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Introduction to Maruti Suzuki Ltd.

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Introduction to Maruti Suzuki Ltd.

Maruti Suzuki India Ltd. is a leading manufacturer of four-wheeler in India. Born in 1983 with the mission to motorise India, Maruti was a joint venture between Government of India and Suzuki Motor Corporation, Japan. It quickly grew into the largest compact car making company of India and remained so till 2004. The company started with Suzuki holding the minor stakes of the company while GoI holding the major stakes. As of present, GoI has disinvested its stakes in the company completely, and handed over the management of company to Suzuki Motor Corporation. Today, Maruti and its partners employ more than 75000 employees. Its manufacturing facilities are located at two locations, Gurgaon and Manesar, both south of New Delhi.

Maruti’s Green Philosophy

Maruti’s Green Philosophy stems from its use of “Three R’s”: Reduce, Recycle and Reuse policy in its plants, so that there is a minimal stress on natural resources. The company has launched a number of initiatives under its Three R’s umbrella to make the plants more efficient in terms of resource usage. It is also certified with ISO 14001:1996 for its Environment Management System programme and uses the principle of “Smaller, fewer lighter, shorter and neater” for its operations.

Maruti – Sustainable Operations through Internal Efficiency

Maruti in recent years, owing to several innovative measures like investing in green equipments, its employee-driven campaigns and Kaizens (shop floor improvements), has drastically reduced the consumption of power and water and the waste generation in its facilities. Company also credits this decrease in utility consumption to its adoption of “just-in-time” approach towards operations. Some of the facts and figures supporting Maruti’s claims are (figures available for year 2007):
• Total energy consumption per vehicle is down by 26 % over the last six years.
• Power Consumption has come down by 31 % over the last six years.
• Water Consumption per vehicle has dropped by 63% over the last six years.
• Landfill waste has come down by 67 % over the last six years.
• Carbon Dioxide emissions per vehicle (produced during manufacturing) are down by over 39% in last five years.
Maruti is not only working towards implementing environmental best practices in its facilities, but also takes active part working in collaboration with its suppliers to implement best practices in their facilities through its Environment Management System (EMS), bringing benefit to the entire value chain.

Initiatives Taken By Maruti

Initiatives taken by Maruti that helped the company bring down its utilities consumption and waste generation levels are listed below. To honor its green philosophy, Maruti labels the initiatives under its “Three R’s”.

Reduce
• Reducing water usage in its air-conditioning plant: Water use is eliminated by introducing air-cooled air-conditioners and closed cycle cooling towers.
• Reducing water consumption: An employee-driven initiative that works on the principle of “just-in-time” which aims for a relentless focus on zero water abuse.
• Reducing consumption of raw paints: Company has started using automation in paint shop, increasing efficiency and thus reducing raw paint consumption. This has also reduced paint-sludge (industrial waste) generated from the plant.
• Rightsizing of equipments: In its new facility, Maruti has ensured to use right sizes of equipments, saving a lot on energy front.
• Three-coat-one-bake painting system: This state of art system uses only one baking step as compared to conventional system of having two baking steps, thus reducing the consumption of energy levels and increase efficiency.
• Use of solar energy in form of solar lamps and heaters helps in reducing power consumptions.
• Use of natural ventilators: These ventilators use wind energy as against electrical energy to keep the rooms cool, thereby saving on power consumption.
• Reducing noise pollution: Company has installed many noise curtains in its facilities, creating enclosure for high noise generation equipments and hence providing a safer working condition to its employees.

Reuse
• Waste Heat Recovery: Company is reusing the waste gases, generated during power generation, in its manufacturing process, resulting in a saving of almost 4225 MWH per year.
• Sheet metal crap utilization: Parts of unused steel sheets during manufacturing process i.e. scrap, is reused within the value chain (like making smaller components). This results in lower industrial waste generation and better returns for the company.
• Reuse of sewage treatment plant sludge: This waste is used in horticulture, resulting in a significant reduction in landfill wastes.
• Reuse of packaging material: Maruti ensures almost 100 % of domestic components come in collapsible boxes, making them easy to reuse and in turn reducing wood and cardboard wastes.

Recycle
• Recycling groundwater: Maruti uses techniques like soak pits, recharging shafts, rain-water harvesting and water lagoons that help in recharging ground water from the rainfalls.
• Recycling Water, 100% recycling: Through technologies like “Reverse osmosis” and “tertiary treatment” used in its Effluent Treatment Plant, Maruti recycles almost 100 % of its waste water, bringing down the need for fresh water by almost 28%.

