EXECUTIVE SUMMARY:
Al-Ghazi Tractors Limited was incorporated on June 26, 1983 at Lahore.The area of factory, at D.G.Khan, is 100 acres approximately. It uses the product design of “FIAT” of Italy. The main purpose of the company is assembling and distributing of Fiat Tractors. They assemble two models of tractors i.e. 480-S and 640. The depletion rate of 480 is 85% and 640 are 76%.
Forecasting entirely depends upon the marketing department. Previously 98% of sales was made by contract with ADBP but now it is carried out on net cash payment basis. Because delivery through ADBP has been stopped. Highway method is used for transportation purpose.
To reduce inventory level they adopt safety stock method. They have different lead-time for different suppliers. Al-Ghazi Tractors Limited also use ABC analysis for managing inventory. Al-Ghazi Tractors Limited has a separate quality control department. The laboratory is well equipped to under take chemical and mechanical testing of metals. Al-Ghazi Tractors Limited has received the ISO 9002 Certificate.
INTRODUCTION OF THE ORGANIZATION
Al-Ghazi Tractors Limited was incorporated on June 26, 1983 at Lahore.They started operations in September 1, 1983. They started their production at D.G.Khan Auxiliary Plant in February 20, 1985.
A Joint Venture of PACO and Habib Group, NDFC and Fiat of Italy controlled management from September 1983 to August 1990. It was incorporated as a public limited company with an authorized capital of 100 million divided into 20 million shares of Rs. 05 each.
The joint project was first of its kind in pakistan in the line with govt policy of private sector partcupation in nation’s building program of high priority. Both public and private sectors worked together upto 1990 and finallyl Al Ghazi Tractors limited was nationalized in the same years.
Al-Ghazi Tractors Ltd. is rated among the Top Companies of Pakistan & has been the market leader of tractors in Pakistan Al-Ghazi consecutively for the years 1994, 1995 and 1996 by the Karachi Stock Exchange. Al-Ghazi Tractors was conferred the Management Excellence Award by the Management Association of Pakistan for demonstrating the best Corporate Performance in the Engineering Sector of Pakistan for the years 1995 and 1996. Al-Ghazi Tractors is the first Company in the Automobile sector of Pakistan to have achieved the highest quality award “The ISO 9002” registration that gives Al-Ghazi Tractors Ltd. the international recognition as Producers of Fiat and New Holland Tractors.
With a strong dealer-network dotting the country form Karachi to Gilgit with over 300 service workshops to attend to the 100,000 Fiat Tractor Models 480-S and 640 and newly introduced model New Holland operating in the country. Al-Ghazi Tractors today is the market leader with bookings exceeding 50% of the total tractors market in the country. The company is capable of producing 15,000 tractors on a single assembly line.
PRIVATIZATION
Al- Ghazi Tractors Limited was privatized on December 9, 1991 according to the new policy given by Nawaz Sharif government and it was taken over by a forgien investor Al-Futtaim of Dubai.
Now, the Al- Futtaim group owns 54% of Al-Ghazi tractors limited.s shares where as FIAT held 42% of shares and 5% of shares are held by the employees in the local market.
TECHNICAL COLLABORATION WITH ITALY
FIAT has joint hands with Al-Ghazi Tractors Limited to fully furnish know-how and modern technoloogy in the manufacturing tractors as well as their components so that the company does not rely on imports thus saving foreign exchange of country.
Al-Ghazi Tractors Limited is backed by FIAT technological expertise and has full support of italian government who are providing grants for assistance in the shape of personal training in pakistan.
MISSION STATEMENT
“ OUR ENDURING COMPETITIVE EDGE IS THE QUALITY OF OUR TRACTORS”
MAIN OBJECTIVES OF AL-GHAZI TRACTORS LIMITED:
Keeping in view the economic and structural conditions of Pakistan & the firm’s missions the company has formulated the following objectives:
To reduce the expenditures in foreign exchange.
To increase employment.
To fulfill the government policy of promoting industrialization in the remote areas of the country.
Contibution towards national self-reliance in engineering industry.
To be able to satisfy customer’s needs of buying locally assembled vehicles.
To achieve the production capability so that the cultivator may det his tractor readily.
To pay sepacial attention to the quality of the finished products to get customer satisfaction.
To provide prompt and effective after sale services and tactical advice together with adequate supply of spare parts.
To achieve maximum localizaton of components .
ORGANIZATIONAL STRUCTURE
Organizational structure of Al-Ghazi Tractors Limited is that both chairman and CEO are appointed by the Board. The board appoints CEO for running of day to day matter of business in line with the company’s policy and delegation of athority table.
Vital functions of board are the establishment of company objectives and approval of annual budget.CEO is also responsible for the corporate strategy and the formulation of long and intermediate term plans and programs. The CEO privides an integrating function for the entire organization. He gives the organization right direction and purpose. For better survival and growth, group decision making through committees and meetings is a common practice of Al-Ghazi tractors limited.
The organozational structure of Al-Ghazi Tractors limited is split into 5 functional areas;
Personnel and administration
Finance
Material management
Plant and production
Marketing
chart
MAIN OFFICES:
Main offices of the company are located in Karachi, Dera ghazi khan,Lahore, & Multan, where as regional offices are located in Nawabshah, Sukhar, Islamabad, & Peshawer.
Karachi office:
Karachi office is registered head office of the company.
Functions:
Material management
Finance
Personnel & administration.
LAHORE OFFICE:
It’s major function is marketing the product of the company.
MULTAN OFFICE:
It’s major functions are :
Marketing
After sale service.
warranty activities
provision of spare parts to lower punjab area.
LOCATION
The location of facility involves the committment of resources to long range plans. Locations take on even greater significance because those plans represent the basic strategy for assessing markets and may have significant impact in revenue, cost and service level to customers and clients. Technological constraints eliminate most of possible locations. Location of industry is selected on the basis of:
Availability of inputs to products or raw materials on cheap prices and
maximization of profits.
Proximity to potential customers to be served.
Proximity to required labor for performing the operations.
In plant location objective is to minimize the sum of all costs, not only current
but also long term costs.
LOCATION OF AL-GHAZI TRACTORS LTD.
