1

CHAPTER 1

INTRODUCTION

2

1.1 INTRODUCTION

Carborundum Universal was established in 1954 as a joint venture between the

Murugappa Group, India, the Carborundum Co., USA, and the Universal Grinding

Wheel Co. Ltd, U.K. The main business activity of Carborundum Universal involves

manufacture of coated abrasives, bonded abrasive, super-refractories, electro-minerals,

industrial ceramics, and ceramic fibers. Further, CUMI produces about 20,000 different

varieties of abrasive products, refractory products, and electro-minerals. Carborundum

Universal Ltd. has 10 manufacturing facilities across India and these manufacturing

facilities are meticulously connected with a wide network of distributors and sub-

distributors.

CUMI is known to be an innovator and exports its products to 43 countries spread

across North America, Europe, Australia, South Africa, and Asia. All the

manufacturing facilities of Carborundum Universal are ISO 9001:2000 and ISO 14001

certified for quality standards and environment-friendly manufacturing practices

respectively. Carborundum Universal Ltd. is equipped with a state-of-the-art Research

and Development center which works aggressively on product development and

enhancement.

3

1.2. SCOPE OF THE STUDY:

The study has been conducted at Carborundum Universal Ltd, Edappally,

Ernakulam, Kerala, during the period of May, 2011.The study focuses on overall

understanding of how the various departments in the organization function.

4

1.3. OBJECTIVES OF THE STUDY:

To study the functions of various departments

To understand the process flow in each departments

To understand hierarchical structure of various departments

To do SWOT analysis of organization

To have an exposure to the working environment

5

1.4. REASONS FOR SELECTING THE COMPANY:

Carborundum Universal Ltd is one of the major players of the abrasives and refractories

industries in the world. The company has undertaken several joint ventures and also

several major acquisitions. It is a venture of the Indian based Murugappa group.

6

1.5. STUDY PLAN:

Visit the EMD plant of CUMI located at Edappally and interact with the officials.

Collect information about the organization structure and the functions of various

departments.

7

1.6. METHODOLOGY:

The information was collected by means of direct interaction with the top officials and

employees. Secondary data are collected from annual reports or unpublished source that

is through quality reports, brochures, company records and Internet.

Collection of data for the purpose of studying functioning of various departments and

the organization as a whole is based on two types of data .They are :-

1. Primary.

2. Secondary.

Primary Data

Primary Data is a data collected by the investigator himself for the purpose of a specific

enquiry or study. Mainly data is obtained through Direct Observation and Direct

interview method.

Observation: - mainly done by observing the general environment and day to

day operation of the company.

Interview: - Conducted face to face interview with mangers and company

employees.

Secondary Data

Secondary Data is obtained from sources like

Company Annual Report

Company Records

Previous reports

Websites

Magazines etc

8

1.7. LIMITATIONS:

• Due to the short span of time allotted for project work an intense study was not

possible.

• Difficulty in meeting the officials because of their busy schedule.

• Management did not disclose the confidential data.

• Busy schedule of the officers prevented lengthy discussions.

9

1.8 CHAPTER SCHEME

Chapter1: The First chapter contains details regarding the introduction, scope of the

study, objective of the study, reason for selecting the company, study plan,

methodology , limitation of the study.

Chapter 2: chapter contain the details regarding the industry profile ,About world,

Indian and state scenario.

Chapter 3: This chapter deals with details about company profile .

Chapter 4: This chapter deals with different departments.

Chapter 5: This chapter has a complete swot analysis .Also includes the Observations

made and some suggestions also included.

Chapter 6:- This contains the conclusion of the report

10

CHAPTER 2

INDUSTRY PROFILE

11

2.1. INDUSTRY PROFILE

Aluminium oxide industry is one of the major Industries in India. Alumina is the most

widely used oxide ceramic material. Its applications are widespread, and include spark

plugs, tap washers, electronic substrates, grinding media, abrasion resistant tiles, cutting

tools, bioceramics, and laboratory ware and wear parts etc.

Fused alumina is made in electric arc furnaces by passing a current between vertical

carbon electrodes. The heat generated melts the alumina. The furnace consists of a

water-cooled steel shell and 3-20 tone batches of material are fused at any one time.

The fused alumina has a high density, low porosity, low permeability and high

refractoriness. As a result these characteristics, it is used in the manufacture of

abrasives and refractories.

Bauxite is the ore of Aluminium metal, which is the basic raw material for producing

fused alumina. Bauxite is naturally occurring heterogeneous material comprised

primarily of Aluminium oxide minerals, various mixtures of silicon dioxide, Titanium

dioxide, Iron oxide, aluminosilicates, & clay etc.Bauxite is typically classified

according to its intended commercial application, such as abrasive, cement, chemical,

metallurgical, and refractory.

Of all bauxite mined, approximately 85% is converted to alumina for the production of

aluminum metal, and an additional 10% is converted to various forms of specialty

alumina. The remaining 5% is used directly for non-metallurgical bauxite applications.

Worldwide, bauxite is the only raw material used in the production of alumina on a

commercial scale. There are several types of bauxite with alumina content ranging from

35% to 60%. World bauxite resources are estimated to be 55 to 75 billion tones, located

in South America (33%), Africa (27%), Asia (17%), Oceania (13%), and elsewhere

(10%).

12

World Bauxite Distribution

Source : www.murugappa.com

Chart No.1

About 89% of India's recoverable bauxite reserves are of metallurgical grade. Orissa,

Andhra Pradesh, Madhya Pradesh, Gujarat, Maharashtra and Bihar are the principal

States where bauxite deposits are found in the country, with Orissa and Andhra Pradesh

accounting for the bulk of it.

An abrasive is a hard, tough and wear resistant substance for grinding and polishing

operations. Manufactured through a complex and high technology process, these

abrasives are used in metal removal, cutting and finishing operations in almost all

industries.

13

2.2.MAJOR PRODUCTS OF FUSED ALUMINA AND ITS

USES:

PRODUCTS USES

WHITE ALUMINIUM

OXIDE( white fused

Alumina)

Manufacturing of grinding wheels, coated abrasives, paints,

titles etc

BROWN ALUMINIUM

OXIDE (brown fused

Alumina)

Manufacturing grinding wheels, polishing purpose, shot

blasting purpose etc

High Alumina Refractory

Cement

It is used as a binder for all types of castable refractories.

TABLE NO.1: major products of alumina

14

2.3. MARKET SCENARIO OF THE INDUSTRY:

In recent years, there has been a considerable increase in the production capacity in the

Asia-pacific region –in particular in China, India, South Korea & Australia. Price and

quality are the major competitive parameters in this industry.

