there is a functional interdependence between different departments as
different functions communicate with each other in order to meet the business aims
and objectives.
In MRF Ltd., the purchase function is carried out by the purchase
department

of

the

respective

unit

or

plants

and

is

responsible

for

procurement of the unit requirement. The heads of the material department

and purchase department are accountable for effective discharge of purchase
functions within the framework of purchase policy of the company.
The production planning department is the most vital link between product design
and the production department. The production planning department provides the
necessary facilities and technical know- how for the manufacture of the product.
Human Resource department is directly related to all the other departments as it
controls all the manpower requirements in the organization.
92 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

1Production is the functional area where the raw materials are converted into
finished products through a series of production process. It is done by keeping
quality conscious in mind. The quality assurance department ensures the quality
right from the procurement of raw materials, at each stage of production and just
before packaging. Production department also functions by collecting information
both from materials as well as marketing department. Production department
checks the quality of the raw materials and if it does not meet the standards report it
to the purchase department. The material department deals with the purchase of
raw materials and supplies the raw materials to the production department.
The interdependence of quality control department with the production, finance,
quality assurance and HR department is necessary as it deals with products, its
quality, payments and man power. They check the quality of product packed before
dispatch.
The interrelation of finance department is between materials, production,
marketing, advertising, export, quality assurance and HR departments. In addition
to the major functions of budgeting, raising funds internally and from financial
institutions and utilization of funds for growth of performance , it deals with all the
internal and external cash and payment transactions.
Public relation has to be thought of as a long term strategy and to implement this
long term strategy in a phased manner. Appropriate short term strategy are to be
evolved and implemented to build up and maintain the tempo.
Sales and servicing activity is one of the most important function in fulfilling the
objectives of the organization and needs of the customers. It has the activity of
selling the product as per customer requirement and maintain the customer
satisfaction.

93 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Financial Performance Trends

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

(In

crores)
94 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Heads/Years
Total Income
Profit before Tax
Provision for Taxation
Net Profit

2013
13482.15
1226.80
424.59
802
Table 3.4

2012
13093.76
833.12
260.76
572
Source:

2011
10670.17
893.65
274.23
619.42

Secondary Data.

profit (Crores)
profit
1226.8
893.65 833.12

42.9

55.34

99.81

260.96 211.39

398.48

534.66

Chart 3.13

95 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Reserves (Crores)
Reserves
3640.9
2853.56
2293.53

719.17 749.81 820.05

981.91

1686.44
1357.18
1116.55

Chart 3.14

96 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Sales (` Crores)
Sales (` Crores)
13054.0313444.75
10637.03
8080.45

2989.43 3437.13

4233.66

5036.75

5715.52 6141.94

Chart 3.15

Net Worth(` Crores)

Net Worth(` Crores)
3645.14
2857.8

723.41 754.05 824.29

2297.77
1690.68
1361.42
986.15 1120.79

Chart -3.16

97 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Company has crossed a sales turnover of Rs.13000 crores in the year 2012 which is
a landmark achievement. This reflects a sales growth of 32%. The growth was
primarily driven by a remarkable turnaround in the automobile market, lower
interest rates and the general recovery of business. During the year, there was an
unprecedented increase in the price of natural rubber and other key raw materials,
which has impacted the performance of the company. Despite the above, the
company could achieve improved results due to better operating efficiencies, value
systems and cost cutting measures which the company has undertaken over a
period of time.

10 years Financial Summary

98 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

(Rs. in
Crores)

Sales

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

13444.75 13054.03 10637.03 8080.45

6141.94

5715.52

5036.75

4233.66

3437.13

2989.43

37.40

34.40

40.83

24.17

27.07

44.96

58.54

13482.15 13093.76 10670.17 8109.58

6176.34

5756.35

5060.92

4260.73

3482.09

3047.97

1226.80

Other
Income

39.73

33.14

29.13

Total
Income
Profit
Before
Taxation

833.12

893.65

534.66

398.48

211.39

260.96

99.81

55.34

42.90

260.76

274.23

180.68

145.45

66.83

89.18

19.90

15.03

14.10

802.21

572.36

619.42

353.98

253.03

144.56

171.78

79.91

40.31

28.80

Capital

4.24

4.24

4.24

4.24

4.24

4.24

4.24

4.24

4.24

4.24

Reserves

3640.90

2853.56

2293.53

1686.44

1357.18

1116.55

981.91

820.05

749.81

719.17

Net Worth

3645.14

2857.80

2297.77

1690.68

1361.42

1120.79

986.15

824.29

754.05

723.41

5834.14

5477.16

4967.07

3865.62

3020.57

2866.24

2289.77

1955.99

1787.85

1534.47

Provision
for Taxation 424.59
Profit after
Taxation
Share

Fixed
AssetsGro.

