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Under the Guidance Of Mr. Balkrishan Bhatt (Sr. Production Manager, Supply Chain) Caparo Maruti Ltd., Gurgaon

Submitted By: Harish Saini MBA (Manufacturing) ROLL No.50702504


This is to certify that Mr. Harish Saini from L.M. Thapar School of Management, Patiala has undergone & completed summer training course at Caparo Maruti Ltd, Gurgaon on Supply Chain Management under the guidance of Mr. Balkrishan Bhatt from 15 May, 2009-15 July, 2009. His performance was excellent.

Mr. Rattan Yadav (Assistant General Manager, H.R.)

I express my deep sense of gratitude to Caparo Maruti Ltd for providing me valuable insights on Companys Supply Chain practices .I appreciate Mr. Balkrishan Bhatt (Senior Manager), Production and Supply Chain for their constructive guidance on the project titled Cost Minimization by reducing the no. of Trips in Final Product Supply to Customer End. My sincere thanks to Mr. Suresh Yadav (Production Head) who was kind enough to familiarize me to plants operations.

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1. Introduction to Supply Chain 2. Supply Chain Management (SCM ) 3. Caparo Group 4. Caparo Maruti Ltd 5. Stamping Operations at Gurgaon 6. Gurgaons Manufacturing Plant 7. Project Highlights 8. Supply Chain Structure at Caparo Maruti Ltd 9. Shortcomings to Supply Chain 10. Problem Breakdown 11. Savings to Supply Chain Structure

A supply chain is:a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. For Example: A Supply Chain for a Single Product includes;


Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain independently. Purchasing contracts are often negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization. Clearly, there is a need for a mechanism through which these different functions can be incorporated together. Supply Chain Management is a strategy through which such integration can be achieved.


Supply chain management (SCM) is the process of planning, implementing and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. The term supply chain management was coined by Keith Oliver, 1982. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. Importantly, it also includesCoordination and collaboration with channel partners, which can be suppliers, Intermediaries, Third-party service providers, and Customers. In essence, Supply Chain Management integrates supply and demand management within and across Companies The primary objective of supply chain management is to fulfill customer demands through the most efficient use of resources, including distribution capacity, inventory and labour. Various aspects of optimizing the supply chain include:  Negotiating with suppliers to eliminate bottlenecks.  Implementing JIT techniques to optimize manufacturing flow  Using Location/Allocation, Vehicle routing analysis, Dynamic programming and traditional logistics optimization to maximize the efficiency of the distribution side.

Supply chain activities can be grouped into following three levels:

 Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities.  Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics.  Where to make and what to make or buy decisions 2. TACTICAL LEVEL  Production decisions, including contracting, locations, scheduling, and planning process definition.  Inventory decisions, including quantity, location, and quality of inventory.  Transportation strategy, including frequency, routes, and contracting. 3. OPERATIONAL LEVEL  Daily production and distribution planning, including all nodes in the supply chain.  Production scheduling for each manufacturing facility in the supply chain (minute by minute).  Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.

 Inbound operations, including transportation from suppliers and receiving inventory.  Production operations, including the consumption of materials and flow of finished goods.  Outbound operations, including all fulfillment activities and transportation to customers.


There are four major decision areas in supply chain management:

The geographic placement of production facilities, stocking points, and sourcing points is the natural first step in creating a supply chain. The location of facilities involves a commitment of resources to a long-term plan. Once the size, number, and location of these are determined, so are the possible paths by which the product flows through to the final customer. These decisions are of great significance to a firm since they represent the basic strategy for accessing customer markets, and will have a considerable impact on revenue, cost and level of service.

The strategic decisions include what products to produce, and which plants to produce them in, allocation of suppliers to plants, plants to DC's, and DC's to customer markets. Operational decisions focus on detailed production scheduling. These decisions include the construction of the master production schedules, scheduling production on machines, and equipment maintenance.

