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PRASIDH PRASAD
2010-2012
ACKNOWLEDGEMENT
I owe a great many thanks to a great many people who helped and supported me
in conducting the organization study at Apollo Tyres Limited , Kalamassery.
PRASIDH PRASAD
INTRODUCTION
Organisation has gained momentum over the past few decades as the
inevitable source to sustain business activities. An organization is a
power house of resources through which manufacturing and
production activities are effectively carried out.The established Indian
owned enterprises has been steadily increasing their capacity and
widening their range of products for every organization. There is a
hidden asset.An asset that has the power to execute, the vision to excel
and the spirit of limit-less energy.It is a force that is unstoppable; it is
the force of capital.
The Indian tyre industry is about 25,000 crore and is growing at a compounded
annual growth rate (CAGR) of 6-8 per cent.In terms of volume, about 1.2 million
commercial tyres and 1.5 million passenger vehicle tyres are manufactured
annually.The industry is ominated by 4 players-MRF, APOLLO, J.K and CEAT.
3. JK Tyres Limited
Apollo Tyres Ltd is a high-performance company and the leading Indian tyre
manufacturer. Head quartered in Gurgaon, a corporate-hub in the National
Capital Region of India, Apollo is a young, ambitious and dynamic organisation,
which takes pride in its unique identity. Registered as a company in 1976, Apollo
is built around the core principles of creating stakeholder value through reliability
initsproducts.
Apollo’s present strength and market dynamism steps from its early years of strife
in establishing itself as a tyre manufacturer within the closed Indian economy.
Over two decades, Apollo worked on a portfolio of products, tuned to customer
needs and an array of innovative marketing initiatives to establish itself as a
leader in its home market. Some of these include segmenting customers by their
load and mileage requirements, running tyre loyalty programmes and establishing
customer contact programmes.
For the first time, in 2006 Apollo ventured outside India in its quest to test itself
outside its home comforts. Apollo acquired Dunlop Tyres International Pty Ltd in
South Africa (since renamed as Apollo Tyres South Africa Pty Ltd) and Zimbabwe,
taking on southern Africa as the second domestic market. The company holds
brand rights for the Dunlop brand across 30 African countries.In 2009, Apollo
acquired Vredestein Banden B V in the Netherlands, and thereby adding Europe
as its third crucial market.
The company currently produces the entire range of automotive tyres for ultra
and high speed passenger cars, truck and bus, farm, Off-The-Road, industrial and
specialty applications like mining, retreaded tyres and retreading material. These
are produced across Apollo’s eight manufacturing locations in India, Netherlands
and Southern Africa. A ninth facility is currently under construction in southern
India, and is expected to commence production towards the end of 2010. The
major brands produced across these locations are: Apollo, Dunlop, Kaizen,
Maloya, Regal and Vredestein.
HISTORY OF APOLLO TYRES
Apollo Tyres Ltd. (ATL) was incorporated in 28th September, 1972 as a Public
Limited Company and obtained certificate of Commencement of Business on
October 24, 1972. The Company was promoted by Bharat Steel Tubes Ltd.,
Raunaq International Pvt. Ltd., Raunaq & Co. Pvt. Ltd., Raunaq Singh, Mathew T.
Marattukalam and Jacob Thomas.The company was taken over by Dr. Raunaq
Singh and his associates in 1974.The implementation of the tyre project took
place in 1976 at Perambra in kerala.
The research and development of Apollo tyres took place at Perambra and later it
had grown to a substantial height and stature at its present location at Limda,
Baroda.All the activities in the R&D center are extensively supported by a series of
highly sophisticated equipment that help the research scientists develop products
as per customer’s specific requirements.
PHASES OF DEVELOPMENT
1974. The company was taken over by Raunaq Singh and his associates.
2006. Expansion of passenger car radial capacity to 100000 tyres per day.
2006. Launch of India’s first range of ultra-high performance V and W-speed rated
tyres.
2008. Integrating the global product portfolio by rebranding the Dunlop brand
and rolling out new Dunlop Zones across South Africa.
