1

CHAPTER- 1

INTRODUCTION

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INTRODUCTION

1.1 Introduction to the study

Organizational study is an effort towards understanding the organization, its policies,

structure and methodology adopted. It gives us brief description of the overall

functioning of the company or organization. The study encompasses the systematic

and careful application of knowledge about how people perform within organizations.

To understand the working environment of the organization.

An Organization is a social unit of people, systematically structured and managed to

meet a need or to pursue collective goals on a continuing basis. All organizations have

a management structure that determines relationships between functions and

positions, and subdivides and delegates roles, responsibilities, and authority to carry

out defined tasks. Organizations are open systems in that they affect and are affected

by the environment beyond their boundaries

There are a variety of legal types of organizations, including: corporations,

governments, non-governmental organizations, international organizations, charities,

not-for-profit corporations, partnerships, cooperatives, and universities. A hybrid

organization is a body that operates in both the public sector and the private sector,

simultaneously fulfilling public duties and developing commercial market activities.

As a result the hybrid organization becomes a mixture of a government and a

corporate organization

This organization study gives a clear idea about the functions, practices and the

delegation of authority of HMT Kalamassery, and also the major issues facing the

company and by critically analyzing the issues, forming some suggestions also form

part of the reporting curriculum.

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1.2 Scope of the study

The Organization study was conducted in HMT Machine Tool kalamassery . The

study helps to understand the overall working of the organization . The study also

helps to understand the various activities of the organization and functions of each

department . HMT Machine Tools Kalamassery concentrate mainly in production area

and Marketing is done by central office situated in Banglore .

1.3 Objectives of the study

The objective of the study is to understand the functioning of an organization . The

main idea is to understand the functioning of each department . To understand the

functions responsibilities of various department and structure of each department .

1.4 Methodology of the study

The study was a descriptive study. The study was undertaken personally visiting the

plant at Kalamassery and was done over a period of 30 days. Both primary and

secondary data are used for the completion of the organizational study. Primary data

were collected through personal interview and secondary data were collected from the

organizational manual and different department manuals.

1.5 Limitations of the study

One of the major limitations was the time available for the study was limited . Due to

security reasons all enquires were not get cleared. Due to year ending most

department are busy . Area of concentration was mainly HMT Machines tools limited,

Kalamassery. Marketing department is at central office and kalamassery unit

concentrate on production .

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CHAPTER- 2

ANALYSIS OF BUSINESS

ENVIRONMENT

5

ANALYSIS OF THE BUSINESS ENVIRONMENT

2.1 Analysis of the remote external environment

The external environment of an organization comprises of all the entities that exist

outside its boundary, but have significant influence on its growth and survival. An

organization has little or no control over its environment but needs to constantly

monitor and adapt to these external changes, a proactive or reactive response leads to

significantly different outcome. Any organization that easily adapts to the

environment essentially survives and the ones that do not are the ones that are

eliminated in the competition .The informational resources on external environmental

forces are critical to organizations stability and survivability and all this data must be

collected and analyzed to implement strategies and to maximize the organizations

strengths and opportunities.

The external environmental factors that affect the company’s business could be

analyzed using PEST analysis

Political Factors

HMT being a public sector undertaking is greatly influenced by the political forces.

There is a change in policies every time the government changes. The business

decisions are steered to a great extent based on the individual preferences of the new

leadership .The government policies and regulations relating the company’s client

industries can largely affect the future of its business with these customers. For

example, engineering sector, automobile and manufacturing sector .

Major clients of HMT are defense and railways . Promotion of the sector augers well

for the organization as it can crack heavy deals with these companies.

Moreover, the automobile and manufacturing sector was deregulated , which opened

doors for the entry of private players in the market .Such entrants can also be potential

customers for the company .Being a PSU, it is the preferred choice for the other state-

run entities and also the defense services .

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Economic Factors

The National Manufacturing Policy aims at enhancing the sector’s share in gross

domestic product (GDP) to 25 per cent within a decade and creating 100 million jobs

by 2022.The cut in the excise duty in certain manufacturing industries like cars and

two-wheelers in interim budget would help the export of key engineering goods,

which are poised to become the top contributors to India’s export basket . In addition

to that, the government plans to give an impetus to engineering in India through

investments in infrastructure development in 2012-17 in telecom, energy and

construction sector .

Social Factors

In India the whole country and its people are poised for a giant leap towards economic

growth and prosperity. People have realized how important it is for the economy to

develop for their own betterment. Levels of awareness have gone up drastically and

people are much more open to industrial growth. However, having said that HMT

should also ensure that the company its decisions are ethical and don’t encroach upon

the rights of the society. The company should not be negligent towards societal

interests and rights . Companies are taking more interest in corporate social

responsibility these days and steps have been taken by HMT too to further the same.

Its contributions towards CSR till date include building of roads in the location where

company locates and also building of schools and hospitals .

Technological Factors

HMT being an engineering and manufacturing giant is to a great degree driven by

technological developments and innovations and has its earnest efforts directed

towards improving its technological prowess to meet the changing requirements of a

growing economy. At the same time the company has to keep pace with the

developments happening in its business areas, else it will be knocked out by the

competitors .HMT Machine Tools has imbibed a wide range of technologies as a

result of its diversification strategies, to be a truly multi-technology company. The list

includes through not limited to the following technologies :

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High Speed Machining

Computer Integrated Manufacture

Precision Machining

Computer Numeric Controls

R&D efforts in these technology areas are a continuous and ongoing process at the

Design & Development Centers of all HMT Machine Tools’ manufacturing units. In

each area of HMT Machine Tools’ business domain, well-established research &

testing facilities with experienced engineers to man them are in position. Extensive

use is made of in-house CAD facilities for designing products .

The R & D efforts include the design and development of over a 100 new types

variants of machine tools HMT Machine Tools’ R&D is committed to provide the

best to the customer in terms of contemporary technology and contemporary designs

at competitive price

2.2 Industry profile

The engineering sector is the largest of the industrial sectors in India and can be

broadly categorized into two parts, namely, heavy engineering and light engineering.

India’s engineering industry accounts for 27 per cent of the total factories in the

industrial sector and represents 63 per cent of the overall foreign collaborations. It has

emerged as the largest contributor to the country’s total merchandise exports.

Capacity creation in sectors such as infrastructure, power, mining, oil and gas,

refinery, steel, automotive, and consumer durables are driving demand in the

engineering sector. The sector has a comparative advantage in terms of manufacturing

costs, market knowledge, technology and creativity.

Continued growth of manufacturing sector and favorable regulatory policies would

further propel the sector’s growth. The engineering industry has been de-licensed and

enjoys 100 per cent foreign direct investment (FDI). Further, the National Policy on

Electronics is formulated by the Government of India to boost India's electronics

systems and design the manufacturing industry and improve its share in the global

market. Machine Tools belong to the heavy engineering sector .

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2.2.1 Global Scenario

Dollar‐volume production of machine tools around the world during 2012 dipped by

1%. Output by the 28 principal producing countries was $93.2‐billion. That represents

a decline from 2011’s $94.3-billion, following previous increases of 35% and 25%.

So the hole caused by the deep worldwide recession in 2009 has been filled. Most

major producers had relatively small percentage changes in their output. Among the

larger gainers were Germany with a 10% increase; the United States with a 7%

improvement; Austria, +15%; and the Czech Republic, which increased one‐quarter

over 2011. Other countries declined in production, including Brazil, Belgium, and the

United Kingdom.

China saw a slight dip in output in 2012 but remains by far the largest maker of

machine tools. Japan ranks second, with no change in production from the year

before, and it is followed by Germany. The output from those top three account for

64% of 2012’s total world shipments measured in this survey. The United States, still

seventh in output, shipped almost $5‐billion. It continues to be a large importer of

factory equipment with a whopping 30% gain in 2012, and so total consumption of

machine tools increased 19% to $8.7‐billion.

The  largest‐consuming country  in the world continues to be  China, which installed

$38.5-billion worth of machine tools, more than one-third of it in imports. On a  per-

capita basis, consumers Switzerland, South Korea, and Taiwan top the list.

Results of the World Machine Tool Output and Consumption survey 2013 conducted

by Gardner Publication is ready and they have shared the results of the survey with all

the respondents. Based on the survey report India’s position in the world during 2012

is 13Consumption, & 4th in Imports. Figures regarding Production, Import, Export &

Consumption are attached. Brief analysis of the data compiled by them is as follows

Production of machine tools

Global Machine Tool estimated production amounted to USD 93.2 Billion during

2012 a slight decline of 1% from revised USD 94.2 Billion during 2011. India

Production now occupies 13th position in the world compared to 12th during

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2011.Top five countries are China(30%), Japan (20%), Germany (15%), Korea (6%),

& Italy (6%). Top 3 countries accounts for 64% of the global output

Table 1 Global Machine Tool Production

  Country 2012 2011

    Value in US$ Million

1 China, peoples Republic 28,270.00 27,540.00

2 Japan 18,326.60 18,252.90

3 Germany 13,373.70 13,622.90

4 Korea, Republic of 5,754.00 5,705.00

5 Italy 5,912.60 5,667.70

6 Taiwan 5,160.00 5,430.00

7 United States 4,676.70 4,983.20

8 Switzerland 3,607.00 3,199.30

9 Spain 1,072.60 1,060.30

10 Austria 971.1 1,032.00

11 France 855.6 805.8

12 Czech Republic 646 728.4

13 India 720.7 880

14 Canada 639.3 693

15 United Kingdom 731.5 649.8

16 Turkey 659.4 649

17 Brazil 891.3 643.2

18 Netherlands 407.6 402.3

19 Belgium 357.5 296.9

20 Russia 263 263

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21 Sweden 218.4 201.8

22 Finland 196.2 185.1

23 Australia 150 155

24 Mexico 122.4 122.4

25 Denmark 76.5 70

26 Portugal 50.1 46.3

27 Romania 42.5 42.5

28 Argentina 32.4 36.4

  Total 94,344.00 93,204.90

Source: imtma . (Indian Machine Tool Manufacturers' Association)

Consumption of machine tools

Global consumption of machine tools amounted USD 85.4 Billion during 2012 had

decreased by 3% from USD 87.6 Billion during 2011. China which occupies top

position accounts for 41% of the world’s consumption. Top 5 consuming countries

are China (41%), Japan (8%), Germany (7%), USA (9%) & Korea (5%)  India with

about 3% global share occupies 6 compared to 7th position during 2011 .

Table 2 Global Machine Tool Consumption 

  Country 2011 2012

    Value in US$ Million

1 China, Peoples Republic 39,090.00 38,510.00

2 United States 7,321.30 8,722.50

3 Japan 7,417.70 7,462.80

4 Germany 6,901.80 6,400.20

5 Korea, Rep. of 5,244.00 4,646.00

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6 India 2,286.10 2,556.40

7 Italy 2,762.90 2,172.00

8 Brazil 2,385.70 1,867.20

9 Taiwan 1,989.00 1,844.00

10 Mexico 1,360.90 1,360.90

11 Turkey 1,341.10 1,344.30

12 Russia 1,317.00 1,317.00

13 Canada 1,143.60 1,255.60

14 France 1,309.10 1,118.10

15 Switzerland 1,274.50 1,034.40

16 United Kingdom 745.8 816.2

17 Austria 620.5 586

18 Spain 427.1 392

19 Czech Republic 403.3 348.5

20 Sweden 372.8 344.4

21 Netherlands 346.4 343.1

22 Argentina 210.1 261.3

23 Belgium 292.2 246.8

24 Romania 243 243

25 Australia 213 210

26 Finland 150.3 140.1

27 Portugal 118.3 137.5

28 Denmark 43.1 39.8

  Total 87,600.90 85,449.80

Source: imtma . (Indian Machine Tool Manufacturers' Association)

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2.2.2 Indian Scenario

Machine tools production in India has decreased to Rs 3885. Cr. during 2012-13 from

Rs. 4299 Cr compared to 2011-12 registering the annual decline of 10%. Machine

wise production values are collected from all the members from each quarter and

consolidated to annual production values for further analysis. IMTMA segregates the

production of machines into CNC machines, Non CNC machines, Metal cutting

machines and Metal forming Machines .

Figure 1 Production of Metal Working Machine tools in India (Value Rs. Cr)

Source imtma (Indian Machine Tool Manufacturers' Association)

India stands 13th in production and 6th in the consumption of machine tools in the

world as per the latest survey. The country is set to become a key player in the global

machine tools industry and is likely to see substantial high-end machine tool

manufacturing. Industry experts say that the phenomenon is linked to the spurt in

manufacturing, for which the machine tools sector serves as the mother industry.

