20 years of TQM practices at Indus Motor Company Ltd.
Transcript of 20 years of TQM practices at Indus Motor Company Ltd.
ICQI-Lahore, 2-3 May 2011
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20 years of TQM practices atIndus Motor Company Ltd.
Karachi – Pakistan
M. Ilyas SuriPakistan's 12th International Convention on Quality Improvement & 2nd
ANQ Regional ConferenceMay 2-3, 2011, Lahore, Pakistan
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Historical background (pre-nationalization era)
• A fast growing economy during the sixties [6~8% growth]
• Assembly plants were set-up to produce cars, trucks,motorcycles & tractors
• Mostly European products were assembled• Components & sub-assemblies manufacturing factories
started to come-up sponsored by autonomous PIDC &private investors [ex. PMTF, BECO, Allwin etc]
• Pakistan’s pace of development was highly rated.• Its Progress exceeded many countries of the region
Victims of Nationalization [1972]
• Ali Automobiles – Ford products• Ghandhara Industries – GM/Vauxhall products• Haroon Motors – Chrysler products• Kandawallla Industries – American Motors jeeps• Rana Tractors – Massey Ferguson• Batala Engg. Co. – Industrial equipment & components• Pakistan Machine Tools Factory – Automotive gearboxes &
machine tools
Banks, educational institutions, cement and several other units werealso nationalized under ERO [Economic Reform Order 1972]
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Re-emergence of car manufacturing industry
• Many nationalized enterprises stagnated and evendecayed during late seventies & early eighties.
• Rapidly growing population and declining share ofindustrial sector
• Automobile sector shackled with Government sanctions.Only tractor manufacturing showed some signs ofimprovement
• Pakistan Automobile Corporation signed technologytransfer agreement with Suzuki, Japan to start localmanufacturing of Suzuki cars, vans & pick-ups in 1983
• In 1989 Indus Motor Company was sanctioned to launchits project for production of Toyota vehicles in Karachi
• In 1992, after a full 20 years circle, automobile industrywas unshackled paving way for several new plants toemerge. [Honda, Dewan, Master etc]
Guiding PrinciplesThe promoters, Toyotas and House of Habib,had set 4 Guiding Principles for establishingthe new plant in Karachi
1. Invest aggressively to build plant with the latestfacilities
2. Develop culture to implement TPS for assuring built-in quality
3. Develop good labor-management relations tocultivate mutual trust & high degree of motivation
4. Enable and continue to support business partnersfor high quality contribution by them in terms of localcontents & customer services.
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TOTAL QUALITY MANAGEMENT
The essence of TPS:• Eliminate wasteThe Building Blocks of TPS:• Just in Time• Jidoka (autonomation)• Shojinka (Flexible Workforce)• Kaizen (Creative Thinking)
Deming's Principles:
• Create constancy of purpose to improveproducts and services.
• Be ready to adopt new philosophy• Cease dependence on inspection to achieve
quality.• Try to minimize total cost by working with a
single supplier rather than achieving itmerely by the lowest cost suppliers.
• Improve constantly and forever everyprocess for planning, production, andservice.
• Institute training on the job.• Adopt and institute leadership.• Drive out fear.• Break down barriers between staff areas.• Remove barriers that rob people of pride in
their work.• Institute a vigorous program of education
and self-improvement for everyone.• Put everybody in the company to work to
accomplish the transformation
CPD
ASSYSHOP
TRAINING
CENTER
Plot size - 105 Acres (426,500 M2)
From sand dunes to the 1st Corolla
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TEAM LEADER & TEAM MEMBER CONCEPT
The word ‘Team Leader’ and ‘Team Member’ are used instead of‘supervisor’ and ‘worker’, which gives the following benefits;
• Team Leader is almost indistinguishable from the Team Members.
• Interaction with a wide cross-section of Team Members and Staff..
Workers Team MembersSupervisors Team Leaders, Coach,Them UsYou & I WeOrders Consensus making
FROM TO
(CHANGE IN COMMONLY USED TERMINOLOGIES)
COMMON UNIFORM, TRANSPORT AND CANTEEN
These are the elements thatthe IMC Management hasmost emphatically stressedright from the beginning.
• Common uniforms for all staff,• A common canteen,• Common toilets and• Joint morning safety meetings.• Common Transport
The manifestations of aculture that espoused nosocial or hierarchicaldifferences.
