MRF
MRF
MRF
I, Arun Joseph George do hereby declare that this report titled AN ORGANIZATIONAL STUDY AT MRF TYRES Ltd. conducted at MRF Tyres Ltd. Kottayam, in partial fulfillment of the requirement for the award of the degree of MBA has done by me under the guidance of Dr. Pious Thomas, MBA Co-ordinator, Kristu Jayanti College, Bangalore. I assure that this has not been submitted by me fully or partially for the award of any other degree, diploma or other recognition.
ARUN JOSEPH
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ACKNOWLEDGEMENT
First and foremost my sincere thanks to my Principal Rev. Father Josekutty P.D for his support and encouragement. Next in line I thank Dr. Pious Thomas MBA co-ordinator for his constant guidance. I thank Ms. Pramela .P. Skariah, Welfare Officer, MRF Tyres Ltd. for providing me with the relevant information and supporting me during my field study period. I thank all the teachers of the MBA department and my family for their guidance and support.
CONTENTS
1) Executive Summary
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i) Objectives of the Study ii) Scope of the Study iii) Limitations of the Study
4) Company Profile
i) Vision, Mission and Values ii) Management iii) Evolution of MRF iv) Policies of MRF v) Current Position
5) Industry Profile 6) Product Profile 7) Organizational Design
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i) Organization Structure
ii) Organizational Culture 8) Functional Areas
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11) 12)
Conclusion Bibliography
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LIST OF TABLES AND CHARTS 1) Tables a) Board of Directors b) Managers at Kottayam Plant
c) Financial Summary d) MRF Sales Network
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2) Charts
a) Market Share of Indian Tyre Industry b) Organization Structure of Corporate Office c) Organization Structure of Kottayam Plant d) Structure of Production Department
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58 69 74 82 86
EXECUTIVE SUMMARY The objective of this study entitled An Organizational Study of MRF LTD., Kottayam is to highlight the real life situations under the domain of business and organizational world of MRF LTD., Kottayam. The report covers the overall organizational structure, departments, functions, procedures and functions, procedures and policies of the company. The functional areas, products, services of the company have been well studied and documented in the report. The study also includes the SWOT (Strength, Weakness, Opportunity and Threats) analysis of the company in the present situation which is an output of the 6week observational study at the company. IT is intended to analyze comprehensively and understand thoroughly the various departments, services, functions
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Four main attributes like Quality, Cost effectiveness, responsiveness and being customer centric/sensitiveness are the major attributes one considers to identify ones attitude towards the company. INTRODUCTION MRF Tyres was established in the year 1946 by a young entrepreneur, K. M. Mammen Mappillai, opened a small toy balloon manufacturing unit in a shed at Thiruvottiyur, Madras (now Chennai). On its start, the company had no machines in the unit but it just had an employee bubbling with great enthusiasm, innovative ideas and great vision, the owner himself. Any product that could be produced out of rubber without any machinery was produced. From toy balloons to latex cast squeaky toys, industrial gloves, contraceptives, the list is very long. The company name is an acronym for MADRAS RUBBER FACTORY. Since 1946 MRF has emerged as the largest tyre manufacturer in India and 13th largest in the world with a turnover of Rs.5000 crores. It has a built capacity of six million tyres from six production facilities in India.
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The main quality objective of the company is to attain global standards through the continuous improvement in the quality of products and services and also to maintain market leadership. The main strategy of this company in today`s competitive world is to: Cut Cost and Win the Battle
To identify the organizational culture and structure of MRF Ltd., Kottayam. To study the various departments and their functions. To study about the various products and services offered by the company. To study the day to day activities of MRF Ltd. To make a SWOT analysis of this organization to understand and suggest measures to overcome the weaknesses and threats within the scope of this study.
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Useful for academic purpose and further reference. Provides information about the functioning of the tyre industry in India.
LIMITATIONS
Time was a limiting factor during the study. Limited number of employees who were selected for the survey of this study. Some core data could not be collected due to confidentiality policies of the company.
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COMPANY PROFILE
COMPANY PROFILE Just one year before the attainment of independence by our country in the year 1946, a young entrepreneur Mr.K.M.Mammen Mappillai opened a small toy balloon manufacturing unit shed at Thiruvottiyur, Madras (now Chennai). Over the year it started manufacturing a variety of products.
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MISSION MRF `s mission statement is as follows: We will meet global standards of the tyre industry that delights customers through customer service focus, empowered employees, innovative services & Cost efficiency.
VALUES
Customer: We bill be responsive to the needs of our customers. Learning: We will continuously improve our service innovatively & expeditiously. People: We will trust & respect our employees Community & Partners: We will be transparent & sensitive in our dealing with all stake holders.
MANAGEMENT The success or the failure of a company is by the performance of its management. Management plays a major role in decision making. The management of MRF id led by Mr.K.M.Mammen, son of Mr. Mammen Mappillai who started the company 62 years ago. BOARD OF DIRECTORS K.M. Mammen Arun Mammen K.M.Pillai
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MAJOR BRANDS
Superlug - Country`s largest selling Truck Tyre. Shakthi- Country`s largest selling Tractor Tyre. Zigma- Country`s largest selling Radial Car Tyre. Nylogrip- Country`s largest selling Two Wheeler Tyre. Legend- Country`s largest selling Conventional Car Tyre.
SISTER CONCERNS Malayala Manorama Manorama Vision MM Foam Philips Coffee Devon Machines Plantation COLT Computers
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MAJOR OEM (Original Equipment Manufacturers) CUSTOMERS OF MRF (Tyres & Tubes): Ford India Ltd. General Motors India Ltd Maruti, Hindustan Motors Hyundai, TATA Motors Asok Leyland Honda Siel Hero Honda Bajaj LML Ltd. Honda Motors & Scooters India Ltd.
