Organization Study at ASHOK LEYLAND, HOSUR

By ANOOP.R.NAIR 85201140 An Organisational Study Report Submitted In partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION OF COCHIN UNIVERSITY OF SCIENCE & TECHNOLOGY KOCHI- KERALA

June 2011
DEPARTMENT OF MANAGEMENT STUDIES, Toc H INSTITUTE OF SCIENCE & TECHNOLOGY Arakkunnam P.O., Ernakulam District, Kerala-682 313

DECLARATION

I hereby declare that the organizational study done at the Ashok Leyland, Hosur, is a record of an original work done by me, carried out during the period of study in TocH Institute of Science and Technology, Arakkunnam, Ernakulam; under the guidance of Mr. Alexander Joseph Associate Professor Department of Management studies, Toc H Institute Of Science and Technology, and no part of it has been submitted earlier for any degree, post graduation or similar of any University or Institution.

Place: (Anoop.R.Nair)

Date:

ACKNOWLEDGEMENT

Any accomplishment requires the effort of many people and this project study is no exception. Firstly, I would like to extend my gratitude to Dr. Job V Kuruvilla, Director, Toc H institute of science and technology, for his erudition, guidance and benevolence rendered to me. I am deeply in debt to our superior Dr. Hareesh N Ramanathan; Head of the department for his help, stimulating suggestions and encouragement. A special thanks to Mr.Gopakumar.G of the Ashok Leyland, for his assistance and encouragement to do the necessary research work and furnishing me with required data. I gratefully acknowledge the inspiring guidance and morale support provided by Mr. Alexander Joseph; Project guide who helped me at various stages of my project and also helping me in exploring the fields of the study. I also wish to express my gratitude to all those who have contributed to this work anonymously.

Anooop.R.Nair

CONTENTS

Chapter No 1 2 3 4 5 6 7 8 9 10 11 12

Titles List of Tables About the Study Objectives of the study Sources of Data Industry Profile Company profile Department Functions Observations and Interpretations Findings Suggestions Conclusions Bibliography

Page No 6 7 8 9 10 14 24 52 53 54 55 56

LIST OF TABLES

S.NO 1 2 3 4 5 6

Description Personnel and Administration Department Purchase and Material Planning Production Finance Systems Research & Development

Page No 25 35 37 46 50 50

INTRODUCTION

ABOUT THE STUDY

An organizational study refers to the complete understanding of an organization in all dimensions. Ashok Leyland is a well known automobile manufacturing company in India. Ashok Leyland believes that its historical success and future prospects are directly related to combination of strengths. The referred unit is a core limb of Ashok Leyland, the nations pioneering automobile manufacturer. The study includes the brief study of the core departments of Ashok Leyland, Hosur; Unit II. Different officials working in various departments have provided very important data in this report. Every effort has been made to understand the functions and activities of various departments as well as the manufacturing process. The report provides a consolidated preview of the functional activities of Ashok Leyland Hosur; Unit II. The core departments, their primary functions and the integrating activities are described in the report. Other special regulatory functions like evaluation methods, employee benefit schemes have also been covered. The unique features and policies of the company, which make it a leader without contention and have aided the company in carving an excellent niche for itself in the national and the international arena, have also been referred.

OBJECTIVES OF THE STUDY

To familiarize with business organization. To get an in depth knowledge on an organizations core functions. Study the historical background of the company. Understand the hierarchy on reporting, workflow pattern. Identify the pros and cons of the industry. Identify the important players in the organization and their functions. Getting practical experience regarding the organizational function. To understand the culture in the organization and its effect on employees. To get industrial exposure and experience. To learn about the policies and functions of the organization. To provides a better understanding at functional level of each department i.e. Purchase, Materials, Production, Finance and Personnel and Administrative Management. To familiarize with the manufacturing and assembling of commercial vehicles.

Duration of Study: The Organization Study was conducted in a one-month period.

SOURCES OF DATA
The methodology used for the study is through the collection of primary and secondary data. Primary data Direct observation Live discussion with the managers and the staff members.

Secondary data Annual Reports Business Journals Existing Records Website of the company

PROFILE OF THE STUDY

INDUSTRY PROFILE:
AUTOMOBILE INDUSTRY HISTORY:

In the year 1769, a French engineer by the name of Nicolas J. Cugnot invented the first automobile to run on roads. This automobile, in fact, was a self-powered, three wheeler, military tractor that made use of steam engine. The range of the automobile, however, was very brief and at the most, it could only run at a stretch for fifteen minutes. In addition, these automobiles were not fit for the roads as the steam engines made them very heavy and large, and required ample starting time. Oliver Evans was the first to design a steam engine driven automobile in the U.S. The automobile industry finally came of age with Henry Ford in 1914 for the bulk production in cars. This lead to the development of the industry and, it first begin in the assembly lines of the car factory. The several methods adopted by Ford, made the new invention i.e.; car, popular amongst the rich as well as masses. According to the history of automobile industry U.S, dominated the automobile markets around the globe with no notable competitors. However, after the end of Second World War in 1945, the automobile industry of other technologically advanced nations such as Japan and certain European nations gained momentum and within a very short period, beginning in the early 1980s, the U.S automobile industry was flooded with foreign automobile companies, especially those of Japan and Germany. The current trends of the Global automobile industry reveal that in the developed countries the automobile industry are stagnating as a result of the drooping car markets, whereas the automobile industry in the developing nations, such as India and Brazil, have been consistently registering higher growth rates every passing year for their flourishing automobile markets.

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INDIAN AUTOMOBILE INDUSTRY:

India is one of the fastest growing automobile industries in the world. After 1960, the automobile industry saw rapid growth and many automotive manufacturers started production. The automobile industry in India is the seventh largest in the world with and annual production of over 2.6 million units in 2009. In 2009, India emerged as Asias fourth largest exporter of automobiles, behind Japan, South Korea and Thailand. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nations roads. A well developed transport network indicates a well developed economy. For rapid development a well-developed and well-knit transportation system is essential. As Indias transport network is developing at a fast pace, Indian automobile industry is growing too. Also, the automobile industry has strong backward and forward linkages and hence provides employment to a large section of the population. Thus the role of automobile industry cannot be overlooked in the Indian economy. Indian automobile industry includes manufacture of trucks, buses, passenger cars, defence vehicles, two wheelers etc.., the industry can be broadly divided into the car manufacturing, two-wheeler manufacturing and heavy vehicle manufacturing units. The major car manufacturers are Hindustan Motors, Maruti Udyog, Fiat India Pvt. Ltd, Ford India Ltd., General Motors Pvt. Ltd., Honda Siel Cars India Ltd., Hyundai Motors India Ltd., Skoda India Pvt. Ltd., Toyota Kirloskar Motor Ltd., to name a few. The two wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle & Scooter India Pvt. Ltd., Hero Honda, Yamaha, Bajaj etc.., The heavy motors like buses, trucks, defence vehicles, auto rickshaws and other multiutility vehicles are manufactured by Tata-Telco, Ashok Leyland, Eicher Motors, Bajaj, Mahindra and Mahindra etc..,

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INDIAN AUTOMOBILE MARKET:

Many foreign companies have been investing in the Indian automobile market in various ways such as technology transfers, joint ventures, strategic alliances, exports and financial collaborations. The auto market in India can boast of attractive finance schemes, increasing purchase power and launch of latest products. Some vital statistics regarding the automobile market in India has been mentioned below: India ranks 2nd in the global two-wheeler market India is the 4th biggest commercial vehicle market in the world India ranks 11th in the international passenger car market India ranks 5th pertaining to the number of bus and truck sold in the world.

