1.

INTRODUCTION

An organizational study refers to the complete understanding of an organization in all

dimensions.

Ashok Leyland is a well known automobile manufacturing company in India. Ashok

Leyland believe that its historical success and future prospects are directly related to
combination of strengths. The referred unit is a core limb of Ashok Leyland, the nation’s
pioneering automobile manufacturer.

The study includes the brief study of the core departments of Ashok Leyland, Chennai.
Different officials working in various departments have provided very important data in
this report. Every effort has been made to understand the functions and activities of
various departments as well as the manufacturing process.

1.1. OBJECTIVES OF THE STUDY

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• To familiarize with business organization.
• Getting practical experience regarding the organizational function.
• To understand the functions of HR, Finance, Production and Marketing
departments.
• To understand the culture in the organization and its effect on employees.
• To get industrial exposure and experience.

1.2. SOURCES OF DATA

2
The methodology used for the study is through the collection of primary and
secondary data.
Primary data
• Direct observation
• Live discussion with the managers and the staff members.
Secondary data
• Annual Reports
• Business Journals
• Existing Records
• Website of the company.

2. PROFILE OF THE STUDY

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2.1. INDUSTRY PROFILE:
AUTOMOBILE INDUSTRY HISTORY:
In the year 1769, a French engineer by the name of Nicolas J. Cugnot invented the first
automobile to run on roads.

This automobile, in fact, was a self-powered, three wheeler, military tractor that made use of
steam engine. The range of the automobile, however, was very brief and at the most, it could
only run at a stretch for fifteen minutes. In addition, these automobiles were not fit for the
roads as the steam engines made them very heavy and large, and required ample starting
time. Oliver Evans was the first to design a steam engine driven automobile in the U.S.

The automobile industry finally came of age with Henry Ford in 1914 for the bulk
production in cars. This lead to the development of the industry and it first begun in the
assembly lines of his car factory. The several methods adopted by Ford, made the new
invention ie) car, popular amongst the rich as well as masses.

According to the history of automobile industry U.S, dominated the automobile markets
around the globe with no notable competitors. However, after the end of Second World War
in 1945, the automobile industry of other technologically advanced nations such as Japan
and certain European nations gained momentum and within a very short period, beginning
in the early 1980s, the U.S automobile industry was flooded with foreign automobile
companies, especially those of Japan and Germany.

The current trends of the Global automobile industry reveal that in the developed countries
the automobile industry are stagnating as a result of the drooping car markets, whereas the
automobile industry in the developing nations, such as India and Brazil, have been
consistently registering higher growth rates every passing year for their flourishing
automobile markets.

INDIAN AUTOMOBILE INDUSTRY:

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India is one of the fastest growing automobile industries in the world. After 1960, the
automobile industry saw rapid growth and many automotive manufacturers started
production.

The automobile industry in India is the seventh largest in the world with and annual
production of over 2.6 million units in 2009. In 2009, India emerged as Asia’s fourth largest
exporter of automobiles, behind Japan, South Korea and Thailand. By 2050, the country is
expected to top the world in car volumes with approximately 611 million vehicles on the
nation’s roads.

A well developed transport network indicates a well developed economy. For rapid
development a well-developed and well-knit transportation system is essential. As India’s
transport network is developing at a fast pace, Indian automobile industry is growing too.
Also, the automobile industry has strong backward and forward linkages and hence provides
employment to a large section of the population. Thus the role of automobile industry
cannot be overlooked in the Indian economy. Indian automobile industry includes
manufacture of trucks, buses, passenger cars, defence vehicles ,two wheelers etc.., The
industry can be broadly divided into the car manufacturing, two-wheeler manufacturing and
heavy vehicle manufacturing units.

The major car manufacturers are Hindustan Motors, Maruti Udyog, Fiat India Pvt. Ltd, Ford
India Ltd., General Motors Pvt. Ltd., Honda Siel Cars India Ltd., Hyundai Motors India
Ltd., Skoda India Pvt. Ltd., Toyota Kirloskar Motor Ltd., to name a few.

The two wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle &
Scooter India Pvt. Ltd., Hero Honda, Yamaha, Bajaj etc..,

The heavy motors like buses, trucks, defence vehicles, auto rickshaws and other multiutility
vehicles are manufactured by Tata-Telco, Ashok Leyland, Eicher Motors, Bajaj, Mahindra
and Mahindra etc..,
INDIAN AUTOMOBILE MARKET:

5
Many foreign companies have been investing in the Indian automobile market in various
ways such as technology transfers, joint ventures, strategic alliances, exports and financial
collaborations. The auto market in india can boast of attractive finance schemes, increasing
purchase power and launch of latest products.
Some vital statistics regarding the automobile market in India has been mentioned below:
• India ranks 2nd in the global two-wheeler market
• India is the 4th biggest commercial vehicle market in the world
• India ranks 11th in the international passenger car market
• India ranks 5th pertaining to the number of bus and truck sold in the world.

HEAVY VEHICLES MARKET:

Heavy vehicles market in India comprises of trucks, machines, ambulances and school
buses. The popular heavy vehicle brands in India are Volvo, Eicher, Tata, Telco, Ashok
Leyland and Swaraj Mazda.
Following are the major players in the Indian Heavy Vehicles Market:
• Tata Motors is the largest automobile manufacturing company in India that
manufactures a wide range of heavy vehicles adhering to world class standards. It is
the market leader in commercial vehicles in all the segments, be it heavy vehicles,
medium size vehicles, small vehicles, buses or defence vehicles. The heavy vehicles
manufactured by Tata Motors have highly developed braking structure, high ground
authorization, better direction competence and a muscular body. The advanced
engine imparted to these heavy vehicles makes them a class apart from the other
heavy vehicles running on the Indian roads and Highways. Tata Motors leads this
segment with a market share of 61%.
• Ashok Leyland is an exclusively heavy vehicle manufacturing company situated in
Chennai and was initiated in the year 1948. It is one of India’s biggest producers of
heavy vehicles such as trucks, buses, military vehicles and also the second biggest
commercial vehicle firm in India heavy vehicle division with a market share of
around 27%. Ashok Leyland is also renowned for producing auto spare parts and
engines for marine and industrial submission.

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 • Eicher Motors was initiated in 3rd September, 1960. The first firm to manufacture
the first tractor in India. The indigenously manufactured tractor was introduced in the
Indian market straight from Eicher’s Faridabad factory. The history of the firm can
be traced back to 1948, when Goodearth Company was established for vending and
repairs of imported tractors in the nation.
• Swaraj Mazda, a tie up between Mazda and Swaraj Enterprise, Swaraj Mazda
represents advanced Indian expertise and manufacturing. The firm has Research and
Development improvement edge on international scale. The firm manufactures
various products such as Bus, Ambulance, Trucks etc.

The modern automobile market in India has been considering key issues in the process of
growth:
• Customer care, and not just service
• Domestic as well as multi-national investments
• Searing through cut-throat competition
• Road safety
• Anti-pollution norms
• Co-ordination with government to enable advancement
• Used vehicle trade
The future of Indian automobile market is bright as it looks forward to manufacturing and
implementing new innovations such as electric cars as provided by Reva, alternate fuels like
CNG and LPG and probably customized internet automobile orders.

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2.2. COMPANY PROFILE:

Ashok Leyland has been a major presence in India’s commercial vehicle industry since
1948, the year it was born. The origin of Ashok Leyland can be traced to the urge for
self-reliance, felt by independent India. Pandit Jawaharlal Nehru, India's first Prime
Minister persuaded Mr. Raghunandan Saran, an industrialist, to enter automotive
manufacturing.

They are one of the India’s leading manufactures of commercial vehicles and special
vehicles, engines for industrial purpose, gen sets and marine requirement equipments. For
over five decades, Ashok Leyland has been the technology leader in India’s commercial
vehicle industry, molding the country’s commercial vehicle profile by introducing
technologies and product ideas that have gone on to become industry norms.

Ashok Leyland at the time of its inception was known as Ashok Motors. It was
assembling Austin cars at the first plant, at Ennore, near Chennai. In 1950, the company
started assembly of Leyland commercial vehicles and soon the local manufacturing under
license from British Leyland, participation in the equity capital, in 1954, the company
was re christened Ashok Leyland.

