HI-TECH ARAI LIMITED. HTA a brief profile

Transcription

1 HI-TECH ARAI LIMITED Material Cost Management 12 th August 2009 J Chandrasekaran Passion For Perfection HTA a brief profile Established in 1985 as HI-TECH ANCILLARIES PVT. LTD. Mr. R Lakshminarayanan renowned rubber technologist Manufacturers of Oil Seals, O Rings, MRP, RVA - mainly for the automobile sector Professional management from 1990 with joining of MD, Mr. B T Bangera Turned the corner in 1990 and consistent growth since then

2 HTA a brief profile Technical collaboration with Arai Seisakusho, Japan in 1986 for Reed Valve Assemblies and in 1990 for Oilseals Joint Venture with equity participation with Arai & Mitsubishi, Japan in 1993 Name changed to HI-TECH ARAI LIMITED HTA a brief profile First preferred choice of all leading vehicle manufacturers such as Maruti, Hero Honda, Bajaj, TVS Motors, Honda Motors, Honda Cars, Toyata Motors, M&M, etc. In most cases, single source for many of the company s products State of the art technology & equipment Quality awards by many customers such as Bajaj, Maruti, Lucas TVS, Toyota, etc.

3 HTA a brief profile TS & ISO certified Strong QC circle movement/involvement Focus on Kaizen and 5S Winner of awards at State, Regional and National levels in QC circle competitions for operators conducted by CII and QCFI Operates 21 windmills capacity 9.9 MW power as part of its commitment to environmental protection by reducing GHG. Host Country approval Carbon Credit received CSR Wing Costing System Till 2004, traditional costing system - Material costing + standard OH recovery system to arrive at product cost In 2004, introduction of Activity Based Costing (ABC) with the help of CII Cost centres identified based on the location and activity performed Costs captured in the system based on the above cost centres

4 Costing System Product-wise and customer-wise profitability reported and analysed quarterly Significant costs reported and analysed monthly Strategic decisions on costs/ products/ customers taken based on such reports and analyses Activity Based Management (ABM) projects identified and implemented Savings quantified and feedback given to concerned departments/ units Observations of Rating Panel High level of involvement of Top Management especially in strategising business decisions Sufficient production and delivery capability built in to mitigate risk Good hierarchical structure of products and customers Detailed procedure to build up target costing Good Control on material issue and consumption Comprehensive Cost centre structure

5 Hierarchy in Maturity Model Exemplary TCM Enabled Operational Functional Minimal Process Control Process control is a statistics and engineering discipline that deals with architectures, mechanisms, and algorithms for controlling the output of a specific process

6 Process Control-Contd Check/Verify Parameters Controlled Parameters Inputs Correct Inputs Process Outputs Management of Process Input- Existing System The Formualtions are known to select individuals and dependent on human memory. The measuring was manual with variations of grams and human fatigue Material mix up since diffrent grades of rubber appear same to human eye This lead to inconsistent quality/cost for different batches of output.

7 Management of Process Input Identified Rubber Compounding as critical process for management of input Various Rubber and Chemicals are mixed as per formulations Qty variations or material mixup will lead to - Quality problems not meeting specs - Cost variations System Design for Process Input Control System to cater to Storing of formulations confidentially Storing, measuring and handling of different types of materials rubber, carbon black, chemicals and oils Choosing the correct material and correct quantity based on the formulation stored

8 System Design Different storage Bin systems created for groups of materials like rubber,chemicals, carbon black and oils. Each material is coded and stored in a separate bin whose lid is opened and controlled by software control. The Bin size is designed based on a week s requirement for each material Enter Compound Name System Flow Bar coded List of materials and qtys Mat 1 Mat 2 Mat 3 Mat 4 The Lid of first material in the barcode list opens. The Lid will close only after exact qty in the list is taken out. Then the lid of second material opens. After all materials are taken, one more bar code list is generated Right matls Right Qty Issued to process

9 Cost Savings Benefits from the new system Handling and measurement variations loss of materials reduced by 1.5%. Product Rejections due to variations in compound quality reduced by 2% Compound rejections reduced by 3% Thank you