The main customer industries are:

Automobile industry

General metal cutting industry

Polishing of metal surfaces

Marine paints

15

2.4. MAJOR ALUMINA PRODUCING COMPANIES & ITS

MARKET SHARE:

Grindwell Norton Ltd 30%

Snam Abrasives Pvt Ltd 10-15%

Orient Abrasives 20%

Carborundum Universal Ltd 35-40%

TABLE NO. 2 : major alumina producing companies

2.4.1. Grindwell Norton Ltd

Grindwell Norton Ltd is a part of Saint Gobain. In 1941, Grindwell made the first

grinding wheel in India. It has since been offering the best abrasives technology to

Indian industry. Today, Grindwell Norton is India's leading manufacturer and the only

one who offer a full line of abrasive products. Grindwell Norton also manufactures

industrial ceramics, electro- minerals and total solutions for wastewater treatment.

Grindwell Norton's abrasive grains are the industry standard in India. And against

strong international competition, Grindwell has gained preference with customers in

Europe, Australia, Japan and South-East Asia

2.4.2. Snam Abrasives Pvt Ltd

Snam Abrasives produces mainly on varieties of Silicon carbide grains was promoted

in 1985 to manufacture Silicon carbide micro grits up to 400 meshes. Its production

capacity of 300 M.T per year. Presently, its plant is catering to the exacting

requirements of many micro grit uses.

16

Major products of Snam Abrasives:

Ferro Silicon

Ferro Silicon Magnesium

Snam Micro Abrasives

2.4.3. Orient Abrasives Ltd

Orient Abrasives Limited, an ISO 9001 Quality Certified Company, is engaged in the

business of manufacturing and selling Calcined and Fused Alumina Products;

Refractories and Monolithics.

Major products of Orient Abrasives:

Brown fused Alumina

White fused Alumina

High Alumina Refractory Cement

2.4.4. Carborundum Universal Ltd

Carborundum Universal Limited manufactures the widest range of Bonded and Coated

abrasives in the world. The Rs 314 crore, the company pioneered the manufacture of

coated and bonded abrasives in India, besides super refractories, electro minerals,

industrial ceramics and ceramic fibers. CUMI makes over 20,000 different varieties of

abrasives, refractory products and electro-minerals, manufactured at 14 locations.

CUMI has the distinction of having all its manufacturing units ISO 9001: 2000

certified.

17

Major products of Carborundum Universal Ltd:

White fused Alumina (CUMITE-W)

Brown fused Alumina (CUMITE-B)

Silicon Carbide.

In export market, the major threat is the products from the China. They can sell

products at lower price because their cost of production & cost of labour is very low.

World total production of Alumina comprises 40% from China.

Industry overview

Competition is increasing day by day so that the product development will be the main

criteria. Our mineral resources are limited so there is a challenge in future development.

High capital investment, limited market, sophisticated technology, availability of

substitute products, product differentiation & import are the principle challenges in this

industry.

18

2.5 WORLD SCENARIO:

The world market for Bonded and Coated abrasives is estimated at Rs. 4500 crores and

Rs. 6000 crores respectively. The major players are Norton, Baystate and 3M from the

USA, Tyrolit and Treibacher from Austria, and Noritake from Japan. Norton Co. is

the world leader in abrasives and manufactures the entire range of products in bonded

and coated abrasives.

The estimated consumption of abrasives by Eastern Europe & the erstwhile Soviet bloc

is 27% of the world market, Asia 25%, North America 21%, Western Europe 17%,

Latin America and Africa (5% each) and Australia (1%). The application of grinding as

a material removal process has become mature with very few niches remaining for

exploitation. As such the world grinding wheel market is not expected to grow in the

near future. The US market is shrinking by 1 -2% every year and the shrinkage in much

more in Europe.. However, demand in developing countries is on the rise.

Abrasives manufacturers worldwide have focussed their efforts on grain development,

newer and stronger adhesives for product durability and better productivity. Other

developments have been in High Speed vitrified wheels of more than 150 mps and

diamond & CBN wheels. In the case of coated abrasives, the latest developments have

been in non-woven abrasives and scouring pads.

Global demand to climb 5.9% yearly through 2013Global demand for abrasive products

is forecast to climb 5.9 percent annually through 2013 to $38.2 billion. Market

advances in developing parts of the Asia/ Pacific region, the Africa/Mideast region,

Eastern Europe and Latin America will considerably outperform demand in the US,

Western Europe and Japan. China, India and Russia will post some of the biggest sales

gains. China, which recently surpassed the US to become the largest national market for

abrasives, will account for two-thirds of all additional product demand through 2013.

19

Sales advances are also expected to be healthy in Indonesia, Thailand and Turkey.

Market conditions will be much less favorable in developed parts of the world,

dampened by relatively sluggish durable goods manufacturing activity. Abrasives

demand in the US, Italy and France will expand less than one percent annually through

2013, while annual product sales are expected to decline in Germany, Japan and the

UK. However, higher per capita incomes will result in increased consumer expenditures

for a variety of products made using abrasives, providing some offsetting support.

The sales outlook is somewhat stronger for Canada, South Korea and Spain due to

comparatively healthy growth in manufacturing output in these nations. Nonmetallic

abrasives to outpace metallic products Overall abrasives demand is dominated by

nonmetallic products, which include bonded abrasives, coated abrasives, and loose

abrasive grains and powders. Nonmetallic abrasives are also expected to register larger

sales gains through 2013 than metallic products such as steel shot and grit, and wire

brushes and wheels. Loose abrasive grains and powders will post the strongest

increases of any major product type, bolstered by their use in several markets with

above-average growth prospects, including semiconductor manufacturing and

microderm abrasion, and an ongoing trend toward the use of higher value products like

specialty silica and synthetic diamond.

Bonded abrasives demand will climb at the next fastest rate, benefitting from strong

sales growth in China and other fast-growing developing markets where bonded

abrasives account for the largest single share of sales, as well as by increased use of

super abrasive products. However, coated abrasives will remain the biggest product

category on a global basis, supported by an ongoing trend toward the use of more

sophisticated manufacturing processes, in which products are machined closer to their

final shape, boosting use of coated abrasives in finishing operations. Transportation

equipment to be fastest growing durable goods market durable goods manufacturing is

far and away the largest market for abrasives, accounting for more than three-quarters

of all product demand.

20

2.6 INDIAN SCENARIO:

The Indian bonded abrasives has eight units in the organized sector with a total

installed capacity of 13381 tonnes per annum. A large number of units exist in the

unorganised sector and their capacity is 2500 tonnes. The overall capacity utilisation in

the bonded abrasives industry is estimated to be about 85%. The total size of this

market is estimated to be about Rs. 190 crores in value.

The coated abrasives industry has six units in the organised sector with a total installed

capacity of 540,000 reams per annum. The unorganised sector caters to the lower-end

requirements and has a capacity of about 75,000 reams per annum. The capacity

utilisation in this industry is about 60%. The total size of this market is estimated at

about Rs. 110 crores by value.

Carborundum Universal Limited and Grindwell Norton have a range of over 20,000

different products and have a dominating presence in all the segments of the industry.

These two account for 70% of the bonded and coated abrasives market, which in terms

of value is estimated at about Rs. 300 crores. The other players cater predominantly to

localized demand, manufacturing specific categories of products.

The main problems faced in respect of exports are those of price, credibility and

delivery schedules. However, the industry forecasts an annual growth rate of 25% with

the emphasis shifting from exporting abrasive grains to exporting value added finished

products.

