Automobile Industry

Automobile Industry

The automotive industry comprises a wide range of companies and organizations involved in the design, development, manufacturing, marketing, and selling of motor vehicles. It is one of the world's largest industries by revenue. It is also the industry with the highest spending on research & development per firm. Auto component manufacturing is part of a larger supply chain that includes raw material extraction, component manufacturing ,Assembly lines, distribution, vehicle sales, aftermarket and added-value sales. The automobile industry in India faces several challenges, including high competition, a shortage of skilled labor, the need for technology upgradation, and compliance with government regulations, Plant capacity utilisations, Production layout upgradations, Raw material to finished product yield optimizations etc.

Key Issues

The industry presents significant opportunities for growth, particularly in the areas of process standardisation, automation and digitization to be more cost competitive in long term.
Cost Management

As regards the most effective ways to ensure the highest possible profit for the company, two are worth mentioning: reducing production costs and increasing sales revenue. Let us focus on the first issue. Currently, production costs include not only the purchase of materials but also their processing into the final product. This should also include the price of real estate, taxes (e.g. wage pressure), margins of subcontractors, and transport fees, as well as expenses related to development and innovation. Total costs are quite high, but there are some opportunities. There is no need to make cuts in all these sectors at once. Cost reductions can be introduced gradually by implementing further solutions. Everything depends on precise calculation. This method of reducing manufacturing costs is called Lean Manufacturing. It focuses on several fundamental principles – eliminating overproduction, reducing wait times, improving transportation systems and reducing over-processing. Most of these aspects need to be analyzed in relation to the infrastructure and management of the company. As far as the external factors are concerned, one should start from scratch, that is, logistics and production process

Supply Chain Management

In the automotive industry it is worth paying special attention to the supply chain. Optimization of supply chain costs in the automotive industry is one of the basic steps to improve the financial results of our company. Today, it is not only quality materials and efficient transport that make a new product successful. Supply chain cost analysis will show that we must first and foremost seek cooperation with professional partners who will help us optimise costs. And this can be achieved in various ways, for example by using affordable and efficient ways of manufacturing components, such as injection molding, or using reusable transport packaging. Cost optimization in the supply chain is a good start.

Meeting this expectation, however, can be challenging due to the complexity of the supply chain network and the difficulty in managing inventory. Businesses in the industry heavily rely on the timely delivery of raw materials and other supplies to ensure smooth production operations.

Capacity Utilization and Talent Management

Production capacity is the maximum output that can be achieved in the production process of manufactured goods. It’s generally a part-based metric that identifies the most goods that can be created given a set amount of resources (time, labor, materials).

The capacity utilization of automotive industry is heavily dependent on the skills of the labor and machine availability involved in the production and sub-processes. The industry requires a range of specialized skills, die casting, machining, sand blasting, assembly line, engineering drawing, grinding, which are often in short supply Due to poor OEE or six big losses, improper production layout are eventually affecting the plant capacity utilizations.The impact of the Six Big Losses will result in a utilization level for each machine and the factory

Zero Flexibilities in Changeovers

Changeovers in the steel manufacturing industry refer to the process of switching from producing one type of product to another. Changeovers can be time-consuming and complex, and can lead to a number of issues, including: Downtime, Quality control, Increased operation costs, Operator errors and maintenance etc.

To minimize these issues,ZBT comes with best practices such as SMED concept, standardizing changeover procedures, using advanced technologies to automate changeovers, and providing employees with proper training and resources. Also Lean Manufacturing methodologies to streamline their changeover processes and reduce the amount of downtime and resources required.

Environmental, Safety and health Compliances

The automotive industry is required to adhere to a variety of regulations related to environmental impact, labor health, and safety. This can be challenging, as many of the processes used in the industry are polluting, have a high carbon footprint, and pose hazards to worker safety. Non-compliance with any of these regulations can lead to long shutdowns and legal proceedings against the business, making it critical for these businesses to promptly mitigate any regulatory issues.

As regulations become increasingly stringent over time, it becomes all the more important for these businesses to ensure that they are meeting compliance requirements in a timely and effective manner.

Technology Upgradation

The industry is becoming increasingly automated and digital. Staying up-to-date with the latest technology can be challenging, especially for small and medium-sized businesses that may not have the resources to invest in new equipment.

How we help

Profitability Improvement

Improving any parameter in a business requires defining and monitoring it regularly over shorter time periods. Therefore, daily recording of all costs and updating the daily profit and loss statement is an essential step in managing costs in a highly competitive environment. Although this may require introducing new processes, it is essential to track costs and maintain profitability margins in the industry.

To improve profitability margins in automibile businesses, a combination of cost-cutting measures and operational efficiencies using lean methodologies is necessary. Here are some levers that businesses can use to improve profitability margins:

Track production costs, Increase capacity utilization (By improving OEE), Optimize raw material costs through supplier consolidation and reduction in raw material prices, Reduce reject scrap and rework, Diversify product portfolio, Focus on high-margin products, Reduce energy costs, Standardize process norms to reduce manpower costs.

By implementing these strategies, businesses can improve their cost management, increase profitability margins, and maintain a competitive edge in the market.

OEE Improvement

OEE (Overall Equipment Effectiveness) is a performance metric used to measure the efficiency of production processes in a manufacturing plant. Improving OEE in a automibile component manufacturing plant can have a significant impact on profitability margins. Here are some ways to improve OEE in a manufacturing plant: Implement predictive maintenance (Including CLRI & PM, CBM, RCM), Reduce the risk of human errors with the help of low cost automation, Reducing the risk of production errors, Track and analyze production data, Reduction in downtime, changeovers time reduction etc.