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How a Day StartsA typical day begins 10-15 minutes before the official shift time.There is a flurry of activity before the shift begins;•Cleaning of individual work places• Morning Exercises and• A quick safety circle meetingActual production operations begins exactly on time.
A view of safety circle Meeting in IMC
OPEN COMMUNICATION SYSTEMThere are number of meetings for a bettercommunication such as;
• Daily Safety Meeting
• Monthly Production Meeting
• Monthly & Weekly Management Review Meetings
• Interdepartmental Coordination Meeting
• Daily Shop Floor Meetings, etc.
OPEN OFFICE SYSTEM
• There is no cubicles or separate office rooms.• Managers, executives and supporting staff sharethe same space & work environment.• No walls or partitions come between them.• Easy approachability and accessibility.
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Monitoring, Highlighting & Removing bottlenecks thru effective communicationduring meetings in Ohbeya Room for smooth Project Execution.
OHBEYA ROOM
Indus PeopleIndus People
TEAM MEMBERS
Average Age 26 years
MANAGEMENT
Average Age 37 years
(34%)below 30
(18%)above 40
(48%)between
30-40
(77%)below 28
(5%),above
35
(18%)between
28-35
Graduate(1%)Technical
(15%)
Secondary(76%)
High Secondary(8%)
Graduate(44%)
Post Graduate(21%)
Secondary(16%)
High Secondary(19%)
EducationEducation
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TrainingTraining
GM/Sr. Mgr.325
Managers455
TeamMembers352
GL / TL / ATL7,916
9,540Man Days
• In-house trainings• Domestic trainings• Apprenticeship trainings
LOCAL TRAININGFOREIGN TRAINING
Training Man-hours
• ICT• On Job and Multiskill Training• AOTS• Technical Training
220,
400
238,
793
257,
869
272,
592
297,
883
318,
031
350,
370
404,
853
500,
040
577,
621 76
7,34
6 886,
521
998,
137
1,13
5,50
5 1,25
0,82
5
1,30
3,42
3
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
94-9
5
95-9
6
96-9
7
97-9
8
98-9
9
99-0
0
00-0
1
'01-
02
'02-
03
'03-
04
'04-
05
'05-
06
06 ~
07
07 ~
08
08 ~
09
09 ~
10
• 29 ICTs as on 2009-10• 10 more by 2012
I.C.T
IMC Training CentreInaugurated in June’08
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Safety Torque Application
On-Job TrainingOn-Job Training
21
17
1
8
3
6
1
45
11
1
9
13
2
6
1
6
4
2
10
2
13
5
2
56
4
211 11
21
6
3
11 12
112
1 11 1
10
20
8
0
5
10
15
20
25
Productivity SystemImprovement
Quality Safety Cost
Vendors WeldPaint AssyQA PPMCMaint. PDService PartsFinance MarketingHR&T Jig ShopPress Shop CPD
AREA OF THEMES
DEPARTMENT WISE THEMEFROM 1993~2009 =
NU
MB
ER
OF
TH
EM
ES
94
43
47
7
46
237
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10
15,0
00
18,0
00
20,0
00
26,0
00
29,0
00
32,0
00
34,0
00
37,0
00
53,0
00
10,0
00
109121 130
144
38
75
100
200
5770
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
Pre557N Mar'02 Aug'02 Jan'03 'Mar'03 'Aug'03 'Oct'03 'Jan'04 Sep'04
Capacity/YearProduction/Day
History of Capacity EnhancementHistory of Capacity Enhancement
SEPARATEHILUXLINE
EXTENDED SHIFT
TWOSHIFT
6.5
4.2
Takt Time
LaunchedNew
Corolla
2 hrs OTdaily
7
8.5
77.5
‘Mar’05
44,0
00
‘Jun’06
PAINT FACILITIESEXPANSION,
INTRODUCTIONOF
RECIPROCATOR
180
5
FUTURE PLAN
Vendors’ DevelopmentVendors’ Development
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Auto parts industry scenario in early nineties
• The set back caused by nationalisation had badly hit auto partsindustry too.
• It was essentially small scale owners’ run businesses to servetractors producers and later Pak Suzuki to some extent.
