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The

Summer Intership Project Repot


ON

At

AUSTIN ENGINEERING COMPAMY LTD.

Prepared By :
Hiren devaliya
&
Mahesh Paramar

M.B.A. Sem. II

Accademic Year : 2016-17

Institution

Under the Guidance of (in Company)


Mr. Nasir sir

Under the Guidance of (College)


MR.Bharat barad sir

Submitted to
Gujarat Technological University - Ahmedabad

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“Austin Engineering Company Limited”

Company Certificate

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“Austin Engineering Company Limited”

STUDENT DECLARATION

We undersigned student H i r e n And Mahesh. of N.J.S.M.T.I. of


Management Studies – Chanduvav M.B.A. II Semester, here by declare
that, the project on EFFECT IVENESS OF PROMOT ION MIX is my
own work.

In the partial fulfillment of Master Degree of Business Administration, I had


undergone project work at AUSTIN ENGINEERING LTD under the guidance
of MR.Bharat barad N.J.S.M.T.I CHADUVAV and submitted to Gujarat
Technological University, Ahmedabad.

This project work is my original work and has not been submitted to any
where earlier.

Date :-

signature:-

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“Austin Engineering Company Limited”

P R E F AC E

As a part of our studies the industrial training from the practical


knowledge is a study point of view is very important for M.B.A. student. Therefore,
I have prepared the summer training project reporton “AUSTIN ENGINEERING
COMPANY LIMITED” In any type of work, we required some theoretical and
practical knowledge but as we know that only theoretical knowledge is not enough
to make report. So practical knowledge is also required. By practical knowledge we
are in the position to understand industry‘s working system problems and
solution of industry different department like marketing department,
financial department and personal department and industries to the society. have
presented this report , which shows my work during to training period. This
report shows all the information about
the company.
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“Austin Engineering Company Limited”

ACKNOWLEDGEMENT

Knowledge in itself is a continuous process. At this moment of my substantial


enhancement I y find enough words my gratitude towards those who were constantly
involved with me during my project and making it a success. Men become good
through practice than by nature.

I am grateful to Prof. M R . B H A R AT B A R A D , faculty of N . J . S . M . T. I . o f


Management who created this opportunity to work on the project.

I am highly obliged to Mr. NASIR SIR coordinator of Austin engineering company


Ltd. for allocating such an interesting and challenging project. In-spite of being very
busy, he was ready to help us whenever required.

The whole staff of Austin engineering company Ltd. was highly co-operative and we
are thankful for all the support they extended to us. We would also like to thank our
parents and all our friends who have helped us, though indirectly, throughout the project
duration and always have been a source of encouragement.

Date :- signature :-
-HIREN DEVALIYA
-MAHESH PARAMAR

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“Austin Engineering Company Limited”

EXECUTIVE SUMMARY

The promotion is one of important part of the management. The product


may be of an excellent quality. The pricing policy may be fare and
equitable and selling contact select may be good. Even though a firm has
to adopt promotional programmed for increasing the sales of the good and
services. The term promotion embraces influence over process exerted by
seller of product of this, they sell or seek to buyers. It including
advertising personal selling and other selling tools.
“Austin Engineering Company Limited”

INDEX

NO. PARTICULAR PAGE


NO
1. Industry profile
10
1.1 Current Status of the Company
11
1.2 Future of the Industry
12
2. Company profile
13
2.1 Bio-Data of Company
14
2.2 Glance on AEC
15
2.3 History and Development
16
2.4 Product Profile
18
3. Study of four functional area 21

3.1 Production Department 22


3.2 H R Department 34
3.3 Marketing Department 47
3.4 Finance Department 60

8
4. Research Methodology 70
4.1 Introduction 71
4.2 Define the problem 72
4.3 Objective of the study 72
4.4 Literature Review 73
4.5 Limitations of the study 74
4.6 Data collection 75
4.7 Data analysis & interpretation 76
4.8 Findings 86
4.9 Suggestions 87
4.10 Conclusion 88
4.1 Bibliography 89
4.12 Annexure 90
9

1. INDUSTRY

OVERVIEW
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“Austin Engineering Company Limited”

1.1 Current Status of the Company

They make sure that other industries run smoothly but their own is going has not been too
smooth. This is the fate of companies in the bearings industry faces demand slow down,
steady capacity build-up, mounting import threat and rising input costs.

With such pressures on earnings, the stock market has, predictably, been harsh to
the companies. Top players such as SKF bearings, FAG bearings and NRB bearings are now
trading way below their historic highs.

Even the unprecedented stock market boom of 1999-2000 failed to drive the share prices
of bearings companies. Considering the slowdown in the automobile sector and the persistent
threat of cheaper imports, the outlook for the bearings industry is not positive.

The bearings industry consists of bimetal bearings and antifriction bearings. The anti-
friction bearings market can be further classified into two segments - boll and roller
bearings. Ball bearings constitute the biggest segment (over 50 percent) in volume terms in the
industry.

Ball - bearings account for the bulk of the demand in the market. Higher volumes have
attracted more players to this segment.

The bearings industry is characterized by the presence of global majors, such as SKF
and FAG, and companies from the unorganized sector on the other. There is other about 19
units in the organized sector, with an installed capacity of about 152 million units. The
domestic production accounts for about 70 percent of the demand, the rest filled by imports.

For the bearings producers, volume is the key driver of earnings. Considering that
the industry is highly capital - intensive, operating at the minimum economic volume
assumes greater significance. A decline in the capacity utilization level would lead to a
major negative impact on the operational parameters considering the huge initial capital o
utlay.
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“Austin Engineering Company Limited”

1.2 Future of the Industry

Bearings are an important part of automotive components. There are various types
of bearings such as ball bearings, taper head bearings, cylindrical bearings, sphere
bearings, needle bearings. However, in the automotive industry, only ball bearings and
taper had bearings are largely used. Participants such as SKF bearings (leader in ball
bearings market), MBC bearings (leader in taper head bearings market), FAG and
Timken (The Timken Company) are dominating the market. Manufacturers are building
their competency through manufacturing specific bearings. The existing participants
are entering into multiple alliances with the MNC‘s and with the vehicle
manufacturers. Foreign manufacturers have started their subsidiaries in India with a 50
percent stake in management.

With the increase in number of models and new type of vehicles entering the
market, there is an increase in demand in the OE segment. Due to this, the number of
participants entering the market has been increasing. The current Indian bearings
industry is worth Rs.3000crore. In this, automotive segment accounts for 45 percent of the
revenues are being contributed by industrial demand. In the automotive bearings market,
the organized segment manufacturer 50 percent of the demand. About 15 percent
production is by the unorganized segment in Indian, and the remaining 35 percent of
demand is fulfilled through imports.

Indian manufacturer are taking multiple steps to overcome the challenges facing
the Indian market. Manufacturers are investing more in research to develop batter
technologies, which increase the life of the bearings. Companies are giving the warranty of
1 to 2 years on the bearings. Domestic manufacturers are entering into technical
alliances with foreign markets to increase their revenues. There is an increase in demand
from the countries in Asia Pacific government incentives such as reduction of duty rates
and tariffs are likely to help boost the exports. The increase in export is leading to an
increase in installed capacity, production and revenues of the domestic participants. On
the other hand, multiple foreign companies are entering into joint ventures with the
Indian manufacturers considering
increasing demand. An ISO/TS 16949:2009 & Ohsas 14001 & 18001 Certified Company.
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“Austin Engineering Company Limited”

2. COMPANY

OVERVIEW

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“Austin Engineering Company Limited”

2.1 Bio-Data of Company

 NAME:
“Austin Engineering Company Ltd.”

 PLANT:

 ADDRESS:
AUSTIN ENGINEERING COMPANY LTD.
Village: Patla, Taluka: Bhesan
Junagadh 362 030, Gujarat India.

 BANKERS :
Bank of Baroda - Junagadh.

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“Austin Engineering Company Limited”

 PRODUCT :
Bearings

 EMPLOYEE :
650

 MANUFACTURING CAPACITY

05 MM ID TO 18000 ID

 MANUFACTURING RANGE

More than 4500 bearing

 MACHINERY AVAILABLE :

More than 320

 Website :

www.aec-bearings.co m

 E-mail :
Info@aecbearings.co m

2.2 Glance on AEC

The AUSTIN ENGINEERING COMPANY is one of the leading manufacturers of Ball


& Roller
Bearings in India. It was founded by five technocrats as Partnership Firm in
1973.