Since, the manufacturing capacity is stagnating and the growth rate for the machine

tools industry falling in developed economies, shifting machine tool capacity to low-

cost high skill geographies like India, has become imperative.

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Table 3 Industry Segment

The industry can be segmented in several ways:

  CNC Conventional

Forming Rs. 376 Cr RS. 189 Cr

Cutting Rs. 2811 Cr Rs. 509 Cr

The Indian Machine tool Industry has around 1000 units in the production of machine

tools, accessories/attachments, subsystems and parts. Of these, around 20in the large

scale sector account for 70 percent of the turnover and the rest are in the SME sector

of the industry. Approximately, 75 per cent of the Indian machine tool producers are

ISO certified. While the large organized players cater to India’s heavy and medium

industries, the small-scale sector meets the demand of ancillary and other units. Many

machine tool manufacturers have also obtained CE Marking certification, in keeping

with the requirements of the European markets.

Table 4 Indian Machine Tool Industry 2011-12 & 2012-13

Indian Machine Tool Industry 2011-12 & 2012-13 (INR Crores)

   2011-12  2012-13  Growth Rate

  Production  4299  3885  -10%

 Exports  180  214  19%

 Imports  7645  7598  -1%

 Consumption  11764  11265  -4%

The Indian machine tools sector offers several opportunities for investment. Given the

current gap between demand and supply, there is a clear need for adding capacities in

this sector. The industry is moving towards increasingly sophisticated CNC machines,

driven by demand from key user segments, such as, automobiles and consumer

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durables. Machine tool manufacturers need to develop capabilities to cater to this

demand and investments in this area could yield long term benefits.

2.2.3 State Scenario

HMT is the only machine tool manufacturing company and printing machine

manufacturing company in kerala. The Kalamassery unit of HMT is famous for

development activities. Their products have always fetched awards and prizes at

different trade fairs and competitions. The manufacturing shops at MTK are supported

by various infrastructural facilities like High technology machining testing facilities,

foundry, Heat treatment, computer system, CAD system etc. Well experienced

personnel from the human resource of the unit keeps in line with the current corporate

trends. This unit view HRD as one of the primary concern as a measure to increase

productivity and enhance social stranding. The company has a well established

training system managed by personnel of high technical and management skills.

Porter’s Five Force Analysis 

Porter's Five Forces of Competitive Position Analysis were developed in 1979 by

Michael E Porter of Harvard Business School as a simple framework for assessing

and evaluating the competitive strength and position of a business organization.

This theory is based on the concept that there are five forces that determine the

competitive intensity and attractiveness of a market. Porter’s five forces help to

identify where power lies in a business situation. This is useful both in understanding

the strength of an organization's current competitive position, and the strength of a

position that an organization may look to move into.

The five forces analysis of Machine Tool industry

Threat of New Entrants

Due to the existence of well established large players in the sector the threat of new

player is less . Because of the established players in the sector they have an upper

hand in both market share and technology in the sector . Also the fact that these sector

require high investment and also the fact the returns from investment will take time .

But the fact that there exist a large gap between demand and supply . New players are

attracted to the sector .

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Bargaining power of Suppliers

Since there are many supporting industry in and around the main company shows that

the bargaining power of suppliers is comparatively less . Also the fact that import of

raw material is less expensive . The main raw material is iron steel and copper .

Competitive Rivalry

Even though the sector is dominated by few players the level of competition in this

sector in high . Competitive advantage a company needs in this sector is technology at

hand for production as well as on the product . So the fact that the sector is expected

to grow in coming years will attract new players and competition increases .

Bargaining power of Buyers

Due to the fact that demand outstrip supply the buyers have limited opportunity . Also the growth of user industry also leads to a gap in demand and supply . So buyers have limited power .

Threat of Substitutes

While there are no product substitutes, increasing imports are a threat to domestic

industry .

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2.3.1 Industry Key Players

Mysore Kirlosker Ltd

Incorporated in 1941, Mysore Kirloskar manufactures lathes, grinders, computerized

numerically controlled (CNC) machines and special purpose machines. It also

produces grey iron and iron castings for machine tools, diesel engines, compressors

and high-pressure valves. Company has a fully owned subsidiary -- Precision Tooling

Systems. The recession in the capital goods industry has hit the company's

performance since the eighties. The company was passing through one of the worst

periods of crisis particularly around 1985 when Vikram Kirloskar took charge. No

improvement was evident in the next three years and the company finally ended 1987

with a net loss of Rs 57 lac. A large export order from the then USSR pulled the

company out of the mess to some extent for the next few years. However, it sank once

again, recording a massive loss of Rs 16.42 cr in 1993-94. Till 30 Sep.'95, the

company's sales remained stagnant at Rs 40.75 cr. To insulate its machine tools

operations from cyclic fluctuations, the Rs 60-cr company has diversified into various

fields like packaging machines, software exports, pollution control, manufacture of

sophisticated life-saving equipment, etc, dumping outdated products and entering into

technological collaborations with foreign leaders. It has tied up with Linde, Nesa,

Kaiser Aluminium and EMW for air- and water-pollution control and effluent-

treatment systems. For software, it has a tie-up with Wipro Infotech; and for surgical

equipment with Waxter, US. During 1996-97, the company has established a new unit

for the manufacture of Cobalt Therapy Equipments for Cancer treatment with a

installed capacity of 10 nos.

Lakshmi Machine Works

LMW, founded in the year 1962, is today a global player and one among the three

manufacturers of the entire range of Textile Machinery.History stands as a

documented proof of LMW’s Corporate and Financial success reflecting phenomenal

growth since first year of operations. LMW has 60% market share in the domestic

Textile Spinning Machinery Industry.LMW diversified into CNC Machine Tools and

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is a brand leader in manufacturing customized products. LMW Foundry makes

Precision Castings for industries the world over. The only company in Asia outside

Europe to manufacture OE products for Mikron of Switzerland.LMW’s Global

presence has grown over the years, with a market presence not only in developing

countries, but also in Europe

ACE Designers

Ace Manufacturing Systems (AMS) is one of the largest manufacturers of Machining

Centers in India. Strong R&D Facility, a passion to excel and a young dynamic team

led by experienced professionals has fuelled the rise of AMS to this premier position.

Being an ISO9001:2008 company, AMS has reposed great importance in its quality

driven manufacturing processes and performance oriented management practices.

These are ably supported by modern infrastructure with in-house production of

critical components.

Offering the widest range (over 40 variants) of machining centers, both vertical and

horizontal, they cover the entire gamut of milling applications, from the simple to the

most complicated. AMS also offers turnkey option and tooled up solutions.

AMS has contributed greatly in dispelling the myth that machining centers are

expensive. A strong presence in the domestic market has been complimented by an

equally impressive global presence

MAIN FOREIGN COMPETITORS FOR THE UNIT’S PRODUCTS

Okuma, Japan

Nori Saiki, Co Ltd., Japan

Tukisama, Japan

Muzak, Japan

GDM, Germany

Churchill, England

Victor, Taiwan

Tuma, Korea

EMAS, Germany

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2.3.2 Competitor Analysis

Table 5 COMPETITOR ANALYSIS

Company Mysore Kirlosker

Ltd

Lakshmi Machine

Works

ACE Designers

Number of Product 23 21 23

Ownership Pvt Pvt Pvt

Location Karnataka Tamil Nadu Karnataka

Major Product CNC Lathe CNC Lathe CNC Lathe

The main competitor of HMT Machine Tools are Mysore kirlosker , Laksshmi

Machine Works and ACE designers .Both ACE and Kirlosker are Karanataka based

and Lakshmi Machine have its unit at Tamil Nadu .Kirlosker produce 23 types of

machine tool product . The major product of kirlosker is CNC lathes . Lakshmi and

ACE both have their major product as CNC lathes as they are new variety of Machine

tool available in the market . In total they Lakshmi have 21 products and ace have 23

products . All three companies are private companies .

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CHAPTER 3

ORGANIZATIONAL ANALYSIS

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OVERVIEW OF THE ORGANIZATION

3.1.1 Background And History

By the end of the Second World War the government of India was confronted by a big

problem of disposing the colossal war waste. Ultimately the committee was

constituted to inquire into the possibilities. The committee report of 1948 proposed

the establishment of a government owned machine tool industry. This was expected to

fulfill two aspects. The first being utilization of the Rs.4,000 million worth of metallic

waste. The second was the incorporation of a state owned infrastructure

manufacturing facility. The result was birth of the Hindustan Machine Tools Ltd,

which diversified in due course of time to the present structure of the multi-core,

multi location, multi unit, multi product industrial giant HMT LTD.

The HMT Ltd was started as a single factory to produce a Tool Room Lathes at

Bangalore in collaboration with M/s.Orelikon of Switzerland in 1953 with a capacity

to manufacture Bound 400 machines per year. Since then different collaboration

continued in house R&D and tremendous marketing efforts brought HMT to its

present status. The growth of HMT Ltd was characterized by the forward and

backward integration of technology and product diversification. Thus the company

which started with manufacturing and selling expanded its machine tools product

range to evolve as the ultimate solution in metal cutting. The product diversification

efforts took the company to the business of watches in 1962, tractors in 1971, die-

casting on plastic machinery in 1971, printing machine in 1972, Lamp and lamp

making machinery in 1976, Food processing machinery in 1980, CNC systems in

1986, Ball screws in 1B986 and reconditioning in 1990.The multi products activities

made Hindustan Machine Tools Limited change its identity as HMT Limited.

Today HMT Limited has 16 manufacturing units with 22 products divisions spread

through the length and breadth of India. A subsidiary via HMT (International) Ltd.

undertakes the exports of the company. They are also exports several items for other

Indian Companies.

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HMT Limited was restructured in 1992, to facilitate better administration of the

multiproduct business activities. Accordingly the following business groups were

established.

Machine tool business group to concentrate on metal cutting machines.

Industrial machinery business group to deal with printing machines, die

casting and metal forming machines.

Agricultural business group to concentrate on tractors

Engineering components group to deal with casting and ball screws.

Consumer products business group to deal with watches and lamps.

In addition of these business groups the company owns three subsidiaries as follows.

HMT (International) Limited which undertakes over as projects and exports.

Praga Tools Ltd which manufactures machine tools.

HMT Bearing Ltd, which manufactures precision bearings in collaboration

with M/s Koyo of Japan.

It was in the early past independence era that, HMT began in a small way to meet a big

commitment. 'To manufacture mother machines to build modern industrial India .

HMT was conceived by the Government of India in 1949, and was incorporated in

1953, with the objective of producing a limited range of machine tools, required for

building an industrial edifice for the country.

1960's:

With the success achieved in the initial years in absorbing the technology and in

attaining production competence far ahead of the original plans, the Company

launched a bold plan of diversification and expansion which resulted in the

duplication of the Bangalore Unit and the setting up of new units at Pinjore,

Kalamassery and Hyderabad.

In 1967, recession struck the Indian Engineering Industry and the consumption of

machine tools dipped drastically. The traumatic years of recession did indeed serve to

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bring to the fore two latent strengths of HMT, namely, the urge to survive and the

confidence to innovate. With these strengths at full play, the Company emerged from

the recession with the world's widest range of machine tools and associated services

under a single corporate entity. With action plans firmly launched for diversification

into Tractors, Presses and Press Brakes, Printing Machines, Die Casting and Plastic

Injection Molding Machines, Horological Machinery, etc., which were considered to

have economic cycles that are different from those of machine tools. With a Watch

Factory already established in 1961-62, additional capacities for watch production

were contemplated to provide a greater cushion against cyclical fluctuations in capital

goods markets and also to meet the burgeoning demand for watches.

1970's:

The 70s witnessed the fructification of all the diversification plans as envisaged.

1980's:

In the 80s, HMT as a part of vertical integration efforts, launched units to manufacture

Watches at Ranibagh, Watch Cases at Bangalore, Stepper Motors at Tumkur, CNC

Systems at Bangalore, Ball screws for use on CNC machines at Bangalore and HMT

took over Indo-Nippon Precision Bearings Ltd and Praga Tools Ltd as another

subsidiary.

1990's:

The Company restructured itself into five Business Groups viz., Machine Tools,

Watches, Tractors, Industrial Machinery and Engineering Components as part of

Business Reorganization

The New Millennium:

HMT is now restructured with addition of three more subsidiaries to those already

existing. HMT now comprises of six subsidiaries under the ambit of the Holding

Company which also manages the Tractors business directly.

