A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

INDUSTRY PROFILE:

The Indian auto-components industry has experienced healthy growth over the last few years.
Some of the factors attributable to this include: a buoyant end-user market, improved consumer
sentiment and return of adequate liquidity in the financial system.
The auto-components industry accounts for almost seven per cent of Indias Gross Domestic
Product (GDP) and employs as many as 19 million people, both directly and indirectly. A stable
government framework, increased purchasing power, large domestic market, and an ever
increasing development in infrastructure have made India a favourable destination for
investment.The Indian auto-components industry has experienced healthy growth over the last
few years. This industry remains one the fastest growing segments in Indias manufacturing
sector. As far as investments are concerned, the Government of India continues to encourage
foreign investments in the sector. Some policy initiatives include automatic approval for foreign
equity investment up to 100% for manufacture of automobiles and components, delicensing the
industry and allowing free imports of auto components.As indicated earlier, the auto component
suppliers are emerging as systems suppliers with capacity to design and develop critical parts.
The Indian automobile components industry has, no doubt, significant cost advantages, primarily
due to lower labour cost (about one-fifteenth of Japanese cost). The large labour cost advantage
translates into an overall cost advantage of 20-30% over the Japanese producers, despite lower
labourproductivity.The improved quality of vehicles and extended warranties offered by the
vehicle manufacturers has helped the existence of a huge secondary market in India. The Indian
auto-components industry can be broadly classified into the organised and unorganised sectors.
The organised sector caters to the Original Equipment Manufacturers (OEMs) and consists of
high-value precision instruments while the unorganised sector comprises low-valued products
and caters mostly to the aftermarket category.Automobile& Auto Components Policy 2015-20
aims to generate new employment opportunities for at least 2 lakh people and attract new
investments of at least Rs. 20,000 crore in this sector by 2020. The global economic uncertainties
and domestic monetary tightening measures have built up a near term negative sentiment for the
Indian auto component industry. However the long term prospects of the industry are definitely
perceived as a huge opportunity area. The cyclical nature of the automotive industry over several
decades has helped hone the survival skills of the industry. But this survival instinct is being put
to test because new strategies and skill sets are required to mitigate the current challenges.The
industry, over the years, has developed the capability of manufacturing all components required
to manufacture vehicles, which is evident from the high levels of indigenization / localization
achieved in the vehicle industry as well as the components developed for the completely Indian
made vehicles like the Tata Indica, Tata Indigo, Mahindra Scorpio, Bajaj Pulsar etc. The
component industry has now holistic capability to manufacture the entire range of auto-
components e.g. Engine parts, Drive, Transmission Parts, Suspension & Braking Parts,
Electricals, Body and Chassis Parts, Equipment etc. Indian auto component industry can be
broadly segmented into six major segments. Engine and drive transmission parts together
contribute about 50 per cent of the auto component industry production. Engine parts, which
constitute 31 per cent of the production, mainly comprise of pistons, engine valves, carburettors,
fuel injection systems, camshafts, crankshafts and cooling systems. Drive transmission parts,
which constitute 19 per cent of the total production, include axle assembly, steering parts and

KSSEM Page 1
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

clutch assembly (Figure 6). The domestic auto components industry consists mostly of
unorganized players, who are largely small and North America, 8% Asia, 54% Others, 2%
Europe, 36% Source: ACMA Figure 4: Auto component imports - source locations FY11 (% of
total) Aftermarket 17% Exports 11% OEM 72% OEM SEGMENTWISE OFFTAKE CVs &
Tractors, 27% 2&3 Wheeler 20% Cars & UV, 53% Source: CRISIL Research Figure 5: Auto
component industry End user segments (FY11) 4 Tata Strategic Management Group medium
enterprises. However, it is the organized segment that contributes about 72 per cent of the
industrys total revenues. About 619 organized players are registered with the Auto Component
Manufacturers Association (ACMA).The Indian auto components industry is ancillary to the
automobile industry. Demand swings in any of the auto segments (Commercial vehicles, cars,
two-wheelers) have an impact on the auto ancillary demand. Indian Auto Component Industry is
transforming itself from a low-volume, highly fragmented one into a competitive industry
backed by strengths like technology, efficiency and evolving value chain. The industry mainly
caters to 2 segments (1) Original Equipment manufacturers (OEM) and (2) Replacement
market (Aftermarket). OEM dominates the auto component market contributing around 80 per
cent while the replacement market share is around 20 per cent. The auto component sector is
largely unorganized with about 10,000 players operating in the unorganized market. There are
about 700 players in the organized market as of 2015. The demand from replacement market is
low, owing to the high cost of genuine component parts. Unorganized players mainly dominated
the replacement market, which were mostly Tier 3/4 component manufacturers. However, in
terms of turnover, organized market holds about 85% share. The Indian auto component industry
is a highly fragmented industry and was estimated to be valued at around Rs.2.6 trillion (USD 39
billion) in FY16. This industry has witnessed growth of 8.6% on y-o-y basis and contributes to
2.3% to Indias Gross Domestic Product (GDP). The industry is in a stage of transformation and
the entry of new players in last few years has led to surge in the auto component industry.
The automobile as we know it was not invented in a single day by a single inventor .the history of the
automobile reflects an evolution that took place worldwide it is estimated that over 100,000 patents
created the modern automobile .however ,we can point to the many first that occurred along the
way.Several Italians recorded designs for wind driven vehicles.

