VALUE ENGINEERING PROJECT TATA NANO

PRESENTED BY: Kartik Ayyar (PRN 08020771001) Arpit Desai (PRN: 08020771002) Abhishek Kumar (PRN 08020771003) Deepak Kumar (PRN: 08020771004)

What is Value Engineering?

The systematic application of recognized techniques that a) identify the function of a product or a service b) establish a monetary value for that function, and c) provide the necessary function reliably at the lowest overall cost A process that can improve quality, constructability and lower life-cycle costs

 

Why do Value Engineering?

To identify and remove unnecessary costs without compromising the quality and reliability of the design. It can be applied during conceptual design (top down)or design refinement (bottom up).

Value Engineering Is:
    

Systematic problem solving process Multi-discipline team approach Value oriented Function-based analysis Free of normal design restrictions

Value Engineering is Not:

A Design Review or Plan Review
◦ It is not intended to correct omissions and errors in the design, nor to review calculations made by the designer.

A Cost Cutting Process
◦ It does not cut cost by sacrificing quality, reliability, or performance.

Routinely Done on all Designs
◦ It is not part of the normal design process, but a formal cost and function analysis of select projects.

What is the biggest number you can make using three

2s?

Common Answers
2+2+2 =6  2 x 2 x 2 =8  [(2)2]2 = 16  22 + 2 = 24  22 x 2 = 44  222 = 222  222 = 484  222 = 4,194,304

Outside the box answers
   

2(2x2)! 222! 2(22)! Log-1[hypcos 2(22!)]

= = = =

16,777,216 1.1205 x 10426 ∞ ∞

And for value engineering we need to think outside the box…….

x

Description about Nano

The project has literally become India's claim-for-fame in the international-media due to Tata Motors' innovation in developing the car, as well as keeping it low in price. The car itself is expected to boost the Indian Economy, create entrepreneurial-opportunities across India, as well as expand the Indian car market by 65%. The car was envisioned by renowned industrialist, Ratan Tata, Chairman of the Tata Group and Tata Motors, who has described it as an eco-friendly "people's car". Nano has been greatly appreciated by many sources and the media for its low-cost and eco-friendly initiatives which include using compressed-air as fuel and an electricversion. Tata Group will mass-manufacture the Nano in very large quantities, particularly the electric-version, and, besides selling them in India, to also export them world-wide.

Competencies of Tata Nano


Pricing strategy Tata initially targeted the vehicle as "the least expensive production car in the world"— aiming for a starting price of 100,000 rupees or approximately $2300 US despite rapidly rising material prices Export expectation
Being worlds cheapest car it is expected that not only India demand for Nano will go rise at global level. Since it meeting Euro-4 norms at this price so this is taking as a future of small car segment .

Reputation and Acceptance of Tata After launch “TATAs have shown the world what Indian engineering is truly
capable of delivering highly competitive products. ”

Enthusiastic support Tata Motors is receiving preliminary and some very enthusiastic support in the media and officials, even from Europe, for the electric-version from India as well as othernations. The enthusiasm is even higher than that for the petrolversion

Target Market
• The low-cost car is clearly intended for the masses. For the family of four that would otherwise ride on a scooter, precariously balancing a tiny tot on the front and a baby on the wife’s lap. For the first-time car buyer in India - a huge market despite the increasing number of cars in the urban and semiurban areas. Its Also attract the small cars buyers like maruti 800.

THE ORDER QUALIFIERS
 It must be a safe car.

Must meet the mandatory Safety Standards.ad d h so n t a nd ou t a .  It should not emit poisonous fumes.lt pe iden orms s ly y enorms. r r v ry n Must meet the mandatory lEmission to ea ve y c as ula r ve w reg in it with my  I should be able toe sitsm er ci comfortably the s w pti o all family. ion sce m t ta t e r ec have adequate space to at least 4 h onfo It should . T p c ex et e to persons. Th be m ad h to car  It should look like a car and not a contraption. the 17 To have a good ergonomic shape.

THE ORDER WINNER

PRICE TAG OF Rs 1 Lac

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THE COST REDUCTION PARADIGM
Value Engineering Alternatives:

The Guiding factor was that the costhhas ll be at ato t c minimised for each component ed La a yet fin f 1 ed maintaining its basic functionality. t de o a be . The Alternatives are: y re oc rl tu ll to es a c cle tru be a had ativ  Reduce Consumptionyof Material being used. er st s to ame tern e s v co vgetesame lmaterial at a n  Alternate Suppliers ha h s le a t w ive ts to d t ab ge less prices. g en an ail r  Use alternate materials. ta the on ce av e n Th hi mp pri the  Eliminate use of Material. it e co um ing w th im d us x e  Eliminateaa process. m iev h cOr a Combination of the above. a 19

THE COST REDUCTION PARADIGM
Locational Imperatives:

The Guiding factor was that the tax structure, all on materials and manufacturing, must ere wh . support the final cost of Rs 1 Lacn d o ati ieve The Decisions were: loc ch ing be a tur ld  Establish factory in a fac cou zone. nu tax free ma ages t a ant  Get the elec dadvantages on infrastructure s taxa v development. ort the sh  Get the suppliers to establish base near the factory. In
 Get special concessions from State Govt.
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THE COST REDUCTION PARADIGM
of ive hip t ec ers Guiding factor was that the sp suppliers, to be er acceptance to rtn ther selected on the basis of their pa e ep f th t o tog work on tight cost guidelines. m rom e ou wi The Decisions points were: g n. s f ra o s ING r i lie ve e of ituat INK pp e tiv  Suppliers’ Technical lcapability s tweak S design. su um jec N to OF the ct im ob WI le x ON N I  Theirrt se ma the a WI beSTa part of the o willingness to UE ith ing sh iving wproject. O Q prestigious at y In er d willingness to E N arl cre  Their le B establish their facilities near c TO the car manufacturing plant. AD EH  Their willingness to work on tight cost and time ER TH deadlines.
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Supply Chain decisions:

THE CAR PER SE
 Engine Capacity Bosch 624 c.c. twin cylinder

Low capacity, Lighter ,sufficient with better Power weight ratio  Rear Engine to reduce the transmission length using a balancer shaft.
 4 Speed Manual Gear Box  All Aluminum Engine

Higher thermal conductivity than cast iron, Lighter and so better mileage
 Engine Management System by Bosch

Superb control over emission and smooth 22

THE CAR PER SE
 Dimensions L: 3.1m, W: 1.5m, H: 1.6m

Less length but more inner cabin space due to height. Comfortable leg room.
 Independent Front & Rear Suspension Mcpherson Strut in Front & Coil spring & trailing arm in rear.

Better ride than Maruti 800.  Single piece ribbed steel body with safety features such as crumple zones, intrusion resitant doors, seat belts, strong seats & anchorages. Safety requirements are adequately met.
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AN EPITOME OF SMART ENGINEERING
 Single Wiper in place of two.

Cost effective yet functionality is met
 Tube less Tyres

ac r l ve Weight reduced by 2 al Kg. Cost reduction 200 s1 R Fin modern vehicles Rs. And in linee with TS Th OS

ict d

C AR  Instrument console in the centre C HE Elegant to T look at and can be used both in
Left Hand & Right hand version. The list goes on and on.

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What makes it so cheap !
 

 

The Tata Nano uses plastics and adhesives rather than welding. introducing the car with an artificially low price through govt-subsidies and taxbreaks, or using vertical-integration, or partially using inexpensive polymers or biodegradable plastics instead of a full metal-body. It has no AC, no power steering, no power windows, no power bells and whistles.

Techniques used
Creative thinking  Life cycle cost

Creative thinking
  

Thinking outside the patent box How could Tata Motors make a car so inexpensively? It started by looking at everything from scratch, applying what some analysts have described as 'Gandhian engineering' principles - deep frugality with a willingness to challenge conventional wisdom. A lot of features that Western consumers take for granted air conditioning, power brakes, radios, etc - are missing from the entry-level model. More fundamentally, the engineers worked to do more with less. The car is smaller in overall dimensions than the Maruti, but it offers about 20 per cent more seating capacity as a result of design choices such as putting the wheels at the extreme edges of the car.

A modular design revolution  The Nano is constructed of components that can be built and shipped separately to be assembled in a variety of locations  In effect, the Nano is being sold in kits that are distributed, assembled, and serviced by local entrepreneurs.

Costing

Basic Functions HOW
TRANSPORTATION

Easy Low Cost WHY

Supporting Functions Comfortness Assure Convenience Better control

To Satisfy customer APPERANCE

Better Look Facilitate Application

Safety

Prevent Road accidents While Driving Improve Efficiency

Customer Oriented FAST (TATA NANO)

Better Mileage

Less Fuel Consumption

Future of Nano (conclusion)

Emerging markets are a fertile ground for innovation. The challenge of reaching dispersed, low-income consumers in emerging markets often spurs significant innovation. As customers gain more power, they will demand more tailoring and value-added service to meet their needs. Companies that innovate on this dimension are likely to be richly rewarded. World is getting tougher day by day being unique is a competitive advantage. Expectations to Nano has proved this . After 100 years to Henry Ford , Tata has proved him again not only he came out of the expectations but also came out with a platform for Indian auto sector .

So this as per this project conclusion can be draw as a future car not only of Indian but also if exported than could be to the world.

Key Risks Key risks to our rating include: · Delay in the launch of small car ‘Nano’ · Unanticipated increase in the prices steel, aluminium, other non-ferrous metals, rubber, and engineering plastics · Fluctuations in auto loan interest rates

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