Transition From Traditional To Lean Manufacturing, indian automobile

1. Transition From Traditional To
Lean Manufacturing
AMIT MISHRA
SMS MNNIT

2. OUTLINE
Introduction
Company Profile
Bajaj Auto – The transition from traditional to
lean
New Strategy
What Is Lean Manufacturing?
What is Total Productive Maintenance?
Achievement Area - Tangible Benefits
Statistical Process Control (SPC)
Advantage
Conclusion

3. Introduction
NEED

4. Company Profile
•Founder Jamnalal Bajaj
•Year of Establishment 1926
•1926Industry Automotive - Two & Three Wheelers

5. Bajaj Auto – The transition from
traditional to lean
Bajaj Auto is one of the largest automobile companies in
India and has been in business for over four decades. The
company is ranked as the world's fourth largest two and
three- wheeler manufacturer.
During the 1980s and 90s, the manufacturing model adopted
by the company resulted in inefficiencies, higher fixed costs
and a large inventory with hidden quality issues. Bajaj Auto’s
manufacturing model is depicted below:

8. NEW STRATEGY
• During the late 1990s and early 2000s, strong competition and
growing
• customer aspirations led the company to move to:
•
Lean manufacturing (on the lines of the Toyota Production
System)
• Total Productivity Management (TPM)
•
Statistical Process Control (SPC) in manufacturing operations

10. The lean manufacturing drive involved reorganization and a
fundamental redesigning of Bajaj Auto’s core business
processes. The objective was:
 To create a high performing organization by restructuring, restaffing and establishing a performance management system
 Launch new products
 Restructure channels and build capability to increase retail
sales, dealer profits and overall customer satisfaction
 Implement an integrated ERP system
 Reduce purchasing costs
 Cut down conversion costs

11. The move towards a lean manufacturing process resulted in
significant gains for the company. Bajaj Auto’s workforce
productivity rose 10 times. The company was able to reduce
the inventory for raw materials from one week to half a shift
stock. The inventory for finished goods was cut down from
one month to three days. The number of rejected items was
reduced from 20,000 parts per million (PPM) to less than
2,000 PPM

12. WHAT IS LEAN MANUFACTURING?
Lean manufacturing is a continuous way of producing
 what the customer wants,
 when they want it,
 at a price they are prepared to pay and using the least amount
of resources.
The core idea behind lean is minimizing waste, therefore creating
more value for customers with fewer resources.

13. A company can reduce costs and keep prices low without
adversely affecting profits or quality by controlling the amount of
waste generated during production. Lean manufacturing tries to
minimize this waste and benefit consumers in the form of lower
prices.
There are several potential areas in a production chain, where an
organization can eliminate waste by going lean.

14. For example, using production equipment up to the maximum
potential can significantly help reduce waste. Similarly, lowcost automation is another area that can cut costs. On the
sourcing side, purchasing standard parts and re using parts by
dismantling old machines can also assist in waste reduction.
The key features of a lean production system are depicted in
the figure below:

16. What is Total Productive Maintenance?
Total Productive Maintenance (TPM) is a maintenance
program which involves a newly defined concept for maintaining
plants and equipment. The goal of the TPM program is to
markedly increase production while, at the same time, increasing
employee morale and job satisfaction.
TPM brings maintenance into focus as a necessary and vitally
important part of the business. It is no longer regarded as a nonprofit activity. The goal is to hold emergency and unscheduled
maintenance to a minimum.

17. Need of TPM
 TPM was introduced to achieve the following objectives
 Avoid wastage in a quickly changing economic environment.
 Producing goods without reducing product quality.
 Reduce cost.
 Produce a low batch quantity at the earliest possible time.
 Goods send to the customers must be non defective.

18. By adopting TPM, B.A. ltd aim is to  Achieve the increased production with
minimum addition of manpower and bare
minimum
investment,
by
continuous
improvements
 Improve scope of Interface functions to
achieve improvements across entire supply
chain.
 Implement Innovative kaizen for further
improvement in profitability.
 Achieve excellence in every aspect of business
and to completely imbibe the TPM philosophy
in our work culture.

19. Achievement Area - Tangible Benefits
•
•
•
•
PRODUCTIVITY :
improved to 94.5%
Output per Man increased
by 3.1 time
QUALITY:
In-process
defect
phenomenon reduced by
99%
COST:
Manufacturing
cost
reduced by 51%
DELIVERY:
• Customer
Delivery
adherence achieved 100%
• Component Lead time
reduced by 69%
SAFETY:
• No Major Accidents
• Health & Environment
parameters well within
BAL standards

20. Statistical Process Control (SPC)
SPC is an industry-standard methodology for measuring and
controlling quality during the manufacturing process. Quality
data in the form of Product or Process measurements are
obtained in real-time during manufacturing. This data is then
plotted on a graph with pre-determined control limits.

21. Control limits are determined by the capability of the
process, whereas specification limits are determined by the
client's need. Data that falls within the control limits indicates
that everything is operating as expected. If data falls outside
of the control limits, this indicates that an assignable cause is
likely the source of the product variation, and something
within the process should be changed to fix the issue before
defects occur.

22. ADVANTAGE
With real-time SPC you can:
• Dramatically reduce variability and scrap
• Scientifically improve productivity
• Reduce costs
• Uncover hidden process personalities
• Instantly react to process changes
• Make real-time decisions on the shop floor

23. CONCLUSION
BAL has adopted various methods to achieve operational
excellence including going lean, total quality management,
automating systems.
Reduction of waste, improvement in quality, higher
throughput and an overall more efficient production system is
leading inturn India towards a manufacturing revolution.

24. THANK YOU