REGIONAL ACTIVITY

NORTHERN REGION

PUNJAB TRACTORS LTD (PTL)

Mr R P Sehgal, Executive Director - Manufacture, made a Presentation on "Continuous Improvement - PTL Experience". PTL, promoted in 1970, manufactured indigenously designed tractors - a product of, entirely, Indian know-how and technology. From 11.5% in 1980, grown today, to 21.5% of the total share of the tractor industry.

To create a culture of Continual Quality Improvement, various initiatives were taken, resulting in achieving excellence in every field -

• R & D department not only provided various models to cover a wide range of market needs, but also created Customer Delight Continuously by providing features that fulfilled the needs of a particular operation or field condition.
• To meet customers in villages and understand the desires of the customers, a minimum of 3 visits in the year was made by Mr Sehgal, himself.
• A major role in bringing down labour costs, thereby, improving margins, was Productivity Improvement through innovations and technologyContinuous Improvement Activities were part of the Annual Business Plan
• The Juran Quality Improvement Programme (JQIP) was adopted to help in Continuous Improvement bit by bit, project by project.
• The innovative, voluntary scheme, "Self Quality Assurance Incentive Scheme" resulted in creating disciplined work culture and statistical quality control. Under this scheme workmen signed an agreement ensuring quality output by strictly following the process and through periodic quality inspection for which appropriate training was given.
• More than 400 component manufacturers supplied to PTL. Most of these were located within a 100 Km radius while 100 components were on 'ONLINE DELIVERY".
• Manufacturing systems were continuously upgraded to edge towards Zero Defect and ensure First Time Right.

Some of the milestones/performance indicators shared by PTL:

• Number of tractors produced increased from 14338 in 1990 to 28220 in
  the year 2000
• Turnover generated per employee increased from Rs.13 lacs in
  1990 to Rs. 59 lacs in 2000
• Number of tractors produced per workman increased from 11 in 1990 to 25 in 2000
• Change in technology and introduction of the Incentive Scheme saw reduction of manpower while scrap generation reduced from Rs 480/- to Rs. 56/- per tractor
• Total warranty cost per tractor reduced from approx. Rs. 700/- per tractor to
  Rs. 540 and finally to Rs. 270 per tractor after recovery from suppliers.

Some achievements:

• First CNC Machine installed in 1990. Now cent per cent, CNC machines
• A new plant set up with one third less manpower
• No increase in workforce since 1982. This would continue to 2005.
  In between a reduction of 300 in manpower took place,
  in the way of retirement

It was specially heartening to learn from Mr Sehgal's presentation, that the company's "partnership spirit with vendors" concept of trusteeship along with the emphasis on R & D, was described as "the shrine" of PTL.

Presently, PTL had the capability of manufacturing tractors with a maximum horsepower of 55 and the technology to develop tractors within 2 years.

PTL's perceptions:

• Display target rejections in "PPM" levels - missing in Indian plants
  Self evaluation necessary - lacking in the industry
• No perceived threat from China
• PTL was an emotional and traditional Indian company - Vendor contracts had never been terminated and special "Vendor Development Cell" had been created to improve the strength and capability of vendors. In the long term, however, the Company may need to look at changing this system
• The definition of customer, it was felt, had not been understood by the local industry
• The future of the Tractor industry, would continue with fluctuations till 2003. It was expected that by 2006 it would go up with no further foreseeable changes.

Mr A K Taneja, Chairman (NR) thanked the hosts for an excellent visit. In conclusion he said that it was a great opportunity for everyone to learn, first hand, the success story of a "Now The Second Largest Tractor Manufacturer In India - truly an Indian company". Overcoming many challenges and obstacles, it had emerged as one of the forerunners of the Tractor Industry.