SME CONFERENCE. Confederation of Indian Industry Chennai A Case Study Presentation HI-TECH ARAI LTD., Madurai

Transcription

1 SME CONFERENCE Confederation of Indian Industry Chennai A Case Study Presentation HI-TECH ARAI LTD., Madurai GROWING & ACHIEVING EXCELLENCE THROUGH PEOPLE PAST: The name was M/S. HI-TECH ANCILLARIES LTD. A tiny family concern as private limited company with initial equity of Rs.4.25 lacs. By 31st March 1990, the annual sales was Rs.80 lacs, equity base was Rs lacs and the accumulated loss was Rs lacs (almost 3 times the equity base). The total manpower was 75. Technical collaboration with M/S. Arai Seisakusho Co. Ltd., Japan.

2 GROWING & ACHIEVING EXCELLENCE THROUGH PEOPLE PRESENT: The name is M/S. HI-TECH ARAI LTD. As of 31st March 2007, the annual sales turnover has touched Rs.190 crores. The profit before tax for the year is Rs.30 crores, the equity base is Rs.5.60 crores, and the cumulative surplus (profit ploughed back) is Rs crores. GROWING & ACHIEVING EXCELLENCE THROUGH PEOPLE CURRENT STATUS IN THE INDUSTRY: Leader in the market in the OE market with 70% market share. Exports to Yamaha (Japan), Thailand, France, Indonesia,China and Piaggio (Italy), all for OE market only. Now the Company is in Joint Venture with M/S.Arai Seisakusho Co. Ltd., Japan and M/S. Mitsubishi Corporation, Japan. The Japanese equity holding is 47% Now the company also has a Windmill Division with currently 16windmills in operation.(5.00 megawatts).

3 THE STATUS-THEN AND NOW SALES PROFIT BEFORE TAX Lacs (COMPOUNDED GROWTH -8.4 Lacs (Loss) 190 Crores ANNUAL 25%) 30 Crores ACCUMULATED PROFIT -23 Lacs (Loss) 65 Crores EQUITY 12 Lacs 5.6 Crores MAN POWER BUILDING TRUST EMPLOYEE DIGNITY TRANSPARENCY (DECISION MAKING) VISIBILITY (ACTION) OWN THE WHOLE FAMILY COUNSELLING

4 CORPORATE VALUES (GUIDING PRINCIPLES) 1. EMPOWERMENT 2. OPEN NESS 3. TEAM WORK 4. RESPONSIBILITY TOWARDS SOCIETY Gross Sales (Rs in Crores)

5 70 Net Worth (Rs in Crores) Profit Before Tax (Rs in Crores)

6 GROWING & ACHIEVING EXCELLENCE THROUGH PEOPLE THE CORE BELIEF IS THAT IT IS POSSIBILE TO ACHIEVE ZERO DEFECT AND ACHIEVE LEADERSHIP IN THE MARKET GROWING & ACHIEVING EXCELLENCE THROUGH PEOPLE TRAINING BENCH MARKING EMPLOYEE INVOLVEMENT EMPLOYEE EMPOWERNMENT ROOT CAUSE CORRECTIVE ACTION TEAM WORK UNIVERSAL RESPONSIBILITY THINKING STATISTICALLY ORGANISATION CULTURE BUILDING SUSTAINED MANAGEMENT COMMITMENT

7 HI-TECH ARAI LIMITED MILESTONES HI-TECH ANCILLARIES LTD WAS REGISTERED ST UNIT IN TANAKKANKULAM TECHNICAL COLLABORATION WITH ARAI SEISAKUSHO CO LTD TOTALLY PROFESSIONALISED SECOND UNIT IN TRICHY AWARDED BEST SSI UNIT IN THE DISTRICT AWARDED BEST SSI UNIT IN THE DISTRICT THIRD UNIT IN K.PUDUR SET UP R&D CENTRE IN K.PUDUR AWARDED BEST UNIT IN THE STATE JOINT VENTURE WITH ARAI SEISAKUSHO CO LTD AND MITSUBISHI CORPORATION, JAPAN HI-TECH ARAI LIMITED MILESTONES NAME CHANGED TO HI-TECH ARAI LTD NEW COMPOUNDING UNIT AT KAPPALUR FOURTH UNIT IN K.PUDUR FIFTH UNIT (DEDICATED TO MARUTI UDYOG LTD) IN K.PUDUR MOST MODERN FACTORY BEING SET UP AT K.PUDUR HI-TECH ARAI Q.C. CIRCLE TEAM WON THE FIRST PLACE IN Q.C. CIRCLE COMPETITION IN TAMIL NADU STATE CONDUCTED BY CII(S.R.) HI-TECH ARAI Q.C.CIRCLE TEAM WON THE FIRST PLACE IN Q.C. CIRCLE COMPETITION IN SOUTHERN REGION CONDUCTED BY CII(SR) CONTINUES

