Final Report for Ashley

8/2/2019 Final Report for Ashley

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A REPORT ON

ORGANIZATIONAL STRUCTURE STUDY

AT

ASHOK LEYLAND

CHENNAI, TAMILNADU

Submitted By

S.SIBI PRASANNA

REGISTER NUMBER: 1120334

I MBA SECTION D (2011-2013)

CHRIST UNIVERSITY,

INSTITUTE OF MANAGEMENT (CUIM)

BANGALORE


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Dear Professor Rahul Gupta and A.villas

I wish to inform you that your student Mr S Sibi Prasanna has undertaken a project onthe Study of the Organization Structure from 10 th May 2011 to 31 st May 2011.

He has submitted a project report capturing the major corporate processes.

Regards

V Krishna Shankar


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ACKNOWLEDGEMENT

Project is the systematic study to gain knowledge. It is possible only in the light of guidance, advice and help from a number of sources, without which a learner is a

soldier in the vast uncharted sea without radar.ORGANIZATIONAL STRUCTURE TRAINING was assigned to me by

Christ University, institute of management as the part of the curriculum of 2 yearsMaster of Business Administration.

I would like to say thanks to my Project Supervisor Mr. KRISHNA SHANKAR,Training Head in Ashok Leyland, Chennai and Mr. Satish Kumar for giving me thevaluable time, suggestions and technical guidance during my hard work withoutwhich my hard work would have been too far from the smart work which is newmantra of success in this centurys corporate world.

I am also very thankful to my mentor Prof. A.VILLAS and Prof. RAHUL GUPTAfor his valuable time, guidance, inspiration and continuous encouragementthroughout the period of project.

In the end I would like to thank all my friends and people who helped me in thisproject and also in regenerating my enthusiasm whenever I need it the most. Ithank them again and again for letting me be where I am today.


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TABLE OF CONTENTS

S.NO. CONTENTS PAGE NO.

1. INTRODUCTION 5

2. PROFILE OF THE STUDY 6

3. MAJOR DEPARTMENTS 15

4. HR DEPARTMENT 15

5. FINANCE DEPARTMENT 23

6. MARKETING DEPARTMENT 29

7. PRODUCTION DEPARTMENT 37

8. CSR 41

9. SWOT ANALYSIS 43

10. COMMUNICATION SYSTEMS 44

11. FINDINGS 46

12. SUGGESTIONS 46

13. CONCLUSION 46


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1. INTRODUCTIONAn organizational study refers to the complete understanding of an organization inall dimensions.

Ashok Leyland is a well known automobile manufacturing company in India.

Ashok Leyland believes that its historical success and future prospects are directly

related to combination of strengths. The referred unit is a core limb of Ashok

Leyland, the nations pioneering automobile manufacturer.

The study includes the brief study of the core departments of Ashok Leyland,

Chennai. Different officials working in various departments have provided very

important data in this report. Every effort has been made to understand the

functions and activities of various departments as well as the manufacturing

process.

1.1. OBJECTIVES OF THE STUDYTo familiarize with business organization.Getting practical experience regarding the organization function.To understand the functions of HR, Finance, Production and Marketingdepartments.To understand the culture in the organization and its effect on employeesTo get industrial exposure and experience.

1.2. Methodology and SOURCES OF DATAThe methodology that I used for the study is through the collection of primary andSecondary data.Primary dataDirect observation by going to their training service center and analysed howpeople behave there, how people are trained .etcLive discussion with the managers , training heads and the staff members.Secondary dataAnnual Reports Business Journals Existing Records Webs ite of the company


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2. PROFILE OF THE STUDY2.1 INDIAN AUTOMOBILE INDUSTRY:

India is one of the fastest growing automobile industries in the world. After 1960,

the automobile industry saw rapid growth and many automotive manufacturers

started production.

The automobile industry in India is the seventh largest in the world with and

annual production of over 2.6 million units in 2009. In 2009, India emerged as

Asias fourth largest exporter of automobiles, behind Japan, South Korea and

Thailand. By 2050, the country is expected to top the world in car volumes with

approximately 611 million vehicles on the nations roads.

INDIAN AUTOMOBILE MARKET :

Many foreign companies have been investing in the Indian automobile market in

various ways such as technology transfers, joint ventures, strategic alliances,

exports and financial collaborations. The auto market in India can boast of

attractive finance schemes, increasing purchase power and launch of latest

products.

Some vital statistics regarding the automobile market in India has been mentionedbelow:India ranks 2 nd in the global two-wheeler marketIndia is the 4 th biggest commercial vehicle market in the worldIndia ranks 11 th in the international passenger car marketIndia ranks 5 th pertaining to the number of bus and truck sold in the world.

HEAVY VEHICLES MARKET:

Heavy vehicles market in India comprises of trucks, machines, ambulances and

school buses. The popular heavy vehicle brands in India are Volvo, Eicher, Tata,Telco, Ashok Leyland and Swaraj Mazda.

Following are the major players in the Indian Heavy Vehicles Market:


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Tata Motors is the largest automobile manufacturing company in India that manufactures a wide range of heavy vehicles adhering to world class standards. Itis the market leader in commercial vehicles in all the segments, be it heavyvehicles, medium size vehicles, small vehicles, buses or defence vehicles. Theheavy vehicles manufactured by Tata Motors have highly developed brakingstructure, high ground authorization, better direction competence and a muscularbody. The advanced engine imparted to these heavy vehicles makes them a classapart from the other heavy vehicles running on the Indian roads and Highways.Tata Motors leads this segment with a market share of 61%.