HEAVY VEHICLES MARKET:

Heavy vehicles market in India comprises of trucks, machines, ambulances and school buses. The popular heavy vehicle brands in India are Volvo, Eicher, Tata, Telco, Ashok Leyland and Swaraj Mazda. Following are the major players in the Indian Heavy Vehicles Market: Tata Motors is the largest automobile manufacturing company in India that manufactures a wide range of heavy vehicles adhering to world class standards. It is the market leader in commercial vehicles in all the segments, be it heavy vehicles, medium size vehicles, small vehicles, buses or defence vehicles. The heavy vehicles manufactured by Tata Motors have highly developed braking structure, high ground authorization, better direction competence and a muscular body. The advanced engine imparted to these heavy vehicles makes them a class apart from the other heavy vehicles running on the Indian roads and Highways. Tata Motors leads this segment with a market share of 61%. Ashok Leyland is an exclusively heavy vehicle manufacturing company situated in Chennai and was initiated in the year 1948. It is one of Indias biggest producers of heavy vehicles such as trucks, buses, military vehicles and also the second biggest commercial vehicle firm in India heavy vehicle division with a market share of around 27%. Ashok Leyland is also renowned for producing auto spare parts and engines for marine and industrial submission.

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 Eicher Motors was initiated in 3rd September, 1960. The first firm to manufacture the first tractor in India. The indigenously manufactured tractor was introduced in the Indian market straight from Eichers Faridabad factory. The history of the firm can be traced back to 1948, when Goodearth Company was established for vending and repairs of imported tractors in the nation. Swaraj Mazda, a tie up between Mazda and Swaraj Enterprise, Swaraj Mazda represents advanced Indian expertise and manufacturing. The firm has Research and Development improvement edge on international scale. The firm manufactures various products such as Bus, Ambulance, and Trucks etc.

The modern automobile market in India has been considering key issues in the process of growth: Customer care and not just service Domestic as well as multi-national investments Searing through cut-throat competition Road safety Anti-pollution norms Co-ordination with government to enable advancement Used vehicle trade

The future of Indian automobile market is bright as it looks forward to manufacturing and implementing new innovations such as electric cars as provided by Reva, alternate fuels like CNG and LPG and probably customized internet automobile orders

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COMPANY PROFILE
Ashok Leyland is the flagship company of the Hinduja group of India, founded in 1948 and head quartered in Chennai, Ashok Leyland started manufacture of commercial vehicles in 1954, with technology from and equity participation by, Leyland Motors Ltd., U K. With its own R&D base, strengthened collaborations with international automotive leaders, Ashok Leyland has established a tradition of technological leadership and a strong reputation for product reliability. They are one of the Indias leading manufactures of commercial vehicles and special vehicles, engines for industrial purpose, gensets and marine requirement equipments. For over five decades, Ashok Leyland has been the technology leader in Indias commercial vehicle industry, moulding the countrys commercial vehicle profile by introducing technologies and product ideas that have gone on to become industry norms. Ashok Leyland at the time of its inception was known as Ashok Motors. It was assembling Austin cars at the first plant, at Ennore, near Chennai. In 1950, the company started assembly of Leyland commercial vehicles and soon the local manufacturing under license from British Leyland participation in the equity capital, in 1954, the company was re christened Ashok Leyland. In 1987 the overseas holding by LRLIH (LAND ROVER LEYLAND INTERNATIONAL HOLDINGS LIMITED) was taken over by a joint venture between the Hinduja group, the Non Resident Indian Transnationals group and IVECO Fiat SPA part of the Fiat group and Europes leading truck manufacturing company. Ashok P Hinduja is the chairman of the company. The Hinduja group also associated with Ennore Foundries Limited, Automotive Coaches and Components Limited, and Gulf Ashley Motors Limited. The subsidiary holdings are Ashley Holdings Ltd., Ashley Investment Ltd., and Ashok Leyland Project Services. The chief competitors of the company are; Tata Motors Mahindra Volvo

With a commanding strength of the about 12,000 employees the company is looking forwards to enhance the scope of its action. It is aiming at expanding its production operation overseas to make it a more globally accessible company. It is looking to acquire a small to medium sized commercial vehicle manufacturers in China and other developing nations, which have an established product line. An example would be the 2007 acquisition of the Czech based Avias truck business rechristened Avia Ashok Leyland Motors Since its inception, Ashok Leyland has been a major presence and these years have been punctuated by a number of technological innovations which went to become
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industry standard. This tradition of technological innovations and leadership was achieved through years of vigorous in-house research and development. From 18 seater to 82 seater double-decker buses, from 7.5 tonne to 49 tonne in haulage vehicles, from numerous special application vehicles to diesel engines for industrial, marine and genset applications, Ashok Leyland offers a wide range of products. Ashok Leyland has seven manufacturing plants; Ennore Plant, Chennai. Hosur Plants Unit I, Unit II and Unit II A. Alwar, Rajasthan. Bhandara, Maharashtra. Pantnagar, Uttarakhand

Early products of Ashok Leyland included the Leyland Comet bus chassis sold to many operators including Hyderabad Road Transport, Ahmedabad Municipality, Travencore State Transport, Bombay State Transport and Delhi Road Transport Authority. In the popular metro cities, four out of five state transport undertaking buses come from Ashok Leyland. Some of them like the Double Decker and Vestibule buses are unique models from Ashok Leyland, tailor made high-density routes. Statistics reveal that the company is Indias largest exporter of medium and heavy duty trucks. It sells close to 83,000 medium and heavy vehicles each year. The company has a near 98.5% market share in the Marine Diesel engine markets in India. At 60 million passengers a day, Ashok Leyland buses carry more people than the entire Indian Railway network.

VISION OF THE COMPANY Be among the top Indian corporations acknowledged nationally and internationally for Excellence in quality products. Excellence in customer focus and services.

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MISSION OF THE COMPANY Be a leader in the business of commercial vehicles, excelling technology, quality, value to customer, fully supported by customer services of the highest order and meeting national and international environmental and safety standards.

VALUES OF THE COMPANY CUSTOMERS We value our customers and will constantly endeavor to fulfill their needs by proactively offering them products and service appropriate to their diverse application. EMPLOYEES We consider our employees as our most valuable asset and are committed to provide full encouragement and support to them to enhance their potential and Contribution to the companys business. VENDORS Our vendors are our valued partners in our business development and we will work with them in a spirit of mutual co-operation to meet our business objectives DISTRIBUTORS Our distributors are the vital link between the company and the customers and we are committed to advise and support our distributors to continuously upgrade their infrastructure skills and capabilities to serve our customers better. SHARE HOLDERS We value the trust reposed in us by our shareholders and strive unstintingly to ensure a fair and reasonable return on their investment. SOCIETY Safety we are committed to add to the wealth and well- being of our society by enacting the quality of life and contributing to its economic development while maintaining the highest level of environmental and standards.

