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26 February 2016

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An organization is a social unit of people, systematically arranged or managed to meet the needs or to pursue collective goals on a continuous basis. A sound organization can contribute greatly to the continuity and success of the enterprise. All organizations have a management structure that determines the relationship between functions and positions. Without proper care of higher, middle and lower levels of administration, it would be practically impossible for any management to run the organization smoothly. The better the organization the fuller would be the achievement of the common objective. Hence the study of the organization is of great importance. It helps to understand the organization better and become familiar with its functions. MRF LIMITED, an enterprise that was established in1946, in South India grew quickly to become one of India’s biggest tyre manufacturing companies, renowned for product superiority and innovation. MRF continues to be the leading tyre-maker in India. MRF inaugurated its Kottayam unit in 1969 as the second plant of MRF with a small rubber mixer and seven employees. The plant is engineered in four fully merged with the environment. World class rubber mixing facility with SCADA based recipe management, fully automated carbon handling systems and modern dust collecting systems keep the environment tidy. Facilities with upgraded systems for Tube, Tyre and PCTR manufacturing, deliver world class products. MRF Kottayam is certified with ISO 9001/ TS 16949, ISO 14001/OHSAS 18001-2007 etc. TPM initiatives improved the plant performance in all areas. MRF Kottayam unit also registered small scale energy saving projects for carbon credits and its liaison works with UNFCCC being done by consultants M/s. Ernst and Young. Its turnover crossed the 6100 crore mark in 2008. MRF has the widest product range among the domestic tyre companies as it makes tyres for all class of vehicles from trucks to two wheelers and go-karts. MRF Kottayam unit has nearly 2000 direct work force.

The objectives of the study can be summarized as follows:
To know the history and the growth of the company

To understand the structure of the company

To acquire knowledge about the functional as well as managerial aspects of the organization

To learn about the manufacturing process of the products

To analyze the financial performance of the company

To learn the plans, policies and procedures of the organization

To observe the work culture of the organization

To acquire knowledge about the strengths, weaknesses, opportunities and threats of the organization


The organizational study was conducted in MRF Limited, Kottayam. The organizational structure and the management of various departments of MRF are taken for the purpose of the study. Sufficient attempt has been taken to cover almost all the facets of this organization and to understand the complex factors that are functioning within the organization

Research is a systematic approach to a purposeful investigation. Methodology refers to the various methods used by the researcher right from the data collection and various techniques used for interpretation and inferences. Research methodology addresses the questions; what must be done, howl it must be done, what data must be collected, what data gathering methods must be employed, which sources of data must be selected and how the data must be analyzed and conclusion is reached. The total period allotted for the project work was one month. The study was undertaken by personally visiting the factory in Kottayam.


Primary data are those which are collected as first-hand information and thus they are original in character. These are collected from the direct sources like: Personal interview

Observation method

Secondary data are those which have already been collected by some other agencies of the organization that has been processed. Some of them are: Previous records of the organization

Magazines and Journals


Even if there was sufficient support from the staff of the company; a tight work schedule prevented them from giving additional information. The organizational study has come across certain limitations such as:

The method used mainly provide qualitative data but lack of precision

Too much of interaction was not possible due to the fear of trade secrets being exposed

Personal bias could be the one key factor which has affected in having personal interviews


The tyre industry has evolved from the basic cross ply to the more sophisticated radical tyres. Nylon cords that impart low weight and additional strength to the tyres have also replaced cotton ply. This industry is also driven by agricultural and infrastructural activity that takes place in the region, as those two have an impact on the transport sector. The advent of globalization and liberalization in India urged the companies both small scale and large scale, to build in capabilities, in order to compete effectively on a global platform. The tyre industry in India has been striving hard to establish itself in the global market in its infant stage. There were threats from the global players who enjoyed substantial economies of scale. As a result, the Indian tyre companies were in a constant pursuit of adhering global standards of quality and state of the art technology in production. The fortune of the industry depends on the agricultural and industrial performance of the economy, the transportation needs and production of the vehicles. Hence this is a sensitive industry which has to adapt itself to a high volatile environment.

The tyre industry began to develop in India in 1920’s. The growth of the tyre industry in India may be divided into three phases. In the first phase, multinational companies like FIRESTONE (1920), GOODYEAR(1922) and DUNLOP(1926) came to Indian tyre industry for selling their products. They were considered as the fore runners of commercialization of tyres in India. During the early twenties and the mid-thirties, these companies became very famous and got established themselves in the industry. In the second phase, these multinational companies started their production in India. They became the first generation tyres of the Indian tyre industry. DUNLOP and FIRESTONE had put up plans to manufacture tyres in Kolkata and Mumbai in 1936 and 1942 respectively. The third phase of the Indian tyre industry began when the companies in India started manufacturing tyres that came out to be known as the second generation tyres. MRF, PREMIER and COOT etc were the important companies among them. They started manufacturing their products in sixties and later on the third generation of the tyre industry started by 1970. APPOLO and JK TYRES were the most important companies among them. The most leading tyre companies in India are: MRF

After the initialization process started in 1922, the Indian economy was stepping the ladder much higher. Earlier, automobiles were mainly used for necessity. But nowadays, the whole trend has been changed in the livelihood. Even the middle class people can’t think about their life without having vehicles. This could be one of the main reasons that the Indian tyre industry is growing up day by day, even when the world is facing the major crisis of global recession. To an extent, the Indian tyre industry has faced few problems, but it has not affected the whole trend much seriously as far as the tyre industry of India is concerned.