These are the means by which inventories are managed. Inventories exist at every stage of the supply chain as either raw material, semi-finished or finished goods. Their primary purpose is to buffer against any uncertainty that might exist in the supply chain. These include deployment strategies (push versus pull), control policies-the determination of the optimal levels of order quantities and reorder points, and setting safety stock levels, at each stocking location. These levels are critical, since they are primary determinants of customer service levels.

The mode choice aspect of these decisions is the more strategic ones. These are closely linked to the inventory decisions, since the best choice of mode is often found by trading-off the cost of using the particular mode of transport with the indirect cost of inventory associated with that mode. While air shipments may be fast, reliable, and warrant lesser safety stocks, they are expensive. Meanwhile shipping by sea or rail may be much cheaper, but they necessitate holding relatively large amounts of inventory to buffer against the inherent uncertainty associated with them. Therefore customer service levels and geographic location play vital roles in such decisions. Since transportation is more than 30 percent of the logistics costs, operating efficiently makes good economic sense. Shipment sizes, routing and scheduling of equipment are key in effective management of the firm's transport strategy.

"Caparo is more than a successful business enterprise - it is a story of people, of values and of human effort. Above all it is a story of faith and family" - Lord Paul, Chairman and Founder Caparo is a fast growing global manufacturing group with a 1bn Euro turnover. With business interests predominantly in the manufacture of steel, automotive and general engineering products, the groups wider activities encompass materials testing services, hotels, film distribution and private equity investment. Headquartered in London, Caparos operations are located at over 60 sites in the UK, North America, India, Poland and Spain. The group was founded in 1968 by Indian born British Industrialist, Lord Paul of Marylebone, who remains Chairman. The group employs more than 8,000 people worldwide.

A wholly owned subsidiary of Caparo UK, Caparos development in India began in 1994 with a joint venture with Indias largest car manufacturer, Maruti Udyog. The group has developed three entities in India: Caparo Maruti, Caparo Engineering India PVT Ltd (CEIPL) and Caparo India Private Ltd. It offers complete lifecycle solutions for automotive systems, assemblies, advanced composites, modules and components. Caparos Indian operations currently employ over 5,000 people directly, and many others indirectly. This rapid expansion continues today both via Greenfield projects and planned acquisitions. The Stampings, Fastening and Tubing facilities, soon to be complemented by upcoming facilities for Forging, Foundry and Research Development.


Caparo is something more than a successful enterpriseit is a story of people, of values and of human effort. Working together we can build Caparo with resolution, fortitude and ability. The goodwill and confidence of Caparo employees, our suppliers, our customers and our managers is the bedrock of our business Always aspire for excellence; nothing else is good enough Never abandon hope There is no such thing as bad business; only bad management What I like is people who are proud of what they do Lord Paul Our aim is to always be in the top 10% of performers (measured against our industry competitors) Success will happen so long as you work hard, with integrity Find excitement in industry and your own job in it Cherish the enduring values of fidelity, truth and integrity

Natural Gas Tubes starts making spiral weld tubes at Huntingdon First year sales 14,000 Tredegar Spiral Weld Mill opened by late Prime Minister of India, Mrs. Indira Gandhi Acquire control of quoted public company LK Industrial Investments - becomes Caparo Industries

1968 December 31

1978 November 16

1980 December 31

1984 December 31 Acquire Wrexham Wire now Caparo Wire 1980 December 31 Acquire control of quoted public company LK Industrial Investments - becomes Caparo Industries

1991 December 31 Caparo Industries goes private. Buy back public 20%. 2002 December 31 2002 Summary : Caparo Engineering India Private Ltd Pithampur, new pressing plant commences production

2004 December 31 Caparo Maruti, India - Halol and Bawal plants established. India:- Caparo Fasteners constructing new plant in Chopanki 2005 December 31 (RN).Caparo Engineering expansion in Pithampur (NP) and new plant in Greater Noida (UP) 2006 February 01 Creation of Vehicle Products division

2006 November 03 Duke of York launches Caparo's 120 acre site in Chennai, India 2007 January 2008 July 18 Caparo Engineering India Private Ltd. acquire the sheet metal business of IAL

