Maruti production system

Slide 1: 

Maruti Production system

Things to be covered: 

Things to be covered

Vision : 

Vision THE LEADER IN INDIAN AUTOMOBILE INDUSTRY, CREATING CUSTOMER DELIGHT AND SHAREHOLDER’S WEALTH; A PRIDE OF INDIA . Core values

MILESTONE: 

MILESTONE

Milestones : 

Milestones

Milestones : 

Milestones

GROUP COMPANIES : 

GROUP COMPANIES

Things to know: 

Things to know Maruti is also among Top 5 car companies in the Forbes list of the Worlds Most Reputed Companies In 2001, Maruti Suzuki India Ltd became one of the first automobile companies anywhere in the world to get an ISO 9001:2000 certification. On an average two vehicles roll out of the factory every minute. Certified with ISO: 9001:2000 Certified for establishing and maintaining EMS as per ISO 14001:1996 standards Re-certified in 2005 as per ISO 14001:2004 standards Awards

Slide 9: 

Gurgaon plant

Slide 10: 

M ANESAR PLANT 3 integrated plants with flexible assembly lines. Handle different variants in frequently changing sequences Site produced 9 base models in over 50 variants MANUFATURING PLANTS KB Engine plant.

Plants profile: 

Plants profile Manesar Plant Setup Feb 2007 Installed Capacity : 100000 Produced models: Swift & SX4 and Dzire . The plant is designed to be flexible Automatic tool changers, centralized weld control system and numerical control machines KB Engine plant Setup- 2008, Installed annual capacity-240,000 engines The in-line plant layout consisting of Casting, Machining and Assembly processes has high level of automation, effective material handling and inventory reduction techniques in place, aimed for high operational efficiency.

Manufacturing : 

Manufacturing

Manufacturing facilities: 

Manufacturing facilities Advanced engineering capability IT enabled vehicle build sequence system and vehicle tracking system. At production planning stage of VBSS intranet and extranet are used 17 manufacturing shops Capability of manufacturing 50+ variants of 9 basic models with different specifications within same day Vehicle tracking system monitors and records the implementation of the planning during production.

Continued……… : 

Continued………

Things to know about MUL: 

Things to know about MUL M UL is the best example for imitation and customization MUL has welding and machine shop more labour oriented because wage rate are low. In MUL robots are designed and developed in MUL MUL has wide range of locally developed yet customized solutions including dies, 2-4 axis robots, multi spot welders, welding jigs, automated trolleys, machine shop equipments.etc. which provided lot cheaper solutions Maruti produces 97 cars per employee with only 150 robots MUL’s material flow system - based on SMC’s kanban system

Car Manufacturing process : 

Car Manufacturing process

Slide 17: 

Manufacturing Process

Manufacturing assembly: 

Manufacturing assembly

Press Shop: 

Press Shop Panels are prepared by pressing them between various die sets such as doors, roofs and bonnet In-house capability and the necessary technical knowledge for the design and manufacture of medium-size press dies

Weld Shop : 

Weld Shop

Paint Shop: 

Paint Shop welded body is sent to the paint shop through a conveyor Car body is given an intermediate or primer coat before applying the stoving topcoat paint The intermediate and the final coat are applied by using automatic electrostatic spray-painting machines (micro bells) and robots Body undergoes various pre-treatment and electro deposition painting processes to provide a high corrosion resistance to the body Baking process

Assembly Shop : 

Assembly Shop Trim line wherein various components such as roof head lining, windshield glass and interior trim components are fitted It is transferred to an overhead conveyor, the chassis line, wherein components such as the engine, gearbox and front and rear axles are assembled on the underbody Vehicle is then lowered to the final line on its own wheels and here components and parts such as seats, the steering wheel and the battery are fitted final inspection stages

Engine and machine shops : 

Engine and machine shops

Slide 28: 

Energy conservation

Slide 30: 

Smaller Basic principle Neater Shorter Lighter Lesser This philosophy play as a start point of all effective energy conservation measures. This philosophy reflects in all MUL’s projects and kaizens at factory operations.

