final report (vinay)

Organisation study

1 PROFILES

1.1 Introduction:

The Automobile industry in India is one of the largest in the world and one of the fastest growing

globally. India manufactures over 17.5 million vehicles (including 2 wheeled and 4 wheeled) and exports

about 2.33 million every year. It is the world's second largest manufacturer of motorcycles, with annual

sales exceeding 8.5 million in 2009. India's passenger car and commercial vehicle manufacturing

industry is the seventh largest in the world, with an annual production of more than 3.7 million units in

2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger

vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of

2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South

Korea, and Thailand

An automobile, auto car, motorcar or car is “a wheeled motor vehicle used for transporting

passengers, which also carries its own engine or motor”.

The automobile industry comprises of heavy vehicles (trucks, buses, tempos, tractors), passenger cars,

and two-wheelers.

Acharaya Institute of Management & Sciences Page|1

http://en.wikipedia.org/wiki/Thailand

http://en.wikipedia.org/wiki/South_Korea

http://en.wikipedia.org/wiki/South_Korea

http://en.wikipedia.org/wiki/Japan

http://en.wikipedia.org/wiki/Automobile

http://en.wikipedia.org/wiki/Asia

http://en.wikipedia.org/wiki/Automotive_industry

http://en.wikipedia.org/wiki/Motorcycle

http://en.wikipedia.org/wiki/India

Organisation study

1.1.1 History:

The history of the automobile begins as early as 1769, with the creation of steam engine

automobiles capable of human transport. In 1806, the first cars powered by an internal combustion

engine running on fuel gas appeared, which led to the introduction in 1885 of the ubiquitous modern

gasoline- or petrol-fueled internal combustion engine. Cars powered by electric power briefly appeared

at the turn of the 20th century, but largely disappeared from use until the turn of the 21st century. The

need to reduce the amount of air pollution generated by transportation has raised new interest in electric

and hybrid vehicles. The early history of the automobile can be divided into a number of eras, based on

the prevalent method of automotive propulsion during that time.

The Indian automobile industry seems to come a long way since the first car that was manufactured in

Mumbai in 1898. The automobile sector today is one of the key sectors of the country contributing

majorly to the economy of India. It directly and indirectly provides employment to over 10 million

people in the country. The Indian automobile industry has a well-established name globally being the

second largest two wheeler market in the world, fourth largest commercial vehicle market in the world,

and eleventh largest passenger car market in the world and expected to become the third largest

automobile market in the world only behind USA and China.

The growth of the Indian middleclass along with the growth of the economy over the last few years has

resulted in a host of global auto giants setting their foot inside the Indian Territory. Moreover, India also

provides trained work force at competitive costs making the country a manufacturing hub for many

foreign automobile companies. India proves to be a potential market as compared to most of the other

countries, which are witnessing stagnation as far as automobile industry growth, is concerned.


Organisation study

A recent research conducted by the global consultancy firm Deloitte says that at least one Indian

automobile company will feature among the top six automobile companies that will dominate the car

market by 2020.

The Indian automobile industry proved to be in good shape last year even after the economic downturn.

This was majorly due to the fact of renewed interest shown by global automobile players like Nissan

Motors, which consider India to be a potential market.

As far as authorized dealer networks and service stations are concerned Maruti Suzuki is the most

widespread. The other automobile companies are also showing rapid progression in this field.

1.2 INDUSTRY PROFILE:

1.2.1 Indian Automobile Export market:

India is a very favorable market for small cars be it production, sales or export. Since the Indian

automobile industry is the largest manufacturer of small cars companies like Hyundai and Nissan Motors

export about 2,40,000 and 2,50,000 annually. India emerged as Asia's fourth largest exporter of

automobiles, behind Japan, South Korea and Thailand. The Indian automobile exports registered a 22.30

percent growth in the year 2009. The growth trend was as follows: Two Wheelers- 32.31 percent,

Commercial Vehicle - 19.10 percent and Passenger Cars grew by - 19.10 percent.


