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PAPER ID# 140

BEST PRACTICES AND PERFORMANCE

BENCHMARKING FOR SCM IN INDIAN AUTO INDUSTRY

Sunil Sharma, Reader, Faculty of Management Studies, University of Delhi, DELHI – 110007, INDIA; E-mail : ssharma@fms.edu; Tel : +91-9871119464, Fax : +91-11-27667183.

The present paper first traces out the multidimensional functional relationship of supply chain management (SCM) with material planning and delivery, lean manufacturing and total quality systems. Consequently, based on executive judgement and literature survey, an extensive list of sixty critical success factors has been developed for benchmarking in SCM. These factors are then evaluated and analysed in leading Japan / Korea collaborated car manufacturing units located in India. Some key performance parameters of SCM are thus evolved which are then assessed in sample companies. The paper validates a potential for intensive research in area of performance benchmarking in SCM on a global basis particularly in firms operating on joint ventures / collaborations.

Keywords : Lean manufacturing, JIT II, SCM Performance Parameters

INTRODUCTION :

Recently there has been increased focus in organizations on improvement of value delivery systems to customers and as a part of this strategy, supply chain management (SCM) has been identified as a thrust area by most corporate who are now entering into ‘strategic partnerships’ with specific suppliers and distributors and even customers to improve the performance of value – delivery system and networks facilitated with information technology. This clubbed with the physical distribution and logistics requirements is posing a great challenge to the companies which want to make their value – delivery system most effective particularly regarding their front – ending with the customers. Obviously, manufacturing and engineering companies cannot accomplish these objectives unless their vendors meet the specified criteria specially latter’s ability and willingness to participate in cost, delivery, quality, service and logistics improvement programmes. Never has there been a greater thrust on careful selection, rating and development of suppliers oriented towards fostering ‘strategic alliances’ rather than just meeting shot-term contractual obligations and consolidating vendors base. This is going to be even more rigorously pursued in the first decade of new millennium. Using SCM as a competitive strategy can now not be debated.

Relation of supply chain management with modern material planning and delivery, lean manufacturing and total quality systems :

Since most companies including those in India are changing steadfastly towards adoption of advanced material planning and delivery systems like MRP, JIT and even JIT-II comprising proactive networking, and join collaboration with vendors, it becomes inevitable to tune in their supply – chain management systems with MRP and JIT requirements which in turn are determined by the operation flow patterns existing in respective manufacturing systems and inventory requirements therein. Hernandez (1993) has aptly described relation of TQM / JIT with supply chain. Linkage of MRP / JIT with supply chain management is being enabled by computerised information systems and electronic data interchange (EDI) with suppliers,

PAPER ID# 140

dealers, warehouses and customers alike. In fact, adoption of good supply chain management practices is further necessitated by use of Total Quality (TQ) practices. Most of the international quality system standards today lay down specific criteria for selection, rating and assessment of vendors. Needless to say, supply chain management practices would have marked effects on physical distribution processes including material handling, storage and delivery systems, layout considerations, say, on-line delivery of parts. So, in a nutshell, change in supply chain management practices effects a wider, more than expected, spectrum of operations ranging from layout engineering, operations flow planning and control, material planning, storage and delivery and also quality assurance till the finished goods are transported to warehouses, distribution / retailing centers and finally customers. Michael Porter (1985) has thus, been right in identifying in-bound logistics and outbound logistics as primary activities of value chain being controlled by cross-functional support activities of which procurement of materials is one. Manufacturing batch sizes in layouts having process orientation and line balance and flow rates in layouts having product orientation could affect SCM practices. In fact, volume and process variability have been identified as root causes of unnecessary supply chain cost and variation. It has now been widely researched that contrary to American automakers, Japanese and Korean auto-manufacturers have their production and material reports ‘triggered’ by sales demand not forecasts. (Ahmadian and Afifi, 1990) This implies that planning, replenishment, traffic and distribution of stock is based on orders entirely triggered by customers demand. This has been referred to as ‘demand-driven supply chain’ and is a foundation for ‘lean supply chain’. A demand driven supply chain would aim to move from long manufacturing and delivery lead times to short ones and replacing batch processing with flow processing preferably using group or cellular technology (GT) which facilitates high speed supply chain. Ensuring single piece flows in a lean manufacturing environment would always highlight the value-flow across internal/external supply chain members.