The foreign companies dominated the Indian tyre industry till the 1960’s.However in the later part of the 60’s and early 70’s, the Indian Industrial Entrepreneurs made a stylish entry into the market alongside foreign collaborations with the automobile sector foundation within the country. The tyre industry saw the entry of many players and with the winds of liberalization blowing amidst the hue and cry, swept the entire land in 1922 and brought about the ride of joint ventures within the industry. The industry worth Rs. 9000 crores was independent upon the agricultural and industrial performance of the economy, the transportation needs and the production of vehicles. The Indian tyre industry is one of the largest in the world with more than 100 million motor vehicles on the Indian roads. The Indian tyre industry evolves itself around some salient features like: Adaptability

Technology progression
Wide product range for diverse usage
The Indian tyre market can be categorized into three. They are: Original Equipment market
Replacement market
Export market
The Replacement market generates demand to a greater extend as business volume tends to be high (85%), while the Original Equipment market demand is just a linear function of automobile production whose growth is in turn determined by the overall economic situation and the government policy. Globally, the Original Equipment market segment constitutes only 30% of the tyre market and 105 contributions comes from the Replacement market. This normally has placed the retreads in a better position than the tyre industry as a major colossal threat. The Coimbatore based Elgityres and Tread Limited, the largest retread in India is giving the tyre barons sleepless nights. The tyres basically produced in India are:

The CROSSPLY tyres have been used in India for several years. In this, the Polycords run across with each other or diagonally to the outer surface of the tyre. Rayon and Nylon cords are used as the reinforcing medium. These tyres can retread twice during their life time and hence is preferred by Indian transporters who normally overload their trucks. In India, 90-95 percentages of such tyres are sold. The Radial tyres have their cords running radially from bead at 90 degree angle to the rim or along the outer surface of the tyre. The reinforcing mediums used in these tyres are Polyester, Nylon, Fiber Glass and Steel. Thus guaranteeing a longer life time and provide lower fuel consumption, with better control over the vehicle and road holding. The unhealthy condition of the Indian roads has
resulted in Radial tyres accounting only five percentage of tyre industry as against a global trend of 60 percentages. The tyre industry is a major consumer of the domestic rubber production. The degree of contribution towards the material content in the Indian tyre industry by the Natural Rubber constitutes about 80% and the remaining 20% contribution is made by the Synthetic Rubber( worldwide, the ratio of Natural Rubber to Synthetic Rubber is 30:70) tyres which are subject to the use of different chemicals. The available local Natural Rubber is an added advantage for the industry, since it amounts to around 255 of the total raw material cost of tyres. On the contrary, Synthetic Rubber accounts to just 40% of the total raw material cost (India imports 60% of its Synthetic Rubber requirements). Apart from rubber, the major raw materials are Nylon Tyre, Code and Carbon Black. These raw materials are used to make the tyre strong and impart tenacity to it, while the latter holds responsibility for the color of the tyre and also enhance the life span of the tyre. Nylon codes comprise 345 of the total raw material cost, while Carbon Black accounts about 13 percentages. To be concise, the tyre industry in India is highly raw material intensive and its cost directly affects the profitability of tyres. Therefore about 60-70% of the cost of production is from the cost of raw materials itself. Most of the raw materials are petroleum based. So the price of the international crude oil affects the tyre industry at large. Fortunately for the tyre industry, the rubber and carbon black prices have declined considerably.


The company puts out the following offerings which are the major sellers in their segment: 1. MRF NYLON GRIP ZAPPER FS- MOTOR CYCLE TYRE


MRF was started in the year 1946 by Mr.K.M.Mammen Mappillai, a young entrepreneur from central Kerala. The company was started as a toy and balloon manufacturing unit at Tiruvottiyur, Chennai and from 1951 the company took up the manufacture of tread rubber. By 1958, MRF was known as Madras Rubber Factory Limited. Since 1946, MRF has emerged as the largest tyre manufacturer in India and 12th largest in the world. The company caters to all vehicle segments from commercial vehicles and passenger cars to two-three wheelers and tractors. It has also made a strong presence for itself in both the radial and cross ply segments. It boasts of 68 sales centers, 2500 distributors and exports to over 75 countries, a standing testament to MRF’s outstanding leadership.

MRF will be significant global player delighting customers worldwide through Leadership in technology
World class systems
Excellence in manufacturing
Driven by a team of motivated high performers, to achieve profitable growth.

The corporate office is situated at Chennai where Marketing, Exports, Central planning, Engineering, Quality Assurance, Materials, Human Resource and Industrial Engineering, Environmental Engineering, Safety functions are carried out by Technical and Research and Development functions (plant technical) to cater to specific products.