Table 3.5

99 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

CHAPTER 4
100 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

DATA ANALYSIS AND

INTERPRETATION

SWOT Analysis
The SWOT Analysis has revealed the strength, weakness, opportunities, and threats
of the company. It has been detailed below:
Strengths
Market leader in the industry.
Unique and high brand image.
Major raw material (natural rubber) locally available.
101 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 Strong channels of distribution (wide range of sales office for each zone)
Optimum capacity utilization of plants.
Strict quality measures.
Use of modern technologies and concepts.
Harmonious and cordial employer-employee relationship.
Great reserves and surpluses.
Good infrastructure.
Computerized system.
Environment certification (ISO 14001)
Quality product (ISO 9000 certification)
Highly evolved Research and Development wing
Training to all the employees.
Aggressive marketing Policies.
Experienced work force.
Wide spread recognition.
Quality control.
Strong financial support.

Weaknesses
High operational cost due to the use of modern and costly machinery for production.
Company is highly capital intensive.
High rate of absenteeism.
Strong trade union activities sometimes create problems among employees and also
disturb the smooth functioning of plant.
Lack of marketing department at the plants. It is at the corporate office.
Lack of speedy communication.
Lack of individual initiative.
Less interaction between manufacturing and marketing department.
Lack of commitment.
Opportunities
Growth in the economy, especially automobile industry.
Fast growing automobile sector provides good opportunities for MRF, as it is the
leading tyre manufacturer in the sub-continent.
102 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 Increased access to global source for raw material at competitive price as a result of
various trade agreements by the country.
The modernization of tubeless tyres.
World class products.
Joint ventures or tie-up with foreign automobile companies.
More opportunities for diversification.
Global standards and competition.
Improvement in market share both in India and outside.
Availability of latest technology

Threats
Continuous rise in price of natural rubber and other raw materials.
Steady competition from other leading tyre manufacturers.
Changing technology.
Threat of cheap import of tyres, especially from China.
Market Risks.
Rupee depreciation resulting in lower export realization
Entrance of new players.
Increasing transportation cost.

103 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

PORTERS FIVE FORCE ANALYSIS

Porters five forces is the frame work for the industry analysis and business
strategy development developed by Michael. E. Porter of Harvard Business School
in 1979. It draws upon Industrial Organization economics to derive five forces that
determine the competitive intensity and therefore attractiveness of a market.
Attractiveness in this context refers to the overall industry profitability. An
"unattractive" industry is one in which the combination of these five forces acts to
drive down overall profitability. Three of Porter's five forces refer to competition
from external sources. The remainders are internal threats.
Porter referred to these forces as the micro environment, to contrast it with the
more general term macro environment. They consist of those forces close to a
company that affect its ability to serve its customers and make a profit. A change in
any of the forces normally, requires a business unit to re-assess the marketplace
given the overall change in industry information. The overall industry
attractiveness does not imply that every firm in the industry will return the same
profitability. Firms are able to apply their core competencies, business model or
network to achieve a profit above the industry average. Porter's five forces include
104 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

- three forces from 'horizontal' competition: threat of substitute products, the threat
of established rivals, and the threat of new entrants; and two forces from 'vertical'
competition: the bargaining power of suppliers and the bargaining power of
customers. The following figure gives the structure of Porters five force analysis.

Structure of Porters five force analysis

Potential entrants
(Threat of
mobility)

Suppliers
(supplier power)

Industry
Rivalry

Buyers (buyer
power)

Substitutes
(Threat of
substitutes)

Chart 4.1
105 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

The five forces of Porters five forces are:

o

The threat of the entry of new competitors

The threat of substitute products or services

The bargaining power of customers (buyers)

The bargaining power of suppliers

The intensity of competitive rivalry

PORTERS FIVE FORCE ANLYSIS ON TYRE INDUSTRY

The threat of entry of new competitors
In tyre Industry the threat of entry of new competitors is very high. Potential entry
for new competitors is also the factor to intense the competition in the industry. A
larger pool of new entrants results in more changes of intense competition. Barriers
to entry, however can restrict the firms from entering the market, more number of
entry barriers will make it difficult for the new entrants to exploit the opportunity
of new market. Government policy creates hurdles for new entrants by heavy taxes
and interest rates. New firms must get to know the Government regulations and
policies before making an entry decision into the country.

106 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

The intensity of competitive rivalry

In tyre Industry the intensity of competitive rivalry is high. The ongoing war
between the firms competes in the same industry for gaining customer share in
order to increase their revenues and profits. The tyre industries which engaged in
the production of various types of utensils and vessels compete each other to
achieve more market share. The competition is more intense if the firm pursues
strategies that give it a competitive advantage over the strategies pursued by its
rivals. Developing new strategies is easier than retaining the uniqueness of the
strategies so as to gain a competitive edge over the rivals in the industry. Changes
in strategy by one firm may be met with retaliatory countermoves, such as lowering
the prices, enhancing quality, adding features, providing services, extending
warranties and increasing advertising.

