Industry Overview One of the major industrial sectors in India is the automobile sector. Subsequent to the liberalization, the automobile sector has been aptly described as the sunrise sector of the Indian economy as this sector has witnessed tremendous growth. The Indian auto industry is showing signs of slowdown. Utility vehicles are growing strong, clocking 53% growth over last year. The cumulative production data for April-July 2012 shows production growth of 7. 10% over same period last year. The industry produced 1,746,840 vehicles in July 2012 as against 1,656,014 in July 2011.
The overall growth in domestic sales during the period was 9. 34% over same period last year. Passenger Vehicles segment grew 10. 20% during April-July 2012 over same period last year. Passenger cars grew 5. 5% while utility vehicles grew 53. 66% during April-July 2012 as compared to same period last year. During April-July 2012 overall automobile exports registered negative growth at (-4. 03) percent. While passenger vehicles and commercial vehicles both grew by 9. 14 percent. Two & three wheelers declined by (-1. 00) and (39. 23) percent respectively in April–July 2012 compared to the same period last year.
Porter’s Five Forces of Indian Auto Sector (Passenger car Segment) General Environmental Analysis – PESTLE Porter’s Five Forces Maruti Suzuki India Ltd Maruti Suzuki India Limited is a subsidiary company of Japanese automaker Suzuki Motor Corporation. It has a market share of 42. 1% of the Indian passenger car market as of March 2012. Maruti Suzuki offers a complete range of cars from entry level Maruti 800 and Alto, to hatchback Ritz, A-Star, Swift, Wagon-R, Estillo and sedans Dzire, SX4, in the ‘C’ segment Maruti Eeco, Multi-Purpose vehicle Ertiga and Sports Utility vehicle Grand Vitara.
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It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. MARUTI SUZUKI GROWTH ANALYSIS Maruti Suzuki India Limited logged 9. 2 percent increase in sales for July 2012 at 82,234 units as against 75,300 units in the same month last year, riding back on the humungous sales of its compact sedan, Swift Dzire, clocking an almost four-fold increase, according to a company statement. According to the carmaker, its domestic sales during July stood at 71,024 units, compared to 66,504 units in July last year, up 6.
8 percent. The sales were driven mostly by its compact sedan Dzire, which clocked 11,413 units. Sales of small cars, including the M800, Alto, A-Star and Wagon R, however, declined by 23. 7 percent to 28,998 units. The company’s other best-selling model Swift along with Estillo and Ritz together clocked 15,759 units in July this year, up 73. 2 percent from last year. MSIL’s sales of its mid-sized sedan SX4 plunged by 70. 5 percent to just 679 units in the month, the company said in a statement, adding that it managed to sell just two units of the luxury Kizashi sedan.
Exports during the month stood at 11,210 as compared to 8,796 in July last year, up 27. 4 percent. CORE COMPETENCIES OF MSIL: Core competencies of an organization can be simply defined as a set of qualities, which are unique to that particular organization that cannot be easily imitated by its competitors. Core competencies are factors which give competitive advantage to the organization in its chosen market. Core competencies may be of various types- technical know-how, relationship with customers, employee-dedication, manufacturing process etc.
An analysis of the Maruti Suzuki India Ltd. shows three core competencies: 1. Strong Customer Base & Brand image – The MSIL has a market share of about 55% in the Indian passenger car segment and is the largest manufacturer of small cars in India. The company has been voted as first by Indian customers for level of customer service and customer satisfaction. The company manufactures affordable small cars which serve the needs of an average Indian customer faithfully and hence have a strong brand image as the common man’s car in India, which an average Indian customer identifies with.
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Such a strong brand image and huge customer base can sustain the position of the company as the market leader in the Indian small car segment. 2. Well-developed sales and service network throughout India – The Maruti Suzuki India has a strong dealership network comprising more than 450 cities across India and a huge service network of more 2750 franchises of service outlets spreading about 1300 cities throughout India. Such a widely distributed sales and service network can help the company to relate with its customers across India and also facilitates bargaining power with suppliers and increase profitability.
3. Very Strong knowledge of Indian market – The Maruti Suzuki India has a strong knowledge of the Indian market which has helped them to grow their sales and market share in India. PORTFOLIO ANALYSIS OF THE COMPANY BCG Matrix for MSIL Maruti Suzuki, one of India’s leading automobile manufacturer and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned STAR: The Company has long run opportunity for growth and profitability. They have high relative market share and high growth rate.
