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CHAPTER 1

INTRODUCTION

Organizations play a vital role in the development of any economy. With the growth of industries, the economy will prosper and generates more employment and opportunities. In an organization there is group of individuals who work together to achieve a common goal. It refers to the structure of relationships among positions and jobs built up for realizing common objectives. It assembles the four Ms of management i.e. men, machine, material and money.

In sociology "organization" is understood as planned, coordinated and purposeful action of human beings to construct or compile a common tangible or intangible product. This action is usually framed by formal membership and form (institutional rules). Sociology distinguishes the term organization into planned formal and unplanned informal (i.e. spontaneously formed) organizations. Sociology analyzes organizations in the first line from an institutional perspective. In this sense, organization is a permanent arrangement of elements. These elements and their actions are determined by rules so that a certain task can be fulfilled through a system of coordinated division of labor.

An organization is defined by the elements that are part of it (who belongs to the organization and who does not), its communication (which elements communicate and how do they communicate), its autonomy (Max Weber termed autonomy in this context: Autocephaly)(which changes are executed autonomously by the

Organization or its elements) And its rules of action compared to outside events (what causes an organization to act as a collective actor?).

By coordinated and planned cooperation of the elements, the organization is able to solve tasks that lie beyond the abilities of the single elements. The price paid by the elements is the limitation of the degrees of freedom of the elements.

Advantages of organizations are enhancement (more of the same), addition (combination of different features), and extension. Disadvantages can be inertness (through co-ordination) and loss of interaction.

KEL is one among the largest, most vibrant and productive Public Sector Undertaking, and is fully owned by the Government of Kerala. A multi-product engineering company, consistently catering to an envious client base, ranging from the army and air force of India to world-renowned space research organizations, highly competent engineering companies to mammoth institutions likes the Indian Railways. The company with four state-of-the-art manufacturing units spread across Kerala has a pan India presence with marketing offices in major metros and select

cities.

OBJECTIVES:

The objective of the organizational study is to help the MBA student to develop his ability to apply multi-disciplinary concepts, tools and techniques to solve organizational problems and to evolve innovative theoretical frame work.

• This would help the student to get a practical and real time experience about various aspect concerned with the organization and to relate it to the concepts and theories studied in the classroom.

• To understand the different operations and their overall functions in an organization.

• To study the organizational structure and hierarchical level.

• To study how the various managerial activities like planning, organizing, directing, and controlling the various departments to achieve organizational goals.

• To know the various departments such as marketing, financing, operations, human resource management etc. and its activities and functions.

• To know about the growth prospective of the company

METHODOLOGY:

Primary data:

Primary data are those data collected directly from the organization. It is fresh information collected by the direct interaction with the workers and discussion with the managers and other staff in the organization

Secondary data:

Secondary data are those data collected by others. Data collected from business journals, magazines, quality manuals, websites, brochures and annual reports of the organizations.

SCOPE:

Organizations study is used to know the working of an organization and its various departments. And also know that how well the organization function its activities. Mere reading of textual matters is not enough for an MBA student, he should be practical in all sense. This Organization study helps to know practical aspects of the theories which are learned in the class room. Also this study helps to know about the real life problems of the present business scenario. This study is beneficial to future managers as they are put into the real life situations. The organization study mainly deals with the environmental analysis of the organization. This is based on the assumption that both its external and internal environment control the organization. External factors are competitors, government policies, suppliers and the society. Internal factors are company policies, employees, owners and trade unions.

LIMITATIONS:

• Organizational limitations.

• Time constraints

• Possibility of biased information

• Broad frame work of the study

CHAPTER II

INDUSTRIAL PROFILE

The electrical power industry provides the production and delivery of electrical power (electrical energy), often known as power, or electricity, in sufficient quantities to areas that need electricity through a grid. Many households and businesses need access to electricity, especially in developed nations, the demand being scarcer in developing nations. Demand for electricity is derived from the requirement for electricity in order to operate domestic appliances, office equipment, industrial machinery and provide sufficient energy for both domestic and commercial lighting, heating, cooking and industrial processes. Because of this aspect of the industry, it is viewed as a public utility as infrastructure.

The electrical power industry is commonly split up into four processes. These are electricity such as a power station, electric power transmission, electricity distribution and electricity retailing. In many countries, electric power companies own the whole infrastructure from generating stations to transmission and distribution infrastructure. For this reason, electric power is viewed as a natural monopoly. The industry is generally heavily regulated, often with controls and is frequently government-owned and operated. The nature and state of market reform of the electricity market often determines whether electric companies are able to be involved in just some of these processes without having to own the entire infrastructure, or citizens choose which components of infrastructure to patronize. In countries where electricity provision is deregulated, end-users of electricity may opt for more costly green.

Although electricity had been known to be produced as a result of the chemical reactions that take place in an electrolytic cell since Alessandro Volta developed the voltaic pile in 1800, its production by this means was, and still is, expensive. In 1831, Michael Faraday devised a machine that generated electricity from rotary motion, but it took almost 50 years for the technology to reach a commercially viable stage. In 1878, in the US, Thomas Edison developed and sold a commercially viable replacement for gas lighting and heating using locally generated and distributed direct current electricity.

The world's first public electricity supply was provided in late 1881, when the streets of the Surrey town of Godalming in the UK were lit with electric light. This system was powered from a water wheel on the River Wey, which drove a Siemens alternator that supplied a number of arc lamps within the town. This supply scheme also provided electricity to a number of shops and premises.

Coinciding with this, in early 1882, Edison opened the world’s first steam-powered electricity generating station at Holborn Viaduct in London, where he had entered into an agreement with the City Corporation for a period of three months to provide street lighting. In time he had supplied a number of local consumers with electric light. The method of supply was direct current (DC).

It was later on in the year in September 1882 that Edison opened the Pearl Street Power Station in New York City and again it was a DC supply. It was for this reason that the generation was close to or on the consumer's premises as Edison had no means of voltage conversion.

The voltage chosen for any electrical system is a compromise. Increasing the voltage reduces the current and therefore reduces resistive losses in the cable. Unfortunately it increases the danger from direct contact and also increases the required insulation thickness. Furthermore some load types were difficult or impossible to make for higher voltages.

Additionally, Robert Hammond, in December 1881, demonstrated the new electric light in the Sussex town of Brighton in the UK for a trial period. The ensuing success of this installation enabled Hammond to put this venture on both a commercial and legal footing, as a number of shop owners wanted to use the new electric light. Thus the Hammond Electricity Supply Co. was launched. Whilst the Godalming and Holborn Viaduct Schemes closed after a few years the Brighton Scheme continued on, and supply was in 1887 made available for 24 hours per day.

Nikola Tesla, who had worked for Edison for a short time and appreciated the electrical theory in a way that Edison did not, devised an alternative system using alternating current. Tesla realized that while doubling the voltage would halve the current and reduce losses by three-quarters, only an alternating current system allowed the transformation between voltage levels in different parts of the system. This allowed efficient high voltages for distribution where their risks could easily be mitigated by good design while still allowing fairly safe voltages to be supplied to the loads. He went on to develop the overall theory of his system, devising theoretical and practical alternatives for all of the direct current appliances then in use, and patented his novel ideas in 1887, in thirty separate patents.

