group 7 om ppt
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Company Background Position in 1990s
Operations at Pininfarina
Improvement Initiatives in 1990s
Deal with Mitsubishi
Questions
Future Scope
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In 1930 Battista “Binin” Farina founded. Specialized in design and production of custom
and small series automobile.
Greatest success- producing revered designs such
as Ferrari Berlinetta Dino and Alfa Romeo SpiderDuetto.
In 1966 after death of Farina, name of businesswas changed to Pininfarina.
Throughout the 1960s and 1970s it continued todesign and produce unique automobiles- FerrariBerlinetta, the Lancia Flaminia, the Austin A 40 andMorris 1100.
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Pininfarnia was considered a niche manufacturer. Production volume ranged from only one or two
cars per day.
For special “sedans” such as Fiat Coupe 50 or 60
cars per day. It had produced over 17000 Fiat Coupes in 1994.
Volume producer bargaining power was high andniche manufacturer margins were narrow.
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Niche manufacturer costs for small volumeproducts were lower than those usually achievedby volume assemblers.
Twice less capital and fixed cost.
General purpose equipments and fewer otherspecialized tools needed.
Fewer mechanically performed operations andlower level of automation.
Do not use continuously moving assembly line,had “stop and go process”.
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Flexibility as they were often given contracts onmodels that had higher then usual volumeuncertainty and larger seasonal fluctuations insales.
Products aimed at narrow market segments that
were difficult to specify and had rapidly shiftingtastes.
They coped by developing elaborate contingencyplans as this allowed them to rapidly shift workers
from one line to another as demand fluctuates. This increases station time so that the line moved
more slowly
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Highly competent and renowned design skills inproduct and process.
Design services were an independent source of revenue for them.
In 1994 design and engineering revenue totaled
nearly 90 billion pounds. Close links and effective joint problem solving
between design and manufacturing was a majoradvantage in success of a new car model.
Some designers such as Pininfarnia and Bertonehad widely recognized brand names.
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Pininfarina produced both bodies and fullyassembled cars at two major productionfacilities:
1. Grugliasco2. Giorgio
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Rapidly phased out the production of bodiesand assembling
Committed toward new models
Operational improvement in quality , cost anddeliverability
Manufacturing performance improve
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Two major changes
1.Introduced work team system model
2.Training program
specific operation and techniques training Interpersonal skills training
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In 1991, pininfarina had about 650 supplier.Typically, competitive bids were amongsupplier and volumes were split amongseveral supplier.
By 1993, the number of supplier had beenreduced to 350
Advantages :- increase frequency of deliveries and increase quality
Disadvantages:-decreasing total amount of combined inspection
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By 1996, the number of supplier had beenincreased again to 450 driven by
Improved purchase price and inventory levels. Used new production model
Manage customer needs
Assemble vehicles
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Pininfarina SpA, a renowned manufacturerand designer of niche vehicles for majorautomobile companies, has traditionally competedon flexibility using a highly skilled design andmanufacturing workforce and low levels of automation.
Dream cars: visit
all the unique
models produced
by Pininfarina foreach customer…
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Design A perfect blend of beauty and technological innovation... Engineering From definition of styling to release of the product... Manufacturing Pininfarina is a leader in the production of niche vehicles...
ARC The Pininfarina Aeroacoustic and Aerodynamic Research Center.. Pininfarina Extra Enter the Pininfarina world of the product and interior design... Special Projects Looking for the car of your dreams? Pininfarina will create it for
you... Consultancy In this section you can find all the information about the services
offered by Pininfarina Consulting Customers Alfa Romeo, Ferrari, Ford, Mitsubishi, Volvo and many other leading
names on the world automotive scene..
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car, automobiles, design, style, history,
heritage, collectors, dream car, engineering,production, Pinin, Farina, Pininfarina,vehicles, niche, creativity, prototypes, showcar.