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PRODUCTION UNITS Thiruvottiyur, Tamil Nadu Arakonam, Tamil Nadu Kottayam, Kerala Medak, Andhra Pradesh Pondicherry Ponda, Goa
EVOLUTION OF MRF 1949 MRF established its first office at 334, Thambu Chetty Street, Chennai.
1952 The first machine (a rubber mill) was installed at the factory and MRF ventured into manufacture of tread rubber.
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1955 MRF started competing with foreign companies operating in India by becoming the only Indian company to manufacture superior, extruded, non blooming and cushion backed tread rubber.
1956 MRF became the market leader in tread rubber with 50% share in the Indian market. MRF`s hold on the market was so strong that the foreign companies started withdrawing from the tread rubber business in India.
1961 MRF became a public limited company.MRF entered into technical collaboration with Mansfield Tyre Company of USA and a pilot plant for tyre manufacture was established at Thiruvottiyur.
1963 Full fledged tyre plant and rubber research center was inaugurated by India`s first Prime Minister Pandit Jawaharlal Nehru.
With the manufacture of tyres, MRF started marching ahead, capitalizing on its strengths, overcoming its weaknesses, exploring all opportunities and converting every threat into an opportunity for growth.
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1967 MRF becomes the first Indian company to export tyres to USA which is the birth place of tyre technology.
1972 With the setting up of Arakonam plant, MRF became the only tyre company in India with four manufacturing facilities.
1978
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1980 MRF entered into technical collaboration with BF Goodrich Tyre Company of USA. With this began a significant exercise in quality improvement and new product development.
1984 MRF becomes the first tyre to be selected for fitment on Maruti-800
1986 MRF won 6 awards for quality improvement from BF Goodrich, pitted against 20 tyre companies worldwide. It also won the National Institution for Quality Assurance Award in the same year.
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1988 MRF Pace Foundation was setup with Dennis Lillie as its director to nurture and develop
the talents of budding cricketers. It concentrated on developing pace bowlers and within a few years it contributed pace bowlers to the Indian Cricket Team.
1989 MRF collaborated with the world`s largest toy maker, Hasbro international and launched Funskool India, the most modern toy project in Asia. MRF collaborated with Vapocure of Australia to produce poly-urethane paint formulations. MRF Zigma radials were launched along with MRF World Series cricket which was one of the country`s most spectacular cricketing and marketing events.
1990 The fifth unit of MRF for manufacturing tyres and tubes was opened at Medak in Andhra Pradesh. MRF Tyre Drome became India`s first tyre company owned Wheel Care Complex. MRF collaborated with Pirelli to manufacture conveyor belts called Muscle Flex. The same year MRF brought the World Cup Boxing Championship to India. In this year the company bagged the Vishveshvariah Award for the best business house in South India. It also bagged the Howard Business school Award for best corporate performance.
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1991 MRF moved to its own corporate office which soon became a landmark in Chennai.
1993 MRF became the first Indian tyre company to cross a turnover of Rs.1000 crores. With this the company found a place among the ten most respected corporate groups in India. It was a proud moment for the company when its Founder and Chairman Mr.K.M.Mammen Mappillai was honored with the PADMASHREE award for his contribution to the industry, the only industrialist from South India to be accorded this honor.
1996 In the Golden Jubilee year, the company crossed a turnover of Rs.2000 crores and also setup a new plant at Pondicherry for manufacture of radial tyres.
1999 MRF was declared the most ethical company by the Business World in its survey.
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2002 MRF won the No.1 award for customer satisfaction by J.D.Power, Asia Pacific.
2003 For the second year in succession, MRF won the No.1 award for customer satisfaction by J.D.Power, Asia Pacific.
2004 For the third year in succession, MRF won the No.1 award for customer satisfaction by J.D.Power, Asia Pacific. The company crossed a turnover of Rs.3000 crores.
2006 For the fourth time, MRF won the No.1 award for customer satisfaction by J.D.Power, Asia Pacific.
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SAFETY POLICY OF MRF MRF has a well defined safety and health policy which is as follows: It is the policy of our company that the SAFETY and HEALTH of our employees shall be our FIRST priority. It is the responsibility of everyone in the organization, regardless of the position he occupies to ensure that everyone in the factory returns home to their beloved ones without any injury today and every day. We shall observe this policy not only in letter but also in spirit and offer ACCIDENT FREE SAFE PRODUCTION for the benefit of one and all.
ENVIRONMENTAL POLICY OF MRF This policy of MRF is to ensure that products are manufactured in an environment friendly and safe manner. To achieve this goal, all the MRF plants and the corporate office particular attention to the following:
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CURRENT POSITION
Highlights of First Quarter (Dec 2007): FY 07-08 Turnover (Rs. in crores) Net Profit (Rs. in crores) EPS (in Rs.) Operating Profit (Rs. in crores) : 1155.57 : 51.75 : 122.03 : 127.92
Turnover (Rs. in crores) Net Profit (Rs. in crores) EPS (in Rs.) Operating Profit (Rs. in crores)
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INDUSTRY PROFILE
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TYRE INDUSTRY Robert W Thompson a Scottish Engineer invented the pneumatic tyre in 1845. In 1970 the first solid rubber tyre appeared in England. Hon Dunlop, a Scottish veterinary surgeon improved on Thompson`s invention in 1988. Till 1960`s foreign companies dominated the tyre industry. During late 60`s and early 70`s Indian Industrial Entrepreneurs entered the market with foreign collaborations. As automobile sector began to take its roots in the country, the tyre industry witnessed the entry of many players and with the waves of liberalization sweeping the land in 1922; the industry saw the same as a part of joint ventures.
GLOBAL MARKET MAJORS Bridgestone Michelin Good Year Continental Sumitomo Pirelli Yokohama
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The tyre industry in India came into existence with an established trading outfit by US based Fire Stone Tyre and Rubber Co. in 1922 followed by Dunlop Rubber Co. of UK in 1926. Initially they were trading companies but subsequently diversified into manufacturing sector with plants in West Bengal by Dunlop and in Mumbai by Fire Stone in the year 1932. This Rs.19000 crore industry fully depends on agricultural and industrial performance of the economy, the transportation needs and the production of vehicles in the country. Indian tyre industry is one of the largest in the world with more than 100 million motor vehicles on the Indian roads.