Today the company has developed into a Public Limited Company, with full array
of high quality and precision bearings for different applications. The company‘s
stringent quality assurance system has earned ISO 9001:1994 accreditation for the plant
located near Junagadh in Gujarat.
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“Austin Engineering Company Limited”

2.3 History and Development

2.3.1:- Past Data

1973 Austin Engineering co Ltd established with partnership firm by four


partners namely ‗ACCURATE COM LTD‘. The capital investment 3500
US Dollar.
th
1978 In 27 July partnership firm converted into PVT. LTD. Company
because
making a good performance of the ―Accurate Private LTD. Company‖.
It converted into corporate body and become a PVT. LTD. Company.
The main object of the manufacture by all kinds of the ball bearings.
1985 The accurate PVT. LTD. Company becomes ―Austin engineering public
LTD. company‖ and at present it becomes an ―Austin engineering
Company LTD.‖
1986 New plant started with installation of machineries and testing /
measuring
equipments imported from the Germany, U.K. and the United States of
America. Started exporting bearings to developed nations such as the
U.S.A., the U.K., Italy, and other E.U. countries.
1999 The Austin engineering company LTD. Awarded ISO 9001 certification
from PUV Rhineland
2000 Establishment of AEC Europe S.r.l. in Milan (Italy) and started working
with globally well known bearing manufacturers.
2002 The Austin engineering company LTD. Developed stains steel bearings.
2006 Awarded ISO / TS 16949 : 2002 by TÜV Rhineland
BOARD OF DIRECTORS

Mr. N.C.Vadgama Chairman & Executive Director

Mr. S.M.Thanki Managing Director

Mr. R.N.Bambhania Joint Managing Director

Mr. J.R.Bhogayta Executive Director

Mr. S.V.Vaishnav Non Executive Director

Mr. B.R.Sureja Non Executive Director

Mr. K.J.Mehta Non Executive Director

Mr. D.R.Nakum Non Executive Director

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“Austin Engineering Company Limited”

2.3.2:- Current Status of the Company


At present the Austin engineering com. Ltd. has become a wide and popular
unit in the market. The trademark of the company is '' AEC'' in the initial years of the
company was produced only 40 varieties of bearings and now it produce 4000 to 4500
bearings varieties.

Therefore we can say that the company has large growth and development in
the field of bearings due to its high quality and increasing demand. Thus the firm its turn
over is increasing year by year.

At present these company investment four cores. So, the size of the AUSTIN
Engineering Company is large scale.

2.3.3:- Future plan of company

Vision

We strongly believe that one should


 Always improve continuously.

 Utilize resources in a most efficient way.

 Be versatile to adapt changes.

 Serve society in a most efficient manner.

Mission

We strongly believe that one should


 Always improve continuously.

 Utilize resources in a most efficient way.

 Be versatile to adapt changes.

 Serve society in a most efficient manner.

 Increasing manufacturing capability unto 1800 mm. D

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“Austin Engineering Company Limited”

2.4 Product Profile

PRODUCT RANGE

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“Austin Engineering Company Limited”

2.4.1 Ball Bearings


Ball bearings use balls instead of cylinders. Ball bearings can support lightly-loaded bearings.
Precision balls are typically cheaper to produce than shapes such as rollers; combined with
high- volume use, ball bearings are often much cheaper than other bearings of similar
dimensions. Ball bearings may have high point loads, limiting total load capacity compared to
other bearings of similar dimensions.

2.4.2 Spherical Roller Bearing

Spherical roller bearings use rollers that are thicker in the middle and thinner at the end.
However, spherical rollers are difficult to produce and thus expensive, and the bearings have
higher friction than a comparable ball bearing since different parts of the spherical rollers run
at different speeds on the rounded race and thus there are opposing forces along the bearing.

2.4.3 Cylindrical Roller Bearings

Cylindrical Roller Bearings are similar to the flexible type.


Cylindrical Roller Bearings are used where temperature in the surrounding area is less than
80ºC.

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“Austin Engineering Company Limited”

2.4.4 Needle roller bearings

Needle roller bearings use very long and thin cylinders. The rollers are thin, the outside diameter
of the bearing is only slightly larger than the hole in the middle. .

2.4.5 Tapered roller bearings

Taper roller bearings are used, for example, as the wheel bearings of most cars,
trucks, buses, and so on. The downsides to this bearing are that due to
manufacturing complexities, tapered roller bearings are usually more expensive
than ball bearings.

2.4.6 Flexible roller bearings

Flexible Roller Bearings are used where there is a heavy shock load & the surrounding
temperature is more than 80ºC

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“Austin Engineering Company Limited”

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3. PRODUCTION DEPARTMENT
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“Austin Engineering Company Limited”

3.1.1 INTRODUCTION :-

In all industrial units, production is the basic activity all the other
activities revolved around this activity. The production activity is nothing but the
systematic conversion of one form of materials into another either chemically or
mechanically.

“Production is the process by which goods & services are created.”


- E. S. Buffa.

Now a day, therefore both goods & services fall in to the scope of
production management. It was formally considered as manufacturing mgt only. But now
after inclusion of services in to its scope, it is broadly known as "Operation management".

Operations by formal definition are a process of changing inputs in


to outputs, with the creation or adding some value to some entity. Production management
is a decision making managerial function. The decisions are made regarding the
production processes required for converting the raw-materials into finish goods & the
production or output should be according to specifications, in the specified quantities, as
per the schedule & at
minimum cost.

Thus, production department is the heart of whole the organization.


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“Austin Engineering Company Limited”

3.1.2 PLANT LAYOUT :-

Plant layout means the arrangement of departments & equipment‘s with in


a factory. It is concerned with the orderly arrangement of machines, work areas &
service areas so as to obtain the maximum output at the lowest possible cost. It involves
maximum
& effective utilization of resources available in a factory. After the selection of factory
site the factory building is constructed at the selected site.

TYPES OF ORGANIZATION STRUCTURE

Process product Hybrid fixed Position

The “Austin Engineering Co. Ltd.” is following process layout. Here in


this kind of layout the operation manager must organize resources around the process. Here
the centers are located in such a way that they bring flexible flow operation.

In “Austin Engineering Co. Ltd.” this is best suitable layout because it


has to serve many different customers. More over demand level is somewhat unpredictable
for management to set aside human & capital resources exclusively for a particular product
line or
type of customer.

In “Austin Engineering Co. Ltd.” the layout of the factory as a whole is


factory layout while the arrangement of various departments within factory is plant layout.
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“Austin Engineering Company Limited”

3.1.3 PRODUCTION PLANNING & CONTROL SYSTEM :-

Production planning is an essential prerequisite to production


control. Certain important decisions related to the resources required in manufacturing
operation, selection of resources to produce desired goods at appropriate time and at least
possible cost. Production control constantly keeps a watchful eye on the production
flow & use of resources along with the location of any deviation from the preset action &
to arrange for the prompt adjustment so that productivity may run according to the
original or revised
schedules.

Production control co-ordinates all the production operations.


It collects relevant information about various inputs and outputs. It directs & checks the
course
& progress of the work & closes the records on the completion of the work or order.

In the AEC ltd they are following the production planning


and control system. They are performing PPAP - Production Part Approval Process
that determines the requirements of customers & checks the potentiality of the process to
produce the product as per the requirements. This process assures the total consumer
satisfaction. The responsibility is totally on the HOD of quality assurance.
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“Austin Engineering Company Limited”

3.1.4 TYPES OF RAW M ATERIAL AND PROCUREMENT :-

The hardness of the bearings largely depends on the quality of the


steel. The best quality steel is the basic requirement of long life of bearings & that‘s why
company is importing steel from USA from N. N. Ball & Roller Inc. TN 37650 USA. Other
raw materials rather than these steel balls are purchase from various other areas within India
such as Mahindra
& Mahindra, Indian steel Authority of India. The stock of raw material is kept in bulk & fitness
& hardness tests are made before use. Following are the basic raw materials use for
manufacturing bearings.

Bearing Steel (SFE52100


Grade) Steel Balls
Steel Rollers
Steel Wire
Brass Cages
Reverts
Steel Bars & Turber
Oil, Fuel, Water & Electricity
CRCA Sheet( use in cages)
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“Austin Engineering Company Limited”

3.1.5 MANUFACTURING PROCESS

1. Raw material purchase

2. Testing of raw material

3. Cutting and parting

4. Turning and finishing

5. Heat Treatment

6. Grinding and Honing

7. Assembling

8. Washing, Clearing and oiling

9. Packing and Forwarding

Above manufacturing process are explaining one by one step.

