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NETAJI SUBHAS INSTITUTE OF TECHNOLOGY

Industrial Visits Report

MARUTI SUZUKI INDIA LIMITED

Submitted by Rishabh Solanki(654/MP/10) Submitted to Mr. Pradeep Khanna Lecturer MPAE Department Netaji Subhas Institute of Technology New Delhi-110075

Submitted on May 16, 2012

ABSTRACT

In the following report we will be studying the growth of Maruti Suzuki India Limited and its contribution to the automobile industry in India. The report elucidates the methods adopted for product excellence, operational efficiency and customer intimacy and various production practices involved in the manufacturing of the vehicles.

ACKNOWLEDGEMENT
We want to take this opportunity to thank Mr. Pradeep Khanna for making this trip to Maruti Suzuki India Limited possible and for accompanying us on this trip and also solving our various queries. We are also grateful to the professionals at Maruti Suzuki India Limited for helping us get acquainted with the various manufacturing processes in the industry.

TABLE OF CONTENTS
Abstract Acknowledgment 1. Introduction 2. MSILs Principal Objectives 3. MSILs Competitive Strengths 4. MSILs Supply Chain 5. Sales networkq 6. Marketing 7. Suzuki Quality Management System 7.1 Quality Improvement Initiatives 7.2 Kaizen 8. Maruti Production System (MPS) 9. Lean Manufacturing 10. Just in Time (JIT) 11. Manufacturing Process 11.1 Blanking and Pressing Shop 11.2 Weld Shop 11.3 Paint Shop 11.4 Assembly Shop 11.5 Machine and engine shops 11.6 Inspection 12. Preventive Maintenance 13. Conservation of energy 14. Research and Development 15. Conclusion

1. Introduction Maruti Udyog Limited (MUL) was the result of the joint venture created in February 1981 between Japan's Suzuki Motor Company and the Indian Government when the latter decided to produce small, economical cars for the masses. The intention of the venture was to produce a 'people's car'. It was on December 14, 1983 that MUL launched the first Maruti vehicle - the Marti 800 priced at Rs. 47,500. In late1980s, Suzuki increased its equity stake in MUL from 26% to 40% and further to 50% in 1992, converting Maruti into a nongovernment company. On 17 September 2007, Maruti Udyog was renamed to Maruti Suzuki India Limited (MSIL). The company's headquarters remain in Gurgaon, near Delhi. It is now a leading four-wheeler automobile manufacturer in South Asia. Maruti Suzuki has two manufacturing facilities in India, one in Gurgaon and the other in Manesar, North India. Gurgaon Facility The plant at Udyog Vihar, Gurgaon is spread over 1203364 square meters covering 396957 square meter area. This plant has 3 fully integrated production facilities with flexible assembly lines. While these three plants have a total installed capacity of 350,000 cars per year, several productivity improvements have enabled the company to manufacture nearly 650,000 cars per year at the Gurgaon facilities. In fact on an average, one vehicle rolls out of the factory every 21 seconds and the plant has already rolled out over 6.5 million vehicles till date. The entire facility is equipped with more than 150 robots, out of which 71 have been developed in-house. More than 50 per cent of our shop floor employees have been trained in Japan. Manesar Facility It is rated high among Suzuki's best plants worldwide and the plant was inaugurated in February 2007. The plant has several in-built systems and mechanisms to ensure that cars being manufactured here are of good quality. There is a high degree of automation and robotic control in the press shop, weld shop and paint shop to carry on manufacturing work with acute precision and high quality. In particular, areas where manual operations are hazardous or unsafe have been equipped with robots. The plant is designed to be flexible: diverse car models can be made here conveniently owing to automatic tool changers, centralized weld control system and numerical control machines that ensure high quality. The open layout and ergonomic design make work convenient and improve productivity. The plant at Manesar is the company's fourth car assembly plant and has started with an initial capacity of 100,000 cars per year. This will be scaled up to 300,000 cars per year. A total investment of Rs 2,500 crore will be made in this car plant by 2010. In March 2007, Maruti Suzuki India Limited crossed cumulative export figure of 4,50000 vehicles since its first export in 1986. It has exported vehicles to over 100 countries in 5 continents with 65% of total exports to the highly sophisticated and demanding European Markets.