In 1888, Tesla's work came to the attention of George Westinghouse, who owned a patent for a type of transformer that could deal with high power and was easy to make. Westinghouse had been operating an alternating current lighting plant in Great Barrington, Massachusetts since 1886. While Westinghouse's system could use Edison's lights and had heaters, it did not have a motor. With Tesla and his patents,

Westinghouse built a power system for a gold mine in Telluride, Colorado in 1891, with a water driven 100horsepower (75 kW) generator powering a 100 horsepower (75 kW) motor over a 2.5-mile (4 km) power line.Almarian Decker finally invented the whole system of three-phase power generating in Redlands, California in 1893. Then, in a deal with General Electric, which Edison had been forced to sell, Westinghouse's company went on to construct a power station at the Niagara Falls, with three 5,000 horsepower (3.7 MW) Tesla generators supplying electricity to an aluminum smelter at Niagara and the town of Buffalo 22 miles (35 km) away. The Niagara power station commenced operation on April 20, 1895.

Tesla's alternating current system remains the primary means of delivering electrical energy to consumers throughout the world. While high-voltage direct current (HVDC) is increasingly being used to transmit large quantities of electricity over long distances or to connect adjacent asynchronous power systems, the bulk of electricity generation, transmission, distribution and retailing take place using alternating current.

Electrical industry on growth path

After being in the doldrums towards the end of the 1990s, the Indian electrical equipment industry is seeing a revival in the last couple of years with the growth rate averaging 7 per cent per annum. The next two years should see a double digit growth rate, says P. Krishnakumar, President of the Indian Electrical and Electronics Manufacturers' Association (IEEMA).

There is no doubt that a major cause of this upsurge is the reforms that have led to unbundling of monolithic, state-owned power utilities and the corporatization of the transmission and distribution sectors. The pressure on these new enterprises to be commercially viable has led to the implementation of practices for reducing power losses (technical as well as due to theft) in the pipeline and effect better recovery of dues. This, in turn, has led to investment in new equipment and systems which have boosted the fortunes of the equipment manufacturing industry.

Heavy electrical industry covers units manufacturing large plants and machinery requires for power generation, transmission, distribution and utilization. These include turbo-generators, boilers, and various types of turbines, transformers, motors and switch gears. The major areas where the heavy electrical equipments are used are the large projects for power generator including nuclear power stations, petro chemical complexes, chemical plants, integrated steel plants, non-ferrous metal units etc... The share of the domestic equipment is about 66% of the country’s generation capacity.

The industry has also established a strong manufacturing base to the requirement for the equipment for the nuclear power plants in the country. The domestic heavy electric equipment manufacturer are making use of the developments in the global market with respect to the product designs and upgrading of manufacturing and testing facilities. The industry is also competitive in the field of design and engineering as the skill sets available in the country are relatively less expensive.

The first public sector electrical equipment industry setup in Kerala was the Metropolitan Engineering Company Llimited in Trivandrum in 1945. It was closely followed by the starting of Electrical and Allied Industries Pvt. Ltd (EAIT) at Kundara in 1946. EAIT at 1964 was taken over by Govt., which was registered as a govt. of Kerala undertaking. At present there are five public sector electrical equipment industries working in Kerala and they are.

• The metropolitan Engineering Co. Ltd started in1946 at Trivandrum their main products are isolators, fuses and switches.

• United electrical Ltd in 1960 at Kollam their main products are meters, motors and capacitors.

• Traco cables in 1960 at Angamaly their main products are telephone cables and PVC cables.

• KEL was started in 1964 in Kundara their main products are Alternators and transformers.

CHAPTER III

COMPANY PROFILE

Established in 1964 in the State of Kerala, India, the Kerala Electrical & Allied Engineering Co.Ltd. (KEL) is a multifaceted company fully owned by the State government. Through its five production facilities, located in various districts of the State, this ISO 9001: 2000 compliant company provides basic engineering services / products besides executing projects of national significance for high profile clients like the various defense establishments.

The company manufactures and markets products like general purpose brushless alternators, brushless alternators for lighting and air-conditioning of rail coaches, medium power and distribution transformers as well as

Structural Steel fabrications

The product categories for defense applications include high frequency alternators, frequency convertors, special alternators and power packs for missile projects. The power packs designed and supplied by the company for missile projects like Falcon, Prithvi, Trishul and Akash have been pioneering efforts. The company has also supplied special alternators to the Army (Military Power Cars) and Air Force (Radar Applications).

The company's all-India marketing network with regional offices in all metro cities cater to major institutional clients like the State Electricity Boards, Indian Railways and various defense establishments besides the general market clients.

KEL’s products are marketed through an all-India network of marketing and after sales service offices located in all the metro cities (New-Delhi, Bombay, Madras, Calcutta, Kanpur, Bhopal, Hyderabad, Bangalore, Coimbatore and Trivandrum. These offices provide all support services to the sales and marketing team to guarantee complete customer satisfaction. Also there are Sales / Liaison Officers at Coimbatore and Trivandrum.

Kerala Electrical and Allied Engineering Company Ltd, known as KEL is a fully owned Government of Kerala undertaking engaged in the manufacturing of Electrical Engineering goods.KEL with its corporate office in Kochi has four manufacturing units in Kundara, Mamala, Olavakkot, and Kasargod. In addition to these production centers, a project division for execution of turnkey project a Research and Development wing and the centralized marketing network are having their head quarters in the corporate office .The total manpower strength of the company is 1342 and turnover in 1992-93 was Rs 50 crores.

The present product range of the company includes Brushless Alternators for the Train Lighting and Air-conditioning, Ground Power units (GPU) for air craft’s, high frequency alternators for defense applications and Antarctica expedition, Distribution and Power Transformers ,HRC fuses , Switch Gears Brushless AC Generators, Brushless alternators for automobile etc.

The various products developed by the KEL R&D wing are the following:

❖ 5 KVA, 400Hz alternator for Antarctica expedition for the defense department of Govt. of India.

❖ 20KW DC manual and self propelled type ground power units for ‘Vayudoot’ for starting their Aircrafts.

❖ 30KVA rotary converter for radar application for helicopter starting for Indian navy.

❖ 3KV generator for windmill applications.

❖ 5KV alternator for with rectifier regulator unit for battery charging in locomotive engines.

❖ 40KVA ground power unit for the requirements of starting of fighter aircrafts like ‘MIRAGE’.

❖ 90KVA ground power unit for Boeing and Air Bus Aircrafts and under developing.

❖ 20KVA alternator for powering mobile radar installations .This has been tested, tried and accepted by Indian Air force.

KEL has also got a project wing. It is headed by the General Manager attached to corporate office. they undertakes turnkey projects in design, fabrication, supply and erection of gates, hoists and controlling equipments for power and irrigation projects and civil works including heavy machinery erection.

Manufacturing Units:

1. Kundara Unit, Kollam District Inception: 1964(ISO9001:2000 QMS certified unit):

The Kundara unit of KEL has been manufacturing Railways the world over as the most efficient and reliable one more than 20000 Nos Alternators manufactured by KEL are already in operation with the Indian Railway alone.

KEL has set up a modern Iron Foundry with a capacity of 1500 mts per annum, manufacturing spheroid Graphite Iron and Grey Iron casting of various grades at Kundara unit. The division is equipped with fully mechanized molding lines, sand plant, sand blurt systems, coreless induction furnace and a laboratory with sophisticated material testing equipment to ensure quality castings.

2. Mamala Unit, Ernakulum District Inception: 1968 (ISO 9001:2000 unit):

This unit is engaged in the production and distribution of medium range power up to 1600 KVA 33 KV class with annual production capacity of 6 lakhs KVA and the prime customer is Electricity Board. With over two decades of expertise KEL transformers have earned the distinction of approval from National Test House various electricity Boards and Power corporations in the country. The structural division set up here in fully equipped with sophisticated machine tools and machineries. These divisions undertake design, fabrication and commissioning of hydraulic control gates and hoists for power and irrigation project cranes, pressure vessels and other industrial structures.

