mrf
TRANSCRIPT
KRISTU JAYANTI COLLEGE
AN ORGANIZATION STUDY : MRF
ARUN JOSEPH GEORGE
AN ORGANIZATION STUDY : MRF
DECLARATION
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.
Date: ARUN JOSEPH GEORGE
Place: Bangalore
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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.
ARUN JOSEPH GEORGE
CONTENTS PAGE NO
1) Executive Summary 6
2) Introduction 7
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AN ORGANIZATION STUDY : MRF
3) Study Details 8
i) Objectives of the Study
ii) Scope of the Study
iii) Limitations of the Study
4) Company Profile 9
i) Vision, Mission and Values
ii) Management
iii) Evolution of MRF
iv) Policies of MRF
v) Current Position
5) Industry Profile 22
6) Product Profile 29
7) Organizational Design 35
i) Organization Structure
ii) Organizational Culture
8) Functional Areas 43
9) SWOT Analysis 90
10) Findings and Suggestions 94
11) Conclusion 97
12) Bibliography 99
LIST OF TABLES AND CHARTS PAGE NO
1) Tables
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a) Board of Directors 12
b) Managers at Kottayam Plant 42
c) Financial Summary 51
d) MRF Sales Network 88
2) Charts
a) Market Share of Indian Tyre Industry 25
b) Organization Structure of Corporate Office 36
c) Organization Structure of Kottayam Plant 39
d) Structure of Production Department 45
e) Structure of Finance Department 50
f) Structure of HR Department 58
g) Structure of Quality Assurance Department 69
h) Structure of Engineering Department 74
i) Structure of Security Department 82
j) Structure of Marketing Department 86
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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
and company`s approach towards using technology, Corporate Social Responsibility and work
environment.
In the present business world, manufacturing industry has grown significantly since last few
decades and is also faced by cutthroat competition in every area. MRF, established in 1946, is
one of the largest tyre manufacturing companies in the world.
During the study information was gathered relating to Organizational structure, various
departments, and their functions, products, quality policies, procedures and SWOT analysis of
the company. The study is based on the relevant data and materials obtained from the
organization. Also direct interviews were held with high authorities and staff members to get
more accurate and up to date information. Each activity of the company was studied carefully
with the available data and material.
Nowadays the competition in tyre industry has increased. Foreign and domestic players have
come into picture. The management of MRF is concerned with keeping in touch with the
customers and non-customers expectations and provides better quality of services.
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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 13 th 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.
MRF Ltd. was incorporated towards the end of 1960 and was converted into a public limited
company in 1961. The company caters to all the vehicular segments from commercial vehicles
and passenger cars to two-three wheelers and tractors and tractors. It has its strong presence in
both the radial and cross ply segments. MRF TYRES, India's No. 1 tyre manufacturing company
manufactures an extensive range of superior quality tyres in six production facilities in India. It
boasts of 68 sales centers and 2500 distributors and exports its products to over 75 countries
worldwide - a standing testimony to MRF's outstanding leadership.
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”
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STUDY DETAILS
OBJECTIVES OF THE STUDY
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.
SCOPE OF THE STUDY
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
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Thiruvottiyur, Madras (now Chennai). Over the year it started manufacturing a variety of
products.
MRF Ltd. was incorporated towards the end of 1960 and was converted into a public limited
company in 1961. Additional shares were offered to the public, in order to raise fund for
manufacturing automotive tyres and tubes in collaboration with US based Mansfield Tyre and
Rubber Co. Since then it has emerged as the largest tyre manufacturer in India and 13 th largest in
the world with a turnover of Rs.5000 crores and also built capacity of six million tyres from six
production facilities in India. With a profit margin of approximately 1.3% in the tyre
manufacturing sector, MRF holds more than 20% of the market share. The company caters to all
vehicular segments from commercial vehicles and passenger cars to 2-3 wheelers and tractors
and has a strong presence in both radial and cross ply segments. It hosts 68 sales centers, 2500
distributors and exports to over 75 countries: A standing testimony of MRF`s outstanding
leadership.