Most of the manufacturers have foreign technical collaborations. The collaborators

provide R&D support through product/process upgradation and manpower training.

Indigenous manufacturers have been successful in bringing out internationally used

21

products and adapting them to local needs. This has been due to a continuous dialogue

between the manufacturers and the user industry. However, the initiative lies with the

user industry, who with their foreign collaborators, identify new products and processes

in use internationally, and then communicate this to indigenous manufacturers who

react by developing them.

The raw materials used are abrasive grains of Aluminium Oxide, Silicon Carbide and

Zirconia of grit size of 8 to 1200. Grains of grit size more than 600 are imported. Fine

grains can be manufactured in house but the low volumes do not justify high

investment in machinery. The conventional abrasives are also expensive compared to

the internationally available products because of higher raw material and power costs.

Raw materials used in coated abrasives, that are imported, are special paper for

waterproof backing, fibre and splicing agents.

The major manufacturers have well equipped in house R&D setups with the main

objective of developing new products and processes aiming at cost reduction and

productivity improvement. The expenditure on in house R&D for the major players is

about 2% of annual sales turnover. None of the research institutions like IITs & CMTI

are doing any research in areas related to bonded and coated abrasives, but for some

work related to super abrasives at CGCRI and NPL.

22

CHAPTER 3

COMPANY PROFILE

23

3.1. COMPANY PROFILE

Carborundum Universal, also known as Carborundum Universal Ltd (CUMI) is an

India-based coated and bonded abrasive manufacturing company.

Carborundum Universal was established in 1954 as a joint venture between the

Murugappa Group, India, the Carborundum Co., USA, and the Universal Grinding

Wheel Co. Ltd, U.K . The main business activity of Carborundum Universal

involves manufacture of coated abrasives, bonded abrasive, super- refractories,

electro-minerals, industrial ceramics, and ceramic fibers. Further , CUMI produces

about 20,000 different varieties of abrasive products, refractory products, and electro-

minerals. Carborundum Universal Ltd. has 10 manufacturing facilities across India and

these manufacturing facilities are meticulously connected with a wide network of

distributors and sub-distributors.

The company pioneered the manufacture of Coated and Bonded Abrasive in India in

addition to the manufacture of Super Refractories, Electro Minerals, Industrial

Ceramics and Ceramic Fibres. Today the company ranges over 20,000 different

varieties of abrasives, refractory products and electro-minerals are manufactured in ten

locations across various parts of the country.

24

3.1.1. CUMI-Business Distribution

Source: www.cumi-murugappa.com

Chart No.2

CUMI is known to be an innovator and exports its products to 43 countries

spread across North America, Europe, Australia, South Africa, and Asia. All the

manufacturing facilities of Carborundum Universal are ISO 9001:2000 and ISO

14001 certified for quality standards and environment-friendly manufacturing

practices respectively. Carborundum Universal Ltd. is equipped with a state-of-the-

art Research and Development center which works aggressively on product

development and efficacy enhancement.

CUMI has its own bauxite mines at okha and Bhatia in Gujarat that fills the abrasives

and refractory grains requirements. Mining operations began in 1963 and ever since

25

these mines have supplied the basic raw materials. The raw material bauxite mined is

calcined at CUMIs plants at Edappally and Koratty. The plants were commissioned in

1965, which are ISO 9000 certified, manufacturing a wide range of superior quality

aluminum oxide and silicon carbide grains.

CUMI also exports white Aluminum Oxide and Silicon Carbide abrasive grains to

international market. The R & D wing comes out with constant innovations and

product up gradations of products, which makes the company a world leader in

grinding technology. Its core competence provides total grinding solutions which

enables maximum grinding efficiencies and reduced cost for customers.

26

3.2. OBJECTIVES OF THE COMPANY

Financial objectives

Growth in revenues Growth in earnings Wider profit margins Bigger cash flows Higher returns on invested capital Attractive economic value added (EVA) performance Attractive and sustainable increases in market value added (MVA) A more diversified revenue base

Strategic market objectives

A bigger market share Quicker design-to-market times than rivals Higher product quality than rivals Lower costs relative to key competitors Broader or more attractive product line than rivals A stronger reputation with customers than rivals Superior customer service Recognition as a leader in technology and/or product innovation Wider geographic coverage than rivals Higher levels of customer satisfaction than rivals

27

3.3. COMPANY HISTORY

YEAR EVENTS

1954

- The Company was Incorporated at Chennai. The Company manufacture bonded and

coated abrasive products refractories refractory grains calcined bauxite etc.

1962

- 20 000 No. of equity shares issued at a premium of Rs 25 each.

1991

- 713 shares issued to the shareholders of Wendt (India) Ltd. in ratio of 3 shares of the

Company + Rs 50 cash for every 5 shares of Wendt (India) Ltd.

1992

- The Company offered 15% secured redeemable partly convertible debentures of Rs

130 each on right basis to the existing shareholders in the ratio of 2 debentures for

every five equity share held. Another 1 29 748 debentures were offered to the

employees. All were accepted.

- Part-A of Rs 60 per debenture was converted into one equity share at a premium of Rs

50 per share on 1.4.1993. Part-B of Rs 70 per debenture was to be redeemed in three

instalments of Rs 23 Rs 23 and Rs 24 from 7th 8th and 9th year respectively from the

date of allotment.

- The Company acquired 4 740 preference shares and 1, 24,800 equity shares of Wendt

(India) Ltd. and 10 lakhs Units of Unit Trust of India under the 1964 Scheme.

28

1994

- The Company commissioned a wind farm of 2 MW capacity at Perungudi and

Tamilnadu. During the year a project for manufacture of brown aluminium oxide grains

was commissioned with additional capacity of 8 000 tonnes at Edappally.

1995

- Four wind mills were also added for increasing the capacity to 2.925 MW in order to

meet power requirement of Hosur factory.

- During the year the Company had entered into a technology transfer agreement

relating to manufacture of nitride bonded silicon carbide refractories.

1996

- The performance of electrominerals division was affected by the continuous steep

power cuts in Kerala increase in power traffics and freight charges.

- A new facility for manufacture of new generation monolithics for steel plants was

being established at Visakhapatnam.

- Murugappa Morgan Thermal Ceramics Ltd. a subsidiary in which the Company held

70% shareholding has implemented a new project for 3000 tonnes Spun Ceramic Fibre

1997

- During the year a technology transfer agreement has been entered into with Answer

Technology Inc. USA for manufacture of new generation monolithics for steel plants.

29

- The Company has collaborated with leading research institutions like Regional

Research Laboratory Babha Atomic Research Centre and Pennsylvania State University

for the development of new ceramic materials and process technology.

- The Company's shares have been admitted to the depository system consequent to an

agreement being signed with National Securities Depositories Ltd. (NSDL) in

November.

- The Company is to set up a unit in Visakhapatnam for the manufacture of special

refractories for the steel industry.

- The company also set up four windmills during the year.

