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INTRODUCTION:

In todays world where environment protection and fossil fuel exhaustion are major concerns and where customers has to face constant upward price of fuel ,vehicles using alternative sources of energy are seen as a viable option. There is large untapped potential in this category to cover the need for cheap and environment friendly transportation facilities. In the current scenario electric vehicles are gaining popularity but there are many factors which are acting as hindrance to their popularity. The main problems with electric vehicles are: low mileage with each recharge, very long charging time, speculations about pulling power, service and spare part inadequacy.

THE COMPANY:
Neptune Bikes has come up with a hybrid bike, which uses electricity as primary fuel source
and small quantity of fossil fuel like kerosene to resolve the above problem related to electric bike. The product is named GO which is a short form for Green Oxygen which represents the environment friendliness and competitiveness of the hybrid scooter.

PRIORITIES AND GOALS OF COMPANY:


Customers in the bottom of the pyramid Presence in International developing markets An effective supply chain management Profitable business model through mass production Solution to depleting fossil fuel and rising global fuel price Solution to green house gas emission from automobiles and global warming

VISION STATEMENT:
A population empowered with power of mobility and care for nature.

MISSION STATEMENT:
To build a company synonymous with a genre of vehicle which provide transportation to common man at affordable cost with no harm to environment and attain financial objectives of the promoters.

QUALITY STATEMENT
We are committed at all levels to achieve high quality in whatever we do, particularly in our products and services which will meet and exceed customer's growing aspirations through: 1

Innovation in products, processes and services. Continuous improvement in our total quality management systems. Teamwork and responsibility.

BASIC BUSINESS CONCEPT OF NEPTUNE AUTOS


The objective of the company is to develop innovative bike models on platform of electric bikes which overcome constraints of electric bikes currently available in the market and become complete alternative to petrol bikes. The new series would cover following shortfalls of electric bikes: 1) Low mileage: The higher end electric bikes available today has an average mileage of around 60 km after each recharge which makes it infeasible for long distance travel. 2) High Battery Recharge Time: The electric bikes available in the market today have a battery recharge time of 7- 12hrs. Recharging the bikes for such long hours after covering 60-80kms makes it incompetent related to petrol bikes which need to be refueled on an average of 500km after every full tank. 3) Low service and spare parts availability : Electric bikes currently doesnt have a wide service back up like petrol bikes 4) Frequent power failures in India poses a challenge to electric bikes for recharging purpose. The company plans to capture substantial market share from petrol and electric bikes by merging the good factors of electric and conventional petrol bikes and forming a hybrid bike which is a new concept.

THE PRODUCT

SPECIFICATIONS
Power train Battery Pack: Motor: Torque: Transmission: Chassis Suspension/Front: Suspension/Rear: Brakes/Front: Brakes/Rear: Wheels/Tires/Front: Wheels/Tires/Rear: Target Performance Top Speed: Range: Recharge Time: Interactive Feature: Service High Energy Lithium 3-phase AC Brushless Induction motor 60 lb-ft @ 0 to 1,500 rpm Single speed Ohlins 43mm inverted fork; fully adjustable, 4.5-in travel Ohlins Single shock w/piggyback reservoir; fully adjustable, 4.5-in travel Dual Brembo 310mm disc; Brembo radial-mount forged 4-piston calipers Brembo 220mm disc; single-piston caliper Marchesini forged aluminum 3.5" x 17", 120/70ZR17 - race Compound Marchesini forged aluminum 6.0"x17", 190/55ZR17 - race Compound 70 km/hr 80 kms per charge (est. EPA drive cycle) Under 12 hours Adjustable regenerative rear wheel braking 3 free services

THE MARKET
Population in low and middle income group with a salary above Rs 4000:Population who owns a bike from this population: There are nearly a million people earning above Rs 4000 per month in India. The majority of them although can afford a conventional petrol or electric bike deter from owning one because of high fuel price of petrol bikes and constraints of electric bike. There is a large customer base of low income and middle income group available in India who come in the bottom of the pyramid in India who are potential customers for our product. Globally, the company sees a huge potential in all the developing markets across the globe.

