Marathwada Shikshan Prasarak Mandal’sDeogiri Institute of Engineering and Management Studies, Aurangabad Inplant Training Report At “VARROC ENGINEERING PVT. LTD.” Submitted by Ms. Bhagyashri Kala Specialization Finance Roll no. F-30 MBA III semester Batch 2016-2018 In partial fulfillment of the completion for MBA course of Dr. Babasaheb Ambedkar Marathwada University, Aurangabad 1 Acknowledgement I, Bhagyashri Kala thank to Mr. Girish Kulkarni (Finance Department Head). His expertise was valuable during each step of the in-plant Training from narrowing the scope of the research to theoretical development and analysis. I also thank Prof. Bharat Pawar (Project Guide), Prof. Rupesh Rebba (HOD) and Dr. Ulhas Shiurkar (Director), Deogiri Institute of Engineering and Management Studies, Aurangabad for encouraging and guiding me through In-plant Training. Ms. Bhagyashri Kala Roll no. F-30 MBA III semester Batch 2016-2018 2 3 4 5 INDEX SR. PAGE TOPIC NO. NO. 1 Introduction of Report 7 1.1 Need 8 1.2 Scope 8 1.3 Objective 8 Profile of the Company (Introduction, History, Organization 2 9 Structure, Founders, etc) 2.1 Vision 12 2.2 Mission 12 2.3 Objectives 12 2.4 Achievements of the company 13 3 Product Profile 14 4 Study of the Departments 16 4.1 HR 17 4.2 Marketing 20 4.3 Finance 23 4.4 Production Operations 26 4.5 Research & Development 29 4.6 Store 30 4.7 Purchase 32 4.8 Material 35 5 SWOT Analysis 38 6 Findings 39 7 Conclusion 40 8 Bibliography 41 6 Chapter 1 INTRODUCTON Generally the main objective of the in-plant traning is to work in organization & study about different things. For example, to study about the organizational structure, vision, mission, strategies, etc. Basically to study about finance, HR & other departments in organisation. Also study about functions of department. How they company with each other? How they manage various resources? & how they manage all organization? For the purpose it is necessary. In a course the students get opportunity to work in a company to explore their career field & experience real work situation & gain future employment contacts by networking with potential employers. In-plant is very crucial period in students educational life. So this traning should be in such manner that it eusure a strong & firm base of knowledge & skill which will help for future. In this project I explained all department information & also the achieve priorities, strategies of the organization. 7 1.1 NEED & OBJECTIVES • In this training, we will have to study problem in company perspective and submit the report to the university. The training period will be 45 days. Generallywe will go for their in plant training during their semester vacations. • Such in-plant training will provide the theoretical knowledge which we have learned in college must be helpful in practical training.Reputed companies are providing in-plant training to us. • After the successful completion of studies we have to face this competitive world with knowledge to face many problems and to find the right solutions which is to be solved in the minimum duration of time. • The in-plant training is getting totally different form the class environments. • To apply our conceptual knowledge in a practical situation. • To learn working of an organization and mangers. • To know more about inter –relationship of deferent department. • To understand the decision making process. 1.2 SCOPE & LIMITATIONS • This research will be helpful to the management people of the manufacturing to improve the product. • As well as is helpful to find what the new policies are which helpful to the company. • To study leading companies changes for achievement of goal. . 8 Chapter 2 PROFILE OF THE COMPANY Introduction:- Founded in 1990, Varroc group is an emerging global automotive component manufacturer and supplier of exterior lighting systems, powertrains, electricals-electronics, body and chassis parts to leading passenger car and motorcycle segments worldwide. With 35 world- class manufacturing facilities, 11 engineering centers, 13500 employees and 760 engineering experts in 10 countries, Varroc group is on an exponential growth trajectory clocking a sale of 1.5 billion USD in 2016-17. The company is a leading global passenger car lighting supplier and the number one 2-wheeler automotive component supplier in India. Varroc offers best design solutions that give customers a competitive edge in their markets Varroc started to more polymer manufacturing facilities in 1997 Varroc expanded its development capabilities by collaborating with MITSUBA Corporation, Japanese manufactures of automobiles part. The company collaborated with brasses based materials technology companies. In 2005, started production of automotive catalytic converter. Varroc acquires Poland and Italy to strengthen forging business in European markets, off road and oil drilling industry. The company also invested in design and set up of the 10th polymer plant Chennai to supply Yamaha motor company. 