A- ALWAYS LEARNING
T-TRUST MUTUALLY
E-ETHICAL PRACTICES
VISION
“A significant player in the global tyre industry and a brand of choice, providing
customer delight and continuously enhancing stakeholder value”
COMPANY MISSION
COMPANY AT A GLANCE
BOARD OF DIRECTORS
MD : Neeraj R S Kanwar
Promoters : 39.35 %
Public : 17.16 %
Govt. of
kerala /
Others, 1.98%
Prom oters ,
Public, 26.38%
39.35%
FIIs / NRIs /
FIS / Banks /
Foreign
Mutual funds
Corporate
, 17.53%
Bodies,
14.76%
MARKET SHARE
strong appetite for expansion saw Apollo becoming the number one tyre
manufacturer in the truck and bus tyre(Heavy Commercial Vehicle) segment in
india. With an average monthly production of 2,72,911 tyres, it ended FY 09 with
a 26 per cent share in the HCV segment. In the passenger car segment, Apollo had
an average monthly production of 2,63,779 tyres during FY 09, and ended the
year with a 19 per cent shae, behind only MRF with a 24 per cent share.
EBIDTA
14 13.08
12
10 9.53
8.81
% MARGIN
8
6
4
2
0
FY2007 FY2008 FY2009
6 5.75
5
% MARGIN
4
3 2.72 2.79
2
1
0
FY2007 FY2008 FY2009
NET SALES:
50,000 49,841
48,000 46,912
46,000
(Rs. Mn)
44,000 42,992
42,000
40,000
38,000
FY2007 FY2008 FY2009
24.61
25
20
17.13
% RETURN
15 14
10
0
FY2007 FY2008 FY2009
EARNING PER SHARE:
6 5.73
EARNING PER SHARE
5
4
(Rs.)
3 2.8 2.76
2
1
0
FY2007 FY2008 FY2009
DEBT/EQUITY:
1
1
0.8
0.69
0.61
0.6
0.4
0.2
0
FY2007 FY2008 FY2009
RETURN ON CAPITAL EMPLOYED:
24.61
25
20
17.13
% RETURN
15 14
10
PRODUCT PROFILE
5
0
FY2007 FY2008 FY2009
Products Brands
Apollo
Champio
Loadstar Super Champio
Hercules Champio
Loadstar Super Amar
Loadstar Super Amar D
Gold Amar G
XT 7 Amar A
XT 7 Haulug
Truck XT7 Gold
XT-9
XT-9 Gold
Kaizen
27 L
50 L 77 R
36 L 99 R Plu
Commando
XDT
Car Radials
Tubeless Radials
Tube Type
(Amazer XL
Quantum)
4x4 Radials
Amazer XL
Hawkz
Storm
Alloy Wheels
Inspire
Haste Slay
Passenger Torque Multispoke
Car Nirvana Sphere
Frost Cinco
Quest
Tubeless Radials
Hawkz
Acelere
Amazer XL
Powerhaul
Mixed Application Bias Segment
Krishak Premium
Farmking
DEPARTMENTAL PROFILE
Objective
Functions
The production planning and control department is responsible for fixing monthly
production levels, meeting production targets ,scheduling machines as per the
requirements ,employees ,developing subordinates and the preparation of raw
material requirements based on monthly production ticket.Other functions of the
PPC Department includes
It deals with computing all activities .The systems department is a network of 100
PC’s which are interconnected in a LAN with the use of optical fibers. The head of
this department monitors all of the software requirements of all the departments
with the help of the executives under him.
All the IT initiatives in Apollo are integrated with the overall corporate strategy.
Integration of the company is achieved by the implementation of the commonly
used ERP software; SAP enables ATL to connect a vast network of 140 centers by
converting them into a single source of data centre.
4.PRODUCTION DEPARTMENT
1. Mixing
2. Dipping
3. Calendaring
4. Extrusion
1. Bias cutting
2. Band building
3. Stock preparation
4. Tyre building
1. Tyre curing
2. Final inspection
The main duty of the quality assurance department is the determination of the
quality standards, measurements of the actual quality, compares it against the
standard and controls whether established standards are maintained and
practiced.
