I= COPING WITH MEDIUM VOLUME-LOW VARIETY MANUFACTURING ENVIRONMENT IN AUTOMOBILE INDUSTRY OF PAKISTAN
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Title of Thesis
COPING WITH MEDIUM VOLUME-LOW VARIETY MANUFACTURING ENVIRONMENT IN AUTOMOBILE INDUSTRY OF PAKISTAN

Author(s)
Engr. Mirza Jahanzaib
Institute/University/Department Details
Department of Mechanical Engineering/ University of Engineering and Technology, Taxila
Session
2008
Subject
Mechanical Engineering
Number of Pages
219
Keywords (Extracted from title, table of contents and abstract of thesis)
medium volume-low variety, manufacturing environment, automobile industry, pakistan, manufacturing companies, manufacturing strategies

Abstract
Manufacturing companies all around the world are facing unstable environment due to global competition, improvement in manufacturing processing technologies, innovative product development and marvelous customer service. The survival of these companies depends on rapid solutions to obtain effective management, marketing, finance and decision making process. This demands to take right decisions making at the right time. The problem is therefore multi- dimensional i.e. timely related decision making process, agility and utilization of information (resources) to coordinate between various activities like design, manufacturing, marketing, financing, distribution to achieve specific corporate objectives. Manufacturing is the second largest sector of the economy contributing more than 17% of GDP and engaging 11 % of employed labor force in Pakistan. Basic manufacturing sector can be classified into process industry and discrete parts manufacturing industry. The growth in discrete parts sector has picked up during the last couple of years and plays a vital role in economic development of country. Unfortunately, not much attention had been paid in discrete parts sector (especially on automobile as this is one of the fastest growing sector) which is considered as a back bone of economy. Due to this reason, discrete parts automobile manufacturing industry in Pakistan is affected with more turbulent, dynamic and jolting business environment. In order to compete in the world market, local manufacturing industry needs to acquire world class performance irrespective of whether they are domestic manufacturers or exporters. To some extent industry has realized this fact and risen to the challenges, but the battle for survival and industrial growth has just begun. Obviously, the success of industry lies in meeting the challenge and effectively cope with existing situation by proposing concrete solutions to move itself from protected domestic market to a world class manufacturing status quickly and efficiently in a systematic and coherent manner. Apparently, one logical solution would be to invite major changes in the national level policies that rationalize taxi tariff structures on the one hand while increasing the size of the middle class on the other so that a larger demand of products can be created. This approach, however, does not allow a major role for the manufacturers. We have therefore adopted an alternative course of action, which suggests concrete actions (in the form of manufacturing strategies/framework) on the part of local manufacturers as there is a lot of pressure on Pakistani manufacturers to increase their product quality and reliability particularly due to increasing competition and likely changes in the world trade structure. It is therefore, imperative for the industry to improve its productivity and competitiveness which aid local manufacturers as no significant studies are available for utilization by the manufacturers in Pakistan.

The plan of action in this regard is to develop an understanding of existing scenario of manufacturing industries and assess the direction in which it is heading. A questionnaire was designed in consultation with the practicing managers, discussions with Engineering Development Board (EDB) Pakistan sector development group. The questionnaire containing questions like manufacturing firm's objectives; familiarization/practicing of methods/systems, assessing existing infrastructure and problems encountered. From the responses of questionnaire, the manufacturers rated agility, supply chain and faster product development as the most important strategic objectives, but are still operating business in conventional ways. The quality practices are also at infancy stage as companies are not focusing on continuous improvement philosophies both in products and processes. However, manufacturers are quite aware of the tools/techniques/ methods being practiced in industry. In order to assess level of tools/ techniques practices, we have calculated breadth versus depth approach. The breadth assesses the manufacturer's know-how about tools/techniques/methods and depth spot out what manufacturers are actually practicing. Based on breadth and depth percentages, it was found that breadth (know-how of systems) is moderate, but depth (practicing within shop floor) is very low. This illustrate that manufacturers are aware of strategic objectives, but their practices are far away from their stated goals. Having right objectives may not lead to superior performance, but operating without them would guarantee to lead to competitive disadvantage. The findings of the survey exercise also identified three types of manufacturers by comparing their stated objectives with international standards. The manufactures identified in our benchmarking exercise are termed; 'Protector', 'Offensive' and 'Innovative' corresponding to low cost, high quality with customer focused and value added ones to outperform competition. Most of the companies claimed that they are practicing tools/techniques (as asked in the questionnaire), but it was evident from questionnaire responses that they have achieved a necessary not a significant condition.

