Flexibility in an Automobile Manufacturing Enterprise

Gupta, A B

Abstract

The present manufacturing systems have become very complex. This requires the manufacturing system to rapidly adjust itself to changes, complexities, and uncertainties. Therefore, flexibility is needed. At the same time, productivity is also desired due to resource crunch and severe competition. This paper presents an approach for managing flexibility in an automobile manufacturing enterprise, keeping productivity improvement in mind. The values of various types of flexibilities have been found at various intervals of time for a tractor manufacturing enterprise. Various types of productivity have been calculated for the corresponding time intervals. The trends of flexibility and productivity have been determined. An approach has been suggested for managing flexibility in future. A hireachy of flexibility, listing the order in which various types of flexibility should be focused in future, is also given. SAP (situation-actor-process) analysis has been earned out to arrive at learning issues.

Keywords: automobile manufacturing enterprise, flexibility, productivity, SAP

Introduction

The wave of liberalization and economic reforms in India has led to drastic changes in the approach to manufacturing. These days, the emphasis is more on production of small batches due to rapid changes in product design. The manufacturing systems have become very complex as a variety of materials, machines, tooling and other inputs are being employed for production purpose. This complexity along with market uncertainties due to short product life cycles and rapid product innovations require the manufacturing system to respond quickly to uncertainties and changes. For that, flexibility is needed. Flexibility is the ability of a system to respond or react to a change with little penalty in time, effort or cost (Upton, 1994). The change may be internal (equipment breakdown, workers' absenteeism etc.) or external (change in product design, demand and product mix). Flexibility is also the ability to do things differently or do something else should the need arise (Bahrami, 1992). Flexibility is the exercise of free will or freedom of choice on the continuum to synthesize the dynamic interplay of thesis and antithesis in an interactive and innovative manner, capturing the ambiguity in systems and expanding the continuum with minimum time and efforts (Sushil, 1997). On one side, flexibility means being agile and versatile, while on the other side, it means being robust and resilient so as to withstand shocks when negatively affected by changes. There are various types of flexibilities. A comprehensive classification of flexibility is provided (Browne et al, 1984) by describing eight types of flexibilities - machine flexibility, process flexibility, product flexibility, routing flexibility, volume flexibility, expansion flexibility, process sequence flexibility, and production flexibility.

Various companies are experimenting with novel organizational structures and management processes to accommodate flexibility. Some of the prevalent developments include delayering, team-based network, alliances and partnerships.

Besides flexibility, proper utilization of resources is essential due to unprecedented competition coupled with acute resource crisis. Enhancement in productivity is the key to success. One of the method of improving productivity is to measure productivity. Productivity can be measured either as total productivity or partial productivity, i.e. material productivity, labour productivity, energy productivity, and equipment productivity. The paper presents an approach for managing flexibility in a tractor manufacturing firm, keeping productivity improvement in mind.

Methodology for Measurement of Flexibility and Productivity

The methodology involves measurement of existing levels of different types of flexibilities. For this, various parameters contributing towards a particular type of flexibility are identified. A paired comparison of these parameters is carried out by drawing a position matrix to find out their weight. Further, questions have been framed related to these parameters in a specially designed questionnaire to know the response of the manufacturing firm to these parameters. Various types of flexibilities have been measured on 0-1 scale. The trends in various types of flexibilities have been measured by comparing their values with the values of the last year and with that of five years back At the same time, productivity values (partial as well as total) of the manufacturing firm have been found out for the corresponding periods by finding actual output and various types of inputs in monetary terms. The trends of various types of productivities have also been determined. Correlation have been established between various types of flexibilities and productivities. Based on the past trends and existing levels of various types of flexibilities and keeping in mind the correlation between flexibilities and productivities, an approach has been suggested for managing flexibility in future. A hierarchy of flexibility, listing the order in which various types of flexibilities should be focused in future, is also given.

Present Status

Swaraj Tractors division, a unit of Panjab Tractors Limited was established at S.A.S. Nagar (Panjab) in 1972 for manufacturing tractors. It is India's first large scale project based on totally indigenous design, know-how, and technology. It went into commercial production in the year 1974 with Swaraj 724, a 26.5 bhp tractor as its first model. Since then, Swaraj tractors has not only expanded its tractor manufacturing capacity but also added more products to its manufacturing range. The product range of the plant includes Swaraj 724 (a 26.5 bhp tractor), Swaraj 735 (a 39 bhp tractor), Swaraj 720 (a 19.5 bhp tractor), Swaraj 855 (a 39 bhp tractor) and various agricultural implements like disc plough, cultivator, disc harrow, and planter.