MRF enjoys of manufacturing the largest range of tyres in India and it has the highest brand
preference for superior quality, appearance and wears ability. It manufactures the largest range of
tyres in the country and is the market leader with the largest market share in almost every
segment of the tyre industry.
MRF Ltd. is the first Indian company to export tyres to the US, the very birthplace of tyre
technology. It is the first company in India to manufacture and market Nylon tyres passenger
tyres commercially. The company was given the title of most ethical company by 'Business
World' magazine after a survey conducted in 1999.
VISION
MRF TYRES Ltd. has a vision- a vision to be a significant player in the global tyre industry and
a brand of choice providing customer delight and enhanced stakeholder value. And in order to
make empower vision, they have strived to meet the needs of the customers through:
To be most admired Tyre Brand – Globally by 2010.
Error- free service delivery
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Innovative products and services
Cost efficiency
Loved by more customers
Targeted by top talent
Benchmarked by more business
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 customer’s.
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.
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BOARD OF DIRECTORS
K.M. Mammen Chairman
Arun Mammen Managing Director
K.M.Pillai Whole Time Director
Dr. K. C. Mammen Director
C.G. Rangabashyam Director
K.D. Prakh Director
Ashok Jacob Director
S. Nandhagopal Director
V. Shridhar Director
Vijay .R. Kiriloskar Director
N. Kumar Director
Ranjith. I. Jesudasen Director
D.M. Choksi Secretary
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
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Plantation
COLT Computers
INDIAN COMPETITORS TO MRF
Ceat
Apollo
Good Year
J K Tyres
Modi
Bridgestone
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.
Mahindra & Mahindra
Eicher Motors
New Holland
Volvo
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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.
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
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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.”
1964
MRF started an overseas office in Beirut (Lebanon)to develop export market.
1967
MRF becomes the first Indian company to export tyres to USA which is the birth place of
tyre technology.
1970
Kottayam plant became operational.
1971
Goa plant was built in a record time of 18 months.
1972
With the setting up of Arakonam plant, MRF became the only tyre company in India with
four manufacturing facilities.
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1973
MRF launched India`s first NYLON car tyre.
1978
MRF launched Super Lug 78 which later became the largest selling truck tyre in India.
1979
MRF`s turnover crossed Rs.100 crores
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
1985
MRF Nylongrip tyres for two wheelers were launched.
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.
1987
MRF became the No.1 tyre company in India by crossing the Rs.300 crores turnover.
1988
MRF Pace Foundation was setup with Dennis Lillie as its director to nurture and develop
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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.
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 it’s 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.”
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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.
2000
MRF launched the smile campaign on Indian roads.
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.
POLICIES OF MRF
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QUALITY POLICY OF MRF
This policy is to maintain market leadership through continuous quality improvement. To
achieve this goal, all the MRF plants and the corporate office particular attention to the
following:
Product/process improvements by field/plant performance monitoring and prompt service
to the customer.
Up gradation of machinery to meet the increasing needs of the customer.
Continuous training of all employees in order to acquire necessary skills and knowledge.
At the Plant level the respective General Managers are assigned the responsibility of
carrying out quality systems by collaborating with corporate functions.
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:
Minimize the impact of manufacturing activities on the environment-air, water, soil.
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Comply with all applicable regulatory requirements.
Develop environmental performance evaluation procedures for continuous monitoring.
Optimize the consumption of resources (water, energy and raw materials) by minimizing
wastage, recovering and recycling where ever possible.
Up gradation of machinery and pollution control equipment when required.
Train all employees to perform their activities in an environmentally responsible and safe
manner.
TRAINING POLICY OF MRF
This policy is to provide and develop knowledge, skills and behavior of the employees to
continuously improve performance. To achieve this goal the following are paid proper attention:
Identify and document the training needs of each employee through competence
evaluation each year.
Design and publish training calendar and schedule.
Providing training periodically based on identified needs and as per the documented
schedule.
Monitor and evaluate the training process and outcomes to asses and to decide the next
training cycle requirements.
