OpsEssentia

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Ageing XYZ Motors

George and Balan, two Premium Management Institute students were excited as one of their dreams came true.
They had been recruited by one of the India’s largest Automobile OEM, XYZ Motors. XYZ is well known for its rapid
expansion of market share since its inception in the year 1993.

With them, 40 other students were also recruited, all who enthusiastically joined the firm from various other B-
Schools. Initially in the orientation program, all the new entrants were exposed to various departments like
Procurement, Purchase & Stores, Production, Supporting (core & non-core), Planning, Administration, Utilities &
Services etc. All the candidates were made to interact with management executives and machine operators as they
would then gain more knowledge from bottom to top. They were also asked to visit the shop floor of various
departments and learn about the various processes and products of each department and thereby get a clear picture
of the overall functioning of the company. The fact that operators have a union and management takes major
decisions in consultation with the union became a welcome note to the corporate minds fresh out of colleges.
When George and Balan visited the production department that manufactures clutch assembly, they came across
the following important observations:

 There was the main assembly line which assembled 7 different components with several other components
received from suppliers to produce a clutch assembly. The clutch assembly will then be supplied to a major
vehicle assembly line.
 These 7 parts, which are made in plant A, are machined in their respective individual lines where machines
are arranged in the product layout.

On close observation, George and Balan noted that the clutch component assembly lines had the following
worsening problems:
1. More outdated and manually driven machines (Productivity & quality issues)
2. Substantial number of components exceeding their tolerance limits.
3. Frequent machine breakdown
4. Oily work environment
5. Poor ergonomics (e.g. Safety issues)

Then they both contacted Mr. Philip (Senior Manager), the team leader of the concerned department they
discussed, and raised the issues observed by them related to the Production lines.
Mr. Philip who had been working in the department for more than 13 years felt that he had been overlooking the
existing issues, raised by the enthusiastic new entrants, due to his sole focus on meeting production targets and it is
high time that those are resolved to ensure efficiency at each scale.
Understanding that there is a huge scope for improvement, Mr. Philip called in for a meeting of the ‘Analytical team’
which comprises his team members to analyze the various areas for improvement.

Put yourself in the shoes of a studious team member, enter the meeting board room and assist your team leader
with your valid ideas to improve the condition of shop floor. Consider the following information while assisting your
team leader.

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General Function of the Clutch Assembly in the Transmission System of a Vehicle:
The power house of any automobile is its Internal Combustion Engine. This produces power (Brake Power) that must
be delivered to the wheels at maximum efficiency. For this purpose, transmission system plays the key role. A typical
transmission system comprises of the Clutch, the Flywheel and the Gear Box. A clutch is a mechanical device that
engages and disengages the power, transmission, especially from driving shaft to driven shaft. Gear Box ensures the
constant power developed at the cam shaft of the engine to be delivered variably (with more Torque and less Speed
to drive up a slope or with more Speed and less Torque for otherwise smooth cruising) at the front wheels (if it is a
front-wheel driven automobile).

Fig 1: A schematic diagram of the Transmission system and its Linkage with the power house of any automobile

This lists down the importance of manufacturing Clutch assembly that are updated to the latest technology available,
for if you want to ensure maximum efficiency for your cars and ultimately maintain your market share.
The problems of out dated machinery and regular breakdowns that have risen need utmost attention. Plus as
entailed by Industrial Engineering principles, Ergonomics play an important role in ensuring least strain on the
Muscles of the Operator of that Machine. Poor ergonomically designed machines pose undue strain on his muscles,
thereby attaining less efficiency on the Human Resource aspect as well.

The In-situ Production Lines:

Each line has a specific number of machines arranged in a specific order to produce a required component, in a
specified cycle time. This Cycle time for each Production Line has to be maintained to feed components continuously
to the Main Assembly line since the efficiency of the main line should always be maintained at 100%. Here lies the
problem - the machines installed in the lines are of different ages and thereby have different efficiencies. Since it is
an old plant, few major projects were carried out to replace the old machines whose outputs were not satisfactory.
Steps were taken during 2006 and 2015 to carry out such a task. Apart from this, minor projects are also carried out
every year to improve the condition of the machines, to make it compatible with newly added models etc.

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Company working:
The company works for 290 days a year in 3 shifts per day. Each shift is of 8 hours each. In a year, two 10-days
shutdown period is mandatory to carry out maintenance activities.

Budget:
Top management will shell out INR 1.5 crore if your plan is valid, viable and can be accommodated within their
business plan for the year. It should include everything from revamping production line, training employees to
operate new technology to all other modifications. Cost of one new machine is INR 7.5 lakh.

The scope of your analysis will be restricted to the following parameters:

1. Possible suggestions to improve the condition of In-situ lines (Overall plan, factors considered etc.)
2. Planning and execution (Inter-department coordination, expected benefits, steps to execute, various options of
execution etc.)
3. Logic behind the decisions on budget breakup and timeline (phase wise, if any)
4. Ways to improve ergonomics and environment standards
5. Expected issues during and after execution of your proposal

Note: The participants are expected to use whatever information is given in the case. No additional information will
be provided herewith or afterwards. They should take appropriate and viable assumptions to arrive at the solutions
they recommend and mention them explicitly in their presentation.

(TIPS: A well organized and thought about logical flow of ideas is more important. Consider overall aspects of a
company. Do not restrict yourself to the shop floor. You are free to do benchmarking studies related to any
automotive industry.)

Exhibit 1: Overall Layout

Note: A 1993 machine will take 5 seconds, 2006 machine will take 3 seconds, while 2015 machine will take 2
seconds individually to process a component.

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Exhibit 2: List of Machines Installed Line

Number of Years with Machines Installed

S No. 1993 2006 2015 TOTAL
1 10 3 4 17
2 9 4 3 16
3 9 3 5 16
4 11 2 1 14
5 8 4 4 16
6 10 4 3 17
7 9 5 8 22

(Note on how to decipher the above information: Line 1 has a total of 17 machines installed in 1993. In 2006, 3
of the 17 machines were replaced by new machines. Hence, by 2006 out of 17 machines, 14 machines will be of
1993 make and 3 machines of 2006 make. Similarly in 2015, 4 more old machines of 1993 make were replaced.
This resulted in the line 1 having 10 machines of 1993 make, 3 of 2006 make and 4 of 2015 make. The number
of machines required does not change for any line)

Exhibit 3: Clutch Assembly Diagram

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