Supply Chain Management TATA Motors

Group 2Thomas Chandy (51A)Sumanth Patlolla (50A)Sanjeev Kumar (42A)Pratik Godhane (35A)Nikhil Indla (29A)Gukan K (18A)Anand Savur (8A)Supply Chain Management TATA Motors

ContentsMission, Vision & Values2Timeline & Introduction3Indian Automobile Industry Overview4Passenger Vehicle Industry5Commercial Vehicle Industry6Supply Chain7Value Chain Process8Inbound Logistics..8Operations, Outbound Logistics, Marketing & Sales9Supply Chain Integration9ERP12Procurement and Vendor Management Program.14Enterprise Process Model15New Product introduction (NPI) Process Overview..16Supply Chain Process - Tata Nano.17Low-Cost Approach.18Manufacturing Model19Distribution Model..20Innovations in Design and Supply Chain Practices.20Layout of factory21Ratios Analysis.27Performance Evaluation Framework..31Conclusion.32

2000-20131977-921992-200019451954-66Introduction Set up in 1945, Tata Motors is Indias largest automobile company (in terms of revenues) with a pan India and international presence

1st in Commercial vehicle segment and 4th in Passenger vehicle segment in terms of sales(FY12)

The total revenues for Tata Motors in FY12 was USD 37.4 billion

Has presence in countries across Asia, Europe, Africa and South America

Manufacturing Plants in India: Pantnagar: Tata Ace, Tata Magic, Sumo, Gold

Pune: Tata 407, Indigo, Manza, Safari, Aria

Jamshedpur: Luxury Trucks (World Trucks)

Lucknow: Buses (Star Bus)

Dharwad: Tata Ace, Iris

Sanand: Nano

Indian Automobile Industry Overview Passenger vehicle sales in India slumped by 6% in 2013-14, marking the biggest drop in a decade

Passenger Vehicle Sales post 6% decline in 2013-14

SIAM expects the economy to grow at 6% in the current fiscal year, with some boost for the manufacturing sector likely to trigger fresh investments and build up new capacities in the industry

India is the 6th largest automobile market in the world after China, US, Germany, Japan and Brazil

Car market in India is evolving at a great pace

Indian Passenger Vehicle Industry

The Indian Passenger Vehicle (PV) industry recorded volumes of 2.3 million units in 11m 2013-14, a decline of 6.0% YoY. The Indian Passenger Vehicle (PV) industry recorded volumes of 2.3 million units in 11m 2013-14, a decline of 6.0% YoY

In February 2014, excise duty on small cars was reduced from 12% to 8%; while on mid and large-sized cars, it was brought down from 24% to 20% and 27% to 24%, respectively

In 2013-14, nine new brands and several refreshed versions of ongoing brands have been launched by various OEMs

In ICRAs view, the Indian PV industrys domestic volumes may likely decline by 6-7% in 2013-14 but grow by 2-3% in 2014-15

Indian Commercial Vehicle Industry After witnessing over two successive years of contraction in unit sales, the Commercial Vehicle (CV) industry showed some signs of recovery, especially in the medium & heavy duty truck segment, which has borne the brunt of economic slowdown

The Medium & Heavy Commercial Vehicle (M&HCV) segment has started showing a recovery with growth of 2.5% YoY in June 2014

The Heavy Commercial Vehicle Segment (HCV) sales have been growing steadily for past three months and registered an overall growth of 9.3% in Q1 2014-15

TATA Motors - Global The company operates in over 175 markets, and have over 6,600 sales and service touch points

The manufacturing facilities are in South Africa, Morocco, UK, Spain, India, Thailand and South Korea

The R&D centres are in UK, Italy, Spain, India and South Korea

Supply Chain

ERCNPITechnical ServiceStrategic SourcingAPQPVendor DevelopmentMaterialLogisticsIndirect MaterialSQIGManufacturingDealersCustomersSuppliers

As you can see the Value chain is divided into five parts. The logistics is controlled by tight Information Technology control systems such as SAP and VCM. From the outbound logistics till the front end services are also controlled through Customer Relationship Management related softwares.The facets of value chain are explained as below: Inbound Logistics Transporters and Agents are tied up with long term contracts with the service providers Regional offices have dedicated workforce to overlook at transit operations so as to ensure smooth flow SAP System Integration to ensure that transparency is maintained and the chain is well monitored DTL supplies (load bodies and panels for commercial vehicles) for critical high value items The storage facilities have been made efficient so as to make storage of parts and retrieval easy and smooth