SALIENT FEATURES OF INDIAN TYRE INDUSTRY Adaptability and absorption Innovativeness Exports
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The Indian Tyre Industry produced 736 lakh units of tyres (11 lakh tonnes) garnering Rs. 19,000 crores in FY 07-08. MRF Ltd. was the market leader (22% market share) followed closely by Apollo Tyres Ltd. (21%). The other major players were JK Tyre & Industries Ltd (18%) and CeatLtd.(13%).
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Globally, the OEM segment constitutes only 30 per cent of the tyre market, exports 10 per cent and the balance from the replacement market. In India the major demand comes from the
replacement market accounting for around 48.70 per cent. It is followed by 42.80 per cent from the Original Equipment manufacturers (OEM) and 8.50 per cent from the exports. Retreading is looming over the tyre industry as a colossal threat. Simply put,
rethreading is replacing the worn-out tread of the old tyre with a new one. The popularity of rethreading stems from the fact that it costs only 20 per cent of a new tyre but increases its life by 70 per cent to 80 per cent. Most of the transporters in India retread their tyres twice during its lifetime, while a few fleet owners even retread thrice. Though retreading has penetrated 25 per cent of the tyre market, it has not made much of a dent in the rapidly growing two-wheeler and passenger car segments.
Cross ply tyres have been used in India for several years. The cross ply trestle pooly cords run across each other or diagonally to the outer surface of the tyre. Rayon and Nylon cords are used as the reinforcing medium. These tyres can rethread twice during their lifetime and hence preferred by the Indian transporters who normally overload their trucks. In India 90-95% tyre is sold of this type.
Radial tyre have their cord running radially from bead at 90* angles to their rim or along the outer surface of the tyre. The reinforcing mediums used in these tyres are polyester, nylon,
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PRODUCT PROFILE
COMPANY`S PRODUCTS
Automotive Tyres
Light Truck Tyres Special Tyres for Defense Tyres for industrial application Agricultural Tractor and Tilling tyres Off the road tyres- solid tyres and earth mover tyres Passenger tyres- bias ply and radial Two/Three wheeler tyres Specialized tyres for motor rallies
Superlug - Country`s largest selling Truck Tyre. Shakthi- Country`s largest selling Tractor Tyre. Zigma- Country`s largest selling Radial Car Tyre. Nylogrip- Country`s largest selling Two Wheeler Tyre.
Paint and Specialty Coating MRF manufactured speciality coating for a wide range of application. The revolutionary 100% polyurethane finishes are available in formulation for application to metal, wood, plastic, paper, vinyl, textile, ceramics and glass. These coatings have been developed for color and gloss retention, strong adhesion and durability.
MRF Metal Coat MRF Wood Coat MRF Glass Coat MRF Vapocure MRF Brass Coat MRF Auto Coat
Funskool Toys Funskool India Limited is a joint venture between MRF and Hasbro Inc., USA, the world`s largest toy company. Since late 1991-1992 Funskool` s Goa plant has been making its own moulds for a number of its products, the most popular of which are Pipsqueaks, a range of low priced baby toys. These soft colorful animal toys have their sound built into their internal construction, doing away with the traditional whistle that breaks easily.
Funskool` s range of board games has catalyzed the phenomenal growth of this segment in the Indian toy market. Games like Scotland Yard, Battleship, The Game of Life, The Memory Game, and the recently launched Go to the Head of the Class have made Funskool the undisputed market leader in the board games segment. The G. I. Joe series of army action figures and vehicles, which has taken the children`s world by storm has gone up to a collection of 30 figures and 20 vehicles. Two new toys, the racing jeep and the Street Hawk motorcycle are based on MRF ads. The latest to the Funskool range of toys are the WWF characters.
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MRF`s collaboration with PIRELLI came at a time when Indian Conveyor belting industry was seeking technological momentum.MRF Muscleflex offers several advantages to buyers of belting in India.
The MRF Conveyor Belt plant is in Arakonam, Tamil Nadu, with an annual capacity of 3000 tonnes, is the most modern belting plant in India and is dedicated to the development or manufacture of the finest Conveyor and Elevator Belting products. The plant integrates a high degree of polymer /textile technology with definitive standards in process control/product testing, employing the latest in conveyor belt manufacture. MRF Muscleflex conveyor belting brings international expertise and reliability.
MRF Pretreads MRF Pretreads is the most advanced Pre cured Retreading system in India. MRF made a foray in retreading as far back as 1970. Today, MRF has perfected the art of pre cured retreading with their extensive knowledge in tyres and rubber. In the MRF Pretreads system, the tread rubber is pre cured from MRF's factory under carefully controlled conditions, thereby ensuring you get world class quality. Today, MRF Pretreads has emerged as the Mileage leader in Pre cured Retreading and also has the specialized expertise required for retreading Radial Tyres.
A brain child of late Mr. Ravi Mammen, the birth of this foundation coincided with one of the greatest events in Indian cricket-the hosting of MRF World Series for the first time in the sub-continent. This marked a significant forward step in Indian Cricket. The MRF Pace Foundation is unique in its nature and objective. It selects nurtures and scientifically develops the cricketing skills of youngsters. When it was started it possessed very little facilities other than an unused ground on the Madras Christian College campus. Since then, under the stewardship of Dennis Lillie and the able guidance of Chief Coach T.A. Sekar, former Indian Pace Bowler, the MRF Pace foundation has come a long way.
