Organisation study 1 PROFILES 1.1 Introduction: The Automobile industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 17.5 million vehicles (including 2 wheeled and 4 wheeled) and exports about 2.33 million every year. It is the world's second largest manufacturer of motorcycles , with annual sales exceeding 8.5 million in 2009. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world , with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia 's fourth largest exporter of passenger cars , behind Japan , South Korea , and Thailand Acharaya Institute of Management & Sciences Page|1
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Organisation study
1 PROFILES
1.1 Introduction:
The Automobile industry in India is one of the largest in the world and one of the fastest growing
globally. India manufactures over 17.5 million vehicles (including 2 wheeled and 4 wheeled) and exports
about 2.33 million every year. It is the world's second largest manufacturer of motorcycles, with annual
sales exceeding 8.5 million in 2009. India's passenger car and commercial vehicle manufacturing
industry is the seventh largest in the world, with an annual production of more than 3.7 million units in
2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger
vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of
2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South
Korea, and Thailand
An automobile, auto car, motorcar or car is “a wheeled motor vehicle used for transporting
passengers, which also carries its own engine or motor”.
The automobile industry comprises of heavy vehicles (trucks, buses, tempos, tractors), passenger cars,
and two-wheelers.
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1.3 COMPANY PROFILE
1.3.1 Vision
Aditya Auto would constantly strive to live and 'excel' & meet customer expectations and shall continue
to be 'customer focused' and 'customer success' driven.
1.3.2 Mission
Aditya Auto is committed to building process capabilities, ensuring engineering excellence, assuring
quality and guaranteeing customer delight through sustained leadership and teamwork.
1.3.3 Aditya Auto Products & Engineering (India) Private Limited
Aditya auto is a privately owned organisation with its head-quarters in Bangalore; it began as Autarky
Auto in April 1989 founded by C. Jayaraman(Managing Director & C.E.O) and established as Aditya
Auto Products in February 1999. Aditya Auto serves OEMs and tier-one automotive suppliers in both
domestic and global markets; In addition to providing door latches, window regulators, wiring harnesses,
and engineered assemblies, Aditya Auto is also pushing into new markets as a contract manufacturer.
While classified as a midsize business, the company operates a complex manufacturing and distribution
network that spans six production facilities in India plus logistic support units in India, Europe, and
North America.
Aditya Auto’s core business is the design, development & manufacture of Door & Access systems,
Wiring Harness systems, Driver Control Systems, integrated products for the automotive industry.
Aditya Auto not only caters to the need of domestic customers but also the long list includes international
OEM’s and automobile manufacturers from around the world. This list of customers includes names like
Mahindra and Mahindra, PIAGGIO, Skoda Auto, Ashok Leyland, Tata Motors, Suzuki, Robert Bosch,
Inteva Products etc.
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Along with the above said products “Aditya Auto” has pushed into the world of contract manufacturing;
wherein Aditya Auto manufactures parts or products based upon the customers design and preference;
rather than designing it themselves.
Company Profile
Name Aditya Auto Products & Engineering
(India) Private Limited
Founder C. Jayaraman (Managing Director &
C.E.O)
Headquarters Bangalore, India
Industry Automotive
Products and services Auto parts and
contract manufacturing
Employees 400
Revenue 100 crores($15.4 million)
No. of Plants 4
Products Door latches, window regulators, wiring
harnesses, and engineered assemblies
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CUSTOMERS
Aditya Auto caters to a wide range of both domestic and international clientele; some of them are:-
Domestic
Aditya Auto’s proves in manufacturing parts for various domestic and global OEM’s are well known in
market; some of the domestic OEM’s who rely on Aditya for there equipment components are:-
Maruti Udyog (Suzuki) – 800 cc Car; Omni, Gypsy, Esteem, Wagon R, Versa & Swift
Tata Motors – Sumo Victa Gx
Ashok Leyland - Iveco LCVs & Trucks
Eicher Motors (LCVs & Trucks)
Mahindra & Mahindra – Scorpio, Bolero & Cab King
Global
Aditya also caters to the requirements of various overseas i.e. global OEM’s and tier 1 suppliers t the
automobile industry; some of which are:-
ArvinMeritor Lvs USA, France, Poland, & China (Spin off Company of Rockwell International
Inc., USA), now known as ArvinMeritor Inc.
