PROJECT REPORT ON SUPPLY CHAIN MANAGEMENT IN TATA NANO
SUBMITTED TO THE BIRLA INSTITUTE OF TECHNOLOGY, T ECHNOLOGY, RANCHI RANCHI
FOR THE PARTIAL FULFILLMENT OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION
KURIYACHAN VITHAYATHIL MBA/8021/09
Under the Supervision of MR. SOOFI ANWAR DEPARTMENT OF MANAGEMENT
BIRLA INSTITUTE OF TECHNOLOGY INTERNATIONAL CENTER
RAS AL KHAIMAH UNITED ARAB EMIRATES
SUPPLY CHAIN MANAGEMENT IN TATA NANO TOPIC
PAGE NO
1
Executive Summary
2
Company Profile 2.1 Introduction 2.2 Areas of business 2.3 SWOT Analysis 2.4 Product Development and Nano 2.5 Idea Generation and Nano 2.6 Vision, Mission, Values
3
Cost Reduction 3.1 Definition 3.2 Advantages of Cost Reduction 3.3 Dangers of Cost Reduction 3.4 Scope of cost reduction
4
SUPPLY
CHAIN
MANAGEMENT
IN TATA NANO 4.1 Objective of the Study 4.2 Limitations of the Study 4.3 Scope of the Study 4.4 TATA NANO- The complete Supply
chain and Drivers 4.5 Challenges to Supply chain outsourcing
in India 5
Conclusions References
SUPPLY CHAIN MANAGEMENT IN TATA NANO
CHAPTER 1 EXECUTIVE SUMMARY
Tata Nano is the cheapest car in the world. It is sold in home country India around Rs 1-lakh i.e. approximately USD 2000. It is manufactured by Tata Motor Limited, the largest automobile company in India. It¶s Chairman, Mr Ratan Tata envisions that Tata Nano to become a ³People¶s car´ which is affordable by almost everybody. Tata Nano was first launched in India on 1st April 2009 and expected to be in Indian Indian market by July 2009. Since launching, it has created a huge buzz buzz all over India. Within the first two days of lunching, lunching, it has received received 5500 booking. booking. The figures keep keep increasing every every day since the launching. The car was the result of a five year research and development project carried out by Tata Nano development team. While developing the car, Tata Motors and its SUPPLY CHAIN MEMBER constantly made efforts to reduce the costs while ensuring quality of each and every component including engine, steering, wheels, tires, windshield washing system, gear shifter etc.
CHAPTER 2 COMPANY PROFILE 2. INRODUCTION
The Tata Group (www.tata.com) comprises 96 operating companies in seven business sectors: information systems and communications; engineering; materials; services; energy; consumer products; and chemicals. The Group was founded by Jamsetji Tata in the mid 19th century, a period when India had just set out on the road to gaining independence from British rule. Consequently, Jamsetji Tata and those who followed him aligned business opportunities with the objective of nation building. This approach remains enshrined in the Group's ethos to this day. The Tata Group is one of India's largest and most respected business conglomerates, conglomerates, with revenues in 2005-06 2005 -06 of $21.9 billion (Rs 967,229 967,229 million), the equivalent of about 2.8 per cent of the country's GDP, and a market capitalization of $46.9 billion. Tata companies together employ some 202,712 people. The Group's 28 publicly listed enterprises²among them stand out names such as Tata Steel, Tata Consultancy Services, Tata Motors and Tata Tea²have a combined market capitalization that is the highest among Indian business houses in the the private sector, and and a shareh older base of over over 2 million. The The Tata Group has operations in more than 54 countries across six continents, and its companies companies export products and services to 120 nations. The Tata family of companies shares a set of five core values: integrity, understanding, excellence, unity, and responsibility. These values, which have been part of the Group's beliefs and convictions from its earliest days, continue to guide and drive the business decisions of Tata companies. The Group and its enterprises have been steadfast and distinctive in their adherence to business ethics and their commitment to corporate social responsibility. This is a legacy that has earned the Group the trust of many millions of stakeholders in a measure few business houses anywhere in the world wo rld can match. Every Tata company or enterprise operates independently. Each of these companies has its own board of directors and shareholders, to whom it is answerable. There are 27 publicly listed Tata enterprises and they have