The location of Al-Ghazi Tractors Ltd. is about 12 kilometers on main Sakhi Sarwar Road from Dera Ghazi khan in the South Punjab. Total land area covered by the plant is approximately 100 acres.Plant is located at about 30 acres whereas the colony is spreaded over 70 acres of land. AGTL select D.G.Khan because Govt. gave option to AGTL to select either D.G.Khan or Khushab. Both were tax free zone. The location had been selected in early 80’s during the period of late President Of Republic Of Pakistan Gen. Zia-ul-Haq when it was declared free industrial zone for five years.Plant was inaugurated by Lt.General Saeed Qadir on jan 11, 1984.auxilary plant started it’s production on february 20, 1984. the main plant started it’s production on april 01, 1985.
FACTORS
Due to following factors the plant was selected at the above location.
TAX FREE ZONE
To promote the back-word areas of Pakistan certain areas were announced as tax free zones in all provinces. The district of Dera Gazi Khan was one of them. Habib and group decided to establish a tractor factory in this region. A factory “Al-Ghazi Tractors Ltd.” was established by joint venture of PACO, HABIB GROUP, NDFC, and FIAT of Italy in September 1983.
FAVORABLE LABOR CLIMATE
The labor plays an important role in the selection of the labor-intensive company. So the selection of this location was also favorable labor for construction of the factory.
TAXES AND REAL ESTATE COSTS
One important factor was that the real estate’s cost was too much lower as compared to other areas of the country. That was the other main reason for the selection of the site.
CONSTRUCTION COST
The major cost involved in any organization is in the shape of the construction costs. That took a large amount. But at that time the labor was available at the cheaper rate. Due to which the site was selected at that place
PROXIMITY TO MARKETS
It is located in the district Dera Ghazi Khan of province Punjab whose boundaries attaches to all four Provinces of Pakistan, especially the most fertile areas of Province Punjab and Sindh. So, it has more proximity to the market, as Dera Ghazi Khan and Multan Divisions are famous of being Cotton Belt.
AVAILABILITY OF UTILITIES
The basic utilities are easily available at the place. The facility of fax, electricity, Sui Gas and telephone was provided by Govt. at that time to encourage the partners to establish plant there. So these utilities proved much helpful to contact with the global market at every moment is a key to success. The transportation facility is easily available at factory place.
FACILITIES PROVIDED TO ATTRACT THE EMPLOYEES
AGTL has the following facilities for his staff. Which are considered to be important.
1-HOUSING FACILITIES
It is having housing facilities for 126 family homes and quarters for executives and workers. The population of the staff colony is approximately 500.
2-MOSQUE HOSPITAL AND SCHOOL FACILITIES
There is a Mosque, Hospital with ambulance and AGTL primary school for the children of staff residing in the colony. AGTL is having a school bus for pick and drop services to school and college for the children of staff studying in Dera Gazi Khan City.
3-UTILITY FACILITY
Clean water supply with U.V filter and private electric generator for Un-interrupted power supply for the staff because the weather in summer is much hotter here.
4-RECREATION CENTERS
Recreation centers for executives, workers, children and ladies with indoor games TV, Videos, Dish Antennas and other facilities are available at AGTL staff colony.
EMPLOYEES
There are 536 employees which, are working in the factory.
DEMAND FORECASTING
“A forecast is the prediction of future events used for the planning purposes”
.
Forecasting has an important role in scheduling all the operations of the organization. Forecasting is based on qualitative as well as quantitative methods. Management needs accurate forecasting of demands to make schedule of all operations and to cope with lead-time of different and reduce inventory levels. Accurate forecast allows schedulers to use machine capacity efficiently, reduce production times, and cut inventories.
FORECASTING TECHNIQUES
There the four forecasting techniques are available for the purpose of the forecasting of the demand, which are as under.
Qualitative techniques
Sales Force Estimate
Executive Opinion
Market Research
Delphi Method
Quantitative techniques
Causal Techniques
Regression
Correlation
Time Series Method
Naive Method
Simple Moving Average
Weighted Moving Average
Exponential Smoothing Method With trend & Seasonal Effect
FORECAST AT AL-GHAZI TRACTOR LTD.
There is no forecast method at Al-Ghazi Tractors Ltd. The advance booking period is normally six months. So, Head Office, Karachi, sends monthly production schedule to the factory according to the number of bookings. Al-Ghazi Tractors Ltd. has a strong dealers network from Karachi to Gilgit at the district level but the sale is done through ADBP. The bank prepared the draft and send to AGTL for booking. The plant is capable of providing 15,000 tractors per year. Whatever the demand is fulfilled by producing that required amount of tractors.In year 1999-2000 , the firm produced 18000+ tractors utilizing over time to meet the orders out of which 16366 were 480-S & 2049 were 640.
FACTORS AFFECTING DEMAND
There are two main types of factors affecting the demand of the tractors.
External factors
Internal factors
External Factors
Following are the external factors that affect the demand.
ADBP’s loaning policies and procedures
Climatical disasters such as floods
Changes in govt. laws, regulations, polices and tariff structure.
Economics conditions of the country
Supply constraints of local and CKD components.
Internal Factors
These factors are listed are follows
High manufacturing cost and selling expenditures
Promotion Policy
Lack of professionalism in dealerships.
PRODUCTION AND CAPACITY
CAPACITY
Production is essential for any organization’s continued existence and society’s well being General Manager (plant) is responsible for managing production and all its allied activities.
The main features of production management at plant are
Efficient execution of required production
Maintaining quality in accordance with FIAT specification and standards.
Producing goods at economical cost.
Total capacity of plant is 15,000 tractors per annum. Full scaleProduction of FIAT tractor models 480-S and 640 commenced from April, 1985. The plant operates on high efficiency because assembly operation wastes are negligible. The optimum production level is 10,000 tractors and Al-Ghazi Tractors Limited is now having 50% market share. Al-Ghazi Tractors limited is using effective capacity i.e., maximum out put under realistic conditions and it implies one-shift operation.
PRODUCTION DATA
MODEL YEAR | 480-S | 640 |
1993-94 | 3686 | 1861 |
1994-95 | 4400 | 2015 |
1995-96 | 4415 | 2202 |
1996-97 | 3841 | 1098 |
1997-98 | 5375 | 913 |
1998-99 | 10012 | 2188 |
1999-2000 | 16366 | 2059 |
INVENTORY MANAGEMENT
“Inventory is a stock of anything held to meet the future demand”
Al-Ghazi Tractor is manufacturing organization, the management gives more emphasis on raw material inventory and mostly inventory is held in terms of input products and raw material. Most of the inventory is treated as dependent demand for the assembling. Here there is a separate Material Management department.