3. Olavakkod Unit, Palakkad District Inception: 1977 LT Switch gear Division:

This unit is engaged in the manufacture of KEL –NORFUSE,HRC fuses and micro fuses under license from UNILEC,Frame and confirming to IS 92244-979 ;The other products include ,isolator switches, distribution fuse switch fuses etc.

4. Kasaragod Unit, Kasaragod District: Inception: 1990 an ISO 9001 Unit:

The unit was commissioned in 1990 for the manufacture of Gensets and Alternators with technical collaborations from Meteors Leroy Somers of France. The unit set up at an investment outlay of Rs 20 crores, has an installed capacity to manufacture 3000 Nos of all per annum ranging from 15 to 1500 KVA.

KEL PRODUCT RANGE:

KUNDARA UNIT:

a) Inductor type Brushless alternator for train lighting and air-conditioning 1kw to 40 kw.

b) Inductor type Brushless alternator for automobiles and for charging system in diesel engines 12 volts and 24 volts up to 45 Amps.

c) High frequency alternator (400 Hz) up to 100 KVA

d) Variable speed alternator for wind mill application up to 100 KVA.

e) Ground power units 28.5 volts DC 1500 Amps for starting Avro and Dornier Aircrafts.

f) Ground power units for powering Boeing Aircrafts up to 100 KVA.

g) Ground support aggregate with dual voltage system for starting wing and other fighter aircrafts.

MAMALA UNIT:

a) Medium power and Distribution Transformers up to 1600KVA 33KV class.

b) Design, fabrication, supply and erection of gates and hoists for irrigation and power projects.

c) Structural steel fabrication to customer specifications.

OLAVAKKOT UNIT:

a) Fuse puller for micro fuse and nor fuse.

b) Cast Iron clad switch fuse up to 100 Amps to 415 Amps.

c) Sheet metal clad switch fuse up to 200 Amps 415 volts.

d) Sheet metal clad front handle switch fuse up to 100 Amps 415 volts.

KASARGOD UNIT:

Brushless AC generators (Alternators) from 15 KVA to 1500 KVA, at 1500 rpm and 415 volts.

COMPATITORS:

The main competitors of KEL are;

• H.M.T.D Chennai

• Store India Calcutta.

• Press Tech India.

• Unitech

• Crompton Greaves Ltd Chennai.

MAJOR CUSTOMERS:

a) Indian railway

b) Defense application.

c) Air force

d) Bharath Heavy Electrical (BHEL)

e) Bharath Earth movers Ltd (BEML)

|Our Vision |

| To be a globally recognized enterprise committed to enhancing stakeholder value by providing world class |

|engineering and power system solutions |

|Our Mission |

|To achieve our vision by : |

|Applying state-of-the-art technology, processes and innovative solutions. |

|Building long term relationship with stakeholders in an environment of fair |

|business ethics and values |

|Creating value through sustainable and profitable growth |

|Leveraging productivity through highly motivated and empowered team |

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ORGANISATIONAL STRUCTURE

FUNCTIONAL DEPARTMENTS

The first real task in designing an Organization structure is the identification of activities and to group them properly. The process of grouping the activities is commonly known as departmentation. The basic advantage of the specialization lies in the terms of efficiency with which the work is performed because a person focuses his attention on a narrow aspect of the work and he gets mastery over that aspect. Naturally this results into performing the work more efficiently.

The major departments working operating in KEL are:

1. Planning Department

2. Finance and accounting Department.

3. Quality Assurance Department

4. Personnel and Administrative Department

5. Design and Development Department

6. Production Department

7. Marketing Department.

8. After sales department

9. Materials Management Department

PLANNING DEPARTMENT

Planning is one of the important functions of the management. The main function of the planning department is to plan and schedule for the production and dispatch. This department includes both planning and dispatch sectors.

POLICY

To establish and maintain a documented procedure for planning the production, availability of materials and schedule of dispatches for enabling the organization to provide the right product and services at the right time, every time as per the customer requirements.

OBJRCTIVES

To minimize the difference between the times that planned and achieved production.

FUNCTIONS

1. Get information from the marketing department about the orders received. The information contains all details about the customer quality and quantity.

2. Analysis of orders and decide about when to start and how to start.

3. Information is then passed to production department.

4. Check whether materials are available in the store department, if not, then the information is passed on to the materials department to purchase the materials.

STRUCTURE OF PLANNING DEPARTMENT

PLANNING PROCESS/ACTIVITY:

1. Yearly planning

2. Quarterly planning

3. Monthly planning

4. Preparation of work order

5. Issuing work order and bill of materials

6. Raising PR

7. Monitoring production

8. Analysis of production short fall

9. Maintenance of records

PLANNING PROCESS CHART:

Yes No

WORK INSTRUCTION FOR PACKING FOR EXPORTS

1. Quality: The quality of packing material to be ensured packing material to be chemically treated seasoned for sea worthiness

2. Check whether inspected seal is marked / punched before packing the finished goods.

3. Compare and confirm the finished goods with delivery Chelan

4. Use hoist which loading heavy items.

5. Proper cushioning is given while packing the spares in wooden cases.

• Proper covering with jute to be given for avoiding transit damages

• Silica gets to be used to prevent rusting and avoid moisture.

6. Witness: Ensure that the central excise personnel verify the finished goods and sealed the packing.

7. Marking: All plywood/wooden boxes to be suitably marked with paint indelible water proof ink with the following particulars on the outside apart from the destination address.

• Purchase order number, Gross weight ,Net weight and box measurement

• Box number to be indicated on at least three sides of the box.

8. Ensure that the packing is fumigated or pest control before shipment.

• Certificate to this effect is obtained and sent along with the consignment.

WORK INSTRUCTION FOR LOADING

1. Check whether the “inspected sea” is provided.

2. Make sure that the hoist in working condition.

3. Compare and confirm the finished goods with Delivery Chelan.

4. Make use of hoists while loading and unloading heavy items.

WORK INSTRUCTION FOR PACKING

• The quality of packing case is assured as per craving

• Check whether inspected seal is marked /punched before packing the finished goods.

• Compare and confirm the finished goods with Delivery Chelan

• Use hoist while loading heavy items

• While loading the item which is not being packed.

a) Wooden rapiers are placed in between, when finished goods are stacked in rows.

b) Paraffin papers/ paper cutting in between, when finished goods are stacked one over the other.

I. Proper cushioning is given while packing the spares in wooden cases /cartoons

1. While packing Alternator Pulleys, proper covering with Sack (jute) is given for avoiding transit damages. Each packed material is made identifiable by putting the address of the consignee with

Corresponding sale order number, item and quantity on the top of the packing, follow these instructions strictly.

DISPATCHES

OBJECTIVE

Eliminate wrong dispatches and reduce transit damages to 50% within one year.

POLICY

Delivery of products at the right time.

FINISHED GOODS STORE;

PROCESS/ACTIVITY:

1. Checking of finished goods and storing (FG store)

2. Checking and preservation (FG store)

3. Packing of finished goods F.G.C.F.G

4. Intimation for preparation of D.C and excise gate pass

5. Delivery of finished goods as per D.C

6. Collection of acknowledge D.C from consignee

FLOW CHART FOR FINISHED GOODS STORE:

FINANCE DEPARTMENT

Finance department is headed by finance manager. The main responsibility of finance managers is to take finance decisions which include investment decisions. Financing decisions, dividend decisions etc. The manager has to keep a constant touch with all other departments and also keep all the records of transactions. At the end of every year he is responsible for making the financial statements.

