perodua presentation. 26 april 2012

Master In Engineering Management EM774 Fakulti Kejuruteraan Mekanikal Universiti Teknologi Mara

MEM 775 MANAGING THE VALUE CHAIN OPERATIONSupply Chain Management Perodua Manufacturing Sdn. Bhd. Towards Toyota Production Systems and Globalization Challenges. Date: 6 May 2012Lecturer Name : Prof. Dr . Ramzi ChikStudent Name : Mohd Anuar Ahmad 2011636338 Aizat Hilmi Zamzam - 2011636874 Joharis Mohamad Isa - 2011835244

Table Of Content1. Company Profile (Product & business strategy ,TIV, market shares, production forecast) ~ Introduction. 2. Perodua sales, order flow and plant layout ~ Business model. 3. Implementation of TPS (Toyota Production System) in Perodua ~ Kanban, Standardize Work, 5S, Kaizen. 4. Perodua assembly line (Line A1 & Line A2). 5. Globalization challenge and future trends. 6. Recommendation. 7. Conclusion.

1.0 Introduction

1.0 Company Profile.Company Name: Perusahaan Otomobil Kedua Date of establishment : 1993 Company status : Joint venture company with Japanese partners. Shareholder: UMW Toyota 38%, MBM resources: 20%, Daihatsu Motor Japan 20%, PNB 10% and others. Factory area: 64,000 square meters Facilities : Press shop, casting, machining, engine assembly, R&D, assembly shop, etc. Workforce : As of June 2009 about 10,000 staff Production capacity : 250,000 units per annum on 2 shift cycle Corporate mission : Professionalism in all our operation, Optimizing benefits to customers and stakeholder, Uniqueness in our product, Aspiration to glory the name of PERODUA, Resilience in meeting our challenges, Efficiency in utilizing technologies and available resources.

1.1Product & Business Strategy.

Introduction

Viva

Alza Myvi

Product, variant and price.

1. Viva : 660cc-1.0cc : 13 variant : 6 color : Price RM27k RM43k 2. Myvi : 1.3cc-1.5cc : 14 variant : 7 color : Price RM52k-RM63k 3. Alza : 1.5cc : 6 variant : 6 color : Price RM56k-RM70k As summary 3 model 33 variant, 7 color and price from RM27k-RM70k

Business strategy.1. Focus : Cost leadership, people car, compact car, small car 2. Target customer : For 2nd car, student, fresh graduate, small family. 3. Selling point : Fuel efficiency, acceptable quality, low maintenance cost, easy to handling.

1.2 Product life cycle and type of new Introduction product development.Sale Type of new product development at Perodua : Modification and Addition (not new concept). Based on platform develop by Daihatsu Motor Japan

Maturity of product

0

1 Facelift no1

2

3 Facelift no2

4

5 Full model change

6

Year

1.3 Total Vehicle Market In Malaysia As Of Nov 2011 (551,018 unit) Overview 2011 sales of vehicles. Introduction180000161777

160000

148124

140000120000 10000081548

80000 60000 40000 20000 0Market Leader

31864 29669 8106

34457 12756 8537 6216 6782 5352 5330 4402 1065 1915 0 1523 1595

1.4 Percentage Market Share Of Automotive Industries In Malaysia As Of Nov 2011.0.0% 0.3% 1.5% 0.3% 1.0% 1.0% 1.2% 0.3% 1.0% 2.3% 5.0% 7.4% 1.1% 0.8% 0.2% 6.3%

Introduction

29.0%

14.0%26.0%

Perodua Isuzu Mazda Hyundai

Proton Daihatsu Citroen Hyundai-Inokom

Toyota Mitsubishi Hicom Chevrolet

Honda Ford Kia Others

Nissan M/Benz Naza

1.5 Market units comparison as of Mar 2012. Introduction Total Industries Vehicle (TIV) ActualTIVUnits (x 1,000) 70.0

TIV Mar'12 : 53.6K~ Vs Feb12 +9.6k (+15%) ~ Vs YTD Mar11 -19.9k (-13%)

uYear 2012 (Est. TIV 615k)MAA Report

60.0

50.0

40.0

Year 2011 (TIV 600k)New Lending Guideline from BNM

30.0

Impact Thai Flood

Year 2011Cumm.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TIV 54.8 40.4 63.3 50.9 46.0 41.8 50.3 58.4 44.4 53.6 48.3 48.0 600.154.8 95.2 158.4 209.4 255.4 297.2 347.5 405.8 450.2 503.9 552.2 600.1

2012Cumm.

