Delphi's passage to India perfects process

NEW DELHI - Some call New Delhi the Rome of India, while others argue it's more like Paris, but the abject poverty and lack of infrastructure throughout the region leave both comparisons wanting. For the hordes of drivers who rumble down the streets in unmitigated chaos each day, the one thing clearly shared with the European cities is the ubiquitous car horn.

It's little wonder that the few traffic lights to be found flash "relax" across their red portion in a futile effort to convey order. Or that cars and b uses paint on their backsides: "Keep your distance, please." Blame the Brits for leaving behind colonial-era roundabouts that no one appears to know how to use. Intersections are a free-for-all, pitting a frightful myriad of bicycles, scooters, 3-wheelers, buses, cars and trucks against animal-drawn carts, pedestrians and some 40,000 holy Hindu cows that roam at will.

The capital city is a paradise compared to old Delhi with its well-planned boulevards, city parks and red-bricked buildings - another vestige of colonial days. But air pollution from leaded-gas and smoke-belching diesel-run vehicles is taking its toll - suffocating the region's 11 million people in a thick yellow pall and making New Delhi one of the most polluted cities in the world.

The government has instituted an "India green" program, encouraging the planting of trees along roadsides. The saplings, however, face an uphill battle to fulfill their destiny. More importantly, the India supreme court earlier this year ordered that all cars conform to Euro I emission standards from June 1, and be ready for tougher Euro II rules by next April. But that still leaves thousands of aging buses, trucks and other motorized transportation.

Though India's population has just broached 1 billion, a mere 3 million passenger cars travel the roads. Nevertheless, the promise of a burgeoning well-educated and prosperous middle class is the lure that so far has attracted 14 global automakers to India's major manufacturing centers in Delhi, Bangalore, Mumbai and Chennai.

That India is a democratic society with a strong legal system helps. But the main reason for investment is found in the statistics. The ratio of cars per head is one of the lowest in the world at nearly four cars per 1,000 people. Just bringing India up to average ownership level of developing countries (39 vehicles per 1,000) would require the sales of 35 million vehicles by some estimates.

Indian automobile sales surged ahead in the first half of the fiscal year ending next March 31 as commercial vehicle sales for the first six months, to the end of September, rose to 71,153 units from 55,259 in the corresponding period of 1998.

Car sales increased to 300,419 units compared with 205,087 a year earlier, reflecting a return of consumer confidence following Asia's 1997 economic free fall. It also reflects favorably on a range of new small car models recently introduced, such as the Honda City, Daewoo Matiz and Ford Ikon. The Fiat Palio and Suzuki Wagon R may be launched next year, plus Toyota Motor Corp. is considering a midsize sedan for India. Some analysts predict the country's market for small cars, alone, will grow to 160,000 units, up from 100,000 last fiscal year.

That's good news not only for automakers but also for global suppliers. The market for automotive components here is expected to be worth $4 billion, according to the world's largest automotive partsmaker, Delphi Automotive Systems, based in Troy, MI.

Ministering to its growing list of OEM customers, Delphi currently has four wholly owned world-class manufacturing facilities in India, employing 1,100 people and accounting for an estimated $60 million in sales. The plants are important not only for strategic purposes but for their contribution to Delphi's newly instituted global lean manufacturing process - called the Delphi Manufacturing System (DMS).

The combined Delphi Chassis Systems and Delphi Harrison Thermal Systems plant in the Greater Noida District, located southeast of Delhi, for example, warehouses none of its parts, which instead are located beside the line. "We have no forklifts in the plant," says Bob Walden, country manager - chassis systems. "That's important to safety and pollution."

The integrated facility, which was awarded QS9000 and ISO9001 certificates in 1997, manufactures suspension, brake and HVAC products, and has its own key inspection and metrological testing facilities. Much has been done to eliminate waste, streamline the process and improve floor space by implementing batch production dependent on manpower, with little automation.

In one 2x3-ft. (0.61x0.91 m) cell occupied by several workers, for example, it takes 30 seconds to change over to produce a different model of brake assembly. With everything in the plant on casters, it takes less than half an hour to unplug machinery and reformat a line. The result? "Where total product cycle time once was 56 days, it's now down to 10 days," Mr. Walden says, adding, "We want to get less than that, and use less space."