It is now well established that Japanese and Korean automakers represent classic examples of integrating supply chain with their plant and customer requirements. Schonberger (1982) has enumerated some characteristics of world class firms trying to manage suppliers towards stock reduction and short manufacturing and delivery lead times. Leading consultants like KPMG (1997) and Mc Kinsey (1992) have also enlisted some key performance benchmarks in world class firms following SCM. The present paper deals with an insight into key attributes and performance benchmarks of using supply-chain management practices in some leading Japan and Korea collaborated automobile units located in India.

LITERATURE SCAN :

Beamon (1999) presented a number of characteristics that are found in effective performance measurement systems for SCM. Camp (1989) has provided a comprehensive treatment of benchmarking for best practices related to superior performance.

In order to study the large number of supply chain performance measures available, researchers have categorized them. Neely, et. al. (1995) presented a few of the categories namely quality, time, flexibility and cost. The SCOR (Supply Chain Operations Reference) Model of the Supply Chain Council suggests metrics related to reliability (on-time delivery, order fulfillment lead time, fill rate), Flexibility (supply chain response time and upside production flexibility), Expenses (all SCM costs, warranty cost as a percentage of revenue and value added per employee) and assets/utilization (total inventory days of supply, cash-to-cash cycle time and net asset turns).

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The performance measures utilized in the models proposed by various authors as Bytheway (1995), Waters-Fuller (1995), Lamming (1996) etc., directly relate with real-world applicability in terms of different performance measures mostly categorized into :

(i)

cost

(ii)

time

(iii)

customer responsiveness

(iv)

(volume and variety-) flexibility

(v)

a combination of two or more than two of the above.

Costs may include inventory costs and other operating costs as procurement, manufacturing and distribution cost. Customer responsiveness measures include lead time, on-time and available-to-promise (ATP) delivery, stock-out probability and fill rate. Interestingly Lee and Bellington (1992) also cite a number of trade-offs that a corporate might have to do for best results from a supply-chain. These are – lot size – inventory trade-off, inventory-transportation cost trade off, lead-time-transportation cost trade-off, product variety – inventory trade-off and production and distribution costs – customer service trade-off. Various measurement categories and corresponding criteria are summarized in Table 1.

Table 1 :

SCM Performance parameters as cited by different researchers.

Sr.

Performance

Corresponding

 

Key Parameters

No.

Measurement

 

Researchers

Categories

 

1. Cost

 

Cohen and Lee (1988)

 

Costs related with procurement, manufacturing, transportation, inventory, warhousing, distribution etc.

Cohen and Moon (1990)

Lee and Feitzinger (1995)

Pyke and Cohen (1993)

   

Tzafestas and Kapsiotis (1994)

 

2. Cost and Time

Arntzen et. al. (1995)

 

Customer

response time

 

manufacturing lead time, available-to-promise (ATP) performance, order fulfillment cost.

3. Cost

and

Christy and Grout (1994)

 

Making a trade-off between cost and customer responsiveness to optimize the return on investments.

Customer

Cook and Rogowski (1996)

Responsiveness

Davis (1993)

 

Ishii et. al. ( 1988)

   

Newhart,

Stott

and

Vasko

( 1993)

Wikner,

Towill

and

Naim

(1991)

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4. Customer

Lee and Billington (1993)

High level of customer service judged by on-time deliveries, customer satisfaction, fill rate, stock-out probability, warranty costs and product returns etc.

Responsivess

Voudouris (1996)

Volume and variety flexibility to meet customer demand.

5. Flexibility

Examples of other performance measures are : customer satisfaction (Christopher, 1994), information flow (Nicoll, 1994), supplier performance (Davis, 1993), risk management

(Johnson and Randolph, 1995). Stevenson (2005) reports another interesting factor – Velocity

in terms of inventory velocity which refers to the rate at which inventory goes through the

supply chain (faster is better) and information velocity which would refer to the rate at which information is transferred within a supply chain.

METHODOLOGY :

A sample of leading Japan and Korea collaborated car manufacturing units located in India

were selected. Three of them were located in NCR (National Capital Region) of Delhi and one located near Chennai and the other one in Bangalore. These are namely : Honda Siel Motors, Maruti Udyog Ltd., (the then) Daewoo Motors (I) Ltd., Hyundai Motors (I) Ltd. and

Toyota Kirloskar Motors Ltd. A list of key success factors (KSFs) was prepared on the basis

of literature survey, executive judgement and cues provided by professional studies done by

consultants like KPMG, Mc Kinsey on a global basis and the ET (Economic Times) Intelligence Group in India. A questionnaire, which listed key success factors (KSFs) for supply chain management practices, was administered to senior executives of materials, purchasing and/or vendor development departments of these companies. A comparative analysis is done as to what extent these companies are following supply chain management practices. The manufacturing system and flow patterns were similar in selected companies. Moreover, the companies selected had Japanese or Korean collaborators who had demonstrated potential of integrating supply chain management systems and practices particularly in a lean environment.