In 1987 the overseas holding by LRLIH (LAND ROVER LEYLAND

INTERNATIONAL HOLDINGS LIMITED) was taken over by a joint venture between
the Hinduja group, the Non Resident Indian Transnational group and IVECO Fiat SPA
part of the Fiat group and Europe’s leading truck manufacturing company. Ashok P
Hinduja is the chairman of the company. The Hinduja group also associated with Ennore
Foundries Limited, Automotive Coaches and Components Limited, and Gulf Ashley
Motors Limited.

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The subsidiary holdings are Ashley Holdings Ltd., Ashley Investment Ltd., and Ashok
Leyland Project Services. The chief competitors of the company are;

• Mahindra
• Volvo
• Tata Motors

With a commanding strength of the about 12,000 employees the company is looking
forwards to enhance the scope of its action. It is aiming at expanding its production
operation overseas to make it a more globally accessible company. It is looking to
acquire a small to medium sized commercial vehicle manufacturers in China and other
developing nations, which have an established product line. An example would be the
2007 acquisition of the Czech based Avia’s truck business rechristened Avia Ashok
Leyland Motors.

Since its inception, Ashok Leyland has been a major presence and these years have been
punctuated by a number of technological innovations which went to become industry
standard. This tradition of technological innovations and leadership was achieved through
years of vigorous in-house research and development.

From 18 seater to 82 seater double-decker buses, from 7.5 tonne to 49 tonne in haulage
vehicles, from numerous special application vehicles to diesel engines for industrial,
marine and genset applications, Ashok Leyland offers a wide range of products.

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Ashok Leyland has seven manufacturing plants -

• Ennore Plant, Chennai.

• Hosur Plants Unit I, Unit II and Unit II A.
• Alwar, Rajasthan.
• Bhandara, Maharashtra.
• Pantnagar, Uttarakhand

Early products of Ashok Leyland included the Leyland Comet bus chassis sold to many
operators including Hyderabad Road Transport, Ahmedabad Municipality, Travancore
State Transport, Bombay State Transport and Delhi Road Transport Authority.

In the popular metro cities, four out of five state transport undertaking buses come from
Ashok Leyland. Some of them like the Double Decker and Vestibule buses are unique
models from Ashok Leyland, tailor made high-density routes.

Statistics reveal that the company is India’s largest exporter of medium and heavy duty
trucks. It sells close to 83,000 medium and heavy vehicles each year. The company has a
near 98.5% market share in the Marine Diesel engine markets in India. At 60 million
passengers a day, Ashok Leyland buses carry more people than the entire Indian Railway
network.

The Five AL Values are:

1. International
2. Speedy
3. Value Creator
4. Innovative
5. Ethical

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GROWTH MILESTONES OF ASHOK LEYLAND:

1966 – Full air brakes introduced

1967 – Double Decker buses introduced.
1968 – Power steering offered.
1979 – Multi-axle trucks introduced.
1980 – Integral bus with air suspension.
1992 – Self-certification status for defence supplies.
1994 – ISO 9001 Certification
1997 – India’s first CNG powered bus.
1998 – QS 9000 Certification
1999 – CNG (Compressed Natural Gas) introduced.
2000 – Euro-I, Engines/vehicles introduced.
2002 – ISO 14000 Environment Management System Certification.
2002 – Exclusive Machine line – 2 for Hino cylinder.
2003 – E-Comet launched.
2004 – 50,000 mark vehicle produced.
2006- ISO/TS 16949 Corporate Certification.

ASSOCIATE COMPANIES:

• Automotive Coaches & Components Ltd (ACCL)

• Lanka Ashok Leyland

• Hinduja Foundries

• IRIZAR – TVS

• Ashok Leyland Project Services Ltd

• Gulf Ashley Motors Ltd

• Ennore Foundries Ltd

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FACILITIES:
• The company has seven manufacturing locations in India
1) Ennore, Tamilnadu
2) Hosur: Unit 1, Tamilnadu
3) Hosur: Unit 2, Tamilnadu
4) Hosur: Unit 2A, Tamilnadu
5) Alwar, Rajasthan
6) Bhandara, Maharashtra
7) Pantnagar, Uttarakhand
• Ashok Leyland’s Technical Centre, at Vellivoyalchavadi in the outskirts of
Chennai, is a state-of-the-art product development facility, that apart from modern
test tracks and component test labs, also houses India’s one and only Six Poster
testing equipment.
• The company has an Engine Research and Development facility in Hosur.
• The new plant in the North Indian state of Uttarakhand at Patnanagar is set up at
an investment outlay of Rs.1200 crores. This plant is expected to go on stream in
the year 2010 to cater mainly to the North Indian market taking advantage of the
excise duty and other tax concessions. The facilities have been so designed as to
accommodate further expansion in terms of capacity and future models. At full
capacity utilization, 75000 vehicles will roll out of the Patnanagar plant.
• The company has signed an agreement with Ras Al Khaimah Investment
Authority (RAKIA) in UAE for setting up a bus body building unit in the Middle
east.

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CLIENTS (Not exhaustive):
 Indian Army.
 US Army.
 Honduras Armed Forces (HAF).
 Tamilnadu State Transport Corporation (TNSTC).
 Metropolitan Transport Corporation (MTC), Chennai.
 State Express Transport Corporation (SETC), Tamilnadu.
 Kerala State Road Transport Corporation.
 Maharashtra State Road Transport Corporation (MSRTC).
 Andhra Pradesh State Road Transport Corporation (APSRTC).
 Parveen Travels.
 Sharma Transport.

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VISION
Achieving leadership in the medium/heavy duty segments of the domestic commercial
vehicle market and a significant presence in the world market through transport solutions
that best anticipate customer needs, with the highest value -to-cost ratio.

MISSION
-Identifying with the customer.
-Being the lowest cost manufacturer.
-Global benchmarking our products, processes and people, against the best in the
industry.

QUALITY POLICY
Ashok Leyland is committed to achieve customer satisfaction by anticipating and
delivering superior value to the customer in relation to their own business, through the
products and services offered by the company and comply with statutory requirements.

Towards this, the quality policy of Ashok Leyland is to make continual improvements in
the processes that constitute the quality management system, to make them more robust
and to enhance their effectiveness and efficiency in achieving stated objectives leading to
1. Superior products manufactured as also services offered by the company.
2. Maximum use of employees potential to contribute to quality and environment by
progressive up gradation of their knowledge and skills as appropriate to their
functions.
3. Seamless involvement from suppliers and dealers in the mission of the company
to address customers changing needs and protection of the environment.

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 2.3. ORGANIZATION CHART OF M/s. ASHOK LEYLAND LTD.

MANAGING DIRECTOR
MAMANGIN

SPECIAL ED SPECIAL
ED ED ED DIRECTOR DIRECTOR
INTERNA ED CONSTRUC-
PRODUCT & TION &
CFO L DEVELOPM HR COMPANY BUSINESS PLANNING
ALLIED
AUDIT -ENT SECRETARY
PLANNING BUSINESS &
PORTFOLIO
MGMT

WHOLE
TIME
DIRECTOR
& COO

ED ED
MFG MKTG

ED ED
INTER-
PRODUCT NATIONAL
PLANNING OPERATIONS

ED
SALES
&
SERVICE

15
 ORGANIZATION STRUCTURE OF M/s. ASHOK
LEYLAND LTD.
(AUTHORITY FLOW)

MANAGING DIRECTOR

WHOLE TIME DIRECTOR

EXECUTIVE DIRECTOR

SPECIAL DIRECTOR

GENERAL MANAGER

DEPUTY GENERAL MANAGER

ASST. GENERAL MANAGER

DIVISIONAL MANAGER

SENIOR MANAGER

MANAGER

DEPUTY MANAGER

ASST. MANAGER

SENIOR OFFICER

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 OFFICER
3. FUNCTIONS OF THE MAJOR DEPARTMENTS SELECTED

The major functional areas of the unit and the major departments which oversee those
areas are catalogued as follows:

a) HR Department
b) Finance Department
c) Marketing Department
d) Production Department.

A brief review of each department and its activities as follows:

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a) HUMAN RESOURCE DEPARTMENT OF ASHOK LEYLAND
LTD.

