The Hindu : Suzuki drives Maruti to benchmark costs

Online edition of India's National Newspaper
Thursday, Oct 10, 2002

Business

Business

Suzuki drives Maruti to benchmark costs

By K. T. Jagannathan

NEW DELHI OCT. 9. Suzuki Motor Corporation (SMC) of Japan has drawn up an elaborate road map to put its Indian subsidiary Maruti Udyog Ltd. (MUL) among the top car companies in the world. SMC has placed MUL ``as the focus centre among all its overseas activities,'' according to Yuichi Nakamura, Joint Managing Director of MUL.

Far from achieving a mere reduction in cost, SMC wants MUL to change the mindset towards `bench-marking costs' in every conceivable area. The broad objective is to reduce cost by 30 per cent and improve quality by 50 per cent over the next three years.

Mr. Nakamura told visiting journalists from Chennai at the company's plant in Gurgaon that the production practices followed by SMC were now being inserted in MUL as well to bring about a reduction in manufacturing costs. Essentially, he said, SMC practices resulted in better planning, greater production control and lesser inventory. Mr. Nakamura, who had been deputed to MUL for the second time by SMC, said the challenge for MUL lay in not only controlling and monitoring the nine base models and over 200 variants that the company had now but also that of over 300 vendors. Already, MUL had begun an exercise to `limit the worker movement that is not yielding any value addition''. ``Workers must be paid not to walk but to work,'' said Jagdish Khattar, Managing Director, quoting SMC Chairman Suzuki as saying to the Cabinet Minister, Murli Manahor Joshi. MUL, according to Shinichi Takeuchi, Director (Production), was looking at eliminating needless movement of a worker in the line so as to improve productivity. Mr.Nakamura said MUL at the moment required 24 man hour to produce a vehicle. The SMC plant in Japan took just two-thirds of the MUL time to make a vehicle. The Joint Managing Director said MUL required to bring this to the level of 12 man hour per vehicle within the next three years to stand a global comparison.

According to Mr. Khattar, now that MUL had become its subsidiary, the SMC's participation in the company ``has become intense''. ``They have given us a road map and asked us to give an action plan to implement them over the next three years. I am going to Japan next month to discuss the action plan,'' he added. As SMC had to consolidate the accounts of MUL with its balance sheet, it had begun to look at the financials of the company far more seriously, he pointed out. ``Hence, SMC's involvement will be greater in view of the fact that whatever happens to MUL will affect SMC share prices,'' Mr. Khattar said.

Printer friendly page
Send this article to Friends by E-Mail

Business