MRF is pioneer is a pioneer of motor racing in India. Every MRF tyre designed is a result of a special acid test on the race and rally tracks: Sharp turns, abrupt braking, straight stretches of streaming asphalt, excruciating conditions. MRF tyres are made to run at speeds exceeding 150kmph, at which they are exposed to extreme conditions of heat and land traction. The molecular stability of the rubber compounds is tested against severe gravitational stress. Experts observe, analyze and gather information at the pits and the dirt track, which they pass on to the R&D department. This is then reviewed and used to develop safer, better quality tyres not only for formula racing cars that rough it but out on the tough Indian roads every day.
MRF Powerhouse The MRF Powerhouse speaks of commitment to raising Indian motor sports to international standards. It provides MRF`s dedicated team of skilled motor racers, an environment that brings out the best in them. It creates winning opportunities by providing state of art racing equipment that maximizes the output of both man and machine.
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Automobile Tyre This is the basement on which the whole superstructure of automobile rests. Here only conventional or bias tyre of passengers, jeep, truck and farm tyres are manufactured.
Rethreading Material Both conventional and procured tread rubber are manufactured here. While the conventional tyre requires a longer curing time, in case of PCTR , molded tread profile is kept on the top of the worn out tyre and pressurized, with the intermediary of steam.
Flap This is kept in between the tubes and the tyre. This serves as a protective sheath for the tube from external damages of the tyre and also as isolation medium, which filters the passage of the heat from the tyre to the tube. This is generally used for the bigger tyre. Different tyres of flap with valve block reinforcement are also being tried out.
Bladder This is an element used for curing of tyre, which carries the internal media and is mainly used for captive consumption.
Envelopes
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Vulcanizing Solution This is an aid for vulcanization and is used for the retreading of tyre.
ORGANIZATION STRUCTURE
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Plant 1: Thiruvottiyur unit Plant 2: Arkonam unit Plant 3: Pondicherry unit Plant 4: Kottayam Unit Plant 5: Medak Unit
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Organization Culture Innovation and risk taking: There is a research department that takes care of all the innovations and new developments. Workmen are not given the liberty to any kind of innovation. Attention to details: Employees at every level have to give attention to the minutest detail in order to ensure precision and quality. For eg: The raw material that is received is tested by the technical department before it is sent to plants for production. Such kind of check and attention can be seen at every level in the organization . Outcome orientation: The management gives highest importance to the quality of product and services the company delivers to customers. For this it gives very much importance to the processes and procedures, the quality of the materials used, the efficiency of the workers etc.
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Aggressiveness The workers are not found to be very aggressive, as any kind of promotion or salary hike is mainly based on the duration of work and attendance of employees. For eg: If an employee has completed 6years tenure in the same post in the company, he may not get a promotion or change of post but his salary is hiked to the next higher grade.
Stability MRF is a company that stresses on continuous improvement. So it always directed towards development and change so as to adapt to the market conditions.
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ORGANIZATION PROFILE: KOTTAYAM PLANT Kottayam plant was started as a small masticating unit towards the end of 1969; the first machine was a 3A banbury (a small internal mixer) with a mixing capacity of about 66kgs per batch. Later automotive tube production started in1971. The mixing capacity of the unit was increased with the introduction of 11A and 11D banburys. Later, tread rubber and a host of tyre repair materials were also produced. Kottayam became a supplier of mixed compound to other units of MRF. Pre cured tread rubber was also added to the product range of Kottayam unit. The commissioning of the tyre plant in 1994 was the beginning of a new era in the history of the Kottayam unit. This marked the starting point of a massive expansion drive at Kottayam. Initially tractor front tyres were produced and then it diversified into passenger tyres, tractor rear and truck tyres of various sizes. Cement house was also built to prepare various cements and paints required at tyre plant and also for the production of vulcanizing solution. With the commissioning tyre plant, PCTR production was also increased with more PCTR curing presses being commissioned. Flap production was started in tyre plant initially with two presses and later increased to six. (PCTR and Flap presses were later shifted to PCTR plant when the new plant was commissioned) Kottayam plant supplies mixed rubber to other plants of MRF and hence with the increase in demand, it became essential to augment the mixing capacity of the plant. A new plant exclusively for mixing was built with huge internal mixers (banburys) which have automatic carbon and oil charging facilities. It houses two banburys of P270 type and one banbury of F620 type. With a mixing capacity of 600 tons per day, this is one of the largest mixing units in Asia.
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A new plant, mainly for PCTR production was commissioned in the year 2000. This plant now houses a 6 cold feed extruder for extruding, rethreading materials and PCTR slugs, PCTR curing presses, 48calendar for production of tyre repair materials, 68fabric calendar, German tuber for flap slug extrusion, flap curing presses, tyre finishing and repair, tyre clinic, textile lab, finished goods storage and shipping. With the growth in the number of tyre presses and subsequent increase in the requirement of bladders (Supplied by other units of MRF), Kottayam unit started producing bladders for its use and also for supplying to other units. The bladder press is located in tube plant.As a new product, solid tyre production was introduced at Kottayam in 2004. The solid tyre presses are located in the tube plant.
Built up area Management Staff Regular Workmen Casual Workmen Total finished goods production Total turnover of finished goods Mixed stock sent to other units Tyre Production
: 6 lakh sq.feet : 252 : 1,115 : 399 : 3,400 MT/month : Rs.37 crores/month : 7,000 MT/month : 52,000 tyres /month
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INTERNATIONAL CERTIFICATIONS FOR KOTTAYAM PLANT ISO 9001 in the year 2000 ISO 14001 in the year 1996 CQC
MANAGERS AT THE KOTTAYAM PLANT Mr. Michael Ribeiro Mr. Saji Varghese Mr. Francis Mathew Mr. C.S Joy Mr. Cherian Zachriah Mr. Anil Petre Mr. Simon C.P Mr. Raghuram Major. Sivadasan Mr. K.M Anil Kumar General Manager Plant Production Manager Plant Engineering Manager Plant Technical Manager Plant Quality Assurance Manager Plant Accounts Manager Plant Human Resources Manager Plant Industrial Engineering Manager Security Officer Safety officer
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FUCTIONAL AREAS
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PRODUCTION
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Production is the primary function of MRF and hence all other functions are supporting functions. Production is carried out in four plants in Kottayam unit. They are:
Tube Plant called Plant1 Tyre Plant called Plant2 Mixing Plant called Plant3 PCTR Plant called Plant 4
The following are the main functions of the production department: Planning for Production Process Every month a plan is given to the plant by the central planning department, the plant panning department will prepare a simulation plan by dividing the month into 3segments of 10 days each. This simulation plan is taken as the guideline for each plant to plan their production process. The available inventory and the priority of dispatch are taken into consideration while preparing the daily schedule. Slight changes are made in the simulation plan to obtain the objective and improve production efficiency.
