AMITY GLOBAL BUSINESS SCHOOL, MUMBAI

REPORT

On

“PRODUCTION & OPERATIONS MANAGEMENT”

IN

“GENERAL MOTORS”

Vivek Mishra 002 Abhishek jaju 017

Purab Doshi 008 Abhijeet Parikh 019

Hozefa Kanchwala 016 Siddharth Gandhi 028

Mohit Agarwal 038

Under the guidance of

Prof. Amol Muley

APRIL : 29-04-2010

1

CERTIFICATE

This is to certify that

Have satisfactorily completed the requirements of the

PROJECT

ON

“PRODUCTION & OPERATION MANAGEMENT”

IN

GENERAL MOTORS

Prof. Amol Muley Prof. Dr Vijay Singh Dahima

PROJECT COORDINATOR DIRECTOR

2

Sr.No Particular Page No.

ACKNOWLEDGEMENT 4

EXECUTIVE SUMMARY 5

1. INTRODUCTION 6-8

2. OBJECTIVE 9

3. PLANT LAYOUT 10-12

4. PRODUCTION PLANNING & CONTROL 13-17

5. INVENTORY MANAGEMENT 18

6. CHANNEL DISTRIBUTION 19

7. SCHEDULING 20-23

8. CONCLUSION 24

9. BIBLIOGRAPHY / REFRENCES 25

3

ACKNOWLEGDEMENT

We are very grateful to our project coordinator, who helped us in the development of our

project. The in-depth knowledge of the subject is achieved with sincere and dedication

efforts from the GM coordinator and Mr. Amol Muley the faculty coordinator.

For the successful completion of any project, it takes the complete dedication of all the

group members and the combined guidelines provided by the college professors.

As our project is based on Production & Operation Management in General Motors, we

have understood the importance of working together as a group. Since it is completely

based on Production & Operations, the amenities provided by our college helped us to

satisfy our need for Production & Operations Management Project.

Had it not been the sincere efforts of our project guide Prof. Amol Muley it would have

been next to impossible for the completion of our project. His efforts have been very

helpful in the development of our project to solve different problems that arose

during implementation of the application.

We would like to thank every other person who might have helped in the making.

If in the course of acknowledging the contributors to the project, we have forgotten any

names, generously pardon us.

4

EXECUTIVE SUMMARY

GENERAL MOTORS (HALOL) is a two shift operating plant with automation of medium

level.Halol unit is having lean production process flow.

GM Assembly line consists of two lines:

Assembly car line

Assembly truck line

Assembly car line consist of small segment car like Chevrolet Aveo, Beat, Spark etc

Assembly truck line consists of multi-utility segment car like Travera.

From Body shop car body is molded into the desired shape of the model & then its body is first

painted in paint shop. Paint shop comprises of plastic paint shop and primer paint shop.

From paint shop the car is moved to assembly line. MPC & Supply chain provides the

material to body shop. Now the car is moved to Chassis Assembly were the chassis is

attached at the bottom of the car.

Next step after chassis Assembly is the axle assembly where axle is checked and then the

car is moved to transmission assembly where the transmission pipe, exhaust system is

checked & last but not the list engine assembly. It is the most vital step of this whole

assembly line. Engine is fitted accurately with precision. Finally the car is moved to finish

assembly where finishing and minor defects if any are corrected.

“Safety is the overriding priority of general motors”.

5

1. INTRODUCTION

General Motors-Halol is having manufacturing capacity of 85,000 units per annum with

the plant size of 65,000 sq meters. The production was started in June 1996 with a Joint

venture between Hindustan Motors with 50:50 partnerships. Later GM whole took over the

plant & continued with its own production. The plant is certified for “GM Global

Manufacturing Systems”.

ISO: 9001 & ISO 14001 certified company.

Safety is overriding priority in GM-

GM is committed to promote energy efficient activities, safety, environmental protection &

social welfare. GM-has established its new vehicle assembly unit in Pune (Maharashtra).

Fig. 1

6

JOURNEY OF GENERAL MOTORS IN INDIA-

1928- GM enters India.

1954- GM exits due to unfavorable business conditions.