acombined market capitalisation of some $60 billion, and a shareholder base of 3.5 million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels and Tata Communications. Tata Steel became the sixth largest steel maker in the world after it acquired Corus. Tata Motors is among the top five commercial vehicle manufacturers in the world and has recently acquired Jaguar and Land Rover. TCS is a leading global global software company, with delivery delivery centres in the US, UK, Hungary, Brazil, Brazil, Uruguay and China, China, besides India. India. Tata Tea is the second largest branded tea company company in the world, world, through its UK -based subsidiary Tetley. Tata Chemicals is the world¶s second largest manufacturer of soda ash and Tata Communications is one of the world¶s largest wholesale voice carriers. In tandem with the increasing international foot print of Tata companies, the Tata brand is also gaining gaining international international recognition. Brand Finance, Finance, a UK based consultancy firm, recently valued the Tata brand at$9.92 billion and ranked it 51st among the world's worl d's Top 100 brands. Business week magazine ranked Tata 13th among the '25 Most Innovative Companies' list and the Reputation Institute, Institute, USA, recently rated it 11th on its list of world's most reputable companies. Founded Founded by Jamsetji Tata in 1868, Tata¶s e arly years were inspired by the spirit of nationalism. It pioneered several industries of national importance in India: steel, power, hospitality and airlines. In more recent times, its pioneering spirit has been showcased showcased by companies companies such as TCS, India¶s first software company, and Tata Motors, which made India¶s first indigenously developed car, the Indica, in 1998 and recently recently unveiled the world¶s lowest -cost car, the Tata Nano. Tata companies have always believed in returning wealth to the society they serve. Two-thirds of the equity of Tata Sons, the Tata promoter company, is held by philanthropic trusts that have created national institutions for science and technology, medical research, social studies and the performing arts. The trusts also provide aid and assistance to non-government organizations working in the areas of education, healthcare and livelihoods. Tata companies also extend social welfare activities activitie s around their industrial industri al units. The combined
development-related development-related expenditure of the tru sts and the companies amounts to around 4per cent of the net profits of all the Tata companies taken together. Going forward, Tata is focusing on new technologies and innovation to drive its business in India and internationally. internationally. The Nano car car is one examp le, as is the Eka supercomputer (developed by another Tata company), which in2008 was ranked the world¶s fourth fastest. Anchored in India and wedded to traditional values and strong ethics, Tata companies are building multinational businesses that will achieve growth through excellence and innovation, while balancing the interests of shareholders, employees employees and civil society. Introduction to Tata Motors:
Tata Motors was established in 1945, when the company began making trains. It has its manufacturing base in Jamshedpur, Lucknow, and Pune and soon one more plant is going too established at Singur, West Bengal. Product Product Manufactured - Passenger Cars and commercial commercial vehicle . Installed Capacity - 350,000-400,000 vehicles a year. Investment Investment - Rs 2,500 crore (Rs 25 billion). Turnover - $21.9 billion (Rs 967,229 million). Employees - 2,46,000/22001 Tata Motors had created the wealth Rs. 320 billion during 2001 2001 -2006 and stood among top10 wealth creators in India.
2.2 Areas of business
Tata Motors makes passenger cars, multi-utility vehicles and light, medium and heavy commercial commercial vehiclesvehicles
Passenger cars: The company launched the compact Tata Indica in 1998, the sedan Indigo in 2002 and the station wagon Indigo Marina in 2004. Tata Motors also distributes Fiat¶s cars in India. Utility vehicles: The Tata Sumo was launched in 1994 and the Tata Safari in 1998. Commercial vehicles: The commercial vehicle range extends from the light two-tonne truck to heavy dumpers dumpers and multi -axled vehicles in the above 40-tonne segment.
Passenger buses: The company also manufactures and sells passenger buses, 12-seaters to 60-seaters, in the light, medium and heavy segments.