Financial statements are prepared for the purpose of presenting a periodical review of report on progress by the management and deal with the status of investment in the business and the results achieved during the uses of fund. Financial statements reflect a combination of recorded facts, accounting principles and personal judgments. In order to understand the financial performance of a company it is necessary to analyse the balance sheet and profit and loss accounts.

To maintain all books of account up to date as per the statutory requirements and to manage working capital, preparation of budget, ensuring discipline in the case of financial resources preparation and analysis books of account. The main books of account maintained in KEL are cash book, bank book, purchase register, Journal register pay roll statement and central excise records. The software used is TALLY 9.

Sales turnover of KEL during 2005-06 is 12 crores and during 2006-2007 around 40 crores. In KEL the financial statements are audited internally and externally. The internal audit is done by the corporate office while the external audit is done by Government officials.

The main responsibility of the finance department is to make:

➢ Investment Decision

➢ Financing Decision

➢ Dividend Decision

The manager has to keep in touch with all the departments and also keep all the records of the day to day transactions at the end of the year prepare financial statements.

STRUCTURE OF FINANCE DEPARTMENT:

In KEL the accounts and books are computerized. The software used maintaining records are Tally 9 release 2.11. The books maintained in this software are:

➢ Cash book

➢ Bank book

➢ Journal register

➢ Purchase

➢ Sales

➢ VAT records

➢ Central excise records

Balance Sheet as at 31st March 2003, published on 18-02-2005

|Particulars |31-03-2003 |31-03-2002 |

|Source of Funds | | |

|Share Holders Fund | | |

|Capital |683780774 |561680774 |

|Reserves and surplus |4049631 |3981803 |

|Loan funds | | |

|Secured Loans |190733192 |300624005 |

|Unsecured Loans |78301147 |3299884 |

|Total |956864744 |869586466 |

| | | |

|Application of Funds | | |

|Fixed assets | | |

|Gross Block |250096232 |249001661 |

|Depreciation |172885169 |159381073 |

|Net Block |77211063 |89620588 |

|Project W.I.P |90864374 |89055216 |

| | | |

|Investments |50500 |50500 |

|Current assets, loans and advances |451222041 |320319519 |

|Less: current liabilities and provision |280309051 |228843522 |

|Net current assets |170912990 |91475997 |

|Deferred revenue expenditure |9650 |14476 |

|Profit& loss A/C |617816167 |599369689 |

|Total |956864744 |869586466 |

Profit and loss A/C for the year ended 31st march 2003

|Particulars |31-03-2003 |31-03-2002 |

| | | |

|Income | | |

|Sales, works, contract, job works and miscellaneous |496325769 |349185891 |

|Increase (Decrease) in stocks |62668813 |(22042022) |

|Total |558994582 |327143869 |

|Expenditure | | |

|Materials Consumed |232139715 |150743292 |

|Interest & Bank charge |38473225 |38511861 |

|Other expenses |293279111 |236086639 |

|Depreciation |13544184 |13834705 |

|Deferred revenue expenses written off |4825 |4825 |

|Total |577441060 |439181322 |

| | | |

|(Loss)/ Profit |(18446478) |(112037453) |

SIGNIFICANT ACCOUNTING POLICIES

1. Accounting convention

The financial statement is prepared under historical cost convention on accrual basis and in complains with the Companies Act of 1956.

2. Fixed asset

Fixed assets are stated at cost less depreciation. Assets and liabilities are recorded at higher cost.

3. Depreciation

Depreciation of fixed asset has been provided as per rates indicated in line XIV of Companies Act 1956 under return down value method

4. Inventories

• Finished goods are valued at cost on market price whichever is less; excise duty is also taken into consideration

• Scraps are valued at net realization value.

• Goods in transit are valued at cost.

5. Sales

• Sales comprise of sales of goods and services including excise duty.

• Price variation claims on sales effective are accounted for on accrual basis.

6. Consumption

• Loose tools issued to shop floor is stated as consumed and return of as scrap

• Consumption of materials for production is computed on derived basis.

7. Liability on material on transit

The liability on account of bank charges and other expenses on material in transit on the date of closing is accounted on approval basis.

8. Research and development:

Capital expenditure on R&D is treated as in addition to fixed assets and revenue expenditure on R&D is charged to P&L account under appropriate heads in the year in which it is incurred.

9. Contingent liability:

Contingent liabilities are not provided for, but disclosed in notes on accounts.

MAJOR BANKS:

• State Bank of Travancore

• State Bank of India

• Federal Bank Limited

• State Bank of Mysore

• Kerala State Corporation Bank Limited

QUALITY ASSURANCE DEPARTMENT

POLICY

Quality policy of QAD is to ensure the quality of materials/components to the concerned areas for further processing.

OBJECTIVES

• Materials offered along with GRNs will be inspected within 10 days from the date of receipt of GRN.

• Reducing the defective materials returning from production to 50% within one year.

KEL has established, documented , implemented ,maintains and continuously improved its quality management systems, with the requirements of ISO 9001:2000 by different process involved in understand the customer requirements , manufacturing and supply of products and after sales services as well as management process are identified and its sequence and instructions are determined. The process map is developed detailing the sequence and control points for each step involved in the process. A process interaction chart determining the sequence and interaction of the process is developed.

QUALITY ASSURANCE DEPARTMENT CHART

The Quality Management System documentation includes:

a) KEL’s stated quality policy and the quality objectives

b) Quality manual.

c) Quality system procedures including the six documented procedure required by ISO 9001:2000.

d) Control of documents.

e) Control of records.

f) Internal Audit.

g) Control of non-conforming products.

h) Corrective action.

i) Preventive action.

f) Drawings, work instructions and check list.

g) Records.

Quality verification is done at three stages

In the first stage, they verify every incoming raw material against the relevant ISO specification. When the materials fails to meet the criteria, the whole lot of batch is rejected, however when it require the material urgently department will reject only the facility item.

The production department offers the materials as various hold points for verification then QAD checks the products and maintains are record of conformity this is the second stage of verification.

Final test for the reliability is carried out by KEL, on all Alternators and Regulators as per specification given by RITS and BIT. Its intended operation will be verified for a specified period of time under certain experimental condition. No products shall be dispatched until activities specified in quality plan or documented procedure has been completed

Quality testing is done at QAD (Quality Assurance Department). Quality testing is done at three stages. They are

i. Incoming material.

ii. Incoming process.

iii. Final testing.

When materials arrive from suppliers, it arrives with a test certificate certifying the quality of product. In case of well known suppliers like SAIL the certificate is accepted and no further quality testing is done. In other vendors testing is

compulsory. The test conducted in the quality departments have to meet certain criteria according to ISO 9001:2000 regulations. When the material fails to meet the criteria, the whole lot of batch is rejected.

Quality Manual:

The Quality Management System is established, maintained and documented in the quality manual. It is developed as a policy manual to describe the Quality Management System followed in the Organisation. The quality manual includes.

• Quality policy and objectives, Organization structure, responsibilities, authorities and scope.

• Reference to procedures and process maps.

• Sequence and interaction of the processes.

• Policy of the company regarding each process/activity.

The quality manual is reviewed and approved by General Manager for correctness and suitability to meet the Organization requirements.