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“Austin Engineering Company Limited”

1. Raw material purchase:

Accumulation of raw material is the first and for most stage


in production. In raw material of “Austin Engineering Co. Ltd.‖ we can include following.

Steel bars & tuber


Steel wire
Steel balls
CRCA Sheets
Rollers

Tapers etc.,

For ensuring the smooth production without break, enough


stock of different raw material should be kept ensure starting from the steel bar to oil

2. Testing of raw material :

The second stage of manufacturing process of “Austin


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

3. Cutting and parting :

In this step in manufacturing process. It is special steel for


manufacturing bearings, called SAE 5210 having special micro structure of carbon,
Magnesium, Chromium, Nikel etc. this is the basic raw material in the beating manufacturing.
Before using raw material in the bearings manufacturing, it is inspected in laboratory. The raw
material is cut and parted in form of brush, which onward incorporates in the outer or inner of
bearings. After its dimension checking it is sent for race turning.

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“Austin Engineering Company Limited”

4. Turning and finishing :

The partly machined components, called bush are sent to for


the race turning according to design and types of bearings. The production planning
department issues a specific drawing of master piece or race to the job worker for the
reference in turning race.

5. Heat Treatment :
Heat treatment is very crucial process in the bearings
production. Under this step, the material in form of race or roller is sent in the furnish which is
heated up to
1200 degree C and then it is at about 800-900 degree C. the heat treated material is checked
in the laboratory.

6. Grinding and Honing :

Having finished the previous stage, grinding of face and roller


is fourth stage of the process. After heat treatment the part of race and rollers are granddad
and other parts of race are given shape through grinding

7. Assembling :
Once the bearing components are ground and super finished
under grinding and honing process, they again inspected having inspected these
components; they are sent to the assembly department for the assembling of complete
bearings. The components outer, inner, cage roller or balls etc. are assembled.

8. Washing, Clearing and oiling :


This is the important of this process. Bearings have to be
washed, cleaned and de-magnetized. It is then dipped in the rust preventive oil for
preventive bearings from the rusting. Now, at this stage, the bearings are completely ready for
dispatch. It is therefore, sent to the packing and forwarding department.

9. Packing and Forwarding


The finished goods are first sealed in the metallic
pouch, printed Austin and then inserted in the Austin printed carton so packed is further
stacked in the jumbo corrugated box which sent to the market.
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“Austin Engineering Company Limited”

3.1.6 MATERIAL HANDLING SYSTEM :-

According to American Material Handling Society, ―Material


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

“Austin Engineering Co. Ltd.” is following particular procedure for material handling
which is as follows.

Material Handling Process:

This procedure for material handling can be used at every stage


where material is handled products are stored, packaged, preserved & delivered. The “Austin
Engineering Co. Ltd.” is following FIFO method for material handling. The BSR
supervisor, HOD quality assurance, shift engineers, assembly in charge etc. are responsible
authorities in
this process.

Handling:

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

Storage & Material Handling:

All the raw materials, which are received, shall be stored in


stores before issuing them to the production department. Follow the procedure of rece ipt
storage
& issue of material. In process material movement & storage procedure should be followed.
Store all the finished bearings at Bonded Store Room.
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“Austin Engineering Company Limited”

Packing & Material Handling :

All the finished bearings & components should be packed as


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

Preservation & Material Handling :

Rust preventive oil is applied to avoid rust formation in


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

Delivery & Material Handling :

AEC transports material or product to the customer‘s


premises through approved transporter. Approve transporter includes all the supplier of the
company details of dispatch have been kept with the marketing department.
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“Austin Engineering Company Limited”

3.1.7 QUALITY CONTROL

Moreover the Company is an ISO 9001-2000 Company. It is also good at


the social responsibility. The general statement of Austin is as under:
We are committed to satisfy customer needs and expectations continuously by
Developing and providing quality products.
Measuring, Monitoring and improving process performance.
Continuously improve work culture by providing adequate training & develop
good interpersonal relation.

Here, ―Austin Engineering Company Ltd.‖ has given special attention on


the quality of the product. It is also an ISO 9001:2000 awarded company because of its
quality. Moreover, they have developed a QUALITY POLICY for better quality control. The
company is also having certain testing instruments for testing the product at different levels.
The product process includes five inspection stages which show the company‘s efforts to
maintain its quality.
Different instruments are necessary for measuring accuracy of the product, which are
given below :

Testing instruments :-

 Spectrometer
 Magna field crack detection
 Surface roughness tester
 Roundness tester
 Electronic comparator
 Air gauge comparator

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“Austin Engineering Company Limited”

3.1.8 MANAGEM ENT OF INDUSTRIAL SAFETY :-

th
In this 21 century when liberalization, privatization & globalization is at
the pick in India, the importance of human needs has been increasing rapidly. A
widespread recognition to improve working condition as well as living conditions of the
workers has been now engaged in the productive process. Certain safety rules within the
industry can also be discovered & established with the help of trial & error method.

The main driving force behind the industrial safety movement is the fact that
accidents are expensive & preventing them can have substantial savings. The key to a
successful safety program in any in any plant whether large or small is leadership by
management. The workers should assure that the safety & security of those with whom they
work are constantly maintained properly & also they should adopt & practice safe habits in
their routine operations.

Generally AEC is not producing any life threatening products, which


can damage the life of workers performing a particular operation. No doubt they are giving
free insurance to the workers working with grinding machines. More over fire fighting
instruments are also provided at the factory site. In case of any accident free medical services
are provided to
the workers.
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“Austin Engineering Company Limited”

3.2 HUMAN
RESOURCE DEPARTMENT

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“Austin Engineering Company Limited”

3.2.1 INTRODUCTION

Employees hold a key place in business. No business enterprise can


exist and function without employees. The success of business enterprise depends to a large
extent on the quality of its human resources.
To achieve the organizational objectives, it is necessary to coordinate
the resources of the organization, i.e., four important resources, which are, man, money,
material and machinery. Among all these, man is of extreme importance because it is like the
driver of a vehicle. A vehicle is of no use until it is driven by someone. Just like this,
machines, materials, and money are of no use until they are coordinated by man. It is also of
paramount importance in the success of any organization because most of the problems in the
organizational settings are of human and social rather than physical, technical or economic.
The management must therefore be aware not only of the
organizational needs but also of employee needs. The management of ―men‖ is very
important and challenging job, important because it is a job, not of managing ―men‖ but of
administering a social system. The management of men is a challenging task because of the
dynamic nature of people.
.

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“Austin Engineering Company Limited”

3.2.2 HUM AN RESOURCE PLANNING :-

In an organization future demand of manpower is forecasted in the


HR planning. The word itself says that proper planning of human resource that is available.
The future demand for & supply of the right type of people at the right place & in the right
number is possible only through HR planning. It includes the estimation of how many qualifies
people are necessary to carry out the assigned activities, how many people will be available
& what, if anything, must be done to ensure that

Assigning current Manpower Requirement

Forecasting Future Needs

Projecting Supply of Future H.R

Compare Forecast with Supply

Framing H.R Policies

Evaluating H.R. Program

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“Austin Engineering Company Limited”

3.2.3 RECRUITMENT, SELECTION & INDUCTION :-

Recruitment ::

After HR planning the next logical step is to hire right number of people of
the right type to fill jobs. Hiring involves two broad groups of activity, Recruitment &
Selection. Employees are the lifeblood of any organization. We can even imagine any
organization without manpower .For that recruitment is necessary
They key requirement policies are:
1.Use of internal sources of recruitment of bottom level management .On the basis
of performance along with experience, operative level persons is promoted to upper levels.
2. The friends, relatives & children of the employees for jobs are appointed in lower or
middle levels.
3.Merit system with enough experience is preferred at the official level recruitment
ignoring recommendation & relation.
In AEC Ltd company believes in internal recruitment process because it
is less costly. Nevertheless, sometime company is unable to find certain extra qualified
workers within the organization so it has go for external recruitment. AECL gives
advertisement in the newspaper like Indian Express, Times of India & local news paper.