Joint-ventures, subsidiaries, associates:-
Tata Motors has joint ventures with Marcopolo, Marcopolo, the Brazil -based maker of bus and coach bodies, and with Fiat Auto (to build a commercial vehicle at Fiat's facilities in Córdoba, Argentina). y
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Tata Daewoo Commercial Vehicle Company, a 100-per cent subsidiary of Tata Motors in the business of heavy commercial vehicles (www.daewootruck.co.kr/). Tata Motors European European Technical Technical Centre is a UK -based, 100-per cent subsidiary engaged in design engineering and development of products. Telco Construction Equipment Company makes construction equipment and allied services. Tata Motors has a 60 per cent holding; the rest is held by Hitachi Construction Construction Machinery Company, Japan ( www.telcon.co.in/). www.telcon.co.in/). Tata Technologies provides specialised engineering and design services, product product lifecycle management and product -centric information technology technology services ( www.tatatechnologie www.tatatechnologies.com/ s.com/). ). Tata Motors (Thailand) is a joint venture between Tata Motors (70 per cent) and Thonburi Automotive Assembly Plant Co (30 per cent) to manufacture and market the company¶s pickup vehicles in Thailand (www.tatamotors.co.th/). Tata Cummins manufactures high horsepower engines used in the company¶s company¶s range of commercial vehicles vehicles ( www.tatacummins.com www.tatacummins.com// ). HV Transmissions and HV Axles are 100-per cent subsidiaries that make gearboxes gearboxes and axles for heavy and medium comm ercial vehicles. TAL Manufacturing Solutions is a 100-per cent subsidiary that provides factory automation solutions and designs and manufactures a wide range of machine tools (www.tal.co.in/). Hispano Carrocera is a Spanish bus manufacturing company in which Tata Motors has a 21-per cent stake (www.hispano-net.com/). Concorde Motors is a 100 per cent subsidiary retailing Tata Motors¶ range of passenger vehicles vehicles ( www.concordemotors.com/). www.concordemotors.com/). Tata Motors Finance is a 100 per cent subsidiary in the business of financing customers and channel partners of Tata Motors (www.tatamotorfinance.com/).
Location
Tata Motors' plants are located at Jamshedpur (eastern India), Pune and Sanand (west), and Lucknow and Pantnagar (north). Tata Motors and Fiat have set up a common manufacturing facility at Ranjangaon, near Pune. Tata Nano - ONE LAKH CAR PROJECT ³People¶s Car´
³A promise is a promise,´ said Rattan Tata,Chairman, Tata Motors, on 10th January, 2008, when the Nano was first displayed at the Auto Show in Delhi.The Nano project project didn¶t grab the attention attention of only Indians Indians ; the entire world had their eyes glued to the world¶s cheapest car.A truly People¶s Car, this time is from India.Though the dealer price is Rs. 1 lakh, the price on road,when it will be launched, will reach around Rs. 1,25,00but it will be still more affordable and will be more ecofriendly than most other cars giving a mileage of around23km/liters. The price of the car is such that a lot of richand HNIs, if interested, can buy the car just by a single swipe of their credit cards.Providing a car worth rupees one lakh car was the dream of the chairman of Tata motors Mr. Rattan Tata. And with high qualified IT skills people he has shown the Indian talents to whole the world.
Idea conceived by - RattanTata Cost of development - 1700 crores Manufacturing Manufacturing cost (excluding dealer margin and taxes) taxes ) - Rs 65,000per 65,000per unit Development of Design - India Time for designing the car - 4 years Team - A team of 150 engineers, everyone below age 28 Biggest hurdle - To make a car cheap car without without Compromising design
Details of Nano Specs:
Engine: 624 cc / 33 bhp 4 door, 5 seater (and yes 4 Wheeled too) Rear Engine Weight: 600 kgs Mileage - 22-23 km/liter
Variants:
Standard Deluxe (with AC) Future:
Diesel Variant Exports outside India or assembly plants outside 2.3 SWOT Analysis STRENGTH
Brand name TATA Cost price low Fuel efficient Safe
OPPORTUNITIES
Large market market for selling Awareness in the market First car in low range Can hit in global market
WEAKNESS
Low power Not a status symbol Delay in manufacturing Limited features
THREATS
Company rival Not sure to hit in rural and semi-urban areas
2.4 New Product Development and Nano
As seen before, A product can be considered new under the following situations: New-to-the-world products New product lines
Additions to existing product lines Improvements and revisions of existing products Repositioning Cost reductions