MATERIALS MANAGEMENT
“Materials management concerns short range decisions about supplies, inventories, production level, staffing patterns, schedules, and distribution”.
Decisions in these areas affect the whole of the organization, either directly or indirectly.
CENTRAL ROLE OF THE MATERIALS.
As the AGTL is a manufacturing organization so they need the input material for the purpose of the production of tractors from the vendors in country as need as well as the foreign countries. This material takes round about the 80% while staff takes 20% of the resources of the organization.
The other reason is the impact of inventory on the profitability of the organization. As on keeping more inventories the organization has to bear much more holding cost.
FUNCTIONS OF THE MATERIAL MANAGEMENT
The Sales, Vendor Development, Purchasing, Production Departments are tied collectively to perform the functions relating to the materials. The Sales Department makes the forecasts of the month, on the basis of orders paid by Agriculture Bank of Pakistan. Then these are send to the production department, then Production Manager makes the monthly production plan, then depending upon the production, they need the raw material which is asked by Sales Department to the Purchasing department, then this department makes the required purchasing plan. This plan is made for the purchase from the inside as well as from the foreign countries. The purchasing is made according to documented procedures of ISO 9002 standards discussed in ISO 9002.
OBJECTIVES OF INVENTORY MANAGEMENT
Following are the objectives of the inventory management system.
To minimize cost
To maximize profits
Reducing the possibilities of stock out
Continuity in the production system
To avail discounts
TYPES OF INVENTORY MANAGEMENT
The inventory can be divided into two broad categories.
Raw Material Inventory.
Finished Goods Inventory.
RAW MATERIAL
The company needs raw material for the purpose of the production by the company can divide the items, which come under the raw material, into two broad categories.
a) Imported material
b) Local material
1). IMPORTED MATERIAL
The main items, which are imported by this company, are the gear cases and Engine and the critical items, which are necessary for the purpose of the production by the company. The company imports these items from Italy, Turkey.
The raw material fall under this category for
Model 480-S is 15%
Model 640 is 24%
2). LOCAL MATERIAL
AGTL is having 359 vendors from all over the Pakistan. These vendors are responsible for providing the high standards products to the AGTL. This contains the main portion of raw material. These are also categories according to the Models
Model 480-S 85%
Model 640 76%
REORDER POINT
At any time the raw material of 200 tractors is present in the factory premises. Whenever the material falls below it a fax is sent to Head Office for more raw material. The reorder point in the company is the raw material of 200 engines of the tractors.
LEAD TIME
Local suppliers
Vendors from Lahore area have lead-time of 10 days.
Vendors from Karachi area have lead-time of 30 days.
Foreign suppliers
Lead-times for foreign vendors from Italy and Turkey have usually 6 months.
METHODS FOR INVENTORY MANAGEMENT AT AGTL
ABC PLAN FOR INVENTORY
AGTL uses ABC, system that is the process of dividing items into three classes according to their Rs. Value and usage.
Category A:
A category includes those items that require largest money investment about 80 % of the overall investment while they account for only20 % only. It requires continuous review of the items included.
It includes the following items
1). Engine of tractor
2). Gear box of tractors
3). Imported items
Category B:
B category is the second important category includes those items that require second largest money investment about 15 % of the overall investment while they account for only 30 % only. It requires periodic review of the items included.
It includes the following items
1). Items used in transmission
2). Nozzles
3). Tires
Category C:
The last category is C category includes those items that require least money investment about 5% of the overall investment while they account for 50 % of all items. It includes items, which are prepared by local vendors.
Quality PolicyIn Al-Ghazi quality is a dynamic state associated with the products, services, people, processes and environment that meets or exceeds the expectations of their customers and it is a strong edge on the basis of quality against the competitors. There is well-established Quality Control department in the company that assures quality by incorporating other departments.
DEPARTMENTS
There is well-established setup to ensure quality in the company. The following departments are directly concerned with quality assurance in the company.
Quality Control department.
Purchasing department.
Inspection department.
Production department.
Vendor development department.
There is a strong integration of all the departments to make assurance of quality at the every stage of whole the process starting from purchasing to final inspection of finished products.
QUALITY CONTROL IN PURCHASING
About 85% parts of 480 model and 75% of 640 model are obtained from local vendors while the remaining parts are imported from Italy. For local parts the Vendor department gives drawing and material specification to Vendors. Samples are obtained from them and are sent to well establish Material & metallurgical Laboratory, which is situated in the plant for calibration of, required specification of the part and strength of the material. If the results are up to mark then ordered are placed to them. Otherwise engineers of the company assist them in solving the problems relating to strength and specification of the part.
The purchased parts are inspected in the company and Karachi where company’s headquarter is situated, by taking sample among them on the following criteria.
13 out of 100 items.
32 out of 200 items.
The specification of the items, quality and the strength of material of materials used in parts are checked by material and metallurgical engineers in the laboratory. If the items are 2% of the total sample are defective than the whole lot is not accepted. Then all the items are checked and cost of checking and inspection of these items is beard by the vendors and all defective items are replaced and repaired by the vendors. If defective items are less than 2% than all defective
are replaced and repaired by the vendors.
