Group 7 Om Ppt

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Company Background Position in 1990s

Operations at Pininfarina

Improvement Initiatives in 1990s

Deal with Mitsubishi

Questions

Future Scope



In 1930 Battista “Binin” Farina founded. Specialized in design and production of custom

and small series automobile.

Greatest success- producing revered designs such

as Ferrari Berlinetta Dino and Alfa Romeo SpiderDuetto.

In 1966 after death of Farina, name of businesswas changed to Pininfarina.

Throughout the 1960s and 1970s it continued todesign and produce unique automobiles- FerrariBerlinetta, the Lancia Flaminia, the Austin A 40 andMorris 1100.



Pininfarnia was considered a niche manufacturer. Production volume ranged from only one or two

cars per day.

For special “sedans” such as Fiat Coupe 50 or 60

cars per day. It had produced over 17000 Fiat Coupes in 1994.

Volume producer bargaining power was high andniche manufacturer margins were narrow.



Niche manufacturer costs for small volumeproducts were lower than those usually achievedby volume assemblers.

Twice less capital and fixed cost.

General purpose equipments and fewer otherspecialized tools needed.

Fewer mechanically performed operations andlower level of automation.

Do not use continuously moving assembly line,had “stop and go process”.



Flexibility as they were often given contracts onmodels that had higher then usual volumeuncertainty and larger seasonal fluctuations insales.

Products aimed at narrow market segments that

were difficult to specify and had rapidly shiftingtastes.

They coped by developing elaborate contingencyplans as this allowed them to rapidly shift workers

from one line to another as demand fluctuates. This increases station time so that the line moved

more slowly



Highly competent and renowned design skills inproduct and process.

Design services were an independent source of revenue for them.

In 1994 design and engineering revenue totaled

nearly 90 billion pounds. Close links and effective joint problem solving

between design and manufacturing was a majoradvantage in success of a new car model.

Some designers such as Pininfarnia and Bertonehad widely recognized brand names.





Pininfarina produced both bodies and fullyassembled cars at two major productionfacilities:

1. Grugliasco2. Giorgio



Rapidly phased out the production of bodiesand assembling

Committed toward new models

Operational improvement in quality , cost anddeliverability

Manufacturing performance improve



Two major changes

1.Introduced work team system model

2.Training program

specific operation and techniques training Interpersonal skills training



In 1991, pininfarina had about 650 supplier.Typically, competitive bids were amongsupplier and volumes were split amongseveral supplier.

By 1993, the number of supplier had beenreduced to 350

Advantages :- increase frequency of deliveries and increase quality

Disadvantages:-decreasing total amount of combined inspection



By 1996, the number of supplier had beenincreased again to 450 driven by

Improved purchase price and inventory levels. Used new production model

Manage customer needs

Assemble vehicles



Pininfarina SpA, a renowned manufacturerand designer of niche vehicles for majorautomobile companies, has traditionally competedon flexibility using a highly skilled design andmanufacturing workforce and low levels of automation.

Dream cars: visit

all the unique

models produced

by Pininfarina foreach customer…



Design A perfect blend of beauty and technological innovation... Engineering From definition of styling to release of the product... Manufacturing Pininfarina is a leader in the production of niche vehicles...

ARC The Pininfarina Aeroacoustic and Aerodynamic Research Center.. Pininfarina Extra Enter the Pininfarina world of the product and interior design... Special Projects Looking for the car of your dreams? Pininfarina will create it for

you... Consultancy In this section you can find all the information about the services

offered by Pininfarina Consulting Customers Alfa Romeo, Ferrari, Ford, Mitsubishi, Volvo and many other leading

names on the world automotive scene..



car, automobiles, design, style, history,

heritage, collectors, dream car, engineering,production, Pinin, Farina, Pininfarina,vehicles, niche, creativity, prototypes, showcar.



Ferrari, Maserati, Fiat , Lancia, Alfa Romeo,Peugeot, Citroen, Rolls-Royce, Daewoo,Honda, Hyundai, General Motors, Brilliance,AviChina – Hafei, Chery, JAC, Ford, Jaguar,

Volvo, Mitsubishi

http://arc.pininfarina.it/english/home_en.shtml



Short term profits Manufacturing challenges

Long term benefits



New production facilities would have to beacquired and equipped for Mitsubishiproduction.

