COMMENCED AT MAHINDRA & MAHINDRA LTD.

, SWARAJ DIVISION, MOHALI

PRESENTED BY Preet Baninder Singh Roll No. 120425702 MBA 3rd Semester

 Automotive supply chain has been undergoing

tremendous changes and the industry has been exploring innovative methods to
reduce operating cost, lead time and inventory

to sustain their growth in the market

The study is about the supply chain management in

Mahindra & Mahindra Ltd. Swaraj Division, Mohali.

INTRODUCTION
The best companies around the world are discovering a powerful new source of competitive advantage. Supply Chain Management-related activities such as inbound and outbound transportation, warehousing, and inventory control

IMPORTANCE OF SUPPLY CHAIN MANAGEMENT Managers these days recognise that getting products to customers faster than the competition will improve a company's competitive position
OBJECTIVES OF SUPPLY CHAIN MANAGEMENT The fundamental objective is to "add value". SUPPLY-CHAIN PRINCIPLES/ METHODOLOGY & SOLUTIONS Supply-Chain Principles

Segment customers based on service needs Customise the Supply Chain Management network Listen to signals of market demand and plan accordingly Differentiate product closer to the customer Strategically manage the sources of supply Develop a supply-chain-wide technology strategy Adopt channel-spanning performance measures

 Four Step integrated Approach Potential analysis Concept study Detailed planning Project or change management

EXPECTED RESULTS / BENEFITS Supply Chain Creates Value

Profitable growth Working-capital reductions Fixed-capital efficiency Global tax minimisation Cost minimisation

Opportunity Areas Distribution network optimisation Shipment consolidation Cross docking Supplier management Supplier integration

 Tractor industry plays an important part as agriculture

sector has a major contribution to Indias GDP.

Tractors are part of agricultural machinery industry. Tractors came to India through imports and later on were

indigenously manufactured with the help of foreign collaborations.

 Tractor industry plays an important part as agriculture

sector has a major contribution to Indias GDP.

Tractors are part of agricultural machinery industry.

Tractors came to India through imports and later on were

indigenously manufactured with the help of foreign collaborations.

Indian tractor industry, comparatively young by world

standards have expanded at a spectacular pace during last four decades.

MAHINDRA & MAHINDRA LTD., SWARAJ DIVISION, MOHALI

Punjab Tractors Limited (PTL) a joint sector company of

the Punjab Government, which went into commercial promotion in the early seventies, is a unique example of technological self reliance in a high technology area like the automotive sector in the country.

BACKGROUND
Punjab Tractors Limited (PTL) was promoted by PSIDC to

commercialize the indigenous tractor developed by the Central Mechanical Engineering Research Institute (CMERI). where production commenced in the year 1974.
Harvesters and Forklifts.

The Company's plant is situated at S.A.S. Nagar (Mohali) The company's product line also includes Combine The production capacity of tractors has increased to 60000

nos., from the level of 5000 nos.

ASSOCIATE UNITS OF PTL

SWARAJ FOUNDARY DIVISION:
SWARAJ COMBINE DIVISION (SCD): SWARAJ AUTOMOTIVES LITD. SWARAJ MAZDA LTD. SWARAJ ENGINES LTD. (SEL).

PUNJAB TRACTORS LTD EQUITY SHAREHOLDING PATTERN AS ON 31st March, 2010

STRENGTHS:
Due to strong consumer preference and the potential for expansion, the industry in

bound to record growth. Being a cash rich company, PTL should have no obstacle for further expansions. The management of PTL is very efficient and effective. The company mainly has medium horse power tractor in its product portfolio, which hold a good growth potential thereby leading to an increase in the market share. The company has an excellent distribution network along with established brand equity of the company can capitalized upon. Strong Research and development set up.