As far as Nano is concerned, it falls into new to the world products in the context that it has made a history for the cheapest car ever made without compromising on quality. I.e. best way value analysis. It can also be considered considered as new product in the since of cost reduction as it¶s the first time in the history that such a cheap car is produced. The story of the Nano is not confined to its impact on the auto industry. It's a tale that illuminates the India of today²an eager, ambitious nation with a combination combination of en gineering gineering talent, a desire for low costs and value, and the hunger of young managers looking to break from a hidebound corporate environment. Indeed, the team that worked on the Nano²on average aged aged between 25 and 30 ²has helped to flatten Tata Motors' stodgy, multilayered management structure, which has resulted in an unexpected unexpected side -benefit called "organizational innovation". innovation". 2.5 Idea Generation and Nano
A dream is born ±Says, ´I observed families riding on two wheelers -- the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. Add to that the slippery roads & Night time too. It is downright dangerous. It led me to wonder whether one could conceive of a safe, affordable, all weather form of transport for such a family.´ So when Tata Motors needed someone to take charge of the company's most ambitious plan yet to build the world's cheapest car ever Ravi Kant, who by then had become the company's managing director, again turned to Wagh. Wagh remembers what he learned marketing the little truck. "People want to move from two-wheelers to four-wheelers," he says. "Today they can't afford it." More and more can, but Indian car buyers today represent a tiny slice of a potentially giant market India has just seven cars per 1,000 people. India's auto industry has grown an average of 12% for the past decade, but just 1.3 million passenger vehicles were sold in India in the fiscal year ending March 2006. That
means a billion Indians buy about the same number of cars in a year as 300 million Americans buy in a month. If four wheels cost as little as two t wo wheels, that could change change fast. About 7 million scooters and motorcycles were sold in India last year, typically for prices between 30,000 rupees and 70,000 rupees, about $675 to $1,600. Tata is targeting a price of 100,000 rupees one lakh, in Indian terms of measurement measurement or about $2,500 $2,500 at current exchange exchange rates, for its small car. That sounds sounds impossibly cheap in the West but remains three times higher than India's annual per capita income. The average pay for factory workers at Tata Motors is just $5,500 a year. Idea screening
Trying to build a car cheap enough for motorcycle buyers seems to make sense now but seemed crazy several years a go when Rattan Tata, longtime chairman of Tata Motors and scion of the nation's giant Tata Group conglomerate, conglomerate, first mentioned his dream of building a one -lakh car in 2003. "They are still saying it can't be done," he says, insisting that it can and will. "Everybody is talking of small cars as $5,000 or $7,000. After we get done with it, there will hopefully be a new definition of of low-cost." 2.6 VISION, MISSION, VALUES VISION
The vision statement of Tata Motors Limited, India's largest automobile company, is to be "best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics." MISSION
"Tata Motors is committed in letter and spirit to Corporate Social Responsibility". VALUES
The Tata name is a unique asset representing leadership with trust. Leveraging this asset to enhance group synergy and becoming globally competitive is our chosen route route to sustained growth and long -term success. y
Integrity: We will conduct our business fairly, with honesty honesty and transpare ncy.
Everything we do must stand the test of public scrutiny.
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Understanding: We will be caring, show respect, compassion and humanity
for our colleagues and customers around the world, and always work for the benefit of the communities we serve. Excellence: We will constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide. Unity: We will work cohesively with our colleagues across the group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation. Responsibility: We will continue to be responsible, sensitive to the countries, communities communities and environments environments in which we work, always ensurin g that what comes from the people goes back to the people many times over.
CHAPTER 3 COST REDUCTION 3.1 Definition:-
Cost Reduction may be defined as the real and permanent reduction on the cost of goods manufactured/sold manufactured/ sold or the services rendered without impairing impairin g their quality and suitability for the intended use. 3.2 Advantages of Cost Reduction
Increases profit ± dividends to shareholders. Money for labour welfare schemes. Goods will be available at a cheaper rate. Meets competition Revenue to government by taxation. Export price may be lowered. Cost reduction is obtained by increasing productivity. Cost reduction lays emphasis on continuous search for improvement which will improve the image of the firm for long ± term benefits.
3.3 Dangers of Cost Reduction Quality may be sacrificed at the cost of reduction in cost.
Cost reduction programme may not be liked by the employees. Reduction in cost may not be real and permanent. Conflict between organisational objective and individual objective.