AL-GHAZI TRACTORS LIMITED D.G.KHAN
Quality Control Department
Sampling Plan
0.65
1.5
04
6.5
LOT SIZEACCEPTANCE QUALITY LEVEL
N | K | R | N | K | R | N | K | R | N | K | R | |
2-10 | % | % | --- | % | % | --- | 03 | 00 | 01 | 02 | 00 | 01 |
9-15 | % | % | --- | % | 00 | 01 | 03 | 00 | 01 | 02 | 00 | 01 |
16-25 | 20 | 00 | 01 | 08 | 00 | 01 | 05 | 00 | 01 | 08 | 01 | 02 |
26-50 | 20 | 00 | 01 | 08 | 00 | 01 | 13 | 01 | 02 | 08 | 01 | 02 |
51-90 | 20 | 00 | 01 | 13 | 00 | 01 | 13 | 01 | 02 | 13 | 03 | 03 |
91-200 | 20 | 00 | 01 | 13 | 00 | 01 | 13 | 01 | 02 | 13 | 03 | 03 |
201 & ABOVE | 32 | 01 | 02 | 32 | 01 | 02 | 32 | 03 | 04 | 32 | 05 | 08 |
AQL FOR MACHINE PART = 1.5
AQL FOR CASTED PART = 6.5
N = # OF SAMPLES FOR INSPECTION
K = ACCEPTABLE LIMIT
R = REJECTED LIMITED
AQL FOR HARDWARE 0-200 = 05%
AQL FOR HARDWARE 201-500 = 03%
AQL FOR HARDWARE 501& ABOVE = 02%
AQL FOR HOOD ASSY. = 05%
LIST OF COMPONENTS ACCEPTED ON FITMENT/FUNCTIONAL TEST
Hudraulic lift
Steering box
Instrument cluster
Hood
Water body
Fenders
Self starter
Alternatos (generators)
Gear box
Axle casing
Oil sump
Piston
Gears
QUALITY CONTROL DURINDG WORK IN PROCESS
As the lot is accepted on the basis of sample and it may be possible that there are some defective items in the lot, due to this during the process on assembly line these defective parts are identified and than Quality Inspector or the employees working on assembly line separate them out and latter than these are returned to vendors.
The following are major activities/operations on the assembly line.
1) Gear box checking
2) Transmission
3) Coupling of Transmission with Gear box
4) Test Bench
5) Coupling of Engine with Transmission
6) First line
7) Paint shop
8) Second line
9) Final inspection
There is chained relationship among all above activities and operations. If one person fails to identify a defective item than the next one will identify it. The Quality Inspector is on the assembly line to check the quality of the items and to identify defective parts.
FINAL INSPECTION
In the last a group of Quality Inspectors examines the finished product. They check the paint and performance of tractors on the “Roller test” to check the gear, speed and working of the tractors. After it each and every tractor is checked on the road before the delivery. For this purpose meter reading is noted before and after the test. Each and function is checked in the Road Test. After it pre delivery test is completed.
CHART ?
TOTAL QUALITY MANAGEMENT
“Total Quality Management is an approach to doing business that attempts to maximize the competitiveness of organization through the continual improvement of the quality of its products, services, people, processes and environment”.
In Al-Ghazi Tractors Ltd. management has been taking the following steps for Total Quality Management.
1-EDUCATION AND TRAINING
The management has established a training center in the premises of the company for training to the managers and workers to increase the performance at every level. This improvement in performance is directed towards satisfying such cross-functional goals as quality, schedule, and others activities. Before audit of ISO 9002 implementation in the company all the employees who are concerned with quality were given training so that all the employees could understand all the documented procedures, authorities and responsibilities of each other in the company. Some managers were sent to different seminars and workshops to learn about ISO 9002.
Now a days the companies has introduced their new product New Holland tractor in the market. For this they are giving training to new hired employees about assembling of the tractor.
2-TEAMWORK
In Al-Ghazi there is strong existence of teamwork. These are the managed group of the employees doing their best competitive efforts to cope with the barriers, rivalries and distrust among different departments to improve the quality of the their products. In the company the employees have
3-CUSTOMER FOCUS
In Al-Ghazi all operations are directed satisfaction to both external or internal customers .The product produced, to the external customers is totally checked by the internal customers. The internal customers in Al-Ghazi check the quality of items, semi-finished goods during process because the work of one depends on the work that proceeds them.
OBSESSION WITH QUALITY
For obsession with quality the employees are trained from time to time to learn the philosophy “ how can we do better ” the suggestion given by the employees about quality are appreciated in the company.
SCIENTIFIC APPROACH
As the engine of the tractors are produced in Italy for Fiat and for New-Holland . From New-Holland Company which is a subsidiary of Fiat group. These both are operating 13 research and development centers located in Brazil, Belgium, Canada, England, India, and Italy, United States. Besides it both is directly operating 19 manufacturing centers and 26 sales offices around the world. These research centers are using scientific approaches to develop and modify their existing and new products.
CONTINOUS IMPROVENENT OF SYSTEM
The management of Al-Ghazi tractors Ltd. has taken many steps to improve their system in order to continually improve the quality of products and services. Employees are trained from time to time and new technologies are adopted. Recently company has introduced hydraulic pressure engine in their 486 and 640 models.
A new product New-Holland has been introduced in the market that is symbol of new technology.
EMPLOYEE INVOLVEMENT
Employees are involved in all the matters relating to quality, purchasing and other functions of the company. It results in good decision making and more effective improvement by bringing more minds to bear the situation.
PRODUCTION PROCESS
The process design in the assembly line of tractors consists of the following operations an activities.
Gear Box
Transmission
Coupling of transmission with Gear-Box
Test Bench
Coupling engine with transmission
First line
Paint shop
Second line
Final inspection
1-GEAR-BOX
Engines and many parts of the tractors are imported from Fiat manufacturers in Italy and Turkey. During the journey from Italy to the plant many parts of gearbox get loose. On arriving in the plant, during assembling certain operations are performed by technical individuals, are discussed as under.
CLEANING OF CASE FROM INSIDE
Here the case of gearbox is cleaned from inside because it is much effected due to dust. The dust is removed from inside the case by cleaning it with some dust-removing agents.
COUNTER SHAFT NUT TIGHTING AND STAKING.
Some parts of gearbox get loosed because of journey in ship and later on trucks. Here shaft is tightened and
some other items are assembled to it.
TRANSMISSION SHAFT COVERS TIGHTENING.
After counter shaft nut tightening next the transmission shaft cover is tightened
because of above reasons.
SPILTER TIGHTENING AND LOCK PLATE BENING.
After transmission shaft cover tightening a splitter of weight of 9.5 kg is fixed into the
Gearbox by tightening bolts and locking plates are bent.
v) CHECK POSITION OF MAIN SHAFT INNER AND SEAL AFTER INSERTION OF
P.T.O. SHAFT.
It is a final operation in the gearbox checking. Here it is checked and assures that our
shafts are on its right place or not, further corrective actions are taken to make it ready.
Then gearbox is totally sealed after insertion of P.T.O. shafts.
2-TRANSMISSION
The following are the operations that are performed during transmission.
i) CLEANING FROM INSIDE.
