A framework for creating competitive advantage through throughput time reduction:The case of hindustan 1035N dumber-Hindustan Motor Limited.

Abstract

Hindustan Motors, a Public Limited Company of Birla Group having the Head Office at Calcutta is a pioneer in the automobile field. The Earthmoving Equipment Division (EED) located at Thiruvallur in Tamilnadu is manufacturing Earthmoving Equipment to the International Quality Standards with the Collaboration of Caterpillar Inc., USA. It contributes 25 % to the total Company's Business. EED has the best Manufacturing Architecture, Skilled Manpower and better Quality Systems & Procedures with ISO 9001 Certification. Inspite of the above advantages, EED is unable to deliver the Products to the Customers in a timely manner because of the longer Throughput Time taken in the Manufacturing Process ending up with Dissatisfied Customers. The Main Objective of the Project is to analyze the existing Throughput Time in detail for developing a Framework to create a Competitive Advantage through Throughput Time Reduction for the Earthmoving Equipment manufactured by EED. This Study is carried out on the Hindustan 1035N Dumper - a future Cash Cow Product for EED to develop a Framework for extending it on all the other Products. The following Methodology is adopted for this Project. a) Measure the Current Throughput Time & Throughput Time Efficiency b) Identify the Non-Value Added Activities for the longer Throughput Time c) Analyze the Root Causes for the Non-Value Added Activities d) Plan the Remedial Actions to improve the Throughput Time e) Implement the Recommended Remedial Actions f) Monitor & Control the Improvement achieved The Analysis revealed the following for the Hindustan 1035N Dumper. a) The Total Throughput Time taken for this Product is 109 Days including all the Activities at Various Plants. b) The Hindustan 1035N Dumper Line Assembly, where the final Product is assembled has very poor Throughput Time Efficiency which is only 29 % with a Productivity Index of 0.13 (1.04 Std Hours produced/man/shift). c) Among the Total Time spent by the Workmen in the Hindustan 1035N Dumper Line Assembly, only 16 % of the Time is used for Value Added Activities and the remaining 84 % of the Time is spent on Various Non- Value Added Activities. The following Non-Value Added Activities are chosen for the Analysis over the others based on the lesser difficulty involved and the maximum benefits derived in the elimination of these NVAs. a) Waiting due to Rejections & Incorrect Manufacturing Bill of Materials b) Reworks c) Road Test & Pre Delivery Inspection Snags d) Searching due to inadequate & improper material storage locations A detailed Analysis is done to find out the Root Causes for these NVAs and suitable Recommendations are suggested to eliminate these NVAs. Based on the above Recommendations, a 3 Stage Implementation Plan is designed considering the time taken in implementing these Recommendations.With the implementation of all these Recommendations as per the Implementation Plan, the Total Throughput Time will be reduced to 66 Days from the Current Throughput Time of 109 Days resulting into a Throughput Time Reduction of 43 Days within a period of 1 year. With the above improvements, the production of Hindustan 1035N Dumper will be increased by 26 % within the first 3 months, by 73 % within the first 6 months and by 168 % within the first one year enabling to achieve the production of 51 Hindustan 1035N Dumpers per year ( 4 Units/Month) from the 19 Units produced in the year 95-96. Based on the experience gained from this study, a Framework has been developed to extend this study on all the other Products to gain an overall Competitive Advantage for EED.