automotive india study tour september 2012

Automotive India Study tourSeptember 2012

the dtiDepartment:Trade and IndustryREPUBLIC OF SOUTH AFRICA

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AUTOMOTIVE INDIA STUDY TOUR

Foreword

Learning from others is always a powerful way to add to one’s understanding of a given subject. In the South African Automotive Component Supplier Development Programme (ACSDP) that was funded by the South African Department of Trade and Industry (the dti) and implemented by UNIDO in cooperation with the AIDC, a provision had thus been made for an international study tour to enhance the skills of the AIDC service providers in their daily intervention activities within the participating auto supplier companies.

Many of the tools and techniques of continuous improvement programmes are attributed to the Japanese auto makers and a visit to Japan will surely impress those who are embarking on their early-stage continuous improvement activities. For many though, the achievements reached by Japanese companies may seem a step so far removed from where they are currently that the visit may turn out to be interesting, but also intimidating.

UNIDO has a long and very positive relationship with the Confederation of Indian Industry (CII) and supported their drive for a system to help develop the auto suppliers there for over a decade through a dedicated Partnership Programme. In the context of this programme, many Indian companies have benefited from the application of the specific techniques developed for application at the level of small and medium-sized companies. The CII, and subsequently ACMA (Automotive Components Manufacturing Association), have grown a body of experienced counsellors who can accompany senior management as well as shop floor workers on their continuous improvement journey.

There are numerous parallels between India and South Africa in terms of maturity of understanding of the techniques of continuous improvement activities. At the same time however, the scale of the industry in India is huge compared to that in South Africa and many Indian companies are now able to demonstrate excellent levels of progress since commencing their efforts a few years back.

The study tour organized in the context of the ACSDP was aimed to demonstrate to South African companies in the early stages of implementing continuous improvement principles how, with commitment from the senior management and engagement of the workforce, significant performance and competitiveness gains may be achieved.

Additionally, CII has been steadily developing Centres of Excellence to provide infrastructural support for managers and workers in companies and to provide the training and counselling necessary to truly understand how to apply these principles of continuous improvement.

It is with deep gratitude that UNIDO extends its thanks to the senior staff within CII, particularly Dr. Sarita Nagpal, for constructing the India study tour - the outcome of which has greatly enriched the skills of the attending AIDC members, South African component manufacturers and dti representatives.

Natascha WeisertIndustrial Development OfficerUNIDO

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Preface

The ultimate objective of the study tour was to expose and to equip the AIDC team and automotive component manufacturer’s representatives with the developments within the Indian automotive industry, including detailed understanding of competitive tools that are used. As part of the ACSDP, it was made a delivery of the programme to visit a fast developing economy country from which South Africa can learn and share experiences about supplier development initiatives for the automotive industry.

With commitment from UNIDO in Vienna Ms. Natascha Weisert and support from the UNIDO International Technical Advisor Mr. Arthur David, the study was given a go ahead in May 2012.

The AIDC team worked very hard to make sure that all plans were done and completed on time. I must mention Ms. Bianca Jagger and Ms. Thulaganyo Mokoka who were involved from the initial planning of the study tour and who executed all required actions promptly and diligently, under very tight time constraints, in collaboration with CII and other industry stakeholders.

The timing of the study was perfect and in line with the UNIDO objectives of ACSDP, to provide capacity for AIDC. All the company visits, which were well planned, provided good insight to the delegates on the Indian Automotive Industry initiatives at company level. It was also a great privilege for the delegation to attend both ACMA and SIAM conferences which were during the first week of the study tour.

Nkumbuzi Ben-Mazwi Automotive Industry Development Centre Department Manager : Supplier Development Email: [email protected]: + 27 12 564 5321

Nkumbuzi Ben-MazwiDepartmental Manager:Supplier Development DepartmentAIDC

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During the study tour the following key observations were made:● Structured and coordinated support throughout the supply chain by the OEM’s and Tier 1’s to

component suppliers.

● Commitment from the component suppliers CEO’s and drive to lead continuous improvement initiatives in their companies.

● Impact of TEI (Total Employee Involvement) to the companies improved KPI’s and business results.

● The positive impact of TEI on labour relations issues and unions.

● Integrated approach on Supplier Development initiatives by OEM’s, Component Suppliers and Trade Associations in partnership with CII and Government.

● JCB successful Localisation programme journey, with 97% local content.