The mere mention of the word MRF is bound to bring “The Muscleman” in the mind of Indians. The muscleman evolved in 1964, soon after MRF began manufacturing tyres. During the last 35 years, the “Muscleman” has evolved from a mere corporate mascot to a symbol of strength, reliability and durability; embedding the quality of tyres that the muscle man represents. The muscleman evolved into a high-tech symbol in the mid-80, a sign of changing times. Its new appearance was a silent testimony to the indomitable spirit that carried MRF across the INR 20 billion mark. The muscleman’s appearance changed once again in 1996, MRF’s golden jubilee year. He started appearing in full form and is now also known affectionately as the MRF tyre man by motorists across India and 65 countries worldwide, which have come to rely on him for sale and comfortable ride.

Tiruvottiyur : Tamilnadu
Arakonam : Tamilnadu
Kottayam : Kerala
Ponda : Goa
Medak : Andhra Pradesh
Puducherry :Tamilnadu

Quality policy of MRF is to maintain market leadership through continuous quality improvement. To achieve this goal, all the plants and the corporate office shall pay particular attention to the following: Product or process improvement by field or plant performance monitoring and prompt services to the customers 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 senior General Manager or General Manager is assigned the responsibility of carrying out the quality system by collaborating with the corporate functions.

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 his beloved ones without any injury that day 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.

The environmental policy of MRF is to manufacture our products in an environmentally friendly and safe manner. To achieve this goal, all the MRF plants, together with the corporate office shall: Minimize the impact of our manufacturing activities on the environment, especially the air, water and soil Comply with all applicable regulatory requirements

Develop the environmental performance evaluation procedure for the continuous monitoring Up gradation of the machinery and pollution control equipment when required Train all over employees to perform their activities in an environmentally responsible land safe manner At the plant level, the respective Senior General Manager or General Manager is assigned the responsibility of carrying out the environmental system by collaborating with the corporate functions.

The training policy of MRF is to provide and develop knowledge, skills and behavior of their employees to continuously improve their performance. To achieve this goal, all MRF plants together with the corporate office shall: Identify and document training needs of each employee, through competence evaluation each year Design and publish training calendar and schedule

Provide training periodicals based on identified needs and as per the documented schedule Monitor and evaluate training process and outcomes to assess and to decide the next training cycle requirement At the plant level, the respective Senior General Manager or General Manager is assigned the responsibility of carrying out the training activities through Human Resource Department of the plant and the corporate office.

A Total Productive Factory where
The work environment is pleasant
The work force is highly motivated and empowered
The machineries are reliable, efficient and precise to meet the increasing customer demand The product satisfies the customers with high quality and best price MAIN CUSTOMERS
1. Volvo
2. Tata Motors
3. Ashok Leyland
4. Mahindra
5. Force Motors
Some of the major competitors of the company are:
1. Michelin
2. AppoloTyres
3. Bridgestone
4. JK Tyres
5. Goodyear

It was in the late 1946 that a young pioneer, K.M.MAMMEN MAPPILLAI started a
small toy balloon manufacturing unit in a small shed at Tiruvottiyur in Chennai. 1952: Company ventured into the manufacture of tread rubber 1955:MRF soon becomes the only Indian owned company to manufacture the superior extruded, non-blooming and cushion- backed tread rubber enabling it to compete with the MNC’s operating in India at the same time 1956: The quality of the product was of a high standard that by the close of 1956, MRF had become the market leader with a 50% share of tread rubber market in India. So effectively was MRF’s hold on the market, that the large multinationals had no other option but gradually withdraw from the tread rubber business in India 1961: With the success achieved in tread rubber, MRF entered into the manufacturing of tyres. MRF established a technical collaboration with the Mansfield Tyre and the Rubber Company of USA. Around the same time, MRF also became a public limited company 1963: Pandit JAWAHAR Nehru laid the foundation stone for the rubber research Center at Tiruvottiyur to commemorate the inauguration of the Tiruvottiyur factory 1964: With the commissioning of the main plant in 1964, MRF also made progress in the export of tyres. An overseas office at Beirut was established to develop the export market, and it was amongst India’s very first efforts on tyre exports. This year also marked the birth of the now famous MRF Muscleman. 1967: MRF became the first Indian company to export tyre to USA- the very birth place of tyre technology 1969: MRF factory built at Kottayam

1970: MRF inaugurated its Kottayam unit
1971: MRF gained license to build factory in Goa
1972: MRF’s fourth factory set up at Arakonam
1973: MRF launched India’s first Nylon car tyre
1978: MRF launched Super lug- the country’s largest selling truck tyre 1979: MRF turnover crossed Rs. 100 crores
1980: MRF entered into a technical collaboration with the B.F. Goodrich Tyre Company of USA, which was involved with the development of tyres for the NASA space- shuttle. With this began a significant exercise in quality improvement and new product development. MRF took a major policy decision to be aggressive on the racing circuits 1983: MRF began rapid product development programme for the new vehicles entering India 1984: MRF sales turnover crossed Rs. 200 crores. MRF tyres were the first tyre selected for the fitment on the Maruthi Suzuki 800 India’s first modern car 1986: MRF was selected by National Institution of Quality Assurance for their most prestigious award. Pitted against 20 tyre companies worldwide, MRF also won 6 quality improvement awards instituted by B.F Goodrich tyre Company from USA 1987: MRF becomes the No.1 tyre company in India.