Material Request and Receipt The daily requirement of raw material is calculated at each plant after considering the available inventory and the scheduled production of the next day. The raw material request
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Processing Processing is carried out as per the technical specifications of the BSP (Basic Standard Practice) and the work instructions of the respective department. Set up verification is done for each product and each run. Once the process is stabilized, the process parameters are checked and recorded. If the parameters are as per specification process is continued, else the necessary correction is made and the process is resumed.
Production department ensures that all necessary instruments and equipments are calibrated by checking the calibration sticker on the instrument. Cases where the instruments are overdue are for calibration is overdue are reported to the instrumentation department through AVO (Avoid Verbal Order). The supervisor stops usage of such equipments depending on the criticality of system violation. Whenever machines stop or behave abnormally the engineering department is informed and a maintenance request is made.
Product Identification and Traceability The objective of product identification and traceability is to prevent mix up of products and to ensure traceability of products at various stages. This applies to raw materials, in process materials and finished goods.
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In the case of traceability, for example, while extruding treads, the details of stock (stock code, date and shift of mixing, batch numbers) used for extruding those treads are entered in the traceability register.
Inspection Inspection is done to ensure that the materials, equipment, storage area are free from any contamination.
9202 Tubes per day 1750 Tyres per day 50 Solid tyres per day 8MT Tread rubber 2300 Flaps per day
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FINANCE
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PERIOD ENDING Turnover (Rs. in crores) Net Profit (Rs. in crores) EPS in (Rs.)
Finance is the lifeblood of any organization. Hence it becomes very important to mange finance properly. It is one of the major elements, which activates the overall growth of the economy. It
knits the financial system directly contributing to the growth of the organization and hence the economy
Functions of Financial Management Estimation of financial requirement of the firm Selection of right and appropriate sources of funds After selecting the right source, raising of funds required by the firm Effective working capital management to ensure smooth running of business Financial management also ensures fulfilling social obligation of business
According to J.F. Bradley, Financial management is the area of business management devoted to a judicious use of capital and careful selection of source of capital in order to enable a business firm to move in the direction of reaching its goal.
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The functions of the accounts department at the plant level has been divided into Financial accounts Cost accounts Wages and salaries Sales tax
Financial Accounts This branch deals with all types of cash payments and receipts. This will include payments for engineering and raw material purchase, petty cash payments, operation and reconciliation of bank accounts, payments to the government in the form of taxes and levies, payment of PF, deduction from salary and payment of loan outstanding and insurance premium of employees, freight payments, payments in lieu of travel bills of employees, canteen expenses, payment to contractors, payment of leave travel allowances, medical reimbursements etc. Cash receipts in the case of scrap sales and any other cash receipt will also come under this branch of accounts.
Cost Accounts This branch deals with forecasting, budgeting, analysis and reporting the income and expenditure of the company. The budget for expenditure is prepared using standard costing principles and it
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Sales Tax All matters related to sales tax are handled in this section. A monthly return for sales tax is filed on behalf of the sales depots. VAT (Value Added Tax) system has been introduced and all matters related to this is looked after by this department of accounts. C forms are issued for purchases from outside the state and F forms are issued for receipt of goods from depots.
Raw Material Stores Raw Material stores will receive a copy of the raw material requirement for the month which is prepared and sent by the plant planning. This is also sent to central planning and central purchase by plant planning. Based on the requirement central planning and central procurement of materials and issues a delivery schedule to the plant. On receipt of delivery schedule the supplier will release the specified quantity of material at the specified dates to the plant. Raw materials,
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TECHNICAL
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Sample Transfer or Visual Inspection Report is prepared and samples are collected for testing as per the documented sample plan. The sampled bag is identified and samples are sent to the technical department for testing. The technical department tests all the samples sent after inspection and informs the test results through the Material Release / Rejection / Hold Note printed at the bottom portion of the Sample Transfer or Visual Inspection Report. Based on the test result:
A GREEN color sticker captioned OK is affixed if the material is OK. A RED color sticker captioned REJECTED is affixed if the material is Not Fit. An ORANGE color sticker captioned HOLD is affixed if the material needs further
tests before reaching a concrete decision. The materials certified as OK by the Technical department are issued to production as per the request received from the production department for each plant. The rejected materials are sent back to the suppliers and the cost is recovered. The technical department rules out any kind of defect before the raw material is consumed by any plant for production. This is an attempt by MRF to be very cautious and to ensure quality right from the start till the end. In other words the company makes it a point to ensure supreme quality from raw materials to the end product and even after sales service.
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HUMAN RESOURCES
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Man is the most important element of any organization .It is he who controls and utilizes all other resources. The HR department at MRF is one of the best in the country. They are proud of their ability to nurture individuals and provide them the space and empowerment they need to
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FUNCTIONS OF THE HR Recruitment and Selection of employees & General Administration Training Performance Appraisal Industrial Relations and Labour Management Disciplinary Actions and Proceedings
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Recruitment, Selection, Placement, Induction and Orientation In the case of management staff, the functions of recruitment, selection and placement is done by the corporate HR department. Induction and orientation is given by the plant HR department. This is to align the objectives and goals of the individual with that of the company, so that the synergy produces benefits to the company as well as to the individual.