HUMAN RESOURCE MANAGEMENT

Human resource management is defined as the managing function of employees,
developing and compensating HR resulting in creation and development of human
relations with the view to contribute proportionately to the organizational,
individual and social goal.

VALUE STATEMENT
“We consider our employees as our most valuable asset and are committed to
provide full encouragement and support to them, to enhance their potential and
contribution to the company’s business”.

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DEPARTMENTAL STRUCTURE:

ED- HR

DIRECTOR-
GM-
MGMT
MANAGEMENT
DEVELOPMENT
DEVELOPMENT DGM-HR
CENTRE-HOSUR

AGM-
OFFICE SERVICES

DIVISIONAL MEDICAL CHIEF SECURITY

SR.MANAGER- HR
MANAGER- IR OFFICER OFFICER

-MANAGER
-ASST. OFFICER
- ASST.MANAGER
MANAGER - MGMT TRAINEE
-OFFICERS

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FUNCTIONS OF HR DEPARTMENT:
1) HR ACQUISITON
• Recruitment
• Selection
2) HR DEVELOPMENT
• Training and development
• Organization development
3) PERFORMANCE AND COMPENSATION
• Performance appraisal
• Incentives and benefits
4) MOTIVATION
• Creating motivation environment
• Empowerment and participation
• HR Mobility

1) HR ACQUISITION

 RECRUITMENT
Recruitment is the process of ‘finding and attracting capable applicants for employment.
The process begins when new recruits are sought and ends when their applications are
submitted. The result is a pool of applicants from which new employees are selected.

SOURCES OF RECRUITMENT
The following are various external sources of recruitment:
1. Consultancies
2. Campus recruitment
3. Lateral entries

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1. CONSULTANCIES
The department heads where requirements are needed informs to the HR department
about the requirement. The concerned persons for recruitment gets approval for filling the
vacancies. Then the consultancies are approached telling the requirements. The fit
applications are mailed to attend the interview. If satisfied, they are called for the
personal interview.

2. CAMPUS RECRUITMENT
The recruitment panel goes to the reputed colleges to select the candidates.
On the following basis they recruit the candidates
 GETs - Graduate Engineer Trainees
 DETs - Diploma Engineer Trainees
 ITI- Industrial Training Institute

3. LATERAL ENTRIES
They pick the experience candidates or people from other companies. The
following is the process of lateral entry recruitment:
1. Sourcing
2. Interview
a. Written test
b. Technical round interview
c. Personal Interview

PROCEDURE FOR LATERAL RECRUITMENT

 Pre-Selection
 Selection
 Post-Selection

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 PHASE 1: PRE-SELECTION

REQUIREMENT FUNCTIONAL HEAD

REQUISITION

HR

APPROVING AUTHORITY

IDENTIFICATION OF
PROSPECTIVE CANDIDATE
Job site search
Internal references
Hiring consultants
Direct applicants

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 PHASE 2: SELECTION

INITIAL HR SCREENING

SCREENED RESUMES
SENT FOR FURTHER
SHORT-LISTING TO THE
FUNCTIONAL HEAD

PERSONAL INTERVIEW

DISCUSSION AND FINAL

INTERVIEW BY THE
INTERVIEW PANEL

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 PHASE 3: POST SELECTION

SALARY AND GRADE FIXATION

BY APPROVED AUTHORITY

INITIAL OFFER COMMUNICATED

TO THE CANDIDATE

NEGOTIATION WITH THE

CANDIDATE

OFFER NOT ACCEPTED OFFER ACCEPTED

HR INFORMS THE
FUNCTIONAL HEAD AND
CLOSES THE
HRCASE
INFORMS THE HR ISSUES OFFER LETTER
FUNCTIONAL HEAD
ABOUT PROBABLE DOJ

JOINING FORMALITIES

NEW HIRES

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 SELECTION
The selection procedure is concerned with selecting the right candidate at right time for
right place. The selection procedure saves a lot of time and money by eliminating
candidates who are not eligible for the post.

STEPS IN SELECTION
• Receiving of application
• Preparing of shortlist by the department
• Verification of resume by department head
• Interview (one round)
• Psychological test
• Reference/Background information
• Final selection
• Placement

2) HR DEVELOPMENT
 TRAINING
Training is an on-going process aimed at capability-building of the employees at all
levels. In today’s competitive mileu, organizations are increasingly turning to training to
capture the cutting edge. As they manage growth in a constantly changing environment.
Purposive training and planned re-training have an acquired priority status on the
corporate agenda. Centre stage in Ashok Leyland training endeavours is the management
development centre, at Chennai and Hosur. Training programme is classified into
• Skill
• Knowledge
• Attitude

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 TRAINING PROCESS OF ASHOK LEYLAND LTD.

Business
Performance Plan Priority Needs
Appraisal of depts./ units

3600 Competency
Feedback Mapping

Quad 1 Training Yes Initiative

Executives Need
Input
Sources
Climate Competency
Survey Mapping

Training
Training Plan
Effectiveness
Training
Objectives
On- The – Job
Evaluation Learning Outlines

Programme Design
&
Evaluation of
Methodology
Faculty
Resource Identification of

Faculty Resource
Evaluation of
Effective
Training
Measures
Programme
Schedule of
Training
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Schedule of
Training
Training programs in Ashok Leyland are:
• Quad 1 executives
• Competencies and priority needs of departments/ units
• E-learning
• Induction for DET (2 years) GET (1 year), Laterals (7 days)
• GENMOD training program.
• General-Planning for retirement
Budget spent for training (8hrs- 1day) middle managers (3 to 4 persons) is 3-4 lakhs
WORKMEN CAPABILITY BUILDING
Training & Development for the unionized employees at the manufacturing units is
focused on skill development. Both internal and external training is given for associates.
Guest lectures of external faculty and various other industrial visits will be arranged for
associates. In addition to some programmes like engineering drawing and waste
elimination are also conducted.

TRAINING FOR SENIOR/ MIDDLE LEVEL MANAGEMENT

Both external and internal training is given for the executives. Faculty from outside
agencies will be arranged for training them. They also get faculty from corporate level.
Training for senior/middle level management is done on the following basis:
1. Technical
2. Behavioral
3. Functional
 MANAGEMENT DEVELOPMENT PLAN
Management development plan of Ashok Leyland focuses on the following competencies
• People leadership
• Transformational leadership
• Project management capability
• Result orientation
• Entrepreneurial perspective

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HR processes such as job evaluation and competency mapping will be dovetailed into the
development plan to enhance objectivity and effectiveness.
DEVELOPMENT ACTIVITIES
The following are the developmental activities:
 TEI – Total Employee Involvement
 CFG – Cross Functional Group
 QC – Quality Circles
 SS – Suggestion Scheme
 Re-deployment

3) PERFORMANCE AND COMPENSATION

 PERFORMANCE APPRAISAL
“Performance appraisal is the systematic evaluation of the individual with regard to his or
her performance on the job and his potential for development”
In Ashok Leyland graphical scale method is followed, it is also known as linear rating
scale. In this, a printed appraisal form is used for each appraise. The form consists of
various employee characteristics and his job performance. Various characteristics include
initiative, leadership, dependability, creative ability, analytical ability etc..,
The rating is done on the basis of scale which is in continuum representing various
degrees of particular quality. Ashok Leyland use numbers say 5, 4, 3, 2 and 1 to denote
points for various degrees of excellent-poor, high-low, good-bad and so on.
The appraisal form is divided into 8 parts where under each part separate sections are
being covered.
• Part I- Performance in the present job (Employees achievements, goals)
• Part II- Work behavior (Plans, objectives, activities, execution of plans)
• Part III- Abilities (Job knowledge, commitment to achieve results at work)
• Part IV- Potential ( Areas of interest, personality traits, strength, weakness)
• Part V- Overall performance rating ( Based on assessment of part I, II III)
• Part VI- Training need (To improve performance in present job, to assume higher
responsibility)

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 • Part VII- Development plan (Job rotation, job enlargement, special assignment/
reputation)
• Part VIII- Other comments
Five point scale of Ashok Leyland showing levels of performance:
5- Exceptional - Consistently outstanding performance.
4- Superior - - Performance which is consistently significant beyond job
requirements contributes in related area also.
3- Good - Performance which adequately meets job requirements
and occasionally produces good over and above requirements
2- Barely satisfactory - Just meets minimum job requirements
1- Unsatisfactory - Does not meet job requirement at all.