40.9 44.0 53.640.9 85.0 138.5

138.5

1.6 Market units comparison as Mar 2012. Introduction Market Share Movement Actual

P2 Market Share50%

Mar 30% u YTD Mar 32%35% 29% 31% 24%Perodua

40%

33%

34% 30%

30%

20%

10%

Perodua Proton Toyota Nissan Honda1st Qtr 2011

YTD Mar'12 45 k 35 k 23 k 8k 2k2nd Qtr 2011

32.3% 25.3% 16.3% 5.8% 1.5%

v

VS 2011 -2.0% -21.8% +6.6% -15.1% -82.0%4th Qtr 2011 Jan'12 Feb

Proton24% 19%

Toyota Nissan Honda6% 2% Mar

0% 3rd Qtr 2011

1.7Market units comparison as of Mar 2012. Introduction Passenger Car ActualUnits (x1,000) 10.0k

Mar'12

YTD Mar'12Model Volume 22.2k 17.2k 12.8k 9.6k 7.9k 23.7k 93.4k Market Share 24% 18% 14% 10% 8% 25% 100% Vs 2011 +4% -16% -19% -22% +8% -34% -18%

u7.7k 6.5k

8.0k

6.0k

4.8k

v3.5k 3.0k

4.0k

2.0k

0.0k Myvi Saga Viva Persona Vios

Myvi Saga Viva Persona Vios Others Total

w

1.8 Market units comparison as of Mar 2012. Introduction Multi Purpose Vehicle (MPV) Actual

Units (x1,000) 5.0k

Mar'12

YTD Mar'12Model Alza Exora Grand Livina Avanza Innova Others Total Volume 9.7k 6.5k 3.0k 2.0k 1.4k 1.9k 24.4k Market Share 40% 27% 12% 8% 6% 8% 100% Vs 2011 +15% +18% -12% +10% -12% -24% +7%

4.0k

u 3.5k2.4k

3.0k

2.0k

1.3k1.0k

1.0k 0.5k

0.0k Alza Exora Avanza Grand Livina Innova

v

1.9 Perodua production tact time. Plant Operation

Introduction

May'12 ~ No OT Plan u ~ Daily OT reserve 4.0H/day for recoveryMonth Tact Time A1 Line A2 Line Daily OT (Hour) A1 Line A2 Line Sat OT (Days) Reserved Sat OT Apr'12 2.1' 2.0' 1.0 1.0 2 May 2.1' 2.0' 3 Jun 2.1' 2.0' 3 Jul 2.1' 2.0' 3 Aug 2.1' 2.0' 0.5 0.5 2 Sep 2.1' 2.0' 0.5 0.5 2 Oct 2.1' 2.0' 0.5 0.5 3

2.0 Perodua production six month rolling forecast. Production SummaryTotal Prodn May12Est. Apr'12 19.5 5,034 7,333 3,700 16,067

Introduction

ASSY Line On = 13,500 unitsu DO / EXPDI = 13,500 unitsProduction DO Plan Jul Aug 22 16 5,540 4,690 9,890 7,310 3,800 2,700 19,230 14,700

Model Working Days Viva Myvi Alza Total

May 19 4,600 7,400 1,500 13,500

Jun 21 5,110 8,800 3,100 17,010

Sep 20 5,550 8,990 3,450 17,990

Oct 17 4,950 7,930 3,000 15,880

v

* High Working Day (Volume 880u/day)

Average prodn 18.0k per month, 900u per day. Note: Production DO plan is included recovery or advance production.

2.1 Perodua sales and order flow.

Ordering flow

Notes: 1.Each variant of model have specific part number for it component. (Example Bumper Myvi Std variant color black/white : XXXXX-XXXXX-AB/C) 2. Booking from customer will be stored in the system and production will start to produce the car based on the order. 3. Ordering of part to all supplier will be generate in the system and the sequence will be follow accordingly. 4. The standard and normal lead time from ordering to deliver the car to customer is about 5 days.