FINANCIAL VIABILITY:
The companys aim of reaching the low and middle income (Bottom of the pyramid) market is augmented by its tie up with rural banks and government banks to provide loan with an EMI rate of Rs 650-700 per month. The advantage for government is the empowerment of aam admi with no burden on environment. The viability of loan from banks point of view needs to be worked out. 3

ECONOMIC VIABILITY:
Through effective supply chain management the company can utilize low cost supply sourcing from across the globe. This strategy in addition to mass production can cover the R & D and production cost there by making it an economically viable project. The company can avail government grants and incentives for the development and popularization of an environmentally friendly product which helps in empowering rural population against the primitive transportation infrastructure of the country. Before implementing a testing face is launched where we take a customer survey of liking and attitude of people to this product and we would design our product accordingly.

FINANCIAL DETAILS
The cost of project is estimated at Rs 10 Crores. This is proposed to be financed to the extent of 3 Crore by means of a term loan from Banks. The promoters are experienced in the field and are capable of operating the new venture successfully and they will bring in 6 Crores as their contribution. Rs 1 Crore will be available as State Government subsidy. The unit proposes to provide employment to 52 persons. The proposal is technically feasible and economically viable. In mass production, the basic price of the product will be low and can provide a good profit margin.

Cost of Production and Profitability


Projected profitability statement has been prepared for the first 3 years after the commencement of production and is quite promising for a brighter future. The statement has been worked out on the basis of the following assumptions. The details of sales realization are given with the concern that possible fluctuations in the selling price of products are not taken into consideration. It is expected that any increase in the cost of raw materials, consumables & packing materials will be offset by corresponding increase in the sales revenue. However, the selling prices and the cost of various inputs are based on the prevailing market rates. The unit is expected to work for 285 days on a single shift basis, depending upon the demand and response from the market the increase in production work can be done by double shift basis. The unit is expected to work 70 % of the installed capacity during the first year and definitely it will be increased to 100% step by step in forth coming years. Full salaries and wages have been taken into amount during the first year of operation. Wages and salaries will be increased by 5 % per annum to provide for annual increment, Employee benefits will be taken at 15% of wages and salaries. Repairs and Maintenance are taken as 2% and insurance as 1 % of building and plant & machinery. 4

In order to meet any unforeseen oscillation in any of the direct expenses, due to the economy recession and other possibilities, other than raw materials & consumables, a contingency provision at the rate of 5% is included in the cost. Depreciation will be charged in the profitability statement under the straight line method. But for the purpose of computation of income tax , adequate adjustments will be made in the computation so that depreciation is charged under the written down value method . Administrative overhead is worked out at 4% of sales revenue. Selling overhead including commission is worked out at 12%. Interest on term loan has been worked out at 18% on the amount outstanding. Interest on working capital loan is worked out at 18%.

Company Balance sheet


Liabilities Sources of Funds Owner's Fund Equity Share Capital Share application money Preference share capital Reserves & surplus Loan Funds Secured Loans Unsecured Loans 2,25,00,000 1,50,00,000 3,50,00,000 75,00,000 2,00,000,00 1,25,00,000 Land & Building Plant Machinery Current Assets Long term investments Short term investments 3,75,00,000 2,50,00,000 7,50,00,000 62,50,000 62,50,000 Assets

Uses of Funds Creditors Bill Payable Total 3,12,50,000 62,50,000 15,00,00,000 Total 15,00,00,000

Cash Flow
The cash flow is sufficient even after withdrawal by the investors as dividend at the rate of 5% in the second year and 10% thereafter, to ensure the repayment of loan and to plough back a reasonable amount for the growth of the unit. CASH FLOW STATEMENT Inflow Share issued Loan received Cash from operation TOTAL Outflow Purchase of Land Purchase of Machinery Investment Net Current Assets (including cash balances) TOTAL 3,75,00,000 2,50,00,000 1,25,00,000 3,75,00,000 11,25,00,000

6,25,00,000 3,75,00,000 1,25,00,000 11,25,00,000

COST SHEET
Material Direct Expenses Factory overhead expenses Rent Salaries & wages Transportation Advertisement Brand Ambassador Commissions Profit Sales 2,18,75,000 15,00,000 1,00,000 22,50,000 63,00,000 6,75,000 75,00,000 3,00,000 15,00,000 1,05,00,000 5,25,00,000

BREAK EVEN ANALYSIS


Fixed Expenses = Rs 81,25,000 Contribution = Selling Variable Expenses = 36,00,438 36,00,000 = 438 BEP = Fixed Expenses / Contribution = 81,25,000 / 438 = 18,551 units

PRODUCT DEVELOPMENT STAGES


1. - Stage : This stage includes the making of the prototype of the product. The specifications of various parts are as decided and necessary changes are made subsequently until desired. 2. - Stage : Based upon the prototype design in the previous stage, a working model is assembled. The products is analysed for various factors and is then subjected to many tests 3. : A sample batch of the product is assembled and the various production capabilities are accessed and major production activities are chosen 4. Line / Mass Production: Initially line production is adopted. When the company enters the consecutive stages of development, mass production can be chosen.

