Organization Structure Training

A report submitted toChrist University of Management

By

Snehal JelokaRegister No: 1121445

Under the guidance of

Prof. T.S.Ramachandran

Christ University Institute of ManagementBangalore

STUDENT’S DECLARATION

I declare that this training report entitled “Organization Structure Training of HMT

Machine Tools Ltd, Bangalore” is a record of independent work carried out by me during

the period of 29th April 2011 to 26th May 2011, under the Supervision and guidance of:-

1. Mr. Sudhakar (AGM-HRD)

2. Mr. T. S. Ramachandran (Mentor, Christ University)

I also give my sincere thanks to various managers of all the Departments who have

contributed to this project by lending precious information about the organization,

without their help, this project would have been in complete.

Date: Snehal Jeloka

Place: Bangalore CHRIST UNIVERSITY,

CONTENTS

1. Introduction

2. History of the Organization

3. Company Profile

4. Departments

i. Human Resource Department

ii. Finance Department

iii. Sales Department

iv. Planning Department

v. Purchase Department

vi. Production Department

vii. Material Management Department

5. Trade Unions

6. SWOT Analysis

7. Findings and Suggestions

8. Conclusion

INTRODUCTION

Organization is a systematically designed, scientifically planned, sum total of various

function co-ordinate mutually, synchronized in a format to achieve the goals and

objectives of company.

The various functions which contribute to the success of organization, which plays vital

role in well-functioning, are the following Departments:

1. HR Department

2. Finance Department

3. Sales Department

4. Planning Department

5. Purchase Department

6. Production Department

7. Material Department

OBJECTIVE OF THE STUDY:

The aim is applied to things exterior to the mind, & objectives of its attention subjective

to the operations of the mind itself. Hence an objective motive is some outward thing

awaking desire.

The objective of the project at HMT machine tools limited, Bangalore includes:

To get an insight into organization structure.

To know the corporate profile structure & performance.

To learn & study the functioning of an organization in the field.

To gain the practical knowledge while conducting the study.

REASONS FOR SELECTING HMT:

It is one of the reputed public sectors in India.

It is an organization with all departments under one roof & study of the

organization structure will be more useful & meaningful.

It has got many programs to help to the students by giving exposure to the real

working environment.

The production & distribution network is very efficient & large size.

SCOPE:

The scope of this study is restricted to Bangalore unit of HMT. This report mainly

focuses its view on company’s profile & different departments such as marketing

administration, finance, human resource & production departments.

ACTIVITIES CARRIED OUT DURING THE PROJECT PERIOD :

Attending the organization regularly.

Learning about the working environment.

Assess the organizational performances.

Interaction with the employees who have got more experience with their

respective jobs.

Studying the activities of the employees and how they work.

Following up their rules & regulations in disciplined manner.

DATA COLLECTION :

Field observation

Secondary information at company’s manuals

Website of the company & other relevant sites.

Newspaper clips.

HISTORY

HISTORICAL BACKGROUND OF MACHINE TOOLS

Machine tools were manufactured as early as 1890, but were poor in quality and lacked

standardization. After 1930, machine tools of a reasonably good quality began to be

produced in India principally by P.N.Dutta and company in Calcutta co-operation

engineering works at Satara and the Indian machinery company at Pasangar near

Calcutta. These enterprise which were the pioneers of machine tools making in India

made mostly sliding, surfacing and screw cutting lathes of the conceptually headstock

types. However, all the enterprise suffered from the absence of a ready market for their

products, mainly because of completion from established manufacturers in England.

The outbreak of 2nd World war India became the main base of supply and production of

war materials for the British and the allies’ army in the east. There was Avery sharp

increase in demand for machine tools, all though, imports of machine tools continued on

a reduced scale, throughout 936 and 1940 the situation became increasing more

precarious.

In 1941 the government of India passed the machine tools control order/ whose main

object was to make an inventory of machine tools that could be obtained in India and to

regulate and improve production. So as to meet the needs of the ordinance factories

and other near industries. The machine tool control laid the foundation for a rational and

systematic development of the machine tool industry in India which gave birth to HMT.

The idea of setting up a machine tool industry in the public sector germinated only after

India got its independence. In 1947, the new government found the 4000 million worth

of surplus was, arterials including a number of machine tools in itself. A committee was

setup in 1948, which suggested the establishment of machine tool factory.

In 1947, the government of India decides to enter in to a joint venture with the Swiss

firm OERLIKON MACHINE TOOL WORK, BUCHIRE and COMPANY. Another few

years ruled by the government, registered HINDUSTAN MACHINE TOOLS was

formally registered in 1953.

BIRTH OF HMT:

Hindustan Machine Tools Limited is a public Limited company started in 1953 and the

first output is given in 1955.

HMT Ltd was incorporated as HMT LTD on 07th February 1953.