The automobiles industry,now a 100years old,is often regarded as the main engine of the industrial
growth of the 20th century it effects on urban life and the environment as a evident everywhere the
industry is a complex and ever changing system of manufacturing, sub-contractor and alliances and
together, both suppliers and assembles are a principal source of wealth and employers in the industrialized
economies its production techniqus and in a particular the assembly line, have had profound influence on
the organization and technology of other industry and services

Automobile industry, the business of producing and selling self-powered vehicles, including passenger
cars,truks,farm equipment and others commercial vehicles by allowing consumers to commute long
distance for a work shopping, and entertainment,the auto industry has encouraged and the development of
an extensive road system and made a possible the growth of suburbs and shopping centers around a major
cities, and the played a key role in the growth of ancillary industries, such as the oil and travel businesses
the auto industry has become one of the largest purchases of many key industrial products such as
steelThe spare parts for automotive market is a market on which thousand of firms are activating. Auto
spare part dealers hold about three-quarters of the value of sales of the spare parts estimated2 for 2008-
2010 (the dealers share is rising up from year to year). A total of 11 traders were holding in 2010, almost

KSSEM Page 2
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

one third of the turnover estimated for the entire market (rising up from one quarter, in 2008). However,
after application of Herfindahl-Hirschman Index, which is measuring the market concentration, it was
shown that the spare parts market is weakly concentrated. Based on 23 known market shares (of the
largest traders and dealers in the market) and the (very relaxed) hypothesis that the rest of the firms are
holding less than 5% market shares, an upper limit of the HHI was estimated. For each of the three years
(2008, 2009 and 2010) an upper limit of the HH Index below 500 resulted. It is worth mentioning that this
degree of concentration is estimated for the entire market. In a particular case, given the criteria for
defining the relevant market (segmentation of the spare parts in original and non-original parts, as well as
their sub segmentation according to the car brand) and given that a replacement part is in itself a distinct
market, not being interchangeable with another, the market shares can differ significantly (e.g., if parts
have visible3 origin, for which legal protection is granted under the patents law on models and drawings,
monopoles can exist.).The Indian auto-components industry is growing at a healthy in the last few years
owing to a buoyant end-user market, improved consumer sentiment and return of adequate liquidity in the
financial system. The market size for auto component sector increased by 9.7% to US$38.5 billion in
FY15 and is expected to reach US$66 billion in FY16 and as much as US$115 billion by FY21, backed
by strong exports ranging between US$80-US$100 billion by 2026. The auto-component industry is set to
become the third largest in the world by 2025. The Indian auto-components industry can be classified into
organised and unorganised sectors. The organised sector caters to the OEMs and consists of high-value
precision instruments, while the unorganised sector comprises low-valued products and caters mostly to
the aftermarket category. India today offers quality production and sourcing network for all types of auto
components and sub assemblies including engine parts, drive transmission & steering parts, suspension
and braking parts, body & chassis, electrical parts, and other auto components and accessories

2.1 ORGANIZATION PROFILE:

BACKGROUND:

Sup ramindustries is established in the year 1994 in Bangalore, promoted by Narayanaprasanna.

Sup ram industries believe in offering the best products to the customers and give
100 percent satisfaction level

The company guarantees prompt services and international standard quality level so as
to exceed the expectations of the company

The company has a belief in excellence and is dedicated to providing outstanding

quality in its services

Sup ram industries endeavor to be responsive to the needs of the clients and innovation
in new ideas with improved process and production facilities

They adopt an open management style to foster an environment of enthusiasm within the
organization , which believe enhances the quality of services to the customers.

Spare Part Sales Management

KSSEM Page 3
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

This functionality allows for you to automatically and/or manually create sales orders. Along
with that, you may even choose to manage prepayment actions, and sell not just stock, but non-
stock spare parts as well. Spare parts can also be transferred between different locations, and
price policies for customers can be set. To serve your clients better, you may even create spare

Series 1
3
Series 2
Series 3
2

0
Category 1 Category 2 Category 3 Category 4
part
sales agreements with them

Non-stock Item Management

Through the vendor catalogue integration feature, you can easily prevent overloading the
warehouse with spare parts that are not required, or unnecessary. All the parts that you sell, but
do not have stored in the inventory can be registered. You can also set prices for sales and
purchase, whereas non-stock items and their discounts can also be managed.

Spare Part Booking

All existing and future inventory can be allocated to a specific sales order line. This way,
inventory items will be prevented against being used for other purposes. You can automate the
entire item reservation process. Items can also be reserved manually to gain full ownership and
responsibility for the inventory that has been reserved.

Spare Part Item Substitution

Each spare part can have one or many substituted items. Use this functionality to increase sales
and to a void lost sales. Item of substitution can be a similar spare part but delivered from other

KSSEM Page 4
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

vendor or it can be a spare part with the same characteristics. Link main spare part with items
valid for substitution and allow this functionality in your service, spare part trade, in web shop or
for mobile sales force.

Spare Part Purchase

The purchasing module allows all users through the system to register their individual needs,
while concentrating this information to the central procurement. The feature acquires records via
different system users, departments and locations, and stores them centrally. This includes users
like spare part sales managers and service managers etc. This information can then be used by
purchase managers to designate best orderings or to attain special pricing from vendors. This
particular module additionally comes with acceptance functionalities for instances when it is
vital for purchase documents to be accepted by the higher management prior to being released.

