• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

WITH reference to the news item `Bid to rejig manufacturing processes. Production stopped at one Maruti unit' (Business Line, March 21, 2002), Mr Kanwaldeep Singh, AGM, Corporate Communications, Maruti Udyog Ltd, writes:

The report and the headline give the impression that Maruti Udyog has stopped production at one of its three manufacturing plants. This has not happened. Nor is this planned.

Background

Maruti Udyog Ltd has three production plants at its manufacturing facility in Gurgaon.

The total installed capacity of these three plants is 3.5 lakh vehicle units per annum.

In 2001-02, Maruti is expected to produce about 3.7 lakh units at these three plants. This is for sale in the domestic market as well as for exports.

Productivity improvement

It is well known that in the past one-year or so, Maruti has achieved sharp increases in productivity. For instance, the company had publicly said that it could now produce as much in five shifts as it did in six shifts earlier.

After 20 per cent of the employee strength opted for VRS in end-October, the company had expressed confidence that it would still be able to produce at 120 per cent of plant capacity. This was another indication of the improvement in productivity achieved in the company.

In fact, the number of employees in production at Maruti is today the same as in September 1994. The number of cars produced is now two and a-half-times the number produced then.

Later, while explaining the turnaround achieved in the first six months of the current fiscal, the company had cited that the proportion of direct pass or defect free vehicles on the assembly line was double of the previous year. Such a sharp fall in defects had, in turn, improved productivity and reduced cost.

All these illustrate that the company was able to achieve a substantial improvement in productivity during the fiscal year.

Gearing up to be world class

In the wake of these successes, it was considered that the company should now gear itself to be a world class manufacturing facility in terms of cost and productivity. As such, a blueprint `Challenge to the Top' has been prepared within the company. The objective is to be a world-class manufacturer by year 2005.

The first step in this strategy is to reorganise the manufacturing operation from April 2002. The objective of this reorganisation is to improve quality, productivity, cost, safety and the environment.

One model one plant

Maruti 800 is currently produced in all three plants. As a result, components have to be delivered at each of these plants. Quality checks are undertaken at each of these plants. And so on.

It has often been considered in the past that the total production of any model should be streamlined and consolidated in one plant. That will obviously reduce material movement and cost and improve quality and productivity.

The reorganisation has not been done in terms of closing one plant or keeping the others functioning etc. The organisation has been done in a manner that achieves the most optimal utilisation of the total facilities available with the company, irrespective of which plant they are located in.

Therefore, while operations in Assembly Shop of Plant III are being discontinued as part of the reorganisation, the Paint Shop and Weld Shop of Plant III will run two shifts instead of one shift at present.

Similarly, Paint Shop of Plant II will be discontinued even as assembly operation of WagonR and Alto is shifted to the same Plant.

Why reorganisation

This shows, therefore, that the company is streamlining, consolidating, modifying its existing set of facilities so that it can get more out of these facilities.

In fact, after this reorganisation, the company's production in 2000-03 will be much more than 2001-02. At the same time, it will save cost on power and other overheads.

This is a proactive response to the market conditions. But the company's operations are planned in such a way that should the market revive somewhere in the next fiscal, the company will be able to scale up production from its facilities within a period of 15 days.

Send this article to Friends by E-Mail

Stories in this Section
It's `reorganisation' not stoppage of production, says Maruti

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line