Process of Material Inspection:

PERSONNEL AND ADMINISTRATION DEPARTMENT:

The term personnel management has now been modified as Human Resource Management. But in KEL, they still follow the old term Personnel Management. The Personnel Management controls the personals in the company.

POLICY

To achieve the competency of our skilled manpower through constant training, education and experience in order to gain product quality.

OBJECTIVE

To educate and train our skilled manpower on a half yearly basis at the rate of 8 hours training per employee to upgrade the skill level and to reduce the rate of absenteeism to 5% from 7% which will be measured on a monthly basis.

Duties of Personnel Manger:

• Manpower planning

• Recruitment

• Selection

• Placement procedures

• Training and Development

• Performance Appraisal

• Transfer and promotion

• Employees welfare administration

• Disciplinary action

• Wages and Salary administration

• Leave Administration

Structure of Personnel and Administration:

[pic]

Recruitment:

Mainly three types of recruitment are following in KEL. They are :

1. Direct recruitment.

2. Internal recruitment.

3. External recruitment.

1) Direct Recruitment:

On the basis of rules and regulations prevailing in this company, the management can recruit the technical hands such as unskilled workers, semi skilled workers and as supervisors. They are appointed as apprentice trainee.

They are recruited through employment exchanges. Sometimes security guards are also appointed through direct recruitment.

2) Internal recruitment.

In certain cases, company conducts an internal notification for the higher post. The qualifications, experience, additional qualifications etc required must be clearly specified in the notification. The internal recruitment is through promotion, only after considering the merits and performance of the employees.

3) External recruitment:

In this type, recruitment is done through Kerala Public Service Commission (KPSC).On the vacancies intimated by the management, KPSC advertises through the media calling appropriate candidates. The test/interview is conducted by the KPSC and posts them to the company. Clerical post appointments i.e. typist, stenographers, drivers and junior assistant etc are through public service commission.

PROCESS:

❖ Receiving recruitment for labors from the entire department.

❖ Sending letters to registered and corporate office.

❖ Informing employment exchange ,RI centre (RO)

❖ Receive list of candidate from the agency

❖ Fixing interview date

❖ Form the interview board

❖ Sending call letter

❖ Conducting interview

❖ Sending appointment letter to candidate (RO)

❖ Joining report preparation

❖ Allocation of candidate to required department

Clerical post appointment:

▪ Typist

▪ Stenographers

▪ Drivers

▪ Junior assistants

Are appointed through PSC

Training and Development:

It’s an effective tool for employee’s development. Three types of training are mainly adopted in KEL.

1. Induction Training.

2. External Training.

3. Internal Training.

1) Induction training:

The fresh employees and the transferred employees from other units must undergo this training. A training schedule is prepared by the personal department and directs the employees to the various sections or departments for the training.

2) External training:

This is given to the permanent employees such as engineers, officers and other executives conducted by external agencies or external organization.

3) Internal training:

This type of training is given to technical persons working in various division/sections. Apprentice training also given as a part of internal training. Work rotation is another technique for internal training.

Management gives training for a period of one year for the fresh employees. After the successful completion of training he is recruited on probation and after he is appointed in regular service. This training is compulsory for the company.

TRAINING PROCESS:

1. Sending circular to all HODs about the training need of employees of the concerned department in prescribed format.

2. Receiving the responses.

3. Preparation on annual training plan

4. Scheduling monthly plan

5. Preparation of panel for training (external and internal)

6. Keeping attendance of participants

7. Evaluation and feedback from participants.

Welfare Measures:

The welfare measures provided by KEL are:

❖ Loan Facilities

❖ Canteen

❖ Recreation Club

❖ Education benefit

❖ Death Assistance

❖ Funeral Assistance

❖ Retirement Assistance

❖ Benefit on registration

❖ Marriage Contribution

❖ Provident fund

❖ ESI

❖ Accident Benefits

❖ Maternity leave

❖ Drinking Water

❖ Latrine & Bathroom

❖ Telephone

Some of the allowances given to the employees are:

❖ Washing allowance

❖ Night shift allowance

❖ Milk allowance

OTHER BENEFITS:

• NSA-allowance of rupees 5/shift

• WA- rupees 16.50 /month

• MA-rupees 2.50/day

• Risk allowances rupees 75/month

• HR-rupees 30/month

• Uniform cloth allowances- one pair of shoes and two pair of socks every year

• Duplicating allowance-rupees 16.50 pm for one person

• Heat treatment allowance- rupees 35/month for one or two person who are in finance.

Wage and Salary Administration:

Wages:

Wage depends on the long term agreements exist for duration of four years. Wages are fixed after bilateral discussion with labour unions and management. These wages are enacted only after the approval from the government.

There is no profit sharing, but they get indirect benefits out of realized profits.

Salary:

Salary=Basic Pay +DA+ HRA+ Other allowance

DA is based on the cost of living index at Kollam district. Department of Economics and Statistics fix the index. Government fixes the DA for officers. Allowances include washing allowance, risk allowance, heat treatment allowance, cycle allowance and night shift allowance etc.

Health and Safety:

KEL provides high facilities for health and safety for employees. Ventilation for each room, canteen and rest rooms at convenient places and recreation club is also functioning in there.

For safety measures company provides shoes and socks once in one year for the relevant workers, uniform cloths to the workers once in two years; goggles (protective glass) are provided to the welders and furnace workers.

Time Office Attendance:

Punching system is being followed for all employees. Attendance bonus is used for motivating employees. The scheme provides with 12 days bonus salary for employees with full attendance.

There are 3 shifts with a general shifts:

|Ist Shift |8:00am to 4:00pm |

|IInd Shift |4:00pm to 12:00am |

|IIrd Shift |12:00am to 8:00am |

|General Shift |8:00am to 4:30pm |

Transfer:

At the time of appointment every employee is given a declaration to the management regarding, they are willing to work in all over India wherever the company has units and regional offices. As per the manpower requirements transfer the employees to different units. In the case when employee request for transfer as per his convenience, if the management found the reason is relevant they gives consent. But the employee is posted as the junior most employee of that unit in the same category.

Promotion:

It is based on the promotion policy agreement; it’s strictly based on the seniority of service. If there is vacancy in higher post, then promote to the higher post otherwise give the higher grade scale.

Promotion Channel:

|POST |Completion of years |Promoted post |

|Unskilled worker |8 |Semiskilled worker |

|Semiskilled worker |8 |Skilled worker |

|Skilled worker |10 |Special skilled worker |

|Special skilled worker |6 |Charge hand. |

|Charge hand. |6 |Foreman |

|POST |Completion of years |Promoted post |

|Foreman |6 |Asst Engineer |

|Asst Engineer |6 |Engineer |

|Engineer |6 |Asst Manager |

|Asst Manager |6 |Manager |

|Manager |6 |Dy. General Manager |

|Dy. General Manager |6 |General Manager |

|General Manager |6 |Executive Manager |

MANPOWER PLANNING

One of the important function of Personnel and Administrative management is manpower planning. It means correct utilization of manpower. They undertake the task of creating human capacities which ensures that fully contributes to the total organizational performance. They also have the responsibility for the determination of manpower recruitment of organization both in the right number and of the right kind

.

SELECTION:

Selection is mainly for the ex-service men, that is, by an agency through application, scrutiny test. The persons selected are based on interview for placement of job.

GRIEVANCE HANDLING:

The grievances are also handled by Personnel and Administrative department. They collect the grievances of the employees and informed to the top level mangers and solve their problems. There is a suggestion box inside the organization for grievances of the employees.

