Operation management: industrial reality of Peugeot PSA Citroën

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Operation management: industrial reality of Peugeot PSA Citroën

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Abstract

During the 20th century, the world went through many evolution phases, especially in the automotive industry. Today, this industry is a very important factor in economic development. PSA is a French automotive manufacturer. In 1973 the company made a merger with Citroën, and became the second European manufacturer behind the German group: Volkswagen and the 7th in the World. This status is maintained to date. The actual economic context is characterized by a constant increase of competition with a multiplication of national and international commercial flows. The products have shorter life cycles, and tastes have become different for everyone. Clients are constantly searching for a unique product which is perfectly adequate to their needs. Thus, differentiation is the only solution to satisfy the demand. The companies must insist on quality and diversify their production. Parallel to this, automobile companies have to reduce their production costs to remain competitive. Thus, PSA adopted the Just in Time to become more flexible and efficient in their methods of production. This management strategy has now become the base of their way of thinking, leading to the adoption of Kanban, and the lean management. The PSA group can put vehicles on the market quickly with reduced costs thanks to its platform policy in order to answer easily to all different expectations of the clients.

Company history and business environment
1. Company History
2. A very competitive environment
The Supply chain in Citroën PSA
1. From the raw materials to the finished good
2. From the factory to the client's hands
A reactive organization concerned by the optimization of its costs
1. Lean Management
2. Just In Time
Improvements applied to a factory in Valenciennes

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[...] The WIP stock includes the raw materials as well as some parts of the car (gearbox, engine etc) In the case of the Gearbox factory, the activity of PSA Valenciennes does not constitute a source of profit. No margin is made, because the factory works for the firm. Once the order is wrapped-up, the merchandise is placed in trucks. These trucks deliver only one assemblage factory at a time, according to the car-model that the pieces are made for. Then, when all the spare parts are assembled, the cars are transported by train to distribution platforms, where the cars will be transported to selling points to be given to the client. [...]

[...] The competition has forced PSA Peugeot-Citroën to improve its way of working; It has forced it to be more efficient, which required a big investment. Another difficulty posed by the environment is the new type of demand. Consumers are now searching for eco-friendly engines. The Creation of this type of car is really expensive, and PSA Peugeot-Citroën must thus develop new technologies all the time. II. The Supply chain in Citroën PSA The “Maison Citroën is supported by two major pillars, on which its logistic strategy rests. [...]

[...] Moreover, it recycles used solvents. In the end no finish-goods (cars) are wasted, thanks to the JIT. All the cars made are waiting to be delivered. new paint equipment The company involves everyone in the production of its cars. PSA tries to empower all its employees and the team spirit is one of its principal values. Most of the times the factories run at 110 per cent capacity, the problem occurs when the orders are very low, but we will study that situation later. [...]

[...] The factory in Aulnay Sous Bois is organized in basic units of production to 10 people and a supervisor). It functions 24 hours a day. (5am-1pm, 1pm-9pm, 9pm-5am). Everyone is very important in the supply chain because each worker has a specific job and if one of them does a bad job, the final quality of the car will be compromised. Moreover in the Just in Time method, work needs to be well done, and done quickly, which is why every employee is responsible and has to do a good job if the company wants to deliver perfect cars on time. [...]

[...] Between 2009 and 2010, the first of lean management prerogatives should be dispatched in concessions and agencies of Peugeot and Citroën. The PSA production system in manufacturing: Process PPS 1. To challenge by ambitious purposes 2. Stabilize to allow progress 3. Adopt good technical principles to focus on customer value 4. Grow autonomous teams by eradicating waste 5. Develop behaviors and attitudes related to values No Default To achieve building quality in every step, PSA sets up: 1. Self control 2. [...]

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