Maruti Suzuki

-Abhishek Sinha
Devanu Roy C.
Past Practices

 The company had about 400 vendors supplying over

2000 types of components.
 Vendors were also being penalised for supplying
defective components.
 MUL has asked Sona Steering to pay Rs 40 lakhs as
cost incurred for replacing the defective steering in
the 50,000-odd cars.
 Maruti sourced 75 per cent of its component
requirement from vendors.
Past Practices
 Maruti'scomponent defect rate was as high as
30,000 parts per million (PPM) as compared to
200 (PPM) for the developed countries.
 The company did only random checks (one out of
30 components supplied).
 The defect rate of Indian component suppliers is
100 times more than the world standards.
 Changes
 The number of vendors is being reduced from the present four
to five per component to a maximum of three vendors.
 MUL has decided to make internal and external audits of
vendors and suppliers more stringent and regular in future.
 This would ensure that vendors adhere to quality norms.
 Company executives said interaction with vendors and
suppliers was also being stepped up to know their needs and
the sources of their raw materials.
 This would also help in up gradation of vendor technology
and their production facilities.
Changes
 A better way of detecting faults in components is
by putting stickers along with the batch number so
that the faulty components can be easily detected.
 Maruti has a vendor consultancy cell which look
into problems of vendors and advises them on
modernisation and upgradation.
 Maruti procures components worth about Rs.5,000 crores
every year.
 The company's top 10 vendors account for about 34 % of its
aggregate purchases of components from vendors in India.
 Maruti works on a 3.5% per annum reduction in vendor prices
by 2004-2005.
 Maruti streamlined the sourcing and stocking of materials and
components through its Delivery Instruction system , one of
Suzuki's best practices.
 This system provided details of Maruti's component
requirements for every 15 days, across the different variants of
the various models, to its vendors.
Example of Vendor Selection
 Maruti selected UGS as a Product Lifecycle Management
(PLM) solution provider
 The need for shorter cycle times is always at the top.
 Management wants to be able to launch new models faster and
reduce the time required for minor changes and development
of product variants.
 Maruti’s goal is to collaborate closely with its global teams
and suppliers on the development of new platforms and
product freshening.
 Other challenges include streamlining the process of vehicle
localization and enhancing quality and reliability.
 These challenges pointed directly to a product lifecycle
management (PLM) solution with capabilities for information
management, process management, knowledge capture and
support for global collaboration.
 PLM’s information management capabilities address the issue
of the many platforms, local variants and export destinations.
 Process management permits concurrent development and
faster change management and provides a platform for other
process improvements – for faster vehicle development.
 Maruti selected the UGS PLM software solution because
“UGS leverages the business value by offering a complete
PLM solution,” according to Maruti sources.
 Maruti Udyog Ltd. Maruti’s PLM implementation includes
Teamcenter, NX and Tecnomatix software.
 Teamcenter provides a wide range of functionality for release
management including bills of material management and
change management.
 Teamcenter also handles the vehicle localization process,
coordinates the part approval process and integrates design
and engineering information with the company’s ERP system.
 Teamcenter also provides the infrastructure for global
collaboration. It does this by permitting real-time data sharing
with suppliers in India and the global Suzuki team.
Results of PLM by UGS
 Maruti has seen a 50 percent reduction in assembly/build issues.
 Since implementing the UGS PLM solution, engineering change
notice (ECN) time at Maruti has decreased by 50 percent.
 The number of ECN errors has also been cut in half. Cost
reduction, which had been occurring to some extent before the
PLM implementation, is even more effective now, an
improvement of 54 percent.
 On a recent program, digital design reviews revealed 36 issues
that previously would not have been detected until the prototype
stage, resulting in program delays. With the UGS PLM
implementation, such delays are now avoided.