Organisation study

Key automobile manufactures in India

Maruti Udyog

General Motors

Ford India Limited

Eicher Motors

Bajaj Auto

Daewoo Motors india

Hero Motors

Hindustan Motors

Hyundai Motors India Limited

Royal Enfield Motors

Telco

TVS Motors

DC Designs

Swaraj Mazda Limite

1.2.1.1 Indian Automobile Industry Growth 2009 :

Gaining from Government stimulus packages, more demands and lower interest rates on automobile

loans the Indian automobile industry witnessed a phenomenal growth of 26.41 per cent in the year

2009. Segment wise cars posted a growth of 25.10 percent and two wheelers sales grew by 26

percent. The year 2009 actually turned out to be one of the best years in the history of the automobile

industry in India. If the trend continues the same way then Indian will soon become the second fastest

growing automobile market in the world only after China.


Organisation study

Table 1.2

Domestic Market Share for 2009 2010

AutomobilesMarket

Share

Passenger Cars 15.86 %

Commercial

Vehicles4.32 %

Two Wheelers 3.58 %

Two Wheelers 76.23 %

Figure 1.2


Organisation study

1.2.1.2 Auto components sectors:

Any automobile is the assembly of several auto parts with each part contributing to its machinery and

polishing its quality. Lack or failure of just one part can breakdown the entire system so every

component plays its part. We have provided the detailed list of all the components of any vehicle. This

list would enable the user to gain complete knowledge about various auto parts. It would allow the user

to access the importance and uses of various integral parts of automobile.

The automotive sector, comprising of the automobile and auto component sub sectors, is

One of the key segments of the economy having extensive forward and backward linkages

with other key segments of the economy. It contributes about 4 per cent in India's Gross

Domestic Product (GDP) and 5 per cent in India's industrial production. The well developed

Indian automotive industry ably fulfills this catalytic role by producing a wide variety of

vehicles like passenger cars, light, medium and heavy commercial vehicles, multi-utility

vehicles such as jeeps, scooters, motorcycles, mopeds, three wheelers, tractors etc.

The auto component industry, which is an important part of automotive sector, comprises

about 500 firms in the organized sector and more than 10,000 firms in the small and

unorganized sector has been one of the fastest growing segments of Indian manufacturing.

It has the capability to manufacture the entire range of auto parts and has rapidly added to

its capacity base. Indian auto components industry has an important place at the global

level.


Organisation study

1.2.2 Advantage India:

India holds huge potential in the automobile sector including the automobile component

Sector owing to its technological, cost and work force advantage. Further, India has a well-developed,

globally competitive Auto Ancillary Industry and established automobile testing and R&D centers. The

country enjoys natural advantage and is among the lowest cost producers of steel in the world. The

Indian automobile industry today boasts of being the second largest two wheelers manufacturers in the

world, second largest tractor manufacturer in the world, fifth largest commercial vehicle manufacturer in

the world and Fourth largest Car market in Asia. World largest Motorcycle manufacturer is in India.

India has largest three-wheeler market in the world, second largest two wheeler market in the world,

fourth largest passenger vehicle market in Asia, fourth largest tractor market in the world, fifth largest

commercial vehicle market in the world. India became fastest growing car market in the world in 2004.

In India, lots of investment opportunities exist in the following areas:

_ Establishing Research and Development Centres

_ Establishing Engineering Centres

_ Passenger Car Segment

_ Two Wheeler Segment

_ Heavy truck Segment

Segment Installed Capacity(Nos.)

Four Wheelers 1,590,000

Two & Three

Wheeler

7,950,000

Total 9,540,000


Organisation study

1.2.3 Total production:

The automobile industry produces a wide variety of vehicles including 17 lakh four wheelers

and over 80 lakhs two and three wheelers in 2005-06. The turnover of auto components

industry has grown from US $3.1 billion to US $10 billion between 1997-98 and 2005-06.

Production trend:

Installed capacity of this sector has been growing at a compound annual rate of over 16 per

Cent since 2001-02. Automobile industry grew by 14.83 per cent in April 2006-Feburary

2007. Cumulative growth of some important segments in April 2006-December 2007 was

_ Passenger Vehicles: 22.91%

_ Passenger cars: 24.76%

_ Utility Vehicles: 12.69%

_ Multi-Purpose Vehicle: 28.38%

_ Commercial Vehicle: 36.12%

_ Medium and heavy Commercial Vehicle: 36.74%

_ Light Commercial Vehicle: 35.25%

*Source: Ministry of Heavy Industries & Public Enterprises (Department of Heavy

Industries), Government of India


Organisation study

1.2.4 Some of the major companies:

There are 15 manufacturers of passenger cars and multi utility vehicles, 9 manufacturers of