9 Varroc Group:- Type:- Private Ltd. Industry:- Automotive Components Founded:- 1990 Founder:- Tarang Jain Headquarters:- Aurangabad, Maharashtra 10 HISTORY Varroc was established by Tarang Jain in 1990, in Aurangabad, India with commencement of company’s polymer division. Between 1992 and1998, company focused on product diversification and capacity expansion and started electrical and metallic division. Varroc started to more polymer manufacturing facilities in 1997 in Pune and Aurangabad. In 2001, Varroc is expanded its Development capabilities by collaborated mitsuba Corporation, a Japanese manufacture of automobile parts. In 2005 and started production of automotive catalytic converted. Between 2007 and 2010, Varroc acquired IMES, Poland and Italy to strengthen forging business in European markets, of road and oiling drilling industry. In 2015, Varroc partnered with UK based manufacturer and supplier Scorpion Automotive Ltd to provide security based product for 2 wheelers. Organization structure:- CEO GM AGM Production HR Department Marketing Finance Department Purchase Department Department Department Manager Manager Manager Manager Manager Engineer Officer Executive Accountant Asst. Manager Supervisor Assistant Assistant Asst. Accountant Store Keeper 11 2.1 VISION To be a $ Billion Globally diversified business in transportation and allied industry in 2020. Core business will continue to be automotive components. Global Operations will fuel our domestic technology build up. Select technology product for 4W industry 2.2 MISSION Be an affordable and flexible global technology supplier and deliver value to customer by being the supplier of choice. From manufacturing foot prints. By achieving operational excellences. By investing in safe and green technologies. 2.3 OBJECTIVE To Ensure Effective Supply Chain Management. To Establish Proper Value Stream Across the Organization. To Enhance Human Resource Utilization by Implementing Result Oriented HR Practices. To Evolve as Responsible Corporate Sector, Nurturing Human Values and Concern for Society and the Environment. CORE VALUES (SHIPS) Sincerity Humility Integrity Passion Self Discipline 12 2.3 ACHIVEMENT OF THE COMPANY 2016:- • Emerging manufacturing giant citation honor by Devendra Fadanvis. • India Automotive Lighting Technology Innovation Leadership Award “at the Frost &Sullivan GIL2016 India Award. • Environmental youth of the year Award 2016 for implementing green initiatives from clean &green India. 2015:- • New Product Development Award by HMSI. 2014:- • Receive award for outstanding performance in quality for the year. 2013:- • Tarang Jain received Forbes Next Generation Entrepreneur award. 13 Chapter 3 PRODUCT PROFILE 14 We make rubber and rubber to metal bounded parts. • Auto Sector-2 wheelers • Auto Sector-3Wheelers • Auto Sector 4 Wheelers • White Goods-Washing Machines, Refrigerators. Auto Sectors- 4 Wheelers Engine Mounts Body Mounts Silent block bushes Air hoses Auto sector- 3 Wheelers Engine Mounts Body mounts Air Ducts Bellows Auto Sector- 2 Wheelers Bellows Handle bar Grips Silent Block Bushes Air Ducts Connecting tubes Electrical Industry Panel Gaskets Packing Sheets Cushion Rubbers White Goods Industry Outer Tube Buffers Cock Valve Packing’s Bearing case Washers 15 Chapter 4 STUDY OF DEPARTMENT HR Department Marketing Department Finance Department Production Operations Research & Development Store Department Purchase Department Material Department 16 4.1 HR DEPARTMENT HR Department and units in organizations typically undertake a number of activities, including of employees recruitment, training and development, performance appraisal, rewarding (e.g.-managing pay and benefit system) HR is also concern with industrial relations that is balancing of organizations. HR department also serve to offer benefit that will appeal workers thus reducing the risk of losing corporate knowledge. Functions:- • Human resource planning:- 1. Forecasting future manpower requirements 2. Preparing an inventory of present manpower 3. Anticipating manpower resources 4. Meeting Manpower requirements • Recruitment :- The HR team facilitates the whole recruitment process &the manpower plan & in combination with business plan. • Performance management:- Initiated to setting goals with employees review their progressagainst goals & asses & coach performance. • Rewards & recognitions:- A robust R & R program help to identify & recognize star&exceptional performers within & across team, ignite your growth.Toolkit available with no.ofresources to develop employee. Objectives:- Smooth running of plant with support of employees. Timely pat-roll processing. Adherence of government rules & regulations. Employee motivation. 