An alternate method for analyzing of existing manufacturing environment is plotting industrial data on standard PPMx. It showed that there exists 'medium volume- low variety manufacturing environment in automobile industry' which is uneconomic as major investments are made haphazardly without knowing Product - Process match of their existing infrastructure as advocated by Hayes and Wheelwright (1979a,b). In order to cope with this environment a framework is developed for operationalizing of tools/techniques systematically for each type of manufacturers (Protector, Offensive and Innovative) on PPMx so that manufacturers can be benefited from these tools/techniques. The framework consists of four phases, i.e. competitiveness/objective identification phase, strategy formulation phase, model development and evaluation phase, validation phase. A company may opt for being the lowest cost producer, highest quality/customer focused and product differentiators with improved customer satisfaction level. Each of these competitive advantages forces the organization to adopt a particular manufacturing strategy, which may in turn demand a particular type of manufacturing system, organizational set-up, material handling methods, information processing and manufacturing control systems (characteristics). It starts typically by comparing existing industrial sector analysis (capacity, technology/manufacturing capabilities) and current market environment. The comparison results in identifying competitive drivers and hence setting the objectives accordingly. Based on the objective settings and competitive drivers, manufacturing option strategy is formulated comprising of three types of manufacturers (protector, offensive and innovative) identified as a part of research in our benchmarking/survey exercise. Having selected an objective e.g. either low cost, high quality/flexibility and innovation, strategies are formulated with objective, operationalization and continuum (characteristics). The strategies are termed 'protector' corresponding to low cost, 'offensive' corresponding to quick response to customers and 'innovative' corresponding to product differentiation respectively.

A simulation model is developed using real world data from case companies at tactical level. Experimentation is performed by changing the base values important to see its impact on performance measures. Slopes of the functions are then computed using standard spreadsheet software. The values are prioritized based on decreasing order of sensitivity. Important performance measures related to the three strategies are discussed with the company's management. The model results are finally prioritized which aid manufacturers to focus on most sensitive parameters for business settings at tactical level. It has been found from simulation experimentation that PMAX is the most sensitive parameters for protector, YIMP and YMIN for offensive and MFLEX for the innovative manufacturers. Thus minimization of wastes and other non productive times compel manufacturers to think about lean production system; which is termed 'lean and clean'. The results at offensive stage (local level) confirm that use of flexible processes not only improves agility but also yield related parameters which are rated the most sensitive in prioritization. This is termed as 'perfect first time quality' Le. focus is on improving process flexibility to accommodate product variety and improve process yield. The prioritized results in innovative stage advocate of using more flexible processes and improve value of product using value analysis approaches like 'importance versus cost'. This is termed 'value adding by continuous innovation' i.e. to enhance product importance at same or reduced cost. The combined prioritization (at global level) also showed that yield related parameters are the most sensitive hence reinforcing our belief 'make it right-first time every time' to become world class manufacturers.

Whole business process activities have also been modeled and analyzed using AHP at strategic level. The necessary information needed in this regard is filled up in 'n x n' matrix in which the judgments are recorded and calculated. It has been found using Analytical Hierarchical Process (AHP) that at strategic level production planning & control, quality assurance and product development are most important activities which affect business settings for each type of manufacturers. It is therefore imperative for manufacturers to keep special emphasis on production planning and control issues at protector, quality assurance at offensive and product development techniques at innovative stage respectively.

It is strongly recommended for Pakistani automobile industry to streamline manufacturing process by reducing/minimizing waste time from systems (PMAX, HRATE), use time compression with more flexible technologies (PVFLEX, MFLEX), incorporate optimized processes in their businesses (VFLEX), use rapid product development solutions, using standard machines/equipments to reduce defects before rework (YMIN, YIMP and MRATE), use SMED and flexible fixtures (MHTIME, SUTIME) etc to meet requirements of world market to become competitive. Pakistani discrete parts automobile manufacturing industry should focus on issues of competitiveness both at tactical and strategic level in the near future other wise their future would be in jeopardy.

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8061.24 KB
S. No. Chapter Title of the Chapters Page Size (KB)
1 0 Contents
662.75 KB
2 1 Introduction 1
279.19 KB
  1.1 Background Of Automobile Industry 2
  1.2 Research Theme/Focus 4
  1.3 Research Objectives 7
  1.4 Thesis Organization 7
3 2 Literature Review & Overview Of Automobile Industry 7
716.54 KB
  2.1 Literature Review 10
  2.2 Overview Of Automobile Industry 25
4 3 Research Methodology : Questionnaire Design And Analysis 29
671.18 KB
  3.1 Questionnaire Design 29
  3.2 Research Questionnaire Analysis 31
5 4 Theoretical Consideration-Manufacturing Strategy Framework 50
802.79 KB
  4.1 Introduction 50
  4.2 Theoretical Framework 50
  4.3 Conclusions 71
6 5 Model Development And Evaluation 74
1046.15 KB
  5.1 Introduction 74
  5.2 Problem Formulation 74
  5.3 Review Of Solution Methodologies 83
  5.4 Methodology Adopted 88
  5.5 Choice Of Simulation Modeling 88
  5.6 Specific Objectives Of Simulation Models 97
  5.7 Manufacturing Simulation Model 97
7 6 Model Behavior Analysis( Tactical Level) 104
1871.87 KB
  6.1 Introduction 104
  6.2 Design Of Simulation Experiments 107
  6.3 Sensitivity Analysis 108
  6.4 Summary Of Simulation Experiments 156
8 7 Strategic Level Decision Making 178
576.61 KB
  7.1 Introduction 178
  7.2 Strategic Management-An Overview 178
  7.3 Analytical Hierarchal Process( AHP) 180
  7.4 Conclusions 193
9 8 Recommendations & Future Work 196
466.56 KB
  8.1 Introduction 196
  8.2 Summary Of Research 196
  8.3 Significant Findings And Contributions 198
  8.4 Recommendations 200
  8.5 Recommendations For Further Study/ Future Work 207
  8.6 Concluding Remarks 208
10 9 References 209
1279.36 KB
  9.1 Appendix