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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
PART –A
1. INDUSTRY PROFILE
1.1 General Introduction:
Auto parts manufacturing industry refers to those industries which involve in manufacturing and
processing of auto parts items for heavy commercial vehicles especially cars and two wheelers.
The manufacturing industry accounts for a significant share of the industrial sector in developed
countries. The final products serve as immediate goods used in the production process.
Being an integral sector, growth of the auto parts industry has an immense bearing on the entire
economy, especially India’s manufacturing industry.
The following is India’s position in world production:
2nd in two wheelers
11th in passenger cars
13th in commercial vehicles
Engine parts 31%
Drive Transmission & Steering Parts 19%
Suspension & Brake Parts 12%
Electrical Parts 9%
Body and chassis 12%
Equipment 10%
Others 7%
Indian auto parts industry is the 2nd largest in the world with an annual production of 15-20% of
the industry size of about $ 12 billion in financial year 2007. India is expected to overtake China
as the world’s fastest growing auto market in terms of the number of units sold as the automotive
industry is one of the fastest growing manufacturing sectors in India. Because of its large market
India has become a huge attraction for car manufacturers in India.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Auto Component Industry Structure
It contributes about 4% in India's Gross Domestic Product (GDP) and 5% in India's industrial
production. The well-developed Indian automotive industry ably fulfils this catalytic role by
producing a wide variety of vehicles like passenger cars, light, medium and heavy commercial
vehicles, multi-utility vehicles such as jeeps, scooters, motorcycles, mopeds, three wheelers,
tractors etc.
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Base raw material produces
(Steel, Plastics, Rubber, Aluminium Non steel-gas, textile, paint, paper,
Foam)
Semi finished material
(Wiring, cable hardware)
Assemblers/ system integrators
Tier l manufacturers
Assembly OEM goods
Module/ component suppliers
Tier ll manufacturers
Compressors, pumps, pistons & Rings etc.
Process oriented
Suppliers
Tier lll manufacturers
Molding/ dying. Casting, forging, stamping, grinding, milling, polishing
Domestic market
International market
Intermediaries
End
User
TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
1.2 Background of the industry:
The Indian auto component industry is one of the few sectors in the economy that has a distinct
global competitive advantage in terms of cost and quality. The value in sourcing auto
components from India includes low labor cost, raw material availability, technically skilled
manpower and quality assurance. An average cost reduction of nearly 25‐30% has attracted
several global automobile manufacturers to set base since 1991. India’s process engineering
skills, applied to re‐designing of production processes, have enabled reduction in manufacturing
costs of components. Today, India has become the outsourcing hub for several global automobile
manufacturers.
Till the 1990’s the auto component industry was solely dependent on the domestic automobile
industry to drive the demand for ancillary products. This composition of the market however is
undergoing radical changes with global outsourcing gaining momentum.
1.3 Growth of the industry:
Production of auto ancillaries was estimated at US $ 10 billion in 2005-06 and has been growing
at a robust 20% per annum since 2000. Export of auto components have been strong growing at
24% per annum since 2005. This growth in exports if sustained for another five years will see
India’s auto components exports will touch US $ 5 billion by 2015 from the US $ 2 billion at
present. The country is building a reputation in designing and manufacturing low cost cars.
1.4 Future prospects:
Future prospect of Indian Automotive Sector is looking bright. According to a Vision 2020
Document prepared by the Automotive Components Manufacturer’s Association, the overall
domestic demand for automobile components is likely to increase from about $30 billion in 2009
to as much as $119 billion by 2020. Looking forward, the industry displays tremendous potential
in generating employment and boosting entrepreneurship in the country. The spate of new
investment plans announced by global and domestic automobile manufacturers promises the
emergence of India as a global hub for auto components. The industry is transforming, and the
boost in demand will see the emergence of several new players in the industry. The vast market
for auto components, and the diverse products and technology involved ensures a place and role
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
for many. At the same time, the entry of several global automobile manufacturers will bring in
more regulation into the industry and see a pruning of the spurious market.
2. COMPANY PROFILE:
2.1 Background and Inception of the company:
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Toyota Kirloskar Auto Parts Private Limited was established in the year 2002as a joint venture
of Toyota Motor Corporation (TMC) Toyota Industries Corporation (TIC) and Kirloskar Oil
Engine (KOI) Ltd.