Total revenue of the plant rose by 26% in 1995-96 as compared to that in 1994-95. Market tilt towards higher horsepower tractors was also manifest during 1995-96, when nearly 90% of the sales came from 35 HP and 55 HP engines. The growth has been equally pronounced on the export front, where billings touched INR 64 million against previous year's INR 32 million.

The comfortable order-book position for tractors indicate a sound growth for the enterprise in future. Table 1 gives the values of various flexibilities of the enterprise for the year 1991-92, 1994-95, and 1995-96 respectively. The percentage changes in these values in 1994-95 and 1995-96 as compared to that in 1991-92 are also shown. Table 2 shows values of various types of productivities along with percentage changes in the values for the year 1994-95 and 1995-96 as compared to that in 1991-92.

Trends of Flexibility

The changes in various types of flexibilities that have occurred in Swaraj Tractor plant in the last five years are discussed below:

Routing Flexibility

The type of machinery installed in the plant has contributed a lot towards routing flexibility. Nearly 50 percent of the machines are special purpose machines with negligible margins of changeover. Around 40 percent of the machines are purely general-purpose which allow for routing flexibility. A lot of emphasis has been given on installing CNC machines and flexible machining centres, which accounts for 10 percent of the installed machines.

In case of machine breakdown, it is possible to shift the operation to other similar type of machines. Generally, the shifting is done only if down-time is long. The rescheduling needs some effort but there is not much loss of production time. Another option is that the sequencing of operations for some products can be changed with some loss of time and efforts.

The managers of the plant, sometimes, may resist bringing changes in the process particularly if the change affects the production targets. The production lines are completely balanced. The material handling system also contributes towards routing flexibility of the system, as in case of breakdown, the material handling in the new situation results in very little loss of time and efforts.

Due to these factors, the routing flexibility of the plant increased by 16.12 percent and 16.38 percent from 1991-92 to 1994-95 and 1995-96, respectively.

Volume Flexibility

The plant has gone in for a lot of expansion to cope with the increasing demands from customers. The production levels increased from 14,809 in 1991-92 to 23,149 in 1994-95, and it further increased to 24,193 in 1995-96. The turnover increased from 1NR1908.8 million in 1991-92 to INR 3836.4 million in 1994-95, and it rose further to INR 4460.3 million in 1995-96.

The company has never faced any situation of under-demand or shortage of orders. However, in any such type of situation, the plant has the capacity to utilize its excess capacity as it has got many sister concerns like Swaraj Combine Division, Swaraj Mazda Division, and Swaraj Engines Ltd. from where orders can be received. The company is already making gears for Swaraj Mazda, and agricultural implements for Swaraj Combine Division.

To cope up with increasing demands, the company has been continuously investing by procuring new machines at various intervals of time. The total investment in machinery and equipment has been INR 5708.4 million and Rs. 8600.6 million in 1994-95 and 1995-96 respectively. The lead time for incremental investment, which used to be around one year, has decreased over a period of time and at present it is in the range of 6 months to 9 months. The plant has got a network of vendors who are providing various parts, components, and sub assemblies to the plant. At present, the plant has got around 4000 vendors, and every year 10-15 new vendors are being added. The plant has made a policy of giving incentives to employees for achieving higher production targets, which helps in increasing volume flexibility. The incentives given amounted to INR 895.7 million in 1991-92, increased to INR 1533.3 million and INR 1702.6 million in 1994-95 and 1995-96, respectively. A complete and detailed exercise is conducted to evolve a strategy to meet wide fluctuations in demand.

All these factors have led to increase in volume flexibility from 0.493 in 1991-92 to 0.643 in 1994-95, and 0.753 in 1995-96 respectively.

