INDEX

SERIAL NO. PARTICULARS GENERAL INFORMATION PRODUCTION DEPARTMENT HUMAN RESOURCE DEPARTMENT MARKETING DEPARTMENT FINANCE DEPARTMENT SWOT ANALYSIS SUGGETION CONCLUSION BIBLOGRAPHY

PAGE NO.

1 2 3 4 5 6 7 8 9

2 13 28 41 54 70 71 72 73

[1]

GENERAL INFORMATION

[2]

CONTENT

Sr. No.

PARTICULAR

PAGE No.

Company profile

Vision & mission

Milestone

Size & form of the organisation

10

Organisation structure

11

Future plans & Achievement

12

[3]

COMPANY PROFILE

Name of the unit

:-

Austin Engineering Company Ltd.

Year of the Establishment :1973

Form of Organization :Medium Scale

Registered Office

:-

Austin Engineering Co. Ltd. Dist.: Junagadh Tal. : Bhesan Patala 362 030

Address of Junagadh Office :101, G.I.D.C. Estate, Vadal Road, Junagadh 362 003.

Phone Numbers

:- (91-285) 2660144, 2660069

Fax Numbers

:-

(91-285) 2661505

[4]

E-mail Address

:- info@aecbearings.com

Auditors

:-

Dhirubhai Dand & Co. Chartered Accountants Gokul Chamber, Junagadh 362 001.

Cost Auditors

:- S.B. Parikh & Co. Cost Accountants, Vadodara.

Bankers Registrar & Transfer Agent

:- Bank of Baroda, Junagadh.

:-

Sharepro Services, Satam Estate, 3rd floor, Above Bank of Baroda, Cardinal Gracious Road, Andheri (E) Mumbai 400 099

[5]

BOARD OF DIRECTORS

Mr. N.C.Vadgama

Chairman & Executive Director

Mr. S.M.Thanki

Managing Director

Mr. R.N.Bambhania :

Joint Managing Director

Mr. J.R.Bhogayta

Executive Director

Mr. S.V.Vaishnav

Non Executive Director

Mr. B.R.Sureja

Non Executive Director

Mr. K.J.Mehta

Non Executive Director

Mr. D.B.Nakum

Non Executive Director

[6]

VISION

Always improve continuously Utilize resources in most efficient way Be versatile to adopt changes Serve society in most efficient manner

MISSION

To implement the ISO/ TS 16949 quality system

To increase the marketing capability up to 2100 mm diameter

[7]

MILE STONE

1973 Partnership firm formed by five technocrats. Started manufacturing needle roller cage assemblies with the manpower of 10 and the capital investment of 3500 US Dollars. 1980 Manufacturing capacity of all aforesaid bearings increased up to 150mm diameter. 1982 Started supplying bearings for gear box application to Premier Automobiles Limited (FIAT-Italy Collaboration) for passenger cars. 1984 Started supplying case carburized specially heat treated ground components (exclusive supplier) and King-pin bearings to TELCO for light and heavy commercial vehicles. 1985 Converted into Public Limited Company and offered shares to public. 1986 Started New Plant (Unit II) with installation of machinery and testing/measuring equipment imported from Germany. Started exporting bearings to developed countries such as UK, USA, and Italy. 1987 Started manufacturing import substitute bearings for military tanks and armed vehicles of Indian Defense Department.

[8]

1990 Increased manufacturing capacity to 600mm diameter. Started manufacturing double row tapered and spherical roller bearings. 1991 Awarded indefinite rate contract with All India State Road Transport Undertakings (ASRTU) for 78 sizes of bearings for their passengers vehicles. 1997 Started manufacturing flush ground single row angular contact ball bearings for US and European Markets. 1998 Started production of four row tapered roller and mutli-row cylindrical roller bearings for roll-neck application in steel plants. 2000 Established AEC Europe S.R.L in Milan, Italy. 2002 Developed stainless steel (Grade 440C) bearings (for Atomic Energy Plant). 2003 Developed and supplied Screw Down bearing (equivalent to Torrington 202 TTSX 942 EE2000). 2004 Developed Slim bearings (Constant Section Bearings) up to 18 inch. Established Accurate Engineering Inc. (WOS of AEC Ltd.) in USA. 2006 Awarded ISO/TS 16949:2002 Certification for design and manufacturing of all type of rolling bearings from TUV Rheinland. 2008 Developed crossed cylindrical and tapered roller bearings.

[9]

SIZE AND FORM OF THE ORGANIZATION

On the basis of size, there are mainly three size of organization. 1. 2. 3. Large Scale Organization Medium Scale Organization. Small Scale Organization

AEC is a Medium Scale unit as it has 7 caroreS of equity equipment and machinery .And it has employed 655 workers.threfpre we can say that AEC is a LARGE scale unit. The form of organisation can be classified as under:

FORM OF OWNERSHIP

Sole proprietorship Partnership Co-operative society Company Pvt. Ltd Public Ltd. Government

As far as the Austin Engineering Company Limited is a public limited company because it has element of public limited company. It is an incorporated association which is an artificial person created by law having a common seal, different capital ,transferable share, limited liability, wide distribution of risk and large membership etc.

[ 10 ]

ORGANIZATION STRUCTURE

An organization is group of people working together towards to achieve one or more targeted Goals. A good organization structure is the basis of any successful organization for an effective system There are mainly following type of organization structure.

Types of Organization Structure

LINE ORGANIZATION

STAFF ORGANIZATION

LINE & STAFF ORG.

