SUPPLY CHAIN MANAGEMENT of TATA MOTORS AND MARUTI SUZUKI

SUBMITTED BY Amar Jyoti (12PGDM128) Ankur Chaturvedi(12PGDM131) Manish Kumar(12PGDM87) Michael Mangalam(12PGDM89) Subham Gupta(12PGDM111)

OBJECTIVES OF STUDY
Study of vehicle manufacturing processes from raw material to finish vehicles. Comparision of supply chain management at tata motors and maruti suzuki

Indias largest automobile company, with revenues of US$ 34.575 billion (2012)

Winning products in the compact, midsize cars and utility vehicle segments

The Companys 60000 employees are guided by the vision to be best in the manner in which we operate, best in the products we deliver and best in our value system and ethics

Worlds fourth largest truck and second largest bus manufacturer

The first company from Indias engineering sector to be listed in New York Stock Exchange

Subsidiaries are Tata Daewoo, Tata Hispano, Tata Technologies, Jaguar and LandRover

Plant Location and production Capacity

Location Pune Type of vehicle manufactured Passenger Cars (Indica, Indigo, Marina, Indica Vista) Production Capacity(Lakh/PA) 2.7 L

Pune

Commercial Vehicles (MCVs 2.5 L and HCVs, LCVs, Utility vehicles) Trucks & Special Purpose Vehicles Buses 1.08 L 0.6 L

Jamshedpur Lucknow

Pantnagar(Uttarakhand)
Sananand

Mini Truck (Ace), Passenger Carrier (Magic)

Tata Nano

2.25 L

Hereafter we have limited the scope of study to a single location which is Passenger Car Business Unit (PCBU), K Block, Pune

Competitive Priorities for TATA Motors

1 Maintaining global standards to tackle competition For luxury bus segment: its major focus is on the fully-built vehicle delivery rather than supplying only chassis Diversified suppliers, eg. NANO car has more than 128 suppliers Sourcing through reverse auction which includes evaluating suppliers, identifying new suppliers, leading to better supply management To cut costs, Tata Motors tried innovative techniques such as zero-based costing Believed in developing strong in house design, engineering, and manufacturing capabilities

Management Hierarchy of PCBU, Pune

HR
Formalized selection, evaluation, and payroll processes Records basic selection, training and development, capabilities and skills management, compensation planning records etc.

Engineering & Research Centre

The facility includes - improving Engine Performance, Reducing Emissions, Test Tracks, Designing and Styling and Safety

necessary technical assistance for smooth production in the plant Technical & Functions includes setting up new assembly lines, seeking prospects for modifications in the Productivity current assembly lines, etc.
Services

Production

Group carries out production as per the production plan prepared by production planning and control (PPC)

Vendor Developmen t

Small parts are outsourced to various vendors, due to various in-house constraints Identifies the appropriate vendor and ensures proper quality standards

Production Strategy Followed in TATA Motors

Passenger Car Division in 'K' block executes the entire process of car manufacture over five shops
Engine shop
Transmission shop Press and body shops Assembly shop

Paint shop

1 2 3 4 5

The shops are fully automated ensuring that there is minimal chance for error in the manufacturing processes Production Strategy being implemented in Tata Motors is Make to Stock Demand forecast is done by the marketing team and accordingly a production plan is prepared The cars produced are tested thoroughly and after successful completion, they are stored in large free space available in the company premises Some special purpose vehicles such as utility vehicles for defence, mini-ambulance for hospitals are made as per the order

Plant Layout of PCBU, Pune

Machine Shop Engine Shop Press Shop

Paint Shop
TCF

Quality Management
1
Has introduced cleaner engines

First Indian company introduce vehicles with Euro I and Euro II norms

Manufacturing stage - regulars quality audits held by in-house auditors

Post manufacturing -stringent testing standards such as shower test, wheel balancing

ENVIRONMENTAL MANAGEMENT
1
Reduce the emission levels of vehicles in full compliance of the regulatory norms

proactively work with the industry, Government, other related industries & agencies to bring in international practices

Conserve natural resources and energy by minimizing their consumption & wastage

Certified with ISO 14001 : 1996 for Environmental Management System (EMS)

WORK MEASUREMENT
1
first Indian Company to introduce the Balance Scorecard System in automotive sector in India

Balance Scorecard System - incorporates SQDCM (Safety, Quality, Delivery, Cost and Morale)

Suggestion scheme - any employee irrespective of his cadre can suggest an improvement in the work place ; if approved, employee gets rewards points

Gift voucher for achieving certain number of points

Bonus on certain festive occasion

VALUE ENGINEERING
1
Continuous efforts are made to reduce the cost of service

Rejection of input parts received from vendors closely monitored

Vendors penalised if rejection exceeds beyond the defined limits

consumption of electricity, water, LPG, Compressed air - continuously monitored ; steps taken to reduce their consumption

MATERIAL MANAGEMENT
Tata Motors uses SAP 4.6C Material Management (MM) module for: materials planning and control, purchasing, goods receiving, inventory management, invoice verification.

REVERSE ENGINEERING
Reverse engineering is a process by which the design of a product is analysed or re-created using a physical part or mock-up as a starting point. This becomes truly valuable when trying to extract the design intent from a handmade model Tata motors does reverse engineering of its competitors cars in an effort to constantly improve on the design of its cars

Problems identified
Waste management and hygiene issue
Major environmental wastes: machine lubricants and coolants; aqueous and solvent cleaning systems; paint; and scrap metals and plastics. Hazardous cleaning chemicals very common, require special waste management arrangements.

Efficient utilization of Human resource

Efficient utilization of human capital is always a questionable task. On comparing the human capital utilization with that with the best in the business, TATA motors was found lagging behind.

Tools management
Lot of time wasted in tools movement from the stock to the shop floor. Whenever a tool is broken or is declared useless, than the assembly line has to stop till the new

Unorganised flow path

The place for each item was not clearly labelled or demarcated. Items not arranged in a manner that promotes efficient work flow (eg : Workers had to bend repetitively to access materials) Each tool, part, supply, or piece of equipment was not kept close to where it will be used Untidy shop floor with dusts in the weld shop and press shop Customer complaints and defects in products after delivery

OUR RECOMMENDATIONS
Adoption of Kaizen
The Kaizen Management System addresses all aspects that contribute to company results including quality, costs, logistics, staff motivation, safety, technology The entire process chain from supplier via the internal customer to the final customer is therefore taken

available tools are used to eliminate all wasteful activities

Adoption of six sigma methodology

6 sigma is a structured statistical methodology that can be used to measure the quality of the service and performance. 6 sigma is 3.4 Defects per million opportunities(DPMO). The accuracy is at a level of 99.9997%. Six Sigma is a process improvement set of tools and strategies

Device to clean foot - Before coming to the assembly lines and the shop floors everyone should clean their shoes

Efficient utilization of space

Focus on hygiene

Problems in implementing kaizan

Unfortunately there are a number of barriers that must be overcome in order to implement a kaizen programme.

management resistance

managers may find it hard to manage empowered workers

employee resistance

this may occur, especially in situations where industrial relations have been poor in the past. Employees may simply feel that they are being asked to do more without extra pay

cost of training

- attitudes will need to change and the type of training required to achieve attitudinal change will be expensive and lengthy.
the costs of implementing a kaizen programme, in terms of both training and lost production, will be clear. The benefits will be unknown until the programme is up and running.

justifying the cost