1. HMT MACHINE TOOLS LIMITED

2. HMT WATCHES

3. HMT CHINAR WATCHES

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4. HMT BEARINGS

5. HMT INTERNATIONAL

6. PRAGA TOOLS

HMT MACHINE TOOLS LIMITED

The HMT machine tools Ltd is engaged in the manufacture and marketing of General

Purpose Machine Tools, Special purpose machine tools, computer numerically

controlled machine tools, Precision machinery system, Printing machines, Metal

forming press and Ferrous and non- Ferrous casting.

THE KALAMASSERY COMPLEX OF HMT LTD., KALAMASSERY

The kalamassery unit, 4th machine Tool unit was established in 1963 and started

production in 1964. The unit originally manufactured only two type of centre lathes

viz. H&LB, but later added special purpose lathes like copying and turret lathes.

Model LT-20 was the first product to be indigenously development of this product

was land mark in the history of the unit.

The production of this machine was later licensed to M/S QETCOS Ltd Kollam

Kerala, MATOOLS ,Philippines Ceylon steel corporation, Sri Lanka .The original

centre lathes ,H&LB were then replaced by a new family of unified series of lathes,

which was designed and developed by the unit, incorporating the concept of computer

optimized design, manufacturing, standardization and unification.

The strategic plans of the HMT group are co-ordinate by the holding company at

Bangalore. To navigate through the challenges of the new millennium, HMT seeks

strategic alliances from global leaders to synergies its own strengths with symbiotic

inputs from the partners. During the period 1972 – 73, Kalamassery unit diversified

its product range to include printing machines. This was born the printing machinery

division (PMK) the commercial entry of PMK was two types of letter presses Viz.

RTE and TRAF Under collaboration with M/S Nebiolo of Italy. Auto plates, on

indigenous development came up subsequently.

During the ensuing years, the printing machinery division came up with offset press

viz. OMIR in collaboration with M/s Nebiolo. Later indigenous offset presses viz.

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som 136 was introduced to the market. The first two color machine from HMT was

OMIR in Collaboration with M/S Koenig & Bener of Germany. The latest

development of PMK is the paper cutting Guillotine PG 92 D3, in collaboration with

M/S Divano Binders of Italy.

The Kalamassery unit of HMT is famous for development activities. Their products

have always fetched awards and prizes at different trade fairs and competitions. To

name of few are the prizes bagged in different IMTEX fairs by FC- 25, SBC, and

SBCNC machines. The CNC lathe model STC 25 has won the VASVIK Industrial

Research Award 1987 instituted by the vivdhalaxi Audyogik samsodhan vikas Kendra

(Vasvik) Mumbai for outstanding advancement of science and technology.Product

development at machine tool unit Kalamassery:

The machine tool product of this unit have been certified by RWTUV – Reinisch –

West falischer Technical User watchungs Vercin – an international certification

agency of high repute as confirming to total quality management system. Both the

divisions have been awarded ISO 9001 certification by IRQS. The manufacturing

shops at MTK are supported by various infrastructural facilities like, High

technology, CNC machining centers, Testing facilities, foundry, heat treatment,

computer system, CAD system etc. Around 800 well experienced personnel from the

human resources of the unit keeping in line with the current corporate trends

3.1.2 Company Vision & Mission

Vision

To be an Engineering Company of International Repute, Providing Best of Products

& Services with Contemporary Technologies to suit Customer Needs

Mission

“To establish ourselves as one of the world’s premier companies in the

engineering field having strong international competitiveness”

“To achieve market leadership in India through ensuring customer satisfaction

by supplying internationally competitive products and services”

25

“To achieve sustained growth in the earnings of the group on behalf of

shareholders”

Objectives

“To encourage the modernization of Indian Industry through the supply of

engineering goods and services of world class excellence”

“To maintain technological leadership through continuous efforts to update

product technology and manufacturing methods”

“To globalize our operations by developing a mix of international markets and

businesses”

“To ensure a satisfactory return on capital employed, to meet the growth needs

and the aspirations of our stakeholders”

“To present an active, pleasant and productive working environment”

3.1.3 Products And Market

The machine tools marketing divisions with its headquarters at Bangalore and having

wide network of regional and divisional offices spread throughout India caters to the

marketing needs of this unit at the primary level. To co-ordinate the marketing

activities at unit level and co offer technical support to machine tool marketing, a

strong sales and services team is constituted at unit level. HMT’s major customer

includes defense, railways, automobile and other engineering industries in various

sectors

Market Share

The overall market share for Turning Machines is around 2-3 % of the country's

consumption and about 6-9 % of the country's production .

The overall market share for Sheet fed offset Printing Machines is about 5-7% of the

country's consumption

26

The following products are developed by the machine tools unit of kalamassery

indigenously:

Table – 6

YEAR PRODUCT

1. 1969 – 70 LT – 20

2. 1976 – 77 NH/NL

3. 1976 – 77 FC – 25

4. 1981 – 82 SB CNC – 35

5. 1982 – 83 SB CNC – 55

6. 1986 – 87 STC – 25

7. 1990 – 91 STC – 15

8. 1991 – 92 ECONO CNC

9. 1992 – 93 STC – 20

10. 1993 – 94 STC – 10

11. 2000 – 01 STALLION – 10

12. 2003-04 M CELL

13. 2004-05 SMC With GANTORY LODER

14. 2004-05 STALLION – 100

15. 2005-06 SB CNC 40, ECONO CNC 26

16. 2006-0 SB CNC 60, AUTO COMP

27

Table – 7 PRINTING MACHINE DIVISION

PRODUCT MODEL

Sheet fed Offset Printing Machines

(SOM)

SOM 125G ( Single Colour )

SOM 131

SOM 136

SOM 225 ( Double Colour )

SOM 231

SOM 236

SOM 425 ( Four Colour )

SOM 436

Paper Cutting MachinesPG – 9203

PG - 115

3.1.4 Awards, Recognitions And Certifications

The products of Kalamassery Unit have fetched awards and prizes at different trade

fairs and competitions . To name a few are the prizes bagged at different IMTEX fairs

by FC25 , SBC and SBCNC machines and the prizes bagged by Printing Machines for

indigenous design at several Printing Fairs and exhibitions .

At IMTEX 2000 , the unit's product Stallion 100 HS secured the FIE Foundation

Award .

Table – 8 AWARDS

1990-91 Best Productivity National Productivity Council

1990-91 Tech. Development for Machine

Tools, Bangalore

Directorate General of Technical

Development

1991-92 Best Productivity National Productivity Council

1992 National Safety National Safety Council

1994 Best Performance in Company

Standardization

Sir Jahangir Ghandy Trophy

1995 Best Products at IMTEX – 95 CMTI - PMT Trust Award

1995 Best Product at IMTEX – 95 FIE Foundation

28

1995-96 Regional 'Top Exporters Shield' Engineering Export Promotion

Council, Chennai

1996-97 Regional 'Top Exporters Shield -

Project Exporters'

Engineering Export Promotion

Council, Chennai

1997-98 All India Trophy for Highest

Exporters

Engineering Export Promotion

Council, Kolkata

1998 Best Product at IMTEX – 98 FIE Foundation

1998 Best Products at IMTEX – 98 CMTI - PMT Trust Award

1998-99 Regional Trophy for Highest

Exporters in the Group  - Services

Exporter

Engineering Export Promotion

Council, Southern Region, Chennai

The machine tool products of the unit had been certified by RW-TUV ,Germany , an

International Certification Agency of high repute as conforming to their Total Quality

Management System Standards .

The unit has secured ISO 9001-2008 Certification for its business activities covering

Design to Sales & after Sales servicing

3.1.5 Business performances

The financial performance of the company is given below

Table – 9

YEAR NET PROFIT SALES

2008-2009 33110265 547972262

2009-2010 699454 543747275

2010-2011 (74207724) 516776140

2011-2012 4084920 705270887

2012-2013 22289560 702233818

29

3.1.6 Strategic Plans And Long Term Objectives

KSIE

The Kerala state Industrial Enterprises Limited (KISE) A Government of kerala

undertaking under the industries Department of the State has approached the unit for

20 acres of land for setting up ware houses .M/s KSIE have offered to utilize the land

on lease basis . The lease amount expected is Rs 2.5 Crores per year .

CONCOR

M/s Container Corporation of India Ltd also has approached the unit for 25 acres of

land on lease basis . The lease amount expected is Rs 3.12 Crores per year .

Modernisation Plan

Based on the load capacity analysis the surplus machines are identified and proposed

for disposal . The capacity load chart projected for the next 5 years is used for

modernizing the plant layout also .The requirements include :

Re-conditioning of plant machines .

Replacement of old machines with new machines .

Upgrading Quality Control facilities .

Revamping business processes with advanced information-Technology based

systems and Tools .

MTK foundry Upgradation to double the production and sales turn over by

2018 . Also to export castings to outside countries . To establish market

leadership in the manufacturing of high tech castings .

30

3.2 Organization Structure

Any operating organization should have its own structure in order to operate

efficiently. For an organization, the organizational structure is a hierarchy of people

and its functions . The organizational structure of an organization tells us the

character of an organization and the values it believes in. Therefore, when we do

business with an organization or getting into a new job in an organization, it is always

a great idea to get to know and understand their organizational structure . Although

the organization follows a particular structure, there can be departments and teams

following some other organizational structure in exceptional cases . Sometimes, some

organizations may follow a combination of the organizational structures as well.

3.2.1 Corporate Structure

Figure -2

HMT Machine Tools belongs to Engineering sector .HMT is central government

owned organization in which it comes under the Ministry of Heavy Industries. The

corporate structure of HMT as a whole is Tall structure . They have a board of

MINISTRY OF HEAVY INDUSTRIES

BOARD OF DIRECTORIES

CHAIRMAN AND MANAGING DIRECTOR

SUBSIDARY CHIEFS

DEPARTMENTAL HEADS

31

directors under which Managing director for HMT comes and MD have direct control

over the all subsidiaries under HMT .

3.2.2 Business And Departmental Structure

Figure -3

CHIEF OF MACHINE

GMUNIT CHIEF

SALES INSPECTION & QUALITY

DESIGN & DEVELOPMENT

MATERIAL ENGG

SALES ENGG,

SPARES, SERVICING, JOB ORDER, EXCELLENC

E RECONDITIO

INCOMING, INSPECTION, IN-PROCESS INSPECTION

& CALIBARATI

ON, FINAL INSPECTION & TESTING

QUALITYASSURANC PRODUCT

DETERMINATION, PRODUCT

UPGRADATION, CAD

STANDARDS, IMPORT

SUBSTITUTION

MATERIAL, STORE,

DESPATCH, TRANSPORT

FOUNDRY & PATTERN SHOP

PLANNING

FINANCE

PERSONNEL

MISC & CORPORATE PLANNING,

INDUSTRIAL ENGG, COMPUTER CENTRE,

TRAINING, SUB CONTRACT OFF

LOADING, PRODUCTION

TECHNOLOGY, PRODUCTION

PLANNING

CASH, INWARD BILL, OUTWARD

BILL, WAGES, MATERIAL

HRD, WELFARE, INDUSTRIAL RELATION, MEDICAL, VIGILENCE, SAFETY,

SECURITY, TRAINING & CIVIL ENGINEERING

DEPARTMENTS

PRODUCTION

MANUFACTURING PROGRAM, CONTROL

TOOL ENGG, CIVIL ENGG

REPAIR & PREVENTIVE MAINTANENCE, ENERGY CONSERVATION, RECODING

PLANT MACHINE

ASSEMBLY & PRODUCT PLANNING

32

HMT Machine Tools Limited” (HMT-MTL) is a Multi unit, Multi location, Multi

technology Company manufacturing a wide variety of “State-Of-The-Art” Machine

Tools. HMT-MTL has its manufacturing units at Five locations with each unit

specialized in a particular family of Machines. Kalamassery Unit is the fourth

Machine Tools Unit and it is the only machine tool manufacturing and printing

machine manufacturing company in Kerala. The Kalamassery unit of HMT is famous

for developmental activities. The various departments of HMT are:

1) Production Department

i) Production Planning Department

ii) Foundry Department

iii) MTK Manufacturing Department

iv) MTK Assembly Department

v) PMK Manufacturing Department & Assembly Department

2) Materials Engineering Department

i) Purchase Department

ii) Stores Department

3) Marketing

4) Quality Control Department

5) Sales Department

6) Public Relation Department

7) Plant Service

8) Safety Department

9) HRM Department

10) Finance Department

33

3.3 Functional Analysis

The organization has several departments as previously mentioned in the corporate

structure. Each department has its own functions and responsibilities. Structure of the

department varies from tall to flat.