MRF crossed Rs. 300 crores turnover. MRF legend, the Premium Nylon car tyre was introduced 1988: MRF pace foundation was set up, with international pace bowler, Dennis Lillee as its Director. Not long thereafter, pace bowlers trained at the foundation were selected for the Indian Cricket team 1989: MRF medak plant went on stream. Once again recognition of excellence, MRF was awarded the Visveswaraya Award for the Best Business House in South India and the Economic times Harvard Business School Award for the Best Corporate Performance. MRF collaborated with Hasbro international USA, the world’s largest toy makers and launched Funskool India 1993: K.M.MammenMappillai was awarded the Padmashri award of National Recognition for his contribution to industry the only industrialist from South India to be accorded this honor until that time. MRF was selected as one of India’s most admired marketing companies by the readers of the A and M magazine 1996: MRF celebrated 50 years. Turnover touches Rs.2000 crores. A special factory dedicated to the manufacture of radials was started at Pondicherry. MRF tyres were also chosen for fitment on the Ford Escort, Opel Astra and Fiat Uno 1997: MRF launches its first ever F3 car

1998: MRF launches its Super Lug tyre for trucks
1999: MRF was declared the most ethical company by “Business World” magazine in its survey 2000: MRF launched the smile campaign on Indian roads
2001: MRF won JD power award for customer satisfaction
2002: The MRF Nylogrip Zappers for two wheelers is launched. MRF wins the JD Power Award 2004: MRF’s turn over crossed Rs. 3000 crores
2006: MRF’s turn over crossed Rs. 5000 crores
2008: MRF’s turn over crossed Rs. 6000 crores
2009: In spite of Global meltdown, MRF’s turn over crossed Rs. 6200 crores

MRF Tyres, Kottayam was set up in 1969 on a hill top in the village of Vadavathoor about 7 km from Kottayam town in the state of Kerala. After starting the first MRF unit at Thiruvottiyur in Chennai, MRF management decided to take advantage of low electricity costs, tax concessions on Natural Rubber at no extra transportation cost and the availability of skilled and educated labor and started the second unit of MRF at Kottayam. The unit started off as a factory building with an area of 34200 sq. ft. and a Ban bury of 3A size with a capacity to mix 10 meters a day. Today MRF houses 265 management staff and 1319 regular workers. It started as a small mixing unit growing into a full scaled manufacturing unit producing tyres. It also manufactures tread rubber and with two newly installed Ban bury. It has become one of the most productive plants in India with a record production of tubes. The commissioning of a tyre plant in 1994 marked a new era in the unit’s history. Initially, tractor tyres were produced, and then diversified into passenger tyres and truck tyres of various types. The Kottayam plant supplies mixed rubber to the other plants of MRF and with the increase of demand the plant had to be augmented. A new plant exclusively for mixing, was built with huge internal mixers and a mixing capacity of 600 tons per day and is one of the largest mixing units in Asia.

Tube plant
Tyre plant
Mixing plant
Pre-cured Tread tyre plant
The present turnover of finished goods of Kottayam unit is Rs. 650 crores per annum. Kottayam unit has also started Pre-cured tread rubber (PCTR) production in August 1993.

Built up area – 600000 Sq. Ft. Management staff – 252 Nos Regular workmen – 1115 Nos Casual workman – 399 Nos Total Finished goods production – 3400 MT/ month Total turnover of finished goods – 37 crores/ month Mixed stock sent to other units – 7000 MT/ month Tyre Production – 52000 Tyres/ month Tubes, Envelopes and curing bags production – 263000/ month Flap Production – 82000/ month Conventional tread rubber production – 160 MT/ month PCTR Production – 330 Tonnes/ month Repair Materials – 83 Tonnes/ month Vulcanizing Solutions – 32500 Litres/ month


The organization is made up of different departments. Departmentalization is the grouping together of similar or logically related activities. There are several bases for departmentalization. The different forms of departmentalization are departmentalization by functions, by products, by regions, by process or a combination of any of them. The basic need of department arises because of specialization of work and limitation on the number of sub-ordinates that can be directly controlled by the superior. Departmentation converts the work into manageable units. If there was no departmentation, there would have been serious limitation on the side of the organization. The company is having eight different departments which play a vital role in the development of the company. The different departments are:-

1. Production Department
2. Human Resource Department
3. Accounts and Finance Department
4. Quality Assurance Department
5. Engineering Department
6. Industrial Engineering Department
7. Technical Department
8. Security and Safety Department