Product Flexibility

At present, the plant is manufacturing four models of tractors namely Swaraj 724, 735, 720, and 855. Although no new model has been introduced in the last five years, yet the product flexibility of the plant has increased due to installation of CNC machines and machining centres. Some major design changes include changes in input shaft and bull-pinion shaft. A few changes have also been made in the design of bevel pinion. The production levels have also increased from 14,809 in 1991-92 to 23,149 in 1994-95, and 24,193 in 1995-96. Recently, the plant has introduced fuel efficient versions of Swaraj 724 and Swaraj 735 models. all these factors have contributed towards improvement in the product flexibility of the plant by 34.34 percent and 43.82 percent from 1991-92 to 1994-95 and 1995-96 respectively.

Product Mix Flexibility

The variation in share of Swaraj 724 varies from 8 to 33 percent, that of Swaraj 735 from 66 to 75 percent, and for Swaraj 855 it varies from 10 to 14 percent. Most of the components that are made in the plant have large variations in size and shape. However, different sub-ranges of these components can be made on different sets of machines by changing tooling.

The time and cost for rescheduling a product mix has decreased over a period of time. The plant is presently using around 800 components which are bought from various vendors. Due to this, the product mix flexibility of the plant has increased from 0.574 in 1991-92 to 0.748 in 1994-95, and to 0.761 in 1995-96.

Labour Flexibility

The labour flexibility has increased tremendously over the last five years due to company's policy to focus on human resources development. The number of persons employed was 1,538 in 1991-92. It increased to 1,653 in 1994-95, and rose to 1,668 in 1995-96. The workforce in various categories has been increasing but the strength of supervisors decreased from 412 in 1994-95 to 399 in 1995-96. The delayering of the work force at middle level has been done to help in better communication, and quick decision-making.

The workers' union in the enterprise plays a significant role if a worker has to be shifted from one machine to another in case of workers' absenteeism. Generally, shifting of workers is possible within the section. Despite this, more than 25 percent of the workforce is trained to work on 4-5 different types of machines. The skill levels of the workers have increased by nearly 10 percent in the last five years due to installation of machining centres, and CNC machines. The workers generally cooperate in achieving the production targets, and they do the work expected of them. A lot of attention is paid towards training of workforce for attaining production targets. The investment in staff training was INR 0.298 millon in 1991-92, and it increased to INR 0.403 million in 1995-96. A new human resources development centre has been established in 1992 for training of management staff, supervisory staff, and workers. Thus, labour flexibility of the plant increased from 0.499 in 1991-92 to 0.725 in 1994-95, and it improved further to 0.725 in 1995-96.

Design Change Flexibility

To meet the growing needs for greater research, a new research wing was established in 1992. The wing built for improving existing design of tractor includes a design office, prototype manufacturing section, assembling and testing sections. Changes are made in the tractor design, both at major and minor levels, regularly for improving productivity and quality. The plant has also established teams for getting continuous feedback from the customers regarding the problems being faced by them, and design changes proposed by them. However, a lot of time and efforts are needed for making design changes. The major changes made in the last five years include changing the design of input shaft, bull-pinion shaft, and bevel-pinion. The plant has also introduced fuel-efficient versions of Swaraj 724 and Swaraj 735 models of tractors. Other design changes include shifting of battery to the back side of the tractor, strengthening of fenders, developing water proof brake system, and developing double clutch system. Thus, the design change flexibility improved by 47.87% and 63.64% from 1991-92 to 1994-95 and 1995-96 respectively. Correspondingly, the investment in R&D has increased from INR 5.913 million in 1991-92 to INR 7.791 million in 1994-95 and INR 9.222 million in 1995-96.

Machine Flexibility

The Swaraj Tractor Division consists of a number of shops, namely, light machine shop, heavy machine shop, assembly shop, heat treatment shop, and paint shop.

The light machine shop is the largest of all the shops in the enterprise. all transmission components like shafts and gears used in tractors are manufactured in this shop. The facilities of this shop include gear manufacturing and grinding, machining of bull gears, bevel gears, cutting of all rounds parts on power hacksaws, facing and centering, all types of grinding inner and outer gears, hobbing and broaching machines, gear shavers, gear deburring machines, and drilling machines for all types of gears. The various types of machines are: cylindrical grinders, internal grinders, copying lathes, gear hobbers, radial drilling machines, drum turret lathes, honing machines, centre lathes, capstan lathes, broaching machines, centering and facing machines, vertical milling machines, horizontal milling machines, deburring machines, boring machines, bevel gear generators, gear shapers, CNC machines, power hacksaws, special purpose drilling machines, twin chuckers, and grinding machines. In view of complexity of operation and high standard of quality, this shop is manned by about 170 highly experienced operators.