Ashok Leyland is an exclusively heavy vehicle manufacturing company situatedin Chennai and was initiated in the year 1948. It is one of Indias biggest producersof heavy vehicles such as trucks, buses, military vehicles and also the secondbiggest commercial vehicle firm in India heavy vehicle division with a market

share of around 27%. Ashok Leyland is also renowned for producing auto spareparts and engines for marine and industrial submission. Eicher Motors was initiated in 3rd September, 1960. The first firm tomanufacture the first tractor in India. The indigenously manufactured tractor wasintroduced in the Indian market straight from Eichers Faridabad factory. Thehistory of the firm can be traced back to 1948, when Good earth Company wasestablished for vending and repairs of imported tractors in the nation. Swaraj Mazda, a tie up between Mazda and Swaraj Enterprise, Swaraj Mazda

represents advanced Indian expertise and manufacturing. The firm has Research

and Development improvement edge on international scale. The firm manufactures

various products such as Bus, Ambulance, and Trucks etc.

The modern automobile market in India has been considering key issues in theprocess of growth:Customer care, and not just service .Domestic as well as multi-national investmentsSearing through cut -throat competition

Road safety Anti -pollution normsCo -ordination with government to enable advancementUsed vehicle trade


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2.2. COMPANY PROFILE:

Ashok Leyland has been a major presence in Indias commercial vehicle industry

since1948, the year it was born. The origin of Ashok Leyland can be traced to the

urge for self-reliance, felt by independent India. Pandit Jawaharlal Nehru, India'sfirst Prime Minister persuaded Mr. Raghunandan Saran, an industrialist, to enter

automotive manufacturing.

They are one of the Indias leading manufacture rs of commercial vehicles and

special vehicles, engines for industrial purpose, gen sets and marine requirement

equipments. For over five decades, Ashok Leyland has been the technology leader

in Indias commercial vehicle industry, molding the countrys commercial vehicle

profile by introducing technologies and product ideas that have gone on to becomeindustry norms.

Ashok Leyland at the time of its inception was known as Ashok Motors. It was

assembling Austin cars at the first plant, at Ennore, near Chennai. In 1950, the

company started assembly of Leyland commercial vehicles and soon the local

manufacturing under license from British Leyland, participation in the equity

capital, in 1954, the company was re christened Ashok Leyland.

In 1987 the overseas holding by LRLIH (LAND ROVER LEYLANDINTERNATIONAL HOLDINGS LIMITED) was taken over by a joint venture

between the Hinduja group, the Non Resident Indian Transnational group and

IVECO Fiat a part of the Fiat group and Europes leading truck manufacturing

company. Ashok P.Hinduja is the chairman of the company. The Hinduja group

also associated with Ennore Foundries Limited, Automotive Coaches and

Components Limited, and Gulf Ashley Motors Limited.

The subsidiary holdings are Ashley Holdings Ltd., Ashley Investment Ltd., andAshok Leyland Project Services.The chief competitors of the company are;

Mahindra Volvo Tata Motors


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With a commanding strength of the about 12,000 employees the company is

looking forwards to enhance the scope of its action. It is aiming at expanding its

production operation overseas to make it a more globally accessible company. It is

looking to acquire a small to medium sized commercial vehicle manufacturers inChina and other developing nations, which have an established product line. An

example would be the 2007 acquisition of the Czech based Avias truck business

rechristened Avia Ashok Leyland Motors.

From 18 seater to 82 seater double-decker buses, from 7.5 tonne to 49 tonne in

haulage vehicles, from numerous special application vehicles to diesel engines for

industrial, marine and genset applications, Ashok Leyland offers a wide range of

products.

Ashok Leyland has seven manufacturing plants - Ennore Plant, Chennai. Hosur Plants Unit I, Unit II and Unit II A. Alwar, Rajasthan. Bhandara, Maharashtra. Pantnagar, Uttarakhand

In the popular metro cities, four out of five state transport undertaking buses come

from Ashok Leyland. Statistics reveal that the company is Indias largest exporter

of medium and heavy duty trucks. It sells close to 83,000 medium and heavy

vehicles each year. The company has a near 98.5% market share in the Marine

Diesel engine markets in India. At 60 million passengers a day, Ashok Leyland

buses carry more people than the entire Indian Railway network.

The Five AL Values are:

1. International2. Speedy

3. Value Creator

4. Innovative

5. Ethical


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GROWTH MILESTONES OF ASHOK LEYLAND:

1966 Full air brakes introduced

1967 Double Decker buses introduced.

1968 Power steering offered.1979 Multi-axle trucks introduced.

1992 Self-certification status for defence supplies.

1994 ISO 9001 Certification

1997 Indias first CNG powered bus.

1998 QS 9000 Certification

1999 CNG (Compressed Natural Gas) introduced.

2000 Euro-I, Engines/vehicles introduced.2002 ISO 14000 Environment Management System Certification.

2002 Exclusive Machine line 2 for Hino cylinder.

2003 E-Comet launched.

2004 50,000 mark vehicle produced.

2006- ISO/TS 16949 Corporate Certification.ASSOCIATE COMPANIES: Automotive Coaches & Components Ltd (ACCL) Lanka Ashok Leyland Hinduja Foundries IRIZAR TVS Ashok Leyland Project Services Ltd Gulf Ashley Motors Ltd Ennore Foundries Ltd

FACILITIES:The company has seven manufacturing locations in India

1) Ennore, Tamilnadu2) Hosur: Unit 1, Tamilnadu3) Hosur: Unit 2, Tamilnadu4) Hosur: Unit 2A, Tamilnadu5) Alwar, Rajasthan6) Bhandara, Maharashtra7) Pantnagar, Uttarakhand


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Ashok Leylands Technical Centre, at Vellivoyalchavadi in the outskirts of Chennai, is a state-of-the-art product development facility, that apart from moderntest tracks and component test labs, also houses Indias one and only Six Poster testing equipment. The company has an Engine Research and Development facility in Hosur. The new plant in the North Indian state of Uttarakhand at Patnanagar is set up atan investment outlay of Rs.1200 crores. The company has signed an agreement with Ras Al Khaimah InvestmentAuthority (RAKIA) in UAE for setting up a bus body building unit in the Middleeast. CLIENTS (Not exhaustive):

Indian Army.

