Professional Documents
Culture Documents
Hinopak Production Managment
Hinopak Production Managment
&
SEC A
TERM REPORT
ON
“HINOPAK”
SUBMITTED TO:
LETTER OF ACKNOWLEDGEMENT.....................................5
EXECUTIVE SUMMARY...........................................................6
INTRODUCTION.........................................................................7
SITUATIONAL ANALYSIS........................................................9
APPLICATION OF OGSM PHILOSOPHY AT HINOPAK. .12
What OGSM......................................................................................
A Live Document..............................................................................
MARKET SUMMARY...............................................................17
Target Market...................................................................................
Market Needs....................................................................................
Market Trends...................................................................................
Market Growth..................................................................................
Objectives..........................................................................................
MARKET SEGMENTATION...................................................27
Types of Customers..........................................................................................................................
COMPETITIVE ANALYSIS.....................................................30
CAPACITY PLANNING AT HINOPAK.....................................32
APPLICATION OF TQM............................................................33
PDSA Cycle.......................................................................................
SWOT ANALYSIS......................................................................40
CUSTOMER RELATIONSHIP MANAGEMENT.................41
RECOMMENDATION TO APPLY GEMBA.........................43
RECPMMENDATION TO APPLY BALDRIGE CRITERIA
.......................................................................................................45
GRADING OUR PM INC. SUBSIDIARY (MBNQA).............48
HinoPak's product range has been designed and built in Hino's traditions of
automotive excellence to be the leader in its category and the main emphasis
has been given to passengers' safety & comfort.
Hinopak also offers a complete in-house facility for designing and building
buses, ambulances, cargo trucks, dumpers, water boozers and a wide range
Hinopak delivers only the safest most reliable products and remains the
Pioneer in supplying the largest number of Urban Buses those are
successfully facilitating the commuters of Punjab and Sindh. Hinopak is fully-
equipped to design and manufacture a wide range of Bus Chassis and all
types of Bus Bodies.
The year 2007 marked the year of great success, as Hinopak Motors broke
record in three fields: volume of sales, chassis assembly, and body
fabrication.
Hinopak uses the OGSM methodology to help build a strategic plan for its
automobile business.
OGSM:
A strategic planning framework that uses a top-down approach to define the
Objective, Goals, Strategies & Measures (OGSM) of their business. The
output is a clear, simple and concise (ONE page) strategic plan:
The mission of Hinopak Motors Limited is: “To provide the society with safe,
economical, comfortable and environment friendly means of transportation by
manufacturing and supplying commercial vehicles and services.”
Goals: Translation of their vision into specific goals e.g. turnover, profit,
market share, professional organisation etc.
Hinopak also develops multiple OGSMs that all link to one another. This
ensures their different businesses / divisions (3S Dealership) are united
under a single objective and that cohesive strategies exist between them.
A Live Document:
Hinopak believes that an OGSM is a live document and should be reviewed
regularly, i.e. annually. The objective of each review is to take into account
progress and any changes in the macro-environment / consumer trends,
then update the goals, strategies and measures accordingly.
OBJECTIVE
Be the leading facilitator of commercial vehicles and services
MEASURES (by 2012
GOALS (by 2012) STRATEGIES
latest)
Markets, Channels,
8% profitability Categories - ≥60% revenue from
($11M) Canada and USA
Focus on (key priorities): - Focus on Distribution
$140m sales Pakistan, USA, and operations
Australia
Serve 250M - 5 year transition plan
consumers in Focus on distribution in place
Pakistan, Japan, Grow retail operations - 15%-20% CAG
Australia, New Exit non-profitable (support focus
Zealand, Thailand, Communications operations specialized vehicles
Canada, and the US (outsource) expansion)
TARGET MARKET:
1. Institutions:
These are the main customers including:
MARKET NEEDS:
MARKET TRENDS:
Mobility has been an important objective for mankind since the beginning of
time. The invention of the wheel about the year 3000 B.C. was the first great
achievement. Then in the 18th century the steam engine, one of the greatest
gifts of the Industrial Revolution made a major impact on the life-style of the
human race. The mating of the 'wheel' with the 'engine' made it possible to
transform animal driven carriages into automobile.
From the 18th century to the 20th century the history of the automobile is a
tale of human ingenuity and passion for comfort, fastness, safety and a
better quality of life.
MARKET GROWTH:
In the year ended December 31, 2007 Hinopak made the highest ever profit
in its history. The production and sales revenue have also been the highest.
While the sale of locally manufactured trucks declined nationally, Hinopak
was able to claim a larger share in the reduced numbers.
