20 years of TQM practices at Indus Motor Company Ltd. Karachi - - PDF document

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20 years of TQM practices at Indus Motor Company Ltd. Karachi - - PDF document

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ICQI-Lahore, 2-3 May 2011 20 years of TQM practices at Indus Motor Company Ltd. Karachi Pakistan M. Ilyas Suri Pakistans 12th International Convention on Quality Improvement & 2nd ANQ Regional Conference May 2-3, 2011, Lahore,

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SLIDE 1

ICQI-Lahore, 2-3 May 2011 1

20 years of TQM practices at Indus Motor Company Ltd.

Karachi – Pakistan

  • M. Ilyas Suri

Pakistan’s 12th International Convention on Quality Improvement & 2nd ANQ Regional Conference May 2-3, 2011, Lahore, Pakistan

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SLIDE 2

ICQI-Lahore, 2-3 May 2011 2

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 were also nationalized under ERO [Economic Reform Order 1972]

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SLIDE 3

ICQI-Lahore, 2-3 May 2011 3

Re-emergence of car manufacturing industry

  • Many nationalized enterprises stagnated and even

decayed during late seventies & early eighties.

  • Rapidly growing population and declining share of

industrial sector

  • Automobile sector shackled with Government sanctions.

Only tractor manufacturing showed some signs of improvement

  • Pakistan Automobile Corporation signed technology

transfer agreement with Suzuki, Japan to start local manufacturing of Suzuki cars, vans & pick-ups in 1983

  • In 1989 Indus Motor Company was sanctioned to launch

its project for production of Toyota vehicles in Karachi

  • In 1992, after a full 20 years circle, automobile industry

was unshackled paving way for several new plants to

  • emerge. [Honda, Dewan, Master etc]

Guiding Principles

The promoters, Toyotas and House of Habib, had set 4 Guiding Principles for establishing the new plant in Karachi

1. Invest aggressively to build plant with the latest facilities 2. Develop culture to implement TPS for assuring built- in quality 3. Develop good labor-management relations to cultivate mutual trust & high degree of motivation 4. Enable and continue to support business partners for high quality contribution by them in terms of local contents & customer services.

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SLIDE 4

ICQI-Lahore, 2-3 May 2011 4

TOTAL QUALITY MANAGEMENT

The essence of TPS:

  • Eliminate waste

The Building Blocks of TPS:

  • Just in Time
  • Jidoka (autonomation)
  • Shojinka (Flexible Workforce)
  • Kaizen (Creative Thinking)

Deming’s Principles:

  • Create constancy of purpose to improve

products 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 it merely by the lowest cost suppliers.

  • Improve constantly and forever every

process for planning, production, and service.

  • 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

C P D

ASSY SHOP

TRAINI NG CENTE R Plot size - 105 Acres (426,500 M2)

From sand dunes to the 1st Corolla

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SLIDE 5

ICQI-Lahore, 2-3 May 2011 5

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 Members Supervisors Team Leaders, Coach, Them Us You & I We Orders Consensus making

FROM TO

(CHANGE IN COMMONLY USED TERMINOLOGIES)

COMMON UNIFORM, TRANSPORT AND CANTEEN

These are the elements that the IMC Management has most emphatically stressed right from the beginning.

  • Common uniforms for all staff,
  • A common canteen,
  • Common toilets and
  • Joint morning safety meetings.
  • Common Transport

The manifestations of a culture that espoused no social or hierarchical differences.

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SLIDE 6

ICQI-Lahore, 2-3 May 2011 6

How a Day Starts

A 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 meeting

Actual production operations begins exactly on time.

A view of safety circle Meeting in IMC OPEN COMMUNICATION SYSTEM

There are number of meetings for a better communication 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 share

the same space & work environment.

  • No walls or partitions come between them.
  • Easy approachability and accessibility.
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SLIDE 7

ICQI-Lahore, 2-3 May 2011 7

Monitoring, Highlighting & Removing bottlenecks thru effective communication during meetings in Ohbeya Room for smooth Project Execution.

