CASE STUDY FIAT GROUPS
The aim of this work is to present establishments of the basic model of World Class Manu‐
facturing (WCM) quality management for the production system at Fiat Group Automobiles in
order to make products of the highest quality eliminating losses in all the factory fields an
improvement of work standards. In fact, World Class Manufacturing is a manufacturing system
defined by 6 International companies including Fiat Group Automobiles with the in‐ tent to raise
their performances and standards to World Class level with the cooperation of leading European
and Japanese experts and this includes all the plant processes including quality, maintenance,
cost management and logistics etc. from a universal point of view. Thus, automotive
manufacturing requires the ability to manage the product and its associat‐ ed information across
the entire fabricator. Systems must extend beyond their traditional role of product tracking to
actively manage the product and its processing. This requires co ordinating the information flow
between process equipment and higher level systems, sup‐ porting both manual and automatic
interfaces. A case study methodology was used to collect detailed information on division and
plant strategic objectives, performance meas‐ urement systems, and performance measurement
system linkages. The result of this re‐ search was to develop principles on strategic objectives,
performance measurement systems and performance measurement system linkages for improved
organizational coordination. The purpose of this study is to examine the relationship between
division and plant per‐ formance measurement systems designed to support the firm’s strategic
objectives and to improve organizational coordination. We will focus our attention on the Cost
Deployment Pillar, Autonomous Activities/Workplace Organization Pillar and
Logistics/Customers Serv‐ ice Pillar. 4.1.
Company background
Fiat Group Automobiles is an automotive-focused industrial group engaged in designing,
manufacturing and selling cars for the mass market under the Fiat, Lancia, Alfa Romeo, Fiat
Professional and Abarth brands and luxury cars under the Ferrari and Maserati brands. It also
operates in the components sector through Magneti Marelli, Teksid and Fiat Powertrain and in
the production systems sector through Comau. Fiat operates in Europe, North and South
America, and Asia. Its headquarters is in Turin, Italy and employs over 137,801 peo‐ ple [21]. Its
2008 revenues were almost € 59 billion, 3.4% of which were invested in R&D. Fiat’s Research
Center (CRF) can be appropriately defined as the “innovation engine” of the Fiat Group, as it is
responsible for the applied research and technology development activi‐ ties of all its controlled
companies [22]. The group Fiat has a diversified business portfolio, which shields it against
demand fluctuations in certain product categories and also enables it to benefit from
opportunities available in various divisions.
4.2. Statement of the problem and methodology
The aim of the project is to increase the flexibility and productivity in an ETU (Elementary
Technology Unit) of Mechanical Subgroups in a part of the FGA’s assembling process in the
Cassino Plant through the conventional Plan-Do-Check-Act approach using the WCM meth‐
odology:
- PLAN - Costs Analysis and Losses Analysis starting from Cost Deployment (CD) for the
manufacturing process using the items and tools of Workplace Organization (WO) and for the
handling process the Logistic and Customer Services (LOG) applications.
• DO - Analysis of the non-value-added Activities; analysis of re-balancing line and analysis of
re-balancing of work activities in accordance with the analysis of the logistics flows using the
material matrix and the flows matrix. Study and realization of prototypes to improve
workstation ergonomics and to ensure minimum material handling; Application of
countermeasures found in the production process and logistics (handling).
- CHECK – Analysis of results in order to verify productivity improvement, ergonomic im‐
provement (WO) and the optimization of the internal handling (in the plant) and external
logistics flows (LOG). Check of the losses reduction according to Cost Deployment (CD).
- ACT - Extension of the methodology and other cases.
Here below is a description of the Statement of the Problem and methodology.
4.2.1. PLAN: Costs analysis and losses analysis (CD) for the manufacturing process (WO) and
for the
handling process (LOG)
In this first part (PLAN) were analyzed the losses in the assembly process area so as to organize
the activities to reduce the losses identified in the second part of the analysis (DO).
