Together Towards Excellence

Brakes India Limited Foundry Division

Emerging trends
Globalization of Business

Prices under constant pressure; Squeeze on profits.

Optimizing customer benefit - total cost of acquisition. Supply chain rationalization. Survival of the fittest in P, Q, C, D, S, M. Strict ecological regulations. Automation. Proliferation of communication; digitalization is the key.

Our response to the emerging trends

Focus on new growth markets.
Focus of strategies to shift towards capabilities (know-how, knowwhy) rather than positional assets (infrastructure, market presence). Increased result / cost orientation. Flatter, decentralized organization with concept of internal customers.

Increased use of cross functional teams.

Higher degree of cross cultural interactions.

Increasing ability to manage external interfaces.

Competency for change management.

Our Imperatives
Quality is the single most important factor to compete globally.

Exceed Customer Expectations

Emerge as the fastest cycle time competitor both in terms of delivery and new product development. Continuous improvement in P, Q, C, D, S & M. Total employee involvement to sustain growth.

Have a global perspective and benchmark against the best practices

Achieve cost efficiency Resource conservation & retainment. Environment protection & humanizing working conditions. Streamline Outsourcing Processes

Towards excellence
Emerge as the fittest in Quality, Cost, Delivery, Safety and Morale and continuously improve through employee involvement. Fulfil customers expectations in total. Enhance technological edge by becoming a learning organisation and updating skills and knowledge. Build leadership and vision to achieve business excellence. Achieve continuous improvements across the organisation systematically to continue to achieve long term business objectives and strategies

effectively and efficiently in a sustainable manner.

Understanding TPM concepts and practicing its methodology is the most comprehensive solution to achieve all the above.

Vision
We shall achieve customer satisfaction by providing products and services of high quality at globally competitive prices. We shall be a leading player in our chosen area of operations in the light engineering industry. We shall improve the quality of life of our employees and fulfill their reasonable aspirations. By creating an atmosphere of trust and care, we shall work as a cohesive team always encouraging higher standards of performance. We shall provide an adequate return to our stock holders and facilitate the growth of the organisation. We recognize our vendors as our partners in progress. We shall give them a fair deal and nurture a healthy relationship. We shall conduct ourselves as a responsible corporate citizen known for integrity and ethics. Issue: 01 April 1997 Executive Director

Vendors as partners

Return to stock holders

PUSH

VISION

PULL

Customer satisfaction

Employees quality of life

Excellence
Commitment

Cultural values
Vibrancy

Orderliness
Cleanliness

Harmony & Co operation Respect & concern for people

Core Values
Trust & Integrity

Openness

Transparency

Basic Values
Humility

Creative values

Fairness

Innovativeness

2001 QS 9000 2003 ISO 14001

Brakes India - Foundry

1999 TPM Kick off

2004 ISO/TS 16949

Systems

1998 TQM Kick off

2006 OHSAS 18001

1992 SF I 1981 PMF 1996 SF 2 PUSH

1992 ISO 9002

2006 Best supplier 2007 TPM Spl Award

2006 TPM Consistency

2005 Energy Award 2005 Green Foundry 2004 SHE award 2003 TPM Excellence

Milestones

PULL

Recognition

Capacity

2008 Dunes Oman

2001 Best Foundry

2002 SF 3

2005 SF U2

1997 CAD

2008 5 Axis machining

2003 Deming prize

1997 CAM

Technical capability
2003 ATAS 2001 CAE

Human side of BI
Atmosphere of care
Basic requirements Provide: Housing for employees Subsidised food Fair-price shops Uniform Health check ups Developmental aspirations Institute: Free Medical centre Vocational training centre Own vehicle scheme Recreational club Free Education for wards Computer literacy classes

Dedicated employees

Empowerment of Employees

Vision

PUSH

Improve the quality of life

PULL

BI one large family

Social meets Periodical Family visits to foundry Sports day

Employee participation Awards of recognition Suggestion schemes

Ownership and accountability

Atmosphere of trust / Organisational climate

BIF A responsible corporate citizen

Societal needs

Infrastructure
Provided: Drinking water Communication facilities Banking facilities Transport facilities Housing scheme Direct and Indirect employment of local people

Environment Rain water harvesting Zero discharge of pollutants Utilisation of waste Utilisation of green power Green belt development

Brakes Indias total identification with Sholinghur

PUSH

Upliftment of Sholinghur

PULL

Harmony with Sholinghur

Health Setting up: Blood bank primary health centre Accident relief centre

Education Established: Higher secondary school Technical training centre Computer literacy classes Computer centres at V.I.T.