17 Activities:- Prepartion of job descriotion. Selection & recruitment. Transfer & promotion. Identification of traning needs. Annual appraisal. Cateen managements. Security arrangement. House keeping Source of Financing:- Sale. Term loan from banking. Internal accruals (Sale from other paln). Future plans:- Within two years turnover should be 1500 crore. Expand the business into international market within 5 years. Policies:- Equal employment opportunity policies. Workdays, paydays, pay advance etc. Overtime compensation. Meal periods and break periods. Vacation policies. Sick days and personal leave HR files of each staff employee are maintained. Employees are allowed to take three leaves in each quarter. They can also avail 6 casual leaves. Salary and wages deposition policy. Leave travels assessment policy. Loan and benefit policy. Uniform policy. Medical reimbursement Competency matrix Recruitment and selection policy Performance appraisal policy 18 Recruitment Process: 5 Steps Involved in Recruitment Procces:- 1. Recruitment Planning:- The first step involved in the recruitment process is planning. Here, planning involves to draft a comprehensive job specification for the vacant position, outlining its major and minor responsibilities; the skills, experience and qualifications needed; grade and level of pay; starting date; whether temporary or permanent; and mention of special conditions, if any, attached to the job to be filled ” 2. Strategy Development:- Once it is known how many with what qualifications of candidates are required, the next step involved in this regard is to devise a suitable strategy for recruiting the candidates in the organization. The strategic considerations to be considered may include issues like whether to prepare the required candidates themselves or hire it from outside, what type of recruitment method to be used, what geographical area be considered for searching the candidates, which source of recruitment to be practiced, and what sequence of activities to be followed in recruiting candidates in the organization. 3. Searching:- This step involves attracting job seekers to the organization. There are broadly two sources used to attract candidates. These are:-Internal Sources and External Sources 4. Screening:- Though some view screening as the starting point of selection, we have considered it as an integral part of recruitment. The reason being the selection process starts only after the applications have been screened and shortlisted. 5. Evaluation and Control: Given the considerable cost involved in the recruitment process, its evaluation and control is, therefore, imperative. The costs generally incurred in a recruitment process include: 1. Salary of recruiters 2. Cost of time spent for preparing job analysis, advertisement 3. Administrative expenses 4. Cost of outsourcing or overtime while vacancies remain unfilled 5. Cost incurred in recruiting unsuitable candidates 19 4.2 MARKETING DEPARTMENT Varroc has B2B marketing.it means there are only business to business marketing method use. Involves the sale of one company product or service to another company. While consumers choose products based not only on price but on popularity, status and other emotional triggers, B2B buyer make decision on price and profit potential alone. B2B marketing involves building valuable relationship to guarantee lasting customers. This marketing plan must be focused in delivery and broad in application. This means that while consumer marketing can advertise very specifically to a wide audience, B2B marketing cannot. Instead, it need to brand itself very broadly (though email, corporate image and technical specifications) to a very specific customer. Business marketers can develop and decide how to employ their B2B plan by identifying and understanding the importance of the following function Marketing is the communicating value of the product, service or brand to the customer, for the purpose of the customer, for the purpose of promoting, selling that product and brand etc. Marketing technique include choosing target markets through markets analysis and market segmentations, as well as market understanding consumer behavior and understanding the product. Social point of view marketing is link between society material requirement and economy partnership response. Marketing satisfies this need and wants through exchange processes and long term relationship. Functions:- Such a sales, advertising and brand management, Research and Trade marketing, digital marketing (social media Marketing is component / function of digital marketing). Marketing blends art and applied science (such as behavioral science) and make use of information technology. Marketing is applied in enterprises and organization through marketing management. 