Selection ::

Selection is the process of picking individual out of the pool of the applicants with
requisite qualification & competences to fill jobs in the organization. It is concerning with
securing relevant information about an applicant. The most qualified person to perform
a particular job is selected here
In AECL company prefers both methods of selection (Participative selection &
Employees leasing) as per the prevailing circumstances. It believes in a careful selection,
which helps an organization to avoid unnecessary cost.
Induction ::

Induction is nothing but crate familiarity with the organization. After selection
generally employee has put on a probation period, which is ranging from six month to one
year, after that his employment may be conformed, during this period his work has been found
to be satisfactory
.In.AECL, also induction procedure has followed. Here worker needs a short & simple
induction by.
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“Austin Engineering Company Limited”

3.2.4 TRAINING & DEVELOPMENT :-

In this highly automotive era, it becomes difficult for the organisation to maintain
their work force for a long time. Workers must train to operate machines ,reduce scrap and
avoid accidents. Not only workers need trsinning but supervisers, managers& executives
also need training to enable them to grow and acquire maturity of thought & action.

On the job To the workers

Off the job To the Supervisors

In AECL,Employees are given the freedom to continuously improve their


skills.They most probably select trained & experined employees only but in case of fresh
candidates, the senior officer provides training on the job. In case of middle level
employees are providing apperntice training and at the top level,seminars and conference are
to be held for better results. Sometimes group disscussion is also arranged for particular
problem.
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“Austin Engineering Company Limited”

3.2.5 TIM E KEEPING SYSTEM :-

Time keeping system means how many shifts are there in one day in a
particular company. Time keeping system is much more important in controlling the
organization.
The purpose of time system is to established control and facilitated emp loyees
discipline. Now a day‘s company is using time keeping system so that the arrival and
departure can make easily.
In “Austin Engineering Company Limited”, there are 655 workers. For a time
keeping, there is a card system. Every employee has given a card having none of the
person‘s photo and serial number on that card, timing is also written. Time keeping officer
notes the coming and going time out of the company.
This company is working throughout 24 hours a day. The working hours are
divided in to 3 shifts. Every worker is work to 8 hours in the day. Overtime system is
available in this company

Company‘s plant runs in 3 shifts, timings of which are as under:

Time keeping system :

Sr. No. Shift Time Working Recess time


hours

1 1st 06.00am to 02.00pm 8 12.00pm to 12.30pm


2 2nd 02.00pm to 10.00pm 8 06.00pm to 06.30pm
3 3rd 10.00pm to 06.00am 8 03.00am to 03.30pm
4 General 08.00am to 04.30pm 8 12.00pm to 12.00pm
39
“Austin Engineering Company Limited”

3.2.6 WAGE & SALARY ADMINISTRATION :-

"Every company has want to maintained the wage & salary structure"
But Austin Engineering Company has also paid to wage & salary of each & every employee &
workers in to as per as the rules and regulation of Indian Government.
In AECL, salary is fixed. In "AEC" totally workers and so many
th th
employees are working. "AEC" paid the wages at a every month on 7 or 8 date. A ready
slip is given to employee who contains the data regarding salary. It contains total wages,
income tax amount, PPI scheme, Provident fund Scheme are deducted. If any worker has
taken installment and it is also deducted from it this slip shows net amount of payable salary.
And this amount paid immediately paid down to workers in cash.

Benefit of Wages & salary Administration.

 It will be increased of employee‘s motivation & moral because wage program can be explained

and based upon facts.

 It attracts qualified employees ensuring adequate payments for all the jobs.

40
“Austin Engineering Company Limited”

3.2.7 PERFORMANCE APPRISAL :-

Performance apprisal is the processof eveluating an employee‘s


performance of a job in terms of its rquirements. After selection, placements,training
etc process are completed the performance of the employee is evaluated.

In AECL ,Modern method of performance apprisal i.e Management


by Objectives has follwed. Performance is apprised by efficiency, which is calculated
yearly.It provides best information in case of promotion ,transfer etc. In this company
certain special forms are given to the employees & apprisal is done on the basis of the above
three criteria such as

 Production
 Attendance
 Attitude

41
“Austin Engineering Company Limited”

3.2.8 TRADE UNIONS & INDUSTRIAL RELATION :-

Trade Unions are not confined to mere striking and negotiating on the
behalf of workers. Their role is very much wider. Unions, for example may make their
presence felt in Recruitment and Selection. They may also decide who is to be hired and
under what condition. Unions can also play on important who is to be promoted, given a
new assignment, sent for training, terminated or laid off. Trade Unions are voluntary
organization of workers or employees formed to promote and protect their interests.

Thus a trade union must be :-

 A combination of workers and employees


 Complimentary procedure related to trade union is completed
 Those who become member of the union, he should pay membership fees
 Main aim is to maintain healthy relation between workers & management

In AECL all the workers are not satisfied with the management and thus
there formed Trade union under name of Austin Engineering Co. Ltd. Any dispute or
grievance on the part of employees is managed by mutual understanding.
AECL has maintained very good industrial relation between management
and workers. However if any problem arises at that time manager of the company solves it.
The workers are highly satisfied with the facilities provided to them by the company.

42
“Austin Engineering Company Limited”

3.2.9 DISPUTE MANAGEMENT :-

According to industrial disputes act, 1947 industrial dispute means any


dispute or difference between employers & employees or between employers & work man
or between work man & work man, which is connected with the employment or non
employment or terms of employment or with the condition of labor of any person. In AECL,
Two methods are mainly used to manage the dispute, which are as under.

a) Collective Bargaining:

Collective bargaining is the most effective method of resolving the


disputes. Here representative of a labor union meet management representative to
determine employee's wages & benefits, to create or revise work rules & to resolve disputes or
violations of the labor contract. The best plus point of this method is it benefits both
employees as well as
employers.
In this company, there are two main criteria in which employees'
participation is inevitable i.e. salary & wage and bonus. Here there is a committee of five
employees who are the representative of all the employees working in AEC ltd. they sign
the agreement between employers & employees. All the other employees of unit do
ratification of the agreement. The signature of newcomer has also taken on this agreement &
finally it transfers in to one type of contract.
With the help of collective bargaining & agreement company decided
to give 20 % bonus to the employees every year on Diwali. The attitude of management
towards employees is really kind & supportive. They are always ready to hear the
complaints & suggestions from the employee side.
b) Grievance Handling Procedure:
A grievance may be understood as an employee's
dissatisfaction or feeling of personal injustice relating to his or her employment relationship.
Generally, violation of any law, rule, and safety standards may give rise to grievance in the
mind of employees. Grievance handling is a code of discipline adopted by 26th section of
Indian labor act 1959 recommended by national commission of labor.
―Grievance is a written complaint filed by employee claiming unfair treatment”
In AEC ltd the shareholders/investors Grievance
Committee was constituted to look into the redress of shareholders/investors grievances.
43
“Austin Engineering Company Limited”

3.2.10 WELFARE POLICY :-

Welfare means faring or doing well. It is a comprehensive term & refers to


the physical, mental, moral & emotional well being of an individual. A welfare facility
tends to make the worker happy, cheerful & confidant looking. Therefore, the welfare
policy of the company must be attractive & satisfactory. AEC ltd also adopted a strong
welfare policy for the employees working under the company, which are as follows.
In AEC ltd I have observed a very good & healthy environment at the
work place. Cleanliness at the workplace is highly appreciable. The housekeeping of
factory i.e. compound wall, lawns, gardens, etc are up to the mark. Employees can take their
lunch in a natural environment. One particular notice is providing at each machine so in case
of absent of one authorize person any one can handle machine properly & safely.

Conveniences:
 Urinals & lavatories, washbasin, bathrooms, provision for spittoons, waste disposal...
 Provision of drinking water, water coolers...
 Canteen services, full meal...

Wor ker's health services :


In case of emergency, aid has provided medical examination of workers & health
education is provided to the workers.

M edical facility :
The AEC ltd has its own clinic with the staff of doctors, which provides services to the
employees & their families

Bonus:
Bonus has provided to each & every employees of the company at 20 % once in a year.

Loan:
Loan up to Rs.20000 has granted to the workers, which are interest free, & it has
deducted from salary in installments over a period.

44
“Austin Engineering Company Limited”

Provident f und scheme :

The employee's provident fund & family pension act


1952 mention that it is applicable to those companies where more than 20 workers are
working.