OPERATIONAL ACTIVITIES & CAPACITY PLANNING PROCESS


Current capacity of the plant is 1000 vehicles per month. It includes various process of forecasting futuristic demand and then deciding what resources will be needed to meet that demand. At Planning, operations decision regarding the total number of vehicles to be produced and the product mix it should have is decided. The role will be critical in future when new models and variants would be introduced into the market. The decision regarding what and how much to produce? would be taken based on the following: The competitors previous month sales This will give the total market taste and preference for the types of electric vehicles. Enquiries generated through showroom walk ins and telephone are clearly noted down in the customer database. The customers feedback is considered as the stepping stone to greater success. The complaints received are scrutinised and necessary modifications are brought about in the product.

Steps Involved In Capacity Planning


1. Forecast future demand, including the likely impact of technology, competition, and other events 2. Translate these forecasts into actual physical capacity requirements 3. Generate alternative capacity plans to meet the requirements 4. Analyze and compare the economic effects of the alternative plans 5. Identify and compare the risks and strategic effects of the alternative plans

Phases Of Technological Decisions


Major technological choice :
Various options regarding what technology has to be adopted are decided. The major technological choice had to be made regarding the type of batteries to be used. The choice had to be made from lead acid, lithium ion and ferrous oxide batteries. Each one had its own pros and cons. The 7

innovative technology was licensed from Japan. The product design was outsourced from China. Most of the plastic body parts were shipped from Singapore considering the quality and cost advantage. Separate R&D department would be set up in future for facilitating an internal effort to develop the technology.

Minor technological choice


Initially batch production was chosen for producing the vehicles. Later on, as demand picks up, continuous production would be implemented. Belt conveyor system was put up in the main assembly department as this would support both batch and continuous production.

Specific-component choice
All the major components are imported from Singapore. These components are designed for easy assembly. At this initial stage, the degree of automation is very minimal. It is just restricted to the conveyor system in the main assembly section. In both Main assembly and Sub assembly, every process is manual. The material handling is through customized trolleys to carry the components from various sections. Later on, when the operation is converted to mass production, robotics and other automated material handling systems can be introduced.

Process-flow choice
Each vehicle will have different set of assemblies. Based on the assembly drawings the assembly charts are prepared for every vehicle. In addition to this, process flow chart is prepared by sequencing all the operations involved to reduce material handling and storage cost. In the factory, line flow layout is implemented as they have faster processing rate, lower inventories and less unproductive time lost to change overs and material handling. The major operations sequences involved are:

DESIGN

PROCURE

INCOMING INSPECTION

STORES

SUB ASSEMBLY

PRODUCTION

PRODUCT INSPECTION

DESPATCH

Time Study
In the main assembly, the time required for each activity is decided by the analysts according to industrial standards. Thus the following pre determined data approach is being followed, taking into account the productivity rate and other constraints. The normal time is fixed by trained workers of the company and has been recorded.

Sl no 1 2 3 4 5 6 7

Work element Taking Frame Handle bar Assembly Fork & Suspension Assembly Wheel Assembly with Brakes Wiring Harness Connection Headlamp Assembly Motor, Battery, Controller switch panels Seat Assembly Indicator & Toolbox Side panels & Main body

SD 0.0305 0.0171 0.0226 0.0241 0.0335 0.0245 0.0118

Select Time (sec) 25 40 145 230 100 63 102

Samle Size 10 10 10 10 10 10 10

Performance Factor 1.05 0.95 0.90 1.10 0.90 1.10 1.05

Normal Time (sec) 26.25 38 130.50 253 90 69.30 107.1

8 9 10

0.0267 0.0311 0.0278

75 45 75

10 10 10

0.95 1.05 0.95

71.25 47.25 71.25

PLANT LAYOUT
The plant layout is made to be highly flexible enabling the smooth product flow across various departments within the factory. The plant layout is designed so as to obtain the maximum productivity from the men and the machines.