The appraisal form also consists of customer satisfaction survey where the need, service
provider and period of assessment are all identified. It also follows graphical scale
method using a five point scale based on the criteria
1)Quality ( Customer needs, service information, quality works, complaints etc..,).
2)Delivery (Delivery time, point of use, use or parts/service information)
3)Communication (Interaction with customers, listening to customer views, timely
feedback, and review changes with the customer)

4)Responsiveness (Responding to customer complaints, changes to customer needs)

5)Improvement (Positive attitude for improvement, implementation & effectiveness of
improvement and improvements at the customer end)
Overall Customer Rating = 1+2+3+4+5
5

 EMPLOYEE RETENTION
Performance linked pay
The company has an annual appraisal system in place and pursuant to this system,
performance linked pay, annual variable pay and/or commission is paid to the employees.
Employee motivation

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Ashok Leyland targets 100% of its employees to be involved in its continuous
improvement activities. Reward systems such as IMPROVE, RISE, BITES, 100% CLUB
and GEMBA passport scheme motivates people to contribute their ideas.
 INCENTIVES
1) Surcharge on Direct Booking Incentive.
2) Special Incentive Scheme.

Employee welfare schemes

The following are the welfare schemes available to the employees.
• Canteen facilities
• Medical claims
• Transport facilities
• Ashok Leyland school for their children
• Scholarship schemes
• Recreation facilities

 BENEFITS
1) Tuition fee refund:
Reimbursement of expenses related to course fees, examination fees and purchase of
books is allowed upto 75% of amount spent per academic year subject to a maximum
amount as given by personnel administration.
2) Major medical plan:
Benefits will be available within the laid down overall limits for self dependants viz.
reimbursement of medical expenses and interest free loan
3) Medical reimbursement:
Domiciliary expenses incurred on domiciliary medical treatment shall be reimbursed
subject to the annual limits fixed from time to time.
4) Domestic travel:

30
Boarding and lodging expenses per diem allowance, when an employee opts to makes his
own arrangements , out of pocket expenses, other expenses such as local conveyances,
office phone calls.
5) Conveyance reimbursement:
It is made on self certification of expenses by the executives. This will stand withdrawn
in the event of company transport being provided.
6) Vehicle loan:
Interest free loan upto 100% of the cost of a new two wheeler subject to a maximum
limit stipulated from time to time.
7) Group term insurance:
It is in addition to the accident insurance cover provided by the company for executives.
In the event of accidental death, the beneficiaries will receive benefit under both policies.
8) Sixth day compensation (ie. Saturday):
Executives in CG 25 (Corporate Grade) and below will be paid 7.5% of basic salary for
every 6th day (optional) worked. The 6th day compensation as indicated above will be
considered as salary for the purpose of contribution to PF and eligibility for bonus/ Ex-
gratia.
9) Maternity leave:
Total period: 12 weeks leave with pay (6 weeks before delivery and 6 weeks immediately
following the delivery) for lady executives.
10) Leave:
All executives are eligible for privilege leave (PL)-30 days, sick leave (SL)- 7 days,
casual leave (CL)- 7 days, national and festival holidays. All leave will be credited in
January, every year.
11) Retirement age:
The age of retirement from company’s service will be the last day of the calendar month
in which the executive attains the age of fifty eight years.

3) MOTIVATION
 CREATING MOTIVATING ENVIRONMENT
GEMBA:

31
Gemba is a Japanese word meaning “Real Place” where the real action takes place.
In the manufacturing business, Gemba is the shop floor; in a service business, the place
where the customer and the service come together. It is also the quality of human
interaction in the workplace between co-workers, with customers and business partners.
Launched in June 2005 as a company- wide initiative, Mission Gemba’s objective is to
provide information, develop skills and empower employees to reach world-class levels
in quality, cost and delivery. The logic is simple and undisputable: value is created at the
Gemba and the Gemba knows its work best.

GEMBA KAIZEN:
Three ground rules for practicing kaizen in Gemba.
1. House Keeping
2. Muda Elimination [Waste Elimination]
• Waste of over production
• Waste of inventory
• Waste of waiting
• Waste of Motion
• Waste of transportation
• Waste of Producing Rejects
• Waste of processing
3. Standardization.

GEMBA MISSION:
N7i+1
New 7 initiatives
1. Increase in the number of GEMBA
2. 5s [SEIRI,SEITON,SEISO.SEIKETSU,SHITSUKE]
3. EEI (Effort and Ergonomy index)
4. CMI (Cost management initiative)
5. Inventory Initiative
6. Critical machine uptime

32
 7. Quality
8. Safety.

 EMPOWERMENT AND PARTICIPATION

IMPROVE
Improve is an annual company- wide event to record, recognize and award employees for
their positive involvement in organizational growth innovation and customer satisfaction.

RISE
The expansion for RISE is Reward For Individual Search For Excellence. It is an
integrated award and is given to the associates. If an employee does some good activity
or work apart from his usual one he is being awarded with RISE.

TQM – Total Quality Management

The main objective of the TQM cell is to set human in a good manner to achieve the
goals. The quality circle includes 6 people which include 5 associates and 1 executive.
Their main function is to identify the problem, find the solution and to implement it.

 HR MOBILITY
PROMOTION OPPORTUNITIES
Promotions is based on the seniority, eligibility for post , efficiency, skill, qualification
etc.., The management decides whether to fill a post of outside recruitment or through
promotion. Workman shall be considered for promotion to a post based on certain rules.
• He has rendered a minimum period of qualification service of five years.
• He possesses the qualification prescribed for the post to which he is to be
considered.
• Fulfills prescribed attendance.

SEPARATIONS
Separation involves cessation of services of personnel from an organization. When
people leave the organization, Exit interviews are usually conducted to know the reasons
for leaving. The common reasons given are:

33
 • Better opportunities
• Lack of growth

 ALLOWANCES
• House rent allowance
• Washing allowance
• Uniform and stitching allowance
• Night shift allowance
• Conveyance allowance
• Milk and vitamins allowances
• Flexibility allowance
• Quality certification allowance
• Direct production allowance

34
 b) FINANCE DEPARTMENT OF ASHOK LEYLAND LTD.

Finance is considered as the life blood of business. This is because in the modern money-
oriented economy, finance is one of the basic foundations of all kinds of economic
activities. Finance function may be defined as the procurement of funds and their
effective utilization.

 RESPONSIBILITIES OF FINANCE DEPARTMENT:

• The pricing department is responsible for the fixing of prices for sales of the
vehicles and for buying of raw materials and semi finished goods.
• Treasury section is responsible for all kinds of funding managements such as
investments.
• Taxation section is responsible for remittance of tax, filing of returns, handling of
litigations etc..,
• Costing and Budgeting department is responsible for the unit costing of each
product in particular, such as spare parts and a vehicle as whole.
• The FSG (Finance account Service Group) deals with the payables and
recievables at regional offices.
• The Explore finance department deals with the FSG exporting of items.