US Army. Tamilnadu State Transport Corporation (TNSTC).

Metropolitan Transport Corporation (MTC), Chennai.

State Express Transport Corporation (SETC), Tamilnadu.

Kerala State Road Transport Corporation.

Maharashtra State Road Transport Corporation (MSRTC).

Andhra Pradesh State Road Transport Corporation (APSRTC).

Parveen Travels.

Sharma Transport.

VISION

Achieving leadership in the medium/heavy duty segments of the domestic

commercial vehicle market and a significant presence in the world market through

transport solutions that best anticipate customer needs, with the highest value -to-

cost ratio.


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MISSION-Identifying with the customer.-Being the lowest cost manufacturer.-Global benchmarking our products, processes and people, against the best in theindustry.

QUALITY POLICY

Ashok Leyland is committed to achieve customer satisfaction by anticipating and

delivering superior value to the customer in relation to their own business, through

the products and services offered by the company and comply with statutory

requirements.

Towards this, the quality policy of Ashok Leyland is to make continual

improvements in the processes that constitute the quality management system, to

make them more robust and to enhance their effectiveness and efficiency in

achieving stated objectives leading to1. Superior products manufactured as also services offered by the company.

2. Maximum use of employees potential to contribute to quality and environment

by progressive up gradation of their knowledge and skills as appropriate to their

functions.

3. Seamless involvement from suppliers and dealers in the mission of the companyto address customers changing needs and protection of the environment


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2.3. ORGANIZATION CHART OF M/s. ASHOK LEYLAND LTD(Departments).

In Ashok Leyland the Organization structure consists of many divisions.Here Managing Director (MD) is the overall head. Under him there arenine different departments. They are Chief financial officer (CFO),Executive Director(ED) for internal auditing, ED for product development,

ED for HR, ED & company secretary, Special Director for businessplanning, ED for construction and allied business, Special Director forplanning and portfolio management, and the whole time director. Alsounder the Whole Time Director, Chief Operating Officer (COO) there arefive sub divisions. They are ED for Marketing, ED for Manufacturing, ED forInternational Operations, ED for Production Planning and Ed for Sales andService.

MANAGINGDIRECTOR

CFO ED INTERNALAUDIT

EDPRODUCT

DEVELOPMENT

ED HRED &

COMAPANYSECRETARY

SPECIALDIRECTORBUSINESSPLANNING

EDCONSTRUCTION

AND ALLIEDBUSINESS

SPECIALDIRECTOR

PLANNNIG ANDPORTFOLI

MGMT

WHOLE TIMEDIRECTOR 7

COO

ED PRODUCPLANNINED INTERNATIONAL

OPERATIONS

ED SALES & S

ED MFG ED MKTG


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2.3. ORGANIZATION CHART OF M/s. ASHOK LEYLAND LTD.

So for a particular department various grades of the officers are shown here fromtop to bottom. It shows who is superior to him and who have to report to whom.Here the basic level in their management is the officer which is at the bottom. Andafter that his superiors are ordered in successive manner to the top.

MDWHOLE TIME

DIRECTOR

ED

SPECIALDIRECTOR

GM

DEPUTY GM

ASST. GM

DIVISIONALMANAGER

SNRMANAGER

MANAGER

DEPUTYMANAGER

ASST.MANAGER

SNR OFFICER

OFFICER


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3. FUNCTIONS OF THE MAJOR DEPARTMENTS SELECTED

The major functional areas of the unit and the major departments which oversee

those areas are catalogued as follows:

a) HR Department

b) Finance Department

c) Marketing Department

d) Production Department.

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

a) HUMAN RESOURCE DEPARTMENT OF ASHOK LEYLAND

LTD.

HUMAN RESOURCE MANAGEMENT

Human resource management is defined as the managing function of employees,

developing and compensating HR resulting in creation and development of human

relations with the view to contribute proportionately to the organizational,

individual and social goal.

VALUE STATEMENT

We consider our employees as our most valuable asset and are committed to

provide full encouragement and support to them, to enhance their potential and

contribution to the companys business.


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DEPARTMENTAL STRUCTURE:

FUNCTIONS OF HR DEPARTMENT:

1) HR ACQUISITON

Recruitment

Selection

2) HR DEVELOPMENT

Training and development

Organization development

3) PERFORMANCE AND COMPENSATION

Performance appraisal

Incentives and benefits

4) MOTIVATION

Creating motivation environment

Empowerment and participation

HR Mobility

ED HR

DIRECTOR-MGMT DEV.

CENTRE-HOSUR

GM - MGMTDEVPT.

AGM-OFFICESERVICE

DGM- HR

CHIEFSECURITYOFFICER

MEDICALOFFICER

SR MANAGERHR

DIV,MANAGER

MANGER,ASST

MANAGER,OFFICERS

ASSSTMANAGER,

MGMTTRAINEE

OFFICER


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1) HR ACQUISITION

RECRUITMENT

Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their

applications are submitted. The result is a pool of applicants from which new

employees are selected.

SOURCES OF RECRUITMENT

The following are various external sources of recruitment:

1. Consultancies

2. Campus recruitment

3. Lateral entries

1. CONSULTANCIES

The department heads where requirements are needed informs to the HR

department about the requirement. The concerned person for recruitment gets

approval for filling the vacancies. Then the consultancies are approached telling

the requirements. The fit applications are mailed to attend the interview. If

satisfied, they are called for the personal interview.

2. CAMPUS RECRUITMENT

The recruitment panel goes to the reputed colleges to select the candidates.