Energy Conservation at Maruti : 

Energy Conservation at Maruti Energy conservation Four step action plan

1. Use of renewable energy: 

1. Use of renewable energy Use of Solar energy Use of natural lighting Use of natural ventilation

2. Eliminate Waste: 

2. Eliminate Waste Waste Heat recovery Boiler Steam turbine driven compressor Steam condenser

3. Improve energy efficiency: 

3. Improve energy efficiency CFL for street lighting Lowering of height

4. Improve process efficiency with automation : 

4. Improve process efficiency with automation Temp. sensor Cooling tower Temp sensors

Manufacturing Paradigm : 

Manufacturing Paradigm Target control and PDCA approach are used as the underlying theme of all processes. Target Control

PDCA cycle: 

PDCA cycle

Slide 39: 

Initial study Sub optimal Warehouse Layout • Long Process to bin a material • High rate of Inventory discrepancies • Unsystematic Process in Material handling • High rate of Manual errors • Discrepancy between items ordered and items shipped to dealers • Packlist not available • Long Order execution Solution Implementation • Floor Wise Implementation • Barcode and Dot Matrix Printers • One Hub and one print server for each floor • Wedge Scanners to scan Barcodes MUL decided to revamp its spares distribution operations and implement Warehouse Management System

Benefit/Value-addition : 

• Well organized Warehouse Layout • Systematic Process to bin a material • Group Picking • Accurate Inventory Control • System Driven Processing/Material Handling/Containerization • Quick Order execution time • Minimal scope of Manual errors & Inventory discrepancies • Real time inventory status visibility • High accuracy in order shipping • Scope for increase in sales turnover (push method of sales) Benefit/Value-addition

Five “s”: 

Five “s”

Kaizen : 

Kaizen Continuous or ongoing improvement in work processes usually without any large capital outlay and involving the entire workforce of an organisation . Operation Challenge 50 looks at Reducing overall costs Bringing down the lead time for launch of new models Enhancing production capacities in a shorter cycle Improving efficiency. The focus will be on multiple measurement parameters like Hours per vehicle, Quality index and Warranty costs. Challenge 50 Challenge 30

Working philosophy: 

Working philosophy Transfer of basic work dispositions concerned three things Commitment and discipline Cleanliness and quality awareness Co-operation and communication ( Stressing the taking of responsibility, punctuality and attendance)

Slide 45: 

Group discussions among employees in different departments are conducted on a monthly basis in order to discuss and resolve problems relating to their areas of operation.. Based on the belief that individuals contribute to improvement in growth, MUL has a suggestion scheme in which MUL promotes participation of all employees at all levels. The average number of suggestions made per employee has improved by approximately 24% in fiscal 2003, when it received 72,000+ suggestions. Suggestion scheme Quality circle MUL has won "Excellence in Suggestion Scheme" award instituted by the Indian National Saving Scheme Association regularly for four years and 15 trophies in quality circle competitions organized by the Confederation of Indian Industries.

CULTURE BUILDING INITIATIVES : 

CULTU RE BUILDING INITIATIVES Japanese Management philosophy of Team Spirit

Japanese Working methods: 

Japanese Working methods

Enterprise unions management: 

Enterprise unions management By establishing company union MUEU( maruti udyog employee union), for various shop floor decisions No political party affiliation Established for consultation and co-operation rather than strikes and agitation A paternalistic relationship has ensured job security, high wages and some decision making authority in exchange for industrial piece Every body sign ‘ a good conduct undertaking’ MUL has de regulated MUEU and now it has regulated MUKU (MARUTI UDYOG KAMGAR UNION)

Slide 50: 

Vendor management system

Supplies localization status: 

Supplies localization status

Supplier relationships : 

Supplier relationships Transfer effort focused on three crucial aspects Contractual process Structural Contractual terms Structural terms Supply flow/ process terms MUL tried to implement tierization of MUL’s supplier relations MUL goes for JIT MUL tried to establish a close ties with its suppliers

SUPPLIERS : 

