By T Murrali:
Alliance Tire Group (ATG), the wholly owned subsidiary of the Japanese tyre giant Yokohama Rubber Company Limited (YRC), and a leading name in the global off-highway tyres business, is scripting strategies to strengthen its presence and gain inroads into the unexplored markets. The three world-renowned brands of ATG, Alliance, Galaxy and Primex, are well-known in the off-highway segments of fields, mines, forests and factories for their design, construction and build quality.
In 2016, YRC acquired ATG for $1.18 billion to expand its product line-up to a wide range of mining, construction, agriculture and forestry tyres. This has become a win-win deal for both the entities as YRC comes with 100 years of manufacturing excellence.
ATG has three manufacturing plants, two in India and one in Israel. On a recent visit to one of its Indian plants in Tirunelveli, about 550km south of Chennai in Tamil Nadu, the company officials shared with AutoParts Asia their vision and the roadmap to implement it. The other plant in India is in Dahej, Gujarat. ATG’s plant in Hadera, Israel, is mainly for high performance tyres.
The Indian plants, located close to major ports, develop and manufacture agriculture, forestry, industrial and off-the-road (OTR) tyres mostly for exports. They follow the stringent quality standards in manufacturing common to all ATG products. ATG will raise the capacity of the Dahej Plant from 57,000 tonne to 91,700 tonne and that of the Tirunelveli plant from 80,000 tonne to 87,500 tonne by the end of 2019.
YRC is known for continually innovating to ensure that its tyres add value to customers consistently. The patented Orange Oil technology, which the company developed a few years ago, has been a huge step in tyre manufacturing. YRC also makes tyres for F1 races and for extreme conditions like snow. All these technologies and patents are now available to ATG to make it a robust tyre maker in the off-highway segment in India and the world. The company has more than 2,000 dealers and distributors in 120 countries in all the Continents. It had a global turnover of $575 million in 2017.
ATG has world-class R&D centres in Israel, North America, and India. The strategic locations of these centres enable the company to understand the unique needs of farmers, contractors and other end-users in each region and customise solutions for their specific requirements. This has made the three brands of the company the preferred choice of OEMs across the globe.
Anil Gupta, Chief Operating Officer, ATG, said, the off-high-way market (excluding tractor tyres) in India is close to 90,000 tonne worth about $350 million. This market includes major segments such as earth moving, mining, port, industrial and construction. The company has a dedicated research and development programme for India to ensure rapid and relevant new product development. Being a fully-owned subsidiary company of YRC, ATG enjoys its advanced technology facilities like high-tech research centre with detailed reverse engineering, proving ground, testing centres etc. This technological support not only upgrades ATG’s product innovation activities but also augments its process capabilities, product quality and brand image across the regions.
In addition to developing new products, the R&D team is also working on substitutes for raw materials for OTR as seen in passenger car radial tyres. “We have to ensure that there is no compromise on quality and any development should only enhance our product performance. It is vital for survival in the competitive world market,” he said.
Both the manufacturing facilities in India are located in free trade zones. Therefore, the company has the advantage of procuring raw materials duty-free. Also it has a global sourcing policy which allows it to connect with vendors across the world. So whichever country is attractive to its bottom line at a particular point, it sources its requirements from there. The list of vendors also includes those who do not use crude oil as a basic raw material. Like most of them in this field, the company has technologies in place which allow it the flexibility of using various combinations of raw materials without compromising on the product quality. According to the company, the impact of depreciating rupee is limited as its major revenue is from exports. But for the business in India it faces problems from the rising input cost.
Market Scenario And Strategy
Considering the Government’s focus on infrastructure and industrial growth, the company is optimistic about the India growth story for the next five to six years. The company expects the off-highway tyre industry to grow at six to eight percent year-on-year. The company’s export strategy has been to develop the market and provide application specific products to ensure lower cost of ownership for the end-customer. This has resulted in a very strong and wide product portfolio which has helped the company gain the top slot in the off-highway tyre category.