Robert Bosch, Clayton, Australia
Kongsberg Automotive, Burton, UK
KRAH – RWI, Drolshagen, Germany
ESAB, LAXA, Sweden
INFRASTRUCTURE
DOOR & ACCESS DIVISION
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This division located in the Doddaballapur Industrial Area in Bangalore, deals with the design and
manufacture of Window Regulators and Door Latches for various vehicles with customers located across
India and abroad. Under Technical license with ArvinMeritor, a global leader in Window Regulators &
Door Latches, Sun Roof and related products, this division of Aditya Auto has an agreement that
provides for technical assistance and new product development.
Spread over floor area of 3450 sq m in a 6032 sq m campus, this unit has a full complement of facilities
like Welding facility and Manufacturing lines along with testing facilities.
WIRING HARNESS DIVISION
A 100% Export Oriented Unit, this division located at the Bommasandra Industrial Area in Bangalore,
deals with the design and manufacture of Harnesses, Integrated Products, Lead wires and Insert Molded
Connectors for export. This division has the distinction of being ranked thirteenth in India and is also the
only manufacturing facility to get ISO, QS & TS certifications within three years of inception. Spread
over floor area of 1750 sq m in a 4000 sq m campus, this unit has a full complement of facilities for high
quality production.
CONTRACT MANUFACTURING DIVISION
Established in 2005, this division primarily deals with the exports of Window Regulator and Latch sub
systems. This division also houses Aditya Auto’s Engineering Design Center. Located in the
Doddaballapur Industrial Area in Bangalore, this facility addresses the demand for outsourced
manufacturing of auto components and epitomizes our competitive edge in the realm of design, testing
and prototype development
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The division caters to the manufacture of products intended for OEMs of leading international
automobile brands and is capable of meeting specific product development requirements. Aditya Auto is
a major player in the export of automotive parts to. The major products are Door Latch sub-systems like
Retention Plate & Back Plate sub-assemblies and Window Regulator sub-assemblies.
COLD HEADING & PART MANUFACTURING
Established in 2006, this is the latest addition to the manufacturing divisions at Aditya Auto. Located at
Pudukottai near Trichy in Tamil Nadu, this division handles the Cold Forging, Cold Heading and Vertical
Integration tasks. Spread over an 18,000 sq feet campus, this division deals with the manufacture of fasteners
and rivets.
PRODUCTS
Door & Access Products
Window Regulators
Aditya Auto manufactures and supplies a wide range of Window Regulators, both manual and power, to
various customers across domestic and overseas markets.
Cross Arm
Drum & Cable
Push Pull
Door Latches
Door Latches are among the flagship products of Aditya Auto. It consist of three product categories that
include
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Split Latch (2 PC. External & Internal)
Compact Latch
Actuators Including ECUs
Wiring Harness & Integrated Products
Aditya Auto has been a major producer of wiring harnesses since its inception; the various types of
harnesses manufactured by it are:-
Wiring Harnesses
Integrated Harnesses
Electronic Sub-Assemblies
Over Moulded / Insert Moulded Assemblies
Lead Wires
Turnkey Solutions
Aditya’s competencies across the design, development, production, testing, and validation space for a
wide range of auto components enables it to address the requirement for Prototypes.
Organisational Structure
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Organisation Structure refers to the framework, typically hierarchical, within which an organization
assigns the lines of authority and communications, and allocates rights and duties. Organizational
structure determines the manner and extent to which roles, power, and responsibilities are delegated,
controlled, and coordinated, and how information flows between levels of management.
A structure depends entirely on the organization's objectives and the strategy chosen to achieve them. In
a centralized structure, the decision making power is concentrated in the top layer of the management
and tight control is exercised over departments and divisions. In a decentralized structure, the decision
making power is distributed and the departments and divisions have varying degrees of autonomy.
Elements of Organization Structure
There are six elements that managers need to address when they design their organization’s structure:
Work Specialization
This describes the degree to which tasks in an organization are divided into separate jobs. The main idea
of this organizational design is that an entire job is not done by one individual. It is broken down into
steps, and a different person completes each step. Individual employees specialize in doing part of an
activity rather than the entire activity.
Departmentalization
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It is the basis by which jobs are grouped together. For instance every organization has its own specific
ways of classifying and grouping work activities.
There are five common forms of departmentalization:
Functional Departmentalization : It groups jobs by functions performed. It can be used in all kinds
of organization; it depends on the goals each of them wants to achieve.
Product Departmentalization : It group jobs by product line. \each manager is responsible for an
area within the organization depending on his/ her expertise.