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CURRENT POSITION
Highlights of First Quarter (Dec 2007): FY 07-08
Turnover (Rs. in crores) : 1155.57
Net Profit (Rs. in crores) : 51.75
EPS (in Rs.) : 122.03
Operating Profit (Rs. in crores) : 127.92
Highlights of Second Quarter (Mar 2008): FY 07-08
Turnover (Rs. in crores) : 1214.83
Net Profit (Rs. in crores) : 65.62
EPS (in Rs.) : 154.72
Operating Profit (Rs. in crores) : 154.39
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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
Kumho
Cooper
Toyo
Oust
Hankook
MRF
Shangai
Chinghi
Gajab Tungsad
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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
Technology progression
Wide product range for diverse usage
INDIAN MARKET MAJORS
MRF
Ceat
Apollo
Good Year
J K Tyres
Modi
Bridgestone
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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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Market of Tyre can be classified into 3 categories
Original Equipment Manufacturer (OEM)
Replacement Market
Export Market
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.
The Tyres produced in India are
Cross Ply
Radial
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.
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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,
fiberglass and steel. Hence it provides for a longer life time and lower fuel consumption, with
better consumption, better control over vehicle and road holding.
Radial tyre usage has shown has shown significant increase in usage every year. In India almost
all automobile segments have shifted to radial tyres and the usage of cross ply is restricted to
trucks and buses only.
The Indian tyre industry is mainly dominated by the organized sector and consists of four major
players who together account for almost 85% of the industry`s turn over- MRF Ltd., Apollo
Tyres Ltd., JK Tyre &Industries Ltd. and Ceat Ltd.
Unlike the international tyre industry where passenger car radials dominate the market, in the
Indian tyre industry commercial vehicle tyres take the lead and account for approximately 70%
of the industry`s turnover. As a result, the growth of the entyre industry depends upon primary
factors like agricultural growth, industrial production, growth in vehicle demand and secondary
factors like infrastructure development, prevailing interest rates and financing options.
The tyre industry is highly raw material intensive and a major consumer of rubber. With raw
material costs accounting for 70% of the cost of production, any change in the price of rubber or
the crude basket has a direct impact on the cost of production. The comparatively stable raw
material prices in the first half of FY 2007-08, coupled with price rises undertaken by the
industry in FY 2006-07, resulted in all major players reporting improved operating profit
margins. This was after a four consecutive years of raw material cost push, both for natural
rubber and crude oil linked raw material basket. The second half of FY 2007-08, saw an upward
trend for all major raw material prices and the same is anticipated in the year ahead. As a result
margins are once again under pressure, even while the demand-supply situation continues to be
in favor of the industry.
The industry, already bogged by over capacity, is facing a severe threat of dumping of cheap
tyres by South Korea. Under the Bangkok agreement, signed between India and South Korea in
1976, import of tyres from the latter into India would attract a concessional duty of 33 per cent as
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against the normal tariff of 40 per cent. Two years ago, the industry estimated the growth in the
passenger car radial demand at 20 per cent per annum. However, the auto recession has hit them
badly. But South Korea made a killing by dumping cheap car radial tyres and walked away with
11 per cent of the tyre market.
Another threat to the industry is the price of its raw materials, most of which are petroleum by-
products. Carbon, synthetic rubber and nylon tyre cord are offshoots of petrochemicals. Thus, the
future of the industry will swing with the supply of crude oil.
The biggest threat, however, is yet to fully materialize. It will be from global majors like
Bridgestone and Michelin, which control 36 per cent of the global tyre market. These players
have set up their bases in Southeast Asia and the slump of the markets in this region, coupled
with the vast growth potential of the Indian market, is beckoning them towards India.
Bridgestone has tied up with ACC for a 100 per cent radial tyre unit and Michelin is also
marketing its products through retail outlets. The industry is driven more by volumes than by
margins and each of the big five in the global tyre industry Continental, Michelin, Goodyear,
Pirelli and Bridgestone generate an annual tyre production equivalent to the total demand of the
Indian market. These MNCs have deep pockets and can easily withstand losses for 2-3 years.
Their financial muscles also permit them to invest in R&D, which is beyond the reach of the
average Indian tyre manufacturer.
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PRODUCT PROFILE
COMPANY`S PRODUCTS
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Automotive Tyres
Truck tyres – tube type and Tube less type
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
Major Tyre Brands of MRF
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
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.