WEAKNESSES:
The company has a weak presence in southern and eastern India as compared to

northern India. The company is addressing this problem by going in for capacity expansion and increasing dealer network. The company has not leveraged its brand and product varies in the exports market. Being agro-based product , companys fortune depends on the vagaries of the monsoon. Major market share in Punjab & Haryana could stagnate as the market mature.

OPPORTUNITIES:
By launching high horse power tractors , the company can enjoy more

high growth rate . The core rural market is untapped and lots of opportunity exists there any finance companies,. Largest second market of Gujarat and Madhya Pradesh with low cost economy tractors. Good brand name, product quality and cost advantage to increase exports in low value markets of Sri Lanka, Bangladesh and African countries.

THREATS:
The entry of international and new domestic players would intensify

competition significantly. This could put pressure on the sale growth and the merging of the company. The contained increase in price of inputs relative to price of final product could effect badly. Number of technically superior new models likely to be launched in the market in the next two years. The evitable increase in petroleum prices including diesel, will naturally bring down the spirit of a prospective tractor purchasers

SUPPLY CHAIN MANAGEMENT IN AUTO-INDUSTRY

 POTENTIAL BENEFITS OF INTEGRATED BUYER-

SUPPLIER RELATIONSHIPS

 SUPPLY CHAIN AND LOGISTICS STUDY AT MAHINDRA &

MAHINDRA LTD. SWARAJ DIVISION, MOHALI The Right Parts In Right Quantity In the Right Place At the Right Time

 VENDOR SELECTION PROCEDURE

INFORMATION FLOW IN THE SCM

On the basis of forecasted demand the factory places order at the Vendors end. The factory has the information i.e. communicated to it by the Distributors regarding the demand. It also has info about vendors The distributors have the data that the retailer passes on to him. It is Connected to both the factory and the retailer. The retailer has the data that the consumer passes on to him Real demand data is obtained

SCOPE AND OBJECTIVES

SCOPE OF SURVEY Relationships with suppliers and clients. Functions important to efficient supply chain management. Factors considered when forming a supply chain relationship. Principal objectives in developing supply chain collaboration. Key success factors in supply chain management development. Barriers to implementation of construction supply chain relationships.

OBJECTIVES OF THE STUDY Main objectives of the study are: 1. To study the importance of integral organizational functions and building relationships with suppliers/clients. 2. To study the importance and objectives of supply chain management and supply chain practices with reference to Indian automobile industry. 4. To study the supply chain and logistics study at Mahindra & Mahindra Ltd. Swaraj Division 5. To study the principle objectives in developing supply chain management and its effective key factors. 6. To study the major barriers to implementation of supply chain management relationships and working strategies on the basis of current programs. 7. To study the current growth process of the organization and problems faced by supply chain management.

RESEARCH METHODOLOGY
Descriptive research: Has been used to describe what existed in the market/field
Classificatory research: Has been used to classify, categorize and compare similarities and differences observed in the various samples studied. Explanatory research: Has been used to explain the various phenomena in terms of similarities and differences. Sampling plan: Researcher has adopted the probability, random sampling method to conduct survey. Sampling method: Probability sampling and non-probability sampling. Sample size: A total of 40 respondents (Dealer) were surveyed

Sources of data: Keeping in view the objectives of the study, a conventional and stratified marketing research programs was adopted and the procedure for the study consists of following elements.
Primary data Secondary data

Data collection instrument: Research instrument used for obtaining primary data is questionnaire.

Research limitations:
1. The study was restricted to Bathinda city only. 2. The size of the sample is limited to time and resources. 3. The information collected is valid until there is no any technical change or any innovation is released in the market regarding Supply Chain Management to dealers. 4. The result is assuming that respondents have given accurate information.