In the heavy machine shop, all heavy castings of tractors like differential housing, gear box housing, rear cover, trump housing, and steering housing of tractors are machined with the help of special purpose machines. These machines have been designed to suit component requirements. In addition, facilities of this shop include general purpose turning machines, drilling machines, and milling machines. About 20 special purpose machines and 30 general purpose machines have been installed in this shop.

In the heat treatment shop, heat treatment of various tractor parts, such as axles, gears, and shafts, is carried out. The heat treatment processes include hardening, tempering, and toughening. The shop is equipped with several heating furnaces and testing machines.

In the assembly shop, assembly of all finished components for tractor models Swaraj 720, 724, 735, and 855 is done. The various sections in assembly shop are differential assembly, gearbox assembly, steering assembly, brake paddle assembly, engine preparation for assembly, and chassis painting.

The paint shop is utilized for painting of sheet metal components, chassis, rims, and other implements. The important equipment in this shop include high pressure cleaning machines, spray painting booth, paint baking oven, feeding conveyors, and pre-treatment tanks.

From 1991-92 to 1994-95, various CNC machines like hob resharpening machine, grinding machine, drilling centre, twin chucker, shaving machine have been procured in the light machine shop. While in the heavy machine shop, CNC turning centre has been procured from year 1991-92 to 1994-95. During 1995-96, CNC vertical machining centre and CNC turning centre have been further added to the shop.

It is clear that the enterprise is emphasizing in bringing more and more machining centres, which will provide more flexibility to the equipment. As light machine shop is already having high flexibility, therefore emphasis is being laid in further reducing the change-over times in the light machine shop. The machine flexibility of the plant has increased by 23.94% and 24.38% from 1991-92 to 1994-95 and 1995-96 respectively.

Planning Flexibility

The plant is conducting a complete and detailed exercise of master production scheduling and operation scheduling. In addition, complete exercise is also done to evolve strategy to meet wide fluctuations in demands and variable production levels. A firm master production schedule is made, which is reviewed from time to time. A complete line balancing of production lines is planned. No provision of stand-by machine is made and situation is tackled as the time comes.

The installation of CNC machines and equipment has also contributed towards increase in planning flexibility. Planning flexibility increased from 0.786 in 1991-92 to 0.787 in 1994-95, and it further rose to 0.791 in 1995-96.

Communication Flexibility

Presently, the plant is using an integrated computer based management information system. The system is widely used in various areas like purchasing, production planning, designing, and dispatching. The delayering at the middle level has also contributed a lot to communication flexibility. Communication flexibility increased by 12.5 percent from 1991-92 to 1994-95, and increased further by 11 percent from 1994-95 to 1995-96.

Total Flexibility

Total flexibility of the plant has increased from 0.534 in 1991-92 to 0.696 in 1994-95, an increase of 30.19 percent. Its value rose to 0.700 in 1995-96, an increase of 31.07 percent as compared to that in 1991-92. The increase in total flexibility is attributed mainly to an increase in product flexibility, labour flexibility, design change flexibility, product mix flexibility, and volume flexibility.

Productivity Trends

The equipment productivity of the plant has increased by 14.14 percent in 1994-95, and by 20.64 percent in 1995-96 as compared to that in 1991-92. The labour productivity increased by 38 percent from 1991-92 to 1994-95 but it fell by 13 percent in 1995-96.

The material productivity and energy productivity show a similar trend decreasing by 0.76 percent and 5.87 percent, respectively in 1994-95 as compared to that in 1991-92, but both these productivities improved marginally in 1995-96.

Total productivity shows an increasing trend with 2.26 % and 4.53 % increase in 1994-95 and 1995-96, respectively as compared to that in 1991-92.

Keeping in mind the decrease in labour productivity and marginal increase in material productivity and energy productivity in 1995-96, there is a scope to improve labour productivity, material productivity, and energy productivity in the future.