Pandit Jawaharlal Nehru inaugurated HMT’S First Manufacturing Unit (Machine tools,

Bangalore) & remarked it as “HMT is gift to country & jewel of country”.

Presently, HMT has branched into 16 factories, 24 divisions and 29,000 employees in

10 different states.

The machine tools division at HMT in Bangalore was the oldest manufacturing unit of

the company and the product line consists of 16 types of metal working machine. The

die casting division molding machine in technical collaboration with reifenhaeuser Gmbh

and company of West Germany.

The company offered technical collaboration to industrial commercial development

corporation of Kenya (ICDC) to setup plant for the manufacture of machine in Kenya.

PROFILE OF THE COMPANY

Dr.S.M.Patel started HMT limited as a HINDUSTAN MACHINE TOOLS LTD on 7 th

February 1953 in technical and financial collaboration with OERLIKON Machine tools

works of Switzerland. The first product produced by machine tools was H22 lathe on 6 th

October late of government of India bought the shares held by OERLIKON transforming

HMT as a government of undertaking. Hindustan machine tools ltd Bangalore is one of

the major machine tool factory in India, it is located at Bangalore it has branch into 16

factories 24 division and 29000 employees in 10 different states.

AREA OF OPERATION:

HMT corporation head office is situated at Bellary road, Bangalore from where

administration and control of all units of the HMT is undertaken by the company. Apart

from corporate head office, HMT has various offices in all states with the service center

for the smooth functioning of the activities of the company.

SUCCESS CLIP – BOARD – MILESTONES

YEAR UNITS/DIVISION LOCATION STATE

1953 Machine Tools I Bangalore Karnataka

1961 Machine Tools II Bangalore Karnataka

1963 Machine Tools III Pinjore Haryana

1965 Machine Tools IV Kalamaseery Kerala

1967 Machine Tools V Hyderabad Andhra Pradesh

1969 Press Division Hyderabad Andhra Pradesh

1971 Die Casting Division Bangalore Karnataka

1972 Printing Machinery Division Kalamessery Kerala

1973 Precision Machinery Division Bangalore Karnataka

1975 Machine tools VI Ajmer Rajasthan

1975 HMT (International) Ltd. Bangalore Karnataka

1985 Ball Screw Division Bangalore Karnataka

1986 CNC Systems Division Bangalore Karnataka

1991 Central Reconditioning

Division Bangalore Karnataka

1999 Subsidiary HMT Bangalore Karnataka

Machine Tools Ltd

HMT Fast Forward:

It was in the early post-independence era that, HMT began in a small way to meet a big

commitment:

“To manufacture mother machines to build modern industrial India”.

HMT was conceived by the Government of India in 1949, and was incorporated in 1953,

with the objective of producing a limited range of machine tools, required for building an

industrial edifice for the country.

THE 1960s:

With the success achieved in the initial years in absorbing the technology and in

attaining production competence far ahead of the original plans, the Company launched

a bold plan o diversification and expansion which resulted in the duplication of the

Bangalore Unit and the setting up of new units at Pinjore, Kalamassery and Hyderabad.

In 1967, recession struck the Indian Engineering Industry and the consumption of

machine tools dipped drastically. The traumatic years of recession did indeed serve to

bring to the fore two latent strengths of HMT, namely the urge to survive and the

confidence to innovate. With these strengths at full play, the Company emerged from

the recession.

With action plans firmly launched for diversification into Presses and Press Brakes,

Printing Machines, Die Casting and Plastic Injection Molding Machines, that were

considered to have economic cycles that are different from those of machine tools.

THE 1970s:

The ‘70s witnessed the fructification of all the diversification plans as envisaged.

HMT set up:

HMT International Limited as a subsidiary company to channel HMT’s products

and technical services abroad.

Two more units for manufacturing of watches, one at Srinagar and another at

Tumkur. HMT took over Machine Tool Corporation at Ajmer as its sixth machine

tools unit.

THE 1980s:

In the ‘80s, HMT as a part of vertical integration efforts, launched units to manufacture:

Watches at Ranibagh.

Watches Cases at Bangalore

Steppers Motors at Tumkur.

CNC Systems at Bangalore

Ball screws for use on CNC machines at Bangalore

HMT took over Indo-Nippon precision Bearings Ltd, a state owned unit as a

subsidiary, which was renamed HMT-Bearings Limited.

HMT took over Praga Tools Ltd. as another subsidiary.

THE 1990s:

Formation of Machine Tool Business Group as part of Business Reorganization.

Formation of Central Reconditioning Division at Bangalore.

The New Millennium

Formation of HMT Machine tools Limited as a wholly-owned subsidiary of HMT Limited.

COMPANY PROFILE

HMT’S VISION

HMT’S MISSION

To establish ourselves as one of the world’s premier companies in the

engineering field having strong international competitiveness.

To achieve market leadership in India through ensuring customer satisfaction by

supplying internationally competitive products and services.