2.1 NATURE OF BUSINESS:

Efficiency factory : improve labor productivity ,labor flexibility, and capital efficiency
Resource availability : quality manpower availability, infrastructure improvements, and
raw material availability
Effective cost controls :close relationship with supplies and goods distribution channels
Establishment of export markets :growth of export markets
Having an extensive distribution /collection network :goods distribution channels
Successful industrial relations policy :ethical and tactical industrial relations
Access to the available and most efficient technology and techniques :the degree of
investment in technological improvements and product development
Optimum capacity utilization :the level of plant utilization
Similar to the invention of the airplane, the emergence of automobiles has had a profound
effect on our everyday lives.
The auto manufacturing industry is considered to be highly capital and labor intensive.
The major osts for producing and selling automobiles include:
Labor - While machines and robots are playing a greater role in manufacturing vehicles,
there are still substantial labor costs in designing and engineering automobiles.
Materials - Everything from steel, aluminum, dashboards, seats, tires, etc. are purchased
from suppliers.
Advertising - Each year automakers spend billions on print and broadcast advertising;
furthermore, they spent large amounts of money on market research to anticipate
consumer trends and preferences

KSSEM Page 5
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

India exports of auto components increased at a 11.31 percent , during FY09-FY16, with
the valve of auto component exports increasing from USS 5.1 billion in FY09 TO USS
10.8 billion in FY16.

The auto market is thought to be made primarily of automakers, but auto parts
makesupanotherlucrative sector of the market. The major areas of auto parts manufacturing are:

Original Equipment Manufacturers (OEMs) - The big auto manufacturers do produce

some of their own parts, but they can't produce every part and component that goes into a
new vehicle. Companies in this industry manufacture everything from door handles to
seats.
Replacement Parts Production and Distribution - These are the parts that are replaced
after the purchase of a vehicle. Air filters, oil filers and replacement lights are examples
of products from this area of the sector.

Spare parts Management plays an important role in achieving the desired plant availability at an
optimum cost. Presently, the industries are going for capital intensive, mass production oriented
and sophisticated technology. The downtime for such plant and machinery is prohibitively
expensive. It has been observed in many industries that the non-availability of spare parts, as and
when required for repairs, contributes to as much as 50% of the total down time. Also, the cost of
spare parts is more than 50% of the total maintenance cost in the industry. It is a paradox to note
that the maintenance department is complaining of the non-availability of the spare parts to meet
their requirement and finance department is facing the problem of increasing locked up capital in
spare parts inventory. This amply signifies the vital importance of spare parts management in any
organisation. The unique problems faced by the organisation in controlling/managing the spare
parts are as follows.Firstly, there is an element of uncertainty as to when a part is required and
also the quantity of its requirement. This is due to the fact that the failure of a component, either
due to wearing out or due to other reasons, can not be predicted accurately. Secondly, spare parts
are not that easily available in the market as they are not fast moving items. The original
equipment manufacturer has to supply the spares in most of the cases. New models are
introduced to incorporate the design improvements and old models are phased out. Hence the
spares for old models are not readily available. Particularly, this is more so in case of imported
equipment as the design changes are taking place faster in the developed countries. Thirdly, the
number and variety of spare parts are too large making the close control more and more tedious.
For instance, the number of items of spares in a medium scale engineering industry may be
around 15,000 and that in a large scale chemical industry may be around 100,000. Fourthly, there
is a tendency from the stage of purchase of the equipment to the stage of the use of the spare
parts, to requisition spare parts more number than that are actually required and accumulation of

KSSEM Page 6
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

spares takes place. Finally, the rate of consumption of spare parts for some are very high and for
some are very low. These problems are to be faced by systematic spare parts management. The
objective of spare parts management is to ensure the availability of spares for maintenance and
repairs of the plant and machinery as and when required at an optimum cost. Also, the spares
should be of right quality. There are many actions required to ensure the spare parts management
effective. There is a need for systematic actions while managing spare parts as given below: a.
Identification of spare parts
Forecasting of spare parts requirement c. Inventory analyses d. Formulation of selective control
policies for various categories e. Development of inventory control systems f. Stocking policies
for capital & insurance spares g. Stocking policies for rotable spares or sub- assemblies h.
Replacement policies for spare parts i. Spare parts inspection j. Indigenisation of spares k.
Reconditioning of spare parts l. Establishment of spare parts bank m. Computer applications for
spare parts management. Every organisation should proceed systematically and establish an
effective spare parts management system. Codification helps the organisation minimizing
duplication of spare parts stocking thereby reducing inventory, aids the accounting process and
facilitates the computerisation of spare parts control systems. The inventory analyses carried out
on the basis of different characteristics of the spare parts, such as annual consumption value,
criticality, lead time, unit cost and the frequency of use, help the company in establishing suitable
policies for selective control. This also helps in focusing our efforts on real problem areas. A
good inventory control system will help systemizing the ordering procedure and also achieving
an optimum level of inventory. In addition, selectively efforts should be made to evolve optimum
replacement policies for selected spare parts, for which cost of down time and cost of
replacement are very high. So, we have to identify such spare parts and carry out the exercise for
evolving optimum replacement policies. For the spare parts which are very expensive and those
which are to be imported, it is essential that the useful life for such spares is extended by
appropriate applications of reconditioning and repair techniques. Also, efforts should be made to
indigenise the spare parts in view of the hard-to-get foreign exchange involvement. Also, for
similar industries establishing of spare parts bank goes a long way in reducing the total inventory
holding of the expensive spare parts and also reduces the stock holding cost. For different
industries, it will be helpful to establish spare parts banks and a suitable information system for
the exchange of spares. Lately, the application of computers for the processing maintenance
engineering and management will ensure timely actions for an efficient and effective spare parts
management. IDENTIFICATION OF SPARE PARTS When a spare part is required to put back
in operation an equipment which is under breakdown, it becomes necessary to identify the part
for getting the same issued from the store or for purchasing the same from the vendor. While
identifying it becomes essential to give the complete description including the size and type of
the spare to draw from the stores and it becomes essential for all concerned ie., the maintenance
personnel and stores personnel are aware of such description. If it is the vendor, he may not be
satisfied with the description and he may also require the manufacturer's part number. It is a
cumbersome and time consuming task during every transaction to identify a spare part by its