2. MSILs Principal Objectives


As the leading player in the small car segment of the Indian market, they have the following principal objectives: To expand the size of the Indian market for small cars by strengthening and expanding the dealer network and making automobile financing available at competitive rates To strengthen their leadership position in the small car segment of the Indian market To continue to benchmark themselves against improving global manufacturing, marketing and other practices and standards, strive to increase customer satisfaction through quality products and new initiatives, and promote the financial strength of their sale network.

3. MSILs Competitive Strengths


Expertise in small car technology. As a subsidiary of Suzuki, they have access to globally respected technology in the small car segment. They have the advantage of Suzukis expertise in all aspects of small car technology and design, with respect to their products, manufacturing processes and business practices, the development of their supply chain and the training of personnel. Extensive product portfolio. They are the major manufacturer of cars in segment A (priced below Rs.300,000). The Maruti 800 has been the largest selling car in India for several years, and still continues to have the very high sales volumes. They also manufacturer three distinct models, the Zen, the Alto and the WagonR, in segment B (priced between Rs. 300,000 and Rs.500,000). Their dominance in segment A and extensive product range in segment B enables them to offer the customer a wider choice in the small car segment than any of their competitors. Quality products. In November 2001, MSIL was one of the first automobile manufacturers in the world to receive the ISO 9001:2000 certification. They benchmark their products against international quality standards. They export their products to approximately 70 countries, which are manufactured using the same assembly line as that for the domestic market. Extensive sales and service network MSIL has the largest network of dealers and service centers amongst car manufacturers in India In addition to the distribution of cars, their dealership network is a critical resource in their efforts to provide customers with a one-stop shop for automobiles and automobile related products and services such as automobile finance, automobile insurance, Maruti certified pre-owned cars available for purchase, and leasing and fleet management, in order to promote customer loyalty. Brand strength: MSIL is present in the Indian market for almost 24 years and have built the brand on the basis of the values of trust and reliability In 2000, 2001 and 2002, J.D.Power Asia Pacific, Inc. ranked MSIL the No. 1 in the India Customer Satisfaction Index, which assesses customer satisfaction with product quality and dealer service. NFO Automotives 2002 Total Customer Satisfaction Survey ranked Maruti products as No. 1 in the Economy, Premium Compact and Entry Midsize segments respectively, for 2002.

Integrated manufacturing facility. Their manufacturing facility consists of fully integrated plants with flexible assembly lines located at Gurgaon. The facilities have advanced engineering capability and each plant is upgraded on an ongoing basis to improve productivity and quality. They are one of the most efficient among the vehicle manufacturing facilities of Suzukis subsidiaries outside Japan in terms of productivity measured as the ratio of number of vehicles produced to number of employees. Strong vendor base and higher rates of localization: In order to improve quality and generate economies of scale, MSIL has reduced the number of vendors of components in India from 370 as of March 31, 2000 to about 100 as in 2005. As of the same date, they had strategic equity interests through joint venture agreements in their vendors, who together supply a substantial portion of the purchases of components. A number of their vendors are their dedicated suppliers in that they account for a majority of their turnover. Vendors located within a radius of 100 kilometers from the facilities supply the majority of the components. The production systems of their vendors are generally aligned to their needs for a reliable and timely supply of components that meet the required quality standards. This has enabled MSIL to increase the proportion of locally sourced, lower cost components in their models, a concept refer to as localization.

