Forbes India 15th Anniversary Special

The Accelerator - M.M. Singh from Maruti Suzuki

Maruti Suzuki needed to quickly increase production to catch up with a spurt in demand for cars. Here’s how M.M. Singh did it

Published: Apr 7, 2011 06:52:36 AM IST
Updated: Apr 7, 2011 07:21:06 AM IST
The Accelerator - M.M. Singh from Maruti Suzuki
Image: Amit Verma
M.M. Singh, Managing executive officer (production), Maruti Suzuki

The Man: M.M. Singh, 55
His Profile: Managing executive officer (production), Maruti Suzuki
The Challenge: Increase production by a fifth to cater to an unanticipated surge in car demand
How He Did It: Worked on improving the efficiency in each shop floor process; robots were reprogrammed; a flexible final stage assembly line, which could work on any car model, was set up
What Next: Transfer these learnings to suppliers, and if required, to other Suzuki plants in Hungary and China

In April 2010, we had a serious problem on our hands. The recovery in car sales, which had begun modestly, suddenly turned into a gallop. Just a few months earlier, we had budgeted for a 10 percent increase, but now sales were growing at nearly 30 percent a month compared to the same month the year before. On the other hand, having come out of a particularly bad slowdown, no investment had been made in increasing manufacturing capacity. So our installed capacity stayed at a million units a year. Our production was a little above that number and fresh capacity addition would happen by late 2011 at the earliest.

As they didn’t suffer from any such capacity crunch, our competitors knew this was a particularly vulnerable time for us. In some of our models like the Swift and its sedan version the Dzire, customers have always had to put up with waitlists. But when, on a visit to Bangalore, I heard a sales manager complaining about how waiting periods for the Alto — the country’s bestselling car — had touched one month, I knew we had to get down to fixing things fast.

Losing market share due to lack of capacity can prove to be the death knell for an auto company. It surrenders its ability to set prices. Winning back lost market share is twice as hard as maintaining it and over time it may lose some of its sheen in the eyes of the consumer. With a share of 49 percent, we knew it could not be allowed to fall further.

My department’s challenge: Increase production without sacrificing quality.

First, we decided to focus on the machine shop. Additional production was only possible if we changed our approach to the maintenance of our machines. Usually, maintenance is done on a preventive basis. A bulk of this happens when the plant is shut down for two weeks every year. This helps us keep the machines operating at an efficiency of 85-90 percent, an industry norm. We decided to work on process maintenance where workers at the end of the shift [would] spend some time on re-greasing and cleaning the machines and ensuring there’s no leakage. With this, we were able to improve productivity to 98 percent, ensuring that the assembly line was well supplied.

A common assumption that managers often make is that robots in the factory are as efficient as they can get and there is no point trying to improve that. With the high levels of automation at our two plants [65 percent at Gurgaon and 90 percent at Manesar, both in Haryana], working on improving human efficiency alone was not going to do the job. The robots work mainly in the welding department and handling, which is moving products from one part to the other. A team of 12 engineers got down to analysing every step the robot makes and seeing where wastage could be cut down. Once this was identified, we rewrote the software programs that run these robots. Similarly, improvements were made in the paint shop, another major bottleneck. New technology allowed us to apply the paint more evenly, which resulted in it drying faster.

Perhaps the biggest improvement was made at the final assembly stage. This is the stage where the largest numbers of rejections due to poor quality take place. There was immense pressure on my team to add a third shift but I refused. Due to power cuts and high humidity in many months of the year, workers are unable to sleep comfortably during the day. This hampers their ability to work properly at night. So I stuck to the two shifts for the final assembly stage and instead worked on modifying the lines.

At Maruti, our production lines were in a manner that allowed only a few models to be assembled on them. For instance, the line that made the Alto and the Omni were common. As a result, it was impossible to adjust to an increase in demand for a particular model. This served us fine when we had fewer models and when competition in the marketplace wasn’t as intense. Now, this lack of flexibility proved to be a major stumbling block.

To tide over this, our engineers designed what we call a ‘flexi line’, making it possible for us to assemble any model. In a flexi line we increase the number of processes per work station. As a result, the length of the usual assembly line is reduced from about 80 metres to 50 metres. With experience, now our in-house team can set up a flexi line within a month. We have been able to more than double the production for the Alto to over 30,000 units a month. Another example of flexible production is the Swift. As the demand for Swift is more and our Manesar plant has capacity constraints, we make Swift’s body shell at Manesar and then it is trucked to the Gurgaon plant where the final assembly is done. This helps in manufacturing more Swifts.

Without worker participation, making these improvements would have been impossible. Early on we realised that a top down approach wouldn’t work. My department has 7,000 people with 4,400 working on the shop floor. I started out by conducting meetings with my supervisors, who then took the message to their rank and file. Suggestion boxes were put in place and incentives were aligned to the number of cars produced. Often, there is something given for the family. This, we have seen, is the best motivator.

All in all, these process improvements cost us Rs. 150 crore. No external help was taken and everything was done within the company with a high contribution by our production team. We ended up saving almost Rs. 1,700 crore — the cost of a new line — for the company.

My bosses at Suzuki have been pleasantly surprised with our achievements in the months since this initiative has started. The Gurgaon plant, which has an installed capacity of 850,000, will make a million cars this fiscal year and Manesar, which has a 250,000 capacity will make 350,000. But most satisfyingly for me is the fact that at 49 percent, our market share is the same as it was last April.

(As told to Samar Srivastava)

(This story appears in the 08 April, 2011 issue of Forbes India. To visit our Archives, click here.)