Maruti Suzuki India Ltd.

• Maruti Suzuki India Limited (MSIL), a subsidiary of Suzuki Motor Corporation, Japan, is India's largest
passenger vehicle maker. India's first Company to manufacture and sell more than 1.5 million cars in
India in a year, Maruti Suzuki is credited with having ushered in the automobile revolution in
the country. The Company, formerly known as Maruti Udyog Limited, was incorporated as a joint
venture between the Government of India and Suzuki Motor Corporation, Japan in February, 1981, Govt
holding 74% stake and Suzuki 26% . Presently, Suzuki Motor Corporation owns equity of 56.2 per cent.
• Making a small beginning with the iconic Maruti 800 car, Maruti Suzuki today has a vast portfolio of 16
car models with over 150 variants. Maruti Suzuki's product range extends from entry level small cars like
Alto 800 to premium sedan Ciaz. Inspired by the needs of Indian customers, the Company launched a
new retail sales channel NEXA in 2015
• Maruti Suzuki has pioneered in offering new and innovative technologies to its customers. It was the
first company to offer a range of CNG cars, launched Celerio (with contemporary Auto Gear Shift
technology) to meet the changing lifestyle of its customers. With Hybridisation in focus, Maruti Suzuki
successfully introduced mild-Hybrid technology (Smart Hybrid) in its popular Baleno, Ciaz and Ertiga
vehicles.
• Besides serving the Indian market, Maruti Suzuki also exports cars to
several countries in Europe, Asia, Latin America, Africa and
Oceania. During the financial year 2018-19 Maruti Suzuki's net sales
stood at Rs 830,265 million and the Profit After Tax was Rs 75,006
million.
• FACILITIES IN INDIA
Supply Chain MSIL
• The fragmentation and segmentation of vehicle models (such as hatchbacks, sedans,
vans, SUVs etc.) are growing. The complexity of customized models and variants is on the increase,
especially with regard to how individual vehicles variants are equipped. Automobile Manufacturer must
schedule the supply at few thousand sub-assemblies and components in vehicle, with billions of possible
combinations to car outfit.
• Maruti now produces 17 models and 1,480 variants. If you include color variations, that number
exceeds 10,000 variants. And each car typically contains more than 30,000 individual parts.
• In automotive production standardization of modules to common platforms is a common goal for mass
market OEM like MSIL. Modules refer to groups of related components and systems serving for the same
or connected tasks (e.g. the front/rear axle, complete front-section of a body or the steering system).
Interrelated modules constitute the platforms, on which products for different car brands are developed.
• This means that vehicles can be adjusted to the individual requirements of customers and delivery
schedules enable OEMs (Original Equipment Manufacturer) to produce multiple models (based on
varying platforms), at the same manufacturing facility in assembly plant. This sharing of components is
crucial for reducing costs.
Upstream
• 1st tier suppliers - are global located world producers of completed
modules (e.g. dashboard, seating, steering etc.) with own manufacturing
and assembly capacities established within 100 Km radius of automakers
plant considering to logistics way in condition of JIS (just-in-sequence) or
JIT (just-in-time) delivery specifications; they are incorporated into MSIL
product development projects and innovation process - this means that
they make their own engineering decisions and designing solutions with
establishing local engineering or development center.
• Tier 1 suppliers are the biggest suppliers to the OEMs in terms of volume
as the quantity supplied by the Tier 2 and Tier 3 goes on to make the
components required by the Tier 1 supplier. Ex : Asahi India Glass Ltd,
Key Characteristics of Tierization Structure
Amtek Auto Ltd., Motherson Sumi Systems Ltd
• Number of firms increase as we go down the Tier level. For
• 2nd tier suppliers who procured parts for these modules (assembly units,
example, basic component manufacturing units are more in number
e.g. welded framework of seating); they are the companies with own
production or assembly plants establish near to 1-Tier suppliers (global or as compared to Tier-1 firms.
regional players). • Buying power & influence decrease as we go upstream i.e. from
• Tier 3 suppliers are raw material producers and companies of Tier-1 to Tier-3.
manufacturing capacities for small simple parts and individual • Technology & Manufacturing capability of Tier firms decrease as we
components (e.g. plastic parts, metal parts, aluminium parts), which fulfil go upstream i.e. from
mainly quality and volume conditions of 2-Tier suppliers, some delivers for Tier-1 to Tier-3.
1-Tier suppliers (e.g. coiled sheet). • Tier-1s are direct suppliers to OEMs, similarly, Tier-2 is Direct
supplier to Tier-1.
Downstream
MSIL is delivering its
vehicles to the dealers
across length and breadth
of the country through
logistics partners directly
from Factory or routed
through regional
stockyards located at
Bangalore, Nagpur and
Siliguri
Supply Chain Success Strategies
• GOING LOCAL
MUL set about creating a supplier network. Initially suppliers were skeptical about the project and worried about their own losses if it didn’t succeed.
Also, at the time the maximum foreign investment allowed was up to 40 percent and so the question of Japanese part makers setting up their own
subsidiary in India didn’t arise.
Maruti management treated vendors as important partners jointly working and followed the policy of interdependence. Maruti, then, decided to get
even more involved with its vendors, forming joint ventures to manufacture components that were critical to the quality of the vehicles, or were bulky
to transport, or required high technology and large investment .
• Just In Time System
JIT necessitates all the suppliers to be competent enough to meet the demand of the manufacturer in time. This required Maruti Suzuki to have its main
suppliers to be located near the assembly plant to allow frequent and on time delivery of components.
The result of JIT application is: inventory levels are never overstocked, material flows is perfectly synchronized, processes are leaner, and consumers
enjoy customized configurations.
Just in sequence is an inventory strategy, it is an approach to manufacturing where
components arrive at an assembly line in a specific order at the precise moment they are needed, and not before. Each parts and sub-assemblies
received in sequence to be delivered to production stations in assembly line as they are needed, in the sequence they will be consumed.
• E-Nagare System
E-Nagare, an online platform that connects Maruti Suzuki’s production facility directly with its vendor base. It is an online adaptation of the Suzuki’s
manual nagare (Japanese for “flow”) system, where each component is assigned a card (a Kanban) that circulates between the assembly line and the
vendor. Launched in 2004, e-Nagare took the company’s entire supply chain onto an intranet, which provided detailed instructions to vendors on every
order.
• MACE ( Maruti Centre for Excellence)
With the advent of recalls and its exports to global markets, the company required stricter quality standards, not only in its plants in Guragaon and