JOB DESIGN ISSUES


In the initial phase, the total workforce of 52 employees are maintained which can be extended till 75 or more employees after the expansion. There are 5 managers, namely Factory Manager, Assembly Manager, Area Sales Manager, Area Service Manager and Quality Manager. In the lower level, there are 5 supervisors and 15 operators who work in the shop floor in the shop floor and the others form the finance and marketing team. The factory is equipped with all necessary safety features. Special care has been given for worker safety. All the workers are insured and strictly instructed to wear safety gadgets while on work. Efforts are being made to keep the productivity high. Whenever required, the workers are given training.

JOB DESCRIPTION
QUALITY MANAGER Ensure compliance to the companys quality control manual. Knowledge of PPAP, FMEA, MSA & Control Plan. Problem Solving Technique/Counter Measure. In-process Quality control activities/Rejection, Rework Analysis and Action. Customer Quality for handling customer compliant. Education: BE/BTECH mechanical preferably with MBA Experience: 3 to 5 years experience in related field. Should be able to withstand high level of pressure from customer end and should act swiftly. A good communication skill is highly required. FACTORY MANAGER Accurate coordination between the Head office and the Factory Involved in the monthly meetings between marketing and production Maintaining accurate levels of Inventory with the objective of keeping minimal stock levels Ensuring the proper turnaround time of executing orders within the stipulated delivery time to avoid delays and thus payment penalties Vendor development in coordination with the Purchase Department and good knowledge of AutoCad Ensure availability of spare parts at all times Ensure service contracts are renewed on time Education: BE/BTECH mechanical engineering, knowledge on AUTO CAD is a must. Experience: 8 to 10 years ASSEMBLY MANAGER Managing the production of assembly components. Optimum utilization of all resources. Leading the CFT. Multiskilling of engineers and the technicians to eliminate dependency. Ensuring good House keeping and Safety in the shop through daily shop rounds. Knowledge of Critical operations. 10

Good knowledge in different types of welding & fabrication processes. Education: BE/BTECH mechanical engineering Experience:3 to 5 years

AREA SALES MANAGER Channel Management Dealer Account Management with flair of Sales Target achievement. Connect with all the area dealers and deal with all the problems. Excellent communication skills are required with natural finesse to convince customers. Guiding to dealers and ensuring their profitability Education: BE/Btech mechanical engineering with MBA (marketing) Experience: 5 to 8 years in related field. AREA SERVICE MANAGER Monitor and support service activity at Dealer Network. Handling Customer Complaint Defect diagnosing Monitor , Control and Improve service performance Providing Technical support to dealer network Spares Parts management & support to dealer network Education: BE/BTECH any field Experience: 5 to 7 years in after sales service of an automobile company

HR POLICIES
RECRUITMENT POLICY
Neptune Autos is an equal opportunity employer. Selection is strictly based on experience and past performance. Natural attrition is usually taken care of by promotions and horizontal movements within the organisation to provide career opportunities for our employees. Occasionally, specific skill-sets may warrant lateral recruitment.

WORK

CULTURE

The work culture supports and enhances our brand. The GO bike brand signifies excitement. It strives to inspire confidence through excitement engineering. The culture is built on core values of learning, innovation, perfection, speed and transparency. Facilitative leadership style helps in developing leaders at all levels and establishes accountability.

COMPETENCY BUILDING
The company has a very flat organisation structure with three management levels. Each level represents a specific role and hence needs relevant competencies. Competency building at Neptune Auto is a combination of development for current and future roles. To cater to companys futuristic needs interventions like development centres, need-based training and job-rotation plans are used. We use different methods of imparting training like lectures, group-discussions, role-plays, seminars, outbound training, assignments and on-the-job tasks.

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COMPENSATION PHILOSOPHY
Neptune Autos strives to be amongst the top quartile in our compensation structure. Competence and performance are the key drivers of the compensation policy. A significant part of the compensation is in the form of variable pay linked to the individuals and the organisations performance

FACTORY OPERATIONS Production Planning Activities


INVENTORY MANGEMENT
The level of inventory is always kept at a minimum as it requires a temporary investment. The inventory cost or carrying cost is calculated to be 20 percent. The average value of total inventory is 20% of sales then the average annual cost to hold inventory is 4% of total sales.

