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© Subros Limited. All rights reserved
Presentation By
R. P. Gupta
Vice President –Operations
Subros Limited-Noida
20.01.2007
Shop Floor Cost Management
© Subros Limited. All rights reserved
Subros - an Introduction
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Suri Group of Companies
India’s Largest and Integrated car AC manufacturing Company.
Annual Turnover Rs.725Crores.
India’s Leading 5 star hotel chain with 7 properties in India. Annual
Turnover Rs.185Crores
Automobile Precision component manufacturer. Annual Turnover
Rs.37Crores.
Mega Automobile retailing Company. Annual Turnover
Rs.313Crores.
Telecom Convergences solutions Company. Annual Turnover
Rs.19Crores.
Strategic acquisition in 2005. FIBCOM is the leading telecom
solutions company manufacturing optical networking equipments.
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About Subros
Established in 1985, Subros is the Largest AC company in India. A Joint Venture company between Suri group, Suzuki and Denso.
Our Plants
Noida Plant
Noida Tool Room
Noida R&D CenterManesar Plant Pune Plant
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Subros’s Customer & Market Share
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Product Range
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Vibration Testing
Calorimeter
CAE
Environment Test Chamber
CNC Machines
Wire EDM
Product Development Infrastructure: R&D / Tool Room
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Need for Cost Competitive Management
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Changes in the Global Economy
Global market place
Customer preferences
E commerce
Shrinking Time and Distances
Falling Trade barriers under WTO
Free Trade agreements between Nations
Unified Markets in Europe, ASEAN
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Global Cost Pressures
Source : McKinsey Study done for ACMA
Cost pressure on global OEM will drive them to outsource from LCCs
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Country-wise Quality & Cost Competitiveness in Auto Component Sector
S.No. Country Supply
Quality Level
Cost Advantage
(FOB Basis)
1 India 500 ppm 0
2 Japan (reference)
5 ppm -5%
3 Thailand 30 ppm -20%
4 Indonesia 15 ppm -15%
5 Europe 10 ppm -5%
6 USA 7 ppm -10%
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Market Potential
The Indian Passenger car market is far from being saturated-leaving Ample room for volume growth
Vehicle (Cars+CV’s) Production and A.C demand
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Subros - Cost Leadership Road Map
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Cost Leadership Structure at Subros
Corporate Objective----------------------------
Cost Leadership
Deployment of PQCDSME Goal
Operational Cost AreasStrategic Cost Areas
Material Cost
• Localisation
• Alternate Sourcing
• ZBC
• Vendor Cost down
• Standardization
• Target Cost Setting
• VAVE
• Localisation at SOP
• Lead Time Reduction
NPD & Break thru
ABC
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Cost Management at Shop Floor
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Our Approach
Cost Awareness
Cost Understanding
Cost Driver Identification
Permissible Cost
Non Permissible Cost
Cost ControlActivities
(Kaizen/ QC/TPM)
Plant Managers do not necessarily manage cost directly
They Manage activities and resources that consume cost
People Involvement and use of Cost Management Tools In
Decision Making
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Our Approach
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Cost Driver based Potential Areas
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Examples of action taken for waste elimination
SINGLE FEEDING – SPEED IS SLOW DOUBLE FEEDING – SPEED IS HIGHER
Layout Changes
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177 1770 0 0 0
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Internal BM Elimination of MUDA Internal to External Improvement in Internal Adjustment Other activity Target
Tim
e (S
ec)
4633
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4413
540
29762976
2731
Reduction in Yield LossesTime Reduction in Set Up
and Adjustment
Flux Consumption Energy Saving in NBF
Examples of action taken for waste elimination
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Conclusion
Cost Management is not by Choice it is a question of survival
Build a Cost Culture in the Organization
People involvement is very important
Line Managers transformation to Cost Managers
Cost Transparency is important for real action
Use Integrated Cost management Tool for tracking all actions.
(TPM/TQM/Kaizen/QC etc…).
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Thank You