Commercial vehicles, 14 of two-three wheelers and 14 of tractors besides 5 manufacturers

of engines. In passenger car segment, Maruti Udyog Ltd. Is on the top, followed by Hyundai

and Tata Motors. Some of the major players of Automobile industry are:

Automobile Production

Category 2000-01 2001-02 2002- 03 2003-04 2004-05 2005-06 2006-07(tillSept'06)

PassengerCars 513 564 609 842 961 1,046 594

Multi Utility

Vehicle 128 106 112 146 249 263 144

Commercial

Vehicles 157 163 204 275 350 391 237

Two

Wheelers 3,759 4,271 5,076 5,625 6,527 7,600 4,155

Three

Wheelers 203 213 277 341 374 434 264

Total 4,759 5,316 6,280 7,229 8,461 9,735 5,394

Growth in

per cent 2.1 1.7 18.6 15.12 16.8 14.97 18.04


Organisation study

1.2.5 Total investment & turnover:

The automobile industry had an investment of nearly 50,000 crore in 2002-03 and it is

Estimated to go up to Rs. 80,000 crore by the year 2007.The turnover of this sector

exceeded Rs. 144,000 crore in 2003-04 including nearly 92,500 crore of automobile

industry. In 2004-05, total turnover of this sector was estimated to exceed Rs. 1,65,000

Crore

Presence of foreign firms:

Company Industry MarketCapitalization( RsCrore), January 2007

Maruti Udyog Ltd. Automobile 26711

Hero Honda Motors Automobile 14925

Bharat Forge Co. Auto Ancillaries 8090

Ashok Leyland Automobile 6,011

Amtek Auto Auto Ancillaries 4549

Exide Industries Auto Ancillaries 2981

Sundaram Clayton Auto Ancillaries 2497

TVS Motor Company Automobile 1944

Sundaram Fasteners Auto Ancillaries 1756

Fag Bearings India Auto Ancillaries 1124

Bosch Chassis Systems India

Auto Ancillaries 1044

Eicher Motors Automobile 1005

Automotive Axles Auto Ancillaries 957


Organisation study

After liberalization of Indian Economy in general and automobile industry in particular,

considerable number of Multinational Companies is operating in India either as wholly

owned subsidiaries or in collaboration with their Indian collaborates. This automotive sector has

taken benefit of liberalization of Indian economy to a large extent and made available

various international brands in India for Indian consumers. Firms like Hyundai are supplying

manufactures cars in the international market using its manufacturing facility in India in a

big way. These firms are using locally available efficient and cost competitive huge pool of

human resource in India.

Employment generated: This sector has generated about 4.5 lakh of direct employment and about one

crore of indirect employment. The auto component and ancillary industry has huge forward and

backward linkages in terms of employment generated. Huge number of firms in auto

component and ancillary industry in India are in small scale and unorganized sector

employing large number of human resources.

Automotive sector in India has great potential to play a significant role in export from India.

This potential is being tapped to some extent after liberalization of Indian Economy. During

the last two years, the export in this sector has grown mainly to the export of cars,

two/three wheelers.


Organisation study

1.2.6 Future prospects:

Future prospect of Indian Automotive Sector is looking bright. A Customer Satisfaction

Ranking done by TNS Automotive in April 2007 revealed that indigenous automobile

companies are replacing foreign multinational companies in terms of consumer satisfaction.

For the first time since 2002, the year on which TNS started this kind of survey, home

grown companies displaced MNCs from the top. This trend shows that automotive sector

has much to deliver in the years to come.

Automobile Export

(Numbers in thousand)

Category

2000-

01

2001-02 2002-03 2003-04 2004-05 2005-06 2006-

07(till

Sept.06)

Passenger Cars 23 50 71 126 161 170

98

Multi utility

Vehicles 4 3 1 3 6 5 3

Commercial

Vehicles 14 12 12 17 30 41 23

Two wheelers 111 104 180 265 367 513 332

Three wheelers 16 15 43 68 67 77 62

Total 168 185 307 479 620 806 519

Growth (%) 20.24 9.74 65.35 55.98 31.25 28.03 27.43


Organisation study

1.3 COMPANY PROFILE

1.3.1 Vision

Aditya Auto would constantly strive to live and 'excel' & meet customer expectations and shall continue

to be 'customer focused' and 'customer success' driven.