Individual needs

Establish basic TPM policy and goals

TPM POLICY
Brakes India Foundry shall achieve total customer satisfaction by the continuous pursuit of excellence to deliver products and services of high quality at globally competitive prices. We shall be guided by world class manufacturing benchmarks with employees involvement in maximizing the effectiveness of our resources and employees satisfaction by ensuring a healthy and safe work environment. Brakes India Limited Foundry Division Executive Director (Foundry)

TPM Objectives
Zero of Accidents Zero Breakdown Zero Defects Zero Pollution

Our Motto Together Towards Excellence

Roles

Meeting Frequency

(EXAMPLE )
President
TPM Secretariat

1. 2. 3.

Basic policy and target setting Arrive at and approve overall implementation plan. Provide resources, monitor progress and take appropriate corrective actions.

Once a month

99
1. 2. 3. Preparation of departmental targets and implementation plan. Implement activities according to the plan. Monitor the progress with respect to the plan and take appropriate actions. Feedback to the TPM Steering Committee Preparation of weekly plan Implementation of TPM Promotion activities in the department Feedback to the TPM Sub Committee Prepare item wise / machine wise plan. Review weekly plan and implementation activities and take appropriate actions as and when necessary.

Twice a month

4.

1. 2. 3. 4. 5.

Weekly

Small group activities by the operators.

Daily

3.1

Master plan
1999-2000 2000 - 2001 2001 2001 - 2002 2002 2002 - 2003 2003 Jun-99 Sep-00 Oct-00 Mar-01 Apr-01 Sep-01 Oct-01 Mar-02 Apr-02 Sep-02 Oct-02 Mar-03 Apr-03 Sep-03
1 2 3 4 5 6 7

Declaration by Management Initial education & training Establish TPM Organisation Setting objectives & targets Drafting of Master Plan Kick off of TPM Implement 5 S activities Autonomous Maintenance

Jun-99 Staff Aug-99 Aug-99 Aug Oct-00 Across the foundry Model Equipment Model Equipment Model Equipment Operator

7.1 Individual Improvement

replication Horizontal Application

All other equipment All other equipment

7.2 a. Step 1 to 3

b. Step 4 - 7 Planned Maintenance a. Establish systems for PM Model Equipment & CM

7.3 b. Control system for

All other equipment as per time based & predictive

lubricants and spares, Zero failure campaign c. Operation/maintenance skill training

Model Equipment System for Training

Whole plant for other equipment

Operation / Maintenance skill training Trial development, Implementation, Reinforcement

Establishing development management activities Implement quality maintenance activities Model Equipment

Establishing system requirements for the process

10 Implement OTPM activities

1S & 2S Activities

3 - 5 S Activities

KAIZEN for better management

11

Establishing systems to improve SHE Sustaining full TPM gains/ level raising

Zero Accident campaign

Safety training & Implementation

Implementation of Environmental Management System

Excelling environmental performance Preassess ment audit

12

Individual Improvement

SEIRI
Autonomous Maintenance

SEITON Planned Maintenance SEISO

Quality Maintenance

TPM

Implementing 9 pillar activities

5S
SEIKETSU SHITSUKE

Development Management

Energy Management

Safety, Health & Environment

Education & Training

Administrative Office TPM

TPM JOURNEY - PHASE 1

ESTABLISH & IMPLEMENT SOPs

Work Place Organization.