OHBEYA ROOM

Indus People Indus 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% ) T echnical (15% )

Secondary (76% )

High Secondary (8% ) Graduate (44% ) Post Graduate (21% ) Secondary (16% ) High Secondary (19% ) Education Education

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SLIDE 8

ICQI-Lahore, 2-3 May 2011 8

Training Training

GM/Sr. Mgr. 325 Managers 455 Team Members 352 GL / TL / ATL 7,916 9,540 Man Days

  • In-house trainings
  • Domestic trainings
  • Apprenticeship trainings

LOCAL TRAINING FOREIGN TRAINING Training Man-hours

  • ICT
  • On Job and Multiskill Training
  • AOTS
  • Technical Training

220,400 238,793 257,869 272,592 297,883 318,031 350,370 404,853 500,040 577,621 767,346 886,521 998,137 1,135,505 1,250,825 1,303,423

  • 29 ICTs as on 2009-10
  • 10 more by 2012

I.C.T

IM C T raining Centre

Inaugurated in June’08

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SLIDE 9

ICQI-Lahore, 2-3 May 2011 9

Safet y Torque Applic at ion

On-Job Training On-Job Training

21 17 1 8 3 6 1 4 5 11 1 9 13 2 6 1 6 4 2 10 2 13 5 2 5 6 4 2 1 1 1 1 2 1 6 3 1 1 1 2 1 1 2 1 1 1 1 10 20 8

5 10 15 20 25

Productivity System Improvement Quality Safety Cost

Vendors Weld Paint Assy QA PPMC Maint. PD Service Parts Finance Marketing HR&T Jig Shop Press Shop CPD

AREA OF THEMES

DEPARTMENT WISE THEME FROM 1993~2009 =

NUMBER OF THEMES

94 43 47 7 46

237

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SLIDE 10

ICQI-Lahore, 2-3 May 2011 10

15,000 18,000 20,000 26,000 29,000 32,000 34,000 37,000 53,000

10,000

109 121 130 144 38 75 100 200 57 70

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/ Year Production/ Day

History of Capacity Enhancement History of Capacity Enhancement

SEPARATE HI LUX LI NE EXTENDE D SHI FT

TWO SHI FT

6.5 4.2

Takt Time Launched New Corolla 2 hrs OT daily

7 8.5 7 7.5

‘Mar’05

44,000

‘Jun’06 PAI NT FACI LI TI ES EXPANSI ON, I NTRODUCTI ON OF RECI PROCATOR

180

5

FUTURE PLAN

Vendors’ Developm ent Vendors’ Developm ent

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SLIDE 11

ICQI-Lahore, 2-3 May 2011 11

Auto parts industry scenario in early nineties

  • The set back caused by nationalisation had badly hit auto parts

industry too.

  • It was essentially small scale owners’ run businesses to serve

tractors producers and later Pak Suzuki to some extent.

  • Business volume and customer requirement did not support

investment in technology and also production & quality management set-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
  • verhauling.
  • 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 for

building 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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SLIDE 12

ICQI-Lahore, 2-3 May 2011 12

Indigenisation Policy Past & Present -1

UP TO 1994

  • The Ministry of Industries

regulated indigenisation level w/o a proper system

  • An approved automobile

assembler was required to submit its own deletion program in %age terms.

  • Each company used its own

method to allocate %age.

  • The system was non standard

and lacked transparency.

  • Indus played an active role to

transform the system to be known as ‘Industry Specific

Deletion Program’.

1994 to 2006

  • GOP constituted Engineering

Development Board and tasked to promote industrial development

  • Recognizing importance of

automobile sector, the EDB initiated dialogue with stake holders and devised INDUSTRY SPECIFIC SYSTEM “ISDP”

  • ISDP emerged as a strong driver

to embrace localisation on the basis of Standardised Parameters e.g. given points for parts of vehicles categorized according to type & capacity

  • The system was reformed later to

what is now known as TBS or Tariff Based System.

Indigenisation Policy Past & Present -2

  • To comply with WTO regulations ‘ISDP’ has

been substituted by TARIFF BASED SYSTEM.

  • It consisted of 5 years tariff plan and several
  • ther measures to further uplift the industry
  • Indigenisation achieved with ISDP remains

protected through tariff only.