This study tour could not have been possible without an excellent partnership between AIDC and CII that goes back as far as 2001 when the AIDC Tirisano programme was introduced in collaboration with CII and UNIDO, and would like to sincerely thank Dr. Sarita Nagpal and Ms. Madhu Ayra and the whole team from CII who led and championed all the arrangements respectively and exceptionally. The professionalism and hospitality we received whilst in India, was outstanding. The industry, UNIDO and AIDC delegates contributed to the success of the study tour and the participation from Mr Lance Schultz from the AIDC EC office was appreciated.

I would also like to thank the dti Mr. Mkhululi Mlota for funding and supporting the study tour through UNIDO.

We appreciated the support we received from the industry, NAACAM and the OEM’s Purchasing Council and NAAMSA. The participation from Transnets Executive Manager for Supplier Development, Ms. Mmadiboka Chokoe, was strategically relevant for future collaboration of Transnet with the Automotive Industry.

I am convinced that the lessons and findings of this study tour will change the future of the automotive component manufacturer’s competitiveness in SA for the better, especially with tools like TPM (Total Productive Maintenance) and VLFM (Visionary Leaders for Manufacturing). The study tour outcomes will further place the South African automotive industry in the correct path in remaining and becoming a competitive global player.

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Abbreviations

ACMA Automotive Component Manufacturers AssociationACT ACM Centre of TechnologyAIDC Automotive Industry Development CentreAMP Automotive Mission PlanAPDP Automotive Production Development ProgrammeCOE Centres of ExcellenceDFMEA Design Failure Mode and Effect AnalysisFTA Free Trade AgreementFY Financial YearISO International Standards OrganisationKPI Key Performance IndicatorsJIPM Japan Institute of Preventive Maintenance OEE Overall Equipment EffectivenessOEM Original Equipment ManufacturersNAACAM National Association of Automotive Component and Allied ManufacturersNAAMSA National Association of Automobile Manufacturers of South AfricaQC Quality CirclesSIAM Society of Indian Automobile Manufacturersdti Department of Trade and IndustryTEI Total Employee InvolvementTPM Total Productive MaintenanceTQ Total QualityUSD United States DollarVLFM Visionary Leaders For ManufacturingV-SME Visionary Small Medium EnterprisesEC Eastern CapeGP Gauteng ProvenceSA South AfricaCEO Chief Executive Officer\UNIDO United Nations Industial Development OrganisationTirisano In Sotho means “Working Together”R&D Research and DevelopmentMD Managing Director

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Table of contentsIntroduction 6Objectives of study tour 6Delegates 8Programme for the week 1 9Programme for week 2 9Study Tour Itinerary 10Itinerary: Automotive India Study Tour 10Overview of the Indian Automobile Industry 12Indian Automobile Industry Statistics 13Segmental Share of Indian Component Supplier 14Key challenges for the Indian automotive sector 15India’s Auto Industry to Double GDP Contribution 2006 – 2016 16AMP Impact 17Companies visited in India 18Company Profiles 18Factory Visits – Munjal Showa 18Factory Visits – Sona Okagawa 19Factory Visits – Asahi India Glass 21Factory Visits – QH Talbros 23Factory Visits – Trikuta Metals 24Factory Visits – Carrier Engineering 25Factory Visits – Sumi Motherson 26Confederation of Indian Industry (CII) 27CII: The Evolution 27CII Centres of Excellence 28CII Institute of Quality, Bangalore 29CII Centre of Excellence for Competitiveness for SMEs 29CII Centre of Excellence for Competitiveness for Leaders 30CII Centre of Excellence for Competitiveness for SMEs – Clusters 30CII - Cluster Level 1 31CII - Cluster Level 2 32CII - Cluster Approach 32ACMA Structure and Organisation 33ACMA – ACT 33Key observations and lessons from the study tour 36Conclusion 37Annexure - Letter of appreciation to CII 38Annexure - Visionary Small Medium Enterprise case study 39Articles from Indian local newspapers 40Newspaper clips - SA Initiatives Post Study Tour 42

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Introduction

Background

The AIDC developed a manufacturing competitiveness programme in 2002 in partnership with CII and UNIDO named ‘Tirisano’, for South African Automotive Suppliers. The Tirisano programme has since been one of AIDC’s key programmes for supplier development and has been implemented in more than 120 South African Automotive Suppliers.