2.2 Perodua plant layout and flow.1 OMI (vendor sub assy tire)1

Plant layout & flow

CKD Warehouse

1 Casting,Machining, Engine Assembly (CMK)

Bumper Paint 2 Shop

1 TLS (Total Logistic Services)

2 Body Shop

3

Paint Shop

4

Assembly Shop 1 Logistic 1

5

1

KLB (Konsorti um Logistic berhad)

Press Shop

Pre Delivery Inspection

6 RND Finish Good Stock Yard

Corporate Building

1.

Supplier

Press

Body

Paint

Assembly

2. 3.Daihatsu Japan,Indonesia

Supplier

KLB/TLS

Logistic

Assembly

CKD Warehouse

CMK

Assembly

4.

Supplier (Tire/Alloy Wheel)

Wheel Assembly

Assembly

5.

Supplier

Bumper paint shop

Assembly

2.0 TPS Implementation

2.3 TPS Implementation.

TPS and TPM implementation

Notes: 1.Perodua start to implement some of the basic concept of TPS from year 2002. 2. At the same time Perodua also implement TPM.


2.4 TPS Objective.

Profit vs Loss Graph (Idea of increase profit through wastage/non value added activity reduction)PROFIT = SALE PRICE - COST PRICECompany X Cost Selling price increase Cost Toyota Reduction of cost through TPS

Profit Selling Cost price price up 1 2 1 2 Profit Selling Cost price price reduce

2.5 TPS Basic Tools Perodua implement.2 Big base of TPS toolsJUST IN TIME


Basic PrincipleHeijunka as precondition: 1. Make process as flow 2. Decide tact by necessary volume. 3. Pull out from next process.

Tool / Method for realizationProduct : Synchronism. Man : Multi-skill worker. Equipment : Layout of process sequence

Shorten die change time and make smaller lot

Standardized work Kanban JIDOKA1. Quality should be made in each process. 2. Reduce man power. 1. Stop by abnormal 2. Understand abnormal 3. Separate the work for man and work for machine.


2.6 TPS Focus on 7 type of wastage.1. Waste of over production 2. Waste of waiting time/idling 3. Waste of conveyance/transportation 4. Waste during processing 5. Waste of inventory/Stock 6. Waste of motion 7. Waste of correction/rework


2.7 TPM Definition Machine maintenance system consist of the entire life of equipment in every division Participation from all working level i.e. from top to bottom Implementation through autonomous small group activities


2.9 TPS Practice (in Perodua)1. Lot size is small. 2. Storage space is less. 3. Kanban implemented. 4. Handling of parts in & out is reduced. 5. Consumption of transport is less. 6. Buffer stock is less. 1. Internal Kanban produces only required parts to body. 2. Die change time is reduced. 3. Lot space is reduced.Press

1. Using Pull system. 2. Lot size is small. 3. Implement Kanban and Jundate system to save space at line.

1. Running cars is reduced. 2. Accident can be reduced. 3. Missing parts can be less. 4. Lead time to PDI is less. 5. Miss inspect car can be eliminated due to less car.

Body QA PDI

Supplier

Perodua Lg

1. Heijunka pattern is follow. 2. No PBS loss to Assy. 3. Quality is detect in line.1. Full Kanban implementation. 2. Continuous Kaizen activity. 3. Machine trouble can be easily visualize. 4. Reject material is reduced.

Paint

Assy Cmk

1. Efficiency of Std Work to eliminate 3 muda. 2. Full Kanban implementation. 3. Minomi supply at lineside. 4. Heijunka production line. 5. Jidoka system to avoid defective vehicles.

1. Less vehicles at distribution yard. 2. Less rework time to be done. 3. Faster delivery to customer due to no holding cars.