KSSEM Page 7
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

description and manufacturer's part number accompanied by the parent equipment's name, make
and model designation. Therefore, it is essential to give a numerical name or code to each spare
part. This process of giving code to each spare part is called codification. Since, the range of
spares used in any organisation is too large and there are quite a few spares meant for specific
equipment, it is always preferred to use codes which are significant ie., from the code number
one will be able to find out - the equipment type, make & model - the type/class of the spare-part
- the size (in some cases) If the spare part code is to incorporate the equipment type etc., then the
codification of equipment becomes a prerequisite for spare part codification. The number of
digits required for spare part code depends on the actual requirement ie., the range of equipment
in use and the types and number of spare parts in the organisation. It is very common to come
across 9 to 16 digit codes for spare parts. For instance, a 10-digit code may signify, 1st digit -
imported or indigenous 2nd, 3rd & 4th digits - machine type, make & model 5th, 6th & 7th digits
- spare-part class 8th, 9th & 10th digits - size or serial number. By classifying and codifying all
the spare parts, it becomes easy to minimize the duplication of spare parts thereby effecting
reduction in the inventory. Codification also helps easy accounting and computerisation in
addition to easier communication between concerned parties. In addition to codimaintenance
engineering and management should be made aware of and should be supplied with the relevant
codes and stock location numbers in the form of a spare parts catalogue. The spare parts
catalogue should contain the following information: Spare parts codification plan Spare part code
Spare part description Drawing number Manufacturer's code & part number Stock location
number. The spare parts catalogue may be produced in sufficient copies so as to make available
for all the users such as the maintenance personnel, stores personnel and purchase personnel.
This is a very important aspect often neglected in the organisation. The next step in identification
of spare parts is to put an identification tag or mark with the code to enable the stores personnel
identify during the time of issue. If sufficient care is not taken to incorporate the code, a lot of
time is spent in locating the part and that time is actually added to the down-time which is really
very expensive in case of vital spare parts. There are a variety of stickers which are scratch-
proof, water-proof and temperature-proof available in the market. Efforts should be made by the
organisations to make use of such identification tags and it will go a long way in reducing the
downtime. INVENTORY ANALYSIS AND SELECTIVE CONTROL For the successful spare
parts management, it is essential to analyze the spare parts inventory based on various
characteristics such as the frequency of issues, the annual consumption value, the criticality, the
lead time and the unit price. This is essential as it would not be possible to exercise the same type
of control for all items and it may not really be effective. Inventory analysis aids selection of
policies for selective control. Commonly used inventory analyses are: (1) FSN Analysis (2) ABC
Analysis (3) VED Analysis (4) SDE Analysis (5) HML Analysis FSN Analysis: Classification
based on Frequency of Issues/Use:- F, S & N stand for Fast moving, Slow moving and Non
moving items. This form of classification identifies the items frequently issued, less frequently
issued for use and the items which are not issued for longer period, say, 2 years. For instance, the
items can be classified as follows: Fast Moving (F) = Items that are frequently issued say more

KSSEM Page 8
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

than once a month.fying the spare part, it will be of immense benefit to codify the location of
spare parts. Stock location number helps the stores personnel to locate the part and issue the
same as and when the same is requisitioned. Also the stock verification and upkeep programme
becomes less and less cumbersome. After codifying the spare parts and assigning stock location
numbers, all the usersof spare parts information and operating an effective spare parts control
system will be very helpful for the organisation and
2.3 VISION:

The vision is to provide best valves and satisfaction to the customer , supplier and
employees by growing the business to new heights through technology and business
process improvements.

They aim to be a leading company in the global markets for the products

To become a leader in the automotive industry by focusing on customers, employees, growth,

innovation and efficiency.

Continuity of our leadership in the sector

- Continuous of our development and follow the Technological Progress
- Produce the best quality with the most competitive prices.
- Continuity of our customer satisfaction and warranty extension.
- Improve a trade identity : Delivery on Time & Product Support after sales.
- Environmental Protection and human health in our production activity.

2.4 MISSION:

Through commitment to people and the society , we provide valves to the customers and
all other stakeholders by providing high end manufacturing solutions by continuous
improvement to the technologies and resources

Core valves
The commitment to customer
Competent suppliers
Competent work force
The social responsibilities
develop ,retain and attract exceptional people
achieve global manufacturing and supply chain excellence
diversify and broaden our customer base
strive for process and product innovation culture

KSSEM Page 9
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

Excellence in manufacturing for customers around the world they provide the best valve to
customer around the world by capitalizing on the technical strengths in power transmission
products and material handing systems
Emphasize on multi products and availability in spare parts business
Maximize operational efficiency by improving resources utilization
Expansion of appropriate supply source
To utilize the full potential of to achieve maximum process efficiency and optimization
Have the right people with adequate skills, knowledge, attitude, and customer orientation.