COSTING OUT A LOT SIZING POLICY


The company needs to have a proper lot sizing policy while ordering the various assemblies from different countries. Each part needs to have different lot size ordering policy to minimize the complexity involved in managing the inventory and to prevent the low inventory turnover. Safety stock of 250 batteries is maintained. Shown below is the methodology involved in the framing of a lot sizing policy for procuring the batteries from the supplier.

Annual Demand, D = 180 X 52 = 9360 units Cost of placing order with supplier, S = Rs 4500 Holding cost, H = 0.25 X Supplier Charges = 0.25 X Rs 6000 = Rs 1500 Economic Order Quantity, Q = =
( )( ) ( )( )

= 237 units

Total Annual cycle inventory cost, C =

= Rs 3,55,472 Time between orders, TBO = = = 9 days

DEMAND FORECASTING & TREND ANALYSIS


The market for electric vehicles is constantly expanding and thus the sales of our vehicles are also showing an upward trend. Hence a trend adjusted exponential smoothing is used to forecast this demand series which has an increasing trend over a period of time. Capacity of production = 1000 vehicles Rate of production = 4 vehicles \ hour Working hours = 7 hours \ day Actual monthly production = 28 * 26 = 728 vehicles

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MONTH 0 1 2 3 4 5 6

SALES 626 680 654 722 758 739 786

SMOOTHED AVERAGE 626.00 644.80 656.05 678.57 705.52 725.38 751.21

TREND AVERAGE 10.00 11.76 11.66 13.83 16.45 17.13 18.87

FORECAST

FORECAST ERROR 44 -37.76 56.34 22.17 -35.45 29.87

636 691.76 665.66 735.83 774.45 756.13

Trend Analysis
800

Demand per Month

758 750 700 650 600 680 636 1 654 2 3 4 691.76 722 665.66

774.45

756.13 726 Forecast Actual Demand

735.83 739

Month

TOTAL QUALITY MANAGEMENT (TQM) TRAINING & IMPLEMENTATION


Since the company is in its initial stage, reducing operating cost and improving customer satisfaction and product quality is a prerequisite. Moreover implementing TQM would increase the productivity, in addition to the decrease in scrap and rework defects. The implementation of TQM was outsourced to a private company, MMQC. Their primary task was to teach the employees the techniques of TQM and familiarise them with the

implementation process of TQM including problem solving techniques and the basic TQM tools for problem identification and analysis. Training covers TQM background, internal and external customer and supplier relationships, quality, process variation, and measurement. They customized the training to the companys needs.
The following TQM elements based on measurement instruments were identified as follows 1. Top management commitment 2. Customer focus 3. Supplier quality management 4. Design quality management 5. Benchmarking 6. SPC usage 7. Internal quality information usage 8. Employee empowerment 9. Employee involvement 10. Employee training 13

11. Product quality 12. Supplier performance

SPC - Statistical Process Control


The company is planning to obtain certification of the International Organization for Standardization (ISO) 9001 and the environmental management standard, ISO 14001. The ultimate objective of the company is to attain the highest customer satisfaction and to ensure profitability by supplying exceptional products in terms of quality, cost, and delivery. From the company perspective, the use of SPC is considered as a good practice. Adequate training is provided for the managers, engineers and operators. Quality control department is the department which is responsible to take action timely and find out causes and counter measure when out of control condition occurs. Their duties also include overall coordination and implementation of statistical techniques. Manufacturing department is assigned to identify process parameters for SPC, review and calculate control limits according to schedule. It uses e-SPC software to collect data, monthly review data, make evaluation of new coming products and machines. The system is developed for multiple users, as such it can be accessed by production and management site. This system also supports full security of the underlying database. In addition, password setting is available to protect confidential data. For further improvement, the company plan to upgrade it system to SPC online and provide advance training for workers. However, the main limitation of e-SPC is that the system provides intelligent device (alarm) to flag the point out of control data by the form of control charts. Shown below are some of the control charts and how they have been made use of in the organisation.

USAGE OF X and R CHARTS


Here the incoming inspection of the front fork diameter of the vehicle is shown. The fork diameter is really critical for the company and each time a lot arrives, random sampling would be done to check its diametrical accuracy and its conformation to other specifications. The required diameter is 30.5 mm with a tolerance of +0.005mm to -0.005mm. Data from five samples appear in the accompanying table. The sample size is 4. The statistical control of the process is determined.