Additional expenses related to the paint

shop which would have to run foradditional shift.

The Pajero would offer a two tone paintingoption, and this also posed some problem

for the paint shop. Space is required to dry and store vehicles

in between painting stages.



Bertrandi knew that Mitsubishi consider itsown quality standards to be very high and thatit focus differ from Pininfarina’s existingcustomers.

Some in the company believed the Mitsubishi

might demand the defect level to be ¼th of Pininfarina.

Experience shows that different customersconsidered different things in deciding whatwas the defect.

Some customers specified the quality asharness of enine compartment, while othermanufacturer only functionality wasconsidered.



Major mechanical parts like engines would besupplied by the production in Japan eitherfrom Mitsubushi itself or from one of itssuppliers.

Other parts are sourced from Europe. Mitsubushi agreed to own the inventory until

it arrived at Pininfarina.

Pininfarina has some experience in long

distance supply chain. Pininfarina calculated that 13 days shipping

would be required.



MIXED level strategy1. Corporate level

2. Business level

3. Functional level



1. Pininfarina Accept the Mitsubishi Business orNot ?Favorable Points:

Learning OpportunityChance to improve Operation system and make

compatible with global competition

Promises Utilization of extra facilities available due toretirement of old models

Chance to be a GLOBAL LEADER in Niche manufacturer Easily Adaptable Japanese Model with Pininfarina’s

Operation.

Unfavorable Points: Doubt on Mitsubishi’s Capabilities

Low Profit margins



No this decision is not favourable in today'sscenario because debt crisis in Europe

Uncertainty in the demand forecast.

Increasing competition from china hasreduced the market share of companies.

Due to onset of recession European markethas become very risky.



Moreover people are shifting towards vehicleshigh on mileage as fuel prices are rising.

Considering a hypothetical scenario

Back in 1990 pound was weaker than dollar

But it has become stronger now

Labour is no longer cheap in Europe.

So Italy produced cars will not be able to

compete in Indian market so this project ismore suited for Indian or Chinese market.



Absence of major player in suv sector India and china will become largest

automobile sector after united state in nearfuture.



The agreement between Mitsubishi Motors and Pininfarina was

signed in January 1997. Pininfarina then purchased an industrial

site at Bairo Canavese in Turin, Italy, in April 1997, as a

production facility dedicated to the production of the newMitsubishi PAJERO PININ.

Initial production will consist of the three-door model unveiled

at that year's Geneva Motor Show, followed by production of a

five-door model from autumn 2000.

The Bairo Canavese plant carries out the assembly and finishingoperations, as well as the final check-up and testing on the track

adjacent to the plant. The body assembly and paint shop are

located at the Industrie Pininfarina factory in Grugliasco.



For Pininfarina, this agreement with Mitsubishi Motors means

not only a significant increase in its manufacturing operations, but

also opens the door on an extremely promising market sector. The

compact SUV segment (small size Sport Utility Vehicles) have beenone of the fastest growing segments in the European automotive

market. Sales volume of compact SUVs are expected to reach

approximately 440,000 units by the year 2000.



Both partners in the venture made huge investments in the

Shogun Pinin project. Pininfarina spent approximately $40 million

US (£27 million, 70 billion lire, 36 million euro) on buying and

equipping the Bairo Canavese factory, as well as on expanding itsGrugliasco assembly and painting facilities. Mitsubishi Motors'investment has totaled almost $100 million US (£66 million, 180

billion lire, 93 million euro).

The plant will provide the local economy with a substantial

boost. It will employ 450 people, creating 200 new jobs and

transferring 250 jobs from other Pininfarina plants. In addition, afurther 150 employees at Grugliasco will be working exclusively on

the Shogun Pinin lines. This means that out of Pininfarina's total

workforce of 2,500, almost a quarter (600) will be working on the

Shogun Pinin.



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Group 7 Om Ppt

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