8 HI-TECH ARAI LIMITED MILESTONES IN OCT 2000, HI-TECH ARAI S TWO Q.C.CIRCLE TEAMS WON BOTH THE FIRST AND SECOND PLACE IN Q.C.CIRCLE COMPETITION IN TAMILNADU CONDUCTED BY CII (SR) IN JUNE 2000, THE CO. INITIATED ENVIRONMENT MGMT. SYSTEM CERTIFICATION PROGRAMME AND AND OBTAINED THE CERTIFICATION IN JULY 2001( ISO 14000) IN NOV.2001, A PRESTIGEOUS QUALITY PERFORMANCE AWARD FROM MARUTI UDYOG LTD. WAS RECEIVED IN DEC.2002, TWO Q.C. TEAMS WON BOTH DISTINGUISED AWARD AND MERITOROUS AWARD IN AN INTERNATIONAL CONVENTION HELD BY QCFI THE COMPANY INSTALLED TOTAL COST MANAGEMENT SYSTEM PROGRAM THE COMPANY WAS ACCREDITED ISO 9000:2000 CERTIFICATION CONTINUES HI-TECH ARAI LIMITED MILESTONES QC COMPETITION: STATE LEVEL (TAMIL NADU) - FIRST REGIONAL LEVEL (SOUTHERN) - FIRST NATIONAL LEVEL - SECOND AWARDED BY CII & APAC (AIDS PREVENTION & CONTROL PROJECT) AS BEST INDUSTRY IN PRACTISING THE HIV / AIDS PREVENTION PRACTICES FIRST EXPORT ORDER FROM CHINA.

9 VISION To become market leader in the country within five years To become one of the top three in the world in the field of Oil Seals.

10 MISSION TO PRODUCE HIGH QUALITY PRODUCTS, AT COMPETITIVE PRICES, COMBINED WITH ON- TIME DELIVERY, STRICTLY ADOPTING ENVIRONMENTAL FRIENDLY PROCESSES Oath Our Company Philosophy is TO PRODUCE HIGH QUALITY PRODUCTS AT COMPETITIVE PRICES COMBINED WITH ON-TIME DELIVERY STRICTLY ADOPTING ENVIRONMENTAL FRIENDLY PROCESSES This Philosophy is supported by following deep rooted beliefs High Quality products shall be produced by practising TOTAL QUALITY MANAGEMENT AS A WAY OF LIFE Competitive Prices shall be achieved through SUSTAINED EFFORT ON CONTINUOUS IMPROVEMENT On-Time Delivery shall be maintained through TEAM EFFORT Environmental friendly processes shall be adopted by practising ENVIRONMENTAL MANAGEMENT SYSTEMS

11 ENVIRONMENTAL POLICY WE, HI-TECH ARAI LIMITED,MADURAI, ARE ONE OF THE LEADING MANUFACTURERS OF PRECISION AUTO COMPONENTS NAMELY OIL SEALS, O RINGS,REED VALVE ASSEMBLIES AND TECHNICALLY SPECIFIED MOULDED RUBBER PRODUCTS. WE ARE COMMITTED TO: -STRIVE FOR CONTINUAL IMPROVEMENT OF OUR ENVIRONMENTAL PERFORMANCE BY PREVENTION OF POLLUTION AND MINIMISATION OF WASTES -PROMOTE ENERGY SAVINGS AND CONSERVATION OF RESOURCES -COMPLY WITH ALL APPLICABLE LEGISLATIVE, REGULATORY AND OTHER REQUIREMENTS -ACHIEVE THE ABOVE BY CREATING AWARENESS AMONG OUR EMPLOYEES THROUGH PROPER COMMUNICATION, TRAINING AND PROVIDING CONDUCIVE WORK ENVIRONMENT