In AEC ltd 24 % is providing as a provident fund to its


employees. In which 12 % has deducted from the salary while the company provides other
12 %. One another

scheme i.e. "family provident fund" is also there. If any employee dies during the working
hours, his family members can get 8.33 % of employee's salary after his death. Furthermore,
any employee can get loan from provident fund with payment of interest. The amount of loan
has deducted from the salary of employee in installment.

Transport facility:
The AEC ltd is located at Patla, which is 25 km away from
proper Junagadh. Most of the employees of the company belong to Junagadh. Therefore,
company provides bus facility

Other facility :
Company gives holiday to the entire employee once in a week i.e. on Friday.
A free telephone facility to higher-level employees has also provided. Following other facilities
are also provided by the company to their employees.

Sickness benefits
Medical benefits
Maternity benefits
Disability benefits
Funeral benefits.

45
“Austin Engineering Company Limited”

3.2.11 SOCIAL RESPONSIBILITY :-

As each & every company has certain responsibility towards the society. Because
company gets input from the society and gives output to the society only. Therefore, they have
to think about society as a whole.

Towards societ y :

 They could not polluted the water of the residential area around the plant
 Health & safety of the society people of that area must be taken into account by the company.
 In March 2005 they have manage a free checkup camp for ―Vyasan Mukti‖ at Bhutnath
Temple not only for Austin employees but also for other people too. The seminar was of 2
days that helps people how to get freedom from their addiction.
 More over company provides a kind response to the trainees like me. They are so supporting to
the students coming to them for getting the experience if real world.

46
“Austin Engineering Company Limited”

3.3 MARKETING
DEPARTMENT

47
“Austin Engineering Company Limited”

3.3.1 INTODUCTION :

Globalization, Technological advances & deregulation spell


endless opportunities in the market. Marketing means meeting needs profitably. One saying
is there,
―The future isn't ahead of us it had already happened.‖ Marketing deals with future.
To convert societal needs in to profitable opportunities is marketing. For that forecasting of
the needs is at the base. Marketing deals with customer. Customer satisfaction is must for
successful marketing. Marketing has typically seen as the task of creating, promoting &
developing goods
& services to consumer & businesses.
According to W.J. Stanton, Market is the place where manufacturer /
seller and buyers come to exchange their goods and money respectively. In that sense, market
bridges the gap between production and consumption, or more precisely it fills the gap between
the place of production and the place of consumption.
However, the term marketing is very vast in its scope. It involves a series
of functions that can satisfy consumer needs and deliver standard of living.
In the words of Kotler, ―Marketing involves a set of human activities,
directed at facilitating exchange products and services with some
value.‖
A firm cannot survive in the market with the tradition concept of sales.
Today‘s market is customer oriented and customer is king. A firm cannot get succeeded if it
is unable to meet the expectation of the consumers. In light of this philosophy, we will analyze
the marketing practice and strategy philosophy; we will analyze the marketing practice and
strategy of AECL.
48
“Austin Engineering Company Limited”

3.3.2 PRODUCT MIX

Product mix can be described as the entire range of products of a company


for sale. Product mix need not consist of related products the products mix of a company has
four main characteristics :

 Width
 Depth
 Consistency
 Length

“Austin Engineering Co. Ltd.” the entire product mix consists of 4500 items
which can be segregated in to two main aspects based on their uses.
Automobile bearings
Industrial bearings

Product Mix :

A decision concerning product mix is the major aspect in marketing


management. Product mix is the set of all products and items that a particular seller offers
for sales. Product mix is also known as product assortment it includes following four items
i.e. Length, width, depth and consistency.

Product Mix Length :

The length of a product mix refers to the total number of items in


the mix the “Austin Engineering Co. Ltd.” is producing near about 4500 types of
bearings products.
Product Mix Width :

The width of a product mix refers to how many different lines the
company carriers here in “Austin Engineering Co. Ltd.” number or product line are
only one because it produces only one bearings of different types. The product line is one
i.e. ball bearing so width of the product mix of “Austin Engineering Co. Ltd.” is one

49
“Austin Engineering Company Limited”

Product Mix Depth :-

The depth of product mix refers to how many varieties were


offered of each product in the line. “Austin Engineering Co. Ltd.” has organization one
product line which offers five types of product.

Needle Roller Bearing.

Spherical Roller Bearing

Cylindrical Roller Bearing

Taper Roller Bearing.

Flexible Roller Bearing

Product Mix Consistency:

The consistency of the product mix refers to how closely


various product lines are related to each other in the end use. In “Austin Engineering
Co. Ltd.” the product is industrial nature so consistency is there.

3.3.3 PRODUCT LIFE CYCLE :-

Today is not like yesterday & tomorrow will be different From today so
continuing today’s strategy is risky So is turning to a new strategy.

Each & every product is having their life cycle. At each step of life cycle they are
having different strategic. Means marketing mix differs at each stage of life cycle. To stay
in this competitive era few changes in price, packaging, strategy.... etc is acceptable for that
you have to do yours as well as competitor's swot analysis, product life cycle is a fool to
analyze the strength
& weakness is as well as opportunities & threats of competitor‘s product. In fact, product
life cycle gives the sells revenue and profit margins history of product over a period.
The product of AEC ltd is now at growth stage. It is an industrial product and is having
a continuous demand.
50
“Austin Engineering Company Limited”

3.3.4 BRANDING, PACKAGING & POSITIONING

Branding :

A brand is name, sign, symbol or a combination of them, which is intended


to identify the goods or services of one seller from those of competitors. Branding is a
strategy to make individual product distinctive.
Branding can add value to a product and is therefore an intrinsic aspect of
product strategy.
A brand is essentially a seller's promise to consistently deliver a specific set of
features, benefits & services to the buyers. The seller has granted exclusive rights to the use
of the brand name. The best brand conveys the warranty of quality. AEC ltd has chosen the
brand name " aec‖ that is recognized by government. The brand name of the company is
international
brand. The symbol of company's trademark brand is,

Thus, the trademark is the essential legal term, which protects the rights of
manufactures to use the brand name.

51
“Austin Engineering Company Limited”

Packaging:

The AEC ltd is very conscious about packing & labeling functions. As company
is producing different type of bearings, it needs different packaging materials too. Company is
having a separate division for packing & labeling. Labeling is the next step to packing.
Labeling
implies putting identification marks as labels on the packing. A label
provides useful information about product, brand name, address of producer & dealer,
weight & measurement of the product, date of packing & expiry, maximum retail price,
...etc.

For proper packing first, all the bearings from different manufacturing
department are keeping to gather & wash it properly. Then oiling process is performed to
prevent friction at last they are packed in an attractive paper boxes. The colors of these boxes
are kept as per the customer specification. All this process is performed in a separate air-
conditioned room which is called assembling department.

Positioning:

A product can only enjoy a strong position in the market by fulfilling customer
needs to their best.
As we analyze AEC ltd, it had established such a product policy that produces best
product with higher efficiency & greater profitability. However, company is having stable
sales in the market still its product has capture a strong position in the bearing market as a
whole. The main reason behind it, is that the company is providing strong and durable
bearing at a reasonable price & as per customer specification. Company is not just
concentrating on bulk orders; it satisfies the need of small purchasers too. Company provides
wide range of products. Therefore, customer is having a full confidence & trust on company's
goodwill.
52
“Austin Engineering Company Limited”

3.3.5 MARKET SEGMENTATION

Market consists of buyers, and buyers differ in one or more respects.


They may differ in their wants, purchasing power, geographical locations, buying attitudes and
buying practices. Any of the variables can be used to segment a market.
It is a process of dividing the total market for goods and services into
small groups, such that the members of each group are similar with respect to factors that
influence demand. It is a strategy of ‗divide and conquer‘ i.e. dicing market in order to
conquer them. Its philosophy is something for everybody within practicable limits. It enables
the market to give better attention to the selection of the customer and offer an appropriate
marketing mix for each segment for a group of buyers having homogeneous demand.
In Austin, they have selected target market to satisfy the wants
of customers. They have divided the target market in different division.

Indian defense department


Steel plants and steel rolling
mills Textile machinery
manufactures Power plants
Automotive industries
Indian railways
Process industries
State toad transport undertakings throughout India
Overseas customer in the USA, the UK. EU nations
etc. Replacement market/after market

53
“Austin Engineering Company Limited”

3.3.6 PRICING POLICY

Price refers to the value of the product in terms of money. Price is


equally important to both consumer as well as sellers. Pricing decision is a very critical
decision. Company reserves the pricing issue by selecting the best pricing policy or method.
For getting secure profit, sound-pricing policy is needed. AEC Ltd. fixes its prices at
prevailing market rates.