Among all the functional areas of management, production is considered to be crucial in any industrial organization. Production in terms of economics is the process developed to create a collection of input, which may be energy, capital, information, material, manpower or any other raw materials into a specified set of output produce like finished goods and services in proper quantity & quality. Production is the primary function of the company, thus all other functions support the production department in various segments. Pro-duction Department controls the production process by coordinating the activities of other departments. After receiving the marketing or Sales price from corporate office, the annual production plan is made and this will be further broken down into monthly and weekly plan. MRF has production in four plants. They are Tube plant, Tyre plant Mixing plant and PCTR plant

FIG 2.2

In this plant artificial rubber called butyl rubber is used for manufacturing of the tubes. It is mixed with carbon black and chemicals and then extruded into various sizes. After sufficient cooling it is sent for pre-cutting to the required length, value fixing and splicing. It is then moved to the freezing table for cooling the splice joint and is shaped to the required size. After this is taken out and kept inside the curing presses for vulcanization. After the set time the tube is unloaded from the press and sent for inspection. The tubes are then deflated using vacuum and the tube core is inserted. The size are segregated and packed as per the standards.

FIG 2.3

Grey fabric is passed through calendaring machine for coating both sides with rubber. From there it goes to a machine called the fabric cutter for cutting it into different lengths as per specifications. Steel wires are passed through bead extruder for coating with rubber and wounded on specific wheels as per the specifications. On tyre build-ing machine, green tyres are made using calendared fabric, bead, tread etc. Green tyres are vulcanized in tyre curing press by steam heated moulds. After this the tyres are inflated to retain its properties by trimming, inspection and dispatch.

FIG 2.4

Ordinary rubber is mixed with carbon black, chemicals and the rubber processing oils in the specified quantities into the rubber mix-ing equipment called the ban bury. From there it is dumped into the dump mill and passed through batch of tanks in sheet form for cooling and is then stored in metal skids. Samples from each batch are tested and the batch is certified for use. This compound rubber is sent to the tyre and PCTR plants.

FIG 2.5

Pre — cured Tread Rubber (PCTR) is used for re — treading rubber. Compound rubber is used in mixing mills and extruded to the required size using extruders and passed through conveyors for cool-ing. These slugs are stored in leaf trucks for ageing. It is then vulcanized in the curing process. After curing, an excess flash material is trimmed off and goes for inspection. It is then sent to the stretch wrap-ping machine for packing.

FIG 2.6

The main functions of Production department are:
PLANNING FOR PRODUCTION PROCESS: This is based on the monthly plan given by central planning, plant planning department will prepare a simulation plan by dividing the month into 3 segments of 10 days each. The simulation plan given by plant planning for the month is taken as a guide line and each plant plans the production for each process. The available inventory and the priority of dispatch are taken into consideration while daily schedule is given. Slight changes are made in the simulation plan to reduce the number of sizes running at a time with the objective of improving production efficiency.

MATERIAL INDENT AND RECEIPT: The daily requirement of raw materials is calculated on each plant after considering the available inventory and the scheduled production for the next day. Raw material indent is made to raw material store. Raw material stores make arrangements to deliver the indented material at the plant.

PROCESSING: Processing is carried out as per the technical specification, BSP (Basic Standard Practice) and the work instruction 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 the specifications, production is continued. If any parameter is not confirming to the specified limits, then necessary correction is made and the production process is resumed. Whenever a machine/ equipment are behaving abnormally, it is informed to the engineering department. If the process variation is abnormal, production is stopped by production supervisor/ quality supervisor/ technical supervisor. The abnormality of machine is rectified by engineering department and the machine is handed over to production. If any non-conformance is noticed in the product, it is held using NCM [Non-Conforming Material] tag. Whenever engineering department notices a machine behaving abnormally, they request production stoppage through a maintenance request

PRODUCT IDENTIFICATION AND TRACEABILITY: The objective of proper identification and traceability is to prevent mixing up of products and to ensure traceability of products at various stages. This applies to raw materials, in- process materials and finished goods. For example, in the case of extruded tubes, details like size, month code, year code, plant code, date of extrusion, extruder operator code, and ‘ made from imported Butyl are printed. Traceability is ensured in different ways. For example,
while extruding treads, the details of stock (like stock code, date and shift of mixing, batch numbers) used for extruding those treads are entered in the traceability register.

CHECKING AND INSPECTION: The activity of inspection covers raw materials, process parameters, in – process materials and finished goods. Inspection is done to ensure that the materials, equipment and storage area are free from any contamination. Proper identification of the materials, FIFO (first in first out), ageing (minimum and maximum), and test status (whether the material is tested and cleared, or is pending for test or is it rejected after testing) are checked. Dimension checking is done during in – process operations. Visual checking is done on in – process materials for defects like cured lumps, air traps, wrinkles, improper cutting etc. process parameters like temperature, pressure, water flow etc are also checked. Visual inspection of finished product is carried out by production department.

CONTROL OF NON- CONFIRMING PRODUCTS: During the processing, if any non-conformance is noticed in the product, it is held with a NCM (Non-Conforming Material) tag, which is filled up in duplicate with details like the material that has been held, size/ code, defect, quality held and the location where the material is kept. It has separate space for writing down the disposal and also the disposal follow up.