The Questionnaire :

The questionnaire was administered through visits to various plants located in National Capital Region and through mail to plants located near Chennai and Bangalore. The questionnaire was framed keeping into view the factors that are attributed to best practices in supply chain management in the contemporary environment. The questionnaire listed sixty key success factors (KSF’s). As indicated, KSF’s were derived on judgemental and literature survey basis by this researcher.

OBSERVATIONS

A comparative analysis of the sixty identified critical success factors in the select sample

companies namely Honda-Siel Motors, Maruti Udyog Ltd., Daewoo Motors (I) Ltd., Hyundai Motors (I) Ltd. and Toyota Kirloskar Motors Ltd. is done. A point rating of 1 is given if a company is very strongly following the management practice given in the form of a key success factor (KSF) while a rating of 0.5 is given if a company is partially following or is in the process of implementing a practice. A rating of zero is given if a company does not at all

PAPER ID# 140

follow a practice. A 5-point equal-interval rating scale is used to represent degree of presence of a particular supply chain attribute in a company. The results are tabulated in Table 2 and Table 3.

INTERPRETATION :

It is clear from Tables 2 and 3 that the select companies have significantly followed supply- chain management practices, vendor integration and consolidation strategies. These companies are common in aiming for :

i)

High level of sole-sourcing.

ii)

Having most vendors located proximally.

iii)

Better span of control for their purchasing executives for better follow-up, expediting and control.

iv)

Reduction of delivery lead time with vendors.

v)

Keeping vendors informed about production schedule changes on a regular basis.

vi)

Minimum lead time in placing orders with vendors.

vii)

Higher level of strategic alliances with suppliers including Joint Ventures (JVs).

viii)

Giving preference to vendors having material planning and information systems and on-line access to production schedules of OEM purchasing companies.

ix)

Need for less frequent contract reviews / negotiations and encouraging blanket ordering.

x)

Preferentially selecting vendors with ISO 9001/02 quality assurance systems.

xi)

Giving flexibility to vendors in design change, process improvement and cost reduction.

xii)

Encouraging vendors to supply on-line and in small frequent lots.

xiii)

Assisting vendors in reducing their manufacturing lead times.

xiv)

Vendors assistance and development schemes for joint collaboration.

xv)

Development of supplier quality assurance systems and practices.

xvi)

Reduced followup and expediting efforts with vendors.

xvii)

Simplifying and consolidating logistics operations and practices.

The selected companies however, lacked in :

i)

Following strategic classification of materials

ii)

Controlling late deliveries from vendors which still cluster around 15%

iii)

Controlling rejects from vendors as lot control systems / acceptance sampling plans are inadequate or are not properly contractually obligated. Rejects still hover around

5%.

iv)

Controlling number of line stoppages due to material / component shortages.

v)

Extensive strategic partnerships / alliances in form of coalition / joint ventures

vi)

Preferential selection of vendors with QS-9000 and ISO 14001 system

vii)

Encouraging more vendors to follow recirculatory packaging and handling and enabling them to deliver right on / near the line (JIT II)

viii)

Giving vendors more design and processing flexibility i.e. focusing on performance specifications rather than design specifications.

ix)

Properly arbitrating contractual clauses so that disputes related to cost, quality and delivery are reduced

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x)

Rationalising purchasing costs which still amount to 10-15%

xi)

Encouraging far-off vendors to develop transit stores / contract warehousing and own

xii)

transport by giving them financial assistance. Intensive consolidation of out-bound freight and encouraging contract warehousing and company owned transport at the focal firm end.

xiii)

Design and installation of a transporter rating system.