The company is situated at about 35kms away from Bangalore city at plot No.21, KIADB
Industrial Area, Bidadi in Ramanagar District. The premises of the company are spread over in
50 acres of land. Currently there are about 1100 employee/trainees on company rolls. The
company currently manufactures Front axle, Rear axle and propeller shaft in 3 unit’s plant for
Innova, a premium multi utility vehicle being produced by M/s. Toyota Kirloskar Motors Private
Limited with an annual capacity of 75,000 units. TKAP expanded its operations for the
worldwide manufacture and supply of R-type manual transmissions for Toyota plant worldwide.
The 100% EOU has a capacity to make 1,75,000 transmissions per year.
2.2 Origin of the Company:
1962: Kirloskar Asea Ltd (KAL) established as collaboration with Kirloskar&Asea of Sweden.
1973: KAL was changed to Kirloskar System Ltd with exit of Asea Ltd from the joint venture.
1999: KSL started auto component manufacturing for TKM.
2002: Toyota Kirloskar Auto Parts Private Limited is established as a joint venture between 3
companies namely Toyota Motor Corporation, Toyota Industries Corporation (TICO) and
Kirloskar System Ltd.
2.3 Nature Of Business Carried:
TKAP manufactures auto components in 2 units.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
3 Unit Division
Products: Front Axle, Rear Axle, Propeller Shaft for Innova and Knuckle for Etios.
Transmission Division
This division manufactures R type transmission to be exported to Thailand.
2.4VISION AND MISSION:
Mission:
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Enriching the lives of all through eco-friendly products, struggle to build mutual trust,
confidence and sense of responsibility within our team members.
Vision:
Become No. 1 unit manufacturer in Asia Pacific in Quality, Cost and Customer satisfaction.
2.5 QUALITY POLICY:
“We will continuously strive to surprise and delight our customers with outstanding Quality of
our products and services
In our Endeavour to achieve this objective we will:
Ensure capable processes are established.
Maintain and improved continuously our standards of manufacture.
Prevent outflow to next process when defect is generated.
Record and control the change points at each stage.
Provide the feedback to previous process for continuous improvement.
Ensure traceability system and compliance throughout the supply chain.
Internalize “Total Quality” at all levels encompassing all our activities.
Create and nurture men at Quality by continuous education and training.
We believe that our future lies in the hands of our valued customers.”
2.6 PRODUCT PROFILE:
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Front Axle:
Front Axle comprises of the following components:
Disc hub (cast iron), Arm steering knuckle, Knuckle (steel) etc. these components undergo
turning, drilling, boring, tapping etc in-house.
Rear Axle:
Rear Axle comprises mainly of the following components:
Forging like steel rear axle shaft, end flange drive pinion companion, Banjo. Casting like drum
brake, differential carrier, differential case, bearing caps etc. the companies undergo tuning,
milling, drilling, boring, tapping, welding etc in-house. After this the components are assembled
and painted.
Propeller Shaft:
The propeller shaft is a part of the ‘drive train’ which connects the engine transmission to the
rear axle differential.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Propeller shaft assembly consists of the following components:
1) Steel tube
2) Spider yokes (forging item)
3) Bearings
The components undergo machining operations such as turning, milling, drilling, tapping,
broaching, welding etc. after this the components are assembled and painted.
Transmission:
Transmission refers simply to the gearbox that uses gears and gear trains to provide
speed and torque conversions from a rotating power source to another device.
2.7 Area of operation:
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
The company is doing its activities at regional and global level. The company is sending its
products to Toyoto Kirloskar Motors, Bangalore, and it is exporting to Thailand and Argentina.
2.8 Ownership pattern:
Toyoto Motor Corporation 64%
Toyoto Industries Corporation 26%
Kirloskar Systems Limited 10%
2.9 COMPETITORS INFORMATION:
For 3 unit plant (For axles):
Bharath Forge
Amtek Auto
For Transmission:
AIAT (Aisin IA Thailand)
TAP ( Toyoto Auto Philiphines)
AIAJ ( Aisin IA Japan)
2.10 Infrastructure Facilities:
The company has a very good infrastructure facility spread over in 50 acres of land. At present it
has 2 divisions: 3 unit and transmission unit. There is also good canteen facility, transportation
facility and training centers.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
2.11 Achievements/ Awards:
Achievements:
TKAP has got two new EFC project from Toyota Motors Corporation, Japan i.e engine
and transaxle for sustaining quality and meeting customer demand and customer
satisfactions over the years.
During the global recession time TKAP sustained (without affecting employees’ job and
pay) through continuous cost reduction activities.
TKAP will be the first company to do engine assembly in the domestic market.
Awards:
First company to manufacture R- type transmissions and export globally.
Best Quality Award for “ZERO CUSTOMER COMPLAINT” in 2008.
Best Quality Award for “ZERO CUSTOMER COMPLAINT” in 2009.