Object of the study was the Mechanical Subgroups ETU - Elementary Technology Unit (in a part
of the Cassino Plant Assembly Shop). The aim of this analysis was to identify a pro‐ gram
allowing to generate savings policies based on Cost Deployment:
• Identify relationships between cost factors, processes generating costs and various types of
waste and losses;
• Find relationships between waste and losses and their reductions.
In fact, in general a production system is characterized by several waste and losses (MUDA),
such as:
• Non-value-added activities;
• Low balancing levels;
• Handling losses;
• Delay in material procurement;
• Defects;
• Troubleshooting Machines;
• Setup;
• Breakdown.
It is important to give a measure of all the losses identified in process examination. The data
collection is therefore the “key element” for the development of activities of Cost Deploy‐
ment. Here below in Figure 7 an example of losses identified from CD from the Assembly
Shop is shown and in Figure 8 is shown an example of CD data collection regarding NVAA
(Non-Value-Added Activities) for WO (for this case study we excluded check and rework
losses) in the Mechanical Subgroups area.
Finally Figure 9 shows Analysis of losses Cost Deployment.
4.2.2. DO - Analysis of non-value-added activities, of the re-balancing line and analysis of re-
balancing
of work activities
According to figure 9 and figure 10 were analyzed the losses regarding NVAA and Instauration.
In fact were analyzed all 4 critical workstations (because they have the worst losses) and were
identified 41 types of non-value-added activities (walking, waiting, turning, picking....) in the
various sub-phases of the production process. In Table 4 is shown some examples of non-value-
added activities analyzed (MUDA Analysis). Some examples of standard tools used to analyze
NVAA reduction (MUDA Analysis) for
the 4 workstations are shown here below in Figures 10, 11 and 12) job stratification (VAA -
Value Added Activities; NVAA – Non-Value-Added Activities; LBL - Low Balancing Level;
EAWS - European Assembly Work Sheet – Ergonomy); 2) Spaghetti Chart and 3) Kaizen
Standard.
At this point was assumed the new flow of the complete damper (corner) = damper + com‐
plete hub sequencing according to the material matrix considering losses relating to han‐
dling (material matrix classification – see figure 14). The material matrix classifies the
commodities (number of drawings) in three main groups: A (bulky, multi-variations, expen‐
sive), B (normal) and C (small parts) and subgroups (a mixture of group A: bulky and
multivariations
or bulky and expensive etc.). For each of these groups was filled out the flow
matrix that defines the correct flow associated: JIS (and different levels), JIT (and different
levels) and indirect (and different levels). After identifying the correct flow, in the JIS case,
was built a prototype of the box (bin) to feed the line that would ensure the right number of
parts to optimize logistic handling. However, the new box (bin) for this new mechanical
subgroup must feed the line in a comfortable and ergonomic manner for the worker in the
workstation, for this reason was simulated the solution before the realization of the box (bin)
(see figure 15).
At the end of the Muda analysis (NVAA analysis) were applied all the solutions found to
have a lean process (the internal target is to achieve 25% of average NVAA losses) and was
reorganized the line through a new line balancing level (rebalancing) to achieve 5% of the
average line balancing losses (internal target). Another important aspect was the logistics
flows analysis (see figure 16) considering advanced warehouses (Figure 17). The simulation
scenario was defined using trucks from the Cassino plant warehouses that also feed other
commodities to achieve high levels of saturation to minimize handling losses.
At the end of the handling analysis (flow, stock level…) thanks to this new “lean” organiza‐
tion of material matrix was used the correct line feed from the Just In Sequence warehouse.
It was reduced the internal warehouse (stock level), the space used for sequencing (square
metres), the indirect manpower used to feed the sequencing area and we obtained zero fork‐
fts on the shopfloor because we used the ro-ro (roll in - roll out) system. Figure 18 shows
the final scenario in which we have 1 operator instead of 4 operators.
4.2.3. Check – Analysis of results to verify productivity and ergonomic improvement and
optimization
of logistics flows
In detail the main results and savings can be summarized as follows:
Productivity improvement +75% (Figure 19) direct labour;
Ergonomics improvement +85% (Figure 20) according to the rest factor; • Optimization
of logistic flows (Figure 21) according to the flow matrix.\
