Operation Management: Dewan Farooque Motors Motors (Pakistan)

Essay by OParachaUniversity, Master'sA, March 2007

download word file, 39 pages 4.6

Executive Summary

The automobile industry of Pakistan is growing rapidly with the influx of many foreign brands. This growth is attributed to the fact that most of the people are standard conscious and assume that the type of car that they drive reflects their personality and is a symbol for image.

This report discusses operational activities, strategies of manufacturing cars followed by Dewan Farooque Motors Limited. It also discusses the popularity of Korean technology in the market as well as its brand image seen nationwide. Dewan Farooque Motors Limited is a subsidiary of Dewan Mushtaq Group, one of the country's leading business groups.

Dewan is working under the Technical Licensing and Exclusive Distributor agreements with Hyundai Motor Company, Korea's No. 1 and the world's seventh largest automobile manufacturer. Dewan Farooque Motors is one of the key players in the automobile industry of Pakistan offering an impressive line up of passenger cars and commercial vehicles.

Its state-of-the-art plant has a capacity of 10,000 vehicles per annum on single shift basis and is equipped with the latest facilities, which includes CED (Electronic Dipping) paint system and robots.

Company Field of BusinessCapacityEstablished

Dewan Salman Fibre LtdPolyester Staple Fibre108,500 MT1990

Dewan Sugar Mills LtdWhite Refined Sugar9,000 MT1982

Dewan Textile Mills LtdSpinning50,646 spindles1970

Dewan Mushtaq Textile Mills Ltd.Spinning27,400 Spindles1975

Dewan Khalid Textile Mills Ltd.Spinning26,624 Spindles1978

Dewan Farooque Motors Ltd.Automobile20,000 vehicles1998

Table of Content

Acknowledgement

Preface

Letter of Transmittal

Executive Summary

Marketing Forecast by Automobile Manufacturers

Organization Itself

An Introduction to Dewan Farooque Motors Limited (DFML)

Key Players in Automobile Market

Chapter # 1: Introduction to Operations Management

What is Operations Management?

Input Vs Output Diagram

Role of Operations Management at DFML

Type of the Organization

Chapter # 2: Operations Strategy

What is Operations Strategies?

Mission

Mission Statement of the Company

Environment

Target market

Core Competencies

Corporate Philosophy

Chapter # 3: Process Management

What is process management?

Process Choice

Vertical Integration

Customer Involvement

Resource flexibility

Capital Intensity

Chapter # 4: Management of Technology

Management of Technology

Which technology they are using?

Computer Integrated Manufacturing

Manufacturing Capabilities & Skills

Chapter # 5: Work-Force Management

What is Workforce Management?

The core values

Natures of Employments

Motivational Benefits

Leave granted to permanent employees

Chapter # 6: Total Quality Management

Total Quality Management

Customer Driven Quality Definition at DFML

Employee Involvement at DFML

Training & Communication

Infrastructure

Working Environment

Awards & Incentives

Continual improvement

Chapter # 7: Statistical Process Control

Benchmarking

Positioning Graph

Chapter # 8: Capacity Planning and Strategies

Measures of Capacity

Utilization Rate

Safety stock

BCG MATRIX

Setting Stock Levels

Chapter # 9: Location

Chapter # 10: Layout

Manufacturing Layout

DFML Layout

Production Line

Warehouse Layout

Chapter # 11: Supply-Chain Management

Distribution Technique

Channels of Distribution

Analysis of Dealer's Network

After Sale services

Chapter # 12: Forecasting Techniques

Demand Pattern

Judgment Method

Chapter # 13: Inventory Management

Inventory Management Objectives

Functional Area

Integrated Inventory Management

Analysis of Inventory Control Department

Segments of Inventory

Chapter # 15: Material Requirements Planning

Materials Management Cycle

Treatment of Materials at DFML

Chapter # 16: Just-in-Time Systems

Conclusion

Recommendation

Appendix

Population

Sampling

Research Methodology

Time & Cost Requirement

Questionnaire

Bibliography

Marketing Forecast by Automobile Manufacturers

Provided that economic growth continues at the current pace, or at the slighter higher rate forecasted for the years to come, and provided that no significantly damaging legislation is introduced, Pakistan is likely to sustain an annual passenger car market growth averaging about 6%. Economic growth of over 5% and the rising number of assemblers will help drive demand to around 35,000 units by the year 2000.

Organization Itself

Management of the Group is now in the hands of fourth generation of Dewan Family. Current Chairman of the Group is successfully navigating the Group activities on the lines set and visualized by his forefathers. This generation is young, dynamic, and ambitious and is striving to expand the Group business activities.

To cope up with rapidly expanding activities and to be in line with modern management techniques, the Group has already begun to change itself from a family-controlled style to a professionalized and participatory style of management.

An Introduction to Dewan Farooque Motors Limited (DFML)

On December 25, 1998, Dewan Farooque Motors Limited entered into Technical Licensing Agreement with Hyundai Motor Company of South Korea for assembling and manufacturing of Hyundai vehicles in Pakistan. The project cost was approximately Rs. 1.8 billion financed on a 58:42 Debt to Equity ratio, with the assembly plant's installed capacity of 20,000 vehicles annually in two shifts.

An independent team of professionals in the areas of Marketing, Finance and Production are working on the project. The vision of the group is to expand activities gradually in the automobile industry with the introduction of a range of different vehicles. DFML has the advantage of introducing a superior quality and cost competitive product to a market that was dominated by Japanese manufacturers.

DFML has a long-term vision and plans to expand activities gradually in the automobile industry, i.e. the mother of engineering industry; as a number of other sectors of the economy depend on it, directly or indirectly, for their income. Some of these sectors are engineering, electronics, metal, rubber and plastic. The ultimate aim is to achieve 90% localization by 2015.

The company also imports and market "HYUNDAI" Commuter Vans, which are not being manufactured in Pakistan. The sale of these vehicles is supported by complete after-sales service, through a 3'S dealership network. The company has a total of 22 dealers nationwide.

Short-term objective is to achieve a sales target of 25,000 Hyundai vehicles by the year 2005. This can easily be achieved on the basis of the demands of the Pakistani buyer and the fact that per person car ownership in Pakistan is amongst the lowest in the region and expected to rise in the near future.

The product line of DFML is

Santro, Shehzore and Grace Van by HYUNDAI

Sportage, Classic and Spectra by KIA

Key Players in Automobile Market

Pakistan automobile industry is basically dominated by four major players of automobile industry. Namely, Pak Suzuki, Indus Motor Company Limited, Honda Atlas Cars Limited and Dewan Farooque Motors Limited in passenger and light commercial vehicle segment are the key players of the automobile industry.