In 2009 due to the success of the programme, the dti approved a 3 year contract project managed through UNIDO whereby the AIDC was contracted to implement Competitiveness Improvement Programme; officially known as ACSDP (Automotive Component Supplier Development Programme) with 65 national automotive companies within South Africa over a three year period. In addition to this programme it was also requested by UNIDO and the dti to enhance the skills and knowledge of AIDC staff by arranging a study tour to other countries where similar programmes are currently implemented. Due to a long standing working relationship between UNIDO, CII and the AIDC, the AIDC facilitated and organised to send a South African Delegation comprising of The dti, UNIDO, AIDC, industry members and other key stakeholders to India, on a study tour.

The purpose of the visit was to obtain first-hand experience on India’s Manufacturing Improvement Programmes and Initiatives as well as to attend scheduled training and workshops in India.

UNIDO sent a formal letter to CII, requesting them to support the study tour. CII was requested to facilitate all the arrangements of the study tour in India including plant visits and other sessions with automotive associations in India and government.

Objectives of study tour

● To expose the members of the South Africa delegation to Indian companies and subject-matter experts in order to gain a greater insight into the practical application of continuous improvement techniques or programmes.

● The study tour was scheduled and planned for a period of 2 weeks and the first week included participation by the Industry members and key stakeholders, the second week was only attended partly by the dti representative in India and full time by the AIDC and UNIDO. The first week focused on best practise companies visit looking at concepts like TPM (Total Productive Maintenance), CIP (Continuous Improvement Program), Lean Manufacturing, TEI (Total Employee Involvement) and other Supplier development initiatives. The second week focused on engaging with Indian Automotive associations and obtaining more in-depth knowledge on various programmes offered and implemented within the sector.

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● To expose AIDC and industry members to:

- Overview of the Indian Automotive Industry - Indian Automotive Supplier companies - Subject matter experts in continuous improvement techniques

● To expose AIDC , UNIDO and the dti to India supplier development programmes by visiting and interacting with:

- SIAM (Society of Indian Automobile Manufacturers) - ACMA (Automotive Component Manufacturers Association) - CII (Confederation of Indian Industry) - CII TPM Club India - VLFM (Visionary Leaders For Manufacturing) - V-SME (Visionary - Small Medium Enterprise) - CII Centres of Excellence - Indian government

Scope

● Plan, coordinate and execute an Automotive Industry Study Tour to India for 2 weeks, from 03rd until 17th September 2012, for a maximum of 15 delegates.

● Industry visits during the study tour.

● Attending workshop and sessions during the study tour with industry associations, subject matter experts from CII, industry and government.

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Delegates

Title Name Surname Company Position Mr Arthur David UNIDO International Technical AdvisorMr Ravi Issar The dti Advisor Trade & InvestmentMr Nkumbuzi Ben-Mazwi AIDC Department Manager - Supplier

DevelopmentMr. Lance Schultz AIDC EC Department Manager - Supply

Chain & Supplier DevelopmentMr Claude Pillay AIDC GP Project Manager - Supplier

DevelopmentMr Barend

FrederickLubbe AIDC GP Project Manager - Supplier

DevelopmentMr. Zahier Ebrahim AIDC EC Senior Project ManagerMr. Theodore

Clements Naidoo AIDC KZN Project Manager - Supplier

DevelopmentMr. Umash Ramkalawon KZN National

Tooling Initiative (NTI)

Programme Manager

Mr. Abdurahman Adams CI Automotive Manufacturing ExecutiveMrs Mmadiboka

MagdelineChokoe Transnet SOC

LtdExecutive Manager

JCB Plant VisitManufacturer and Marketers of earth moving machines and construction equipment.

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Programme for the week 1:

● Visited best practise companies in TPM, Continuous Improvement Initiatives and attended SIAM and ACMA conference for an indepth understanding of the Indian automotive industry:

● Overview of the Indian economic and political climate, ( SIAM and ACMA annual conferences).

● General situation of the auto industry sector in India (scale, growth forecast, export/ import, etc.) and this was covered during the SIAM and ACMA annual conference.

● Government support of auto development (support initiatives, subsidies and trade tariffs), including a session that was organised by CII with the Joint Secretary of State for Public Enterprises and Heavy Duty vehicles.

● Industry’s challenge to compete in the global market.

● Themes being promoted to encourage continuous improvement activities, eg. Lean, TPM, TPS, VLFM, VSME, TEI etc.

● Themes being promoted to encourage compliance with the “Green” agenda.

Company visits to observe examples of Best Practice which serves as a model for other companies to follow.