CORRECTIVE AND PREVENTIVE ACTION: Corrective is a required action when a non-conformity is noticed either in process or product, immediate corrective action is taken to rectify the defect, so that the process or product is not affected any further. Preventive action is required when recurring non conformities which are noticed, in process by production, quality, technical or engineering are taken up for discussion in the weekly QA( Quality Assurance) meeting to initiate preventive action in consultation with the concerned departments. In case of occurrence of non-conforming process or product due to operational lapse, the concerned people are trained. In other cases, the proposed preventive action is recorded in the minutes of the meeting and the responsibility of implementing is assigned to the concerned departmental person as decided in the meeting. This is followed up in the subsequent meetings and reviewed for its effectiveness. If the preventive action calls for a change in procedure or work instructions, this is discussed in the weekly Quality Assurance Meeting and a joint decision is taken by the departmental heads.

Human resource management perceives organizations in their totality. Every organization requires many things in order to be effective for producing the product or service, financial resources, away of marketing whatever product or service is created by human resource. People are the real assets of an organization. Without human beings the organization cannot attain any progress. The production, technology, financing and customer connection can all be copied easily. But every organization must find effective way to attract, retain and motivate employees.

FIG 2.7

The Board of Directors, Plant Manager and the HR Manager will decide the number of employees required, their qualification, method of requirement, remuneration etc. RECRUITMENT AND SELECTION
It is one of the main functions of HR department. In the case of management staff, the functions of recruitment, selection and placement is done by corporate HR department. Induction and orientation is given by plant HR. this is to align the objectives and the 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 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. Workers are selected at 100% merit basis. Experience is considered as an additional qualification. MRF provides the tradition of selecting the relatives of the existing employees wherever a vacancy arises provided the relative is fit and suitable for the job. 1. Application Blank

2. Antecedent Verification
3. Medical Checkup
4. Blood Group Testing
5. Reference Letter
6. Recommendation Letter
7. Selection List
8. Physical Examination
9. Selection Interview
10. Appointment

A program of training and development is important as it lends stability and flexibility to an organization, besides contributing to its capacity to grow. It is essential to help in developing skills and updating knowledge. Especially in a cut- throat world, an organization must commit resource in employee training and development if it has to maintain a viable knowledge work force.

The plant Human Resource Department maintains records of education, experience and training of all personnel. The plant HRD sends competency evaluation forms to all department heads once a year. The significant aspects in each job which affects product quality are identified in various work centers and the significant jobs are listed out. The Department Heads along with the section heads determine the necessary competence required for personnel whose work affects product quality. The competencies of those who perform significant jobs are evaluated and the area in which training is to be imparted is determined for those who fall below the required competency level. These details are sent back to the HRD by concerned department Heads. HRD consolidates the training requirements and a training calendar is prepared.

For external training programs wherever required plant sends the details to corporate functional heads for approval and corporate HR arranges the approved training programs. Internal training programs are conducted with either internal or external faculties. Training programs are conducted in accordance with the identified training needs of the employees and also the company needs (wherever required). Training details are recorded in the training register. The details of the training program attended by each employee are entered in the data base after the training program. Wherever feasible, pre training and post training tests are conducted to evaluate the effectiveness of the training programs. Wherever pre training and post training are not feasible, training evaluation forms are filled by the participants and sent to plant HR/Corp.HR. New entrants are given orientation training as per the orientation schedule. Monthly reports of the training activities are sent to Corporate HR.

The various modes of training are as follows:
a. Knowledge Based training
b. Skill based Training (On –the- job and Off- the- job)

The methods used in Knowledge Based Training or conceptual training are total Productive Maintenance (TPM) and ISO 9000 to ensure quality to both products and employees. At the same time, Skill Based Training includes mainly Technical Training. On- the -job training is usually meant for the men at work place as well as supervisors. It includes activities, assignments, operations, machinery etc. Off- the- job training is usually given to employees from General Manager to workmen. Off –the- job training consists of class room classes, training, quality training, meetings, behavior based training, external training.

The wages of the workmen is fixed based on the long term agreement. It is paid to the workmen based on the work done on each day as a piece rate system. The work done on each day is recorded in work sheets and it is routed through time office to the accounts section where wages to be paid are calculated and paid. The wages to be paid for the casual workmen is fixed and revised from time to time. In the case of management staff, salary is fixed by the corporate HRD. The plant HRD coordinates the periodic appraisal of performance which is the basis for salary revision. The salary for the staff is paid on the basis of attendance and this is monitored by time office which is a function of HRD. The time office does the functions of time keeping, attendance monitoring and up keep of leave records.

Performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in their allotted work and is treated properly by giving Dearness Allowance, Fringe Benefits, Bonuses and other payments according to the rules and regulations of the company. According to the seniority and performance, an employee gets a shift in his position in the same hierarchy. It depends upon the parameters such as seniority, merit and the suitability of the job. The performance appraisal is done on weekly, monthly, half yearly and yearly basis.

