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BACKGROUND OF THE CASE The year 1986 was significant for Eicher Tractors as the company was faced with
increasing competition and initiated a series of strategic changes to consolidate and improve their position in the
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They restructured the entire operations and made substantial investments in technology to meet the market
requirements. They implemented PLAN M aimed at upgrading product quality and operating systems
Objectives of PLAN M :
Objectives of PLAN M To produce every component and assembly as per drawings and specifications with less
fatigue and effort from workmen. To change handling of stores and materials in all stages of production to ensure that
material was available in the right quantity at the right time in the right
Company History :
Company History 1948 Good earth Company was established to sell and service imported tractors. 1959 Eicher
Tractor Corporation of India Pvt. Ltd. was setup by Mr. M.M. Lal. in collaboration with Gebr Eicher of West Germany
1960 The first tractor manufactured in India rolled out of the Faridabad plant.
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1960s Govt. regulations on imports resulted in the company achieving 85% indigenization. 1970s Achieved
100% indigenization and setup two new factories in Alwar and Parwanoo. 1980s Changed its name to Eicher
Goodearth Limited and diversified into LCV. Also, setup a new LCV manufacturing unit in Prithampur .
Major Reorganization in Eicher tractors :
Major Reorganization in Eicher tractors The reason of reorganization was increasing competition and sustainability.
Each of the three independent plants were reorganized into interdependent plants. Parwanoo Gears and
transmission production Alwar Engine manufacturing Faridabad Final assembly
Modernization :
Modernization Introduced the concept of producing every component and every assembly as per drawing and
specifications. Company moved existing machinery and installed new ones. Changed production and procurement
processes, renovated buildings and changed layouts on the shop floor. Company taken decision to produce 24hp
tractors to cater to small farmers.
Total quality management model :
Total quality management model
Just in time system :
Just in time system It was introduced in stages. Transmission sub assembly was chosen for starting work on JIT
implementation. Line was designed by analyzing the work content and choosing a target cycle time. Cycle time was
measured as one vehicle every so many minutes
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This cycle time would match the required capacity of the plant in terms of vehicles per day. The work was broken
down so that each work station had a work content that took less time than the cycle time. In line with the philosophy
of JIT the work content at which station was not sought to be equalized rather it was designed so that most work
stations work for full cycle time with some allowance for rest and fatigue and other work stations had a fair amount of
idle time. The space available at each work station did not allow the worker to produce the next item until the person
succeeding him had physically moved it over to his work station.
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Work station was designed using surgeon concept. All tools and parts were within one arm or leg movement from
workers position on the line. Heavy physical work was minimized by use of over head cranes to lift and move heavy

Difficulties during implementation of JIT :

Difficulties during implementation of JIT Negotiation with unions. 1. Employees were afraid they might have to work in
harder and stricter work condition. 2. Retrenchment No prior experience with JIT Relatively new method Incentive
problems Benefits were not clear
Planning for implementation of JIT :
Planning for implementation of JIT The change required here is to treat each employee as a hole human being
rather than as one with a very limited purpose. Mr. M.M. Lal They planned to provide competitive salaries, good
working conditions, and intensive efforts for training of employees through manuals, cassettes and video, as a
procedure for implementing change.
Implementation and training :
Implementation and training Formed core team of four engineers. Initially trained them for a month on JIT philosophy
and technique. Implemented firstly at faridabad and then extended it to Prithampur, Alwar and H.P. plants Twelve
workers were identified to work on the new line under JIT implementation program. These workers were trained by
core team of engineers. Training- 1. Designed games in class room 2. Directly on line.
Continued.. :
Continued.. Workers were encouraged to write down the operating standers which specified the sequence of steps
for each item on the assembly line going through his station.
Eichers approach to incentives :
Eichers approach to incentives Some times lower production was required so worker producing faster than the
others in assembly line served no purpose Rewarding someone for working faster gave no meaning. It also Increased
work in progress inventories. Looking the implication company abolished incentive system and bought new system
for rewarding by negotiating with the worker unions.
Indicators of Manufacturing Performance :
Indicators of Manufacturing Performance Quality Percentage straight pass. Defects per unit. Demerit rating.
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Cost Inventory at various stages. Delivery Target achievement. Safety Measured by no. of accidents. Teamwork
Extending JIT to suppliers :
Extending JIT to suppliers JIT required appropriate quantities for production during shifts. For just in time inventory
management the company used two types of supplier :- 1. Located far from the plant. low coordination because of
distance 2. Local suppliers. Vendors using cycle, rickshaws to ship parts directly to the shop floor 2 to 3 times a shift
Total quality control :
Total quality control Production and quality systems: Product drawings were translated in to the assembly operations
sheet. Quality standards were established by the quality planning and production people. Quality checks were carried
out at three levels: Worker Supervisor Quality auditor
Continued.. :
Continued.. Worker checks every item coming in and coming out of his work station. Supervisor checks a sample
of items once or twice a shift. Quality auditor checks a smaller samples once a day. Workers used simple methods,
supervisor used bit more sophisticated methods like vernier calliper, auditor uses methods equivalent to supervisor.
Finished products were inspected by quality control inspector.
Total Employee Involvement :
Total Employee Involvement The company believed that once the workers were properly trained and had imbibed
spirit of TQM & JIT they were in the best position to observe and suggest improvements pertaining to there area of
work . Company implemented the system to follow up on worker suggestions. Since empowerment and involvement
were important so if a workers achievements were recognized his ability to contribute to increase
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It followed the employee recognitions system like giving gift of a pen in front of his colleagues.

Indicators of Manufacturing Performance :

Indicators of Manufacturing Performance Quality Percentage straight pass. Defects per unit. Demerit rating.
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Cost Inventory at various stages. Delivery Target achievement. Safety Measured by no. of accidents. Teamwork
Thank you :
Thank you