20 Marketing departments Objective and Strategy:- Marketing Objective:- The goal set for the marketing department to help the business to achieve overall objective. Marketing Strategy:- Long term plan established for achieving marketing objective. Duties:- customer feedback Creating pramotional material andads Gathering compititive intalligence Establishing price 21 Responsibilities of Marketing Department:- 1. Applying customer approach 2. Branding 3. Creative andinnovative 4. Communicate with other department 5. Budgeting 6. Managing events 22 4.3 FINANCE DEPARTMENT Finance is the deals with allocation of assets and liabilities over time under conditions of certainty and uncertainty. Finance can also define as the since of money management. And key point in finance is the time value of money, which states that purchasing power of one unit of currency, can vary over time. Finance aims to price assets based on their risk level and their expected rate of return. Functions:- No delay in supplier’s payment. Cheque preparation on time. Better utilization of SAP system. Book keeping Protecting the property of business. Compliance with legal requirement. To generate right information this is helpful to various persons in planning & decision making. To ascertain whether the business operation is profitable or not. To manage the accounts such way to ensure their optimum utilization with the available resources. To forecasts the requirement of fund for both short term and long term purposes. To make financial reports, have and eye on profit and losses etc. To monitors the cash flows prepares accounts and work on financial models. To constantly review the financial performance of various units of the Organizations. To ensure that no excess cash is lying idle. Activities:- Verification & booking of invoices. Handling direct 7 indirect taxes. Calculation of variance (budget vs. Actual). Monthly MIS(Management information system) Payment to internal & external customers. Closing of accounts & preparation of final accounts. 23 Growth summary:- 65%revenue from outside India of which 92% is within the passenger car segment. 90% of India revenue is from two and three wheeler automotive segments. No customer is larger than 20% of varroc total revenue. Objective of Finance Department:- No delay in supplier payment. Cheque preparation on time. Book keeping. Varroc Engineering Pvt. Ltd:- ITEMS 2016-17 2015-16 2014-15 Rs (Cr)| Convers- Rs(Cr) Convers Rs (Cr)| Conver ion -ion sion period period period (days) (days) (days Raw material 166.81 30.62 160.06 30.51 145.83 37.32 Work in progress 32.44 5.03 19.15 3.07 20.42 4.32 Finish Goods 303.6 40.21 189.38 26.11 77.78 1.67 Receivables 435.52 56.45 477.89 66.85 411.79 72.29 Sundry Creditors 592.65 107.45 553.67 104.07 468.63 117.73 BASIS 2016-17 2015-16 2014-15 Raw materials 1988.7 1914.89 1426.12 consumption Cost of production 2354.86 2278.98 1727.24 Sales 2755.96 2647.84 2076.52 Credit purchase 28.16 2609.21 2079.08 2013.1 1941.93 1452.88 24 Turnover Ratio of Varroc Engineering Pvt Ltd Fiscal year Turnover 2014-15 211cr 2015-16 500cr 2016-17 800cr Turnover 2014-15 2015-16 2016-17 14% 53% 33% 25 4.4 PRODUCTION OPERATION • Production planning:- During production planning, managers determine how goods will be produced, where production will take place, and how manufacturing facilities will be laid out. • Production control:- Once the production process is under way, managers must continually schedule and monitor the activities that make up that process. They must solicit and respond to feedback and make adjustments where needed. At this stage, they also oversee the purchasing of raw materials and the handling of inventories. • Quality control:- Finally, the operations manager is directly involved in efforts to ensure that goods are produced according to specifications and that quality standards are maintained. Objective Of Production & Opration Department:- A. Efficiency:- Increased output for given input. B. Productivity:- Increased production using given resources. C. Quality:- Good quality product at reduced cost. D. Reduced processing time:- Increased production with in a given amount of time. 26 Production Operation Cycle:- Maintanance location of management facilities Material Material handeling managment Quality product control design Production Process planing design 27 Types of production system:- Contineous Intermittent Production Production System System Mass Job Production Production Process Batch production Production Assembly Line production. 