LEAVE STRUCTURE:

• Casual leave-14 days

• Sick leave -14 days (for more than 3 consecutive days sick leave, a medical certificate should be produced )

• Privilege leave-30 days.

DISCIPLINARY ACTION:

The Personnel and Administrative department is responsible for disciplinary actions against violation of rules and regulations which are mentioned in the standing order.

SOME CASES ARE;

• Willful in subordination

• Disobedience

• Fraud

• Theft

• Dishonesty

• Illegal absence

• Sexual harassment

PROCESS

1. Case reporting to the GM

2. Issue show cause memo

3. Warning or enquiry

4. Inform to head office

5. Approval for enquiry and posting of enquiry officers

6. Meeting management witness and employee witness

PUNISHMENT ACTIONS

➢ Suspension

➢ Increment banning

➢ Dismissal

TRADE UNIONS AND LABOUR RELATIONS:

KEL has got 4 affiliated unions:

✓ Electrical & Allied workers Union (UTUC)

✓ Electrical & Allied Industries employee union (INTUC)

✓ KEL employees organization (STU)

✓ KEL employees union (CITU)

DESIGN AND DEVELOPMENT:

OBJECTIVE

To design the alternators and its accessories as per design plan on receipt of the approved drawings / customer supplied drawings within the delivery period with zero design errors, so that field failures are eliminated and by limiting the number of prototypes to be made before freezing the design as two.

POLICY

To establish and maintain a documented procedure for designing the right product at the right time. This is achieved through continual improvement through constant technology up-gradation and team work at all levels.

STRUCTURE:

PROCESS

✓ Tender enquiry from marketing department.

✓ Feasibility study.

✓ Order and specialization.

✓ Design Plan.

✓ Collection and review of design input.

✓ Preparation of design outputs such as drawings, technical data sheets and bill of materials.

✓ Review of design outputs.

✓ Prototype manufacturing

✓ Verification of design.

✓ Validation of design

✓ Review of validated design

✓ Modification, if required

✓ Offering of prototype for customer inspection

DESIGN AND DEVELOPMENT FLOW CHART:

DESIGN PLAN

1. Collection of input

a) Customers specification

b) Results of contractual review

c) Inter face with other department

2. Design calculation

3. Design review

4. Preparation of drawings

5. Preparation of material list

6. Preparation of material specification

7. Preparation of acceptance criteria

8. Design review (output)

9. Modification after review

10. Issue of drawings, TDs, material list

11. Prototype manufacturing

12. Preparation of Quality Assurance Plan and Validation Plan

13. Validation of design

14. Review of validation design

15. Modification if required

16. Offering of prototype for customer inspection

QUALITY SYSTEM PROCEDURE FOR CONTROL OF DOCUMENT

OBJECTIVE

To make available required documents at all centers of operations related to quality system, to follow and demonstrate conformity to the specified requirements incorporating the latest revision.

SCOPE:

All documents such as quality system manual, quality system procedures, quality plan, and quality assurance plan, acceptance criteria drawing , specifications, work instructions formats, charts, material list and master list of document.

QUALITY SYSTEM PROCEDURE FOR CORRECTIVE ACTION

OBJECTIVE

To establish and maintain a documented procedure for implementing corrective action to eliminate the causes of existing non –conformities at all levels of the quality system ,to prevent the recurrence of non conformities.

SCOPE

All functional areas of organizations wherever quality system is implemented.

OVERALL RESPONSIBILITY

Committee or continual improvement

QUALITY SYSTEM PROCEDURE FOR PREVENTIVE ACTION

OBJECTIVE:

To establish and maintain a documented procedure for implementing preventive action to eliminate the causes of potential non-conformities at all levels of the quality system to prevent the occurrence of non conformities.

SCOPE

All functional areas of organization wherever quality system is implemented

OVERALL RESPONSIBILITY

Committee to continual improvement.

PRODUCTION DEPARTMENT:

POLICY

To provide right products at the right time which results in customer satisfaction through team work.

OBJECTIVE

To establish and maintain a documented procedure for carrying out the activities of production.

Key words in the policy shall be achieved through the functional objectives stated below:

❖ Right Product:

Reducing the Rework/ Rejection / In-house failures. Reducing rework/failures by 25% at the following stages:

a) Shaft ground.

b) End shield/turned/drilled.

c) High Voltage Test/Wound frames.

d) Testing of Alternator with Rectifier regulator unit.

❖ Right Time:

Achieving better on-time delivery by increasing the number of satisfied customers by 85% within the next three months and 90% within one year.

❖ Team Work:

Improving employee involvement and team work through generation of two suggestions per quarter and implementing a minimum of two improvement projects per year.

STRUCTURE OF PRODUCTION DEPARTMENT

Production Process

✓ Planning the daily activities and intimation of material shortage.

✓ Receipt of material tools/drawings.

✓ Projecting the requirements of measuring and testing the equipments.

✓ Production process.

✓ Review of non-critical items found during process.

✓ Offering inspection to QAD.

✓ Finished goods transfer note issuing.

✓ Return of excess material

✓ Monitoring production.

✓ Break down intimation.

Equipments used in production

o Lathes rolling machine.

o Welding machine.

o Hydraulic pressure.

o Drilling machine.

o Grooving machine.

o Sheering machine.

Shops involved in production

o Foundry unit.

o Fabrication Shop.

o Old machine shop.

o New machine shop.

o Winding & Assembling.

o Regulator section.

1. Foundry unit:

Founding or casting is the process of producing metal/alloy components parts of desired shape by pouring the molten metal/alloy into a prepared mould and then allowing the metal/alloy to cool& solidify. The solidified piece of metal/alloy is known as casting.

2. Fabrication shop:

Activities in here are plate cutting, profile cutting, press work, rolling etc.

3. Machine shop:

The main works in here is boring, drilling, grooving, facing, centering, turning, milling, grinding and balancing

4. Winding and assembling:

The main activities in here are phase coil and field coil winding, brazing preparation, paper cutting, varnishing, and assembly of alternator components and finishing.

5.Regulator section:

This is an independent division. In here electronic regulator for the alternator is prepared. Regulator is used for rectifying and regulates the alternator current.

Production Process flow:

YES

Yes NO

No

Maintenance team:

In KEL Kundara two types of maintenance teams are operation. They are mechanical maintenance and electrical maintenance teams. Maintenance department of KEL is responsible for keeping up the Plant and equipment in the plant in good condition. There are mainly three types of maintenance.

1. Preventive maintenance:

In Preventive maintenance, the staff ensures that the machine is being operated at the optimum possible condition. The various precautions that are taken by the staff are

a) Checking the amount of lubricating oil.

b) Checking the various motors.

c) Wear and tear check in gears and other moving parts of machines.

d) Working of various switches.

e) Maintenance of the various drive belts.

2. Breakdown maintenance:

When the machine has some serious defaults, then breakdown maintenances is done. This is done at the fastest possible place with affecting the smooth functioning of the operation of the company, ensured by assigning a competent worker in dealing with the fault machine.

3. Predictive maintenance:

In this type, maintenance is done by fitting gauge like devices which give an idea of the working of the machine. The maintenance may be either automatic as it is in the case of the pressure relief valve in air compressor

or would have to be done manually like changing the lubrication oil within the time specified by the manufacturer of the machine.