- The Ranipet unit manufacturing super refractories received the ISO 9002 certification.

- The Company part of the Murugappa Group Chennai has become the first Indian

company to have got the approval of the Directorate of Civil Aviation for plasma

coating aircraft propellers and turbine blades.

- The Company is merging the three companies that it acquired last year - Cutfast

Abrasive Tools (CAT) Cutfast Polymers (CPL) and its arm Eastern Abrasive (EAL).

1998

- Eastern Abrasive Ltd and Carborundum Universal Investments Ltd. are subsidiaries of

Carborundum Universal Ltd.

- The Company has established a wholly owned subsidiary in the U.S.A by name

CUMI America Inc. for marketing the Company's products in the American markets.

2000

- The Company has sold its refractory unit in Visakhapatnam for a sum of Rs 7.8 crore.

30

2002

-Mr M V Murugappan steps down as the Whole Time Director on the Board of the

company.

-Sells its Electrocast refactories unit at Palakkad for Rs.31 crs.

2003

-Appoints Mr Ramesh Agarwal as the Manging Director of the company.

-The Company has acquired a 51% stake in CUMI Australia Pty Ltd.

2004

-M.M. Murugappan new MD for Carborundum Universal

-Gets award for industrial safety instituted by National Safety Council Kerala Chapter

in other industries sector in the small industries category

2005

-Carborundum Universal Ties up with South African firm Cerdak

-Carborundum Universal Ltd sets up 100% subsidiary in Ras Al Khaimah U.A.E for

marketing its products namely Abrasives Ceramics Refractories and Electrominerals in

Middle East

2006

-Carborundum Universal enters into a Joint Venture with CEEB to take a 49% stake in

Jingri Yanjiao China

2008

-Carborundum Universal Ltd has entered into a Business Purchase Agreement with IVP

Ltd for the acquisition of its industrial ceramics division at Aurangabad Maharashtra

31

3.4. ORGANISATION STRUCTURE

MD

President- EMD

GM-Mktng

VP-EMD

AGM-Mftng KOR

Sr Mngr-HRAGM-Mfg&Pro

GM-Technical

AGM-Accnts

Dy Mngrs

Managers

Jr officers

Executives

Sr Mngrs

32

Chart No. 3 : Organization Structure

3.5. DIFFERENT PHASES OF DEVELOPMENT:

In 1992 The Company acquired 4 740 preference shares and 1, 24,800 equity shares of

Wendt (India) Ltd. and 10 lakhs Units of Unit Trust of India under the 1964 Scheme.

In 1994 The Company commissioned a wind farm of 2 MW capacity at Perungudi and

Tamilnadu. During the year a project for manufacture of brown aluminium oxide grains

was commissioned with additional capacity of 8 000 tonnes at Edappally.

In 1995 Four wind mills were also added for increasing the capacity to 2.925 MW in order to

meet power requirement of Hosur factory.

In 1996 A new facility for manufacture of new generation monolithics for steel plants

was established at Visakhapatnam and Murugappa Morgan Thermal Ceramics Ltd. a

subsidiary in which the Company held 70% shareholding has implemented a new

project for 3000 tonnes Spun Ceramic Fibre

In 1997 The Ranipet unit manufacturing super refractories received the ISO 9002

certification.

In 1998 The Company established a wholly owned subsidiary in the U.S.A by name

CUMI America Inc. for marketing the Company's products in the American markets.

In 2003 The Company has acquired a 51% stake in CUMI Australia Pty Ltd

In 2005 Carborundum Universal Ltd sets up 100% subsidiary in Ras Al Khaimah

U.A.E for marketing its products namely Abrasives Ceramics Refractories and

Electrominerals in Middle East

GM- Mktng

AGM-mfg &

AGM-Accnts

GM-Technical

Sr Mgr-HR

AGM Mfg

Sr. Mngrs

Managers

Executives

Jr Officers

Staffes

Staff

33

In 2006 Carborundum Universal enters into a Joint Venture with CEEB to take a 49%

stake in Jingri Yanjiao China

CHAPTER 4

DEPARTMENTAL DETAILS

34

Departments

1. HUMAN RESOURCE DEPARTMENT

2. PRODUCTION DEPARTMENT

3. COMMERCIAL DEPARTMENT

4. ACCOUNTS DEPARTMENT

5. MARKETING DEPARTMENT

35

4.1. HUMAN RESOURCE DEPARTMENT

4.1.1. HR Department Hierarchy

Chart No.4 : Human Resource Department Hierarchy

GM

HR MANAGER

HR EXECUTIVE

DY HR MANAGER

STAFF

36

4.1.1. Human Resource Department

Human resource has always been one of the focus points in business strategy. HR

strategy is carefully linked to the vision, mission and overall business strategy of the

company. In CUMI , the HR department is responsible for putting together the HR plan

based on corporate plan. It is responsible for recruitment, selection of employees,

transfers, payroll processing, canteen, and legal proceedings.

Human Resource Planning is done with the 3+1+3 business plan (3-past 3

year’s performance, 1- current year performance,3-forecast of future 3 year’s

performance). The company evaluates the HR requirements estimated by a series of

analysis. The basic objective of this department is effective utilization of Human

Resource, desirable working relationship among all employees and maximum

individual development. The most appreciating feature of CUMI is its profound

flexibility in communication between any subordinate and superior. This contributes to

a friendlier cooperating environment. CUMI has a group of very committed

employees. It has strength of 143 employees, 85 permanent employees & 47 temporary

employees.

4.1.2. HR Values

Concern for people

Integrity

Customer orientation

37

Continuous improvement

Executive excellence

4.1.3. HR Principles

Whether workers or management staff, employees are employees. They are

not different bloc, but two faces of the same coin.

Employee Unions are treated with respect and are partners in the progress.

Harmony and peace cannot be at the cost of dilution of organization ethos.

Fairness and firmness will govern all employee relations.

Communication and dialogue would be the essence of managing

relationships.

A proactive approach and a state of mental and physical preparedness would

help in managing unpleasant issues.

4.1.4. HR Functions

Recruitment & selection.

Preparing appointment letters.

Arranging training and development programs for the employees.

Keeping all statutory obligations.

Collecting data from all other factories to enable them prepare details for

long term negotiation.

38

Informing the concerned department about the change of factory rules &

other related acts.

Maintaining strict discipline.

Making daily attendance of the employees, pay and overtime, this

department also does all correspondence relating to the ESI and PF.

Running of canteen.

4.1.5. Recruitment & Selection

Recruitment and selection is based on integrity, competency and the ability to work in a

team. Company takes value fit individuals with group into consideration. Individuals

are placed under 1 year probation in which the superior accesses his/her abilities,

teamwork, and performance in pressure situations. But successful completion of

probation does not imply on assurance for permanent employment. Based on

experience and qualification selection of managers is done at the Head office, Chennai.

The management gets people through campus recruitments, personal references etc.