To achieve sustained growth in the earnings of the group on behalf of

shareholders

CORPORATE OBJECTIVES & GOALS

To encourage the modernisation of Indian Industry through the supply of

engineering goods and services of world class excellence

To maintain technological leadership through continuous efforts to update

product technology and manufacturing methods

To globalise our operations by developing a mix of international markets and

businesses

To ensure a satisfactory return on capital employed, to meet the growth needs

and the aspirations of our stakeholders

To present an active, pleasant and productive working environment.

CORPORATE STRENGTHS

HMT'S PRODUCTS

BUSINESS DOMAIN

Product Range

TURNING MACHINES GRINDING MACHINES

GEAR MANUFACTURING MACHINES MACHINING CENTRES

OTHER GPMs SPECIAL APPLICATION MACHINES

DIECASTING MACHINES PRESSES

CNC SYSTEMS PRECISION BALLSCREWS

Organisation Structure

DEPARTMENTS

Human Resources Department:

HRM is planning, organizing, directing and controlling of the procurement, development,

compensation, integration and maintenance of people for the purpose of contribution to

organization, individual, social goals.

HR needs to be given a strong emphasis, as it is the quality of human factor in his

organization, which determines its effectiveness.

KEY ROLES PLAYED BY HRM DEPARTMENT

1. Recruitment

2. Selection

3. Induction

4. Promotion

5. Transfer

6. Welfare

OBJECTIVES OF HUMAN RESOURCE

To attract and retain best available young talent in the country in engineering and

other areas like finance, marketing and personal.

To maintain effective coordination between HRM and other departments

HRM department helps in motivating the employees in attaining individual goals

and in retune will lead to attain the organizational goals.

A qualified applicant for specific type of job.

To ensure the above objectives by eras of a systematic scheme of centralized

recruitment this will be regular and effective.

SCOPE

The recruitment of professional trainees in engineering and other professional areas like

finance, marketing, personnel etc., induction level of executive that is PS 3 for centrally

pooled requirement of units. Recruitment of senior executive at level of corporate cadre

like PS 7 is as per need of unit.

ESTABLISHMENT SECTION

Establishment section of HMT MBX involved with the activities like recruiment,

selection, promotion and performance appraisal record of day-to-day activities as well

as manpower adjustments. The selection is basically involved with estalbishment

acitvities.

Recruimtent and selection

It is process of selection for prospective employee and stimulating and encouraging

them for job in an organization. Selcetion is process of putting right perosn to right job

according to job specification of organization.

Procedure or recruitment rules

1. Corporate personnel directorate will engage recuriment.

2. It is centralized recruitment by following two methods:

Campus recruitment

Recruitment trhough opens all India advertisement.

3. Not less than 50% of vacancies projected and approved in manpower

operational plan in PS 3 for engineering graduates and in vairous disciplines.

HRMDEPARTMENT

ESTABLISHMENT INDUSTRIAL RELATION

TRAINING & DEVELOPMENT

WELFARE

4. Campus recruitment for post of executives in PS 3 for engineering graduate or

post graduate in technical areas or postgraduate diploma holder from recognized

institution only,

5. Mode of selection by group discussion and personal interview by above

committee.

6. All India advertisement will be released every year, inviting applciaiton form

candidates possess degree in engineering with minimum marks of 60% who will

be eligible for written test.

7. The result of written test candidate in the ratio 1:6 will be called for interview and

group discussion.

8. Selected candidate will undergo induciton training for period of a year.

9. For seection of senior executive at level of corporate cadre will be taken up by

corporate personal directorate once in 4 months in April August an dDecember in

calendar year.

10.Recruitment was done for last time in 1992 & now days HMT is planning to

recruit fresh blood.

INDUCTION POLICY

After selection of qualified candidate they undergo management trainee induction

program for a period of one year.

In one year 3 months are a MDI and remianing months at rspective units.

Purpose of induction program is to acclimatize them into company’s wokring

system and culture.

TRAINING AND DEVELOPMENT MEASURES

Training calendar:

The tainin gprogram in HMT is conducted according to the annual training

calendar prepared every year for all categories of workers.

Identification of training needs:

Training needs shall be identified by respective needs of departmetn.

Training shall be planned, implemented & reviewed.

There shall also be general orientation awareness & knowledge based

training program including induction program to the trainees in a new

areas & freshly recruited personnel.

Training program for personnel working areas of special purpose.

Types of training porvided by HMT (MBX)

Apprenticeship training: Training is for period of 3 years. Those who apply for

apprentice should have passed S.S.L.C on the date of report. The report says

that there are 91 trainees are paid a stipend of 820/- to 1090/-.

Graduate training: Training is given for graduates such as B.A, B.Com, and B.E

in mechanical & others. The period of graduates training is for a year and they

get a stipend of 1970/- PM.

