Operation

Management Assignment

Submitted To: Submitted By:

Prof. O. S. Rao Krishna Chaitanya (19004)
M. Ashok Kumar (19010)
Sneha Suman (19037)
 Devesh Soni (19057)
Karan Thawani (19058)
Hyundai Manufacturing Plants
Company Overview
Hyundai Group is a South Korean conglomerate (Jaebeol) founded by Chung
Ju-yung. The first company in the group was founded in 1947 as a
construction company. With government assistance, Chung and his family
members rapidly expanded into various industries, eventually becoming
South Korea's biggest chaebol. The company spun off many of its better
known businesses after the 1997 Asian financial crisis, including Hyundai
Automotive Group, Hyundai Department Store Group, and Hyundai Heavy
Industries Group.

The Hyundai Group now focuses on elevators, container services, and

tourism to Mount Kumgang. As of March 2007, Hyundai Engineering and
Construction is the main shareholder of Hyundai Merchant Marine, which is
the de-facto holding company of Hyundai Group.

History
In 1947, Hyundai Togun (Hyundai Engineering and Construction), the initial
company of the Hyundai Group, was established by Chung Ju Yung. In 1950,
Hyundai Togun was renamed Hyundai Construction. In 1958, Keumkang
Company was established to make construction materials. In 1965, Hyundai
Construction begins its first overseas venture, a highway project in Thailand.

In 1967, Hyundai Motors was established. In 1975, the group begins

construction on an integrated car factory and launches a new Korean
vehicle.
In 1973, the group's shipyard is incorporated as Hyundai Shipbuilding
and Heavy Industries, renamed Hyundai Heavy Industries in 1978.
In 1976, Hyundai Corporation is established as a trading arm. The same
year, Asia Merchant Marine Co. established, later renamed Hyundai
Merchant Marine.
 In 1977, Asan Foundation was established.
In 1983, Hyundai Elevators and Hyundai Electronics were established.
In 1986, Hyundai Research Institute was established.
In 1988, Asian Sangsun was established, renamed Hyundai Logistics in
1992.
During 1997 Asian financial crisis, Hyundai acquired Kia Motors and
LG Semi-Conductor.
In 1998, Korea's economic crisis forced the group to begin restructuring
efforts, which include selling off subsidiaries and focusing on five core
business areas. Nevertheless, Hyundai began South Korean tourism to
North Korea's Kumgangsan. In 1999, Hyundai Asan was established to
operating Kumgang tourism, the Kaesong Industrial Complex, and other
inter-Korean work.[2]
In 2001, the founder Chung Ju-yung died, and the Hyundai Group
conglomerate continued to be dismantled.[3]
In 2007, Hyundai Construction Equipment India Pvt. Ltd. established in
India.
In 2010, Hyundai Group was selected as a preferred bidder by creditors
for the acquisition of Hyundai Engineering & Construction.

Restructuring
Before restructuring (beginning circa 2000), Hyundai's major areas of activity
included shipbuilding, car manufacture, construction, retailing, finance, and
electronics. After founder Chung Ju-yung's death in 2001, the component
companies of Hyundai were split off into separate companies.

VISION & MISSION

Vision
Our Team provides value for your future.

Mission
To create exceptional automotive value for our customers by harmoniously blending
safety, quality and efficiency. With our diverse team, we will provide responsible
stewardship to our community and environment while achieving stability and security
now and for future generations.

Goal and Objective Of Company

Customer satisfaction is the number one value of the company. Hyundai
Motor Company considers its most important mission to be bringing the
enjoyment of elegance and confidence to its customers, rather than just
selling products. Hyundai strives to bring its customers luxury and style.
Therefore, Hyundai will continue to stabilize its global management by
establishing an effective cooperation system among production bases around
the world. Hyundai Motor Company's management goal in 2009 is customer–
oriented management and continuous execution of global management.
Large–scale investments made up to this point will materialize.