Pak Suzuki Motor Limited

Indus Motor Limited

Honda Motors Limited

Dewan Farooque Motors Limited (DFML)

DFML offers a wide range of superior quality and cost competitive products to a market that was dominated by Japanese manufacturers.

Chapter # 1: Introduction to Operations Management

What is Operations Management?

Operations management is concerned with the efficient and effective transformation of inputs into "desired outputs". Traditionally those outputs have been understood largely in manufacturing terms and in the context of profit making organizations. Increasingly, however, it has been recognized that the disciplines of the operations manager can be deployed in virtually any area where a purposeful system or organization is striving to achieve its objectives. There are many subsections of operations management, but the one we are going to study is Operations Management in automobile company.

Input Vs Output Diagram

Input

Worker

Manager

Equipment

Facilities

Material

Service

Land

Energy

Operations & TransformationOutput

Goods & Services

Role of Operations Management at DFML

Dewan Farooque Motors Limited is a very big car manufacturing organization in the country as it generates revenue with the co-ordination of a large number of departments, which are directly or indirectly connected, with the operations of the organization, DFML is a manufacturing concern; the operations cycle is a bit complex in nature.

1.Sales/Demand Forecast: is prepared by the Marketing and Sales department, and is forwarded to the Production Planning department.

2.BOM (Bill of Materials) and MPS (Master Production Schedule) are prepared by Production Planning department in coordination with the Production department, and are sent to Procurement department.

3.The Procurement department then queries the members of SVL (Standard Vendors' List) for availability of materials and their prices; then

4. Purchase Requisition(s) is/are sent to respective vendor(s) after getting approval from the Finance department.

5.Finally, upon arrival of the materials, samples of raw materials are taken from the Materials Quarantine and are tested for 'quality standards'; if the materials are up to the required standards, then they are sent to the Raw Materials Storeroom; or else, are returned to the respective vendors.

6.When the Materials Requisition is sent from the production floor to the Materials Management department; materials are issued from the Raw Materials Storeroom to the production floor. When the product is produced, then again it is sent to the Finished Goods Quarantine; samples are drawn from the finished goods and are tested for 'quality standards'. If the finished goods are up to the required level of standards then they are sent to the Finished Goods warehouse to be distributed; or else, 'batch failure' is reported to the Production department and the concerned offices.

Type of the Organization

The Dewan Farooque Motors Ltd is car manufacturing organization that is actually purchase parts from the local vendor(s) and from Kia Motors Ltd and Hyundai Motors Ltd and assemble then to manufacture cars.

Chapter # 2: Operations Strategy

What is Operations Strategies?

An operations strategy, which specifies how operations can help implement the firm's corporate strategy, basically operations strategy linked with long-term & short-term operations decisions to corporate strategy. Corporate strategy defines the direction of an organization over a long term and determines the goal that must be achieved by the organization.

Mission:

Be the market leader in the passenger car segment (1000cc and above) by the year 2006.

Mission Statement of the Company:

The mission of Dewan Mushtaq Group is to be the finest organization, and to conduct business responsibly and in a straightforward way.

Their basic aim is to benefit the customers, employees and shareholders, and to fulfill their commitment to the society.

Their hallmark is honesty, initiative and teamwork of their people, and ability to respond effectively to change in all aspects of life including technology, culture and environment.

To create a work environment, which motivates, recognizes, and rewards achievements at all levels of the organization, because in Allah they trust and in people they believe.

Environment:

In the opinion of DFML, both internal and external environment is really important and that can be done by the environmental scanning by which the company monitors the trends within the socioeconomic environment, including the industry and the marketplace for the potential opportunities and threads and also to stay ahead of the competitors.

Target market:

Small & Medium size businessman

People who already have a car and are in need of a second family car.

Professionals (Doctors, Engineers, Architects, Brokers, Insurance agents)

Corporate Customers

College & University Students

Working Ladies & House Wives

Core Competencies:

1.Workforce: Being a large automobile assembling industry Dewan Farooque Motors Ltd have well trained and experienced workforce that can manage multi-tasks and respond to the market needs in a timely fashion.

2.Facilities: They have also well located plant, head-offices, warehouse and show-rooms give them a primary advantage to handle a verity of products.

3.Market & financial know-How: They have a wide and flexible network of car distributors and have acquired information system that can give them up to date information about their warehouse and plant as well.

4.System & Technology: In Dewan Farooque Motors Ltd they have well organized and updated information system that gives them a competitive edge among other automobile industry. All the departments are interlinked through a strong ERP (Enterprise Resource Planner) system and the link between head-office and assembling plant is through satellite.

Corporate Philosophy: The Group's corporate philosophy is based on following principles laid down by its founders and predecessors:

-Credibility, integrity and honesty

-Straight forward business dealings

-Work as a worship

-Spirit of social service and human respect

By following the above philosophy, the Group enjoys an excellent corporate image amongst business community, banks, financial institutions, and governmental circles. The share price of Group companies' shares is the most prominent reflection of this confidence.

Chapter # 3: Process Management

What is process management?

Process management deals with how to make a product or service. Many choices must be made concerning the best mix of human resources, equipment and materials. Process Management is of strategic importance and is closely linked to the productivity levels a firm can achieve .It involves the selection of inputs, operations, workflows and methods used to produce goods and services. Process Decisions are made in the following circumstances: a new product is to be offered or an existing product modified, quality improvements are necessary, competitive priorities are changed, demand levels change, current performance is inadequate, new technology is available, or cost or availability of input changes.

Process Choice:

Line Process is carried out in DFML. A number of well trained workers and programmed robots are there and every body knows what to do. At every location where a new process is being start a supervisor is assigned who look after every finish product of every process that can be the input for another process.

Vertical Integration:

Since DFML has its own assembling system or service facility, which helps in handling the entire process, the greater is the degree of vertical integration at DFML. But as the manufacturing is concern they won't manufacturing a single thing, they purchase the body parts locally and from Korea.

Customer Involvement:

There is a low level of customer involvement at DFML because DFML is an automobile assembling organization and the plant of DFML is At Sajawal so the customers can not come up at any time and can express their ideas and views.

Resource flexibility:

There is a high degree of resource flexibility at DFML. The cars that are assembled at DFML are highly customized, in order to fulfill the customer requirement there is highly flexible workforce & equipment.

Example: For Hospitals they made ambulance, for Armed Forces they made trucks and jeeps, and for corporate customers they made Specified product that they called now as Santro Exe.