ORGANIZA TION

FUNCTIONAL ORGANIZATION

DIVISIONAL ORGANIZATION

As far as AEC Co. Ltd. Is concern it has adopted Line & Staff organization Structure. In this type of structure line of authority &

responsibility moves downward. Here individual & a group of specialists advise the line officer for the special aspects. It would be clear by following organization.

[ 11 ]

FUTURE PLANS

Due to nature of confidentiality, it is obvious that an organization may not find it appropriate. Certain key plant, however the management of AEC ltd shared the following information. Development slewing rim bearings for heavy earth moving & construction equipment Increase adherence to the training calendar Reduce new development cycle time, machine idealness, electrical

& mechanical breakdowns Etc.

ACHIVEMENT

Back up roller bearings for sendzimei cold strip mills Multi raw cylindrical roller bearings & for two tapered roller bearings for roll neck, application in rolling mills. Flush ground single row angular contact ball bearings. Precision class cylindrical roller bearings for machine tools spindle application. Flexible roller bearings Thin series ball bearings Large diameter, spherical roller thrust bearing Moreover, the co is having 9001: 2000 certificate

[ 12 ]

PART- 1 PRODUCTION DEPARTMENT

[ 13 ]

CONTENT

No.

PARTICULAR

PAGE No.

Product

15

Product Range

16

Production capacity

17

Production Process

19

Material Handling System

25

Quality Control

27

[ 14 ]

PRODUCT

This company is mainly produced 4000 to 4500 types of bearings which are under. available in 20000 varieties or sizes. The main product is as

1) Single Raw deep grove ball bearing 2) Single Raw angular contact ball bearing 3) Double Raw angular contact ball bearing 4) Self aligning contact ball bearing 5) Tharst ball bearing 6) Spherical roller bearing 7) Cylindrical roller bearing 8) Needle roller bearing 9) Cylindrical &needle roller bearing

[ 15 ]

PRODUCT RANGE

There are varieties of bearings that are right now in existence. They can be classified according to the size and use of it. In the world market, 20,000 types of bearings are traded and used. Specifically AEC ltd. produces around 4,500 different types of bearings. It is produced following type of bearing are as under. 1. Ball Bearing, 2 . Roller Bearing. 3. Spherical roller bearing (SRB) 4. Taper roller bearing (TRB) 5. Cylindrical roller bearing (CRB) 6. Needle roller bearing (NRB)

7. Flexible roller bearing (FRB)

[ 16 ]

PRODUCTION CAPACITY

Production capacity of AEC. Ltd. As follow Installed Capacity: Utilized Capacity 3500 PER DAY : 3500 PER DAY

Capacity: 10 mm ID to 1200 mm OD Current working at: 10mm ID to 900 mm OD

SUPLLIERS 1) 2) 3) 4) 5) Mahindra & Mahindra Ltd-steel bars Indian Seamless Metal type ltd steel pipe Social steel ltd-Roller Material Needumeelbra Industries ltd.-steel rolls Sanjay udhyog-Brass Cages

[ 17 ]

CUSTOMERS

MAJOR CUSTOMERS BHARAT HEAVY ELECTRICALS LTD. BHARAT HEAVY ELECTRICALS LTD. BHILAI STEEL PLANT BOKARO STEEL PLANT C.V.R.D.E. EICHER TRACTORS LTD. FAIRFIELD ATLAS LTD. INDIAN AIRLINES LTD. INDIAN RAILWAYS L & T KOMATSU LTD. OIL & NATURAL GAS COMMISSION ROURKELA STEEL PLANT VOLTAS LIMITED VOLTAS LIMITED BHOPAL TRICHI BHILAI BOKARO STEEL CITY CHENNAI FARIDABAD BELGAUM CHENNAI PATIALA BANGLORE KARAIKAL ROURKELA THANE CHINCKPOKALI

[ 18 ]

PRODUCTION PROCESS

Raw material purchase

Testing of raw material

Cutting & Turing of roller

Assigning Hardness to races

Grinding of Races

Facing & lapping process

Super Finishing

Pressing

Inspection & Grading

Assembling, Cleaning & Branding

Storage & Dispatch

[ 19 ]

1)

Collection of Raw Material

Accumulation of raw material is the first and for most stage in production. In raw material of Austin Engineering Co. Ltd. we can include following.

Steel bars & tuber Steel wire Steel balls CRCA Sheets Rollers Tapers etc.,

For ensuring the smooth production without break, enough stock of different raw material should be kept ensure starting from the steel bar to oil.

2)

Testing of Raw Material:

The second stage of manufacturing process of Austin Engineering Co. Ltd. is the testing of raw materials, which have been purchased from the different suppliers. They are having total 68 machines as a measuring & testing instruments. But here the raw materials are tested whether there is any defect in the material or not quality of raw material is checked here & if there is any defect it is rejected at this stage only to avoid future accidents. Many workers are engaged in testing the raw materials with the use of various machines & hand meters.

[ 20 ]

3)

Cutting & Turning of Rollers:

For producing races of the bearing the steel should be cut into pieces. These pieces are to be made with the help of special machine i.e. Double Disk Machine.