Presentations from experts on their approach for supporting the industry, eg. VLFM, V-SME.

Closing review allowed all delegates to reflect on the key learning points from the study tour.

Objective for week 2: To allow members of the delegation (not industry members) to gain a better understanding how the various support organisations in India address the needs of the automotive sector and how they are managed and funded.

Programme for week 2:

● Meeting at CII to understand the historical development, of. the current situation and the future direction of CII’s Centres of Excellence.

● Opening review that allowed delegates the opportunity to reflect on the study tour way forwards and key topic for discussion during the study tour specifically reviewing the study tour itinerary for the week of the 10 – 14 September 2012.

● Met representative from the Auto Trade Associations, SIAM and ACMA for their view on sector support efforts.

● Met representatives from government bodies - national - who are active in policy development for the sector.

Objective for the week 1: To allow all members of the delegation to understand current, practical activities in India which support the development of automotive industry suppliers.

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● Visited the offices of TPM Club India to understand the work it has been doing over 10+ years.

● General discussion with CII and others on the benefits of support from other organisations and countries, eg JICA in Japan.

● Closing review allowed delegates to reflect on the key learning points from the study tour.

Study Tour Itinerary

Itinerary: Automotive India Study TourDate Company Name Product Type

(if applicable)Location Additional Comments

02.09.2012 Arrival of UNIDO/AIDC/DTI/Industry Delegation

03.09.2012 Munjal Showa Front Fork, Shock Absorbers, Struts Gurgaon Part of Hero Corp

03.09.2012 Sona Okegawa Forged and Precison Stering Components

Gurgaon Part of Sona Group

04.09.2012 Asahi Glass India Laminated and toughened glass Gurgaon

05.09.2012 ACMA AGM Not Applicable New Delhi Annual General Meeting - Networking

05.09.2012 JCB India Construction equipment,Agriculture Machinery

Faridabad

05.09.2012 ACMA Dinner Not Applicable New Delhi Annual General Meeting - Networking

06.09.2012 SIAM AGM Not Applicable New Delhi Annual General Meeting - Networking

06.09.2012 Interaction with Mr Ambuj Sharma, Joint Secretary (Heavy Industry). Govt of India

Not Applicable New Delhi We recommend that the Industry members continue in the SIAM AGM; other delegates to go for meeting with Heavy Industries Secretary

06.09.2012 SIAM Dinner Not Applicable New Delhi Networking with SIAM Members

07.09.2012 QH Talbros Steering & Suspension parts Gurgaon Replaced following cancellation on Monday

07.09.2012 Trikuta Metals Pressed components and Fabrication

Faridabad

07.90.2012 Carrier Engineering Hydraulic Connectors and Machined components

Faridabad Followed by a presentation on CII Clusters by Amit Sanghvi (CII)

08.09.2012 SIAM Interaction with SIAM New Delhi Understanding SIAM and its Services

08.09.2012 Facilitated Session Closing Review Gurgaon Reflection on Key Learnings

08.09.2012 Facilitated Session Action Planning Gurgaon Way Forward

09.09.2012 Departure of AIDC Industry members

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Itinerary: Automotive India Study TourDate Company Name Product Type

(if applicable)Location Additional Comments

10.09.2012 Overview of CII CoEs + Interaction with CII VLFM

Institute

Not Applicable Gurgaon

10.09.2012 Interaction with CII-CESD Not Applicable Gurgaon

10.09.2012 Interaction with Technology Divn

Not Applicable Gurgaon

11.09.2012 Interaction withACMA

Not Applicable New Delhi Understanding ACMA and its Services

11.09.2012 Interaction with CFC Not Applicable Gurgaon Understanding CFC and its Services

12 & 13.09.2012 Travel to Bangalore and Hyderabad for interactions with CII-Institute of Quality and CII-Green Business Centre

14.09.2012 Facilitated Session Closing Review CII, New Delhi (1) TEI. (2) CII International (3) CII FACE

14.09.2012 Facilitated Session Action Planning CII, New Delhi Closing comments by Dr Sarita Nagpal

15.09.2012 Finalising notes etc. The Park Hotel Summing up by delegates in hotel

16.09.2012 Departure of UNIDO / AIDC DELEGATION

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Overview of the Indian Automobile Industry

The Indian automotive sector has experienced significant growth regardless of recessionary conditions experienced throughout the globe. India is currently the 2nd largest producer of two wheelers and the 6th largest producer of passenger cars globally. At present, India compromises of 20% of the Asia Pacific market.

