Re: Success Story: Dimpi Kumari 16134

Re: Success story
by DIMPI KUMARI 16134 - Friday, 14 October 2016, 1:21 PM

The reasons for success of India's best-selling car are the following:
1. Sustained Performance:over 30 new car models in the Indian passenger car market at the
vehicle segment level to provide comparison among the similar groups of vehicles in the
key areas of sales satisfaction, product quality, vehicle performance and design, after-sales
service, brand image and cost of- ownership.
2. Innovation: introduce new models regularly, Maruti had the widest product range among
Indian car manufacturers, with ten basic models and more than 50 variants. Three out of the
top-five-selling car models in India (Maruti 800, Zen and Omni) belonged to Maruti.
3. Good operational efficiency & Capacity Utilization: Operating at a capacity utilization of
103%, against the industry average of 57.8%.per year increased 200000 capacity.
4.
Reduce cost and increase productivity: In 2002, Maruti started a program Challenge 50
initiative to improve productivity by 50 % and reduce cost by 30 % by 2004-05. saved about Rs.5.16
lakhs a year by reducing the size of the rectangular steel blank used in the inside portion of the Alto's
front door. While in 1995, 4800 employees produced 730 cars a day, in 2003, 4500 employees
produced 1,700 cars a day.
5. Customer Service:They get closer to their customers by launching various initiatives to improve
customer service like Maruti Service Masters (MSM), offered maintenance service, spares,
accessories, insurance related services and took care of warranty claims, set up Customer Call
centres in the National Capital Region.
6. Product for all segment:Its product range are available for all segment like Premium Compact,
Economy, Mid-size. It also entered four related businesses-corporate lease and fleet management,
buying and selling of used cars, auto finance , and car insurance
7. Channel base: It continuously improve their network of dealer. By the early 2000s, Maruti had the
largest network of dealers and service stations amongst all car manufacturers in India. In 2003, it
had 182 authorized dealers with 243 sales outlets in 161 cities, 342 dealer workshops and 1,545
Maruti Authorized Service Stations (MASS) covering 898 cities, and express service stations on 30
highways across the country.
8. In-house development: It reduce the cost of developing new models through in-house
development and localized sourcing of dies, welding jigs, and other equipment, and by introducing
flexible welding lines.
9. Updated with Information Technology: It make profit by using an information technologyenabled vehicle build sequence system and vehicle tracking system to increase the flexibility of the
production line. They develop their ERP & uses software for Oracle and Computer Associates, built a
variety of applications covering inventory management, receipts, excise, consumption, production,
sales, invoicing, exports, financial accounting, payroll, and bank reconciliation
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Re: Success story

by SAHITHI LANKA 16160 - Friday, 14 October 2016, 4:04 PM
Operations Management at Maruti Udyog Article Review
Maruti Suzuki is the joint venture of Maruti and Suzuki Motors of Japan. In the year 1982, Indian
government has signed an agreement with Suzuki which was offered a 26% equity Stake in the
Company. In late 1980s, company increased it to 40% later in 1992 it increased to 50%.
Maruti Udyog Ltd.(Joint venture) dominated Indias automobile market with a 54% market share.
With 100% share domination in A Segment(less that 3lakhs price) and 36% in B
segment (ranging between 3-5lakhs) in Indian small car market. With competitors like Hyundai, Tata
motors and Ford the company had to improve operational efficiency, cut the costs and introduce new
products.
In december 1983, Maruti introduced its first car as the 'people's car'.
In 1984 & 19845 OMNI & GYPSY (Utility vehicle).
In 1995, Maruti reached a production of two million vehicles.
In 1995, Maruti received ISO 9002 certification.
In 1997-98, overall market share was 83.1%.
Maruti started with weak distribution and service network compared to its competitors like Hindustan
and Tata motors in the beginning of its operations. But in 2000s, Maruti increased its network of
dealers and service centers. In 2003 with 182 authorized dealers and 243 outlets in 161 cities. The
four key alliances played an important role in operating its business, i.e, the financer, dealer, insular
and the car rental agency.
Manufacturing Process
Maruti had three integrated manufacturing plants with 17 manufacturing shops and flexible assembly
lines at Gurgaon, about 25 Kms from New Delhi, the capital of India. Its manufacturing facilities are
located at two facilities Gurgaon and Manesar south of New Delhi. Marutis Gurgaon facility has an
installed capacity of 350,000 units per annum. The Manesar facilities, launched in February 2007
comprise a vehicle assemblyplant with a capacity of 100,000 units per year and a Diesel Engine
plant with an annualcapacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities
have acombined capability to produce over 700,000 units annually.
Maruti Suzuki offers 12 models, Maruti 800, Omni, Alto, Versa, Gypsy, A Star, WagonR, Zen Estilo,
Swift, Swift Dzire, SX4, Grand Vitara. Swift, Swift dzire, A star and SX4are maufactured in Manesar,
Grand Vitara is imported from Japan as a completely built unit (CBU), remaining all models are
manufactured in Maruti Suzuki's Gurgaon Plant. Suzuki Motor Corporation, the parent company, is a
global leader in mini and compact cars for three decades. Suzukis technical superiority lies in its
ability to pack power and performance into a compact, lightweight engine that is clean and fuel
efficiency.
Production Division in Maruti Suzuki has been renamed as Production Business Vertical(PBV)
after inclusion of projects, production engineering and supplier Quality assurance divisions. Major
components are
Blanking and Forming- Press shop and Blanking line
The steel coils are cut to the required size and panels were prepared by pressing them between
various sets such as doors, roofs and bonnet. An anti-rust coat was applied at this stage. Maruti also
has the in-house capability and the necessary technical knowledge for the design and manufacture
of medium-size press dies.
Welding- weld shop(1,2 & 3)
Maruti had three welding units with 122 six-axis robots and 25 in-house manufactured two-to
four axis robots. In the weld shop, all the formed parts were welded in serial fashion like
underbody,left and right bodies, and the top roof.
Painting- Paint shop(1, 2 & 3)
Maruti had three painting units. Here, the body underwent various pre-treatment(The body is
thoroughly washed to remove dirt and electro deposits painting processes to improve corrosion
resistance with ZnPO4(phosphating).
Machine and Engine Shops(1, 2& 3)
Maruti assembled and tested engines in the engine shops and carried out precision machining of
engine components in the machine shops.
Operational Efficiency
Kaizen emphasized making continuous improvements in the processes and the products.
For example, Maruti started manufacturing 25 multi-axis robots and 16 multi-spot welders.
Group discussions among employees in different departments were conducted on a
monthly basis to discuss and resolve problems relating to their areas of operation.
In the late 1990s, Maruti adopted the Japanese technique of Plan, Do, Check, and Action.
PDCA consisted of: Planning by setting a target and time-line, dividing into action plan with
value to each factor/element; Doing the standardized operation as
decided; Checking through gap analysis whether the operation was yielding the desired
results; and Acting to freeze if effective or correct.
Maruti kept posting messages on the wall of the company to avoid the three Ms-Muri
for inconvenience, Muda for wastage andMura for inconsistency.
The cost of developing the system was a mere Rs.5 lakhs, compared to Rs.35 lakhs for purchasing
a robot to do the same task. The pay back on the investment was just one year. Maruti started using
new layouts and small innovations like automated trolleys to reduce wasteful movements and worker
fatigue. In house automation, such as two-axis and four-axis robots and material handling devices
also
enhanced productivity.
Maruti provided ongoing training to employees at its premises as well as at Suzukis facilities
in Japan. On March 31, 2003, Maruti had 4,590 employees, out of whom more than 1,900 had been
trained at the facilities of Suzuki in Japan.
Training provided by Suzuki in Japan covered arange of activities:
Training of managerial, executive and supervisory employees provided in collaboration with the
Japanese government to enhance managerial skills and technical skills;
Training of employees across divisions of Maruti to transfer Japanese best practices for their
functions;
Training in connection with the development of new products;
To improve quality, Maruti had introduced various measures:
Tracking surveys and direct customer contact in order to understand the problems faced
by customers.
Technology implementation
Maruti had implemented an in-house designed supply chain application, that extended ERP on
the extranet and linked both dealers and vendors. The Extranet architecture was based on the
public Internet but was fully secured with encryption. The Extranet was fully integrated with the
back- end ERP.
Conclusion:
Through its cost leadership approach-Market leader for 3 decades, 50% market share. It was in a
constant innovation process which is helping to achieve efficiency. Cost advantage by maintaining
long term contracts with its suppliers. Moving towards integrated cost leadership and differentiation
strategy to cater the demand and to sustain in the long run.
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Re: Success story

by SACHIDEV B C 16159 - Friday, 14 October 2016, 4:06 PM
Operations Management at Maruti Udyog: Article review
Operation management is defined as the process of creating, defining, designing and delivering
values in a production system and production environment in order to satisfy the needs, wants and
interests of the consumers. One of the classic example stated here in the case is about Operations
Management at Maruti Udyog.
About Maruti & its prodcuts:
Maruti was incorporated in 1981 by taking over the assets of the erstwhile Maruti Ltd, (set up in 1971
and wound up in 1978). In 1982, the government signed a joint venture agreement with Suzuki,
which was offered a 26% equity stake in the company. Maruti had the widest product range among
Indian car manufacturers, with ten basic models and more than 50 variants.
Operational functions and operational variables of Maruti-Suzuki Ltd. (As per the concepts
learnt in class):
Capacity: Maruti produced 359,960 vehicles, operating at a capacity utilization of 103%, against the
industry average of 57.8%.5 Maruti was ranked 12th amongst the Most Respected Companies in
India by Business World.
Capacity planning & expansion: In 1984, the first plant was set up with an initial installed capacity
of 20,000 vehicles per annum. This was augmented to 130,000 by 1991. In 1995, the second plant
was installed, which increased Marutis capacity to 200,000 vehicles per year. In 1996, Marutis
installed capacity was increased to 250,000. With a third plant becoming operational in March 1999,
the installed capacity became 350,000 vehicles per year.
Cost of not updating the product in the dynamic market: A huge loss of Rs.2690 million in 2001.
The company realized the profile of the Indian car market had changed. Leaving the basic 800
model unchanged for over 15 years had been a strategic blunder.
Competition analysis: According to Michael Porters 5-force competitive strategy-Customers,
Supplies, new entrants, substitute product, potential competitors are factors affecting a competition.
So, in order to defend competitor and emerge out to be the leader in market one has to differentiate
their products & services, reduce costs, keep lower prices, consistent relation to be maintained with
its supply chain (value chain). As competition intensified, Maruti realized the importance of getting
closer to its customers. The company launched various initiatives to improve customer service by
introducing Maruti Service Masters (MSM) workshops across the country. In March 2002, Maruti
strengthened its interactive web site, www.marutiudyog.com, to provide a wealth of information and
practical help to customers. Maruti also entered four related businesses-corporate lease and fleet
management9 (Mid-2001), buying and selling of used cars (October 2001), auto finance (January
2002), and car insurance (May 2002). Also established a customer service call centre as a part of
enhanced service to be assured to the customers.
Maruti: Manufacturing Process

Blanking and Forming: Here, the steel coils were cut to the required size and panels were
prepared by pressing them between various die sets such as doors, roofs and bonnet. Aluminium
alloys in the form of coils were fed to the blanking presses, which were of two types: hydraulic and
mechanical. The mechanical presses used a link system to move the upper die to generate the
blanking pressure. The hydraulic presses used hydraulic pressure to deliver a controlled force.
Welding: Maruti had three welding units. In the weld shop, all the formed parts were welded in serial
fashion like underbody, left and right bodies, and the top roof. While minor welding activities were
performed manually, the robot arms performed the rest of the welding.
Painting: Maruti had three painting units. The car body was given a primer coat before applying the
stoving topcoat paint. The final coat was applied by using automatic electrostatic22 spray-painting
machines and robots, followed by a baking23 process.
Assembly: The assembly shop consisted of a trim line, chassis line, final line, vehicle inspection line
and the final inspection line. In the heavy inspection line, tests like toe-in/toe-out24, camber25,
turning radius test, slide slip test, speedometer test, brake test etc. were performed.
Machine and Engine Shops: The Work Instruction Chart (WIN Chart) provided clear instructions to
machine operators both for doing work and handling the parts.
Operational Efficiency: Maruti started a program Challenge 50 initiative to improve productivity
by 50 % and reduce cost by 30 % by 2004-05. In spite of huge losses incurred by the company in
the year 2001, the companys implementation of KAIZEN process helped company to revive from
the shadow of huge decline.
Employee productivity increased by approximately 81% from 1995 to 2003. While in 1995, 4800
employees produced 730 cars a day, in 2003, 4500 employees produced 1,700 cars a day. In 2003,
its 4,000 shop floor employees had an annual per capita output of over 100 cars. This compared
very favorably with Suzuki, which had an annual per capita output of 140 cars. Labour productivity
was so high, the ratio of inventory costs to total income was just 2.5 %, much lower than the industry
average.
The effectiveness of these measures was reflected in a 30% fall in Hours per Vehicle (HPV) in 20012002. This HPV came down to 24 hours in 2003 and was expected to be further reduced to 12-13
hours by 2005.
CSR activities: The Companys reverse osmosis water treatment plant and effluent and sewage
treatment plant followed the three principles-3Rs Reduce, Reuse and Recycle for conserving
energy. Diesel driven forklifts were converted to Compressed Natural Gas (CNG) to improve ambient
air quality in shop and reduce fuel cost.
Total quality management: Maruti emphasized doing it right, the first time. The Average
Defect per Vehicle came down by 80% in 2002, compared to 2000. Direct final check ok, which
signified the percentage of vehicles that passed through the inspection stages as defect free,
improved from 19.5% in 2000-01, 77% in March 2002, to 87% in March 2003.
Vendor management: Maruti procured components worth about Rs.5, 000 crores every year. The
company's top 10 vendors accounted for about 34 % of its aggregate purchases of components from
vendors in India. There was a thorough planning involved in the production system of Maruti, it
streamlined the sourcing and stocking of materials and components through its Delivery Instruction
system, one of Suzukis best practices. This system provided details of Marutis component
requirements for every 15 days. Maruti was known for having an improved Inventory Turnover ratio
(ITR) YoY. This shows the best practices of managing its inventory, with decrease in inventory 17%
overall from 1997-03.
Agreements with vendors, so that the design, drawings and specifications provided by Maruti,
exclusively met the expectations. Outsourcing reduced cots here for Maruti. Make to assemble
concept can be recalled here.
Over and above implementation of Information Technology (IT) and all the above mentioned features
helped Maruti a lot in procuring raw materials, managing supply chain, production activities, that
made Maruti to look up as one of the class manufacturers that the country has ever seen.
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Re: Success story

by VENKAT VASIST REDDY 16117 - Friday, 14 October 2016, 6:44 PM
Maruti has a market share of 83.1 % in 1997-98 which continued to fall down due to some
controversies. They continued with the same model for ab out 15 years, this shows their inability to
bring innovation in their product and processes. Later it tied up with Japanese car manufacturer
Suzuki which helped to regain its market share and launch new models of cars like WagonR, Baleno
etc.
By early 2000, Maruti succeeded in having largest network of dealers and service stations as
compared to the competitors or other car manufacturers in India.
Maruti had a great operation efficiency as we can see that the company started a manufacturing
unit in 1984 with a capacity of 20000 units per annum and then in 2003 it succeeded in establishing
182 authorized dealers with 243 sales outlets in 161 cities by having a manufacturing capacity of
about 352000 units in 2001-02.
Manufacturing of Maruti cars involved various operation lines like blanking and forming, welding,
painting, Assembly and machines and engine shops. Each unit plays an important role in the
manufacturing of the car. Maruti made an excellent turnaround from a loss of Rs. 2690 million in
2001 to a net profit of Rs. 1045 million in 2002.
They started to improve their operational efficiency by various initiatives live Challenge 50initiative
which helped its employees to give their suggestions regarding any changes made in the
manufacturing process of the Maruti cars. This initiative helped Maruti to improve the productivity by
50% and reduce cost by 30%. They started to adopt techniques that helped to reduce cost such as
inhouse development of dies and introducing flexible welding line that could be used for other
models as well. They started saving Rs. 5.16 lakhs per year by reducing the size of the rectangular
steel blank used in the inside portion of the Altos front door. This can be seen as a classic example
of achieving operational efficiency by optimum utilization of resources. This is how Maruti Suzuki
achieved success by improving their operational efficiency. Maruti started receiving suggestions
regarding improving the operational efficiency from their employees.
They also started improving labour productivity which further enhanced their operational efficiency.
This also helped them in reducing inventory cost which again is an example of optimum use of
resources and improving operational efficiency.
Further they started adopting automated manufacturing processes, which helped them to reduce
costs. They also started to give more satisfaction to their customers by giving them better services.
They further improved their operations by keeping a proper stock of their inventories, which helped
the company to carry the manufacturing process more smoothly. They made a team of 45 engineers
who developed a software to cover inventory management, production, etc. This helped them to
increase more operational efficiency.
It can be clearly seen that Maruti believed in the principle of KAIZEN (continuous change), as they
have continuously improved their operations and has been increasing their efficiency by adopting
new methods and policies.
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Re: Success story