National Sales:
The sales of buses increased by 16% from 928 in 2006 to 1078 in 2007 as
the sales tax was reduced to zero towards the end of 2006. However, it still
fell considerably short of the level of 2004 when1411 buses were sold. The
bus sales, it seems, will remain depressed till the time the second-hand
imports are altogether stopped and the policy incentives for urban transport,
under consideration since long, are announced by the federal and provincial
governments.
The following are more specific areas that could be corrected to improve
efficiency:
Objectives
Suppliers
Since JIT is a stockless production and does not allow room for defects or
error having trustworthy reliable suppliers is an important factor. When
choosing a reliable supplier, consider their location and prior occurrences
with labor issues such as strikes. Once a reliable supplier is found, creating a
good relationship is the next step. This is a two way relationship in that both
the company and supplier get some positive out of it. The company gets
products or material with no errors or defects, a quality partnership, and gets
everything on time according to delivery schedules. Also the supplier must
have a back-up plan incase for emergencies such as strike, weather
conditions, and any other problem that many arise. The supplier gets a long
term contract, constant demand for their product, and a good constant
price.
There are many advantages of that Hinopak can receive from JIT. Listed
below are some of the advantages:
Disadvantages
Conclusion
Hinopak’s customers:
Those people who are looking to make money by operating their product.
Like CNG bus owner will buy CNG bus from them because this bus will carry
They have done Behavioral Segmentation. Unlike cars these Buses and
trucks are very expensive. They are bought when there is a special need on
special requirement. It is basically a Procedural segmentation. When there is
a need, customers come to them with different requirements. The Sales force
attracts them and then the customers usually give their specifications and
the structure they want on the chassis. For e.g. a customer might want a
High wall trailer built on FM2PKPA 6X4 Prime mover but with changes in
standard specification.
1. Institutional Customers:
Description:
These are the main customers. They include Pakistan Army, Pakistan Air
Force, Pakistan Navy, Shell, Total, Caltex, City District Government
Karachi, NED, KU, CNG Bus owners and others.
They want to add buses to their fleet. For e.g. CNG bus owner would like
to add new CNG buses to his existing fleet.
They buy products with customized body. For e.g. some client might need
bowzer with high density.
The objective of customers while buying the product is that the cost
should be minimal, the product should be helpful in overall business and
the most important factor is that the operating cost should be low. Also
the initial cost should be low.
Price sensitivity:
Institutional clients are more price sensitive then the individual clients.
You cannot dictate them. The product has to be very good. 80% of the
times customers demand low price and they are looking for lowest tender.
The sales of Hinopak overall increased in the past. The ratio of Institutional
to Individual customers is 80-20 %. As in past the purchases of Institutional
customers increased with the increase in purchases of the government and
the armed forces.
But in the past few months the ratio has changed to 60-40%. This is because
of the increase in the purchase of individual customers and the decline in
government purchases due to political instability. The government is not
building infrastructure as it was in the past. Therefore, they are buying less.
Also because of the high inflation all the customers are holding money and
thus the sales of the industry has declined as buying of such vehicles is not
everyday task and involves high investment.
2. Individual Customers:
Description:
Dealers, people who want to make money while using the product.
Use of product:
Objective:
The selling is done by using the advantage Hino has in the market of being
the market leader and the favorable opinion market has about the products
of Hino.
Also, the goodwill is high. They have free service camps in which they give
service free of cost to the customers; they are given free oil change and a
new filter. A new filter usually cots around Rs.7000. so it’s a big thing for the
customers.
The price of Hino’s products are relatively higher than their competitors, this
is because their product is of good quality. They easily use this image. The
quality of the competitor’s products is lower mainly because they sell low
quality products
COMPETITIVE ANALYSIS
July'08 Aug'08 Sep'08 Cumulative
Prod. 209 133 155 497
Hino
Sale 180 176 149 505
TRUCKS
July'08 Aug'08 Sep'08 Cumulative
Prod. 209 133 155 497
Hino
Sale 180 176 149 505
Prod. 116 48 54 218
Nissan
Sale 79 34 11 124
Prod. - - - -
Dong Feng
Sale - - - -
Prod. 99 27 26 152
Master
Sale 48 41 24 113
Prod. 68 35 23 126
Isuzu
Sale 40 36 15 91
BUSES
July'08 Aug'08 Sep'08 Cumulative
84 54 12 150
Hino
41 64 43 148
Nissan - - - -
TRUCK
BUS
Big vehicles, like trucks and buses, are bought when there is a special need
on special requirement. Hinopak basically has Procedural segmentation.
When there is a need, customers come to them with different requirements.
Unlike small body makers who spray paint the vehicles and then later receive
numerous customer complaints, Hinopak actually uses baked paint to give a
longer life and better finish to the vehicles.