Over 67% of the global market resides in the Asia Pacific region.

One of the key strengths of the Indian automotive landscape remains the robust domestic markets driving sales in the country. Passenger vehicles have grown considerably over the last few years by over 14% and year on year 5%. Commercial vehicles continue to show strong growth with 18% growth year on year.

Where does India stand in the World?

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Indian Automobile Industry Statistics

A SIAM Presentation

INDICATOR STATISTICS - India STATISTICS - SA

Industry Turnover (FY12) USD 56,259.57 million (estimated) R 422 billion (FY 12)

Contribution to GDP 6% (approx.) 7% (FY 12)

Employment (Direct) 1 million (approx.) 305 000 (OEMs, components and retail)

Employment (Indirect) 17.5 million (approx.) 2. 5 million (approx.)

Contribution to Excise Revenue USD 6,666.67 million (estimated) No data

Contribution to Import Duty USD 1,666.67 million (estimated) No data

Share in Excise Revenue ~22% No data

Share in Import Duty ~7% No data

Total Tax on Car Purchase 50 – 80% Max. 45% (Approx.)

Exports USD 6,805.75 million R 82.2 billion (FY 11)

Imports USD 4,048.93 million R 120.8 billion (FY 11)

Gross Profit Ratio – Four Wheelers - (FY11) 5.5% No data

Industry R&D Expenditure (FY11) USD 788.89 million No data

Total Investment by Industry (FY11) USD 23,582.67 million R 3.9 billion

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Segmental Share of Indian Component Supplier

The Indian component supply base enjoys large domestic demand for products, coupled with strong OEM support for supplier development. The combination of the Association of Component Manufacturer’s (ACMA) and the Confederation of Indian Industry (CII) driving competitiveness in the sector has added to the overall growth of the sector in India. In 2011, the automotive component sector was estimated to be USD 30 billion. The turnover is expected to grow to USD 11O billion by 2020.

Additional component supplier competencies expected to emerge include additional capacity for Engine and Exhaust, Transmission and Steering which will contribute towards 60 percent of the overall exports by 2020.

- Global scale component production capability of small cars, two wheelers and light commercial vehicles.

- Increasing reliance on Indian based component suppliers driven largely manpower productivity and overall supplier competitiveness through OEE.

- Continued government support in developing component manufacturing eco-system in India.

- Close relationship amongst Indian suppliers and OEM’s.

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Automotive component suppliers in India are fairly advanced in the adoption of best practices. This is evident in the latest breakdown of supplier certifications and best practice awards received internationally.

- ISO 9000: 585 suppliers

- TS 16949: 482 suppliers

- JIPM: 3 suppliers

- TPM Award: 15 suppliers

- Deming Quality Award: 12 suppliers

- ISO 14001: 208 suppliers

- Japan Quality Medal: 2

- Shingo Silver Medallion: 1

Automotive component supplier’s pursue operational excellence to attract international business and increase profits in order to mitigate some of the challenges facing the Indian automotive component sector. India currently trails only Japan in the world with the number of Deeming awards received, which is considered a major accomplishment for suppliers and provides customers with assurance of the supplier’s capabilities to meet targets.

Key challenges for the Indian automotive sector

DOMESTIC ISSUESHigh Interest rate Increasing fuel pricesHigh Inflation Labour unrest – Re-emerging unionism latest

threat to the industryInfrastructure bottlenecks/challenges Reduction in consumer spendingEmbedded tax structure Rising commodity/input costsUncertainty of Government policy on fuel pricing

Lack of world class safety standards

Slowdown in overall economy hence reduced overall demand

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INTERNATIONAL ISSUESDeclining Exports Global Economic slowdownLack of incentives/schemes Anti-dumping / Safeguard dutiesInfrastructure bottlenecks Speculation on FTA agreements affectingInvestmentTransfer PricingCost pressures on Supply Chain Importance of Customer Management System (CMS)Pressure on reducing Carbon EmissionsThreat from low cost manufacturing economies

The Automotive Mission Plan (AMP)

The Automotive Mission Plan (AMP) 2006- 2016 was the outcome of a protracted in-depth dialogue with all stakeholders (industry, academia and authorities) over a period of fifteen months.

India’s Auto Industry to Double GDP Contribution 2006 – 2016

“To emerge as a destination of choice in the world for the design and manufacture of automobiles and auto components with output reaching $145 billion accounting for more than 10% GDP and providing additional employment to 25 million people by 2016.”