SWIFT, SWIFT DEZIRE AND ZEN ESTILO is the fast growing and has potential to gain substantial profit in the market. QUESTION MARK: These are also called as wild cats that are new products with potential for success but there cash needs are high and cash generation is low. MARUTI SX4, GRAND VITARA, RITZ fall in the category of question mark. CASH COW: It has high relative market share but compete in low growth rate as they generate cash in excess of their needs. ALTO AND WAGNOR have fallen to ladder 3 & 4 due to introduction
of ZEN ESTALIO and A STAR. DOG: The dogs have no market share and do not have potential to bring in much cash. Business of SX4, OMINI, and VERSA has liquidated and trim down. Value Chain Analysis The value chain is a comprehensive set of activities that are required to bring a product from a concept stage to marketing and consumption of end products. In competitive terms, value is the amount buyers are willing to pay for what a firm provides them. A company is profitable if the value it commands exceeds the costs involved in creating the product.
Analysis of marketing strategy of Suzuki Motor Company, Ltd. (Suzuki)Company Background: Michio Suzuki founded Suzuki Loom Works, a privately owned loom manufacturing company, in 1909 in Hamamatsu, Japan. In 1952, the company began manufacturing and marketing a 2-cycle, 36 cubic centimeter (cc) motorcycle, which became so popular that in 1954 the company introduced a second motorcycle and changed ...
Michael Porter distinguishes between primary activities and supporting activities. Primary activities are directly concerned with the creation or delivery of a product or service. Each of these primary activities is linked to support activities which help to improve their effectiveness or efficiency. Primary activities at Maruti Suzuki 1) Inbound Logistics: The receiving and warehousing of raw materials, and their distribution to manufacturing. Maruti Suzuki’s inputs primarily comprise raw materials and purchased components. Raw material includes rubber, glass, steel, plastic, aluminum.
Tyre, windshields, and airbags are example of parts or components. The company has implemented Tier-zation of suppliers and Just in Time supply logistics. In order to improve quality and generate economies of scale, MUL has reduced the number of vendors of components in India from 370 as of March 31, 2000 to about 82(variants excluded) as in 2012. By lowering the time and cost involved in dealing with more vendors, they have increased their supply chain efficiencies In case of repair and replacements, costs of defective components supplied are borne by the vendor.
Information systems – Vendors are linked through the Internet-based information network, which maintains online information regarding order status and delivery instructions. These have helped in reducing both inventory levels and lead times required for the supply of various components. The Company worked hard along with its vendors on cost reduction initiatives. The key initiative was a raw material yield improvement program with a micro focus on each component on the lines of Suzuki philosophy. Called “One Component One Gram”, this program calls for weight reduction of one gram for every component.
With this micro focus, the raw material yield improvement savings increased by a factor of three in 2012 as compared to 2011. The material cost to net sales reduced from 90% in 2000-01 to 79% in 2011-12, partly due to external factors but largely due to cost reduction efforts. The company has instituted sustainable practices in its relationship with vendors like communicating realistic volumes to avoid excess capacities and inventories and making quick payments to facilitate healthy cash flows and financial discipline.
... cars sold in India are made by Maruti. The company is 54.2% owned by the Japanese multinational Suzuki Motor Corporation per cent of Maruti Suzuki ... of the finance, sales, parts, inventory and administration components of running the dealership. One of their functions can ... various factors such as market share, competition, material costs, product identity and the customer’s perceived value ...
To reduce supply bottle necks, transport related uncertainties, high in-transit inventories (related to long distance transport) and ultimately its total inventory levels, Maruti-Suzuki creates incentives for far away suppliers to move near its plant. These incentives comprise: setting up a supplier park with excellent on-site infrastructure; offering subsidized, well located and industrially developed land; sales tax concessions; and reliable power supply generated by Maruti-Suzuki itself. Over 76% of the company’s 246 suppliers are located within 100 kilometers of radius.
This has facilitated cost reduction in supply chain. The JIT system has evolved over the last 25 years in the company from monthly scheduling to daily scheduling of parts order and finally in 2003 the release of schedules on hourly systems, a practice that aids in maintaining less than two hours inventory of components within the company. Maruti-Suzuki gets involved in establishing suppliers, supplier JVs with local suppliers and asks Japanese suppliers to do the same. For instance, Maruti Suzuki formed a joint venture with ‘Futaba Industrial Co. , Ltd. ‘ (Futaba) for manufacture of Exhaust Systems Components (ESCs).