CONCLUSIONS

From this study, it is concluded that automobile companies with Japanese / Korean collaboration are going in a big way to consolidate and integrate their supply chain and value delivery networks. For this they are striving towards attaining better logistics and communication system with their vendors. However, they are still giving less flexibility in design and process changes to vendors and most of the vendors are at receiving end. May be, vendors also have to change their attitude and have to be more particular in terms of cost, speed of delivery, quality, service and flexibility criteria. It is to be appreciated that backward vertical integration may also not be a good proposition always and should be resorted to on selective basis. Also successful negotiations on a win-win basis could be strategically used to arbitrate purchasing contracts on mutual basis for long term partnerships and develop strategic coalition in value delivery systems. More and more OEM companies should go in for encouraging and assisting vendors to adopt material planning, information and communication systems including MRP, e-networking, etc. Sometimes there is inadequate sharing of real time information about material planning, delivery and production routing and scheduling by OEM with their vendors. Companies need not see SCM in an isolated manner and should analyze for variability cause of SCM tracing back to even their production flow systems and bottlenecks and volume and design flexibilities. Both capacity and capability assessments are to be done at vendor’s end. Emphasis must be there to remove waste (muda) in processes to remove unnecessary cost and variation in supply-chain. To cap it all, even traditional mid-sets at a company could be stumbling blocks in implementation of SCM practices. Lot control systems and plans must be rigidly followed. What is required in Indian context is, that companies should make their manufacturing and supplies systems more reactive and responsive to needs of changing demand patterns for which vendor consolidation, integration and development in tune with individual needs may only provide the final solution. Lastly the importance of third party relationship in case of outsourced logistics should not be under-estimated. This particularly holds true for Indian companies who have to work out a functional relationship using proper coordination while dealing with third party logistic (3PL) providers. By next decade, most buying companies in India should have all vendors equipped with on-line communication, a developed ability to deliver zero-defect small lots on-line at a short notice, a strong system to plan and control materials and a strategic intent to follow international quality, environmental and safety standards throughout the supply chain.

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Table 2 :

ANALYSIS OF KEY SUCCESS FACTORS OF SUPPLY CHAIN MANAGEMENT IN SELECT COMPANIES

(Legend :

(Legend : Very strong Strong Medium ∆ Weak Very weak strength of KSF

Very strong Strong Medium Weak

(Legend : Very strong Strong Medium ∆ Weak Very weak strength of KSF

Very weak strength of KSF

/ attribute presence)

KEY SUCCESS FACTORS OF SUPPLY CHAIN MANAGEMENT

Daewoo

Honda-Siel

MUL 1

HML 2

TKM 3

1. Carrying out strategic classification of materials

1. Carrying out strategic classification of materials ∆

2. Maintenance of Approved Supplier List

3. Regular assessment and upgradation of vendors list

4. Keeping number of suppliers per part minimum

4. Keeping number of suppliers per part minimum

4. Keeping number of suppliers per part minimum

5. Assignment of minimum suppliers to each purchasing executive

6. Maximising percent components sole-sourced

7. Maximising percent suppliers located within 100 kms

7. Maximising percent suppliers located within 100 kms

8. Pursuing advance material quantity planning

8. Pursuing advance material quantity planning

9. Pursuing advance material quality planning

9. Pursuing advance material quality planning ∆ ∆

10. Keeping lead time minimum with suppliers

10. Keeping lead time minimum with suppliers ∆

11. Minimisation of time spent in placing order

11. Minimisation of time spent in placing order ∆

12. Minimisation of percent late deliveries

13. Minimisation of percent rejected material

13. Minimisation of percent rejected material ∆

14. Minimisation of time lost in line stoppages due to material shortages per year

14. Minimisation of time lost in line stoppages due to material shortages per year ∆

15. Minimum times the stock overflows in 4 ‘A’ class items

1 .

2 .

.

3

Maruti Udyog Ltd. Hyundai Motors Ltd. Toyota Kirloskar Motor Ltd.

