Assignment on Company: Maruti - Suzuki

Subject: Production Management and Quantitative Techniques

Submitted to: Ms. Japneet Kaur

Submitted by: Charan Kamal Singh MBA-HR

Date: 04/04/2014

Semester II

University Business School (UBS), Panjab University, Chandigarh

INDEX
S. No.
1 2 3 4 5 6 7

CONTENTS
Introduction Organizational Structure of Maruti-Suzuki Plant Layout of Maruti-Suzuki Production Process of Maruti-Suzuki Inventory Processes and Quality Practices in Maruti-Suzuki Work Study Methods used in Maruti-Suzuki Supply Chain Management in Maruti-Suzuki References

PAGE No.
3 6 7-8 9-12 13-16 17-18 19-20 21

MARUTI-SUZUKI INDIA LTD.

Introduction
Maruti Suzuki India Limited commonly referred to as Maruti and formerly known as Maruti Udyog Limited, is an automobile manufacturer in India. It is a subsidiary of Japanese automobile and motorcycle manufacturer Suzuki. As of November 2012, it had a market share of 37% of the Indian passenger car market. Maruti Suzuki manufactures and sells a complete range of cars from the entry level Alto, to the hatchback Ritz, A-Star, Swift, Wagon R, Zen and sedans DZire, Kizashi and SX4, in the 'C' segment Eeco, Omni, Multi Purpose vehicle Suzuki Ertiga and Sports Utility vehicle Grand Vitara. It recently entered into automotive transmission segment by its new range Maruti Celerio. The company's headquarters are at No 1, Nelson Mandela Road, New Delhi. In February 2012, the company sold its ten millionth vehicle in India.

History Originally, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the company in June 2003. As of May 2007, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog. Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Kei car which at the time was the only modern car available in India, its only competitors - the Hindustan Ambassador and Premier Padmini - were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 million vehicles. Maruti Suzukis are sold in India and various several other countries, depending upon export orders.

The company exports more than 50,000 cars annually and has domestic sales of 730,000 cars annually. Its manufacturing facilities are located at two facilities Gurgaon and Manesar in Haryana, south of Delhi. Maruti Suzukis Gurgaon facility has an installed capacity of 900,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 550,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 14,50,000 units annually. About 35% of all cars sold in India are made by Maruti. The company is currently 56.21% owned by the Japanese multinational Suzuki Motor Corporation per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange of India. During 2007 and 2008, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983. The Suzuki Motor Corporation, Maruti's main stakeholder, has been a global leader in mini and compact cars for three decades. Suzukis strategy is to utilise light-weight, compact engines with stronger power, fuel-efficiency and performance capabilities. Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific. The model is supposed to be fuel efficient, and therefore more expensive. With increasing market competition in the small car segment, a new model along with the upcoming WagonR Stingray will be the key fresh products for Maruti Suzuki India (MSI) to defend its market share amid the ever increasing competition.

Type Industry Predecessor(s) Founded Headquaters Plants Capacity

Public Automotive Maruti Udyog Limited 1981 New Delhi, India Gurgaon and Manesar in Haryana. Gurgaon 950,000 per annum Manesar 550,000 per annum (1000 diesel)

Products

Automobiles (Cars) Wagon-R, Ritz, Alto 800, Alto K10, Swift, Stingray, Dzire, SX4, Ertiga, Omni, Eeco, Gypsy, Grand Vitara, Celerio Maruti Finance, Maruti Insurance, Maruti Genuine Parts, Maruti Genuine Accessories, Maruti Auto Card, Maruti Driving School Suzuki Motor Corporation, Japan

Other Services

Parent Company

* Firm type: Manufacturing (Cars) + Service ( Maruti Finance, Maruti Insurance, Maruti Genuine Parts, Maruti Genuine Accessories, Maruti Auto Card, Maruti Driving School ).

* Scale of operations: National - Maruti Suzuki has local presence. International presence is through its Parent company Suzuki, Japan * Layout : Product Layout

Organisational Structure

Maruti has a separate productions department.