3.3.1 Production Department

HMT Machine Tools, Kalamassery Units has mainly concentrating on the

manufacturing of Machine Tools and Printing Machines. In Machine Tools, HMT

Kalamassery manufactures CNC Machines and Lathe Machines, and In Printing

Machine Division, HMT Kalamassery manufactures two color and four color

machines and paper cutting machines. The location of HMT Plant is located in the

wide area of 150acres. The Production Department may subdivide in to five

departments are as follows:-

i. Production Planning Department

ii. Foundry Department

iii. MTK Manufacturing Department

iv. MTK Assembly Department

v. PMK Manufacturing & Assembly Department

i. Production Planning Department

In any organization, production activities must be related to market demands. For

maximum effectiveness this must be done in such a way that customer’s demand are

satisfied. But at the same time, production should be carried out in an economic

manner. The process of developing this kind of relationship between market demand

and production capability is the function of production planning and control.

The production planning department is the most vital link between product design and

the production department. The production planning department provides the

necessary facilities and technical know-how for the manufacture of the product. The

production planning department is headed by Joint General Manager (JGM (P)). There

are fifteen employees in this department.

34

Production requires the organized utilization of natural resources, men, money,

material and machine. But before starting the work of actual production, planning has

to be done in order to anticipate possible difficulties and decide in advance as to how

the production should be carried but in the best and economic way. The principles of

production planning lies in the statement, “First plan your work, and then work for

your plan”. The role of production planning department at MTK is as shown below.

Production planning department at HMT Machine Tools Ltd Kalamassery comprises

the following sections.

1. Production Pre-planning and Planning Estimation – PPP & PPE.

2. Production Planning Ordering & FPS – PPO & FPS.

3. Central Production Planning Control-CPPC

Objectives Of Production Planning

In any business organization, production activities must be related to market demands

as indicated by the continuous stream of customer’s orders. Aggregate planning is

carried out in an economic manner for maximization of production. From the annual

operating plan, rolling production plan for 3 months is made. Objective of the

production planning department is to ensure that annual production target is achieved

is an economic manner.

FUNCTIONS OF PRODUCTION PLANNING DEPARTMENT

The various functions of the production planning department are:

1. Production preplanning and estimation

2. Production planning and ordering

3. Central Production Planning Control

4. Processing design documents

5. Preparing selling cost

35

1. Production Preplanning and Estimation:

Identify in house manufacturing, outside manufacturing and bought out components.

Prepare Operation Layouts for all in house manufacturing components . Identify and

initiate action for all special tooling . Maintain special tool data .Coordinate and

implement design alteration. Prepare list of assembly operation, assembly flow charts

etc . Computerize the data related to part list data . Attend shop problems related

production . Coordinate with foundry for the manufacture of patterns. Maintain all

data documents, records and file related to products. Estimate standard time for all

manufacturing/assemble operation . Attend shop problem related to standard time.

Conduct time study . Product costing. Coordinate activities with various department .

2. Production Planning Ordering (PPO):

Issue-series wise manufacturing papers to production shops . Coordinate the activities

with various departments for effective control of production.

3. Central Production Planning Control (CPPC):

They are handing over the manufacturing papers alone with raw material to Pre

Planning Control (PPC).

4. Processing design documents:

All design documents received and routed through Chief of planning. Production

preplanning ensures that they are sufficient number copies of different design

documents. Production planning department take one set of above documents into in

house manufacturing, bought out and sub-contract items. Production preplanning

personnel forward - four set of component drawing along with a covering letter to the

chief of Sub-Contract Department for procurement of Sub-Contract (OFS) items. A

copy of the letter should sent to PPM for raising necessary MPR (material purchase

request), one set of parts list and two sets of components drawings of bought items

along with a copy of release note to PPM for procurement items. Production

preplanning personal segregate manufacturing items and distribute the same process

planning personal. One set of papers shall be forwarded to PPO also. They prepare

operation layouts for all in house manufacturing components and hand over the

documents to production planning estimation for standard time estimation. They raise

36

departmental orders for design and manufacture procurement of special tools. They

intimate the programming cell may about requirement of programmes if any.

PPE shall estimate standard time for each operation and prepare operation master

through computer for all manufacturing items. On completion of PPE work, PPE

personal keep the reference copy of drawing and operation layout in the filing tracks.

They distribute the document distribution chart.

5. Preparing selling price:

The main function of planning department is to calculate the determination of selling

price of the product .

37

Structure Of Production Planning Department

Figure - 4

GMK

JGM(P)

PMD

SENIOR ENGINEEER

STAFF

DGM(P)

MTD PLANNING

SENIOR ENGINEER

DEPUTY ENGINEER

ENGINEER

STAFF T/R OFF.SUPT

38

ii. Foundry

Foundry industry is the mother industry for all types of industrial, agricultural and

consumer products. The development in this industry therefore is bound to have a far

reaching effect on the production in all other sectors. Though the casting process are

based on techniques that are age old and amazing the simple in principle, considering

the effectiveness of the results achieved the metal casting industry have become the

key industry in the world today.

Foundry industry is based on casting principles. Casting is a process of producing

metal parts of desired shape by pouring molten metal in to a prepared mould and then

allowing the metal to cool and solidify. This solidified metal is known as casting.

A pattern may be defined as a model of anything, so constructed that it may be used

for forming an impression called mould in sand or other suitable materials. This

mould, then filled with molten metal that solidity, forms a reproduction of the pattern.

The process of making a pattern is known as pattern making and the person who is

makes the pattern is known as pattern maker.

Pattern Shop

A pattern may be defined as a model of anything, so constructed that it may be used

for forming an impression called mould in sand or other suitable material. This

mould, when filled with molten metal that solidify, forms a reproduction of the

pattern and is known as casting. The process of making a pattern is known as pattern

making and the person who makes the pattern is known as pattern maker. The skilled

pattern bridges the gap between designer and founder

Sand Preparation

In the Foundry, The Sand is used for preparing the moulds. The moulds should have

the capacity to carry the metal and set in to the shape. Sand mixtures are used for the

preparations. Mainly 3 types of sand are used and are as follows:-

Unit sand

CO2 sand

Partial bake sand

39

Foundry Flow Chart

Figure -5

Planning/ Job order

Chief foundry

Foundry Planning

Fy – Tech/ Pattern Shop

Moulding Heavy,

Medium, LightSand Plant

Lab

MeltingClosing/ Pouring

Knock- Out

Decoring

Fettling

Store

Inspection

Priming

Customer

40

Moulding Or Core Making

To produce a casting it is necessary first to have a pattern which can be made of 2 half

moulds. If these 2 half moulds are closed together and metal poured in a solid casting

would result. Two types of molding are in practice

Hand Molding

Machine Molding

For machine molding the pattern is to be fixed on a suitable size match plate. Loose

patterns are used for hand molding.

Pouring

The metal prepared and is fed into the furnace for melting. The metal melts due to the

very high temperature that is prevailing in the furnace. The liquid metal is transferred

to the moulds through gates. The process of transferring the metal into moulds is

called pouring. This should be done very carefully in the moulds should be thus

prepared so that it can with stand the temperature.

Knockout

The cooled metal is knocked out from the mould with the use of heavy instruments.

The moulds are opened and the surface is knocked hard enough for the cast to fall out

of the mould. This knocked out cast will have irregular edges which are removed in

the following processes.

Finishing

The knock out metal is finished by removing the irregular as well as unwanted edges.

The waste parts are removed by use of special tools. The finished structure is made to

undergo process called Priming in which the part is painted with a primer which helps

in increasing the lifetime of the part by protection from rusting in order to damages

Inspection

It is done by the concerned department to check whether the parts have been made

according to the specified standards n measures. The inspection process ensures that

41

max quality is maintained and that the produced parts are order specific. It also helps

in reducing wastage of material.

Organizational Structure Of Foundry

Figure -6

SFPENGINEERSFH

ASST.ENGINEE

Dy.Engineer ENGINEER

ASST.ENGINEER

DY.ENGINEER DY.ENGINEER

Me l t i ngFet t l I ngPPCMe l t i ng

Mec. maintanance

Green Sand

Heavy Mou l d i ngMedium

StoresPPMPPE

DCE (FP)

Of

42

iii. MTK Manufacturing Department

Figure -7

Small Parts

The various small parts are gears, apxon, flanges, lead screw, spline shafts,

racks, levers, rests, compound rests, tool posts, turrets, tool heads, swivel head etc.

According to the shapes and uses there parts are classified in two sections.

o Rounds

o Non rounds

Heavy Parts

The heavy parts departments manufacturing the large sizes parts. Special cranes are

used for spacing the parts of various operations.

The various heavy parts manufactured in the heavy parts departments are:

Lathe bed ,Legs, Carriage, Headstock, Tailstock ,Tool head etc

Most of the heavy parts are casted at the foundry and has to be milled.

MTK - MANUFACTURING

SMALL PARTS

HEAVY PARTS

43

Duties & Responsibilities Of Departmental Head

Overseeing the production process, drawing up a production schedule. Ensuring that

the production is cost effective .Making sure that products are produced on time and

are of good quality .Working out the human and material resources needed .Drafting a

timescale for the job .Estimating costs and setting the quality standards .Monitoring

the production processes and adjusting schedules as needed. Being responsible for the

selection and maintenance of equipment .Monitoring product standards and

implementing quality-control programmes .Liaising among different departments, e.g.

suppliers, managers .Working with managers to implement the company's policies

and goals . Ensuring that health and safety guidelines are followed .Supervising and

motivating a team of workers .Reviewing worker performance .Identifying training

needs .

Organisational Structure Of MTK Manufacturing

Figure -8

DG (MM)

DCE (SP)SMS SMH

ENGR

ASST ENGR

ASST ENGR

ENGR ASST ENGR

SMN

ENGR

SGR

DY ENGR

ENGR

DY ENGR

GM (P)

44

iv. MTK Assembly Department

Among the subsidiaries of HMT Limited Machine Tools division Kalamassery, is

engaged in producing various types of turning centre, printing machines and cutting

machines. Assembly activity is the key function of any organization.

Function

To assemble the machines as per rolling plan supplied by sales department. To

assemble the machines to meet the design specification. To complete the assembly of

machines as per the dispatch plan. To evolve systems to make the system flexible to

adapt the changes in the sales plan. To improve methods any systems to changing

needs for market. To assemble the pre- assembles, group assembles and final

assemblies to match with assembly drawings and specification of the machine. To

record the non-conformities and take corrective actions to prevent recurrence of the

problem.To interact with departments like production, design tool design, purchase,

sub contract and sales for continual improvements of the machine. To complete the

assembly of machines with the act of any short coming and problems for the final

assembly.

Duties &Responsibilities Of Deparmental Head

Co-ordinate the activities in the respective assembly areas effectively and efficiently

in line with the unit’s, dispatch and production programme. Maintain discipline and

good industrial relation irrespective assembly groups. Co-ordinate the activities in

assembly with other sections like design, planning, etc. To ensure proper upkeep of

assemblies facilities. Effective leadership in implementation of productivity

improvement programme. Implement and sustain procedure relating to ISO 9001.

Non-conformity report analysis and to take necessary corrective actions prevent

occurring such none. Conformities again. Assist on Corporate Planning

Activities ,After Sales Service . Maintain and improve the working environment and

safety

45

Organisational Structure Of MTK Assembly Department

Figure -9

JGM (MP) JGM (EA)

SR. ENGINEER

ENGINEER

DY.ENGINNER

ASST.ENGINEER

WG-8

M277 ELE.ASSY

SR.ENGINEER SR.ENGINEER

ENGINEER

WG-23

M271 GPM ASSY

ASST. ENGINEER SR.ENGINEER

WG-4

M272 GROUP.ASS

WG-7

M273 PRE FINAL ASSY.

WG-10

M274 FINAL ASSY

JGM (P)

46

v. PMK Manufacturing & Assembly Department

The printing machine department of HMT Kalamassery is a leading manufacturer of

offset printing machines in India. PMK department is functioning very similar to that

of MTK manufacturing. The major components are cast with the help of foundry

department. The cast components are manufactured into printing machine components

at PMK manufacturing department.

The printing machine department of HMT Kalamassery is functionally divided into

two section, namely, PMK manufacturing and PMK assembly. The components

manufactured by PMK manufacture section and brought out components are

assembled in the PMK assembly section.