Major MRF Paints and Speciality Coatings
MRF Metal Coat
MRF Wood Coat
MRF Glass Coat
MRF Vapocure
MRF Brass Coat
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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.
MRF Muscleflex Conveyor Belt
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.
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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.
OTHER ACTIVITIES
MRF Pace Foundation
The MRF Pace Foundation was established in August ‘1987, with the legendary Dennis Lillie of Australia as Director, with the singular mission of developing and breeding strike bowlers of tomorrow.
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.
Racing and Rallying
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
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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.
PRODUCT PROFILE OF KOTTAYAM PLANT
Automotive Inner Tube
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This component is kept inside the tyre and which when inflated renders strength and
impacts profile to the tyre.
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
These are made of chlorobuty and are used at the time of retreading tyres. This acts as an
envelope and retains the thermal input supplied to the tyre.
Vulcanizing Solution
This is an aid for vulcanization and is used for the retreading of tyre.
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ORGANIZATION STRUCTURE
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ORGANIZATION STRUCTURE OF CORPORATE OFFICE
Plant 1: Thiruvottiyur unit
Plant 2: Arkonam unit
Plant 3: Pondicherry unit
Plant 4: Kottayam Unit
Plant 5: Medak Unit
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Plant 6: Goa Unit
Organization Structure: Authority Relationship
Major decisions related to the profits of the company or any kind of new investment is made by the top management at corporate office where we come across an Organic Structure because where flexibility prevails and people initiate changes.
At the Plant level decisions are made by the administrative officers of each department (Middle level). Worker`s participation is very limited in decision making. Here also we can see more traces of an Organic structure
But at the HR and Welfare level there are active representatives from the workers dealing with workmen and their problems.
Hence the structure seen below the plant administration level at the worker`s level(Low level)is more of a centralized structure i.e.; a Mechanistic Structure as flexibility is less as people are not given the freedom to initiate much of a change. They follow the rules and procedures made by the plant managers.
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.
People Orientation:MRF is company that gives a lot of importance and care for its employees, their development and welfare. Proper and compulsory training is given to employees for
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better results and keeping their knowledge updated thereby giving them better chances of development
Team orientationAt the factory level workers are not divided into teams. Workmen work in shifts and for each shift they are assigned a particular machine. One machine may need more than one employee to operate so a team effort can be seen here.
AggressivenessThe 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.
StabilityMRF 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 STRUCTURE OF KOTTAYAM UNIT
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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.
A BD (broken down rubber) mixing unit was also built to ensure self sufficiency in BD
production since BD mixing was earlier being done in outside mixing units. The outside mixing
units operated with open mills and hence batch to batch consistency was low. With the mixing of
BD in the banburys at the BD plant better consistency could be achieved in properties of broken
down rubber. BD mixing unit has two 11D banburys and two extruders to sheet out the mixed
rubber.
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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, 48”calendar for production of tyre repair materials, 68”fabric 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.
KOTTAYAM PLANT – FACTS AND FIGURES (Sept 2007)
Built up area : 6 lakh sq.feet
Management Staff : 252
Regular Workmen : 1,115
Casual Workmen : 399
Total finished goods production : 3,400 MT/month
Total turnover of finished goods : Rs.37 crores/month
Mixed stock sent to other units : 7,000 MT/month
Tyre Production : 52,000 tyres /month
Tubes, envelopes and curing bags total
production
: 2,63,000 /month
Flap Production : 82,000 /month
Tread rubber production (conventional) : 160 MT/month
PCTR production : 330 tonnes/month
Repair Material : 83 tonnes/month
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Vulcanizing solution : 32,500 litres/month
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 General Manager
Mr. Saji Varghese Plant Production Manager
Mr. Francis Mathew Plant Engineering Manager
Mr. C.S Joy Plant Technical Manager
Mr. Cherian Zachriah Plant Quality Assurance Manager
Mr. Anil Petre Plant Accounts Manager
Mr. Simon C.P Plant Human Resources Manager
Mr. Raghuram Plant Industrial Engineering Manager
Major. Sivadasan Security Officer
Mr. K.M Anil Kumar Safety officer
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FUCTIONAL AREAS
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PRODUCTION
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STRUCTURE OF PRODUCTION DEPARTMENT
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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
is made to the raw material store. Raw material store makes arrangements to deliver the
requested material to the plants. The receipt of material is acknowledged by the production
department to the raw material store by the production signing on all the copies of the
transfer or issue certificates. In case of in process material, request is given 1-3 days in
advance to the concerned plant which produces the material.