The hierarchy diagram of MSIL

Layout of Maruti Suzuki

Maruti Suzuki use product layout for its manufacturing units. Product layout is usually suitable for assembly operations. The layout has been designed to carry out the following activities for manufacture of cars : 1.BLANKING 2.PRESSING 3.WELDING 4.PAINTING 5.MACHINING 6.ENGINE ASSEMBLING 7.ASSEMBLING 8.INSPECTION

Blanking

Pressing

Welding

Painting

Engine Assembly

Machining

Assembly

Product Layout

Inspection

Production Process
The production takes place according to the sequence mentioned below:

1. Blanking: In this process steel coils are cut into blanks of various shapes and sizes by blanking machine.

2. Pressing: In this process blanks are pressed to various panels by presses

3. Welding: Pressed panels are welded together to form body shells.

4. Painting: Body shells are painted in various shades using automatic painting machine and robots.

5. Machining: Various raw material for engine components are machined using automatic machining center.

6. Engine Assembly: The machined parts & various components of engine are assemble together to make.

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7. Assembly: Various components like, harness, glass, instrument, panel, suspension, engine, wheels, seat etc. are assembled in the painted body to make complete vehicles.

8. Inspection: Assembled vehicle are tested for their functionality and road worthiness.

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Process Flow Gurgaon Plant

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Inventory Processes and Quality Practices

Maruti Suzuki is governed by the manufacturing excellence principles of reducing wastages, inconvenience and inconsistency, which are imbibed from its parent company Suzuki , Japan. Maruti Suzuki using best practices such as Just in Time (JIT), Kaizen (continuous improvements), Pika Pika and Poka Yoke (mistake proof operations). The best practices are replicated in the business process of business partners to make their operations lean and error free. The company is efficiently interfaced with the dealers through Dealer Management System (DMS), annual dealer interactions and reviews which help the dealers in cost savings and customer convenience. Optimum levels of inventory are maintained to reduce the burden of inventory carrying cost. Higher inventory levels are corrected whenever required to them financially viable. This results in multiplicity of efficiency across the value chain.

JIT at Maruti Suzuki India Limited The Company has adopted the Japanese System, JIT to achieve higher operational efficiencies and reduce inventory carrying cost. JIT improves the return on investment of a business by reducing in-process inventory and its associated carrying costs. To achieve JIT material supplies, the company gives preference to locally based suppliers and encourages far distance suppliers to set up base close to Maruti Suzuki`s facilities. Over 76% of the company's 246 suppliers are located within 100 kms of radius. Have strategically located the suppliers of bulky components such as instrument panels, fuel tanks, bumpers, seats, etc. adjacent to the company's manufacturing facilities in the Suppliers' Park. The JIT system has evolved over the last 25 years in the company from monthly scheduling to daily scheduling of parts orders and finally, in 2003, to E-Nagare system i.e. the release of schedules on hourly systems, a practice that aids in maintaining less than two hours inventory of components within the company. The E-Nagare system is successfully running today at the company and helps in maintaining the right material inventory, at the right time, at the right place and in the exact amount without the safety net of excess inventory, thus reducing high inventory carrying cost.
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Quality Policy of Maruti Customer satisfaction through continuous improvement of our products and services by following PDCA in all functions and levels of organisation.

Quality Tools
5S 4M 3M 3G 3K

What is 5S? SEIRI PROPER SELECTION SEITION ARRANGEMENT SEISO CLEANING SEIKETSO CLEANLINESS SHITSUKE DISCIPLINE
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What is 4M? The factory is essentially a mix of man, materials, machines and methods. These should move continuously and effectively to produce a quality product at low cost. The most essential work in quality control is to thoroughly investigate regarding the problems concerning quality, decide suitable counter measures and carry out improvements accordingly. MAN MACHINE MATERIAL METHODS

What is 3M? In Japanese Language 3M is:

MURI INCONVENIENCE MUDA WASTAGE MURA INCONSISTENCY

What is 3G? In Japanese Language 3G is: GENCHI GO TO ACTUAL PLACE GENBUTSU SEE THE ACTUAL THING GENJITSU TAKE APPROPRIATE ACTION
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ISO Standards

Maruti Suzuki is the first automobile company in the world to get the A.V. BELGIUM ISO 9001:2000 certification for quality standards and procedure.

Maruti Suzuki was the first passenger car company in India to get certified for EMS as per ISO 14001:1996 in Nov. 1999.

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Work Study Methods

The following methods for work study have been adopted by Maruti Suzuki India Ltd. 1. Traditional plus technology 2. Work Sampling 3. MTM-3 (Third generation Method Time Measurement)

Traditional plus Technology In some labour situations, the most effective way to improve on the traditional time study is not to completely discard it, but to upgrade it. This involves replacing the stopwatch and clipboard with modern technology that is more conducive to quick, accurate data collection. In todays work measurement arena, this technology involves computer-based time study tools and software. The two prominent types of these tools those based on custom software and those based on Microsoft Excel are exemplified by the two products shown in figure below

Work Sampling While using the latest technology to improve the time study process decreases the amount of effort it takes to collect data, observers still have to watch the entire process multiple times to develop time estimates. Work Sampling is a common method of work measurement that, when used correctly, can eliminate the need to watch the custom job from start to finish. Work Sampling involves taking instantaneous observations of a job at separate points along its timeline. At each observation, the observer quickly picks which step an employee is doing from a predetermined list of possible tasks.