The same functions and responsibilities are allotted to the accounting and finance
department of the manufacturing plants in Ennore, Hosur-1, Hosur-2,
Hosur-2A, Alwar, Bhandara, Pantnagar.
35
DEPARTMENTAL STRUCTURE:

MANAGING DIRECTOR

CFO

Pricing Manufacturing Units

Treasury
Ennore
Direct
Taxation Hosur-1
Indirect
Costing and Budgeting Hosur-2

Corporate Consolidation Hosur-2A

FSG Alwar
( Finance account Service Group)

36
 Bhandara
Explore finance Pantnagar

DEPARTMENTAL STRUCTURE
(AUTHORITY FLOW)

MANAGING DIRECTOR

CHIEF FINANCING OFFICER

GM-FINANCE

DGM-FINANCE

AGM-FINANCE

DIVISIONAL MANAGER

SENIOR MANAGER

MANAGER

DEPUTY MANAGER

ASST. MANAGER

SENIOR OFFICER
37
 OFFICER

 ROLE OF FINANCE:
• Recorder (accounting) of all Financial Transactions
• Reporting of Financial Performance
• Arranging long and short term funds – Capital and Debt
• Working Capital Management
• Compliance of tax and other corporate laws
• Risk Management
• Controllership function
• Audit coordination
• Investor Relations

 PROCESS & ACTIVITIES OF FINANCE:

a) Financial Accounts
• Quarterly, Half-yearly and annual results published as per listing requirements
• Limited Review / audit coordination.
• Annual Reports – Disclosures made are comprehensive; complied much before
they become mandatory
• Early completion of accounts, audit process; forefront in adherence to accounting
standards & other guidelines.
• Audit Committee – comprises of Stalwarts from the profession.
• Automation of processes
b) Financial Planning & Control

38
 • Financial Planning includes estimating the amount of capital to be raised and
laying down the policies as to administration of the financial plan.
• Monthly MIS: Very Comprehensive with wider coverage and highly informative.
• Monthly review covers business volumes, market share, physical and financial
parameters including alerts on laggards, exceptions in all fronts.
• Exception reporting and Profit management measures form integral part of this
process

c) Treasury Management
- Raising of Funds
- Funds Management
- Debt Servicing
- Risk Management
• Financial instruments for Funds raising would depend on end use of funds; de-
risking is an important consideration in deciding the instrument.
• Capex and long term working capital requirements are funded through share
capital and long-term debt.
• Financial Instruments used include
- Long term funds: Shares, GDR, ECBs, Debentures, term loans etc.
-Short term Funds: Cash credit, Demand Loans, Commercial paper, FCNR,
etc.
• Major funds raising in AL include GDR of US$134 Mn. in 1995 & ECB of
US$315Mn incl. US$ 200 Mn. in Dec 2007.
• Level of debt (Long-term): Rs. 2280.44 cr as on 31/3/10
• Banking relationships for working capital is managed through Consortium of
banks comprising of 14 banks – Fund based Rs.600 cr & Non-fund based Rs.750
cr.
• Funds Management includes managing collections and outflows and
surplus/deficit management. Closer working with Marketing and Units is vital.
• Surplus management includes investment in Fixed Deposits, Mutual Funds, etc.,
Direct investment in equity avoided.

39
 • Debt Servicing includes repayment of principal and payment of interest on due
dates and ensuring that commitments made are adhered to.
• Risk Management is vital since organization is exposed to both currency as well
interest rate risks. Risks offer both threats and opportunities (can increase income
or reduce expenditure). Results depend on how well they are managed.

• Credit rating
Long Term / WC Short Term
CRISIL AA (-) P1+
ICRA LAA(-) A1+
d) Costing & Pricing
• Strategic pricing of products, quotes for various tenders.
• Special pricing for export contracts.
• Monitoring of cost of production of various models and for make or buy decisions
• Project / capex evaluations for optimization and for making commitment
decisions
e) Taxation
• Compliance with Direct (Income Tax Act, Wealth Tax) & Indirect Taxes (Excise,
Customs, Service Tax, Sales tax etc).
• Tax planning is an important component of business decisions.
• Recent major developments include introduction of Service Tax legislation and
VAT across many States.
• Aligning the business process across the organization and maximizing the benefits
against such legislations is a major task handled by Finance.
• Regular tasks include remittance of tax, filing of returns, handling of litigations
etc.
f) Investor Relations
• In AL, Mutual Funds, FII etc.., hold 32% of shareholding besides public who hold
10%.

40
 • FII & Mutual Funds represent investment community who track company’s
performance continuously very closely.
• Dissemination of data relating to company’s performance and developments very
important and sensitive.
• Handled through presentations in periodic investor meet, web-cast, tele-
conferences, individual meets, address in TV etc.
• Presentations made are hosted in company’s website

PLANNING & MANAGING CASH FLOWS:

1. Planning cash flows
Rolling Quarterly cash forecast prepared and monitored weekly seeking
explanation for variance in order to control and direct operations.
2. Management of daily funds
• Collections from 49 locations pooled under cash management system in to
centralized accounts with consortium banks at Chennai.
• Various payments reported are collated and funded for in the various bank
accounts depending on the expected debits.
• Surplus for the day, if any, invested for tenor which is based on requirement of
funds back in to the system.
• Deficit funded through short term loans from banks, availed based on best
product available / rate offered

STRATEGIC GOALS:
• Raise resources to the tune of roughly US$ 1.8 billion for funding expansion plans
of AL, Nissan and other JVs over the next 3 years
• Achieve optimum funding mix / restructuring of companies to minimize the cost
of raising of funds.
• Maximize tax efficiencies to improve cost competitiveness of products and
improve viability of projects.
• Make globalization a reality through acquisitions and setting up of new ventures
abroad by leveraging AL’s strengths.

41
 • Bench mark financial processes to the best in the world and improve the bar;
maintain high standards of financial discipline.
• Maintain excellent relations with international investor community through
effective communication for international offerings.

FINANCIAL CHALLENGES AHEAD:

• Global slow down challenging break even.
• Decrease in Margins due to inability to pass on cost increases due to competitive
pressures – partially compensated by increase in volumes.
• Profitability pressures due to changes in business mix and commodity price
movements.
• Forex management – unforeseen volatility in major currencies; particularly
important with forex loans
• Supporting inorganic growth – evaluation & funding of emerging options.
• Need to fund major capex & investments – Rs.2400 cr in the next 3 years; major
investments in JVs
• Tackling financial covenant breaches.
• Increase in interest rates
• Business integration of overseas units.
• Managing expectations of stakeholders

42
FINANCIAL RESULTS:
Rs. in Lakh
2007-08 2008-09 2009-10
Sales Volume:
Vehicle (numbers) 83307 54431 63926
Engine (numbers) 11757 21447 19050
Spare parts and others 79124 79969 88506
Net sales/Income from operations 774258 598107 724471
Gross operating margin 82038 46944 76284
Financial expenses 4974 11871 8113
Other income 5760 4962 7045
Gross profit (PBDT) 82824 40035 75216
Depreciation 17736 17841 20411
Profit before tax 65088 20845 54477
Profit after tax 46931 19000 42367
Paid up equity share capital (face 13303 13303 13303
value per share Re.1 each)
Basic earnings per share (Rs.) 3.53 1.43 3.18
Dividend per share (Rs.) 1.5 1.0 1.5

Comments:
Significant reduction in material and operating costs supported by pricing action has
improved margins in the year 2009-10

43
 c) MARKETING DEPARTMENT OF ASHOK LEYLAND LTD.

Marketing is concerned with the people and the activities involved in the flow of goods
and services from the producer to the consumer.

Ashok Leyland has been offering world class products to millions of customers to 40
countries across the world.
Its main product line include Trucks, Buses, Defence vehicles and special vehicles and
engines for Indian and Overseas market.
Ashok Leyland is
• The market leader in Indian bus market offering CNG, Double decker and
Vestibule bus variants.
• The market leader and pioneer for multi-axle trucks and tractor-
trailers.
• Enjoys market supremacy in diesel engines for Industrial, Gen-set and
Marine applications .
• Largest supplier of logistic vehicles to the Indian Army.
• Offers “Total Maintenance Solutions” through maintenance contracts for its
products, relieving the customers of all maintenance worries.
KEY ASPECTS OF APPROACH:

SALES & SERVICE

MARKETING CUSTOMER SUPPORT

44
DEPARTMENTAL STUCTURE:

CHIEF OPERATING
OFFICER

HEAD-DEFENCE
SBU

HEAD-
ENGINE BUSINESS

ED- MKTG

HEAD- FULLY HEAD- MKTG & HEAD- PARTS &

HEAD- VEHICLE
BUILT CUSTOMER CUSTOMER
SALES & SERVICE
SOLUTIONS GROUPS SUPPORT

HEAD –
HEAD ( CG LCV ) MARKETING HEAD – TQM
SERVICE

DGM-
HEAD-AMC
CUSTOMER
HEAD-PARTS RECON
VEHICLES SUPPORT
GROUP

HEAD- HEAD- KEY

HEAD- HEAD- TECH HEAD- HEAD-
PROJECT ACCOUNT HEAD
REGIONAL
LCV .SERVICE PRICING SALES MANAGERS
S STU DISTR-
& PROJECT ADMIN BUTION
SALES &
INVOICE

45
ADVERTISING:
The need for advertising was felt by Ashok Leyland in 2006-07 when they had to project
the transformation that has occurred within Ashok Leyland, but as yet not communicated
to the public. They came up with a product related Ad campaign and a Corporate
campaign. Their aim was to let their target audience perceive their brand as International,
Innovative and Speedy, which has always been their core brand value. At the All India
PR awards 2007 conducted by the Public Relations Society of India (PRSI). Ashok
Leyland won the second prize for their corporate campaign. They gave a prelude to the
campaign by exhibiting their product range and their field of pioneering.
This was followed by a three ad campaign.
• “ONLY AN ASHOK LEYLAND ENGINEER WILL BE INSPIRED BY RAAG
MADHUVANTI TO CREATE QUIETER LUXURY COACHES”.
• “ONLY AN ASHOK LEYLAND ENGINEER WILL CALCULATE THE RPM OF
THE BALL, WHEN A ‘DOOSRA’ IS BOWLED”.
• “ONLY AN ASHOK LEYLAND ENGINEER WILL WATCH ‘TITANIC’ TO
SPOT THE DESIGN FLAW IN THE SHIP”.
Also a television commercial was aired in 2007. The commercial was made in two
languages- Hindi and Tamil. It was broadcast on mainline news channels for wider
coverage. There were translites placed at airports for greater visibility.