Functions
5. Testing process
The engineering department is the service department and provides its service to
various departments such as production, technical, quality, assurance and
engineering. The major function of the engineering department is manufacturing,
installation, maintenance and repair of machines. All machines are checked
regularly. The machine history is recorded so that the life of a particular machine
can be known and used respectively.
1. Preventive maintenance
2. Breakdown maintenance
Preventive maintenance means preventing the machines from any possible
breakdown and breakdown maintenance means repairing the faulty machines.
Structure of HR department
Group manager leads HR department of ATL, HR manager deals with working life
of a worker, from the time of his entry in to the organization until he leaves. It
basically includes activities such as HR planning, job design, performance
appraisal and job evaluation and motivation, welfare, safety and multi facts of
Industrial Relations.
Key functions:
Aims to play an active role in enabling the success and growth of the
organization
Continuous improvement in the quality of people and their approach
towards customer service
Providing newer and more effective methods of managing and leading
HR oriented growth strategies guide towards top level decisions
Strives to maintain a balance between qualitative and quantitative results
Creation of an organization wide involvement with the concept of HR
Commitment of the top management, which is the backbone for the
success of all new HR initiatives
The main functions of the HR department involve
1. Manpower planning
2. Recruitment
3. Selection
4. Performance appraisal
5. Training and development
The manpower planning process is directly linked to the long term business plans
of the organization. The manpower planning exercise is conducted annually to
assess the manpower requirements of the organization.
The following factors form the basis for the manpower planning exercise:
Product Mix
Optimum equipment capacities
Existing manpower
Envisaged organization structure
Comparison of actual versus expected productivity ( measured in terms of
Kgs/man-hour)
Inter-unit comparisons for common functions
RECRUITMENT POLICIES
The recruitment policy asserts the objectives of the requirement process and
provides a framework of implementation of the recruitment programme in the
form of procedures.
SELECTION
The job profile is communicated to the consultants and bio-data of candidates
are invited. The screening of bio-data is completed first by the concerned HR
department and then by the concerned Functional Head. An application blank is
filled is filled up by the candidate to facilitate the interview process. The
preliminary interview is conducted by the HR department. The final interview is
conducted by a panel consisting of the concerned Functional Head, and in case
of key positions, also by the president and/or VC&MD.
PERFORMANCE APPRAISAL
Objectives
All employees are to be covered under the annual appraisal, however, the
trainees and probationers are eligible for appraisal only before their due date of
confirmation.
Objective
The training and development procedure of Apollo Tyres Ltd has the following
broad objectives:
WELFARE MEASURES
The aim and objective of the welfare fund shall be to render financial assistance
to encourage cultural, sport, social and other welfare activities among the
members and to foster among them a spirit of mutual friendship, cooperation and
understanding. The organization provides good welfare services to its employees.
The company runs a subsidized canteen on a contract basis. Rest rooms with
lockers and washing facilities, arts and sports club, library, etc are other facilities
provided. Transportation facilities are also provided to all employees. Company
buses will take the employees from different destinations for which they have to
pay a nominal amount. All the employees drawing a salary below 6000 are
covered under ESI and those who are exempted to ESI are covered under group
accident policy and MEDICLAIM policy. The welfare department also includes
insurance schemes, policies managing the welfare fund activities.
SAFETY
TIME OFFICE
9. COMMERCIAL DEPARTMENT
a)Raw material store
The main function of the raw material store is to receive, store and issue goods
that are essential in the production of tyres .The raw materials are produced from
both local and international agencies .The natural rubber required is purchased
from local agencies. The steel beads wires required for the beads are supplied by
TATA.The processing oil is obtained by the Indian oil corporation .The carbon
black used is obtained from an agency in Karimugal.