1.3.2 Mission

Aditya Auto is committed to building process capabilities, ensuring engineering excellence, assuring

quality and guaranteeing customer delight through sustained leadership and teamwork.

1.3.3 Aditya Auto Products & Engineering (India) Private Limited

Aditya auto is a privately owned organisation with its head-quarters in Bangalore; it began as Autarky

Auto in April 1989 founded by C. Jayaraman(Managing Director & C.E.O) and established as Aditya

Auto Products in February 1999. Aditya Auto serves OEMs and tier-one automotive suppliers in both

domestic and global markets; In addition to providing door latches, window regulators, wiring harnesses,

and engineered assemblies, Aditya Auto is also pushing into new markets as a contract manufacturer.

While classified as a midsize business, the company operates a complex manufacturing and distribution

network that spans six production facilities in India plus logistic support units in India, Europe, and

North America.

Aditya Auto’s core business is the design, development & manufacture of Door & Access systems,

Wiring Harness systems, Driver Control Systems, integrated products for the automotive industry.

Aditya Auto not only caters to the need of domestic customers but also the long list includes international

OEM’s and automobile manufacturers from around the world. This list of customers includes names like

Mahindra and Mahindra, PIAGGIO, Skoda Auto, Ashok Leyland, Tata Motors, Suzuki, Robert Bosch,

Inteva Products etc.


Organisation study

Along with the above said products “Aditya Auto” has pushed into the world of contract manufacturing;

wherein Aditya Auto manufactures parts or products based upon the customers design and preference;

rather than designing it themselves.

Company Profile

Name Aditya Auto Products & Engineering

(India) Private Limited

Founder C. Jayaraman (Managing Director &

C.E.O)

Headquarters Bangalore, India

Industry Automotive

Products and services Auto parts and

contract manufacturing

Employees 400

Revenue 100 crores($15.4 million)

No. of Plants 4

Products Door latches, window regulators, wiring

harnesses, and engineered assemblies


Organisation study

CUSTOMERS

Aditya Auto caters to a wide range of both domestic and international clientele; some of them are:-

Domestic

Aditya Auto’s proves in manufacturing parts for various domestic and global OEM’s are well known in

market; some of the domestic OEM’s who rely on Aditya for there equipment components are:-

Maruti Udyog (Suzuki) – 800 cc Car; Omni, Gypsy, Esteem, Wagon R, Versa & Swift

Tata Motors – Sumo Victa Gx

Ashok Leyland - Iveco LCVs & Trucks

Eicher Motors (LCVs & Trucks)

Mahindra & Mahindra – Scorpio, Bolero & Cab King

Global

Aditya also caters to the requirements of various overseas i.e. global OEM’s and tier 1 suppliers t the

automobile industry; some of which are:-

ArvinMeritor Lvs USA, France, Poland, & China (Spin off Company of Rockwell International

Inc., USA), now known as ArvinMeritor Inc.

Robert Bosch, Clayton, Australia

Kongsberg Automotive, Burton, UK

KRAH – RWI, Drolshagen, Germany

ESAB, LAXA, Sweden

INFRASTRUCTURE

DOOR & ACCESS DIVISION


Organisation study

This division located in the Doddaballapur Industrial Area in Bangalore, deals with the design and

manufacture of Window Regulators and Door Latches for various vehicles with customers located across

India and abroad. Under Technical license with ArvinMeritor, a global leader in Window Regulators &

Door Latches, Sun Roof and related products, this division of Aditya Auto has an agreement that

provides for technical assistance and new product development.

Spread over floor area of 3450 sq m in a 6032 sq m campus, this unit has a full complement of facilities

like Welding facility and Manufacturing lines along with testing facilities.

WIRING HARNESS DIVISION

A 100% Export Oriented Unit, this division located at the Bommasandra Industrial Area in Bangalore,

deals with the design and manufacture of Harnesses, Integrated Products, Lead wires and Insert Molded

Connectors for export. This division has the distinction of being ranked thirteenth in India and is also the

only manufacturing facility to get ISO, QS & TS certifications within three years of inception. Spread

over floor area of 1750 sq m in a 4000 sq m campus, this unit has a full complement of facilities for high

quality production.