Objectives
They are aiming for 5% market share of the Indian market through unit sale
volume of 10 0000. Other objectives are aiming for 10% market share of the
Indian market. An important objective will be to establish a well-regarded
brand name linked to a meaningful positioning. They will have to invest
heavily in marketing to create a memorable and distinctive brand image
projecting innovation, quality and value. They also must measure awareness
and response so they can adjust our marketing efforts if necessary.

Product Overview
Situational analysis

Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of

Hyundai Motor Company, South Korea and is the second largest and the
fastest growing car manufacturer in India. HMIL presently markets 20
variants of passenger cars in six segments. The Santro and Pa in the B
segment, Getz Prime in the B+ segment, the Accent and Verna in the C
segment, the Elantra in the D segment, the Sonata Embera in the E segment
and the Tucson in the SUV segment.Hyundai Motor India, continuing its
tradition of being the fastest growing passenger car manufacturer, registered
total sales of 299,513 vehicles in calendar year (CY) 2006, an increase of
18.5 % over CY 2005. In the domestic market it clocked a growth of 19.1 %
a compared to 2005, with 186,174 units, while overseas sales grew by 17.4
%, with exports of 113,339 units.HMIL's fully integrated state-of-the-art
manufacturing plant near Chennai boasts some of the most advanced
production, quality and testing capabilities in the country. In continuation of
its investment in providing the Indian customer global technology, HMIL is
setting up its second plant, which will produce an additional 300,000 units
per annum, raising HMIL's total production capacity to 600,000 units per
annum by end of 2007. HMIL is investing to expand capacity in line with its
positioning as HMC's global export hub for compact cars. Apart from
expansion of production capacity, HMIL plans to expand its dealer network,
which will be increased from 183 to 250 this year. And with the company's
greater focus on the quality of its after-sales service, HMIL's service network
will be expanded to around 1,000 in 2007.

The year 2006 has been a significant year for Hyundai Motor India. It
achieved a significant milestone by rolling out the fastest 300,000th export
car. Hyundai exports to over 65 countries globally; even as it plans to
continue its thrust in existing export markets, it is gearing up to step up its
foray into new markets. HMIL has also been awarded the benchmark ISO
14001 certification for its sustainable environment management practices.

Product Range:
Hyundai Elantra
 Getz

I10

Santro
 I20

Verna

Accent
 Tuscon

Opportunities
Leading Growth

As the market leader, company led the growth in the passenger car sector last
year. Hyundai sales went up 30% to 4,72,000 units. This, as I said earlier, is
the highest annual sale since company began operations 20 years ago.
Hyundai also gained market share, mainly on account of its performance in
the competitive A2 segment where it increased its share from 40.3% in 2005-
06 to 47.7% in 2006-07. The record sales performance was reflected in the
financials. Net Sales (excluding excise) grew by 31% to Rs 93,456 million.
Operating Profit Margin increased from 0.8 % in 2005-06 to 4.7 % in 2006-
07. Profit after Tax jumped 270% to Rs 5421 million.

The World’s Largest Automobile Plant-The Ulsan Plant

As Hyundai Motor’s main production facility, the Ulsan Plant sits on a
5,050,000 m2 site and is equipped with five independent plants that employ
over 34,000 personnel to produce an average of 5,400 vehicles a day.
Additionally, the plant has its own port where up to three, 50,000-ton ships
can anchor simultaneously. The Ulsan Plant, also dubbed the “Forest Plant,”
encompasses 580,000 trees as part of its landscape and state-of-the-art
facilities.

The Advanced Production Base Focusing On Export Strategy-

The Asan Plant

With an annual capacity of 30,000 units, the Asan Plant is an entirely self-
contained, independent automobile production complex that mainly produces
strategic mid-to large-size passenger cars for export. The Asan Plant offers a
bright and pleasant, people-oriented and nature-inspired working space, and
has proven that the quality of the working environment determines the quality
of products.

