Supply

Chain
Managemen
t Group
TATA
2
Motors
Thomas Chandy (51A)

Sumanth Patlolla (50A)

Sanjeev Kumar (42A)
Pratik Godhane (35A)
Nikhil Indla (29A)
Gukan K (18A)
Anand Savur (8A)

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Contents
Mission, Vision & Values............................................................................................. 2
Timeline & Introduction.............................................................................................. 3
Indian Automobile Industry Overview.........................................................................4
Passenger Vehicle Industry...................................................................................... 5
Commercial Vehicle Industry................................................................................... 6
Supply Chain.............................................................................................................. 7
Value Chain
Process
8
Inbound
Logistics
..8
Operations, Outbound Logistics, Marketing &
Sales9
Supply Chain
Integration
9
ERP
12
Procurement and Vendor Management Program.
14
Enterprise Process
Model
15
New Product introduction (NPI) Process
Overview..16
Supply Chain Process - Tata
Nano
.17
Low-Cost
Approach
.18

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Manufacturing
Model
19
Distribution
Model
..20
Innovations in Design and Supply Chain
Practices.20
Layout of
factory
21
Ratios
Analysis
.27
Performance Evaluation
Framework
..31
Conclusion
.32

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3 | Page

Tie up with Cummins for diesel

engines and introduction of
several new models like Estate,
Sumo, Safari, etc
Collaboration
with Daimler
Benz, First R&D
& ERC center
at Jamshedpur
and Pune
respectively

1945

1977199292 Commercial
First
Vehicle manufactured,
2000
Tie up with Hitachi &
launch of Tata Sierra

195466

Tata Engineering and Locomotive

Co. Ltd. (TELCO) was established to
manufacture locomotives and
other engineering products

20002013

Launch of CNG
buses
Listing on NYSE
Acquisition of JLR
from Ford
Rolls out Nano
Enters into newer
markets like
Bangladesh,
Myanmar, Thailand
& Indonesia

Introduction

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

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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

Market Share FY'14

Passenger Vehicles; 14%
Commercial Vehicles; 1%

Three-Wheelers; 3%
Two-Wheelers; 82%

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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

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Market Share FY'14

5%

19%

8%

15%
10% 42%

Maruti Suzuki
Mahindra &
Mahindra
Honda

Hyundai
Motors
Tata Motors
Others

Indian Automotive Market - Projected Growth (Mn Units)

28.5
25.9
21.5

2013

23.6

2014F

2015F

2016F

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,

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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

Indian Automotive Market - Projected Growth (Mn Units)

9.3

9.9

8.6

6.5

2007

7.1

2008

7.6

2009

7.9

2010

2011

2012

2013

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

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Supply Chain

Suppliers
Strategic Sourcing

ERC

Vendor Development Material

Logistics

APQP
Indirect Material
NPI

SQIG
Manufacturing
Technical Service

Dealers

9 | Page

Customers

SAP, CRM - DMS

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

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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
customers Defense, State Transport Units

requirements

of

institutional

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

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(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

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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

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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 Interface

In 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 Motors

Now 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.

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SAP MODULES: Driving TATA Motors Limited Business

TATA Motors have integrated ERP in Supply chain management in SAP

Supply Chain: Inward to Dispatch flow

In 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

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Supply Chain: Procurement to Payment flow

For 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.

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Procurement
e-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
Johnson

Controls 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 longdistance supply chain

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

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Gateway
Deliverables

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:

Mid Part Assembly:

Back Assembly:

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32 parts | 18 Suppliers
30 parts | 10 Suppliers
6 parts | 4 Suppliers

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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

Tata Nano Sales (in units)1

70,432 74,527

80,000

53,848

60,000
40,000 30,350

21,129

20,000
2010

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2011

2012

2013

2014

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 Costs

Invited 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

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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?