3.4 Scope of cost reduction
Cost reduction is attainable in almost all areas of business activities. There is perhaps no situation which cannot be improved. It covers a wide range like new layout, product design, production methods, materials and machines in factories as well as in offices, innovation in marketing etc. it may also extend to specified activities like purchasing, handling, packaging, shipping, warehousing, marketing, marketing, use of administrativ ad ministrativee facilities and even the utiliza tion of financial resources.
CHAPTER 4 SUPPLY CHAIN MANAGEMENT IN TATA NANO 4.1 OBJECTIVES OF THE STUDY
In-depth study about the SUPPLY CHAIN in TATA NANO. Understand the supply chain driver driverss of TATA NANO Find out the different partners of supply chain Raw material supplied different members
4.2 SCOPE OF THE STUDY
Gathering information and theoretical knowledge is a part of study. As the study has got wide relevance is formulating valid information about the organization, it helps in getting a critical look into the supply chain activities of the organization and the ways in which they have been benefited through this function. 4.3 LIMITATIONS OF THE STUDY
The period of the study was limited to 3 weeks. Data source is only from internet. Totally based on secondary secondary data. data . Lack of on field experience. Accuracy will be low (data form internet).
4.4 TATA NANONANO- THE COMPLETE COMPLET E SUPPLY CHAIN
DRIVE DRIVERS OF SUPPL SUPPL
CHAIN
Fac l y L cation Trans ortation
Sourcing Inventory Information Pricing
FACIL FACILIT
LOCAT OCA TION
Infrastructure and Connectivity Supplier proximity and convenience
Business Environm ent Government Regulation and Support
Mul Multi moda modall connec onnectivit tivity y MICT MICT
Rajkot Rajkot Land for suppl upplier parks parks
GM Indu Industrial trial and Labor environ. Ahmadabad Ahmadabad
Gujarat Indu Indusstrial trial Developm elopme ent Corporation (GIDC) Land
Gujarat Agric Agriculture ture Unive University ity (GAU)
Land
Future Prospects
Gu j
Delhi-Mumba Industrial trial Corridor (DMIC) elhi-Mumbaii Indus Specia Investm tme Region (S (SIR) eciall Inves ent Re
t i a better choice for logi tica l reasons and a satisfactory industr ial and
labour environmen t in the State. The State, li e West Bengal, is well connected by air, sea and land routes. Bes ides, the Delhi Mumba i Industr ial Corr idor
(DMIC
passing two-thirds through Gu jara t and the proposed Spec ial
Inves tment R eg egion (SIR would soon make it even more attrac tive. The loca tion of the nano plant was close to the Charodi rail way station, it was just 200 km from R a jkot, where the best engineer ing workforce can be found. Por ts were just 300-400 km away from bo th P i pavav pavav and Mundra (Mundra had the edge given its container depots for vehicles - Maru ti uses them - and a huge ro-ro (or ro ll on, roll off) terminal for load ing and unload ing vehicles). Then there was a 6-lane highway just 1 km away from the land earmarked for Tata Motors. If the Tatas gave the go-ahead, the State could acquire this k il es s than 24 ilometer of land, too. Last week, Tatas gave their go-ahead. In less hours, the 1,000 acres owned by the s tate were transferred to the Tatas a t market rate.
TRANSPOR TATION:-
Increased m dularity L cal 3PL le eraged
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Open Distributi n ¨
Distributed Assembly M del ¨
M st f the suppl suppliers are l ated acr ss India. JIT and JIS JIS requirements ¡
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97% l al end rs Alm st hal half f ll ated in Vend r Park ¡
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Optim al transp rtati n netw Shrkrte r Lead TImes
Truck ptimizati n s ftwares Lead Time Map
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This is ca lled ³open distr i bu bution" innovation because it mobili es large numbers of third par ti ce s ties to reach remote rura l consumers, tailor the produc ts and services to more effec tively serve their needs, and add va lue to the core produc t or service through anc illary services. Three innovations in produc ts and processes come toge ther to suppor t "open distr i bu bution:" both in produc ts and processes) increased modular it ity ( bo
aggress ive leveraging of ex isting third-par ty, of ten noncommercial, institutions in rural areas to more effec tively reach target cus tomers crea tive use of informa tion technology, carefully integrated with soc ial institutions, to encourage use and de liver even grea ter value.
