Description
A case study on LUCaS TVS. How layout change in an organisation help todo better with time.
LUCAS-TVS A Journey Towards Manufacturing Excellence
Presented By Shashank Goswami Shubham Tiwari Shashank Parulkar Shrey Vasa Sidhharth Dubey Smit Shah
About LUCAS-TVS
? Joint Venture between Lucas Varity, UK and T V Sundaram Iyenger & Sons (TVS), India in 1961. ? Net Sales of Rs. 457.8 Cr & Net worth of Rs. 280 Cr. In Year 1998 ? Company has two divisions- Auto Electrical division and Fuel Injection equipment division. ? Produces a complete range of auto electrical product from starters to wipers and diesel fuel injection equipment for direct & indirect diesel engines. ? Company also has a 50:50 JV with Koito Manufacturing Company japan, Indian Japan lighting System.
Development of Indian Automotive Component Industry
Pre MUL Era-Govt. License raj Killed Competition. After 1983- With the MUL capturing 83% market share, its suppliers were forced to implement new Manufacturing Practices
Post Liberalization (1993) Era- With the entry of International Automobile Cos. & Auto Components manufacturers, Indian Manufacturers felt the need to implement Best Quality Standards in Industry.
Recognizing the need for Change
“We decided that we didn’t need a crisis to change”
- Mr.T K balaji, MD & CEO of Lucas TVS
? Mr. John Parnaby ‘s suggestion Introduction of systems approach towards manufacturing Simplification of material flow by rearranging the machines Introduction of Cellular manufacturing Cross training to work force Designing own product instead of licensing, drawing and design from others.
?
? ? ?
Issues, challenges & solutions
Issues in production ?High Inventory ?Process layout - low space utilization - Criss-crossing of material - High lead time of 30 days - High cycle time ?High rejection rate ? Scrap rate @ 3% Solutions ? Introduce JIT ?Cellular Layout -Nagare cell ? Created focused factory
Issues, challenges & solutions
Finance & Marketing ? Low investment on Training and skill development ? Because of new market entrants like Bosch & Denso, marketing needed to be cost effective. Human Resource ? Changing the mind set of workers for new technology adaptation. ? Convincing the workers for new multifunctional roles. ? Convincing the worker union for a new contract. Solutions ? Workers were sent in batches of 30 to Taramani training centre for basics of Toyota’s 5 S’s. But training still remains an area which requires attention. ? Special monetary incentives, known as “Cell Allowance” was created. Also there was a sense of respect for the company among employees as laying off was hardly practiced.
Cellular layout
? Eliminate all non value activities. ? For implementing cellular layout entire manufacturing unit is divided into cell ? Relocate equipment and machinery to create focused handling single product. ? Operator are responsible for multiple task. ? Reduced in work in progress, wait time ? Required less space ? Each cell is responsible for internal control, scheduling, ordering and record keeping.
Implementation
? All layout changes took place during the week-ends to avoid stoppage. ? Planning at operating level focused on individual process flow. ? Follow hierarchical, modular approach
Company (Lucas-Tvs) Site (Padi Plant) Unit (Alternator) Module (Rotor) Cell (Yoke Machining) Individual(Work station)
? Form NAGRE cell to achieve productivity gains and operational flexibility.
“NAGARE” Cell
SWOT Analysis Pre Cellular Layout
Strengths
? One of largest independent supplier in India ? Well established and a brand name ? Healthy relationship between management and work-force ? Collaboration with international Companies ? Proactive managerial team
Weakness
? Haphazard, complex & time consuming material movement ? Low inventory turns ? Quality inconsistency and higher rejection levels. ? Neglected the importance of timely delivery ? Only 70% processes met product specification ? High scrap levels upto 3 % ? Inefficient inventory management
Opportunities
? MUL’s entry made India an emerging automobile market ? Significant export opportunities ? Wider variety of product mix could provide potential for steady growth ? Economic Liberalization would increase the sales of Automobiles which could be en-cashed.