4)

Assigning Hardness to Races:

Assigning hardness to races goes through four steps which are as follows

Heat Treatment :

In Heat treatment, Material should be given heat treatment through electronic furnace at 845 degree to 855 degree temperature. If heat treatment is not given than it may possible that bearing would got breakage or crack in future. Here Temperature Control Meter is used to manage temperature. A minor variation will give dangerous results. In fact at the time of turning of races, rolls & rollers, they are very soft, for giving them hardness the heat treatment is necessary.

Oiling :

After giving heat treatment oiling must be done for smooth running of bearings & for anticipation of friction. It is necessary for giving cool treatment.

Cool Treatment:

For giving cool treatment the races are required to be deeped in the oil, which gives proper hardness to it. Company is using quenching oil for this purpose.

[ 21 ]

Hardness Test :

The hardness is assigned to the races. Now it is checked through hardness tester machine. The hardness range is 59 to 65 HRC.

Softening :

As the hardness test is made, with the help of Continuous Tempering Machine adequate & required softness is assigned to the races.

5)

Grinding of Races:

At this stage hardness is already assigned to the races & rollers. Due to this process races are turned in to rough black materials. This operation is performed for the following reasons.

deviation.

Giving them a particular shape, if there is any

future.

It assigns brightness to outer & inner. If is necessary to decrease the chances of crack in

Here the races & rollers are kept in to a particular machine, which is imported from Germany. Races are passes through one kind of oil i.e. Cutting Oil A constant flow of this oil is there in the machine. In this process, water is also used. Constant rotation of water in this flow is there. This is known as Collant Flow.

[ 22 ]

6)

Facing & Lapping Process:

Here races are twisted round in the proper manner. This process is done manually. If there is any mistake found by skilled workers then finishing is given to minimize the chances of interior quality production. Here in Austin Engineering Co. Ltd. there is a particular machine shop for facing the races & rollers. It is necessary to find out any defect of formal operations.

7)

Super Finishing:

Now the final material are given super finishing process in which the races & rollers passes through mto / kerosene rotation through machine.

8)

Pressing:

In this department workers press the bearings with help of different machines. The department is having 3 or 4 machines for this process.

9)

Inspection & Grading:

Now all the components of bearing are produce. The inspection department makes final inspection. So that quality of the bearings can be assured. For that Magnetic creak detection is done.

[ 23 ]

10)

Assembling, Clearing & Branding :

Now final inspection & grading is made to all the components of bearings. The next step is to assemble them in a proper way.

Fixing the roller in cages. Fixing the cage in between inner & outer races.

By this way finally bearings has been produced. This stage is totally performed manually through skilled workers only. After assembling properly the bearings are sent for clearing and final oiling is needed. Finally bearings are sent to the packing department. Packing is made according to the customer specification. If the product is made for export then wooden packing is made otherwise box packing is made. At last trade mark of the company AEC designed on the packing. Size and quality of the bearing are also written on it.

11)

Storage and Dispatch:

The finished products are stored in to the go down. The storage is done in different package, plastic package or wooden package as per specification. Dispatching is made as per the order of marketing department. Bonded Store Room take the decisions regarding dispatch. As per the ISO and TS they check once or twice in a year that the material stored is displaceable in future or not. Bonded storeroom department inform the excise department about such audit made by them.

[ 24 ]

MATERIAL HANDLING SYSTEM

According to American Material Handling Society, Material Handling is the art and science involving the movement, packing & storing of substances in any form in any manufacturing firm after obtaining raw material from suppliers & stored in to store room. They are issued to production department & are moved inside the plant for further processing & convert it into a finished product. Material handling involves the movement of materials from one place to another for the purpose of processing. It is moved either manually or mechanically with the help of different types of material handling equipments. Austin Engineering Co. Ltd. is following particular procedure for material handling which is as follows.

Material Handling Process:

This procedure for material handling can be used at every stage where material is handled products are stored, packaged, preserved & delivered. The Austin Engineering Co. Ltd. is following FIFO method for material handling. The BSR supervisor, HOD quality assurance, shift engineers, assembly in charge etc. are responsible authorities in this process.

Handling:

Handling should be done in such a way that prevents damages & deterioration. For all the light items, workers are assigned & manually this is done. They may take help of trolley.

[ 25 ]

Storage & Material Handling:

All the raw materials, which are received, shall be stored in stores before issuing them to the production department. Follow the procedure of receipt storage & issue of material. In process material movement & storage procedure should be followed. Store all the finished bearings at Bonded Store Room.

Packing & Material Handling :

All the finished bearings & components should be packed as per the specification given in the packing work instruction. This is responsibility of assembly supervisor. In RMS materials, which are to be packed, are inspected as per plan.

Preservation & Material Handling :

Rust preventive oil is applied to avoid rust formation in bearings. Then after it is wrapped sealed in pouch & put it in carton. Specified shelf life material shall be done on FIFO basis. Material beyond the specified limit should be use after approval of HOD.

Delivery & Material Handling :

AEC transports material or product to the customers premises through approved transporter. Approve transporter includes all the supplier of the company details of dispatch have been kept with the marketing department.

[ 26 ]

QUALITY CONTROL

The maintenance of the quality is very important for a reputed firm. When the product of the company is proved qualitative, the company should maintain the same quality standard, because it is useful in creation of customers, to increase market share, to stay in competitive etc.

Here, Austin Engineering Company Ltd. has given special attention on the quality of the product. It is also an ISO 9001:2000 awarded company because of its quality. Moreover, they have developed a QUALITY POLICY for better quality control. The company is also having certain testing instruments for testing the product at different levels. The product process includes five inspection stages which show the companys efforts to maintain its quality. Thus, there is a great attention given to quality control in the company.