• Business volume and customer requirement did not supportinvestment in technology and also production & quality managementset-up of an appropriate scale
• The existing OEM were using more than one supplier for Cost• Our joint survey in 1989 revealed our inability to meet the local
contents expectations of GOP• GOP policy on indigenisation was unclear. It needed
overhauling.• For Toyota, neither Quality nor Delivery could have been
compromised so FACE THE CHALLENGE
The Challenge (Toyota Global Standards & QCD)
• Select only those who can demonstrate capability forbuilding long term partnership
• Take risk to have one supplier (Deming key principle)• Establish framework & rules to develop products and
processes for built in quality throughout life cycle• Teach TPS and continuously promote its enforcement• Transfer viable technology where needed• Encourage staff to participate in joint kaizen activities• Create communication networks nationally &
internationally.
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Indigenisation Policy Past & Present -1
UP TO 1994• The Ministry of Industries
regulated indigenisation levelw/o a proper system
• An approved automobileassembler was required tosubmit its own deletionprogram in %age terms.
• Each company used its ownmethod to allocate %age.
• The system was non standardand lacked transparency.
• Indus played an active role totransform the system to beknown as ‘Industry SpecificDeletion Program’.
1994 to 2006• GOP constituted Engineering
Development Board and tasked topromote industrial development
• Recognizing importance ofautomobile sector, the EDBinitiated dialogue with stakeholders and devised INDUSTRYSPECIFIC SYSTEM “ISDP”
• ISDP emerged as a strong driverto embrace localisation on thebasis of Standardised Parameterse.g. given points for parts ofvehicles categorized according totype & capacity
• The system was reformed later towhat is now known as TBS orTariff Based System.
Indigenisation Policy Past & Present -2
• To comply with WTO regulations ‘ISDP’ hasbeen substituted by TARIFF BASED SYSTEM.
• It consisted of 5 years tariff plan and severalother measures to further uplift the industry
• Indigenisation achieved with ISDP remainsprotected through tariff only.
• Further indigenisation is encouraged oneconomic merit and mutually agreed fiscal andother concessions.
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6HUB
163
21
DASKA
GUJRANWALA
32
Total Suppliers 60
Near IMC 38North Side 22
SUPPLIERS LOCATION MAP
K a ra ch i:
1 A .E.K.
2 A / S pa re s
3 A B Engg.
4 A llco
5 A tla s (A llw in)
6 A lsons
7 A -One
8 A tla s Ba tte ry
9 A utom a te
10 Bro the r Engg.
11 Fe roze Ind.
12 G.I. Ente rp.
13 GT R
14 Hinopak
15 IT S
16 Jaw ed M e ta l
1 7 L a n d h i E n g .
1 8 L o a d s
1 9 L . R . P a k
2 0 M e h r a n
2 1 N o o r En g g .
2 2 O m a r J ib r a n
2 3 P a c i f i c In t ’ l
2 4 P la s te c h2 5 P r o c o n
2 6 R a z i s o n s
2 7 R u b a te c h
2 8 S h a h e e n
2 9 T e c n o P a c k
3 0 T h a l En g g .
3 1 U T C
3 2 Z a ib En g g .
Hub:
1 Agri Auto
2 Exide Pakistan
3 Auvitronics
4 BEWL
5 BWL
6 Omega
Vendors W/o TAAVendor with TAA
Lahore:
1 H. M. Brothers
2 Hawks Engg.
3 Hybrid Techn.
4 Infinity
5 Kentax S irgroh
6 Malik Auto
7 Mecas Engg.
8 Meraj Ind.
9 Metaline Engg.
10 Metaline Ind.
11 Panther Sports
12 SPEL
13 S tanley
14 Techman
15 Thermosole
Islamabad
1 Rastgar Engg
Gujranwala:
1 Jodhala Complex
2 S ilver Falcon
3 UMI
Daska:
1 Alba Engg.
2 Darson
Mannan Shahid16 Mannan Shahid16
• Foreign Suppliers Study Visit(Indonesia / Thailand)
• Financial Assistance Scheme
• TMC/TMAP Instructors visit
• Process Audit by top management
• Quality Confirmation Activities
• 5S & Safety Audits
• Kanban Implementation
VisualControl
Quick DieChange
Quick DieChange
5S5S CheckingFixtures
CheckingFixtures
Die was changed in 22 mins. Inpast this time was above 45mins.
