BM Project On

SCM between Maruti Dealer and Distributor

Group 9 Sec C2DE

Under the guidance of: Compiled by: SaritaChowdhary PallaviAggarwal Tanvi Mehta

Prof T . K. Chatterjee

About Maruti Suzuki India Limited

Maruti Suzuki India Limited (MSIL, formerly known as MarutiUdyog Limited) is a subsidiary of Suzuki Motor Corporation, Japan. MSIL has been the leader of the Indian car market for over two and a half decades. The company has two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi, India. Both the facilities have a combined capability to produce over a 1.2 million (1,200,000) vehicles annually. The company plans to expand its manufacturing capacity to 1.75 million by 2013. The company offers a wide range of cars across different segments. It offers 15 brands and over 150 variants - Maruti 800, people movers, Omni and Eeco, international brands Alto, Alto-K10, A-star, WagonR, Swift, Ritz and Estilo, off-roader Gypsy, SUV Grand Vitara, sedans SX4, Swift DZire and Kizashi. In an environment friendly initiative, in August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models across vehicle segments. These include Eeco, Alto, Estilo, Wagon R and Sx4. In fiscal 2009-10 Maruti Suzuki became the only Indian company to manufacture and sell One Million cars in a year. Maruti Suzuki has employee strength over 8,500 (as at end March 2011). With this, at the end of March 2011, Maruti Suzuki had a market share of 44.9 per cent of the Indian passenger car market.

Maruti believes in customer delight. Creating Customer Delight is not a recent discovery for the company rather the expression finds roots in the company vision. Taking forward the same spirit the company is committed to serve many more customers through a numerous way..in times to come....

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Core values of the company are:

Customer obsession Fast, flexible & first mover Innovation & Creativity Networking & Partnership Openness & Learning

Key Stakeholder:
Not only this, the company follows a partnership approach with its various stakeholders, and believes that the prosperity and wellbeing of the stakeholders will fuel the growth of the company in the future.

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Dealers for Maruti

The dealers and their sales executives are the first point of contact for the company's customers. Therefore, their feedback is given utmost consideration while upgrading products and services of the company. The company makes efforts to upgrade their excellence through various engagement activities.

Engagement Activities for Dealers

About City Motor and ShubhamAutomobiles:

City Motors is a MARUTI spare parts distributor for the whole of BHOPAL. MP is divided into 3 regions. Dealers get the spares directly from the Gurgaon office and they cant sell the same in the market. City Motors is a distributor who sells the spare parts in the market. Shubham Automobiles which is an authorized service center in Bhopal buys the spare parts from them.

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They use inventory management software provided by IIPL. IIPL is annual contract software of Maruti which is run all over India. It has an annual rent of Rs. 7500 and upgraded annually by the professionals from the company itself. It can be updated by the service centre regularly. They try to keep their dead stock as low as possible.

Quality management model @ShubhamAutomobiles:

The dealer follows the Fixed Order Quantity Model / P-model of inventory management. The inventory is checked only at a fixed interval of one month, rather than on a continuous basis. Time between orders is constant and the lead time is 8-10 days. The dealer maintains a total stock level worth of Rs. 20-30 lakh of inventory. Only the amount necessary to bring the total inventory up to a pre-specified target is ordered depending upon the on hand inventory in stocks. As P model is a practical approach, its easy to use. Again as demand variability is very rare in this field, intense regular checking is not required which cut the unnecessary administrative cost. Stock out option is also very rare because of stable or non volatile demand. But even if it occurs then near to suppliers strategy helps them to meet these demands and rule out any stock out option. To keep track of the stock, they used software provided to them by IIPL. They enter the data in their software as per labeling at regular basis. Whenever a part is used, they enter that information in their software. After one month this software automatically generates the list of all the parts used in last 30 days. It does also automatically generate quantity in their

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hand for coming month. This helps them to work effectively as they dont need to focus on what has left and how much is required. The screenshot of the software is shown.

Process for Inventory management:

Whenever a vehicle says for example a WagonR comes with damage. The on shop workers look for the damage by analyzing the vehicle. They look for the parts which are to be repaired. Once the fault is identified the damaged part are sorted out in a manual. For every model there is a different manual. The manual lists the various parts used in the vehicle with their photo. A typical manual page looks like:

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Each spare part has a unique number associated with it. The number is then fed on to software to find out its availability. The software also helps in locating the position of the rack which holds the spare part. A typical rack with the spare parts arranged on it looks like:

If during processing if there is a lack of some part then the distributor is contacted by phone. The distributor delivers the requisite spare parts at the earnest. The rates of the
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parts are mostly uniform all across the country. A service centre is liable to earn a discount of 10% on the parts procured. The difference in rates may arisebecause of the difference in taxes which vary from state to state. For our dealer it is 13%.

Relationship Management is the name of the game..!!!

Annual and Quarterly meeting

They conduct quarterly meetings to acknowledge the top performers. The all MP Mass annual meet was held in Koushalaya Resort Kanha from 12th to 13th May.

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Rewards & Incentives:

Per vehicle Rs 750 could be earned in every servicing. For a month the service load must amount to be 170-180 vehicles. This means per day 7-8 vehicles. This assures use of genuine spare parts. Schemes are based according to the target.

Once there was a gold scheme which was according to the sales. Then there could be a foreign trip.

For each quarter a target is decided and after its achievement suitable rewards are awarded to perform better and then the next target account for an increase of 10%. Awards are based on stock maintenance, infrastructure and related parameters.

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Fun @ WorkDuring the mass meet they also organized events like tribal dance.

Singing and dancing.

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Jungle Safari

Conclusion:
Maruti being a very old player in this field, have very strong inventory control management system. So as it service center. The quality control practices at Shubham Automobiles are very impressive. They are a good mix of automation and manual work which helps them in cost reduction. They exactly know how much is required and when is required. Their strong understanding of the entire system helps them to cut unnecessary cost and help them to remain competitive in market. . The use of software and near suppliers strategy is another factor that helps them to cut down the costs further. The short reorder points period and not going with safety stocks keeps them updated and helps them to avoid any dead stock. Labeling of parts and subparts are effective way to track the inventory and hence reduce any wastage of time and increase the efficiency of the workers. But behind this seamless flow, lots of other factors are contributing. Relationship management at every level making this entire Supply chain very smooth.In B2B Marketing RELATIONSHIPS, rather than simple transactions, is the pivotal focus. Developing Profitable Relationship with theRight Customers is the goal of successful B2B Marketers. A steady combination of highly organized and well planned strategy allows Shubham Automobiles to sustain demand and retain customers alongside maintain good profit levels.
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References:
http://www.marutisuzuki.com City Motor (Bhopal) Shubham Automobiles (Bhopal)

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