2.9 TPS Practice (in Perodua)PART BY PART BASIS ORDERING AND RECEIVINGVendors


Perodua Ordering and Receiving System For Local Part (Year 2004)

DI as reference

PPC Dept.DI as reference

Vendors Third Party Logistics

E-SimsVendors

PART BY PART BASIS Pull System

PDIO Part manifest List (PML)

Vendors

Logistics Dept.Vendors

Hikitori Kanban

Production Line

MILK RUN

Vendors

Perodua Delivery Instruction Order (PDIO)

Vendors

2.9 TPS Practice (in Perodua)


Year 1994 ~2004: Holding stock at PERODUA (Logistic)Year System Holding Stock (Perodua)

19942001 2002 2004

Lot Basis Direct Vendor Lot Basis - TPLInternal Kanban (Hikitori) Milk Run

3~51~2

daysdays

0.5 ~ 1 days 0.25 ~ 0.5 days



BEFORE

AFTER



Before (2004) Carton Box

After (2004) TP Polybox

Improvement items : 1. Change from carton box to TP (Toyota Polybox). 2. Ordering based on customer ordering (pull system). 3. No need to open and dispose of carton box. 4. TP polybox is returnable. 5. Part easy to see and differentiate. 6. Fifo system had been implemented. 7. Maximum and minimum quantity of part is based on level and quantity at storage area. Visual control. Benefits. 1. Save cost in terms of packaging (recycle and reuse of polybox) ~ Previously carton box. 2. Save operator time to open, count and check part inside the carton box. 3. Better visual control. 4. Reduce cost due to secondary defects such as old stock, wrong part and part missing.



Visual control stock at maximum quantity

Visual control stock at medium quantity

Note : The area of receiving already being calculated to consider : The part size, number of TP polybox should be accordingly with the space provided in order to easy visualize the stock and pre-judge of the stock level with the time. (Normal or abnormal) JIT concept cant be 100% implemented at Perodua due to cost of transport is high and reliability of supplier and Perodua in house to Keep the minimum stock.



In Out Specific parking area accordingly with number of carSpecific parking for buggy car 5S

Gravity roller type

Fifo control

Note : 1. Each part have the specific area based on the area that need to supply at the production line. 2. Fifo system implemented using gravity roller stacking part storage from behind and take out from front. 3. Specific parking for buggy car, the parking area specifically tally with the quantity of buggy car. Visual control on buggy car missing or breakdown.


Assembly Overview Year 2012

Perodua Assembly Line Layout :- A1 and A2 (2012)

BIG PART AREA JUNDATE ZONE AS

Start Line A1

501

502

503

504

505

506

A1 LineTrim 199 100 101 102 103 104 105 106 107 108 109 110 111 112 113

S

S/A ENGINE A1 R E P A I R B A Y

S/A CTR A1

JUNDATE A1

HEAVY REPAIR

M

M

S/A CTR A3

508

Engine & Drive train

Trim 2509 146 145 144 141 140 139 138 137 136 135 134 133 132 131 130 129 128

JUNDATE ZONE B154 153 152 151 150 149 18 147

IP LINE A1510

End Chassis 1160 161 162 163 164 165 166 167 168 169 170 174 175 176 177 178

511

S

Final179 180 181 182 183 185 186 187 188 189 190 191 192 193

REPAIR BAY A1

512

513

JUNDATE ZONE C514

SPS FINAL A3

JUNDATE ZONE E JUNDATE ZONE DChassis 1330 331 331 333 333 334 335

S/A CTR A2

SPS FINAL

SPS DOOR A1

SPS DOOR A2290 M

REPAIR BAY A2

515

516

Final336 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359

End

517

518

360

519

520

REPAIR BAY326 325 324 323 316 316 316 316 318 317 316 315 314 313 312 311 310 309 308 307 306 305 304 303 302 301 300 299 298 297 296

Start Line A2

521

Engine & Drive train

S

S/A ENGINE A2 REPAIR BAY

S/A ENGINE A2

A2 LineSPS TRIM S/A GLASS S/A PEDAL

Trim 1

522

523 M

IP LINE A2

SPS TRIM

2.9 TPS Practice (in Perodua) - (Example)BEFOREIdentified muda: - Process flow crossing (9 to 10)

Location: AT1-9 Process Name: S/A Ventilator

Position No. & Surrounding

6

4

9 1

2

5

3

Objective : 1. Reduce walking and pick-up time 2. Reduce manpower 3. Improve process arrangement 4. Reduce space

2.9 TPS Practice (in Perodua) - (Example)IMPROVEMENT

Racking Kaizen no. 1 Fuel Pipe Kancil M/T & A/T

PIC 1

PIC 2

Before1. 2. Racking Size = 2400 mm No FIFO system

After1. 2. Racking Size = 800 mm With FIFO system

3.