Processing
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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.
Specific ways of identifying each material at each stage is defined. For example, in case of
extruded tubes, details like size, month code, year code, plant code, date of extrusion,
extruder operator code are printed.
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.
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MRF Kottayam unit produces:
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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STRUCTURE OF FINANCE DEPARTMENT
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FINANCIALS ANNUAL – SUMMARY OF THREE YEARS
PERIOD ENDING Sep 2007 Sep 2006 Sep 2005
Turnover (Rs. in crores) 5036.75 4233.66 3437.13
Net Profit (Rs. in crores) 171.78 79.91 40.31
EPS in (Rs.) 401.75 185.66 92.26
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.
OBJECTIVES OF FINANCIAL MANAGEMENT
Maintaining adequate liquid assets
Maximization of wealth
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Maximization of profit
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
is compared with actual expenditure. Any variation from the budget (whether positive or
negative) is analyzed to find the exact reason and is reported to the top management. All MIS
(Management Information System) reports are generated from cost accounts. An example of
MIS report is MUL (Material Utilization Loss) report which tracks the loss to the company due
to various reasons related to material utilization. Some of the losses may be controllable and
some others may be uncontrollable. The objective of the MUL report is to give an idea about the
loss and try to find out ways to reduce the controllable losses.
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Wages and Salary
Computation of wages and salary is done by this section of the accounts department. Wages of
workmen are fixed in the long term agreement and is calculated on a daily basis depending on
various factors like grade, number of hours worked, the output achieved etc.
In case of staff up to MB3 grade, the salary is calculated and paid by the plant. For staff above
MB3 grade, salary is computed and paid by the corporate office.
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,
consumables, fuel etc are received at the factory gate with the delivery schedule and the purchase
order which are verified before delivery to plant.
The load is weighed, GAE (Goods Arrival Entry) is made and the load is redirected to the
unloading point through the security department. The unloading point is usually the raw
materials godown, but sometimes unloading is done at the plants where it is consumed.
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At the unloading point visual inspection is done and then materials are stored with proper
identification tags showing the primary status of the material (Hold/Pending for test). Each
material has a specified storage space and it is placed in the storage area.
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. GRN (Goods Receipt Note) is prepared at this point.
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. Stock inventory and stock status
reports are prepared every month.
The rejected materials are sent back to the suppliers and the cost is recovered. Transfer of
materials to each plant is also monitored here.
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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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STRUCTURE OF THE HUMAN RESOURCE DEPARTMENT
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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
hone their talents. Their size gives them the unique ability to provide fast growth and high
responsibility
Employees
What makes an organization is its people. At MRF, the ‘Mantra’ for employee delight focuses on
5 Ps They believe that one of the most important drivers of growth and success for any – People,
Pride, Passion, Processes and Performance .
MRF follows an “open door policy” to approach the management, which helps resolve issues
with mutual agreements. They encourage people to stand up against any unfair treatment for
which they have:
MRF ensures transparency through the various communication policies, strategies and plans.
Regular Employee Communication Forums provides a platform for the employees to raise issues
that require resolution. Their leaders strongly believe in facilitating and initiating activities that
help employees manage their health and well-being. The focus always remains to redefine
leadership; they develop leaders who enable performance and inspire their people to unleash
their potential. Their people orientation reflects in their vision of being “targeted by top talent”,
and a key aspect of their business focus “building a best-in-class leadership team that nurtures
talent at every level.
Current Number of Employees at Kottayam Plant: 2377
FUNCTIONS OF THE HR
Recruitment and Selection of employees & General Administration
Training
Performance Appraisal
Industrial Relations and Labour Management
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Disciplinary Actions and Proceedings
Statutory and Non Statutory Welfare Measures
Contract Services
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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paid are calculated and paid. Wages to be paid for the casual workmen is fixed and revised from
time to time.