4. MSILs Supply Chain


MSILs inputs primarily comprise raw materials and purchased components. Only a small amount of raw material and components consumed are imported and a much larger portion is purchased from the sources within India. Raw Material Suppliers The raw materials used in the manufacturing process primarily comprise steel coils and paints. In recent years, MSIL is increasingly trying to localize the purchases of steel coils with a view to reduce cost. Earlier MSIL used to follow the tender system for the purchase of steel. Under this system, specifications were advertised and accept the lowest price offered by a supplier who could meet the specifications. In 2001 MSIL moved to the quotation system which gives them the flexibility to renegotiate the prices once an offer is submitted. Standard purchase orders are issued covering a period of six months for purchase of steel from foreign suppliers for Indian supplier the period extends up to one year. At MSIL the role of the vendors has gradually evolved from tactical to strategically where the vendors work in close coordination with MSIL to meet our longterm goals in terms of: component development; quality; delivery cost control. In order to improve quality and generate economies of scale, MSIL has reduced the number of vendors of components in India from 370 as of March 31, 2000 to about 100 as in 2005. In case of repair and replacements, costs of defective components supplied are borne by the vendor.

Delivery by Vendors MSIL has a delivery instruction system that provides details of the component requirements for every 15 days, across the different variants of the various models, to the vendors. Vendors are linked to the MSIL through the Internet-based information network, which maintains online information regarding order status and delivery instructions. These has helped in reducing both inventory levels and lead times required for the supply of various components and sub-assemblies, and enable the vendors to more efficiently plan and dispatch their products. Vendors located within a radius of 100 kilometers from the manufacturing facility supply the majority of the components. This has enabled the vendors to eliminate packaging and supply components directly to the assembly line. Reduction of Vendor Costs In some of the major vendors MSIL has implemented the MPS, which focuses on the elimination of wasteful activities in its manufacturing processes. Vendors are helped in areas such as improving their productivity, reducing the number of their components that are rejected, reducing materials handling, improving their yield from materials, and reducing their inventories. This helps reduce their costs of production, and also reduces the costs of the components required. Vendor Quality Control Quality management system such as ISO 9000/ QS 9000 forms the basis for producing a quality product. To assist small and medium vendors in achieving ISO 9000 certification, in 1995 MSIL adopted a cluster approach wherein vendors are grouped together, are trained in quality management and are assisted in obtaining ISO 9000 certification. This cluster approach was extended to helping vendors attain QS 9000 certification. Periodic vendor quality system audits are conduct in order to ensure that quality standards are sustained. Imported components Imported components are mainly purchase from Suzuki.

5. Sales network
Dealers: MSIL has the largest network of dealers amongst car manufacturers in India. As of March 31, 2003, dealers had employed more than 3,500 sales executives. Sales network is linked with the MSIL through the secure extranet-based information network. The sales of spares, accessories and Automobile-related services such as insurance and finance serve as additional sources of revenue for the dealers. The availability of these related products and services at sales outlets also helps to attract customers to the outlets and promotes sales of the cars. Agreements with our dealers MSIL dealers provide services to customers such as predelivery inspection of vehicles, sales of cars, after sales service, supply of spare parts and other services that promote sales of cars within the territory for which they are appointed. Dealers are required to maintain their outlets in accordance with the specifications and employ well-trained sales staff. Agreements with the dealers are usually of five years.