2 units required each for Kancil M/T and A/T

3.

1 unit required each for Kancil M/T and A/T


Racking Kaizen no. 2 Wire Roof Kelisa

PIC 1

PIC 2

Before1. 2. 3. Wire stacked up No FIFO system Double location Supply (LG) & Assy pick-up

After1. 2. 3. MINOMI style FIFO 5S improvement

4.

No more double location


Racking Kaizen no. 3 Ventilator KANCIL

KELISAPIC 1 RR View PIC 2 FR View

Before1. 2. 3. Big space requirement 2300mm Operator need to dispose empty boxes Operator need to open carton boxes

After1. 2. Smaller space requirement 1 rack for both Kancil & Kelisa - 1000mm No empty boxes

3.

Reduction in process time through opening & disposing carton boxes

2.9 TPS Practice (in Perodua) - (Example)IMPROVEMENTRacking Kaizen no. 4 Courtesy Switch & S/A Fuel Pipe Parts

Before1. 2. 3. MUDA on walking available 5 seconds No FIFO system Separate racking from main part

After1. 2. No more walking MUDA on S/Assy rack S/A parts on the same rack as Fuel Pipe

3.

With FIFO on parts delivery


Control Heater

Bracket

Before1. 2. 3. Difficult to pick-up parts. Operator need to open carton boxes No FIFO system Assy operator need to open packing case

After1. 2. 3. 4. Operator no need to open carton boxes. Easy pick-up Parts are properly arranged and separated Easy pick-up- Assy operator no more opening packing case With FIFO


Racking Kaizen no. 6 Quarter Glass

Before1. 2. No FIFO system Quality problems with Weather-strip being dislocated/roll up

After1. 2. With FIFO Quality up zero DPU in March

2.9 TPS Practice (in Perodua) - (Example)AFTERLocation: AT1-9 Process Name: S/A VentilatorMUDAs ELIMINATION -- Process flow no crossing

-- Layout space reduction

Position No. & Surrounding

6

4

2 9 1

5

3

2.9 TPS Practice (in Perodua) - (Example)PICK UP WALKING WORKING

PICK UP

KANCIL

WALKING WORKING

KELISA120

25140 120 100 80 60 40 20 0PICK UP WALKING WORKING BEFORE 15 42 64 AFTER 13 20 64 64 64 42 13 20

18 714 22 11 13

1015

100 80 60 40 20 0 PICK UP WALKING WORKING

66

66

BEFORE 14 22 66

AFTER 11 13 66

2.9 TPS Practice (in Perodua) - (Example)~ TRIM LINE 1 STANDARD TIME BEFORE & AFTER KAIZEN (Year 2002)MINOMI BEFORE 140 120 100 80 60 40 20 0 WALKING PIC K-UP OPERATION 2 14 6 99 3 18 7 94 4 17 71 5 11 85 6 10 89 7 10 83 8 13 13 83 9 10 11 12 12 80 13 15 84 14 15 16 17 22 18 17 4 19 17 13 20 14 14 71 21 29 18 63 22 17 11 78 23 8 6 49 24 12 12 88 25 41 53 26 27 80 27 19 77 28 16 67 29 14 72 30 22 65 OPERATION PIC K-UP WALKING

21 7.6 8.4 23

34 9.2 24 65 64 79

20 4.6 19 80 87 64

15 8.4 7.8 6.8 17

11 4.8 3.8 15

13 7.8 5.4 5.4 9.4 5.4

79 101 73

MINOMI AFTER BALANC E SHEET 140 120 100 80 60 40 20 0 WALKING PIC K-UP OPERATION 2 12 7.6 97 3 4 88 4 12 81 5 13 81 6 12 87 7 7 82 8 8.7 87 9 6 78 10 11 12 13 14 14 84 15 4 89 16 18 83 17 18 19 20 12 10 73