World’s Largest Scale Commercial Vehicle Production Plant-

The Jeonju Plant

With an annual production capacity of 125,000 units, the Jeonju Plant

specializes in producing mid-to large-size buses, trucks, and specialty
vehicles that exceed 2.5 tons.
Global Production System

Making The Top 10 In Its First Year Of Operation

In North America

Within one year after it began mass production in May 2005, the Alabama
Plant achieved the incredible feat of being placed 10th in product quality
among 37 plants in North America. It focuses on mid-to full-size vehicles,
and continues to live up to its reputation as a comprehensive automobile plant
that applies the latest technologies and techniques to its production lines.

600,000 Units Per Year Production

Capacity-China Plant

In addition to the existing first plant, a second plant with an annual capacity
of 300,000 units was added to the China Plant, increasing its total annual
production capacity to 600,000. The plant is a reassuring foothold in securing
a sizable share in the automobile market in China, which is rapidly becoming
a global economic powerhouse.
 Second Place Market Share In Just
Two Years- India Plant

A comprehensive, self-sufficient automobile plant that focuses on the R&D,

testing, manufacturing, and sales of new products that are adapted to the
Indian market, the India Plant added a second plant in 2008 to achieve an
annual production capacity of 600,000 units. It serves as an overseas
manufacturing plant for compact cars, such as the first overseas-specific
model i10 and the strategic European model i20. It has accomplished much in
India’s automobile industry, including setting a production record of
2,500,000 units and sales of 1,000,000 units in the shortest time, and is
responsible for 20% of the market share and 66% of the automobile export in
India.

Critical Foothold In The European Market-Turkey &

Czech Republic Plants
Turkey: The expansion of the Turkey Plant in March 2007 resulted in an
increase in the annual production capacity from 60,000 units to 100,000 units.
A strategic foothold that connects Europe, Africa, and the Middle East, the
Turkey Plant plays a key role in the increase of exports from the region
through the localization of the Accent and i20 models.

Czech Republic: Nineteen months after its historic groundbreaking, the

Czech Republic Plant commenced mass production in November 2008. The
Czech Republic Plant focuses on a strategy of full localization to develop
models geared to the tastes of European consumers. Taking full advantage of
its strategic location in the center of Europe, the Czech Republic Plant

Russia Plants
Scheduled to commence mass production in January 2011, the Russia Plant is
the only auto plant in Russia that can handle the entire manufacturing process
of complete units. The plant will start off with an annual production of
100,000 units, which will eventually increase to 150,000 units. Comprised of
expert employees trained in Korea and in the Czech Republic, the Russia
Plant will focus on production of the C-Class models with reinforced designs
adapted to the local needs in Russia.

Brazil Plants
The Brazil Plant will secure a manufacturing foothold in the biggest market
in Central and Latin America and play an important role in increasing sales in
the region. The Brazil Plant will be producing stylish and fuel efficient
compact cars suited for the Brazilian market, and contribute to increasing the
market share in the region.

Inventory Management
In an ongoing effort to enhance customer service, Hyundai will roll out a new
inventory management system to dealers, which is expected to increase same-
day service repairs and enhance inventory efficiency. The Supply Modeling
and Retail Tracking collaborative dealer inventory management program,
known as Smart Stock, has increased parts sales by 19 percent and inventory
turns by 25 percent in a pilot program. Hyundai's goal is to increase same-
day service repairs, a key component of overall customer service.

Between 30 and 40 dealerships will be upgraded to the Smart Stock system in

November, with all Hyundai dealers having access by the end of 2010. While
individual dealers understand local market trends and seasonal demands,
Smart Stock takes a collaborative approach to inventory management. Smart
Stock leverages the inventory supply system used by Hyundai and the data
generated by Hyundai's network of almost 600 dealers to optimize stocking at
the individual market level.

"The bottom line is that we provide the information and tools that the dealer
needs to make informed stocking decisions," said George Kurth, Director of
Supply Chain and Logistics. "Guesswork is virtually eliminated because the
dealer knows the importance of each part and the system will automatically
recommend whether that part should be stocked or not."