Capital Intensity:

DFML is highly capital intensive & requires a large amount of investment to equip the workers and maintain the equipments. At DFML flexible automation is adopted which can be change easily to handle various products.

Chapter # 4: Management of Technology

Management of Technology:

Management technology relates to the designing and implementation plan of the manufacturing of the cars, they suggest that the technology they are using to get more efficient and effective in the market and accomplish their business goal.

They are using in-house built ERP that can help them in decision making and problem solving and make them up to date. The whole organization like assembly plant, head office and warehouse are linked with satellite.

Which technology they are using?

Dewan Farooque Motors Limited is using Korean Technology in manufacturing of cars, according to the DFML sales executive that Korean technology is more reliable and much improved then the others.

Computer Integrated Manufacturing

They are using robotic arms for painting, welding and screwing the nuts of the car.

AGV's are also used in warehouse to arrange the stock.

Dewan Farooque Motors are also using PLC (programmable logic control).

Manufacturing Capabilities & Skills

1. Trained and qualified staff available

On the Job Training (OJT) from HYUNDAI /Asia Plants

2. DFML Plant Capacity available to accommodate HYUNDAI'S product

CED Paint shop can intake Sportage 4X4 and Grace Van

3. Localization Skills

Staff available having knowledge of HYUNDAI Engineering, Operational, Inspection \ services

Vendors are familiar with Hyundai's standards

Localization Achieved up to 57%.

Chapter # 5: Work-Force Management

What is Workforce Management?

Workforce management relates to the managing of all the people or the employees and to keep motivating them by offering them incentives. In addition to "people" factors, there are numerous aspects dealing with manpower, accounting and finance that must be considered. Human resource management, budgets, committees, planning activities, information systems and decision support systems have been developed to assist with personnel management responsibilities.

As a Social Responsibility: Because many of the beneficiaries of good management practices are from groups of people that are "disadvantaged" in our communities, there is certainly good reason to consider workforce diversity as an exercise in good corporate responsibility. By diversifying our workforces, we can give individuals the "break" they need to earn a living and achieve their dreams.

As a Resource Imperative: The changing demographics in the workforce, that were heralded a decade ago, are now upon us. Today's labor pool is dramatically different than in the past. No longer dominated by a homogenous group of white males, available talent is now overwhelmingly represented by people from a vast array of backgrounds and life experiences. Competitive companies cannot allow discriminatory preferences and practices to impede them from attracting the best available talent within that pool.

As a Legal Requirement: Many companies are under legislative mandates to be non-discriminatory in their employment practices. Non-compliance with Equal Employment Opportunity or Affirmative Action legislation can result in fines and/or loss of contracts with government agencies. In the context of such legislation, it makes good business sense to utilize a diverse workforce.

As a Marketing Strategy: Buying power, particularly in today's global economy, is represented by people from all walks of life (ethnicities, races, ages, abilities, genders, sexual orientations, etc.) To ensure that their products and services are designed to appeal to this diverse customer base, "smart" companies, are hiring people, from those walks of life - for their specialized insights and knowledge. Similarly, companies who interact directly with the public are finding increasingly important to have the makeup of their workforces reflect the makeup of their customer base.

As a Business Communications Strategy: All companies are seeing a growing diversity in the workforces around them - their vendors, partners and customers. Companies that choose to retain homogenous workforces will likely find themselves increasingly ineffective in their external interactions and communications.

As a Capacity-building Strategy: Tumultuous change is the norm in the business climate of the 21st century. Companies that prosper have the capacity to effectively solve problems, rapidly adapt to new situations, readily identify new opportunities and quickly capitalize on them. This capacity can be measured by the range of talent, experience, knowledge, insight, and imagination available in their workforces. In recruiting employees, successful companies recognize conformity to the status quo as a distinct disadvantage. In addition to their job-specific abilities, employees are increasingly valued for the unique qualities and perspectives that they can also bring to the table.

The core values:

Growth Development:

*Competence and contribution as the only basis for job security.

*Promotion from within

*Learning environment and opportunities

*Provision for world class education and training

*Aligning people with latest technological trends

Recognition & Reward:

*Achievement orientation

*Performance based evaluation

*Appreciation & Incentives

*Setting ever rising standards of performance

Innovation:

*Listening and two way interaction

*Participation

*Encouragement & Motivation

*Enterprise & Initiative

Trust:

*Cooperation & Support

*Teamwork

*Sense of ownership & Empowerment

*Integrity& Dignity

*Respect & Candidness

An employee is required to devote his/her whole time and attention to the service of the organization.

There are 5 natures of employments:

1.Permanent

2.Probationer

3.Badli

4.On contract

5.Apprentice

They also motivate by giving them benefits like

Provident fund

Group insurance

Sickness benefits

Maternity benefits

Death grant

Surgery benefit

Disablement pension

Employees old-age benefit

The following are the different types and quantum of leave normally granted to permanent employees:

Annual Leave

Maternity Leave

Casual Leave

Study Leave

Sick Leave

Compensatory Leave

Special Sick Leave

Extra Ordinary Leave (without Pay)

The following are some of the benefits a secured person is entitled to receive:

Sickness benefits;

Maternity benefits

Death grant;

Medical care during sickness & maternity

Surgery benefit

Disablement pension

Disablement gratuity, etc.

The employees will be entitled to following benefits under this act.

Old age Pension

Invalidity Pension

Widows Pension

Chapter # 6: Total Quality Management

Total Quality Management:

TQM is a continuous process that involves the whole organization and is customer-Driven. This process is aimed at creating a culture of excellence in any organization. Hence, TQM can be seen as a process of culture transformation through which the existing elements of the culture are modified, replaced or strengthened with better elements. These elements encompass values and attitudes, systems and procedures.

Operational practices, organization structure and so forth. TQM aims, ultimately, to enable organizations to achieve total quality in all its operational aspects. Hence quality does not only mean the production of quality products and services but also encompasses all operations and activities pertaining to an organization. At this stage, quality will be reflected in many ways in an organization such as effectiveness of management, ability of the employees, efficiency of the operational systems and so forth.

Customer Driven Quality Definition at DFML:

Quality may define as meeting or exceeding the expectation of the customer. Most of the people are satisfied with the quality of the cars and its performance but suggest the quality of the materials and the parts of the car should be improved. The basic finishing of the parts and the inner sides of the bonnet needs improvement.

Some people say that the shape of Santro and Spectra is good because of aero dynamics but some suggest that still there is a room for the aerodynamic shape to be improved. The position of the head lights and back lights should also be improved.