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In 2006, Joint Secretary to Government of India, for Ministry of Heavy Industries and Public Enterprise said, India is at the threshold for a major take off in the automotive sector. Time bound implementation of the Automotive Mission Plan ‘ AMP 2006-2016’ together with establishment of a world class testing, homologation and certification facilities along 9 state of the art R&D centres under National Automotive Testing and R&D infrastructure development project (NATRIP) will ensure Indian Automotive Industry a distinct edge amongst the newly emerging automotive destinations of the world.

The AMP highlights that the concept of competitiveness will not be attained solely on the basis of low cost abundant labour, favourable exchange rates and a concessional duty structure. The areas of productivity, utilities optimisation and human resource development are highlighted as key areas for the continued growth of the sector combined with proper infrastructure and a well- educated engineering workforce.

The AMP further states that the use of Six Sigma, TPM and Lean Manufacturing techniques will play a pivotal role in developing suppliers on a global competitive scale towards excellence. This in turn will expand the supply base leading to greater scale of economies and greater local content in locally produced vehicles.

AMP Impact

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Companies visited in India

Company Profiles

Factory Visits – Munjal Showa

All factory visits included a welcome and presentation about the company by a senior representative of the company, journey followed for competitiveness excellence, key success factors, a guided plant tour and a questions and answer closing session.

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Observations from the company visit:

● TPM Policy and objectives available and visualised.

● TPM awards received and use of them to motivate the team.

● Testing of walking speed in the plant was very impressive.

● Focus on experiential and practical training.

● Managing Director walks the plant 2 times a day.

● Video of the plant before the TPM journey and improvements achieved to date.

● Focus on rebuilding of Lean machines.

● Motivation to focus on tooling capability was based on learning that 71% of machines used in India are imported outside India.

Factory Visits – Sona Okagawa

Company presentation to the delegation

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Practical Training Centre


● The company boosted a high number of kaizens (Continuous Improvement actions) for reduction of availability losses.

● Took almost 2 years for mindset change for management and operators to buy in and implement TPM autonomous maintenance, top bottom and hands on practical approach was applied.

● TPM gallery ensures visualization of KPI.

● TPM is a journey and a way of running an ideal best practise business.

● TPM needs a passionate leader, to succeed.

● Use of cluster approach effectively.

● Management is driving the implementation process.

● Comprehensive training for all people, from top down.

● There appears to be a very good relationship between CII and the companies.

● The training is experiential.

● There is a good working pace in the factories.

● Benefits and effects of TPM (Results).

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Factory Visits – Asahi India Glass

Practical Training Centre

Quality Circles team presented in Hindu and an Integrated training system is inclusive of management, staff and operators

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● Responsibility taken for R&D – take into account experiences with current machines in designing new machines.

● When Kaizen is done – each project have clear “themes” identified, and champions appointed.

● Local content programme (terms of increase) is driven by companies.

● Leadership was very clear – top down approach.

● Average age of employees fairly young, below 30 years.

● TPM is working very well and is very successful.

● Employee involvement is the most important factor for success.

● Training plan (career path) for all the people and levels of training visible on the shop floor.

● Visual management was very evident – helping to drive the TPM message to the shop-floor – everyone involved was knowledgeable on TPM.

● Big focus on keeping customer happy and driving customer needs.

● DFMEA was evident – getting to root cause of problems. This was a good element within their TPM.

● Education & training for all team members, leaders, etc. Clearly understand what and why they are doing it.

● Not all companies will be involved in QC circles – but it is part of a theme and also a must for one of the pillars – they chose Quality circle for this feedback.

● Government select small player and assist with funding to get CII assistance.

● Biggest factor for success is TEI – total employee involvement, also ensures sustainability of improvements.

● In sourcing and use of strength capabilities brings lots of passion into programme.

● Excellent performance results achieved, communicated, displayed and measured well, also used to motivate the employees.

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Factory Visits – QH Talbros

TPM Roadmap for the next 15 years and a detailed Implementation plan


● TPM declaration 2007, kick off 2008, Award application 2011, received TPM award March 2012, Visualise TPM Policy and objectives, TPM targets and actuals across the plant.

● Excellent methodology on TPM implementation and great benefits achieved.

● Excellent visualisation of Roadmap and linked to measured TPM effects and visualised benefits across the plant.

● Sales growth linked to TPM Implementation.