Won Gold medal in ASIA PACIFIC GOBAL PRODUCTION CENTER skill contest at
global level
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
2.12 Work Flow Model
3 Units Work Flow Model
Transmission Unit Work Flow Model:
2.13 Future growth and prospects of the company
Toyota Kirloskar Auto part’s New Products
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Supplier PC Logistics
Soft Machining
Heat treatment
Hard Machining
AssemblyShipping
PC Shipping
Supplier PC Logistics
MFG Quality
TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Toyota Kirloskar Auto Parts Pvt Ltd (TKAP) has invested another Rs 500 crore in India for
expanding its second plant, which produces transmissions, and setting up of a third plant to
manufacture 100,000 engines a year for Etios, a compact car being produced for the domestic
market.
TKAP will be producing engines for the recently launched compact car, Etios, at the third plant
of TKAP. The Etios has been specially designed for the Indian market. To begin with, Etios will
sport an imported engine from Japan.
The expansion of the second plant and the setting up of the third plant would be completed by
the third quarter of 2012 and early 2013 respectively, the fresh investment would create 500 jobs.
While the third plant would produce 100,000 engines, the second plant would start
manufacturing 240,000 transmissions a year from early 2013. After utilizing part of this
production for Etios, the rest would be exported to Thailand and Argentina.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
1. MCKENSY’S 7S FRAME:
The Mckinsey 7s model is widely used frame work used for viewing the interrelationship
of strategy formulation and implementation. It helps to focus manager’s attention on the
importance of linking the chosen strategy to a variety of activities that can affect the
implementation of the strategy.
Originally developed as a way of thinking more broadly about the problems of
organizing effectively, the 7s provides a tool for judging “do ability” of strategies.
According to this model, there are seven basic dimensions, which represent the core of
managerial activities. These are the “Levers” which executives use to influence complex
and large organizations. Obviously, there was a concerted effort on the part of the
originators of the model to coin the managerial variables with words beginning with the
letter S so as to increase the communication power of the model.
To be effective, their organization must have a high degree of fit, internal alignment
amongst all the seven S’s are interrelate and a change in one has a ripple effect on all
the others. It’s impossible to make progress on one without making progress on all.
Thus, to improve their organization, you have to pay attention to all of the seven
elements at the same time. There is no starting point or implied hierarchy. Different
factors may drive the business in any one organization.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
The TKAP’s seven S’s are:
1.1 Strategy:
Some of the strategies which are being followed in TKAP are:
Kaizen: English translation is continuous improvement. The “Zen” in kaizen emphasizes
learning by doing is a daily activity whose purpose goes beyond improvement. It is also
a process that, when done correctly, humanizes the work place, eliminates overly hard
work (both mental and physical), and teaches people how to perform experiment using
the scientific method and how to learn on spot and eliminate waste in business
processes. Everyone is encouraged to come up with small improvement suggestions on
a regular basis. This is not a once a month or once a year activity. It is continuous.
Kaizen must operate with three principles
Systematic thinking
Non-judgmental
Non-blaming
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
TPS (Toyota Production System):
It is known as lean manufacturing system.
The purpose of TPS is to
Produce required quality at the required time and required frequency.
To control production in a structured way to produce parts.
Meet customer requirements with minimum cost and maximum utilization of
available resource.
JIT (Just In Time):
It is making only “what is needed, when it is needed, and in the amount needed”. It is an
inventory strategy implementation to improve the return on investment of the business
by reducing in-process inventory and its associated costs. JIT lead to remarkable
improvement in a manufacturing organization’s return on investment, quality and
efficiency. New stock is ordered when stock drops to the re-order level. This saves
warehouse space and costs.
Jidoka:
It may be described as “intelligent automation” or “automation with a human touch”. This
type of automation implements some supervisory functions rather than production
function. At Toyota this usually means that if an abnormal situation arises the machine
detects the problem on its own and stops, preventing defective problems from being
produced. As a result, only products satisfying the quality standards will be passed on to
the next processes on the production line.
Since a machine automatically stops, when processing is completed or when a problem
arises and is communicated via the “andon” (problem display board), operators can
confidently continue performing work at another machine as well as easily identify the
problem cause and prevent its recurrence. This means that each operator can be in
charge of many machines resulting in higher productivity, while the continuous
improvement leads to greater processing capacity.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Heijunka (leveled production):
It is a Japanese term. It refers to a system design for the smooth production to achieve
a more even and consistent flow of work. It is a technique for reducing
the muda (waste). The goal is to produce intermediate goods at a constant rate so that
further processing may also be carried out at a constant and predictable rate.