The company has very good 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. The local leaders of the trade union are the Secretary, Treasurer and a 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 HR with the help of Industrial Engineers and other departments involved.

Absenteeism is dealt in MRF in a very strict manner. An employee who absents himself regularly is first called and advised to improve the attendance. After that if he is not improving, a show cause notice issued and asked for written explanation, which has to be submitted within 48 hours of notice. If he still continuous to be absent, he is issued a first warning, then a second warning. After this he will be suspended and if he still has not changed, he will be terminated. This principle is applicable to all the employees who are irregular and who violate the rules and regulations of the company. The procedure of this rule is descriptive. Employees, who are absent regularly, would be given a show cause notice. A charge sheet is issued upon the receipt of unsatisfactory reply to the show cause notice. A domestic enquiry is also issued. By this procedure, the absentees and those who violate the rules and regulations are made to understand the situation that led them to this conduct. The second show cause notice is issued for the employees to present reasons. If he/she fails to state a convincing reason, then he/she would be suspended or even dismissed from the company. These rules are common for all the employees who are trying to falsify the record or status of the company. The dismissed employee is considered in the case of an assault or making the person a criminal.

The welfare of labour is the statutory code which is controlled by the Factories Act for the benefit of the employees within the industrial system. Sometimes the living and cultural condition of the employees beyond which is required by the law, keeping in par with the customs of the industry and the conditions of the market. Labour welfare aims at providing the physical, psychological and general well-being of the work population. The welfare officer carries out all the functions and activities related to labour welfare and take care of the physical and general well-being of the employees.

The main functions of the Welfare Officer are as follows:
The welfare officer helps to maintain a harmonious relationship between the factory management and the workers by establishing contact and holding consultations. To notice the grievance of the workers to the management and act as a Liaison officer between the management and the labour.

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 are also provided. Workers in the factory are provided with safety gloves, shoes, masks for the
accident free working environment.

Every employee and his family members are covered under some or other Health Scheme based on the wage the moment if it is below Rs.7500/-they 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 Accident. WORKING HOURS

The working hours in MRF are divided into 4 shifts, the time allotted to each shift is mentioned under:-

General shift -8.00am to 4.30pm
First shift -7.00am to 3.00pm
Second shift -3.00pm to 11.00am
Third shift -11.00pm to 7.00am

Finance is the life blood of every organization. According to J.F. Brodley “Financial management is the area of business management devoted to a judicious use of capital and careful selection of the source of capital in order to enable a business firm to move in the direction of reaching its goals”. A firm cannot sustain in the absence of an efficient financial department.

Plant account manager is in full charge of various activities done by the accounts department. He verifies the various functions done in each section. He takes decision for maximizing the profit and minimizing the expenses. He makes an important decision. This department keeps accounts of all the financial transactions of the company. The accounting period of MRF is from October 1st of one year to September 31st of the next year. MRF has a fully computerized accounting of production unit starting from the issue of goods received to the final documentation is computerized. Funds obtained for capital structuring for both internal and external sources. The internal sources include capital reserved debentures; shareholders etc. and the external sources include banks such as SBI, Canara Bank etc. the strategy that the company has adopted is to go for credit transactions and payment will be made within one month time. All the costing taxation, salaries and wages, fringe benefits turnover details etc are computed and posted by the raw materials stores, engineering stores, shipping departments and engineering departments. Wages, fringe benefits turnover details etc are computed and posted by the raw materials stores, engineering stores, shipping departments and engineering departments.

FIG 2.8

This branch deals with all types of cash payments and receipts. This will include payment for engineering and raw material purchase, petty cash payments, operation and reconciliation of bank accounts, payment 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 employee, freight payments, payment in lieu of travel bill of employees, canteen expenses, payment to contractors, payment of leave travel allowance, medical re-imbursement etc. cash receipts in the case of scrap sales and any other cash receipt will also come under this branch of accounts.

[Rs in crore]
Other Income
Total Income
Profit Before Taxation
Provision for Taxation
Profit after Taxation
Share Capital
Net Worth
Fixed Assets Gross

This branch deals with forecasting, budgeting, analyzing and re-porting the income and expenditure of the company. The budget for expenditure is prepared using standard costing principles and it is com-pared with the actual expenditure. Any variation from the budget (whether positive or negative) is analyzed to find the exact reason and it is reported to the top management.

Computation of wages and salaries is done by this section of accounts departments. 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.

All matters related to sales tax are handled by this section. Monthly returns for sales tax are filed on behalf of sales depots. VAT (Value Added Tax) system has been introduced and all matters related to this are also looked after by this branch of accounts. “C” forms are issued for purchases from outside the state and “F” forms are issued for receipt of goods from depots.

Quality is considered as 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 also many other relevant entities such as process, systems, people and organization. When a person buys our product, he has certain expectations. These are determined by several factors and it de-pends on the intended use of the product. The expectations can be performance, price, dependability, consistency of performance etc. If the product fulfills the customer’s expectations when it is used, he will be pleased with tile product and will say that product is of good quality. If his expectations are not met he will say that the product is of low quality.