Also, Implementing a comprehensive training program covering all aspects of the production process and incorporating a reward and recognition system can improve the productivity and skills of workers in the fabrication and foundry industry. This can include a mix of classroom and hands-on training, regular refresher courses, and technology-based methods. Skilled workers can also act as mentors to new employees, while incentives and recognition can encourage exceptional performance.

SMED (Single minute exchange of die)

SMED (Single-Minute Exchange of Dies) is a methodology used to reduce the time required to changeover from producing one product to another. Implementing SMED in a steel manufacturing plant can help to increase production efficiency and improve profitability margins. Here are some steps for implementing SMED in a automobile industry: Identify opportunities for improvement, Separate internal and external activities, Streamline the changeover process, Implement quick die change systems with the help of Gantt charts, Tarin people etc

Line Balancing

Line balancing also referred to as load balancing, production leveling describes a technique to align production output with customer demand through leveling of cycle times. Using the line balancing method several sources of waste (jap. Muda) are reduced. ZBT helps client to optimize the line balancing in assembly line by intoducing time and motion study, MOST, defining takt time, Identify process bottlenecks and excess capacity then Optimize process sequences and reassign resources.

OTIF Improvemen

Ensuring on-time deliveries to customers in the automobile industry can be a challenging task, but it is essential to maintain customer satisfaction and build a strong reputation in the market. Here are some strategies that businesses can implement to ensure on-time deliveries:

  • - Establish clear delivery timelines and communicate them with customers in advance, so that there is no confusion or miscommunication.
  • - Implement lean manufacturing practices to optimize production processes, reduce lead times, and minimize downtime.
  • - Regularly monitor the production schedule to identify potential bottlenecks and delays and take proactive measures to prevent them.
  • - Improve inventory management to ensure the availability of raw materials, tools, and equipment required for production.
  • - Establish a strong network of suppliers and partners to ensure timely delivery of raw materials and other essential supplies.
  • - Invest in technology and automation to streamline processes and reduce the risk of human error.
  • - Use data analytics and forecasting tools to predict demand and plan production schedules accordingly.

ESG Practices Implementation

The business can develop an ESG framework and policy, conduct an health, safety and environmental audit, set reduction targets for injuries, nearmiss, emissions and waste, promote sustainable procurement and energy use, enhance worker safety and social responsibility, and engage stakeholders for better governance.

Generally businesses do to take ISO certifications for health, safety and enviroment but not tend to follow the written processes and practices. In order to customise the practices, policies and processes, an audit is coducted and all HSE (health, safety and environment) hazards are mapped in the entire value chain. For each of the such hazard mitigation and control plans are prepapred to ensure that they don't pose risks above the prescirbed regulatory tolernaces. Once the docuementation is done, the impementation of the policies and processes start as follows:

  • - Regular training programs for workers on safety and health procedures, as well as environmental awareness.
  • - Implementation of a robust safety management system that includes regular risk assessments, hazard identification, and emergency response plans.
  • - Provision of personal protective equipment (PPE) to workers, such as gloves, masks, and safety glasses.
  • - Regular monitoring and maintenance of equipment to ensure proper functioning and reduce emissions and pollution.
  • - Reduction of energy consumption and use of renewable energy sources to minimize the carbon footprint.
  • - Introduction of waste management practices, such as recycling and responsible disposal of hazardous materials.
  • - Encouraging worker participation in safety and environmental programs, and providing them with incentives for safe and sustainable behavior.

Where we help

Car AC manufacturing, Two wheeler clutch Manufacturing

ZBT is helping to improve car AC manufacuring, two wheeler clutch manufacturing performance by conducting a thorough analysis of the factory VSM, identifying areas of inefficiency, and developing strategies to address them. This may involve optimizing thedie casting furnace's raw material inputs, improving its energy efficiency, implementing better maintenance and repair practices (MTTR & MTBF) , and enhancing the skills of its operators. The ZBT also uses data analytics and simulation tools to model the plant's production line performance and forecast potential improvements. Ultimately, the goal is to increase the overall plant's productivity, reduce its costs, and improve its overall performance, while ensuring safety and environmental compliance.

Four wheeler parts Manufacturers

ZBT offers several strategies for performance improvement in the automobile industry

Supply chain optimization: ZBT is helping to optimize their supply chains to reduce costs and improve efficiency. This involves streamlining production processes, identifying areas for automation, and improving logistics management.

Lean manufacturing: Adopting lean manufacturing techniques help automobile manufacturers minimize waste, reduce costs, and improve productivity. ZBT assists in identifying areas where lean principles can be applied, such as in production processes and supply chain management.

Product development: ZBT helps automobile manufacturers improve their product development processes by incorporating customer feedback, optimizing the use of technology, and streamlining design and testing processes.

Strategic planning: ZBT assists in developing and implementing strategic plans for automobile manufacturers, such as market analysis, identifying potential areas for growth, and developing new product lines.

Organizational restructuring: ZBT is assisting in restructuring the organization to improve communication, efficiency, and collaboration across departments, as well as implementing performance metrics to evaluate success.

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Impact Delivered

Financial gain or improved customer service level

We work with clients to address their key business issues and in our approach we link the financial parameters or customer service level with the process primary parameters which can be managed and controlled through accurate and precise outcome based processes. Learn more about our successes through case studies...

Reach out to us

Are you facing business challenges ? Would you like to begin the improvement journey ?