On the following basis they recruit the candidates

GETs - Graduate Engineer Trainees

DETs - Diploma Engineer Trainees

ITI- Industrial Training Institute


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3. LATERAL ENTRIES

They pick the experience candidates or people from other companies. The

following is the process of lateral entry recruitment:

1. Sourcing

2. Interview

3. Written test

4. Technical round interview

5. Personal Interview

PROCEDURE FOR LATERAL RECRUITMENT

Pre-Selection

Selection

Post-Selection


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PHASE 1: PRE-SELECTION

STEPS IN SELECTION

Receiving of application

Preparing of shortlist by the department

Verification of resume by department head

Interview (one round)

Psychological test

Reference/Background information

Final selection

Placement

Requirementrequisition-

FUNCTIONAL HEAD

HR- APPROVINGAUTHORITY

Identification of prospectiveCandidate

Initial HR screening

Screened resumessent for furthershort-listing to

Functional Head

Personal InterviewDiscussion & Finalinterview by theinterview panel

Salary and GradeFixation by approved

authority

Initial offercommunicated to

the candidate

Negotiation with thecandidate

If offer accepted HRinforms the

Functional headabout probable DOJ

HR issues offer letter

Joining FormalitiesNew Hires


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2) HR DEVELOPMENT

TRAINING

Training is an on-going process aimed at capability-building of the employees at

all levels. In todays competitive scenario , organizations are increasingly turning to

training to capture the cutting edge. As they manage growth in a constantly

changing environment. Purposive training and planned re-training have an

acquired priority status on the corporate agenda. Centre stage in Ashok Leyland

training endeavors is the management development centre, at Chennai and Hosur.

Training program is classified into

Skill

Knowledge

Attitude

Training programs in Ashok Leyland are:

Quad 1 executives

Competencies and priority needs of departments/ units E-learning Induction for DET (2 years) GET (1 year), Laterals (7 days) GENMOD training program. General-Planning for retirement Budget spent for training (8hrs- 1day) middle managers (3 to 4 persons) is 3-4lakhs.


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3) PERFORMANCE AND COMPENSATION

PERFORMANCE APPRAISAL Performance appraisal is the systematic evaluation of the individual with regard to

his or her performance on the job and his potential for development In Ashok Leyland graphical scale method is followed, it is also known as linear

rating scale. In this, a printed appraisal form is used for each appraise. The form

consists of various employee characteristics and his job performance. Various

characteristics include initiative, leadership, dependability, creative ability,

analytical ability etc..,

The rating is done on the basis of scale which is in continuum representing various

degrees of particular quality. Ashok Leyland use numbers say 5, 4, 3, 2 and 1 to

denote points for various degrees of excellent-poor, high-low, good-bad and so on.

Five point scale of Ashok Leyland showing levels of performance:5- Exceptional -Consistently outstanding performance.4- Superior - -Performance which is consistently significant beyond job

requirements contributes in related area also.3- Good -Performance which adequately meets job requirementsand occasionally produces good over and above requirements2- Barely satisfactory-Just meets minimum job requirements 1- Unsatisfactory -Does not meet job requirement at all.

The appraisal form also consists of customer satisfaction survey where the need,

service provider and period of assessment are all identified. It also followsgraphical scale method using a five point scale based on the criteria1) Quality (Customer needs, service information, quality works, complaints etc..,).2) Delivery (Delivery time, point of use, use or parts/service information)3) Communication (Interaction with customers, listening to customer views, timelyfeedback, and review changes with the customer)


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4) Responsiveness (Responding to customer complaints, changes to customerneeds)5) Improvement (Positive attitude for improvement, implementation &effectiveness of improvement and improvements at the customer end)

Overall Customer Rating = 1+2+3+4+5 / 5

INCENTIVES 1) Surcharge on Direct Booking Incentive.2) Special Incentive Scheme.Employee welfare schemesThe following are the welfare schemes available to the employees.

Canteen facilities

Medical claims Transport facilities Ashok Leyland school for their children Scholarship schemes Recreation facilities

BENEFITS 1) Tuition fee refund

2) Major medical plan3) Medical reimbursement4) Domestic travel reimbursement5) Conveyance reimbursement6) Vehicle loan7) Group term insurance8) Sixth day compensation (i.e. Saturday)9) Maternity leave

10) Leave11) Retirement age


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HR MOBILITY PROMOTION OPPORTUNITIES

Promotions is based on the seniority, eligibility for post, efficiency, skill,

qualification etc.., The management decides whether to fill a post of outside

recruitment or through promotion. Workman shall be considered for promotion to

a post based on certain rules. He has rendered a minimum period of qualification service of five years. He possesses the qualification prescribed for the post to which he is to be

considered. Fulfills prescribed attendance.

SEPARATIONS

Separation involves cessation of services of personnel from an organization. When

people leave the organization, Exit interviews are usually conducted to know the

reasons for leaving. The common reasons given are: Better opportunities Lack of growth ALLOWANCES House rent allowance

Washing allowance

Uniform and stitching allowance Night shift allowance Conveyance allowance Milk and vitamins allowances Flexibility allowance Quality certification allowance Direct production allowance

b) FINANCE DEPARTMENT OF ASHOK LEYLAND LTD.Finance is considered as the life blood of business. This is

because in the modern money-oriented economy, finance is one of the basic

foundations of all kinds of economic activities. Finance function may be defined as

the procurement of funds and their effective utilization.


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RESPONSIBILITIES OF FINANCE DEPARTMENT: The pricing department is responsible for the fixing of prices for sales of the vehicles and for buying of raw materials and semi finished goods. Treasury section is responsible for all kinds of funding managements such as

investments. Taxation section is responsible for remittance of tax, filing of returns, handling of litigations etc.., Costing and Budgeting department is responsible for the unit costing of each product in particular, such as spare parts and a vehicle as whole. The FSG (Finance account Service Group) deals with the payables and receivables at regional offices. The Explore finance department deals with the FSG exporting of items.