Line managers are expected to prepare job description and job specification in respect

of job to be filled, HR department is expected to oversee and ensure proper compliance

with statutory and organizational requirement and policies. The recruitment process is a

three tier method-direct, indirect and third party. The sources of recruitment included

both internal & external. The internal source includes transfer and promotion, which is

more preferred by the company. The management chooses external source like campus

recruitments, personal references etc.

39

4.1.6. Induction

The workers are recruited and selected is given an individual program; introducing

them to the plant, their work and to the concerned department. For managerial

personnel, the induction method used is apprenticeship-training method; immediate

supervisor trains employees. For workers shop floor training is given. There is three

level of induction at CUMI:-

Corporate induction : mainly for corporate personnel. Given in Head Office

(Chennai).

Induction across unit : Given for management staffs across the units in order to

know the various dynamics exist in the group.

Department/functional unit induction : This is given for both management and

non-management staffs; each department managers or supervisors give this.

4.1.7. Training and Development

The need for training is determined by identifying the gap between present performance

of an employee and the desired performance. In CUMI, it is done on the basis of skill

matrix. Training needs identification procedure:

Business Plan/ Long Term Strategy

Policy Deployment

Skill matrix for operatives/ Competency requirement for managers

40

Chart No.5: Training Need Identification Procedure

4.1.8. Skill Matrix:

The objective of the skill matrix is to have a scientific analysis of skill level. The aim is

that technology changes fast and new technology demands new skill. Therefore, this

helps employees to progress his career plan. Skill matrix measures five aspects of an

individual/personal characteristics, discipline, skill work performance and participation

in management. The skill matrix is to find out the attitude of individual towards work

and the skill of the person to perform. It is to identify scientifically the skill level

existing in the organization and to develop the skill levels pattern to meet the business

requirements. In skill matrix, the department head and the employee are rated based on

certain parameters. In rating the performance, it is classified into three -good

performance, average performance and poor performance.

Competency gap

Training need identification

41

4.1.9. Training for Management staffs

Two functional and one Personal Effectiveness Training Program as a part of

corporate initiative.

Specific program against the requirement- Division/unit HR.

Advanced TQM orientation

Negotiation skill.

Out bound training.

SHE programs.

4.1.10. Training for non-management staffs

Behavioral training

Skill improvement training

Multi skilling

Process orientation

Energy management conservation

TQM orientation

4.1.11. Performance appraisal

42

The methods used in CUMI are supervisory rating and self-rating. Performance

appraisal for the managers is called Policy Deployment. This system is based on factors

like business result, quality systems, total employee involvement, waste elimination and

customer satisfaction etc. In this system, the objectives of the GM will be the measure

of his next subordinate and this flow down accordingly until the final objective is

attained. The Performance Management System is based on the Balance Score

Card .The Balance scorecard is the culmination of the Business Plan and is the

complete strategic indicators and thrust areas of business. Appraisal for staffs consists

of knowledge of methods and procedures, quality of work, attendance and punctuality,

resourcefulness, good manners, team spirit etc.

4.1.12. Promotion Policy

Suitability and merit are the criteria for promotion. Promotion policy has been drawn

taking into consideration of performance and not seniority.

4.1.14. Workers participation in management

CUMI takes suggestions from employees mainly relating to the cost reduction. The

better suggestions will be considered by the management and rewarded properly.

4.1.13. Grievance handling

Company policy:

Redressal of day-to-day grievances can motivate employees to be more effective.

Grievances should be settled reasonably, swiftly and transparently.

Scheme:

Applicable to all employees. It can be in the form of oral or written.

43

4.1.14. Welfare benefits:

Welfare fund

Management agrees to contribute towards employee’s welfare fund at the rate of

Rs.15.00 – 20.00 month with effect from 1st September, 2006.

Advances

Management agrees to increase advance from Rs.5750.00 to Rs.7500.00 per annum,

which is to be paid in three installments of Rs.6000, Rs.3500 and Rs.1000 as Onam

advances and school advances and special advance respectively.

Safety shoes:

Additional one pair of safety shoes per year to plant operatives considering safety

requirements.

Leaves:

(a) earned leave - strictly as per factory act

(b) casual leave - Maximum 13 days per annum

(c) medical leave - Maximum 12 days per annum

Hospitalization schemes:

Scheme for employee’s, spouse children. Introduced for those employees who are

out of purview ESI scheme consequent to exceeding the prescribed salary limit of

Rs.10, 000.

44

Tour subsidy:

The annual tour subsidy is revised from 17,500 to 22,500. Terms and conditions

unchanged.

Wages and allowance:

Applicable to all permanent employees with effect from 1st September, 2006

Dearness allowance:

DA is revised from Rs.4.35 to Rs.4.78 per point over and above 83 points of the

consumer price index (1970=100) published by the Director of Statistics, Kerala for

Ernakulam.

House rent allowance:

The house rent assistance is revised from Rs.390.00 to Rs.554.00 per month

Conveyance allowance:

The conveyance allowance is revised from Rs.355.75 to Rs.523.75 per month.

Night shift allowance

Revised from Rs.10.00 to Rs.15.52 per shift for those who work between 4 pm and 12

midnight shift.

45

Revised from Rs.13.00 to Rs.19.88 per shift for those who work between 12 midnight

and 8.00 am

Attendance bonus

An amount of Rs.50.00 per month will be paid to eligible employees in addition to the

present practice of paying one day basic pay as attendance

Incentives

Normal maximum amount earned for good performance per month is Rs.660. variable

pay base on 3 criteria namely process criteria, company criteria and individual criteria.

Overtime

Overtime allowance is given to the workers on the basis of mass hours.

Overtime=Basic+DA *attendance hours/240

4.1.15. Trade unions

Carborundum Universal Employees Union (INTUC)

Carborundum Universal Worker’s Union (CITU)

Carborundum Universal Employees Association

Carborundum Universal Staff Union

Edappally Carborundum Universal Thozhilali Union.

46

4.1.16. Industrial relation

In CUMI, the HR department plays a vital role in maintaining harmonious industrial

relations. A very good relationship exists between the management and the employees.

Since1987, no strike were reported. Inter as well as intra union rivalry is very low.

4.1.17. Performance management system

The performance management system is based on the score card.

The balance score card is the culmination of the business plan and is the complete

strategic map which identifies the strategic indicators and thrust areas of the business.

This balance score card is the authentic document approved by the Murugappa

Corporate Board. Based on the approved score card the functional score card are

evolved.

The monthly plans are then evolved from the above. These plans are reviewed on a

monthly basis against the plan.

The feedback and the learning’s from the monthly reviews and course corrections are

incorporated.

The Performance Management System is on line with Policy Deployment. The steps

involved in policy deployment or Hoshin Kanri is explained in the table.

The system is designed to capture the objectives and measures in the policy deployment

table drawn up for the current year.

The objectives and measures are to be clear cut, specific and quantifiable.

47

The appraiser and the appraisee will jointly discuss and arrive at the best regrouping

possible of the objectives.

In the discussions, the appraiser and the appraisee agree on a action plans including

resources and support. This is summarized and signed off by both the appraiser & the

appraisee.