Modular designs combined with creative leverage of loca l third-par ty pants to get better faster. Companies such as Ta ta and institutions hel p par tici pan Cummins are going far beyond "cus tomer co-creation" in the narrow sense of soliciting isolated ideas from cus tomers. Instead, they are building long-term er m persona l relationsh i ps with customers, enr iched by the speciali ed capabilities of broad ne tworks of third par ti ties that generate much deeper insight into customer needs and afford a fford oppor tunities to tailor va lue.
SOURCING:-
Suppliers divided into Proprietary and Non-proprietary.
©
% parts sourced from local suppliers.
Innovation in mfg. processes done locally to avoid extra costs Long term volume contracts rather than annual contracts
75% single source components
TATA divided the components into two par ts: propr ietary designs and tata motor designs. For propr ietary des igns TATA motors went with es tab lished suppliers such as B SC
that supplies the engine management system and
signif ican tly contr i bu buted to diese l engine. For components and systems designed
in-house, Ta ta Motors chose suppliers with strong process capabilities who could give va luab le suggestions and improve on the designs. Near ly everything has been sourced loca lly and the Nano will have 97% loca l conten t from day
one. Tata¶s suppliers were an integral part of not only the design and development process, but also purchasing.
SUPPLIERS LIST:The key decision was to bring in suppliers. Tata brought following suppliers for achieving this. 1. SUPPLIERS TO TATA NANO
Bosch
Freudenburg
Caparo
GKN
Continental
Itw Deltar
Delphi
INA
Denso
Johnson Controls Fag Mahle Ficosa
Saint gobain
TRW
Ceekay
Vibracoustic
Visteon
Z.f (friedrichshafen) A.G
Behr
SUPPLIED MATERIALS BY SUPPLIERS:
BOSCH: A German based automotive company. It supplies Gasoline injection system, starter, alternator, alternator, brake system.
Caparo Vehicle Technologies ( CVT ) : A Europe based company. it supplies Inner structural panels.
Continental motors: it is a Europe based company. It supplies fuel level sensor, gasoline fuel supply system.
Delphi : an automotive parts company headquartered in Troy, Michigan, USA. It supplies instrument clusters.
Denso: a global automotive components manufacturer headquartered in the city of Kariya, Japan. It supplies Windshield wiper system.
FAG: A German based company manufacturing ball bearings. It supplies rear wheel bearings.
Ficosa: It supplies Rear-view mirrors, interior mirrors, manual and CVT shifters, washer system .
Freudenberg: Freudenberg: a town in the, in North Rhine -Westphalia, Germany. Germany. It supplies Engine sealing.
BEHR GmbH & Co : German corporation It supplies engine cooling systems and HVAC for the luxury version.
ZF Friedrichshafen: a town on the northern side of Lake Constance Constance in southern Germany, leading worldwide supplier of driveline and chassis technology.
It supplies Chassis components, including tie rods
Vistoen : a U.S based company. It supplies a ir induc tion system.
Vi bracous bracoustic: it supplies Engine mounts.
TR W: an Amer ican corpora tion. It supplies break systems.
Saint-Goba in : a French multinational corporation, headquar tered on the outsk ir ts of Par is . Or iginally a mirror manufacturer, it now a lso produces a var iety of construction and high-performance ma ter ials. It supplies glaz ing.
Mahle GmbH: a german based company headquar tered in Stuttgar t. it supplies Camshaf ts, spin-on oil f ilt ilters, fuel f ilt ilters and a ir c leaners .
Illinois Tool Works (Itw): a U.S based company. It supplies Outside and inside door hand les .
Johnson Controls: a U.S based company. It supplies seating sys tems.
INVE INV ENTORY:-
Just in time Inv In ventory
ti-purpose Multi-purpo se compone compon ntss ent
Seamless Seam less Inte Int egration
Leveraging the proximit y of supplier s Less number of supplier s
Innovative but not too much comple xit y in design Less numb er of total compon ents
Accurat e data on for ecast Ear ly Captur e of d esign issues
Above three strategies used for inventory, helped in, reducing inventory inventory reduces the working capital cost , reduces warehousing costs and obsolescence costs . To reduce inventory, demand fluctuation will have to be reduced, reliability of inventory inventory replenishment will have to increased, Inventory Inventory Record Accuracy will have to be above ~95% and supply chain length will have to be reduced.