These agreements are generally renewable for successive terms of three years, by mutual agreement. Enhancing dealer performance: The performance of the dealers is followed and improvements are suggested frequently. In order to assist the dealers in enhancing their performance and capabilities, MSIL has introduced a concept of Balanced Scorecard. Using this tool, the performance of a dealership in several areas of operations, including sales, service, spares and accessories, financial management and management systems is measured. Dealers who perform well on the Balanced Scorecard are reward with a cash payment at the end of the fiscal year. The Balanced Scorecard serves as an effective incentive for dealers to enhance their performance. After-sales Service Network There are more than 400 Maruti dealer workshops and more than 1,500 Maruti Authorized Service Stations, or MASSs, covering more than 900 cities in India. In addition, 24-hour mobile service is also offered under the brand Maruti On-road Service. As a benchmark for dealers with respect to service quality and infrastructure facilities, MSIL has launched service stations under the brand Maruti Service Masters, or MSMs. MSIL also has service stations on highways in India under the brand Express Service Stations. To promote sales of spare parts and the availability of high quality, reliable spare parts for its products, spares are sold under the brand name Maruti Genuine Parts, or MGP. These are distributed through the dealer network and through the authorized sellers of the spare parts. Many of the MASSs are at remote locations where MSIL do not have dealers. In order to increase the penetration, in terms of sales volumes, of its products in these remote areas, some of the MASSs are integrate 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.

6. Marketing
Marutis marketing objective is to continually offer the customer new products and services that: Reduce the customers cost of ownership of our cars Anticipate and address the customers needs and preferences in all aspects and stages of car ownership MSIL has been aggressively cutting prices of its models since the beginning of the year. The rationale behind the price cuts is the focus on offering new upgraded vehicles at a low price.

7. Suzuki Quality Management System


Based on a method adopted by Suzuki at its manufacturing facilities, the quality of a vehicle dispatched from their facility is measured through a quality index audit on a daily basis. The quality index is a relative measure of quality based on evaluation of vehicles selected at random on a daily basis.

7.1 Quality Improvement Initiatives


For quality control Maruti had recently introduced: Tracking surveys and direct customer contact in order to better understand customer satisfaction levels and customers problems. Full-time task forces for improvement in initial quality study problems and departmental cross-functional teams to work on defined problems with challenging targets. Quality gates at various stages in order to raise alarms for correction and immediate action on defects; Fool-proofing, or Pokayoke in Japanese, which comprises checks conducted in order to prevent defects arising from human error during the manufacturing process; A real-time feedback system, cross-linked with overall targets. The Pica Pica system, which aligns the sequence of components and vehicles in order to prevent incorrect fitting of components.

7.2 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.

8. Maruti Production System (MPS)


MPS is a systematic approach to eliminate Muri's (inconveniences if any for shop floor employees) Mudas (all forms of wastages) and Muras (inconsistencies in quality) from the system so that cost, quality, productivity and safety are under control. Under the Maruti Production System (MPS), derived from the Suzuki Production System, Maruti engineers captured all aspects of operation on video and scrutinized each process to identify wastage. Together with workers on the shop floor, layouts were altered, innovative equipment and processes were introduced and operations relentlessly made lean and efficient.

According to MPS, there are eight types of wastages in any process namely, Idle Time Inventory Over Production Production Defects Unnecessary man movement Unnecessary material movement Unnecessary inspection Unnecessary processing However, if every employee tries to do the job right the first time, wastages due to unnecessary inspection and processing are eliminated from the system and it is a cost effective approach.

9. Lean Manufacturing
Lean Manufacturing is the optimal way of producing goods through the removal of waste and implementing flow or smoothness of work. The concept of Lean Manufacturing was adopted by their parent company Suzuki Motor Corporation (SMC). Lean Manufacturing ushered a new era in the world of manufacturing. As opposed to the mass manufacturing approach lean manufacturing is all about high quality and high flexibility. As a philosophy Lean Manufacturing is widely acclaimed for its focus on eliminating wastes of all kinds.

10. Just in Time (JIT)


JIT is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated carrying costs where everything from procurement of raw material to dispatching of final product is done just at the time of requirement. This means that stock levels of raw materials, components, work in progress and finished goods can be kept to a minimum. This requires a carefully planned scheduling and flow of resources through the production process. Modern manufacturing firms use sophisticated production scheduling software to plan production for each period of time, which includes ordering the correct stock. Information is exchanged with suppliers and customers through EDI (Electronic Data Interchange) to help ensure that every detail is correct.