Manesar in Haryana, but to its vendors too. Therefore, it started a programme called Maruti Centre for Excellence (MACE) in 2004– involving 21 of its
component vendors -- to provide consultancy and training support to suppliers which enable them to achieve world-class standards in Quality, Cost,
Service and Technology Orientation.
Logistics
For MSIL, Logistics has played an important role in keeping overall supply chain costs as low as possible, particularly in reducing
inventory. MSIL constantly innovate to achieve logistics improvements, including studying new routes and trade options.
• MSIL has outsourced the management of spare parts and components in terms of warehouse management and
transportation. The outsourced logistics service partner gets an access to the e- nagare system of MSIL. Logistic service
providers (LSPs) actually operate as Tier I suppliers to MSIL and maintain an inventory of 3 days in the warehouse and 2 days of
in-transit inventory. The spare parts are directly dispatched to the dealers after receiving the indents through the MSIL system.
• In 2010- 11, the organization started encouraging its suppliers to supply material during the night shift, which helped in
reducing traffic congestion and pollution in and around their plant in Gurgaon city. A milk run system was also started in 2010-
11 for 30 suppliers based in Faridabad. The logistics for these companies is managed by one logistic supplier. This initiative
helped in reducing the number of trips per day to MSIL by 30 per cent from these suppliers and improvement in the truck fill
rate by over 25 per cent.
• MSIL’s 80-plus vehicle carriers operate a combined fleet of around 9,000 trucks or trailers. MSIL has deployed the trako Visual
Cargo solution in outbound logistics trucks that transport new cars from the factory to MSIL dealers across India. The trako
Visual Cargo is software, as a service solution, that provides on-demand visibility from loading to delivery location of cargo
vehicles using Global Positioning System (GPS) devices. It is a single, common platform for supply chain stake holders, which
include consigners, consignees, transporters and vehicle owners, to track and manage the movement of goods in transit to
enhance operational efficiency and improve customer service.
Challenges and Way Forward
• The main supply chain challenges are – visibility, cost containment, risk management, increasing customer demands and globalization . Generally
as an industry, automotive
supply chains, globally, lag behind other supply chains (such as retail, pharmaceutical etc) in these five parameters clearly indicating the need for
and scope of considerable improvements to make them more resilient and responsive.
Indian Market Peculiarities
• Supply chains in the automotive sector like many other industries have to confront with peculiarities special to Indian market which are distinctly
different from other big automotive markets.
• Preference for small cars and two wheelers, lack of visibility at the customer end particularly in rural markets, packaging complexities due to
language and cultural diversity, quality challenges due to resource shortcomings, large number of fragmented suppliers which impede effective
collaborations, complex tariffs and duties, lack of infrastructure and multimodal transport are some of the significant supply chain challenges .
• In addition low skill level of workers particularly in Tier II & Tier III suppliers add to the challenge. Only 50% of the workforce is considered to be
of high quality with a high attrition rate averaging 40%.
• “Infrastructure developments has not been in tandem with the growth witnessed by the auto industry. The quality of commercial vehicles has
improved but auto companies have not been able to leverage the advancement in technology due to a poor road network.
• Contrary to matured economies, road transport continues to be the preferred mode for the movement of finished vehicles in India, with the
share of rail and water transport negligible. In countries, like the US or Europe, a large number of cars, nearly 60-75%, are transported by rail.
The railway is the obvious alternative opportunity but is moving too slowly.
Waterways are another untapped area both inland and coastal which has not been developed.
• All the bottlenecks and challenges in the supply chain network leads to inefficiency in the industry which reflects in the cost and quality of the
product both for domestic as well as export market. Given India is such a price sensitive market, need of the hour is to pull our socks and resolve
the long pending issues for overall growth of the industry. No wonder with one of the highest manufacturing contributor to the national GDP it is
the need of the hour if India wants to become 5 trillion economy in near future.
Tata Motors 
• Established in 1945, Tata Motors’ presence cuts across the length and
breadth of India. Over 8 million Tata vehicles ply on Indian roads,
since the first rolled out in 1954. The Company’s manufacturing base
in India is spread across Jamshedpur (Jharkhand), Pune
(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand),
Sanand (Gujarat) and Dharwad (Karnataka). The Company’s
dealership, sales, services and spare parts network comprises over
6,600 touch points.
• Through subsidiaries and associate companies, Tata Motors has
operations in the UK, South Korea, Thailand, Spain, South Africa and
Indonesia. Among them is Jaguar Land Rover, acquired in 2008. 
• Tata Motors Group (Tata Motors) is a $34 billion organisation. It is a leading global automobile
manufacturing company. Its diverse portfolio includes an extensive range of cars, sports utility vehicles,
trucks, buses and defence vehicles. Tata Motors is one of India's largest OEMs offering an extensive range
of integrated, smart and e-mobility solutions
• Part of the USD110 billion Tata group founded by Jamsetji Tata in 1868, Tata Motors is among the world’s
leading manufacturers of automobiles. We believe in ‘Connecting aspirations’, by offering innovative
mobility solutions that are in line with customers' aspirations. We are India's largest automobile
manufacturer, and we continue to take the lead in shaping the Indian commercial vehicle landscape, with
the introduction of leading-edge powertrains and electric solutions packaged for power performances and
user comfort at the lowest life-cycle costs. Our new passenger cars and utility vehicles are based on Impact
Design and offer a superior blend of performance, driveability and connectivity. 
• Our focus on connecting aspirations and our pipeline of tech-enabled products keeps us at the forefront of
the market. We have identified six key mobility drivers that will lead us into the future – modular
architecture, complexity reduction in manufacturing, connected & autonomous vehicles, clean drivelines,
shared mobility, and low total cost of ownership. Our sub-brand TAMO is an incubating centre of
innovation that will spark new mobility solutions through new technologies, business models and
partnerships. 
• Our mission - across our globally dispersed organisation – is to be passionate in anticipating and providing
the best vehicles and experiences that excite our global customers. 
Mahindra and Mahindra