Sections In PMK Manufacturing

The PMK manufacturing is broadly divided into two sections, namely, small parts,

heavy parts and high technology center

Small Parts

The small parts are again sub-divided into rounds non rounds and CGR (cams, gears

and rollers). The round or symmetrical objects are machined rounds. The irregular

parts are machined in non-rounds cams, Gears and rollers require more accuracy,

hence they are machined in separate special purpose machines (SPM) in CGR.

Heavy Parts

As the name suggests the heavy parts deals with machining of heavy parts like:

1. Weld metal base – The base is made by welding together the beams in the welding

shop.

2. Side frame – Side frames are mechanized, drilled bored.

3. Cylinder Drums are machined, and grinded

Assembly

Among the business group of HMT Machine Tools Limited, Kalamassery Division is

engaged in producing various types Printing Machines & Cutting Machines.

47

Assembly activity is the key function of any organization. In HMT, PMK Assembly

deals with the assembling of various components of Printing Machines.

Function

To assemble the machine as per the rolling plan supplied by sales department. To

assemble the machine to meet the design specifications . To complete the assembly of

machines as per the dispatch plan . To evolve system to make the system flexible to

adapt to the change in the sales plan . To improve methods and systems to changing

needs of the market . To assemble the pre-assemblies to match with assembly drawing

and specification of the machine . To record the non-conformities and take corrective

action to prevent recurrence of the problem .To interact with department like

production ,design tool design purchase , subcontract and sales for continual

improvement of the machines .To complete the assembly of machines without any

shortcoming and problems for the final assembly inspection

PMK Assembly Chart

Most of the products are formed from a large number of single parts produced

at different times by various production processes. The object of assembly is to form a

part of higher complexity with specified functions in a specified period of tin from the

individual parts. The printing machine assembly is primarily categorized in to three

sections.

PMK - ASSEMBLY

PRE - ASSEMBLY FINAL ASSEMBLYGROUP ASSEMBLY

MECHANICAL ASSEMBLY

ELECTRICAL PRE-ASSEMBLY

48

Figure -10

Organisational Structure Of PMK

Figure -11

DGM

AGM

SENIOR ENGINEER

(HEAVY PARTS)

SENIOR ENGINEER(SMALL PARTS)

SENIOR ENGINEER(HIGH TECHNOLOGY

WORKERS

WORKERS

WORKERS

ENGINEERROUNDS

ENGINEERNON-ROUNDS

ENGINEERC G R

WORKERS WORKERS

JGM

49

3.3.2 Material Engineering Department

In HMT, Materials Engineering Department deals with purchase of raw materials, and

parts of machineries…etc. The main functions of this department is that the purchase

of materials and storing the same in stores. In this department may subdivided in to

two are as follows :-

i. Purchase Department

ii. Stores Department

i. Purchase Department

In the present scenario of increased competition, reduced time to market and

globalised outsourcing, material management has evolved as one of the major

factors for the success of an organization. The Purchase function, a key

component of material management is now functioning with more agility and

is shouldered with more responsibility than before.

In HMT Ltd., and its subsidiary companies, the purchase function is carried

out by the purchase department of the respective unit or divisions and is

responsible for procurement of the unit or division’s requirement. The heads of

the material department and purchase department are accountable for effective

discharge of purchase functions within the framework of purchase policy of

the company. Purchase department is the one of the most important functional unit in

HMT, Kalamassery. Purchase department is under the Materials & Engineering Chief

(JGM materials).There is 20 employees in this department. They have varieties of

functions.

Objectives

Timely procurement and supply of required materials with prescribed

specifications and quality at the most competitive price and terms. Fair,

50

Consistent and transparent purchase practice. Continuous search for alternate

sources of supply and to develop reliable sources of supply.

Responsibilities Of Purchase Department

Adherence to guidelines contained in the purchase manual. Maintenance of an

updated vendor registers system. To issue enquires/ tenders, analyze the quotations

received and prepare comparative statements with a view to obtain competitive prices

to HMT. To keep tender box with lock for receiving offers in sealed tender. Tender

box shall be opened in the presence of vendors and representative of finance

department in the case of open tender, limited tender, single tender etc. To ensure fair

opportunity to tenderers/ supplier and competitive prices and terms and assured

quality to HMT. To issue purchase orders in time after obtaining competent

authority’s sanction and follow up for supplies and periodical review of pending

purchase orders. To follow up with suppliers for timely supply and replacement/

settlement of claims and other dues from suppliers and closure of purchase order is

ensured. To co-ordinate and assist finance and inspection department in settlement of

bills and recovery of dues if any. To submit applications for import clearance and

obtain technical clearances and import licenses wherever applicable. To enter into

annual rate contracts with committed delivery schedules for standard items, wherever

advantageous to HMT. To enter into services contracts for transportation, customs

clearance and maintenance of equipment etc. To ensure after- sale- service is fulfilled

by the supplier during warranty and post warranty period. To effectively plan and

control the inventory level. To be alert and responsive to the change in production

programmer and change in requirement of material. To keep abreast with government

regulations relating to purchase, various statutory levies there on and import- export

policy. To ensure claim of all taxes/ duties exemptions/ duty drawback etc as

applicable, for national/ international procurements. To submit monthly MIS reports.

To interact frequently with purchase department of other units with a view to sharing

of information regarding price, source of supply, payment terms, vendor rating etc. To

ensure that insurance claims are preferred in time, for items damaged/ lost in transit.

Standardization and computerization of purchase activities and inventory controls. All

relevant data regarding purchase function should be recording and maintained Review

51

of show cause notice from customs, counter claims from vendors and advance

payments for items rejected subsequently. Minimize dependency on imports. Serve as

an information center on materials viz, prices, sources of supply, specification etc, to

all other units/ departments. Ensure inventory is at an optimum level. Ensure that the

economic and legal interests of the organization are safe guarded at all lengths.

Modes Of Purchase

Open Tender

Open tender refers to calling of quotations by advertising tender enquiry in website of

the company and at least in one reputed local/ national news paper. All tender notices

are to be approved by the competent authority. Open tenders have be resorted to for

an item where the estimated tender value of purchase exceeds Rs25 lakhs.

Limited Tender

Limited tenders are those addressed to all parties in the approved list of vendors for

the required items For not addressing enquiry to any approved vendors, approval of

unit chief shall be obtained with justification. Tender shall be posted under certificate

of posting or speed post/ courier/ RPAD & E-mail to all sources of supply listed for

that category of items. The time allowed for receiving quotations against limited

tenders shall be minimum 15 days from the date of release of tender.

Single Tender

Single tenders are those addressed to a single party and the reasons for the same are to

be clearly recorded in the proposal.

Local purchase through spot offers(spot tenders)

This is resorted to only for emergent requirements. A team of officers comprising of

representatives from purchase, finance and user departments proceed to the market

and obtain sport offers from local vendor after physically verifying and inspecting the

goods and obtaining the assurance that the items are offered ex-stock.

Purchase from collaborators:

52

Purchases from the collaborators does not come under tender system, The other

procedures like MPR, obtaining sanction for the proposal and placement of

purchase orders are to be followed. The import license if required are obtained

by the purchase department. The requirements in quantity and values in terms

of foreign exchange have to be planned well in advance. It is imperative that

the items are ordered within a reasonable period so that shipment could be

effected within the validity period of license.

Purchase from foreign suppliers:

All imports should have prior approval competent authority as follows

Import value (CIF) Competent authority

Unto Rs. 10 lakh Unit chief

Rs.10 lakh & above Subsidiary chief or functional director

of holding company

The regular tendering procedure has to be followed for procurement from foreign

suppliers also. However tender enquires may be sent through fax or email in order to

save time.

53

Purchase Department Structure

JGM (ME)

DGM

AGM

MANAGER (2)

ASST. OFFICER

DY.MANAGER

OFFICER

SUPERVISOR

WORKER GRADE

54

Figure – 12

ii. Stores Department

The materials cost constitutes a major portion of the manufacturing cost of a product.

Moreover almost all of the working capital in industries lies locked up in inventories.

Hence, small changes in materials cost can result in larger sums of money saved or

lost. A proper system of Inventory Control together with scientific methods on store

keeping will help in bringing down the actuation and retention costs of inventory and

thereby reduce the material cost and its overheads. Store keeping is the function of

receiving, storing and issuing of materials. It involves supervision of the clearance of

incoming supplies, to ensure that they are maintained in good condition, safety and

readiness for use when required while they are in storage and issuing them against

authorized requisitions. In short it is concerned with the physical handling well being

of the stocks.

Functions

The store keeping activities start with the clearing and forwarding operations which

involve making necessary arrangements to take deliveries of consignments or

incoming goods, on receipt of either document or information from the supplier or

from the purchase department, and to carry out all the necessary formalities in

clearing the goods and claim for missing or damaged goods.

The receiving department unloads, identifies prepares receiving reports arranges for

early inspection of materials and handles the accepted goods moving then to the area

in the plant where it is to be stored or used it takes action on the rejected goods and on

any discrepancies in suppliers.

The storage function covers receiving, storage and issue of all types of inventories in

stores. The stores department classifies, identifies and locates all materials in a

manner which permits ready accessibility. It protects the materials in its custody

against pilferage damage, deterioration and unauthorized withdrawal.

55

In some companies the store keeping functions include in the departmental handling

of material and semi finish items warehousing, shipping and distribution of finished

goods salvaging and retrieval of material, disposal of scrap and surplus.

Duties

Their authority and responsibility will be varying according to the organization

structure and division of work in the organization.

Store officer supervises and co-ordinates the activities of varies stores under his

control , particularly in regard to staff and labour deployment inspects periodically

the store keeping methods , layout handling precautionary measures taken against

pilferage damage deterioration losses fire and other hazards keeps a watch over delays

in movement of materials enforces up-to-date and accurate maintenance of all stores

records and paper work supervises the salvage disposal stock verification operations

looks after the discipline and prevention of malpractices amongst his staff.

Store keeper takes up the responsibility bring the chief custodian of all the items held

in his stores against pilferage damage deterioration fire and other hazards supervises

the work of receiving storing and issue of items maintained in the stores regularly

inspects for the safety and security of stock held responsible for good housekeeping in

the stores maintains all records stipulated by management arranges for stock taking

and stock verification helps stock control departmental in cutting down cost of

retention of materials waste reduction etc.

Types Of Stores

There are mainly types systems of storage

1) Closed stores system

In closed systems all materials are physically stored in a closed or controlled area and

no one other stores personnel is permitted into the area material enters or leaves only

when accompanied by documents of authorization. This system affords maximum

physical security and ensures tight accounting control.

2) Open stores system

56

In the open system, no store room as such exists and materials are stored as close to

the point of physical use as possible. The system is designed to expedite production

actives and reduction in handling and places little importance in security. This system

is justifiable in cases of fast moving production and assembly lines or when the

material is too bulky to handle eg( where heavy castings may me left near the

machines just near the point of operations )and where chances of deterioration are

negligible.

Goods Inward Stores (Receiving Section)

All the incoming goods must be necessarily checked for quality and quantity before

being accepted and taken into stock. The stock keeper in the receiving section should

be responsible for clearing the goods received without delay and necessary records

should be maintained.

Main Store

In main store raw materials, finished components tools, spares, consumables are

stored. Materials like castings, timber, heavy steel plates, coal scrap etc., are neatly

stocked or piled up. Materials are issued in accordance with the “First in First Out”,

which will minimize the deterioration of perishable goods.

Finished Product Store

This store is responsible for packaging and dispatching goods to different destinations

through various modes of transport and handling of papers and documents connected

with them.

Sub-Contract Store

The sub-contract store acts like “Satellite” to the main store. The store will hold the

main stock of certain items. Regarding such items, when fresh consignments are

received, the accepted goods from the receiving stores will be sent directly to the Sub-

Contract Store.

Despatch Store

57

Dispatch store is responsible for receiving stock, stock taking and issue, packing, and

dispatch of finished goods and other items like scrap disposal, surplus and capital

items disposal.

Organisational Structure Of Stores Department

Figure – 13

JGM (ME)

DGM(PURCHASE)

SENIOR PLANNING MANAGER

DEPUTY ENGINEER

STAFF

58

3.3.3Marketing

The machine tools marketing division has its headquarters at Bangalore under the

General Manager for Marketing who has direct authority over the Regional / Zonal

Managers who in turn have Divisional Managers under their office. The Marketing

Division has a wide network of regional and divisional offices spread throughout

India caters to the marketing needs of this unit at the primary level. To co-ordinate the

marketing activities at unit level and to offer technical support to machine tool

marketing, a strong sales, and services team is constituted at unit level. HMT’s

marketing efforts are done by an active and ambient team of Marketing Engineers.