OBSERVATIONS
Sample Number 1 2 3 4 5 1 2 3 4 R X

30.5014 30.5021 30.5018 30.5008 30.5021

30.5022 30.5041 30.5026 30.5034 30.5036

30.5009 30.5024 30.5035 30.5024 30.5014

30.5027 30.5020 30.5023 30.5015 30.5027 AVERAGE

0.0018 0.0021 0.0017 0.0026 0.0022 0.0021

30.5018 30.5027 30.5026 30.5020 30.5024 30.5023

Source: Incoming Quality Inspection Data

For constructing R chart, UCLR = D4 R = 2.282(0.0021) = 0.00479 mm LCLR = D3R = 0(0.0021) = 0 mm For constructing X chart, UCLX = X + A2R = 0.5042 mm LCLX = X A2R = 0.5012 mm 14

The A2, D3 and D4 value is the factors for calculating three sigma limit for X and R charts

R - Chart
0.005 0.0045 0.004 0.0035 0.003 0.0025 0.002 0.0015 0.001 0.0005 8E-18 -0.0005

Range

0.0026 0.0018 0.0021 0.0017

0.0022

3 Sample Number

X - Chart
30.5036

Average

30.5026 30.5016 30.5006 1 2 3 4 5

Sample Number From the above two charts it is clear that process of inspecting the fork diameters is in control and the parts received are of required specification. The supplier is despatching excellent
quality parts.

USAGE OF p- CHARTS
The p chart is commonly used to know in the incoming inspection department if the supplies received are defective or not. After checking if the bulbs received are fused or not, we plot p charts for keeping a check on the proportion of defective supplies received. For inspection is by random sample of 500 bulbs is taken for each month. The observations for the first six months are shown below SAMPLE NUMBER NUMBER OF SAMPLE PROPORTION DEFECTIVE BULBS DEFECTS 1 6 0.012 2 4 0.008 3 5 0.010 4 6 0.012 5 3 0.006 6 7 0.014 Total Defects 31
Source: Incoming Quality Inspection Data

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P = 0.0103, Sig p = 0 .004515, UCLp = 0.014815, LCLp = 0.005785

p - CHART
Propotion Defects
0.015 0.01 0.005 0 0 1 2 3 4 5 6 7

Sample Numbers From the p chart it is seen that suppliers of the bulb received are ensuring enough quality in their dispatch and the process is in control.

USAGE OF c CHART
When the each of the vehicle rolls out after its final assembly, it is taken for road test. Final product testing is really important for the company to avoid the external failure cost. If the customer identifies any defect in the product after its delivery, it will affect the companys reputation and values in addition to dissatisfied customers. Usage of c Chart has aided the reduction in the warranty cost. After the final assembly, it is found that the number of defects averaged to about 7 defects when the process functions at 2 sigma level and when it is subjected to road test. Therefore, UCLc = c + z =7+2 = 12.29 LCLc = c - z =7-2 = 1.71 The numbers of defects found in the first 20 vehicles produced were found to be: 5, 6, 10, 8, 12, 7, 5, 6, 8, 7, 5, 9, 10, 4, 5, 9, 11, 8, 6, 5.
14 12 10

Defects per vehicle

8 6 4 2 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Vehicle Number

From the c chart, it is evident that the defects per vehicle assembled is under control and can be corrected before showroom delivery.

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PREVENTIVE MAINTENANCE SCHEDULE


In the main assembly section, a weekly preventive maintenance schedule is followed to avoid unanticipated break down. Preventive maintenance is done to the conveyor system. The various parts of the belt conveyor are checked, cleaned and lubricated to ensure its smooth functioning. The following are the various tasks involved and their respective time taken SL NO. 1 2 3 4 5 6 7 8 INST. CODE CLG W CLG N CLG N CLG H CLG H CLG H CLG H CLG J SFT. TASK CODE PME070 PMC051 PMC052 PML034 PML035 PML036 PML037 PMA054 TASK DESCRIPTION Cleaning the belt Checking the swaying of belt Checking the housing arrangement Lubrication and inspection of motor Lubrication of gear Lubrication of idler rollers Lubrication of drive sprocket Adjusting the skid plate TOTAL HOURS DURATION HOURS 2.00 0.50 0.30 0.30 0.15 0.45 0.15 0.15 4.00