CONTRACT MANUFACTURING DIVISION

Established in 2005, this division primarily deals with the exports of Window Regulator and Latch sub

systems. This division also houses Aditya Auto’s Engineering Design Center. Located in the

Doddaballapur Industrial Area in Bangalore, this facility addresses the demand for outsourced

manufacturing of auto components and epitomizes our competitive edge in the realm of design, testing

and prototype development


Organisation study

The division caters to the manufacture of products intended for OEMs of leading international

automobile brands and is capable of meeting specific product development requirements. Aditya Auto is

a major player in the export of automotive parts to. The major products are Door Latch sub-systems like

Retention Plate & Back Plate sub-assemblies and Window Regulator sub-assemblies.

COLD HEADING & PART MANUFACTURING

Established in 2006, this is the latest addition to the manufacturing divisions at Aditya Auto. Located at

Pudukottai near Trichy in Tamil Nadu, this division handles the Cold Forging, Cold Heading and Vertical

Integration tasks. Spread over an 18,000 sq feet campus, this division deals with the manufacture of fasteners

and rivets.

PRODUCTS

Door & Access Products

Window Regulators

Aditya Auto manufactures and supplies a wide range of Window Regulators, both manual and power, to

various customers across domestic and overseas markets.

Cross Arm

Drum & Cable

Push Pull

Door Latches

Door Latches are among the flagship products of Aditya Auto. It consist of three product categories that

include


Organisation study

Split Latch (2 PC. External & Internal)

Compact Latch

Actuators Including ECUs

Wiring Harness & Integrated Products

Aditya Auto has been a major producer of wiring harnesses since its inception; the various types of

harnesses manufactured by it are:-

Wiring Harnesses

Integrated Harnesses

Electronic Sub-Assemblies

Over Moulded / Insert Moulded Assemblies

Lead Wires

Turnkey Solutions

Aditya’s competencies across the design, development, production, testing, and validation space for a

wide range of auto components enables it to address the requirement for Prototypes.

Organisational Structure


Organisation study

Organisation Structure refers to the framework, typically hierarchical, within which an organization

assigns the lines of authority and communications, and allocates rights and duties. Organizational

structure determines the manner and extent to which roles, power, and responsibilities are delegated,

controlled, and coordinated, and how information flows between levels of management.

A structure depends entirely on the organization's objectives and the strategy chosen to achieve them. In

a centralized structure, the decision making power is concentrated in the top layer of the management

and tight control is exercised over departments and divisions. In a decentralized structure, the decision

making power is distributed and the departments and divisions have varying degrees of autonomy.

Elements of Organization Structure

There are six elements that managers need to address when they design their organization’s structure:

Work Specialization

This describes the degree to which tasks in an organization are divided into separate jobs. The main idea

of this organizational design is that an entire job is not done by one individual. It is broken down into

steps, and a different person completes each step. Individual employees specialize in doing part of an

activity rather than the entire activity.

Departmentalization


Organisation study

It is the basis by which jobs are grouped together. For instance every organization has its own specific

ways of classifying and grouping work activities.

There are five common forms of departmentalization:

Functional Departmentalization : It groups jobs by functions performed. It can be used in all kinds

of organization; it depends on the goals each of them wants to achieve.

Product Departmentalization : It group jobs by product line. \each manager is responsible for an

area within the organization depending on his/ her expertise.

Geographical Departmentalization : It groups jobs on the basis of territory or geography.

Process Departmentalization : It groups jobs on the basis of product process flow.

Customer Departmentalization : It groups jobs on the basis of common customer.

Chain of Command

It is defined as a line of authority that extends from upper organizational levels to the lowest levels and

clarifies who reports to whom. There are three important concepts attached to this theory.

Authority: Refers to the rights inherent in a managerial position to tell people what to do and to expect

them to do it.

Responsibility: The obligation to perform any assigned duties

Unity of Command: The management principle that each person should report to only one manager.

Span of Control


Organisation study

It is important to a large degree because it determines the number of level and managers an organization

has. It also determines the number of employees a manager can effectively manage.

Centralization and Decentralization

In a centralized organization, all decisions are made by C-level managers such as chief executive officer,

chief operating officer and chief marketing officer. Centralization leaves department managers with little

or no input.

