SUPPLY CHAIN MANAGEMENT OF Hyundai motors
Hyundai Motor India is a wholly owned subsidiary of Hyundai Motor Company. It is the second largest manufacturer and the largest exporter in India. HMIL presently markets 7 models of passenger cars which include Santro, Getz prime, i10, i20, Accent, Verna, Sonata and Tucson. Hyundai Motor India has a fully integrated manufacturing facility with a production capacity of 600000 units per annum. HMIL currently exports to more than 110 countries across EU, Africa, Middle East, Latin America, Asia and Australia. As of December 2010, HMIL has 413 dealerships and 600 authorized service centers in 329 cities across India. In 2010 the sales was 603819 vehicles with approximately 50% of the sales in domestic market and the remaining in export markets .
The assembly line needs to have accurate information on the inventory level to maintain the production rate. 60 minute Stoppage in the assembly line at HMIL costs 400000 USD. The production planning process used to be manual and there were number of line stoppages due to non availability of inventory. Production schedules were important to avoid line stoppages, engine and transmission plan was essential. The schedules were important for the vendors to maintain the inventory supply. Manual reports were generated using excel and consolidated to plan the requirements of inventory for the next production cycle. Real time information on the inventory levels was not available, the stock levels were known only by the end of the day. There were shortages of essential parts and only after the daily updates the shortages were known. In 2008 a new application was developed to share the information online with the vendors and also within the company. The application had AS/400 screens to capture data online and display in the web. PCs and barcode printers were placed along the line. The data was entered every two hours, production and inventory plans were based on the inputs from the line. The application improved the decision making process with availability of information and improved productivity. The application also improved the alignment of vendor supply with the production, reduced the line stoppages and improved the production planning process.
Hyundai Motor Company has shifted its entire production of Atos Prime to India, it has also set up a $40 million CAD center and the newly launched i10 is manufactured only in India. Hyundai has planned to increase the engine manufacturing capacity by 150000 over the next three years, it has also planned to increase its car manufacturing capacity from 630000 to 670000 by 2011 and launch three new models including an 800cc small car by 2011. Reducing the cost of operation due to line stoppages, reducing the cost in the supply chain are important for overall cost reduction and better pricing of the final product. Productivity improvements, maintaining product quality, low cost through process innovation, technology use and better coordination of the supply chain activities will improve the profitability of the company.
Barcodes consists of a series of stripes which has the capacity to hold a lot of information. 2 Dimensional barcodes can hold more than 2 kilobytes of data. The information can be read using scanners. Barcodes are already in use for Vehicle identification numbers and inventory pallets at Hyundai Motor India. The use of barcodes has already been beneficial in various processes and error reduction in the assembly line. The benefits can be further extended to cost savings by using barcodes for automation and improving the information availability in various systems for better decision making. The use of barcodes can be further extended to areas where there are frequent quality problems. The cost of barcode scanners is around a few hundred dollars and the cost of barcodes is only a few cents. The total cost of using the...
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