Waste Reduction. Improving Equipment availability. Reducing Production failures RESULTS Improved plan Vs Performance Reduced product cost Improved efficiency TOOLS PDCA Cycle of Management & QC Story Internal customer concept. 5 S & 3 MU concepts Exactness & Visual controls J.I.T deliveries Quality awareness & Quality Circle activity People building

Reducing Inventories
Reducing Customer Returns Reducing non-value adding activities Improving participation & involvement

Suggestion schemes

Improved inventory turns

Reduced failure cost

TPM JOURNEY - PHASE 2

IMPROVING S.O.PS. Improve process technology. Improve maintenance technology. Job rotation / enlargement / enrichment. Further improve equipment availability. Increase production throughput. Improve environment & conserve resources. Implement appropriate automation. TOOLS

Daily Work Management

FMEA & FTA Poka - Yoke V.A /V.E

Cross Functional Approach to problem solving

Implement new technology Education on ownership & accountability PSM Methodology / Strategic sourcing Concepts of M.P. & C.P Deployment Policy Deployment EMS

RESULTS Increased labour/ machine productivity Improved delivery performance Reduced customer returns / Concerns Increased capital turnover ratio Reduced material cost

Improved marginal profit rate

Increased ratio of value added work Improved Employee morale Goal congruence

TPM JOURNEY - PHASE 3

EVOLVING INNOVATIVE S.O.P.S New product development New / re-engineered process development TOOLS Deep analysis Market Survey & Research Bench Marking against Best Practices

New equipment development

New business development

New Knowledge of material, product & technology. RESULTS New Markets Developed Niche Products Developed New / State of the Art Technology Implementation Business Process Outsourcing Fastest cycle time competitor

Vendor Development & Integration

Supply Chain Management Quality Assurance Diagram. Business Process Re-Engineering Collaborative efforts with customers at design stage. Creation of Knowledge Data Base Leveraging Information Technology

BIF Journey of TPM

Phase III 2005-2007
TPM Special Together towards excellence by Innovation and Breakthrough
Continual Improvement on P,Q,C,D,S&M and cultural change Breakthrough in Cost reduction through Policy deployment Manufacturing excellence Business excellence 3 Years ahead of competition & Leadership in foundry industry
Breakthrough

Phase II 2003-2005
Consistent TPM Commitment

Together towards excellence

Phase I 1999-2003
TPM Excellence Defect Zero B/D Losses
Continual Improvement on P,Q,C,D,S&M and cultural change Continual Improvement on P,Q,C,D,S&M and cultural change Breakthrough in Cost reduction through Policy deployment Manufacturing excellence

Retainment Retainment Improvement

Improvement

Retainment

Improvement

TPM Phase III Business Model

Innovation and Breakthrough Customer Satisfaction Create a new value Proposition 3 Years Ahead of competition

Customer Loyalty Create new customer & Development New Market

Business

Technology Globally Competitive

Operations Management Quality Management (QM)

Vision

Operations Excellence

Maintenance Management (JH & PM)

Cost Management (KK)

Energy Management
IT E&T Total Employee involvement Responsible Corporate citizen

Yield Management
HSE

Harmony with the society

Business Excellence

Breakthrough in

Research & Development

Leadership in Foundry Industry

From manufacturing excellence towards business Excellence Manufacturing Excellence

Business Excellence
2010

Difficult to respond conventionall y

Paradigm Shift

2004

Management Innovation and Breakthrough is required to drive TPM efforts

Towards excellence
Mere improvements will not do, we need breakthrough

Breakthrough

Improvement

Retainment

Breakthrough is the only way to be ahead of competition by three years

Skill Base Development

Improvement functions Retainment functions

Innovation & Breakthrough functions

III I II

High Degree of analytical skills Should not be over ambitious Ability to manage Should have problem solving skills Ability to investigate the problems Ability to perform in different functions High degree of leadership skills Self motivated/ driven High degree of perseverance

Creativity - Out of the box thinking

Creator of crazy ideas

routine jobs
Adequate knowledge & Skill

Change Agent

Competencies to drive performance

Bell curve representing the normal distribution of performers in a company

Exist
Low Performers

Enhance
Average Performers

Excel
High Performers

10%

80%

10%

SHIFT
Competencies when properly applied, significantly skews the distribution to the right to create a high performance organization.