FIG 2.10

The quality system requirements of the customers are collected and all efforts are taken to ensure that the requirements are met. This is done by employing statistical process control techniques and by training the operators. The different functions of quality assurance department are as follows: → To process audit and final product inspection

→ To improve the profitability of the company by reducing defects and waste generation → To materialize the document called Basic standard practice, which says how the process is to be carried out, what are the ‘do’s and ‘don’t’s of each process etc → Whenever a process or product does not meet the specifications, the process is stopped and the defective products are kept held using a tag called the NCM (Non-Conforming Material) tag → To check whether the process is carried out in concurrence with the laid down specifications and the basic standard practice → The performance of the product are recorded and monitored on a daily basis so that any abnormal deviation can be easily detected and attacked → To initiate studies for implementing new systems and procedures on the principle of continuous improvement. FMEA (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 → Whenever a tool change is done, the relevant parameters are checked by quality Assurance and certification is done before the commencement of production → Whenever a new machinery is installed, QA carries out the process of industrialization of machinery, in collaboration with engineering and technical department → Audits on suppliers and outside godowns are conducted periodically to ensure that the materials procured are of the required quality and also ensure that they are stored in the manner that does not give room for any determination → Slow moving and non-moving items are tracked at regular intervals to avoid the material getting deteriorated due to prolonged storage and to avoid producing material which is not needed in the market.

The functions of Engineering Department are divided into mechanical, electrical, instrumentation, civil and environmental engineer-ing. The main functions are new machinery layout preparation, erection and commissioning of new machinery, preventive maintenance, breakdown maintenance, condition monitoring and overhauling of machinery and other related equipment’s. Erection, commissioning, operation and maintenance of utility items, generators, boilers, compressors, pumps, freezer lines and cooling towers and maintenance of material handling systems are done by engineering departments. The maintenance of equipment’s at pump house and allocation of training centers are also done.

FIG 2.11


1. Preventive Maintenance
All equipment’s that need preventive maintenance are listed out. It is ensured that the 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. Preventive maintenance schedule for the particular week is taken and the necessary materials, tools, manpower and spares are arranged. The necessary clearances are obtained from planning and production of equipment’s and the machine is released for maintenance. The schedule maintenance activities are carried out based on work instructions and experience. Then the machine is checked and handed over to production. Based on the number and nature of breakdowns in each machine during the year, the preventive maintenance schedule reviewed and a new schedule is prepared for the next year.

2. Breakdown Maintenance

The defective machinery is identified either by production or by engineering and a maintenance request is generated. In case of production detecting the flow, production raises the maintenance request and in the case of engineering detecting the flow, engineering raises the maintenance request and arranges for the tools, maintenance personnel and spare parts. Then the machine is released for the maintenance. The required maintenance jobs are carried out and the machine is thoroughly checked. If the maintenance is done, then the machine is handed over to the production. Otherwise the necessary rectifications are done again. Every month, down time analysis is done and permanent corrective actions are initiated in the case of recurring failures.

MRF Limited is the leading tyre manufacturing company in India which has
exports over 75 countries across the world

MRF makes tyres for heavy duty trucks, bus, light truck, passenger car to motor cars, rally cars, off the road earth movers, two and three wheelers, farm service and military service

Talking about the findings on the infrastructure of the manufacturing plant in Kottayam, there is good working environment for the employees

The usage of modern and updated technology, in the field of production process gives a cutting edge to the modernization of the company

The improved quality standards of the company show a tremendous achievement in the tyre industry

All departments are well structured

Good working environment for employees

Team effort and honesty in their strength

Health and safety of employees are given importance

Training programmes and meetings are held subsequently

The present strategies of the company in various segments should be improvised especially in the case of setting up a marketing development in the unit

The company should maintain better tie ups with the dealers and subsidiary institutions

More attractive advertisements in media would help in marketing

The company website should be updated often

Motivational incentives should be given to the best performers in the organization as it could be the best way to do performance appraisal to figure out if more productivity of the work is being performed

It is better to provide a collaborative system and approach to the current limitations of the work methods and need to support track and achieve the revision work

It is better to diversify MRF products to avoid the limitations of current exports


MRF has been the potential market leader and the trend setter in the tyre industry for the last 21 years inspite of the emergence of competitors and their competition. The company has a considerable lead over the arch rivals in the tyre market but has a stiff competition from the other global players. The clinical performance of the company is only because of the combined efforts of management and its employees. MRF has been successful in providing high quality and technology superior products to the customers. Being driven by technology and product innovation, every tyre that comes out is of the highest standards and tested to the toughest conditions to take on any role. Hence it is clearly visible that the company is in the forefront of the tyre industry and hope that it is going to continue the same impact in each segment of the tyre industry for a long time. The organizational study at MRF Limited, Kottayam, which helped me in gaining awareness of the functioning of different department in the unit and give an outlook of the various modes of work being performed at managerial level, middle level and at the bottom level of the organization. The study has helped me to get a clear picture of the objectives and policies of the company and the mission of MRF and that is to maintain market leadership in the long run.

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