Subros

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Presentation By

R. P. Gupta

Vice President –Operations

Subros Limited-Noida

20.01.2007

Shop Floor Cost Management

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Subros - an Introduction

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Suri Group of Companies

India’s Largest and Integrated car AC manufacturing Company.

Annual Turnover Rs.725Crores.

India’s Leading 5 star hotel chain with 7 properties in India. Annual

Turnover Rs.185Crores

Automobile Precision component manufacturer. Annual Turnover

Rs.37Crores.

Mega Automobile retailing Company. Annual Turnover

Rs.313Crores.

Telecom Convergences solutions Company. Annual Turnover

Rs.19Crores.

Strategic acquisition in 2005. FIBCOM is the leading telecom

solutions company manufacturing optical networking equipments.

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About Subros

Established in 1985, Subros is the Largest AC company in India. A Joint Venture company between Suri group, Suzuki and Denso.

Our Plants

Noida Plant

Noida Tool Room

Noida R&D CenterManesar Plant Pune Plant

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Subros’s Customer & Market Share

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Product Range

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Vibration Testing

Calorimeter

CAE

Environment Test Chamber

CNC Machines

Wire EDM

Product Development Infrastructure: R&D / Tool Room

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Need for Cost Competitive Management

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Changes in the Global Economy

Global market place

Customer preferences

E commerce

Shrinking Time and Distances

Falling Trade barriers under WTO

Free Trade agreements between Nations

Unified Markets in Europe, ASEAN

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Global Cost Pressures

Source : McKinsey Study done for ACMA

Cost pressure on global OEM will drive them to outsource from LCCs

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Country-wise Quality & Cost Competitiveness in Auto Component Sector

S.No. Country Supply

Quality Level

Cost Advantage

(FOB Basis)

1 India 500 ppm 0

2 Japan (reference)

5 ppm -5%

3 Thailand 30 ppm -20%

4 Indonesia 15 ppm -15%

5 Europe 10 ppm -5%

6 USA 7 ppm -10%

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Market Potential

The Indian Passenger car market is far from being saturated-leaving Ample room for volume growth

Vehicle (Cars+CV’s) Production and A.C demand

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Subros - Cost Leadership Road Map

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Cost Leadership Structure at Subros

Corporate Objective----------------------------

Cost Leadership

Deployment of PQCDSME Goal

Operational Cost AreasStrategic Cost Areas

Material Cost

• Localisation

• Alternate Sourcing

• ZBC

• Vendor Cost down

• Standardization

• Target Cost Setting

• VAVE

• Localisation at SOP

• Lead Time Reduction

NPD & Break thru

ABC

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Cost Management at Shop Floor

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Our Approach

Cost Awareness

Cost Understanding

Cost Driver Identification

Permissible Cost

Non Permissible Cost

Cost ControlActivities

(Kaizen/ QC/TPM)

Plant Managers do not necessarily manage cost directly

They Manage activities and resources that consume cost

People Involvement and use of Cost Management Tools In

Decision Making

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Our Approach

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Cost Driver based Potential Areas

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Examples of action taken for waste elimination

SINGLE FEEDING – SPEED IS SLOW DOUBLE FEEDING – SPEED IS HIGHER

Layout Changes

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177 1770 0 0 0

290150

150 150 150 150

130130

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1189

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Internal BM Elimination of MUDA Internal to External Improvement in Internal Adjustment Other activity Target

Tim

e (S

ec)

4633

3645

4413

540

29762976

2731

Reduction in Yield LossesTime Reduction in Set Up

and Adjustment

Flux Consumption Energy Saving in NBF

Examples of action taken for waste elimination

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Conclusion

Cost Management is not by Choice it is a question of survival

Build a Cost Culture in the Organization

People involvement is very important

Line Managers transformation to Cost Managers

Cost Transparency is important for real action

Use Integrated Cost management Tool for tracking all actions.

(TPM/TQM/Kaizen/QC etc…).

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Thank You