Hourly wage of worker = Rs 25 Thus preventive maintenance cost involved per week = 25 X 4 = Rs 100

FOUR SIGMA PROCESS CAPABILITY TESTING


The factory has an average turnaround time of 16.3 minutes and a standard deviation of 1.35 minutes. The nominal value is taken to be 15 minutes with an upper specification limit of 20 minutes and lower specification limit of 10 minutes. The administrators of the factory want to have a four sigma capability, Lower specification calculation = 16.3 10 / (1.35 X 3) = 1.56 Upper specification calculation = 20 16.3 / (1.35 X 3) = 0.91 Cpk = minimum of ( 1.56, 0.91) = 0.91 The target value for four sigma performance is 1.33, hence the process capability index told that the process is not capable for achieving four sigma performance. Checking up the process variability with process capability ratio, the results are found out. Cp = (20 10) / (6 X 1.35) = 1.23 Even the process variability did not meet the four sigma target of 1.33. Hence the factory needs to make further improvement in their production planning and processes to reduce their production timing to attain four sigma performances in the future.

MARKETING ACTIVITY
The Go bike is introduced mainly to reduce the smoke emitted considerably which in turn will helps to save the environment and also its a bike which runs on less expenses. So the major advertisements on radio and newspaper will highlight these key objectives. 17

The company has started its own factory outlet at three sites within the Coimbatore city at RS Puram, Gandhipuram and Peelamedu. Soon the showrooms will be extended to Tripur and Erode, since potential markets have been identified there. And with the predicted growth level, in another yearor two, we will extend showrooms in all the major centres in south India through our direct showroom and also franchisee in possible areas. The marketing department in the Neptune GO Bike has deviced their own plan of action. They have split their whole members into three teams with each team having their own distinctive strategy Showroom Activities Direct Marketing Rural Marketing Activities

SHOWROOM TEAM:
The teams main work is to market the products to the customers visiting the showroom. The Team will have 3 Executives and a person for handling test ride activities and another person for handling exchange of old bikes activities. The customers visiting the showroom will be provided with good hospitality, enough care and respect. The receptionist welcomes the customers and making necessary people to approach them, the Executives will take care of them by explaining the vehicles with the posters, books and other function of the vehicles, and clarifying the doubts of the customers and convincing them to buy the product. For enhancing the brand image of Neptune Auto, the following are practiced: Customers Waiting Lounge Complimentary gifts like Water bottles , Glasses, Pens, Diaries etc Notice board / Display board / Advertisement banners ID card for Employees Dresses /Uniforms

DIRECT MARKETING TEAM


The team will focus more in identifying the target markets and segment. The team will have two Team Leaders and the groups will be formed under them. The two teams will involve in the function of organizing marketing camps at the selected places in the city, which will help to make to interact directly to the customers and to clear the doubts/queries of the customers .This helps them a lot to convert the desire/wish of the customers to eye a GO bike and identify the prospective customers. Each of their details will be entered into the customer database and followed up regularly.

RURAL MARKETING:
We believe that rural customers are important and they are making the major sales ratio. Likewise this team also will have a Team leader and the team functions is to identify the market, sub-dealers etc to carry out the marketing activities.

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BIBLIOGRAPHY
CAPITALINE PLUS OPERATIONS MANAGEMENT PROCESSES AND VALUE CHAINS by Krajewski, Ritzman, Malhotra EBSCO DATABASE
www.scribd.com/doc/12384865/Production-and-Operations-Management www.scribd.com/doc/9672389/MB0028-P-OM-Set-1-2

www.scribd.com/doc/3974829/Facility-Planning

www.scribd.com/doc/9823790/Basics-of-Production-Management www.scribd.com/doc/7136950/Prod-DsgProcess-Analysis www.scribd.com/doc/7369836/Facility-Layout

http://www.mtmanufacturingcenter.com/Services/ProcessImprovement/total_quality_mgmt.html http://www.businessknowledgesource.com/manufacturing/how_to_use_tqm_to_increase_manufac turing_efficiency_023643.html http://dissertations.port.ac.uk/31/01/MBA2.pdf http://www.eurojournals.com/ejsr_26_3_15.pdf

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