1.2 Systems:
The company follows Just in time system and purchases the required materials for
production process. It also works with ERP system and every task is performed
systematically. Kanban system is used. It is an information tool which indicates what to
produce, when to produce and how much to produce. This helps in reducing mistake.
Ergonomics system is used to lift heavy parts.
The company also follows 5’S system. The work place that has undertaken the 5’s
activity will gain good safety and health control levels as well as progress in productivity.
It is important to distinguish between the necessary and unnecessary. Disposal of the
unnecessary and making use of necessary, thus aiming at creating a comfortable work
place without any accident, is the aim of 5’s activity. The 5’s are:
SERI: Distinguishing between the useless and useful, and the necessary dispose of the
useless.
SEITION: Keep the necessary things which are easy and safe to use.
SEISOU: Always clean up thoroughly and remove garbage, dust, dirt etc.
SEIKETSU: Keep the work cloths clean and dirt free.
SHITSUKE: To maintain the discipline of the work place.
3.3 Style:
TKAP is following the participative management style
In this company, the roles responsibilities and the authority given to the supervisors,
managers and the other staffs are clearly defined.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
When a problem arises with respect to quality, the supervisor takes (immediate
decision) regarding the parts involved in the process. If he is unable to solve the
problem, he is bound to report the same to the manager. The parts will be sent for
quality check along with a report which carries the details of the problem. This will be
presented to the higher manager or HOD. He decides whether to accept or reject the
parts. Then counter measures are taken in order to avoid similar problems. Small
decisions such as cleaning of machines part, tool change is taken by the employees
themselves.
3.4. Skill:
Skills include those characteristics that a company feels the employees must possess to
carry out the work efficiently as well as effectively in key positions. TKAP follows both
on-jobs as well as off-job developmental techniques to train its employees perform.
TKAP believes in OJD (on the job development) rather on OJT. The company believes
that the process of learning is as important as achieving results and it inculcates the
employees/trainees right way of doing right things at right time. The employees/trainees
are expected to think creatively and contribute by way of suggestion for Kaizen
(continuous improvement). The company believes that employees/trainees should be
multi skilled to improve their own employability and grow. Company believes that time is
very precious and expects all of their work/ training, making schedules before starting
the work and adhering to the schedules to achieve the desired results. The basic
qualification for a Team member is ITI, Team leader is Diploma and for Group leader, it
is engineering.
3.5. Shared values:
Shared values include the core values which are essential guiding principles and
doctrines of core purpose which encompass the company’s business goals, how it
strives to achieve them, the values it will uphold. It is the values shared by members of
the organization.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
The Toyota Way
The Toyota way is a management philosophy used by the Toyota Corporation that
includes the Toyota Production System. The main ideas are to base management
decisions on a “philosophical sense of purposes”, to think long term , to have a process
for solving problems, to add value to the organization by developing its people, and to
recognize that continuously solving root problems drives organizational learning.
Since the 1980s, Toyota and Lexus vehicles have been recognized for their quality and
are consistently ranked higher than other car makers in owner satisfaction surveys, due
in large part to the business philosophy that underlies its system of production.
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THE TOYOTA WAYTHE TOYOTA WAY
CONTINUOUS IMPROVEMENTCONTINUOUS IMPROVEMENT RESPECT FOR PEOPLERESPECT FOR PEOPLE
Challenges
Long term vision to meet challenges with courage and creativity to realize our dreams
Team work
Stimulate personal and professional growth
Share opportunities for development
Maximize team and individual performance
Genchi Genbutsu
Go to the source to find the facts to make correct decisions and build consensus and trust
Kaizen
Improve business operations all the time by always trying for innovation and evolution
Respect
Respect others
Make every effort to understand each other
Take responsibility
Do our best to build mutual trust
TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
WORKING AT TKAP
At TKAP, all employee/trainees are expected to understand the company’s business
goals and make sincere efforts to achieve the same. The company believes that the
process of working/learning is as important as achieving results and the company
inculcates the employees/trainees right way of doing right things at right time.
All employee/trainees are expected to work with high orientation to Safety, Quality,
Productivity and Flexibility. Toyota always places thrust on Safety first and then
Quality, Production and delivery. The employee/trainees are expected to think creatively
and contribute by way of suggestions for KAIZEN (continuous improvement). The
company believes that employees/trainees should be multi skilled to improve their own
employability and grow. Company believes that time is very precious and expects all
employees/trainees to plan their work/training, make schedules before starting work and
adhere to the schedules to achieve the desired result. Company expects all
employee/trainees to work/learn with high sense of dignity, integrity and work in
collaboration with others as a team.