Shop Floor Initiatives
ATG has introduced Continuous Improvement (CI) initiatives at its plants to reduce downtime and fatigue, while gearing up to deliver quality tyres. ATG’s plants follow various measures on a continuous basis to provide safe and conducive environment for every associate. As part of its strategy, the CI plan was rolled out with a team identified as responsible for these initiatives. A yearly calendar was made from July 2017 to July 2018 which included initiatives like Jishu Hozen, 6-S Programme, etc.
One of the methodologies of best practice by the Japanese companies is 5-S: Sort, Set in order, Shine, Standardise and Sustain. ATG has added one more ‘S’ to this: Safety first. The objective of this programme is to identify initiatives to increase plant productivity without compromising on hygiene and safety standards.
Initiatives to improve quality at the Tirunelveli plant are many. Recently the plant, on account of the initiatives taken at the shop floor, eliminated ‘Belt Fold Defect’ in large forestry tyres by changing the first top belt direction with regards to outer ply and managing the alignment of servicers to avoid the stretch in belts. Besides, the reduction of process scrap and elimination of visual defects also helped to avoid potential customer complaints. The plant also eliminated ‘Shaping Cut and Round Bead’ defects by controlling shaping pressure in curing presses switched from manual to auto mode. Reduction in the height and the diameter of the building drum crown resulted in containing the defects.
At Tirunelveli, focus on Safety and Quality is given priority. The company drives this through various initiatives as part of the continuous improvement projects. It is building a strong culture, wherein the attitude and behaviour of the workforce are focused through Leadership Gemba (shopfloor in Japanese parlance) Walk (LGW) by the plant leadership team. The leadership team is engaged in identifying the abnormalities and taking swift actions to eliminate them.
For convenience the plant has been divided into 31 zones and each zone is identified with one area owner. All the initiatives are driven through the area owners, and this brings in ownership of the area and healthy competition among the zones.
Zone-wise 6-S audit is done every month, and a Rolling Shield has been introduced to recognise the best zone. As the team believes that coaching and mentoring people will yield consistent and sustainable results, it conducts town-hall meetings to communicate the performance of the plant in performance metrics and business strategies, including the requirements for the coming months. Besides, the members from various departments form cross-functional teams to achieve the quality targets and develop special tools to enhance the processes.
These initiatives have paid rich dividend to the plant. Visual identification, before the calendaring process incorporated for easy identification of dipped fabric width, resulted in a saving of Rs 33.75 lakh/month. Compound rejection due to mix-up issues have been eliminated by introducing differentiation in colours of poly bags between mixers. Operator fatigue has been reduced by providing dedicated trolleys for chemical bags for respective mixers and by installing cured tyre inspection machine and die storage rack with labels for easy identification. These have also been saving time.
Frequent electrical breakdowns in the carbon loading area had been contained to nil from three, by shifting the panel. Due to elimination of top mould fall down in the solid tyre curing section, the plant was transformed as a safe environment for the workers. The plant has introduced ‘Lean Spiderman’ concept to address a few issues including delay in material supply, high transportation within the shop floor and ergonomics.
About the service of tyres, which is another challenge, mainly in the mining sector, the company sources said, in the past ATG had a limited number of service engineers in India for the mining sector. However, it is now expanding the service front to be closer to the customers for regular product evaluation, monitoring and for a better understanding of their emerging needs.
As part of its environment conservation initiatives, the plant celebrated Forever Forest Ceremony (Phase-2) last September. About 3,600 saplings of native tree species were planted in just an hour in a stretch of 115 metres of land by applying the Miyawaki Method of Plantation from a Japanese University.
The main motto of this event was to develop a dense forest in the factory premises and to encourage employee participation in this green movement. To encourage community participation, 100 school children and teachers from the nearby areas were invited to take part in this tree plantation programme.