QUALITY POLICY OF THE COMPANY Ashok Leyland is committed to achieve customer satisfaction by anticipating and delivering superior value to the customers in relation to their own business, through the products and services offered by the company and comply with statutory requirements. Towards this, the quality policy of Ashok Leyland is to make continual improvements in the processes that constitute quality management system, to make them more robust and to enhance their effectiveness and efficiency in achieving state objectives, leading to: 1. Superior products manufactured as also services offered by the company
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2. Maximum use of employee potential to contribute to quality and environment, by progressive up gradation of their knowledge and skills as appropriate to their functions. 3. Seamless involvement from suppliers and dealers in the mission of the company to address customers changing needs and protection of the environment.

ENVIRONMENTAL POLICY OF THE COMPANY

We at Ashok Leyland are committed to preserving the environment and will

Commit to comply with all relevant legal and other requirements.

Adopt pollution prevention techniques in design and manufacture of our products. Conserve all resources such as power, water, oil, gas, compressed air, etc., and to optimize their usage through scientific methods. Continuously strive to minimize waste generation by all possible ways and to reduce, Reuse and Recycle the same through a time bound action plan. Provide a clean working environment to our employees, contractors and neighbors. Set and review objective & targets towards continually improving the environment. Towards fulfilling the above objective, we propagate our Environmental policy and our commitment to continuous improvement to all employees, suppliers, customers and neighbors. We will strive towards maintaining harmony between society and environment towards achieving our environmental goal.

SAFETY AND HEALTH POLICY OF THE COMPANY

Ashok Leyland affirms that all its employees, irrespective of cadre or rank need to be safeguarded against any personal injuries or damage to the properties during working periods. That the management recognizes the principle that accident prevention contributes in the long run to all round progress and development of the organization.

Towards this objective, Ashok Leyland is committed to:

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 Implementing all practical safety measures like safe working and environmental conditions. Carrying out a systematic critical appraisal of all potential hazards involving personnel, plant, services and operation methods. Following strictly safety rules and regulations incorporated in the factories act and rules. Maintaining safe and healthy working environment at all working places conductive to the success of the managements safety programs in the long run. Implementing safety and health education programs for employees with specific emphasis on creating safety and health awareness Welcoming useful and constructive suggestions and ideas in regard to safety and health. The management reaffirms its conviction in the implementation of its safety policy without any reservations. It involves promoting and achieving high degree of safety standards.

GROWTH MILESTONES OF ASHOK LEYLAND: 1966 Full air brakes introduced 1967 Double Decker buses introduced. 1968 Power steering offered. 1979 Multi-axle trucks introduced. 1980 Integral bus with air suspension. 1992 Self-certification status for defence supplies. 1994 ISO 9001 Certification 1997 Indias first CNG powered bus. 1998 QS 9000 Certification 1999 CNG (Compressed Natural Gas) introduced. 2000 Euro-I, Engines/vehicles introduced.

ASSOCIATE COMPANIES Automotive Coaches & Components Ltd (ACCL) Hinduja Foundries
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Lanka Ashok Leyland IRIZAR TVS Ashok Leyland Project Services Ltd Gulf Ashley Motors Ltd Ennore Foundries Ltd

CURRENT STATUS

Inter-city luxury bus Ashok Leyland is the second technology leader in the commercial vehicles sector of India The history of the company has been punctuated by a number of technological innovations, which have since become industry norms. It was the first to introduce multi-axled trucks, full air brakes and a host of innovations like the rear engine and articulated buses in India. In 1997, the company launched the countrys first CNG bus and in 2002, developed the first Hybrid Electric Vehicle. The company has also maintained its profitable track record for 60 years. The annual turnover of the company was USD1.4 billion in 2008-09. Selling 54,431 medium and heavy vehicles in 2008-09, Ashok Leyland is India's largest exporter of medium and heavy duty trucks. It is also one of the largest private sector employers in India - with about 12,000 employees working in 6 factories and offices spread over the length and breadth of India. The company has increased its rated capacity to 105,000 vehicles per annum. Also further investment plans including putting up two new plants - one in uttarkhand in North India and a bus body building unit in middle-east Asia are fast afoot. It already has a sizable presence in African countries like Nigeria, Ghana, Egypt and South Africa. Ashok Leyland has also entered into some significant partnerships, seizing growth opportunities offered by diversification and globalization with Continental Corporation for automotive infotronics; with Alteams in Finland for high pressure die casting and recently, with John Deere for construction equipment As part of this global strategy, the company acquired Czech Republic-based Avia's truck business. The newly acquired company has been named Avia Ashok Leyland Motors . This gives Ashok Leyland a foothold in the highly competitive European truck market. The Hinduja Group also bought out IVECO's indirect stake in Ashok Leyland in 2007. The promoter shareholding now stands at 51%.

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Nissan Ashok Leyland In 2007, the company announced a joint venture with Japanese auto giant Nissan (Renault Nissan Group) which will share a common manufacturing facility in Chennai, India. The shareholding structures of the three joint venture companies are:

Ashok Leyland Nissan Vehicles Pvt. Ltd., the vehicle manufacturing company will be owned 51% by Ashok Leyland and 49% by Nissan Nissan Ashok Leyland Power train Pvt. Ltd., the power train manufacturing company will be owned 51% by Nissan and 49% by Ashok Leyland Nissan Ashok Leyland Technologies Pvt. Ltd., the technology development company will be owned 50:50 by the two partners.

Dr. V. Sumantran, Executive Vice Chairman of Hinduja Automotive Limited and a Director on the Board of Ashok Leyland is the Chairman of the Powertrain Company and he is on the Boards of the other two JV companies. The venture, once it takes off, will be one of the largest investments made in automotive field in the country IBUS Ashok Leyland announced iBUS in the beginning of 2008, as part of the future for the country's increasingly traffic-clogged major cities. Launched as a concept during the Auto Expo 2008 in India, a vehicle for a first production run of pilot models should be ready by the end of this year. The start of full production is scheduled for 2009. The bus will probably be equipped with an engine from the new Neptune family, which Ashok Leyland also introduced at this exhibition, which are ready for the BS4/Euro 4 emission regulations and can be upgraded to Euro 5 U-Truck Ashok Leyland, announced sale of vehicles on the new U-Truck platform from November,2010 with the rolling out of the first set of 10 models of tippers and tractor trailers in the 16 49-tonne segment. Further, another 15 models are set to enter the market in the next 12 months. Ashok Leyland Defence Systems