Here nozzles that are to be fitted into gearbox are cleaned. Others parts are also cleaned and
oiled.
ii) BEVEL PINION NUT TIGHTENING.
It is the second operation in transmission. Here the bevel pinion nut is tightened into the
gear- box.
iii) BEVEL PINION ROTATING TORQUE.
Bevel pinion rotating torque is cleaned and made ready for assembling into the gearbox.
iv) DRIVE HEAD TIGHTENING.
Drive is a separate part, which is later adjusted to the gearbox, is tightened with some of
other parts.
v) BEVEL DRIVE ROTATING.
Bevel drive rotating is cleaned and its specification is checked and is sealed by adjusting it
into the gearbox.
vi) BEVEL DRIVE BACKLASH.
Here the bevel drive is recoiled so that it is ready for coupling to gearbox and engine.
3-COUPLING OF TRANSMISSION WITH GEAR-BOX
Here gearbox and all other parts, which are prepared in transmission, are coupled and the following operations are performed.
i) GEARBOX WITH TRANSMISSION TIGHTENING.
Here gearbox is coupled with transmission by tightening that integrates them.
ii) FINAL DRIVES TIGHTENING.
Drive head, which is a separate part, is tightened into coupled gearbox and transmission.
iii) BREAK PEDAL ADJUSTMENT .
Here the position of break pedal is adjusted for both forward and back Tires with the engines.
4-TEST BENCH
Here the engine is checked to check that all its parts are at their its correct places or not,
further actions are taken later on.
i) OPERATION TEST.
Here the engine is checked by engintioning it and the performance of the engines are
checked to ensure its performance.
ii) CLUTCH TO FLY WHEEL TIGHTENING
Here the flywheel are checked and tightened strongly with the transmission.
iii) ENGINE WITH TRANSMISSION
Here the engine is combined with the transmission and bolts are strongly tightened.
iv) MASTER CLUTCH PEDAL ADJUSTMENT
Here the master clutch pedal is adjusted.
v) HYDRALIC LIFT TRANSMISSION TIGHTENING
Here hydraulic lift is fixed and tightening with transmission.
vi) LEVER TO STEERING BOX TIGHTENING
Here lever of tractor is tightening with the lever to transmission.
vii) FRONT AXLE SUPPORT TIGHTENING
The bolts of front axle are tightened to the transmission.
viii) DRAG LINK TO STEERING ARM AND AXLE TIGHTENING
Here small and big axles are tightened to transmission.
ix) CORRECT APPLICATION OF PROTECTION TO VARIOUS PARTS
Here different parts are checked and adjusted to their correct places.
5-PAINT SHOP
i) WASHING
Here to remove dust the body of engine , the body of the engine is washed with hot mixture
of hot water and chemicals.
ii) PRIMER
Here the body is make prepared for paint by allowing to remained in the hot air.
iii) PAINT
Here the steel body is painted in the “Paint Shop”.
6-SECOND LINEi) INJECT GREASE IN ALL LUBRICANTS
Here grease and other lubricant oils are injected to engine and moving parts of the tractors like wheel.
ii) ELECTRICAL SYSTEM
Here all electrical wiring system is built ion to the tractor a d a battery is adjusted in the
tractor. All lighting bulbs are put bonnets relevant places.
iii) ALIGNMENT OF STEEL METAL
Here the painted body of the tractor is aligned tom the engine and other body of the tractors.
iv) FRONT WHEEL TIGHTENING
Here the bolts of front line are tightened and also are injected grease to it
v) REAR WHEAL TIGHTENING
Here the bolts of the back wheel are tightened, and the inner parts are oiled with Mobil Oil.
vi) WHEEL ALIGNMENT
Here the front and back wheels are alighted and their bolts are tightened.
vii) OIL CHECKING
Here the oil levels are checked and fill oil to it and after it the final inspection is made.
7-FINAL INSPECTION
The following are the operations, which are performed during final inspection of finished tractors.
i) CHECKING OF OIL LEVEL:
Engine oil level checking
Gear Box oil level checking
Air cleaner oil checking
Water level checking
Weight test of Hydraulic pressure
ii) CHECKING OF OPERATING PARTS:
Clutch play tightening and sound test
Tightening of break L/H & R/H
P.T.O Clutch test
High, low gear sound checking
1-2-3-4 & reverse gear checking
break seal of L/H & R/H
Final drive tube leak
Differential case hole and sound checking
Gear box top cover leak checking
P.T.O top cover leak checking
P.T.O plate leak checking
P.T.O cover leak checking
P.T.O seal leak checking
Differential leak checking
Engine sound checking
Lift pump support checking
Automisophry support checking
Paint cover checking
Fuel engine pipe leak cover checking
Top hydraulic leak checking
High pressure pipe leak checking
Low pressure pipe checking
Steering plate leak checking
Steering loose/tight/free checking
Wheel alignment checking
Tie rood (rubber boot/pin) checking
640 fender & distance checking
Sheet metal (paint/welding/crack) checking
Grease checking
Tire’s air checking
Self starter checking
Leaving box checking
ELECTRICAL LIGHTING SYSTEM CHECKING :
Parking lights checking
Parking indicators checking
Neutral switch checking
Head light low checking
Head light high checking
Beam indicators checking
Oil pressure checking
Alternate light checking
Alternate junctions checking
Fan belt (extension/loose) checking
Fuel gauge checking
Temperature gauge checking
Main wire clip checking
Back lights checking
Horn checking
Yellow lamp checking
Fuse box checking
Wire fitting checking
All body paint checking
Sheet metal checking
DISTRIBUTION FUNCTION
The distribution function is the part of the marketing department and its activities are as follows.
Booking of tractors
Delivery of tractors
Handling of payments
Preparation of reports for MIS
Close co-ordination with production and material management department.
1-BOOKING OF TRACTORS
There are two types of tractors bookings i.e., against ADBP loans and cash bookings are registered with the company either by customers over the counter or through dealership network. 90% booking’s are being entertained through dealers.
2-DELIVERY OF TRACTORS
On the delivery side prime functions is to obtain information form Material Management so as to ascertain the availability for tractors. After the availability of tractors delivery scheduled is circulated to the dealers by the way of intimation letters to customers.