In an increasing number of markets and industries third party quality assessment and

registration is becoming a pre-requisite for doing business. ISO 9000 registration and

the related quality assurance and very stringent quality check has always been the

strength and cause of HMT’s vast customer base.

HMT Machine Tools Limited have a centralized marketing system. The Head

Quarters of the Central Marketing Division is at Bangalore. HMT Machine Tools

Limited has produced mainly producing the Industrial goods, so as per the customers

of HMT Machine Tools Limited are Large Scale Industries. HMT’s major customers

include Defense, Railways, Automobile and other Engineering Industries in various

sectors.

In all over the India, the customers of HMT are segmented into four different zones.

They are South, North, East and West. Each Zones have a regional office and

Regional Mangers will take care of the marketing activities. Each zones have their

direct service and sales centers. In case of Kerala, nearest Sale and Service centre is at

Coimbatore

59

3.3.4 5 Quality Control Department

Quality Control is in its simplest term refers to control of quality during

manufacturing. Both Quality Control & Inspection are envisaged to assure the quality

in entire area of any production process. Inspection is deter mining function when the

control become effective, the need of inspection decreases hence, quality control

determines the causes of variations in the characteristics of products and gives

solution by which these variations can be controlled objective in its procedures,

dynamic in its operation and helpful in its treatment

Duties & Responsibilities Of Departmental Head

Maintain all relevant records necessary for the ISO-9001 QMS. Any other works

related to ISO-9001 QMS, Assigned for time to time. Responsible for incoming

inspection, in process inspection and final testing of printing machines and paper

cuttings guillotines. Conduct the TQM activities like incoming inspection ,in process

inspection Assy. Inspection and product testing of all printing division products Plan

and maintain process required for the effective functioning of TQM dept . measure

monitor and control the process and take necessary action to achieve the planned

results Take positive leadership involving every employed of the section to achieve

the planned and performance and continual improvement Maintain ISO-9001 Quality

mgt system procedures and documents in the section. Do the routine administrative

function and maintain the records. Plan and schedule the rollers required for different

printing machine and ensure the availability in time Any other related work assigned

from time to time.

Function

To ensure incoming items or raw materials being used directly or indirectly , or not

supplied for manufacturing end product , without inspection or verification for its

60

conformance to specified standards. To ensure castings, produced in the foundry meet

design specified standards . To ensure the components and assembled units, during

various stages of its processes , are inspected or tested and the details documented. To

ensure end products is tested for its specifications, inspected for its performance in a

systematic manner as specified in working instruction and the data are documented.

To ensure the identification and procurement of testing instruments are done by

keeping in view of the overall measuring requirement and its periodic calibration. To

ensure major components at various manufacturing processes are inspected and

details recorded in the relevant document. To ensure feedbacks on the performance

and reliability of the products are received from inspection, service centers and the

complaints received from customers are analyzed systematically for continuous

improvement of the product quality and thereby ensure total customer satisfaction.

Structure Of Quality Control Department

UNIT CHIEF

JGM (Q)

DGM (QC) DCE (QI)

Asst Eng Asst Eng

WG WG

61

Figure -14

3.3.6 SALES DEPARTMENT

Sales and servicing activity is a most important function in fulfilling the objective of

the organization and needs of the customers. It has the activities of selling the

machines as per customer requirement and maintains the customer satisfaction

through its after sales activities.

Performance Target

1. Sales Target Turnover

Sales turnover

2012-2013:- 77 corers

2013-2014:- 54 corers (present)

Sales target

2012-2013:- 62 corers (achieved 64 corers)

2013-2014:- 75 corers

2. Customer satisfaction parameters mentioned in process measurable are to

be maintained.

Sales department of HMT, Kalamassery is under the JGM (Joint General Manager).

Under him there are 40 employees in this department. Sales department of HMT is

divided into two sections:

Printing Machine Division (PMD) Sales and

Machine Tool Kalamassery (MTK) Sales.

Duties & Responsiblities Of Sales Department Head

62

Generation of enquires in liaison with Regional/ Zonal marketing offices. Preparation

and submission of standard and tooled up offers for CNC lathes. Interact with

customers regarding the offers submitted and provide clarifications required on these

offer. Follow up of the offers for the receipt of orders. Scrutiny of orders and

obtaining technical and commercial amendments, if any required. Put up for unit

chiefs sanction if the prices accepted vary from the approved prices. Preparation of

drafts details of firm order for obtaining assembly group numbers/ stock numbers

from design department. Preparation of tooling layouts and follow up for customer’s

approval in case of tooled up offers. Associate with tooling trails and incorporate

corrections in tooling layout if any. Issue of details of likely orders/ details of firm

orders with assembly group numbers/ stock numbers. Request/ release of tooling

layout for detailed tool design. Initiate manufacturing/ procurement of tooling after

detailed design tool selection. Correspondence with marketing office/ customer

regarding technical details, trial materials, inspection etc. Co-ordinate with all

concerned sections and all technical work up to dispatch of the machine.

Functions

The main function of a sales department is attract and retain customers. Many moving

parts are tied to this but the number one objective is to attract and retain customers.

That said, sales activities need to been co-ordinated i.e., to meet the customer demand

with appropriate supply. The next is to increase the sales volume considering a

particular period of time. Then to find appropriate persons/ agencies to carry out the

sales activities. To help marketing department in meeting the sales volume fore casted

by then. To give motivation by appropriate means to the sales persons and to give

appropriate training to them in carrying out the sales activities successfully.. They

analyze the demands of markets. They study the consumer's psychology, study market

fluctuations, prepare sale budgets, explore new markets and the process begins again -

attract and retain customers

SERVICING

Commissioning and servicing of machines supplied by MTK in targeted time either

by deputing engineers for unit or by coordinating with the corresponding regional

63

offices, servicing of out of warranty machines on chargeable basis. Arranging free

replacement spares for rectifying complaints reported during warranty period of all

machines. Monitoring of customers complaints and to provide technical advice/

suggestions/ clarifications wherever required. Furnishing data for quality assurance

department for continual improvement.

.

Structure Of Sales Department

Figure -15

JGM(SD)

JGM(S) JGM(SS)

DGM(S)

DEPUTY Eng SALES Eng SERVICING TRAILS

64

3.3.7 Public Relation Department

Public relations are the lifeblood of any company. Whether a company is public or

private, profit or nonprofit, its reputation will determine its ultimate success. Instant

worldwide communications make it more important than ever to manage a company's

image and control how a company interfaces with its customers. Public relations

failures can seriously undermine the effectiveness of management and compromise

company credibility. To keep things running smoothly, the public relations manager

must wear many different hats: that of a journalist, marketer and sociologist.

Function

If the public relations functions are considered important in the company by the top

management. It may create a publicity section. Advertising section, grievance section

etc. mostly the publicity section looks after preparation of publicity material its

implementation and review time to time of its publicity strategy to crate the desired

impact on the public’s.

The public’s relations department is directly made in charge of enquiries and

grievance redressal and members of concerned public do not have to interact with any

other department. Some other functions are,

Scanning newspapers every day for information regarding the company or even

the competitors and it provide a backup service to the concerned department.

The department also has the responsibility of receiving VIP s and arranging

other visits including factory visits of students from technical institutions.

Manage the letters and couriers to the respective departments. And Receptions are the

frontend of this department. Conference hall is managed by the PR department. And

65

Conducts some community development activities. Overall responsibility for all

work is publicity including receptions, arranging seminars and conference of

general nature, protocol, photocopying and duplication work liaison with media

and service like telex, fax, telephone exchange etc. Have the functions of

editing, printing and publishing journals in English and Malayalam, releasing

advertisements, holding press conference and press release.

Duties & Responsibilities Of The Departmental Head

Advocate

The public relations manager is the chief advocate for the company. He must focus all

energy on building an organization that will be deemed a good corporate citizen. He is

the mouthpiece for management -- and in political circles known as the press

secretary.

Communicator

The public relations manager crafts communications policies and oversees the

development of all statements and news releases for the company. Sociology,

psychology and good journalism are requisite talents for the manager and staff.

Communications must be clear, concise and relevant to the audience.

Problem Solver

The public relations manager is the ultimate spin doctor. It is her job to put the best

face on news and information that could embarrass or malign the company's

reputation. Often, she will be called upon to polish mundane information into

platinum data that gives the company more credit than would ordinarily be due for

routine accomplishments.

Opinion Maestro

The public relations manager directs all outreach efforts. He is responsible for media

placements and coordinating organizational functions and the efforts of executives. It

is his responsibility to determine the executive appropriate for each situation and

ensure that person has approved information and statements in hand.

OFFICE STAFFF PHOTOCOPIER OPERATOR

RECEPTION

66

Organisational Structure Of Public Relations Department

Figure -16

PUBLIC RELATION OFFICER

OFFICE SUPERINTENDENT

GENERAL MANAGER (GMK)

DEPUTY GENERAL MANAGER (HUMAN RESOURCE)

67

3.3.8 Plant Service

The Plant Service Department is responsible for maintaining the machines and

equipment of the unit in optimum conditions of performance so as to make them

available for production. It has got the resposibility of erection and commissioning of

the machines in the plant. The department is also responsible for the electrical power

distribution of the entire factory complex. It also looks after the internal transport

functions and house keeping activities inside the factory.

Function

Erection, commissioning, repair, maintenance, reconditioning, retrofitting and

preventive maintenance of all the machines and equipment used for production in the

MTD and PMD plants and Training center. Maintenance of the EOT cranes, Jib

cranes, Air compressors and a/c units in the MTD and PMD plants. Upkeep of R&M

stores and spare parts planning. House keeping activities in the shop floors. Mateirals

movement in the shop floors and maintenance of Internal Transport vehicles and

equipment. Maintenance of power supply to the entire factory complex. Maintenance

of 66 kV sub-station, switchgear, power transformers, and the entire distribution

system. Maintenance of supply distribution in Colony, Pump house. Maintenance of

Internal telephone exhange and the communication system. To arrange and co-

ordinate contract works in conncection with any of the above activities.

Duties & Responsibilities Of Departmental Head

68

Head of Plant Services Department has to ensure Administration Electrical ,

Maintenance for MTD , Mechanical Maintenance , Internal Transport , PMD

Maintenance

Also ensure safety aspects as per Factories Act, Factory Rules and Electricity Rules in

respect of Plant and Machinery.

Mechanical Section

Erection, commissioning and maintenance of all machines and equipment, cranes, air

compressors and A/c Plant in the factory of MTK and PMD. Preventive maintenance

of all critical machines and equipment under his control. Reconditioning of all critical

machines and equipment. Testing of EOT cranes and compressors as per factory

regulations. Maintenance planning. Identifying training needs of employees under his

control. Lubrication services. Housekeeping functions in the factory. Ensuring

compliance with ISO 9001 requirements of the department.

Electrical Section

Maintenance of Power supply system in 66KV Substation. MTK and PMD Plants and

HMT Colony. Erection, commissioning and maintenance of electrical portion in

machines and equipment and operations of all electrical equipment. Preventive

maintenance (Electrical) of all critical machines and equipment in MTK and PMD.

Reconditioning (Electrical) of all critical machines and equipment. Safety of all

electrical equipment as per factory rules and electricity rules. Internal communication

systems. Energy conservation. Internal Transport activities. Identifying training needs

of employees under his control. Ensuring compliance to ISO 9001 standards of all the

activities in his section.

69

Organisational Structure Of Plant Services Department

Figure -17

JGM

DCE DCE

SR.ENG(EM)

SR.ENG(EM) SR.ENG(MM)

DY.ENG(EM) DY.ENG(MM)

WG WG/WS WG WG WG/WS

70

3.3.9 Safety Department

The company adopts statutory measures for ensuring safety. Sixty fire extinguishers

are placed at different places inside the organization. The company conducts

periodical medical checkup for employees in certain areas like electroplating which

affect the health of the employees. A welfare checkup is giving to employees in

foundry periodically.

In this department activities are carried out according to safety standards. These

standards are exhibited at different places inside the organization. The employees are

given several safety equipments like leather gloves, PVC gloves, helmets, fire shield,

dust mask, welder shield, safety shoes etc. If any accident occurs in the company, the

matter will be informed to the safety department within 24 hours by the supervisors

through an accident intimation form. This form is prepared in triplicate- one copy to

medical department, one copy to the safety department and the third to the concerned

department. The supervisor should inform to the ESI department if the injured

employee have ESI. All the accidents in the factory should be communicated to the

factory inspector, if the employees are disabled for more than 48 hours.

