MARUTI SUZUKI

1. Explain how the organizational strategy of that company is related to supply

Chain strategy?
GREEN SUPPLY CHAIN
Maruti Suzukis strategy is Green Supply chain by using this it became the market
leader in automobile segment with 49% market share having an effective supply chain
strategy
It has laid down robust sourcing processes and procedures that include competitive
bidding and evaluation of new supplier by all concerned departments (Engineering,
Quality & Supply Chain) before inclusion in the company's supplier list.
In recent years, the supply chain risk exposure of the company has increased due to
higher complexity of suppliers' network, increasing labour expectation, highly volatile
markets and unpredictable events in various parts of the world. Maruti Suzuki felt the
need for developing a structured approach to assess risk arising from various suppliers
in order to plan actions proactively and mitigate negative impacts on the company.
In 2013-14, supplier risk management was initiated in supply chain to assess suppliers'
risks in operational and financial areas. The operational risks are assessed in the area of
labour, quality, delivery performance, management response, safety, tier-ll
management etc. The financial risks are assessed in profitability, liquidity and funding
management. Locational risks are based on the risks associated with the location of the
supplier's manufacturing facility.
Some initiatives taken by the company with its suppliers include:
Since inception, the company has laid stress on local suppliers. Both the Gurgaon
and Manesar plants, have adjacent Suppliers' Parks where select suppliers have
established manufacturing units.
The company places great focus on local sourcing of parts. Nearly 78% of the
supplier base by value is located within a 100 km radius of the company. As
compared to last year, there is a reduction in the percentage of supplier base
located within 100 km radius due to merger of Suzuki Powertrain with the
company.
An important function of the Supply Chain is the localization of components.
Localization has many benefits. It develops a reliable local source for all future
requirements, reduces exposure of the company to foreign exchange movement

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and builds capability of local suppliers and boosts local economy. In the
reporting year, localization of KD parts, especially those that hadn't been
localized due to unavailability of technology in India or lack of volumes, was
undertaken.
The company formulated Green Procurement Guidelines in the year 2012-13.
These were rolled out in 2013-14 for tier-l suppliers. As per the guidelines, the
tier-l suppliers are required to submit the Green Procurement Agreement,
Environment Compliance Sheet and a copy of ISO 14001 certificate to the
Company. So far, 150 agreements have been received by the Company.
Maruti Suzuki has been working closely with the tier-l suppliers to encourage
and support them to go for ISO 14001 certification. As on March 2014, 85%
suppliers were ISO 14001 certified.

Supplier plants certified for ISO 14001 Certifications (%)

Supply chain model of Maruti Suzuki

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2. Identify the Products / Services of the above company

Products are classified into two segments premium (NEXA) & Normal Distributors
(E.g. Varun)
In NEXA there will be Baleno, Ignis, S-Cross, Ciaz,
In normal distributors there will be remaining Maruti vehicles like Alto, Ertiga,
WagonR, Celerio, StingRay, Ritz, Swift, DZire, Ciaz, Ertiga, Omni, Eeco,
Gypsy, Grand Vitara and Vitara Brezza.
Services of company: creating value to each of the customers
Authorized Service Stations
Service is a major revenue generator of the company. Most of the service
stations are managed on franchise basis, where Maruti trains the local staff.
Maruti Insurance
Launched in 2002 Maruti provides vehicle insurance to its customers with the
help of the National Insurance Company, Bajaj Allianz, New India Assurance and
Royal Sundaram
Maruti Finance
Maruti had started two joint ventures Citicorp Maruti and Maruti Countrywide
with Citi Group and GE Countrywide respectively to assist its client in securing loan

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Maruti True Value

One can buy, sell or exchange used Maruti vehicles with the help of this service
in India
Maruti Driving School
MDS not just imparts better driving skills but also tries to inculcate safe driving
culture through special theoretical sessions for behavioral training and road sense. The
school was the first to introduce advanced driving training simulator for better
judgment and concept of route maps for holistic on-road practice
Maruti Auto Card
Get an attractive exchange loyalty bonus of 3000 auto points when you
exchange your existing car with the latest Maruti Suzuki car. There is a card for
everyone, just apply for the one of your choice. You can use this card while buying
any of the upcoming Maruti Suzuki models
Maruti Genuine Parts
Maruti Genuine Parts are easily available through their nationwide network of
dealer workshops, service stations, Maruti Genuine Parts distributors and retail outlets
at reasonable prices, which further adds to the joy of owning and driving a Maruti
Suzuki.