An Indian road-mobile launcher with a ballistic missile

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Ashok Leyland Defence Systems (ALDS) is a newly floated company by the Hinduja Group. Ashok Leyland, the flagship company of Hinduja group, holds 26 percent in the newlyformed Ashok Leyland Defence Systems (ALDS). The newly floated company has a mandate to design and develop defence logistics and tactical vehicles, defence communication and other systems. Ashok Leyland is the largest supplier of logistics vehicles to the Indian Army. It has supplied over 60,000 of its Stallion vehicles which form the Army's logistics backbone Ashok Leyland, the Hinduja Group flagship has registered a sale Turnover of Rs 11117.71 crores during 2010-2011 compared to Rs 7244.71 crores in the previous Fiscal reflecting a rise of 53.5%. Net Profit too rose by 49.0% to touch Rs 631.30 Crores. Domestic volume jumped 45% to touch 83800 vehicles as against 57947 vehicles. Exports Surged by 72% to reach 10306 vehicles. FACILITIES: Ashok Leylands Technical Centre, at Vellivoyalchavadi in the outskirts of Chennai, is a state-of-the-art product development facility, that apart from modern test tracks and component test labs, also houses Indias one and only Six Poster testing equipment. The company has an Engine Research and Development facility in Hosur The new plant in the North Indian state of Uttarakhand at Patnanagar is set up at an investment outlay of Rs.1200 crores. The facilities have been so designed as to accommodate further expansion in terms of capacity and future models. At full capacity utilization, 75000 vehicles will roll out of the Patnanagar plant. The company has signed an agreement with Ras Al Khaimah Investment Authority (RAKIA) in UAE for setting up a bus body building unit in the Middle East. LEADERSHIP From April 1, 2011 Mr. R. Seshasayee was handed over the responsibility of Executive Vice Chairman of Ashok Leyland, passing over the responsibility of Managing Director to Mr. Vinod Dasari. Mr. Seshasayee was the MD since 1998. Under his leadership the company has expanded from a purely India-centric company to a company with global focus. Mr. Seshasayee was also the President of CII (Confederation of Indian Industry), the apex body representing Indian Industry for the year 2006-2007. The following are the other functional heads at Ashok Leyland: 1. 2. 3. 4. 5. 6. 7. Mr. Vinod Dasari - Managing Director Mr. K.Sridharan - Chief Financial Officer Mr. J.N.Amrolia, Executive Director - Construction and Allied Businesses Mr. Anup Bhat, Executive Director - Strategic Sourcing Mr. S.Balasubramanian, Executive Director - Projects Mr. A.K.Jain, Executive Director - Project Planning Mr. R.R.G.Menon, Executive Director - Product Development
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8. Mr. N.Mohanakrishnan, Executive Director - Internal Audit 9. Mr. M.Nataraj, Executive Director - Global Bus Strategy 10. Mr. Rajindar Malhan, Executive Director - International Operations 11. Mr. Rajive Saharia, Executive Director - Marketing 12. Mr. Shekar Arora, Executive Director - Human Resources 13. Mr. B.M.Udayashankar, Executive Director - Manufacturing 14. Mr. A.R.Chandrasekaran, Executive Director - Secretarial and Company Secretary ACHEIVEMENTS

Ashok Leyland buses carry 60 million passengers a day, more people than the entire Indian rail network Ashok Leyland has a near 85% market share in the Marine Diesel engines markets in India In 2002, all the vehicle-manufacturing units of Ashok Leyland were ISO 14001 certified for their Environmental Management System, making it the first Indian commercial vehicle manufacture to do so. In 2005, received the BS7799 Certification for its Information Security Management System (ISMS), making it the first auto manufacturer in India to do so. In 2006, received the ISO/TS 16949 Corporate Certification, making it the first auto manufacturer in India to do so.

It is one of the leading suppliers of defence vehicles in the world and also the leading supplier of logistics vehicles to the Indian Army

CLIENTS (Not exhaustive): Indian Army. US Army. Honduras Armed Forces (HAF). Tamilnadu State Transport Corporation (TNSTC). Metropolitan Transport Corporation (MTC), Chennai. State Express Transport Corporation (SETC), TamilNadu Kerala State Road Transport Corporation. Maharashtra State Road Transport Corporation (MSRTC). Andhra Pradesh State Road Transport Corporation (APSRTC). Praveen Travels. Sharma Transport

PRODUCTS (not exhaustive)

Luxura Viking BS-I - city bus Viking BS-II - city bus

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Viking BS-III -city bus Cheetah BS-I Cheetah BS-II Panther 12M bus Stag Mini Stag CNG 222 CNG Lynx Double Decker Vestibule bus Airport Tarmac Coach

GOODS SEGMENT

Comet 1611 1612 H 1613 H 1613 H/2 (12m Goods) 4/51 GS 1613 Taurus 2516/2 (6x4) Tipper CT 1613 H/1 & H/2 Bison Tipper 1613 ST (4x2) Taurus HD 2516MT/1 (6x4) Taurus 2516 - 6X4 2516 H (6X2) Taurus 2516 - 6 X 2 4018 Tractor Artik 30.14 Tractor Tusker Turbo Tractor 3516 ecomet 912 ecomet 111i 4921 U-Truck Tippers U-3123 U-2523 U-2518 U-1616 U-1618 U-Truck Tractors U-4923 U-4023 U-3518

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HOSUR II OVERALL ORGANISATION CHART

BOD

CHAIRMAN

PLANT DIRECTOR

GENERAL MANAGER

FINANCE

PERSONNEL &ADMINIST RATION

PURCH ASE

PRODUC TION

STOR E

PEP

IED

QC

PLANT ENGINEE RING

MEP

R&D

systems

FAP

SMP

CHASS

CW

CT

CP

DEPARTMENT FUNCTIONS
The major functional areas of the unit and the major departments which oversee those areas are catalogued as follows:

Personnel and Administration Department Purchase & Material Planning Department Production Department Finance Department Systems Department Research & Development.

A brief review of each functional department and its activities as follows

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Personnel and Administration Department

GM

AGM P&A

SR MGR P&A

SR MGR CSO

MANAGER SAFETY

DY MGR P&A

IR MANAGER

Executives

Executives

Executives

Executives

VALUE STATEMENT We consider our employees as our most valuable asset and are committed to provide full encouragement and support to them, to enhance their potential and contribution to the companys business. FUNCTIONS OF PERSONNEL AND ADMINISTRATION DEPARTMENT 1. P&A ACQUISITON a) Recruitment b) Selection

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2. P&A DEVELOPMENT a) Training and development

b) Organization development
3.

PERFORMANCE AND COMPENSATION a) Performance appraisal b) Incentives and benefits MOTIVATION a) b) c) d) Creating motivating environment Empowerment and participation Promotion Opportunities Allowances

4.

(A) P&A ACQUISITION

RECRUITMENT

Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applicants from which new employees are selected. SOURCES OF RECRUITMENT The following are various external sources of recruitment:
1) Consultancies 2) Campus recruitment 3) Lateral entries

1) CONSULTANCIES

The department heads where requirements are needed informs to the PERSONNEL department about the requirement. The concerned person for recruitment gets approval for filling the vacancies. Then the consultancies are approached telling the requirements. The fit applications are mailed to attend the interview. If satisfied, they are called for the personal interview.

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2) CAMPUS RECRUITMENT The recruitment panel goes to the reputed colleges to select the candidates. On the following basis they recruit the candidates GETs - Graduate Engineer Trainees DETs - Diploma Engineer Trainees ITI- Industrial Training Institute
3) LATERAL ENTRIES

They pick the experience candidates or people from other companies. The following is the process of lateral entry recruitment; 1) Sourcing 2) Interview a. Written test b. Technical round interview c. Personal Interview

PROCEDURE FOR LATERAL RECRUITMENT Pre-Selection Selection Post-Selection

SELECTION

The selection procedure is concerned with selecting the right candidate at right time for right place. The selection procedure saves a lot of time and money by eliminating candidates who are not eligible for the post. STEPS IN SELECTION Receiving of application Preparing of shortlist by the department Verification of resume by department head Interview (one round) Psychological test Reference/Background information Final selection Placement

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(B) P&A DEVELOPMENT

TRAINING Training is an on-going process aimed at capability-building of the employees at all levels. In todays competitive milieu, organizations are increasingly turning to training to capture the cutting edge. As they manage growth in a constantly changing environment. Purposive training and planned re-training have an acquired priority status on the corporate agenda. Centre stage in Ashok Leyland training endeavours is the management development centre, at Chennai and Hosur. Training programme is classified into; Skill Knowledge Attitude Training programs in Ashok Leyland are: Quad 1 executive - Competencies and priority needs of departments/ units E-learning - Induction for DET (2 years) GET (1 year), Laterals (7 days) GENMOD training program - General-Planning for retirement. Budget spent for training (8hrs- 1day) middle managers (3 to 4 persons) is 3-4 lakhs