Geographical Departmentalization : It groups jobs on the basis of territory or geography.
Process Departmentalization : It groups jobs on the basis of product process flow.
Customer Departmentalization : It groups jobs on the basis of common customer.
Chain of Command
It is defined as a line of authority that extends from upper organizational levels to the lowest levels and
clarifies who reports to whom. There are three important concepts attached to this theory.
Authority: Refers to the rights inherent in a managerial position to tell people what to do and to expect
them to do it.
Responsibility: The obligation to perform any assigned duties
Unity of Command: The management principle that each person should report to only one manager.
Span of Control
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It is important to a large degree because it determines the number of level and managers an organization
has. It also determines the number of employees a manager can effectively manage.
Centralization and Decentralization
In a centralized organization, all decisions are made by C-level managers such as chief executive officer,
chief operating officer and chief marketing officer. Centralization leaves department managers with little
or no input.
A decentralized system allows all managers the opportunity to give input, while bigger decisions are still
made by C-level managers.
Formalization:
It refers to the degree to which jobs within the organization are standardized and the extent to which
employee behavior is guided by rules and procedure.
Types of Organizational Structure:
The most common organizational types may be classified as follows:
The Functional Structure
The Divisional Structure
The Matrix Structure
Functional Structure:
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Functional Structures have been extensively used large organizations; Employees within the functional
structure are differentiated to perform a specialized set of tasks. For instance, the marketing department
would be staffed only with marketers responsible for the marketing of the company's products. This
specialization leads to operational efficiencies where employees become specialists within their own
realm of expertise.
Functional structures are often characterized by a large degree of formalization, making each function
reliant on standardized ways of operating. Decision-making power is often centralized at the top of the
hierarchy.
Divisional Organizational Structure:
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A divisional structure groups an organization’s divisions according to the specific demands of products,
markets or customers. Unlike the functional organizational structure, where the different organizational
functions of the company conduct activities satisfying all customers, markets and products, the divisional
structure focuses on a higher degree of specialization within a specific division, so that each division is
given the resources, and autonomy, to swiftly react to changes in their specific business environment.
Therefore, each division often has all the necessary resources and functions within it to satisfy the
demands put on the division.
Matrix Structure:
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The matrix structure is an organizational design that groups employees by both function and product.
The organizational structure is very flat, and the structure of the matrix is differentiated into whatever
functions are needed to accomplish certain goals. Each functional worker usually reports to the
functional heads, but do not normally work directly under their supervision. Instead, the worker is
controlled by the membership of a certain project, and each functional worker usually works under the
supervision of a project manager. This way, each worker has two superiors, who will jointly ensure the
progress of the project.
The cross functional teams of a matrix structure reduce the functional barriers between departments, and
increase the integration of functions. Matrix structures open up for communication, and may provide an
opportunity for team members to learn from each other - thus distributing valuable knowledge laterally within
the organization. The matrix structure makes it possible to assign specialized resources to projects when needed.
Example:-Matrix Organizational structure
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Organizational Structure of Aditya Auto
Aditya Auto being auto-parts manufacturing concern and due to its foray into contract manufacturing,
has to cater to the various whims and needs of the customer; so as to meet the customer requirements on
time. Thus it follows a complex structure which is a mixture of all the above defined organizational
structures namely functional, divisional and matrix structures.
As is visible in the following organizational structure “The top management the i.e. board of directors;
managing director and the dept. heads follow a functional structure i.e. they grouped according to there
functions; each department has a divisional structure which is followed by a matrix structure.
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Departmental Analysis
Aditya Auto being a automotive parts manufacturing concern consists of the following departments,
Human Resource
Accounts
Engineering
o Design
o Production
o Stores
o Purchase
Marketing
Human resource:
Today customers expect a higher standard of service than they did years ago. They now choose suppliers
based on the Quality of products and services that meet not just customers' needs, but exceed their
expectations.Human Resource Department has a major role to play in building right attitudes of people to
change the way of working and their work life by facilitating the learning and practice of these principles.
Competency may be determined by comparison between the job requirements that define what
employees must do and the qualification of the employees.Human Resource Department should promote quality
culture in the organisation by improving competency levels of employees through continual training and other
actions.
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Competency
New appointments
Promotions
Position classification and grading
Salary determination
Performance appraisal review and processing
Conduct problems
Performance problems
Policy development
Benefits
Insurance etc.