IT STARTEGY:-
Tata Motors investment in IT for efficient supply chain ± Implementation
of
SAP
3.1
and
4.6c
(Asia¶s
largest
implementation) ± SAP SRM (Supplier Relationship Management) for end to end supply chain integration) ± SAP WM (Warehouse Management) Management) combined combined with barcodes barcodes to automate warehouse operations) ± Knowledge based Engineering (KBE) in design SRM platform used for sustainable savings and value generation Benefits ± Reduction in procurement cycle time ± Improve process by e-procurem e-pr ocurement ent ± Real time supplier integration with business ± Knowledge sharing SAP WM with mobile data entry is combined with RF Technology (barcodes) to automate warehouse operations Benefits ± Improved throughput at warehouses by RF enabled processes ± Capability enhancement to handle more parts and team size ± Real time inventory tracking Knowledge based engineering in CAD/CAM with help of KNEXT ± in house software
Benef it its of K BE 30% reduc tion in cycle time Des igner¶s knowledge and company¶s best practices retained
PRICING:-
Reducing Inventory
Eliminating waiting time and delays
Increasing utilization of warehouses & trucks
Optimizing location of warehouses and plants
Optimizing transportation networks
COST COST OF THE SUPPL SUPPLY CHAIN:Conventi Conventional onal Strategy
Calculate Production costs + Marg in = Pr ice Tata Nano¶s strategy
Set pr ice => Work backwards & Challenge Suppliers to lower costs
TARGET ARGET PRICING / PENET ETRA RAT TION PRICING/ PRICING/ LOW PRICING ST STRATE RATEGY GY
These are the terms that des igned the wor ld¶s cheapest car. It was impor tant to unders tand that the car was to be designed within the specif ied range of 1 Lakh
R upees upees in the Indian Market. Pri ing¶ attemp ted to unders tand what fea tures were required in The µTarget Pri
the car.
The pricing strategy followed by the Tata Motors was ³ Penetration Pricing´. This is the strategy where an organization sets the price of the product to a new low level so that consumers switch to the product and the product product penetrates t he market rapidly. The promise of 1 Lakh rupees car stated by the Tata¶s was the first step of initiation of this strategy.
4.5 CHALLENGES TO SUPPLU CHAIN OUTSOURCING IN INDIA Following are internal challenges to supply chain outsourcing in India
Strategic
± Management Management buy-in buy -in ± Cultural fit ± Scope of outsourcing
Organizational
± Restructuring organization ± Re-deploying Re-deploying existing resources ± Anticipating quantum and timing of change ± Managing change
Operational
± Reengineering existing processes in view of outsourcing strategy ± Framing KPIs/ SLAs both for internal resources and for external agencies ± Implementing processes across the organization and initiating MIS generation ± Measuring performance and benefits of outsourcing Following are challenges in vendor selection
Selection Challenges
± Ability to understand and assess customer¶s requirement ± Project management and roll-out roll -out capabilities ± Framing appropriate performance measurement system ± Information technology integration and interface ± IT and communication infrastructure up gradation ± Managing relationship with customers/ vendors/ authorities/ employees
± Developing short-term and long-term infrastructure ± Developing strong intra-country intra -country dependable dependable distribution service Following are external challenges
Optimizing within infrastructure constraints
Poor road conditions Lack of dependable communication infrastructures Real estate hurdles
Managing multiple government authorities
Sales tax authority Octroi Authorities/ Entry Tax Authorities
CHAPTER - 5 CONCLUSION
The great wonder car by Tata¶s has stunned the entire world. Critics who often said that it was not possible to make a car at a price below $3000 were taken to a back sit when Ratan Tata the chairman of Tata Motors unveiled this car in New Delhi at a price of $2500. Since then it has been in lime light and has been making news in the auto sector throughout the world.
REFERENCE
TataNano.com tatamotors.com www.tatatechnologies.com www.tatamotors.co.th www.tatacummins.com www.tatamotorfinance.com Scm project by KANIKA LUTHRA Scm tata nano ppt by Neha Baid Anand Pillay Arun Sharma Naveen Kumar Nidheesh Hirwani y y y y y