ASHOK LEYLAND- THE BRAND:

“ENGINEERING YOUR TOMMOROWS” has been Ashok Leyland’s Brand promise.
The tag line finds expression at two levels: on the hard core strategy level, that is the sum
total of the essential values of vehicle technology-safety, comfort, economy and ecology;
on the aspirational level, it denotes a warm and caring relationship with each stake holder
in a unique way.
Brand values
The two most visible- and recognized- components of the brand are the dynamic “L” logo
and the name of Ashok Leyland. The name has historic reasons- and time less meanings.
Ashok meaning Happy is the name of the company’s founder Raghunandan Saran’s son.
The second part of the company’s name has come to cue the international aspect while

46
the first part, so unmistakably Indian, has un-declined the custom built relevance of the
company’s products and operations in the Indian context.
Brand Ashok Leyland is essentially and experiential brand, its values felt in day to day
life- more palpably by its immediate customers and end users. The core of the brand has
always been innovative, international, speedy, moving with times- and often-even ahead
of it. The innards of Ashok Leyland vehicles have always been contemporary. The core is
now being matched by contours of the new, modern, future ready range of vehicles.
In 2006, Ashok Leyland felt a need for change in perception of image among its public
after its research feedback by its brand study. Though the company has pioneered many
product concepts, and technologies, it was perceived to be a slow, elderly and not modern
brand. This made it necessary for Ashok Leyland to bring about a shift in perception and
reinforce the fact that the company was fundamentally strong, masculine, traditional,
sincere, transparent, financially managed and innovative. As per the research, the
company was a fairly strong brand with good recall value. It was seen as an experiential
brand, where the public related to it thought very high of it but those away from the brand
has only a fuzzy image of it.
Thus emerged the new Ashok Leyland with a new face. The tangible shift began with a
change in the typeface of the brand name along with a baseline. Also the company came
up with a corporate identity manual which was strictly to be followed by all. The content
specified brand name usage in various areas. Various advertisements were aired to
promote the brand. The launch of a new website opened to doors to the world outside.
Also screening of its corporate film helped them gain publicity.

47
MARKETING PROCESS:

DELIVERING
Sales UNDERSTANDING
Service Customer /Markets
Network Planning Marketing Initiatives

CUSTOMER

SUPPORTING
Parts
AMC
Used Vehicles
Transport
Exchange

MARKETING ENVIRONMENT:
• Legislative changes related to commercial vehicles.
• Improving efficiency in railway operations.
• Customers demanding more from manufacturers.
• Service products becoming important buying decision.
• Entry of multi-national players.
• Higher growth rate in LCV segment.
• Directly competing with railways.
• Road vs Rail share stabilizing
• Shift towards Hub and Spoke model

48
BUSINESS INTEREST:
• Medium & Heavy commercial vehicles.
• Defence
• Exports
• Industrial applications
• Spare parts
• Service products

MARKETING STRATEGIES AND PLANS OF ASHOK LEYLAND:

NEW PRODUCT LAUNCHES
The company is expected to launch a slew of new products in the markets which is
expected to propel the demand for its products.
INCREASING GLOBAL FOOTPRINT
The company is now targeting new strategic markets with increased thrust on the
Asian and African countries.
PLANS TO MEET THE GROWING NEEDS OF THE MARKET
The company is constantly reviewing their strategies. They are moving into higher
value added jobs because it becomes very important to engage workmen fully and
also their efficient utilization.

FACTORS AFFECTING GROWTH:

Infrastructure development
Overall economic growth
Restrictions on overloading
Better operating economy of new trucks
Restrictions on the age of vehicles
Replacement demand due to changes in emission norms

49
CURRENT PLAYERS IN THE COMMERCIAL VEHICLE INDUSTRY:
• Ashok Leyland
• Tata Motors
• Eicher Motors
• Swaraj Mazda
• Volvo
• Tatra Udyog
• Force-MAN
• Asia Motor Works
• Mercedes Benz
• Scania
• Hino Motors
• Daimler -Chrysler
New entrants on the anvil- Mahindra Navistar,URAL

ASHOK LEYLAND- DISTRIBUTION NETWORK:

PLANT

MARKETING

REGIONAL
CUSTOMER SALES OFFICE
GROUP

DEALERSHIP

CUSTOMER

50
ASHOK LEYLAND- MARKETING NETWORK:
• Regional offices- 10
• Areas offices- 18
• Regional sales offices-19
• Parts warehouse-7
• Main dealers- 43
• Dealer outlets- 177
• Authorized service centres- 145
• Service bays- 2352

DISTRIBUTION CHANNEL – SALES:

REGION REGIONAL OFFICE AREA OFFICE

South-1 Chennai Chennai, Madurai, Eranakulam
South-2 Bangalore Bangalore, Hubli
South-3 Secunderabad Secunderabad
West-1 Mumbai Mumbai
West-2 Ahmedabad Ahmedabad
Central Nagpur Nagpur, Indore
North-1 Delhi Delhi, Lucknow
North-2 Jaipur Jaipur
North-3 Chandigarh Chandigarh
East Kolkata Kolkata, Bhubaneswar,
Jamshedpur, Guwahati

51
PRODUCT PROFILE (Not Exhaustive):
Ashok Leyland offers a comprehensive product range with trucks from 7.5 tons GVW to
49 tons GVW(Gross Vehicle Weight). From 19 to 80 seaters in passenger transport, a
host of special application vehicles and diesel engines for industrial gensets and marine
application. Product profile can be broadly split into five categories viz. Buses, Trucks,
defence vehicles, special Vehicles and Engines.
BUSES
LYNX BS-II Viking BS-II 12 M Bus-BS II
Cheetah (Front engine) Viking BS-III Viking AL
Airport Tarmac Coach Vestibule Bus Panther (Rear engine)
Cruiser Viking CNG BS-III Falcon (Front engine)
Stag BS-II Double Decker

TRUCKS
4x2 Haulage models Ecomet
4x2 and Multi-axle Tipper Tractor
Multi Axle vehicles

DEFENCE VEHICLES
Short Chassis Bus Field artillery tractor Comet 4x4
Topchi field Artillery tractor Long Chassis Bus
Stallion 6x6 Stallion truck fire fighting

SPECIAL VEHICLES
Hippo tractor Stallion Mk III Tipper Hippo Tipper
Beaver tractor Rapid Intervention Vehicle
Beaver Haulage Hippo Haulage

ENGINES
Genset application Marine application
Industrial application DG sets for exports

52
VEHICLE SALES:

SALES in Units TOTAL SALES

YEAR DOMESTIC EXPORTS In Units
2006-07 77069 6025 83094
2007-08 76022 7285 83307
2008-09 47619 6812 54431
2009-10 57947 5979 63926

SALES TURNOVER & PROFIT:

YEAR SALES TURNOVER NET PROFIT

Rs.Crore Rs.Crore
2006-07 7168.17 441.28
2007-08 7729.12 469.31
2008-09 5981.07 190
2009-10 7244.71 423.67

• Ashok Leyland registered a sales turnover of Rs.7729.12 crores during 2007-08

compared to Rs. 7168.17 Crore in 2006-07 showing an improvement of 7.8%
• After a sluggish start in 2008, the sales turnover improved by 21% touching
Rs.7244.71 crores in 2009-10 compared to Rs.5981.07 crores in the 2008-09.
• The net profit rose by 6.4% in 2007-08 to touch Rs.469.31 crores compared to
Rs.441.28 crore in 2006-07.
• Similarly the net profit improved to 123% to touch 423.67 crores in 2009-10
against Rs.190 crores in 2008-09.

