Dynamics Of Creating A Highly Visible Integrated Dynamics Of Creating A Highly Visible Integrated

Supply Chain to Gain Market Leadership Supply Chain to Gain Market Leadership
D K Sethi
Maruti Suzuki lndia Ltd.
14
WK
May, 2008
AGENDA AGENDA
- Introduction to Supply Chain in
Automotive Industry
- Supply Chain Challenges
- Key to success
Sales Outlets
Local
T2 suppliers
T3 suppliers
STRUCTURE OF AUTOMOTIVE SUPPLY CHAIN STRUCTURE OF AUTOMOTIVE SUPPLY CHAIN
Automaker
Sales Outlets
Service Outlets
End
Customer
Local
T1 suppliers
Overseas
suppliers
RM supplier
Logistics
Service
Provider
In-house
O/H expenses,
Governed by
Organizational
make-up : mostly
fixed
Most critical for
controlling costs
VALUE ADDITION IN AUTOMOTIVE SUPPLY CHAIN VALUE ADDITION IN AUTOMOTIVE SUPPLY CHAIN
SUPPLY CHAIN
O/S
Vendor
T1
T2/
RM
Dealers
Service
stn
End
Customer
Rs. 100
(output)
Rs. 75
(input)
In-house
production
costs
Mktg../Sales/
Distribution
Expenses
Dictated by
market
controlling costs
AUTOMOTIVE SUPPLY CHAIN : CHALLANGES AUTOMOTIVE SUPPLY CHAIN : CHALLANGES
Capability to Launch New Models
High frequency
Within target cost.
On schedule On schedule
Pressure on Costs - Need to perpetually reduce cost
Indian customer expectations on quality
Lower operational costs- Thinning Inventories
Exponentially expanding volumes
KEY TO SUCCESS : SUPPLY CHAIN KEY TO SUCCESS : SUPPLY CHAIN
Relationship with Strategic Partners
Quality Focussed Supply Chain
Lean Supply Chain
Agile Supply Chain
Efficient Supply Chain
Progressive Supply Chain
RELATIONSHIP BASED SUPPLY CHAIN RELATIONSHIP BASED SUPPLY CHAIN
Long Term Relation-ship with suppliers:
Collaborative Collaborative
Transparent ; Mutual Trust
Compact Vendor Base
Role in Upgrading Vendors
QUALITY FOCUSSED SUPPLY CHAIN QUALITY FOCUSSED SUPPLY CHAIN
- Design and development capability
- Process Quality
- Robust Quality Systems. - Robust Quality Systems.
- Tier-II Supplier Management
- Developing and retaining Human Resource
- Continuous capability Up gradation
LEAN SUPPLY CHAIN LEAN SUPPLY CHAIN
- Consistent price reduction can be achieved only
through continuous cost reduction.
- Involving vendors early- at design stage.
- Partnering to identify opportunities to reduce costs - - Partnering to identify opportunities to reduce costs -
conducting cost workshops
- Procurement Consolidation .
- Collaborative approach to eliminate waste.
- Productivity Improvement.
AGILE SUPPLY CHAIN AGILE SUPPLY CHAIN
- Shorter Product Development Cycle.
- Flexible Production System
- Managing Changes : Proactive response to - Managing Changes : Proactive response to
market needs
- Flexibility of sourcing commodities / non
strategic parts.
EFFICIENT SUPPLY CHAIN EFFICIENT SUPPLY CHAIN
- Integrated Supply Chain
- Low Inventory
- Ordering System - Ordering System
- Quick Truck Turnaround
- Automated Material Inwarding System
- Direct on line supplies
PROGRESSIVE SUPPLY CHAIN PROGRESSIVE SUPPLY CHAIN
- Technology Leadership - Entire Chain
- Stretched beyond national boundaries.
- Strategic Alliances - Strategic Alliances
- Global Models
- Green Supply Chain
Thank You Thank You