Kirloskar Ferrous Industries Ltd (KFIL)
KFIL is a leader in automotive and non-automotive casting supplies in India and abroad with manufacturing facilities at Koppal and Solapur. It produces grey iron and S.G iron castings for various applications, such as cylinder blocks, cylinder heads and various housings for automobile, tractor and diesel engines. The Casting industry, which KFIL is part of, is associated with very poor (Daily) On-Time Delivery (OTD). Therefore, to offset the high lead-time and unreliability, OEMs are forced to maintain huge inventories at their end (20-30 days).
After adopting TOC with the help of Vector Consulting Group, the company introduced small batch production system thereby improving its ability to adjust to the customer consumption pattern and deliver as per the requirement of the customers. New product development processes too were revamped according to TOC principles. Consequently, KFIL has managed to achieve the following results:
The senior management of the company discusses on what challenges they faced in implementing and sustaining the innovative pull-based flow processes in manufacturing and new product development.
Kirloskar Ferrous Industries Limited is a well-known name in the area of automotive castings, and also for the raw material pig-iron for the foundries. Now, we are one of the largest foundries in India, catering to all the OEMs in the field of automotive manufacturing, as also tractors.
I think it was seven to eight years back when we started the process of implementing the Theory of Constraints processes in KIFL in both the plants – Koppala as Sulapur. It was critical for us to understand what was the key ask of our customers, what were their real challenges or problems. And with that focus, we talked to Vector. Vector proposed to implement the Theory of Constraints, and I must say, in hindsight, that it was one of the best possible ways by which we could address our customers’ challenges. We could improve our supply chain, and were able to address two important aspects of our customer concern. One was the supply chain in terms of how we can ensure on time in full, and the other was to reduce the new product development cycle time. Here too, TOC helped us in developing new products faster.
We were prepared to bring this change in the organization, become a different foundry or a different organization compared to all the others in the industry. With the experience of what was done in Kirloskar oil engines, we realized that these flow processes can improve our supply chain to our customers and started implementing them. And, believe me, this was definitely not just implementing a system, but bringing about a change in our processes, bringing a change in our mindset, and overcoming the apprehension whether these will really prove beneficial to us or not. I think it was a good surprise, good experience for us. Essentially, we had to work with three very basic three concepts – we will work only with a full kit, there won’t be any multi-tasking, and a daily review will happen, come what may. Additionally, ensuring that the supply chain has some buffer creation to ensure that we don’t fail on our commitment to our customers. When we started working with these three principles or concepts for all our customers and from both our foundries, it did take us some time to implement the processes correctly and to start seeing the results. We had to work for a couple of years on this concept, but we could bring a change. We could start delivering on time in full. We could get the customer to notice and appreciate that there was a significant and noticeable change in our supply performance.
The other one was related to new product development. One is the process itself. And, here I am not talking about the fact that products had to be developed for not just one customer but for a number of customers – that is understood. What I am referring to is the fact that major technological changes were happening. From Euro 3 to Euro 4, and then from Euro 4 to Euro 6. A lot of casting development was happening! And we as an industry, were known to take six to nine months to develop a cylinder block or a cylinder head. At Kirloskar, however, we decided that we want to make a major shift. And, once our mindset changed, our thinking opened up, and everybody wanted to ensure that they can also make a change. In due course of time, we decided to upgrade our technology in the new product development area of casting making. We also decided to go for 3D printing. And today we have that capability to make the cores by 3D printing without making the core boxes, which really brings down the time substantially. To cut a long story short, development time got reduced from nine months to two months. What is more, we now have the capability to develop new products for our customers in case of an emergency requirement. We can develop the parts in 30 days or even 20 days. And recently, we made it in four days!
Not only did we bring about a major change in the supply chain, and cut down new product development cycle time, but we changed the mindset of our organization, and the mindset of the industry because we started offering parts faster than what customers expected.
This kind of capability improvement in us readily brought a change in our customers, and they started looking towards us to meet more of their their requirements. Our share of business began to go up, say, from a supplier with 30% share to 50% or even 70%. What is more, today, our biggest customers – very large businesses – entrust 100% of their business with us. Therefore, I think qualitative improvement, better delivery performance, reduced new product development cycle time, etc. all made a big change.
We wanted to revamp the way we thought, planned and worked. And, every senior leader of the organization got involved in this. Not only that, we ensured that this implementation was from the shop floor, and that it was done not as a supplementary process, but that it replaced the system in the process. The planning process itself was replaced by TOC, and when we started getting results, we started getting comfortable. Most customers stopped talking to us every day regarding delivery, because the system spoke for itself and they got the communication they needed. We could really see the comfort that derived in implementing this process, and that by itself was a great motivation for continuing to implement this system and make it a part of our daily routine, to make it a continuous process, to improve it further and further, and not view it as a one-time activity. It was also crucial that our organizations were system oriented, not just leadership drive oriented. I think this is the most important aspect that we have tried. Let me also add this other very important aspect – we have learned a lot working with our customers. Whether it is highly demanding domestic customers, or foreign customers, automotive customers are one of the most highly demanding customers one can get, and their first and foremost demand is that we should follow the SOPs. And I think this was in alignment with TOC principles. So it not only helped us to completely revamp our processes and achieve process alignment, but the results that we could achieve also kept motivating us to work with these systems.
As the industry is going through a change, we have our own constraints or our own apprehensions, especially with respect to how much to develop the foundries. Is EV going to come, and if it comes what happens to the engines, what happens to the blocks? Many questions are there and there are proponents on both sides. While some say that it will take a few more years for EV to become popular, there are others who claim that electric vehicles are a reality, and that there is not much time left for them to become popular and common. But from one foundry 10 years back, we are now setting up the fourth foundry. So, it has been a tremendous journey. We had a capacity of just 40,000 tons of casting per annum 10 years back, and we are now increasing to 200,000 tons. That itself is proof that customers have tremendous confidence in Kirloskar Industries, and we are also continuously striving to understand what is critical to our customers, what is important for our customers and how we ensure that we are best or we are good in doing what is required by our customers. It is not a one-time activity, it is continuous improvement that we need to bring, and we have to be successful in bringing that change. I think we have been able to do a little and that has improved the confidence of our customers in Kirloskar and we continue to grow at about, 15% year on year.
Kirloskar Ferrous Industries Ltd - Transforming Foundry Operations & Sustaining Excellence
Mr. R.V. Gumaste, Managing Director, discusses how Kirloskar Ferrous Industries Ltd (KFIL), successfully unlocked the full potential of their operations and sustained excellence over the last 7 years.
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