Testing instruments

Spectrometer Micro handless tester Magna field crack detection Carbon-supper apparatus Surface roughness tester Roundness tester Electronic comparator Air gauge comparator Dial calibrators Redial clearance measuring instrument

[ 27 ]

PART-2 HUMAN RESOURCE DEPARTMENT

[ 28 ]

CONTENT

Sr. No.

PARTICULAR

PAGE No.

Introduction

30

Organisation of personnel

31

Recruitment and selection

32

Training and management development

35

Promotion and transfer policy

36

Performance appraisal system

38

Wages and salary

39

Grievance handling procedure

40

[ 29 ]

INTRODUCTION

In any organization management of people plays an important role to be success in the competition. Personnel management refers to management of personnel. We know the important component of an organization is its human resources or personnel. It is important branch of knowledge, most of the progressive organization having separate department, and they are appointing the expert as personnel managers. The success of any organization depends upon workers and therefore it is considered as

Mind your men and Men will mind all other things. This management of personnel is done by personnel department. In AEC LIMITED also there is one separate personnel department and it is handled by the personnel managers. Personnel manager manages the problem of personnel and also does activities of recruitment, selection, training, wages and administration etc. of personnel. Manpower is like a blood in the business. The management of men is very challenging job because it is a job not of managing a man but of administrating a social system. Personnel management has a vital importance in modern industrial organization. Personnel department is the part of management which is primary concerned with establishment and

maintenance of personnel relations.

[ 30 ]

ORGANISATION OF PERSONNEL

Personnel management is a very important and challenging job because it is a job only of managing men but also of administrating a social system. Each and every company needs faithful handling of personnel who cannot be operate like a machine.

ORGANIZATION STRUCTURE

Chairman

Managing director

General Manager

Personnel Manager

Personnel time Officer

public officer

chief time officer

Assist. Personnel

chief time keeper

[ 31 ]

RECRUITMENT AND SELECTION

Recruitment and Selection

To fill the vacancy in the organization recruitment and selection is done. RECRUITMENT:

Recruitment is the process of searching for prospective employees and stimulating them to apply for the job.

Recruitment is the positive process. There are mainly 3 methods of recruitment viz,

Direct method Indirect method Third party method

There are 2 sources of recruitment 1) Internal sources 2) External sources

[ 32 ]

If company adopts internal source of recruitment then recruitment is done within the organization, and if company adopts external source for recruitment then employees are recruited from outside. The best internal source is promotion and external sources are advertisement, trade unions, schools, colleges etc. In AEC Limited recruitment is done from colleges i.e. campus placement. And promotion is based on the performance not on the basis of seniority.

In Austin Engineering Co. Ltd. the sources of general recruitment & selection is done for recruitment of top or executive level and the advertisement is given in leading newspaper like The Times of India, Indian Express.

This company adopted direct & indirect method both as per need. When recruitment procedure is completed, selection procedure started. Selection means appointment of a proper candidate for the right post.

S ELECTION:

After the ending of recruitment process the selection process start.

According to Dale Yoder:-

Selection is the process in which candidates for employment are divided into two classes.

[ 33 ]

Those who are to be offered employment. Those who are not.

Thus the selection is hands of the management of differentiate the qualified and unqualified applicants by applying various techniques.

In AEC LIMITED for different posts different applications forms are there with each application form are assessment sheet is there which is assessed by the interviewer at the time of interview. They adopt the simple policy for general post means there is no lengthy process for selection for selection of general post. After this, they issue an official form for

selected persons. If the person wishing to work he will sign this offer by this way the person is selected.

1. 2. 3. 4.

Procedure for selection :To give advertisement To receive application Checking of reference Final selection

[ 34 ]

TRAINING AND MANAGEMENT DEVELOPMENT

TRAINING:

Every organization needs to have trained and experienced employees to perform the activity that have to be done. Employees training for development are not only an activity that an organization must it. Training and development of personnel is a follow up of selection. It is an improvement and enhancement of different type of skills so that employee can perform their jobs effectively. There are two types of training methods.

On the job training Off the job training

In on job training persons are trained during the working hours. no, extra time is given for that on the job training. In AEC LIMITED departmental head and welfare officer handle the training. Training is given whenever required at least once in a year training is given to each employee. The employees of AEC Limited gave training twice in a year. Training is related to their job profile, service to customers, and knowledge about new products. This training is given by senior officer of AEC LIMITED.

DEVELOPMENT:

Development is long term education process utilizing systematic and organized procedure by which managerial personnel learn conceptual and theoretical knowledge for general purpose Development is a process by

which managers & executives acquire not only skills & competency in their present jobs, but also capabilities for future managerial tasks.

[ 35 ]

PROMOTION AND TRANSFER POLICY

PROMOTION

A promotion may be defined as

An upward advancement of

employees in an organization to

another job, which commands better wages, better status and higher opportunities, responsibilities and authorities, better working environment hours of works and facilities etc.

A promotion is a vertical move in rank and responsibilities while a transfer a horizontal movement of an employee from one job, section, department, to another at the another place where his salary, status, responsibilities are the same. The promotion means to do upliftment of an employee within the organization. At this stage employees wage & salary, status, prestige moves towards the top level. Their thinking is also increasing up in his duties & opportunities.