28 4.5 RESEARCH & DEVELOPMENT Process development lab work as similar to that of research and development. Basic difference between their working is that in R&D going on for the developmen1t or on the molecular new process is find out the production. R&D department work about product design, costing and testing, product. A research to product color, height, length, contains, raw material. This thing is important manufacturing product. This department under product cost fixing. How to actual cost raw material to finish goods. Then show the other competitor product in market and finally decide the product cost. Macro examination reveals the defect such as internal sound ness. Lead times of suppliers are more as most of supplier is in Pune, Aurangabad etc. Sometimes communication gap between varroc and Bajaj leads to delay of order. Frequent change in production plan sometimes leads to emergency purchase of material and sometime lead to wastage of material. Production loss due to defective material and line stop due non- availability of material. Time loss due to arrangement of vehicle for customer supply and follow-up with transporter for material delivers on time. 29 4.6 STORE DEPARTMENT Large retail establishment with an extensive assortment in variety and range of goods, organized in to separate department. All departments are housed under the same roof to facilitate buying customer service, and control. Own • Vendor department • Production • Store Department Supplier Customer Function:- • Issuing purchase requisition to purchase department as and when necessity for material in store arises. • Storing and preserving materials at proper and convent places so that item could be easily located. • Storing the material in such a manner so as to minimize occurrence of risk and to prevent losses due to storage handling. • The separate stockroom may be used for different classes of inventories. • Receiving incoming goods. • Arrange for inspection and complete the inspection. • Send goods or parts to store. • Send other document to respective department. • Ensure correct accounting of stores. • Receiving incoming goods. 30 Objective of store;- • Minimizing cost on material. • Maintaining the value of material. • Service to user department. • Customer expects quality cost and delivery from every supplier. • Availability market continuously to the production department. • Minimum possible wastage of material while this is being store in the godown store keeper of used in the company by the worker. • Better utilization of store space. • To reduce man power cost. • No production loss in search of material. • On time service to production dept. • To reduce the manpower cost. • Better utilization of store space. Responsibility:- 1) Receipt of incoming goods. 2) Storage and preservation. 3) Identification of all material stored. 4) Material handling. 5) Packaging 6) Maintenance of stock records. 7) Store Accounting. 8) Stock taking. Activities of Store:- 1. Material unloading, physical, verification and storage. 2. Material issue to production. 3. Interplant procurement. 4. Maintain store inventory. 5. Logistic planning. 6. Rejection material return to vendor. 7. Material Issue to production. 31 4.7 PURCHASE DEPARTMENT In Varroc engineering Pvt. Ltd, Purchasing is the buying goods and service from external sources to an organization. Purchase departments buy raw materials, spare parts, and services etc. This department is developing good relation with the existing suppliers. Maintain proper &up to date records of all transactions. Purchasing department is an organizational unit of a firm whose duties include some part or all of the purchasing functions. Objective of Purchase Department:- To Achieve Zero production loss due to no material To achieve zero defect in components To minimize cost loss Better utilization of SAP system Activites:- Generation of purchase order. Schedule to the suppliers. Road permit to the suppliers. Arrangement of materials as per requirement. Monitoring of suppliers. Capacity increase at supplier end/ Additional source. Cost reduction through negotiation/ alternate source. Localization of suppliers/ components. Observation:- Time loss due to delay in purchase order generation. High transportation cost loss. Communication loss (delay in schedule to supplier). Rework dur to vendor defective parts. 32 Procedure of purchasing:- Purchasing requisition Chacking and passing Tenders of bill for a payment Receiving Purchase materials order 1) Purchasing requisition:- Purchasing requisition is the basis for placing the purchase order for material and suppliers. Its written request prepared by the foramen responsible officer of the user department and handover the purchase department. It include like material code number, types of material, quality and quantity, of material. 2) Tender:- A) Single Tender:- A tender is called from only on source i.e. supplier. B) Restricted Tender:- Tenders are invited from the selected supplier on the basis of the past experience. C) Open Tender:- Invited from the entire supplier through advertisement in newspaper and journals. 33 3) Purchase Order:- Purchase order is prepared in 6 copies. The first copy is sent to the supplier, a second copy sent to the department, which initiated the purchase requisition, the third copy sent to the account department, fourth copy is sent to the finance department, fifth copy is sent to the store department, and last six copies sent to the purchase department. 