3-HANDLING OF PAYMENT
If the tractor is ordered on cash basis then it is immediately delivered to the customers from stock that the company holds but if they put to loan order such documents are passed on to the payment handling section where the sets of documents are submitted to ADBP, bank drafts for its encashment in accordance with prevalent Agriculture Bank procedures.
4-SERVICE FUNCTION
The function of this department is to look after products and their after sales service. This department is not a profit oriented department. Its operations are directed towards cost savings, which are conducted in a business like manner. It provides prompt and satisfactory after sales service to the customers.
5-PARTS FUNCTIONS
The aim and objective of Parts Department is to ensure availability of all necessary imported and local parts for the ease and convenience of the end user.
ISO 9000
ISO 9000 is quality system standards and are the highest criteria of quality in the world. Many companies in EC, Arab countries, USA and other countries are now demanding ISO 9000 registration from the suppliers around the world. Approximately 45000 companies around the world are ISO 9000 certified. ISO 9000 is effecting industry and business in every sector. Due to the importance of the ISO 9000 many companies in Pakistan have started their journey on the certification.
ISO 9000 IN AGTL
AGTL is the first company in the automobile industry of Pakistan who has achieved ISO 9000 quality award. The ISO 9000 registration gave AL-Ghazi Tractor Limited the international recognition as producer of FIAT Tractors.
REASONS FOR OBTAINING ISO 9000
To maintain the world class standard of Fiat.
To produce quality confirmed tractors.
To determine all steps in the production so that it can be identified and corrected.
To have quality control over the purchases from the vendors to all over the Pakistan.
To have an effective internal audit to identify mistakes and takes corrective actions.
To be automobile leaders in Pakistan.
To expand the market to the other nearest Asian countries.
ISO 9002 IMPLEMENTATION IN AGTL
The customers of every organization in response to new global competitive environment have become more quality conscious. Now due to it some of your customers might already asked you about the ISO 9000 series quality standard and your attention in this regard. Now a-days, no matter what business you are in, you will be eventually be asked, “Are you ISO certified” by your customers. Now a days in the World, just about every business, from the large multinationals to the local organizations have pursued or pursuing certification to satisfy and win the hearts of their customers.
In Pakistan about 90 companies have still certified ISO 9000 that is a positive indicator as it laying a foundation of Quality Management in the companies. Its nice to see so many companies achieving ISO 9000 registration the growth is extraordinary. Al-Ghazi Tractors Ltd. the market leader in tractors in auto industry is the pioneer in getting the highest quality standard of World ISO 9000 in Pakistan. The management and employees have taken it a real challenge to integrate the Quality Management into their business operations as an essential part of their work.
MANAGEMENT’S RESPONSIBILITY
OUR QUALITY POLICY:
“OUR MOST ENDURING COMPETITIVE EDGE IS QUALITY OF OUR TRACTORS”
RESPONSIBILITY AND AUTHORITY:
The quality control program with in Al-Ghazi Tractors Ltd. has been established at the direction of the Senior Management due to demand of quality as a competitive edge in Auto Industry. The responsibility for development and integration of the quality plan resides within the quality control operation. The responsibility for execution of the quality program is delegated to the Production Manager. The Production Manager has delegated responsibilities to all those who are concerned with quality. Responsibilities and authorities in the company have been documented.
Quality control has the organizational freedom and authority to initiate action to prevent the occurrence of non-conformities, record problems, initiate corrective actions, verify solutions, and if necessary, stop those processes until such time as they fully comply.
The Quality Control Manager has the responsibility for overseeing, incoming material inspection, work in-process test, final inspection, and statistical techniques in conjunction with the production departments.
Independent personnel are trained and appointed by the quality control department, perform the quality audits and can audit any area from which they are trained and appointed.
RESOURCES
The management of Al-Ghazi has designated appropriately trained individuals, to meet all the requirements of the quality program. Quality control department has approved personnel performing the quality inspections. The employees who are concerned with quality in the company have been trained to understand and maintained the quality policy of the company.
There are documented job descriptions that define authority and responsibility for quality operations.
There are trained employees have been assigned to internal audit activities and audit reports are transmitted to senior management.
The trained engineers and employees of Materials and Metallurgical laboratory to verify and inspect the conformance of incoming raw materials and products against the design specifications that is managed and overseen by quality control department.
The trained engineers and employees of Quality Control department and Production Department perform In-process inspection, final inspection, and functional testing that ensure conformance to product design specification.
MANAGEMENT REPRESENTATIVES
The Production and Quality Control Mangers are responsible for insuring that the ISO 9002 requirements are met as well as all other customer requested requirement. It is also the function of the quality control manager to provide regular feedback on the status of the quality system and its progress. This is accomplished via reports on those measures reflective of the quality system.
The Quality Control Manger also acts as the primary communicator with reference to any outside bodies affecting the quality system.
MANAGEMENT REVIEW
From time to time the Quality Control Manager reviews the quality system’s methodology and its application to the ISO 9002 Standard. Revisions to the manual and quality system is made as required to guarantee the quality of the product, services, and the needs of the company.
The Upper Management and staff conduct regular reviews of quality issues. These documented reviews are used for further corrective plans.
QUALITY SYSTEM
In Al-Ghazi Tractors Ltd. the quality control program is a formally documented system of planned activities established to provide evidence of compliance to the requirements of applicable regulation, codes, standards, contractual specifications, drawing, ISO 9002, as well as the company quality policy.
All of these activities are governed by procedures and written instructions supported with records of training and satisfaction compliance of products and processes.
QUALITY PLANNING
The quality manuals and all the supporting departmental procedures are referred to as the quality plans. The preparations of these plans are responsibility of the Production Department and Personnel Department and they maintain them in conjunction with senior management review.
CUSTOMERS ORDERS
The firm maintain a documented system with appropriately maintained records to ensure the appropriate review of the customer’s orders. This ensures that the order is well understood by both parties and we have the capability to meet the requirement. These procedures require agreement prior to the acceptance to the order. It is the responsibility of the sales organization to ensure a comprehensive documented integration of this requirement exists.
AMENDMENTS TO CONTRACTS
The organization maintains procedures for the processes used to amend a customer requirement to ensure compliance with the request.
RECORDS
The customer orders (contracts) shall be maintained by the sales department for the duration of the warranty period plus one-year unless otherwise requested by the customer. Documented procedures exists to support the retention of these records.
