AMITY GLOBAL BUSINESS SCHOOL, MUMBAI

REPORT
On

PRODUCTION & OPERATIONS MANAGEMENT IN GENERAL MOTORS

Vivek Mishra Purab Doshi Hozefa Kanchwala Mohit Agarwal

002 008 016 038

Abhishek jaju Abhijeet Parikh Siddharth Gandhi

017 019 028

Under the guidance of Prof. Amol Muley

APRIL : 29-04-2010

CERTIFICATE
This is to certify that

Have satisfactorily completed the requirements of the

PROJECT
ON

PRODUCTION & OPERATION MANAGEMENT IN GENERAL MOTORS

Prof. Amol Muley

PROJECT COORDINATOR

Prof. Dr Vijay Singh Dahima

DIRECTOR

Sr.No

Particular

Page No.

ACKNOWLEDGEMENT

EXECUTIVE SUMMARY

1.

INTRODUCTION

6-8

2.

OBJECTIVE

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

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.

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.

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 GMGM 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

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

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.

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.

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.

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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.

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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.

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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 its 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 ShootPaint 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 1st station where car comes after the paint shop. TR-1 being the station where the mud guards are fixed then it flooring of the car followed. moves to TR-2 Station where done like this the whole process is

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 performed14

 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 boards 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 its just parked next to finishing line of the TR stations. GM never puts back the car as its 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.
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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

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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 Proximity to market Labor Amenities Transport Inputs Services Land & Climate Weights 7 9 6 4 4 5 2 Halol Plant(Gujarat) 3*7=21 5*9=45 8*6=48 6*4=24 4*4=16 7*5=35 4*2=08 Pune Plant(Maharashtra) 4*7=28 4*9=36 6*6=36 5*4=20 5*4=20 8*5=40 482=08

Regulations Safety Cost Politics/culture Special grants Near to port/air/rail

8 7 3 4 3

6*8=48 7*7=49 6*3=18 6*4=24 3*3=09 5*5=25

7*8=56 6*7=42 5*3=15 5*4=20 3*3=09 5*5=25

5 Supplier information 7 Availability of skilled labor Projected cost Quality of road 6 6 3 5*6=30 4*6=24 3*3=09 6*6=36 5*6=30 2*3=06 6*7=42 5*7=35

Availability of infrastructure Total =>

3*8=24 499

7*8=56 518

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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.

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CHANNEL DISTRIBUTION

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 Indias 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.

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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 customers Resource 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 Engine Lot Size = 25 units Lead Time = 0 periods

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Period Demand Available MPS

1 30 20 50

2 30 15 25

3 30 10 25

4 30 5 25

5 30 0 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 Demand Available MPS

1 25

2 25

3 25

4 0

5 15

6 35

7 25

50

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FORMAT OF MPS

Part Number

Description

Quantity on hand

Safet y Stock

Quantity UNAVAI L

Cum L/T

Fam Lot PLN GR hor P

Time fence

Master schedule

Begin date Days/period Forecast Actual Demand Projected bal Target inv bal Avail to Prom Cumulative ATP MPS

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LINE BALANCING

Work element TR-1 TR-2 TR-3 TR-4 TR-5 TR-6 TR-7 TR-8 TR-9 TR-10 TR-11 TR-12 TR-13 TR-14 TR-15 Total=>

Description Mud Guards Flooring & roofing matting Dash Board Mats Seats installation Fixation of ABC & steering & gear Head lights & Tail lights Front wind shield & back wind shield Doors fixation Tier Alignment & fixation Engine fixation Electrical work Music systems & Lock systems Fuel filling Final stage

Time(min) 2min 5 min 8 min 5 min 6 min 20 min 3 min 2 min 4 min 15 min 20 min 25 mins 3 mins 2 min 10 sec 130 min

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8. CONCLUSION:

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.

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REFERENCES/BIBLIOGRAPHY 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, 9th 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

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Thank You

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