A decentralized system allows all managers the opportunity to give input, while bigger decisions are still

made by C-level managers.

Formalization:

It refers to the degree to which jobs within the organization are standardized and the extent to which

employee behavior is guided by rules and procedure.

Types of Organizational Structure:

The most common organizational types may be classified as follows:

The Functional Structure

The Divisional Structure

The Matrix Structure

Functional Structure:


Organisation study

Functional Structures have been extensively used large organizations; Employees within the functional

structure are differentiated to perform a specialized set of tasks. For instance, the marketing department

would be staffed only with marketers responsible for the marketing of the company's products. This

specialization leads to operational efficiencies where employees become specialists within their own

realm of expertise.

Functional structures are often characterized by a large degree of formalization, making each function

reliant on standardized ways of operating. Decision-making power is often centralized at the top of the

hierarchy.

Divisional Organizational Structure:


Organisation study

A divisional structure groups an organization’s divisions according to the specific demands of products,

markets or customers. Unlike the functional organizational structure, where the different organizational

functions of the company conduct activities satisfying all customers, markets and products, the divisional

structure focuses on a higher degree of specialization within a specific division, so that each division is

given the resources, and autonomy, to swiftly react to changes in their specific business environment.

Therefore, each division often has all the necessary resources and functions within it to satisfy the

demands put on the division.

Matrix Structure:


Organisation study

The matrix structure is an organizational design that groups employees by both function and product.

The organizational structure is very flat, and the structure of the matrix is differentiated into whatever

functions are needed to accomplish certain goals. Each functional worker usually reports to the

functional heads, but do not normally work directly under their supervision. Instead, the worker is

controlled by the membership of a certain project, and each functional worker usually works under the

supervision of a project manager. This way, each worker has two superiors, who will jointly ensure the

progress of the project.

The cross functional teams of a matrix structure reduce the functional barriers between departments, and

increase the integration of functions. Matrix structures open up for communication, and may provide an

opportunity for team members to learn from each other - thus distributing valuable knowledge laterally within

the organization. The matrix structure makes it possible to assign specialized resources to projects when needed.

Example:-Matrix Organizational structure


Organisation study

Organizational Structure of Aditya Auto

Aditya Auto being auto-parts manufacturing concern and due to its foray into contract manufacturing,

has to cater to the various whims and needs of the customer; so as to meet the customer requirements on

time. Thus it follows a complex structure which is a mixture of all the above defined organizational

structures namely functional, divisional and matrix structures.

As is visible in the following organizational structure “The top management the i.e. board of directors;

managing director and the dept. heads follow a functional structure i.e. they grouped according to there

functions; each department has a divisional structure which is followed by a matrix structure.


Organisation study


Organisation study

Departmental Analysis

Aditya Auto being a automotive parts manufacturing concern consists of the following departments,

Human Resource

Accounts

Engineering

o Design

o Production

o Stores

o Purchase

Marketing

Human resource:

Today customers expect a higher standard of service than they did years ago. They now choose suppliers

based on the Quality of products and services that meet not just customers' needs, but exceed their

expectations.Human Resource Department has a major role to play in building right attitudes of people to

change the way of working and their work life by facilitating the learning and practice of these principles.

Competency may be determined by comparison between the job requirements that define what

employees must do and the qualification of the employees.Human Resource Department should promote quality

culture in the organisation by improving competency levels of employees through continual training and other

actions.


Organisation study

Competency

New appointments

Promotions

Position classification and grading

Salary determination

Performance appraisal review and processing

Conduct problems

Performance problems

Policy development

Benefits

Insurance etc.

Finance:

Finance is the life blood of any business. Organisation should understand the importance of finance as a

component of the strategic decision making process. SMK has a well functioning finance department. The policy

of the finance department is to ensure provisions of timely finance to various departments, be liaison with bank,

plan and analyze cash inflows and outflows, maintaining accounting records as per the company’s Act and

Quality policies.


Organisation study

Finance and accounting department Policy:

The policy of Accounting and Finance department is to ensure provision of timely finance to various departments

without any delay as per plans and to exercise financial controls and to maintain and record all financial

transactions of the organization accurately, systematically and to provide all statutory reports and returns to

concerned statutory agencies; and to provide internal information reports on time to management for measuring

organizational performance and for decision making. The accounting is done as per the Generally Accepted

Accounting Principles prevailing in India and as per the accounting policies formulated by the organization and

also as per the accounting standards issued by the Institute of Chartered Accountants of India.