The cars are very reliable and help in storing more things. Some of the respondents are not very satisfied with the position of the back seats. They suggest improving the back seats comfort as they require more leg space for the back seats. The levers to move the front seats to and fro are very uncomfortable.

The CNG variance and the automatic variance are in demand. Some people also demand for automatic or power steering and power windows. The rear windows should also be powered and the central locking system should be provided on the driver's panel. People also suggest attaching CD player with Santro club, EXE and Spectra as well.

More option of colors should be provided by introducing dark colors. Some people believe that the car is too expensive and too high. The pick up of the car should be improved and the speed of accelerator should be lowered down in order to change the gears easily. The shape of the back view mirror should be changed. People also recommend giving the glove box at the place of standard CD player.

Employee Involvement at DFML:

The challenge of quality management is to instill an awareness of the importance of quality in all employees to motivate them to improve product quality. With TQM, everyone is expected to contribute to the overall improvement of quality. One of the major challenges is to develop the proper culture for TQM is to define customer for each employee that could be internal or external customers.

The concept of internal customers work when each internal customer demands value added activities of their internal suppliers: that is activities that external customer will recognize and pay for. DFML gets its employees aware about the concept of quality at source by arranging IMS day on the 6th of every month. This activity will create an environment where every employee would feel them as a contributor to maintain the quality at all levels that are from managerial to operator level. Handbooks are arranged to let everyone know about the TQM.

Training & Communication:

DFML Ltd. uses only competent and qualified personnel for performing tasks, which effect quality, safety and environment. The organization has identified the competency levels for different positions. The bases for competency are education, training, skill and experience.

Department / Sections heads are responsible to identify training needs of persons working under them through annual appraisals. The assessment of training needs is based on competency evaluation, new equipment or process induction and upgrade or cross-utilization of personnel. Accordingly, the training schedule is prepared and internal/external training is provided to address the identified needs. HR manager is responsible to coordinate the training activity.

Records are maintained for all training of all employees; including internal training, external training, on-the-job training, courses attended, and the qualification and certificates received.

Infrastructure:

DFML Ltd. ensures that its infrastructure including machines and instruments utility services and supporting services are working properly under technical supervision. This is achieved by developing and implementing maintenance plans. Maintenance of buildings and associated facility is generally carried out through outsourcing; however DFML management ensures its continued suitability. Where required, regulatory and safety inspections are done to ensure safe operation of equipment and other instruments. Concerned department is responsible for maintaining the necessary infrastructure to ensure conformity with product requirements.

Working Environment:

DFML Ltd. management ensures that suitable work environment is maintained to achieve conformance of product to the quality requirements. Identifying hazards and risks and eliminating or controlling them ensures safety of employees, visitors, building & facilities, materials and other assets. DFML Ltd. ensures that work is carried out under suitable lighting, ventilation, cleanliness of workspace, and personnel are provided with safety shoes, head mask and protective gears for use, where required. Safety regulations are fully implemented.

DFML Ltd. also takes measures to ensure that its' activities do not adversely effect its surroundings and environment. Environmental impacts are studied and controlled as part of the system.

Awards & Incentives:

The prospect of merit pay and bonuses can give employees some incentive for improving quality. DFML Ltd give cash awards, gifts, prizes for showing inclination towards the quality, work standards and training institutions.

Continual improvement:

Continual improvement is a permanent objective of the company. The management strives to improve the effectiveness and efficiency of the system objectives setting based upon data analysis, implementation of corrective and preventive actions. It encourages employees' suggestions and involvement in determining the improvements needed and their achievement.

DFML Ltd actively engaged in continuous improvement and instills their work teams to use the Deming's approach plan-do-check-act cycle for problem solving that focuses on continual improvement. They use to train employees for the SPC tools and other tools they are normally using in their daily operations.

Based on the customers' requirements and technical parameters, planning is carried out by identifying and determining quality objectives, required work processes, inspection and testing activities as well as criteria for acceptance.

DFML Ltd. has established OH&S (occupational Health and Safety) management programs to ensure that the requirements of health and safety are met and its performance is constantly improved. A procedure has been established detailing the methodology and criteria for identification of hazards and classification of risk and controls are planned accordingly.

Chapter # 7: Statistical Process Control

DFML Ltd. carries out analysis of performance of the integrated management system to determine improvement objectives. Using suitably the statistical techniques and methods like Pareto charts, control charts, histogram and fishbone diagram does this.

Data on customer satisfaction, defect trend, process performance, accidents and incidents as well as suppliers performance is analyzed amongst other parameters.

Benchmarking:

Benchmarking is a continuous, systematic procedure that measures a firm's products, services and processes against those of the industry leaders. DFML claims that there is no other pharmaceutical company in Pakistan that implements Total Quality Management. So they have benchmarked their products, services and processes against foreign companies.

The company is newly founded, and they do not have any historical data of their own, but in order to focus on standards, they have taken up benchmarking the international Automobile Manufacturing Industry.

Positioning Graph

Chapter # 8: Capacity Planning and Strategies

Measures of Capacity

1.No single capacity measure is applicable to all types of situations. Different organizations measure capacity in different ways. In general it can be expresses in one of the following two ways:

. Output Measures

Input Measures

Output measures are best utilized when a firm provides a relatively small number of standardized products and services. Such measures can be number of finished goods produced or number of customers served etc.

Input measures are best utilized when a firm provides a relatively large number of customized products and services. Such measures can be number of labor hours worked or amount of material used etc.

(Examples of Input / Output Measures of Capacity)

Utilization Rate

2.Utilization at DFML is calculated as the number of customers entertained per showroom or number of order per month.

Calculation for Average Output Rate

Total Number of units assembled in a year = 1,800 units/year.

Average output per month = 1800 / 12 = 150 units.

Total Number of Showrooms in Pakistan = 22.

Maximum Capacity

Maximum Capacity = 150 safety stock per month.

Utilization Rate

Utilization = (Average Output Rate / Maximum Capacity) X 100

= (150/ 150) X 100

= 100%

Safety stock:

To avoid CKD delays and robbing, DFML manages to store at least 1 month's safety stock for continuous production. Cost does increase but not more than the cost burden due to plant inactivity. Moreover, by continuous production, they ensure shorter delivery times.

Setting Stock Levels

One major objective of capacity control department is to ensure that "stock-out" does not occur, and that "surplus" stocks are not carried. Stock-out occurs because insufficient stocks are carried; this may lead to production stoppage and hence loss of customer goodwill. Surplus stock results in increased storage costs, and also ties up capital which could be utilized more profitability in other projects. On the other hand the working capital of the company tends to increase. The stock levels to be properly determined the company maintain strict figurative policies relating to the Re-Order Level, Minimum Level and the Maximum Stock Level.