Continuity of our leadership in the sector

- Continuous of our development and follow the Technological Progress
- Produce the best quality with the most competitive prices.
- Continuity of our customer satisfaction and warranty extension.
- Improve a trade identity : Delivery on Time & Product Support after sales.
- Environmental Protection and human health in our production activity.

Timeless guiding principle

Leadership
Intergrity
Quality and continuous improvement
Customer satisfaction
Grow with partnership
Commitment to client, suppliers and investors
Togetherness in endeavors
A diverse and involved them
Enhancing shareholders valve

2.5 QUALITY POLICY:

As per ISO TS standards the quality of all the products are maintained consistently at every stage
of manufacturing ,thus ,ensuring accuracy towards the specifications of customers. Over a
decade of experience in the manufacturing line has earned us the trust of all the customers solely
by virtue of superior quality ,accuracy of its products and prompt delivery schedules .the
industries

Sup ram industries endeavor to achieve maximum customer satisfaction by supplying

machined and fabricated products which meet or exceed the customers quality
expectations

KSSEM Page 10
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

They believe in surpassing our competitors and always stay ahead by bringing continual
improvement in the quality management system , processes improvement, up- gradation
production facility expertise and innovation at all levels

The products go through testing and inspection at every level by carrying

out agreements made with customers to the letter

by implementing agreed targets for quality throughout the production chain

by delivering products and service promptly as agreed

by fulfilling customer requests quickly and flexibly

by acting on feedback from customers

by fulfilling statutory and regulatory requirements

by ensuring the development of our operations through a process of continuous

improvement

PRODUCT PROFILE:

KSSEM Page 11
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

KSSEM Page 12
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

KSSEM Page 13
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

2.6 ACTIVITIES :

Supplying precision machined parts to aerospace customers

Developing and supplying parts and assemblies to automotive OEMs
Developing sub systems and assemblies to automotive customers

2.7 EXPERTISE

Sheet metal working - stamped parts

Welding and fabricated assemblies both Manual and Robotic
Precision CNC machining
Sub system design and development

2.8 FACILITIES

They design and develop all tools for the customer requirement for all the parts
and sub - system supply requirement , they have been developing , proving and using

Progressive tools for piercing and blanking

Complex forming and bending tools
Machining fixtures for milling , drilling

2.9 CLIENTS

Alstom T and D Ltd

Leeboyindia construction equipment pvt. Ltd
Redlandmotorspvt .Ltd
Commercial vehicle group pvt. Ltd
Hindustan aeronautics Ltd
Autofitpvt Ltd
Harita seating systems Ltd
VST tillers tractors Ltd
Miitsubishi VST diesel engines Pvt Ltd
SKF technologies Ltd
Surin auto Pvt. Ltd
Acer engineering

Manufacturing strategies
Decrease in sales affects entire supply chain
Evolving planning system that addresses changes

KSSEM Page 14
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

Addressing inventory and converting of stock to cash

Identify sub-optimal performance in consumption of material or inefficient processes
De-risking sales is fundamental to operations
Continuous performance improvement in operations by engaging process improvement
teams who work with R and D to make positive changes for cost material utilization
Improve data collection about customer trends,technology improvements and realistic
forecast
Efficient utilization of ERP systems
Production for new markets
Lean manufacturing

2.10 OWNERSHIP PATTERN

Managing Director

HR Accounts Business Purchase

and Finance development and CCD
marketing

Production Quality Stores Maintenance

CCD CCD

2.11 AWARDS AND ACHIEVEMENTS:

1. Best supplier award - 2016.

2. Participated in national and international events.

KSSEM Page 15
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

International appearance for business and self development and looking for good
opportunities for growth.

KSSEM Page 16
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

KSSEM Page 17
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

2.12 FUTURE GROWTH AND ASPECTS

Fuel economy and demand for greater fuel efficiency is a major factor that affects
consumer purchase decision that will bring leading companies across two wheeler
segment to focus on delivering performance oriented products.
Sturdy legal and banking infrastructure.
Increased affordability, heightened demand in the small car segment and the surging
income of the Indian population.
Indian is the third largest investor base in the world.
The government technology modernization fund is concentrating India as an auto-
manufacturing hub.
Availability of inexpensive skilled workers.
Industry is perusing to elevate sale by knocking on doors of women,youth , rural and luxury
segment.

The Indian automobile market is tipped to become the third largest in the world by 2020 according to
estimates by Ernst & Young.

While many of the global OEMs are increasing their designing focus in the Indian market, most of the
new launches in the Indian market are global successful mode.

Automobile sector has been opened up for FDI long back. Daimler BMW etc are all 100% subsidiary of
their parent companies with no local partners.

The global automotive game will be pretty much decided by twin forces for China and India.

India automotive industry is going through the transformation phase. Political stability, new regulations,
increasing competition and rising consumer expectations will shape the way auto manufacturers or
suppliers do their business in India.

The long-term outlook remains positive for strong fundamental reasons such as high GDP growth,
adequate financing availability, higher per capita GDP, decreasing unemployment, increasing disposable
incomes, favorable demographics, and rising consumer expectations.