PAPER ID# 140

KEY SUCCESS FACTORS OF SUPPLY CHAIN MANAGEMENT

Daewoo

Honda-Siel

MUL 1

HML 2

TKM 3

16. Maximum percent blanket orders / open orders of total orders

16. Maximum percent blanket orders / open orders of total orders

17. Frequent release of production schedules to vendors

17. Frequent release of production schedules to vendors

17. Frequent release of production schedules to vendors

18. Release of Purchase Orders (P.O.) through modern communication aids e.g., e-mail

18. Release of Purchase Orders (P.O.) through modern communication aids e.g., e-mail

18. Release of Purchase Orders (P.O.) through modern communication aids e.g., e-mail

19. Getting orders from dealers through modern modern communication aids e.g., e-mail.

19. Getting orders from dealers through modern modern communication aids e.g., e-mail.

19. Getting orders from dealers through modern modern communication aids e.g., e-mail.

20. Development of design capability in vendors with focus on performance specifications

21. Enabling suppliers to undertake value analysis for cost reduction

21. Enabling suppliers to undertake value analysis for cost reduction

21. Enabling suppliers to undertake value analysis for cost reduction

22. Disregarding vertical integration and encouraging coalition / JV’s with suppliers

22. Disregarding vertical integration and encouraging coalition / JV’s with suppliers

23. Preferred and advantageous contracts against parent foreign collaborators

24. Capability to arbitrate / negotiate reasonable contracts with supply sources for strategic partnerships’

24. Capability to arbitrate / negotiate reasonable contracts with supply sources for strategic partnerships’

24. Capability to arbitrate / negotiate reasonable contracts with supply sources for strategic partnerships’

25. Limiting competitive bidding to only new purchases

25. Limiting competitive bidding to only new purchases

26. Policy of always storing materials only at point of manufacture

26. Policy of always storing materials only at point of manufacture ∆ ∆

27. Vendor incentive / development schemes for superior and inferior vendors respectively.

27. Vendor incentive / development schemes for superior and inferior vendors respectively.  

 
27. Vendor incentive / development schemes for superior and inferior vendors respectively.  

Assessment at vendor’s end of

(28-44)

28. Testing, measurement and calibration system in operations

28. Testing, measurement and calibration system in operations  

 

29. Ensuring single piece flow control system / lean environment

29. Ensuring single piece flow control system / lean environment  

 
29. Ensuring single piece flow control system / lean environment  

PAPER ID# 140

KEY SUCCESS FACTORS OF SUPPLY CHAIN MANAGEMENT

Daewoo

Honda-Siel

MUL 1

HML 2

TKM 3

30. Supplier quality assurance system

30. Supplier quality assurance system  

 
30. Supplier quality assurance system  

31. Information system / EDI / e-mail facilities at vendor

31. Information system / EDI / e-mail facilities at vendor ∆  

 
31. Information system / EDI / e-mail facilities at vendor ∆  

32. Management’s competence and attitude for quality, cost reduction and continuous improvement

32. Management’s competence and attitude for quality, cost reduction and continuous improvement  

 
32. Management’s competence and attitude for quality, cost reduction and continuous improvement  

33. PPM analysis to pursue zero defects

33. PPM analysis to pursue zero defects

34. Ability to produce and supply in frequent small-sized lots

34. Ability to produce and supply in frequent small-sized lots

35. Communicational accessibility of vendor

35. Communicational accessibility of vendor

35. Communicational accessibility of vendor

36. ‘Milk-run’ to verify material, engineering and design specifications

37. Establishment of ‘Lot Control’ systems ie. labeling of lot with reliable information on quality and quantity and submission of inspection plans

systems ie. labeling of lot with reliable information on quality and quantity and submission of inspection

38. Maintenance of process output data (SPC etc.) for critical processes

38. Maintenance of process output data (SPC etc.) for critical processes ∆

39. Documentation of process improvement over a period of time

39. Documentation of process improvement over a period of time

40. Assessment and validation of machine capabilities of special processes so that C p index is equal to or greater than 1.33

and validation of machine capabilities of special processes so that C p index is equal to