Chapter # 9: Location

Location of Dewan Farooque Motors Limited:

Location of Dewan Farooque Motors Limited has one of the most advanced automobile assembly plants of South East Asia. Located in Sajawal, Thatta, 152 Kilometers from Karachi was built in a record time. The plant stands on a 40-hectare plot and has been built with an initial investment of more than Rs.1.8 billion. Its unique feature include, inter-ailia, the provision of high standard of living accommodation for all categories of employees, the availability of land for expansion of production facilities, and the in-house generation of electric power. It has a production base of 10,000 units' p.a. on a single shift basis.

The plant is first automobile manufacturing unit in Pakistan to be independently invested by 100% Pakistani investors. The groundbreaking ceremony for the plant was held in August 1999, and the first pilot Santro was ready in a record-breaking time of 6 months. Today the modern state-of-the-art plant is rolling out cars every day. This is the first automobile assembling plant in Pakistan with the state of art robotic equipment.

Total Customer Care

Dewan Farooque Motors Limited strives to serve its valued customers. The in-house Customer Care & Training Departments has been instrumental in conducting various seminars and workshops for developing professional skills and techniques for effective customer handling to provide high value products and services to customers and to ensure highest level of customer satisfaction.

Chapter # 10: Layout

DFML Layout:

DFML is using product layout that use standardized processing operations to achieve smooth, rapid, high-volume flow. They are designed to accommodate only a few product designs. Such layouts are designed to allow a direct material flow through the facility for products.

They use specialized machines that are set up once to perform a specific operation for a long period of time on one product. These machines are usually arranged into product department. Product layouts can take one of the following three forms:

a) Production Line; which is a standardized layout arranged according to a fixed sequence of production tasks.

b) Assembly Line; which is a standardized layout arranged according to a fixed sequence of assembly tasks.

c) U-Shaped Layout; is a compact layout requiring half the length of a straight production line.

Production Line

1.Body shop (welding)

2.Paint shop (cleaning, and smoothing, coloring, actually they are using 3 types of methods for coloring: chemicals, dip, robots)

3.Assembly shop (assemble the whole car)

A) Body Shop: Spread over an area of 8,400 square meters, the Body Shop is equipped with the most modern welding equipment and automatic type jigs & fixtures from Korea.

The well-trained and experienced manpower is making the best use of the available equipment and is practicing up-to-date production and quality control techniques to produce highest quality vehicle bodies here.

B) Robotic Paint Shop: The Paint Shop is a combination of excellent engineering know-how and design with the most efficient German and Korean equipment.

The plant has a state of the art CED paint shop from Shindurr. Shindurr has German technology and has constructed number of CED paint shops in Europe, Far East and Asian countries. The Cathodic Electro Deposition (ED) System provides durability to the body and protection against rust.

The facility also includes high-speed integrated setup of Robots to provide unprecedented paint quality. Painting Robots are supplied by DURR-BEHR of Germany, the most technologically advanced name in the world for such equipment, are being used to paint the vehicle bodies for the first time in Pakistan.

This is the first Automobile assembling plant in Pakistan with the state of the art Robotic Equipment. The use of robots results in the production of evenly sprayed, high gloss, defect-free and high quality painted bodies.

C) Assembly Shop & Inspection Line: The combination of the conveyors provided by SEOKWANG of Korea, and the ANDON System installed throughout the shop provide efficient communication and better control of production activities.

The tester line, with high precision equipment from Iyasaka - Korea, is employed to test and adjust the vehicles in order to ensure defect free and highest quality output. Exhaust gas analyzers are also used to ensure that environment friendly automobiles are rolled-out from the factory.

Warehouses:

There are 2 warehouses. One is near the head office, which stored items for a temporary time period, and the other is at Sajawal, which is the main. These warehouses are highly secured and well organized so that the parts may be easily located. The parts are identified by its label and the concern person knows regarding the placement of the parts. The shelves have tags on them where the item code, item name, store code and rake no is written down on each tag.

The inventory is stocked in the warehouse for the usage of one month only. At least 150 safety items for a complete car in any case are stored in the warehouse. When any of the items goes out of the warehouse to the assembly line, it has to be acknowledged by filling a particular form, which is to be signed by three authorized persons.The planning and controlling of the inventories is done in a very well organized manner. Manager store and Deputy General Manager plans the inventory strategy for the company.

Top management and marketing department decide the number of cars to be manufactured every month. The Top management plans the total schedule and each department is informed regarding the plan and the related requirements accordingly.

During the purchase of the inventories, the company faces difficulties in the negotiation of pricing, counting mistakes in the units ordered, purchased, processed or assembled. It is also very hard to control the venders to supply the parts on time, and if the market rate of some part increases, the company pays extra amount for the purchase. The company has no difficulty regarding the storage of the inventories. The company has been successfully able to solve 90% of the theft issue by implementing strict secured environment within the organization

Chapter # 11: Supply-Chain Management

Supply Chain Management is use to control inventory by managing the flow of material. Supply chain management required a high degree of functional & organizational integration that progress link purchasing, production control and distribution to create an internal supply chain which is responsibility of a material management development. They link supplier & customer, an external supply chain to internal supply chain to form an integrated supply chain.

Inventory is a stock of material used to satisfy customer demand or support the production of goods or services. There are three categories.

Raw Material is inventories needed for the production of goods or services. They are considered to be input to the transformation processes of the firm whether they produce a product or service.

The Raw Material at DFML is spare parts & safety stock of a complete car.

Work-in-process (WIP) consists of items such as components or assemblies needed for a final product in manufacturing. WIP is also present in some service operations, such as service shops mass finished goods (FG) service providers, and service factories.

The WIP at DFML are the cars which are under process or those units that are not completed until the work stops.

Finished goods (FG) in manufacturing plants, warehouses, and retail outlets are the items sold to the firm's customers. The finished goods of one firm may actually be the raw materials for another.

The Finish Goods at DFML is a complete tested car.

Distribution Technique

The distribution techniques adopted by DFML is the network of dealers. Presently, there are 22 dealers in all, managing both Hyundai and Kia products. There are still 4-5 prospective dealers in the pipeline. The company is also planning to separate Kia and Hyundai dealers from the existing combined dealerships. Santro and Shehzore are the products of HYUNDAI, while Sportage, Classic and Spectra are Kia products.