A promotion is a vertical upward, movement in rank & responsibility. In AEC they give promotion on the basis of capability of employees with the purpose of proper candidate on proper post. Secondly on the basis of previous work, history & performance of the employees he will be promoted

[ 36 ]

TRANSFER

Transfer policy is horizontally movement, which does not change employees status, authority or salary. But only place is change from one organisation to another organisation. Transfer is given by two reasons Either for recruitment or, As for punishment

While transfer is done at any corner of the country as per requirements and situation. Transfer is done after every 3 years.

[ 37 ]

PERFORMANCE APPRAISAL SYSTEM

Performance appraisal is the process of evaluating the performance and qualification of the employees in terms of the requirement of the job for which he is employed, for purpose of administration including placement, promotion.

There are so many methods to appraise the employees but AEC LIMITED system to appraised the employees are as under.

Grading Graphing rating scales Critical incidents Group appraisal Field review method Accounting method

They measure the skills, experience, ability, discipline, attendance, regularity, and give this report to the head and this report is useful in promotion etc. thus they determine the performance appraisal.

[ 38 ]

WAGE AND SALARY

Wages usually refers to an hourly rate paid to such groups such as production and maintenance employees. On the other hand salary refers to the monthly rates paid to professional employees.

Austin Engineering Co. Ltd. Administration is totally computerized and according to time keeping system, the wages and salary of the employees are paid. Wages and salary of the employees is fixed. Increment is given on the basis of performance & efficiency.

The wages & salary given to employees is Rs. 3, 46, 90,800 which includes directors remuneration Rs. 31, 63,200.

[ 39 ]

GRIEVANCE HANDLING PROCEDURE

It is not always happens that all the workers working in the organization satisfied with the policies procedures of the company when there is room for upward communication. It is easy to know the grievance. Grievance is any dissatisfaction in connection with ones employments situation that is bought to the attention of the management. Grievance is written complaint filled by employees in respect of wages, allowances, job assignment, and transfer etc. that is dispute to employees.

The steps of the grievance handing procedure are as follows.

(1)

Any

dissatisfied

employee

can

fearlessly

approach

his

immediate boss with the reason for his dissatisfaction. The immediate boss then replies within a week.

(2)

If the employee feels that reply is not satisfying he could

approach his department head who toot his best to solve the dissatisfaction mostly grievances are handled at his stage.

(3)

The worker can also approach the general manager directly or

through the union. But it is hardly require in the process.

[ 40 ]

PART - 3 MARKETING DEPARTMENT

[ 41 ]

CONTENT

Sr. No. 1

PARTICULARS

PAGE No.

Introduction

43

Organisation of marketing department

44

Product Planning

46

Production mix

47

Price and distribution decision

48

Production Related Strategies

49

Market segmentation

50

Advertising & Consumer behaviour

51

Competition

52

[ 42 ]

INTRODUCTION

Marketing is a social & managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others. -PHILIP KOTLER Marketing is beating heart of any business organization.

Marketing occupies an important position in the organization of any business unit. Marketing means working with markets to actualize potential exchanges for the purpose of satisfying human need & wants.

MARKETING IS THE ANALYSIS, PLANNING, IMPLEMENTATION AND CONTROL OF PROGRAMMES DESIGNED TO BRING DESIRED EXCHANGES WITH TARGET AUDIENCE FOR PERSONAL & MUTUAL GAIN.

Each and every organisation has to make marketing efforts so, all marketing decision has its own importance in the efficiency and source of any organisation.

[ 43 ]

ORGANISATION OF MARKETING DEPARTMENT

An organisation is the rotation co-ordination of activity of number of people for the achievement of some common objective. Marketing organisation is made up people activity, responsibilty, authority and relationship for the purpose of achieving marketing objective.

The company has adopted mixture of line and staff organisation. It is vertical line of authority same as other department. Sales direction is on a top position who looks after all the activity of marketing department and also responsible for the result under him there is a general manager who guides and directs the sales department.

[ 44 ]

ORGANISATION CHART

Chairman

Marketing director

Marketing Manager

Asst. Marketing Manager

Sales officer

Dispatch clerk

Sales man

[ 45 ]

PRODUCTION PLANNING

The base of any product before launching into market is its marketing strategies, which depends on the analytical survey of the similar kind of product with the competitive companies.

In AEC whether they want to take any decision regarding products, they always perform product research and accordingly they formulate strategies.

A well planned product strategy depends on the analytical data from the market which in turn give the benefit to both the customer & the sellers along with the stock holder of the company, in consideration. Every product moves to lifecycle stages. it gives the sales revenue and profit margin history of product their stages are : 1) Introduction 2) Growth 3) Maturity 4) Decline This time companys products are passing through growth stage and bearing is heart of any vehicle and machine. So, there is no any substitute of bearing, we can say that demand may not be decline. It will increase so far as companys product life cycle is concerned. AEC gives 12 months guarantee for bearing.

[ 46 ]

PRODUCTION MIX

Product mix refers to the set of items offered for the sale by a particular business house. It represents each & every product lines & products in each line separately. The product mix of Austin consists of 1800 items.

The whole 1800 types of bearings are divided into two main product lines viz, 1. Automobile bearings 2. Industrial bearings

This is the broad classification of the bearings on basis of the use to which they put on. If we consider the different industries the Austin produces for textile industries to the machine industries.

Hence it can be said that Austin is having a unique product mix, which only proves profitable for the firm but also assist the country in the development process.