4) Receiving of materials:- Prepare statement of goods received. Indicate identification mark for each type of material separately. Checking quantity and quality of materials. 5) Checking and passing of bill for a payment:- If invoice is correct in all respect the purchase manager will pass the invoice and send the same to account department for payment. 34 4.8 MATERIAL DEPARTMENT Varroc pvt. Ltd company deals with planning and design for the movement of the material or logistic that deals with the tangible components of the supply chain. This covers the acquisition spare parts and replacement. Quality control of purchasing and ordering such parts, and the standard involved in ordering and warehousing the said parts. Material Cycle:- MAIL TO SUPPLIERS MONITORING SHEDUULING THE SUPPLIERS PURCHASE MATERIAL ORDER INWORD PURCHASE QUALITY REQUISITION INSPECTION MRF STORE ISSUE MATERIAL SHEDUEL FROM FOR BAJAJ PRODUCTION CUSTOMER MATERIAL LINE BAJAJ MATERIAL OUTWORDS FINISH GOODS 35 FUNCTIONS:- • Coordination of planning • Sourcing • Purchasing • Moving • Storing and controlling material in optimum manner in order to provide pre decided service to the vendors. Supply chain material management areas of concentration:- 1. Goals- The goal of material management is to provide an unbroken chain subcomponents for production to manufacture goods on time for vendor’s base. Materials are delivered on time to the company using the correct carrier. 2. Material management- The major issues that all materials managers face are incorrect bills of materials, unreported scrap, shipping errors, production reporting errors. 3. Standards- There are no standard for materials management that are practiced from company to company. Most companies use SAP system and other system manage material control. 4. Receiving of materials- Prepare statement of goods received. Indicate identification mark for each type of material separately Checking quantity and quality of material 36 Inventory Turnover Ratio Ratio 9 8 7 6 5 4 Ratio 3 2 1 0 2013-14 2014-15 2015-16 Year 2015-16 2014-15 2013-14 Current ratio 1.13 1.27 1.16 Quick ratio 0.16 0.8 0.8 Inventory turnover 5.5 7.18 8.5 ratio Debtor turnover ratio 6.47 5.46 5.05 Operating profit ratio 0.06 0.03 0.02 37 Chapter 5 SWOT ANALYSIS Strength:- Manufacturing excellence of business vertical. Ability to develop product as per customer requirements. Weakness:- Lack of advertisement. Less scope for women employees. No direct marketing. Opportunity:- Capture of market easily. Marketing of company through quality of product. Varroc have good brand image in market, company should increase number of customers. Threats:- Increase in price of raw materials. Changing laws, rules & regulations amd legal uncertainties. Increase in labour cost. 38 Chapter 6 FINDINGS The Varroc Engineering Pvt. Ltd. Has very efficient research & development centre. The company develop the employee knowledge by the training. There is good coordination among with employee. Better canteen service, quality food, water facility are available. All department and staff members are accurately trained for handling any structure & unstructured trouble. Form the study it is clear that most of employees agree to the fact that performance appraisal activities and support from the co-workers is helpful to get motivated. The company is providing good safety measures for ensuring the employees safety. 39 Chapter 7 CONCLUSION While this In-Plant Training project in Varroc Engineering pvt. Ltd. to study of different department & management gives advance knowledge about the working and management of company. The organization has given me lot of knowledge & best experience of all the function & different department. The company improves me to face the new global change in the market. It will make my future bright in corporate world. During this in plant training I tried to learn various things about Varroc Engineering Pvt Ltd having a great pleasure to study this reputed organization & it’s working. After doing this implant training I understood professionalism and dedication to work and actual working of an organization. It gave me opportunity to learn the thing practically and to meet the senior person in the organization and learn from them. no text book would have been able to do this just with in the 45 days. Finally, I have understood the day today functioning of all department .this this project has been valve addition for me. In terms of learning and exposure to various aspect of the organization. I have learnt necessary managerial skill and positive attitude to enhance the skill and get experience to be true professional. 40 Chapter 8 BIBLIOGRAPHY Website:- www.varrocgroup.com https://en.wikipedia.org/wiki/Varroc Reference Book:- Financial Management - Prasanna Chandra Marketing Management - Philip Kotler Human Resource Management - Ronald R. Sims 41