Method of pricing policy :

Cost plus Pricing Method


Going Rate Pricing Method
Target Return Pricing Method
Demand & Supply Approach

As we all know that AEC Ltd. is one of the top level cos. in India for
bearing's production. The company is following cost plus pricing method for deciding the
price of the products. This method is based on production cost per unit i.e. going to be
priced in open market and also add selling expenses and other additional margin of
profit. For determining sales price, four basic items are needed i.e. cost of production, se
lling expenses, interest and depreciation and profit margin.
This method decides price that is nearer to the existing market price.
Sometimes company also fixes prices according to demand and supply approach. The demand
of company's bearing in the market is very high because they provide specialized products
and government restrictions are also less in comparison to others

54
“Austin Engineering Company Limited”

3.3.7 PROMOTION MIX :-


There are following four elements of promotion mix, which are
equally important to analyze before deciding promotion mix of any product. All these
elements should be properly analyzed. It should decide up on for getting an effective
promotion mix. It includes decisions relating to advertising, budget, and timing of sales
promotion efforts training & development of the employees, publicity campaign timing etc.

Element of promotion Mix :

Advertiseme nt:

Austin company is the leading manufacturing company of bearing and as its has
selected OEM as a market segment therefore company need not require to advertise its
product for selling in market. But just for information they used as advertisement so, Austin
company always prefer ‘press’ as a media on the basis of nature of products.

Publicity:

According in Austin always accept any sponsorship of cultural programs imagination of


sports like cricket tournament etc. to get publicity .According to them good & favorable
publicity can
provide you lots of benefits.
55
“Austin Engineering Company Limited”

Sales promotion :

According to sales department, they use sales promotion, as it is one of the

effective marketing efforts, which stimulates the consumer purchasing and dealer‘s

coupon public display etc.

Austin Company gives sales promotion at consumer level and dealer level.

Personal selling:

According to the marketing manager, salesman must know technical knowledge


of product, communication skill, grater personality knowledge regarding customer and many
other things are the good quality of good salesman. In Austin company salesman is recruited
through
advertising. Salesman are rewarded by salary through they are not paid commission.
56
“Austin Engineering Company Limited”

3.3.8 CHANNEL MANAGEMENT

Company should adopt current trend to distribute its product. The


channel management must be effective enough to run smoothly in the market for the product.
Channel management is related with the way through which goods & services flow or
move from producer to consumer. It includes decisions regarding how to make availa ble
the finished product to the final consumer from manufacturer.
To provide the product to the customer with the least number of
transactions, distribution channel is must. Every producer wants that his product is reach to
the customer in a most smooth & speedy way. For that distribution channel plays a vital role.
There are two types of channels, which is as below.

 Direct Channel :
Direct channel distributes the goods & services from factory to
consumer directly. To stay in to competition this company uses direct channel for quick
delivery. Company has made direct contract with AISTRU (All India state transportation
road undertake), Indian defense, Volta‘s, Godrej, etc.

 Indirect Channel :
In indirect channel, Company uses middleman for the distribution
of product. Intermediary is a connecting link between manufacturer and consumer.
As AEC ltd is having both type of consumer i.e. industrial buyers &
general buyers, it has adopted combination of both direct & indirect channel. For industrial
buyers they
uses direct channel & for general buyers they uses indirect channel of distribution.
57
“Austin Engineering Company Limited”

3.3.9 INTERNATIONAL MARKETING

Because of globalization, the international marketing has now


become important for any business. International marketing makes the product of the
company world class and this affects the goodwill of the company positively. It is also
important from the view point of government because international marketing attracts the
foreign customers and earns valuable foreign exchange.
Austin has given importance to international marketing by which they
have created and are maintaining the customers worldwide. They have established
branches for marketing in Italy and U.S.A. The countries in which they are having export
customers are:

Italy

U.S.A.
U.A.E.
Sri Lanka
New Zealand

By international marketing, the company faces international


competition and so the product is more qualitative as compared to other domestic producers.
The company exports 50 % of its total production, which earns valuable foreign exchange.
58
“Austin Engineering Company Limited”

3.3.10 COMPETITION LAND SCAPE :-

In this global & technical era, we should hardly find any sector
without competitors. Competition is at the center of any organization‘s growth. It is
competition only, which encourages the owner to improve their product more than the
competitors.
There is a well-known term ―Core Competency‖ means to do or
to perform better then the competitors not only in terms of product but also in its packag
ing, marketing; etc., also. The ―Austin Engineering Co. Ltd.‖ believes in this concept. It
provides always better than their competitors.
―Austin Engineering Co. Ltd.‖ is the only company that provides
wide
range product even in less quantity with variety. All the other companies accept order in bulk
but
―Austin Engineering Co. Ltd.‖ also concentrates on small purchases too. So, it has no any
direct competitors. Nevertheless, the lists of major competitors are as under. Among which
China market is one of the major influence of this company.

NKF
SKF
NBC
TIMKEN
CHINA MARKET
FAG
59
“Austin Engineering Company Limited”

3.4 FINANCE
DEPARTMENT

60
“Austin Engineering Company Limited”

3.4.1 INTRODUCTION

As human body is impossible to survive without oxygen, an


organization needs proper finance to survive in this competitive business era. Finance is the
base for building an effective & incompatible organization. Without base, we cannot build a
building similarly without finance we cannot imagine future of any business organization.
Financial management is concern with the efficient use of an important economic resource
namely, capital funds.

From above definition, we can understand that financial management


involves, rising of funds & their effective utilization keeping in view the overall objectives of
the firm. This requires great caution & wisdom on the part of management.

Austin Engineering Company Limited has a separate department for


financial management. It uses various financial techniques & devices for administrating the
financial affairs of the firm in the most effective & efficient way. Therefore we can say that
financial management is the entire gamut of managerial efforts devoted to the management
of finances both its sources and uses of the firm. Detail information about financial
department of AEC ltd is mentioned in this section.

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“Austin Engineering Company Limited”

3.4.2 SOURCES OF CAPITAL


Financial management involves the three important areas :

Investment Decision
Financing
Decision

Dividend Policy
Among them, the investment decision is the first step to be taken up by

the owners. This involves the decisions regarding the procurement of funds. So it is necessary

to study the different sources of finance available. This decides the cost of capital. So the

sources you select to procure the funds should be such that they would minimize the cost of

capital. The terms and conditions of different institutions should be studied and compared

while taking the decision about borrowed capital. The balance between owned and borrowed

capital should also be kept in mind at that time.

At the initial stage of business firm, generally capital is brought by the

owner and some outside institutions, banks etc. But when the business starts growing,

the reinvestment of profits becomes also an important source of capital.

Here, Austin is a public limited company. So it is having share capital as

a major source of finance. Some borrowed capital is also brought in the company. Moreover,

now the retained earnings have also become an important source of finance for the company.

The sources of finance are as under

Equity Share Capital

Bank of Baroda

ICICI Bank

Retained earnings

62
“Austin Engineering Company Limited”

3.4.3
CPITALISATION :-

The word capitalization comes from the word ―capital‖.


Capitalization simply means valuation of the capital and will include owner‘s funds,
surplus earnings. The valuation of the capital depends upon the earnings of the
company. The total capital that is invested in the asset of the company should be
justified by its expected earnings. A company is expected to earn at least that much,
while similar to other in the same industry are earning. Thus the rate of earning of the
company should be similar to the other companies in the industry. There are three
possible situations.
Fair
Capitalization
Over
Capitalization
Under
Capitalization.

 Fair Capitalization:

The company‘s capitalization is found fair earning of the unit is


same to
the capital employed i.e. Earning = Capital Employed.

 Under Capitalization:

The company‘s capitalization is found under when the


earning of the
unit is greater than capital employed i.e. Earning > Capital Employed.

 Over Capitalization:

Company can be said to be over capitalized when the


company‗s
earnings are less than capital employed i.e. Earning < Capital Employed.