The US $6.7 billion Mahindra Group is among the top 10 industrial houses in India. Mahindra & Mahindra is
the only Indian company among the top three tractor manufacturers in the world. Mahindra's Farm
Equipment Sector has recently won the Japan Quality Medal, the only tractor company worldwide to be
bestowed this honor. It also holds the distinction of being the only tractor company worldwide to win the
Deming Prize.
Mahindra is the market leader in multiutility vehicles in India. It made a milestone entry into the passenger
car segment with the Logan. The Group has a leading presence in key sectors of the Indian economy,
including the financial services (Mahindra & Mahindra Financial Services Ltd, Mahindra Insurance Brokers
Ltd., Mahindra Rural Housing Ltd.), trade and logistics (Mahindra Inter-trade Lid., Mahindra Steel Service
Ltd., Mahindra Middle east Electrical Steel Service Centre FZE, Mahindra Logistics) automotive
components, information technology (Tech Mahindra, Bristlecone), and infrastructure devebpment
(Mahindra Life spaces, Mahindra Holidays & Resorts India Ltd., Mahindra World City).
With over 62 years of manufacturing experience, the Mahindra Group has built a strong base in technology,
engineering, marketing and distribution which are key to its evolution as a customercentric organization.
The Group enpbys over 50,000 people and has several state-of-the-art facilities in India and overseas.
Mahindra and Mahindra Supply Chain Pune Plant

