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Transcript of hmt
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