SUPPLIER ASSISTANCE ACTIVITYSUPPLIER ASSISTANCE ACTIVITY
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VALUE OF LOCAL PURCHASES (SUPPLIER PARTS)
59 341
374
477
592
915
1,51
9
1,61
3
1,73
4
1,41
1
4,08
1 6,45
6 8,58
1
9,42
1
8,81
1
9,12
1 10,9
16
15,2
40
31 44 59106
163
258294
383
578
751
864913
1,0331,066
898
1052
1144
1170
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 '01-02 '02-03 '03-04 '04-05 '05-06 '06-07 '07-08 '08-09 '09-10
Mill
ions
0
200
400
600
800
1,000
1,200No. of Parts / AssyBusiness Volume
LOCALIZATION QUANTUM
Highest localization than 1000Cc & abovevehicles achieved in Toyota Corolla
OtherCost Incl.
CKD &PlantCost
Localization Level
0
100
200
300
400
500
600
Corolla City Civic Liana Swift
No.
of P
arts
/ A
ssem
blie
s
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Customers
Focus on Customer Care Developing CR as The Competitive Edge
Dealership Development
INDUS MOTOR COMPANY
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Shareholders, Financial Analysts, PAMA, PAPAAM, EDB, Media…
AwardsAwards1. Asian CSR Award 2007
2. Forbes Asia’s Annual Best Companies Under a Billion List 2007, 2008
3. IMC listed in the top 25 companies of Karachi Stock Exchange, 2006, 2007, 2008
4. Helpline Trust “CSR Award” 2006, 2008
5. Helpline Trust “Putting Consumer First” 2009
6. Environment Excellence Award 2004, 2005, 2006, 2007, 2008
7. Employers Federation of Pakistan 2007
8. ICAP Best Corporate Report 2006
9. National Consumers Choice Awards 2005, 2006, 2007
10. Pakistan Centre of Philanthropy, highest philanthropic contribution 2007, 2008, 2009
11. MAP Corporate Excellence Certificate 2005-06, 2006-07, 2007-08, 2008-09
12. MAP Best Sector-wise Award (Automobile and Parts) 2009
13. IMC’s 2006-07 COP, recognized as “Notable” by UN Global Compact
14. Best Annual Report Cover 2006-07, 2007-08, 2008-09
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Concern beyond cars (CSR)
Annually 1% of PBT is allocated to serve our SocietyAreas of our focus and support are:-
– Education– Health & Community Service– Environment– Sports and– Response to National Calamity
Road Traffic Injury ResearchCentre
Partners
• Jinnah Post Graduate Medical Centre
• Aga Khan University Hospital
• NED University
• Ministry of Health GOP
INDUS MOTOR COMPANY
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IMC Earthquake Relief Operation
TQM - Progression summaryConstruction
Phase89¬92
OperationPhase
93¬2001
RapidExpansion
Phase02¬2008
ConsolidationPhase2009¬
1 P h i l o s o p h y & T P SConcepts Application
Guiding Principles& T P SC o n c e p t s
I M C V I S I O N &E T H I C SF o r m u l a t e d
A C T # 1V isu al i z at ion S e l f - r e l i a n c e
2 P D C A a p p l i c a t i o nc o n s t a n c y P D C A a p p l i e d P D C A a p p l i e d P D C A a p p l i e d P D C A a p p l i e d
3 Team Members OJT, worke t h i c s & T P S
M e r i t B a s e dS e l ec t i o n &O J T
C o n t i n u i n g Upgraded for TMCCerti f ication
4 Team & Group LeadersT r a i n i n g
Selection & OJT inT O Y O T AP l a n t s
C o n t i n u i n g C o n t i n u i n g C o n t i n u i n g
5 K ai ze n or Q CC O rg .&A c t i v i t i e s
O r g a n i z a t i o n &Activities FullyA p p l i e d
Enhanced Scope &P ar t i c ip a t ion
Upgraded per TMCF r a m e w o r k
6 P a r t i c i p a t i o n &E m p o w e r m e n t Fully established S t r e n g t h e n e d S t r e n g t h e n e d
73 S D e a l e r s h i p
D e v e l o p m e n t &t r a i n i n g
6 D e a l e r s h i p sestablished
2 1 D e a l e r s h i p sOperat ional
3 0 D e a l e r s h i p sO p e r a t i o n a l
3 5 D e a l e r s h i p sOperational
8Local Suppliers Selection
& D e v e l o p m e n t Selection ProcessI n i t i a t e d
Sing l e suppl i erse n g a g e d
T e c h n o l o g yE n r i c h m e n t
T e c h n o l o g yE n r i c h m e n t
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In another opportunity wewould repeat all actionsonly with greater humility.
• PLAN with conviction• DO diligently (righteously)
• CHECK judiciously• ACT promptly and
persevere for right result