BIF should attempt to be 3 years ahead of competition

Industry trend
Change in OEM In-house value creation
PreSeries development development Module Manufacturing 75% 25% Module Assembly 75% 25% Vehicle Assembly 1% 99%

Suppliers
OEMs

2002

55% 45%

54% 46%

Change in OEM inhouse value creation (%) -9 -14

-15

-12

-3
Suppliers

4% 2015 64% 36% 68% 32% 90%

10%

87% 13%

96%

OEMs

Value addition at supplier end will go up from 65% to 77% up by 19%

Supplier

OEM

Positioning regarding part complexity

Premium
Improved technology process lead to a shift of classification of selected parts

High
High requirements Small premium segment

Medium

complexity
Increasing competition due to new emerging global players

Low complexity
Volume

Complexity ( Weight, Size, Geometry )

To be 3 years ahead of competition

Inference

BIFs imperatives

Industry trend

Customer requires value added products

Strong competitive environment for low complexity parts.

Develop capabilities in more domain areas

Be more cost competitive

Positioning regarding part complexity

Medium and high complexity parts offer differentiation against competition Improved processes and technology for producing complex parts

Develop new products Develop new processes, new technologies

Strategic direction for BIF

Premium Innovation-oriented Foundries Cost-oriented Foundries

Volume
Engineering Melting

Contract Manufacturers/ Job shops

Casting Cleaning Machining

Full Service supplier Parts assembly Module assembly

Value Chain

To be 3 years ahead of competition

Inference Industry trend Customer requires value added products BIFs imperatives Develop capabilities in more domain areas Be more cost competitive

Strong competitive environment for low complexity parts.

Positioning regarding part complexity Medium and high complexity parts offer differentiation against competition

Develop new products

Improved processes and technology for producing complex parts Cost leadership for high volume market

Develop new processes, new technologies

Productivity should lead to overwhelming competitiveness Develop capabilities to produce new materials, products and processes

Strategic direction for BIF Innovation leader in the premium market with full system capability

BIF must achieve cost and technological leadership

Policy Deployment

Vision

LTO

MTO

Results

Linking of objectives

Policy deployment Management for objectives

Overall company savings (2009 -10) Rs. 475 Millions

Department wise deployment

SF-1&2 Rs. 45.8 Millions

SF-3 Rs. 49.7 Millions

PMF Rs. 4.6 Millions

Unit 2 Rs. 33.3 Millions

Technical Rs. 96.5 Millions

Utilities Rs. 70.6 Millions

Marketing Rs. 106.3 Millions

Purchase Rs. 68.1 Millions

Cost savings through Policy Deployment YOY

MFO COST SAVINGS
600 500
SAVINGS (RS. MIO)

2500 472 475 2057 2000

Cumulative Savings (Rs. MIO)

495

505

400 329 300 200 100 0 90 85 85 2001-2003 (3 years) 110 98 183 2003-04 245 240 136 280 272 305 1110 805 110 293 533

1582

1500

1000

500

0 2004-05 2005-06 YEAR Target Actual Cumulative 2006-07 2007-08 2008-09 2009-10

Loss Cost matrix

Brakes India Limited Foundry division Target

LOSS COST MATRIX

Issue : 1 Year: 2009-2010

Year 2009 - 10 Cost

Purchase and Marketing Sand Foundry -Unit 2
24.00 4.28 9.93 4.00 1.18 10.20 5.72 73.90 69.60 69.60 9.98 2.52 5.55 56.26 475.00

Sand Foundry -1 &2

Depatment

Overall company target Rs 505 Million

Permanent Mould Foundry

Sand Foundry -3

Technical

Improvements To Improve Pattern Plate Yield by Yield Loss saving 3500MT 2% To reduce energy consumption Energy Loss by 10 KWH/MT To reduce internal failure cost - < Defect and Rework 0.9% Loss To achieve zero PPM in machining rejection To reduce change over loss by Change Over loss 50% Improving productivity by Speed loss reudcing the cycle time
Material Loss

136.00 20.56 6.25 8.34 8.20 4.00 14.20 13.40 5.10 12.20 203.85 18.90 2.10 4.80 12.72 9.60 5.35 53.47