In case of management staff, salary is fixed by corporate HR department. Plant HR coordinates
the periodic appraisal of performance which is the basis of salary revision. Salary for staff is paid
on the basis of attendance and this is monitored by the time office which is a function of the HR
department. Time office does the functions of time keeping, attendance monitoring and upkeep
of leave records.
The industrial engineering department would compute the manpower requirement at the various
work centers. The HR department does the recruitment and selection which is followed by the
induction and training. Vacancies are notified as and when they occur in the leading newspapers.
Allowance
The workmen are provided dearness allowances, fringe benefits, bonuses and other payments
according to the rules and regulations of the company. There is also overtime wages and
attendance bonuses. Overtime bonuses are given to people who normally work beyond their
time; such as lunch time, night shift etc. Allowances include attendance bonuses. This is also
given to employees working outside factory premises, night shifts etc.
Promotion and Transfer
Promotion means shifting an employee to a position in the same hierarchy. This may be due to
seniority and performance. Promotion depends upon parameters such as seniority, merit,
suitability of the job etc. for some promotions a test is also done and an interview is also
provided.
For transfer of an employee from the organization, he is paid gratuity benefit as required by
statutory standard. A Farewell party is given to the employee. He is paid the benefits he has to
get from the organization.
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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MRF Employees Union: CITU
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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Labour welfare aims at providing the physical, psychological and general wellbeing of the
working population. Labour welfare is carried out by the Welfare Officer, who takes care of the
physical and general wellbeing of the employees.
The functions of the Welfare Officer are:
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.
To study absenteeism and labour turnover and to take strict measures to prevent them.
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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.
Home Visits
The welfare officer visits the houses of the employees twice a week to make general visits,
visits based on problems, courtesy visits, weddings, functions, funerals and other need based
visits. Such visits help the shop floor personnel to understand the cause of employee`s
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behavior for any problem committed by him. Even the disciplinary proceedings for
absenteeism and other violations are preceded only after hearing the general report based on
such home visits.
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.
The ladies forum conducts monthly training programs to the family of employees. This
includes safety savings, general health, cooking, counseling etc. These programs are
conducted free of cost. On festive occasions like Onam, Christmas etc celebrations are
organized.
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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
company by providing opportunities to all employees at all levels in the organization to
acquire the requisite knowledge.
Training is an ongoing and continuous activity of MRF. Training is provided to all the newly
appointed staff and workers.
The training policy of MRF is to provide and develop knowledge, skills and behavior of
employees to continuously improve their performance.
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To achieve the ultimate goals of the company, all the MRF plants with the corporate office:
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:
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
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QUALITY ASSURANCE
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STRUCTURE OF THE QUALITY ASSURANCE DEPARTMENT
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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
pleased with the product and say that the product is of good quality else, low quality. Hence we
can define quality of a product as its ability to fulfill the customer`s expectations. In other words
it is defined as fitness of use. Quality is considered as one of the most effective tool to improve
productivity, to achieve cost effectiveness, to improve profitability and market share and to
remain competitive in the global market. In the business environment of today, quality impacts
not only products and services but many other relevant entities such as process, systems, people
and organization.
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 don’t 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 don’ts 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 doesn’t 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.
Special care is taken in the following cases:
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.
Audits on suppliers and outside godowns are conducted periodically to ensure that
are procured are of the required quality and also to ensure that they are stored in
the manner that doesn’t give any room for deterioration.
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Whenever a finished product is returned to a factory due to any defect, those
products are inspected and the reasons found out are communicated to everybody
concerned.
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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STRUCTURE OF THE ENGINEERING DEPARTMENT
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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.
Preventive maintenance schedule for the particular week is taken and the necessary materials,
tools, manpower and spares are arranged. Necessary clearance is obtained from planning and
production (for production equipments) and the machine is released for maintenance. The
scheduled maintenance activities are carried out based on work instructions and experience.
Then the machine is checked and handed over to production.