Future Order of Flexibility Acquisition

Seeing the changes in the flexibility values in the last five years, as shown in Figure 1, it is clear that the Swaraj Tractors plant is mainly focusing on design change flexibility, product flexibility, and volume flexibility. On the productivity front, there has been a decrease in energy productivity in 1994-95 as compared to that in 1991-92, and it has not shown much improvement in 1995-96. The labour productivity has also decreased appreciably in 1995-96.

It is proposed that, in the future, the plant should focus on various types of flexibilities in the following order:

i) Design Change Flexibility

ii) Product Flexibility

iii) Volume Flexibility

iv) Product Mix Flexibility

v) Planning Flexibility

vi) Labour Flexibility

vii) Machine Flexibility

viii) Routing Flexibility

ix) Communication Flexibility

The plant should continue to increase its product flexibility, volume flexibility, and product mix flexibility, in the future, also. The plant should focus, further, on design change flexibility, in the future, which may improve labour productivity because both have a positive correlation. Higher design change flexibility may also contribute to an increase in product mix flexibility, machine flexibility, and total flexibility. Further, the plant should focus on increasing planning flexibility, which may improve energy productivity as well as material productivity. In addition, higher planning flexibility may contribute towards an improvement in routing flexibility and communication flexibility because planning flexibility has a significant positive correlation with them.

SAP Analysis

SAP (situation-actor-process) analysis has been carried out to determine the approach adopted by the enterprise for managing flexibility. SAP analysis (Sushil, 1994,1997) is a method of analyzing case study. In SAP analysis, the case has been described through three basic components (situation, actor and process) that define the dynamic interplay of reality. From the analysis, learning issues have been explored.

Situation

* Swaraj Tractor Plant is India's first large scale project based on totally indigenous design, know-how, and technology.

* The plant has developed core competence in tractor manufacturing.

* Increasing demand for tractors especially in the category of higher horse-power tractors.

* Demand from customer for changes in tractor design as per their needs.

Actor

* Vice Chairman and Managing Director of the plant as the visionary leader.

* Managers and engineers of the plant as the dedicated lot.

* Employees of the plant as multi-skilled, trained, and flexible workforce.

* Customers as a source of innovative ideas.

Process

* Making a lot of investment in the area of research, design, and development.

* Acquiring state-of-art technology by installing CNC machines and flexible machining centres.

* Increasing volume flexibility by increasing the number of vendors, and stressing on vendor development.

* Establishing teams to get feedback from the customers regarding design changes and any problems faced by them while using the existing models.

* Introducing new tractor

models catering to the requirements of specific region and areas.

Learning Issues

The SAP analysis helps to arrive at the following learning issues :

* Core competence helps in meeting the customers requirements, thus, increasing flexibility.

* Investment in R&D helps in building up product flexibility.

* Acquiring state-of-art technology helps the firm to have a competitive edge over others.

Concluding Remarks

Flexibility is a multi dimensional concept. Flexibility is required to respond to uncertainties and changes. There are various types of flexibility, namely, routing, volume, product, product mix, labour, design change, machine, planning, communication and total flexibility. A particular type of flexibility can be measured taking into account the weight of various parameters contributing to it and the response of an enterprise to these parameters The paper highlights the fact that it is possible to manage flexibility keeping productivity in mind as different types of flexibility have significant relationship with various types of productivity. However, the type of flexibility to be acquired will also depend on the present levels of flexibility, cost aspects and preparedness of an enterprise to acquire flexibility.

References

Bahraini H. (1992) The Emerging Flexible Organization: Perspectives from Silicon Valley, California Management Review, 33-51.

Browne J., Dubois D., Rathmill K., Sethi S.P. and Stecke K.E. (1984) Classification of Flexible Manufacturing Systems, The FMS Magazine, 114-117.

Sushil (1994) Flexible System Methodology, System Practice, 7(6), 633-651.

Sushil (1997) Flexible System Management : An Evolving Paradigm, System Research Behavioural Science, 14(4), 259-275.

Upton D.M. (1994) The Management of Manufacturing Flexibility, California Management Review, 36(2), 72-89.

A. B. Gupta

Assistant Professor, Curriculum Development Centre

Technical Teachers' Training Institute, Sector 26, Chandigarh

T. P. Singh

Professor, Department of Mechanical and Industrial Engineering

Thapar Institute of Engineering and Technology, Patiala

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