TATA NANO

SUPPLY CHAIN
Submitted By-
RAGHAV SAXENA(2k16/EL/063)
SHUBHAM KUMAR(2k16/EL/084)
 TATA MOTORS
• Tata Motors is the largest Indian automaker, in terms of
commercial and passenger vehicles.
• It was first established in 1945 as commercial vehicle
manufacturer.
• Tata Motors is a subsidiary of the Tata Group of
companies, a large conglomerate that has been in India
since its establishment in the latter half of the 19th
century.
• In terms of market share, Tata Motors is the undisputed
leader in the commercial vehicle segment while its
 THE TATA NANO
• Tata Motors has clearly shown its emergence as an international
presence with the launch of the INR 1 lakh car, the Tata Nano.
• The launch of the Tata Nano that exposes Tata's strategic
superiority in the supply chain context
• To become profitable after accounting for materials, overhead
and taxes, the Nano must have a highly reliable and low cost
supply chain network that must chum the demand that it has to
generate.
 THE TATA NANO SUPPLY
CHAIN
• The general framework of Tata Motor's supply chain
consists of tier 1, 2 and 3 suppliers and original
equipment manufacturers
• The suppliers; the design group, engine and transmission
OEMs along with the assembly plant representing the
automaker itself.
• The third party dealers, representing the distribution
network.
THE TATA NANO SUPPLY CHAIN
Contd.

Fig 1. Tata Nano Supply

Chain
 THE SUPPLIERS OF TATA
NANO
The major aspects of the Nano's supplier network are:
1. Proximity to assembly plant
2. Local and single sourcing
3. Tata group subsidiaries
4. Two and three wheeler market suppliers
 SUPPLY NETWORK OF TATA
NANO
COMPANY COUNTR SUPPLIES
Y
1. BOSCH GERMANY Gasoline injection system, starter,
alternator and brakes
2. CAPARO EUROPE Inner structural panels
3. DELPHI USA Instrument clusters
4. DENSO USA Windshield wiper system
5. FICOSA SPAIN Rear view mirrors, interior mirrors and cvt
shifters
6. JOHNSON USA Seating systems
CONTROL
7. MAHLE GERMANY Oil filters, fuel filters and air cleaners
 MAJOR ROLES OF TATA
MOTOR
• 1. DESIGN : The design of the Tata Nano is credited for the cost effectiveness of the Tata
Nano's supply chain and the reason for the car's low price.
• The Tata Nano is designed to reduce costs from bumper to bumper. The main aspects of the
design of the Tata Nano are critical design team, Innovative design, Multi-functionality.
• Critical design team : it included design teams not only from its employees but also from
their business partners as well as they hired graduate trainees from near universities like
IIT kharagpur and Jada universities.
• Innovative design and Multi-functionality : The innovations of the Nano's design are
abundant. For instance the body is not made entirely of steel but a composite material.
Multifunctional properties of design aids supply chain efficiency while keeping costs in
check. For instance, the seats have metal structures with headrests integrated into them.
 MAJOR ROLES OF TATA
MOTORS(contd)
• 2. MANUFACTURING AND ASSEMBLY : Tata Motors' manufacturing division is
responsible for its core competencies such as engines and manual transmissions.
• The Tata Nano's plant is in Singur. (which was later reinstalled in gujrat) This plant is also integrated
with some of its supplier facilities and is in close proximity to other key suppliers such as the Tata steel
plant.
• Manufacturing practices have been set to follow the Japanese processes of lean manufacturing and
continuous improvement.
• All Tata plant workers receive training in Japanese manufacturing techniques and the smallest of
measures are adopted to improve performance. The most notable is the Indian car purchasing scenario
which enables "make to assemble" manufacturing for new models. This is because customers in India
are accustomed to long waiting periods for newer models of cars once orders are placed. This benefit
provides assemblers lead times of 3-4 months for urban customers and as long as one year for a rural
customer
 MAJOR ROLES OF TATA
MOTORS(contd)
• As shown by figure 2. (TATA NANO SUPPLYAND DEMAND)