In the case of workmen, selection is done by the plant HR department through a written test followed by an interview. Then they are given induction and orientation before being sent to the plant for on the job training. Induction and orientation is given to workmen for one day.
Certain pre requisites for selecting workers: Height: 5 5 or above Weight: Min50 kgs Worker`s are selected at 100% merit basis. Experience is considered as an additional qualification.MRF provides the tradition of selecting the relatives of existing employees whenever a vacancy arises provided the relative is fit and suitable for the job. The workmen selected in MRF have to work for the first 3 years as TEMPORARY or CASUAL employees, and then they work for one year as TRAINEES and next one year on PROBATION and finally after 5 years they get the status of CONFIRMED employees.
Wages and Salary Administration Wages of workmen are fixed based on the long term agreement. It is paid to the workmen based on the work done on each day as piece rate system. The work done on each day is recorded in work sheets and it is routed through the time office to the accounts section where wages to be
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Industrial Relations and Labour Management The company has very cordial industrial relations. The two trade unions of the company are: MRF Employees Union: INTUC
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The trade union consists of an organization. They also have a level of hierarchy in the organization. The local leaders of the trade unions are the Secretary, Treasurer and Convener. The external leader comprises of President, Vice President and General Secretary. The workmen category of MRF is controlled by a long term agreement every three years. Negotiations and conciliation between management and workmen are made over the table through continued discussions. This is mainly organized by the HR department with the help of industrial engineers and other departments involved.
Disciplinary Action Absenteeism is strictly dealt with in MRF. There is a general principle for the employees who are absent or who are not regular. This process is carried out very strictly and is applicable to all employees.An employee who absents himself regularly; first he is given a show cause notice. If he still continues to be absent then he is given the next warning. After that if he is irregular he will be suspended, or will be terminated. This principle is applicable to all absentees and people who violate the rules and regulations of the company. The procedure of these rules is descriptive. People absent regularly are given a show cause notice. A charge sheet is issued upon receipt of unsatisfactory reply to the show cause notice and a domestic enquiry is also issued. By this procedure, absentees and people who violate the rules and regulations are made to understand the situation that led them to misconduct. The second show cause notice is issued for the employee to present his reasons. If he fails to provide a convincing reason, then he will be suspended or even dismissed from the company. These rules are common for all employees who are trying to falsify the record or status of the company.
Welfare Labour welfare is the statutory code controlled by the Factories Act for the benefit of employees within the existing industrial system, working and sometimes living and cultural conditions of the employees.
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To maintain a harmonious relation between the factory management and workers by establishing contact and holding consultations.
To study and understand the problems of labour at workplace in order to help factory management to shape and formulate labour policies and to interpret the policies to workers in their language.
To notify the grievances of the workers to the management and act as a liaison between the management and labour.
To help factory management to ask questions relating to the training of new workers, apprentices, supervisors and control of notice board and information bulletins to further the education of workers and to encourage their attendance at technical institutes.
To advice on provisions of welfare facilities such as housing, foodstuff, recreational facilities etc.
To promote the relation between the concerned departments of the factory and workers and this will bring about efficient productivity, and also to advice the workers to adapt or adjust themselves to their working environment.
To watch industrial relations and act as a mediator in an event of a dispute arising between factory management and workers and help to bring about a settlement by persuasive efforts.
To encourage provisions for amenities such as canteen, drinking water, benevolent schemes in payments, pension funds, gratuity payments, granting loans also providing legal advice to the workers.
To assist and help the management achieve its objectives. Suggest the workers to raise their living standards and to promote their wellbeing.
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Medical Facilities Every employee and his family members are covered under health schemes based on their salary package. At the moment if it is below Rs.7500/- it will be covered under ESI Scheme. If it is above the limit then a special medical insurance scheme is arranged for them covering the expenses in connection with hospitalization and personal accidents.
Voluntary Retyrement Scheme The employees who are permanently disabled or handicapped can retyre from service. If his son is fit and suitable for work he will be appointed in his place, else a mutually agreed compensation will be given to him.
Other Welfare Facilities Loans are given to employees to purchase vehicles for them. Educational loans are also provided. Basic essential facilities such as food, shelter, sanitation, recreational facilities, reading facilities etc. are also provided. Workers in the factory are provided with safety gloves, shoes, masks for accident free working environment.
Counseling Cell MRF has a Counseling Cell comprising of nine trained counselors. Employees with problems are dealt with great care and compassion. Problems can be of any nature: personal, family, or other social problems. If any employee is found with an addiction or mental problem they are sent for de-addiction and psychiatric counseling to outside agencies at the cost of MRF.
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Free Tyre and Tube Scheme Every confirmed employee in the grade Junior Assistant to Assistant Manager who owns a vehicle are entitled to one set of two wheelers tyres and tubes on completion of five years of the company. Those in grades of Deputy Manager and Manager are entitled to one set of four wheeler tyres and tubes on completion of 5years of service in the company.
Canteen Facilities The canteen is also run under the Human Resource Department. Quality food twice a day with snacks and tea are provided to employees at subsidized rates. The company has appointed a qualified supervisor to monitor and control the activities of the canteen. There is also a general committee comprising of management representatives and the union representatives to decide on frequent menu change and to maintain the standard of food. The canteen has good house keeping staff to keep the canteen in good condition.
Family Welfare Schemes MRF runs a family welfare center, a charitable society for mental, physical, spiritual and intellectual wellbeing of employees, their wives and children. There is an executive committee of nine members. This consists of a Chairman, the wives of three management staff, wives of three worker staff, the family welfare coordinator and the officer HR.
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Income Generation Schemes To meet financial needs of the families of employees the women are encouraged to undertake certain activities like stitching, cooking etc. Tailoring classes are provided for women and teenage girls. Cutting, hand or machine operated embroidery are taught here. For this purpose a full time tailoring teacher is employed.