11 Caparo T1 smashes track record at Dubai Autodrome



An expansion into automotive and aerospace markets, whilst maintaining and developing the steel and engineering business, is a key strategy for the group. This has been highlighted by the launch of the Caparo T1 high performance sports car in 2006, which showcases many of Caparos innovative new products and processes in this sector. The development of Caparo Vehicle Products, a grouping of Tier 1 component design, engineering and manufacturing companies providing advanced solutions to the automotive, aerospace, military and motor sport markets is just one of the key initiatives being developed within the group. Furthermore the creation of Caparo Testing Technologies, a group of businesses specializing in comprehensive Destructive and Non-Destructive Testing (NDT) services will provide support to the aerospace industry and offer a valuable service to other Caparo group companies. Geographically, Caparos plans to create a leading automotive components manufacturing group in India are well advanced. From an initial joint venture with the major Indian car manufacturer Maruti Udyog in 1994, Caparo have established a wide range of businesses and now operate on 22 sites in India and plans are in place to develop a further 9. Caparo Indias activities will serve not only the regional automotive sector, but also established Caparo customers worldwide where Caparo will continue to provide local service and support, with the benefits of Asian manufacturing.

The Caparo group is a collection of over 40 companies operating on over 60 sites in the UK, India, Spain, North America, Canada and Dubai. With business interests mainly in the manufacture of steel, automotive and general engineering products, the group's wider activities encompass materials testing, film distribution, hotels and bespoke furniture. And Caparo is still growing. In 2006 alone the group acquired 22 companies. y AEROSPACE The Caparo group companies offer the aerospace industry a diverse range of solutions. Further expansion into this market is part of Caparos ongoing commercial strategy. Products supplied to the aerospace market include Anti Shock Vibration mounts from Caparo Dynamics. This range of lightweight mounts is compact enough to be used in a variety of aerospace applications. y ENGINEERING Caparo Engineering has continued to develop and grow strongly and is reaping the benefits of its size and the cross fertilization of ideas from the different subsidiaries and the adoption of best practices. The company continues to identify appropriate acquisitions in niche manufacturing. India Caparo Engineering India Private Ltd (CEIPL): The Industry manufactures stampings and fasteners for the automotive and general engineering markets. The 120 acre Chennai site, which houses a forge, foundry, research and development centre and stampings facility, was inaugurated in October 2007.

In pursuit of commercializing innovative inventive ideas, Caparo established The Caparo Innovation Centre at the beginning of 2003 as collaboration between Caparo plc and the University of Wolverhampton. The Caparo Innovation Centre is an imaginative new approach to turning product ideas into business realities.

Caparo group has invested in a diverse portfolio of companies from film distribution to private equity investment. The Companies are AV pictures, Core Capital, Film 24, Hapax and Gordon Murray Design.

Caparo Hotels is a management and investment company which currently operates four hotels in Southern and Central England. y VEHICLE PRODUCTS Caparo Vehicle Products (CVP) is a grouping of innovative Tier 1 component design, engineering and manufacturing companies providing advanced solutions to the automotive, aerospace, military and motor sport markets. The Companies are as follows: North America - Caparo Vehicle Components, Inc. India Caparo Maruti Ltd India Caparo Engineering India Private Ltd (CEIPL)

Caparos steel operations span the UK, North America and more recently India. UK Caparo Steel Products Ltd North America - Bull Moose Tube Company India Steel Tubes India, Dewas




Caparo Maruti Limited (CML) is a world-class Tier1 sheet metal stamping, weld assemblies and closures supplier to Maruti Suzuki (India) and General Motors (India).Formed in 1994 as a joint venture with Indias largest car manufacturer, Maruti Udyog Ltd ( Manufacturers of Automotive body panels). They serve in the fields of Stamping die, Panel checker & Welding jig designing for sheet-metal parts. The Company operates from three sites in India: Gurgaon, Halol and Bawal.