The accounting shall be done systematically by using the various processes and by classifying as various cost

centers duly approved by the management. The documents and records is classified, written and kept in a logical

order and in a manner easy for identification and retrieval up to the stage of final accounts and for presentations

to those concerned with the business. The records are kept updated and current till previous day so that any

information given is accurate, current and useful. The records, reports and procedures will be audited internally

as the management may deem important either by internal staff or by external agency to ensure the authenticity

and security of the systems and procedures. Aditya Auto taking into consideration various constraints has

outsourced the functions of Accounts Department to an external organization.

Engineering department:


Organisation study

Aditya Auto being a manufacturing concern Engineering Department is most significant part. The Engineering

Department is responsible for all the necessities related to product from its design & production of product to

quality control & maintenance of the machineries. Each of which is highly essential not only for the quality of the

product but it also affects the reputation and brand image of the company as a whole.

The sub-departments under Engineering are:

Design:

The design department has the main function to design parts in accordance with the customers

requirement and also improve the existing design provided by the customer so as to meet there specifications; in

some cases parts are designed according to the suitability to the existing machinery or in other cases improve the

designs quality and durability.

Production:

The production department sets standards and targets for each section of the production process.

The production department takes care of each function and process relating to the production of the product. It

also monitors the quality and quantity of the product. In Aditya Auto the quality of the product is monitored at

each stage of production rather than at the end.


Organisation study

Stores:

The stores department is responsible for storing all the necessary tools, spares, raw materials and

equipment required by the manufacturing process. Where sourcing is unreliable, buffer stocks are kept and the

use of computerised stock control systems helps keep stocks at a minimal but necessary level for unhindered

production. The activities of stores is an important one. The materials required as per Production plan

are to be indented, Stored and made available. It is also the duty of Stores Department to handle and

preserve the materials to avoid breakage and deterioration in quality.

Purchases:

The purchase department is plays an important role. It is responsible for providing raw material,

components and equipment required to keep the production process up and running . A vital aspect of this role

is ensuring stocks arrive on time and to the right quantity and quality.

Production Process:

The Co-ordination between various departments and the functions of these departments can be best understood

by considering the following production process followed in Aditya Auto.


Organisation study

The process consists of the following operations;

Incoming Inspection of raw materials

Storage of raw materials

Progressive banking

First part & online inspection

Bending & Coining operation

First part & Online Inspection

Final Inspection

Packing

Back Audit

Layout Inspection

Dispatch to customer

Aditya Auto starts the process of manufacturing ones the customer confirms an order i.e. customer accepts the

terms & conditions of the contract; accepts the design and gives a go-ahead on manufacturing the product. The

process is as follows.

Incoming Inspection of Raw materials:

The first step begins when the raw materials are ordered and received by the purchase department. The

purchase department is responsible to check whether all the raw materials supplied are in accordance with order

placed. If wrong materials are supplied he has to ensure that necessity steps are taken to correst it.

Storage of raw materials:


Organisation study

In the next step the raw material that is stored; various variables needs to be checked before storage can be

complete like the moisture content in the storage area, materials packing condition, material handling

methodology etc ; this is taken care of by the store department.

Progressive Banking:

In this step the raw materials needs to be separated according to grade; rusting and the usage in different

processes. This is done so that it becomes easy to supply the required and correct raw materials to the respective

process without delay and in correct quantity; again this is taken care of by the stores department.

First Part &Online inspection:

The next step is inspection this step checks the instruments for any calibration errors and rectifies or replaces

them as and when possible.

Bending & coining operation

Bending and coining operation deals with the actual manufacturing wherein the raw materials are prepared and

used in production of the product with required specification.

Final Inspection:

This inspection is done so as to confirm that the machine tools and press used are calibrated and there exists no

errors in them after production. If an error is found it is rectified or the machine is replaced.

Packing:

At this stage the products which are manufactured are checked for defects and defective parts or products are

rejected and the good ones are packed.


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Back Audit and layout Inspection:

Back Audit & layout inspection is done so as to check and recheck the machine tools and presses used and

recalibrate them or replace them according to the requirement.