by VANYALAKSHMI P 16176 - Friday, 14 October 2016, 7:19 PM
SUCCESS STORY
Operations management at Maruti Udyog:
Maruti Udyog Ltd. Had the highest share in the Indian market in the automobile industry with the
widest product range offered by the company. With the need for the small and affordable car the
company planned to expand its operations by joint venturing with the Japanese manufacturer Suzuki
which helped it in capturing the market more widely through its strategic operations management.
Due to some of the disputes between the government and Suzuki, Maruti had to face certain
consequences but soon it realized and came up with improvements in its operations by providing
customer services in terms of service stations , franchisees, offering spares, accessories, call
centres etc and looked for all it can provide to attract more of the customer base.
The manufacturing process of Maruti showed a positive output where it had a good number of
manufacturing plants across the country which had high capacity of production and it also further
increased its capacity also resulting in the capacity utilization of 102%. Regarding the other
mechanical manufacturing operations, Maruthi had its own in-house units for blanking and forming,
welding, painting, assembly etc
Maruti faced a major turnaround incurring loss of Rs.2690 million in 2001 where it turned into net
profit of Rs.1045 million in 2002, this was a result of their efforts in continuous process innovations
and an initiative taken by them to improve productivity by 50% and reduce costs by 30%. They used
several best practices in their production systems which helped them make improvements in their
products and the production process and solve the major problems in that regard. This increased
their productivity as they strived hard to improve their operational efficiency. It also concentrated on
increasing the labour productivity by adopting various techniques. It also indulged in a strategy of
low cost automation and increased productivity. To improve its quality Maruti developed varios
measures such as tracking surveys, customer feedback etc which also added to its operational
efficiency.
Another major measure undertaken by Maruti to improve its operational efficiency was the Vendor
management where it planned accordingly to have a regular supply of raw materials and also
maintain economies of scale. With regards to its information systems Maruti started developing its
systems with very little technology and went on expanding them to technology based systems to
improve its efficiency in operations. Maruti with all its efforts to increase its operational efficiency can
plan to develop and launch new variants and grab more of the market share as it has the capacity to
increase its productivity.
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Success story
by MOHAMMED MASOOD 16145 - Friday, 14 October 2016, 7:28 PM
In the success story of Maruti suzuki s , leading performance was a result of strong performance on
service-related factors. Maruti had started with a weak distribution and service network, compared to
players like Hindustan Motors and Tata Motors, when it started its operations. But by the early
2000s, Maruti had the largest network of dealers and service stations amongst all car manufacturers
in India. In 2003, it had 182 authorized dealers with 243 sales outlets in 161 cities, 342 dealer
workshops and 1,545 Maruti Authorized Service Stations covering 898 cities, and express service
stations on 30 highways across the country.
They also worked on Improving operational efficiency and Quality.Vendor management became an
important area as Maruti attempted to improve operational efficiency. Maruti turned around from a
loss of Rs.2690 million in 2001 to a net profit of Rs.1045 million, in 2002. This turnaround had been
facilitated by sharp improvements in quality and productivity, both in-house and at the vendors end.
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Re: Success story

by YOGESH ROHRA 16060 - Friday, 14 October 2016, 10:16 PM
from the case we understood, how Maruti udyog ltd. carried out its operations of cars production and
continuous improvement in the process. The company was incorporated in the year 1981as a joint
venture with "Suzuki" of Japan. Maruti launched its fisrt car "Maruti 800" in decembber 1983 which
was targeted to masses at a price of Rs 40000 (ex showroom). In the year 2003 maruti dominated
Indian automobile market with a market share of 54%.
the company started improving its operation , it introduced a program "challenge 50 initiatives" to
improve productivity by 50% and cut cost by 30% by 2004-2005.it also started new manufacturing
techniques, value analysis and value engineering initiative.
one way to keep the cost down was on going process innovation, maruti attempted to reduce cost of
developing new models through in house development and localized sourcing of dies,welding jigs
and other equipment. these all changes which were adopted by maruti showed their results in a
positive direction its sales grew up as the quality of production improved and the company was able
to save several labor hours.
Maruti also adopted several practices form Suzuki produtive system that encourage participative
management, team work, communication and information sharing and open office system, 'Kiazen'.
with the help of these activities the company was able to reduce the workers required and at the
same time increased the output per labor.
thus from this we can infer that there should be continuous change in the operation of the company
until it reaches to the optimum level and sustain that level of production.
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Re: Success story

by VIMAL ULLAS MANGESHKAR 16058 - Friday, 14 October 2016, 11:09 PM
Maruti Udyog is a joint venture between Japanese Suzuki Motors & Indian Government. It
dominated the Indian Automotive market in 2003 with 54% market share producing 359,960 vehicles
& operating at a capacity utilization of 103%, against the industry average of 57.8%. Its rivals were
Tata motors, Ford & Hyundai. Its 800, Zen & Esteem ranked No 1 at their respective segments then
at 2003. Its product range included Maruti 800, Omni, Zen, Wagon R, Alto, Baleno, Esteem, Versa,
Gypsy & Vitara, most of which run on the road even today in 2016.
Its sales grew formidably from 1997 till 2003 from Rs 8000 to 1000 crores. Though it earned
sufficient profits in the period 1997 to 2003, maximum being of Rs 600 crores at 198, it suffered huge
losses at 2001 as the profile of Indian car market was changing & leaving the model of Maruti 800their basic earner, unchanged was the strategic blunder.
As competition intensified, Maruti realized the importance of getting closer to its customers. The
company launched various initiatives to improve customer service. So they started MSM in 1999
throughout the country which was a one stop shop meeting all the needs of Maruti owners. Maruti
had started with a weak distribution and service network, compared to players like Hindustan Motors
and Tata Motors, when it started its operations. But by the early 2000s, Maruti had the largest
network of dealers and service stations amongst all car manufacturers in India.
Maruti had three integrated manufacturing plants with 17 manufacturing shops and flexible
assembly lines at Gurgaon. With the number of plants increasing since its inception, its capacity
increased drastically from 20000 to about 350000 per year in just 15 years making Maruti one of the
largest passenger car manufacturing facilities of Suzuki outside Japan. That was a huge growth in
capacity. Plants I,II & III produced specific brands of cars in its facilities.
The blanking & forming shop produced doors, roofs, bonnets & panels, all the several parts were
welded in the welding shop by spot welding, pre treatment & painting of the body was done in the
paint shop & assembly in the assembly line. All the shops were aligned properly in the plant to
facilitate quicker production to increase capacity & also large capacity demanded huge number of
raw materials.
Maruti adopted several means to improve operational efficiency like iniating challenge 50 in 2002 to
reduce by 30% & improve productivity by 50% by 2004-5, product development was very capital
intensive, replicating best practices form Suzuki productions like Kaizen as a result employee
productivity increased by approximately 81% from 1995 to 2003 producing 1700 cars a day.
They kept avoiding harmful 3 Ms and measured 8 types of wastage at each operational points by
observation. Maruti pursued a strategy of low cost automation to improve productivity and reduce
operator fatigue without heavy capital expenditure. Maruti provided ongoing training to employees at
its premises as well as at Suzukis facilities in Japan.
They focused on improving quality by poka yoke , quality gates, feedback systems and pica pica
system as a result average defect per car lowered from 2.35 to 0.45 in 3 years. They used vendor
management to increase operational efficiency by which vendors managed the inventory and
provided Maruti with supply just when required i.e informed in advance. So it was possible to
implement JIT. Information Technology too lent a great hand in contributing towards their operational
success.
Thus the case tells us in detail about Maruti's successful journey by successful operations.
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Re: Success story

by MANEL SRIKANTH NAYAK 16082 - Saturday, 15 October 2016, 11:14 AM
The article illustrates as to how Maruti Udyog stands as a classic example of a company which
undertook full fledged necessary measures in having improving its productivity and not leaving much
scope of wastage of any sort. The company w venture between which began with a joint venture
between Maruti and Suzuki went on to become one of the leading automobile manufacturers of the
country with a major market share in the 90s and 2000.
Maruti very well had implemented various stages involved in its manufacturing process such as
blanking and forming, welding, painting, assembly, machine and engine shops. This facilitated
specialisation in the various separate tasks that were involved giving rise to economies of scale. It is
also interesting to note the company took several reforms to improve on its operational effficiency
that saw a major turnaround from losses to profits.
it adopted excellent strategies which definitely deserve to be mentioned such as that of 'Challenge
50' initiative which aimed at improving its productivity by 50% by adopting several mechanisms such
as developing new models through in-house development and localized sourcing of dies, welding
jand also by introducing flexible working lines that could be used for multiple models. What is
interesting to note is that the company saved Rs 5.16 a year, merely by reducing the size of a
rectangular steel blank used in the inside portion of the Alto's front door. While in 1995, 4800
employees produced 730 cars a day, in 2003, 4500 employees produced 1,700 cars a day and this
is something that has to be lauded for.
Some other achievements that need to be mentioned are its strategy of low cost automation to
improve productivity and reduce operator fatigue without heavy capital expenditure. An example is
weld shop for Maruti 800. The older manual system of welding the backdoor was changed to an inhouse designed multi-spot automatic welding, which replaced the need for two operators. The
company saved around 30 lakh in the process as it need not have purchased a robot to do the
same. These small meaures come a long way in improving the productivity of the company.
Maruti always looked for ways to conserve energy. Its sewage treatment plant followed the three
principles of Reduce, Reuse and Recycle for conserving energy. Between 1997 and 2003, Maruti
reduced the consumption of electricity per vehicle produced, by approximately 29%.
It also took several quality improving measures such as a quality index audit which involved full time
task forces for improvement in initial quality study problems, quality gates at various stages, Foolproofing, or Pokayoke in Japanese, which consisted of checks to prevent defects arising from
human errors. As a result the average number of defects per vehicle came down from 2.35 in 19992000, to 2.26 in 2000-01 and to 0.45 in 2001-02.
It also undertook several vendor management issues such as Maruti formed joint venture
agreements with 13 vendors that supplied critical raw materials and components both to secure a
reliable supply and to generate economies of scale. Maruti had plans to reduce the number of
vendors to 100. For example, earlier, Maruti had 30 to 40 suppliersfor sheet metal. By creating
subassemblies, it reduced the number to six. Maruti had also joined hands with its vendors in
sourcing common materials such as steel and
aluminium.
This company no doubt stands as an exemplary case of a company which undertook the best
measures to improve on productivity. However in my opinion I do feel that along with improving on
productivity a company must also concentrate on innovation at the same time. Rather than merely
improvising on its old models, which in no doubt is certainly essential, the company must also look
for gaps in its products and launch certain new products frequently which concentrates on meeting
the gap through its features.
There was also an instance where a successor was appointed against the decree of the BOD. This
is certainly harmful for the company and succession planning must be considered only by fulfilling
the requirements of all the shareholders. Hence in my opinion this company is no doubt an emulative
case for anyone trying to improve on prouctivity.
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Re: Success story

by BINKA GOWDA M.S. 16012 - Saturday, 15 October 2016, 12:29 PM
I feel the following are the important steps in operations which led to success story of Maruti Udyog.
Capacity utilization: Maruti could produce 359,960 vehicles, operating at its
Capacity utilization of 103%, against its, the industry average of 57.8%.
Tie up : Government of INDIA tied up with Japan world class capabilities in small car Suzuki.
Expansion Plan: rs 22 billion and modernization plan.
Maruti Suzuki received ISO 9002 certification.
Capacity underutilization: Due to dispute between Suzuki and Government in regard with MD post it
distracted production of cars and market share dropped 65% to 52%
Order winner: Maruti established chain of a model workshops called Maruti Service Masters across
the country, for customers interaction with the company it introduced a toll free telephone
Number. And also, Maruti strengthened its interactive web site, www.marutiudyog.com, to
Provide information and practical help to customers.
Economies of Scope: Maruti also entered in four related in Businesses-corporate lease and fleet
management9, buying and selling of used cars, auto finance, and car insurance.
Quality and Productivity: Maruti status turned around from loss of Rs.2690 million in the year 2001 to
a net profit of Rs.1045 million, in the year 2002. This had been facilitated by the sharp improvements
in the quality and productivity
Maruti started the program called Challenge 50 initiative to improve the productivity by 50 % and
also reduce cost by 30 %. Maruti involved many component suppliers in Challenge 50.
Introduction of Kaizen concept.
Improved labor productivity
Environment Concern: Followed the 3 principles of concern with environment Reduce, Reuse and
Recycle for the conserving energy. Maruti also reduced the consumption of the electricity per
vehicle produced, by approximately 29%.
Improving Quality: Real time feedback and Pica Pica system and TPM management.
Economies of Scale: connected with vendors through Internet-based information network, which
maintained the online Information regarding order status and also delivery instructions.
Maruti also formed the joint venture agreements with the 13 vendors who supplied the critical raw
materials and also components for both to secure a reliable supply.
Worldwide purchase system (WWP) helped to reduce cost.
Maruti also used an information technology-enabled vehicle build the sequence system and also the
vehicle tracking system,
I feel the following are the important steps in operations which led to success story of Maruti Udyog.
Capacity utilization: Maruti could produce 359,960 vehicles, operating at its
Capacity utilization of 103%, against its, the industry average of 57.8%.
Tie up : Government of INDIA tied up with Japan world class capabilities in small car Suzuki.
Expansion Plan: rs 22 billion and modernization plan.
Capacity underutilization: Due to dispute between Suzuki and Government in regard with MD post it
distracted production of cars and market share dropped 65% to 52%
the country, for customers interaction with the company it introduced a toll free telephone
Number. And also, Maruti strengthened its interactive web site, www.marutiudyog.com, to
Provide information and practical help to customers.
Improving Quality: Real time feedback and Pica Pica system and TPM management.
Worldwide purchase system (WWP) helped to reduce cost.