Threats
? High Competition on price, quality and response time (Bosch & Nippon Denso) ? Weak supplier relationship ? Risk of delay in implementing any changes or up gradation ? Production loss that would occur while transformation
Process Vs Product Layout
SWOT Analysis Post Cellular Layout
STRENGTH
? Increased productivity ? ? Just In Time Delivery ( due to MUL Demands) ? Multi tasking and higher skilled workforce ? ? Reduced inventory and scrap by implementing Quality management ? ? Flexible manufacturing process. ? Automated & streamlined projects ? Increased number of Kaizens through formation of Small Group Activities ? QS 9000 & ISO 9001 Certification acquired
WEAKNESS
Rejection rate was much higher than their global competitors due to poor quality standards. Lack of expertise in Cellular layout. Low investment for training the workers.
Opportunities
? Making the foothold in the export market ? Inculcate the concept of leaner manufacturing
? ?
Threats
? Suppliers were still inefficient and unable to match demands ? Avoid complacency and laid back approach ( Annual Savings from suggestions)
Wider variety of product mix Develop new products and technologies
Transformation in PADI Plant
sales value (Rs. In Million)
4000 3000
sales per Employee
2 0.196 0.48
?
1466.9 609.8 1985 1991
3178.2
1.107
2000
1000 0
sales value
0
1985 1991 1998
sales per Employee
1998
space utilization index
5 1 0 1985 1991 1998 2.03 4.33 20 space utilizatio n index 10 0 4.2
inventory turn
14 inventory turn
7.2
1985 1991 1998
CURRENT STATUS
? Over 70% of the current sales turnover is realised from new products developed by in-house R&D
? Spends 2-3% of its turnover on R&D with over 150 dedicated engineers.
? Lucas-TVS, will be setting up a plant on a 10-acre site at Singur in West Bengal to cater to Tata's requirements.
? The company's Rs 15-crore acquisition of Indrad Auto Components in August 2007 was also aimed at boosting its technology capabilities
CURRENT STATUS
? The Chennai-Padi plant’s product list includes Wiper motors, Starter Motors , Mechanical/electronic distributors and Alternators. ? Every 4 out of 5 vehicles rolled out daily are fitted with Lucas-TVS products. ? Products are manufactured using State-of-the-Art facilities and approach towards Total Quality Management. ? Deming Prize winner in 2004
THANK YOU !!
doc_795096787.pptx
A case study on LUCaS TVS. How layout change in an organisation help todo better with time.
LUCAS-TVS A Journey Towards Manufacturing Excellence
Presented By Shashank Goswami Shubham Tiwari Shashank Parulkar Shrey Vasa Sidhharth Dubey Smit Shah
About LUCAS-TVS
? Joint Venture between Lucas Varity, UK and T V Sundaram Iyenger & Sons (TVS), India in 1961. ? Net Sales of Rs. 457.8 Cr & Net worth of Rs. 280 Cr. In Year 1998 ? Company has two divisions- Auto Electrical division and Fuel Injection equipment division. ? Produces a complete range of auto electrical product from starters to wipers and diesel fuel injection equipment for direct & indirect diesel engines. ? Company also has a 50:50 JV with Koito Manufacturing Company japan, Indian Japan lighting System.
Development of Indian Automotive Component Industry
Pre MUL Era-Govt. License raj Killed Competition. After 1983- With the MUL capturing 83% market share, its suppliers were forced to implement new Manufacturing Practices
Post Liberalization (1993) Era- With the entry of International Automobile Cos. & Auto Components manufacturers, Indian Manufacturers felt the need to implement Best Quality Standards in Industry.
Recognizing the need for Change
“We decided that we didn’t need a crisis to change”
- Mr.T K balaji, MD & CEO of Lucas TVS
? Mr. John Parnaby ‘s suggestion Introduction of systems approach towards manufacturing Simplification of material flow by rearranging the machines Introduction of Cellular manufacturing Cross training to work force Designing own product instead of licensing, drawing and design from others.
?
? ? ?
Issues, challenges & solutions
Issues in production ?High Inventory ?Process layout - low space utilization - Criss-crossing of material - High lead time of 30 days - High cycle time ?High rejection rate ? Scrap rate @ 3% Solutions ? Introduce JIT ?Cellular Layout -Nagare cell ? Created focused factory
Issues, challenges & solutions
Finance & Marketing ? Low investment on Training and skill development ? Because of new market entrants like Bosch & Denso, marketing needed to be cost effective. Human Resource ? Changing the mind set of workers for new technology adaptation. ? Convincing the workers for new multifunctional roles. ? Convincing the worker union for a new contract. Solutions ? Workers were sent in batches of 30 to Taramani training centre for basics of Toyota’s 5 S’s. But training still remains an area which requires attention. ? Special monetary incentives, known as “Cell Allowance” was created. Also there was a sense of respect for the company among employees as laying off was hardly practiced.