Finance:
Finance is the life blood of any business. Organisation should understand the importance of finance as a
component of the strategic decision making process. SMK has a well functioning finance department. The policy
of the finance department is to ensure provisions of timely finance to various departments, be liaison with bank,
plan and analyze cash inflows and outflows, maintaining accounting records as per the company’s Act and
Quality policies.
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Finance and accounting department Policy:
The policy of Accounting and Finance department is to ensure provision of timely finance to various departments
without any delay as per plans and to exercise financial controls and to maintain and record all financial
transactions of the organization accurately, systematically and to provide all statutory reports and returns to
concerned statutory agencies; and to provide internal information reports on time to management for measuring
organizational performance and for decision making. The accounting is done as per the Generally Accepted
Accounting Principles prevailing in India and as per the accounting policies formulated by the organization and
also as per the accounting standards issued by the Institute of Chartered Accountants of India.
The accounting shall be done systematically by using the various processes and by classifying as various cost
centers duly approved by the management. The documents and records is classified, written and kept in a logical
order and in a manner easy for identification and retrieval up to the stage of final accounts and for presentations
to those concerned with the business. The records are kept updated and current till previous day so that any
information given is accurate, current and useful. The records, reports and procedures will be audited internally
as the management may deem important either by internal staff or by external agency to ensure the authenticity
and security of the systems and procedures. Aditya Auto taking into consideration various constraints has
outsourced the functions of Accounts Department to an external organization.
Engineering department:
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Aditya Auto being a manufacturing concern Engineering Department is most significant part. The Engineering
Department is responsible for all the necessities related to product from its design & production of product to
quality control & maintenance of the machineries. Each of which is highly essential not only for the quality of the
product but it also affects the reputation and brand image of the company as a whole.
The sub-departments under Engineering are:
Design:
The design department has the main function to design parts in accordance with the customers
requirement and also improve the existing design provided by the customer so as to meet there specifications; in
some cases parts are designed according to the suitability to the existing machinery or in other cases improve the
designs quality and durability.
Production:
The production department sets standards and targets for each section of the production process.
The production department takes care of each function and process relating to the production of the product. It
also monitors the quality and quantity of the product. In Aditya Auto the quality of the product is monitored at
each stage of production rather than at the end.
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Stores:
The stores department is responsible for storing all the necessary tools, spares, raw materials and
equipment required by the manufacturing process. Where sourcing is unreliable, buffer stocks are kept and the
use of computerised stock control systems helps keep stocks at a minimal but necessary level for unhindered
production. The activities of stores is an important one. The materials required as per Production plan
are to be indented, Stored and made available. It is also the duty of Stores Department to handle and
preserve the materials to avoid breakage and deterioration in quality.
Purchases:
The purchase department is plays an important role. It is responsible for providing raw material,
components and equipment required to keep the production process up and running . A vital aspect of this role
is ensuring stocks arrive on time and to the right quantity and quality.
Production Process:
The Co-ordination between various departments and the functions of these departments can be best understood
by considering the following production process followed in Aditya Auto.
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The process consists of the following operations;
Incoming Inspection of raw materials
Storage of raw materials
Progressive banking
First part & online inspection
Bending & Coining operation
First part & Online Inspection
Final Inspection
Packing
Back Audit
Layout Inspection
Dispatch to customer
Aditya Auto starts the process of manufacturing ones the customer confirms an order i.e. customer accepts the
terms & conditions of the contract; accepts the design and gives a go-ahead on manufacturing the product. The
process is as follows.
Incoming Inspection of Raw materials:
The first step begins when the raw materials are ordered and received by the purchase department. The
purchase department is responsible to check whether all the raw materials supplied are in accordance with order
placed. If wrong materials are supplied he has to ensure that necessity steps are taken to correst it.
Storage of raw materials:
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In the next step the raw material that is stored; various variables needs to be checked before storage can be
complete like the moisture content in the storage area, materials packing condition, material handling
methodology etc ; this is taken care of by the store department.
Progressive Banking:
In this step the raw materials needs to be separated according to grade; rusting and the usage in different
processes. This is done so that it becomes easy to supply the required and correct raw materials to the respective
process without delay and in correct quantity; again this is taken care of by the stores department.
First Part &Online inspection:
The next step is inspection this step checks the instruments for any calibration errors and rectifies or replaces
them as and when possible.
Bending & coining operation
Bending and coining operation deals with the actual manufacturing wherein the raw materials are prepared and
used in production of the product with required specification.