Hinopak Motors Ltd. has reduced its chronic waste by 18% and as a result its
annual plant capacity has increased to 10,000
Eliminate Waste
o Remove any activity or resource in the organisation that does not add
value to an external customer/patient
Improve Work Flow
o This is an important way to improve the quality of service provided by
any process
Stock Control
o Stock of all types is a possible source of waste; understanding where
stock is stored is the first step in finding opportunities for improvement
Focus on Variation
o Reducing variation improves the predictability of outcomes and
reduces the frequency of poor results
Once a team has set an aim, established its membership, and developed
measures to determine whether a change leads to an improvement, the next
step is to test a change in the work setting
PDSA CYCLE
Use of PDSA cycles is a way of testing an idea by putting a change into effect
on a temporary basis and learning from its potential impact. This approach is
quite different from the approach traditionally used in healthcare settings,
where new ideas are often introduced without sufficient testing.
Step 2: Do
Step 3: Study
A process that is in Six Sigma control will produce no more than two defects
out of every billion units. Six Sigma uses many statistical tools but applies
them in a clear 5 stage project oriented cycle: Define, Measure, Analyze,
Improve, Control (DMAIC). Tools used in the Six Sigma approach include
Flow charts, Run charts, Pareto charts, Check sheets, Cause and effect
diagrams, Opportunity flow diagrams, Control charts, Failure mode and effect
analysis, Design of experiments
Lean
Lean is aimed at the elimination of waste in every area of production
including customer relations, product design, supplier networks and factory
management. Its goal is to incorporate less human effort, less inventory, less
time to develop products, and less space to become highly responsive to
customer demand while producing top quality products in the most efficient
and economical manner possible. The keys to Lean are understanding where
the value in your process lies, identifying all non value adding activities as
waste and devising plans to remove the waste from the process.
Flowcharting is a core tool of Lean - as flowcharting provides a visual image
of a process enabling waste identification to take place. This flowcharting is
known as value stream mapping. Lean considers that there are 7 wastes -
Defects, Overproduction, Transportation, Waiting, Inventory, Motion, and
Processing (DOTWIMP). The worst of all the 7 wastes is overproduction
because it includes in essence all others and was the main driving force for
the Toyota JIT system Ohno and Shingo were smart enough to tackle this
one to eliminate the rest.
SWOT ANALYSIS
HELPFUL HARMFUL
(to achieving objectives) (to achieving objectives)
I STRENGTHS WEAKNESSES
TPS continues to evolve today. Toyota people are beginning to call TPS the
"Thinking People System" instead of the Toyota Production System. TPS is
always improving.
TPS is the Operational Blueprint for a Lean Enterprise
The organizations that have implemented Lean most successfully have
adopted TPS as their operational blueprint. They have studied
and understood the system, renamed it to take ownership of it as their own
system, and adopted as pure a form of TPS as possible
Make what the customer needs, when it is needed, and in the right
amount
Minimize inventories
Separate machine work from human work and fully utilize both
Build quality into the process and prevent errors from happening
Reduce lead-times to allow for rapid, flexible scheduling
Produce a high mix of low volume products efficiently
The GRPS house shows how to build a world class production system that
continuously improves by eliminating waste.
Just-in-Time (Takt-Flow-Pull)
Left Pillar Eliminate the 7 Wastes of Production
Create a smooth flow of product and information,
minimize inventory and space.
Jidoka (Autonomation)
Build quality into the process, separate man &
Right Pillar machine using intelligent automation.
Implement low-cost automation, error-proofing,
equipment upgrades and reliability improvement.
Heijunka (Leveling)
Foundation Stabilize production schedule variability
Reduce total Lead-time, coordinate sales,
scheduling, and customer needs
Category 1—Leadership
Strength
1.
2.
OFI
1.
2.
Strength
1.
2.
OFI
1.
2.
Strength
1.
2.
OFI
1.
2.
Strength
1.
2.
OFI
1.
2.
For High-Importance Areas
Importance
Criteria (High, Stretch
Category Medium, (Strength) or What Action Who Is
Low) By When?
Improvement Is Planned? Responsible?
(OFI) Goal
Strength
1.
2.
OFI
1.
2.
Strength
1.
2.
OFI
1.
2.
Category 7—Results
Strength
1.
Points
S.No Category Description
Out Of Obtained
1. Category 1 Leadership 120 110
2. Category 2 Strategic Planning 85 80
Customer and Market
3. Category 3 85 83
Focus
Measurement,
Analysis, and
4. Category 4 Knowledge 90 85
Management
Human Resource
5. Category 5 85 80
Focus
6. Category 6 Process Management 85 80
7. Category 7 Business Results 400 390