  • Further indigenisation is encouraged on

economic merit and mutually agreed fiscal and

  • ther concessions.
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ICQI-Lahore, 2-3 May 2011 13

6

HUB

16 3 2 1

DASKA GUJRANWALA

32

  • SUPPLIERS LOCATION MAP

Ka r a ch i:

1 A.E.K. 2 A/ Sp ar e s 3 AB En g g . 4 Allco 5 Atlas ( Allw in ) 6 Alson s 7 A- On e 8 Atlas Batte r y 9 Au tom ate 10 Br oth e r En g g . 11 Fe r oze In d . 12 G.I. En te r p . 13 GT R 14 Hin op ak 15 IT S 16 Jaw e d M e tal 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 Jib r a n 2 3 P a c if ic I n t ’l 2 4 P la s t e c h 2 5 P r o c o n 2 6 R a z i so 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 TAA Vendor with TAA

La hore :

1

  • H. M. Brothers

2 Haw ks Engg. 3 Hybrid Techn. 4 Infinity 5 Kentax Sirgroh 6 Malik Auto 7 Mecas Engg. 8 Meraj Ind. 9 Metaline Engg. 10 Metaline Ind. 11 Panther Sports 12 SPEL 13 Stanley 14 Techm an 15 Therm osole

I sla m a ba d

1 Rastgar Engg

Gujra nw a la :

1 Jodhala Com plex 2 Silver Falcon 3 UMI

Da sk a :

1 Alba Engg. 2 Darson

Mannan Shahid 16 Mannan Shahid 16

  • 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

Visual Control Quick Die Change Quick Die Change 5S 5S Checking Fixtures Checking Fixtures

  • SUPPLIER ASSISTANCE ACTIVITY

SUPPLIER ASSISTANCE ACTIVITY

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SLIDE 14

ICQI-Lahore, 2-3 May 2011 14

VALUE OF LOCAL PURCHASES (SUPPLIER PARTS)

59 341 374 477 592 915 1,519 1,613 1,734 1,411 4,081 6,456 8,581 9,421 8,811 9,121 10,916 15,240

31 44 59 106 163 258 294 383 578 751 864 913 1,033 1,066 898 1052 1144 1170

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 Millions 200 400 600 800 1,000 1,200

  • No. of Parts / Assy

Business Volume

LOCALIZATION QUANTUM

Highest localization than 1000Cc & above vehicles achieved in Toyota Corolla

Other Cost Incl. CKD & Plant Cost

Localization Level

100 200 300 400 500 600 Corolla City Civic Liana Swift

  • No. of Parts / Assemblies
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SLIDE 15

ICQI-Lahore, 2-3 May 2011 15

Customers

Focus on Customer Care Developing CR as The Competitive Edge

Dealership Development

INDUS MOTOR COMPANY

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SLIDE 16

ICQI-Lahore, 2-3 May 2011 16

Shareholders, Financial Analysts, PAMA, PAPAAM, EDB, Media…

Awards Awards

1. 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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SLIDE 17

ICQI-Lahore, 2-3 May 2011 17

Concern beyond cars (CSR)

Annually 1% of PBT is allocated to serve our Society Areas of our focus and support are:-

– Education – Health & Community Service – Environment – Sports and – Response to National Calamity

Road Traffic Injury Research Centre

  • INDUS MOTOR COMPANY
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SLIDE 18

ICQI-Lahore, 2-3 May 2011 18

IMC Earthquake Relief Operation

TQM - Progression summary

Construction Phase 89¬92 Operation Phase 93¬2001 Rapid Expansion Phase 02¬2008 Consolidation Phase 2009¬

1

P h i l o s o p h y & T P S Concepts Application

Guiding Principles & T P S C o n c e p t s I M C V I S I O N & E T H I C S F o r m u l a t e d A C T # 1 Visu ali zation 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 n c 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, work e t h i c s & T P S

M e r i t B a s e d S el ec ti o n & O J T C o n t i n u i n g Upgraded for TMC Certification

4

Team & Group Leaders T r a i n i n g

Selection & OJT in T O Y O T A P 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

Kaizen or QCC Org .& A c t i v i t i e s

O r g a n i z a t i o n & Activities Fully A p p l i e d Enhanced Scope & Parti cip ation Upgraded per TMC F 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

7

3 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 s established 2 1 D e a l e r s h i p s Operational 3 0 D e a l e r s h i p s O p e r a t i o n a l 3 5 D e a l e r s h i p s Operational

8

Local Suppliers Selection & D e v e l o p m e n t

Selection Process I n i t i a t e d Singl e suppli ers e n g a g e d T e c h n o l o g y E n r i c h m e n t T e c h n o l o g y E n r i c h m e n t

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SLIDE 19

ICQI-Lahore, 2-3 May 2011 19

In another opportunity we would repeat all actions

  • nly with greater humility.
  • PLAN with conviction
  • DO diligently (righteously)
  • CHECK judiciously
  • ACT promptly and

persevere for right result