Final Inspection:
This inspection is done so as to confirm that the machine tools and press used are calibrated and there exists no
errors in them after production. If an error is found it is rectified or the machine is replaced.
Packing:
At this stage the products which are manufactured are checked for defects and defective parts or products are
rejected and the good ones are packed.
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Back Audit and layout Inspection:
Back Audit & layout inspection is done so as to check and recheck the machine tools and presses used and
recalibrate them or replace them according to the requirement.
Dispatch to customers:
The finished goods after packing are checked after which these packed goods are dispatched to the respective
customers.
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SWOT Analysis
A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The following diagram shows how a SWOT analysis fits into an environmental scan.
SWOT Analysis Framework
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1.1 Strengths
1.1.1 Desing validation process
Desing validation process refers to ensuring the design meets the form and functional requirements specified in the statement of requirement for a product, by means of physical testing is commonly referred to as design validation.
Simultaneous Engineering
A way of simultaneously designing products, and the processes for manufacturing those products, through the
use of cross functional teams to assure manufacturability and to reduce cycle time.
Lean manufacturing
Aditya Auto has applied the concept of Lean Manufacturing in production wherein as mentioned earlier
the quality of the product is checked at each stage rather than at the end; thus minimizing errors and
improving quality.
1.2 Weaknesses
1.2.1 Raw Material Input
Though most of the Aditya Auto is automated or semi-automated many of the raw-materials are manually
introduced into the machinery, because of the vaiation in the amount of input required in various machinery. But
such manual input not only consumes time but also can be hazardous to the workers.
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1.2.2 Lack of full Fledged IT department
Lack of facility in the IT department was one of the major weekness found in Aditya Auto. Though there is an
intranet facility available in the company, it was found to be inefficient.
1.3 Opportunities
1.3.1 Increasing Exports
The figure shown below states increase in the export of automotive parts in the past two decades.
Size and Export of Indian Auto Component Industry (In US $ billion)
Source: Source: Automotive Component Manufacturers Association
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India being a labour intensive country several international and foreign companies are looking towards India and
other Asian countries for cheap and reliable auto-parts, hence the exports would tend to grow substantially. Only
few automotive parts manufacturers cater to the ever increasing need of foreign companies . Though Aditya
Auto has several international clients,its major source of income remains from that of the local players
1.3.2 Foreign Investments
Over the past decades there has been an increase in FDI in the automotive sector, lots of foreign players are
looking for a company with latest technology where in it can invest. Aditya Auto can use this opportunity to
update its technology and grow. Thus giving competition to several multinational automotive parts
manufacturers which have entered Indian markets.
1.4 Threats
1.4.1 Multinational Companies
With liberalisation privatization and globalization many of the MNC’s have entered the Indian market, which has
high finalcial backing and with latest technology which can easily cut the cost of there products and can give a
mojor competition for many local players like Aditya Auto Products.
1.4.2 Increase in Raw Material Prices.\
Due to scarce in the resources available prices of raw materials like steel have been increasing over few years causing a major concern to the producers, which has effected the company with increase in the cost of production and decrease in the profit margins.
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1.4.3 Access to World-class Technology and Quality Practices
Though Aditya Auto products has good technology and an ISO certificate one, but it is not something which can
be referred to as on par with multinational companies. Aditya Auto doesn’t have access to the existing and ever
changing world-class technologies, this restriction has made it difficult for Aditya Auto to compete with
multinationals with there high-class technology.
1.4.4 Remaining cost competitive
Cost is the major factor which determines the competitiveness of the company. Its been a challenge to the Aditya
Auto to be cost competitive against the multinational companies which has backed itself with high-class
technology and huge financial support..
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Best Practices
Over 20 years of its existence Aditya Auto has adopted several good practices which not only proved beneficial
for the company but also for its employees. Some of them have been described below;
Quality Circle
A quality circle is a volunteer group composed of workers (or even students), usually under
the leadership of their supervisor (but they can elect a team leader), who are trained to identify, analyse and
solve work-related problems and present their solutions to management in order to improve
Aditya Auto has implemented quality circle in it; where in the employees create voluntary groups so as to
detect and discuss the problems faced and the possible solutions for it.
Lean Manufacturing
Is a system / approach to eliminating waste and enabling continuous
improvement. Aditya Auto has applied the concept of Lean Manufacturing in production wherein as
mentioned earlier the quality of the product is checked at each stage rather than at the end; thus minimizing
errors and improving quality.
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