A single car has more than 7000 parts, alone the engine has more than 300 parts. These parts are supplied from all over the world to
maintain the quality and the cost of parts 
Mahindra prepares body of car and engine in house the assembly apart from these they have their own logistics company to manage
thousands of part in sub assembly. For few parts like cockpit they have developed their suppliers inside the plant in line with JIT
They have 6-7 sub assembly (Engine, transaxle, door etc..)
The supply chain strategy of mahindra is reponsive, they make to order/assemble to order plus keep small buffer to keep delivery
chain efficient. 
They have 350 suppliers out of which 100 are in Pune. They have plan to reduce supplier base 10% year to year. As per the need of
different parts they follow multi vendor and single vendor strategy 
Lear is the seat supplier for mahindra, Lear supply to many OEMs but tool development is done by the individual OEMs
Transportation cost is reduced as supplier plant is near to mahindra plant which also reduces inventory holding cost by allowing to
follow JIT
Seats are then transferred to assembly line by sequencing of material process 
Mahindra follows multi vendor strategy for tires (Bridgestone, apollo, JK Tyre). These suppliers have their warehouses in Pune to
reduce leap time and avoid demand fluctuation for mahindra. Mahindra has a different logistics company to manage the
transportation 
After the vehicle is made it is stored in the logistics yard and then handed over to mahindra logistics.
Ashok Leyland

Ashok Leyland is an Indian multinational automotive manufacturer,

headquartered in Chennai. It is owned by the Hinduja Group. It was
founded in 1948 as Ashok Motors and became Ashok Leyland in the
year 1955. Ashok Leyland is the second-largest manufacturer of
commercial vehicles in India, the third-largest manufacturer of buses
in the world, and the tenth-largest manufacturers of trucks.
With the corporate office located in Chennai, its manufacturing
facilities are in Ennore (Tamil Nadu), Bhandara (Maharashtra), two in
Hosur (Tamil Nadu), Alwar (Rajasthan) and Pantnagar (Uttarakhand).
Ashok Leyland Supply chain
* Vendor Development and Strategic Sourcing are handled by Corporate Materials Department (CMD). 
- CMD identifies the vendors, rates the vendors based on feedback received from Supplier Quality Assurance Cell, sends drawings / specifications, calls for quotes with
detailed break-up of operationwise costs, and negotiates the price at which the parts will be supplied. 
- In addition to CMD at Ennore, and the two Units at Hosur, there are Materials Management Departments (MMDs) for scheduling based on unit production plan.  
* Vendor Development of Strategic Sources 
- Strategic Sourcing is central to the integrated Materials Management function. Ashok Leyland's policy is to develop a vendor base committed to continuous improvement to
meet quality, cost and delivery standards. 
- Ashok Leyland considers its vendors as partners in progress and believes in establishing mutually beneficial relationships. Ashok Leyland provides necessary technical
assistance in the form of Project and Production Engineering, to maintain quality levels. In addition, where required, Ashok Leyland also helps vendors financially.  
* Becoming a Vendor to Ashok Leyland is easy, involving just four steps 
- Fill the Questionnaire. As this provides the basic inputs required for preliminary study, applicants need to provide as much information as possible.  
- If Ashok Leyland needs the item you would like to supply, CMD will inform Ashok Leyland's Supplier Quality Assurance Cell (SQA) for an on-site assessment. Otherwise, the
Vendor information is stored for future reference. 
- If SQA approves the vendor, then CMD will send the drawings for SQA cleared components to the Vendor for obtaining a quotation. If, instead of approving the vendor, SQA
recommends improvements to facilities, the Vendor is given adequate feedback and a re-survey is undertaken at a mutually agreed future date.  
- If the Vendor matches Ashok Leyland's expectations in terms of price, quality and delivery, then CMD places a trial order with the Vendor. Both on-line and off-line
inspection may be carried out at the time of processing the trial order. Based on the outcome of the trial order, CMD may place the Vendor in the Approved Vendor List.  
* Some of the relevant points to note - Ashok Leyland's Purchasing Philosophy is to maximize bought-out parts. Over 90% of the parts are bought-out.  
- Ashok Leyland believes in global sourcing. Consistent with its operational needs, AL would consider both domestic (Indian) as well as international vendors. Global sourcing
is normally resorted to overcome local constraints 
- in the form of technology, quality, capacity or cost effectiveness.
• https://www.icmrindia.org/casestudies/catalogue/Operations/Supply%20Chain-Ashok
%20Leyland%20Way-Operations%20Case%20Study.htm
• in 1999, AL launched Project OSCARS (Optimising Supply Chain and Rationalising
Sourcing). OSCARS identified two methods to reduce costs in the inbound supply
chain: reduce material costs and through optimum inventory levels reduce the
invisible inventory carrying costs
• teams jointly formed the single window vendor management agency, bringing with
them specialised commercial and technical knowledge. Within the centrally
negotiated price and share of business, unit material functions interacted with the
approved panel of vendors to "pull" materials in line with their production plans.
• AL dealt directly with tier-one suppliers who, in turn, were supported by tier-
two and tier-three suppliers. The benefits of system buying could be illustrated with
the example of the tool kits that accompanied every vehicle
• The revamp of the out-bound supply chain (code named OSCARS II) had the twin
objectives of improving customer satisfaction and reducing finished goods inventories,
and reaching improved service levels with optimum pipeline inventory levels
• In the first half of 1999-2000, AL recorded a net profit of Rs 1.9 crore on sales of Rs
1,092.8 crore, against a Rs 36.7 crore loss for the corresponding period in 1998-99
Supply Chain Management at Volvo Eicher
• In the automobile sector availability of every part is important to
deliver the product on time, which makes inventory management one
of the most important part of supply chain management.