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Methods Time Measurement - 3 (MTM-3)

Despite numerous advantages, a Work Sampling program is not the best choice in every custom, high-skill labour environment. Even though observers can often do some of their own work while measuring someone else with a Work Sampling study, they still have to be available to collect each of the samples and develop estimates from them, processes that take weeks or even months if the task being measured isnt done often. Predetermined Motion Times Systems (PMTSs) have been developed throughout the past century to minimize this sampling time. A slew of system names exist in the realm of industry. A few of the more common general systems are Methods Time Measurement (MTM), Maynard Operation Sequence Technique (MOST), Modular Arrangement of Predetermined Time Standards (MODAPTS), Master Standard Data (MS), and WorkFactor (Dossett 22). Every system has been developed by industry for a similar purpose; each is a collection of time estimates for individual human motions in a specific work environment. Examples of these motions often include walking in a straight line, gripping an object with one hand, or bending at the waist to pick up a heavy object. An observer using MTM-3 does not have to be very familiar with the labour process they are measuring. When the person watches an operator, he or she does not need to assign a name to each task, which can be difficult when watching a custom job. The observer only needs to classify each motion under one of the four movement categories. Job fear is also reduced, because no stop watch is present during the observation process. MTM-3, however, takes a significant amount of time, and does not address barriers such as variation of work methods or hierarchy of organization culture. Regardless of these issues, the method can greatly improve the accuracy of an estimate, and reduce overall stress of work measurement.

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Supply Chain Management in Maruti Suzuki

Maruti Purchasing

Parts Supplier Maruti Trading Parts Supplier

Parts Supplier

Raw Materials Mill Parts Supplier

Maruti Assembly

Plant
Maruti Assembly

Parts Supplier

Plant

Parts Supplier

Maruti Suzuki is one of the most successful stories in supply chain management in the Indian automobile market. Over the years it has worked to convert obstacles into opportunities. The company has 246 local suppliers and 20 global ones they all function in a seamless manner. The company strictly receives their supplies ordered the previous night in a two hour slot the next day. A far cry from the initial 30 day supply period. Here are some highlights of its success story.

Maruti was set up in the 80s, many of Suzukis global vendors set up joint ventures in the northern region.While setting up the plant the government had approved of manufacturing only on condition of localization of components. Maruti used this by scouting for entrepreneurs and turning them into vendors, facilitating loans, licenses, technical know-how and even location in a phased manner. Of the 246 suppliers, Maruti has joint ventures with 14 of them and hold strategic equity stake to have a say in production and quality issues. Maruti however was not satisfied with the delays in production due to the lag time in supplies. The company had adopted the Japanese system, Just In Time (JIT) to achieve higher operational efficiencies and reduce inventory carrying cost. Maruti Suzuki has adopted the eNagare system of electronic flow which has completely transformed its supplier chain.

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To achieve JIT material supplies, the company has given preference to locally based suppliers. Over 76% of the company's 246 suppliers are located within 100 kms of radius. They have strategically located the suppliers of bulky components such as instrument panels, fuel tanks, bumpers, seats, etc. adjacent to the company's manufacturing facilities in the Suppliers' Park. Maruti supports its vendors in all possible ways. This includes finding technology partners, giving financial, technical and management support and bringing transparency in its dealings. Of late Maruti has been collaborating with its suppliers to smooth HRD issues which had resulted in strikes and delays. Fifty four of the top eighty component suppliers of Maruti Suzuki India compete against each other in what has been called 'Quality Circle Competition', and the top three get a chance to present their cases in Suzuki's Japan facility alongside other global vendors. The idea behind the Quality Circle Competition was for the teams from different vendors to identify, discuss and resolve any one core business issue that will add value to the overall functioning of the company, thereby increasing overall efficiency

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References
1. http://www.marutisuzuki.com/technology.aspx 2. http://www.automotivelogisticsmagazine.com/interview/maruti-suzuki-on-raising-theindian-supply-chain 3. http://en.wikipedia.org/wiki/Maruti_Suzuki 4.http://indiatransportportal.com/2010/12/a-peek-into-maruti%E2%80%99s-supplychain-management/

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