1994-GM re-enters Indian market.

1999- GM acquires 100% stake in GM-India.

GENERAL MOTORS-

General Motors Corp. (NYSE: GM), the world's largest automaker has been the annual

global industry sales leader for 77 years. Founded in 1908, GM today employs about

280,000 people around the world.

Fig 1.2

7

With global Headquarters in Detroit, GM manufactures its cars and trucks in 33 countries.

In2007, nearly 10.2 million GM cars and trucks were sold globally under the following

brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,

Pontiac, Saab, Saturn and Vauxhall. GM's On Star subsidiary is the industry leader in

vehicle safety, security and information services.

8

2. OBJECTIVE

This project takes into picture the production and operations management of General Motors

(GM). The content of this project will focus on their planning, organizing, directing and

controlling of activities for their production. General Motors India has its base in Halol, Gujarat,

where the company has had many initiatives. The project deals with the entire end-to-end process

of General Motors from the proper acquisition of resources required for production purposes to the

manufacturing of goods/services. The objectives of production management of this company were

to combine various factors of production for the purposes of:

1. Delivery of vehicles in the fastest possible time.

2. At the cheapest rates possible

3. With designs and products of the best quality.

On the other hand the operations management of GM focuses on carefully managing the processes

to produce and distribute products and services. A great deal of focus is on efficiency and

effectiveness of their processes. The operations management includes substantial measurement and

analysis of internal processes.

As well said by E. L. Brech, “Production management is the process of effective planning and

regulating the operations of that section of an enterprise which is responsible for the actual

transformation of materials into finished products”. This aspect of Production Management has

been dealt with, at General Motors. The project digs into the aspects of Plant Layout, Inventory

Management, Distribution Channels, Production Planning & Control (PPC) and Scheduling.

The market for Cars is huge and competition high. General Motors has kept this into account in

producing Cars, costing as per the manufacturing estimated, delivering high quality goods,

delivering goods in the time scheduled, and utilizing the available resources by effective

optimization. Production and Operations management of GM remains the main scope of this

project and the nitty-gritty of these would be dealt with in the current project.

9

3. PLANT LAYOUT

General Motors follow the “Process layout”. Halol unit of GM is having lean production process

flow. The process flow is explained with the below diagram.

10

Fig 3.1

As seen from the above figure GM has two assembly lines, Assembly –Car Line and the other

Assembly –Truck Line. The raw materials required for the manufacturing of the vehicle are

supplied from the MPC through the supply chain which is provided to the assembly lines.

At the Car assembly line we can see a process is followed where initially the Axle assembly is

taken care of which is then followed by the Transmission assembly and finally the Engine

assembly.

At the Truck assembly line we can see a process where the chassis assembly is done and then is

followed by the body shop. After the work is completed from the body shop, it then goes for the

paint shop. Under the paint shop we have two sections where the plastic painting work is done and

also the primer paint is taken care of.

The line flow of car assembly line is different from that of the Truck assembly line because the

materials used under car assembly line are different from that used for the truck assembly line. The

car assembly line will have the vehicles like Aveo, Optra, Beat, Spark & Magnum whereas the

truck assembly line has production of single vehicle which is Tavera.

11

As discussed above GM follows a process layout which helps in faster production considering two

assembly lines and also quality check is maintained when a proper process is followed. Process

layout helps GM in sharing of specialized and costly equipments, provides more flexibility and is

less vulnerable to breakdown.

12

4. PRODUCTION PLANNING & CONTROL

The way production layout is spread in Halol Plant is

really feasible to understand. The GM-Halol plant has

two lines of manufacturing Units.

Line 1 : Tavera Line i.e., Truck Line

Line 2 : General car line i.e., SUV, Sedan,

Hatchback etc.

The reason being Tavera line is different because it’s a MUV (Multi-Utility Vehicle) & the

manufacturing process is very different as process starts with Chaises Line then engine is

set up with further movement taking place when the whole body is installed on the Chaises

then after the same procedure is followed as of Car Line which is explained as under.