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Ferrari, Maserati, Fiat , Lancia, Alfa Romeo,Peugeot, Citroen, Rolls-Royce, Daewoo,Honda, Hyundai, General Motors, Brilliance,AviChina – Hafei, Chery, JAC, Ford, Jaguar,
Volvo, Mitsubishi
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Short term profits Manufacturing challenges
Long term benefits
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New production facilities would have to beacquired and equipped for Mitsubishiproduction.
Additional expenses related to the paint
shop which would have to run foradditional shift.
The Pajero would offer a two tone paintingoption, and this also posed some problem
for the paint shop. Space is required to dry and store vehicles
in between painting stages.
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Bertrandi knew that Mitsubishi consider itsown quality standards to be very high and thatit focus differ from Pininfarina’s existingcustomers.
Some in the company believed the Mitsubishi
might demand the defect level to be ¼th of Pininfarina.
Experience shows that different customersconsidered different things in deciding whatwas the defect.
Some customers specified the quality asharness of enine compartment, while othermanufacturer only functionality wasconsidered.
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Major mechanical parts like engines would besupplied by the production in Japan eitherfrom Mitsubushi itself or from one of itssuppliers.
Other parts are sourced from Europe. Mitsubushi agreed to own the inventory until
it arrived at Pininfarina.
Pininfarina has some experience in long
distance supply chain. Pininfarina calculated that 13 days shipping
would be required.
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MIXED level strategy1. Corporate level
2. Business level
3. Functional level
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1. Pininfarina Accept the Mitsubishi Business orNot ?Favorable Points:
Learning OpportunityChance to improve Operation system and make
compatible with global competition
Promises Utilization of extra facilities available due toretirement of old models
Chance to be a GLOBAL LEADER in Niche manufacturer Easily Adaptable Japanese Model with Pininfarina’s
Operation.
Unfavorable Points: Doubt on Mitsubishi’s Capabilities
Low Profit margins
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No this decision is not favourable in today'sscenario because debt crisis in Europe
Uncertainty in the demand forecast.
Increasing competition from china hasreduced the market share of companies.
Due to onset of recession European markethas become very risky.
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Moreover people are shifting towards vehicleshigh on mileage as fuel prices are rising.
Considering a hypothetical scenario
Back in 1990 pound was weaker than dollar
But it has become stronger now
Labour is no longer cheap in Europe.
So Italy produced cars will not be able to
compete in Indian market so this project ismore suited for Indian or Chinese market.
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Absence of major player in suv sector India and china will become largest
automobile sector after united state in nearfuture.
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The agreement between Mitsubishi Motors and Pininfarina was
signed in January 1997. Pininfarina then purchased an industrial
site at Bairo Canavese in Turin, Italy, in April 1997, as a
production facility dedicated to the production of the newMitsubishi PAJERO PININ.
Initial production will consist of the three-door model unveiled
at that year's Geneva Motor Show, followed by production of a
five-door model from autumn 2000.
The Bairo Canavese plant carries out the assembly and finishingoperations, as well as the final check-up and testing on the track
adjacent to the plant. The body assembly and paint shop are
located at the Industrie Pininfarina factory in Grugliasco.
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For Pininfarina, this agreement with Mitsubishi Motors means
not only a significant increase in its manufacturing operations, but
also opens the door on an extremely promising market sector. The
compact SUV segment (small size Sport Utility Vehicles) have beenone of the fastest growing segments in the European automotive
market. Sales volume of compact SUVs are expected to reach
approximately 440,000 units by the year 2000.
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Both partners in the venture made huge investments in the
Shogun Pinin project. Pininfarina spent approximately $40 million
US (£27 million, 70 billion lire, 36 million euro) on buying and
equipping the Bairo Canavese factory, as well as on expanding itsGrugliasco assembly and painting facilities. Mitsubishi Motors'investment has totaled almost $100 million US (£66 million, 180
billion lire, 93 million euro).
The plant will provide the local economy with a substantial
boost. It will employ 450 people, creating 200 new jobs and
transferring 250 jobs from other Pininfarina plants. In addition, afurther 150 employees at Grugliasco will be working exclusively on
the Shogun Pinin lines. This means that out of Pininfarina's total
workforce of 2,500, almost a quarter (600) will be working on the
Shogun Pinin.