Maruti also used an information technology-enabled vehicle build the sequence system and also the
vehicle tracking system,
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Re: Success story

by ANURAG BORA 16009 - Saturday, 15 October 2016, 12:39 PM
The first article was titled 'Classics in Production and Operations Management'. This article talked
about two research.
1) What are the criteria which should be used for judging a person or work?
2) Which work can be judged within the framework of criteria established by question 1?
Phase 1: Respondents were asked to rate the criteria on 4 point scale using vitality(how lasting the
contribution has proved), historical significance, seminal importance, degree of interest to
management, recognition by serious students, readability, time frequency of quotations.
Phase 2: A survey instrument was designed on the basis of results of the exploratory survey. The
questionnaire had two phases.
Exploratory phase findings:
Research question 1: potential criterias were presented to the survey respondents from a scale of 1
to 4.
Research Question 2: Each respondents were asked to identify classic works in the field of POM.
The response to the exploratory survey was low because of time and thought required to complete
the questionnaire, since phase 1 had many open ended questions.
Phase 2 was quick because there were no open ended questions.
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Re: Success story
by ANURAG BORA 16009 - Saturday, 15 October 2016, 12:46 PM

Maruti Suzuki followed the strategy of Blanking and Foaming. Their revenue dipped to 2690 million
in 2001 and it rose to 9045 million in 2002. This turnaround was facilitated by sharp improvement in
quality and productivity both from the in-house and the vendor's end.
Maruti Udyog followed the strategy of Plan Do Check Action(PDCA).
Through this strategy, they were able to eliminate 8 wastage problems namely:
a) Over production
b) Mass Movements
c) Material Movement
d) Idle time of Operation
e) Work in progress
f) Machine availability
g) Wasting time
H) Needless processing
Maruti Udyog also pursued a strategy of low cost automation to improve productivity and reduce
operational fatigue without heavy capital expenditure.
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Re: Success story

by ANAND M DILEEP 16006 - Saturday, 15 October 2016, 12:50 PM
Success Story :Maruti Suzuki
Maruti has 10 basic models and 50 variants and is the No 1 in costumer satisfactory Index.1980 govt
tied up with Suzuki the company with expertise in making small cars and Sanjay Gandhi was the
founder. In 1994 Maruti became the first Indian company to roll out one million units and in 1997
crossed two million where they obtained ISO certification. The Market share dropped from 83.1% in
1997 to 65% in 1999 and to 52% in 2000 due to conflicts in interest in management and they failed
to release new models unlike Tata with Indica, Daewoo with Matiz and Hyundai with Santro .The
present CEO is Kenichi Ayukawa .Jagadesh Khattar took in charge in 1999 and various reform
movements where induced in the company. Rolling out maruti800 for continuous 15 years has put
them in pressure without any new models launching. in 1999 they have introduced various models
targeting each consumer class and also made a strategic decision by launching one new model
every 6-12 months in a price gap of about 25000 .they also launched various initiatives
concentrating on customer service . One stop Shop for all vehicles, warranty claims, accessory and
spares which where undertaken by franchisees. Even though they started with less Outlets and
service centers by 2000, they expanded rapidly in term of Maruti Authorized Service Stations
Currently in 2016, Maruti has two production facilities in Manesar and Gurgaon, and total 16 lakh
units are produced from both the plants annually. There are various departments in the
manufacturing factories. Blanking and forming where the Panels for doors bonnets and tops are
made. Welding were the external frame and chassis are build. Painting depot allows Maruti to have 7
shades for each of their various models in production line. The production line assembles a car once
in every 12 seconds and finally the machines are arranged at machine shops with a proper blue
print. They have gone through huge losses in 2000 and came out of it with a fair net profit in 2002.
Due to trend in releasing automobile models frequently, Maruti plans their manufacturing by in house
manufacturing for certain articles and the rest outsourced. They also focus on Kaizen or continuous
improvement. They have planned and succeeded in managing 8 types of possible wastage by
proper inventory management and sharp service. Vendor management and Inventory management
has also been ensured with venture agreements for supplying essential raw materials. Their Network
started from 1990 even before ERP with combination of software and skilled engineers. All the
factories regional offices and head offices has an established network connectivity. Even though the
company has a stagnant growth rate, their profit has grown by 138%.In 2016 the market share is
47% with 45,714 million Net profit. With comfortable financial position and goodwill, Maruti Suzuki
has survived their competition and conquered the market with their strategy.
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Re: Success story

by ANUPAM KUMAR MEENA 16128 - Saturday, 15 October 2016, 1:03 PM
Success story........................
It has been a great successful story which I have read till now. Tremendous effort and clear cut
missions put Maruti in a different rank. In all dimension Maruti put rigorous effort and get positive
outcome of it.
Lets discuss in detail success story of Maruti
In success journey of Mruti there were lot of up and downs and which was well managed by Maruti
In 2003, Maruti produced 359,960 vehicles, operating at acapacity utilization of 103%, against the
industry average of 57.8%.During four consecutive
years from 2000 to 2003, J.D.Power Asia Pacific, had ranked Maruti No. 1 in the India Customer
Satisfaction Index study. In 1993, it introduced a new model, the Zen
with a 1300 cc engine, and Esteem, a variation of Maruti 1000 (which was replaced) with more
power and a new exterior.This bring the negative impact in Maruti in terms of relation and execution
exterior.
Around this time, the first sign of conflict between the joint venture partners surfaced, when
Suzuki proposed a Rs.22 billion expansion and modernization plan. The transfer of gearbox
technology was also a bone of contention between the two partners. The government felt that
Suzuki was deliberately withholding this technology so that it could export it to Maruti and make
windfall profits at the cost of Maruti. However, in mid-1996, the government approved the plan
and Suzuki agreed to transfer its technology.Confliction become increase between Maruti and Indian
government. The two partners decided to settle their differences amicably. Bhaskarudu indicated he
would step but Jagdish Khattar would replace him in January 2000.In this form the confliction took
place for ex- Khattar a embarked upon an aggressive productdevelopment strategy. This was
prompted by a decline in Marutis overall market share from 65% (1999) to 52% (2000) and a huge
loss of Rs.2690 million in 2001.
Key factors through which Maruti become succeed
Improving Operational Efficiency
In 2002, Maruti started a program Challenge 50 initiative to improve productivity by 50 % and
reduce cost by 30 % by 2004-05. Maruti involved various component suppliers in Challenge 50.
Productivity improvement programs were undertaken by key vendors in collaboration with
experts from Suzuki. Maruti started implementing new manufacturing techniques and various
value analysis and value engineering initiatives,which is very important in that time.
Maruti: Employee Productivity

Maruti also significantly improved its labour productivity. For each operation, Maruti had an
operating standard, which decided how much time it took to complete a particular function on the
assembly line. Discounting for automation, theproductivity of Marutis employees compared very
favorably to that of Suzukis facilities in
Japan.Since labour productivity was so high, the ratio of inventory costs to total income was just 2.5
%,
much lower than the industry average. This the powerful step taken up by Maruti.
Vendor Management
Vendor management became an important area as Maruti attempted to improve operational
efficiency.
Other important factors

Leverage Information technology
Quality management
So, this a great inspiration story of Maruti through which we can learn many aspects of how to
effective.
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Re: Success story

by AYUSHI SINGH 16011 - Saturday, 15 October 2016, 5:45 PM
This article shows how operations management helped Maruti udyog .In 1980, government decided
to produce a small car affordable to the Indian middle class . In 1982, government signed a joint
venture agreement with Suzuki with 26% stake in the company.In, 1983, first car Maruti 800
launched and it was targeted masses but in 1990 , there was conflict between both of them in
expansion and transfer of technology in 1997-98, Maruti overall market share 83% and again there
was conflict between Suzuki and Government on successor and these disputes resulted into
delayed introduction of new models and worst part was Maruti 800 model unchanged over 15 years.
later on, Maruti used operations management techniques to come back again in the league of top
sellersin India.they tried to improve their operational efficiency, they started challenge 50 initiative to
improve their productivity and reduce cost they started doing inhouse development and localized
sources and other equipment. they also use some best practices of Suzuki open house system,
kaizen,multi skilling of operators, flat structure etc. in order to optimum utilization of resources.
Kaizen stresses on making incremental improvements in the processes and products. It also
significantly improved its labour productivity. In late 1990, they adopted , japanese technique of plan,
do ,check and take action. they also modified their old facilities, energy efficient technologies to
improve their productivity.In 1995 , they introduced cluster approach in which vendors were grouped
together , trained on quality management. Maruti also introduced "milk running system" in which
materials were pooled from different vendors so that a truck's carrying capacity was utilized. due to
the result of this Maruti which was in loss of Rs. 2690 million in 2001 was in profit of Rs. 1045
million in 2002 and in 2003 , Maruti udyog ltd. dominated indian automobile market with 54% market
share and 3 out of 5 top selling car model in India belonged to Maruti. and for the year ended march
31, 2003 the profit after tax of maruti has grown by 138% to Rs. 282 crores.. so this shows how
operations techniques help companies in acheiving their objective.
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Re: Success story

by CHETAN SHARMA 16013 - Saturday, 15 October 2016, 6:33 PM
The following are important steps in operations which led to success story of Maruti Udyog.
Capacity utilization: Maruti could produce 359,960 vehicles, operating at itsCapacity utilization of
103%, against its, the industry average of 57.8%.
Government of INDIA tied up with Japan world class capabilities in small car Suzuki

There was a huge dispute between government and suzuki in regard for md post it caused a great
harm on its manufacturing and the sales drastically dropped down from 65% to 52%.
Maruti status turned around from loss of Rs.2690 million in the year 2001 to a net profit of Rs.1045
million, in the year 2002. This had been facilitated by the sharp improvements in the quality and
production.
the country, for customers interaction with the company it introduced a toll free telephone Number.
And also, Maruti strengthened its interactive web site, www.marutiudyog.com, to Provide information
and practical help to customers
.
maintained the online Information regarding order status and also delivery instructions..
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Re: Success story

by SANKEERTH B.S. 16043 - Saturday, 15 October 2016, 6:45 PM
According to me, the steps taken by Maruti Udyog into this success story in operations are:
This article gives us a bright picture on how Maruti Udyog is one of the classic example on how a
manufacturing company needs to measure its capacity, productivity and etc in any other means. The
company W venture between which began with a joint venture between Maruti and Suzuki and went
on becoming the leading automobile manufaturing company with major market share in 90s and in
2000s.
Some of the facts which made Maruti Udyog a Success Story are:
Their Capacity utilization: They had a capacity of producing 359,960 vehicles and operating at its
capacity utilization at 103% and the industry average of 57.8%.
They also having the expansion plans of Rs.22 billion and some modernization plan. They tied up
with the help of government of India with a Japan world class vehicle manufactures Suzuki.
Maruti Suzuki received an ISO 9002 certification.
What is interesting to note is that the company saved Rs 5.16 a year, merely by reducing the size of
a rectangular steel blank used in the inside portion of the Alto's front door. While in 1995, 4800
employees produced 730 cars a day, in 2003, 4500 employees produced 1,700 cars a day. Some
other acheivements that need to be mentioned in the comments that using the strategy of using the
low cost automation to improve their productivity. An examplefor this is the weld shop of Maruti
800,The older system of wek=lding the back doors were changed and designed in multi spot
automatic welding. Which replaced the need of 2 operators which induced in the cost cutting in the
production line of the company. Through this process the company saved around 30 lakh. Like these
some of the small measures came into the organisation in improving its capacity and productivity.
The company actually started saving Rs.5.16 a year in reducing the size of the rectangular steel
blank used in the inside portion in one of their model called Alto. And while in 1995 around 4800
employees produced 730 cars a day and in 2003 around 4500 employees produces 1700 cars a
day. This shows how their Productivity and capacity have increased in the following years.
When it comes to conservation, Maruti always was looking forward to conserve energy. Its sewage
treatment plant followed the three principles of Reduce, Reuse and Recycle for conserving energy.
Between 1997 and 2003, Maruti reduced the consumption of electricity per vehicle produced, by
approximately 29%. This company no doubt stands as an exemplary case of a company which
undertook the best measures to improve on productivity. However in my opinion I do feel that along
with improving on productivity a company must also concentrate on innovation at the same time.
Rather than merely improvising on its old models, which in no doubt is certainly essential, the
company must also look for gaps in its products and launch certain new products frequently which
concentrates on meeting the gap through its features.
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Re: Success story

by AASHISH A KALRO 16061 - Saturday, 15 October 2016, 6:49 PM
in the quality and productivity.
aluminium.
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Re: Success story

by SHERI MIRIAM JOHN 16105 - Saturday, 15 October 2016, 7:31 PM
Indian Government wanted to produce a small car affordable to the Indian middle class and decided
to tie up with Suzuki in Japan, offering them 26% equity stake in the company. Thus in 1981, they
formed Maruti Suzuki. They launched Maruti 800 for the masses, Omni which was an 8 seater utility
vehicle and Gypsy for tough road conditions. Suzuki further went on to take 50% stake in the
company thus making Maruti Suzuki a non-Government company. With the initiative of Suzuki, the
company ventured in for expansion and modernization plans. By 1997-8, Marutis total market share
increased to 83.1%. After a dispute between Maruti and Suzuki over who would be the chairman
after Bhaskarudu, Jagdish Khattar took over in Aug 1999, meanwhile competition from Tata motors
indica, Hyndais santro etc increased. Jagdish focused on product development strategies and
brought out Baleno, Wagon R, Alto in 2000, Versa. All these were the vehicles that came under the
tagline Maruti Udyog.
Under the new leadership, as part of getting ahead of its competitors, in 1999 Maruti established a
chain of model workshops called Maruti Service Masters(MSM) and set up customer call centers in
the National Capital Region, Bangalore, Hyderabad, Chennai and Mumbai. After the government
and Maruti executed a revised Joint venture Agreement(RJVA), Suzukis holding on Maruti rose to
54.2%, leaving Maruti with 42%. The government divested 27.5% in IPOs, leaving it with 18% stake
in the company.
Maruti started various initiatives to improve its productivity. The production capacity of the 3 plants
were improved multiple times and value engineering initiatives were implemented, resulting in
boosting Maruti, which was incurring loss, to gaining a net profit of Rs.1045 million in 2002.
Maruti also improved its labour productivity and involvement by implementing their timely
suggestions. Various Japanese techniques like Kaizen, PDCS (Plan, Do, Check and Action) were
implemented and it made sure that Muri(Inconvenience), Muda(Wastage) and Mura(Inconsistency)
were avoided. The company also looked at enery conservation by following the principles of
Reduce, Reuse, Recycle. To improve the quality, Maruti conducted classes both in India and
Japan, and quality of cars were checked using an index on a daily basis. With the help of Oracle and
Computer associates, the company introduced technology to improve the internal response systems,
and even made booking and tracking of orders possible online.
Inspite of all the efforts, by 2003, the sales of Maruti became stagnant. In my opinion, the company
can continue to flourish with the backup of Suzuki. All the efforts done to improve productivity and
quality of the vehicles, have had a positive impact on the sales and they can still continue to do so in
the future by working together.
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Re: Success story

by VISMAYA DIVAKARA 16179 - Saturday, 15 October 2016, 8:35 PM
OPERATIONS MANAGEMENT AT MARUTHI UDYOG
Maruti Udyog Ltd. Had the highest share in the Indian market in the automobile industry with the
widest product range offered by the company. Maruti has a market share of 83.1 % in 1997-98 which
continued to fall down due to some controversies. They continued with the same model for ab out 15
years, this shows their inability to bring innovation in their product and processes. Later it tied up
with Japanese car manufacturer Suzuki which helped to regain its market share and launch new
models of cars like WagonR, Baleno etc. The article illustrates as to how Maruti Udyog stands as a
classic example of a company which undertook full-fledged necessary measures in having improving
its productivity and not leaving much scope of wastage of any sort. The company w venture between
which began with a joint venture between Maruti and Suzuki went on to become one of the leading
automobile manufacturers of the country with a major market share in the 90s and 2000.
According to me, the steps taken by Maruti Udyog into this success story in operations are:
Capacity: Maruti produced 359,960 vehicles, operating at a capacity utilization of 103%, against the
industry average of 57.8%.5 Maruti was ranked 12th amongst the Most Respected Companies in
India by Business World. Maruti Suzuki received ISO 9002 certification. Maruti started the program
called Challenge 50 initiative to improve the productivity by 50 % and also reduce cost by 30 %.
Maruti involved many component suppliers in Challenge 50.
the country, for customers interaction with the company it introduced a toll free telephone Number.
Also, Maruti strengthened its interactive web site, www.marutiudyog.com, to provide information and
practical help to customers.
Improving Quality: Real time feedback and Pica system and TPM management.
Another major measure undertaken by Maruti to improve its operational efficiency was the Vendor
management where it planned accordingly to have a regular supply of raw materials and also
maintain economies of scale. With regards to its information systems Maruti started developing its
systems with very little technology and went on expanding them to technology based systems to
improve its efficiency in operations. It can be clearly seen that Maruti believed in the principle of
continuous change, as they have continuously improved their operations and has been increasing
their efficiency by adopting new methods and policies.
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Re: Success story

by SOMYA GUPTA 16049 - Saturday, 15 October 2016, 8:54 PM
This case tells us how Maruti after anticipating tough competition from other brands and also
observing a fall in its sales, adopted and implemented various techniques and models to boost its
productivity and operational efficiency, as well as reduce operator fatigue.
It replicated several best practices from Suzuki production system, such as: participative
management, open office system, Kaizen, multi-skilling of operators, in-line quality assurance
processes and widespread quality circle movement, and also implemented in-house low cost
automation (wherein from 4-8 multi-axis robots it shifted to manufacturing 25 multi-axis robots),
optimum utilization of production lines and significant reduction in material handling. It also adopted
the Japanese technique of PDCA, i.e. Plan, Do, Check and Action.
It improved its labor productivity tremendously by fixing the standard time taken to complete a
function on the assembly line. This helped lower the ratio of inventory costs to total income to 2.5%.
Further, by adopting various measures and changes, it cut down its power and water consumption
by 29 and 66 percent respectively. Shift from diesel to CNG driven forklifts improved in shop air
quality and fuel cost.
Maruti emphasized heavily on reducing cost by improving on quality at all levels of production and
thereafter. Average number of defects per vehicle came down and the number of people involved in
post-production repairs reduced significantly. Both in-process rejection cost and in-house warranty
cost per vehicle declined. It also implemented TPM (Total Productive Maintenance) system in its
cluster of vendors, and helped them attain ISO 9000 certification to improve quality standards. It
implemented its own ERP (Enterprise Resource Planning) model to streamline the source and
stocking of various materials and components. This helped reduce procurement time and cost and
practice just-in-time manufacturing efficiently. Maruti also moved from the tender system of
purchasing steel to the quotation system as it was more flexible and feasible.
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Success story
by MANOJ KUMAR SA 16023 - Saturday, 15 October 2016, 10:30 PM
This article clearly explains how Maruti focused on even small things to make itself a successful
company. The company incurred a huge loss in 2001 and it was able to make profits in the next year
by understanding the market. Maruti had strengthened its distribution networks which gained
competitive advantage over other companies. Even though it had weak distribution network in its
beginning, it identified its importance and converted its weakness into strength. In 2002, it had
capacity utilization of 102% which is unbelievable. These things happened only because of their
strategies and way of approach to problems. They were mainly focused on reducing the cost and
increasing the productivity. They had implemented best practices from all around the world. They
reduced the cost of automation by developing the equipments in house. This led to faster Return on
Investment. They also reduced the consumption of raw materials per vehicle at possible areas and
reduced the production time per car. They followed JIT system which reduced the costs of inventory.
They also introduced milk running system to achieve full utilization of trucks. They focused mainly on
cost reduction and improving efficiency which made them market leader in the Indian Automobile
Sector.
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Re: Success story