The new governments efforts to implement a GST, build smart cities, and revive key sectors such as
mining and infrastructure should boost job creation. Other key factors for substantial growth are higher
spending on infrastructure and the governments focus on rural areas.

In fact, we expect the India automotive sales to exceed the US market by mid 2030s

The engineering R&D services market is expected to be on a roll with increasing interest by the global
companies to set up their captive R&D centre in the country.

Automobile industry contributes 4 of the national GDP and accounts for 5 of the industrial output in
India. It is moreover, a major employment generator in the country. The Indian automobile industry
provides employment to around 13 million people directly or indirectly at present, a number that is likely
to double by 2016.

KSSEM Page 18
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

The liberalization policies of government have been one of the biggest factors behind the industry's rapid
growth. Supportive policy measures like relaxation of foreign exchange and equity regulations, reduction
tariffs on imports, and banking liberalization leading to a boom in financing driven purchases and
convenient EMIs have contributed to the present success of the Indian automobile industry.

With a number of foreign brands joining ranks with the domestic manufacturers, the Indian consumer is
now flooded with choice. An average Indian can now select from a wide range of Indian and foreign
products. Some of the major Indian players are MarutiUdyog, Tata Motors, Mahindra, Ashok Leyland,
Hero Honda and Bajaj. Toyota, GM Honda, Daimler Chrysler, Ford, Volvo and Hyundai Suzuki are the
key international players in the Indian Automobile market. However, despite the presence of foreign
brands, the domestic companies are still the biggest players. MarutiUdyog and Tata vehicles share the top
honours for passenger and commercial vehicles respectively.

The ICRA analysis of the Indian market projects heavy growth for competitively priced sports-utility-
vehicles or SUVs and two wheelers. A number of major global brands like Honda, Suzuki, General
Motors and Hyundai have launched their products in the SUV segment of the Indian automobile market.
An average of 11.5% growth in the two-wheelers sales in 2004-2007 has kept a number of global
companies interested in this segment as well. The market has been moreover bolstered by a healthy rise in
the sales of heavy commercial vehicles, and the presence of a strong auto component industry that now
ranks 2nd in the world.

One of the best things to happen for the Indian automobile market in the recent years was its telling
improvement in the export sector. There was a 56% growth in exports from 2003 to 2004. Although
economy cars continue to hold the lion's share of the export market, vehicles worth more than USD 1
billion were also exported in 2004, for the first time in history.

This increasing demand for Indian cars on the foreign shores has helped the country's automobile industry
in two significant ways. First, it has decidedly contributed to the economic growth of the industry.
Secondly, it has helped to improve the image of the Indian manufacturing infrastructure at a global level.
This increased confidence has resulted in more and more foreign brands opening manufacturing units in
India, directly contributing to economy and employment.

The Indian automobile industry is now riding high on success, and the bright picture does tend to obscure
the problems and challenges that lay on the track of its growth. Poor road conditions, heavy pollution and
large scale traffic related accidents are serious impediments in the way of the industry's growth. However,
steps are being initiated by the government to address these problems at various levels, and solutions are
being worked out at a steady pace

KSSEM Page 19
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

MCKENSY 7S FRAMEWORK WITH SPECIAL REFERENCE TO ORGANIZATION UNDER STUDY

The 7s model can be used in a wide variety of situation where an alignment perspective is
useful,forexample,to help you

Improve the performance of a company

Examine the likely effects of future changes within a company
Align departments and processes during a merger or acquisition
Determine how best to implement a proposed strategy

The mckinsey 7s model can be applied to element of a team or a project as well.the alignment issues
apply,regardlessof how you decide to define the scope of the areas you study.

The mckinsey 7s model involves seven interdependent factor which are categorized as hardor
softelement

hard elements are easier to define or identify and management can directly influence them.These are
strategy statement organization charts and reporting lines :and formal processes and IT system

Soft element in the other hand can be more difficult to describe and are less tangible and more
influenced by culture .however ,these soft elements are as important as the hard element if the
organization is going to be successful.

The model is based on the theory that, for an organization to perform well, these seven elements need
to be aligned and mutually reinforcing .so the model can be used to help identify what needs to be
realignment to improve performance , or to maintain alignment(and performance )during other types of
change

KSSEM Page 20
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

KSSEM Page 21
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

McKinsey 7s model is a tool that analysis firms organizational design by looking at 7 key
internal element :strategy,structure,system,sharedvalves,style,staff and skills,in order to identify
if they are effectively aligned and allow organization to achieve its objectives .

The model can be applied to many situation and is a valuable tool when organizational design is
at question .the most common uses of the framework are:

To facilitate organizational change

To help implement new strategy
To identify how each area may change in a future
To facilitate the merger of organizations

Strategy is a plan developed by a firm to achieve sustained competitive advantage and successfully
compete in the market .In general ,a sound strategy is the one that clearly articulated ,is long-term,help
to achieve competitive advantage and is reinforced by strong vision ,mission and values.butits hard to
tell if such strategy is well aligned with other elements when analyzed alone .so the key in 7s model is
not to look at your company to find the great strategy,structure,systems and etc. but to look if its aligned
with other element. For example ,short term strategy is usually a poor choice for a company but if its
aligned with other 6 element ,then it may provide strong results

Structure represents the way business divisions and units are organized and includes the information of
who is accountable to whom.in other words,structure is the organizational chart of the firm.it is also one
of the most visible and east to change elements of the framework

System are the processes the procedures of the company ,which reveal business daily activities and how
decision are made .system are the area of the that determines how business is done and it should be the
main focus for mangers during organizational change

Skills are the abilities that firm employees perform very well.They also include capabilities and
competences.During organizational change ,the question often arises of what skills the company will
really need to reinforce its new strategy or new structure.