Studio Caparo, the London based provider of design-led manufacturing solutions has now been trading for over a year. Even in this short period, the company's aim to produce high-concept, quality products that showcase a first class design pedigree has been realized. Recent projects completed by Studio Caparo include the innovative line of furniture created for APRRO; the challenging Braemar Seascope, an acoustic canopy which reflects sound back into the building; the ingenious smart board dining table, which transforms into a sideboard in seconds; and the quirky Stack drawer concept, developed by upcoming designer Shay Alkalay.


CML is making auto chassis for Omni model for Maruti Udyog Limited. This part is critical for spot strength as the body of the vehicle is welded to it.

CML is the manufacturer of Dash assy parts for following models for Maruti Udyog Limited (India) 800cc car Zen Esteem Wagon-r Alto Versa This part is critical for the mounting of air-conditioner units and engines and for the prevention of water entering into the vehicle. These parts are commonly called the firewall and they separate the engine chamber from the driver chamber.


CML is the manufacturer and supplier of this assy for following models of Maruti Limited (India) 800 CC car Alto


CML is the manufacturer for Maruti of Cowl upper assys parts for the Zen model. This part is critical for mounting of steering wheel & for prevention of water into the vehicle.


Caparo Maruti manufactures complete doors for General Motor Indias MUV. Aesthetically, functionally and from the safety standpoint, this is probably the most important element in an automobile. Facilities at the plant include a press shop, hemming shop, die spotting press, weld shop and a quality control laboratory.


Caparo India specializes in providing complete Steel & Aluminum metal stamping solutions for a variety of applications. It is the only supplier in India possessing capabilities to meet all stamping & stamping assembly requirements of OEMs. Starting right from the Process design & development stage to providing tools, migration to mass production & effective delivery management, the Company offers tailor-made solutions to customers. Having started with a single unit at Gurgaon, Caparo Indias stamping operations are now spread across several hi-tech facilities in India. It has developed capabilities to supply complete body-in-white systems to OEMs like Tata motors a skill set unmatched in the Indian industry. The companys wide range of stamping products include body parts, chassis parts, long members, reinforcements, brackets, frame add-on parts, and other general stampings. Caparo India is also strongly focused on developing technologies to get into Advanced Composite Materials- perhaps the technology most likely to replace sheets metal over the next 7-10 years.

Caparo India stamping operations are currently based out of 11 plants with 3 new plants under construction .Caparo Indias facility in Greater Noida, primarily services Honda Siel while the Pithampur plant is dedicated largely to Eicher motors & Force Man .Halol has been set up mainly for General Motors & the Gurgaon & Bawl facilities service Maruti. The plants in Pune & Jamshedpur were acquired in 2007 & are critical to developing business with Tata Motors.



Greater Noida

Pithampur (Indore)



CML, Halol


Outer Body Panel Large Inner Panel Reinforcements Brackets Frame add-on parts Cross members and Chassis Parts General Stampings

o o o o o o o


Operational since - Feb 1996 Total Area - 12,100 sq.m Built up Area - 5,600 sq.m Capacity - 2.4 mn line strokes p.a. Investment - INR 100 cr Man power employed - 330 employees

 Fully-automatic press line consisting one press of 800T, three presses of 400 T each, one press of 110T & 80T  Bed size of all presses is 2.5*1.8 meters  Products manufactured are Dash Panels ,Floor panels, Quarter Line ,Hood inner ,Front member & Door inner

 Automotive Press Shop  Die Spotting Press  Car Wield Shop y Projection wielding stations y Drawn-Arc wielding stations y Spot wielding stations


 Skin Parts- Caparo India manufactures all kinds of skin parts such as outer panels & inner panels in various sizes (t=0.5-0.6 mm) At present, Caparo is manufacturing complete doors for General Motors Indias MUV, Tavera.