MARKETING DEPARTMENT

The KEL’s main product is 4.5 KW and 25 KW alternators. The main customers of KEL are Indian Railways, L&T, BHEL (Bharath Heavy Electrical LTD), BEML (Bharath Earth Moving LTD) and Defense (Prithvi and Trishul missiles). But always the end user is Indian Railways. As the target customer is Indian railway, KEL’s marketing department has no need for marketing their product. So there are no market research and analysis activities done by marketing department.

KEL participate in open tender as and when railways invites tenders, for this KEL’s services centers are located in all the metropolitan cities. These offices give all support services to sale and marketing lean to guarantee complete customer satisfaction.

As the number of customers are limited, so short channel of distribution.

OBJECTIVE

❖ To establish and maintain a quality system suitable for organization’s vision and commitments towards marketing and sales of products and services rendered to the customer.

❖ To improve upon customer satisfaction by reducing customer complaints, other than product complaints, by 50%within 6 months.

❖ To meet customers need both stated and implied in order to maximize the order realization by 10% within one year

❖ To increase customer satisfaction by 10% of the existing index by avoiding delay in providing on time services by 10%within one year.

POLICY

❖ To provide customer satisfaction and confidence to the customers that quality is being maintained and will be continuously sustained in the delivered products by providing the right product at the right time.

SCOPE

❖ The procedure covers all tender enquires, submission of tenders, acceptance and amendment of orders execution, invoicing and collection of payments.

PROCESS

1) Liaisons with customer for receipt of tender/enquires.

2) Purchase of tender documents.

3) Evaluation and review – Technical/Commercial

4) Pricing

5) Preparation of offer

6) Submission of tender

7) Tender opening

8) Negotiation

9) Preparation of offer for spares

10) Follow up for order

11) Receipt of order review and acceptance

12) Order register

13) Amendments from customer

14) Production planning

15) Issue of sale order and follow up.

16) Road permits/ Octroi exemption.

17) Arranging of Inspection

18) Preparation of delivery Chelan

19) Invoicing

20) Collection of payments

21) Warranty servicing

22) Training to customers

23) Records (marketing)

MARKETING PROCESS CHART

WORK INSTRUCTION FOR EXPORT:

1. Check I.E.C (Import Export Code) License whether valid nor not.

2. Check whether registration with export promotion council is valid.

3. Rate should be quoted as C.I.F(Cost Insurance and Freight) or F.O.B (Free On Board)

4. In case of C.I.F, sea/air freight charges to be collected from freight operators and insurance from insurance agencies.

5. Case should be taken on clauses like payment terms warranty after sales service etc.

6. Payment clause should be advance payment or through conformed irrevocable letter of credit at sight opened by reputed bank.

On receipt of purchase order, other than technical parameters ensure the following:

1. Payment clause should be conformed irrevocable L.C (Letter Of Credit) at sight by a reputed bank or advance.

2. Verify L.C, clause by clause internally and finally by our negotiating bank.

3. C.I.F or F.O.B rates.

4. Freight by air or sea.

ON ACCEPTANCE OF PURCHASE ORDER:

1. Arrange Insurance E.C.G.C (Export Credit Guarantee Corporation) to avoid any risk on political instability at buyer country.

2. Arrange marine insurance.

3. Inform Central Excise department and sale tax department regarding the export.

ON FINAL INSPECTION AND DISPATCH:

1. Painting should perfect conforming to international standard and packing should be sea worthy.

2. Prepare packing list and invoice.

3. Arrange central excise verification closing of packing box and sealing.

4. Ensure that packing boxes should be marked with sufficient information asked in the purchase order.

5. Arrange fumigation, if required.

6. Arrange customs formalities at sea port by engaging freight agencies

7. Arrange shipping

8. Collect documents through freight agent for obtaining the D.E.P.B (Deputy Entitlement Pass Book) benefits.

The main registers used by marketing department are:

a. Tender Register.

b. Sale order Register.

c. Payment Register.

AFTER SALES DEPARTMENT:

POLICY:

To provide customer satisfaction and confidence to the customers that quality is being maintained and will be continuously sustained in the delivered products by providing the right product at the right time.

OBJECTIVE:

• To improve upon customer satisfaction by reducing customer complaints, other than product complaints, by 50%within 6 months.

• To meet customers need both stated and implied in order to maximize the order realization by 10% within one year

• To increase customer satisfaction by 10% of the existing index by avoiding delay in providing on time services by 10%within one year.

Department structure

• GM - General Manager

• AM - Assistant Manager

• ST - Service Technician

PROCESS OF AFTER SALES DEPT

START

1. Co-ordination with regional officer regarding

➢ To attend service calls

➢ Arrangement of return of faulty alternator

➢ Dispatch of service spares

2. Making report against customer returned goods

3. Failure investigation and corrective action to be taken

4. Arrangement of dispatch of rectified alternator to consignee

5. Report regarding failure to MR

END

After sales service:

1. Co-ordination with regional offices regarding

a. To attend service calls.

b. Arrangement of return of faulty alternator.

c. Dispatch of serviced spares.

2. Making report against customer returned goods.

3. Failure investigation and corrective action to be taken.

4. Arrangement of dispatch of rectified alternator to consignee.

5. Report regarding failure to management review committee.

Process step:

a. Preventive action

o Periodic visit to customers (Manual and price list).

o Intimation of design changes.

o Training to customers

b. Servicing

o Customer complaints

o warranty servicing and training

o Maintaining tools, instruments and spares.

o Maintaining calibration.

MATERIAL MANAGEMENT DEPARTMENT:

Materials Management means managing materials in an organization with the main objective of reducing the cost and efficient handling of materials at all stages and sections in an undertaking. It includes purchasing, storage, inventory control, material handling standardization etc. This department deals with material cost, its supply utilization and handling.

POLICY:

To establish and maintain the process for procurement of right material and services at right time, from approved suppliers as our requirement and those of our customers.

OBJECTIVE:

❖ To purchase materials without deviation from specification by reducing concessional acceptance by 50% from the present level.

❖ To achieve 100% on time delivery by suppliers and to develop alternative source for tailor made items.

FUNCTIONS

1. Procurement of required quality and quantity of materials at the best price for production as per design.

2. Maintaining continuity of supply to ensure production schedule at minimum investment i.e.; inventory handling.

3. Avoidance of duplication of materials leading to wastage of materials and equipments.

4. Creation of goodwill for the company through dealing with the suppliers ABC analysis is used in inventory handling of materials.

The main duty of materials department includes:

1. Procurement of required quality and quantity of materials at the best price for production as per design.

2. Maintaining continuity of supply to ensure production schedule at minimum investment. i.e. inventory handling.

3. Avoidance of duplication of materials leading to wastage of materials and equipment.

4. Creation of goodwill for the company through dealing with suppliers.

ABC analysis is used in inventory handling of materials. When the reorder level reached, tender invites for the supply of materials.

STRUCTURE OF MATERIALS DEPARTMENT:

[pic]

a) GENERAL STORE

OBJECTIVE

To establish and maintain a quality system procedure for receiving, storing and issuing of materials.

SCOPE

This covers all materials used in production, installation and servicing of plant and machinery.

QUALITY SYSTEM PROCEDURE

1. Receipt of material

2. Quality verification

3. Preparation of GRNS

4. Offering for inspection

5. Inspection status

6. Rejection intimation

7. Segregation

8. Issue of materials

9. Issue of materials to sub contractors

10. Stock intimation

b) PURCHASING

OBJECTIVE

To establish and maintain a quality procedure for purchase of goods and services to ensure that all materials and services obtained from outside sources fully meet our requirements and those of our customers.

SCOPE

This covers all materials and services and used in production, installation and development of Technology and servicing of plant and machinery.