by RAMACHANDRAN RAMASWAMY 16097 - Saturday, 15 October 2016, 11:09 PM
The case talks about the changes implemented by Maruti Suzuki India Limited in their supply chain
and logistics management process which helped them become a market leader in the India
Automobile Industry. The case talks about the competitive environment in the Indian Automobile
industry due to which they had to go through these changes.
The case in detail mentions about the manufacturing areas where changes were made like Blanking
and forming, welding, painting, assembly, machine and engine shop. The basic moto behind any
company to improvise the supply chain and is to increase the productivity and reduce cost, so was
Marutis. The changes made have benefited all the Marutis partners, helped them reduce cost,
manage inventory optimally, ease of transit of vehicles and spare parts to their dealers, and most
importantly meet customer expectations.
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Re: Success story

by RAMACHANDRAN RAMASWAMY 16097 - Saturday, 15 October 2016, 11:09 PM
The case talks about the changes implemented by Maruti Suzuki India Limited in their supply chain
and logistics management process which helped them become a market leader in the India
Automobile Industry. The case talks about the competitive environment in the Indian Automobile
industry due to which they had to go through these changes.
The case in detail mentions about the manufacturing areas where changes were made like Blanking
and forming, welding, painting, assembly, machine and engine shop. The basic moto behind any
company to improvise the supply chain and is to increase the productivity and reduce cost, so was
Marutis. The changes made have benefited all the Marutis partners, helped them reduce cost,
manage inventory optimally, ease of transit of vehicles and spare parts to their dealers, and most
importantly meet customer expectations.
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Re: Success story

by THEJAS K S 16174 - Saturday, 15 October 2016, 11:47 PM
The car company, once represented the status in India was Maruti . Maruti & its joint venture Suzuki
from Japan released its first car Maruti 800 to the Indian market and its popularity have made the
company's name to deeply penetrate into hearts of Indians, even after decades of its launch. Though
there are many competitors to Maruti, its market share only represents the Indians loyalty towards
the company.
Maruti's Operation and Production management is really very good. Its ability to recover from the
loss is also appreciable. The steps it took to reduce the cost, maintain the vendors, Inventory
managements and also the energy saving schemes which has been benefiting the company are
recognized from the facts and figures given. This case also tells us how the company implemented
Japanese models like 3'M',5'S', Kaizen.
This case shows how an Industry works and also how an industry should work.
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Re: Success story

by NAYANASHREE HERALE 16028 - Saturday, 15 October 2016, 11:54 PM
The article-operation management at Maruti Udyog, emphasis on Marutis operation in the market
and their inhouse management.
Maruti Udyog Ltd. (Maruti), a joint venture between Suzuki Motors of Japan and the Indian
government. In 2003, Maruti produced 359,960 vehicles, operating at a capacity utilization of 103%.
Hyundai, Tata Motors and Ford were all rivals. Many models of Maruti introduced in the market to
different segments of the customer. Maruti gave importance to its customer by introducing customer
call centers etc. Maruti started with weak distribution but at later stages it became top in the list.
Maruthi has manufacturing plant in Gurgaon, Delhi and stages involved in process is welding,
Blanking and Forming, painting, assembling, machine & engine shops etc. Maruti incurred a loss of
Rs.2690 million in 2001 to a net profit of Rs.1045 million, in 2002 by sharp improvements in quality
and productivity by introducing Challenge 50 initiative. Labour productivity was so high, the ratio of
inventory costs to total income was just 2.5 %.Three principles of Reduce, Reuse and Recycle for
conserving energy was mainly followed. To implement Just-in-time, the frequency of supply was
increased for nearby vendors. Maruti has 299 vendors supplying different components. ACS was an
IT Service Provider for Maruti. Maruti concentrated mainly on cost cutting by improving its production
process.
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Re: Success story

by SANJANA S PATIL 16102 - Saturday, 15 October 2016, 11:57 PM
This article emphasis on scale of operations of Maruti which includes from the point of
manufacturing, assembling and finally in-house management. This article explains the
manufacturing process of Maruti like blanking and forming, welding, painting, assembly, machine
and engine shops. It is important to observe that in each of these process Maruti try to bring
innovation in the process of production and ultimately tries to reduce the production and operation
cost. Maruti pursued a strategy of low cost automation to improve productivity and reduce operator
fatigue without heavy capital expenditure. Maruti was joint venture between Suzuki of Japan and
Indian government. Maruti was ranked 12th amongst the Most Respected Companies in India by
Business World. Maruti also try to conserve natural resources like water so it came up with three
unique principle i.e. Reduce, Reuse and Recycle. Maruti tried to cut down its vendor prices, so it
managed to cut 3.5% vendors cost annually. To reduce procurement cost and time it came up with
web or internet so that it reduced their order and delivery cost. Maruti formed joint venture
reliable supply and to generate economies of scale. Maruti always tried to maintain good relationship
with its vendors because it shared savings with the vendor and it gave an opportunity to vendors to
become the sole supplier for a Suzuki product in several countries including India.
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Re: Success story

by SUSHMA S 16171 - Sunday, 16 October 2016, 1:08 AM
Maruti Udyog, a joint venture between Suzuki Motors of Japan and

the Indian government has been a leading catalyst for driving up the
overall Customer Satisfaction Index industry average. Marutis
industry leading performance was a result of strong performance on

service-related factors.In 2001-02, it produced 351,949 vehicles,
operating at a capacity utilization of 102%, against the industry
average of 57.8%.Maruti turned around from a loss of Rs.2690
million in 2001 to a net profit of Rs.1045 million, in 2002. This
turnaround had been facilitated by sharp improvements in quality
and productivity, both in-house and at the vendors end.In 2002,
Maruti started a program Challenge 50 initiative to improve
productivity by 50 % and reduce cost by 30 % by 2004-05.
Maruti has taken several best practices from the Suzuki
production system that emphasized on participative management,
team work, communication and information sharing, open office
system, Kaizen, multi-skilling of operators, flat structure,
immaculate housekeeping (the famous Japanese 5 S way), in-line
quality assurance processes and widespread quality circle
movement. Maruti also significantly improved its labour
productivity. Since labour productivity was so high, the ratio of
inventory costs to total income was just 2.5 %, much lower than the
industry average. In case of Suzuki, the ratio was 5.6 % and in case
of General Motors, it was 5.5 %. In Indian companies, the ratio was
much higher. In the late 1990s, Maruti adopted the Japanese
technique of Plan, Do, Check, and Action .Maruti kept posting
messages on the wall of the company to avoid the three Ms-Muri for
inconvenience, Muda for wastage and Mura for inconsistency
Vendor management became an important area as Maruti
attempted to improve operational efficiency. Maruti procured
components worth about Rs.5,000 crores every year. The company's
top 10 vendors accounted for about 34 % of its aggregate purchases
of components from vendors in India.Vendors received
communication of Marutis schedule two weeks in advance, with
detailed instructions, including the date and even the exact
workstation. Maruti later introduced an online system for
replenishment of inventory. Vendors began to produce only what
was indented and made supplies only after receipt of the indent card
from Maruti. When Maruti decided to automate its operations in the
early 1990s, there was no ERP vendor support available in the
country.Maruti used an information technology-enabled vehicle build
sequence system and vehicletracking system to increase the
flexibility of the production line.Both vendor management and
leveraging IT have contributed for the growth of the company
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Re: Success story

by MAHESHWARI M 16081 - Sunday, 16 October 2016, 10:08 AM
Maruti udyog.docx
marui udyog story
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Re: Success story

by PARIKSHIT B BANNIKOPPA 16031 - Sunday, 16 October 2016, 11:17 AM
Maruti Suzuki Automobiles is a Front runner in Indian Four wheeler Automobile industry. As we go
through the case we get know how it has achieved this feat.It is classic case of how ti innovative
quickly and how to adapt to changing environment and how to manage resources efficiently and
effectively.The case describes how Maruti had been able to reduce cost of manufacturing through
optimum utilization of resources .Key take-aways from the case is that
How to improve operational efficiency ,Maruti had a loss in the year 2001 and with improving its
quality and productivity it was able to gain profits the subsequent year.with its "challenge 50 initiative
and reducint the cos by 30% i think it made workers more involved in the manufacturing process.
1)Improving Quality'through surveys, direct customer contact, quality gates and with varies
measures maurti is keeping check on its quality, which shows how committed they are to customers.
2)Vendor management, by implementing just in time inventory and increasing the frequency of
supplies from near by vendors and with web based intiatives maruti was able to keep track of its
orders with reducing cost and time. Maruti showed how to manage vendors to the companies
advantage.
3) Importance of information technology in operations, with automated operations and implementing
ERP on their own turned out very well for them. it helped them provide required information to
dealers and vendors etc
Overall we get know that how maruti with its innovative operations approach is able to reduce cos
and also provide value to its customers
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Re: Success story

by NEHA PRASANNA 16148 - Sunday, 16 October 2016, 11:46 AM
Maruti had the widest product range among Indian car manufacturers, with ten basic models and
more than 50 variants. The company dominated the Indian small car market with a 100% share in A
segment and 36% in B segment. In 2003, Maruti produced 359,960 vehicles, operating at a
capacity utilization of 103%, against the industry average of 57.8%.5 Maruti was ranked 12th
amongst the Most Respected Companies. Study conducted by NFO Automotive in India, the Maruti
800 was ranked No. 1 in the Economy segment, the Maruti Zen (petrol version) was ranked No. 1
in the Premium Compact segment while the Maruti Esteem was ranked No. 1 in the Entry Midsize segment. It realized competition could not be underestimated. Hyundai, Tata Motors and Ford
were all formidable rivals. It has been ranked fourth largest manufacturer in japan and when
considered the sales and profit of Maruthi ,sales was high in the year 1999-2001 and profit was high
in the year 1997-1999 it was very low in 2001. Maruti was incorporated in 1981 by taking over the
assets of the erstwhile Maruti Ltd. In 1983, Maruti launched its first car, Maruti 800, targeted at the
masses, as the peoples car with a price tag of Rs.40,000 and introduced a utility vehicle, Omni that
could seat up to eight people. The relationship between Suzuki and the government deteriorated as
the two partners disagreed over management control and the appointment of Bhargavas successor.
It was Bhargava who had played a significant role in getting Maruti up and running. dispute between
Suzuki and the government distracted Maruti. Hyundais Santro (September 1998), Daewoos Matiz
(October 1998) and Tata Motors Indica (March 1999) all began to offer stiff competition to Maruti.
Manufacturing process of Maruti had three integrated manufacturing plants with 17 manufacturing
shops and flexible assembly lines at Gurgaon, about 25 Kms from New Delhi, the capital of India. In
1984, the first plant was set up with an initial installed capacity of 20,000 vehicles per annum. Their
improving operation efficiency turned around from a loss of Rs.2690 million in 2001 to a net profit of
Rs.1045 million, in 2002 and in 2002, Maruti started a program Challenge 50 initiative to improve
productivity by 50 % and reduce cost by 30 % by 2004-05. Maruti involved various component
suppliers in Challenge 50 undertaken by key vendors in collaboration with experts from Suzuki.
Maruti also significantly improved its labour productivity. Discounting for automation, the productivity
of Marutis employees compared very favourably to that of Suzukis facilities in Japan.
Maruti continued to look for ways to cut energy consumption and reverse osmosis water treatment
plant and effluent and sewage treatment plant followed the three principles of Reduce, Reuse and
Recycle for conserving energy. Maruti planned to have a full model change capability by 2006-07,
while its R&D centre would play an important role in indigenisation of component. Marathis
improving quality has Fool-proofing, or Pokayoke in Japanese, which consisted of checks to
prevent defects arising from human errors during the manufacturing process, a real-time feedback
system, cross-linked with overall targets. The Pica Pica system, which aligned the sequence of
components and vehicles in order to prevent incorrect fitting of components. When Maruti first
started the cluster approach, there were 11 vendors and Vendor management became an important
area as Maruti attempted to improve operational efficiency through an Internet-based information
network, which maintained online information regarding order status and delivery instructions. Maruti
used an information technology-enabled vehicle build sequence system and vehicle tracking system
to increase the flexibility of the production line and in April 2002, Maruti implemented a Warehousing,
e-Fulfillment and Supply Chain Execution solution - MARC-CS.
Maruti had plans to raise its operating efficiency to that of Suzuki's premier plant where Suzuki
planned to bring in new technology from Japan making Maruti capable of full model-development by
2007. Marutis sales had been virtually stagnant but its profit after tax had grown impressively by
138% to Rs.282 crores.
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Re: Success story

by AVINASH KUMAR KANU 16070 - Sunday, 16 October 2016, 12:07 PM
In the years 1997, 1998 and 1999 the sales were between Rs. 7500 cr and Rs. 8000 cr while the
profits were between Rs. 500 cr and Rs. 610 cr. In the year 2001, sales amounted almost to Rs.
9000 cr. but there was a dramatic change in the returns. Inspite of increase in the sales by almost
Rs. 1000 cr the company had faced a loss of Rs. 269 cr. It is not very difficult to say that the cause
for this was the cost of production. The company was quick enough to identify the problems and take
the corrective actions. In this matter, Maruti did not take any major strategic decision. It just asked for
suggestions from the employees and it was these small suggestions that made the big things fall into
place. Further, Maruti also concentrated on new product development in order to remain in the
competition and fight back. The company which was producing only Maruti 800 since 1983 was now
focusing on launching many other new models of cars. In order to cut costs, Maruti brought
modifications in its manufacturing process which not only reduced costs but also reduced the time
required to manufacture a car. With a view to improve its operational efficiency, Maruti adopted some
ideas and techniques that the Japanese manufacturers used. Maruti knew that one of the major
reasons of increasing cost of production was wastage of raw materials and time. For this matter,
Maruti kept posting messages on the wall of the company to avoid the three Ms-Muri for
inconvenience, Muda for wastage and Mura for inconsistency. Another important decision that Maruti
took in order to reduce cost was regarding vendor management. It encouraged its vendors to set up
warehouses near its plants in order to implement just-in-time delivery mechanism. This helped
Maruti to cut down the costs of holding inventory. Another important initiative that Maruti took was
regarding Information Technology. When Maruti decided to automate its operations in the early
1990s, there was no ERP vendor support available in the country. So, the company decided to do it
all by itself. A team of 45 engineers, using a combination of software from Oracle and Computer
Associates, built a variety of applications covering inventory management, receipts, excise,
consumption, production, sales, invoicing, exports, financial accounting, payroll, and bank
reconciliation. The applications were developed and upgraded on a regular basis, while only the
maintenance and administration were outsourced. This made IT a low cost affair for Maruti.
These quick all round modifications in the operations that Maruti made helped it in fighting back and
consequently, it is still one of the major automobile manufacturers in India.
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Re: Success story