Balavedhi (A Forum for Employees Children) It is a small committee for the children of employees. It conducts monthly training programs for children on various subjects like general health, education, safety etc. This program also provides various levels of personality and leadership camps for several age groups. This helps children in improving their leadership skills, communication ability, public speaking, interpersonal relations and effective memory. MRF encourages the children of employees to actively participate and compete in education and sports through scholarships instituted in the name of Mr. Ravi Mammen and Mr. K.C. Mammen Mappillai. Awards are also granted for SSLC top scorers. Outsourcing and Labour Contract The changing trend of any management is to concentrate more on core jobs and leave the fringe and peripheral jobs on job contracts. But being the principal employer MRF sees to it that statutory requirements are strictly adhered to. Training The training program is done for the employees. It is aimed at improving performance of a particular job. Training helps the employees to help in achieving the objectives of the
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Identifies and documents the training needs of each employee, through competence evaluation each year.
Designs and publishes training calendars and schedules. Provides training periodically based on identified needs and as per the documented schedules.
Monitors and evaluates the training process and outcomes to assess and to decide the next training cycle requirements.
Time Office The time office keeps track of the attendance of employees. The functions of the time office are given below: Attendance details Leave details Wage calculation Daily reports Attendance and time is considered very strictly in the organization. There is an automatic punching machine in all the departments. The employees are asked to punch the machine to register their attendance and time in and time out. Work Timings:
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Administrative Staff: 8:00 am to 4:30 pm Factory Workmen: Work in shifts 7:00 am to 3:00 pm 3:00pm to 11:00 pm 11:00pm to 7:00 am
QUALITY ASSURANCE
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The expectations of a customer with regard to the quality of products depend on several factors and the intended use of the product. The expectations can be performance, price, dependability, consistency etc. If the product fulfills the customer`s expectations when it is used, he will be
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Functions of Quality Assurance Department Quality assurance department has a main aim of customer satisfaction. Hence its prime duty is to ensure that any customer complaint should be taken seriously and should be communicated to all concerned. Problem solving tools are employed to ensure that the problem is solved and error proofing methods are adopted to ensure that such problems dont occur again. The quality system requirements of customers are collected and all efforts are taken to see that they are met. This is done by applying statistical control techniques and by training the operators.
The profitability of the company is improved by reducing defects and waste generation. This is done by initiating projects for waste reduction and forming task forces for close follow up. Specific targets are placed in each area for waste reduction and quality improvement and are done in coordination with all other departments.
The main function of the QA department is process audit and final product inspection. This will include monitoring the inspection status of incoming materials, in process materials, process parameters and finished product inspection.
Ensuring identification and traceability of all materials is also a function of QA. Each process and product has specifications and tolerances which are given by the technical department. A document called Basic Standard Practice is also available which says how the process is to be carried out, what are the do`s and donts of each process etc.
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The QA department checks whether the process is carried out in concurrence with the laid down specifications and the basic standard practice. The inferences are recorded and follow up action is initiated where ever any abnormality is found. Special attention is given to critical and problematic areas. Trials are followed up and the relevant processes and parameters are recorded and reports are published.
When ever a process or product doesnt meet specifications, the process is stopped and the defective pieces are withheld using a tag called NCM (Non Conforming Material). This will later be disposed in an appropriate manner by the technical department.
All major highlights of quality assurance reports are discussed in weekly and monthly quality meetings so as to make everyone aware of the situation and to initiate permanent corrective action.
QA coordinates the removal of scrapped items so that exact data can be obtained on the reasons for scrap and exact quantity of material scrapped.
QA also initiates studies for implementing new systems and procedures on the principle of continuous improvement. FEMA (Failure Mode Effect Analysis) is carried out and a control plan is also prepared to ensure that the causes of failure are avoided before they happen.
Whenever a tool change (tyre/tube/flap/bladder/PCTR mould change/tyre building drum change) is done, the relevant parameters are checked by QA and certification is done before commencing production. In such cases if it involves a time change (curing time change/ mould change) or a media change (changing from steam cure to air cure and vice versa in case of tube curing) such cases are also checked and certified.
When ever new machinery is installed QA carries out the process of industrialization of machinery in collaboration with the technical and engineering department.
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Slow moving and non moving items are tracked at regular intervals to avoid deterioration of material and to avoid production of material not required in the market.
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ENGINEERING
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The Engineering department functions are divided into mechanical, electrical, instrumentation, civil and environmental engineering. The main functions are:
New machinery layout preparation Erection Commissioning of new machinery Preventive maintenance Breakdown maintenance Condition monitoring Overhauling of machinery and other related equipments Maintenance of utility items like generators, boilers, pumps, compressors, freezer liners and cooling towers
Maintenance of material handling systems like lift, hoist, chain block, gantry, forklifts Maintenance of equipments at pump house and training centers
MECHANCAL ENGINEERING Preventive Maintenance All equipments that need preventive maintenance are listed out. It is ensured that equipment history and manuals are available for all machines. A preventive maintenance schedule is prepared after a careful analysis of breakdowns in the machine and based on the personal experience of the maintenance personnel. The annual maintenance schedule thus prepared is divided into weekly schedules.
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Breakdown Maintenance The defective machinery is identified either by production or by engineering and a maintenance request is generated. The department that detects the flaw( production or engineering) raises the maintenance request and arranges for tools, maintenance personnel and spare parts. The machine is then released for maintenance. The required maintenance jobs are carried out and the machine is thoroughly checked. If the machine is OK then it is handed over to the respective department.
Every month down time analysis is done and permanent corrective actions are taken in case of recurring failures. Mean time between failures (MTBF) and Mean time before repair (MTBR) are the measures adopted to track the improvement.