The threat of substitute product or services

Firms mostly monitoring the trends within the industry to track the strategies but
competition not only arise within the similar industry but also in different industry.
Companies in other industry offer products with similar features and functionality
or even better act as substitute for the products. MRF tyre face heavy competition
with other tyre manufacturing alternatives such as Ceat, Appoloinrespect of price,
models distribution channel etc...

107 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Bargaining power of customers

Consumers are the final users of the product; performance of the companies totally
depends upon the consumers. Bargaining power of consumers is more especially
when they are huge in number and consumers purchase in large quantity. Rival
firms offer discounts, warranty and services to switch the consumer from one brand
to another in the same industry. As the satisfaction level of consumer goes up more
the intensity level of competition increases.

Bargaining power of suppliers

Supplier and producer relation always matters especially in manufacturing
industries. Suppliers play an important role in the production of goods and services,
making the raw material better and till the final product are made. Bargaining
power of suppliers affect the intensity of competition especially if there are huge
number of suppliers, less availability of raw material and the cost of switching
between suppliers or raw material is high. These attributes in the industry give
power to the supplier to enforce terms and conditions on manufacturers and charge
high cost on raw materials.
This chapter gives the clear picture of strengths, weaknesses, threats and
opportunities of MRF. Ltd through SWOT analysis, and Porters five force analysis
is the framework for the industry analysis and business strategy development.

108 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

109 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

CHAPTER

FINDINGS, RECOMMENDATIONS AND

CONCLUSIONS

Findings

110 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

in the world.
MRF exports its products to more than 75 countries worldwide.
MRF is the first Indian company to export tyre to the US.
The company is providing good working environment.
MRF is the first company in India that manufacture and market Nylon tyres,

passenger tyres commercially.

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

Suggestions

111 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

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

market to maximize quality production.
The company can utilize the railways to transport its materials to reduce the overall
logistics cost
More attractive advertisements should be given through the Medias.
Introduce new brand ambassadors.
Monthly entertainment programs for employees must be arranged to avoid
absenteeism.
Locally available raw materials can be used for production so that the cost of
production can be substantially reduced.
The management must take sufficient step to install a grievance settlement
machinery with sufficient participation of workers
Improve employer-employee relation.
Open a show room at factory itself.
More investment has to be made in Research and Development.

Conclusions
112 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Madras Rubber Factory mobilized itself as the market leader. The strong
performance of MRF is because of combined efforts of management and
employees. MRF provides high quality and technologically superior products to its
customers. The company has the provision to find out which tyre is manufactured
by which worker. The effective management along with successful workers is very
dedicated and is aware of new developments taking place in the industry. There is
no compromise on the quality policy makes them King of Kings in tyre industry.
If they implement the suggestion put forward, will help them to improve profit and
helpful for the workers. So the company can attain global standard through
continuous improvement in the quality products and service in order to maintain
market leadership and can be the king in tyre industry for many years.
MRF Kottayam unit is one of the 6 production units of MRF India.
Its location is ideal as the major raw material -natural rubber- is locally available.
The factory has different specialized plants for the production of various products.
Work is done 24 hours a day.
Work runs smoothly with non interference from outsiders.
Each department in the company plays a crucial role in the smooth running of the
factory and they all work together to achieve the common goal of maintaining
market leadership and making products that meet global standards.
The unit offers vast employment opportunities to skilled workers of the area.
The HR department takes excellent care of its workers through various welfare
schemes.
The company meets all the statutory requirements and runs non-statutory works also.
Rights are fulfilled and demands are met.

113 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

Bibliography

Books

114 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

 Human Resource Management by Gary Dessler&BijuVarkey, Publisher Dorling

Kindersley (India) Pvt. Ltd, licensees of Pearson Education in South Asia. 12 th
Edition, year of publishing 2012
Organizational Behavior - by Stephen P. Robbins &Thimothi A. Judge, Publisher Dorling Kindersley (India) Pvt. Ltd, licensees of Pearson Education in South Asia.
14th Edition, year of publishing 2012
Principles of Management by T.N Chhabra, Publisher DhanpatRai& co.
Edition, year of publishing 2012
Marketing Management PHILIP KOTLER, 12th edition, year of publication
MRF Records - MRF Ltd.,
MRF Magazines - MRF Ltd.,
MRFJournals - MRF Ltd.,
MRF Manuals - MRF Ltd.,
MRF Annual Reports - MRF Ltd., MRF accounts department.

Websites
http://www.mrftyres.com
http://www.moneycontrol.com
http://www.fadaweb.com/indiantyresindustry.htm

115 -

ORGANISATION STUDY
AT MRF LTD,KOTTAYAM

9 th