OPERATION

PIC K-UP

WALKING

No. of processes eliminated and manpower reduced

21

22

23 0 0 0

24 10 9.3 91

25 0 0 0

26 12 87

27 19 78

28

29

30 0 0 0

13 9.4 13 7.4 17 8.6 26 8.9 17 8.9 11 89 79 79 80

16 9.9 15 77 91 75

17 9.9 17 8.7 71 91

12 7.9 79 79

7.4 6.6 8.1 11 9.6 4.6 5.3 11 3.6 14

11 9.6 9.9 8.3

2.9 TPS Practice (in Perodua) - (Example)

IMPLEMENTED: 1. CHANGING RACKING/PROCESS POSITION 2. MINOMI RACKS

1ST STEP

2ND STEP

IMPLEMENTED: 1. CHANGING RACKING/PROCESS POSITION 2. MINOMI RACKS

3. JUNDATE SUPPLY

3RD STEP

2.9 TPS Practice (in Perodua) - (Year 2002)Before Kaizen

After Kaizen

1.Fifo 2. Ergonomics

1.Fifo 2. Ergonomics 2. Stabilizer Bar

1. FR Exhaust Pipe

1.Fifo 2. Ergonomics 3. Need to open packing 3. Drive Shaft

3.0 Globalization and future trends.

3.1 SWOT ANALYSIS- CURRENT PERODUA CONDITION IN AUTOMOTIVE INDUSTRIES .Strength. 1. Technical know how support from Daihatsu Motor Japan. Weaknesses. 1. Too much depends on parents company support. 2. Cant make final decisions on technical and specification matter. 3. Local vendor unable to compete with global supplierThreat.1. Increasing in hybrid and electrical technology 2. High competition with global car maker. (Toyota, Proton, Nissan, Honda) 3. No support from government after liberalism. 4. Unable to compete & sustain in the industries.

2. Commercial support from Astra Daihatsu Motor Indonesia.3. Support from Toyota group of company. Opportunity. 1. Can learn and benchmark quality and cost from Daihatsu group of company. 2. Can utilize Daihatsu group global supplier & vendor. 3. TA/JV for local vendor with Daihatsu supplier.

3.2 Cost competitiveness for compact car in Asian Region. (Current trends)

Honda Brio 1.2L Launch in Thailand early 2012, Price without tax RM27K and with 70% tax, price is about RM46k.

GM Sail 1.2L Launch in China early 2012, Price without tax RM22K and with 70% tax, price is about RM37k. Note: Current trends: 1.Many new player focusing on compact car segment. 2. Thailand and China supplier strong in the cost competitiveness due to volume, competitive labor cost, technical capability due to most supplier are Japanese joint venture and compare to Malaysia majority Supplier were technical assistance support.

Perodua Myvi 1.3L with incentive from government price RM52K.

3.3 High technology in producing (automation) new concept of automotive ~hybrid/electrical engine, new environmental friendly system-less emission, high safety factor, module system (Future trends)

Body, Chasis, Engine

Interior

Paint

Customer

Module 1 (Automation) 1) Door 2) Engine 3) Drive train 4) Chasis

Module 2 (Automation) 1) Seat 2) Instrument Panel

Note: Future trends : Highly automation and production efficiency is very high and the automotive technology also change towards enviromental friendly, safety and energy saving. High in automation cost (fix cost) but efficient to produce high volume.

4.0 Recommendation.

4.1 Recommendation for survival in globalization.1. To focus on new technology in order to become competitive in terms of new hybrid/electrical and concept car. 3. To develop competitive supply chain, supplier to invest new facilities near to Perodua in order to reduce transport cost.

2. To conduct feasibility study on automation production in order to compete globally.

5.0 Conclusion.

5.0 Conclusion.1. In order to survive in global and liberalism market, Perodua need to enhance automotive technology (hybrid, electrical) and production automation capability. 2. Without compliance with the enviromental, safety, emission new regulation and competitive in cost, it is difficult for Perodua to export to oversea. 3. The government should encourage the national automotive industries in research and development activity so that they can sustain in the industries after.

Thank You

perodua presentation. 26 april 2012

Documents

market units comparison

market shares

market leader

total vehicle market

perodua sales

tiv mar12

perodua production tact

toyota production systems