The same functions and responsibilities are allotted to the accounting and financedepartment of the manufacturing plants in Ennore, Hosur-1, Hosur-2,Hosur-2A,Alwar, Bhandara, Pantnagar.


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Here the top superior officer Chief financial officer which precedes by 10successive officers with basic level officer at the end.for every section in financethere are different deputy managers which followed by asst. managers at each endfor the smooth running of this department

ROLE OF FINANCE: Recorder (accounting) of all Financial Transactions Reporting of Financial Performance Arranging long and short term funds Capital and Debt Working Capital Management

MANAGINGDIRECTOR

CHIEF FINANCINGOFFICER

GM-FINANCE

DGM-FINANCE

AGM- FINANCE

DIVISIONALMANGER

SENIORMANAGER

MANAGER

DEPUTYMANAGER

ASST MANAGER

SNR MANAGER

OFFICER


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Compliance of tax and other corporate laws Risk Management Controllership function Audit coordination Investor Relations

PROCESS & ACTIVITIES OF FINANCE:a) Financial Accounts Quarterly, Half-yearly and annual results published as per listing requirements Limited Review / audit coordination. Annual Reports Disclosures made are comprehensive; complied much before

they become mandatory

Early completion of accounts, audit process; forefront in adherence to accounting

standards & other guidelines. Audit Committee comprises of Stalwarts from the profession. Automation of processes b) Financial Planning & Control Financial Planning includes estimating the amount of capital to be raised and

laying down the policies as to administration of the financial plan. Monthly MIS: Very Comprehensive with wider coverage and highly informative. Monthly review covers business volumes, market share, physical and financial

parameters including alerts on laggards, exceptions in all fronts. Exception reporting and Profit management measures form integral part of this

processc) Treasury Management

- Raising of Funds

- Funds Management

- Debt Servicing

- Risk ManagementFinancial instruments for Funds raising would depend on end use of funds; de -risking is an important consideration in deciding the instrument.Capex and long term working capital requirements are funded through share capital and long-term debt.


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Funds Management includes managing collections and outflows andsurplus/deficit management. Closer working with Marketing and Units is vital.Surplus management includes investment in Fixed Deposits, Mutual Funds, etc.,Direct investment in equity avoided

Debt Servicing includes repayment of principal and payment of interest ondue dates and ensuring that commitments made are adhered to.

Risk Management is vital since organization is exposed to both currency as

well as interest rate risks. Risks offer both threats and opportunities (can increase

income or reduce expenditure).d) Costing & Pricing

Strategic pricing of products, quotes for various tenders.

Special pricing for export contracts.Monitoring of cost of production of various models and for make or buy decisions e) TaxationCompliance with Direct (Income Tax Act, Wealth Tax) & Indirect Taxes (Excise,Customs, Service Tax, Sales tax etc).Tax planning is an important comp onent of business decisions.Recent major developments include introduction of Service Tax legislation and VAT across many States.

Aligning the business process across the organization and maximizing the benefits against such legislations is a major task handled by Finance.Regular tasks include remittance of tax, filing of returns, handling of litigations etc.f) Investor RelationsIn AL, Mutual Funds, FII etc.., hold 32% of shareholding besides public who hold

10% FII & Mutual Funds represent inves tment community who track companys performance continuously very closely.

Dissemination of data relating to companys performance and developments very important and sensitive.

Handled through presentations in periodic investor meet, web -cast,tele-conferences, individual meets, address in TV etc.


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PLANNING & MANAGING CASH FLOWS:

1.Planning cash flows

Rolling Quarterly cash forecast prepared and monitored weekly seeking

explanation for variance in order to control and direct operations.2. Management of daily funds Collections from 49 locations pooled under cash management system in to centralized accounts with consortium banks at Chennai. Various payments reported are collated and funded for in the various bank accounts depending on the expected debits. Surplus for the day, if any, invested for tenor which is based on requirement of funds back in to the system. Deficit funded through short term loans from banks, availed based on best product available / rate offeredFINANCIAL CHALLENGES AHEAD:Global slowdown challenging break even.Decrease in Margins due to inability to pass on cost increases due to competitive pressures partially compensated by increase in volumes.Profitability pressures due to changes in business mix and commodity pricemovements.Forex management unforeseen volatility in major currencies; particularly

important with forex loansSupporting inorganic growth evaluation & funding of emerging options.Need to fund major capex & investments Rs.2400 cr in the next3 years; major

investments in JVs

Tackling financial covenant breaches.

Increase in interest rates

Business integration of overseas units.

Managing expectations of stakeholders


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FINANCIAL RESULTS:

2007-2008 2008-2009 2009-2010SALES VOLUMEVEHICLE 83307 54431 63926

ENGINE 11757 21447 19050SPARE PARTS 79124 79969 88506NET SALES/ INCOMEFROM OPERATION

774258 598107 724471

GROSS OPERATINGMARGIN

82038 46944 76284

FINANCIAL EXPENSES 4974 11871 8113OTHER INCOME 5760 4962 7045GROSS PROFIT 82824 40035 75216DEPRECIATION 17736 17841 20411PROFIT BEFORE TAX 65088 20845 54477

PROFIT AFTER TAX 46931 19000 42367PAID UP EQUITYSHARE CAPITAL( FACEVALUE PER SHARE ISRS.1 EACH)

13303 13303 13303

BASIC EARNINGS PERSHARE

3.53 1.43 3.18

DIVIDEND PER SHARE 1.5 1 1.5

Comments:

Significant reduction in material and operating costs supported by pricing actionhas improved margins in the year 2009-10.

c) MARKETING DEPARTMENT OF ASHOK LEYLAND LTD.

Marketing is concerned with the people and the activitiesinvolved in the flow of goods and services from the producer to the consumer.

Ashok Leyland has been offering world class products to millions of customers to

40countries across the world.Its main product line includes Trucks, Buses, Defence vehicles and special vehicles

and engines for Indian and Overseas market.