63
“Austin Engineering Company Limited”

3.4.4 CAPITAL BUDGETING :


Capital budgeting is a tool for managing fixed assets of the company.
Capital budgeting the most important & most crucial decision on the part of firm. Because
they are related to the fix asset of the company that directly affects the profitability of the
firm. It is the responsibility of firm to invest in most effective long term activities which in
turn gives expected cash flow in future. Capital budgeting is related with fix asset, but
obvious it is long- term decision & more risky. Every business organization should believe in
one thing i.e. Higher the risk, higher the return.
In AEC ltd Company using "Payback Period Method" for evaluating
the investment proposals come to them.
Original Investment
Payback Period = ————————
Annual Cash Flow

Review of latest capital project :

The AEC ltd has occupy an important place in the


present bearing industry due to one reason it does not produce in bulk only but it produces wide
range of products according to customer demand. At present not even, a single company
produces such a wide range of products as Austin has. For that company has adopted
German Technology & machineries are also imported from Germany.
Recently company has purchased a new CNG machine
for grinding process of racks & roads. This is the latest machine of German Technology,
which produces bearing more in quantity & better in quality. As company works in this
project, it would not prefer to enter in any other project right now.

64
“Austin Engineering Company Limited”

3.4.5 CAPITAL STRUCTURE :

The work of manager does not get over by merely arranging for
finance. Their task is to select best mixture of various sources of funds, which makes a
particular structure that is known as capital structure. An improper capital structure leads to
failure of an organization. Without a balanced capital structure, various kinds of management
techniques are useless. It affects the financial liquidity, rate of dividend & capacity of raising
financ e in future
of any company.
Financial structure is a very broad term in comparison of
capital structure because it consists of both long term as well as short-term funds but capital
structure is the narrow term as it consist of only long term funds. It is one kind of
permanent financing. Thus, we can say that company's capital structure is only a part of
financial structure.
Capital Structure of AEC Ltd.

Particular Amt
Authorized capital 34,778,0 0
34,77,800 equality shares (Rs. 10)
Reserve & surplus 367,104,7 8
Loan Fund:
Secured loan 93,064,494
65
“Austin Engineering Company Limited”

3.4.6 LEVERAGE ANALYSIS :

The term leverage refers to the ability of the firm in employing


long term funds having a fixed cost to enhance returns to the owners. There are three
types of leverage which an explained below.
Financial Leverage :

In simple words, we can say that financial leverage means


percentage return on equity percentage return on capitalization.

EBIT

DFL = ----------

EBT

Operating Leverage:

The operating leverage may be defined as the ability to use the


fixed operating cost to magnify the effect of change in sales on its operating profit.
Operating leverage refers to the operation of activities of firm. In short operating leverage
occurs where a firm has fixed operating cost.
“Operating leverage is the tendency of the operating profit to very
disproportionately with sales”.

The above calculation shows that 1 % increase in the volumes of sales


would be accompanied by 0.18 % increase in operating profit and vises a versa. Hence, we can
conclude that higher the operating leverage the higher is the risk.

Contribution OR Contribution

DOL = ------------------- ----------------


Operating profit EBIT
66
“Austin Engineering Company Limited”

3.4.7 WORKING CAPITAL MANAGEMENT :

Working capital is what makes a company work. It is just not possible to


carry on the business with only fixed assets. Working capital is must. In adequacy of working
capital chocks any business to death. Working capital is also called as "circulating capital" it is
that pail of capital, which is require to purchase current assets i.e. to meet regular & recurring
needs of a business firm like rent, advertising, power & so on.
A sound working capital management policy is one which ensures "Higher
profitability & proper liquidity." The goal of working capital management is to ensure that
the firm is able to continue its operations and that it has sufficient cash flow to satisfy
both "Maturing short term debt & upcoming operational expenses" In AEC ltd the position of
current
assets & current liabilities is as follow.

Particular 2010-11 2011-12


Curre nt assets
Inventories 285,516,305 254,321,914
Sundry debtors 164,825,535 151,569,700

Cash & bank balanc 19,178,538 64,391,467


Loans & Advances 64,582,047 54,261,808
534,102,425 524,544,889
Curre nt liability
Liabilities 169,730,997 132,349,343
Provision 45,724,425 43,789,818

Net working capital = Current assets - Current liabilities

2008 – 09 = 534,102,425 – 215,455,422

= 318,647,003

2009 - 10 = 524,544,889 – 176,139,161

= 348,405,728
67
“Austin Engineering Company Limited”

 Operating Cycle :

WIP

Raw material Finish Goods

Cash

sales

Operating cycle means days require converting raw material in


to finish goods. The managers have to maintain easily convertible finance. Each current asset
is swiftly transformed into other asset forms. For instance, cash is used for acquiring raw
material which is transfer to finish goods, which are sold & converted in to account receivable
and finally in to cash. Operating cycle in AEC ltd is as under
In any manufacturing company like AEC ltd, the operating cycle
considers length of time necessary to complete the above events of operating cycle. In this
company raw material is converted in to finished goods within 60 days.

 Receivable M anageme nt:

Receivable means the amount to be receivable when goods are


sold on credit. This amount is known as "Trade Debtors" or "Account Receivables." Though
receivables are assets, it involves risk of receiving money in future. In this highly
competitive globalize market, no firm can exist without credit sales which blocks the money
that may receive in future. Until that time manager has to arrange for funds by incurring debt
or issuing equity shares, which include opportunity cost.
So its management requires a great caution. Management
of receivable forms an important part of current assets. In country like the one India 1/3 of
current assets comprises of receivables & an improper management of it may harem the
profitability. AEC ltd provides a credit facility for a period of 45 to 60 days to retailers &
buyers while for
new customer it is of 30 days.
38
“Austin Engineering Company Limited”

3.4.9 DIVIDEND POLICY :

Dividend is a term that refers to that part of a profit of a company,


which is distributed by the company among its shareholders. It is one kind of reward for
shareholders for the investment made by them in the shares of a company. The investors are
interested in earning the maximum return on their investment & maximize the wealth. A
company o n the other hand needs to provide funds to finance its long-term growth.
If company pays out a dividend most of what it earns, then for the
other business requirement & further expansion it will have to depend up on outside resources
such as issue of new share or depth. Thus, dividend policy of a firm affects both long-term
financing & wealth of the shareholders, since dividend is the right of shareholders. In
return of their investment in the share capital of a company they ask for participation in the
profit & sir plus of
company.
Regular Dividend
Stable Dividend
Traditional Dividend
No Dividend
The Austin Engineering Company Limited does not follow any
dividend policy. Austin believes in conservative money for future expansion currently they
declare 1.5 rupees per share.
69
“Austin Engineering Company Limited”

4. RESEARCH

METHODOLOGY

70
“Austin Engineering Company Limited”

4.1 INTRODUCTION :-

Market survey should be conducted properly because that helps the


top management in decision making. A research gives the exact result only when the
studies are properly conducted. In fact research is an art of scientific
investigation research is the systematic & intensive study directed towards a more
complete knowledge of subject study and if start due to some specific question or
problem.

―Research is essentially an investigation a recording & analysis


of evidence for the purpose of gaining knowledge.‖

Research methodology defines what the activity of research is,


how to proceed how to measure progress, and what constitutes success.

Methodology is a jumbled mess. Different methodologies define


distinct schools which wage religious wars against each other.

The data will be collected through the annual reports of the company. It also collected
through the websites, different published books by the authors and magazines.
The data is also to be collected from the practical work and opinions of the staff-
members.

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“Austin Engineering Company Limited”

4.2 Problem of the Study -


The study of effectiveness of promotion mix helps the company to maintain
a standard and increase sales.

4.3 Objectives of the Study :-

 To know various promotion mix strategy of Austin engineering company limited.


 To understand public pattern.
 To know effectiveness of direct marketing strategy.
 To know various advertising policy adopted by Austin engineering company limited.
 To understand public relation strategy adopted by Austin engineering company
limited.
 To know employee retention strategies of Austin engineering company limited.

72
73
“Austin Engineering Company Limited”

4.4 Limitations of study

The limitations of the study are as follow:-

 It is very difficult for any researcher when there is a number of samples is small. So, it is
not give exact idea about it.

 For this research report 50 respondents have been taken and tried to obtain
conclusion.

 The collection of primary data is comparatively very difficult and sometimes


problem of unanswered question arise because of the people may not like to disclose the
information.

 The time duration given for the research is less.

74
4.5 Data collection method

Whatever information data and data I gathered mainly I received from two sources
primary and secondary data.