11. Manufacturing Process


The manufacturing process at Maruti facility is depicted below:

Fig 1: Arrangement of various facilities in Maruti Suzuki Plant Each of the shops had a product type of layout. In this type of layout machines are arranged in order of sequence of operation. Product Layout is suited for mass or continuous production and its advantage are that the cost per product is less and work in progress inventory is less. Utilities Maruti do not have to rely on outside sources of power as they have a 60-megawatt gas turbine captive power plant, which has multi-fuel capability. They also have our own reverse osmosis water treatment plant and effluent and sewage treatment plant. 11.1 Blanking and Pressing Shop Blanking is the operation of punching, cutting, or shearing a piece out of stock to a predetermined shape and size by die cutting the outside shape of a part for the next operation such as pressing, drawing and forming. Pressing is the process of giving blanks required shapes with dies and presses.

Fig 2: Steel coils converted into steel sheets.

The press shop has five transfer presses and two blanking lines. In the press shop, steel coils are cut to the required size and panels are prepared by pressing them between various die sets such as doors, roofs and bonnet. An anti-rust coat is applied at this stage. This plant uses 400 tonne presses to press the blanked sheets. There are six passages with a capacity ranging from 1000-4000 tonnes. The plant is capable of producing pressed sheets for all the ten models manufactured by Maruti Udyog Ltd. They have in-house capability and the necessary technical knowledge for the design and manufacture of medium-size press dies. 11.2 Weld Shop Spot welding is a type of resistance welding, which is a method of welding two or more metal sheets together without using any filler material by applying pressure and heat to the area to be welded. It is used to weld various sheet metal products. Typically the sheets are in the 0.5-3.0 mm thickness range. The process uses two shaped copper alloy electrodes to concentrate welding current into a small "spot" and to simultaneously clamp the sheets together. Forcing a large current through the spot will melt the metal and form the weld. The attractive feature of spot welding is a lot of energy can be delivered to the spot in a very short time (ten to one hundred milliseconds). That permits the welding to occur without excessive heating to the rest of the sheet.

Fig 3: Spot Welding There are three welding shops with 122 six-axis robots and 25 in-house manufactured two-to-four axis robots. In this shop, various press metal components manufactured in the previous stage are spot-welded together to form the body shell. Various parts such as the floor panel, side panel, doors and bonnet are sub assembled in this shop. Subsequently, the assembled parts undergo final welding. The welded body is sent to the paint shop through a conveyor.

Fig 4: Different car parts are welded

Fig 5: Weld Shop

11.3 Paint Shop There are three paint shops, within one of which the final outer body is fully painted by robots. In the paint shop, the body undergoes various pre-treatment and electro deposition painting processes to provide a high corrosion resistance to the body. The car body is given an intermediate or primer coat before applying the storing topcoat paint. The intermediate and the final coat are applied by using automatic electrostatic spray-painting machines and robots, followed by a baking process. Due to the risk of inhaling poisonous fumes in the Paint Shop no one is permitted inside the shop without proper safety equipment. The paint shop consumes about 7 hours because the conveyor is a few kilometres long. At the end of the paint shop the painted shell is taken to the assembly shop.

Fig 6: 1st coat of paint to make it stain and rust proof

2nd and 3rd coat of paint on the vehicle body.

Final inspection of the painted vehicle.

11.4 Assembly Shop Maruti has highly flexible assembly lines, which can simultaneously handle a large number of variants as well as adapt to sequence changes. The painted bodies proceed for final assembly in three stages. Doors are covered with coverings to prevent scratches on painted car body. The first stage is the trim line wherein various components such as roof head lining, windshield glass and interior trim components are fitted. Thereafter, the car is transferred to an overhead conveyor, the chassis line, wherein components such as the engine, gearbox and front and rear axles are assembled on the

underbody. The vehicle is then lowered to the final line on its own wheels and here components and parts such as seats, the steering wheel and the battery are fitted. These are done manually and the painted car moves on a conveyor belt at ground level. At each work station parts being assembled come on a line perpendicular to the conveyer. The conveyor is raised to appropriate heights for the workers comfort to increase their efficiency. The completely assembled vehicle finally rolls out of the assembly lines to the final inspection stages. 11.5 Machine and engine shops The various raw materials for engine components are machined using automatic machining centres and these machined parts are assembled together to make engines. Assembling and testing of engines takes place at engine shops and precision machining of engine components is carried out in the machine shops.