Operations Capital Equipment Manufacturing division had tooling development capabilities of global standards Apprentice Trainee Course had ensuring stable source of skilled manpower Kaizen & TPM team was there to continuously drive to improve efficiencies Automated manufacturing processes did to reduce human error and make tracking simpler Distributed manufacturing in assembly units at South Africa, Thailand, Bangladesh, Brazil etc.Outbound Logistics Stockyards, all across the country Long term contracts with transporters higher volume of business to transporters ensures competitive price Regional Sales Office and Vehicle Dispatch Section linked through SAP Efficient security system for prevention of any kind of pilferage Marketing & Sales Quick assessment of the changing market dynamics and consumer preferences Tata 407 LCV Large network of dealers (650) use of technology : DMS Independent teams for addressing the requirements of institutional customers Defense, State Transport Units Supply Chain Integration: When a business is integrated with ERP, the whole extended system provides a vision of business processes that span multiple businesses and enterprises. In the most ideal case companies should be able to connect disparate platforms, applications and data formats across the value chain, including not only suppliers but customers as well. Furthermore, companies should retain the flexibility to change and add functions to applications as business needs evolve. Companies need to be able to adapt their ERP systems to the emerging world of business.

The major partners of the supply chain are the suppliers, the organization and the consumers and any other partners involved in the business transactions (like banks, middlemen, etc.). Supply chain refers to the complex network of relationships that organizations maintain with trading partners to procure manufacture and deliver products or services. Supply chain encompasses the facilities where raw materials, intermediate products and finished goods are acquired, transformed, stored and sold. These facilities are connected by transportation links along which materials and products flow. Supply chain consists of many companies, individuals and institutions. Supply chain management is the coordination of material, information and financial flows between and among all the participants. In order to bring uniformity to our operations and to function in an efficient and effective manner, we use an enterprise process model (EPM) manual consisting of enterprise level processes and sub-processes. Changes in business needs and shifts in processes are reflected in the model which is updated on a periodic basis. Our Enterprise Resource Planning SAP gives us the benefit of accurate and consistent data. We also have a CRM-DMS (Customer Relationship Management Dealer Management System) that has been initiated through a centralised system and deployed to all channel partners. Feedback from customers and dealers forms a critical input to our business planning. We continue to innovate on our customer engagement initiatives to provide a unique customer experience. Our host of customer engagement initiatives, both in commercial vehicles segment and passenger cars segment, are well received and appreciated by our customers. We have established a robust Customer Relationship Management (CRM) framework integrated with Dealer Management System (DMS) to seamlessly process customer information and feedback. Regular customer satisfaction surveys are conducted to assess customer satisfaction levels and benchmark our performance with industry peers. Our Passenger Car business uses globally renowned J.D.Power survey scores to assess overall customer satisfaction and benchmark with industry peers. TNS survey scores are used by Commercial Vehicles business to ascertain customer satisfaction levels. We achieved a score of 785 out of 1000 points in J.D.Power CSI Score for 2011 and were ranked 7th. The results of TNS Customer Engagement Index confirm our market leadership in M&HCV Truck and MCV Bus segments with index ratings of 83 and 86 respectively (on a 200 point scale). We use a combination of secondary and primary sources of data to continually improve our quality of customer experience. We have a consumer privacy policy to guide us to ensure continued trust of our customers. Customer dissatisfaction is also measured separately and dissatisfied customers are addressed through root cause analysis of complaints received through Complaint Management Process. Continued commitment to customer delight has resulted in establishment of Tata Alert, a 24X7 call centre and introduction of Customer Delight, a customer loyalty program. We have launched Project NEEV, a new rural marketing initiative to promote SCVs. Our CVBU engaged with more than 1300 rural youth through this initiative and over 5,000 SCVs have been sold. Dealer satisfaction surveys are conducted annually to understand their satisfaction levels. Apart from these annual surveys, our sales, service and spare parts team works closely with our dealers to deliver quality customer experience. A cascaded structure of regional dealer councils and national dealer council for PCBU helps us to understand the Voice of Dealers. The EXCEED (Exceeding Customer Expectations through Enablement of Distribution Network) program is a key dealer engagement program with a three-step strategy to enhance dealer relationships and customer delight. The first step is to promote a partnership with the dealer. We then work to ensure dealer profitability. Customer input is continuously fed back into the process, while a dealer scorecard highlights areas of excellence and addresses areas of concern in the dealer-customer engagement process. We have an established Supplier Relationship Management framework. Regular supplier/vendor meets are conducted at plant level and regional level to discuss key issues of concern and areas of innovation. In these meets we also provide suppliers/vendors with important information on our business plans to enable them to better plan their capacities. We have a dedicated website for our suppliers providing all the information they need to know on the supplier relationship management framework. We also provide awareness on environmental and social issues and extend support to suppliers to improve their performance on these parameters. Ethics and integrity is of paramount importance to us and we percolate this philosophy to our suppliers/vendors through their commitment to the TCoC