12 OUR HIV / AIDS POLICY To help maintain harmony at the workplace as well as strengthen the existing bond between employer and the employee, the company s policy on HIV/AIDS would be as follows: 1. The company would provide a safe and healthy work environment for employees. 2. The company would educate its employees and the family on prevention, care and counseling of HIV/ AIDS by providing information through posters,leaflets, articles in the company journal and having interactive sessions. Particularly, attention would be given to dispel ill conceived notions and myths. 3. A HIV Positive person would be allowed to continue to work in his/her job unless medical conditions interfere with the specific job that he/she is doing. In such case only if it is necessary, the employee will be shifted to another position where he/she would be comfortable. 4. The company would educate its employees on safe blood donation and transfusion. 5. If an employee has been infected, information about the illness would be kept confidential by the company. Only the immediate boss would be kept advised to prevent any eventuality on the shop floor. 6. No employee can refuse to work along with an HIV positive employee. In fact, the company would expect all employees to ensure that the affected person is comfortable and gets a feeling of being a part of the family. 7. The company, as a policy would not discriminate against any staff infected by HIV/AIDS with regard to promotions, training and other privileges as applicable to all employees of the company. 8. The company can ask a person who is being offered a job, to undergo general medical tests before the issue of the appointment letter. The test would not cover HIV / AIDS. 9. HIV / AIDS test will not be a part of the annual health check ups, unless specifically asked for by an employee. 10. The company would preferably arrange for the availability of condoms at the work place. It is hoped that with this policy, it would be possible to control the epidemic from spreading, to build positive attitudes towards those infected, to promote health and safety amongst the employees. This, in turn, will assist in bringing about higher productivity and efficiency in the company s operations. HUMAN RESOURCE YEAR NO. OF EMPLOYEES GROWTH (%) SALES (RS. IN LACS) GROWTH (%) PRODUCTION/ EMPLOYEE (RS. IN LACS) NIL

13 Year No. of Circles Savings (Rs in Lakhs) Savings Sales Turnover Profit Before tax NIL Star Silver Star Rock Fort Polestar Sun Flower Millennium Golden Star Blue Diamond Mount Everest Arai Star Madurai Jasmine White Rose Peagle Windows Kurinchy Quality Circles Annual Savings (Rs.in lacs) Agni Discovery Dolphin Thendral Prism Power HTA.Com Eagle Everest Arai Lion Marshin Sun Unix Flora Sincere Seven Madurai Meenakshi Golden Seven Sapthaswaram Radar Radiant Insaat Red Rose Blue Star Globe Titanic Orchid Vectrum Park Friends Unity QC Butterfly Others 8.25 Total Savings = Rs lacs

14 State Level -First Regional Level -First National Level -Third QC Circle Competition for Workers conducted by CII at State, Regional & National Level State Level -Third Regional Level -First National Level - x State Level -First & Second Regional Level -First National Level -Second State Level -Second Regional Level - x National Level - x State Level -First Regional Level -First National Level -Second Culture has got everything to do with it because everything you say, our competitors could copy tomorrow. But they can t copy the culture, and they know it.

15 You can dream, create, design and build the most wonderful place in the world but it takes people to make the dream a reality. - Walt Disney Culture Building Activity is a marathon race and not a sprint

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17 Photo Album by BANGERA

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22 SCALING UP Basic Philosophy on Scaling Up Demand to chase capacity Achieve maximum from existing facilities Every expansion should be for technologically superior machinery / processes with improved productivity and not for just duplicating existing capacity. Step by step expansion Sustainability of quality and culture after expansion. Mass Customization.

23 SCALING UP Funding Strategy Expansion funded by internal accruals and debt. Use internal accruals maximum for long term debt to finance scaling up and use the balance for working capital funding. Reduce working capital funding by Long credit period from overseas suppliers at lower interest Shorter credit period for customers giving cash discount Lower inventory and reduced process cycle Get the funds in time even at higher cost much more savings and contribution from timely completion of projects. SCALING UP Funding Strategy Transparency with Bankers High on business growth and short on rations Achieve projected sales and profits targets ratios and excess borrowings will be excused Build a good track record with banks and institutions Build units in Industrial Estates- Speedy Pollution Control Clearance, minimum spending on infrastructure like Power, Roads, Availability of manpower etc.

24 SCALING UP Funding Strategy Go for Multiple Banking competition for funding helps Foreign Currency Loans FCNR-B Loans Buyer s Credit Factoring Debentures SCALING UP Gap Management Gap = Funds required for scaling up Funds tied up This Gap to be managed innovatively till the project goes on the stream. Then the inflows from the project will take care of the Gap Stretch the suppliers, get faster collections, tight inventory, tight first on overheads, off balance sheet financing etc.

25 THANK YOU