● Shared comprehensive TPM activity report that was submitted to JIPM.

● Question: Does a company need a TPM expert, the answer not really at the beginning but access to trained personnel eg CII, JIMP and TPM centres of excellence is imperative.

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Factory Visits – Trikuta Metals

Trikuta part of JCB suppliers cluster and this report is used to measure cluster improvements


● Importance of management (MD specific) to be involved in this programme. And the passion showed by MD towards this, including the honesty about the duration he needed for his own mind set change.

● World class examples for SMED.

● Showed the cost benefit on the cost side on the shop-floor itself.

● Surprising that such a small company can supply OEMs.

● Was good to see the different “levels” of the companies in their TPM journey.

● Commitment from CEO’s/owner was outstanding.

● Cluster programme very value adding.

● My machine my factory concept and feeling - TEI.

● Established baseline measurements very early in programme, motivated company to improve.

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Factory Visits – Carrier Engineering

Poka yoke demonstration


● Carrier – what they give back to employees to get involvement & commitment for programme. Very 1st step is management buy-in, 2nd step is employees.

● Carrier – world class examples for improvements as shown on shopfloor (see photos).

● CEO taking the time to go through each and every improvement suggestions, this was excellent!

● Good SMME, to see the different “levels” of the companies in their TPM journey.

● Commitment from the CEO/owner was outstanding.

● CEO’s involvement to the continuous improvement programme – hands on approach. Even though they did not have significant budgets for this programme.

● Duration of the programme was eye opener – TPM needs to be built in to the vision of the organisation and be a complete mind-shift.

● Themes to generate kaizen (simple theme like one gram per second per cycle).

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● Huge capacity and investment on Research and development.

● Sound labour relations and non existence of strikes linked to accessibility of Chairman and owner to all employees.

● Standardisation of uniform for operators and management is used for equality and respect for each other.

Factory Visits – Sumi Motherson

Plant tour – Sumi Motherson

Delegation and Sumi Motherson managementMothersonSumi Systems Limited (MSSL) is the flagship company of the Samvardhana Motherson Group and was established in 1986

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Confederation of Indian Industry (CII)

The Confederation of Indian Industry (CII) is a non-government, not-for-profit, industry-led and industry-managed organisation that

● Plays an active role in India’s developmental process.

● Works as a guardian with government and industries on policy issues.

● Has 6300 organisations as direct members from private and public sectors.

● 90,000 companies as indirect members from around 336 national and regional sectorial associations.

● 57 offices in India.

● Offices in Australia, Austria, China, France, Singapore, UK, USA.

● It has also forged partnerships with 240 organisations in 101 countries.

CII: The Evolution

● EITA: Engineering & Iron Trades Association● IEA: Indian Engineering Association● EAI: Engineering Association of India

● AIEI: Association of Indian Engineering Industry● CEI: Confederation of Engineering Industry● CII: Confederation of Indian Industry

EITAIEA

EAIAIEI

CEI

CII

18951912

19421974

1986

1992

CII Celebrated its Centenary in 1995

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CII Institute of Quality, Bangalore

Various booklets on TPM and continuous improvement

CII Centres of Excellence

The 10 CII Centres of Excellence:

● Cll Institute of Logistics, Chennai.

● CII Institute of Quality, Bangalore.

● CII-lTC Centre of Excellence for Sustainable Development, New Delhi.

● CII-Avantha Centre for Competitiveness for SME’s, Chandigarh.

● CII-Naoroji Godrej Centre of Excellence for Skills, Mumbai.

● CII-Sohrabji Godrej Green Business Centre, Hyderabad.

● CII-Suresh Neotia Centre of Excellence for Leadership, Kolkata.

● CII VLFM (Visionary Leaders for Manufacturing) Institiute, Gurgaon.

● CII-Triveni Water Institute, Jaipur, New Delhi, Bangalore, Pune.

● CII-Jubilant Bhartia Food and Agriculture Centre for Excellence, New Delhi.

● Planning to introduce additional Centres of Exvellence, eg. Centre of Excellence for Innovation.

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Various SMME Programmes offered by CII

CII Institute of Quality, Bangalore ● Quality Management System.

● Organisational / Business Excellence.

● Total Quality Management.

● Lean Management.

● Six Sigma.

● Process Improvement Methodologies.

● Quality Tools and Techniques.

● Industrial and Legal Metrology.

● Road Safety Management.

● Management and Executive Development Programs.