Channel of Distribution

MANUFACTURER (OEM)

Distributor / Assembler (DFML)

Dealers (3'S Dealerships)

Consumer (Target Customers)

Analysis of Dealer's Network

Dewan Farooque Motor Ltd has a countrywide 3'S dealer network for the distribution of its products. The Assembly plant of DFML is very huge located at Sajawal. The imported parts are directly taken from the port and off loaded at Sajawal. Many parts are also bought from the local vendors. PTN is the main transporter responsible for delivering the cars to the dealers. The (finished product) cars transported from the plant to the dealers, are delivered to the customers of the respective city.

The dealership network setup by the company is satisfactory. Presently, there are 22 dealers in all managing both Hyundai and Kia products. There are still 4-5 prospective dealers in the pipeline. The company is also planning to separate the Kia dealers from Hyundai. Santro and Shehzore are products of HYUNDAI, while Sportage, Classic and Spectra are Kia products.

The dealer's analyzed are as follows:

1.Hyundai Apollo Motors

2.Hyundai Shahra-e-Faisal

3.Hyundai South Motors

4.Hyundai Sherwani Motors

5.Hyundai Western Motors

The dealers are basically very satisfied by the dealer's network set by the company. There are as such no strict terms and conditions given by the company to the dealers. As per the company's Sales Policy, dealers have adopted the procedure of Stock Sales i.e. the vehicles produced are allocated among all the dealers according to their region / territory wise fixed sales targets, for which the dealers make advance payments to the company for the number of vehicles allocated.

The company wants the full payment of the car in advance at the time of placing the order for the car. The dealer takes the payment from the client and makes the payment on his behalf to the company. The advance payments made by the dealers to the company are for the total cost per vehicle, which includes the Sales Tax and dealers' commission as well.

Some times, there may be a delay of 10 -20 days in the delivery of the car by the company to the dealers. Hence, the dealers plan the delivery date accordingly and then issue the delivery date of the car to the customer.

The distribution policy set by the company's logistics department is satisfactory as the vehicles are dispatched to each dealer throughout the country by its nominated transporter, covered under an insurance policy. The dealer pays the cost of transportation and Insurance to the company, which is then recovered by the dealer from the customer who buys the car.

According to the dealers colors of cars, which are mostly in demand, are;

Husky gray

Silver

Gun Metallic

Black

White

There are four departments in the dealership; sales, service, spare parts and accounts. The entire departments are working very effectively and satisfactorily. All the departments are very well coordinated with each other.

The training courses are offered as per company's plans and schedules for both the Sales and Service departments. The company carries out training programs for the employees in almost every department of the dealership after every 4 to 6 months. This process helps the employees to understand the products in detail and in enhancing the qualities and skills of the employees, which may be favorable for the company. The company also carries out a training program at the time of launching of new product or new variants.

Dealers get Rs.10,000/- commission from the company on each sale of car.

The dealers are satisfied with the price set by the company for their cars but in the view of the dealers, but the customers are not very much satisfied with the price and consider the product to be expensive.

After Sales Service

The Sales and Service departments of dealership operates under the guidance of company's respective departments as per the specified policies and procedures.

DFML, in order to provide complete after sales support to the customers, has established a nationwide dealership network of 22 Hyundai-Kia 3S, also known as 3S DEALERSHIP NETWORK: (Sales, Service and Spare Parts) dealers, under its roof.

It is the dealer's responsibility to carry out a Pre-delivery inspection of the car. The dealers also make periodic maintenance calls to customers.

There are many more after sales services provided by the dealers. The dealers attract the customers by offering them personal attention and prompt service. They also offer free after sales services, Parts and service warranty of the company for 20,000 KM or 1 year, (which ever comes first) is also provided by the dealers.

In case of occurrence of any problem in the car, the dealer sends their mechanics to the customer, who tries to fix the problem. In case, if the mechanic is unable to manage the problem, he then brings the car at the workshop and reports the problem to the company's Service department. These incidents occur very rarely as the assembly system is automated and the chance of having such problems is very rare. The new cars are thoroughly examined before finally distributed to the dealers.

Chapter # 12: Forecasting Techniques

Forecasting

It's the predication of future events used for planning purpose. It needs to aid in determining what resources are needed, scheduling existing resources, acquiring the additional resources. It allows schedules to the machine capacity efficiently reduce production time & cut inventories. Its methods may base on model using historical data available, quantities methods drawing on managerial experiences or a combination of both.

Demand Pattern

According to the dealers and the sales & marketing department of the Dewan Farooque Motors Ltd the demand pattern of the cars is random or un-forecast able variation in demand they said that they are manufactured cars according to the demand but it is not necessary that the demand of current month is same as the demand of next or pervious month. It is un-forecast-able not conform that in which month the demand is high & in which its low.

Judgment Method:

Judgment methods can be used to modify forecasts generated by quantitative methods. Dewan Farooque Motors are using marketing research method. Market research is a systematic approach to determine consumer interest in a product or service by creating and testing hypotheses through data-gathering surveys. DFML have a separate department of research & development. And after analysis the features of demand they plan annually that how many cars are been manufactured.

Chapter # 13: Inventory Management

At DFML Inventory Management Provides

Up-to-date information about data processing resources through the creation and archiving of records in a centralized repository.

Financial records specific to a single component, or groups of components.

Service records for all components in the inventory.

Data used to support configuration diagrams of the hardware and software components contained within specific locations, or the entire data processing environment.

Objective of Inventory Management at DFML

The objective of Inventory Management is to manage the physical and logical properties of I/S resources and their relationship, while ensuring that service level commitments are achieved. This process will ensure efficient and timely identification of vital corporate assets. It will also assist in managing the enterprise-wide inventory and provide a common repository for asset protection. The inventory management process plans and controls the proliferation of assets across the enterprise.

The objectives of Inventory Management are:

To identify and track all data processing assets in an Inventory System Repository.

To define the process by which assets are identified and maintained in the Inventory System.

To provide Inventory System access to all necessary personnel (data entry, update and deletion).

To provide a full range of reports that will satisfy informational requirements.

To document the Inventory Management System within the Standards and Procedures Manual.

To provide training to personnel responsible for supporting the Inventory Management System.

Functional Areas

The functional areas that interface with an Inventory Management System are:

Overview of DFML Inventory Management Functional Areas

All of the functional areas listed above can utilize the information contained within the Inventory Management System's Central Asset Repository of information. Additionally, the Recovery Management area could utilize inventory information to identify an assets criticality (especially when the asset's location and owner are identified within the Inventory Management System). Through the use of reports generated from the Inventory Management System's Repository, it would be possible to obtain a listing of all "Most Critical" resources, by location and group. This report would then serve as the basis of a Business Recovery Plan.