There is a safety committee for discussing the problems relating to the safety of

workers. The company maintains a pollution free environment inside and outside its

premises. However certain areas such as foundry, chimney, electroplating department

71

etc. are under the pollution control board. They undertake the sample periodically

from the areas and check whether it is restricted to permissible level.

HMT Machine Tools Limited is a company where health and safety, assurance is

properly maintained. The department which helps in maintaining safety has introduced

many technical and methodical ways to reduce the accidents and hazards. For the

safety of employees some statutory tests are made for certain areas such as crane, lift,

pressure vessels etc. There are 60 fire extinguishers placed in several areas for the

safety of the workers.

Functions

To maintain safety of the organization . To promote safety need among workers . To

prevention and take precaution against fire . To checking of the safety instruments. To

provide fire and safety training to the employees.

Safety Measures

Fire hydrant network .Sprinkler system for spaying water in case of fire. Insulated

sphere and bullets to reduce heat. Deluge system provided for loading and unloading

areas of chemical. Fired form process. Safety shower and eye wash system are

provided. Fire proofing is done. Two generators of 1000kw are installed. Fire alarm

Smoke detectors .

Duties &Responsibilities Of Safety Department

The chief of safety department shall be responsible for the maintenance of the system

related to safety management. He should ensure that safety standards issued by the

standards department are available with all sections and are clearly understood and

followed. He should arrange for setting up safety committees to promote employees

participation in safety measures and act as adviser and catalyst in such committee

meetings. In coordination with human resource department arrange for in plant

training of all employees in safety, health and fire prevention.

72

Organize any other activities to motivate and make employees aware. Maintenance of

records related to accident. He should arrange for procurement and distribution of high

quality personal protective equipment. Arrange for the periodical testing and

certification of all cranes, lifting tackles, lifts and pressure vessels used in factory by

outside competent agency. He is to conduct accident investigation following receipt of

accident intimation. He should conduct safety inspection of plant and machinery and

arrange for corrective action in liaison with concerned sections if any unsafe

conditions or actions are found.

Organization Chart Of Safety Department

GM

SAFETY OFFICER

Figure -18

73

74

3.3.10 HRM Department

HRM is a management function concerned with hiring, motivating and maintaining

people in the organization. Its prime focus is on the people. It is a set of programs,

functions and activities designed and carried out in order to maximize both employee

and organizational effectiveness. HRM is the utilization of individuals to achieve

organizational objectives. The goal of human resource management is to help an

organization. Meet strategic goals by attracting and maintaining employees and also

to manage them effectively.

HRM Department of HMT is headed by DGM (HRM). There are 20 employees

working in this department. Human resources management strives to ensure

continuous organizational growth by nurturing the strengths of employees and

providing the environment and opportunity for every individual to raise to his/her

highest potential. HMT Ltd as around 11,000 employees in the corporate level.

They are divided into two groups, PS grade and WG grade employees in the

shop floor and in various office the employees include trainees recruited into

various grades. In addition, there are Directors, a Chairman and MD appointed

by the Govt. of India. The total strength of employees in HMT MTL,

Kalamassery is now 521 compared to 3000 when it was started. This is due

to VRS policy actively followed by the company.

No. of direct employees : 135 No. of indirect employees (incl.ps): 364

Functions:

The major functions performed by the department are:

Industrial Relations:

The company has been enjoying peaceful industrial atmosphere for as long time. The

company has the cooperation of employees in almost all the activities. Whenever

conflict occurs it is the duty of this department to look into the matters and take

corrective action. The IR Officer acts as a liaison with legal advisors.

75

 In the early days there were only one recognized union in HMT and it was CITU.

Currently there exist four major trade unions. They’re

HMT Employees Union- this was affiliated to CITU. It is the 1 st and largest

union in the company.

HMT Workers Congress- this is also a recognized union affiliated to INTUC

HMT Workers Union

HMT employee federation

These are newly formed unions and are trying to be recognized.

 The G.M. of the unit meets the trade union leaders once in every month to listen to

their suggestions and complaints and to appraise the overall situation of the company.

 It is natural that the interest of management and trade union differs on certain issues.

In an industry the maximum production can be achieved only by securing the

confidence and cooperation of the trade union leaders and utilizing them in a positive

way.

Training

 HMT gives very high priority to human resource development through training and

organizational activities. The company looks after training needs of employees. They

also conduct customer training programmes. The programmes are sandwiched with

lecture sessions followed by interacting sessions guided by various expert faculties.

The medium of instruction is English.

There are mainly four types of training programmes:

a. Employee training

b. Customer training

c. Statutory training

d. Student guidance programme

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. 

PERSONNEL ACTIVITIES

This includes all the personnel administration activities in the company, the personnel

function is carried out according to the policy framed by manual. Some of the

personnel functions in the company are:

HRM grievance procedure:

The objective of grievance procedure is to provide a settlement of grievances of

officers and to adopt measures so as to ensure expeditions. Settlement of grievance

leads to increased satisfaction on the job and results in improved productivity and

efficiency in the organization.

Procedure:

Each unit has a grievance committee consisting of production chief account chief and

personnel chief of the unit. The personnel chief being convener of the committee. The

aggrieved person should submit his grievance in writing to the convener of the

grievance committee. The convener should collect all the related relevant data

regarding the sound grievance. Grievance committee then calls the aggrieved officer

with in fifteen days of the receipt of the grievance and discuss with him. Within a

week the grievance committee should record and submit its findings. The findings of

grievance committee should be communicated to the aggrieved officer by the

convener with a copy to the department head for taking necessary action arising out of

the findings of the grievance committee.   If the aggrieved officer is not satisfactory with

the findings of the grievance committee, he may prefer an appeal to the Unit Chief. The Unit

Chief should convey his decision within fifteen days of the receipt of the appeal. The decision

of the Unit Chief is final.

Recruitment:

Every organization needs man and man need organization, in that sense recruitment is

an important function of any organization. Recruitment means inviting suitable

applicants for a desired post.

77

Recruitment policy in HMT

The main objective of the policy is to identify and retain the best available young

talent in the country in various field like engineering, finance, marketing etc. In HMT

the following type of recruitment exist.

1. External recruitment

2. Internal recruitment

External recruitment is done by the corporate personnel directorate. These includes

1. Campus recruitment

2. Through open all India advertisement

Internal recruitment means recruiting people from the organization itself, for this an

employee must satisfy the following

a) An employee must have completed at least 3 year in the grade before

being eligible for external recruitment for the next higher grade.

b) Employee joining a new post on for the same for a minimum of 2 years.

Procedure for recruitment of management trainees in engineering and other

professional areas:

The recruitment in these areas will be made by the Corporate Personnel Directorate.

For such centralized recruitment, the following two methods are adopted as:

a. Campus recruitment

b. Recruitment through open all India advertisement

The campus recruitment for the post of executives in PSIII for graduate engineers and

post graduate diploma holders on management will be made from the recognized

institutions only.

The recruitment by Open All India advertisement will be made for selecting

engineering graduate in technical areas and for professionally qualified candidate.

78

Recruitment of senior executives:

               Recruitment of senior executives at the level of ‘Corporate Cadre’ i.e.

PSVII  and above will be taken by the  Corporate personnel directorate once in 4

months in April, August and December in a calendar  year. The proposals from the

units for such recruitments for the vacancies as per the sanctioned manpower

operational plans should be sent to directorate in January, May and September every

year, who will take further action for Centralized Recruitment of Corporate Cadre

Senior Executives. Recruitment at the level of PSVI and below (with the exception of

management trainees) will be undertaken by the Units.

Performance appraisal system:

Stages of appraisal:

This appraisal will consist of the following stages:

Appraisal rating of the employee on

1. Job performance factors- job knowledge, quality of work, target fulfillment,

cost\time control, and safety consciousness.

2. Managerial ability factors- planning & organizing, problem analysis and

decision, inter personal skills, communication skills, self motivation,

commitment, responsiveness to change, developing subordinates, management

of human resource, positive discipline.

a) General comments and overall assessment of developmental needs

of appraise leading to final assessment.

b) Review discussion by appraisal

c) Follow up action to the taken

d) Review discussion b/w appraises and after appraising the employee

is complete both by reporting and review officers.

79

Voluntary retirement scheme:

 The scheme is introduced to cut down the manpower strength and reach an optimum

level and also provide monetary benefit to employees. The scheme is not applicable

for professionally qualified employees like graduate employees and professionally in

finance, HRM, marketing.

Procedure for VRS:

Employees opting for the scheme are to apply through proper channel to the HRM

chief. The HRM department verifies the particulars and forwards it to recommending

committees. After recommendation it is permitted. Employees are permitted to retire

on any day of the shift.

Welfare Activities:

Statutory welfare measures:

Washing facilities – separate washing facilities for men and women, it is

easily accessible to the work place.

Storing and drying clothes.

Sitting facilities

First aid and ambulance – dispensary with all medical facilities and

ambulance.

Canteen – meals provided at subsidiary rates

Rest room & lunch room – there is a home meal section attached to the

canteen. Rooms are provided for the purpose.

Welfare officer – as per factories act, there  are 1 welfare officer

Non statutory welfare measures:

Uniform – two sets of uniforms are supplied to eligible work men

excluding foundry. For the foundry workers 4 sets of uniforms are

provided. For administrative 2 sets of uniform are provided.

Free supply of milk – for those who are engaged in hazardous area

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Vitamin tablets – issued of free cost to the employees working in foundry

and heat treatment.

Interest subsidy for house building advance - There is a scheme for paying

interest subsidy for the loan granted by outside approved agencies for

house building.

Housing - Subsidized quarters are provided for the benefit of the

employees. 240 quarters under the SIHS for workers. In addition there are

32 single quarters and 48 multi quarters.

Transport facilities - Company buses and buses run on contract basis are

plying through various routes for the benefit of all the employees. A

certain amount based on the salary is deducted every month from the

salary wages of the bus pass holder.

Conveyance reimbursement and conveyance allowance.

Recoverable advance, vehicle advance, house building advance etc.

Family welfare program - One special increment in the grade for that

undergoing sterilization operation.

Conveyance allowance - For those who are not provided with transport

facilities and quarters and staying 5km away from the company are being

paid conveyance allowance at the rate of Rs. 25/- month. For the

physically handicapped the maximum conveyance allowance is Rs. 50/-

Per month of they are not provided with company quarters or transport.

Scooter advance is being paid to the employees.

Festival advance is also granted once in a year.

81

DEPARTMENTAL STRUCRURE

Figure -19

GM

JGM

Dy MANAGER

OFFICER

STAFF

Dy Chief Eng

Eng

SMO SEE

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3.3.11Finance Department

The Process of financial analysis is widely employed to evaluate the past, present and

likely future performance of organization and identifying the financial strength and

weakness of the enterprise by properly establishing the relationship between the items

in balance sheet and profit and loss account

The financial statements are prepared as of a going concern, under the historical

cost convention , on accrual basis of accounting and in accordance with the provisions

of the Companies Act, 1956 and comply with the mandatory Accounting standards

issued by the institute of Chartered Accountants of India to the extent applicable.

Major Functions Of Finance Department

Budgetary Control. Working Capital Management . To provide strategic financial

support regarding operational and general business planning. To meet internal and

external needs and financial reporting requirements of the company at large.

Providing financial information, guidance and advice to other departments.

Management of taxes. Ensuring timely payment of employee’s salary and other

welfare expenses.

Various Sections In Finance Department

Outward Bill Section (OBS)

OBS maintains the records of sundry Debtors, accounts of sale of machines, special

accessories, spares and job order. OBS monitors and follow up with debtors for

realization of outstanding dues. OBS also prepares the provision entries relating to

debtors. OBS also generate sales and servicing invoices. All the work related to sales,

tax, excise duty, and service tax comes under the ambit of OBS.

Inward Bills Section (IBS)

IBS is concerned with purchase accounting and authorizing payments to creditors,

contractors, and also various expenses like water, electricity, hire charges, welfare

expenses, legal charges etc. Thus, this section also handles, import procedure like LC

opening, authorizing direct transfer to foreign customer (TT) monitoring exchange

83

rate variation arranging for forward cover from bank etc. IBS also create provision for

outstanding with respect material which has not been accounted as purchase.

Wages & Time Office Section

Wages prepares payrolls of officers, workers, trainees, on the basis of muster roll

given by the time office. Payroll preparation is computerized and the salary or wages

are made through bank. Time office /wages also engage with the work of attendance

monitoring, entering the leave of employees, conveyance reimbursement, medical

reimbursement, TA and DA settlement, calculation and disbursement of retirement

benefits.

PF Section

PF section arranges for the recovery of provident fund from the employee salary.