Ashok Leyland is The market leader in Indian bus market offering CNG, Double Decker and Vestibule bus variants.


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The market leader and pioneer for multi-axle trucks and tractor- trailers. Enjoys market supremacy in diesel engines for Industrial, Gen-set and Marine applications. Largest supplier of logistic vehicles to the Indian Army. Offers Total Maintenance Solutions through mainte nance contracts for its products, relieving the customers of all maintenance worries.

Departmental Structure

Here the chief operating officer who is the head has three successors. They areHead for defense sector and Head for engine business and the Executive forMarketing. Also Under the executive director there are four sections, one for Fullybuilt solutions, another for marketing and customer groups, and for customersupport there is also a head, and finally the head for vehicle sales and service.

CHIEF OPERATINGOFFICER

HEAD-DEFENCE SBU

HEAD ENGINEBUSINESS

ED- MARKETING

HEAD FULLY BUILTSOLUTIONS

HEAD MKTG &CUSTOMER GROUPS HEAD- PARTS 7

CUSTOMER SUPPORT

HEAD-VEHICLE SALES& SERVICE


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ADVERTISING:

The need for advertising was felt by Ashok Leyland in 2006-07 when they had to

project the transformation that has occurred within Ashok Leyland, but as yet not

communicated to the public. They came up with a product related Ad campaign

and a Corporate campaign. Their aim was to let their target audience perceive their

brand as International, Innovative and Speedy, which has always been their core

brand value. At the All India PR awards 2007 conducted by the Public Relations

Society of India (PRSI). Ashok Leyland won the second prize for their corporate

campaign. They gave a prelude to the campaign by exhibiting their product range

and their field of pioneering.ASHOK LEYLAND- THE BRAND:

ENGINEERING YOUR TOMMOROWS has been Ashok Leylands Brand

promise. The tag line finds expression at two levels: on the hard core strategy

level, that is the sum total of the essential values of vehicle technology-safety,

comfort, economy and ecology; on the aspirational level, it denotes a warm and

caring relationship with each stake holder in a unique way.Brand values

The two most visible- and recognized- components of the brand are the dynamicL logo and the name of Ashok Leyland. The name has historic reasons- and

timeless meanings. Ashok meaning Ha ppy is the name of the companys founder

Raghunandan Sarans son. The second part of the companys name has come to

cue the international aspect while he first part, so unmistakably Indian, has un-

declined the custom built relevance of the companys products and operations in

the Indian context.

Brand Ashok Leyland is essentially and experiential brand, its values felt in day to

day life- more palpably by its immediate customers and end users. The core of the

brand has always been innovative, international, speedy, moving with times- and

often-even ahead of it. The innards of Ashok Leyland vehicles have always been


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contemporary. The core is now being matched by contours of the new, modern,

future ready range of vehicles.

In 2006, Ashok Leyland felt a need for change in perception of image among its

public after its research feedback by its brand study. Though the company haspioneered many product concepts, and technologies, it was perceived to be a slow,

elderly and not modern brand.As per the research, the company was a fairly strong

brand with good recall value. It was seen as an experiential brand, where the public

related to it thought very high of it but those away from the brand has only a fuzzy

image of it.

Thus emerged the new Ashok Leyland with a new face. The tangible shift began

with a change in the typeface of the brand name along with a baseline. Also thecompany came up with a corporate identity manual which was strictly to be

followed by all. The content specified brand name usage in various areas. Various

advertisements were aired to promote the brand. The launch of a new website

opened to doors to the world outside. Also screening of its corporate film helped

them gain publicity.


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BUSINESS INTEREST:

Medium & Heavy commercial vehicles. Defence Exports Industrial applications Spare parts Service products MARKETING STRATEGIES AND PLANS OF ASHOK LEYLAND:NEW PRODUCT LAUNCHESThe company is expected to launch a slew of new products in the markets which isexpected to propel the demand for its products.INCREASING GLOBAL FOOTPRINTThe company is now targeting new strategic markets with increased thrust on theAsian and African countries.


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PLANS TO MEET THE GROWING NEEDS OF THE MARKET

The company is constantly reviewing their strategies. They are moving into higher

value added jobs because it becomes very important to engage workmen fully and

also their efficient utilization.FACTORS AFFECTING GROWTH:

Infrastructure development

Overall economic growth

Restrictions on overloading

Better operating economy of new trucks

Restrictions on the age of vehicles

Replacement demand due to changes in emission normsCURRENT PLAYERS IN THE COMMERCIAL VEHICLE INDUSTRY: Ashok Leyland Tata Motors Eicher Motors Swaraj Mazda Volvo Tatra Udyog

Force-MAN Asia Motor Works Mercedes Benz.

ASHOK LEYLAND- MARKETING NETWORK: Regional offices- 10 Areas offices- 18 Regional sales offices-19 Parts warehouse-7 Main dealers- 43 Dealer outlets- 177 Authorized service centres- 145 Service bays- 2352


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PRODUCT PROFILE :

Ashok Leyland offers a comprehensive product range with trucks from 7.5 tons

GVW to49 tons GVW (Gross Vehicle Weight). From 19 to 80 seaters in passenger

transport, a host of special application vehicles and diesel engines for industrial

gensets and marine application. Product profile can be broadly split into five

categories viz. Buses, Trucks, Defence vehicles, Special Vehicles and Engines.BUSES

LYNX BS-II, Viking BS-II,12 M Bus-BS II, Cheetah (Front engine),Viking BS-IIIViking AL, Airport Tarmac Coach, Vestibule Bus, Panther (Rear engine),Cruiser,Viking CNG BS-III, Falcon (Front engine),Stag BS-II, Double DeckerTRUCKS4x2 Haulage models, Ecomet,4x2 and Multi-axle Tipper Tractor,Multi Axle vehiclesDEFENCE VEHICLESShort Chassis Bus, Field artillery tractor, Comet 4x4,Top chi field Artillery tractor