by SMITHA SHETTY 16108 - Sunday, 16 October 2016, 12:29 PM
This article highlights the journey of Maruti Suzuki. From the time it started out in India as
Maruti Udyog, till the current day. The success story of Maruti is about how the company grew over
the years. The study focuses on how they implemented various strategies to improve their supply
chain and the production system. Innovations and effective logistics management proved out to be
their strength.
In 2003, Maruti Udyog Ltd. (Maruti), a joint venture between Suzuki Motors2 of Japan and
the Indian government, dominated Indias automobile market with a 54% market share. Maruti had
the widest product range among Indian car manufacturers, with ten basic models and more than 50
variants. Even though Maruti was well ahead of its other rivals, it realized competition could not be
underestimated. Hyundai, Tata Motors and Ford were all formidable rivals. In this context, the
companys executives wondered what more could be done to improve operational efficiency, cut
costs and launch new products.
In the early 1980s, the Indian government decided to produce a small car, affordable to the
Indian middle class. The obvious place to shop for technology was Japan, which had developed
world class capabilities in small cars by that time. It was not Toyota or Nissan or Honda, the three
largest players in Japan, with whom the government tied up, but Suzuki, a much smaller company,
with strong capabilities in making small cars. Maruti was incorporated in 1981 by taking over the
assets of the erstwhile Maruti Ltd, (set up in 1971 and wound up in 1978). In 1982, the government
signed a joint venture agreement with Suzuki, which was offered a 26% equity stake in the company.
Maruti had started with a weak distribution and service network, compared to players like
Hindustan Motors and Tata Motors, when it started its operations. But by the early 2000s, Maruti had
the largest network of dealers and service stations amongst all car manufacturers in India.
Manufacturing Process
Maruti had three integrated manufacturing plants with 17 manufacturing shops and flexible
assembly lines at Gurgaon, about 25 Kms from New Delhi, the capital of India. Various stages were
involved in car manufacturing: blanking and forming of the body, welding these forms into the car
body, painting, assembly, vehicle inspection, road test, final inspection and dispatch.
Blanking and Forming
The steel coils were cut to the required size and panels were prepared by pressing them
between various die sets such as doors, roofs and bonnet. An anti-rust coat was applied at this
stage. Maruti also had the in-house capability and the necessary technical knowledge for the design
and manufacture of medium-size press dies.
Welding
Maruti had three welding units with 122 six-axis robots and 25 in-house manufactured twoto- four axis robots. In the weld shop, all the formed parts were welded in serial fashion like
underbody, left and right bodies, and the top roof. While minor welding activities were performed
manually, the robot arms performed the rest of the welding. The complete body of the car was spotwelded.
Painting
Maruti had three painting units. Here, the body underwent various pre-treatment and electro
deposition painting processes to improve corrosion resistance. The car body was given a primer
coat before applying the stoving topcoat paint. The final coat was applied by using automatic
electrostatic spray-painting machines and robots, followed by a baking process.
Assembly
Marutis assembly lines could handle simultaneously a large number of variants in frequently
changing sequence. The assembly shop consisted of a trim line, chassis line, final line, vehicle
inspection line and the final inspection line.
Machine and Engine Shops
Maruti assembled and tested engines in the engine shops and carried out precision
machining of engine components in the machine shops. The Work Instruction Chart (WIN Chart)
provided clear instructions to machine operators both for doing work and handling the parts.
Maruti turned around from a loss of Rs.2690 million in 2001 to a net profit of Rs.1045 million,
in 2002. This turnaround had been facilitated by sharp improvements in quality and productivity, both
in-house and at the vendors end. Product development in the automobile industry was a very
capital-intensive process. At the same time, car companies had no option but to introduce new
models regularly. One way to keep costs down was through ongoing process innovations.
Maruti attempted to reduce the cost of developing new models through in-house
development and localized sourcing of dies, welding jigs, and other equipment, and by introducing
flexible welding lines that could be used for multiple models. Maruti pursued a strategy of low cost
automation to improve productivity and reduce operator fatigue without heavy capital expenditure.
Maruti continued to look for ways to cut energy consumption. Suzuki intended to make India a
research and development (R&D) center for its cars for the Asian market excluding Japan. This
meant new models based on indigenous R&D would roll out of its Gurgaon plant.
Improving Quality
Maruti measured the relative quality of dispatched vehicles on a random, daily basis through
a quality index audit. Maruti deputed its engineers to suppliers plants to help improve quality. To
ensure quality, Maruti had invested considerable effort in ensuring that suppliers conformed to the
highest standards.
Vendor Management
efficiency. Maruti procured components worth about Rs.5, 000 crores every year. The company's top
10 vendors accounted for about 34 % of its aggregate purchases of components from vendors in
India. Vendors received communication of Marutis schedule two weeks in advance, with detailed
instructions, including the date and even the exact workstation. Maruti later introduced an online
system for replenishment of inventory. Vendors began to produce only what was indented and made
supplies only after receipt of the indent card from Maruti. Maruti decided to join hands with its
vendors in sourcing common materials such as steel and aluminum.
Maruti had agreements with vendors such that they could sell components that were made
in accordance with designs, drawings and specifications provided by Maruti, exclusively to Maruti.
Maruti established quality control procedures that involved periodic inspections of components and
audits of vendors premises.
Leveraging Information Technology
When Maruti decided to automate its operations in the early 1990s, there was no ERP
vendor support available in the country. So, the company decided to do it all by itself. A team of 45
engineers, using a combination of software from Oracle and Computer Associates, built a variety of
applications covering inventory management, receipts, excise, consumption, production, sales,
invoicing, exports, financial accounting, payroll, and bank reconciliation. The applications were
developed and upgraded on a regular basis, while the maintenance and administration were
outsourced.
Looking Ahead
With its comfortable financial position and good prospects for double-digit growth, Maruti had
every reason to feel optimistic. But given the excess capacity in the global car industry, there was
every possibility that global players would aggressively expand their presence in India. Only time
would tell to what extent, Suzuki, a relatively small player by global standard, would be able to help
Maruti to withstand competition in what most analysts considered to be a market of strategic
significance.
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Re: Success story

by PAVAN K 16091 - Sunday, 16 October 2016, 12:37 PM
This case on success story of Maruti Udyog speaks about how the company was able to earn
operating efficiency by cutting down the cost, increasing productivity and improving quality. Maruti
India through its collaboration with the Japanese automaker Suzuki turn around the automobile
industry in India producing cars for all segments of the market. The company started by carving out
a niche for itself by being a cost leader. In 2003 Maruti Suzuki dominated the Indian automobile
market with 54% market share after the Indian government had signed a joint venture with suzuki in
1982. In 1992 by having close to 50% stake in the company suzuki successfully converted maruti
into a non government company. Suzuki had differences about some management issues regarding
the company which later was carved effectively by mutual consent but this had already affected the
market as new competitor had already entered the market.
New management started embarking on product development and understood not changing the
model for over a decade is effecting it. So it started releasing cars every year with complete product
range. It also started schemes like MSM to get close to the customers and also introduction of Maruti
Udyog.com for better customer relation. In 1999 having installed capacity of 350000 it became the
largest passenger car manufacturing facility.
Its manufacturing process had 4 key components like blanking and forming, Welding, Painting and
assembling which it had required in house capability and technical knowledge for performing it.
Maruti improved operating efficiency by programs like challenge 50 initiative to improve productivity
and reduce cost. It also started new manufacturing techniques and value analysis models,
continuous innovation, adoption of Kaizen, Flat organisation structure, multi skilling of operators,
quality circle movement etc for improving the efficiency in the output. Addition to this it also took
steps for improving labor productivity, starting initiatives like 3 M's to reduce wastage, inconvenience
and inconsistency, Low cost automation, ways to cut energy consumption, emphasizing on R&D by
sending its personnel to Japan for training and skill development were few of the measures adopted
by Maruti.
Systems like Pica Pica, Fool proofing, real time feedback etc was adopted keeping quality and
customers preference in mind due to this the defective vehicles produced by the company came
down significantly. It also concentrated towards vendor management by implementing vendor rating
techniques for timely feedback. The vendors were encouraged to have their own warehouses near
Gurgaon by giving them incentives so that it would reduce time and money in transportation. It also
introduced a online system for inventory management which enabled managing vendors for Just In
Time delivery. It started building its own software and applications which helped in cutting down the
cost with the help of top engineers around.
Maruti has been successful in earning major portion of market share and having a strong financial
position and growth by its operational efficiency and productivity. But has the automobile industry in
India is growing and entry of new players with the sector having excess capacity in global car
industry there is chance for aggressive competition which Maruti India should be able to face without
compromising on its quality and be a as productive as it has been over the decade.
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Re: Success story

by BIJETA SUR 16131 - Sunday, 16 October 2016, 12:33 PM
The article gives an insight in how efficient operations management can reduce cost and help a
company in generating profits. The company tried to reduce cost and improve efficiency at every
level production starting from blanking and forming to welding, painting, assembling, etc. It also took
initiatives to conserve energy and prevent wastage by providing skylights to improve the natural light
in shops, by reverse osmosis water treatment plant and effluent and sewage treatment plant and it
also reduced its consumption of water by recycling used water. The company also made great efforts
toward improving quality by tracking surveys and direct customer contact in order to understand the
problems faced by customers, by maintaining quality gates at various stages in order to raise alarms
for correction and trigger immediate action on defects,etc. As a result of this the average number of
defects per vehicle came down from 2.35 in 1999-2000, to 2.26 in 2000- 01 and to 0.45 in 2001-02
as well as the number of people involved in post production repairs were also reduced significantly.
The company also did efficient vendor management which in turn helped in reduction of cost as well.
They designed their activities for the mutual benefit of the vendors as well as the company such as
helping them gaining the benefits of economies of scale by giving them large orders etc.
It can be seen how the company improved its operational efficiency by setting targets and achieving
them within time. The constant improvement of its methodology helped the company in maintaining
its markets position.
Maruti Udyog is an excellent example of how strategic management can improve overall efficiency.
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Re: Success story

by PRANAY SAHU 16153 - Sunday, 16 October 2016, 12:37 PM
The case is very interesting and informative. We learn about how two companies i.e. Maruti udyog
and Suzuki MNC of Japan came together and produce the car for the mass segment of the society
and come up stronger than it was every time whenever they face any situation or hard time. We
learned about the different strategies practiced by the company since its inception. The various types
of machines used in production process of different cars under one roof. One of the interesting and
thing to be learn from the company is about its CSR practice, where Maruti Suzuki try to save
environment and power by providing more sunlight in working area and cutting down the use of
electricity and improving the production process and efficiency of the labours. The company try to
improve the quality of raw materials by assisting them in production process by sending its
managers to the suppliers firm. The companys policy of exchanging its employees with the Suzuki
plant employees in Japan which help the employees to improve their efficiency and practicing
kaizen.
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Re: Success story

by AKSHAY R 16124 - Sunday, 16 October 2016, 12:49 PM
The article is about how maruti was able to turn it around from a drastic loss, to become one of the
most trusted automobile industries in the nation.This success story is a result of various strategies
being implemented by the company. They made many moves to become closer to the
customers.Though their Maruti 800 was a huge success among the masses, they failed to make any
modifications for almost the next 15 years. Finally they started introducing new models to compete
with the likes of Tata's Indica, Hyundai's Santro and Daewood's Matiz. They also improved their
service chain through Maruti Service Masters(MSMs).Then they set up call centers and
strengthened their website, all steps being taken as a measure to reduce the distance between the
company and the customer.Everything started paying off gradually.
Suzuki, the Japanese company which had the largest stake in the company by the year 2002, made
constant measures to increase the production capacity. The article also throws light on the
manufacturing process being employed at the maruti's factories.The various steps of the production
are identified as Blanking and Forming, Welding, Painting, Assembly and Testing.
"Challenge 50 initiative' was a measure taken by maruti to increase it's productivity by 50% and
reduce cost by 30 %. The company also started practicing the in house development processes to
reduce cost. They also employed the famous Kaizen management in to their production processes.,
leading to continuous improvement. Every of these steps were fruitful at the end of the day. From
producing 730 cars a day in 1995 with 4800 employees, they have improved to 1700 cars a day in
2003 with just 4500 employees.
The company's labor productivity was another reason for it's roaring success.The productivity rate
was comparable to Suzuki's plants in Japan, which were even more automated. Maruti also took
initiatives to cut energy consumption.They brought in CNG driven cars.
Training the employees was another move. They started an on going training procedure inside the
plant premises.Many employees were given training in the Suzuki's Japan facility. Several measures
were taken ti improve quality. As a result the average number of defects came down in 2002 as
compared to that of in 2000.In 2000, Maruti implemented the TPM, which proved revolutionary.
Maruti also have well sorted out vendor management steps, which ultimately results in cost
reduction.The company also relies a lot in the information technology. They introduced the
Enterprise resource Planning, that could efficiently monitor the various processes, ensuring a
seamless run between the processes.
Value Addition- Maruti introduces iCreate, an online platform that lets buyers personalize
over 90 exterior and interior elements of a car. This is targeted at the young customers.
http://www.financialexpress.com/industry/companies/personalisation-comes-to-maruti-suzuki-checkout-how-you-can-stand-out/418740/
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Sucessful Story of Maruti Suzuki

by AKSHATHA B.J 16064 - Sunday, 16 October 2016, 1:07 PM
Success story of Maruti Udyog in operation management.
Maruthi was ranked 12th in India by business world.In 2003, the Maruti 800 was ranked No. 1 in the
Economy segment Maruti had become the first Indian company to reach a cumulative production of
one million vehicles. In 1995, Maruti received ISO 9002 certifications. Marutihad the largest network
of dealers and service stations amongst all car manufacturers in India. Maruti established chain of a
model workshops called Maruti Service Masters across the country, for customers interaction with
the company it introduced a toll free telephoneNumber. And also, Maruti strengthened its interactive
web site, www.marutiudyog.com, toProvide information and practical help to customers.
Capacity
Ability to hold, operating at a capacity utilization of 103%, against the industry. , Marutis installed
capacity was increased to 250,000 With a third plant becoming operational,it shows that because of
his capacity it became one of the manufacturing company.
Operational Efficiency
Maruti turned loss with net profit of 1045. This turn around had been facilitated by sharp
improvements in quality and productivity,In 2002, Maruti started a program Challenge 50 initiative
to improve productivity by 50 % and reduce cost by 30 % by 2004-05.Productivity improvement
programs were undertaken by key vendors in collaboration with experts from Suzuki. Maruti started
implementing new manufacturing techniques for operating efficiency. optimum utilization of
production lines, and significant reduction in material handling improved productivity and made
operations more efficient.Vendor management became an important area as Maruti attempted to
improve operational efficiency.
Cost
They cut the cost for manufacture efficiently and to make improvement in productivity. Maruti, in
addition to Subros. Instead of assembling components from many small suppliers, Maruti started
buying from one big, tier-1 supplier, who assembled parts supplied by lower tier vendors. This
resulted in reduction in the cost
Environment Consumption
Company followed the three principles ofReduce, Reuse and Recycle for conserving energy.
Maruti continued to look for ways to cut energy consumption for consumption of environment ( CSR
activity)
Quality improvement
Maruti initiated the quality movement among the domestic auto ancillaries. In 1995, Maruti
introduced a cluster approach. Vendors were grouped together, trained in quality management and
assisted in obtaining ISO 9000 certification. This cluster approach was extended to help vendors
attain QS 9000 certification.
Economics of scale
Maruti had started to integrate vendors into its worldwide purchase system (WWP). A vendor could
become the sole supplier for a Suzuki product in several countries including India. This
generatedeconomies of scale and further reduced costs.
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Re: Success story