DOCUMENT AND DATA CONTROL
At Al-Ghazi Tractors Ltd. the management has established document and data control procedures for the collection, maintenance, and distribution, one of key requirements of ISO 9002 implementation. It is the responsibility of each department to follow the established procedures for the collection, maintenance, and distribution and control of all the documents, instruction, and data in their operations to meet the intent of the ISO 9000 standard.
In Al-Ghazi following documents are maintained and controlled.
Policy Documents
Quality Manuals
Operations Procedures
Quality Procedures
Specifications of materials
Inspections & Test Criteria
Process Technology
Quality Plans
Work Instructions
Storage
Handling & Maintenance Instructions
Quality Audit
Training Document
DOCUMENTATION APPROVAL AND ISSUE
All departments in Al-Ghazi have established the procedures and maintenance of the documents. Documents and Instructions are established to handle and avoid a lack that could adversely affect the quality of the process, product, or services provided by the operation.
A master revision listing of the documents of the vendors is maintained and issued by the quality control department at the end of each month to Vendor Development Department for further purchasing decisions. It is the responsibility of the all departments to ensure that only current documents are available for usage. Obsolete documents must be promptly removed by the department and adequately identified as available for reference only.
DOCUMENT CHANGEPrior to the issuance of any new procedure/instructions/documents approval is required from the Upper Management. To upgrade a document related to quality, the quality control department required to provide a new revision about whether it is possible and feasible or not. When making changes, it is required that the changes from the previous instructions should be highlighted to ensure the proper changes are readily implemented. All of the department are informed and provided with attested copies by the concerned manager and upper management, with modified or upgraded documents for information and implementation.
PURCHASING
Providing the best quality products require best raw material that meet certain required specifications. It is the most important function in ISO 9000 standards implementation requirement. The purchasing department plays an important role in that it makes documented policies about the purchasing. In Al-Ghazi Tractor Ltd. the purchasing department situated in head office has established and maintained a documented process with appropriate records that ensure the purchased products meet defined specifications.
EVALUATION OF THE SUPPLIERS
The purchasing department has established documented procedures with the co-operation of quality department by which supplier are selected. Their selection incorporates at least three considerations in the following priority:
Their ability to deliver material that meets the product specifications.
The evaluation of the quality of the products by quality department to ensure that consistent and desired quality and delivery requirements are met.
A cost competitive delivery of the material.
The purchasing department in conjunction with the quality control department determines the methodology employed to ensure the receipts of the appropriately conforming materials. The purchasing department in conjunction with the inspection of incoming materials maintains records of the supplier’s performance. The purchasing department only purchases materials from approved suppliers/vendors. It is the responsibility of the purchasing department to establish and maintain procedures for the generation of an acceptable supplier listing. The listings of approved suppliers must have the approval of the quality control department.
PURCHASING DATA
The purchase orders provided to the suppliers contain appropriate information about standards, specifications, and drawing testing criteria of the company packaging, delivery schedule, mode of transportation.
VERIFICATION OF PURCHASED PRODUCT
The purchasing department has defined the documented procedure how they will ensure that all materials introduced into the operations have undergone a review for conformity. The purchasing department looks and checks the materials by commodity grouping according to defined inspection routines for each commodity.
PRODUCT IDENTIFICATION AND TRACTABILITY
There are procedures for proper identification and documentation of materials it is understandable and can be recognize by all the individuals in the factory. The items and products are assigned numbers for identification that are stored in cases, by the material handling and storage department. These procedures incorporate intractability of the items, components and semi or finished goods along with the appropriate recording of status of batch.
PROCESS CONTROL
This includes operating instructions for all department and employees that affect quality. Specific work instructions and procedures have been defined and documented where there is a lack that adversely affect quality, it includes.
Documented work instructions / procedures that define the manner of production, installation and servicing.
Use of suitable production and installation equipment.
Suitable working environment.
Compliance with referenced standards / codes and quality plans.
Monitoring and control of suitable process and product characteristics during production.
Approval of process and equipment as appropriate.
There is suitable maintenance of equipment to assure continued capability & capability.
Specific training and instructions are given to employees to understand and retain specific records for these special processes.
For employees it is recommended that they follow the assembly line instructions flow-charting method.
INSPECTION & TESTING
In Al-Ghazi Tractors Ltd. there is a well-established computerized Material and metallurgical laboratory in the plant where operations are performed to check the strength and the appropriate specifications of items.
All procedures and activities affecting testing are overseen by quality control and their signature on the proposed procedure is required to the Hovel Card which is attached with gear box and it remain with it until the compelition of the product.
INSPECTION AND TESTING OF RECEIVING ITEMS.
At Al-Ghazi it is responsibility of inspection department to ensure that no material can be used until they can verify compliance with the specified material requirements. The inspection is carried out in Material and metallurgical laboratory by taking a sample from the lot and according to the documented inspection procedure. Quality control engineers approve the testing procedures.
WORK IN- PROCESS INSPECTION AND TESTING
The production department is responsible for work in process inspection and testing. At Al-Ghazi Tractors Ltd. the production department has generated a comprehensive inspection and test plan. This testing plan is based on documented testing instructions. No materials may bypass these inspection plans or continued to be processed without successful completion of the test and inspection requirements. For this purpose many quality inspectors have been assigned on the assembly line. On assembly line the output of one is the input of other one, due to this there are less chances of bypassing a defective item.
FINAL INSPECTION AND TESTING
The production department has generated a comprehensive inspection and test plan that ensures that all defined testing requirements are met. In the last a complete testing plan is formulated to ensure the quality and conformance of the final product. No product may by pass until the final inspection.
INSPECTION AND TESTING RECORDS
A Hovel Card moves on assembly line from beginning to the end. Each observation and testing made by any person is checked and he signed on the card. If any person commits any mistake he is the responsible for it
CONTROL OF INSPECTING, MEASURING AND TEST OF EQUIPMENT
Being a engineering work in the factory, all of work is performed through machines and equipment’s. Quality and Inspection departments in Al-Ghazi Tractors Ltd. have established and maintained documented procedures to select, control, calibrate and maintain inspection, measuring, and test equipment used to demonstrate conformance of the product or items. These devices include measurement tools, gauges, or any other “device” used to ensure conference.