 High Tensil parts-They are used by OEMs to lend strength & stiffness with a favorable mass to cost ratio. Caparo has pioneered this concept in India & supplies 15 such parts to Honda.  Long Members-They are the members on which the complete Chassis & body of Commercial vehicles rest. Caparo India is making long members for Eicher Motors at Pithampur plant.  Assembly Systems-This involves assembling the various body parts including Frames ,members ,floors etc through a combination of processes like welding & adding nuts & bolts.  Body-In-White Systems-Caparo has built capabilities for complete body in white systems that include side panels ,body frames ,pillars ,boot lids ,seat components etc.


Sr.n o. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Model Part No. of stages 4 4 4 3 4 3 4 4 4 4 3 4 4 4 4 4 Stage 1st (tonne) 800 800 800 800 800 800 800 800 800 800 800 800 800 800 800 800 Stage 2nd (tonne) 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400 Stage 3rd (tonne) 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400 Stage 4rth (tonne) 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400

Alto Alto Alto Alto WagonR WagonR WagonR WagonR Omni Omni Omni Omni Omni Versa Swift Swift

Quarter inner lower RH Panel dash Rear wheel housing LH Fendor apron - RH/LH Panel dash Dash side - RH/LH Rear quarter inner RH Rear quarter inner LH FFF- LH FFF-RH FWHO-RH/LH FFR-LH FFR-RH Panel Dash Panel Back Tunnel




According to the specifications of Maruti Udyog Limited, the raw material for the finished goods to be manufactured is supplied by ten major sources namely: 1. Essar 2. Bosco 3. Tata Steel 4. Tata Ryerson 5. Bhushan Steel 6. Ruchi Steel 7. Ispat 8. Uttam Galvano 9. Sail 10. Honda Trading The material obtained is further processed largely at the Gurgaon plant. The shearing of the rolls were done at the MUL plant. The processing of the raw materials is done at the Caparo Maruti station. Thereafter, the processed material is loaded in trolleys which are then transported to the MUL plant in Swaraj Mazda trucks. The items which are considered here are: 1. Cowl top 2. Dash upper 3. Swift tunnel


The transportation of the items to the MUL plant was a very critical process. During the transportation of the items, care had to be taken that the items are not damaged during transit; the high quality set by MUL meant that even a minor scratch was treated as a major non conformity to standards & the part was sent back. The re-work of the part & the additional transportation expenses were additional costs. Each part was manually checked to & then supplied to MUL which means additional costs.



Part: cowl top Units/trolley: 10 Trolleys/truck: 6 Cost of transportation/truck: Rs.1200 No. Transits: 390 Total costs: Rs.4, 68,000

Panel Dash

Part: dash upper Units/trolley: 25 Trolleys/truck: 6 Cost of transportation/truck: Rs.1200 No. Transits: 273 Total costs: Rs.3, 27,600

Swift Tunnel

Part: swift tunnel Units/trolley: 10 Trolleys/truck: 10 Cost of transportation/truck: Rs.1200 No. Transits: 234 Total costs: Rs.2, 80,800

Cumulative transportation costs/month = Rs. 10, 76,400

In a volatile business environment & economic slowdown, MUL has been slashing the prices of its vehicles to remain competitive & recapture its position as the market leader. On the other side, this cost cutting has been transferred to the vendors of MUL who need to control operating costs in order to make profits. As logistics costs are a major chunk of the operating expenses of Caparo Maruti, they need to be minimized so that the logistics process functions optimally. Therefore, In order to minimize the logistics costs, both transportation resources and supply chain system has to be analyzed. With the rising fuel prices and scarcity of petroleum resources, it is necessary that minimum expenditure on petroleum resources should be incurred so that the natural resources are not overburdened. At the same time, expenditure related to transportation of finished goods is reduced. With the limited capacity of the trucks, resources and manpower available at company it was necessary to look in to the supply chain structure operated within the framework of delivery at the company. Within the supply chain structure, we have 3 main variables to work upon: 1. No of rack in a trolleys 2. No. of Trolleys/Truck 3. Size of the trolley