by ROHIT SEMWAL 16039 - Sunday, 16 October 2016, 1:08 PM
Maruti Udyog Ltd, a joint venture between Suzuki motors of japan & the Indian Govt. , Dominated
Indias automobile market with a 54% market share in 2003. Maruti had the ten basic models & mre
than 50 variants which is widest product range among Indian car manufacturers. Maruti 800, Zen &
Omni are 3 out of top 5 selling car models in India.
In 2003, Maruti has a Operating Capacity utilization of 103% against the Industry average 57.8%
which was commendable.
Be it in customer satisfaction, be it in economy segment or premium maruti has topped in all around
in India. In December 1983, Maruti launched its first car, maruti 800, targeted at the waves with a
Price tag of Rs 40000. In 1984, Introduced Omni a utility vehicle & in 1985, Gypsy designed for
tough roads. Late 1980s , Suzuki increased equity stake in Maruti from 26% to 40% & in 1992 to
50%.
In 1993, it introduced a new model , the Zen with a 1300 cc engine , & esteem , a variation of Maruti
1000. Some conflicts occurred between two partners such as transfer of gearbox technology &
expansion plan of Suzuki. In 1984, maruti had become the first Indian Company to reach a
cumulative production of one million vehicles. In 1997-98 , Maruti overall market share was 83%.
The company realised in 2000 that profile of Indian car market had changed as new competitors
such as Hyundai, Tata, Daewoos were giving stiff competition to them.Leaving the basic model 800
unchanged for over 15 years had been a strategic blunder. The company announced it would launch
one new model every 6-12 months with price gaps of about Rs 25,000. The company launched
various initiatives to improve customer service. In 1999, Maruti established chain of model
workshops across the country there are one stop shops met all vehicles needs for maruti cars.
Maruti also set up customercare centre in NCR , Bangalore, Chennai & Mumbai.Maruti had started
with a weak distribution & service network, compared to players like Hindustan motors & tata motors,
when it started its operations. But by early 2000s, Maruti had the largest network of dealers &
service stations amongst all car manufacturers in India. In 2002 , Maruti found itself with a lower
market share but improved to 54 % in 2003. In early 2003 , Maruti made a highly successful Initial
Public Offer (IPO); comprising 7.2 million equity shares of Rs 5 each. Maruti had three integrated
manufacturing plants with 17 manufacturing shops and flexible assembly lines at Gurgaon. In 1984,
the first plant was set up with an initial installed capacity of 20,000 vehicles per annum. In March
1999, the installed capacity became 350,000 vehicles per year, making Maruti one of the largest
passenger car manufacturing facilities of Suzuki outside Japan. Maruti turned around from a loss of
Rs.2690 million in 2001 to a net profit of Rs.1045 million, in 2002. This turnaround had been
facilitated by sharp improvements in quality and productivity, both in-house and at the vendors end.
reduce cost by 30 % by 2004-05. Maruti attempted to reduce the cost of developing new models
through in-house development and localized sourcing of dies, welding jigs, and other equipment,
and by introducing flexible welding lines that could be used for multiple models. It also planned to
source dies for new models and upgraded versions of existing models from countries such as
Taiwan, which were less expensive than in Japan. Maruti also significantly improved its labour
productivity. For each operation, Maruti had an operating standard, which decided how much time it
took to complete a particular function on the assembly line. Since labour productivity was so high,
the ratio of inventory costs to total income was just 2.5 %, much lower than the industry average.
Maruti adopted the Japanese technique of Plan, Do, Check, and Action. Maruti kept posting
messages on the wall of the company to avoid the three Ms-Muri for inconvenience, Muda for
wastage and Mura for inconsistency. Maruti pursued a strategy of low cost automation to improve
productive. Maruti started using new layouts and small innovations like automated trolleys to reduce
wasteful movements and worker fatigue. Inhouse automation, such as two-axis and four-axis robots
and material handling devices also enhanced productivity. The effectiveness of these measures was
reflected in a 30% fall in Hours Per Vehicle. Maruti continued to look for ways to cut energy
consumption. The companys reverse osmosis water treatment plant and effluent and sewage
treatment plant followed the three principles of Reduce, Reuse and Recycle for conserving energy.
Between 1997 and 2003, Maruti reduced the consumption of electricity per vehicle produced, by
approximately 29%. Energy-saving lights and natural light, and the efficient usage of other electrical
appliances also reduced power consumption. In the same period, Maruti reduced the consumption of
water, by approximately 66% through the recycling of wastewater. It modified old facilities by
providing skylights to improve the natural light in shops. Energy efficient tube lights were introduced
in the plant. Diesel driven forklifts were converted to Compressed Natural Gas (CNG) to improve
ambient air quality in shop and reduce fuel cost. Steam consumption was reduced by shortening of
the pipeline, and by pressure and temperature optimization. Photoelectric switch and preprogrammed timer were used for area lighting. These initiatives reduced electricity consumption per
car by 3%, steam by 6%, and water by 9% in 2001. Suzuki intended to make India a research and
development (R&D) centre for its cars for the Asian market excluding Japan thereby bringing costs
down. Maruti provided ongoing training to employees at its premises as well as at Suzukis facilities
in Japan. The average number of defects per vehicle came down from 2.35 in 1999-2000, to 2.26 in
200001 and to 0.45 in 2001-02. The number of people involved in post-production repairs also
reduced significantly, as Maruti emphasized doing it right, the first time. Direct final check ok, which
signified the percentage of vehicles that passed through the inspection stages as defectfree,
improved from 19.5% in 2000-01, 77% in March 2002, to 87% in March 2003. Maruti reduced the
warranty costs of vendors per vehicle by approximately 21% between fiscal 2002 and fiscal 2003.
Maruti deputed its engineers to suppliers plants to help improve quality. In 1995, Maruti introduced a
cluster approach. Vendors were grouped together, trained in quality management and assisted in
obtaining ISO 9000 certification. This cluster approach was extended to help vendors attain QS 9000
certification. One member of the cluster, Sundaram Brake Linings won the prestigious Deming
Award. Maruti was working on a 3.5% per annum reduction in vendor prices by 2004-2005. Maruti
streamlined the sourcing and stocking of materials and components through its Delivery Instruction
system, one of Suzukis best practices. Maruti connected to its vendors through an Internet-based
information network, which maintained online information regarding order status and delivery
instructions. To implement Just-in-time, the frequency of supply was increased for nearby vendors.
The far away vendors were encouraged to set up assembly plants near Maruti. An additional
initiative on cost cutting included the company's encouragement to those vendors who were located
in far away places to build a warehouse near Gurgaon, where its car plant was located. . Maruti
reduced its inventory levels from 22 days in 1995-96, to 13 days in 2001-02, to 2.9 days in 2002-03.
In 2003, inventory of components, paints, consumables, and steel coils reduced by 17.5 %. Vendors
received communication of Marutis schedule two weeks in advance, with detailed instructions,
including the date and even the exact workstation. Maruti later introduced an online system for
replenishment of inventory. Vendors began to produce only what was indented and made supplies
only after receipt of the indent card from Maruti. Marutis average inventory was one and a half days
for domestically sourced components. For imported components, one months inventory was
maintained. Instead of assembling components from many small suppliers, Maruti started buying
from one big, tier-1 supplier, who assembled parts supplied by lower tier vendors. This resulted in
reduced costs, less people to deal with, and reduced inventory. When Maruti decided to automate its
operations in the early 1990s, there was no ERP vendor support available in the country. So, the
company decided to do it all by itself. A team of 45 engineers, using a combination of software from
Oracle and Computer Associates, built a variety of applications covering inventory management,
receipts, excise, consumption, production, sales, invoicing, exports, financial accounting, payroll,
and bank reconciliation. Dealers placed orders on Maruti through email. Even the suppliers were
gradually brought online. Maruti had implemented an in-house designed supply chain application,
that extended ERP on the extranet and linked both dealers and vendors. The dealers did not have to
invest in the infrastructure because the extranet was totally Web-based. They only had to bear the
dial-up charges. So maruti Suzuki did all the best practices of Production management & hence it is
termed as a successful business model & market leader in Indias 4 wheeler automobile segment.
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Re: Success story

by VAIBHAV VATS 16056 - Sunday, 16 October 2016, 1:10 PM
The great journey of success started with a joint venture between Maruti Udyog Ltd. (Maruti) and
Suzuki Motors in 1982. As Maruti incorporated in 1981 and launched people car Maruti 800 in
1983. As we can see Maruti always interested in capturing the market by launching various other
model time to time like zen,omni etc.it is also the first company to reach a cumulative production of
one million vehicle. To be on top Maruti never compromised with the quality as japan manufacturer
are very particular about it and received ISO 9002 certification in 1997. Maruti and Suzukis
disagreed over various management issues like technology, appointment of MD but they overcome
through mutual consent and took the best decision but due to this delay in decision gave an edge to
new competitors like Hyundai Santro(1998) and Daewoos Matiz(1998) and Tatas Indica(1999) and
all began to offer stiff completion to Maruti. Maruti went through various restructuring exercise to
strengthen its competitive position as their market share was decreasing from 65% to 52% and huge
loss of Rs.2690 million in 2001. After launching various models it can be seen that their market share
got increased.
According to me how these four factors gave an edge to Maruti are discussed below:Manufacturing process
It is very much evident that their three integrated manufacturing plants with an initial capacity of
20000 vehicle per annum gave a boost to their sales and delivery. Maruti knew that if they have to
capture the market they have to increase their capacity as well as production,
through forecasting they installed 2 more plants and become the largest car manufacturing
company in India. In my view their manufacturing processes are very much managed and structured
thats why they are still enjoying the market share and in this process I think japans technology
played a major role. From the starting like blanking and forming they maintain the technology intact
and were used according to the capacity, like also in painting, welding, assembly, machine and
engine shops. The one thing to observe is the parameters they have taken during their process like
the correct amount of input and inspection regarding their manufacturing need and the quality
maintenance throughout the process and thats gave an opportunity to Maruti to sustain in the
competition.
Improving operational efficiency
In case of Maruti they started looking at the operational efficiency after they incurred huge loss of
Rs.2690 million in 2001. Challenge 50 initiative was great step to improve productivity as their
Productivity improvement programs were undertaken by key vendors in collaboration with Experts
from Suzuki. Maruti started implementing new manufacturing techniques and various value analysis
and value engineering initiatives. They improved their operational efficiency by reducing wastage
which is one the factor which decrease the efficiency and some of them are over production man
movement ideal time etc. They had a insight where they can reduce the wastage and increase
operational efficiency and this can be seen by their ratios and volumes they produced after
implementing low cost automation, kaizen practices etc.
Improving quality
Quality improvement is very important for anyone manufacturing firm but Maruti took various steps to
get ahead and they were new to everyone like tracking surveys, direct customer contact,
establishing quality gates, real time feedback system. After all this their number of defects came
down to much lower say 80% which is a benchmark and they also implement various movement
like TPM for movement of its function. From Maruti other can learn that quality is a must can be
achieved through rigorous planned decision.
Leveraging Information Technology and vendor management
Maruti understood the importance of information technology in early stages and they develop various
improvement in the ongoing system because it very evident and important to run with latest
technology like maintain daily stocks, customer complaint monitoring and also they join hands
vendors which is again a great step to procure row material and full capacity utilization through
various technique one thing can be understand that they heavily focused on quality and optimum
production.
Conclusion
Being a market leader at that stage still Maruti come so far by doing various changes in their
production system and still focusing in quality through implementing different dimension technology
every manufacturing firm must understand the importance of production and operation efficient
management to beat the completion like Maruti did.
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Re: Success story

by SHRUTHI HEGDE 16106 - Sunday, 16 October 2016, 1:15 PM
Maruti Suzuki India Limited has been in car manufacturing business for over 30 years and is
the largest car manufacturer in India.
Maruti Suzuki India Limited has a nationwide dealer sales and service network.
The study considers various innovations implemented in supply chain and logistics
management and the aids derived by Maruti Suzuki India Limited to increase competitive
authority in the Indian Automobile Industry.
The study is based on secondary data comprising of works review.
The answers suggest that Maruti Suzuki India Limited has been constantly applying many
advances in supply chain and logistics management which have given them many positive
results in terms of development of working efficiencies, cost reductions and attaining
customer satisfaction.
Further study can be conducted on other car manufacturers in the India Automobile Industry.
To understand the applications of innovations in supply chain and logistics management at

Maruti Suzuki India Limited.
The paper is based on secondary data including of literature review and print and online
reports.
Maruti Suzuki India Limited has been a market leader in the India Automobile Industry. The
study efforts to study the changes applied in their supply chain and logistics management
process.
The competition in modern business management is no longer between organizations but
within supply chains components.
From 385 suppliers at one time, Maruti's local Tier I looks much leaner now at 246.
The Indian Automobile Industry has been very competitive and will further get more
competitive.
Continuous innovations in supply chain and logistics management will contribute positively
to the overall capability of the entire value chain and will offer many benefits to all the
partners in the value chain.
MSIL has been receptive to the dynamic market and has been inventing their supply chain
and logistic management process.
The changes applied have benefited all the partners in terms of lean operations, addition of
partners in the value chain, lowering of cost, list decrease, lesser transportation time of
finished vehicles and spare parts to their dealers, and completion of ever changing
customer expectations.
The future will present further tests, MSIL will be required to be flexible and responsive
towards their supply chain and logistics management process and reliably introduce
inventions in order to further improve operational efficiency, quality and cost efficiency.
The study has been restricted to only Maruti Suzuki India limited and it is recommended that
further study may be conducted on other players in the Indian.
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Re: Success story

by NAVEEN CHANDER LAKKIMSETTI 16147 - Sunday, 16 October 2016, 1:18 PM
maruti.docx
success story of maruti udyog
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Re: Success story

by NAINA SINGH 16027 - Sunday, 16 October 2016, 1:22 PM
This case is about the firm Maruti Udyog Ltd which is a joint venture firm between Maruti (Indian
government) and Suzuki (japan) which offers a wide range of cars and also dominates the
automobile segment with the highest market share. Maruti is also ranked no1 by customers
constantly over the years. The rivals of Maruti are Hyundai, Tata motors and Ford. To be better than
its competitors the companys executives decided what more can be done to make the product
better in terms of operational efficiency, reducing cost and launching new products. In the late 1980s,
Suzuki increased its equity stake in Maruti from 26% to 40% and further to 50% in 1992. This
converted Maruti into a non-government Company, giving Suzuki a much freer hand in managing the
affairs of the company.
As competition intensified, Maruti realized the significance of getting closer to its customers. The
enterprise launched many initiatives to improve customer service. In 1999, Maruti established a
chain of model workshops called Maruti Service Masters (MSM) across the country which was
operated by franchisees and these one-stop shops met all vehicle needs for Maruti cars, offered
maintenance service, spares, accessories, insurance related services and took care of warranty
claims. Operations were improved by improving the quality and productivity, both in-house and at the
vendors end.
Maruti started implementing new manufacturing techniques and value engineering initiatives. Maruti
replicated numerous best practices from the Suzuki production system which lay emphasis on
participative management, team work, communication and information sharing, open office system,
Kaizen (Continuous improvement), multi-skilling of operators, flat structure, immaculate
housekeeping (the famous Japanese 5 S way), in-line quality assurance processes and widespread
quality circle movement. Also activities such as in-house automation, optimum utilization of
production lines, and significant reduction in material handling improved productivity and made
operations more efficient. Also suggestion scheme encouraged employees to contribute ideas for
improvement and cutting costs in any area of operation.
In the late 1990s, Maruti adopted the Japanese technique of Plan, Do, Check, and Action. PDCA
consisted of: Planning by setting a target and time-line, dividing into action plan with value to each
factor/element; Doing the standardized operation as decided; Checking through gap analysis
whether the operation was yielding the desired results; and Acting to freeze if effective or correct.
They also initiated Muda for wastage and Mura for inconsistency. The eight typical wastages at each
Operational point were measured by observation about Over production, Man movement, Material
movement, Idle time of operator, Work in process, Machine availability, Waiting time and Needless
processing.
Maruti also pursued a strategy of low cost automation to improve productivity and reduce heavy
capital expenditure. To implement Just-in-time, the frequency of supply was increased for nearby
vendors. Maruti later introduced an online System for replenishment of inventory. This pooling
technique did not end with sourcing of materials but was also extended to Transportation of the
materials. Finding the capacity utilization of the trucks entering its factory, Maruti introduced the "milk
running system" through which the Materials were pooled from Different vendors so that a truck's
carrying capacity was fully utilized.
Maruti had agreements with vendors such that they could sell components that were made in
Accordance with designs, drawings and specifications provided by Maruti, exclusively to Maruti.
Maruti established quality control procedures that involved periodic inspections of components and
audits of vendors premises. Maruti set targets for cost reduction and shared savings with the
vendor. In addition, Maruti had started to integrate vendors into its worldwide purchase system
(WWP) through which a vendor could become the sole supplier for a Suzuki product in several
countries including India. These initiatives generated Economies of scale and further reduced
costs.
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Re: Success story

by JAGRUTHI SHETTY 16017 - Sunday, 16 October 2016, 1:20 PM
Maruti Suzuki India Limited has been in car manufacturing business for over 30 years and is
the largest car manufacturer in India.
Maruti Suzuki India Limited has a nationwide dealer sales and service network.
The study reflects various inventions implemented in supply chain and logistics management
and the aids derived by Maruti Suzuki India Limited to increase inexpensive authority in the
Indian Automobile Industry.
The study is based on secondary data including of works review.
The answers suggest that Maruti Suzuki India Limited has been continuously applying many
advances in supply chain and logistics management which have given them many positive
results in terms of development of employed productivities, cost reductions and attaining
customer satisfaction.
Further study can remain conducted on other car manufacturers in the India Automobile
Industry.
To understand the requests of inventions in supply chain and logistics management at Maruti
Suzuki India Limited.
The paper is based on secondary data including of literature review and print and online
reports.
Maruti Suzuki India Limited has been a market leader in the India Automobile Industry. The
training efforts the changes applied in their supply chain and logistics management process.
The competition in modern business management is no longer between organizations but
within supply chains components.
From 385 suppliers at one time, Maruti's local Tier I looks much leaner now at 246.
The Indian Automobile Industry has been very inexpensive and will further get more
competitive.
Continuous innovations in supply chain and logistics management will contribute positively
to the overall capability of the entire value chain and will offer many benefits to all the
partners in the value chain.
MSIL has been receptive to the dynamic market and has been inventing their supply chain
and logistic management process.
The changes applied have benefited all the partners in terms of lean operations, addition of
partners in the value chain, lowering of cost, list decrease, lesser transportation time of
finished vehicles and spare parts to their dealers, and completion of ever changing
customer expectations.
The future will present further tests, MSIL will be required to be flexible and responsive
towards their supply chain and logistics management process and reliably introduce
inventions in order to further improve operational efficiency, quality and cost efficiency.
The study has been restricted to only Maruti Suzuki India limited and it is recommended that
further study may be conducted on other players in the Indian.
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Re: Success story

by JYOTSNA 16077 - Sunday, 16 October 2016, 1:22 PM
It is a great successful story which I have read till now. Tremendous effort and clear cut missions
put Maruti in a different rank. In all dimension Maruti put rigorous effort and get positive outcome of
it.
Lets discuss in detail success story of Maruti
In success journey of Mruti there were lot of up and downs and which was well managed by Maruti
In 2003, Maruti produced 359,960 vehicles, operating at acapacity utilization of 103%, against the
industry average of 57.8%.During four consecutive
years from 2000 to 2003, J.D.Power Asia Pacific, had ranked Maruti No. 1 in the India Customer
Satisfaction Index study. In 1993, it introduced a new model, the Zen
with a 1300 cc engine, and Esteem, a variation of Maruti 1000 (which was replaced) with more
power and a new exterior.This bring the negative impact in Maruti in terms of relation and execution
exterior.
Around this time, the first sign of conflict between the joint venture partners surfaced, when
Suzuki proposed a Rs.22 billion expansion and modernization plan. The transfer of gearbox
technology was also a bone of contention between the two partners. The government felt that
Suzuki was deliberately withholding this technology so that it could export it to Maruti and make
windfall profits at the cost of Maruti. However, in mid-1996, the government approved the plan
and Suzuki agreed to transfer its technology.Confliction become increase between Maruti and Indian
government. The two partners decided to settle their differences amicably. Bhaskarudu indicated he
would step but Jagdish Khattar would replace him in January 2000.In this form the confliction took
place for ex- Khattar a embarked upon an aggressive productdevelopment strategy. This was
prompted by a decline in Marutis overall market share from 65% (1999) to 52% (2000) and a huge
loss of Rs.2690 million in 2001.
Key factors through which Maruti become succeed
reduce cost by 30 % by 2004-05. Maruti involved various component suppliers in Challenge 50.
Productivity improvement programs were undertaken by key vendors in collaboration with
experts from Suzuki. Maruti started implementing new manufacturing techniques and various
value analysis and value engineering initiatives,which is very important in that time.
Maruti: Employee Productivity

