MRF

KRISTU JAYANTI COLLEGE

AN ORGANIZATION STUDY : MRF

ARUN JOSEPH GEORGE


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

KRISTU JAYANTI COLLEGE Page 2


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



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



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



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.



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”



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.



COMPANY PROFILE

COMPANY PROFILE

Just one year before the attainment of independence by our country in the year 1946, a young

entrepreneur Mr.K.M.Mammen Mappillai opened a small toy balloon manufacturing unit shed at



Thiruvottiyur, Madras (now Chennai). Over the year it started manufacturing a variety of

products.

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



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.



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



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



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



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.



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



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.”



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



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.



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.



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



INDUSTRY PROFILE



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



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



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%).



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.



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



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.



PRODUCT PROFILE

COMPANY`S PRODUCTS



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



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.



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



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



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.



ORGANIZATION STRUCTURE



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



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



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.



ORGANIZATION STRUCTURE OF KOTTAYAM UNIT



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.



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



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



FUCTIONAL AREAS



PRODUCTION



STRUCTURE OF PRODUCTION DEPARTMENT



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



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.



MRF Kottayam unit produces:

9202 Tubes per day

1750 Tyres per day

50 Solid tyres per day

8MT Tread rubber

2300 Flaps per day



FINANCE



STRUCTURE OF FINANCE DEPARTMENT



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



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.



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.



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.



TECHNICAL



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.



HUMAN RESOURCES



STRUCTURE OF THE HUMAN RESOURCE DEPARTMENT



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



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



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



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.



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.



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



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.



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.



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



QUALITY ASSURANCE



STRUCTURE OF THE QUALITY ASSURANCE DEPARTMENT



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.



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.



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.



ENGINEERING



STRUCTURE OF THE ENGINEERING DEPARTMENT



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.



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



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.



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.



SAFETY



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.



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.



SECURITY



STRUCTURE OF THE SECURITY DEPARTMENT



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.



MARKETING



MRF Kottayam doesn’t have a marketing department. The structure of the marketing

departments at MRF as a whole is given below:



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.



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.



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.



SWOT ANALYSIS



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



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



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



FINDINGS AND SUGGESTIONS



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



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



CONCLUSION



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



BIBLIOGRAPHY



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


MRF

Documents

organization study

organizational study

study information

study details

policies of mrf

organizational world

management of mrf

evolution of mrf