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The origin of Ashok Leyland can be traced to the urge for self-reliance, felt by independent
India. Pandit Jawaharlal Nehru, Indias first Prime Minister, persuaded Mr Raghunandan Saran,
an industrialist, to enter automotive manufacture. The company was established in 1948 as
Ashok Motors, to assemble Austin cars. The companys destiny and name changed soon with
equity participation by British Leyland and Ashok Leyland commenced manufacture of
commercial vehicles in 1955. Today the company is the flagship of the Hinduja Group, a British-
based and Indian originated transnational conglomerate.
Through tie-ups with global technology leaders, supplemented by in-house R&D infrastructure
and capabilities, Ashok Leyland has maintained its technological leadership even as it offers the
most comprehensive range of model configurations in its class.
Ashok Leyland, one of the largest private companies in the country, had sales over Rs6,000 crore
in 2005-06. Ashok Leyland is a part of Hinduja Group. It is also one of the largest automobile
and auto component companies in India.
The company offers a world-class range of trucks, buses, special application vehicles and
engines, crossing millions more than 40 countries in the world. During 2005-06, the company
produced total 65,085 vehicles out of which it has exported 4,879 units. In the 9c domestic
market, the company has sold total 56,776 units. The company was facing the huge task of
integrating its entire supply chain and at the same time it had to reduce its costs, inventory, and
improve customer satisfaction. Rising raw material cost was a serious concern for the company.
There had been a steep rise in steel prices and copper prices. Therefore, Ashok Leyland decided
to streamline its supply chain process and the company started its SCM project Oscars to
optimise its supply chain and rationalise its sources.
Ashok Leyland sources more than 70% of the segments for their diverse vehicles from their
suppliers. They have An committed Sourcing and supply chain work with develop sourcing
methodologies adjusted should our corporate vision, deal with An focused worldwide supply
build What's more set up inbound logistics for every last bit manufacturing areas On india.
The have isolated the capacities under domains dependent upon technology, in particular
Proprietary, sheet Metal, Non Metallic, Castings, Forgings, Fasteners & Bar-machining, steel
Furthermore corporate logistics. It works starting with its business settings clinched alongside
Chennai, Gurgaon, ras al-Khaimah Also shanghai.
Their Supplier management process involves engaging suppliers and exchanging real time
information with them. This is enabled through their web portals:
Merchant advancement What's more vital Sourcing would took care of by corporate Materials
division (CMD). CMD identifies the vendors, rates the vendors dependent upon sentiment gained
from supplier nature certification Cell, sends drawings / specifications, calls for Cites with nitty
gritty break-up for operation-wise costs, and negotiates the cost during which the parts will be
supplied.
What's more with CMD at Ennore, and the two Units toward Hosur, there would Materials
oversaw economy divisions (MMDs) to planning In view of unit preparation want..
Climbing crude material cosset might have been An not kidding concern to the organization. This
might have been basically triggered Toward An soak Ascent Previously, steel Furthermore
copper costs. Therefore, Ashok Leyland concluded to streamline its supply chain methodology
and the particular organization began its SCM one task OSCARS with improve its supply chain
Furthermore justify it. Henceforth those principle objective might have been on enhance its
supply chain transform & make it an expense successful particular case i. E. , make an effective
supply chain model such-and-such it Might deal with with make a Zone about key fit to cook
with its supply chains low with moderate intimated interest questionable matter.
Ashok Leyland didn't appear to be will succumb of the 'uncertainty gloom' that might have been
playing devastation to its business surroundings. It chose to meet the test Toward re-gearing its
systems, make it material order, procurement, material handling, stock control or handling.
Ashok Leyland took every employee's ideas into account and figured out a way to
keep things going and reduce production without inflicting pain.
The recession saw Ashok Leyland waging a war on wastage and inefficiency.
To decrease costs Also should move forward the in-bound supply chain Ashok Leyland
acquainted those venture "OSCARS (optimising supply chain and rationalising sourcing),
which incorporates supplier partnership, merchant build rationalisation, supply tiers, stock
optimisation through JIT, downright expense management, logistics initiatives-sourcing What's
more worldwide sourcing. Those OSCARS project distinguished two principle systems about
diminishing costs in the inbound supply chain lessen material costs and through ideal stock
level, diminish the unobservable stock carrying fetches.
Prinicples of OSCAR
a) Supplier partnership
Additions starting with hotspot diminishment incorporates estimating looking into volumes,
change done personal satisfaction and reliability, merchant change programme to nonstop
improvement, tiering for simplicity of fitment- framework purchasing What's more decrease
Previously, paper worth of effort. Merchant build defense & group structuring brought about
5S adherence-mistake proofing, methodology upgrades At last prompting self - affirmation.
The key Sourcing Also corporate personal satisfaction building (CQE) groups mutually
structured the single window framework bringing with them particular business and
specialized foul information. For the suppliers this needed made a helpful single-point
contact for AL, for imparting drawings, for negotiating costs and in length term benefits of
the business volumes and consultancy looking into personal satisfaction will management
issues.
d) Supplier Tiering
AL pruned its board of regulate suppliers through tiering Furthermore framework purchasing.
Under this al managed straightforwardly for level one suppliers who, over turn, were
underpinned via level two and level three suppliers. Merchant tierisation project aided On
accomplishing economies about scale, framework purchasing & making defense for supplier
base.
The profits of framework purchasing Might make illustrated with those case of the devices
kits that went with each vehicle. Tear pipe investigations and esteem building broke down
those constitution Also creation of a piece should prune expense through substitution,
decrease or disposal of materials/ sub-assemblies without influencing nature Also execution.
e) Just In time(JIT)
Total cost management included various cost management initiatives, such as daily
management process, control, design, technology and capacity. Total savings was 3% of total
operating cost.
g) Logistics initiative
These initiatives included transport based rationalisation, enhancement of truckload, space
and route optimisation, which has benefited the company by saving its transportation cost.
Transporter-
based
Rationalisatio
n
Truckload &
Transport
Space
Mode
Optimization
Reduction in Enhancement
Transportatio of Truck
n Cost turnaround
Transport Route
Route Optimization
h) E-sourcing
A client overview Also An investigation about benchmarks required turn out for three significant
parameters for administration level focuses which need aid request should conveyance time,
unwavering quality from claiming conveyances Also accessibility from claiming request status
majority of the data. The clients Might anticipate conveyance On 5 days from the date from
claiming installment to standard models to multi-axled vehicles those guaranteed time might
have been two -four weeks. The second guarantee might have been that those period of the
vehicle The point when conveyed might make greatest for 90 days. Tight pipeline stock
standards were situated for diverse models Furthermore businesses Furthermore were met
through another three level circulation system.
Plant bargains yards acted Likewise national pools will hold uncommon models What's more
abundance for territorial prerequisites. Those next level might have been constructed dependent
upon of the five territorial stock pools, which guaranteed just-in-time supplies should at
territorial bargains business settings. On see client needs What's more osmose the knowledge, al
embraced 4P Programme. Probe, Prioritize, arrange What's more Position. This functioned for
coupled for manufacturing as and only cross-functional group (CFT).