Supplier Selection: In todays accelerating world economy, manufacturing companies are facing the market realities of ever more demanding customers, shrinking product lifecycles and steep price erosion. This condition drive to continually cut costs, focus on core competencies (outsource some or all of their production), improving supply chain execution and leveraging the supply base has become more critical than ever in achieving competitive advantage and thus increases the competitive advantage of a manufacturer through supplier selection process. The overall objective of the supplier selection process is to maximize overall value to the manufacturer. The cost of purchasing raw materials and component parts is significant in most manufacturing companies. Purchased products and services account for more than 60% of an average organizations total costs. Accordingly, improvement in the procurement process can help organization to increase their profits and the relationship quality with their supplier can be deemed as one of the significant criteria in the evaluation of organizationseconomic performance. Selection of the suppliers is considered a critical process, cumbersome and lengthy process. Supplier selection is purchasing most important responsibility. In todays competitive operating environment it is impossible to successfully produce low cost, high quality products without satisfactory supplier. Thus one of the important purchasing decisions is the selection of suppliers. More recently, with emergence of the concept of supply chain management, more and more scholars and practitioners have realized that supplier selection was a vehicle that can be used to increase the competitiveness of the entire supply chain. The selections of suppliers are strategic decisions to be made by an organization with long-term or short term implications. These decisions are highly complex and the most difficult responsibility of the organization and depends on a wide range of criteria such as price, quality, reliability, service, track record, adequate financial resources and ability to comply with the delivery requirements etc. How an organization weigh up the importance of these different criteria will be based on businesspriorities, strategy and characteristic of organization. Tata Motors Limited has Supplier and Dealer assessment process to take care of issues related to social aspects before inducting them in organisation. All legal and regulatory requirements need to be fulfilled before final selection into the Tata Motors fold. The company periodically audits the job contractors for adherence to labour laws and other statutory requirement like minimum wages, PF, payment of gratuity etc. thereby ensuring prevention of violation of Human rights and employment malpractices. All our manufacturing divisions are certified for ISO 14001:2004 environmental management system standard and OHSAS 18001:2007 - safety and occupational health management system standard. Plant has been certified for ISO 50001:2011 energy management system standard this year. In order to ensure we have reliable and responsible suppliers for automotive production and service parts, we have mandated that all of our suppliers adopt the ISO 9001/TS 16949 quality management system frameworks.

Demand Forecasting: Tata Motors mainly follows a push and a push-pull technique for demand forecasting. The past data is taken and the demand is forecasted. This is done model-wise, location-wise, colour-wise and variant-wise. Various techniques are applied and the seasonality, economy, trends and other factors like new products are taken into consideration while forecasting.

ERP: A Strong InterfaceIn TATA motors ERP has helped to integrate the business resulting in higher profits. If the supplier, manufacturer, investor, customer, regulators can all be joined up, business will be fast and lots of redundancies will be removed. Information Technology can help in integrating all the stakeholders. Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Sales Force Automation (SFA) and Customer Relationship Management (CRM) are some of the applications that can integrate complete supply chain. Below we will have a look at the ERP structure in TATA motors.