Sandwich trianing: Diploma students are eligible for taking sandwich training. It

is for one year. Students are from vairous colleges. They are given 3 months

basic training & they have their classes. After completing basic training they will

be send to different department for 15 days or 1 month and they ger stipend of

1140/-.

Foregin training program: Employees are sent to foreign training program

under various plans vise UNIDO, COLOMBO etc. the candidates should be less

than 45 years of age. The candidates should not have attended a foregin

program in 5 years.

PERFORMANCE APPRAISAL SYSTEM

Managing employee’s performance is an integral part of the work that allmanagers and

rating official perform throughout the year. I tis as important as managing finiancial

resource &program outcomes beacuse employee’s performance or the lack thereof,

has a profound effect on the financial & program components of any organization.

COMMON METHODS OF PERFORMANCE APPRAISAL

INDIVIDUALS EVALUATION

Confidential report

Essay evaluation

Critical incidents

Checklists

Graphic rating scale

BARS (behavior anchored rating scale)

Forced choice method

MBO (management by objectives)

MULTIPLE-PERSON EVALUATION METHODS

Paired comparison methods

Forced distribution methods

Paired methods

OTHER METHODS

Group appraisal method

Assessment center

Field review

WELFARE MEASURES

It plays a vital rolein HMT. HMT being a PSU will have to raise their standards with

respect to safety health and welfare of its employees, the welfare activities of HMT can

broadly classified as follows.

1. Welfare measures inside the workplace.

2. Welfare measures outside the workplace.

Welfare measures inside the workplace:

a. Working conditions:

1. Cleanliness, neighborhood, safety.

2. House keeping, maintaining of lawns, compounds, passages, doors etc.

3. Providing safety equipments such as helmets, goggles nad first-aid

equipments. Safety training programs for supervisors and workers to avoid

accident. All machineries are examined periodically to ensure their safe

working. Six safety committees consitute to discuss safety related problem

and to take corrective measures for prevention of accidents.

4. Employees are provided with uniforms every year. Company is incurring

around 14-15 lakhs p.a for this purpose.

b. HMT provides numbe rof amenities to its employees in addition to meeting the

statutory obligations under varius labour organizations:

Canteen-Canteen is managed by welfare department; it is incurring 96 lakhs p.a

to provide hygienic food to it semployees.

Transport-Company has a fleet of 6 buses besides Vans and Cars to provide

transportation faiclties to its employees.

Township – A self-contained township with modern facilties has beenprovided for

the benefit of employees. there are around1676 houses of vairous types of

allotment to employees and allotment is based on seniority and grade eligibility.

Medical – A 200 bed hospital with all modern facilities is established in the

township to take care of medical needs of employees residing in township and

surrounding areas.

However, if employees are not covered under ESI (Employees State Insurance

Corporaiton) the compnay will provide medical facilities. As to say, if the salry is

Rs.10000 or less, the employees will get ESI benefits. And if the salry is above

Rs.10,000 they will get company’s medical facilities.

Company Assistance and Welfare Measures

1. HMTL House building advance (grant & recovery rules)

2. Scheme of interest subsidy for purchase of vehicles through loans from finances

institutions.

3. Company leased accommodation for PSVII and above.

4. Leave and Leave encashment rules.

Earned leave

Casual leave

Sick/commuted leave

Maternity leave

Special leave.

5. Leave Travel concession scheme

Policy on Uniforms

6. Policy on gift watches.

- To the employees of the company.

7. Incentive for acquiring higher qualification

- The employee who attains higher qualifications will be granted monetary

awards as mentioned below provided that.

a) The qualifying examination has been taken up after joining HMT.

b) The employee has not been granted study leave for acquiring

qualification.

8. Medical benefits & Insurances.

9. Compensation for Employment injury to those not covered under the workmen’s

compensation.

10. Incentive for small family norms.

11. Inter-unit sports regulation.

RPF rules and regulation of corporate office and marketing division

INDUSTRIAL RELATION

In HMT (MBX), Industiral relaitons deal with either the relationship between the state

and employers and workers in an organizational themselves. This helps to resolve from

any kind of disputes like: misunderstanding, differnce of opinions, (or) conflict that arises

between an employer and his workmen. Therefore a high level of understanding and

positive relationship between them, can alone lead to the achievement of organizaiton

objectives. Hence industrial relation plays an important role.

FINANCE DEPARTMENT

Any business for the matter whether large or small, profit motive is considered to be a

financial concern and its success or failure to a large extent depends on its financial

decisions. Efficiency of the organization is brightened only when there is efficient

management of its finance.

Financial pans may take many forms but any good plan must be related to the

companies eisting strengths and weaknesses. The strengths must be understood if they

are to be used to proper advantages and weaknesses must be recognized and correct

meaures is to be taken in accordance with the forecasting and budgeting procedures,

but the plan must begin with financial analysis. Financial analysis is the evaluation and

intepretaiton of a company’s fiscal position and operaitons.

