Abstract

The caselet describes the cost reduction initiatives undertaken by the company that led to a turnaround in a short span of five years. The caselet also highlights the company’s move towards reducing costs significantly by maintaining healthy vendor relationships.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Cost reduction initiatives as a tool to company turnaround
• Need for a cross functional team to implement and monitor cost reduction initiatives
• E-sourcing at Tata Motors as an alternative to traditional purchasing. Move towards single vendor policy and maintaining a healthy vendor relationship
• and Shift from a hierarchical model to a collaborative approach.

Keywords

Tata Motors Limited, Collaborative approach, Supply chain management, Cost reduction program, Cost Erosion, Vendor analysis, Value chain analysis, E-sourcing, E-auctions, E-procurement, SWOT analysis, Hierarchical model, Cross functional teams, Debt restructuring, Rebates, Discounts, Direct material costs, Variable conversion costs, Fixed costs, Indian economy, Cross functional teams, balance sheet