Fig 2
 INVENTORY MANAGEMENT
• To know about the raw materials of the company for the last five years. The data’s are to be collected from the secondary.
This analysis to know about the stock levels under EOQ method by R. Kanchana
• EOQ(ECONOMIC ORDER QUANTITY): Economic order quantity (EOQ) is the ideal order quantity a company should purchase
to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was
developed in 1913 by Ford W. Harris and has been refined over time. The formula assumes that demand, ordering, and
holding costs all remain constant.
• Objective of the Study : To Analyse and measure economic order quantity for the selected raw material items.
• Data is collected through primary collection source like Tata motors journals which gives Annual consumption (A), ordering
cost(B or O) and secondary data which is storage cost and carrying cost is assumed from observations of dealers.
• ECONOMIC ORDER QUANTITY: EOQ= EOQ= SQRT.(𝟐𝑨𝑩/ 𝑪𝑺) or SQRT.( 𝟐𝑨/𝑶 ) Where, A=Annual Consumption B or O =
Ordering Cost C = Carrying cost S = Storage Cost
• Like from the data of 2012 we have , RAW MATERIAL= 33168.73, Ordering Cost Per Order= 3500, Carrying Cost= 10 %,
Purchase Price Per Unit= 550

• Calculation of EOQ:- Total units required (A) =33168.73 The ordering cost per order (O) =
Rs.3500 Carrying cost per unit (C) = 10% (i.e.) 10% of Rs.550 =Rs.55, EOQ = RS. 2054.62
 INVENTORY
MANAGEMENT(CONTD)
The above graph shows In 2013 the EOQ is 2054.62
which decrease to 1845.45 in the year 2014.
But increases further and reaches 2152.84 in the
year 2017.
Further concluding Inventory management has to do
with keeping accurate records of finished goods that
are ready for shipment as it helps to quickly convey information
to sales personnel as to what is available and ready for shipment
at any given time. Here in this we not talking about semi finished or
Or finished products.
 DISTRIBUTION
• Tata Motors has dealer networks such that its dealers to have substantial land
holdings and inventory available for customers to take cars with them immediately,
once financing is complete.
• Tata's dealers are predominantly existing dealers from the commercial vehicles unit
of Tata. There are applications and a selection process for dealers. Existing dealers
get preference over new dealers when new dealer locations are announced.
• Indian dealers usually make 3-4% margins on their car sales (Hindu-Business-Line).
• Tata Motors also has stakes in some dealers and is efficiently synchronized with the
dealers. For example, changes made to an order are received immediately and
electronically at the marketing division of Tata Motors.
 CHALLENGES
• 1. Transportation infrastructure : as I stated from fig. 2 customer has to
wait for 3-4 months for their shipment and tagged it as advantage but it’s a double
edged sword as when transporting unassembled cars or components result in delays as
that prove costly, especially when a plant has to remain idle while waiting for a critical
component.
• 2. Lack of supplier expertise : Indian suppliers were notorious for their
quality deficiencies. Automakers attribute this to lack of blue collar skilled labour to
maintain quality assurance practices. the majority of the local component parts makers
are below par in customer service and delivery of quality products. As a result, most
automakers have to import certain components due to which production costs are
driven up as a result of the costlier parts and tariffs associated with imported parts
 Successful strategies for Nano's
supply chain
• This association and the key approaches that have helped Tata Motors to
improve its supply chain to a standard that enables it to produce a cheap car
like the Nano are :
1. Tata Motors is part of a larger conglomerate
2. Product design of the Nano
3. Repetitive strategy
4. Utilization of government support( as of silgur protest the plant has to
shift in Gujarat)
5. Selective supplier base and its specifics.
 CONCLUSION
1. Despite having the best supply chain its fails in the market but its India’s
cheapest car, though its production is closed in January 2020.
2. The car was turning heads in the beginning but having the tag of poor people
car, people prefer not to buy it.
3. It had to face a lot of competition in India and bad publicity and fake rumours
destroys all in one, addition to that a political controversies in West Bengal over
the land of plant.
4. It performs poorly on the roads as no safety features and basic equipment. For
that it required personal customization so its cost raised to 2.5 lakhs which is of
roughly the same prize of as of competitors with having more features and
better looks.