OBJECTIVES:

PROFIT MAXIMIZATION

WEALTH MAXIMIZATION

FUNCTIONS OF FINANCE DEPARTMENT:

The various funcitons under finance department are:

Planning of funds

Acquisiton of funds

Allocaiton of funds

Investment of funds

Dividend decision

Recording of the transaction

Preparing of financial statements

Evaluation of financial performance

Planning of funds:

Planning of funds is a careful estimate made by the manager about the total funds

required which includes both fixed and working capital requirments. This estimation is

done by a keen observation over physical acitivities of the factory. The working capital

requirments in HMT are more. In the year 2008-09 the total budgeted amount is Rs.124

crores but sanctions are made as follows:

52 crores from governement

10 crores from head office

2 crores from other HMT divisions

12 lakhs from bill discounting

5 crore from capital profits.

Acquisitions of the fund:

The HMTMBX will acquire the fund from different sources like:

UCO [united commercial bank] which is consortium of 9 banks tha tprovides

secured loan by hypothecation of assets like inventories, machineries etc.

Government of India: it will provide funds only for capital expenditure and VRS.

Debtors recivable

Loan from head office

Sale of scrap:[this yearsprofit from sale of scrap is Rs.83,00,000]

Allocation fund in HMT (MBX) are made as follows:

Material planning (Machines tools) -50%

Salary (basic pay + DA + DP + allowances+amenities) – 30%

Other expenses (electricity, miscellaneous expenses etc) – 15%

Interest payments – 5%

Investment of funds:

Investment decisions comprises of investment in capital assets, investment in current

assets which is based on the inventory and credit proposals purchasssed by HMT and

by studying requirmmments of working capital. The investmentin capital assets is done

after a careful study over the profitability, safety, liquidity and solvency factor of those

assets. Currently there is no investment made by the HMTMBX.

Dividend decisions:

Divident decision involves the determination of the percentage of profits to be paid to it

shareholders. This percentage is decided after considering the factors such as market

price of the shares the trend in earnings, the tax position and the profitability use of

funds.

Currently the HMTMBX is not making any profits and hence no dividends.

Recording of the transactions:

Each and every transaction that takes place daily has to be recorded properly for

thepurpose of having better control over the funds and for optimize them. All the

transactions are recorded in journal and then posted to the ledger. The informaiton

stored in ledger will be used to prepare the financial performance. The financial

statement includes “trading a/c and income statement” and the “balance sheet”.

Preparing of finanical statements:

The company prepares vairous financial statements like trading and profit or loss

account, balance sheet, cash budget, cash flow, fund flow.

Evaluation of financial performance:

The financial performance evaluated by comparing budgeted statement and actual

statement by using comparative BS, ratio analyses.

Various sections under finance department :

Inward Bill Section (IBS)

Outward Bill Section (OBS)

Wage Section

Cash and Provident fund Section

Main Accounts

INWARD BILL SECTION (IBS)

This section mainly deals with the purchases. There is inland purchase and imports in

the company. The payment for purchases is made by this section. The purchase

department gives the quotation for goods. When the order is accepted by the company,

the purchase department will send the purchase order to IBS. The material inward slip

is received by IBS from the stores. The IBS also receives the invoices or bills from the

suppliers.

That materials purchased are classified into various groups:

Group 1 – Stores and Spares.

Group 2 – Purchase of raw materials.

Group 3 – Capital items.

Group 4 – Export machinery

Group 5- foreign purchases.

Group 6 – Miscellaneous expenditure/payment towards freight.

Group-7 Electrical parts.

Objectives of IBS:

To see the entire material brought in is accounted properly.

Payment is realized only when the supplier the materials or components.

To see if central value added tax, excise duty are accounted porperly or not.

Mode of payments:

The payment for the purchase is made by :-

1. Advance payment.

2. Sundry creditor’s payment.

3. Payment through bank.

4. Payment through letter of credit.

OUTWARD BILL SECTION (OBS):

Outward billing section is also known as Centralized Billing Section. In OBS the

customers deal with making payment to the company. When the customer of HMT

wants the finished product produced by the company, the customer will raise the

purchase order. The company will make an enquiry regarding the availability of the

product and accept the order given by the customer and prepare a delivery voucher

which includes consignee name, quality, designation of material, spare parts, price,

goods carrier, notes details, parties name and address, PAN no. ECC no., service tax

sales tax etc will be furnished.

It also deals with sale of machinery, spares, accessories, CNC, foundry, casting,

reconditioning, repairs, maintenance etc. and filing of statutory returns is also

undertaken.

OBS Activities

1. Accounting of customer’s payment towards advances, outward bills balance

payment.

2. Preparation of sales journals and statmetn at the end of month.

3. Preparation of ledgers which contians information about deposits, withdrawals

etc.

4. Preparation of invoices along with the delivery voucher and purchase order.

5. Letter of credit is also made in case of credit sales to the outsiders, when the

bank guarantees for advance payment, security deposit etc.