The devices, machine is assigned to the appropriate individuals who knows how to make it run. or this the employees are properly given training so they are able to handle the instruments for security purposes. History of the equipment is maintained and whenever it become out of order, it is repaired properly to avoid further errors.
CONTROL PROCEDURE
All the devices are used on a schedule based on usage or duration of time. The schedule has been scheduled in such a way that the all the operations in factory are not affected. Documented inspection procedures exist for the calibration of equipment. That includes maintenance, duration between recalls, as well as the actual testing for which the device is being used. No unauthorized person can make changes in the devices.
INSPECTION AND TEST STATUS:
Production department has established documented process with procedure for ensuring that all materials / products carry a test status. The incoming materials or items are checked by Inspection department, after successful checking they paste a material transfer tag designating transfer for acceptable materials, if the material is not up to the mark than a further tag is pasted on the lot for further decisions.
The work in-process inspection stations demonstrate compliance on HOVEL CARD on which each person who performs a particular activity sign about the conformance and specification of or item used. On assembly line there are many inspection stations where quality control inspectors are assigned that checks the progress and quality of process as well as material used.
Final inspection is done by a group of quality inspectors and it validates the existence of all prior inspection against the check sheet as well as the test data and sign of on acceptance. This check sheet acts as the quality records.
NONCONFORMING PRODUCT REVIEW AND DISPOSITION
When a material is found to be defective/nonconforming then according to established procedures are placed for appropriate disposition. Quality department initiates the authority for disposition of products. By taking a sample from the lot the inspection department checks the specification of the product. If it is up to mark than it is accepted. If not than further actions are taken thorough investigation of the defects, the result of which can fall into the following categories.
Reject the lot.
Check whole the lot on the expenses of suppliers.
If less than 20 % lot is defective accept non-defective parts.
If more than 20 % than reject the whole.
All decisions by the Inspection department results from an investigation of the material specifications. Any compromise to the material will require notification of the affected parities.
CORRECTIVE AND PREVENTIVE ACTION:
All departments in Al-Ghazi Tractors Ltd. have established and maintained procedures for implementation of corrective and preventive actions. It is the slogan of the company that:
“We always take corrective actions not just corrections”
These non-conformities are collected, analyzed, and than with root-cause philosophy they are corrected. Safety issues have received top priority and immediate allocation of resources. In all cases where a corrective or preventative action is employed, a record of the changes made shall be recorded and the record is maintained for further actions.
1-Corrective Action
A corrective action results from a customer, employee of factory or a report of a product nonconformance. The sales department maintains a documented process by which the complaints are complied, analyzed, and corrective action are taken. A report is generated to Senior Management about complaints made by the customers for the solution. Corrective actions are than taken by the management after reviewing the situations.
2-Preventive Actions:
A preventive action is taken on the information indicating a nonconformity within the operating process that affects quality. These information are gathered by way of internal audits, quality records, yields shortfalls, service reports, customer complaints, employee’s indication or any other areas indicating process failures. The quality department than takes action for the prevention of such failure/shortfalls in the future. The quality control department maintains documented processes by which the shortfalls are complied, analyzed and preventive action initiated and tracked. This prevention action is addressed not only the root causes but also the application of controls to ensure its effectiveness. Senior management reviews a report of the corrective and preventive actions.
HANDLING, STORAGE, PACKAGING, PRESERVATION AND DELIVERY
There is separate department for handling and storage of all the input materials has established and maintained documented procedures for the handling, storage and preservation all input products.
1-Handling
There are appropriate trained employees to ensure the proper and safe handling of materials. All forklift drivers are trained to operate the lift.
2-Storage
When an item or product come in the premises the employees put them to large case which contains their identification number and name of that commodity. There are appropriate trained employees in the handling and storage department that ensure the proper and safe handling of materials. All materials are stored to prevent deterioration as well as support easy retrieval for usage. It is the company’s policy to follow a “first in first out” inventory policy and all material storage procedure is accommodate to this policy.
Those materials that are sensitive to environment like it is very important to make safe the engine from dust the engine is kept remained within the case in store and it is not place openly. All the material is properly handle, continually monitor, and removed if inappropriate. All other materials are monitored at regular intervals to detect deterioration.
Receipts for storage and dispatch of materials from storage and handling department are issued and received by authorize persons.
3-Packaging
The trained employees of materials handling and storage department package supporting materials which is given with the tractors. They also maintain packaging of the materials, which are to be use in the internal operations.
4- Preservation
A big secure store area has been established in the plant in material and handling department to segregate the input and semi-finished products to ensure its preservation.
5-Delivery
There is network of dealers of Fiat and New-Holland tractors from Karachi to Gilgit in Pakistan. About 98 % of tractors are sold through Agriculture development Bank of Pakistan and only 2 % sales are on net cash. The tractors are delivered to customers through the dealers or they may buy from company premises.
CONTROL OF QUALITY RECORDS
All departments that are related with quality have established and maintained documented procedures on how they handle quality records. The procedures have been establish that through light and guide about:
Methods for collection of quality records
Methods for accessing of quality records
Filing the quality records
Storage of quality records
Maintenance of quality records
Disposition of quality records.
The purpose of the records is to demonstrate confirmance to the specified requirements of the quality system.
TRAINING
There is a well-established training institutes in the company. Where all employees who affect quality are given training from time to time. Training is given to the managers and workers to increase the performance at every level. This improvement in performance is directed towards satisfying such cross-functional goals as quality, schedule, and others activities. Before final audit of ISO 9002 implementation in the company all the employees who are concerned with quality were given training so that all the employees could understand all the documented procedures, authorities and responsibilities of each other in the company. Some managers were sent to different seminars and workshops to learn about ISO 9002.
SERVICING
Al-Ghazi Tractors Ltd. has offered after sales service to its customers on both Fiat models. The sales department has established and maintained documented procedures and records as related to the services provided. When a customer has some problem in machinery he contacts the nearby dealer of the company which prepare a claim and send it to head-office for further actions.
STATISTICAL TECHNIQUES
Each department in Al-Ghazi Tractors Ltd. has established and maintained documented procedures to implement and control the applications of statistical techniques in their operations. These procedures have been established in conjunction with the quality control department.
To confirm the processes and product performances and in an attempt to increase it, following statistical techniques are being used
Sampling
Formulas for evaluating sampling