A review mechanism is also built in the system to ensure frequent monitoring of

objectives and course correction, if necessary.

The review calendar is drawn up to regularly monitor the progress of the objectives and

provide resources if any on the part of the appraisee

Control charts are maintained at agreed frequency and reviewed.

4.2. PRODUCTION DEPARTMENT

4.2.1. Production Departmental Hierarchy

SVP

GM

48

Electro minerals division (EMD) at Edappally has two plants:-

Plant 1 deals with BFA (Brown Fused Alumina) and Plant 2 deals with WFA (White

Fused Alumina).

SENIOR MANAGER

JUNIOR OFFICERS

SUPERVISORS

JUNIOR SUPERVISORS

MANAGER

DY MANAGERS

WORKERS

EXECUTIVES

49

4.2.2. Production capacity:

Production capacity of the Plant 1is 1000 tons per month and the Plant 2 is 850 tons per

month.

Plant 1 produces Brown fused Alumina, which is used as the raw material for grinding

wheels, Emery paper etc. Calcined Alumina, Coke and Iron boring are the raw material

used for the production of Brown Fused Alumina.

Plant 2 produces White fused Alumina, which is used as Vitrified abrasives and highly

purity Alumina refractories. Calcined Alumina electrodes and electricity are the raw

materials used for the production of White fused Alumina. Production process of White

fused Alumina and Brown fused Alumina are same.

4.2.3. Production Process

Raw material storage

50

Chart No.7 : Production Process(Source: Company Records

Weighing

Raw material mixing

Furnacing

Pig Cooling

Breaking

Sledging

Crushing

Magnetic Separation

Shell Cooling

Scrap recycling

Raw material handling

Weighing Crude forwardin

g

51

4.2.4. Production Process

Raw materials are taken from the godown through elevator to the storage bin. The raw

materials for producing Brown fused Alumina are calcined Alumina, iron borings, char

fines and scrap etc. In case of the White fused Alumina, the raw material is calcined

Alumina alone. The raw materials are taken through blender where all these are

blended for 6 minutes. From blender through elevator this mixture is stored in bins out

of which 11 bins are carried to furnace as 4:3:3 ratios. For producing Brown fused

Alumina, the raw materials are furnacing at 2150°c for 17 hrs.

In the case of white fused Alumina, the raw material is furnacing at 1450°c for 6hrs.

Then the furnace is cooled for 3hrs .Then it is rolled out and the shell is removed with

the help of a crane and ‘pig’ is obtained (pig is the fused state of Alumina). The pig is

shifted to pig yard and allowed to air cooling for five days. From the pig yard the pig is

taken to the break yard.

In the break yard the pig is broken by dropping an iron ball weighing about 2.5 ton,

which is lifted with the help of electromagnet. The pig is thus broken and crushed.

From it, the good parts for further processing like the crude are selected and the

remaining scrap is separated for using it as a part of raw materials. The crude is the fed

into the jaw crusher, which breaks it into small pieces. The crude is the conveyed to the

grain processing plant. One pig gives 8-9 tonnes of Aluminium oxide.

4.2.5. Grain Processing Unit

52

Chart No.8: Grain Processing Unit

The basic operations taking place in grain processing are crushing and grading. The

sizes 4 inches are the inputs to grain producing plant. In the first stage the crushed

crude is passed through 36 tons crusher where its size is minimized to 0.75mm.

After this a series of primary as well as secondary roll crushers takes place. From the

secondary roll crusher the grains are passed on scalper.

Grains used for bonded and refractories are then passed through canary mills for

shaping the grains.

With the help of magnet the grains are passed through graders, where the grains are

separated into difference sizes and collected into bins.

For manufacturing verified abrasives grains are further passed through a high intensity

magnet separator.

The grains are passed to deck grader where the grain are separated and collected into

bins. Then the quality is checked and packing is done as per customer specifications.

Silo JawCrusher

Group grading

Individual grading

Final material

Quality checking

Packing

Roll crusher

53

4.2.6. Work shifts:

The company works in three shifts;

8am-4pm,

4pm-12am, and

12am-8am

4.2.7. Application of products

Bonded Abrasives:

Brown Fused Alumina (BFA) is used for manufacturing of grinding wheels, which are

used on metal of high tensile strength and in paper and clothes. Bonded abrasives

industry is mainly meant for auto ancillaries, bearings, and other engineering industries.

Coated Abrasives:

The coated Abrasive industry makes parts for automobiles, hand tools, sanitary fittings,

wood and leather pads.

54

4.2.8. PLANT LAYOUT

( ) - Production line

Source: www.murugappa.com

55

Locations

1- Recreation club. 20. Grain Processing Unit

2- Foot ball ground. 21. Shipping Department

3- HR Department. 22. Mechanical Workshop

4- Four wheelers parking. 23. Maintenance Department

5- Two wheelers’ parking. 24. Store

6- Weigh bridge. 25. Safety Equipment Store

7- Water cooling furnace systems. 26. Physical Lab

8- Finance department. 27. Visitor’s Rest room

9- GM ‘office. 28. Time Office

10- Visitor’s cabin. 29. Security

11- Marketing department. 30. Shipping Department Office

12- Systems department. 31. Canteen

13- Godown (Bauxite). 32. R&D Department

14- Chemical lab (quality checking). 33. Furnace Testing Lab

15- Employee’s rest room. 34. Electrical Maintenance Department

16- Pig yard. 35. Employees Rest Room

17- Furnace.

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18- Break yard.

19- Crusher.

4.3. COMMERCIAL DEPARTMENT

4.3.1. Commercial departmental Hierarchy

Chart No.10: Commercial Department Hierarchy

The main function of this department is procuring the raw materials and other required

materials for the company. Commercial department invites quotation from various

suppliers and make a vendors list on the basis of some criteria.

AGM

SENIOR MANAGER (commercial)

COMMERCIAL MANAGER

1 SUPERVISOR FOR EACH PLANT

57

Commercial department also rates the each vendor based on their previous experience,

quality of the product, delivery speed and price, which is called vendor rating.

Commercial department issues materials as per the order given by the concerned

department through material requisition. If the required material is out of stock, the

commercial department head invites quotations from the vendors. The best quotation is

chosen and the purchase order is placed. On the arrival of the material, it is checked and

issued to the concerned department.

4.3.2. Purchase procedure:

Purchase request

Authorization

Quotation

Purchase order

Material collection

Takes the least quotation

58

Chart No.11: Purchase Procedure

Purchase request: If the departments require any materials, they will place a material

requisition to the commercial department. If the required material is not in the store, the

store manager places a purchase requisition (PR) to the plant manager.

Authorization: Purchase requisition is checked by the plant manager and approved for

the quotation.

Quotation: Commercial department invites the quotations from the vendors.

Takes the least quotations: Commercial department selects the least quotations

Purchase order (PO): Commercial department takes the least quotations with the

consideration of their previous experience, quality of the product and delivery speed

then placing a purchase order to the appropriate vendor.

Material collection: When the materials are reached to the company, the store manager

inspects the materials and then issued to the concerned department.