[ 47 ]

PRICING & DISTRIBUTION DECISION

Pricing Decision

Price is the exchange value of the product and services expressed in terms of money. Decision about pricing is considered important aspect for success of marketing of any product for an organization. Various factors are taken into consideration while pricing.

Objective of the business Estimated demand Cost of production Competition Distribution policy

Distribution Decisions:

The production is centralized while the consumption decentralized this requires a particular channel which enable the consumers to obtain product from the producer. Distribution channel is such an organized channel consists of various middlemen. The distribution can be direct or indirect Austin sell its 40% product directly to the CEM50% of its production sold through the dealers & 10% product is exported.

[ 48 ]

PRODUCTION RELATED STRATEGIES

I have observed there in the company while they are formulating strategies regarding product, they focus on handling trademarks, packing and labelling guarantee and warrantee etc.

So, the question arise that why they are giving more importance to the branding and trade mark. In answer of that the marketing manager replied that branding enables the firms assured control over the market. He also persuades that there are three types of branding. 1. Individual brand 2. Family brand 3. Umbrella brand

So far as Austin engineering company concerned their brand is individual brand i.e. AEC bearing. They also give importance to packing and labelling of product. As it provide protection to the product and helps in easy handling product. Austin gives 12 months guarantee for its bearing. The dealers collect orders from the consumers & pass the same to the firm they purchase the bearings & sold the same. In the case of report market selling is through the agents

[ 49 ]

MARKET SEGMENTATION

Marketing segmentation is based upon market oriented strategy and philosophy segmentation gives special emphasis on the demand side of the market. Market segmentation is a method of achieving maximum market response from limited marketing resources. By market segmentation tries to identify the target customer. Generally there are two type of market segmentation. 1. 2. People oriented approach. Consumer demand or product oriented approach.

AEC has accepted the consumer demand market segmentation. National and international marketing is also done. The dealers through which this company marketed its products are in India and its original equipment manufacturers are:-

Bharat Heavy Electric Ltd. Tata Electric & Locomotive Co. Ltd. Voltas Ltd. Kirloskar Electric Co. Ltd.

[ 50 ]

ADVERTISING

Advertising is an important factor by which company can increase the sales volume of its product. Advertising is a form of mass communication. It is fails for by a sponsor who wants to communicate about his product or services to his customer. In Austin company there is no need of advertisement, as the brand name of the company is well known to the buyers and their major customers but for the popularity of the company and its brand name the company is providing in their cash budget generally every year Rs. 4 to 5 lacks expended on advertisement they issue a right up of the company product accepted by the renounce companies export orders on hand new development etc. The symbol of this company is AEC upon bearings design on sticker and there is motto: Buy the Best, Leave the Rest.

CONSUMER BEHAVIOUR

We know that consumers behaviour is concerned with how, when, why, where, when and from whom they will be buy product. Consumer behaviour may be viewed as orderly process whereby the individual intellect with his environment for the purpose of making for the purpose of making marketing decision for the product as services I have observed that in Austin engineering while his strategies and marketing mix for help them to understand requirement and what should we have to do now. For this decision they always refer to current consumer behaviour.

[ 51 ]

COMPETITION

Competition has increased in almost every field now days. A healthy competition may beneficial but cut throat competition may create hazardous effect on the company. Competition affects the customers, sales figures & other aspects of marketing. As far as AEC faces no close competition because it is having the largest range of bearings in Asia. . The competitors are: FAG SKF NBC TIMKEN CHINA MARKE

Austin Engineering Co. Ltd. Has got customer from some international market also. The company exports about 20% to 25% of its total production into different countries. All the trading activities between the AEC and foreign customers are carried out through sea way of transportation.

AEC helps in bringing foreign exchange in India through exports which is beneficial for India. In the year 2006-2007 Rs. 2855.97 (in lacks) where earned by AEC as foreign exchange.

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The foreign customers of AEC are mainly from following countries: U.S.A. U.K. Italy Sudan Pakistan Shrilanka Nether land Bangladesh South Arabia

The co. Export its 50% of its total production which earn valuable foreign exchange

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PART 4 FINANCE DEPARTMENT

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CONTENT

NO.

PARTICULAR

PAGE No.

Introduction

56

Organisation of financial department

57

Financial planning

58

Capital structure

59

Capitalisation

60

Management of fixed assets

61

Ratio analysis

62

Working capital Management

67

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INTRODUCTION

Financial management is the managerial activity, which is concerned with planning and controlling of firms financial resources. As we know that this discipline is on resent origin, financial management consist of two words mainly finance and management

Finance may be defined as firm that important resources which are required at all the stage of different activity on the other hand management is process of planning, organizing, directing and controlling. IT is worth to note down that managerial functions are applied to the finance. It means planning & controlling activities of finance is major activity under the financial management.

According to Hogard, Financial management is the application of planning & controlling functions to the finance functions.

From above definition it is quite clear that effective utilization of funds iS major concerned from financial manager. Needless to mention that finance plays every vital role in any organization.

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ORGANISATION OF FINANCIAL DEPARTMENT

Organization of finance department means that division Tand classification of various functions that are to be perform by the financial department. Because of importance of financial department it is necessary to setup sound & effective organization chart depends generally subject to change. Internal factor such, as size and nature of the business and external are tax policy etc. Austin Engineering co. Ltd. has following organization of financial department. FINANCE DEPARTMENT

Chairman & Director

General Manager

Finance Manager

Accountant

Financial Officer

Excise Clerk Organization of finance department

Accountant Clerk means that division and

classification of various functions that are to be perform by the financial department. Because of importance of financial department it is necessary to setup sound & effective organization chart depends generally subject to change. Internal factor such, as size and nature of the business and external are tax policy etc.