Further OBS accounts for the following:

a. Bank guarantees

b. Indemnity bond

c. Bills for discounting

d. Accounting for telegraphic transfer

e. Accounting for funds transfer to other

f. Providing necessary journals, schedules etc for auditing.

These are sent to main accounts section for further processing.

WAGES SECTIONS:

Wage section is the section, which deals with the employee’s benefits and other

activities with regard to company services towards the employees. It is the section,

which helps to keep a better relation between union and management. It deals with any

grade and handles the task of basic pay, DA, HRA.

There are three punching times:

1. In punch

2. Lunch punch

3. Out punch

Functions of wages section:

1. Time keeping

2. Salary payment to employees

3. Incentives payment

4. Provident fund (PF)

5. Dearness Allowance(DA)

6. Pension

7. Income tax

8. LIC

9. Advances

10.Medical polices

This section deals mainly with the attendance record, salary payments and incentives

payments. There are two types of incentives and they are:

Direct areas incentives for workers grade

Indirect areas incentives for officers grade

Salary includes basic wages, DA, retaining allowances and cash value of food

concession, admissible if any. The salary is considered on the basis of past service,

pension able service, widow pension and withdrawals benefit, as written in constitution.

CASH SECTION:

Cash section is one of the important sections in finance department. This department

handles all cash dealings. It generates funds for the company and utilizing the funds

through proper investment.

Cash section deals with:

Payment made by cash and cheque

Receipts and payments of cash

The activities through UCO bank, local UCO branch, Punjab national bank.

Preparation of petty cash book.

Cash dealings:

1. Physical cash dealing

2. Booking section

Physical cash dealing includes:

Payment of wages and bonus to casual labors.

Receiving cash from bank.

Making cash payments.

Booking section undertakes the issue of cheques towards various payments to

suppliers, statutory bodies, salaries to PS group. This section operates the bank

accounts by the authorized joint signature identified by the head office.

Cash receipts

Receipt vouchers are received by cash section from OBS in three copies and the copy

is:

1. Retained by cash section

2. Given to the concerned section

3. Given to the customer

Cash Payments

Payment vouchers are received by cash section from IBS in three copies and the copy

is:

1. Sent to concerned section

2. Given to supplier

3. Retained by cash section

Cash section should submit its report on quarterly basis for auditing. Every month end,.

The reconciliations are checked in cash section and the salary is credited to the

employee’s saving bank account under cash section.

MAIN ACCOUNTS SECTION

The main function of this section is to consolidate all the activities of other sections such

as IBS, OBS, wages etc and arriving at the trail balance, preparing P&L account and

balance sheet, reports and budgeted statement.

In this section, there are three types of audit done. They are as follows:

1. Internal audit

2. Statutory audit

3. Government audit

Significant accounting policies

The financial statements are prepared as of a going concern under the historical cost

convention on accrual basis of accounting and in accordance with the mandatory

accounting standard issued by the Institute of Chartered Accountants of India to the

extent applicable:

a. Fixed assets

b. Depreciation

c. Investment

d. Inventories

e. Development and commissioning

f. Deferred revenue expenditure

g. Revenue recognition

h. Foreign currency recognition

i. Borrowing cost

j. Lease

k. Retirement benefits

l. Warranty

m. Special tool

n. Research and development cost

o. Others

Main accounts section deals with the major activities of the company.

SALES DEPARTMENT

Sales Department under HMT Machines and tools, Bangalore complex is one of the

important departments dealing with sales Engineering and Sales Execution.

General Manager

Head of Sales

Sales engineering Sales Execution

FUNCTIONS OF SALES

The sales Department deals with the following activities:

a) Sales Engineering

b) Sales Execution

Sales engineering prepared the annual operation plan (ADP) for sales based on

the marketing forecast/past trend.

Sales engineering plans and controls the activities such as submission of offer to

customers and convert them into orders. On receipt of order, co-ordinate

internally to build machines and to ensure delivery of the machines to the

customer has direct inter phasing activity with design and development, machine

tool marketing and customer.

Sales Execution activities start with receipt of order. On receipt of order, they co-

ordinate to build machines procure manufacture and to ensure delivery of the

machine to customer. It has direct interaction with design in case of special

executions based on specific customer requirement sales execution also has

direct interphasing with machine tool marketing and customer.

Debtors/C&D form Collection.

PLANNING DEPARTMENT

It is a predetermined future course of action. It is the advanced planning of the future

activities. Planning is the determination of personnel and machine programmers. It

involves planning of human resource requirements as well as machine requirements as

well as machines requirements. It also involves forecasting of personnel and machine

needs, changing values of employees as well as machines to suit the organization

needs.

PURCHASE DEPARTMENT

The functions of purchase department in HMT are decentralized and each unit is

responsible for procurement of its requirement based on the approval annual operation

plans subject to quarterly review based order or market feedback.