Nano

Toyota

GM

Nano has only 100

suppliers

Toyota used to deal with

170 tier one suppliers

GM used to deal with

5,000 tier one suppliers

Improved downstream
control in supply chain by
having stakes in dealer
network

Toyota was always close to

suppliers but downstream
activities are majorly
restricted

GM gives very high level

of independence to
dealers. In US dealers are
more powerful than OEMs

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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
Solution
Transportation infrastructure: Major
reason behind long waiting lists for new
cars
Supply constraints due to transportation
issues
Labour shortage and continuous tussle
between workers and management
Quality bottlenecks from the supplier
sides especially 3rd Tier and 2nd Tier
suppliers
Imported parts increased costs and at
certain time cause delay due to customs
clearances
Some of the suppliers have to meet with
various deadlines in order to meet
different requirements from different
OEM
Local suppliers are not equipped to deal
with multiple variations of order
processes due to which complications
arise

Using a hub & spoke model. Limited

resolution
Suppliers are based out of vendor park
to reduce transportation costs & time
Very good relations with the Employee
union
Screening for supplier selection.
Involving supplier in design through 3P
model & Cockpit Model
Only 3% of parts are imported. Have
collaborated with international firms to
produce the parts locally
Uses single sourcing By having majority
of the supplier in the vendor park their
production facility is utilized exclusively
Partnering 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

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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

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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 semianechoic 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.

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- 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 :

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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:

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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.
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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:

30 | P a g e

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:

31 | P a g e

Length of Supply Chain

Length Of Supply Chain - Tata Motors

41
41
40
39
38
37
36
35
34
33
12-13

36
36
11-12

10-11

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

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Supply Chain Inefficiency Ratio

Supply Chain Inefficiency Ratio
8.00%

7.24%

6.00%
4.00%
2.00%

4.07% 3.63%
3.23%

2.57%

3.04%

2.37%

0.00%
Tata Motors M&M Ashok Ley Eicher SML Isuzu

Supply Chain Inefficiency ratio

4.07%

5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
12-13

3.63%
3.23%
11-12

10-11

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

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SC Working Capital Productivity

20.26

20.19

22.00
20.00
18.00
16.00
14.00
12-13

17.35
11-12

10-11

SWCP
21.00

20.26

20.19

20.00
19.00
%

17.35

18.00
17.00
16.00
15.00

12-13

11-12

Analysis:-

10-11

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

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Accounts Receivable vis--vis Net Sales

Rs. Crores

3,000.00

60,000.00

2,500.00

50,000.00

2,000.00

40,000.00

1,500.00

30,000.00

1,000.00

20,000.00

500.00

10,000.00

0.00

0.00

Y201303Y201203Y201103Y201003Y200903

Accounts Payable and Accounts Receivable

Rs. Crores

3,000.00

6,000.00

2,500.00

5,000.00

2,000.00

4,000.00

1,500.00

3,000.00

1,000.00

2,000.00

500.00

1,000.00

0.00

12-13

11-12

10-11

Comparison with Competitors

35 | P a g e

09-10

0.00

08-09

SCI
SML Isuzu

7.24%

Eicher

2.37%

Ashok Ley

3.04%

M&M

2.57%

Tata Motors
0.00%

4.07%
2.00%

4.00%

6.00%

8.00%

Length of Supply Chain

120

107

100
80

67

60
40

41

35
24

20
0
Tata Motors

36 | P a g e

M&M

Ashok Ley

Eicher

SML Isuzu

SCWC Productivity
50.00
0.00
-50.00
-100.00
-150.00
-200.00
-250.00

20.26
Tata Motors

M&M

15.04

3.44

4.07

Ashok Ley

Eicher

SML Isuzu

-219.44

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, with
A 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
No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

Parameter
Manufacturing Facility
Manufacturing Process
Inspection and Test Facilities
Accredition to Quality Standard
Financial Soundness
Tech Qualification of Suppliers
List of Existing customers
Credit Facility
Process Capability
Process control
Geographical location
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 Tata
37 | P a g e

Motors. 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.

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