Present statutory minimum recovery is 12%.The employees are allowed to contribute

higher amount voluntarily. Out of 12% contribution made by employer an amount

equal to 8.33% is transferred to employee’s pension fund.PF section also provides the

loan facility to employees as per stipulated terms and conditions

Main Accounts and Cost Accounts

All cost data required by financial accounts such as SIT, WIP are prepared by cost

accounts section. Main accounts prepare all the statements related to material

accounts. Weighted Average rate is following for inventory valuation. Half yearly /

periodical physical verification of stock is conducted by main accounts and whenever

discrepancies occurred they are analyzed and rectified. This section prepares monthly

and annual financial statements (Balance sheet, P& L A/C, Cash Flow Statement etc.)

and coordinates with internal / statutory auditors and also with comptroller and

Auditor General of India. (C & AG). This section also prepares Budget and

monitoring variance, maintains fixed asset register, prepares various MIS, fixing

selling price of machines, accessories, spares etc. It also monitors transactions

accounted by other sections of finance department and coordinates with Head office

towards settlement of various financial matters of kalamassery unit of HMT

MACHINE TOOLS LTD.

Cash Section

Cash section keeps the cash day work and the bank day book. The payment vouchers

prepared by the Inward Bill Section are sent to the cash section for payments.

84

Generally payments are made through NEFT or RTGS. This section also prepares

bank reconciliation statement and daily cash flow statement and also monitor that

cash credit does not exceed the permitted limit.

Concurrence

All purchase proposals are sent to concurrence section for financial vetting. They

make it sure that all purchases are made according to the purchase manual. In short,

all purchases (whatever it may be) can be made only with the approval of finance

department.

Duties And Responsibilities Of Finance Department Head

Finance department will be responsible for all the day to day transactional accounting

for the business.  This will include the tracking of all transactions and the

management of any government reporting. In very small owner-managed businesses

this role is often filled by a family member with accounting experience. An outside

accounting firm is usually used for annual financial statements and returns. In larger

organizations this role will extend right through to preparing the financial statements

with an external auditor engaged for assurance purposes.

The finance department is also responsible for management of the organization’s cash

flow and ensuring there are enough funds available to meet the day to day payments. 

This area also encompasses the credit and collections policies for the company’s

customers, to ensure the organization is paid on time, and that there is a payment

policy for the company’s suppliers.  In most organizations there will be some form of

forecast prepared on a regular basis to systematically calculate the ongoing cash

needs.

Finance Chief : All finance activities, cash Management, daily concurrence

(Sanctioning for the purchase of expenditure up to the limit of Rs.50000/-),

Statutory audit signing, final account preparation.

Manager: He looks after general day to day administration.

Accounts Officers: He is in charge of concern section.

Junior Officers & Staff: He is responsible for the work that is assigned to

him by the section in charge.

85

Departmental Structure

Figure -20

GM (FINANCE)

DMF

CONCURRENCE CASH PF PA

IBS WAGES

4 STAFF 1 A/Cs OFFICER

2 STAFF

MAIN A/Cs OBS

3 A/Cs OFFICER

1 A/Cs OFFICER

2 STAFF

1 A/Cs OFFICER

1 A/Cs OFFICER 1 A/Cs OFFICER

86

Financial Ratio Analysis

Current Ratio

Current Ratio = Current asset

Current liabilities

Table - 10

YEAR CURRENT ASSET CURRENT

LIABILITIES

CURRENT RATIO

2008-2009 471482947 439724850 1.09

2009-2010 434414584 419131050 1.03

2010-2011 428519056 427875117 1.001

2011-2012 433697677 518883583 0.835

2012-2013 495861130 529273312 0.936

Quick Ratio

Quick Ratio = Liquid asset

Current liabilities

Table - 11

YEAR LIQUID ASSET CURRENT

LIABILITIES

QUICK RATIO

2008-2009 304885293 439724850 0.70

2009-2010 281452586 419131050 0.67

2010-2011 275907788 427875117 0.64

2011-2012 26339007 518883583 0.50

2012-2013 351814383 529273312 0.66

Debtor’s Turnover Ratio

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Debtor’s Turnover Ratio = Net credit sales

Average debtors

Table - 12

YEAR NET CREDIT

SALES

AVERAGE

DEBTORS

DEBTOR’S

TURNOVER RATIO

2008-2009 547972262 206497650 2.65

2009-2010 543747275 188515289 2.88

2010-2011 516776140 176221349 2.93

2011-2012 705270887 196121349 3.59

2012-2013 702233818 261552559 2.68

Creditor’s Turnover Ratio

Creditor’s Turnover Ratio = Net credit purchase

Average creditors

Table - 13

YEAR NET CREDIT

PURCHASE

AVERAGE

CREDITORS

CREDITOR’S

TURNOVER RATIO

2008-2009 147723826 146810679 1.0062

2009-2010 130147326 134679119 .096

2010-2011 132661933 128256220 1.034

2011-2012 185013647 149784984 1.23

2012-2013 153386560 211020837 0.72

Working Capital Turnover Ratio

88

Working capital turnover ratios= Cost of goods sold

Average working capital

Or

Sales

Net working capital

Table - 14

YEAR SALES OR NET

SALES

WORKING

CAPITAL

RATIO

2008-2009 547972262 40758097 13.44

2009-2010 543747275 15283534 35.57

2010-2011 516776140 643875 802.59

2011-2012 705270887 (85185906) (8.27)

2012-2013 702233818 (33412182) (21)

Net Profit Ratio

Net Profit Ratio = (Net profit/ Sales) 100

Table - 15

YEAR NET PROFIT SALES NET PROFIT

RATIO

2008-2009 33110265 547972262 0,0604

2009-2010 699454 543747275 0.00128

2010-2011 (74207724) 516776140 -0.14

2011-2012 4084920 705270887 0.0057

2012-2013 22289560 702233818 0.0317

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ORGANIZATIONAL ANALYSIS

3.4 Swot Analysis

SWOT stands for strengths, weaknesses, opportunities, and threats. SWOT analysis is

a tool for auditing an organization and its environment. SWOT analysis is the first

stage of planning and helps marketers to focus on key issues. Once key issues have

been identified, the details are fed into marketing objectives. SWOT analysis can be

used in conjunction with other tools for audit and analysis, such as PEST analysis and

Porter's Five-Force analysis. SWOT analysis is a very popular tool, quick and easy to

learn.

STRENGTHBrand image

ISO 9001-2008 accreditationGood manufacturing facility in

foundryQualified design team

WEAKNESSOld plant & machinery

High average age of employeesHigh rate labour turn over

No new recruitment

OPPORTUNITIESDemand from deference sectorGrowth in automobile sectorGrowth in engineering and

Infrastructure sectors

THREATSIncreasing unhealthy competitionImport of cheaper machines and

Imports from ChinaFurther liberalization leading to huge

imports

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STRENGTHS

Great Brand image

As HMT machine tools is the pioneers in the field of producing machine tools

they has a well renowned brand image .

Qualified design team

HMT have excellent planning section which handles the design of new

products and gives product layout .

Good strength in application engineering and tooling

HMT have an experienced set of worker how are expert in engineering and

handling the machines well . So HMT have a good set of workers for

production .So that HMT have an good engineering application and tooling .

ISO 9001-2008 accreditation

HMT is a production based organization which have its prime focus on

quality. So the accreditation from is strength as it point out that they have

quality production technique .

Wide range of products

The product range of HMT is wide . It ranges from printing machines , cutting

machines , NH lathes , CNC lathes .

Good manufacturing facility in foundry

Foundry is the place where base of the product is made . About all the parts

required for assembly of lathe is made in the foundry . Foundry have 3 electric

furnace which have a capacity of 1000 tonne .

Good basic infrastructure

HMT have good basic infrastructure in and around it .All the department

required for production is with in the plant . Also seaport and airport are close

to plant which help in good transportation .

WEAKNESS

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Old plant & machinery

Due to the long range of working experience still the companies owns the

same machine that has been used in the past that is at the early periods. these

machine was an advantage at the olden days times but known as the

technologies are advancing day by these machines loosed their power and

couldn’t perform to its best, and so now this fact is a weakness to company.

High average age of employees

Due to the high average age the working efficency of the workers is low and

they will be unable to do the work at standard time .

High rate labour turn over

At present the company is facing a huge rate of employees turn over. the main

reasons for this low wages to the workers ,work load and the VRS scheme

prevailing in the company.

Difficulties in attracting and retaining talented man-power due to very poor

remunerations compared to other sectors / other organizations

Limited resources in information technology, & limited use of information

technology in sourcing and monitoring the large variety of components in

production, and in the activities of marketing, sales and human resources

management.

OPPORTUNITIES

Demand from deference sector

Defence is the major consumer of machine tools for HMT . As the demand

from defence increase its a opportunity for public sector company like HMT

Growth in automobile sector

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Automobile sector is growing in INDIA and new companys are setting up

there plants in INDIA . Some companies are making INDIA as hub for import

of cars .

Growth in engineering and Infrastructure sectors

With FDI coming to engineering and infrastrucure sector the demand for

Machine tools will be at the higher side .

Growing trend of multinationals establishing manufacturing hub in India and

or outsourcing manufactured components to India

THREATS

Increasing unhealthy competition

The level of competition is so high in this sector . Most of the players are big

players . HMT find it difficult to fight this competition . It can't reduce the

product price easily as HMT is a public sector company.

Import of cheaper machines from China

As china is the manufacturing hub of the world . The import of low price

machine tools from china is great threat .

Further liberalization leading to huge imports

After liberalization import of materials become cheaper so this cause big

problem .

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CHAPTER FOUR

OBSERVATIONS AND CONCLUSION

Observation

94

HMT Kalamassery have a brand name which is not fully utilized by the management .

HMT have good connectivity . Within 25 Km radius they have seaport , Airport and

Railway station . HMT have a aged workforce which is an advantage and at the same

time a disadvantage . Most of the Senior post are vacant . HMT have a flat

organization structure . The communication between each department is done

effectively . Implementation of SAP is going on in the organization which affect the

normal working of the office .Company is not working at its full capacity .Financial

position of the company is satisfactory .Employees are not fully satisfied because of

the pending wage revision .HMT does not have a good administration .One of the

most important problem HMT faces is the lack of Working Capital HMT is now

outsourcing its work . Due to this company is able to run in profit Outsourcing is

done on materials which are expensive to them or in case where they didn't have the

technology to manufacture the material . There is a lack of career growth opportunity in

the company . Main competitive advantage of HMT is the Quality of product . Because of

the high quality and precision of the product the main customer of HMT are defense and

railways . Most of the department is under staffed and contract worker are used in the

manufacturing of the product . These contract workers are given training before they are put

in to the job .

Conclusion

95

HMT kalamassery is one of the most important company in the Heavy Industry

section . HMT have a market presence since 1970's in the machine tool section .

Machine tool industry is a highly competitive industry now . After liberalization in

1990's new companies came in the market and HMT fail to plan according to the

changing needs of the market . Even though all these factors still exist HMT

kalamassery is still working in profit .The main reason for the profit is because of the

high quality they maintain in their products and also the Brand name HMT which is a

symbol of trust for people .

The opportunity before HMT is that the current gap between demand and supply, there

is a clear need for adding capacities in this sector. The industry is moving towards

increasingly sophisticated CNC machines, driven by demand from key user segments,

such as, automobiles and consumer durables. Machine tool manufacturers need to

develop capabilities to cater to this demand and investments in this area could yield

long term benefits. HMT have a good series of CNC machines . HMT is now

developing new CNC machines according to the market need . The future focus would

be on closing technology gap between Indian and international products through

increased productivity, achieving higher consistency and accuracy, HMT is focusing

towards it .

Bibliography

96

David A Decenzo, Stephen P Robbins. Fundamentals Of Human Resource

Management, 8th Ed., New Delhi, John Wiley & Sons Ltd.

Gupta JB, Fundamentals Of Electrical And Electronics, 5th Ed., New Delhi, SP

Kataria & Sons, 2005.

Harold Koontz, Heinz Weihrich., Essentials Of Management, 7th Ed., New

Delhi: Tata McGraw – Hill publishing company Ltd., 2008.

Mahadevan B, Operations Management – Theory and Practise, South Asia,

Pearson Education, 2007.

Dr. Maheshwari S N, Financial Management – Principles And Practice, 13th Ed.,

New Delhi: Sultan Chand & Sons Educational Publishers, 2007.

http://www.imtma.in/(acessed on 31 May )

http://www.hmtmachinetools.com/kalamassery-complex.htm(acessed on1st June )

97

ANNEXURE

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