ELECTRICAL ENGINEERING MRF Kottayam unit falls under the EHT (Extra High Tension) consumer category .All the consumers who use 66KV and above are included in this category. The incoming power supply for this unit is 110 KV. Normally MRF Kottayam gets power from Pallom Sub station but there is also a provision to get supply from Pala sub station in case of emergency. The total connected load of the unit is roughly 30000 HP. The maximum demand is 10,000 KVA. For backup power supply, the unit has three generators of 1000 KVA each and one generator of 5000KVA capacity.
CIVIL ENGINEERING
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ENVIRONMENTAL ENGINEERING This branch of engineering is mainly concerned with monitoring of factors which affect the environment and finding ways by which they are minimized or eliminated. Water pollution, air pollution and sound pollution are the main factors that come under preview of environmental engineering.
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Air Treatment Air pollution is being monitored by engaging an outside agency. Particulate matter in air is measured and compared against standards of permissible levels. Sound Pollution is measured in terms of decibels and compared against standards of permissible levels. This is done twice a year.
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SAFETY
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MRF has a well defined safety and health policy which is as follows: It is the policy of our company that the SAFETY and HEALTH of our employees shall be our FIRST priority. It is the responsibility of everyone in the organization, regardless of the position he occupies to ensure that everyone in the factory returns home to their beloved ones without any injury today and every day. We shall observe this policy not only in letter but also in spirit and offer ACCIDENT FREE SAFE PRODUCTION for the benefit of one and all.
Implementation of the Safety Policy Necessary procedures, rules and guidelines for the effective implementation of this policy without prejudice to the statutory requirements are formulated by the Chief Safety Officer and Plant Safety Officer. They will also render necessary advice and assistance to all management staff in the effective implementation o this policy at respective Sections, Plants, Departments and Unit as a whole. The General Manager is responsible to implement the Safety Policy at the Kottayam plant. Training is given to all employees to alleviate ignorance on safe and standard work practices which will enhance safety. Training will include:
Induction training is given on the basic safety aspects and Safety Officer will be the faculty for induction training. This training will brief on safety devices on machines and personal protective equipment. The training will also cover the proneness of a factory atmosphere to
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SECURITY
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Industry security in the public and the private sector can be defined as protection of men, materials, machines, buildings, classified information and company operations and to provide protective service against fire, theft or damage to the company assets and the installations.
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Imparting training on emergency preparedness and security and fire awareness to MRF employees.
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MARKETING
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Objectives of Marketing Management Creating demand Customer satisfaction Increasing the goodwill of the company Increasing the market share Raising the standard of living of the consumer community
Marketing Strategy and Network MRF has emerged as one among the market leaders in the tyre manufacturing sector in the world. It was also awarded four times by J.D. Asia Pacific for customer satisfaction. This achievement was possible because of MRF`s marketing strategies, product quality and after sales service to customers. MRF has a wide marketing network, which hosts 68 sales centers, 2500 distributors and exports to over 75 countries. Tyre and tyre related products are sold under the brand name MRF and distributed in domestic markets through sales offices, dealers and franchises. The Corporate Executive Director based in Chennai, guides the marketing activity. In Kerala, the district office is at Ernakulum.
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MRF Sales Network NORTH New Delhi Agra Bareilly Bikaner Chandigarh Faridabad Haldwani Hissar Jaipur Jalandhar SOUTH Chennai Ananthpur Bangalore Belgaum Calicut Coimbatore Ernakulum Hubli Hyderabad Madurai Kolkata Asansol Cuttack Dhanbad Guwahati Muzaferpur Patna Ranchi Siliguri EAST WEST Mumbai Ahmadabad Aurangabad Baroda Bhopal Goa Indore Jabalpur Jodhpur Nerul
Advertisement and Sales Promotions MRF concentrates on advertising its products through TV, newspapers, magazines etc. The company also uses posters and hoardings for marketing awareness of their products at selected locations.
MRF involves itself with various sales promotion activities. They bought the 6th World Boxing Championship to Mumbai, the first of its kind with 39 countries participating. Smile campaigns on Indian roads, MRF Pace Foundation, racing and rallying and the list of MRF`s promotion activities goes endless.
Tyre and tyre related products are sold under the brand name MRF and is distributed in domestic markets through sales offices, dealers and franchises. Conveyor belts are sold under the brand name MRF Muscle Flex to customers directly from the Arakonam plant.
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SWOT ANALYSIS
STRENGTHS MRF is a market leader in almost every segment in the tyre industry.
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Strong and efficient channel of distribution- has a wide range of sales offices for each zone
Quality control
Environmental Certification
Satisfied customers
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Lack of commitment
Union problems
Making tie ups with the new automobiles entering the Indian industry
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Modernization of tubeless tyre Product enhancement with natural and synthetic rubber
Changing Technology
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FINDINGS
MRF Ltd. is the No.1 tyre manufacturer in the country and the 13th largest in the world
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SUGGESIONS Care should be taken during recruitment of employees. Only those people who really need a job should be selected, as motivation to work is very essential.
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There should be performance appraisal for employees in order to formulate proper promotion policies
Ensure more coordination and interaction between marketing and manufacturing departments
More attractive advertisements through media like TV, newspapers etc is recommended
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CONCLUSION
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In spite of cut throat competition in the tyre market segment, MRF has emerged as a market leader. The company has considerable lead over its rivals in the tyre market but has stiff competition from both local and global players. The company`s thrust on increasing exports will boost up its growth to a great extent. The outstanding performance of MRF is a combination of high growth in sales along with enhanced operations management and significant cost saving measures. MRF tries to provide high quality and technology superior products to its customers.
MRF Kottayam is one of the six production facilities in India. It has an ideal location due to the easy availability of natural rubber the main raw material of the tyre industry. The plant working 24 hours a day has specialized plant for production of various products. The work runs smooth with no outside interference. Each department in the company plays an important role
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BIBLIOGRAPHY
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Bibliography
MRF Manuals
www.mrftyres.com
www.mrf-exports.com
http://www.dalalstreetjournal.com/PublicationDetails.asp
http://www.prlog.org/10083560-report-on-indian-tyre-industry.html
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