The care line is very unique in itself. The production process has its own USP. Now how

the whole Unit (car) is manufactured is explained as –

1. BODY MANUFACTURING:

Raw Material i.e., a plain sheet of car body is molded into the desired shape of the model e.g.,

SPARK, BEAT or OPTRA. Here the whole welding of the body is done. This process takes place

according to the order received & also according to the

inventories that they maintain in their warehouse.

2. PAINT SHOP:

Now here the Painting is done to the car body from everywhere. GM is currently using a Shoot-

Paint Gun to paint the whole car. The painting is done by computerized machine. Further the

13

painted car is forwarded the baking section in Paint shop itself where the paint is dried under

heavy temperature.

3. CAR LINE:

After passing through stage 1 & 2 finally the model comes on production line where

manufacturing of actual car starts. Here they small stations like TR-1 which being the 1 st

station where car comes after the paint shop. TR-1 being the station where the mud guards

are fixed then it moves to TR-2 Station where

flooring of the car done like this the whole process is

followed.

Function performed on few of these stations is:-

TR-3: After the flooring the car goes for

dash board fittings

TR-4: flooring mats are spread

TR-5: Seats are installed where other few

workers are involved in giving touch to the roof from inside etc.

TR-6: Here ABC (Accelerator, Brake, Clutch is installed with steering and

speedometer etc.)

TR-7: At this station Head lamps & tail lights are fixed.

TR-8: At this station all the glasses are fixed back & front

TR-9: Doors are fixed with glass already fixed in them

TR-10: This station is opposite to the tiers station where tiers are fixed up with

computerized alignment.

From here the car line takes a turn and goes on another track where same TR stations are

followed where following activities are performed-

14

Engines are unpacked from the huge wooden boxes and on seeing the unit (car)

approaching the engineers fix up the specific engine in the specific car. The whole

fixation of engine takes place here

After this the activities are performed by electrical workers where they join in all the

wires interconnection as well different connections for head light to dash board’s

light & for electrical windows plus for anti-door lock systems etc.

If the model requires then Music System is installed or else its forwarded to another

station.

The next station is a fuel station where drums are kept -1.Petrol and 2. Diesel. Now

here according the model of the car fuel is pumped in just for test drive later on.

This is Final Stage.

After completing this entire stages car is taken for test drives & quality checks. In quality

check activities like check of paint, lights, functioning of electrical parts are done. Car is

taken into a different shed where Rain Fall activity is done to check the water proofing.

Then after the car is taken for a test drive.

Suppose if there is some quality problem then car is brought back in to the production yard

where it’s just parked next to finishing line of the TR stations. GM never puts back the car

as it’s not in their systems to follow. They have appointed engineers who come to check

the faulted produced cars after the production. If, there is no fault then the produced car

goes to the Storage Yard.

15

FACTS about GM- Halol :

GM produces 1unit i.e. 1 car in 3hours 45minutes.

Ones the car is out of the assembly line it is never put back.

Production never stops without the top authorities’ decision.

The plant has 1200 workers among them the managerial employees are also

included.

They have 2000 employees who are working on contractual basis.

The plant operates in 2 shifts.

The plant starts its production from 8am to 2pm then from 4pm to 10pm.

FACILITIES, LOCATION & PLANNING :

The Halol plant is not so near to the sources of raw materials but its few kilometers away

from the port & airport where from where they import their materials.

Availability & cost of production

Availability of power, water &fuel.

Availability of skilled & productive labor.

Availability & cost of capital for investments.

Cost of land & construction cost

Local topography & living condition

Taxes benefits by Gujarat Government

Acceptance by the local people

16

Location Evaluation Method :

Our group has assessed GM Halol & GM Pune the attractiveness of each location on the scale of

10. Where we have identified all the relevant factors for the location of the plant.

Factors Weights Halol Plant(Gujarat) Pune Plant(Maharashtra)