Cellular layout
? Eliminate all non value activities. ? For implementing cellular layout entire manufacturing unit is divided into cell ? Relocate equipment and machinery to create focused handling single product. ? Operator are responsible for multiple task. ? Reduced in work in progress, wait time ? Required less space ? Each cell is responsible for internal control, scheduling, ordering and record keeping.
Implementation
? All layout changes took place during the week-ends to avoid stoppage. ? Planning at operating level focused on individual process flow. ? Follow hierarchical, modular approach
Company (Lucas-Tvs) Site (Padi Plant) Unit (Alternator) Module (Rotor) Cell (Yoke Machining) Individual(Work station)
? Form NAGRE cell to achieve productivity gains and operational flexibility.
“NAGARE” Cell
SWOT Analysis Pre Cellular Layout
Strengths
? One of largest independent supplier in India ? Well established and a brand name ? Healthy relationship between management and work-force ? Collaboration with international Companies ? Proactive managerial team
Weakness
? Haphazard, complex & time consuming material movement ? Low inventory turns ? Quality inconsistency and higher rejection levels. ? Neglected the importance of timely delivery ? Only 70% processes met product specification ? High scrap levels upto 3 % ? Inefficient inventory management
Opportunities
? MUL’s entry made India an emerging automobile market ? Significant export opportunities ? Wider variety of product mix could provide potential for steady growth ? Economic Liberalization would increase the sales of Automobiles which could be en-cashed.
Threats
? High Competition on price, quality and response time (Bosch & Nippon Denso) ? Weak supplier relationship ? Risk of delay in implementing any changes or up gradation ? Production loss that would occur while transformation
Process Vs Product Layout
SWOT Analysis Post Cellular Layout
STRENGTH
? Increased productivity ? ? Just In Time Delivery ( due to MUL Demands) ? Multi tasking and higher skilled workforce ? ? Reduced inventory and scrap by implementing Quality management ? ? Flexible manufacturing process. ? Automated & streamlined projects ? Increased number of Kaizens through formation of Small Group Activities ? QS 9000 & ISO 9001 Certification acquired
WEAKNESS
Rejection rate was much higher than their global competitors due to poor quality standards. Lack of expertise in Cellular layout. Low investment for training the workers.
Opportunities
? Making the foothold in the export market ? Inculcate the concept of leaner manufacturing
? ?
Threats
? Suppliers were still inefficient and unable to match demands ? Avoid complacency and laid back approach ( Annual Savings from suggestions)
Wider variety of product mix Develop new products and technologies
Transformation in PADI Plant
sales value (Rs. In Million)
4000 3000
sales per Employee
2 0.196 0.48
?
1466.9 609.8 1985 1991
3178.2
1.107
2000
1000 0
sales value
0
1985 1991 1998
sales per Employee
1998
space utilization index
5 1 0 1985 1991 1998 2.03 4.33 20 space utilizatio n index 10 0 4.2
inventory turn
14 inventory turn
7.2
1985 1991 1998
CURRENT STATUS
? Over 70% of the current sales turnover is realised from new products developed by in-house R&D
? Spends 2-3% of its turnover on R&D with over 150 dedicated engineers.
? Lucas-TVS, will be setting up a plant on a 10-acre site at Singur in West Bengal to cater to Tata's requirements.
? The company's Rs 15-crore acquisition of Indrad Auto Components in August 2007 was also aimed at boosting its technology capabilities
CURRENT STATUS
? The Chennai-Padi plant’s product list includes Wiper motors, Starter Motors , Mechanical/electronic distributors and Alternators. ? Every 4 out of 5 vehicles rolled out daily are fitted with Lucas-TVS products. ? Products are manufactured using State-of-the-Art facilities and approach towards Total Quality Management. ? Deming Prize winner in 2004
THANK YOU !!
doc_795096787.pptx