• Every Company has its own set of practices to ensure the track of
every part in a way that it does not take a lot of space, does not
increase the handling cost and  is available in the amount needed.    
Inventory Management at Volvo Eicher
A combination of following two practices is used for inventory management at the company:-
1. ABC Analysis
•        Division of the parts based on their price 
•        A -  > Rs 1000
•        B -   Rs 500- 1000
•        C -   < Rs 500
2. Division based on frequency of requirement
•        Three Categories are made under this  -
•         Runner - 70% on wheels come every day - high value parts
•         Repeater - 20% (once in a month)
•         Stranger - 10% (as per vehicle order received 
Enterprise Resource Planning at Volvo Eicher
• SAP was used to keep track of all the parts 
• Unique ID – A fert code is generated corresponding to every unique
type of product (family of product) and if any modification is done
the fert code changes. If there is any problem in product of a
particular fert code, it can be changed in all the products with same
id.
• Chassis No.  - This is unique to every complete product. 

These Ids were used to see status on SAP

Bottlenecks
• Boilers
The boilers used in automobile sectors take days to come at the
required temperature. So, these cannot be turned of otherwise it will
waste productivity of many shifts to again start working.
Even on national holidays workers are paid three times to take care of
working of boilers they cannot be shut down.   
Quantitative Metrics
• REVENUE FROM OPERATIONS [GROSS]

MSIL:
MAR'21 – 66,562    MAR'20 – 71,690

TATA MOTORS:  
MAR'21 – 46559    MAR'20 – 43,485

MAHINDRA & MAHINDRA:  

MAR'21 – 44,296    MAR'20 – 44897

ASHOK LEYLAND:  
MAR'21 – 15,301    MAR'20 – 17267

VOLVO EICHER:  
MAR'21 –     MAR'20 –

 
Inventory turnover ratio
• MSIL: 23.06
• Tata Motors: 10.33
• Mahindra & Mahindra: 7.72
• Ashok Leyland: 7.79
• Volvo Eicher: 9.97
Cash Conversion Cycle
 It equals Days Sales Outstanding + Days Inventory - Days Payable.
• MSIL: -10.09 days (4)
• Tata Motors: -12 days (5)
• Mahindra & Mahindra: -9.25 days (3)
• Ashok Leyland: -7.51 (2)
• Volvo Eicher: -5.60 (1)
Production Capacity
• MSIL: -20,76,000
• Tata Motors: -4,80,000
• Mahindra & Mahindra: -15,00,000
• Ashok Leyland: -1,50,000
• Volvo Eicher: -2,15,000