Staff element is concerned with what type and how many employees an organization will need and how
they will be recrited,trained,motivated and rewarded

Style represents the way the company is managed by top-level managers, how they interact,what actions
do they take and their symbolic valve.in other words ,it is the management style of companys leaders .

KSSEM Page 22
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

Shared valves are at the core of McKinsey 7s model .they are the norms and standards that guide
employees behaviors and company actions and ,are the foundation of every organization .

1. Evolving industry : Automobiles represent freedom and economic growth. Automobiles

allow people to live, work and travel in ways that were unimaginable a century ago.
Automobiles provides access to markets, to doctors, to jobs. Nearly every automobile trip
ends with either an economic transaction or some other benefit to the quality of life.

2. Continuous product innovation & technological advancement : With the advent of E-

vehicles & alternative fuel such as Shell gas, CNG and others, Automobile Companies
are increasing R & D expenditure to drive the next phase of growth through use of
renewable sources of energy which may be solar, wind etc.

3. Growth shifting to Asian markets : Although American & European market is the pulse
of this Industry, but the focus is shifting to developing markets like China, India & other
Asian nations because of the rise in disposable income, changing lifestyle & stable
economic conditions.

4. Increasing demand of VFM vehicles : Intense competition in the matured/developed

markets has forced automobile manufacturers to target developing economies. But these
developing economies have high demand for VFM products (value for money). In the
automobile industry, VFM products would be fuel efficient, high mileage vehicles
because majority of customers in these nations prefer vehicles for commuting. On the
other hand, developed nations need is of vehicles for interstate travelling, and high speed
vehicles suitable for long route with high engine power.

5. Increase in demand of luxury commercial vehicles : Companies like VOLVO,

Daimler/Chrysler, Bharat Benz are betting high & are targeting the developing nations
due to increase in demand of Luxury public transportation system.

6. Manufacturing facilities in Asian nations to control cost : In order to control cost & to
manage shrinking margins automobile companies like Harley, Volvo, Bharat benz etc. are
building their manufacturing facilities in developing nations like India, China because
these nations have cheap workforce, are high in resources & are nearer to developed
economies. These are classic conditions of an emerging market.Have many return
customers

7. Customer satisfaction - customers do say they like the service and give positive word of
mouth by recommending grooming services to others

8. Do get some walk-in business

KSSEM Page 23
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

9. Mobile grooming van has eye-catching logo and gives some exposure when performing
on-site services

10.

Weaknesses in the SWOT analysis of Automobile industry

1. Cars recalled : Controversies relating to recalling vehicles on account of some technical

dis-functionality or non-abidance to govt. led rules is becoming very common.

2. Bargaining power of consumers : Over the last 3-4 decades the automobile market has
shifted from demand to supply market. Availability of large number of variants, Stiff
competition between them, and long list of alternatives to choose from has given power
to customers to choose whatever they like.

3. Growth rate of Automobile industry is the in the hands of the government due to
regulations like excise duty, no entry of outside vehicles in the state, decreasing number
of validity of registration period & volatility in the fuel prices. These factors always
affect the growth of the industry.Don't pay much attention to marketing dependent
on word-of-mouth and website

4. Website purely informational and static

5. Don't have a marketing plan

6. Don't have much of a marketing budget

7.

Opportunities in the SWOT analysis of Automobile industry

1. Introducing fuel-efficient vehicles : Optimization of fuel-driven combustion engines

and cost efficiency programs are good opportunities for the automobile market. Emerging
markets will be the main growth drivers for a long time to come, and hence fuel efficient
cars are the need of the hour.

2. Strategic Alliances : Making strategic alliances can be a smart strategy for Automobile
companies. By using specialized capabilities & partnering with other companies, they can
differentiate their offerings.

3. Changing lifestyle & customer groups : Three powerful forces are rolling the auto
industry. Shift in consumer demand, expanded regulatory requirements for safety and fuel
economy, and the increased availability of data and information. Also with the increase in
nuclear families there has been increase in demand of two-wheelers & compact cars and
this will grow further.

KSSEM Page 24
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

4. Market expansion : Entering new markets like Asian & BRIC nations will result in
upsurge in demand of vehicles. After these markets, other markets are likely to emerge
soon.

5. OEM priorities : Given the increase in electronic content, OEMs need to collaborate
with suppliers and experts outside the traditional auto industry. Accomplishing this will
require changes in the way OEMs function. OEMs will be looking to their top suppliers
to co-invest in new global platforms & this will be the driving force in the future

Threats:

Rising interest rates.

Cut throat competition.
Pressure on prices from OEMs(Original Equipment Manufactures) continues.
Smaller players, who do not upgrade to global standards,wouldget extinct.
Imports from FTA(Foreign Trade Agreements) Regime countries, in certain components
segments are a threats to the local industry.

1. Intense Competition : Presence of such a large number of players in the Automobile

industry results into extensive competition, every company eating into others share
leaving little scope for new players.

2. Volatility in the fuel Prices : At least for the passenger segment fluctuations in the fuel
prices remains the determining factor for its growth. Also government regulations relating
the use of alternative fuels like CNG. Shell gas is also affecting the inventories.

