Studying from the foresighted point of view, Bertrandi should accept the prestigious contract from Mitsubishi of producing Pajero.
This would not only provide opportunities to Pininfarina (a niche manufacturer) for further modernizing the production facilities but will also provide learning in productivity improvement, increased quality, better inventory control and space utilization, reduce waste – and all in Japanese way (considered to be the best and meticulous in automobile industry).
Heavy revenues for Pininfarina were estimated to be around 900 billion/year over the life of the project. …show more content…
1. PROBLEMS * Additional logistics – will have to be organized for transporting BIW from Pajero production facility to paint shop in Grugliasco and back for further completion in trim facility.
* Above mentioned transfer also means that extreme care will have to be taken while transporting BIW as they should not get damaged (not even a scratch) while loading/unloading, transit, etc.
* In order to meet Italian pollution control regulations, Pininfarina is forced to use water based cleaning of painting system instead of using solvent based. Due to high volume production and frequent changes of car color, Pininfarina is crossing the acceptable limits of using solvent.
* Two-tone painting option of Pajero would require additional space to dry and store vehicles in between painting stages. This space would have to created.
* High quality standards – It was believed that Mitsubishi might demand extremely low defect level to the extent of one-fourth the level of Pininfarina’s existing customers.
* Extensive planning in Logistics & Inventory – required for mechanical parts supplied from Japan and other parts sourced from European countries.
a) Long supply chain from Japan, days of inventory at port, Contingency plan in case of strike or port closure. b) Supply chain within Europe – most distant supplier 900kms away, many of them outside Italy and most distant being in