Futaba is the largest manufacturer of ESCs in Japan and has operations in many countries. This joint venture will ensure supply of high quality ESCs to the Company at lower cost. II. ) Operations Transform inputs into final product form through machining, packaging, assembly, equipment maintenance, testing, printing and facility operations. Production process at Maruti Suzuki: Maruti Suzuki’s manufacturing facility consists of fully integrated plants with flexible assembly lines located at Gurgaon. The scale and complexity of the Company’s manufacturing operations have now moved to a different league.
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The Company reached a capacity of one million cars annual production in 2008 and was also able to operate at this average rate in the month of March, 2009. Maruti Suzuki has implemented Production Management System, which is a strategy to achieve Manufacturing Excellence evolved through participative approach. PMS is a system which is people driven and ensures involvement of all levels ( Managers, Executives, Supervisors ) A system which ensures ownership A system which brings in standardization of systems & processes A system which ensures Sustainability
Maruti Production System or MPS draws learning’s from its parent company Suzuki Motor Corporation’s concepts on `lean manufacturing’ under Suzuki Production System i. e. SPS. Setting trends in new products and achieving customer delight starts with Manufacturing Excellence and Maruti’s manufacturing excellence hinges around four important pillars-Cost, Quality, Safety and Productivity. Cost Every employee working on the line is ‘Cost Sensitive’ and functions in capacity of a Cost Manager. He is a key contributor in suggesting how to keep costs of production under control.
Maruti Suzuki initiated a program called “Challenge 50:30” whereby cost was reduced by 30% and productivity was improved by almost 50% during the 3 years ending March 2006. Quality A product of poor quality requires repeated inspections, entails wastage in terms of repairs and replacements. “Do it right first time”, is the principle followed to avoid wastage. iii. ) Outbound Logistics Are the activities required to get the finished product to the customer, including collecting, storing, physically distributing, material handling, delivery vehicle operation, order processing and scheduling.
The Company has jointly developed with the Indian Railways, special Auto Wagons, to support a high capacity, high speed and safe car transportation system. To support its export shipments, the Company commissioned a dedicated Roll-on Roll-off car terminal at Mundra sea port in partnership with MPSEZL (Mundra Port and Special Economic Zone Limited).
Built with an initial investment of Rs 1 billion, of which the Company’s share is 40%, the mega car terminal houses a state-of-the-art ‘Washing and Waxing Inspection’ centre, a car stockyard and a parking area. iv. ) Marketing and Sales
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Provide means by which buyers can purchase the product and inducing them to do so, such as advertising, promotion, sales force, quoting, channel selection, channel relations, and pricing. Maruti’s marketing objective is to continually offer the customer new products and services that: Reduce the customer’s cost of ownership of our cars; and Anticipate and address the customer’s needs and preferences in all aspects and stages of car ownership (MARUTI SUZUKI refers to this as the “360 degree customer experience” Maruti Suzuki has been aggressively cutting prices of its models.
The rationale behind the price cuts is the focus on offering new upgraded vehicles at a low price. Maruti Suzuki offers a two-year warranty on all the vehicles at the time of sale. The dealers are required to address any claim made by a customer, in accordance with practices and procedures prescribed by MARUTI SUZUKI, under the provisions of the warranty in force at that time. MARUTI SUZUKI also offers an extended paid-warranty program marketed under the brand, “Forever Yours” for the third and fourth year after purchase.
The extended warranty program is intended to maintain the dealer’s contact with the customer and increase the revenue generated from sale of spares, accessories and automobile-related services. An effort is made during the period of the extended warranty to encourage the customer to exchange his existing. “Maruti car for a new Maruti car or upgrade to a new Maruti car”. True Value Solutions Limited (TVSL), which was incorporated on January 14, 2002 as a wholly owned subsidiary of Maruti, provides value-added services to owners and users of motor vehicles on matters relating to manpower services with regard to recruitment, training and
development. The company also intends to promote the business in the areas of pre-owned cars, lease and fleet management, finance and insurance. v. ) Service Aims to enhance or maintain the value of the product, such as installation, repair, training, parts supply, and product adjustment Over the last few years, the company strengthened the existing practices and experimented with many new initiatives by way of kaizens (continuous improvements) to delight its customers. These initiatives ranged from product design and quality to network expansion, and included new service programs to meet unsaid needs of customers.
Many of the Service Stations are at remote locations where MARUTI SUZUKI does not have dealers. Some of these Service Stations are integrated into the sales process in order to increase sales of the cars and related products and services such as spares and accessories, insurance and financing. In recent years, the Company has used IT to enhance interface with the customer. It has deployed a world class Dealer Management Solution across its vast network of dealers throughout the country. The solution has helped dealer managements to access a wide range of information about their operations, as also customer satisfaction and feedback.