ERP Milestones at TATA MotorsNow we will see below how information technology has been upgraded in TATA motors over the years and how they have progressed from legacy systems to the latest ERP implementation in SAP.

SAP MODULES: Driving TATA Motors Limited BusinessTATA Motors have integrated ERP in Supply chain management in SAP

Supply Chain: Inward to Dispatch flowIn a global market, organisations are heavily depended on their logistic management in order to gain competitive advantage as well as to stand forward than rivals. Number of organisations thinks to outsource their logistics to third party providers, which vary in terms of range and integration of their services. In recent year logistics becomes more globalise and information-intensive. Due to development in technology, information can flow more quickly via internet which assists customers, transport companies, suppliers to track where products or goods are in the supply chain as well as where they are going next. Automatic identification technologies have also contributed in logistic management. Use of barcode provides visibility to the suppliers by allowing them to keep track of how many products are stored at particular location. This allows operation within the chain to co-ordinate their activities more readily as well as gives potential for cost saving. As Tata Motors dealing in commercial vehicles, passenger vehicles and defence vehicles, Tata Motors vehicle mainly sold to dealer, agent, businesses, army etc. They also sale their cars directly to the customers such as households and small businesses through company owned show rooms

Supply Chain: Procurement to Payment flowFor the Automotive organization, the main products provided by their suppliers are different automobile parts such as radiators, heat exchangers, seating system, gear boxes etc., raw materials like steel, iron, plastic required for manufacture some parts, design, technology etc. TML mainly divide its component into two different types: proprietary design and Tata Motors design. For proprietary design sector, TML use established suppliers such as Bosch who supplies engine management system whereas for in-house parts and system design TML choose supplier with strong process capabilities who can give valuable suggestions as well as improve the designs. TML use multiple source for their supply side as they have started work with 600 suppliers and total 1800 supplier part combinations which were dropped down to 100 suppliers. TML prefers to go for long term contract instead of annual contract which helps them to lower their cost. About 75% of their components are from single source whereas about 90% of total cars are being outsourced.

Procuremente-Procurement Initiatives: Global Sourcing Team China , a key destination for sourcing essential items like tires, power steering units etc., Steel procured from Belarus Long term relationships with a stable and loyal pool of suppliers Technology driven procurement SAP and VCM Strategic subsidiaries & JVs TACO group of companies , Tata Cummins, Tata JohnsonControls Limited for seats, Knorr Bremse CV Systems for commercial vehicle air brakes, Tata Yazaki Autocomp Limited for wiring harnesses, JBM Sangwoo Limited for pressed components and Tata Toyo Radiators Limited for radiator assemblies Centralized Strategic Sourcing for key components FIPs (Fuel Injection Pumps) , Steel etc Group resources Tata Steel and Tata International (Leather Products) Localized supplier base at manufacturing locations low inventory levels Vendor Management Program E-commerce initiative was taken through development of a B2B site with assistance of its subsidiary, Tata Technologies Limited, for electronic interchange of data with suppliers; enabled real time information exchange & processing

Establishment of vendor parks in vicinity of manufacturing operations ensures flow of component supplies on a real-time basis, thereby reducing logistics & inventory costs as well as lowering uncertainties in the long-distance supply chain

Over 60% of the components are sourced from these vendor parks

Initiatives Trying to minimize the management of large number of vendors by introducing the concept of Cockpit Assembly was introduced. In this, TML procures the assembly instead of parts. This assembly constitutes the major parts and on the basis of positioning in the vehicle they are divided into three categories as below. Front Part Assembly: 32 parts | 18 Suppliers Mid Part Assembly: 30 parts | 10 Suppliers Back Assembly: 6 parts | 4 Suppliers

Supply Chain Process TATA Nano

Sanand Plant Available Capacity of 2,50,000 cars/year Capacity can be increased up to 3,50,000 cars/year Expansion plan of 5,00,000 cars per year by 2015 Plant spread over 725 Acres Vendor Park spread over 375 Acres

Problems faced with Demand Fluctuations Current Capacity utilization stands at 20-25% Ripple effect on few suppliers like Amul industries & Bhavani Industry Inventory Pile up of up to 20,000 cars