Proximity to market 7 3*7=21 4*7=28

Labor 9 5*9=45 4*9=36

Amenities 6 8*6=48 6*6=36

Transport 4 6*4=24 5*4=20

Inputs 4 4*4=16 5*4=20

Services 5 7*5=35 8*5=40

Land & Climate 2 4*2=08 482=08

Regulations 8 6*8=48 7*8=56

Safety 7 7*7=49 6*7=42

Cost 3 6*3=18 5*3=15

Politics/culture 4 6*4=24 5*4=20

Special grants 3 3*3=09 3*3=09

Near to port/air/rail

5

5*5=25 5*5=25

Supplier information

7

6*7=42 5*7=35

Availability of skilled labor 6 5*6=30 6*6=36

Projected cost 6 4*6=24 5*6=30

Quality of road 3 3*3=09 2*3=06

Availability of infrastructure 8 3*8=24 7*8=56

Total => 499 518

17

5. INVENTORY MANAGEMENT

GM has unique inventory where they are following a SAP inventory management model.

They are importing few parts or machinery from countries like France, Germany & USA.

Parts like the main engine of the car, wheel alignment machines and air suction machine

(Hunter 500).

They even have their local inventory supplier in cities like Indore, kalkotta etc.Where they

supply small inventories ranging from bolt and nut to floor and roof matting.

Fortunately they are following the principles of EOQ, EPQ, & Inventory order cycle.

Where they Re-order the materials from their suppliers on reaching the re-order point.

They always maintain the buffer stock of 500 cars of each model. i.e., from Optra to tavera

& spark & Beat.

GM-Halol is following the process of EOQ ( Economic Order Quantity) where they only

orders such parts & materials which is much needed in the production of the units.

GM-Halol is running the EPQ module where production is maintained & runned efficiently

to achieve the Goal target of the company which is renewed fortnightly.

6 CHANNEL DISTRIBUTION

18

General Motors India is expanding its product and distribution footprint in the country. This

therefore calls for improving the GM and Dealer transactional efficiencies and streamlining

distribution processes for both vehicles and parts. 

The Online Vehicle and Parts Distribution system (OVAPP) is an integrated systems capability

that enables dealers to: 

Place vehicle and parts orders easily and speedily 

Enables them to track status of their vehicles and parts orders without much reliance on

offline communication with GMI staff 

Gives them a transparent view of the stocks and pending orders that help them

communicate more accurately to their end customers on availability. 

Query on parts information 

Improves security of transactions 

Online visibility of their accounts and credit limit status.

The Online system also greatly improves efficiency of order processing at GMI especially with

increased volume and network complexities. The facility obviates the high amount of manual

intervention and inputs to process orders/provide information to dealers by GMI distribution

personnel leading to savings in communication costs as well transfer of accurate down the line

communication to customers. 

The online access to dealers of this “GM India Online vehicle and parts distribution system “is

through a securitized internet connection to http://www.gmindiadistribution.com. 

This site is exclusively to be used by the channel partners of GM India to conduct their “day to day’

operations smoothly. The information on the site is “real time’ and reflects the processes at our SAP

Vehicle and Parts distribution system at GM India’s manufacturing facility at Halol.

The Director of production is Mr. R. Srinivas and Mr. Satya Veerapini is the Operations Manager.

The marketing department inform the dispatch people where there is area wise dispatch and

logistic. The logistic of GM India is taken care by GM as well as contracted. There are

approximately 2500 material staff on contract.

19

7 SCHEDULING

GENERAL MOTOR MASTER PRODUCTION SCHEDULE

Master Production Schedule of GM – States the requirements for individual end items by date and quantity.

The Master Production Schedule must take into account the forecast, the production plan, and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals.

The master schedule is a presentation of demand, forecast, backlog, the MPS, the projected on hand inventory, the available-to-promise quantity.

MPS in GM

Proactively control ability to deliver goods to customersResource availability control

• Production shortfalls will be known ahead of time and alternative plans can be made.