Secondary activities at Maruti Suzuki I. )Procurement The function of purchasing raw materials and other inputs used in the firm’s value creating activities. About three fourth of the car, by value, is outsourced. Any improvement in the car in terms of technology and design, quality or cost has to essentially include the Company’s vendors and their support. The Company has signed two joint venture agreements with global component manufacturers for cost reduction through localization of components for Maruti Suzuki cars.
The Company is setting up a Suppliers Park in Manesar, close to its car plant on an area of 100 acres for Just-In-Time supplies. The second focus area for component cost reduction is raw material yield improvement across all manufacturing processes, like sheet metal, castings, forgings and machining. Every component is studied in detail and innovative ideas are tried, to reduce the input material weight for the same component output. The total cost of raw material as a percentage of net sales ranges from 15% to 20%. II. ) Technology Development
Technology development includes research and development, process automation, and other technology development used to support the value chain. Research & Development (R&D) During 2008, the Company took decisive steps towards building design and development capability, in-house. The number of engineers in R & D went up from 258, at the start of the year, to 398 engineers by the end of the year. In line with this, the number of engineers will be scaled up to 1000 by 2010. Specific areas in which R&D has been carried out by the company: Building Full Mode Change Capability
Vehicle Design and Development Technology absorption, adaptation and innovation Localization, development and testing of parts for existing and new models. Capabilities strengthened in component and vehicle evaluation, benchmarking and design optimization. Capabilities being further strengthened in area of alternative fuels like Diesel, CNG and LPG. Value Analysis/Value Engineering (VA –VE) at the time of design and localization to maximize cost benefit. Acquiring design and cost knowledge through teardown and benchmarking and using it in future designs and cost reduction.
Global sourcing and advanced sourcing to get the advanced technologies into India at lower costs. (Efforts made towards technology absorption, adaptation and innovation by either local vendors or helping world-leading component suppliers to set up shop in India).
Design and development of electronic speedometers, keyless alarm controllers for enhancing comfort and convenience. Benefits derived from above efforts Indigenization of various vehicle aggregates at lower costs. Improvement and up-gradation of existing models for improved comfort, style and better value for money. Continuous reduction in product cost through VA-VE.
Compliance to new regulations. – Significant cost reduction of new model parts compared to existing models, ensuring that the new models are profitable from day one. III. ) Human Resource Management Activities associated with recruiting, training, development and compensation of employees. The Company’s key strength is its human capital. The Company has, during 2007-08, spent about Rs. 10 crores on training of its employees. The Company conducts programs such as “Bulandi” and “Chunauti” for the workmen and technicians to enhance pride in being an employee of the Company and also to create team synergy.
The Company strengthened the concept of Stay Interviews (as opposed to exit interviews); to understand employee aspirations, delight factors and areas for improvement. IV. ) Firm Infrastructure Firm infrastructure consists of general management, planning, finance, accounting, legal, government affairs and quality management The Company has again been awarded ISO: 27001 Certification by STQC Directorate (Standardization, Testing & Quality Certificate), Ministry of Communications and Information Technology, Government of India after re-assessment.
The Company is thus certified to meet international standards for maintaining information security. Maruti Suzuki has two state-of-the-art manufacturing facilities in India. The first facility is at Gurgaon spread over 300 acres and the other facility is at Manesar, spread over 600 acres in North India. Maruti Suzuki’s facility in Gurgaon houses three fully integrated plants. Together the three plants have an installed capacity of around 700,000 units. Maruti Suzuki was certified with ISO: 9001:2000 in 2001 and aim to achieve the TS-16949 certification.
In addition, it had made the following improvements in terms of producing defect-free products: • DFC OK: Maruti Suzuki’s Direct Final Check OK, or DFC OK percentage, which signifies the percentage of vehicles that pass through the inspection stages as defect-free, improved from approximately 77% in March 2002 to approximately 90% in March2004. • Reduction in rejection: Maruti Suzuki’s in-process rejection cost per vehicle, computed as the ratio of (1) the cost of components rejected due to defects arising during our production process, to (2) the number of vehicles sold, declined by approximately 65% from fiscal 2002 to fiscal 2004.
