Chandigarh BDS Cluster

The MPC engineering cluster comprises many vendors who mainly cater to the demands of large-scale tractor/agricultural equipment manufacturers like PTL (now Mahindra & Mahindra), Swaraj Mazda, HMT, Sonalika Tractors, Eicher Tractors and other original equipment manufacturers (OEMs). During the past few months, the project team held a series of meetings with the main OEMs of the region to understand the problems they have with their vendors and the areas in which they want their vendors to improve upon performance/delivery of services. From these interactions the project team realized that there is a considerable gap between the expectations of OEMs and the delivery by vendors in terms of quality and delivery time. The OEMs pointed out the following major issues with existing vendors:

• Rigid mindset
• Hardly any use of statistical techniques for quality improvement
• Processes not properly followed
• Improper factory layouts
• Non- existence of environmental and safety considerations

Recognizing that quality and efficiency norms must be adhered to by vendors in order to enable the OEMs to meet the challenges of an increasingly competitive market, the project initiated a vendor development programme in the MPC cluster.  The objective of the programme is to enable selected vendors to achieve operational efficiency/improve production processes in their units by reducing waste; increasing productivity; introducing innovative practices for improving overall competitiveness; inculcating good management systems; and imbibing a culture of continuous improvement. In turn, this would enable the vendors to meet the requirements of the OEMs in terms of quality, timely delivery and competitive pricing.

The vendor development programme is currently being implemented in 10 units which were selected in collaboration with local industry associations. All the selected units are vendors to major OEMs of the region. The programme is being conducted by three BDS providers empanelled with the project: namely, (1) PTU Gian Jyoti School of TQM & Entrepreneurship, (2) International Business Certifications and (3) Taaran Industries. To start with, the BDS providers conducted preliminary surveys of the vendor units allocated to them. The surveys revealed the following general shortcomings:

• The workplace is cluttered with unnecessary items, which hinder movement of personnel and materials between different areas. Dust and dirt abound. Tools are kept in a disordered manner.
• Jigs and fixtures are not identified. Even their storage is very haphazard.
• Aisles are not identified thus hindering smooth work flow.
• Machines are not cleaned regularly; no records/schedules are kept on machine maintenance
• Working conditions are often unsafe.
• Record keeping is not up to the mark. There is no evidence of inventory control. No records are maintained on analyses, rejections and rework.
• Work guidelines are not displayed.
• No data is maintained for production/productivity monitoring.
• Roles and Responsibilities/Organization Chart not clearly defined.

The surveyed units exhibited all the ‘eight types of waste’ that are identified for elimination by the principle of lean manufacturing (i.e., over-production, over-processing, excess movements, excess inventories, waiting/idle time, needless transportation, defects, and unused employee creativity). Significantly, there was little awareness at management levels on these waste areas. To elaborate on a few:

• Overproduction: The units produce at least 15% in excess of the confirmed orders in order to compensate for reworks, breakages, defects etc.
• Excess movements: The layout in most of the units needs minor changes in order to reduce unproductive movements of personnel and machines.
• Waiting time:  Due to poor scheduling, work-in-progress (WIP) is stalled for weeks from one step to another
• Excess inventory: Excess inventory has been lying in the factories for years, occupying a lot of usable area and representing unrecovered investments.
• Unused creativity of workforce: Some of the workers are very talented and have lot of ideas to reduce different kinds of wastage and thereby improve operational efficiency. However, due to the absence of proper systems to tap this latent creativity in the workforce, it gets lost.

Ongoing initiatives

Under the ongoing vendor development programme, training programmes on ‘5S— its benefits and applications’ have been conducted in all the 10 selected units. The ‘5S’ topics covered were: 1. Seiri—sorting out; removal of unwanted items

2. Seiton—systematic arrangement; a place for everything and everything on its place

3. Seiso—cleanliness; thorough cleaning of the workplace

4. Seiketsu—standardizing methods to maintain cleanliness

5. Shitsuke—self-discipline; commitment

The training programmes were attended by all the workers as well as top management of every unit. The programmes witnessed tremendous response from the workers, who have undertaken a number of 5S-initiatives to improve workplace efficiency with the active guidance of the BDS providers. The workers’ efforts have yielded discernible results in terms of workplace improvements, waste elimination and improved morale.  Currently, projects are being undertaken in each unit for improvement in material handling, continuous 5S improvement, and changes in factory layouts where required. Many more vendors are now approaching the project for support in improving their shop floor practices.

Cluster vendors, in their quest to achieve world-class standards, have realized the necessity to become ‘lean and mean’. A continuous emphasis on improving productivity will not only enhance their competitiveness but also increase the efficiency of their internal processes. The project will set out the final outcomes of its vendor development initiative in the form of case studies/best manufacturing practices, which will be shared with all vendors of the region.