Integrated Inventory Management System

To successfully implement an Inventory Management System, it is necessary to integrate it within the everyday functions performed by company personnel. That is, when a user wants to order equipment or software, they would call up the Inventory Management System screen associated with Acquisition. The same types of processes should be available for Redeployment and Termination of assets. Should a user request the acquisition of a specific type of asset, then it could be possible for the inventory system to determine if the asset is already in surplus, or if it should be purchased under an existing Volume Purchase Agreement with a vendor.

The utilization of Inventory Management Systems to control the purchase and installation of assets can aid in the control of the business environment, while assisting in the assignment of personnel to perform asset related work functions. This methodology will result in a workflow and asset management system.

Analysis of DFML's Inventory Control Department

Inventory Control department is responsible for the production planning and material control language and cost ordering. Dewan has been able to successfully launch the following cars up to date:

Shehzore

Classic

Santro (club, exec, and now planning to introduce sports model).

Spectra

Sportage

The effective inventory carrying system of Santro leads to its cost effective distribution and sales. The company has implemented systems where 90% are using oracle system. The departments are being computerized one by one and then the departments are linked with each other via satellite

Segments of Inventory at DFML

The inventory is segmented into 3 categories of material departments and then stored in the warehouse. Following are the material departments:

1.CKD

2.Local Parts

3.Consumer material

1.CKD/ Imports

CKD (Completely Knock Down) is the main department where only the imported parts are stored. The order of the parts is placed on internet and the further dealing is done through documentation and the further issues are resolved in personal meetings. The order for the parts is placed according to the production of cars to be made in the next following month instead of ordering parts annually or on estimate basis. The ordered parts are received at Karachi port and transferred directly to the main assembly plant located at SAJAWAL.

2.Local parts

Second most important area is to purchase the parts locally from the local vendors. Following are the tasks performed:

Schedule the delivery: the heavy parts are directly delivered to SAJAWAL and the light parts are transferred from the head office after recording.

Follow-up is regularly taken by the vendors to know whether they are manufacturing all the parts that were scheduled or not. Sometimes the steel gets expensive and the vendors stop making the steel parts, so, the company has to convince the vendors to manufacture those parts and the company gives extra money for this purpose.

Payments of the delivered parts are made within 30 to 40 days after PDI (pre-delivery inspection).

3.Consumer parts

Purchase of consumer goods like Greece, oil, battery water, break oil, coolant, etc. The company first schedules the items, and then takes a follow-up with the vendors. The company then pays the outstanding amount to the vendors after checking the quality of the goods purchased. The Inventory control department always keeps 200 units in hand as safety stocks so that they can handle certain situation incase of rejection.

Dewan Farooque Motors basically emphasize on PP (product planning) department. The targeted deletion percentage achieved is 57% at present. Officially the company is showing the targeted deletion percentage as 60%, and to cover the rest of the 3%, they ask the local vendors to make purchases on their behalf. They are targeting to increase this deletion up to 70% to 80%.

CKD used43%

Local 57%

All the parts are not purchased at one time due to the outstanding payables. The parts keep on adding in the total inventory based upon the usage and according to the need of the parts.

The company cannot delete 30% of the parts because the high quality glass or the high cost engine parts or those, which are highly sensitive and not manufactured by the local vender, are imported at cheaper rate than being manufactured locally. Mainly, parts of Engines and glasses are imported from Korea due to less rejection chances and quality factor. While, Steel sheets items and rubber material is manufactured locally.

There are 2 warehouses. One is near the head office, which stored items for a temporary time period, and the other is at Sajawal, which is the main. These warehouses are highly secured and well organized so that the parts may be easily located. The parts are identified by its label and the concern person knows regarding the placement of the parts. The shelves have tags on them where the item code, item name, store code and rake no is written down on each tag.

The inventory is stocked in the warehouse for the usage of 2 to 3 months only. At least 150 safety items for Santro in any case are stored in the warehouse. When any of the items goes out of the warehouse to the assembly line, it has to be acknowledged by filling a particular form, which is to be signed by three authorized persons.

The planning and controlling of the inventories is done in a very well organized manner. Manager store and Deputy General Manager plans the inventory strategy for the company. Top management and marketing department decide the number of cars to be manufactured every month. The Top management plans the total schedule and each department is informed regarding the plan and the related requirements accordingly.

During the purchase of the inventories, the company faces difficulties in the negotiation of pricing, counting mistakes in the units ordered, purchased, processed or assembled. It is also very hard to control the venders to supply the parts on time, and if the market rate of some part increases, the company pays extra amount for the purchase.

The company has no difficulty regarding the storage of the inventories. The company has been successfully able to solve 90% of the theft issue by implementing strict secured environment within the organization

Chapter # 15: Material Requirements Planning

The importance of material management lies in the face that any contribution made by the materials management in reducing materials cost will go a long way in improving their profitability and the rate of return on investment.

Materials management experts claim that efforts for saving a rupee in material cost is almost equal to the efforts made for additional sale. Materials form an important part of the current assets in any organization. Thus the return on Investment depends on a great deal on the manner of utilization of materials.

For any organization, may that be a manufacturing concern (Microwave manufacturers, Television manufacturers, etc) or a service providing organization (Internet Service Provider, Bakeries, etc). Proper management of the raw materials or office supply materials plays a very important role in the profitability and success of the organization.

Materials Management Cycle

The Materials Management Cycle for any organization

Explanation

The figure shows the materials management cycle of acquisition, storage, assembling, storage and distribution. The cycle begins with the purchase of materials or services from outside suppliers. Materials are stored and then converted into goods or services by one or more transformation processes. Manufacturers store semi finished and finished goods and finally distribute the finished products to customers. Materials management decisions have short time horizons and therefore are more tactical then strategic. However, they have a major cumulative effect and thus attract considerable managerial attention. Tactical decisions about materials are important for two reasons

Treatment of Materials at DFML

In the DFML automobile industry direct material is basic part of all materials procured, consumption of which can be identified with specific production unit and which becomes a part of the product. These materials are acquired, stored and subsequently issued for production.

Indirect materials are those materials which are ancillary to production. These are considered as overheads. (E.g. cleaning material for the factory and floor, stationary for the employees includes printer papers etc).

Chapter # 16: Just-in-Time Systems

Just in Time, or JIT is a set of techniques to improve the return on investment of a business by reducing in-process inventory, and its associated costs. JIT causes dramatic improvements in a manufacturing organization's return on investment, quality, and efficiency.

Japanese corporations cannot afford large amounts of land to warehouse finished products and parts. Before the 1950s this was thought to be a disadvantage because it reduced the economic lot size.