Objectives of purchase department:

To ensure timely procurement and supply of material.

To ensure fair consistent and transparent purchase practices are followed.

To ensure continuous search for alternate source supply.

To act as information center for material

To ensure investment made on inventory is at optimum level.

Purchasing procedure:

Following is the procedure involved in the purchase of materials:

1. Indent

2. Material purchase requisite

3. Circulation of enquiries

4. Repairs of offers

5. Comparative statement.

6. Recommendations for procurement

7. Proposed for purchase

8. Financial concurrence

9. GM’s sanction for purchase

10.Placement of order

11.Confirmation of order

12.Follow up

13.Receipt at stores

14.Preparation of material inwards slip

15. Inward inspection

Purchasing Committee:

Every unit should have purchase committee as under:

Unit chief

Finance chief

Material chief

Purchase chief

Chairman

General manager

Joint general manager (JGM)

Conveyor.

Purchase committee should meet once in a year and the reports of purchase committee

will be recorded in relevant files and duly scrutinized.

PRODUCITON DEPARTMENT

Production is the process of converting the raw materials into finished products. HMT

has been designed & built using modern production engineering techniques. It has a

flow production technique employed all stages to ensure high quality at low cost. The

plant is equipped with special purpose production units, test equipment and mass

production machinery. HMT follows batch production.

The production department of HMT MBX is very vast. However this department is

concerned with the production of components, and that is all related to different

machines tools, so it consists of lot of functional heads under the department.

MATERIAL MANAGEMENT DEPARTMENT

For manufacture of finished goods raw material are required by assembling many

components. Finished goods are manufactured so in order to check and control the

various activities right from the purpose of the raw material to disposals of finished

goods to customer, a proper material management is required in MBX. Material

department carries this out. HMT started with one product in 1953 and is now dealing

with 26 products. Total machines are 426 in that 250 are idle.

The main reasons for idle machines are:

Reduction in manpower

Reduction in sales turnover.

CNC machine came into existence to reduce number of people working to increase

output. Each material has BOM (bill of material). It is categorized into indirect and direct

materials.

WINGS OF MATEIRALS

Plan

Procurement

Storing

Inventory

Methods used for material management is ABC classification

TRADE UNIONS IN HMT

HMT Bangalore complex has various TRADE UNIONS which works for the welfare of

the employees. Among the oldest trade union is “Indian National Trade Union Congress

(INTUC)”. It is existing from more than 25 years. Now this union is called “HMT Karmik

Sangh” headed under congress party. There are other Trade Unions apart from this

which carries out different types of activities in the company.

The different types of trade unions in HMT are:-

1. Indian National Trade Union Congress (INTUC) 21

2. Bhartiya Majdoor Sangh (BMS)

3. Employees United Front

Among these unions, INTUC is headed by Congress, BMS is headed by BJP and

Employees United Front is not affiliated to any political parties.

STRUCTURE OF TRADE UNION

Trade union consists of the following committee members:-

1. President

2. Vice President

3. General Secretary

4. Treasurer

5. Joint Secretary

6. Assistant Secretary

There can be more posts depending upon the unions but there should be a minimum of

3 posts of President, Vice President and General Secretary. The Trade union is

selected by an election among all the trade unions in HMT.

RESPONSIBILITIES OF THE COMITTEE MEMBERS:-

1. PRESIDENT - He Controls all the office bearers and also communicates with the

management of HMT.

2. VICE PRESIDENT - He functions and takes on the responsibility of President in

his absence.

3. GENERAL SECRETARY - He is responsible for all the correspondence and

Administration related works.

4. TREASURER - He looks after all the money matters in the trade union.

SWOT ANALYSIS

STRENGTHS

1. Good Brand Image.

2. Proven track record of customer satisfaction and good will.

3. Highly skilled professionally qualified work force.

4. Extensive marketing network.

5. Units accreted with ISO 9000.

6. Well-established manufacturing auxiliary facility like captive foundry, tool

room high technology machine tools, heat treatment etc.

7. Huge infrastructure facilities

8. First reputed machine Tools in India.

9. HMT’s Machine tool has good quality image inland and International.

10.Diversification process has been carried out effectively like:-

HMT Machine tools.

HMT watches.

Chinar watches.

Bearings.

Tractors.

Praga tools,

11.HMT branches have been setup in different parts of the countries.

Bengaluru.

Hyderabad

Kalamassery

Ajmer

Pinjore

WEAKNESS

1. Delay in implementing new systems.

2. Surplus manpower in some divisions.

3. It is facing financial crisis and has been incurring losses since 1993.

4. No internal control.

5. Management is not given more powers to take timely decisions.

6. Wide range of machines in the organization has led to low concentration.

7. Wide gap in communication.

8. The employees do not know the annual target of the HMT.

9. Immediate planning and execution is not carried out.

OPPORTUNITIES

1. Bulk requirement of machine tools like high speed/automated presses, forging

lines etc for defense production.

