LUCAS TVS LTD : A JOURNEY TOWARDS MANUFACTURING EXCELLENCE BY :- Harmeet Singh Arora Jagadeesh. D Kushal Thakker Mansi Pathak Mathew Koshy Mayank Mishra
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LUCAS TVS LTD :A JOURNEY TOWARDS
MANUFACTURING EXCELLENCE
BY :-Harmeet Singh AroraJagadeesh. DKushal ThakkerMansi PathakMathew Koshy
Mayank Mishra
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Lucas TVS was set up in 1961 as a join venture of Lucas Industries UK and TV Sundaram Iyengar &
Sons India to manufacture Automotive Electrical Systems.
Lucas TVS has two divisions :-
Auto Electrical Division :-
Alternators, Axial Starters, Dynamos, Wipers and Distributers,Headlamps and Regulators.
Padi Plant (Chennai)Rewari Plant (Harayana)
Eripakkam (Pondicherry)
Fuel Injection Equipment Division:-
Diesel Fuel Injection Equipment for both Direct and
Indirect Diesel Engines.Mannur Plant (Chennai)
INDIA NIPPON ELECTRICALS LIMITED(INEL), 1985 Joint venture of Kokusan Denki Coltd.(Japan) and Lucas Indian Service (India).---- HOSUR (BANGLORE)
INDIA JAPAN LIGHTING LTD (IJL),1996 joint venture between LUCAS TVS (INDIA), and KOITO
Manufacturing Company Ltd. (JAPAN)--- Puduchatram (Thiruvallur-Padi)
History – Lucas TVS
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Indian Automotive Industry” The Indian auto market will experience among the strongest market
growth in all of Asia over the next decade”
--- Asian Automotive Industry
PHASE I• In 1983, prior to the advent of Maruti Udyog Ltd (MUL)
PHASE II•1983- 1993 MUL captured 83 % of Market Share.
PHASE III•1993, Post liberalization period
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Need for CHANGE!!
“We decided we didn’t need a crisis
to change” - Mr T K Balaji (MD)
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Plant Layout Process based
Criss-cross Material Movement. Lots Work In Progress on shop floor. Roughly 30% of the processes were not capable of
meeting product specifications. Frequent breakdown of machineries. Less focus on timely delivery (delivery reliability),
product quality (quality consistency) High Scrap levels (3%)
LUCAS before --1985
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Entry of MUL in 1983 increased market competition.
Entry of world class manufacturers like Bosch &Nippondenso triggered a need to change.
To remain competitive on price, quality and response time
was a challenge.
It became a business requirement to look beyond India andcompete globally.
…..Continued
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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 technologyadaptation. Convincing the workers for new multifunctional roles. Convincing the worker union for a new contract.
ISSUES/CHALLENGES
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-One of largest independent
supplier in India
-Well established and a brandname
-Healthy relationship betweenmanagement and work-force
-Collaboration with internationalCompanies
-Proactive managerial team
-
Haphazard, complex & timeconsuming material movement
-Low inventory turns-Quality inconsistency and higher rejection levels.
-Neglected the importance of timely delivery
-Only 70% processes met productspecification
-High scrap levels upto 3 %
-MUL’s entry made India anemerging automobile market
-Significant export opportunities
-Wider variety of product mix
could provide potential for steady growth
-Economic Liberalization wouldincrease the sales of Automobiles which could be en-cashed.
-High Competition on price,quality and response time(Bosch & Nippon Denso)
-Weak supplier relationship-Risk of delay in implementingany changes or up gradation
-Production loss that wouldoccur while transformation
STRENGTHS
THREATSOPPORTUNITIES
WEAKNESS
S
W
O
T
A
N
A
L
Y
S
I
S
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Introduction of Systems Approach towards
Manufacturing” Three member Task force formation. Process Layout Product Layout Focus on maximizing potential of current resources-
Low priority to investments in new technologies Providing effective training to the workforce. Encouraging employee suggestions through
formation of Small Group Activities(ContinuousImprovement).
ACTIONS TAKEN BY MANAGEMENT
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In six years, net worth and sales/employee of
the company doubled with almost negligiblechange in the work-force size. Product Layout eliminated criss-crossing of
material across the factory Smoother product flow
Reduction in floor space requirement Improved inventory turns. Creation productive and Flexible workforce
OUTCOMES
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STRENGTH
-Increased productivity
-Just In Time Delivery ( due to MUL Demands)
-Multi tasking and higher skilled workforce
-Reduced inventory and scrap by implementingQuality management
-Flexible manufacturing process.
-Automated & streamlined projects
-Increased number of Kaizens through formationof Small Group Activities
-QS 9000 & ISO 9001 Certification acquired
WEAKNESS
-Rejection rate was much higher than their global competitors due to poor qualitystandards.
-Lack of expertise in Cellular layout.
-Low investment for training the workers.
Threats
-Suppliers were still inefficient and unable to
match demands-Avoid complacency and laid back approach(Annual Savings from suggestions)
Opportunities
-Making the foothold in the export market
-Inculcate the concept of leaner manufacturing
SWOT Analysis Post Cellular Layout
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1 2.03
4.33
0
24
6
1985 1991 1998
space utilization index
spaceutilizationindex
0.1960.48
1.107
00.5
11.5
1985 1991 1998
sales per employee
sales per Employee
4.27.2
14
0
510
15
1985 1991 1998
inventory turn
inventoryturn
609.8
1466.9
3178.2
0
500
1000
1500
2000
2500
3000
3500
1985 1991 1998
sales value (Rs. In Million)
sales value
Transformation in Padi Plant
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Eliminate all non value activities.
For implementing cellular layout entiremanufacturing unit is divided into cell
Relocate equipment and machinery to createfocused 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.
Cellular layout
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All layout changes took place during the week-ends to avoid stoppage.
Planning at operating level focused on individualprocess flow.
Follow hierarchical, modular approach
Form NAGRE cell to achieve productivity gains and operational flexibility.
Implementation
Company
(Lucas-Tvs)
Site
(Padi Plant)
Unit
(Alternator)
Module
(Rotor)
Cell
(YokeMachining)
Individual(Workstation)
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PLANT LAYOUT AT PADI - 1985
Movement of goods.
Longer lead time.
Improper utilization of resources.
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NAGARE CELL
(Simultaneity of two actions)
Aims to facilitate single piece flow in a mixed model production environment Greater flexibility- Number of workers can be altered based on demand
Encourages multi-tasking U shape provides the operators easy access to all machines in the cell
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PLANT LAYOUT- PADI, 1999
Proper movement of goods.
Goods movement restricted to minimum essential.
Optimum utilization of resources.
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Achievements Post cellular Layout
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Process Vs Product Layout
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•Focus on getting it right the fist time.
•Kaizen suggestions to be encouraged to reduce number ofrejections (PPM).
•Investments in technology & machinery.
QUALITY
•Standardization of products.
•New product development & innovation.
•Scales of economy.COSTS
•Vendor development & training.
•Treating vendors as partners
•Developing a network of suppliers
SUPPLIERALIGNMENT
Recommendations
•Skill enhancements of the employees.
•Competent workforce building.•Developing an environment conducive for continuous learning.
TRAINING ANDDEVELOPMENT
•Developing a Management information system.
•Implementing ERP for better control over the operations.
•Use of IT to keep track of the competitor as well as customers
INFORMATIONTECHNOLOGY
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