,Long Chassis Bus, Stallion 6x6,Stallion truck fire fightingSPECIAL VEHICLESHippo tractor , Stallion Mk III Tipper, Hippo Tipper, Beaver tractorRapid Intervention Vehicle, Beaver Haulage, Hippo HaulageENGINES Genset application, Marine application, Industrial application, DG sets for exports


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VEHICLE SALES, SALES TURNOVER & PROFIT:

Ashok Leyland registered a sales turnover of Rs.7729.12 crores during 2007-08 compared to Rs. 7168.17 Crore in 2006-07 showing an improvement of 7.8%

After a sluggish start in 2008, the sales turnover improved by 21% touching Rs.7244.71 crores in 2009-10 compared to Rs.5981.07 crores in the 2008-09.

The net profit rose by 6.4% in 2007-08 to touch Rs.469.31 crores compared to Rs.441.28 crore in 2006-07.

Similarly the net profit improved to 123% to touch 423.67 crores in 2009-10 against Rs.190 crores in 2008-09


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d ) PRODUCTION DEPARTMENT OF ASHOK LEYLAND LTD.Production is an organized process of manufacturing/producing goods and servicesthrough the use of input resources of men, materials, money, machine, methods.PRODUCTION MANAGEMENT STRATEGIES:

Long range strategies Effective management of technology. Innovation in product management and process technology. Globalization in industry. Goodwill inside and outside the organization. An aggressive marketing strategy and risk taking ability. Short range strategies Location and layout.

Product selection and technology.

Capital selection and investment. Flexible strategy of production. Standardization of design. Economy of size and variety. PRODUCTION SYSTEM:Ashok Leyland employs a continuous production system, making use of specialpurpose machines and produces standardized items in large quantities.Characteristics Standard products are manufactured. Small work in progress in involved. More maintenance is required. Minimum cost of production per unit Division of labour is made more efficient


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EXECUTIVEDIRECTOR

PLANT DIRECTOR

GENERALMANAGER-

MANUFACTURING

DGM- MFG

AGM - ENGINES

DIV- MNGR

SNR- MANAGER

EXECUTIVES

ASSOCIATES &DAILY RATED

WORKERS

DGM- CHASSIS

AGM- CHASSIS

DIV- MANAGER

SNR- MANAGER

EXECUTIVES


WORKERS

DGM= MFGSERVICE

AGM-MACHANICAL

DIV- MGRMECHANICAL

SNR MANAGER

EXECUTIVES


WORKERS

DIV- MGRELECTRICAL

SNR MANAGER

EXECUTIVES

ASSOCIATED &DAILY RATED

WORKERS

DIV- MANAGERMECHAYRONICS

SNR- MANAGER

EXECUTIVES


WORKERS


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Here under the executive director the plant director and the general manager forthe manufacturing section. Also under him there are three major sections whichcomprises of Deputy Manager for manufacturing, and chassis building and for theservicing. Again there are different levels under these three sections which willend with the basic level workers.

PLANT LAYOUT:

Product layout is employed in chassis assembly and engine assembly where in the

facilities are arranged in a line as per the process sequence of the component

manufactured.Characteristics

Mechanized material handling. Lesser work in progress. Special purpose machines are used.

There are three major assemblies in the production of the vehicle. They are ENGINE ASSEMBLY

FRAME ASSEMBLY

CHASSIS ASSEMBLY

PDI (PRE DELIVERY INSPECTION): Testing of vehicle on real road conditions

The following are the various tests done to test the vehicle:

1. Speed test

2. Acceleration test

3. Vibration test

4. Torque tightening

5. Oil level and water level checking6. Electrical components checking

7. Air leakage test

8. Grease level checking9. Road test


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PLANT ENGINEERING:

Plant engineering is responsible for proper functioning of the plant by carrying outmaintenance operations such as electrical and electronics equipments maintenance,forklift charging and its repairing, repairing of pneumatic circuits etc.. It is alsoresponsible for maintenance works carried out in the organisation. The followingare the various types of maintenance:

Predictive maintenance

Preventive maintenance

Breakdown maintenance

Routine maintenance

1. PREDICTIVE MAINTENANCE:Predictive maintenance is done on assumption by experience before the occurringor by any symptoms of occurring.


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2. PREVENTIVE MAINTENANCE:Preventive maintenance is work directed to the prevention of failure of a facility3. BREAKDOWN MAINTENANCE:

Breakdown maintenance is work which is carried out after a failure, but for which

advanced provision has been made in the form of spares, material, labour and

equipment4. ROUTINE MAINTENANCE:Routine maintenance is done on even time or on routine basis. It includes machinelubrication, replacement of bulbs throughout plant to arrest building deterioration.

DIVISIONS:Plant engineering is divided into 4 divisions to carry out its functions. Thefollowing are divisions of plant engineering:

Electrical

Mechanical

GWE(General Works Engineering)

Civil

PERIOD OF MAINTENANCE:Period of maintenance is done on the basis of VED analysis. It is also known astime based maintenance. Here VED stands forV - VitalE - EssentialD Desirable

4. CORPORATE SOCIAL RESPONSIBILITY

Ashok Leyland defines CSR as: "Our commitment to improving the quality of life

of our employees, their families, the driver and the local communities around ourunits, and the society."With CSR as an integral part of Ashok Leylands activities, all social initiatives are structured and focused to enhance the commitment of employees and stake holders.