53
 d) PRODUCTION DEPARTMENT OF ASHOK LEYLAND LTD.

Production is an organized process of manufacturing/producing goods and services

through the use of input resources of men, materials, money, machine, methods.

PRODUCTION MANAGEMENT STRATEGIES:

Long range strategies
• Effective management of technology.
• Innovation in product management and process technology.
• Globalization in industry.
• Goodwill inside and outside the organization.
• An aggressive marketing strategy and risk taking ability.
Short range strategies
• Location and layout.
• Product selection and technology.
• Capital selection and investment.
• Flexible strategy of production.
• Standardization of design.
• Economy of size and variety.

PRODUCTION SYSTEM:
Ashok Leyland employs a continuous production system, making use of special purpose
machines and produces standardized items in large quantities.
Characteristics
• Standard products are manufactured.
• Small work in progress in involved.
• More maintenance is required.
• Minimum cost of production per unit
• Division of labour is made more efficient.

54
DEPARTMENTAL STRUCTURE:

EXECUTIVE DIRECTOR
- MANUFACTURING

PLANT
DIRECTOR

GENERAL
MANAGER
- MANUFACTURING

DGM -MFG DGM -CHASSIS DGM –MFG

SERVICE

AGM-ENGINES AGM-CHASSIS

AGM-
MECHANICAL
DIV -MGR DIV -MGR

DIV –MGR
DIV –MGR DIV –MGR
MECHATRONIC
MECHANICAL ELECTRICAL
SENIOR -MGR SENIOR -MGR S

SENIOR -MGR SENIOR -MGR SENIOR -MGR

EXECUTIVES EXECUTIVES

EXECUTIVES EXECUTIVES EXECUTIVES

ASSOCIATES & ASSOCIATES &

DAILY RATED DAILY RATED
WORKERS WORKERS

ASSOCIATES & ASSOCIATES & ASSOCIATES &

DAILY RATED DAILY RATED DAILY RATED
WORKERS WORKERS WORKERS

55
PLANT LAYOUT:
Product layout is employed in chassis assembly and engine assembly where in the
facilities are arranged in a line as per the process sequence of the component
manufactured.
Characteristics
• Mechanized material handling.
• Lesser work in progress.
• Special purpose machines are used.

ENGINE ASSEMBLY:
• The engine case arrives at the first section and it is fitted with cam shaft
and flywheel.
• The pistons are attached one by one to the crankshaft.
• Later fuel filters, oil coolers are attached.
• Belt and gears for the running came is attached in the next section.
• Finally the engine timing is set and sent for mounting on the body of a
truck or a bus.

FRAME ASSEMBLY:
STAGE 1: Mounting of side members and cross members
STAGE 2: Mounting of Front Spring-rear, Front Spring-rear, Rear spring-front, Rear
spring-middle, Rear spring-rear.
STAGE 3: Fitting of Engine mounting brackets and FES mounting brackets
STAGE 4: Side members fastening to torque limit, Steering box bracket, Side Members
reaming, Front tie channel mounting
STAGE 5: Fitment of FES rear brackets, Shock absorber brackets and Torque checking
PASSING STAGE: Checking and tilting

56
STAGES OF CHASSIS ASSEMBLY:
Stage 1: Lay down regular
Stage 2: Fixing of I & U bolt.
Stage 3: Brake chamber.
Stage 4: Steering gear.
Stage 5: Silencer.
Stage 6: Fuel / water separator.
Stage 7: Air tank.
Stage 8: Fuel tank.
Stage 9: Engine mounting.
Stage 10: Air/fuel piping.
Stage 11: Propeller shaft.
Stage 12: ACE link assembly
Stage 13: Exhaust piping.
Stage 14: Radiator.
Stage 15: Tyre mounting.
Stage 16: Lubrication.
Stage 17: Front end structure (FES) Cab mounting.
Stage 18: Bumper.
Stage 19: Steering.

Now the cockpit of the truck is mounted on the body of the truck correctly and then it is
sent for a drive or to the storage area. For every 13 minutes a truck rolls out from the
factory and 135 chassis are assembled per day as per agreement.

Both these sections have a conveyor belt on which each process is carried on. The belt
keeps on moving and the operator has to complete his designated job or else its nothing
but an error.

57
 PDI (PRE DELIVERY INSPECTION):
Testing of vehicle on real road conditions
The following are the various tests done to test the vehicle:
1. Speed test
2. Acceleration test
3. Vibration test
4. Torque tightening
5. Oil level and water level checking
6. Electrical components checking
7. Air leakage test
8. Grease level checking
9. Power steering hose routing and clamping
10. Road test

PRODUCTION PERFORMANCE:

YEAR PRODUCTION
In Units
2006-07 83558
2007-08 84006
2008-09 54049
2009-10 64673

PLANT ENGINEERING:

58
Plant engineering is responsible for proper functioning of the plant by carrying out
maintenance operations such as electrical and electronics equipments maintenance, fork
lift charging and its repairing, repairing of pneumatic circuits etc.. It is also responsible
for maintenance works carried out in the organisation. The following are the various
types of maintenance:

 Predictive maintenance
 Preventive maintenance
 Breakdown maintenance
 Routine maintenance

1. PREDICTIVE MAINTENANCE:
Predictive maintenance is done on assumption by experience before the occurring
or by any symptoms of occurring.

2. PREVENTIVE MAINTENANCE:
Preventive maintenance is work directed to the prevention of failure of a facility

3. BREAKDOWN MAINTENANCE:
Breakdown maintenance is work which is carried out after a failure, but for which
advanced provision has been made in the form of spares, material , labour and
equipment

4. ROUTINE MAINTENANCE:
Routine maintenance is done on even time or on routine basis. It includes machine
lubrication, replacement of bulbs throughout plant to arrest building deterioration.

DIVISIONS:

59
Plant engineering is divided into 4 divisions to carry out its functions. The following are
divisions of plant engineering:

 Electrical
 Mechanical
 GWE(General Works Engineering)
 Civil

PERIOD OF MAINTENANCE:
Period of maintenance is done on the basis of VED analysis. It is also known as time
based maintenance. Here VED stands for
V - Vital
E - Essential
D – Desirable

ANALYSIS DURATION

V- Vital 6 months

E- Essential 9 months

D- Desirable Once in a year

4. CORPORATE SOCIAL RESPONSIBILITY

60
Ashok Leyland defines CSR as: "Our commitment to improving the quality of life of our
employees, their families, the driver and the local communities around our units, and the
society."
With CSR as an integral part of Ashok Leyland’s activities, all social initiatives are
structured and focused to enhance the commitment of employees and stake –holders.
CSR initiatives in Ashok Leyland are aimed at impacting positively, making a difference
and sustaining them, all efforts are focused upon livelihood enhancement, health,
education and environment.
Ashok Leyland encourages employee involvement, engaging the families of the
employees, and involving local, experienced and credible resources in all its CSR
activities.

CSR ACTIVITIES:
1) Fun Bus
• Fun Bus is a gift from Ashok Leyland exclusively for free users round the year by
children of orphanages, corporation primary schools and physically/ mentally
challenged children in Chennai.
• The seating layout reckons the requirements of physically challenged children.
The bus is equipped with a hydraulic lift for the convenience of wheel chair –
bound children.
2) Green Mission
• In 2002, all the vehicle manufacturing units of Ashok Leyland were ISO 14001
certified with Environmental Management System.
• The Ennore unit was recently identified as one of the model energy- efficient
units by a CII-TNEB organized Energy Conservation (ENCON) mission.
Systematic management of all energy resources from the 1980’s through better
house keeping and awareness has made this possible. The 1980’s also saw Energy
audit being introduced. Improvement in machine tools, furnace-loading pattern,
design of heating elements and an energy efficient lighting system has all led to
energy savings of 30,782 units per day.