SUPPLIERS Raw Material Suppliers Steel coils from manufacturers in Japan, Korea and, to some extent, India Paints from Indian suppliers Tender system purchase (Accept the lowest price offered) Quotation system (Flexibility to renegotiate prices) standard purchase orders Six months for foreign suppliers one-year contracts for Indian suppliers Issue of purchase orders happens in line with requirements One-year contracts Issuance of orders on requirement

Components: 

Components MUL plays a collaborative role with our vendors by assisting them in periodically improving their processes and through training and interaction, regular audits and follow-ups in order to reduce line rejections and warranty cost. vendor development program : developed the vendor base majority of vendor’s major turnover comes from MUL Bring their manufacturing and service standards in line with MUL’s requirements vendors work in close coordination with us to meet our long-term goals in terms of: • component development; • quality; • delivery; and • cost control Role of a vendor: Tactical strategic top ten local vendors accounted for approximately 34% of MUL’s aggregate purchases of components from vendors in India

Agreements with vendors : 

Agreements with vendors Agreement includes vendors to provide designs, drawings and specifications provided by MUL, exclusively to MUL. quality control procedures: periodic inspections of components and audits of its premises by MUL Bearing of repair and replacements costs of defective components by vendors Vendors are given supply schedules periodically a change in the ownership of the vendor (2) merger or amalgamation of the vendor with a third party (3)Insolvency of the vendor (4)Transfer of a material portion of the assets of a vendor to a third party so that components cannot be supplied to Maruti without the assistance of the third party Termination of agreement Agreement :

Delivery by Vendors : 

Delivery by Vendors vendors have developed flexible manufacturing systems, provides details of MUL’s component requirements for every 15 days, Internet-based information network. Maintains online records for order status and delivery instructions Advantage: It has reduced both inventory levels and lead times for supply of components and sub -assemblies

Reduction of Vendor Costs : 

Reduction of Vendor Costs Set targets with vendors for cost reduction Sharing benefits of cost reduction with vendors for initial periods (incentives) Implementing worldwide purchase system value analysis & value engineering We try to improve vendors’ Productivity Reducing no. of rejections Their yield from materials Reducing inventories reducing the warranty costs of vendors per vehicle Implementation of MPS which causes elimination of wasteful activities in their manufacturing processes.

Warranty claim ratio: 

Warranty claim ratio

Vendor Quality Control : 

Vendor Quality Control Quality management system such as ISO 9000/ QS 9000 Cluster Approach Vendors are grouped together Training them in quality management Assisting them in obtaining ISO 9000 certification March 31, 2003: 114 vendors-ISO 9001/2 certification, 122 vendors-QS 9000 certification 11 vendors -TS 16949 certification. Periodic vendor quality system audits to ensure that quality standards are sustained

Localization : 

Localization Increase the proportion of locally sourced components and raw materials. It causes lower cost for the model. strategy to introduce new models with a minimum of 75% localisation level and increase the same to at least 90% within three years of introduction of the model. Reducing initial investment cost for new models through: In-house development &localized sourcing of dies, welding jigs and other equipment introduction of flexible welding lines that can be used for the production of multiple models. sourcing dies for new models and upgraded versions of existing models from sources outside India like Taiwan

High localization level : 

High localization level

Continued….: 

Continued…. Joint venture with Suzuki to establish an aluminum foundry For manufacturing components such as cylinder heads, cylinder blocks for aluminum engines and transmission cases Increased localization levels and reduced costs

JIT: 

JIT Couple of MUL’s major suppliers production facility in MUL compound MUL JV with most imp. Suppliers are located near the plant Major delivery happens from suppliers within 100 km MUL developed low cost IT solution for better coordinating with suppliers TO COME CLOSURE TO IDEAL JIT MUL TOOK THESE STEPS

Efforts for JIT Implementation : 

Nearby suppliers Distant suppliers Developing a supplier park Other Incentives offering subsidized, well located and industrially developed land, sales tax concessions and reliable power supply generated by MUL Incentives Building warehouse Make use of warehouse near to the plants. Bearing the warehouses maintenance expense. 1992 Inventory stock -- 57 days 2003 Inventory stock -- 19 days Efforts for JIT Implementation

Thank you : 

Thank you Anurag Dheeraj Neelima Ravindra