How it has Reduced High Inventory Level during 2013-14

Demand aligned production i.e. modification of working hours Ripple effect which led to doing away with second shifts at plants Lay off of upto 30% of workers at Amul and Bhavani Industries Lumax has had to stop production at Vendor park

How they kept the Magical $2,000:

Major Aspects of Nanos Supplier Network

Proximity to assembly plant Local Sourcing Single sourcing Tata Group Subsidiaries Two & Three wheeler market suppliers Only 3% of parts imported

Vendor Development Invitations were extended to 1000 suppliers 100 Tier 1 suppliers were selected Suppliers were part of design process: 3P

Production Preparation Process Methodology Initially 55 vendors were asked to locate at vendor park now reached 60

Supply Chain Innovation to keep Low CostsInvited suppliers with strong resources to take part in idea generation

Alliance with Bosch for Engine Management System TATA Steel provides chassis TVS roped in for parts manufacturing Kinetic supplies gear boxes for CVT engines Caparo provides composite material Manufacturing Model Make to Assemble Model of Manufacturing Customers are accustomed to wait long periods in India Helps provide Lead Times of 3-4 moths for urban consumer & 1 year for rural consumer

Nano What TATA was able to do and Toyota and the likes couldnt?

When the world took notice of Nano it wasnt just because of the $2,000 price tag but they admired the innovative supply chain model which one of the youngest car manufacturers in the world implemented to achieve the impossible

How TATA was better than Toyota and GM?

NanoToyotaGM

Nano has only 100 suppliersToyota used to deal with 170 tier one suppliersGM used to deal with 5,000 tier one suppliers

Improved downstream control in supply chain by having stakes in dealer networkToyota was always close to suppliers but downstream activities are majorly restrictedGM gives very high level of independence to dealers. In US dealers are more powerful than OEMs

Distribution Hub & Spoke Model City Dealers act as Hub Reach to rural and semi urban areas as Spoke Tata Motors has Dealer network similar to GM in US: It requires dealers to have inventory available for customers to take cars immediately Unlike US, Indian Manufacturers dont have binding regulations to reduce influence on dealers Indian OEM give a margin of only 4 % as compared to 10% in US Tata Motors has stake in dealers which is not allowed in US This is why Nano Bookings were opened through websites in initial phase

Challenges SolutionTransportation infrastructure: Major reason behind long waiting lists for new carsUsing a hub & spoke model. Limited resolution

Supply constraints due to transportation issuesSuppliers are based out of vendor park to reduce transportation costs & time

Labour shortage and continuous tussle between workers and managementVery good relations with the Employee union

Quality bottlenecks from the supplier sides especially 3rd Tier and 2nd Tier suppliersScreening for supplier selection. Involving supplier in design through 3P model & Cockpit Model

Imported parts increased costs and at certain time cause delay due to customs clearancesOnly 3% of parts are imported. Have collaborated with international firms to produce the parts locally

Some of the suppliers have to meet with various deadlines in order to meet different requirements from different OEMUses single sourcing By having majority of the supplier in the vendor park their production facility is utilized exclusively

Local suppliers are not equipped to deal with multiple variations of order processes due to which complications arisePartnering with suppliers during design phase and using localized/standardized parts in all variants

Innovations in Design & Supply Chain Practices

Design Innovations

Limiting the Cars Weight enabled the need for two cylinders instead of four

Use of single wiper rather than two saves engine power, cost and increases legroom space

Utilizing a hollow steering wheel shaft

Small engine requirement allowed engine to be placed below back seat and thus increase legroom space

Composite body used in 2 Wheeler helped in reducing weight and improving fuel efficiency

Assembling & Supply Chain innovations S. Girish Wagh the leader of the design team for Nano was also head of design team for Ace

Use of single wiper rather than two reduces assembling time

Repetition of Tata Ace and Tata Nano supply chain frameworks

Use of Cockpit Model

Central Dashboard helps in faster assembly and limits separate dashboards for left and right hand drive

Identical door handles helps eliminating redundant but costlier manufacturing process and reducing the supply chain lead time

Layout of Factory Source: Team-BHP (Complete overview of Tata Motors Factory in Pune)

High point:

- The Pune facility comprises of two units: Pimpri which is spread across 800 acres and Chinchwad occupying 130 acres.

- The facility was established in 1966 and now houses a state of the art R&D center.