61
 • For Ennore, practicing the 3Rs of Reduce, Reuse and Recycle has surely paid off.
Recently, an opinion survey conducted in the neighbourhood reveals that both
industries and the public are happy to have Ashok Leyland as their neighbor.
Building on the eco friendly measure over the years, Ennore has received ISO
14001 certification for Environmental management Systems.
3) Effluent Treatment
• The plant can do primary, secondary and tertiary treatment operations. About
55,000 liters of effluents flow into the plant everyday. Five kilograms of solid
hazardous waste is stored as per Pollution Control Board standards and the rest
water portion is treated and used for organic farming. On an average, 2,50,000
liters of recycled water is pumped into garden saving Rs.1.5 million per annum.
4) Greening
• The Ennore unit is known for its lush green cover. Almost 10% of the total
ground area 53.41 hectares is covered by greenery creating an oasis in the arid
zone of Ennore.
5) Aids Awareness
• In the mid-90’s, the department of International Development, British High
Commission, formed the Truckers Interim Coordination Unit (TICU) for a
focused programme among truck drivers. Ashok Leyland was one of the first
organizations to associate itself by becoming an intervention centre.
• Outside the factory camps, and health education programs like lectures, cycle
rallies, film shows, exhibitions etc. are conducted through our volunteers in co-
operation with AIDS prevention and control project. They also provide
counseling services at our Medical center. Cases which require support service are
sent to ‘Seva Kendra’ in Bangalore (an NGO backed by rotary- TTK), RIDS (an
NGO) in Hosur, Kingsley Community Centre- (an associate of Bill and Melinda
Gates Foundation) in Krishnagiri.

6) Driver Training Centre

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 • Ashok Leyland’s Namakkal Driver Training Centre near Salem in Tamil Nadu
was started in 1995 “ to ready a driver for life on he road and off the road”. From
the very beginning, the curriculum had included, besides functional subjects,
health education including yoga and AIDS awareness along with the education on
the vehicle and traffic rules cum sessions on physical fitness, personality
development and health risks like smoking. The drivers also attend awareness
sessions on Sexually Transmitted Diseases.
• Ashok Leyland has reached out to 90,000 truckers during its training programme
in Tamil Nadu. A training centre is also located at Alwar.
7) Community Welfare
• Started in 1994, the Dharam Hinduja Matriculation and Higher Secondary School,
Thiruvottiyur, Chennai, is managed by a Board of Trustees consisting of senior
executives and workmen of the company.
• The company contributed one crore rupees in aid of relief operations for the
Tsunami victims. In addition, employees contributed another 15 lakhs separately.
• Ambulances are donated for worthy causes. Free medical camps are held in
neighbourhood. Employees participate in large numbers at periodic blood
donation camps held at the Units.
• Substantial relief material was distributed in the worst affected districts of
Tamilnadu through NGOs. The Company is also working with the Confederation
of Indian Industry (CII) for long-term solutions like fishing equipment and
community centers to the fishermen communities.
8) Sludge disposal
• A natural by-product of the painting process, sludge disposal has always been a
problem faced by the auto industry. At Ashok Leyland various actions have been
initiated over the years towards safe storage of sludge, ultimately leading to the
construction of secured landfills within the campus. Since paint had a high
calorific value, its use as a fuel was explored. The effort yielded positive results.

5. SWOT ANALYSIS
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 STRENGTHS
1. Good Training System.
2. Good Organizational Climate.
3. High Market Share
4. Skilled Employees
5. Standard Quality Product

WEAKNESSES
1. High price
2. Sales representatives are less

OPPORTUNITIES
1. Demand for heavy vehicle have steeped up all over the globe.
2. Company provides better credit facility to dealers.

THREATS
1. High competition
2. Promotional programmes of other brands
3. Complicated national market
4. New players entering the market.

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 6. COMMUNICATION SYSTEM AT ASHOK LEYLAND LTD.

The Corporate Communication department in Ashok Leyland started in 1997. Previously,

a part of marketing communications, the department has come a long way. It came into
existence when the management realized the need for a media friendly department to
communicate with its external public. Also there was a need to communicate extensively
to its internal public.

Publics

EMPLOYEES MEDIA

AL
CUSTOMERS SHARE HOLDERS
CUTcustomersmmmmmmmmmm
SUPPLIERS FINANCIAL
INSTITUTIONS
sfsdfsfs
ASSOCIATE PARTNERS INDUSTRY

TRADE ORGANISZATIONS MONITORING BODIES

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INTERNAL COMMUNICATION:
Employees form a vital part of any organization, thus it is required to establish and
maintain mutual understanding with them. This will help the organization to increase
efficiency and productivity in the long run. Continuous communication with the
employees will facilitate the organization to keep them updated on the current
happenings.
Downward Communication:
 MD’s Letter
This letter is addressed to the internal public of the company by the Managing
Director, This letter is drafted by the Corporate Communications Department with
inputs from the MD and is circulated only internally once in three months.
 Managing director holds a meeting with the executives of the company every year
in a 5-Star Hotel
 Communication Meet
The communication meet is one of those events where the top management
communicates directly with various departments of the company. Here the top
management addresses the employees and makes a presentation which discusses
the future plan.
 Circulars.
 E-mail
 Telephone.
 Ashley News
Upward Communication:
 AL PORTAL INTRANET-MD’s Portal
This link allows employees to post queries to the Managing Director. The MD
then goes through them and either replies to it or forwards it to a functional head.
A copy of the reply by the functional head is sent to the MD. Any employee can
ask any question related to the company and its functions.
 Soap box
It is a raised platform on which employees can give in suggestions and feed back

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 such as cost saving techniques, new technologies etc., and discuss over it. Any
employee having company’s e-mail id can access to this link through AL-Portal.
 Counselling
Informal communication:
 Oral communication
 Improve
An annual company wide contest for employee team projects which gives them a
chance to think, innovate and improve. The teams are divided into Workmen, open
and Executive league. These teams compete under three different streams based
based on the theme of their project.
 AL-quiz
The main aim of the quiz is to inculcate the five values of Ashok Leyland ie)
International, Ethical, Speedy, Innovative and Value Creator among the
employees.
EXTERNAL COMMUNICATION:
External communication is the exchange of information and messages between an
organization and other organizations, groups, or individuals outside its formal structure.
The goals of external communication are to facilitate co-operation with groups such as
suppliers, investors and shareholders, and to present a favorable image of an organization
and its products or services to potential and actual customers and to society at large.
Communication media
 Website
 Annual Report
 Customer Journal-Moving Force
 Operator’s Meet
 Vendors & Suppliers Meet
 Dealer’s Meet
 Exhibitions
 Media Relations
 Shareholder Relations

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 The Annual General Body Meeting
7. FINDINGS

1. In this organization there is good employer-employee relationship.

2. It targets 100% of its employees to be involved in its continuous improvement
activities by motivating them through various financial and non-financial
incentives.
3. There is a well integration of all the functional departments which facilitates the
use of software like ERP .
4. To solve work related problems, QC (Quality Circle) and cross functional team are
made effective.
5. Ashok Leyland has not got a foothold in the luxury trucks segment in its domestic
market.
6. Advertisement is not given much importance.
7. The company is increasing its global foot print by entering Asian and African
markets.

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 8. SUGGESTIONS

• The company should concentrate more on the luxury truck segments to keep a
strong hold in the market
• The company should earmark more money for the advertisement and sales
promotion of its products. It helps to increase the brand awareness and image.
• The company should concentrate on markets in the international arena where its
competitors are less powerful.

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 9. CONCLUSION

The summer internship and the resulted report have been of great help to the researcher,
as an aspirant manager, to understand the functioning of a major establishment like
Ashok Leyland. The summer internship has also revealed many unknown facts about the
working of a manufacturing unit and familiarize about the assembling of commercial
vehicles.

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 10. BIBLIOGRAPHY

1) L.M. Prasad, Human Resource Management, 2nd edition, New Delhi, Sultan
-Chand & Sons. Yr.2005.
2) Philip Kotler, Marketing Management, Millennium edition, New Delhi,
Prentice Hall of India (P) Ltd., Yr. 2001
3) Ashok Leyland In- House Journal – Ashley News
4) www.ashokleyland.com

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