Maruti also significantly improved its labour productivity. For each operation, Maruti had an
operating standard, which decided how much time it took to complete a particular function on the
assembly line. Discounting for automation, theproductivity of Marutis employees compared very
favorably to that of Suzukis facilities in
Japan.Since labour productivity was so high, the ratio of inventory costs to total income was just 2.5
%,
much lower than the industry average. This the powerful step taken up by Maruti.
Vendor Management
efficiency.
Other important factors

Leverage Information technology
Quality management
So, this a great inspiration story of Maruti through which we can learn many aspects of how to
effective.
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Success story
by KANGANA DUTTA 16018 - Sunday, 16 October 2016, 1:37 PM
The case Maruti Udyog discusses the important measures introduced by Maruti to achieve
operational excellence.
In 2003, Maruti Udyog Ltd. (Maruti), a joint venture between Suzuki Motors of Japan and the Indian
government, dominated India's automobile market with a 54% market share. The company
dominated the Indian small car market with a 100% share in 'A' segment and 36% in 'B' segment. In
2003, Maruti produced 359,960 vehicles, operating at a capacity utilization of 103%, against the
industry average of 57.8%. In 2002 and 2003, based on India Total Customer Satisfaction
Study conducted by NFO Automotive in India, the Maruti 800 was ranked No.1. Even though Maruti
was well ahead of its other rivals, it realized competition could not be underestimated. Hyundai, Tata
Motors and Ford were all formidable rivals. In this context, the company's executives wondered what
more could be done to improve operational efficiency, cut costs and launch new products. The areas
focused by Maruti which led to their substantial development and success right from the very
beginning are as follows:
Manufacturing Process:
Maruti went for capacity expansion in the year 1995 installing the second plant which increased their
capacity to 2,00,000 units and in 1996 it rose to 2,50,000 and by 1999 the installed capacity became
350,000 vehicles per year, making Maruti one of the largest passenger car manufacturing facilities of
Suzuki outside Japan. Assembly Marutis assembly lines could handle simultaneously a large
number of variants in frequently changing sequence. Maruti also had the in-house capability and the
necessary technical knowledge for the design and manufacture of medium-size press dies. Maruti
had three welding units with 122 six-axis15 robots and 25 in-house manufactured two-to four axis16
robots. Maruti had three painting units. The Work Instruction Chart (WIN Chart) provided clear
instructions to machine operators both for doing work and handling the parts.
Improving Operational Efficiency:
Due to losses in the year 2001, the company made improvements in quality and productivity, both inhouse and at the vendors' end. The main initiative behind this was to improve productivity by 50%
and reduce cost by 30%.
Productivity improvement programs were undertaken by key vendors in collaboration with experts
from Suzuki. Maruti replicated several best practices from the Suzuki production system that
emphasized participative management, team work, communication and information sharing, open
office system, Kaizen (Continuous improvement), multi-skilling of operators, flat structure,
immaculate housekeeping (the famous Japanese 5 S way), in-line quality assurance processes and
widespread quality circle movement. Even training was provided by Suzuki to the employees of
Maruti in japan.
Improving Quality:
In order to improve quality Maruti focused on surveys and direct customer contacts to understand
the problems faced by them. And due to this the average number of defects per vehicle came down
from 2.35 in 1999-2000, to 2.26 in 2000- 01 and to 0.45 in 2001-02. They even focused on quality
improvement and continuous improvement.
Vendor Management:
Vendor management became an important area as Maruti attempted to improve operational efficiency.
Web initiatives helped Maruti to bring down procurement time and costs... Maruti had agreements
with vendors such that they could sell components that were made in accordance with designs,
drawings and specifications provided by Maruti, exclusively to Maruti. Maruti also helped vendors to
reduce their cost of capital by taking advantage of its superior credit rating and borrowing on their
behalf.
Leveraging Information Technology:
As there was no ERP vendor support available in the country in 1990s the company did it all by itself
appointing a team of 45 engineers, using a combination of software from Oracle and Computer
Associates, built a variety of applications covering inventory management, receipts, excise,
consumption, production, sales, invoicing, exports, financial accounting, payroll, and bank
reconciliation. Maruti used an information technology-enabled vehicle build sequence system and
vehicle tracking system to increase the flexibility of the production line. Maruti had also launched
other initiatives such as warehouse reengineering through bar coding.
Looking Ahead:
Maruti had plans to raise its operating efficiency to that of Suzuki's premier plant in Japan by 2005.
Suzuki planned to bring in new technology from Japan making Maruti capable of full modeldevelopment by 2007. Maruti had plans to export to the Middle East and Far-East Asian Countries in
a big way by Introducing new vehicles. Maruti had set itself the target of wresting a 60% market
share of the country's car market during the period 2003-2006, by improving the quality of the
existing ones thus by focusing on continuous improvement once again.
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Re: Success story

by NISHANTH ADYANTHAYA 16090 - Sunday, 16 October 2016, 1:46 PM
The article tracks the development of Maruti Udyog over the ages and the Operations and
Productions practices that they have developed over time. Maruti was incorporated in the year 1981
after taking over the assets of Maruti Ltd. and signed a joint venture with Suzuki, a small Japanese
company. The company was very popular among Indians and was had ranked No. 1 in the India
Customer Satisfaction Index by J.D.Power Asia Pacific and 12th among the most respected
companies in India by Business World.
Maruti, after releasing many models of its vehicles to pump up sales, not only focused on product
development but also on improving value addition to their services. Many Maruti Service Masters
were set up throughout the country, strengthened it's interactive website, and also increasing its
accessibility and reach.
Maruti has been very focused on improving it's quality and productivity and the implications are very
apparent in terms of cost reduction and increased productivity and operational efficiency.
They replicated several best practices from the Suzuki production system that
emphasized participative management, team work, communication and information sharing, open
office system, Kaizen (Continuous improvement), multi-skilling of operators, flat structure,
immaculatehouse keeping (the famous Japanese 5 S way), in-line quality assurance processes
and widespread quality circle movement. They also followed Kaizen, which says there has to be an
incremental improvement in the products and processes. To this end, they invited employee
suggestions, which finally ended up in the result of savings upto Rs. 192 Crores. They also focused
on cutting down costs due to energy consumption, wastage, fuel costs, etc. To this end, they have a
strong team of trained employees to see to it that the best practices are maintained and followed.
Maruti has also focused on improving the quality of its processes and products as they emphasized
more on doing it right the first time, rather than spending more on quality testing and after sales. This
also resulted in higher efficiency. The concept of holistic development was the core of their activities
as they helped their suppliers in achieving higher quality standards and also getting relevant
certifications, so that it could be a mutually beneficial proposition. They also focused on vendor
management as they procured a lot of raw materials from their vendors. They had plans to reduce
the number of vendors to 100, who are capable enough to satisfy their demands. They would also
go furtehr and join hands with the vendors in order to help them in sourcing, efficient delivery, etc. In
many cases, the vendor had become a sole supplier to the company, after Maruti had set crtain cost
reduction goals with the vendor. To this end, they were integrated into the worldwide purchase
system (WWP).
Maruti had further plans of increasing it's operational efficiency to that of Suzuki;s preier plant at
Kosai, japan and has a target of wresting a 60% market share in India by 2003-2006, keeping in
mind that they were currently in a good financial position and good prospects for growth.
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Re: Success story

by SABINLAL 16099 - Sunday, 16 October 2016, 1:54 PM
The case study titled operations management at Maruti Udyog has explained the various operations
management activities that the company has done at micro level to increase its market share. The
case highlights the fact that the company was operating with a capacity utilization of 103% in the
year 2003 and the gradual increase of the sales and profits of the company from the year 1983 when
the first car Maruti 800 was launched by the company. From the case it is clearly evident that the
growth of the company has accelerated at all aspects by inheriting the values from the Japans
culture where Maruti Udyog was formed as a joint venture between the Indian government and
Japans Suzuki motors.
Maruti has achieved the capacity utilization of 103% by increasing its plant size to three from one
and which has the capacity to produce 350000 vehicles per year. To increase its operational
efficiencies the company has replicated several best practices form Suzuki production system. The
company always has given importance to the three important factors of production namely labor,
capital and management. The company has achieved this dramatic management of production by
the following ways
Maruti realized the importance of getting closer to customers and launched various initiatives
like Maruti service masters and customer call centers across the country to improve the
customer service.
Increased its installed capacity by increasing its plant size from one to three
Replicated several best practices from Suzuki production system that emphasized
participative management, team work, communication and kaizen system for continuous
improvement.
It encouraged employees to contribute ideas for improvement and cutting cost in any areas
of operation
Tried to reduce wastage in various areas and look ways to reduce energy consumption.
Took deep care in quality management by checking the cars at all levels of production and
the implementation of TPM with the help of yamaguchi.
Improving Vendor management by making the system online and following just in time
inventory finally by continuous improvement.
Using its own employees to manage information system and launched other initiatives like
warehouse reengineering through bar coding and the use of ERP and CRM.
To conclude Maruti Suzuki as a company has developed all its values from the Japans Suzuki
Company and used it the all levels of production to improve the efficiency. From Labor to
management the company has used efficient policies for continuous improvement to reach the
above utilization level of 103% in the year 2003.
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Re: Success story
by TANVI 16054 - Sunday, 16 October 2016, 2:00 PM

aluminium.
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Re: Success story

by ROHIT M 16158 - Sunday, 16 October 2016, 2:02 PM
The case deeply covered the entire details of Maruti Suzuki and the complete Operations of the
company over the years and the changes made by the company which lead to improvements.
Maruti started off with a joint venture with Suzuki motors and dominated Indian automobile market
with a solid market share of 54%. Maruti had a wide range of cars in all segments. Maruti 800 being
their flagship product in the Economy segment, captured huge market. They also introduce Zen,
Alto, Esteem, WagonR, Grand Vitara, Gypsy and Omni into the market and served all customers.
The company was progressing well and in the year 1994, they saw a production figure of 1 million
cars, which rose to a double figure of 2 million cars in the year 1997. Then there happened to exist
misunderstandings between Suzuki and government over the role of MD and there by they lost focus
on introducing new variants and models into the market, and paved way for Hyundai, Daewoo and
Tata to come up with cars competing Maruti, and Maruti saw declining market share with a huge loss
of Rs.2690 million in the year 2001.
Maruti realised the importance of getting closer to the customers when competition intensified. They
came up with initiatives to improve customer service. The Maruti Service Master, Customer Call
centres where the prominent initiatives. Maruti also intensified its distribution and service network
with almost 182 authorized dealers and 1545 Maruti Authorized Service Stations (MASS).
The various levels of manufacturing process is also well explained in the case. Then the company
started to improve its operational efficiency and there by made a net profit of Rs.1045 million from a
loss of Rs.2690 million. Maruti introduced a program called Challenge 50 initiative to improve
productivity by 50% and reducing cost by 30%. Reducing cost was also carried out by developing
in-house models, localized sourcing of dies, welding jigs and equipment. Maruti started to implement
best practices from Suzuki which covered participative management, teamwork, communication and
information sharing, open office, Kaizen, multi-skilling of operators, flat structure, immaculate
housekeeping, in-line quality assurance process and quality circle movement. Operational efficiency
was also improved and so as the Employee productivity. The labor productivity was significantly
improved. Considerable automation was also introduced thereby increasing efficiency and
productivity. The strategy followed by Maruti waslow-costt automation which profited the company
very well by making an investment of only Rs. 5 lakhs when compared to the Rs. 35 Lakhs
investment for robots.
Maruti also moved to platform sharing methodology for its cars where more than 3 car shared the
same platform. The factory expenses were also brought down to a minimum by introducing various
new initiatives to reduce energy consumption by providing skylights, CNG, photoelectric switch and
pre-programmed timers for area lighting.
Vendor management then became a bigger area of importance for the company. Maruti streamlined
the sourcing and stocking of materials there by attaining a 3.5% reduction in vendor prices. Then the
company also encouraged vendors from far off places to build warehouse near the Gurgaon factory.
The company focussed on reducing the number of vendors to 100 from the current level of 400.
Information Technology helped Maruti automate its operations by introducing ERP vendor support
and other activities to increase the flexibility of production line.
This is how Maruti was able to achieve better returns by reducing costs and increasing the efficiency.
Maruti felt optimistic with its financial position and double-digit growth. Maruti should play more
aggressive games in order to compete with the global players and hold its strong stand maintaining
the market share.
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Re: Success story