Variable 1: No. of racks in a Trolley

Solution for dash upper

With careful research and analysis, it was noticed that the assembly loaded in a trolley were loosely spaced and had no utility. Proper measures with regard to safeguarding of assembly were not taken. Therefore, there was probability of increasing the no. of rows per trolley that would add to the capacity of trolley. This act was a crucial step in the units delivered per transit. Thus, the Supply Chain structure was faster, efficient as well as economical. Earlier the no of rows in a trolley were 5 i.e. 5 units of dash uppers could be loaded in 1 trolley, but there was a lot of space wastage in this process. By increasing the no of rows in the trolley to 8 and spacing the rows uniformly, the no of dash uppers transported per trolley increased to 8 & also there was no compromise on the road safety norms. The quality of the dash uppers also didnt get hampered. Moreover, there was no damage to the dash uppers during transit. This was a significant improvement.

Variable 2: No. of Trolleys\Truck

Solution for cowl upper

The other challenging area was the no of trolleys within the layout of the trucks. It was noticed that per cubic area was not properly utilized especially when it came to the height available within the truck. There was a room for taller and more robust trolleys that would take the same square area, but due to height it would be able to carry almost double the goods to the previous design. To achieve this within the cost structure available, the best possible option was to place two trolleys one upon the other. This would save the cost of purchasing new trolleys and other expenses well fits into the companys budget. With this critical design, mobility of trolleys and size to weight ratio of the trolleys is maintained. Thus, saving the space. To achieve this CUP and LEG design was implemented. In this design, there were extra legs being welded at the top of the trolley while a cup like structure was placed at the bottom. This mechanism in turn would act as a lock and key device in which leg of one trolley would be locked in the cup of the other.

This design maintains the mobility and size of the trolleys because the adhesion of trolleys is temporary and is only utilized within the transportation vehicle. Another problem associated with the transportation of trolleys was the spring-hook assembly at the side of the trolley. This assy. was used to save on the time resources to move the trolleys to the destined transportation vehicle. But the hooks on the side of the trolleys hamper the space management. Because of the hooks on the side of the trolleys within the truck, there was substantial gap between two trolleys and the no. of trolleys that could be loaded were limited to 5 and there was 70% room for the 6th trolley. To overcome this problem the hook and spring design was modified in a way that the hook was placed at the bottom of the trolley to serve the purpose that was less taxing on space and thereby making rest of the 30% space for the 6th trolley. Changing this design would enable the company to load at least 6 trolleys per vehicle that would make each trip less expensive and more efficient.

Variable 3: Size of the Trolley

Solution for swift tunnel

In case of the swift tunnel, the loading area of the truck was optimally utilized by fitting in more trolleys in the loading bay. This was done by modifying the size of the trolleys. By slightly altering the dimensions of the trolleys, the number of trolleys that could be fitted into the loading area increased significantly. Thus, the loading capacity of the truck in terms of the no of units of swift tunnels increased.

Prior to the modification, the size of a trolley being used was: Length: 3feet 11 inches Breadth: 2 feet 11.5 inches

After altering the shapes (considering truck length & width), the dimensions of the trolleys were: Length: 3feet 7.5 inches Breadth: 2 feet 6.5 inches The area of the Swaraj Mazda truck is 17533 square feet. Prior to altering the size of the trolleys the, load ability factor of the truck was 10 trolleys. But after modification, the load ability factor increased to 13. This was a significant increase since now more swift tunnels could be transported per transit & the cost of transportation of the tunnels also decreased in confirmation with the set standards.


No. of transits = 234 No. of units per transit = 100 Swift tunnels transported = 23,400 Total costs = Rs. 2, 80,800 After the modification, the number of transits required to transport 23,400 units of swift tunnels decreased significantly as now 13 trolleys could be loaded in 1 truck. Hence, the cost of transportation to deliver the same amount of material decreased.

No. of units per transit = 130 No of transits required to deliver 23,400 units = 180 Cost /transit = Rs.1200 Total cost = 1200*180 = Rs. 2, 16,000  Net primary savings = Rs. 64,800  Secondary Savings:  Additional Execution Cost at Caparo & at Supplier end  Additional stationary & overhead cost  Additional Man hours Cost reduction