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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
Civil engineering department does the work of preparation of project proposals, drawings and
estimates as per requirements for construction and extension of factory buildings, equipment
foundation, plant offices, and construction of cable and pipeline trenches, storm water drains and
site development work.
The department creates links with government agencies and local bodies for getting approval for
building plans and permits. Projects are executed on item rate contracts. Finalization of contract
rates and issue of work orders are done by this department. Supervision and providing technical
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support are done along with the job of recording the work done, taking measurements and check
measuring contract bills. All civil structures are maintained by the civil engineering department.
Periodic repair of concrete floor, A/c sheet roofing and valley gutters, maintenance of plumbing
and sanitary fittings such as toilets, washing facilities etc, de silting of storm water drains and
annual repainting of buildings are other functions of the department.
Work permits are issued to workmen to ensure their safety. These are done carefully checking
the conditions. The following permits are given:
Height permit for working at height above 3meters
Portable electrical equipment permit
Confined area work permit
Excavation permit
Hot water permit
Once permit is given proper supervision is to be ensured.
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.
Water Treatment
Effluent water is sent into anaerobic digester (where it doesn’t have any air contact). Here 85%
to 90% of suspended solids settle down to form the sludge. The water from which suspended
solids are removed is then sent to an aerator and clarifier where 90 to 95% of the suspended
solids are removed. This is then chlorinated and is called treated water which is used for roof
cooling and irrigation. 300 kilo liters of water are treated per day using a parallel process. A wet
land is also created on a trial basis where the effluent water is aerated by the roots of a special
type of reed which degrades the organic matter and thus purifies water.
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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
factory atmosphere as compared to the outside world, general safe practices and safety
precautions to be followed on dangerous machines.
On the job training provides points on specific activities related to the nature of work of the
new employees. This also covers aspects on applied safety related to specific machines and
specific sections. Shop Floor Officer or Supervisor will be the faculty for this training.
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Periodic/ Refreshment training is given to experienced employees. This training covers the
practical aspects or specialized subjects of safety. External faculty, Chief Safety Officer or
Safety Officer will be the faculty.
Enforcement of Safety Rules and Guidelines
This is regarded as one of the most important area of accidents prevention. The activities of
subordinate staff or workmen in respective Sections, Plants or Departments are closely
monitored to prevent any unsafe act or act of safety violation. This responsibility has been
assigned to respective Shop Floor Supervisors or Officers (at shop floor level), Plant manager or
Plant In charge (at plant level), Department Managers (at department level). The tool used for
this is Job Safety Instructions which has to be imparted to subordinates beforeand during the
course of work.
Safety Audit
Safety audit is done by the Safety officer or by the Chief Safety Officer during his visits. Useful
information is gathered on unsafe conditions, unsafe acts and on the level of enforcement of
safety rules and procedures. Any matter that requires attention is brought to the notice of the
respective staff for corrective action. The unit chief is also intimated. Plant Safety Officer will
assist the staff in taking corrective action if required.
Corrective and Preventive Action
Unsafe acts and conditions which are not rectified will be discussed in the Safety Committee
meeting. The decisions of the meeting are final and are binding on the entyre unit. A detailed
presentation is made on the analysis of accidents by the Safety Officer in this meeting.
Safety Awareness promotional Activities
Boards have been displayed at all conspicuous points. Safety promotional literatures are released
to increase awareness among employees. Safety competitions are conducted during Safety Week
celebrations.
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SECURITY
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STRUCTURE OF THE SECURITY DEPARTMENT
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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.
The main functions of the security department are:
Control of access
Check thefts
Checking In/Out of raw materials, empty vehicles, vehicles carrying finished goods, scrap
etc.
Maintenance and upkeep of firefighting equipment, fire hydrant system and fire fighting
training.
Control movement of personnel and material at the gate.
Control and checks on the company hired taxis and scrutiny of bills.
Coordination of security duties with private security agencies and preparation of bills.
Liaison with Fire and Police department and help the company obtain permits and sanctions
on time.
Imparting training on emergency preparedness and security and fire awareness to MRF
employees.
Control and check entry of contract workers.