3. Identify the names of suppliers of Raw Material(s) for these Products /

Services
BIMETAL BEARINGS LTD., COIMBATORE They manufacture Engine Bearings,
Bushes and Thrust Washers.
AMALGAMATION VALEO CLUTCH LTD. CHENNAI Leading manufacturer of
Clutch Assemblies in India for the new generation vehicles.
I.P. REPCO LTD.CHENNAI A member of Amalgamations Group. Manufacturing
Flywheel Ring Gears for entire range of vehicle
KALYANI BRAKES LTD, PUNE Manufacturers of complete brake systems for
automotive applications
LUMAX INDUSTRIES Biggest manufacturers of Automotive Lights in India
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PRAMOD MARUTI PARTS, NEW DELHI, India based Pramod Maruti Parts is
engaged in the manufacturing of high quality car spare parts under the brand name
'LITTAL'. Which supplies air Cleaner Assembly, Air Filters, Car Axle Parts, Car
Body Parts, Car Brake Parts, Car Carburator, Parts Filters, Fuel Filters, and Car
Electrical Parts
DCM Engineering Maruti main supplier of engine components. The company named
as Sona Kohyo having a long relation with the Maruti Suzuki Motors. It provides car
parts such as Steering, Nutt Bolt for the fitting to the Maruti Suzuki Company.
4. Comment on the distribution system of the above company
Maruti Suzuki has always been the unprecedented leader in the Indian car
market. To gain competitive advantage, Maruti Suzuki developed a unique
distribution network. Presently the company has a sales network of 802 Centers in 555
towns and cities, and provides service support to customers at 2740 workshops in over
1335 towns and cities. Maruti's dealerships and workshops service 50,000 cars every
day and around 17 million vehicles a year. Maruti service employs around 90,000
people.
But failed at selling its premium models in India due to perceived image as a
budget car. This trend made them to do the complete revamp of their Marketing
Strategy and come out with a brand new distribution channel called the NEXA. This
store experience offers a greater level of sophistication and is based on the principles
of exclusivity, pampering and listening to the consumer. Now they are having good
market in both premium and budget selling cars
5. Select any 3 functions (Finance, Marketing etc.) of the above organization.
I am choosing marketing, operations & Human resource department of Maruti
Suzuki
6. Select at least 3 activities in each function
Operation functionalities
Lean management
Maruti Centre for Excellence (MACE) was started with a fund of 10 crore from
Maruti Suzuki India (MSIL) and the vendors contributing 25 lakh each and

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identified areas where the vendors can improve in quality on global levels and
also follow some parameters of operations.
It is the implementation of lean manufacturing system at its vendors based on
what Maruti has in-house production systems based on Suzuki Motor Japan and
Toyota Quality Management (TQM), which means improving the productivity,
eliminating the waste and reducing the defects.
The company through implementing lean manufacturing systems has 720
projects completed so far for productivity improvement, quality, and inventory
control and energy conservation. MACE has worked with 146 tier-II vendors
for overall improvement in performance resulting in reduction in rejections
from 10,933 to 1,180 products per month and defect reduction from 432 to 146
per month.

Six sigma
Six Sigma at Maruti Suzuki
The MACE program also aims at achieving Zero Defects and has been
successful. It has been able to address the issue of ensuring high quality
even at the hands of contract labour ers.
One of the steps taken was the installation of visual and audio alarms at the
production lines which would go off whenever a worker took an incorrect
component during assembly.
Through such programs, many of its vendors have now got zero rejection
in its parts and wastage is also controlled. For example, part of the MACE
since its inception, Superfine Components is been supplying parts to MSIL
with zero rejection, continuously over the last three years.
MSIL through MACE sends its counsellors to other factories as part of the
MoU with Ministry of Micro, Small and Medium Enterprises (MSME).
MACE has also become part of Quality Council of India for such activities
and has tied up with Kaizen Institute India in Ahmedabad, Gujarat. Source
Control rules in assembly shop
Maruti Suzuki India Ltd (MSIL) has four assembly plants in India. Three of the
assembly plants operate in Gurgaon area and one assembly plant is located in
Gurgaon. Each of these assembly plants have certain set of processes which are

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carried out during the course of the production cycle. The Operators, Supervisors and
Inspectors working on the assembly line have to follow certain set of standards called
as Maruti Operating Standards. To aid the work of the employees certain systems
have been implemented in each of these plants.
Marketing activities
Maruti market Research Department
Their Market Research department remains on its toes to study the changing consumer
behavior and market needs. Maruti enjoys 70%repeat buyers which further bolsters
their claim of being customer friendly Maruti Call Center Maruti has proper customer
complain handling cell under the CRM dept. The CIC will help MSL rapidly build an
information pool of over 3 million Maruti owners as well as that of its prospective
customers
Marketing & sales customer care department
Anytime Maruti - 24*7 toll-free helpline to attend to customer grievances
Maruti On road- Maintenance & Repair services
Maruti Finance Car finance in 166 cities in partnership with SBI
Free test drive to customers SERVICE
Promotional activities
Main promotion of car is done by the advertising is mainly done in the form of
different T.V. channels, different newspaper, holdings etc. Now days the main
promotion is done by the brand ambassadors such as film stars, celebrities, sportsmen,
etc. And in this case they decide his actual or required sales forces for selling its car.
And they maintain customer relationship. And they do direct marketing.
Human resource activities
Recruitment for freshers

They recruit fresh Graduates from premier T-Schools and B-Schools across the
country in order to build our future leadership talent pipeline. .