● Conformity Assessment & Standards.

● Total Productive Maintenance + TPM Club India.

CII Centre of Excellence for Competitiveness for SMEs

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CII Centre of Excellence for Competitiveness for SMEs – Clusters

● Definition of a Cluster

– A group of 8-12 companies working together towards a focussed goal. – Can be from a specific industrial sector, a particular geographical location, a common-interest

group of companies, eg., suppliers of an OEM.

● Objectives of the Cluster

– Make Factories Visual and safe. – Bring Total Employee Involvement (TEI). – Bring Quality Focus. – Install Material flow and reduce inventory. – Improve bottom line performance.

CII Centre of Excellence for Competitiveness for Leaders

VLFM Programme

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CII - Cluster Level 1

CII - Cluster Level 2

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ACMA (Automotive Component Manufacturers Association) Conference 05 September 2012

CII - Cluster Approach

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ACMA Structure and Organisation

ACMA – ACT

● ACT - ACMA Centre for Technology● Objectives of ACTTo deliver knowledge and training to ACMA members on:

● Process and product technology.

● Manufacturing technology.

● Implementation of best practices in manufacturing.

● Productivity and quality enhancement.

● Harmonization of automotive standardsand regulations.

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ACMA – ACT

• ACT Approach • Delivery through Cluster Programmes using highly qualified counsellors. • Building competencies within member companies. • Institutionalizing manufacturing best practice for sustainable results. • Offering progressive new programmes.

• ACT Cluster Approach

• Modelled on the CII cluster since 2001. • Progressive suite of cluster models. ● SME Cluster Programme – targeted at Tier 2 and 3 companies (12 months). ● Foundation Cluster Programme – to eliminate waste from shop-floor (24 months). ● Advance Cluster Programme – implementing full lean/TPM activities (24 months). ● Engineering Excellence Cluster Programme – improves tooling, gauges,

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AUTOMOTIVE INDIA STUDY TOURA

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Key observations and lessons from the study tour

● Structured and coordinated support throughout the supply chain by the OEM’s and Tier 1’s to component suppliers.

● Commitment from the component suppliers CEO’s and drive to lead continuous improvement initiatives in their companies.

● Impact of TEI to the companies improved KPI’s and business results.

● The positive impact of TEI on labour relations issues and unions.

● Integrated approach on Supplier Development initiatives by OEM’s, Component Suppliers and Trade Associations in partnership with CII and Government.

● JCB successful Localisation programme journey, with 97% local content.

Mapping the Way Forward

A workshop to summarise a way forward based on week one observations was facilitated by Dr. Sarita Nagpal. The delegates shared their key observations, which were consolidated in the diagram below. From the summary major areas of focus are identified, that will assist to increase contribution of the automotive industry to the manufacturing GDP and enhance productivity improvements.

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Lessons from the study tour will be presented to the respective automotive industry associations like NAACAM, OEM’s Purchasing Council, NAAMSA and other industry key stakeholders like the dti, who made this study tour possible. The main aim would be to make sure that the actions lessons from this study tour are transferred to other existing forums within the industry and final decision on this will be facilitated by AIDC and UNIDO as part of the ACSDP steering committee meeting and closing of the programme.

India Study Tour, September 2012 - Closing Session

Conclusion

During the final closing session of the study tour, the AIDC and UNIDO expressed their appreciation of the outcomes of the study tour. The manner in which the CII facilitated and hosted the South African delegation was outstanding. The satisfaction from both the South African delegation and CII is confined by the closing statements from AIDC, UNIDO and CII.

The timing of the study was perfect and in line with the UNIDO objectives of ACSDP, to provide capacity for AIDC. All the company visits, which were well planned provided good insight to the delegates on the Indian Automotive Industry initiatives at company level. It was also a great privilege for the delegation to attend both ACMA and SIAM conferences which were during the first week of the study tour.

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Annexure

Letter of appreciation to CII

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Annexure

Visionary Small Medium Enterprise case study

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Growth Forecast at Risk, Due to low figures for August 2012

Articles from Indian local newspapers on Indian Automotive Industry, During the study tour

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Sales for the month of August 2012 Down

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AUTOMOTIVE INDIA STUDY TOURAUTOMOTIVE INDIA STUDY TOUR

Newspaper clips - SA Initiatives Post Study Tour

TPM DRIVE IN THE EC IN ACTION

Automotive Component SupplierDevelopment Programme

Notes

automotive india study tour september 2012

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