4.3.3. Store:

The main raw material is alumina calcied supplied mainly by

INDALCO, NALCO. The company is considering purchase from other sources also.

Every item is attached with a ‘Bin Card’, which has UNIX CODE NUMBER

consisting of 14 digits. The card has description of the item, date of receipt, date of

supply, balance, signature, remarks and stock number.

Payment for the material

59

In this store, they also follow Just In Time (J I T) inventory systems. It means that the

materials are being purchased only for the requirements. So there is no need to the

materials are kept for long period.

In this store, they purchase materials only after getting the material requisition. As their

vendors are very close to the company, they can purchase materials only according to

the requirements. There is no need to the bulk purchase.

This Just in time inventory systems helps to avoid the unwanted cost, accumulation of

stock and destruction of materials etc.

Some of the vendor who supply on time are:

Goodwill enterprises

Rose bearings

S N Industries Group

Divya Gas Agency

Jos Electricals.

60

4.4. ACCOUNTS DEPARTMENT

4.4.1. Accounts Departmental Hierarchy

Chart No.12: Accounts Department Hierarchy

AGM (Accounts)

Manager (Accounts)

2 junior officers

Dy MANAGER 2 SUPERVISORS

61

Duties of the a/c assistant are cash transactions, a/c payable, tax remittance, payments

and vouchers etc. Duties of the supervisors are maintaining the trail balance, capital

expenditure, and debt management etc. Responsibilities of the manager a/c are making

monthly report, auditing and fund management etc. AGM a/c has the full

responsibilities of accounts department.

The accounts department at Edappally plant does book keeping, accounting and

reporting functions. It undertakes the work of pay sheet preparation of staffs and

workers, payment of bills, vouchers and other financial transactions. They also prepare

financial reports of the company. All the major financial decisions are taken at

corporate office (chennai). This department also keeps income and expenditure

accounts, which includes the sale and disposal visible cost, contribution, fixed

overheads, operating and non-operating income etc.

The corporate office provides funds for working capital requirements. Departmental

budgeting is also the function of accounts department.

Duties of accounts assistant is cash transactions, accounts payable, payment of tax.

Trial balance, capital expenditure are maintained by supervisor. Responsibilities of the

manager a/c are making monthly report, auditing and fund management etc. AGM a/c

has the full responsibilities of accounts department.

4.4.2. Major functions of this department are:

Keeping depreciation account.

Preparation of income and expenditure account

Preparation of budget for three years.

Departmental budgeting

Prepare management reports

Coordinating the auditing functions

To prepare business plan 3+1+3

For this, sales and performance are taken into consideration 3+1+3 i.e.; 3=past

3year’s performance, 1=current year performance and 3= forecast of the coming 3

year’s performance

62

4.4.3. Capital structure:

CUMI’ capital structure consists of equity share capital, preference share capital,

reserve and surpluses, long-term loan, other loan and deferred tax liability.

4.4.4. Sources of funds:

CUMI’s main source of fund is from the corporate office (Chennai).Issuing of share

and short-term loans from the company’s consortium of banks like State Bank of India

are the other source of funds.

4.4.5. Future investment proposals:

CUMI’s investment proposal is 1500 lakhs for capital planning. It includes 100 lakhs

for mine purchasing, 500 lakhs for the application of tilled furnace, 500 lakhs for the

large-scale production of semi friable products and 400lakhs for miscellaneous.

Every 3rd of the month cash flow statement, Flash Report consisting of sales

contribution, contribution percentage, fixed expenditures, Profit Before Interest and

Tax (PBIT) and 8th of every month Management Information System of profitability

and Capex progress, Balance Sheet statements are sent to Corporate Office. Last year

payment for EMD was rupees 195 crores and rupees 7.8 crores capital expenditure.

4.4.6. Accounting policies:

The company policy has a special accounting policy, which is the basis of the financial

statement. It is in accordance with the accounting standards issued by the Institute of

Charted Accounts of India.

4.4.7. Deferred revenue expenditure:

Preliminary expenses are amortized over a period of 5 years.

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4.4.8. Revenue recognition:

Both income and expenditure are recognized on accrual basis. At the end of the

accounting period, works in progress are recognized as revenue based on proportionate

completion period.

4.4.9. Foreign currency transaction:

Transactions of foreign currency are recorded at the rates of exchange prevailing on the

date of transactions and the exchange loss or gain is recorded within the profit and loss

account.

4.4.10. Depreciation:

Earlier days Company adopted Written Down Value Method. However, the

management felt that straight-line method would be more appropriate. So from 2000

onwards they adopted Straight Line Method.

4.4.11. Investment:

It is meant to be held for long term is accounted at cost.

4.4.12. Retirement Benefits:

The contribution of gratuity fund is based on an annual valuation and to the

superannuating is funded to LIC of India.

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4.4.13. Fixed assets:

Fixed assets are stated at a cost of acquisition and subsequent improvement thereto

inclusive of taxes, dues, freight, and other incidental expenses related too acquisition,

improvement and installation.

4.4.14. Borrowing costs:

Borrowing costs are capitalized as part of qualified fixed assets when it is possible that

they will result in future economic benefits.

4.4.15. Inventories:

Inventories are valued at lower of cost and net realizable value. Cost includes all direct

costs and applicable production overheads to bring the goods to the present location and

condition. Excise duty on the finished goods is added to the cost.

The company also holds a special Murugappa economic value added method for better

operating profit, faster sales growth reduction in incremental fixed capital, reduction in

effective tax rate and lower WACC.

4.4.16. Retirement Benefits:

The contribution of gratuity fund is based on an annual valuation and to the

superannuation is funded to LIC of India.

4.4.17. Capital structure:

CUMI’ capital structure consists of equity share capital, preference share capital,

reserves and surplus, long-term loan, other loan and deferred tax liability.

65

4.5. MARKETING DEPARTMENT

4.5.1.Marketing Departmental Hierarchy

AGM (Marketing)

South region East region West and north regions

Key accounts manager

SVP

RM (Marketing)

66

Chart No.13: Marketing Department Hierarchy

CUMI has a team of marketing executives spread all over the country to facilitate larger

sales and customer services. The company has a traditional marketing wing, which

looks after the sales and services operations. The team also conducts market surveys

and trend analysis, which helps the management to make correct and important

decisions. It also helps in making modifications of existing products and introduction of

new products.

The main responsibilities of this department are the following:

Retaining the regular customers

Identifying new needs arising in the market

Market expansions

Payment follow up

As a part of market research, the sales executives study the requirements of their

customers, both new and existing customers. They collect information from the

customers and prospective customers directly. The first 15 days of every month they do

the above- mentioned activities and the rest of the days they do the payment follow up.

There is a value target and based on this production is carried out.

4.5.2. Main customers:

The main customer industries of the CUMI are:

Automobile industry.

General metal cutting industry.

Polishing of metal surfaces.

Marine paints etc.

And the main customer companies are:

CUMI

Vishwa vishal.

Mechans in UK.

Milthon

AGM (Marketing)

67

Indoflogates.