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FINANCIAL PLANNING

Planning always plays an important role for arranging different activity of the organization. As planning determine future course of action in present. Financial planning relates with financial activities of the organization. More clearly Financial planning means deciding in advance, the financial activities to be carried on to achieve the basic objectives of the firm. Definition

The process of estimating the funds requirements of a firm and determining the sources of funds is called financial planning. (I M PANDY.) Above definition simplifies that financial planning relates with determining the future course of action related with financial department. Financial planning or plan can be formulated for different period of as following. Long Term Planning Medium Term Planning Short Term Planning

Austin Engineering Co. Ltd. has good financial planning. Bank of Baroda provides finance to the company. In long term planning this company think about expansion of business & modernization of company. They decide the financial activities from the following manners. G.S.I. Loan Cash Credit Facility Over Draft Facility etc.

With the help of all these means plus the share capital packing facility, budget of all expanses are being settled.

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CAPITAL STRUCTURE

Capital structure is completely different from Capitalization capital structure refers to the make up of its Capitalization. Capital structure is the permanent financing of firm represented by long term debt, preferred stock and net worth. Capital structure is used to represent the proportionate relationship between debt & equity. Capital structure also includes loans, bonds, share issued, reserves etc. Capital structure of Austin Engineering Co. Ltd. is perfectly maintained. No shortage of capital is aroused because of enough capital. The company has enough capital resources whenever it is required. So, company has no problem about capital structure.

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CAPITALISATION

Capitalization means total among of long term funds available to the company which includes shares and debentures, issued by the company and also long term loans taken from financial institutions. As far as earned profits remained to be distributed are concerned or it is necessary to classify them as either capital surplus or revenue surplus. The amount of capitalization should be only that much which can be justified by the profits and by the normal rate of return for the industry.

Over Capitalization:

A company is said to be over capitalized if its earnings are less in relation to its capital investment. The company may be having a low earning capacity. Thus, it results in over capitalization.

Under Capitalization:

A company is said to be undercapitalized if its earnings are more in relation to its capital investment. Under capitalization is an indication of effective and proper utilization of funds employed in the business. Under capitalization indicates sound financial position and good management of the company.

Austins earnings are Rs. 3, 73, 10,646 and investment is Rs. 12, 47, 61,492. Thus, earnings are less than investment. So we can say that the company is over capitalized.

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MANAGEMENT OF FIXED ASSETS

Assets,

representing

economic

resources,

are

the

valuable

possessions owned by the firm. These possessions owned by the firm should be capable of being measured in monetary terms. Assets are of two types:

TANGIBLE ASSETS:

They are the assets which have physical existence and generate goods and services. It includes land, machinery, equipment, furniture etc.

INTANGIBLE ASSETS:

They are the assets, which do not generate goods and services directly and have no physical existence. It includes patents, copyrights, goodwill, trademarks etc.

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RATIO ANALYSIS

Financial Ratio is most frequently and widely used in practice to assess a firms financial performance and condition. Ratio analysis is a powerful tool of financial analysis. Ratio can be defined as the indicated quotient of two mathematical expression and as the relationship between two more things. In actual position there are many ratios, which can be found out. Here mainly 8 ratios are defined and found out from the data of Austin Engineering Co. Ltd Meaning : Current ratio is the most common ratio for measuring liquidity. Being related to working capital analysis it is called the working capital ratio. Purpose: The current ratio of a firm measure short term current financial liquidity . PARTICULAR Current Assets Inventories Sundry Debtors Cash & Bank Balance Loan & Advances TOTAL Current Liability Liability Provision TOTAL 169730997 45724425 215455422 132349343 43789818 176139161 284664968 179198533 17883875 63106942 544854318 254321914 151569700 64391467 54261808 524544889 2009 2010 2010 2011 CURRENT RATIO

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Current Ratio =

Current liability Current Assets

2009 -2010 =

534102425 215455422

= 2.6 :1

2010 -2011 =

524544889 176139161

= 2.98 :1

Interpritation : The ideal ratio considered to be 2:1.the above calculation shows that the current ratio of the company is 2.6:1 and 2.98:1, in the year march 2009 and march 2010 Respectivly.Here Companys good position in all two years.

QUICK RATIO

Meaning: When liquidity is highly restricted in terms of cash and equipment, this ratio should be relationship between cash and near cash items on the one hand. Purpose: To measure more rigorous of a firms liquidity position.

Quick Ratio =

Quick assets Quick liability

2009 2010 =

248586120 25455422

= 2.22 :1

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2010 2011 =

270222975 17613961

= 1.53: 1

Interpritation: A quick ratio 1: 1 is good for the company. Here in this company this ratio is greater than these norms. But last three years it is decreasing, yet it is not need to worry about it is because it is yet above norms.

PROPRIETARY RATIO

Meaning. This relates the shareholder fund to total assets. it is variant of the debt equity ratio. This ratio shows the long term or future solvency of the business. Purpose: It indicating available to creditor and general financial strength of the firm. PARTICULAR Shareholders Fund Capital Reserve Total 35112500 304198833 339311133 34778000 367104781 401882781 2009-2010 2010 2011

Total Assets

698415831

678351780

Proprietary ratio =

shareholders fund Total assets

2009 2010 =

339311133 698415831

= 0.44: 1

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2010 2011 =

401882781 678351780

= 0.59: 1

Interpretation: This ratio shows the general position of the company is very important to creditors as is help to find out the proportion of shareholder fund in the total assets used in business. Higher ratio indicates a secure position to creditor.