The chemicals required for the rubber production includes sulphur, naptha, and
ammonium formaldehyde .These are ordered from countries such as China,
Thailand, and Russia.The placing of orders for the production requires a proper
coordination with other departments such as the production and marketing
department.
b) Engineering stores:
These stores are responsible for storing necessary spare parts, components
required for smooth functioning of the plant. It includes
1. General spares
2. Insurance spares
3. Furnace oil
4. Lubricants
5. Chemicals
6. Building Materials
On receipt of production department requirement the engineering stores
arranges for its release. The inventory management technique used in VED (Vital,
essential, and Desirable) analysis. A buffer stock is always maintained in the store.
c) Finished goods store: the main function of this store is to receive, store and
dispatch the goods. There are two dispatch centers, Replacement market and
Expert market. Their following go downs are used to store the finished goods .All
the finished goods .After their final inspections are kept till transferred as
required. Finished goods store has the function of receiving, storing and
dispatching as perm the supply chain management requirement and
communicating daily stock levels MIS to the Head office.
Financial section of the ATL, which is concerned with the planning and controlling
of the firms financial resources .The divisional head controls the functions. The
duties include providing information to formulate accounting and costing policies,
preparation of financial reports and the direction of internal auditing budgeting.
The company has to maintain records including quantitative details and situation
of fixed assets.
Costing The process of costing is based on the financial accounts. The price of a
single tyre is determined by taking into consideration, the actual cost involved in
making tyres. The company follows the rule of having only 0.5 or less percentage
of scrap. This helps minimizing loss.
Control It includes monitoring the electricity charges, wastages scrap and other
avoidable expenses .Distribution of payment though is a step also taken under
this function .This has helped in reducing manpower security requirements and
also other risks to be taken by the company. it maintains the minimum inventory
of 6-7 days ,as this is required for aging time of tyres.A total of 1.32 hours is
needed to make a tyre, make it heat resistant, strong, load resistant etc.
Control Excise ATL has to pay 16% excise duty for dutiable items for domestic
purposes to the Central Government .For exports no excise duty has to be
paid.ATL gives about 2-3 crore excise duty in spite of all these measures.
11.PURCHASE SECTION:
Apollo tyres is one of the main automobile tyres and tubes manufacturer in India.
Apollo sees vendors as strategic partners and constantly endeavors towards
building and strengthening long term relationships with its partners .The setup of
procurement functions in ATL is as follows:
1. Centralized procurement cell for raw material is based in the Head office
in Gurgaon
2. De centralized procurement cell for engineering spares &consumables
,based at respective manufacturing location
The basic purchase items are:
About 78 % of the company’s revenues comes from the manufacture of H& LCV
including tyres for the farm sector with no presence in the two and three wheeler
segment. To boost its sales in the heavy vehicle segment it has tie-up’s with
major players like Tata Motors, Ashok Leyland,Eicher, Mahindra and Punjab
tractors.
ATL is setting up a green field project in chennai to expand its capacity from 850
MTPD to 1300 MTPD in FY 13. 380 MTPD of the incremental capacity will cater to
radial tyres for the CV segment.With its agressive expansion plans globally , the
company is in look out for core value driven companies and is in search for new
markets outside India besides the current market reach of 70 countries.
STRENGTH
While taking fresh strides, Apollo Tyres has continued to maintain its lead
in the market within the dominant segment of truck and bus tyres within
the Indian tyre industry.
WEAKNESS
The capital intensive nature of the business in this segment also has its
drawbacks.
OPPURTUNITIES
THREATS
2.There is a need for multi-brand strategy for all its four brands.
(Apollo,Dunlop,Vredestein,Regal)
3.The industry faces tough competition from china. China’s emerging economy
is backed by stimulus packages and government policies , making it more
competitive at cost-levels.
5. The Rupee appreciation against Euro, Dollar and Pound may affect the
financials since the company exports to more than seventy countries.
OBSERVATIONS
Special attention given to its customers and keeps updated about the
new features to be adopted based on customer needs.
Trade union activities are strong and there are frequent lock outs at the
units.
SUGGESTIONS
The company must adopt more green initiatives with major thrust on
clean and renewable energy for its power needs.
CONCLUSION
The organization study at Apollo Tyres Limited was a great opportunityto gain
first hand information about the functioning of the company. The study was very
informative and the experience of working in the organization , interaction with
the staff was very educating. The training measures employed are satisfactory.
Following the rules and regulations and strictly maintaining discipline was also a
great learning curve.