• In house warranty: Maruti Suzuki’s in-house warranty costs per vehicle, computed as the ratio of (1) the aggregate cost of components incurred by us to service warranty claims arising from operational defects in our manufacturing lines, to (2) the numbers of vehicles sold in the fiscal year, declined by approximately 85% between fiscal 2002 and fiscal 2004. Kaizen Maruti had adopted the Japanese management concept of Kaizen, or continuous improvement. The Kaizen activities had resulted in the improvement of the in-house capabilities. For example, they had manufactured 25 multi-axis robots and 16 multi-spot welders.
Group discussions among employees in different departments are conducted on a monthly basis in order to discuss and resolve problems relating to their areas of operation, an activity referred as quality circle activity. Based on the belief that individuals contribute to improvement in growth, there has been a suggestion scheme in which they promote participation of all employees at all levels. The average number of suggestions made per employee has improved by approximately 35% in fiscal 2004, when suggestion received were more than 80,000, as compared to fiscal 2002.
Some of the other improvements as a result of the Kaizen process have been increased automation through automated material transport system. Various stages of Automobile Value chain with respect to Revenue Parameters to judge Operational Strategy Safety Safety Index- Safety is of the paramount importance in a workshop. To meet the desired safety standards various training programs are started so as to give proper knowledge to workers regarding safety precautions.
Safety Index represents the overall percentage of number of points received by an assembly shop to improve safety to number of points available for improving the safety of the department. Safety Audits – PMS audit: Each area is assigned with a safety area co-ordinator, who suggests measure for improving the safety of an area and each suggested measures carries some points. The safety area co-ordinator assigns points based on number of suggestions implemented in the area. Sunday audit: under this an official conducts the audit of all the plants on a Sunday and award points.
External audit: under this an external agency visits the facility and suggests measures to improve the safety. Each measure is given some points. A facility is then given points based on the implementation of the suggestions Quality Quality is of utmost importance to the company. Quality lapses have a huge impact on the company’s image besides the financial loss. Therefore, the company tries its best to foolproof its processes against the operators’ faults. However, still some defects are passed on by the operators during the manufacturing processes.
These defects, when found later during the process need to be removed which causes some cost to the company. Therefore, the company monitors the quality levels and the costs involved by defining KPI(s) listed GCA score ABOK Line off Average per day Direct Pass Rejection Cost Warranty cost Cost of Repair Cost Savings Productivity Productivity is a measure of output from a production process, per unit of input. Productivity may be conceived of as a metric of the technical or engineering efficiency of production. Assembly shop has numerous KPIs to monitor its productivity.
Various KPIs related to productivity are: Indexed CPV HPV Line Efficiency HPV and Non-HPV manpower Line Efficiency = ( Total time available in a shift – Time duration of the stoppages ) / Total working time available in a shift It can be observed that lesser stoppages in the assembly line means higher line efficiency and increased production capacity. Pack Adherence Logic The different models which are manufactured at Maruti-Suzuki can be broadly categorized into the following two types: 1. Heavy work-models: SX4, Swift Dzire. 2.
Light work-models: Alto,Celerio. Heavy work models need more work to be done on them as compared to the Light work models. Therefore, the operators at the station need more time to complete the heavy work models than the light work models It is desirable that no two heavy models come consecutively on the line so as to avoid operator overloading which might cause the line to stop. This means that Assembly line requires models in a specific sequence called ‘Pack’. A Pack consists of a certain number of vehicles arranged in a specific sequence.
All the cars in a pack are arranged such that no two heavy work models come together and the pack remains balanced. This leads to maximization of efficiency of the Assembly line. Ensuring adherence to the packs defined will lead to Reduced Operator Overloading Maximization of line efficiency Increased production capacity of the assembly shop. Project Flow Chart Partial automation of Data Capturing. Optimum Utilization of Resources. Analytics Forecasting and Pre-Planning of Resources. Initial Scope of implementation: Assembly shops Standardization of Control Rules in Assembly Shop
Maruti Suzuki India Ltd (MSIL) has four assembly plants in India. Three of the assembly plants operate in Gurgaon area and one assembly plant is located in Gurgaon. Each of these assembly plants have certain set of processes which are carried out during the course of the production cycle. The Operators, Supervisors and Inspectors working on the assembly line have to follow certain set of standards called as ‘Maruti Operating Standards’. To aid the work of the employees certain systems have been implemented in each of these plants. Benefits are :
Availability of uniform control rules across each of the assembly plants of MSIL Ease of Auditing process Better control of the assembly operations Maruti’s Green Philosophy stems with the use of “Three R’s: Reduce Recycle Reuse policy Reduce: Reducing water usage in its air-conditioning plant: Water use is eliminated by the introduction of air-cooled air-conditioners and closed cycle cooling towers. Reducing consumption of the raw paints: Company has started using the automation in paint shop, increasing efficiency and thus reducing the raw paint consumption.