DATA INTERPRETATION AND ANALYSIS

Importance of Integral Organizational Functions
Functions Very Important Production Procurement Operation Storage Inventory
Very Important
0 3 5 9 10 8 8 16 10 4 2 12

Quite Important 5 / 12.5% 9 / 22.5% 8 / 20% 8 / 20% 2 / 5%

Somewhat Important 3 / 7.5% 6 / 15 % 10 / 25% 8 / 20% 4 / 10%

Not Important 0 / 0% 0 / 0% 6 / 15 % 14 / 35% 22 / 55%

32 / 80 % 25 / 62.5% 16 / 40% 10 / 25% 12 / 30%

Quite Important
0 6

Somewhat Important

Not Important

6 14 22

8 32 25

Production

Procurement

Operation

Storage

Inventory

 Precedence for Building Relationships with Suppliers

Functions Very Important Quality Cost Logistics Processes 32 / 80 % 35 / 87.5% 25 / 62.5% 35 / 87.5% Quite Important 0 / 0% 1 / 2.5% 9 / 22.5% 2 / 5% Somewhat Important 8 / 20% 4 / 10% 6 / 15 % 1 / 2.5% Not Important 0 / 0% 0 / 0% 0 / 0% 3 / 7.5%

Quality

Cost

Logistics

Processes

35 25 35

1 6

8 32 1 0 0

Very Important

Quite Important

Somewhat Important

Not Important

 Precedence for Building Relationships with Clients

Functions Very Important Construction Design Cost Tendering Process Contract 26 / 65% 4 / 10% 10 / 25% 0 / 0% 35 / 87.5% 38 / 95% 5 / 12.5% 0 / 0% 0 / 0% 1 / 2.5% 0 / 0% 1 / 2.5% 25 / 62.5% Quite Important 4 / 10% Somewhat Important 2 / 5% Not Important 9 / 22.5%

Construction Design

Cost

Tendering Process

Contract

26

4 0

0 1 0

38

10
5 9

35 25 4 1 0 2

Very Important

Quite Important

Somewhat Important

Not Important

 Principal Objectives in Developing Supply Chain Management in the Company Functions Very Important Quite Important Somewhat Not Important
Benefit to client / supplier Improvement in customer service Improvement in information flow Increase in profitability Cost reduction of processes in the company Increase market competitiveness Integration of processes Very Important
0 20 0 10

10 / 25% 30 / 75% 4 / 10% 38 / 95% 10 / 25%

10 / 25% 10 / 25% 6 / 15 % 1 / 2.5% 10 / 25%

Important 20 / 50%
0 / 0% 10 / 25% 1 / 2.5% 0 / 0%

0 / 0% 0 / 0% 20 / 50 % 0 / 0% 20 / 50%

4 / 10% 20 / 50 % Quite Important

35 / 87.5% 10 / 25%

0 / 0% 5 / 12.5%

1 / 2.5% 5 / 12.5%

Somewhat Important
1 0 1 0 20 38 0 10 10 35 4

Not Important
5 5 10 20

20

10
10

30

10 6 4

 Key Factors in Effective Supply Chain Management Relationships with Functions Very Important Quite Somewhat Not Suppliers / Clients
Trust Reliability of supply Cultural compatibility Mutual Interest Free flow of information Joint business planning Closer links between demand and supply Common platform for project assessment Human resource development 30 / 75% 40 / 100% 4 / 10% 28 / 70% 4 / 10% 4 / 10% 38 / 95% 4 / 10% 4 / 10%

Important 3 / 7.5% 0 / 0% 6 / 15 % 5 / 12.5% 6 / 15 % 3 / 7.5% 1 / 2.5%

5 / 12.5% 6 / 15 %

Important 3 / 7.5% 0 / 0% 10 / 25% 3 / 7.5% 10 / 25% 6 / 15 % 1 / 2.5%

3 / 7.5% 10 / 25%

Important 4 / 10% 0 / 0% 20 / 50 % 4 / 10% 20 / 50 % 27 / 67.5% 0 / 0%

28 / 70% 20 / 50 %

Very Important

Quite Important

Somewhat Important

Not Important

4 3 3

0 20 40

4 3 5

0 1 1 20 27 38 20 28 10 6 3 4
Joint business planning Closer links between demand and supply