WORKMEN CAPABILITY BUILDING Training & Development for the unionized employees at the manufacturing units is focused on skill development. Both internal and external training is given for associates. Guest lectures of external faculty and various other industrial visits will be arranged for associates. In addition to some programmes like engineering drawing and waste elimination are also conducted. TRAINING FOR SENIOR/ MIDDLE LEVEL MANAGEMENT Both external and internal training is given for the executives. Faculty from outside agencies will be arranged for training them. They also get faculty from corporate level. Training for senior/middle level management is done on the following basis: Technical Behavioural Functional

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MANAGEMENT DEVELOPMENT PLAN Management development plan of Ashok Leyland focuses on the following competencies; People leadership Transformational leadership Project management capability Result orientation Entrepreneurial perspective DEVELOPMENT ACTIVITIES The following are the developmental activities;

TEI Total Employee Involvement CFG Cross Functional Group QC Quality Circles SS Suggestion Scheme Re-deployment

(C) PERFORMANCE AND COMPENSATION

PERFORMANCE APPR AISAL Performance appraisal is the systematic evaluation of the individual with regard to his or her performance on the job and his potential for development In Ashok Leyland graphical scale method is followed, it is also known as linear rating scale. In this, a printed appraisal form is used for each appraise. The form consists of various employee characteristics and his job performance. Various characteristics include initiative, leadership, dependability, creative ability, analytical ability etc.., The rating is done on the basis of scale which is in continuum representing various degrees of particular quality. Ashok Leyland use numbers say 5, 4, 3, 2 and 1 to denote points for various degrees of excellent-poor, high-low, and good-bad and so on. The appraisal form is divided into 8 parts where under each part separate sections are being covered. Part I- Performance in the present job (Employees achievements, goals) Part II- Work behaviour (Plans, objectives, activities, execution of plans) Part III- Abilities (Job knowledge, commitment to achieve results at work) Part IV- Potential ( Areas of interest, personality traits, strength, weakness) Part V- Overall performance rating ( Based on assessment of part I, II III) Part VI- Training need (To improve performance in present job, to assume higher responsibility) Part VII- Development plan (Job rotation, job enlargement, special assignment/ reputation) Part VIII- Other comments
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Five point scale of Ashok Leyland showing levels of performance: 5- Exceptional - Consistently outstanding performance. 4- Superior - Performance which is consistently significant beyond job requirements contributes in related area also 3- Good- Performance which adequately meets job requirements and occasionally produces good over and above requirements 2- Barely satisfactory - Just meets minimum job requirements 1- Unsatisfactory- Does not meet job requirement at all.

The appraisal form also consists of customer satisfaction survey where the need, service provider and period of assessment are all identified. It also follows graphical scale method using a five point scale based on the criteria 1) Quality (Customer needs, service information, quality works, complaints etc..,). 2) Delivery (Delivery time, point of use, use or parts/service information) 3) Communication (Interaction with customers, listening to customer views, timely feedback, and review changes with the customer) 4) Responsiveness (Responding to customer complaints, changes to customer needs) 5) Improvement (Positive attitude for improvement, implementation & effectiveness of improvement and improvements at the customer end) Overall Customer Rating = 1+2+3+4+5

EMPLOYEE RETENTION 1. Performance linked pay The company has an annual appraisal system in place and pursuant to this system, Performance linked pay, annual variable pay and/or commission is paid to the employees. 2. Employee motivation Ashok Leyland targets 100% of its employees to be involved in its continuous improvement activities. Reward systems such as IMPROVE, RISE, BITES, 100% CLUB and GEMBA passport scheme motivates people to contribute their ideas.

INCENTIVES 1) Surcharge on Direct Booking Incentive. 2) Special Incentive Scheme

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Employee welfare schemes The following are the welfare schemes available to the employees. Canteen facilities Medical claims Transport facilities Ashok Leyland school for their children Scholarship schemes Recreation facilities BENEFITS 1) Tuition fee refund: Reimbursement of expenses related to course fees, examination fees and purchase of books is allowed upto 75% of amount spent per academic year subject to a maximum amount as given by personnel administration. 2) Major medical plan: Benefits will be available within the laid down overall limits for self dependants viz. reimbursement of medical expenses and interest free loan 3) Medical reimbursement: Domiciliary expenses incurred on domiciliary medical treatment shall be reimbursed subject to the annual limits fixed from time to time. 4) Domestic travel Boarding and lodging expenses per diem allowance, when an employee opts to makes his own arrangements, out of pocket expenses, other expenses such as local conveyances, office phone calls. 5) Conveyance reimbursement: It is made on self certification of expenses by the executives. This will stand withdrawn in the event of company transport being provided. 6) Vehicle loan: Interest free loan up to 100% of the cost of a new two wheeler subject to a maximum limit stipulated from time to time. 7) Group term insurance: It is in addition to the accident insurance cover provided by the company for executives. In the event of accidental death, the beneficiaries will receive benefit under both policies 8) Sixth day compensation (i.e. Saturday): Executives in CG 25 (Corporate Grade) and below will be paid 7.5% of basic salary for every 6th day (optional) worked. The 6th day compensation as indicated above will be considered as salary for the purpose of contribution to PF and eligibility for bonus/ Exgratia.

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9) Maternity leave: Total period: 12 weeks leave with pay (6 weeks before delivery and 6 weeks immediately following the delivery) for lady executives. 10) Leave: All executives are eligible for privilege leave (PL)-30 days, sick leave (SL)- 7 days, casual leave (CL)- 7 days, national and festival holidays. All leave will be credited in January, every year. 11) Retirement age: The age of retirement from companys service will be the last day of the calendar month in which the executive attains the age of fifty eight years

(D) MOTIVATION CREATING MOTIVATING ENVIRONMENT GEMBA: Gemba is a Japanese word meaning Real Place where the real action takes place. In the manufacturing business, Gemba is the shop floor; in a service business, the place where the customer and the service come together. It is also the quality of human interaction in the workplace between co-workers, with customers and business partners. Launched in June 2005 as a company- wide initiative, Mission Gembas objective is to provide information, develop skills and empower employees to reach world-class levels in quality, cost and delivery. The logic is simple and undisputable: value is created at the Gemba and the Gemba knows its work best. GEMBA KAIZEN: Three ground rules for practicing kaizen in Gemba; 1. House Keeping 2. Muda Elimination [Waste Elimination] Waste of over production Waste of inventory Waste of waiting Waste of Motion Waste of transportation Waste of Producing Rejects Waste of processing 3. Standardization.

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GEMBA MISSION: Increase in the number of GEMBA 5s [SEIRI,SEITON,SEISO.SEIKETSU,SHITSUKE] EEI (Effort and Ergonomy index) CMI (Cost management initiative) Inventory Initiative Critical machine uptime Quality Safety.