The key differentiator is that Hyundai is forecasting demand up to six months

into the future rather than relying on historical average demand, enabling
dealers to get ahead of trends and seasonality. Once a dealer is operational,
Hyundai guarantees that it will buy back all inventory that does not sell on a
quarterly basis provided the dealer ordered the parts in accordance with
program guidelines.

The Smart Stock system is compatible with ADP, Reynolds or UCS computer
systems and Hyundai dealers with parts managers trained on these systems
will be first to upgrade to Smart Stock. Hyundai is targeting upgrades to one
market per region per month through 2003.

Hyundai’s Competitive Advantage

In this sternly aggressive business world, the goal of most firms is to establish
distinctive or unique capabilities to gain a competitive advantage in the
marketplace through utilising the most of their core competencies.
Competencies refer to the fundamental knowledge owned by the firm
(knowledge, know-how, experience, innovation and unique information), and
to be distinctive they are not confined to functional domains but cut across
the firm and its organisational boundaries.

Having a competitive advantage is having a difference, the choice of certain

activities to deliver a unique value-mix to a selected market, thus the ability
to perform particular activities and manage the linkages between activities is
the key source of competitive advantage. The strategic task, then, is to create
a distinctive way ahead, using whatever core competencies and resources at
its disposal, against the background and influence of the environment.
Through these distinctive capabilities the organisation seeks sustainable
competitive advantage. Competition in many domestic and international
markets appears to be entering a new phase, in which product quality and
performance are becoming more important to customers than price. In such
markets, the effective management of the new product development process
is the essence of competitive advantage.
           
Hyundai Motor Company is regarded as the largest auto-manufacturing
industry in South Korea and known as the fifth largest industry in the world.
The company has the capacity to produce or manufacture 1.6 million units in
a year. The company has been able to give emphasis on each level of the
industry which enables them to gain the trajectory and momentum required to
attain competitive position of being a world-class automotive brand and to
attain competitive advantage (Worldwide Hyundai,2010). The company has
been able to operate in different parts of the world including US, Europe and
other parts of Asia.

The management of the company are accountable for having a sustainable

competitive advantage in a business. If the management would not be able to
do their tasks efficiently, the company might lose their competitive
advantage. Competitive advantage is the status of the company in the market
environment against their rival companies. Like any other industry, Hyundai
has also their competitive advantage against their rival auto-manufacturing
industries in the world. In addition, the company may also erode or lose their
competitive advantage and position if the management will not be able to
adapt to the changing market and customer need, specifically in car
industries.

For instance auto manufacturing industries nowadays must be able to provide

car products which are affordable and cost-effective in terms of diesel engine
aspects.  In this regard, Hyundai must be able to produce cars that adhere to
these needs. In order to sustain their competitive advantage, Hyundai has
manufactured Hyundai’s i30 (Hyundai i30 SX CRDi, 2008).  Compared to its
diesel rivals, the diesel i30 emerge to have gazumped them all on either price
or size before it has turned a wheel. Products like these enables Hyundai to
sustain their competitive advantage in the growing crisis of diesel and energy.
Aside from that, there are many ways in which Hyundai will be able to
sustain their competitive advantage. First of, the company should be able to
continue to maintain the superiority of their cars that they offer to the market.

Furthermore in order to sustain their competitive advantage by presenting two

new production models and a program than enhances the general
environmental compatibility of their products. For example, the Sonata brand
has been the standard bearer of the company all over the world in the D
segment, and the other is the 2008 matrix. The company ensures that they
also consider corporate social responsibility to ensure their competitive
advantage by providing products which are environmental friendly as their
way of dealing with the greenhouse gases global issues. The are able to create
an eco-concept package demonstrating how the emerging technologies can
make a relative reduction in CO2 emissions without punitive penalties in
terms of price, driving enjoyment and performance.  This context is a near
production approach for reducing CO2 emission and fuel consumption
(Hyundai Motor, 2008)       .

