Supply Chain Management in Automobile Industry

Anurag asopa (111312) Ishan datta (111322) Mayur gupta (111330) Rajesh samiani (111339) Shantanu Nilosey(111345)

The Supply Chain Management

:

Supply Chain Management

Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption

Activities Involved in SCM

Strategic Level:- Strategic network optimization, including the number, location, and size of warehousing, distribution centres, and facilities Tactical Level :-Sourcing contracts and other purchasing decisions
Operational Level:-Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.

Problems addressed by supply chain management

Distribution Network Configuration:-Number, location and network missions of suppliers, production facilities, distribution centres, warehouses, cross-docks and customers. Distribution Strategy:-Questions of operating control (centralized, decentralized or shared); delivery scheme, e.g., direct shipment, pool point shipping, cross docking,

Problems addressed by supply chain management

Trade-Offs in Logistical Activities:-The above activities must be well coordinated in order to achieve the lowest total logistics cost. Inventory Management: Quantity and location of inventory, including raw materials, work-inprogress (WIP) and finished goods. Cash-Flow: Arranging the payment terms and methodologies for exchanging funds across entities within the supply chain.

Supply Chain Management in Automobile Industry

Automobile industry is a vast and rapidly growing sector

As the demand for new improved vehicles is increasing, so is the need for automation of these industries.
All automakers are constantly under pressure to identify consumer preferences, national biases, and new market segments where they can sell vehicles and gain market share. In view of the present globalisation, implementation of lean production and the development of modularisation have changed the relationships between automobile assemblers (OEMs) and their suppliers,

Global Challenges in Indian Automobile Industry

External Legislation (environment, others) Raw materials and energy costs Exchange and Interest rates Customer
Stagnating demand and price pressure in established markets Segmentation and polarization (low cost vs. premium) Decreasing Customer loyalty

Global Challenges in Indian Automobile Industry

Competition Quickly entering every segment Moving Targets everyone optimizing Global Games, e.g. new entrants
Industry Global Overcapacity Complex alliances and partnerships, M & A Consolidating Ecosystems

Various Flows of Supply Chain Management

Product flow - Movement of goods from supplier to customers and also in case of any customer returns or service requirements. Information flow - Covers updating the status of the delivery as well as sharing information between suppliers and manufacturers. Finance flow Encompasses credit terms, payment schedules and consignment and title ownership arrangements.

Demand trends affecting SCM

Uneven Growth Fragmentation Accelerated Volatility Importance of After-market

Supply trends affecting SCM

Differentiated Outsourcing Low-cost-country sourcing Transparency and Accountability Risk Management

Supply Chain Management practices at Mahindra and Mahindra

Mahindra Logistics is one of the few logistics service providers which

also offers People Transport Solutions;

A specialized line of business which provides customized services to

organizations for transfer of employees from home to their place of work

and back.

Our Mahindra People Transport Solutions division ensures on time

pickups and drops with a focus on safety, comfort and security.

Mahindra Integrated Logistics Execution System (MILES)

MILES is capable of not just transport management but capacity
planning based on sales forecasts, execution visibility, financial reporting

and freight audits.

It is integrated with hand Held Terminals (HHT) and Global Positioning

System (GPS) based vehicle tracking system for complete control of

operations on a real time basis.

Some of the features and benefits can be classified as under:

Planning
Execution Freight Audit

MLL Warehouse Management System

MLL WMS helps transform conventional warehouses by improving efficiency and productivity of operations within

the warehouse.
MLL WMS automates receiving, put away, picking, and shipping in warehouses and supports inventory cycle count planning and execution.

This system also adds levels of control that permit users to better plan and manage resource and storage space in

warehouse operations.
It also provides management with real-time visibility to inventory and order status across different warehouses of the

organization.

Probir Mitra, CIO of Tata Motors spoke to team from CyberMedia News on the various IT implementations and IT spending by the company
CMN: What are the major implementations made over the years? Please specify. PM: - SAP 3.1 & SAP 4.6c implmentation (Asia's largest Implmentation) - SAP-SRM & WM - SOX-ITGC - Knowledge Based Engineering (KBE) in Design - Manufacturing Planning with " Delmia "

SCM- SRM AT TATA MOTORS

The company took the strategic decision to go in for a SAP ERP Solution with the goal of lowering customization and upgrade costs. Risks, which emanate from attrition or change of guard in the company, would also be minimized. The SAP version used was 3.1H. In August 2003, the company moved from SAP 3.1H to 4.6C on a single server platform. Today, there are 3,500 users

across the country. Once R/3 was implemented, extensive rationalization of

processes took place. Various business processes like materials, finance, logistics, etc. were stripped

down to their basic components and a lot of re-engineering had to be done, as

all these processes became location-independent. Tata Motors also opted for the standard cost functionality, which was a

significant business process change for the company.

The SRM system has helped reduce processing time for vendor payments from 48 to 24 hours.

This reduction in vendor payment cycle time has enabled Tata Motors to get
better terms and cash discounts in purchases. It has consequently reduced the manpower required for processing vendor

payments in Tata Motors.

The manual work has gone down by 60 percent. For e.g. there has been a significant reduction in manpower deployed in the Materials Receiving function. A single bar code enables multiple supplier shipments reducing the goods receipt cycle time at the entry gate leading to a reduction in turnaround time for vehicles by 50 per cent.

Benefits of SRM
The SRM deployment has resulted in seamless integration with suppliers and

streamlined the warehouse management at Tata Motors.

The biggest benefit has been the creation of a large, unified database for the entire company.

Now anyone across the enterprise can just look in and easily find out what
customers they have, who are its suppliers and vendors, what prices they offer, etc.

It brought a synergy in purchasing by strategically sourcing critical

components for the entire organization. This has resulted in strategic partnering with vendors with volume discounts.

there are about 1,000 persons employed with tier-2 vendors and support

functions like logistics, canteens etc.

The employment numbers will increase considerably with the scale of operation. Almost 95 percent of the materials supplied from the vendor park are transported in trolleys and returnable packaging.

This initiative is aimed at ensuring flow of component supplies on a real-time

basis, and there-by reducing logistics and inventory costs as well as lowering uncertainties in the long-distance Supply-chain. In the reporting period, our manufacturing plants sourced approximately 58.57 percent of materials and services from vendors.

THANK YOU.