There is an initiative called SEED. In this, employees are welcomed to provide suggestions to improve quality, performance, cost reduction, etc., If their suggestions are feasible, they are accepted and the others are rejected. A cash award, awards such as RESI, GEMBA passport is given to them as a token of appreciation. This motivates people to contribute their ideas. EMPOWERMENT AND PARTICIPATION IMPROVE Improve is an annual company- wide event to record, recognize and award employees for their positive involvement in organizational growth innovation and customer satisfaction. RISE The expansion for RISE is Reward for Individual Search for Excellence. It is an integrated award and is given to the associates. If an employee does some good activity or work apart from his usual one he is being awarded with RISE. TQM Total Quality Management The main objective of the TQM cell is to set human in a good manner to achieve the goals. The quality circle includes 6 people which include 5 associates and 1 executive. Their main function is to identify the problem, find the solution and to implement it PROMOTION OPPORTUNITIES Promotions are based on the seniority, eligibility for post, efficiency, skill, qualification etc.., The management decides whether to fill a post of outside recruitment or through promotion. Workman shall be considered for promotion to a post based on certain rules He has rendered a minimum period of qualification service of five years He possesses the qualification prescribed for the post to which he is to be considered. Fulfils prescribed attendance.

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SEPARATIONS Separation involves cessation of services of personnel from an organization. When people leave the organization, Exit interviews are usually conducted to know the reasons for leaving. The common reasons given are; Better opportunities Lack of growth ALLOWANCES House rent allowance Washing allowance Uniform and stitching allowance Night shift allowance Conveyance allowance Milk and vitamins allowances Flexibility allowance Quality certification allowance Direct production allowance

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PURCHASE & MATERIAL PLANNING

PURCHASE

GM

DGM-Mtrls Materials,PPC,MPL,Stores,GR&D &KDC

AGM-Matl

DIV MGR Vendor Devlp

DIV MGR Purchase

SR MGR

MANAGER BOF

For a manufacturing company to produce end items to meet demand the availability of sufficient production capacity must be co-ordinated with the availability of raw materials and purchased items from which the end items are to be produced. The following are the systems which are followed to procure materials: JIT LCL MRP VMS KANBAN JIT It is an approach than seeks to eliminate all source of waste in production activities by providing the right part at the right place at right time .JIT encompasses the successful execution of all manufacturing activity required to produce a final product from design to delivery and including all stages of conversion from raw materials onwards.

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PURPOSE OF JIT To have only the required inventory need To improve quality to zero defect To reduce lead time To incrementally revise the operations themselves and to accomplish these things at minimum cost

LOW COST LOGISTICS (LCL) LCL Includes materials such as bolts nuts etc. these are purchased in bulk and they are used for production. They dont affect the inventory cost. MATERIAL REQUIREMENT PLANNING

GM

DGM Materials

AGM PPC&Material planning

SR MGR

SR MGR PPC Chasis,Cabs

MGR PPC FRAME/PRESS/AXLE

SR MGR MATERIAL PLANNING

Executives

Executives

Executives

Material is a technique for determining the quantity and timing for the acquisition of dependent items needed to satisfy master schedule requirements. An alternative approach to
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managing dependent demand items is planned for Procurement or manufacture of the specific components that will be required to produce the required quantities of end production schedule indicated by the master production schedule. BILL OF MATEIALS The parts /components requirement of the final product which is to be manufactured is usually presented in the form of a product structure/bill of materials. It is a listing of all components that go into an assembled item. It frequently includes the part number and quantity required per assembly. KANBAN The kanban system is a signal proofing. The firm stores their materials and other inventory item in a signal use contains that holds a specific amounts of material or other inventory part that are used to manufacture the product When the material in a container is depleted, a KANBAN that defines requirements of inventory items to continue the production process is kept in the container

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PRODUCTION

GM

DGM Vacant

AGM

DIV MGR Def/spl vehs& Proto

DY MGR Trim

DIV MGR SMP/Frame/Axle

SR MGR Cab Weld

SR MGR Cab Paint

Production is an organized process of manufacturing/producing goods and services through the use of input resources of men, materials, money, machine, methods PRODUCTION SYSTEM: Ashok Leyland employs a continuous production system, making use of special purpose machines and produces standardized items in large quantities. Characteristics Standard products are manufactured Small work in progress in involved. More maintenance is required Minimum cost of production per unit Division of labour is made more efficient. PLANT LAYOUT: Product layout is employed in chassis assembly and engine assembly where in the facilities are arranged in a line as per the process sequence of the component manufactured.
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Characteristics Mechanized material handling. Lesser work in progress. Special purpose machines are used. ENGINE ASSEMBLY The engine case arrives at the first section and it is fitted with cam shaft and flywheel. The pistons are attached one by one to the crankshaft. Later fuel filters, oil coolers are attached. Belt and gears for the running came is attached in the next section. Finally the engine timing is set and sent for mounting on the body of a truck or a bus. FRAME ASSEMBLY: STAGE 1: Mounting of side members and cross members STAGE 2: Mounting of Front Spring-rear, Front Spring-rear, Rear spring-front, Rear spring-middle, Rear spring-rear. STAGE 3: Fitting of Engine mounting brackets and FES mounting brackets STAGE 4: Side members fastening to torque limit, Steering box bracket, Side Members reaming, Front tie channel mounting STAGE 5: Fitment of FES rear brackets, Shock absorber brackets and Torque checking PASSING STAGE: Checking and tilting

STAGES OF CHASSIS ASSEMBLY: STAGE 6: Radiator mounting brackets, Air tank mounting, Air cleaner mounting bracket, battery mounting bracket, grease nipple fitment, Bellcom lever mounting STAGE 7: DC valve mounting, Oil piping, and Clutch oil piping, quick release valve mounting. STAGE 8: Spring fitment, frame punching STAGE 9: Silencer fitment, first axle mounting. STAGE 10: Second axle mounting, slack adjustment STAGE 11: Fuel piping, Air piping, Air filter mounting, Diesel filter mounting, Steering box mounting STAGE 12: Engine mounting, fuel tank mounting, Diesel filter mounting, Steering box mounting STAGE 13: Radiator fitment, Radiator supports tightening, Rear lamps fitting, Turbocharger outlet pipe connection and Radiator hose connections STAGE 14: Exhaust piping, Shock absorber fitment (front and rear), Battery mounting and connection of circuits, battery casing fitment and second propeller shaft mounting STAGE 15: Tyre mounting, Maxcut checking STAGE 16: FES mounting, electric fitments (male-female connecting process)
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 STAGE 17: Bumper fitment, FES wiring, and Universal joint (UJ) fitment with steering handle, ABC fitment and connecting STAGE 18: Greasing of joints, nuts, etc., off track arrangements Now the cockpit of the truck is mounted on the body of the truck correctly and then it is sent for a drive or to the storage area. For every 13 minutes a truck rolls out from the factory. Both these sections have a conveyor belt on which each process is carried on. The belt keeps on moving and the operator has to complete his designated job or else its nothing but an error.

PDI (PRE DELIVERY INSPECTION): Its testing of vehicle on real road conditions. The following are the various tests done to test the vehicle: Speed test Acceleration test Vibration test Torque tightening Oil level and water level checking Electrical components checking Air leakage test Grease level checking Power steering hose routing and clamping Road test TQM: It is defined as both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization. It is the application of quantitative methods and human resources to improve all the processes with an organization and exceed customer needs now and in the future.