3. Sluggish Economy : Macroeconomic uncertainty, Recession, un-employment etc. are the

economic factors which will daunt the automobile industry for a long period of time.

4. High fixed cost and investment in R &D : Due to the fact that mature markets are
already overcrowded, industry is shifting towards emerging markets by building

KSSEM Page 25
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

facilities, R & D centers in these markets. But the ROI out of these decisions is yet to be
capitalized.

ANALYSIS OF FINANCIAL STATEMENT

Financial statement present a summary of the accounts of the business enterprise to convey an
understanding of financial results and position of a business enterprise .A financial statement is
an organized collection of data according to logical and consistent according procedures .Its
purpose is to convey an understanding of some financial aspects of a business firm .It may show
a position at a moment of time as in case of a balance sheet or may reveal a series of activities
over a given period of time as in case of an income statement Financial statement are
prepared for the purpose of presenting a periodical review or report on the progress by the
management and deals with (a) status of investment in business and (b)results achieved during
the period under review .The term financial statement generally refer to the combination of
balance sheet (also termed as position statement )and income statement (also termed profit and
loss account )the analysis refer to methodical arrangement of data where in the figure contained
in the financial statement are regrouped and the relationship is studied between the component
parts of financial statement .for the purpose of analysis ,the data is sometimes rearranged :the
meaningful relationship are established by comparing the figures of current year with that of the
previous year: or calculating certain ratios, etc. thus the complex and heterogeneous information
contained in financial statement is broken up into simple and valuable information and
significant relationships are established between the element of these financial statement .this is
what we mean by analysis .

Analysis simplifies the heterogeneous data, regroups the figures contained in financial
statement , but the meaning and significant of these simplified figures is explained by
interpretation . It is the process of drawing inferences/ conclusions and explaining the purpose
and the result of analysis .though, both the analysis and interpretation are related to different
aspects , it is difficult to draw a definite line of different between them. Both are complementary
to each other and are interrelated. Analysis is useless without interpretation and the interpretation
is not possible without analysis. Most of the authors have used the Analysis to imply both the
analysis and interpretation.Financial statement analysis is largely a study of relationship among
the various financial factors in a business as disclosed by a single set of statement and a study of
trend of these factors as shown in a series of statement

Broadly , the objective of financial analysis is to understand the financial information contained
in the financial statement in order to identify the strength and weakness of the firm, to make a

KSSEM Page 26
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

forecast about the future and to take decision regarding the operating and financial plans of the
business . The main objective of analysis of financial statement are:

To assess the operating performance (profitability and efficiency) of the business as-a whole and for
different departments and units.

To find out the relative importance and meaning of different element of financial statement

To assess the short-term (liquidity) and long-term financial (solvency) position of the firm

To facilitate relative comparison of various departments and branches of the same firm and various firm
engaged in the same line of business.

To identify the causes and effects of unfavourable change in the various operating and financial
aspects and thereby taking remedial measures for improvement.

March 31st
particulars note no march 31,2016 march 31,2015 2014

1 equity and
capital
1 share holders
fund
(a) share capital 2 679 644 661.5
(b) reserves and 17,954
surplus 3 21,689 14,219
non current
liability
(a) long term 11503.5
borrowings 4 10,688 12,319
other long term 249.5
liability 7 210 287
long term 1756.5
provision 9 1,409 2,104
3 current liabilities
(a) Short-term 5557
borrowings 5 3,352 7,762
(b) Trade payables 11 8,917 8852.65 8884.825
(c) Other current 3705
liabilities 8 4,267 3,143
(d) Short-term 914.29
provisions 10 1215.49 613.09
total 5,242,625 49,943 51186.115
ASSETS
Non-current assets

KSSEM Page 27
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

1 (a) Fixed assets

(i) Tangible assets 12 12,253 12,261 12257
intangible assets 13 3,511 3,523 3517
capital work in 1410
progress 1,470 1,350
intangible assets 4851
under
development 5,011 4,691
non current 16971
investment 14 16,975 16,967
long term loans 2383.5
and advances 16 2,363 2,404
other non current 156.5
assets 18 137 176
current assets
current investment 15 1736 20 878
investors 20 4902 4,802 4852
trade receivable 21 1,568 1,114 1341
cash and bank 698.5
balance 22 452 945
short term loans 1684
and advance 17 1,794 1,574
other current 5978
assets 19 253 11,703
total 5,242,625 49,943 56977.5

RATIO ANALYSIS:
Current ratio:
Current ratio = current assets / current liabilities
YEAR CURRENT CURRENT CURRENT
ASSETS LIABILITIES RATIO
2015 8572.97 20370.63 0.42
2016 10705.91 17751.06 0.60

KSSEM Page 28
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

4.5

3.5

2.5
current ratio
2

1.5

0.5

0
2015 2016

QUICK RATIO:
Quick ratio = quick assets / current liabilities.

year Quick assets Current liabilities Quick ratio

2015 8572.97 20370.63 0.42
2016 10705.91 17751.06 0.60

KSSEM Page 29
 A STUDY OF ORGANIZATION AT SUPRAM INDUSTRIES

quick ratio
0.7

0.6

0.5

0.4 quick ratio

0.3 0.6

0.2 0.42

0.1

0
2015 2016

Current assets to networth ratio

Networth ratio

Gross profit ratio

Net profit ratio

Propritery ratio

Trend analysis

KSSEM Page 30