Just in Time at DFML:

At DFML there is no use of JIT but in future their mission is to test this kind of approach & if it is suitable then implement it permanently.

DFML's Opinion

A huge amount of cash appeared, apparently from nowhere, as in-process inventory was built out and sold.

This improved customer satisfaction by providing vehicles mutually within a day or two of the minimum economic shipping delay.

It also save the space of inventory & reduce the risk.

Also, many vehicles began to be built to order, completely eliminating any risk that they would not be sold. This dramatically improved the company's return on equity by eliminating a major source of risk.

Conclusion

The Dewan Farooque Motors Ltd is car manufacturing organization that is actually purchase parts from the local vendor(s) and from Kia Motors Ltd and Hyundai Motors Ltd and assemble then to manufacture cars.

DFML mission is to be the market leader in the passenger car segment (1000cc and above) by the year 2006.

Line Process is carried out in DFML.

There is a low level of customer involvement at DFML because DFML is an automobile assembling organization and the plant of DFML is At Sajawal.

DFML is highly capital intensive & requires a large amount of investment to equip the workers and maintain the equipments.

Dewan Farooque Motors Limited is using Korean Technology in manufacturing of cars, according to the DFML sales executive that Korean technology is more reliable and much improved then the others.

They are using robotic arms for painting, welding and screwing the nuts of the car.

Dewan Farooque Motors are also using PLC (programmable logic control).

DFML manages to store at least 1 month's safety stock for continuous production.

Located in Sajawal, Thatta, 152 Kilometers from Karachi was built in a record time. The plant stands on a 40-hectare plot and has been built with an initial investment of more than Rs.1.8 billion.

DFML is using product layout that use standardized processing operations to achieve smooth, rapid, high-volume flow.

There are 2 warehouses. One is near the head office, which stored items for a temporary time period, and the other is at Sajawal, which is the main.

Presently, there are 22 dealers in all, managing both Hyundai and Kia products.

It is un-forecast-able not conform that in which month the demand is high & in which it's low.

Judgment methods can be used to modify forecasts generated by quantitative methods. Dewan Farooque Motors are using marketing research method.

At DFML there is no use of JIT but in future their mission is to test this kind of approach & if it is suitable then implement it permanently.

Recommendations

Based on the research carried out we recommend the following suggestions:

The company should develop the major parts of cars locally rather then acquiring them from Korea. The local material and labor is cheap in this way the company can save the substantial amount, which will result in the reduction of selling price of Santo. This would be a competitive advantage.

Most of the people are satisfied with the quality of the car and its performance but suggest the quality of the materials and parts of the car to be improved. The basic finishing of the parts and the inner sides of the bonnet needs improvement.

Some people say that the shape of Santro is good because of aero dynamics but some suggest room for improvement. The back seats comfort should be improved along with the leg space. The levers to move the front seats to and fro are very uncomfortable and need some modification.

The CNG variant and the automatic variant are in demand. Some people also demand for automatic or power steering and power windows. The rear windows should also be powered and the central locking system should be provided on the driver's panel. The company should increase the engine power of their cars so that CNG may not affect the performance.

The sales ratio of DFML vehicles in corporate sector is very low as compared to its competitor's Civic, City, Corola, Cultus & Alto etc. The company should make strategy to focus on corporate sector as well.

The pick up of the car should be improved. More color options should be provided, by introducing dark colors.

Appendix

Population: The target population for our research report is segmented into two categories:

1. The employees working in Marketing and Inventory Control department of Dewan Farooque Motors Ltd.

2. The dealers responsible for the promotion of DFML.

Sample Size: In this study, our sample size of the population is 10 respondents including:

5 employees of Dewan Farooque Motor Ltd.,

5 dealers responsible for the sales and promotion of DFML,

Sampling Techniques: In this study non-probability sampling was carried out which is termed as "Trade-off between cost & time and precision". The "researcher cannot calculate the bias involved". That is why statisticians usually avoid non-probability sampling design.

Research Methodology: Primary and secondary research has been undertaken through survey forms and as per requirements. Primary data has been collected through face-to-face interviews, whereas secondary data will be gathered through brochures, business magazines, newspapers, internet, Seminars/discussions/workshops and other media. The study carried out is under a systematic, objective and controlled condition.

Time & Cost Requirement: The time duration required to conduct the survey on a large organization like Dewan Farooque Motors Ltd is of one month. The cost can be calculated by the expenses made for the print outs, scanning, transportation, snapshots, binding, etc. which comes up to Rs. 2500/-

Questionnaire

Questionnaire for the Dealers

1.Are you satisfied with the dealer network set by the company?

2.What are the terms and conditions given by the company?

3.Are you satisfied with the distribution policy set by the company?

4.Does being Korean technology have anything to do with the sales of the car?

5.How do you manage to attract the customers?

6.Would you like to own the car for yourself?

7.What services you provide to your customers?

8.Which colors are mostly in demand?

9.How are your sales and service departments operating?

10.Does the company provide your staff training courses? How frequent and what types?

Questionnaire for the Inventory Control Department

1.What is inventory in your opinion?

2.How do you manage your warehouse?

3.What are the parts that you import from Korea?

4.What kind of parts do you manufacture locally?

5.How do you plan and control your inventories?

6.What difficulties you face to store the inventories?

7.What difficulties you face to purchase the inventories?

8.How many vendors does your company have? Name some

9.Who plans the inventory strategy for your company?

10.What time period do you stock the inventory for?

11.What type of inventory system do you have?

12.Do you have capacity Cushion?

13.What is the capacity of your plant (per month)?

Questionnaire for the Manufacturing & Assembling Department

1.What is the importance of material management with respect to DFML?

2.What is the procedure of purchasing materials?

3.Which manufacturing strategy do you follow for producing cars?

4.Which process strategy do you follow in the manufacturing of vehicles?

5.How many cars are assembled per day in your assembly plant?

6.Why your assembly plant is different & unique from other assembly plants in Pakistan?

7.Are you using any PLC in your plant?

8.What type of SPC tools you are using in DFML?

9.What is the targeted deletion percentage to be achieved by the company? And what percentage achieved?

10.What is the percentage of parts, which the company cannot delete (cannot be manufactured locally)?

Bibliography

HYUNDAI & KIA BROCHURE

DEWAN GUIDE BOOK

WEBSITES

1.http://www.planetsantro.com

2.http://www.dewan-motors.com

3.http://www.dewangroup.com

4.http://www.hyundai.com

5.http://www.yahoo.com

6.http://www.google.com

7.http://www.pak.org