QUALITY POLICY: Ashok Leyland is committed to achieve customer satisfaction by anticipating and delivering superior value to the customer in relation to their own business, through the products and services offered by the company and comply with statutory requirements. Towards this, the quality policy of Ashok Leyland is to make continual improvements in the processes that constitute the quality management system, to make them more robust and to enhance their effectiveness and efficiency in achieving stated objectives leading to; Superior products manufactured as also services offered by the company. Maximum use of employees potential to contribute to quality and environment by progressive up gradation of their knowledge and skills as appropriate to their functions. Seamless involvement from suppliers and dealers in the mission of the company to address customers changing needs and protection of the environment.

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QC DEPARTMENT

GM

DIV MGR QC & TQM

SR MGR TQM

MANAGER Defence Coordination

SR MGR QC

SR MGR QC / DEFENCE

SR MGR QC VTS

MANAGER QC -W & P

OBJECTIVES OF QC DEPARTMENT: Identity the quality level to meet drawing and specification requirements. Establish necessary infrastructure and system to carryout quality planning, control and improvement activities. Exercise necessary controls at all stages to ensure total conformance of product quality to design specifications Evaluate product quality in the light of performance and customer feedback to review and update quality level, infrastructure and systems.

SYSTEM OF ACCEPTING PRODUCTS: ZERO DEFECT SAMPLING PLAN: Here, the defect level should be zero, then accept the product. If there is one defect also they will reject the product. DOUBLE DEFECT SAMPLING PLAN: Here, first one set of samples will be taken and if they find defect another set of samples will be taken if it goes beyond the fixed level then reject or else accept the products. INSPECTION: It is also to eliminate, substantially reduce or automate the inspection activity. There are 4 phases of inspection. 100% inspection Sampling Audit
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Identity check

RESPONSIBILITIES OF QC DEPARTMENT The quality engineering dept is responsible for quality of all products of Ashok Leyland, Hosur which is achieved by Ensuring the quality of bought out machine VIZ rough, semi-finished & finished. Exercising controls on the processes clearing, manufacturing and assembling there by ensuring the quality of the house made items. Ensuring the quality of the finished products prior to dispatch to the customers. To provide support to the vendors to meet the quality requirements and also guidelines for continuous improving. The department is also responsible for; Planning and implementation of APQPCP & PPAP procedures to meet TS16949 requirements. Training in quality engineering and quality control technique to all dept of Ashok Leyland, Hosur. Monitoring quality level of zero kilometres failures and field performance for improvements.

. CUSTOMER RETENTION: It represents the activities that produce the necessary customer satisfaction that creates customer loyalty, which actually improves the bottom line. It moves customer satisfaction to the next level by determining what is truly important to the customers and making sure that the customer satisfaction system focuses valuable resources things that really matter to the customer. It is the connection between customer satisfaction and the bottom line

WAYS TO RETAIN CUSTOMERS: The following are the various ways followed here to retain their customers; Warranty expenditure measure Dealers conference Customer visits Monthly plant quality review FEEDBACK FROM CUSTOMERS: Feedback is collected from the customers regarding quality through the following ways. Customer visits Toll-free telephone number Comment card Report card

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PLANT ENGINEERING

GM

AGM PE

SR MGR Utility/Paint

SR MGR PE CW/Chsy/CT

SR MGR Frame/Press/Axle/stores

MGR PE Civil

SR MGR Utility/ETP/

Executives

Executives

Executives

Executives

Executives

Plant engineering is responsible for proper functioning of the plant by carrying out maintenance operations such as electrical and electronics equipments maintenance, fork lift charging and its repairing, repairing of pneumatic circuits etc. It is also responsible for maintenance works carried out in the organisation. The following are the various types of maintenance: Predictive maintenance Preventive maintenance Breakdown maintenance Routine maintenance

PREDICTIVE MAINTENANCE: Predictive maintenance is done on assumption by experience before the occurring or by any symptoms of occurring. PREVENTIVE MAINTENANCE: Preventive maintenance is done before the accident occurs, they will take actions to prevent them.

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 BREAKDOWN MAINTENANCE: Breakdown maintenance is done after the accident occurs. Actions will be taken only after the occurrence ROUTINE MAINTENANCE: Routine maintenance is done on even time or on routine basis. It is generally carried out without affecting the productivity.

DIVISIONS: Plant engineering is divided into 4 divisions to carry out its functions. The following are divisions of plant engineering: Electrical Mechanical GWE(General Works Engineering) Civil PERIOD OF MAINTENANCE: Period of maintenance is done on the basis of VED analysis. It is also known as time based maintenance. Here VED stands for V - Vital E Essential D Desirable

PEP: - PRODUCTION ENGINEERING & PROJECTS PEP department works as a bridge between R & D and Manufacturing Department. The R & D designs and if the testing is successfully achieved it is transferred to PEP.

RESPONSIBILITIES OF PEP: Deciding and releasing of MAKE OR BUY DECISION ADVICE ( MBDA) for new components. If bought from supplier that may be; BOR (Bought out Rough) need further processing. BOSF (Bought out Semi Finished) need further processing. BOF (Bought out Finish) ready for assembly. BOR & BOSF are chosen to maintain quality standards, core competency, improve efficiency, and to enjoy cost benefits Laying down the Process and Selection of Machines. Designing new tools for in house components Organising and conducting assembly trials. Continuous improvements towards quality and productivity Analysis of processes and layouts Progressing of new projects to bridge between R & D and manufacturing.
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GM

DIV MGR PEP & IED

SR MGR PEP

MANAGER IED

Executives

Executives

INDUSTRIAL ENGINEERING DEPARTMENT This is closely related to PEP department. They work as a single wing. RESPONSIBILITIES OF IED Decide on capacity planning Manpower capacity & Requirement. Machine capacity and running time Operating time. Frame performance index for incentive. Frame the work instruction sheet, process sheet. Processing FMEA for assembly vehicle

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STORES AND LOGISTICS

GM

DGM Materials

AGM Stores & KDC

SR MGR GR&D,STORES

Executives

There are Stores meant for both Vehicle assembly and Engine Assembly. Vehicle part number and engine part number are framed for identification. 2 bin systems are practiced. Despatching of finished vehicle and semi finished engine are processed every morning. Goods Receipt Note (GRN) is the vital documents required for inspection. TVS Logistics are the group who supply the internal components. All the dispatching and supply schedules are accessed from ERP both by Company Logistics and TVS Logistics. As a cost beneficial measure for the Company and Supplier, the godowns of the supplier is located nearby for easy delivery and enhances the efficiency of JIT.

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FINANCE DEPARTMENT

DGM

AGM

DM

SM

Payables & Treasurey

Time Office & Payroll

Excise

Financial Accounting

Costing

Executives

Executives

Executives

Executives

Executives

Finance is considered as the life blood of business. This is because in the modern money- oriented economy, finance is one of the basic foundations of all kinds of economic activities. Finance function may be defined as the procurement of funds and their effective utilization.

RESPONSIBILITIES OF FINANCE DEPARTMENT: The pricing department is responsible for the fixing of prices for sales of the vehicles and for buying of raw materials and semi finished goods. Treasury section is responsible for all kinds of funding managements such as investments. Taxation section is responsible for remittance of tax, filing of returns, handling of litigations etc.., Costing and Budgeting department is responsible for the unit costing of each product in particular, such as spare parts and a vehicle as whole. The FSG (Finance account Service Group) deals with the payables and receivables at regional offices.