Much of this is due to worker input. All workers on the floor have 12 years of schooling and two years at an industrial training institute. Some have engineering diplomas. There's an additional two years of classroom and on-the-job training at the plant.

Delphi ensures it will draw India's cream of the crop at all of its Indian operations by offering a pay scale that rises above prevailing wages for the country, providing workers with what company officials say is a better-than-average standard of living. An hourly operator with experience, for instance, receives a minimum of 5,500 rupees ($126.69) per month.

Delphi provides daily subsidized lunches, two tea breaks with snacks, and transportation for all workers. Employees also have access to the company's first-class medical facility located at each of the plants.

Delphi also is helping bring its local suppliers up to speed. By law, 70% of content must be localized within three years. "Twenty percent of our time is spent working with suppliers," says Anil Verma, managing director of Delphi India. "Our customers will not accept parts (of) any less (quality) than anyone else."

When Suzuki Motor Corp. entered the market in the early 1980s in its remarkably successful joint venture with the Indian government, it brought Japanese quality systems, which have played a major role in increasing overall quality. Now Delphi is taking the Indian automotive industry into the next stage by introducing the concept of module and systems supply, Mr. Verma says. "To achieve this, we will need a strong supplier base. We are putting a lot of resources into working with local suppliers and are delighted with the results they are achieving."

Delphi is equally proud of the success at its Delphi Saginaw Steering Systems in Bangalore, three hours flying time from Delhi. Ten years ago, this southern city was considered a tropical paradise for the 2 million people who resided here, brimming with lush gardens, wild animals and exotic birds. Rain trees from the West Indies spread their limbs like giant umbrellas.

Today, there are 6 million residents, the air is polluted, the city vastly overcrowded and the garden district disappearing. Yet, there's a cosmopolitan excitement that's hard to miss. Downtown teems with quarry merchants offering thick slabs of marble and granite found locally in abundance; there are food stalls, jewelry and silk wholesalers and colorful Hindu temples. Native skin is darker, colors more vibrant and the living more prosperous. Many women wear Western-style dress, adorn themselves with 24-karat gold, and drive cars.

Alongside the world's oldest rock formations, Bangalore brags of some of the most modern high-tech facilities. India's national space and aeronautic research labs are located here, along with a heavy military presence. It's natural that global manufacturers would congregate in a region of such rich prospects. Indeed, Bangalore is increasingly a center for automotive manufacturing in India.

Delphi's Saginaw Steering Systems plant, which began operations in 1996 and is located an hour away in Jigani, Bangalore, produces half shafts and energy-absorbing steering columns. The facility has the distinction of being among the first to be constructed and managed according to the principles of DMS, and has been recognized for its multi-skilled workforce, quality of its products and exceptional safety record.

Customers include Daewoo Motor India Ltd., Maruti Udyog Ltd. (Suzuki), TELCO, General Motors India and Fiat India, plus future Ford Ikon cars.

In making its plants autonomous wherever possible, Delphi has found that giving more local responsibility leads to more ideas for improvement from all levels of the workforce, particularly when it comes to embracing a new manufacturing system.

The Bangalore plant, run entirely by local management, has been so successful that it has become a mother plant to new facilities in other developing regions, including China.

"Business here is unlike business anywhere else," says Plant Director Ravi Khanna. "We have multiple lines and multiple demands and quick cycle change. The challenge is in strong communication and in keeping energy levels high. The low volumes in India make flexibility and lean manufacturing absolutely critical to our survival."

Mr. Khanna has set up work groups to involve every employee in continuous improvement and to develop the natural synergies between different activities. Each group is responsible for a zone of logically linked production operations and includes all the functions that need to work together to ensure efficiency.

India has been a challenge in other ways. "The infrastructure just does not support us in the same way that it would in a more industrialized region," Mr. Khanna says. "The reality is that we have had to solve many problems ourselves."

That includes delivery supply, a sophisticated air-quality management system, power generation facility, and private telephone network that allows the plant to communicate with others via satellite and mobile phones.

Arguably the most-appreciated improvement is the well-manicured plant grounds, which include an extensive Japanese garden. Not only are local families happy to have workers employed in such pleasant surroundings, but the grounds are equally pleasing to Toyota executives who visit on a regular basis, taking DMS ideas back to Japan to upgrade suppliers there.