DEBT EQUITY RATIO

Meaning: Financing of total asset of business is concern is done by owners equity as well as outside debt. This ratio indicates d the relative proportions of debt and equity in the financial assets of the firm. It is known as external internal ratio. Debt equity ratio is determined to ascertain Soundness of long term financial policy of firms. PARTICULAR Long term Debt Secure loan Shareholders Fund 135446717 248586120 93064494 270222975 2009 - 2010 2010 2011

Debt Equity Ratio =

Long Term Debt Shareholders Fund

2009 2010

= 135446717 248586120

= 0.54:1

2010 2011 =

93064494 270222975

=0.34:1

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Interpretation: It measures the ratio of long term or total debt to shareholder equity. A high ratio shows a large share of financing by the creditor of the firm. A low ratio implies smaller claim of creditor. If the debt equity ratio is high the owners are putting up relatively less money of their own. It is danger signal for the creditors. Here debt equity ratio 54% in 2009 and 34% in 2010, which is shows good financial position of the company.

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WORKING CAPITAL MANAGEMENT

Working capital is what makes a company work. It is just not possible to carry on the business with only fixed assets. Working capital is must. In adequacy of working capital chocks any business to death. Working capital is also called as "circulating capital" it is that pail of capital, which is require to purchase current assets i.e. to meet regular & recurring needs of a business firm like rent, advertising, power & so on.

A sound working capital management policy is one which ensures "Higher profitability & proper liquidity." The goal of working capital management is to ensure that the firm is able to continue its operations and that it has sufficient cash flow to satisfy both "Maturing short term debt & upcoming operational expenses" In AEC ltd the position of current assets & current liabilities is as follow.

Particular Current assets Inventories Sundry debtors Cash & bank balance Loans & Advances

2009-10

2010-11

285,516,305 164,825,535 19,178,538

254,321,914 151,569,700 64,391,467

64,582,047 534,102,425

54,261,808 524,544,889

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Current liability Liabilities Provision 169,730,997 45,724,425 132,349,343 43,789,818

Net working capital = Current assets - Current liabilities

2009 10 =

534,102,425 215,455,422

318,647,003

2010 - 11 = 524,544,889 176,139,161

348,405,728

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SWOT ANALYSIS

STRENGTHS : The company has wide market net work with established

customer base. The company is this line of business for more than 20 years &

enjoy its brand name in the market. The directors are well experienced & technically qualified with

well succession plan. The company is able to obtain skilled workers at comparatively

cover of company. The company is profit making & self performance are improving

year after year.

WEAKNESS The company is over capitalized means it is not utilizing its

resources accurately Its performance is not so good at social responsibility. It has n issued & authorized preference shares & debentures.

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OPPORTUNITIES The company can achieve the top place from the 4th among the

manufacturers of bearings by some improvement in the department. The company has great opportunity to expand for the business

by taking benefit of its largest product range in the Asia. network. The company can increase their sale & can have wide market

duty rats.

THREATS A serious threat is being faced from imports due to decline in

The manufacturers are facing a threats from the spurious parts

manufactured who manufacture duplicate parts & sell them in the name of popular brands I the replacement market at a very low price. Steel & alloy steel are basic raw material for bearing industry &

their prices are expected the upward trend in coming future.

[ 70 ]

SUGGETION

weakness.

Reinforcement activities. I.e. share job related strengths and

Goal setting, goal to each shift and duration to accomplish the

same. Creation of healthy and competitive environment. Training program to motivate and improve their soft skills,

problem solution skill, positive attitude, proper approach and behavior. Participative environment through team building and group work. Appreciation of accomplishment informally and frequently. Motivate employees to give their ideas and views by awarding

them best suggestion awards. Arrange meeting once in a month to give chance to raise their

voice to all the employees.

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CONCLUSION

An easy start, smooth drive fuel economy and minimum maintenance is what a machinery owner wants. But all this is possible provided the right qualities of bearings are used. Having already given their customers the choice of the best branded bearings. AEC Limited has now come out with the best bearings with magic to keep their engines young forever!

AEC Limited is giving constant training to all the employees. From the interaction, interview with all the employees. I have given some suggestions which have accepted by the company.

I am really indebted to the staff of AUSTIN and all our professors who are our future builders in true sense.I think that the future of the company will bright.

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BIBLIOGRAPHY

Books refer:

Finance Management
1. Khan and Jain, Financial Management, 3rd edition, Wiley

India

2. I.M. Pandey, (2010) 11th edition, Vikas Pub.,New Delhi

Marketing Management Philip Kotler, and Kevin Keller, 13th edition, Pearson Education

Human resource management Gupta, C.B. (2007). Human Resources Management, S. Chand & Sons, New Delhi pg. 9 -18 K. Aswathappa, Human Resource Management, 5 th edition, Tata Mc Grow Hill

Annual Report of Austin Engineering Co.Ltd.

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Milestone last retrieved 01/07/2011 from http://www.aec-bearings.com/company.html

Product Range last retrieved 01/07/2011 from http://www.aec-bearings.com/products.html

Journals published by the AEC Limited.

Web Sites: http://www.aec-bearings.com

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