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SHAREHOLDING: The following are the shareholders of Ashok Leyland Ltd: 51% owned by Hinduja group 12% - 14% owned by public Remaining shares are owned by various financial institutions PROCESS & ACTIVITIES OF FINANCE: Financial Accounts Quarterly, Half-yearly and annual results published as per listing requirements Limited Review / audit coordination. Annual Reports Disclosures made are comprehensive; complied much before they become mandatory Early completion of accounts, audit process; forefront in adherence to accounting standards & other guidelines. Audit Committee comprises of Stalwarts from the profession. Automation of processes

Financial Planning & Control Financial Planning includes estimating the amount of capital to be raised and laying down the policies as to administration of the financial plan Monthly MIS: Very Comprehensive with wider coverage and highly informative. Monthly review covers business volumes, market share, physical and financial parameters including alerts on laggards, exceptions in all fronts Exception reporting and Profit management measures form integral part of this process

Treasury Management Raising of Funds Funds Management Debt Servicing Risk Management Financial Instruments used include; o Long term funds: Shares, GDR, ECBs, Debentures, term loans etc. o Short term Funds: Cash credit, Demand Loans, Commercial paper, FCNR, etc. Level of debt (Long-term): Rs. 2280.44 cr as on 31/3/10 Banking relationships for working capital is managed through Consortium of banks comprising of 14 banks Fund based Rs.600 cr & Non-fund based Rs.750 cr. Surplus management includes investment in Fixed Deposits, Mutual Funds, etc, direct investment in equity avoided. Debt Servicing includes repayment of principal and payment of interest on due dates and ensuring that commitments made are adhered to
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 Costing & Pricing Strategic pricing of products, quotes for various tenders Special pricing for export contracts. Monitoring of cost of production of various models and for make or buy decisions

Taxation Compliance with Direct (Income Tax Act, Wealth Tax) & Indirect Taxes (Excise, Customs, Service Tax, Sales tax etc). Tax planning is an important component of business decisions. Recent major developments include introduction of Service Tax legislation and VAT across many States. Aligning the business process across the organization and maximizing the benefits against such legislations is a major task handled by Finance. Regular tasks include remittance of tax, filing of returns, handling of litigations etc.

Investor Relations

In AL, Mutual Funds, FII etc.., hold 32% of shareholding besides public who hold 10%. FII & Mutual Funds represent investment community who track companys performance continuously very closely. Dissemination of data relating to companys performance and developments very important and sensitive Handled through presentations in periodic investor meet, web-cast, teleconferences, individual meets, address in TV etc. Presentations made are hosted in companys website STRATEGIC GOALS: Raise resources to the tune of roughly US$ 1.8 billion for funding expansion plans of AL, Nissan and other JVs over the next 3 years Achieve optimum funding mix / restructuring of companies to minimize the cost of raising of funds. Maximize tax efficiencies to improve cost competitiveness of products and improve viability of projects. Make globalization a reality through acquisitions and setting up of new ventures abroad by leveraging ALs strengths Bench mark financial processes to the best in the world and improve the bar; maintain high standards of financial discipline Maintain excellent relations with international investor community through effective communication for international offerings

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FINANCIAL CHALLENGES AHEAD: Global slow down challenging break even. Profitability pressures due to changes in business mix and commodity price movements. Forex management unforeseen volatility in major currencies; particularly important forex loans Tackling financial covenant breaches. Increase in interest rates Business integration of overseas units. Managing expectations of stakeholders

SYSTEMS The systems department maintains and updates the software / data used in the unit. The department also maintains the intra network and also does the system maintenance. System is an orderly grouping of independent components linked together according to a plan to achieve a specific objective. System is a combination of resources working together to convert the input to useful output. The total arrangement of the required entities takes place in this department

RESEARCH AND DEVELOPMENT World-class Technology: To offer world-class technology that is relevant and affordable to the Indian customer is the philosophy that drives R&D at Ashok Leyland. Over the years, this philosophy has been translated time and again into products that seamlessly integrate international technology with local needs. "The role of R&D is central in fulfilling the company-wide commitment to total customer satisfaction" states MrR. Seshasayee, Managing Director, and adds that the increased infrastructural and financial support expresses the company's determination to become self-reliant in R&D. Value to the Customer The immediate R&D priorities are to pro-actively address safety and environmental issues, harness and adopt technologies that provide value to the customer in an atmosphere enabling creativity and innovation. Powering those who "engineer tomorrows" with an enabling infrastructure has been top priority for the company. Test Tracks But our R&D is not confined within walls. It extends to the test tracks as well. Rigorous tests are carried out under stringent simulated conditions that replicate the most treacherous landscapes. Vehicle ruggedness and longevity are a prime customer concern, as they directly impact earnings. Ever conscious of this, Ashok Leyland makes extensive use of a modern CAD set-up, a comprehensive test track facility (where cobble-stones are calibrated and reset periodically), accelerated fatigue testing rigs and rigorous durability

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testing facilities. Together they ensure that there is a constant improvement in the life and on-road performance of every make of Ashok Leyland vehicle to hit the roads. Innovations Ashok Leyland product development successes have come from a keen sense of anticipation and attentiveness. The company initiated research into alternative fuels well before legislative debate had even begun in the country. The result was the implementation of CNG technology ahead of the rest promising a breath of fresh air for polluted cities.

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OBSERVATIONS AND INTERPRETATIONS. SWOT ANALYSIS STRENGH OF THE COMPANY Good Training System. Good Organisational Climate. High Market Share Skilled Employees Strong Functional Structure Standard Quality Product WEAKNESS OF THE COMPANY High price Sales representatives are less OPPORTUNITIES FOR THE COMPANY Due to liberalization, demands for heavy vehicle have steeped up all over the globe. National market through good advertisement. Company provides better credit facility to dealers. Company introduces promotional programmes THREATS FACED BY THE COMPANY High competition Liberal credit policy of other brand Promotional programmes of other brand Complicated national market New players entering the market

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FINDINGS
In this organization there is good employer-employee relationship. It targets 100% of its employees to be involved in its continuous improvement activities by motivating them through various financial and non-financial incentives. There is a well integration of all the functional departments which facilitates the use of software like ERP. To solve work related problems, QC (Quality Circle) and cross functional team are made effective Ashok Leyland has not got a foothold in the luxury trucks segment in its domestic market. Advertisement is not given much importance. The company is increasing its global foot print by entering Asian and African markets. Work instructions, standard operating procedures, inspection reports, quality control charts are effectively utilised by the employees

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SUGGESTIONS
The company should earmark more money for the advertisement and sales promotion of its products. It helps to increase the brand awareness and image. The company should concentrate on markets in the international arena where its competitors are less powerful Complaints should be rectified in the shortest possible time. For this a customer satisfaction cell should be organized The company should concentrate more on the luxury truck segments to keep a strong hold in the market

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CONCLUSION

Ashok Leyland is a well known automobile manufacturing company in India. In Unit II, Hosur, there is a well planned organisation structure being followed. There is a well integration of all the functional departments which facilitates the use of software like ERP. Retention of the talented people is essential as they contribute a lot to success of the organisation. The summer internship and the resultant report have been of great help to the trainee who, as an aspirant manager, to understand the functioning of a major establishment like Ashok Leyland. The summer internship has also revealed many unknown facts about the working of a manufacturing unit and familiarize about the assembling of commercial vehicles.

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BIBILIOGRAPHY

Ashok Leyland In- House Journal Ashley News www.ashokleyland.com Financial Management I.M. Pandey www.google.com.

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