QUALITY SYSTEM PROCEDURE

1. Vetting of PR

2. Registration of sub-suppliers ,New vendors

3. Floating of enquiry

4. Emergency purchase

5. Comparison of quotation

6. Purchase order preparation

7. Placement of purchase orders

8. Purchase order amendment

9. Follow up of purchase order

10. Sub-contracting jobs

11. Advice in discrepancies in supplier

12. Rejection intimation

13. Rejection Return

14. Acceptance with deviation

15. Issue under positive recall

16. Retention of quality records

17. Settlement of payment

c) VENDOR RATING

OBJECTIVE

To establish and maintain a system for vendor rating, ensure consistency and reliability in quality and delivery of products.

SCOPE:

All vendors supplying items that goes directly or indirectly into the final product.

QUALITY SYSTEM PROCEDURE

1. Vendor evaluation

2. Vendor rating

3. Final vendors assessment

4. Vendor re assessment

CHAPTER IV

FINDINGS AND SUGGESTIONS

FINDINGS:

❖ Good employee employer relationship.

❖ Quality products

❖ Better customer dealings

❖ Better after sales services.

❖ Conduct training programs

❖ Higher turnover ratio

❖ The major customer of KEL kundara is Railway.

❖ Kundara KEL is on the path of modernization

❖ Lack of computerization

❖ Products are manufactured on the basis of customer requirements.

❖ Bio-metric system is used for time keeping

❖ KEL follows three shift system

❖ Workers are recruited through PSC, direct recruitment, and employment exchange.

❖ The level of job satisfaction achieved by workers after the implementation of ISO 9001-2000 in KEL is very good.

❖ Presently no recruitment processes are carried on by KEL.

SUGGESTIONS:

❖ Introduce computerization

❖ Recruit new employees

❖ Timely delivery of products

❖ The political interference should reduce for the proper functioning of the company.

❖ New technology should be introduced for the efficient working of the organization.

❖ Timely purchase of raw materials.

❖ Effective utilization of funds.

❖ Better safety measures should be provided.

❖ First aid services should be availed inside the premises.

❖ Transportation facility to the workers for time keeping.

CHAPTER V

SWOT ANALYSIS

STRENGTHS:

• Good brand image

• ISO 9001-2000 certificate

• It has well developed quality control system

• Intensive training and development program for employees and employers

• It is fully equipped to manufactures Brushless Alternators right from basic raw materials without depending on external sources.

• World class quality for the product

• Wide marketing network

• Hardworking employers and employees

• Good customer relation

• Brother hood relationship among employers and employees

• After sales service at various metro cities.

WEAKNESS:

• Being a public sector Company, so a lot of political interference is there and which affect the smooth functioning of the company.

• Lack of computerization and information technology applications.

• There is no ERP system.

• Often production shortage is there due to shortage of raw materials.

• Planned product is not achieved.

• Lack of financial support which will affect the smooth functioning of the company.

• There is no provision for appointment of new employees.

• Turnover ratio is more.

• Employee employer relation is higher, due to this factor the responsibility is lacking.

OPPORTUNITY:

• Globalization

• There is more scope for E.business application

• There is more scope for potential market.

• There is more scope for the use of highly equipped machinery with latest technology.

• Can prepare customized product for customers that are according to the customer requirements.

THREATS:

• High competition from the competitiors

• Increasing price of the raw materials.

• High political interference.

• Depends only on major customers

CHAPTER VI

CONCLUSION

KEL was established in 1947 in Kerala and is fully owned by state govt. of Kerala. It is an ISO 9001:2000 certified company. It employs 1500 employees which includes more than 250 highly qualified and well-trained professional engineers; KEL is one of the biggest public sector companies in the State.

The company is in tune with modern technology. Products are marketed through all India network marketing and after sales service offices are located in all metropolitan cities. The major customer is Indian railway.

Even though the company faces some problems in recent years, the company is now in a profitable path.

ABBREVATION:

• QSM Quality System Manual

• QSP Quality System Procedure

• QAP Quality Assurance Plan

• QP Quality Plan

• HOD Head Of The Department

• MR Management Representative

• DDC Document and Data Control

• BIS Bureau of Indian Standards

• PM Process Map

• MS Machine Shop

• FAB Fabrication

• WA Winding and Assembly

• REG Regulator

• AM Assistant Manager

• PR Purchase Requisition

• GRN Goods Received Note

• PO Purchase Order

• MMD Materials Mgmt Department

• DC Delivery Chelan

• ALT Alternator

• SPECS Specification

• IOC Indian Office Communication

REFERENCES:

• Quality manual

• Annual report of KEL

• Company brochures and prospectus

•

[pic]

-----------------------

W

W

W

W

W

AM (Electrical)

AM(Mechanical)

Manager (HOD-QA)

GENERAL MANAGER

M PLNG (BLDC)

M (QAD)

• Production

• MMD

• Store

Monitoring production and analyzing of short fall

Raising PR for ‘A’ Value items

Preparations of Work Ordered and issue to various departments

Monthly Production Plan

Monthly Plan

QUATERLY PLAN

START

Charge hand

Forman Grade 1

M (MKTG)

Amendments from customer if any

Order entry register

Receipts of order review and acceptance

Follow up of order

Negotiation

Assistant: Manager

Manger (HOD)

GM

Tender opening

Submission of tender

Preparation of offer for Machine and spares

Pricing

Evaluation and review

Purchasing of tender document Direct/ from railway website

Enquiry direct/ from railway website

Short fall if any

Despatch as per schedule

END

Request for DP.Extend to Marketing department

Collecting of Acknowledgement, Copy of DC from consignee

Delivery of FG as per DC

Packing of FG as per DC

Checking preserving and storing of finished goods

START

END

Packing instructions

Cashier

Clerk

JO

Assistance Accounting Officer

AMF

W

W

W

W

Offering of Materials for Inspection

Inspection of Materials and Records data

Indicating Inspection and test status

Maintaining Records

GM

Manager Personnel and Administration

JO’s

HOD (D&DD)

Chief time Keeper

Time Keepers

Security Guard

Security Inspector

GM

Staffs

Job Officer 1

START

Ass:Engineer store dept

Job Officer 2

Ass:Manager 2

Manager

Ass:Manager 1

HOD (MMD)

G.M

TENDER ENQUIRY FROM MARKETING DEPARTMEENT

Feasibility Study

Order and Specification

Review

Customer Feedback

Design Plan

Collection & Review of Design Inputs

Verification

Materials

Planning

Prototype Manufacturing

Verification

Validation

Design freezing

Preparation of design outputs such as drawings TOS, BOM etc

Review of Design outputs

Production

QAD

Floating of enquiry to approved

Comparison of quotations

Purchase proposal

Purchase order preparations and placement of PO

Receipt of GRN, interaction with supplier

Whether any concession required

Retention of quality records

Settlement of Accounts

END

Whether items can be taken on concession

END

Return the material

Intimate store to take fresh GRN

START

DGM

M (W&A)

AM

AM

M (PLNG)

AM

Foreman

MKTG (Reg)

M

M (D&D)

M (MMD)

M (P&A)

JO 5

AM

AM

AM

AE

JO

AE

GM

Draughtsman GR.1

Asst: Manager

GM

Forman (M/c shop)

AM (Prodt.) (Regulator)

AM (Prodt.) (M/c shop & fab.)

M (Produt.) (W&A)

HOD (Prodt)

ST (2)

ST (1)

SUPERVISOR

AM

GM

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