As a global leader, the company must also strive harder to fulfil their
obligations to provide the needs of the society. The company can also
consider their pricing strategy by providing affordable yet quality cars and
vehicles to the market.  Industrial models which are to be consistent with part
of a strategy of 'flexibility and innovation' must therefore give the firm the
resources to counter the risks of erosion and losing of their competitive
advantage.  In order to cope with the various influences and effects of market
environment changes, and to sustain their competitive advantage, the
management of Hyundai, must be able to improve and expand its
organisation so as to conduct environmental activities on a global scale which
include the expansion of Hyundai through the manufacturing presence of the
brand in China, India, U.S., and Europe; and plans for new plants in Czech
Republic and Russia as well as establishing transplants which is an overseas
production plant; refers to vehicles produced in US or somewhere else at a
Hyundai-owned plant.
Aside from this, the management of Hyundai must also be able to focus on
tier research and development department and to initiate innovative
strategies, accordingly, the higher echelon of management in organisations is
now driven towards innovative strategies designed to provide a competitive
advantage and edge in the marketplace. As business gravitates towards a
global scale, entrepreneurs find themselves faced with the challenge of
producing new and better products at reduced cost and market price. Daft
(2003) pointed out that in managing a global environment, managers of
Hyundai must be characterised by the ability to bring about change through
innovation and creativity.

As discussed, the knowledge of the underlying sources of competitive

advantage highlights the abilities and core competencies of Hyundai as a
world leader in auto manufacturing industries. In this regard, the company
must be able to determine strategies and ways to ensure that their competitive
position and advantage are being sustained in all levels of the organization.

Total Quality Index (TQI)

Hyundai produced the most segment leaders of any automotive manufacturer,
according to Strategic Vision‘s Total Quality Index(TM) (TQI), which
measures total vehicle satisfaction among new car owners. Clinching the top
spot in three distinct vehicle segments is a first for Hyundai. The Strategic
Vision results released today placed the Hyundai Azera sedan atop the large
car segment, the Entourage (tied with the Kia Sedona and Nissan Quest) in
the top spot for the minivan segment and the Santa Fe on top in the small
sport utility vehicle (SUV) segment. ”

Research And Development

-ENGINE & MISSIION

The pride of Hyundai Motor is now measured worldwide ! As Hyundai

Motor Company continues to develop cutting edge engines that will beat
as the heart of next generation cars, we are confident that we will be the
major player of the automobile industry in the future.

THE 'S-ENGINE'-THE NEW CONCEPT THAT

OVERCAME PREVIOUS LIMITATIONS

The S–Engine, the world's highest quality V6 engine, developed solely by

Hyundai, achieves a powerful performance–generating 240 horsepower and
the super fuel efficiency. This engine boasts the most economical fuel
efficiency available today. It not only offers fast response time, but also
overcomes limitations of existing diesel engines. Its power output is
equivalent to gasoline engines and it also meets the Euro 4 Environmental
Regulation standards, proving this is the most advanced new concept diesel
engine, with top quality engine performance, fuel efficiency, and
environmental friendliness, all at the same time. The S–Engine, currently
available in the Veracruz, is also attracting industry attention for its superb
performance and fuel efficiency.

Quality Management
The world's automobile makers closely watch to see what Hyundai will do next.
With uncompromising craft man ship, we will build only the most superior
vehicles.
The Hyundai Sonata, Elantra, and Tucson were selected as the 'Most
Ideal'cars in three segments in Auto Pacific's 2007 Ideal Vehicle Awards,
which conducts studies to determine if cars meet the needs and expectations
of customers and selects the most ideal cars by calculating customer
responses on 15 measurable points.

"Quality control in Production & Manufacturing"

Manufacturers across a wide range of industries face many common challenges in their
efforts to meet rising quality control and standards. The growing mix of complex
products, global expansion of operations, and outsourcing requires a new approach to
quality management. Many organizations are deploying either industry standard quality
management methodologies such as Six Sigma and ISO 9000, or implementing other
quality practices to reduce costs, shorten cycle times and improve overall product and
process quality. But what do you think how and what are the methods organisations can
adopt to ensure quality control in their production and manufacturing.

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