- Tata motors has India's first full vehicle crash test facility, India's only pedestrian safety facilitiy capable of conducting all types of pedestrian tests, Asia's first semi-anechoic chamber, the biggest engine testing facility in India and the only full vehicle climate test facility to be able to carry out environmental tests from small cars to an intercity bus.

- Passenger car assembly lines are located in 'K' block.

- An extension of the facility in Pimpri was formerly used to assemble the Mercedes Benz W124 E-Class. The facility is now used by Jaguar and Land Rover

Overview of Car Manufacturing Process:

1. Machine Shop (Transaxle):Exhaust Manifold, Intake Manifold, gear box casting, gears are manufactured in the machine shop. Heat Treatment is also done for Gears and other parts. The plant is equipped with latest CNC machines.

2. Engine Shop:Engine is considered to be the heart of any automobile. Five Cs of engine (Cylinder Head, Crank Shaft, Cam Shaft, and Cylinder Block & Connecting Rod) are received from the machine shop. Cylinder Block is then washed in washing machine with a cleaning liquid. Thereafter these parts are assembled with other engine components.On final assembly of engine testing is done on engine test beds, where RPM, Power & Torque is checked. Now the engine is ready to be despatched to final assembly line.

3. Press Shop :

Various body panels required for making the body of a car are made in this shop. Cold rolled steel coils are cut into required sizes; this operation is known as blanking operation. Eleven number of skin panels are made in this press shop and rest of the small panel manufactured by the vendors. The blanks which are cut in the blanking line are stacked on one another. These stacks are placed at one end which further moves on the press line. The press line consists of hydraulic presses and pick and place robots. The hydraulic press presses the part into required shape and the pick and place robots lifts the part from one station and places on another station. One press line consists of 4-5 hydraulic presses and the final body panel is obtained at the other end of the press line.

4. Weld Shop:

The skin panel from the press shop and other panels from the vendors are welded in the weld shop in order to make the body of the car.Mainly spot welding operation is done in the weld shop. Weld shop consists of different sub process areas such as Under Body Front (UBF), Under Body Rear (UBR), Under Body Complete (UBC), Main Tack Line, Main Respot Line and Slat conveyor.The job is moved from one station to another with the help of hoist and tackle or by Lift and Carry arrangement.In the Pune factory, the body panels are ready and stacked up, the next line they enter is the weld shop. Various sub components are put together by precise and state of the art welding machines. It's here that one realizes why our friendly neighbourhood tinker can never get the fit, finish and quality that we get out of the factory assembly line. High quality machines from German builders like Kuka, HLS and Nothelfer are used in this facility. The weld shop is capable of being flexible to handle 8 models simultaneously.

5. Paint Shop:

From weld Shop the car body is transferred to the paint shop. Here the surface cleaning operation is done in order to remove the dust particles and the oil deposition. After this the body passes through the Cathode Electrode Deposition (CED) bath and then the final colour coat is applied to the car body as per the production plan.The welded monocoque and other panels like the bonnet, doors and the boot lid leave enters the paint shop. Entry to the paint shop is restricted due to a risk of dust and other material settling in the high sensitivity zone. We could only pass by the shop.

6. Trim cum Chassis Fitting (TCF):

Final assembly of the car is done in TCF. Transmission set-up (gear box mounted on Engines) are received from the engine shop and painted body is received from the paint shop. Other accessories such as seats, steering wheel, window glass, wheels, buffers etc. are fitted in this section. Completely built car comes out of the TCF which is ready for testing and inspection.Highlight of processes in Trim line in Pune Factory

The painted body with matched doors and other panels enters the trim line. This is the final assembly line where all trims, engine, transmission, wheels, doors, etc are fitted on the body. Immediately, all doors are taken out, they'll meet the same car at a later stage. The wiring harness goes in: A machine is used to give the car its identity: the VIN number is stamped. At this stage begins the birth of the car. All cables for the accelerator and transmission, etc are put in: Monograms are stuck on the boot: Sound damping material is stuck and inserted in various parts of the car: The carpet is laid out: Various items that sit behind the dash are fitted: The steering assembly is mounted: The dashboard goes in after the items like the AC coil, etc are put in. Various rubber fittings are then added:

