Tkap Part a Final

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.


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.

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


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


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:


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.


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:


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:


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.


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:


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.


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


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

Supplier PC Logistics

Soft Machining

Heat treatment

Hard Machining

AssemblyShipping

PC Shipping

Supplier PC Logistics

MFG Quality


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.


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.


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


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.


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.

http://en.wikipedia.org/wiki/Muda_(Japanese_term)


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.


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.

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


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.


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

D M D

SVP

DEPT 1 DEPT 2 DEPT 3

VP

G M

D G M


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.

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


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


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.


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


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.

Tkap Part a Final

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