30

10 6 4

28

10 6 4 3 5 4
Common platform for project assessment

6 4
Human resource development

Trust

Reliability of supply

Cultural compatibility

Mutual Interest

Free flow of information

 Major Barriers to Implementation of Supply Chain Management

Relationships

Functions

Very
Important

Quite
Important 3 / 7.5% 1 / 2.5% 0 / 0% 6 / 15 % 3 / 7.5%

Somewhat
Important 6 / 15 % 1 / 2.5% 0 / 0% 10 / 25% 6 / 15 %

Not
Important 27 / 67.5% 0 / 0% 0 / 0% 20 / 50 % 27 / 67.5%

Poor understanding of the concept Inappropriate organizational structure Low commitment from partners Lack of strategic focus Information flow

4 / 10% 38 / 95% 40 / 100% 4 / 10% 4 / 10%

Very Important

Quite Important

Somewhat Important

Not Important

0 1 1

20 27 38 40 10 6 6

4
Poor understanding of the concept Inappropriate organizational structure Low commitment from partners Lack of strategic focus

3 4 Information flow

 Working strategies of supply chain management department on

the basis of the current programs

Functions Outstanding Excellent Good Average 21/52% 15/38% 4/10% 0/0%

outstanding

excellent 0% 10%

good

average

38%

52%

 Supply chain management department is having sufficient

transportation
Frequency Yes Not Sufficient 37/92% 3/ 8%

Yes

Not Sufficient

8%

92%

 According to the current growth process of the organization, which of the following needs much attention and progress to boost the production
Operational Activities activities Current programming Strategies 16 11 13

Operational Activities activities Current programming Strategies

33% 40%

27%

 Choose the right option, where the supply chain department is

facing problem in taking care of the raw material

During Storage Packaging Testing of Packaging Evaluation of defective raw materials 33 25 31 27

33

25

31

27

During Storage

Packaging

Testing of Packaging

Evaluation of defective raw materials

 Rate the delivery activity of the department

Excellent Very Effective Good Average 21/52% 17/43% 2/5% 0/0%

Excellent

Very Effective 0% 5%

Good

Average

43%

52%

FINDINGS
Company Size and Strength of Workforce Industry consists overwhelmingly of small and medium-sized enterprises Structure of the industry continues to fragment Focus remains on hiring of skilled / unskilled labor on temporary Area of Strength / Expertise The expertise is more concentrated towards conventional construction projects The lack of orientation towards industrial / technology projects The margins for earning hefty dividends on residential / transportation works

Importance of Integral Organizational Functions.

Precedence for Building Relationships with Suppliers. Precedence for Building Relationships with Clients.

Principal Objectives in Developing Supply Chain Management in the Company.

Key Factors in Effective Supply Chain Management Relationships with Suppliers / Clients. Major Barriers to Implementation of Supply Chain Management Relationships.

RECOMMENDATIONS AND CONCLUSION

Recommendations
Current supply chain performance shouldnt only be measured

and understood A reflective approach must be adopted towards activities where the knowledge gained is stored All parties involved in the supply chain must look to drive change through all areas by: Education process. Cultural change. An understanding that all parties will benefit / profit.

More effective management of subcontractors through: Regard the sub contractor as being part of the supply chain Sharing a full picture of the project. Sharing the values that are required by the Supply Chain. Inviting input where the sub contractor can add value.

Conclusion The company has faced stiff competition after the countrys economic reform in 1990s. The company was facing a major challenge in its supply chain of products across the country as well as overseas market. The company has set up its assembly/manufacturing facilities at multiple locations, which has increased the complexity of the entire supply and operations. SCM was the only solution to keep its margin healthy minimising costs by reducing the cost of production, logistics, working capital SCM solution has enabled a pull-based replenishment, which helped in optimising the logistics and manufacturing operations to improve margin and minimised costs

THANK YOU