1.30 1.64 1.60 59.70

Loss

To reduce material cost by 10% TOTAL - Rs. 505 Million

Yield
Energy Material Change over Defect & Rework Speed

137.3
124.8 95.90 49.10 37.3 30.7

137.3
262.1 358.0 407.0 444.3

95.9 49.1

37.3

30.7

Yield

Material

Change over

Defect & Rework

Energy

In Rs in millions

475.0

Loss

Speed

Cumulative

Loss

Individual

Cumulative

160 140 120 100 80 60 40 20 0

Utilities

137.3

Loss Cost Matrix 124.8

500 450 400 350 300 250 200 150 100 50 0

Individual

Overall Results

Sales growth
4th Disamatic Sand Foundry Commissioned

9 8
Growth Trend Index
3rd Disamatic Sand Foundry Commissioned

7.6 6.8 6.3 6 5.9

7 6 5 4 3 2 1 0 1.1 1.4 1.5 1.6 1.7 2.3

3rd Disamatic Sand Foundry Commissioned

4.8 4.3 3.2

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Year
Projection

Profit before tax as percentage of turnover

Actual
3 2.77 2.4 2.36 2 2.07 1.82 1.78 1.67 1.5 1 1 1 1.28 1.33 2.36 2.36 2.36

Target
2.8 2.66 2.68 2.56 2.36 2.62 2.6 2.41 2.5 2.39 2.7

2.5

PBT (Index)

1.7

0.5

0 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Years

Projection

Sand Foundry - Customer Complaint Status

7
Numbers/1000 MT of despatach

Better

Actual
6

Target

6 5 4 3 2 1 0

3.9

2.7 2.1 0.98 0.97 0.98 0.6 0.35 0.28 0.37 0.3 0.31

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Years

Projection

Better

Internal Failure cost

Actual
3

Target

2.69
2.5

2.45

2.41 1.82 1.95 1.93 1.49

Percentage

1.5

1.22

1.18

1.09 0.89 0.87 0.77

0.5

0 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Year
Projection

Better

Energy cost as % of Turnover

Actual 25.0 20.9 20.0
Percentage

Target

21.4

22.9 21.3 19.4 17.1 16.8 14.9 14.5 13.3 14.4 15.4

15.0 10.0 5.0 0.0

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Year
Projection

Inventory Turnover
Actual 18 16 14 14.08 12.65 11.5 10.4 13.32 13 13.5 14.51 14.06 12.6 12.71 Target 16.12 14.72

No. of times

12 10 8 6 4 2 0

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Year
Projection

Better

BENCHMARK OF PERFORMANCE INDICATORS FOR AN EXCELLENT FOUNDRY

SL No 1 2 3 4 5 6 Parameter External failure Product life cycle management Internal Failure cost Output input ratio Specific Energy consumption Process control Measurement Customer return rate ppm Developmental lead time Scrap cost / turnover % Pattern plate yield % kWh / M.T of metallics Good parts / parts realizable BIF Status on 2008-09 596 18 Days 0.91 51.2 545 94% Target 2010-11 575 18 Days 0.90 51.5 540 96%

International Best practice

500 28 Days 1.3 52 550 97%

7 8 9

Productivity Stocks
Employee involvement

Tonnage/ employee / year

Total Stocks / Turnover times No. of suggestions / emp. / Year

82 12.00 6.35

93 13.0 8.5

100 20 10

Intangible benefits
1. Increased awareness and participation of everyone in the daily activities. 2. Increased quality consciousness. 3. Improved human relations & ownership. 4. Improved confidence in new product & equipment development. 5. Becoming a learning organization. 6. Increased morale & pride in work. 7. Improved analytical & problem solving skills. 8. Improved presentation & teaching skills. 9. Improved ability to work as a team. 10. Creation of impressive image with employees, customer and visitors

Future plans
1. Diversifying into project management and consultancy 2. Expanding the value chain coverage and working towards becoming a tier 1 supplier 3. Establishing competency based management

4. Extending the global foot prints already established

5. Establishing a technical training center in Oman to uplift the local talent 6. Establishing an emergency care hospital in Sholinghur 7. Moving closer to the customers Foundry in Gujarat

Thank you