Except for the seats and the roof lining, most of the items on the inside are already put in. The head lights are added, the struts and rear shock absorbers are mounted. This trim line is basically a conveyor belt where the cars keep moving as various items get added in. Observe carefully and you'll notice Yellow posts on which the car sits. These posts later become the jacking points of the car: Steering wheels ready to be mounted are stacked up: Front and rear glasses are stuck. There's a machine that is used to achieve perfection in mounting the glass so that it is aligned correctly: Assorted underbody nuts and bolts are added: Fuel and brake lines are added: Fuel tank goes in: On one far end, the engines are lined up for fitment The rear axle, exhaust and the engine is lifted and fitted using an automated vehicle guided system for suspension and engine assembly. This machine require little or no human intervention when in action: Once it is lifted and mount by the guided system, engineers tighten crucial bolts to secure the assemblies in place:

Length of Supply Chain

Analysis: We can clearly see from the above graphs that the length of the supply chain of TATA Motors has increased over the years. This is the sign of inefficiency and TATA Motors should devise ways to reduce this to the desired level The major reason for this increase is the more time finished goods are waiting in the inventory This may also be the strategy by TATA Motors to increase its inventory and thereby serve its customers well

Supply Chain Inefficiency Ratio

Analysis:- Supply chain in-efficiency ratio has increased for TATA Motors consistently from 3.43% to 4.07% As compared to its competitors TATA Motors is doing badly and it has to improve its supply chain in-efficiency ratio to compete well with its competitor. In-efficiency in supply chain can be costly in this tough economic environment and every dollar saved is every dollar earned

SC Working Capital Productivity

Analysis:- On working capital front Tata motors have not done well over the years. It has increased from 16.35% - 20.83%. So, overall TATA Motors need to rejig its supply chain if they want to remain competitive in this industry.

Account Receivables and Net-Sales

Comparison with Competitors

Supplier Performance Evaluation Tata Motors

Under the policy initiative of supplier performance enhancement, we conduct in house vendor council meetings to formulate a sound system for evaluation and enhancement of supplier performance. At PCBU, the meetings are held under the guidance of the Head-Car Plant, Head-Supply chain management, Head-Quality and Assistant General Manager-Vendor development. In order to make the evaluation system more comprehensive, new metrics were identified for continuous evaluation of supplier performance in this year.These include a monthly quality index, monthly delivery index and a monthly vendor rating system based on quality, cost, delivery, design development and management systems. The grading of suppliers would be done based on these parameters on a scale of A to E, withA being the best. This would help our suppliers improve their performance and work towards continuous improvement. Further, we conduct surprise audits under the TCoC framework and third party audits under the purview of SA8000 to ensure that there are no incidents of human rights violations including child labour and forced labour in our supply chain.

Criteria for Vendor Selection

NoParameter

1.Manufacturing Facility

2. Manufacturing Process

3.Inspection and Test Facilities

4.Accredition to Quality Standard

5.Financial Soundness

6.Tech Qualification of Suppliers

7.List of Existing customers

8.Credit Facility

9.Process Capability

10.Process control

11.Geographical location

12.Utility and housekeeping

At Sanand and Pantnagar, adjacent to our plant boundary, we have established a vendor park with all basic amenities in place which would house vendors supplying exclusively to TataMotors. We aim to source more than 60 percent of our components from the vendor park, thus increasing our resource efficiency and decreasing our emissions due to reduction in logistics related transportation. Through these vendor parks we have created employment for about 3,750 persons in and around Sanand, out of which 750 are on fixed roll and 3,000 on contract roll. Apart from this, 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 within their state of operations. Additionally we have specific initiatives to enhance the environmental and social performance of our vendors. Every vendor in the vendor park has installed vortex flow meters for monitoring water usage which gives readings remotely at set frequencies. This helps in analyzing consumption pattern and thus optimizing the water use based on production and manpower engagement.

Conclusion: TATA Motors is doing average when compared to its peer as in almost all the ratios they are in between and not even in single ratio they are doing standout performance. If they want to stay ahead of the competition then they have to improve their Supply Chain performance and they should work towards reducing these ratios. If they are able to do that then this will have direct bearing on their sales if not then they will lose market share.0 | Page

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