This has also reduced paint-sludge (industrial waste) generated from plant. Rightsizing of the equipments: In its new facility, Maruti has ensured the use of right sizes of the equipments, saving a lot on energy front. Three-coat-one-bake painting system: This state of art system uses only baking step as compared to the conventional system of having two of the baking steps, thus helping in reduction of the consumption of energy levels and increasing of the efficiency. Use of solar energy in the form of the solar lamps and heaters helps in reducing the power consumptions.
Use of natural ventilators: These ventilators use wind energy as against electrical energy to keep the rooms cool, thereby saving the power consumption. Reducing noise pollution: Company has installed many noise curtains in its facilities, creating enclosure high noise generation equipments, providing a safer working condition to its employees. Reuse: Waste Heat Recovery: Company is reusing the waste gases, generated during power generation, in manufacturing process, resulting in a saving of almost 4225 MWH per year.
Sheet metal crap utilization: Parts of unused steel sheets during manufacturing process i. e. scrap, is reused within the value chain (like making smaller components).
This results in lower industrial waste generation and better returns for the company. Reuse of sewage treatment plant sludge: This waste is used in horticulture, resulting in the significant reduction in landfill wastes. Reuse of packaging material: Maruti ensures almost 100 % of the domestic components come from collapsible boxes, making them easy to reuse and in turn the reduction of the wood and cardboard wastes Recycle:
Recycling groundwater: Maruti uses technique like the soak pits, recharging of the shafts, rain-water harvesting and water lagoons that help in recharging the ground water from the rainfalls. Recycling Water, 100% recycling: Through technology like “Reverse osmosis” and “tertiary treatment” used in the Effluent Treatment Plant, Maruti recycles almost 100 % of the waste water, bringing down the need for fresh water by almost 28%. JIT at MSIL: The Company has adopted the Japanese System, JIT to achieve higher of the operational efficiencies and reduce the inventory carrying cost.
JIT improves the return on investment of the business by reducing in-process inventory and the associated carrying costs. To achieve JIT material supplies, the company gives the preference to locally based suppliers and encourages the far distance suppliers to set up base close to the Maruti Suzuki`s facilities. Over 76% of the company’s 246 suppliers are located within the 100 kms of radius. Have strategically located the suppliers of bulky components such as the instrument panels, fuel tanks, bumpers, seats, etc. adjacent to company’s manufacturing facilities in Suppliers’ Park. The
JIT system has evolved over last 25 years in company from the monthly scheduling to daily scheduling of the parts orders and finally, in 2003, to e-nagare system i. e. release of schedules on hourly systems, a practice which aids in maintaining less than two hours inventory of components within the company. The e-nagare system is running today at company and helps in maintaining right material inventory, right time, at right place and in the exact amount without safety net of excess inventory, thus reduction of high inventory carrying cost. Maruti – Sustainable Operations through Internal Efficiency
Maruti in the recent years, owing to several innovative measures like investing in green equipments, its employee-driven campaigns Kaizens (shop floor improvements), has drastically reduction of the consumption of power and water and the waste generation in its facilities. Company also credit this decrease in utility consumption to the adoption of “just-in-time” approach towards operations. Some of facts and figures supporting Maruti’s claims are (figures available for year 2007): Cost savings Total energy consumption per vehicle is down by the 26 % over the last six years.
Power Consumption has come down by the 31 % over the last six years. Water Consumption per vehicle has dropped by the 63% over the last six years. Landfill waste has came down by the 67 % over the last six years. Carbon Dioxide emissions per vehicle (produced during manufacturing) is down by over the 39% in last five years MS is governed by the manufacturing excellence principles of reduction of the wastages, inconvenience and inconsistency, which is imbibed from the parent company SMC, Japan. MS using best practices such Just in Time (JIT), Kaizen (continuous improvements) & Poka Yoke (mistake proof operations).
Best practices are replicated in the business process of business partners to make the operations lean and error free. The company efficiently interfaced with these dealers through Dealer Management System (DMS), annual dealer interactions and the reviews which help dealers in cost savings and customer convenience. Optimum levels of inventory are maintained to reduce the burden of the inventory carrying cost. Higher inventory levels are corrected whenever required to be financially viable, which results in multiplicity of efficiency across the value chain Environmental best practices MS is not only working towards i