There are four committees which are constituted for improving the work environment at
TKAP. These committees work in the area of Safety, Transportation, Canteen
management and Housekeeping. There is representation from various departments and
various sections of employees. These committees meet regularly, discuss and put up
improvement plans/proposals to the management for approvals of these
plans/proposals taking into considerations the cost implication and feasibility
implementation.
By rigorously following the above principles Toyota has paved a path for a production
system that is incomparable with any other system in the world. The Toyota production
system (TPS) is the most systematic and highly developed example of what the
principles of the Toyota way can accomplish.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
3.6 Staff:
Staff TMS TSM’s App
trainees
Comp.
contract
Through
contractor
Total
452 265 270 103 53 366 1509
3.7 Structure:
The Structure is basically a hierarchy of authority and responsibility. It may be regarded
as a network of role, relationship, assigned work and delegation of employees.
The organization structure of TKAP is as follows
Managing Director
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D M D
SVP
DEPT 1 DEPT 2 DEPT 3
VP
G M
D G M
TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Manufacturing department:
The main objective of this department of this department is to manufacture the components
within the scheduled time with the available manpower, machines, raw materials with good
quality, negligible defects, negligible wastage which should result with low production cost and
100 % customer satisfaction and also quick change over flexibility from one process to another
process.
Departmental structure and functions:
The structure of this department is very simple. The main goal of this department is to
manufacture products without any defects which reduce the cost of manufacturing.
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MANAGER
DEPUTY MANAGER
GROUP LEADER
TEAM LEADER
TEAM MEMBER
Manufacturing department
3 Unit Transmission unit
Front axle Transmission
Rear axle
Propeller shaft100 % export oriented unit
TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Impex Department (Import export department) :
The main functions of Impex department are:
It deals with import and export related customs clearance and logistics of both units.
Documentation and dispatch.
Excess power generation is sold.
A survey is conducted to decide the worth of the material.
Finance department:
Finance is the important department and plays a very prominent role in the organization.
Finance is the life blood of each and every business.
TKAP does all the transactions with SBI, SBM and ICICI through online. Financial
department follows accounting standards as per American accounting standard.
TKAP does audit, internal as well as external. Internal audit is done 4 times a year
within the organization. This audit is done by auditors of the company.
They are also doing external auditing once in a year or once in 6 months and are done
by external auditors and not the company’s auditor. Finance department is responsible
for recoding, classifying and summarizing business transactions in a systematic
manner. Finance department can be sub divided into the following:
Accounts
Indirect taxation
Taxation
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
Costing
As per the standards, budgeting would start from October-November and ends in
February. Every 25th of the month, payments are received from the customers and
paid to the suppliers. 4th and 5th of the month, a letter of clarification is sent and
15th is the last date to receive confirmation.
HR Department:
Activities of human resource department include planning, organizing, directing,
developing, controlling and Maintainance of manpower of the company.
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
4.1 STRENGTHS:
Information is shared with every employee, which is called as I-time
There are skilled and committed employees especially at middle and top level
who are chosen by careful evaluation.
Sufficient training programs are conducted even for shop floor employees.
They use pull strategy
Attrition rate in TKAP is 2% where as the Industry standard is about 18%
Union members are sent overseas for training
4.2 WEAKNESS:
Attendance and salary updating is done using Microsoft Excel, no software is
used for automatic update, which requires a lot of time.
Manual appraisal system,
Do not practice 360 degree feedback
4.3 OPPORTUNITIES:
Opportunities in Asian market
New models
4.4 THREATS:
Competition in the global automotive market
Tightening emission standards
Appreciating yen against the dollar
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TOYOTA KIRLOSKAR AUTO PARTS (PVT) LTD
LEARNING EXPERIENCE
During my project in TOYOTA KIRLOSKAR AUTO PARTS PVT LTD I learnt many
things which enhanced my knowledge and understanding about the corporate sector.
I understood the importance of different management functions such as planning,
organizing, staffing, directing and controlling.
What I learnt from this experience is that, there can never be theory without practical
experience, to be successful.
The company’s main strength is having HR professionals comprising commendable
background. This is a boon to the company and main asset for its growth.
Employees of TKAP strictly follow all the regulations, they are time bound, gives respect
to each other, mutually helpful, they enjoy their work and are very dedicated. This
project in TKAP does not only satisfy my academic requirement but also very useful for
my personal life.
As there is a saying called “leaders are not made, they are born”, likewise members of
the organization are born with their own skill sets, where the company is polishing their
skills through effective training programs, which matches their skills and motivates to
implement them.
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