At MSIL, they give ample opportunities for learning & growth through hands-on
experience & rigorous training sessions. The young talent undergoes a structured
induction, buddy & umbrella mentoring sessions, periodic management inputs and
cross functional exposure.
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With their exciting career paths coupled with hard work & dedication from your end,
they believe that you will keep on creating success stories in MSIL.

Recruitment Process:

TRAINING PROCESS FOR SALES MANAGERS / GENERAL MANAGERS/

BRANCH HEADS

Dealership Management Program: For second generation dealers, and GMs and Ro
executives on how to manage entire Dealership Operations. Financial Management,
staff management, motivation, tie management planning are covered.
Sales Managers/Team Leaders Program: The Training covers issues like Sales
management (target setting and achievement, enquiry management, resource and time
management etc.), Supervisory skills, Practical Coaching skills, and knowledge of
Maruti Finance, Maruti Insurance Extended warranty, MGA, True value etc. and car
advisor for life concept. (2 days )
Branch managers Program: many of the dealers have multiple outlets. While the
owners sit any one outlet and control the others from there, different branch heads that
managers the day to day operations of the outlet manages the other outlets
360 DEGREE APPRAISAL SYSTEM

Maruti has introduced a unique 360-degree feedback system, starting with its
senior leadership. The new system has been co-developed with Ernst
& Young and has been put in place recently. Under the 360-degree feedback
system, the employee is rated not just by his superiors, but also by his peers
and subordinates Employee to be evaluated not just by the superiors but also by the
peers and subordinates.

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It would seem that there is no corporate human resource policy that has not had its share
of controversies for being biased. With an increase in the number is qualitative factors that
affect employee at the workplace, the performance appraisal process to make it as fair as
possible has been the dream of every manager.
Its initiative is to empower young people in terms of free and frank feedback to their
seniors, to the people who manage them. Each senior gets a sample feedback from a
group of 12-14 people, out of which 5-6 would be juniors , 5-6 colleagues and 2-3 their
superiors.
This is done through an online process to maintain confidentiality. The person also
evaluates himself. After that, profiles would emerge. Based on this, there would be
aggregate profile versus self-profiles.
The 360-degree feedback system will also include a self-appraisal by the
general manager. At the end of the process, he can compare his self-appraisal
with the assessment of his subordinates and peers. One of the benefits that
Maruti is hoping to get out of the 360-degreefeedback process is the sense of
employment and importance felt by subordinates, when they are asked to
offer their feedback about their superiors. Maruti currently has over 4,000
employees on its rolls.

7. Explain how Supply Chain Activities / Strategies influence each of these

functions.
Supply chain management encompasses the entire process of manufacturing and
distributing physical goods, from suppliers supplier to customers customer. Business
functions that are within the realm of supply chain management include: forecasting
and planning, procurement and purchasing, manufacturing and assembly, warehousing
and distribution, shipping and transportation, returns and refurbishment, inventory
management and order management. Or, stated more simply, supply chain management
includes the functions: plan, buy, make, store, move, sell and return.
Operations
A supply chain is a network of facilities and distribution options that performs
the functions of procurement of materials, transformation of these materials into
intermediate and finished products, and the distribution of these finished products to
customers.

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Supply chains exist in both service and manufacturing organizations, although

the complexity of the chain may vary greatly from industry to industry and firm
to firm.
Traditionally, marketing, distribution, planning, manufacturing, and the
purchasing organizations along the supply chain operated independently. These
organizations have their own objectives and these are often conflicting.
Marketing objective of high customer service and maximum sales dollars
conflict with manufacturing and distribution goals.
Marketing
A market orientation provides a unifying focus for the efforts and projects of
individuals and departments within a firm argued a market orientation is valuable
because it focuses the firm on:
continuously collecting information about target-customers' needs and
competitors' capabilities; and
Using this information continuously to create superior customer value.
A market orientation encourages interfunctional coordination that is a firm's
coordinated efforts, involving more than the marketing department, to create superior
value for buyers. This is so because customer satisfaction, the ultimate goal of a market
orientation and the evaluation of the created customer value by a firm, is affected by
many factors that lie either inside or outside the scope of the marketing department. For
example, delivery reliability, invoice accuracy, invoice clarity, and personnel are major
factors that determine customer satisfaction. In these way supply chain strategy
influences marketing functions.
Human resource
In supply chain development HR strategy involves developing flexible systems of
HR best practices that promote an organizations business strategies. Applying these
activities to the supply chain context produces these progressively broader benefits:
Considering supply chain strategy, characteristics and partners when developing
the HR strategy.
Using HR systems (e.g. incentives, performance management, long-term
relationships) to manage supply chain partners.
Collabour ating with the supply chain partners to develop and coordinate HR
systems for the supply chain as a whole.
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Applying traditional (intra-organisation) HR planning and recruitment activities to

the supply chain partner firms produces these larger (inter-organisation) benefits:
Aligning recruitment practices among the supply chain firms.
Sharing applicant pools.
Forecasting labour demand and supply across the entire supply chain.

Bibliography
http://www.cbpp.uaa.alaska.edu/afef/role_of_marketing_in_supply.htm
https://www.slideshare.net/BabasabPatil/hr-policy-in-maruthi
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