Fig 7: Engine assembled from different components 11.6 Inspection Sample inspection is done i.e. in a lot only a few samples are inspected. Following tests are done to inspect the manufactured car: i) shower test ii) headlight test iii) brakes test iv) speed test v) test drive on test track Shower testing is done by spraying water from all sides to check for leakages. For checking wheels speed the car is raised above the ground and then is operated at different speeds and on different gears. The car is driven on a test track which consists of different terrains to check performance of car under different conditions.

Fig 8: Inspecting brakes Fig 9: Emission Checks If any defect is found, then all cars up to the last cleared car are checked again for defects and remedial actions are taken. The cars are then parked in the final vehicle parking area before dispatching.

Fig 10: Handover the vehicles for sales and dispatch

12. Preventive Maintenance


Preventive maintenance is a schedule of planned maintenance actions aimed at the prevention of breakdowns and failures. The primary goal of preventive maintenance is to prevent the failure of equipment before it actually occurs. It is designed to preserve and enhance equipment reliability by replacing worn components before they actually fail. Preventive maintenance activities include equipment checks, partial or complete overhauls at specified periods, oil changes, lubrication and so on. In addition, workers can record equipment deterioration so they know to replace or repair worn parts before they cause system failure. Recent technological advances in tools for inspection and diagnosis have enabled even more accurate and effective equipment maintenance. The ideal preventive maintenance program would prevent all equipment failure before it occurs. Long-term benefits of preventive maintenance include:
Improved system reliability. Decreased cost of replacement. Decreased system downtime. Better spares inventory management.

13. Conservation of energy


Maruti had followed the three principles of Reduce, Reuse and Recycle for conserving energy. Between fiscal 1997 and fiscal 2004, they had reduced the consumption of electricity measured as the ratio of kilowatt hours of power consumed to the number of vehicles produced, by approximately 35%. This was achieved by using energy saving lights and natural light, and also the efficient usage of other electrical appliances, thus reducing wastage. In the same period, reducing the consumption of water, measured as the ratio of the volume of water consumed to the number of vehicles manufactured, by approximately 70%. This is achieved through the recycling of wastewater in their water treatment plant and effluent and sewage treatment plant.

14. Research and Development


R&D activities of Maruti have the twin objectives of reducing product costs by developing capabilities of local vendors and becoming a regional R&D hub for all Suzuki operations. The company has adopted a focused model cost reduction technique. Maruti has been continuously engaging in Value Analysis/Value Engineering (VA/VE) activities across its operations. Some areas in which MSIL carry out research and development is localization and development of components, cost reduction measures such as VA/VE, development of alternate fuel (CNG and LPG) vehicles, performance- benchmarking to certain parameters such as noise, ride handling and braking and development of power-steering for certain models. MSIL regularly upgrade its models and also launch variants by adding features developed through research and development. All this has resulted in significant reduction in the investment required for the modifications.

15. Conclusion
The industrial visit to Maruti Suzuki India Limited was very informative and gave us a fair idea of the steps involved in the manufacturing of a car. It was very impressive to see the amount of automation being used in the industry. It showed us how production, maintenance, inspection, inventory control, demand forecasting all operated simultaneously and with high efficiency. It was heartening to see practical application of a lot of our course content. To sum up we can say that the trip improved our knowledge and helped us to understand the working of a large-scale production unit.