Method of Data Collection

Primary Secondary

Primary Data

I received most of the information from primary data. I asked many


information and question to the employee and they given me many types of information.

Other information I received to Mr. Amit Joshi who is the ISO co-orditon and
HOD of personal department Mr. B.L.Parmar.
I used questionnaire method to survey of the data.

Secondary Data

Some information I also received from the secondary data. There


are two types of the secondary data is as above

o Internal Sources

 Annual report of AEC

 Print mutual

o External Sources

 Websites

 Population list

 Library books

75
“Austin Engineering Company Limited”

4.6 Data analysis and interpretation

(1) Which kind of advertising policy adopted by your company?


Traditional mass media (television
&magazines) Direct mailing of catalog
Electronic media selling technique
Other
Press

Responses Respondent Percentage


Traditional mass media 3 6
(television & magazines)
Direct mailing of catalog 12 24
Electronic media selling 6 12
Technique
Other 2 4
Press 27 54

100
80
60
respond
40
er
20 percent
tradito dire electro other press
0 nal ct nic total age
mas mailing medi
s of a
medi catelo sellin
a g g

Interpretation: There were 54% employee said that press was effective, 24 % employee
said that direct mailing of catalog was effective.
76
“Austin Engineering Company Limited”

(2) Do you use personal selling technique?


Yes No

Response Respondent Percentage


Yes 12 24
no 38 76

100

80

60
response
40 percentage

20

0
yes no total

Interpretation: There were 76% employees said that personal selling technique was not
used in the company. But 24% employee said that says that personal selling technique
was
used.

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“Austin Engineering Company Limited”

(3) Which type of sales promotion technique is mostly used by your company?
Consumer promotion
Dealers‘ promotion
Sales force promotion
Off price selling

Response Respondent Percentage


Consumer promotion 2 4
Dealers Promotion 20 40
Sales force promotion. 25 50
Off price selling 3 6

100
80
60
40
20 respo
nse
0 percet
consumer
promotion promotion
sales forcepromotiondealers
off price selling total age

Interpretation: There were 50% employees said that sales force promotion technique
was effective,
But 40% employee said that trade of middleman or dealer‘s promotion technique was
effective.
78
“Austin Engineering Company Limited”

(4) What is your publicity pattern?


Print media
Radio
Television

Response Respondent Percentage


Print media 40 80
Radio 0 0
Television 10 20

100
80

60
response
40 percentage
20

0
print media redio television total

Interpretation: There were 80%emloyees said that print media was publicity pattern, but
they were not agree with radio and television.

79
“Austin Engineering Company Limited”

(5) To whom your company focuses to maintain public relation?


Customer Stock
holder Government
agency
Special interest group

Response Respondent Percentage


Customer 25 50
Stock holder 10 20
Government agency 4 8
Special interest group 11 22

100
80
60
respons
40
e
20
customer stock speci tot perceta
0
holder al al ge
govern intere
ment st
agency group

Interpretation: There were 50% employees said that company focuses more on
customer and 22% on stock holder, but not more focuses on special interest group and
government
agency.
80
“Austin Engineering Company Limited”

(6) Company‘s direct marketing strategies were effective?


Yes No

Response Respondent Percentage


Yes 10 20
No 40 80

100
80
60
response
40 percentage
20
0
Yes No total

Interpretation: There were 80% employees said that were not effective, but 20%
employees
said that direct marketing strategies were effective.

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“Austin Engineering Company Limited”

(7) What do you think regarding effectiveness of company‘s direct marketing strategy?
High
Moderate
Low

Response Respondent Percentage


High 6 12
Moderate 31 62
Low 13 26

100
80

60
response
40 percetage

20

0
high moderete low total

Interpretation: There were 62% employees said that direct marketing strategies were
moderate and 26% employees said that they were low and other 12%employees
supposed
that its high.
82
“Austin Engineering Company Limited”

(8) AEC is interested in organizing trade exhibitions?


Always Often
Sometime Rarely
Never

Response Respondent Percentage


Always 15 30
Often 11 22
Sometime 23 66
Rarely 1 2
Never 0 0

100
80

60
40 response
percenta
ge
20

0
always often sometime rarely never total

Interpretation: There were 66% employees said that AEC is interested in organizing
trade exhibition sometime, but 30% say always and 22% said that often and other said
rarely &
never.
83
1
“Austin Engineering Company Limited”

(9) AEC is ready to sponsor various social and commercial activities?


Always Often
Sometime Rarely
Never

Response Respondent Percentage


Always 20 40
Often 20 40
Sometime 10 20
Rarely 0 0
Never 0 0

100
80
60
40
response
20
percentag
0 e
always often sometime rarely
never total

Interpretation: There were 40% employees said that AEC is ready to sponsor various
social
and commercial activity always & often and other said sometime.
84
“Austin Engineering Company Limited”

(10) Is their any Sales force compensation plan available to encourage employee?
Yes No

Response Respondent Percentage


Yes 11 22

No 39 78

100

80

60
response
40 percentage

20

0
yes no total

Interpretation: There were 78% employees said that there were no any sales
forces compensation plan available but 22% says that there were sales forces
compensation was
available.

85
“Austin Engineering Company Limited”

4.7 Findings

After the research I found that Austin Engineering Company limited‘s promotion
mix strategies are not more effective And They have to improve promotion mix
strategies to increase sales and earn more profit.

I found that under the sales promotion of Austin engineering company limited use sales
forces promotion technique mostly. They also frequently use dealer‘s promotion
technique. While customer promotion and off price selling were less used by Austin
engineering company limited.

I also found that sells force compensation plan was not work in proper
manner.
Many of the respondent are disagree and not aware about personal selling
technique.

I also found that company‘s gives more emphasize to customer only. Means less focuses
on stock holders, government agency and special interest group.

I also found that company advertising its product by press and direct mailing of catalog
but not more focuses traditional mass media and electronic media selling technique.

I found that company doesn‘t have any direct marketing


strategy.

Austin engineering company limited has mostly used print media for its publicity. Or in
critical time it used medium of television also. But they never used radio for publicity.

It is also found that company focus on maintain public relation with its

customer. The Company has some time organize trade exhibition fore its

customer.

.
86
“Austin Engineering Company Limited”

4.8 Suggestions

The company should focus on personal selling technique to increase its sales
The Company should focus on compensation plan like sales forces compensation
dealer‘s compensation to increase its sales & profitability
The company should focus on dealers and offer incentive to promote sales
The company should focus on promotion mix
The company should give more weightage to electronic media for its
product promotion mix.

87
“Austin Engineering Company Limited”

4.9 Conclusion

On the basis of the study it is found that Austin engineering company


limited is trying to better use of promotion mix compare with other companies because
they are now use advertising and sales forces promotion techniques for increase sales.
.
Austin Engineering is a public limited company having a market capitalization

of Rs. 33.27 Cr. It is truly a well organized and well-managed unit all the department of

the unit is perfectly co-ordinate and managed.

However, there are some problems faced by the company periodically as by other

units but its does not over all affect the successful image of the company.

88
“Austin Engineering Company Limited”

4.10 Bibliography

Books references:

1 Ken Black, Business Statistic, 5th edition.

2 Philip kotler, marketing management, 13th

edition.

WEB SITE :
www.aec-bearing.co m
89
“Austin Engineering Company Limited”

Demographic factors

Name:
Age: Experience:
Qualification: gender:
Department: designation

Study factor

Questionnaire
(1) Which kind of advertising policy adopted by your company?
Traditional mass media (television &magazines) Direct
mailing of catalog
Electronic media selling technique
Other Press
(2) Do you use personal selling technique?
Yes No

(3) Which type of sales promotion technique is mostly used by your

company?
Consumer promotion
Trade of middleman or dealers promotion
Sales force promotion.
Off price selling
(4) What is your publicity pattern?
Print media
Television
No.

90
“Austin Engineering Company Limited”

(5) To whom your company focuses to maintain public relation?


Customer Stock holder
Government agency
Special interest group

(6) Company‘s direct marketing strategies were effective?


Yes No

(7) What do you think regarding effectiveness of company‘s direct


marketing strategy?
High
Moderate
Low

(8) AEC is interested in organizing trade exhibitions?


Always Often
Sometime Rarely
Never

(9) AEC is ready to sponsor various social and commercial activities?


Always Often
Sometime Rarely
Never
(10) Is their any Sales force compensation plan available to encourage
employee?

Yes No

91