by SREENATH G S 16050 - Sunday, 16 October 2016, 2:16 PM
In the context of production and operation management, the history of Maruti was a great success.
The joint venture of Suzuki and the government was successful in the business. After the venture
started, there were many new technologies, measures and schemes involved in the business which
lead to their success. They were the leader in the small car manufacturing sector with 100% share in
the A segment and 36% in the B segment. Since started, they got many awards, recognitions in the
field of production and operation management. Also, the sales has been constantly increasing since
1997 for them. In 1983, they launched their first peoples car Maruti 800.After that, Maruti rapidly
consolidated its competitive position by launching various other models.
During the 1990s, there was disputes between the joint venture partners regarding expansion and
modernizations plan proposed by Suzuki. The transfer of gearbox technology was also a reason for
the dispute.in 1997, the cumulative vehicle production crossed the two million mark from one million
in 1994.
Again in 1997, the relationship between Suzuki and the government deteriorated as the two partners
disagreed over management control and the appointment of Bhargavas successor. But later they
decided to settle their difference. Because of the dispute, there was delay in the introduction of new
models, which led to tough competition from others later in the market.
After the posting of new Managing Director, they went through major restructuring to improve their
competitive position.in 1999, The Company announced it would launch one new model every 6-12
months with price gaps of about Rs. 25,000.
As competition intensified, they tried to focus more on customers. So they introduced initiatives to
improve customer service facilities. Maruti also entered four related businesses-corporate lease and
fleet management, buying and selling of used cars, auto finance, and car insurance. Earlier they
had weak distribution and service network compared to competitors, which they improved later. Now,
they have182 authorized dealers with 243 sales outlets in 161 cities, 342 dealer workshops and
1,545 Maruti Authorized Service Stations (MASS) covering 898 cities, and express service stations
on 30 highways across the country.
Maruti had three integrated manufacturing plants with 17 manufacturing shops and flexible assembly
lines at Gurgaon, which had an initial installed capacity of 20,000 vehicles per annum( later
increased to 130,000). The second plant increased Marutis capacity to 200,000 vehicles per year
and a third plant had installed capacity became 350,000 vehicles per year, making Maruti one of the
largest passenger car manufacturing facilities of Suzuki outside Japan. In 2001-02, Maruti produced
351,949 vehicles, operating at a capacity utilization of 102%, against the industry average of 57.8%.
Various stages were involved in car manufacturing like blanking and forming of the body, welding
these forms into the car body, painting, assembly, vehicle inspection, road test, final inspection and
dispatch. In all the stages, they later brought latest technologies which reduces cost of production.
Marutis assembly lines could handle simultaneously a large number of variants in frequently
changing sequence. The assembly shop consisted of a trim line, chassis line, final line, vehicle
inspection line and the final inspection line. In the heavy inspection line, tests like toe-in/toe-out,
camber, turning radiustest, slide slip test, speedometer test, brake test etc. were performed.
Maruti started a program Challenge 50 initiative to improve productivity by 50 % and reduce cost
by 30 %, implementing new manufacturing techniques and various value analysis and value
engineering initiatives. Maruti replicated several best practices from the Suzuki production system
that emphasized participative management, team work, communication and information sharing,
open office system, Kaizen, multi-skilling of operators, flat structure, immaculate housekeeping, inline quality assurance processes and widespread quality circle movement. In addition, activities such
as in-house automation, optimum utilization of production lines, and significant reduction in material
handling improved productivity and made operations more efficient.
Maruti also launched various initiatives to improve operational efficiency. Employee productivity,
increased by approximately 81% from 1995 to 2003. While in 1995, 4800 employees produced 730
cars a day, in 2003, 4500 employees produced 1,700 cars a day. Maruti also significantly improved
its labor productivity. Since labor productivity was so high, the ratio of inventory costs to total income
was just 2.5 %, much lower than the industry average.
Maruti also adopted the Japanese technique of Plan, Do, Check, and Action. PDCA consisted of:
Planning by setting a target and time-line, dividing into action plan with value to each factor/element;
Doing the standardized operation as decided; Checking through gap analysis whether the operation
was yielding the desired results; and Acting to freeze if effective or correct. They pursued a strategy
of low cost automation to improve productivity and reduce operator fatigue without heavy capital
expenditure.
They look for ways to cut energy consumption. The companys reverse osmosis water treatment
plant and effluent and sewage treatment plant followed the 3 principles of Reduce, Reuse and
Recycle. Between 1997 and 2003, Maruti reduced the consumption of electricity per vehicle
produced, by approximately 29%. Energy-saving lights and natural light, and the efficient usage of
other electrical appliances also reduced power consumption. In the same period, Maruti reduced the
consumption of water, by approximately 66% through the recycling of wastewater. Maruti undertook
various new initiatives to reduce energy consumption.
Maruti provided ongoing training to employees at its premises as well as at Suzukis facilities in
Japan. In 2003, Maruti had 4,590 employees, out of whom more than 1,900 had been trained at the
facilities of Suzuki in Japan.
To improve quality, Maruti had introduced various measures. The average number of defects per
vehicle came down from 2.35 to 2.26 in 2001 and to 0.45 in 2002. The number of people involved in
post-production repairs also reduced significantly, as Maruti emphasized doing it right, the first time.
As a result, the Average Defect per Vehicle came down by 80% in 2002, compared to 2000. They
also focused on vendor management and information technology to improve their business.
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Re: Success story

by KIRAN P 16020 - Sunday, 16 October 2016, 2:25 PM
Introduction:
The company dominated the Indian small car market with a 100% share in A segment and 36% in
B segment.4 In 2003, Maruti produced 359,960 vehicles, operating at a capacity utilization of 103%,
against the industry average of 57.8%.5 Maruti was ranked 12th amongst the Most Respected
Companies in India by Business World.
Background
1. Operated by franchisees, these one-stop shops met all vehicle needs for Maruti cars, offered
maintenance service, spares, accessories, insurance related services and took care of
warranty claims.
2. After the issue, Suzukis holding in Maruti rose to 54.2% from 50%, while that of the
government dropped to 45.54% from 49.6%. The government also indicated it would divest
its remaining equity through a public offer in two phases by April 2004.
3. The government felt that Suzuki was deliberately withholding this technology so that it could
export it to Maruti and make windfall profits at the cost of Maruti.
4. This dispute between Suzuki and the government distracted Maruti, delaying the introduction
of new models.
5. In 2003, it had 182 authorized dealers with 243 sales outlets in 161 cities, 342 dealer
workshops and 1,545 Maruti Authorized Service Stations (MASS) covering 898 cities, and
express service stations on 30 highways across the country.
6. In early 2003, Maruti made a highly successful initial public offer (IPO), comprising 7.2 million
equity shares of Rs.5 each along with a green shoe option10 for 10% of the issue.
7. Maruti also entered four related businesses-corporate lease and fleet management9 (Mid2001), buying and selling of used cars (October 2001), auto finance (January 2002), and
car insurance (May 2002).
8. In 2000, Maruti introduced 'Alto' (premium small car) especially for the export market, in two
versions -- Alto LX with 800 cc capacity and Alto VX with 1,061 cc capacity and Altura.
9. This converted Maruti into a nongovernment company, giving Suzuki a much freer hand in
managing the affairs of the company.
10. 604-048-1 5 In May 2002, the government and Maruti executed a Revised Joint Venture
Agreement (RJVA).
11. Meanwhile, in 1994, Maruti had become the first Indian company to reach a cumulative
production of one million vehicles.
12. Maruti launched an AC version E2 M800, a small Alto Celebration, and a sports utility
vehicle, Grand Vitara XL.
13. In 1993, it introduced a new model, the Zen with a 1300 cc engine, and Esteem, a variation
of Maruti 1000 (which was replaced) with more power and a new exterior.
14. In 1984, Maruti introduced a utility vehicle, Omni that could seat up to eight people.
15. In 1997-98, Marutis overall market share was 83.1%.8 8 Source: Maruti Red Herring
Prospectus.
Manufacturing
1. With a third plant becoming operational in March 1999, the installed capacity became
350,000 vehicles per year, making Maruti one of the largest passenger car manufacturing
facilities of Suzuki outside Japan.
2. In 2001-02, Maruti produced 351,949 vehicles, operating at a capacity utilization of 102%,
against the industry average of 57.8%.11 In 2002, after reorganizing its manufacturing
processes, Plant-I manufactured 800-cc, Omni, Gypsy, Versa and Esteem.
Improving efficiency
1. Training provided by Suzuki in Japan covered a range of activities: Training of managerial,
executive and supervisory employees provided in collaboration with the Japanese
government to enhance managerial skills and technical skills; Training of employees
across divisions of Maruti to transfer Japanese best practices for their functions; Training
in connection with the development of new products; 30 The key parameter for measuring
productivity.
2. Maruti replicated several best practices from the Suzuki production system that emphasized
participative management, team work, communication and information sharing, open office
system, Kaizen (Continuous improvement), multi-skilling of operators, flat structure,
immaculate house keeping (the famous Japanese 5 S way), in-line quality assurance
processes and widespread quality circle movement.
3. Maruti attempted to reduce the cost of developing new models through in-house
development and localized sourcing of dies, welding jigs, and other equipment, and by
introducing flexible welding lines that could be used for multiple models.
4. On March 31, 2003, Maruti had 4,590 employees, out of whom more than 1,900 had been
trained at the facilities of Suzuki in Japan.
Improving quality
1. In-house warranty costs per vehicle, computed as the ratio of the aggregate cost of
components for servicing warranty claims (arising from operational defects in manufacturing
lines), to the number of vehicles sold, declined by approximately 77% between 2002 and
2003.
2. In-process rejection cost per vehicle, computed as the ratio of the cost of components
rejected (due to defects arising during the production process) to the number of vehicles
sold, declined by approximately 55% from 2002 to 2003.
3. Maruti reduced the warranty costs of vendors per vehicle by approximately 21% between
fiscal 2002 and fiscal 2003.
4. To improve quality, Maruti had introduced various measures: Tracking surveys and direct
customer contact in order to understand the problems faced by customers.
5. In January 2000, with the help of Yamaguchi, Maruti implemented TPM in its cluster of
vendors.
6. Maruti conducted periodic vendor quality system audits in order to ensure that quality
standards, implemented in the 1990s, were sustained.
7. The warranty costs of vendors were computed as the cost incurred by the vendors to service
warranty claims arising from defects in components supplied by them.
Vendor management
1. Maruti formed joint venture agreements with 13 vendors that supplied critical raw materials
and components both to secure a reliable supply and to generate economies of scale.
2. Instead of assembling components from many small suppliers, Maruti started buying from
one big, tier-1 supplier, who assembled parts supplied by lower tier vendors.
3. Maruti planned to extend the electronic card system to another 16 suppliers and to 250
components, following the successful implementation in case of ten vendors who delivered
high-value parts.
4. As of March 31, 2003, Maruti had as many as 299 vendors supplying different components.
5. Maruti decided to join hands with its vendors in sourcing common materials such as steel
and aluminium.
6. For several inputs such as glass, seats and axles, Maruti depended on a sole vendor or only
a limited number of vendors.
7. In addition, Maruti had started to integrate vendors into its worldwide purchase system
(WWP).
8. Maruti connected to its vendors through an Internet-based information network, which
maintained online information regarding order status and delivery instructions.
9. Maruti also helped vendors to reduce their cost of capital by taking advantage of its superior
credit rating and borrowing on their behalf.
10. Maruti paid its vendors within ten days of the date of supply.
Looking a head
1. Only time would tell to what extent, Suzuki, a relatively small player by global standard,
would be able to help Maruti to withstand competition in what most analysts considered to
be a market of strategic significance.
2. Maruti had plans to raise its operating efficiency to that of Suzuki's premier plant at Kosai in
Japan by 2005.
3. Suzuki planned to bring in new technology from Japan making Maruti capable of full modeldevelopment by 2007.
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Re: Success story

by VIGNESH J 16177 - Sunday, 16 October 2016, 2:40 PM
Supply Chain Management (SCM) and Logistics are part of the same solution set, one filling the
gaps, and one closing them. Both are involved in integrated activity involving many functions,
divisions and organizations and are responsible for multiple flows of information, physical goods and
financial instruments.
SCM is the integration of key business processes from end user through original suppliers that
provides products, services, and information that add value for customers and other stakeholders.
For supply chains to be effective, operational information about the production process has to be
shared between manufacturer and suppliers.
Logistics has evolved with the overall responsibility for the movement, storage and handling of both
inbound material and outbound products. Logistics innovativeness and logistics service
differentiation both positively influence logistics performance.
Maruti Suzuki India Limited has been a market leader in the India Automobile Industry. The study
attempts to study the changes implemented in their supply chain and logistics management process.
The competition in modern business management is no longer between organizations but within
supply chains
The Indian Automobile Industry has been very competitive and will further get more competitive.
Continuous innovations in supply chain and logistics management will contribute positively to the
overall efficiency of the entire value chain and will offer many benefits to all the partners in the value
chain.
The changes implemented have benefited all the partners in terms of lean operations, integration of
partners in the value chain, lowering of cost, inventory reduction, lesser transit time of finished
vehicles and spare parts to their dealers, and fulfillment of ever changing customer expectations.
The future will present further challenges, MSIL will be required to be flexible and responsive
towards their supply chain and logistics management process and consistently introduce innovations
in order to further improve operational efficiency, quality and cost effectiveness.
The study has been restricted to only MarutiSuzuki India limited and it is recommended that further
study may be conducted on other players in the IndianAutomobile Industry to understand the
innovations in their respective supply chain and logistics management process and the benefits
which have been derived.
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Re: Success story

by NEHA GUPTA 16088 - Sunday, 16 October 2016, 3:01 PM
Maruti having started its operations in India back in 1982 with government, had established the
largest distribution and service network by the year 2000 with 182 authorized dealers with 243 sales
outlets in 161 cities, 342 dealer workshops and 1,545 Maruti Authorized Service Stations (MASS)
covering 898 cities, and express service stations on 30 highways across the country.
One of the strength of Maruti was that its plants capacity utilization was 102% against the industry
average of 27.8% in 2001-02. The installed capacity was 350,000 vehicles pa but it produced
351,949 vehicles. This turned around Maruti from a loss of Rs.2690 million in 2001 to a net profit of
Rs.1045 million, in 2002. Not only productivity, it also emphasized on quality improvement.
Maruti involved its suppliers and key vendor to achieve high productivity, cost reduction and quality
improvement. It also made considerable changes in its operations like developing new models
through in-house development and localized sourcing of dies, welding jigs, and other equipment,
and by introducing flexible welding lines that could be used for multiple models. Kaizen approach of
continuous improvement along with automation and better information flow led to drastic cost
reductions and quality improvement.
Employees engagement through involvement in the operations also resulted in a marked
improvement in productivity, e.g. While in 1995, 4800 employees produced 730 cars a day, in 2003,
4500 employees produced 1,700 cars a day. Even the labor productivity ration was high in Maruti. All
these also led to fall in Hours Per Vehicle (HPV) 30 in 2001-2002. This HPV came down to 24 hours
in 2003 and was expected to be further reduced to 12-13 hours by 2005.
MAruti also improved the sustainability of its plants by reducing the resources it use for instance:
1. Maruti reduced the consumption of electricity per vehicle produced, by approximately 29%.
Energy-saving lights and natural light, and the efficient usage of other electrical appliances
also reduced power consumption,
2. Maruti also reduced the consumption of water, by approximately 66% through the recycling
of wastewater.
3. Diesel driven forklifts were converted to Compressed Natural Gas (CNG) to improve ambient
air quality in shop and reduce fuel cost.
Maruti also reduced its defects through rigorous quality control, checks and hand holding its
suppliers to improve the quality right at the source. This holistic approach helped Maruti in not only
improving quality, vendor management but also substantial price reduction in obtaining its supplies.
It reduced its inventory size, implemented just in time concept. I also reduced the number of vendors
for spare parts and accessories from 100 to a handful.
Maruti went a step ahead in implementing an online based supplier and dealer network to place
orders and receive orders. This increased the profit of the company.
The company now faces competition from global automobile maker and is competing strategically
with innovation and Kaizen to make a in the world and become a global leading automobile
manufacturer.
The case is very interesting and shows the quest of the company to maximize profit, market share
and satisfy the customers through improving its operations drastically. The increased productivity
with reducing cost of production puts a company in a sweet spot, where if the sales are not
increasing the profit is increased as in the Maruti's case where in 2003 the sales were stagnant bu
the profit was 138%. hence continuous improvement in the operations and managing it optimally can
have immense effects in the profit maximization, cost reduction and quality improvement.
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Re: Success story

by SHRUTI ADAPA 16166 - Sunday, 16 October 2016, 3:01 PM
Maruti Udyog Ltd. (Maruti) is a joint venture between Suzuki Motors2 of Japan and the Indian
government dominated Indias automobile market with a 54% market share. In 1994, Maruti had
become the first Indian company to reach a cumulative production of one million vehicles. Maruti has
three integrated manufacturing plants with 17 manufacturing shops. the various process involved in
manufacturing process are :
1. blanking and forming
2. welding
3. painting
4. assembly
5. vehicle inspection
6.Road test
7.Final inspection
8. dispatch
Maruti assembled and tested engines in the engine shops and the WIN chart provided clear
instructions to machine operators and dispatched to the delivery section. The company turned
around from a loss of rs. 2690 million in 2001 to a profit of 1045 million in 2002.
In 2002 maruti started implementing new manufacturing techniques and various value analysis and
value engineering initiatives. Maruti attempted to reduce the cost of developing new models through
in-house development and localized sourcing of dies, welding jigs, and other equipment, and by
introducing flexible welding lines that could be used for multiple models.
The process in which Maruti emphasized are team work ,communication and information sharing,
open office system. moreover , it pursued low cost automation and reduced operator fatigue.
Maruti improved quality by measuring relative quality of dispatched vehicles on daily basis through a
quality index audit. in 2002, it implemented TPM in its cluster of vendors.
efficiency. to implement , the frequency of supply was increased for nearby vendors.
It has implemented an in- house designed supply chain , the extended ERP and extranet and linked
both dealers and vendors. It has also launched warehouse reengineering through bar coding.

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Re: Success story

by DIMPI KUMARI 16134 - Friday, 14 October 2016, 1:21 PM

Re: Success story

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Maruti: Manufacturing Process

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Expansion Plan: rs 22 billion and modernization plan.

Maruti Suzuki received ISO 9002 certification.

Expansion Plan: rs 22 billion and modernization plan.

Maruti Suzuki received ISO 9002 certification.

Worldwide purchase system (WWP) helped to reduce cost.

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Re: Success story

by ANURAG BORA 16009 - Saturday, 15 October 2016, 12:46 PM

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Maruti: Employee Productivity

Other important factors

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Maruti Suzuki received ISO 9002 certification.

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Maruti Udyog, a joint venture between Suzuki Motors of Japan and

industry leading performance was a result of strong performance on

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