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CSR ACTIVITIES:1) Fun Bus Fun Bus is a gift from Ashok Leyland exclusively for free users round the year by

children of orphanages, corporation primary schools and physically/ mentallychallenged children in Chennai. 2) Green Mission In 2002, all the vehicle manufacturing units of Ashok Leyland were ISO 14001 certified with Environmental Management System. The Ennore unit was recently identified as one of the model energy- efficient unitsby a CII-TNEB organized Energy Conservation (ENCON) mission. Systematicmanagement of all energy resources from the 1980s through better housekeeping

and awareness has made this possible.3) Effluent Treatment The plant can do primary, secondary and tertiary treatment operations. About55,000 liters of effluents flow into the plant every day. Five kilograms of solidhazardous waste is stored as per Pollution Control Board standards and the restwater portion is treated and used for organic farming. On an average, 2,50,000liters of recycled water is pumped into garden saving Rs.1.5 million per annum. 4) Greening The Ennore unit is known for its lush green cover. Almost 10% of the total ground

area 53.41 hectares is covered by greenery creating an oasis in the arid zone of Ennore. 5) Aids Awareness In the mid- 90s, the department of International Development, British High Commission, formed the Truckers Interim Coordination Unit (TICU) for a focusedprogramme among truck drivers. Ashok Leyland was one of the first organizationsto associate itself by becoming an intervention centre. 6) Driver Training Centre

Ashok Leylands Namakkal Driver Training Centre near Salem in Tamil Nadu was started in 1995 to ready a driver for life on he road and off the road. From the very beginning, the curriculum had included, besides functional subjects, healtheducation including yoga and AIDS awareness along with the education on thevehicle and traffic rules cum sessions on physical fitness, personality developmentand health risks like smoking.


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7) Community Welfare Started in 1994, the Dharam Hinduja Matriculation and Higher Secondary School,Thiruvottiyur, Chennai, is managed by a Board of Trustees consisting of senior

executives and workmen of the company. The company contributed one crore rupees in aid of relief operations for the Tsunami victims. In addition, employees contributed another 15 lakhs separately. Ambulances are donated for worthy causes. Substantial relief material was distributed in the worst affected districts of Tamilnadu through NGOs.8) Sludge disposal A natural by-product of the painting process, sludge disposal has always been a

problem faced by the auto industry.

5. SWOT ANALYSIS

STRENGTHS

1. Good Training System.

2. Good Organizational Climate.

3. High Market Share

4.Skilled Employees5.Standard Quality ProductWEAKNESSES1. High price2. Sales representatives are lessOPPORTUNITIES1. Demand for heavy vehicle has stepped up all over the globe.2. Company provides better credit facility to dealers.

THREATS1. High competition2. Promotional programmes of other brands3. Complicated national market4. New players entering the market.


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6. COMMUNICATION SYSTEM AT ASHOK LEYLAND LTD.

The Corporate Communication department in Ashok Leyland started in 1997.

Previously, a part of marketing communications, the department has come a long

way. It came into existence when the management realized the need for a media

friendly department to communicate with its external public. Also there was a need

to communicate extensively to its internal public.

INTERNAL COMMUNICATION:

Employees form a vital part of any organization, thus it is required to establish and

maintain mutual understanding with them. This will help the organization to

increase efficiency and productivity in the long run. Continuous communication

with the employees will facilitate the organization to keep them updated on the

current happenings.Downward Communication:MDs Letter

This letter is addressed to the internal public of the company by the Managing

Director, This letter is drafted by the Corporate Communications Department with

inputs from the MD and is circulated only internally once in three months.Managing director holds a meeting with the executives of the company every yearin a 5-Star Hotel communication Meet

The communication meet is one of those events where the top management

communicates directly with various departments of the company. Here the top

management addresses the employees and makes a presentation which discusses

the future plan.

Circulars

E-mail

Telephone.

Ashley News


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Upward Communication:AL PORTAL INTRANET- MDs Portal

This link allows employees to post queries to the Managing Director. The MD

then goes through them and either replies to it or forwards it to a functional head.

A copy of the reply by the functional head is sent to the MD. Any employee can

ask any question related to the company and its functions.Soap box It is a raised platform on which employees can give in suggestions and feed back such as cost saving techniques, new technologies etc., and discuss over it. Anyemployee having companys e -mail id can access to this link through AL-Portal forcounseling.

Communication media

Website

Annual Report

Customer Journal-Moving Force

Operators Meet

Vendors & Suppliers Meet

Dealers Meet

Exhibitions

Media Relations

Shareholder Relations

The Annual General Body Meeting.


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7. FINDINGS1. In this organization there is good employer-employee relationship.

2. It targets 100% of its employees to be involved in its continuous improvement

activities by motivating them through various financial and non-financial

incentives.3. There is a well integration of all the functional departments which facilitates theuse of software like ERP.4. To solve work related problems, QC (Quality Circle) and cross functional teamare made effective.5. Ashok Leyland has not got a foothold in the luxury trucks segment in itsdomestic market.6. Advertisement is not given much importance.7. The company is increasing its global foot print by entering Asian and Africanmarkets.

8. SUGGESTIONS The company should concentrate more on the luxury truck segments to keep a strong hold in the market The company should earmark more money for the advertisement and sales promotion of its products. It helps to increase the brand awareness and image. The company should concentrate on markets in the international arena where its competitors are less powerful.

9. CONCLUSION

The Organization study training and the resulted report have been of great help to

the researcher, as an aspirant manager, to understand the functioning of a major

establishment like Ashok Leyland. This study has also revealed many unknownfacts about the working of a manufacturing unit and familiarize about the

assembling of commercial vehicles.


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10. BIBLIOGRAPHY1) L.M. Prasad , Human Resource Management, 2nd edition, New Delhi, Sultan-Chand & Sons. Yr.2005.

2) Philip Kotler , Marketing Management, Millennium edition, New Delhi,Prentice Hall of India (P) Ltd., Yr. 20013) Ashok Leyland In- House Journal Ashley News 4)www .ashokleyland.com

Final Report for Ashley

Documents

Transcript of Final Report for Ashley