41. Ability of vendors to extend JIT purchasing to their vendors

41. Ability of vendors to extend JIT purchasing to their vendors ∆ ∆ ∆ ∆

42. Compliance with ISO 9001/9002 requirements

42. Compliance with ISO 9001/9002 requirements

42. Compliance with ISO 9001/9002 requirements

43. Compliance with QS-9000 /other specific requiremen

43. Compliance with QS-9000 /other specific requiremen ∆

44. Compliance with ISO 14001/other environmental and safety standards

44. Compliance with ISO 14001/other environmental and safety standards ∆ ∆

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KEY SUCCESS FACTORS OF SUPPLY CHAIN MANAGEMENT

Daewoo

Honda-Siel

MUL 1

HML 2

TKM 3

45. Use of recirculatory / reusable material packaging / handling equipments

45. Use of recirculatory / reusable material packaging / handling equipments ∆ ∆

45. Use of recirculatory / reusable material packaging / handling equipments ∆ ∆

46. Use of computerized material planning (MRP/MRP II) by vendors

47. Delivery by suppliers right near production lines rather than to receipt stores (on-line delivery)

47. Delivery by suppliers right near production lines rather than to receipt stores (on-line delivery) ∆

47. Delivery by suppliers right near production lines rather than to receipt stores (on-line delivery) ∆

48. Regular source development and audit practices particularly for new parts

49. Frequency of contract reviews / negotiations

50. Extent of disputed supplies regarding quality / cost / delivery with vendors

51. Reduced efforts in follow-up and expediting with vendors

51. Reduced efforts in follow-up and expediting with vendors ∆ ∆

52. Development and implementation of a Transporter Rating System

53. Encouraging company owned / contract warehousing and shipping / discouraging common carriers

53. Encouraging company owned / contract warehousing and shipping / discouraging common carriers ∆ ∆ ∆

54. Consolidation of freight for transportation

54. Consolidation of freight for transportation

55. Maintenance of schedules for inbound and outbound freights

56. Flow synchronized concurrent material movement and handling with simple documentation

56. Flow synchronized concurrent material movement and handling with simple documentation

57. Adoption of standards and protective packaging with proper container labeling especially for K.D. assemblies

57. Adoption of standards and protective packaging with proper container labeling especially for K.D. assemblies

58. Adoption of total quality (TQ) approach in operations

58. Adoption of total quality (TQ) approach in operations ∆

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KEY SUCCESS FACTORS OF SUPPLY CHAIN MANAGEMENT

Daewoo

Honda-Siel

MUL 5

HML 6

TKM 7

59. Adoption of Material Requirement Planning (MRP) – Push and /or JIT–Pull system in spirit

 

59. Adoption of Material Requirement Planning (MRP) – Push and /or JIT–Pull system in spirit  

60. Strategic intent for implantation of ERP

 
60. Strategic intent for implantation of ERP   ∆

Table 2 :

KEY PERFORMANCE PARAMETERS OF SUPPLY CHAIN MANAGEMENT IN SELECT COMPANIES

 

KEY PERFORMANCE PARAMETERS

Daewoo

Honda-

MUL

 

HML

TKM

Siel

i)

Minimum number of suppliers per part

01

01

01

01

01

ii)

Maximum number of suppliers per part

02

01

03

03

02

iii)

Approximate number of suppliers per purchasing executive

08

07

05

07

03

iv)

Percent components sole- sourced

95%

95%

15%

75%

95%

v)

Percent suppliers located within 100 kms

80%

80%

80%

75%

90%

vi)

Minimum lead time with suppliers

1

week

1 day

2-4hrs

3 days

2-3hrs

vii)

Maximum lead time with suppliers

4

week

6days

10 days

1 week

1-3 days

viii)

Time spent in placing the order with vendor

1-3 days

1 day

3hrs-

1 day

15 min-

 

½ day

3-4 hrs

ix)

Average percent late deliveries

35%

10%

10%

15%

5%

x)

Maximum percent reject material

15%

05%

2.5%

3%

2%

xi)

Average time in line stoppages due to material shortage per month

20 min

5-10

120 min

60 min

45 min

min

xii)

Average time stock overflowing of ‘A’ class items in a year

10

12

10

12

6

min min xii) Average time stock overflowing of ‘A’ class items in a year 10 12
min min xii) Average time stock overflowing of ‘A’ class items in a year 10 12

PAPER ID# 140

KEY PERFORMANCE PARAMETERS

Daewoo

Honda-

MUL

HML

TKM

Siel

xiii)

% Blanket Orders of Total orders

98%

98%

95%

90%

95%

xiv)

Frequency of release of production schedules to vendors

1/month

1/month

1/month

1/month

1/month

xv)

Number of exclusive Joint Ventures (JVs) with suppliers

4

6

9

5

Not

 

known

xvi)

Percent vendors com-plying ISO 9001/ 02

80%

70%

70%

60%

90%

xvii)

Percent vendors complying

5%

10-15%

Below

5%

20%

QS-9000

5%

xviii)

Percent vendors complying ISO 14001 (environmental and safety standards)

Nil

Nil

A few

Nil

A few

xix)

Percent vendors using recirculatory material handling and packaging

2%

70%

70%

50%

80%

xx)

Percent vendors following MRP / MRP II

30%

50-60%

30%

40%

60%

xxi)

Percent vendors directly delivering on to production lines

2%

Negligible

60%

30%

90%

 

Normally

 

xxii)

Frequency of contract -----------------------------once a year----------------------------------- reviews / negotiations

xxiii)

Percent disputed supplies of total annual supplies

3%

5%

5-10%

3-5%

2-3%

xxiv)

Percent vendors having computerised information systems and e-mail)

5%

20%

80%

40%

90%

xxv)

Cost of purchasing as percent of purchasing value

5-10%

15%

15%

10%

15%

(These responses are as collected from material and purchasing executives of respective companies and may not represent company postulated standards/practices).

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