Dispatch to customers:

The finished goods after packing are checked after which these packed goods are dispatched to the respective

customers.


Organisation study

SWOT Analysis

A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.

The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The following diagram shows how a SWOT analysis fits into an environmental scan.

SWOT Analysis Framework


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1.1 Strengths

1.1.1 Desing validation process

Desing validation process refers to ensuring the design meets the form and functional requirements specified in the statement of requirement for a product, by means of physical testing is commonly referred to as design validation.

Simultaneous Engineering

A way of simultaneously designing products, and the processes for manufacturing those products, through the

use of cross functional teams to assure manufacturability and to reduce cycle time.

Lean manufacturing

Aditya Auto has applied the concept of Lean Manufacturing in production wherein as mentioned earlier

the quality of the product is checked at each stage rather than at the end; thus minimizing errors and

improving quality.

1.2 Weaknesses

1.2.1 Raw Material Input

Though most of the Aditya Auto is automated or semi-automated many of the raw-materials are manually

introduced into the machinery, because of the vaiation in the amount of input required in various machinery. But

such manual input not only consumes time but also can be hazardous to the workers.


Organisation study

1.2.2 Lack of full Fledged IT department

Lack of facility in the IT department was one of the major weekness found in Aditya Auto. Though there is an

intranet facility available in the company, it was found to be inefficient.

1.3 Opportunities

1.3.1 Increasing Exports

The figure shown below states increase in the export of automotive parts in the past two decades.

Size and Export of Indian Auto Component Industry (In US $ billion)

Source: Source: Automotive Component Manufacturers Association


Organisation study

India being a labour intensive country several international and foreign companies are looking towards India and

other Asian countries for cheap and reliable auto-parts, hence the exports would tend to grow substantially. Only

few automotive parts manufacturers cater to the ever increasing need of foreign companies . Though Aditya

Auto has several international clients,its major source of income remains from that of the local players

1.3.2 Foreign Investments

Over the past decades there has been an increase in FDI in the automotive sector, lots of foreign players are

looking for a company with latest technology where in it can invest. Aditya Auto can use this opportunity to

update its technology and grow. Thus giving competition to several multinational automotive parts

manufacturers which have entered Indian markets.

1.4 Threats

1.4.1 Multinational Companies

With liberalisation privatization and globalization many of the MNC’s have entered the Indian market, which has

high finalcial backing and with latest technology which can easily cut the cost of there products and can give a

mojor competition for many local players like Aditya Auto Products.

1.4.2 Increase in Raw Material Prices.\

Due to scarce in the resources available prices of raw materials like steel have been increasing over few years causing a major concern to the producers, which has effected the company with increase in the cost of production and decrease in the profit margins.


Organisation study

1.4.3 Access to World-class Technology and Quality Practices

Though Aditya Auto products has good technology and an ISO certificate one, but it is not something which can

be referred to as on par with multinational companies. Aditya Auto doesn’t have access to the existing and ever

changing world-class technologies, this restriction has made it difficult for Aditya Auto to compete with

multinationals with there high-class technology.

1.4.4 Remaining cost competitive

Cost is the major factor which determines the competitiveness of the company. Its been a challenge to the Aditya

Auto to be cost competitive against the multinational companies which has backed itself with high-class

technology and huge financial support..


Organisation study

Best Practices

Over 20 years of its existence Aditya Auto has adopted several good practices which not only proved beneficial

for the company but also for its employees. Some of them have been described below;

Quality Circle

A quality circle is a volunteer group composed of workers (or even students), usually under

the leadership of their supervisor (but they can elect a team leader), who are trained to identify, analyse and

solve work-related problems and present their solutions to management in order to improve

Aditya Auto has implemented quality circle in it; where in the employees create voluntary groups so as to

detect and discuss the problems faced and the possible solutions for it.

Lean Manufacturing

Is a system / approach to eliminating waste and enabling continuous

improvement. Aditya Auto has applied the concept of Lean Manufacturing in production wherein as

mentioned earlier the quality of the product is checked at each stage rather than at the end; thus minimizing

errors and improving quality.


Organisation study


final report (vinay)

Documents

largest automobile market

indian automobile industry

automobile industry

largest passenger car

automobile sector

economy of india

foreign automobile companies

indias passenger car