Tata refractories.

4.5.3. Branding:

CUMI made its brand well known in the industry through continuous hard work and

determination. This was possible because of the following reasons:

Consistent high quality and reliability

Fair pricing practices and transparency

Relationship management

Customized product variants

4.5.4.Sales:

Ninety percentage of the sale is done through direct orders from the customers and 10

% is from the dealers. Last year the company’s domestic sale was around rupees 45

crore and the export sale was around rupees 11 crores.

4.5.5. Distribution:

CUMI has no formal warehouse. They distribute their products directly to the

consumers.

4.5.6. Pricing strategy:

In the domestic market, the company sells products at premium price. However, in the

export market the company facing great competition from the Chinese products so in

this market the company sells the products at economic price.

4.5.7. Promotion:

Promotion is done using the brochures, brand name, technical journals, and

magazines, yellow pages of the internet and relationship management.

4.5.8. Competition:

Price and quality are the major competitive parameters in this industry. In the domestic

market, company divides the entire market into four regions i.e. north, west, south and

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east. Each Dy.manager is being responsible for sales in the particular region. Last year

the company’s domestic sale was around 45 crore. In the Indian market, 35 % of the

share is from CUMI.The main competitors of CUMI are Grind well Norton, Snam

abrasives and Orient abrasives.

In the export market, the company focuses on South-east Asia, Saudi Arabia, Japan,

UAE, US, Canada, Russia and North America.

CHAPTER 5

OBSERVATIONS

69

5.1 SWOT ANALYSIS

Strengths

Company owns mines in Gujarat and also a hydroelectric project in Maniyar.

This reduces the cost of procuring raw materials and production.

The company provides value for money to the customers through their better

quality and innovative products.

The company treats customers with respect and concern

CUMI is having a better organizational climate and manage the environment

effectively. The company grows in an accelerated manner with new products

and services.

The company has got strong R& D department, which have a policy that 6% of

total sales every year should be from new products. R &D enables the company

to have an edge over competitors in the new product development.

EMD has a very good working environment. It has got professionally managed

personnel department.

70

The company has got professionally managed sales team with strong back up of

reputed dealers.

ISO 9001 certification also helps in obtaining some orders as well as

maintaining the standard of the company.

To maintain equality and dignity all employees are provided with uniform and

are strictly in need to maintain personal hygiene.

The greatest strength of the company comes from the employees who are

efficient, energetic and sincere. Dynamic top level management backs them.

There is no barrier between management and workers.

Weakness

The salinity of water has to be improved.

The roads within the company are to be developed so that men and materials

can be moved easily.

No permanent employees has been recruited for the past 14years , it lacks youth

blood.

The company has to make strict rules regarding wearing of Personal Protective

Equipments like safety shoes , helmets , goggles , gloves , jackets etc.

As the significant financial decisions are taken at Head Office at Chennai , the

speed and efficiency of the branch is not satisfactory.

Tha plant entirely depends on KSEB for power supply, therefore power failure

can affect the production.

Opportunities

71

The company can introduce more of its products in the market.

The company can produce new and improved products with less labor and

advanced technology.

More mines have to be found out.

Globalization and liberalization can make its products globally acceptable.

The company can employ best brains from top business and technical

institutions for better working and management.

Foreign acquisitions and mergers make it possible to tap overseas market.

Threats

Chinese products threaten the company since it is cheaper.

CUMI faces stiff competition from world majors and local players.

Power and other equipments are expensive.

The demand for abrasives has fallen down because of industrial and economy

slowdown.

72

5.2. OBSERVATIONS

The following are the findings of the study:

• The accounting procedure adopted in CUMI is fully computerized.

• They have introduced software ERP Ramco System.

• They do not keep any ledger manually.

• The total capital employed of the company is increased over the past five years.

• The total sales of the company are increasing.

• All the major financial decisions are taken at corporate office (chennai).

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5.3. SUGGESTIONS

There is tremendous potential for growth in exports for most types of abrasives.

Indian manufacturers are required to explore closely the international market,

specifically for vitrified products and for labour intensive products "where India is

cost competitive.

Machinery and equipment used in the industry has to be modernized to replace

outdated existing equipment. The level of automation has to be increased to ensure

improved product quality and consistency.

The demand for coated abrasives is likely to grow in the future mainly because of

the larger productivities that are possible. Hence, development of machines and

equipment suitable for coated abrasive machining should become a thrust area.

capital equipment which is commonly used by all abrasive manufacturers is not

available easily and it can be suggested that development of such equipment could

be taken up on a consortium basis to benefit the industry as a whole.

A majority of the manufacturers have their own testing facilities. However, a need

for setting up common testing facilities is felt.

Indigenous production of premium abrasives like zirconia, CBN, should be taken

up in order to improve productivity of the products.

The equipment for process control inspection, testing and quality control do not

meet international requirements. Also, to bring down the cost of grinding' and to

74

bring in new, high quality products, specialized manufacturing equipment will be

required.

In house R&D efforts towards import substitutions of products/ processes should

be initiated.

To ease the situation of shortage of power it was expressed by the manufacturers

that usage of LPG for industrial applications should be done

Good warehousing facilities abroad, reliable transportation services and better

infrastructure should be provided to ensure longevity in export markets.

CHAPTER 6

CONCLUSION

75

6.1.CONCLUSION:

There is tremendous potential for growth in exports for most types of abrasives. Indian

manufacturers are required to explore closely the international market, specifically for

vitrified products and for labour intensive products "where India is cost competitve.

The demand for coated abrasives is likely to grow in the future mainly because of the

larger productivities that are possible.

Carborundum Universal ltd is a major player in the abrasives industry in India as well

as the foreign market. It has a huge potential for becoming the world no 1 in the

industry. Carborandum Universal Limited (CUMI) is an ISO 9000 certified company. It

is excellent employer and producer of world-class abrasives and refractories. This has

happened only with the support of staffs and workers in the company. The

management is dynamic and supportive and patiently hears the workers voices and acts

accordingly. The study has helped me know the objectives, vision and mission, and

values rules and regulations followed by the company. Company for the standard

functioning follows Japanese concept such as seiri, seition, seiro, seiketsu and shitsuke.

The study gave a practical knowledge about the nature of the business firm and it had

enabled me to have an exposure to the majority of the topics related to a company

functioning, structure, policies, promotional activities, working environment,

76

organizational culture etc. It also helped me to know the practical application of the

theories in the business studies.

REFERENCES

Heinz Weirich, Harold Koontz “Management – a global perspective”, pp 120-180,

Matrix publications

Parker P.A, Abrasives, in science encyclopedia, Vol 7, pp 201-207. New York,

Aesculapus publishers

Stephen P Robbins, Timothy Judge, Seema Sanghi, Organizational Behavior, 13th

edition, NewYork, Pearson publications

Tjader SW, Coltrane J A, & Taylor (1995), The abrasive industry, executive summary,

50, pp 750-765 retrieved from INFO Database.

http://www.murugappa.com

http://www..wikipedia.org

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