Proactively control inventory levels• Proactive approach to inventory control

– Items are scheduled to arrive when needed– Safety stock has less importance

The sales and operations plan sets the direction for the markets that a GM will compete in based on their core competency. This information is broken down or disaggregated into product families by the MPS. The MPS then sets dates for the completion of end items based on input from the sales forecast. In turn, this information is fed to the MRP system of GM for further disaggregation. The MPS is checked through rough cut capacity planning. This is where the GM determines if they have the capacity to produce the necessary volume dictated by the sales forecast. If there is not enough capacity then other options should be explored

How MPS Works

• Information needed for MPS logic– Lot Size– Lead Time– Product Demand– Starting Inventory

GM Inc. MPS for EngineLot Size = 25 unitsLead Time = 0 periods

20

Period 1 2 3 4 5

Demand 30 30 30 30 30

Available 20 15 10 5 0

MPS 50 25 25 25 25

Master Scheduler

• GM Inc. is scheduling production for a new product called the V8 Engine

• Starting Inventory = 0

• Lot Size = 50

• Lead time = 0

Period 1 2 3 4 5 6 7

Demand 25 25 25 0 15 35 25

Available              

MPS 50            

FORMAT OF MPS

Part Number Description Quantity Safet Quantity Cum Fam Lot PLN Time Master

21

on hand y Stock

UNAVAIL

L/T GRP

hor fence schedule

Begin date

Days/period

Forecast

Actual DemandProjected bal

Target inv balAvail to PromCumulative ATPMPS

LINE BALANCING

Work element Description Time(min)TR-1 Mud Guards 2min TR-2 Flooring & roofing 5 min

22

mattingTR-3 Dash Board 8 minTR-4 Mats 5 min TR-5 Seats installation 6 minTR-6 Fixation of ABC &

steering & gear20 min

TR-7 Head lights & Tail lights

3 min

TR-8 Front wind shield & back wind shield

2 min

TR-9 Doors fixation 4 minTR-10 Tier Alignment &

fixation 15 min

TR-11 Engine fixation 20 minTR-12 Electrical work 25 minsTR-13 Music systems &

Lock systems3 mins

TR-14 Fuel filling 2 minTR-15 Final stage 10 secTotal=> 130 min

8. CONCLUSION:

23

Whilst it would be make a lot of business sense for a company like Ford to close down

more plants and accept a smaller portion of the U.S. market this strategy would not work in

favour of GM because then the company would produce and sell fewer vehicles, meaning

less income for those big pension and health-care costs. GM has to maintain its cash flow

to cover these costs until a future date when it is hoped that the elderly retirees diminish in

number whilst also making improvements in quality, efficiency, design and brand appeal.

Although GM has cut the time to assemble a vehicle from an average of 12 hours in 1998

to 3 hours in 2003, and Japanese competitors are still faster in getting new models into the

market. GM should look at this as a challenge to embrace and strategise with a view to

improve its development cycle to match its competitors if not exceed them.

Whilst these recommendations provided are meant to help GM sustain its market share,

they cannot be fully appreciated until they have been put to test and the results obtained

critically analysed to create room for adjustments where necessary and where applicable.

REFERENCES/BIBLIOGRAPHY

24

Bocij, P., Caffey, D., Greasley, A., Hickie, S. (2003) Business Information Systems –

“Technology, Development and Management for the e-business”, 2nd edn, FT Prentice Hall, pp. 8

– 32, 43 – 58, 514 – 545

Curtis, G. and Cobham, D. (2002) Business Information Systems – Analysis, Design and Practice,

4th edn, FT Prentice Hall, pp. 1 – 40, 45 – 69, 331 – 370

Laudon, K. C., and Laudon, J. P. (2005) Essentials of Management Information Systems –

“Managing the Digital Firm”, 6th edn, Pearson Prentice Hall, pp. 74 – 113, 40 – 72, 444 – 483

Laudon, K. C., and Laudon, J. P. (2003) Essentials of Management Information Systems –

“Managing the Digital Firm”, 5th edn, Prentice Hall, pp. 36 – 67, 70 – 103, 380 – 410

McLeod, R. Jr. and Schell, G. P. (2004) Management Information Systems, 9 th edn, Pearson

Prentice Hall, pp. 14 – 21, 25 – 44, 75 – 96

Obrien, J. A., and Marakas, G. M. (2005) Management Information Systems, 7th edn, McGraw Hill

International, pp. 4 – 38, 39 – 60

INTERNET SOURCES

www.gmindiadistribution.com

www.gm.com

25

Thank You

26