2. Modernization of railways and plants.

3. Renovation and up gradation of machine tools.

4. Increased export requirement for HMT’s rang of metal forming tools in countries

like Africa and high technology CNC machines by advanced countries like USA.

5. HMT can deliver its products very faster to the customer by speeding up the

production process.

6. Boom in the infrastructure to benefit HMT entry into earthmoving machines on the

higher HP tractors.

THREATS

1. The company has to face severe competition from both international as well as

domestic market.

2. Competitors offering high technology machines through collaboraiton, up

gradation of existing products and resorting of flexible prices.

3. HMT is lagging behind in technology as compared to MNC players who has

recently entered into Indian markets.

4. Increasing competition with entry of new manufacturers making low-cost

products.

5. Emerging new machine tool manufacturing countires-China, the Province of

Taiwan and republic of Korea.

6. ‘Direct’ marketing by foreign machine tool manufacturers in India through their

own selling set-ups.

7. Rise of ‘Regional’ distributors selling on ‘Stock and Sale’ basis, on behalf of

foreign manufacturers.

FINDINGS AND SUGGESTIONS

The growing competition and technological developments in this sector are having

inevitable effects on the Indian machine tool industry as a whole. The HMT machine tool

limited is facing typical problems in the emerging globalization scenario as under:

POSITIVE ASPECTS

1. Manufacturers sell different designs of machine-variety is too large.

2. HMT machine tool has a regular system for determining unserviceable or

damaged stores, raw materials and finished goods.

3. Materials are classified as ‘A’, ‘B’ and ‘C’ class items.

4. The units have maintained proper records showing full particulars including

quantitative details and situations of fixed assets.

5. The unit has maintained up to date records and submitted to respective

authorities.

6. Inventory has been physically verified during the year by the management.

7. Majority of respondents perceived HMT as a global player and market leader in

developing countries.

8. The major kind of agent used by the company is training and orientation

program.

9. Exports are high.

NEGATIVE ASPECTS

1. The company has not been utilizing whole installed and licensed capacity of its

machines effectively which has in turn resulted in low production.

2. Interruption of trade union is more in the work of management.

3. Lack of utilization of infrastructure.

4. The technology is not advanced. This is one of the reasons for low productivity.

Thus production process is costly and time consuming and overhead costs are

high.

5. Government is not industrializing at fast pace.

6. Absence of center of excellence for Research and Development.

7. Idle time is more; there is no proper time management in HMT.

8. Motivation of employees is less.

9. Less concentration on domestic market.

10.Lack of training including the concept of %S.

11.No recruitment and selection in corporate office.

12.After 1993, salaries are not revised.

SUGGESTIONS FOR NEGATIVE ASPECTS:

1. The company should make efforts in making the whole use of installed and

licensed capacity.

2. Infrastructure should be utilized at optimum level.

3. The company should update its technology so the tit can beat the competitor’s

price and also produce higher quality products.

4. Machines must be replaced in order to reduce cost of production.

5. Government should liberalize some policies in order to take necessary decisions

by management.

6. Development in R & D is required.

7. The company should reduce inefficiency, absenteeism and idle time.

8. The company should concentrate on motivation, incentive schemes and should

liberalize promotion strategies.

9. Upgrade the training programmers in order to increase the efficiency of workers

in order to increase the efficiency of workers.

10.Recruit skilled employees so as to replace existing employees, as most of them

are eat retirement sage and should encourage them to take VRS.

11.Major part of revenue earned is spent on payment of interest. Therefore

measures should be taken to reduce the amount of credit.

CONCLUSION

The study carried out as a part of curriculum of MBA, Christ University gave me a real

exposure to the operational procedures of the company. It helped me to explore the

possibility of rejuvenating the health of a company. HMT is a very popular name among

every Indian, because of its innovation of technology quality assurance durability

affordability to its people or customer. HMT has created the brand image that

symbolizes machine tools to a manufacturer, tractors to a farmer and watches to

millions of people in India.

Today HMT’s machine tools expertise has been developed to such an extent that HMT

can design and develop any kind of machine from simple lathes to CNC machines to

flexible manufacturing system. Today HMT is multi technology multi product company.

HMT commitment to the development of machine tool technology is clearly reflected in

that HMT has as many as 9 exclusively machine tool unit spread across the country

In the changed market condition the organization needs to focus on the customer

satisfaction, in reaching out this goal are conclusion basis the management has to

constantly upgrade technology product profile internal work process nad plant and

machinery in the end ultimately it is the employees who will change the performance of

the company. Therefore motivation must find priority.

During the short period of my study of various departments I found HMT a well-

structured organization capable to maintain inter personal relationships among

employees are very experienced and very dedicated where they feel company a home.

BILIOGRAPHY

HRD (AGM) – Mr. Sudhakar

Company manuals

Websites:

o www.hmtindia.com

o www.hmti.com