Other initiatives
• Secured land fills for non-incinerated wastes: Maruti maintain special land-fills to dispose non-incinerated wastes, such that no wastes leaks out and pollute nearby areas.
• Pollution check camps: Maruti holds many pollution check-up camps in collaboration with its dealers and petrol pumps to check on their vehicles emission levels.
• CFLs: Has converted many of his traditional lights to CFLs and encourage their employees to do the same in their houses.
• Information Portal: Maruti maintains an internal portal illustrating best environmental practices and other informative practices to run plant efficiently.

Drivers for Maruti to implement Environmental Friendly Practices

The main objective for Maruti in implementing eco-friendly measures is to reduce the operating costs, thus reducing the average car making cost. In these competitive markets, Maruti is trying to be competitive by cutting on its energy consumption costs. Rising prices of steel have made all car companies to minimize on its steel scrap losses. Another major driver that forces Maruti innovate on their cars is the emission norms imposed by government. Also with the changing fuel specifications, the automobile companies are forced to change the engine designs so that cars can run more efficiently. Other than that, Maruti has ISO 9001:2000 and ISO 14001:1996 certificates and have to follow them ardently. Maruti also has to comply with other acts setup by the government like Environment Protection Act (1986), Water (Prevention and Control of Pollution) Act and the Air (Prevention and Control of Pollution) Act. Also Government has announced environmental policy for automobiles which each automobile manufacturer has to follow.

Threats and Opportunities for Maruti

Threats: With increasing raw material prices, and increasing competition and increasing environmental concerns, the road is not smooth for Maruti. Already foreign players are entering the market with their environmental practices which more often than not, surpasses what are prevalent in India, placing them in a much more advantageous position in terms of operating cost reductions and reputation in front of public. Technological advancement of foreign players also places them in a favorable position in meeting the strict emission standards set by the government.

Opportunities: There is a growing market for environmental friendly Hybrid electric vehicles which have an alternate fuel arrangement along with the traditional one, saving a lot on emissions and increasing fuel efficiency. It also places lesser burden on the petroleum based natural resources. Another opportunity is to bring in the state of art technologies followed by foreign players, thus saving a lot on the long run.

Competitors in the Sector: Environmental Practices

Two of the main competitors for Maruti are Honda and Tata Motors. The players in the sector are mostly ISO 14001 credited, which implies that the sector is sensitive towards the environment protection. Some of the practices followed by Maruti’s competitors are:

Honda: Honda is known for its environment friendly practices and is recognized by many governments across the world. Honda calls his commitment to environment “enviornmentology” defining it as “an ongoing commitment to environmentally responsible technology”. Honda spends a lot of R&D on green cars. It was the first company to bring in the concept of fuel cars and hybrid cars. Honda is awarded ISO 14001 certification for its environmental practices.

Tata Motors: Tata motors actively engage in the sustainable environment practices. It ensures that its products are environmentally sound in a variety of ways. These include reducing hazardous materials in vehicle components, developing extended life lubricants, fluids and using ozone-friendly refrigerants. Tata motors’ endeavors towards environment protection are soil and water conservation programmes and extensive tree plantation drives. Tata Motors is also awarded ISO 14001 certification for its environmental practices.

Awards & Recognitions for Maruti

• Winner of Golden peacock award for its Environment Management Efforts - 2007
• Among Top 5 car companies in the Forbes list of the Worlds Most Reputed Companies – 2006
• Maruti ranked among top ten (Rank7) greenest companies in India by Business Today – 2005
• Voted one of India's Greenest Companies by Business Today-AC Nielson ORG-MARG – 2004

Maruti – Going Forward (Strategy)

Maruti faces a lot of competition from both domestic competitors and foreign competitors, and thus has to cut into its margins to be competitive. To sustainably run operations, Maruti has to further decrease its operations costs by implementing best environmental practices. Also, it should look into alternate technologies like hybrid cars and fuel cars and should work towards manufacturing them in their facilities. With the growing fuel prices, it is imperative for Maruti to increase its fuel efficiency, and thus will also have to modernize its facilities to be the state of art facilities.

References

1. http://www.maruti.co.in
2. http://www.marutisuzuki.com/
3. http://www.wikipedia.com
4. http://www.moneycontrol.com
5. http://www.tatamotors.com
6. http://www.hondacarindia.com

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