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MARKETING
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MRF Kottayam doesn’t have a marketing department. The structure of the marketing
departments at MRF as a whole is given below:
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Marketing is a societal process by which individuals and groups obtain what they need and want
through creating, offering and freely exchanging products and services that are of value for
others.
According to Philip Kotler,” Marketing is a human activity directed at satisfying the needs and
wants through an exchange process.”
Marketing management is the functional area of management concerned with planning,
organizing, directing and controlling the activities related to the marketing of goods and services
to satisfy the customer’s needs which are ever changing.
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 SOUTH EAST WEST
New Delhi Chennai Kolkata Mumbai
Agra Ananthpur Asansol Ahmadabad
Bareilly Bangalore Cuttack Aurangabad
Bikaner Belgaum Dhanbad Baroda
Chandigarh Calicut Guwahati Bhopal
Faridabad Coimbatore Muzaferpur Goa
Haldwani Ernakulum Patna Indore
Hissar Hubli Ranchi Jabalpur
Jaipur Hyderabad Siliguri Jodhpur
Jalandhar Madurai 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 6 th 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.
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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.
The major OEM (Original Equipment Manufacturers) customers of MRF tyres and tubes are
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.,
Mahindra & Mahindra, Eicher Motors, New Holland, Volvo etc. The major conveyor belting
customers are Cement, Steel, Fertilizers, Thermal Power Plants, mines and ports.
MRF exports tyres and tubes through authorized agents representing countries such as USA,
Canada, Mexico, Brazil, Chile, Australia, Philippines, Bangladesh, Sri Lanka, Korea, Egypt,
Nigeria, South Africa, Ghana, Kenya, Mauritius, UAE, Afghanistan, Pakistan, Iran, Iraq, Syria,
Bahrain, Qatar, Oman, Lebanon, Greece, Turkey, Malta, UK, Uzbekistan, etc. MRF exports
conveyor belts to Australia, South Africa, Europe, Canada, Middle East, etc.
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SWOT ANALYSIS
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STRENGTHS
MRF is a market leader in almost every segment in the tyre industry.
Unique Brand Name
Locally available raw material
Strong and efficient channel of distribution- has a wide range of sales offices for each
zone
Experienced work force
Regular training for employees
Optimum capacity utilization
Quality control
Adoption of latest concepts and technology
Environmental Certification
Satisfied customers
Highly evolved R&D
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WEAKNESS
Marketing department is only at the Corporate Office.
Less interaction between the Marketing and the Manufacturing department
Less aggressiveness among workmen at the plants
High rate of absenteeism
Lack of commitment
Union problems
Lack of transportation facility for employees
OPPORTUNITIES
The company maintains global standards to face global competition
Making tie ups with the new automobiles entering the Indian industry
Availability of funds for up gradation of technology
Enhancement in technology thereby quality
Modernization of tubeless tyre
Product enhancement with natural and synthetic rubber
Hiring new talents
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THREATS
Cut throat competition
Cheap import from China and Korea
Entrance of new foreign players
Fluctuation in the prices of raw material both rubber and petroleum
Use of second hand tyres
Changing Technology
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FINDINGS AND SUGGESTIONS
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FINDINGS
MRF Ltd. is the No.1 tyre manufacturer in the country and the 13th largest in the world
MRF exports its products to 75countries in the world
Policies, strategies and procedures are satisfactory and transparent
Conducive work atmosphere
A level of harmony between management and its employees
Well defined and practiced safety and security policy
Environmental and Quality standards with awards for recognition
Updated technology and concepts
Training and development programs conducted as per the needs
Effective plant maintenance
Satisfied employees and customers
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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.
Employees should be made more aggressive, they should be induced with a healthy
competitive spirit for better performance
There should be performance appraisal for employees in order to formulate proper
promotion policies
Ensure more coordination and interaction between marketing and manufacturing
departments
Further improvement in quality and standards of tyre to face global competition
Avoid outside leadership and influence for unions
Transportation facility for employees
Invest more in R&D
More attractive advertisements through media like TV, newspapers etc is recommended
The company website should be modified and updated regularly
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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
MRF Annual Report
Previous Project Reports
International Rubber Journal
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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