Maruti Udyog - Using Technology in Logistics*



Case Code : CLSDM036
Publication date : 2005
Subject : Sales and Distribution
Industry : Automobiles
Length : 03 Pages
Price : Rs. 100

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Key words:

Maruti Udyog, Cars, Sedan, Information Technology, Logistics, Dealer, Extranet. ERP, Vehicle Tracking, Delvery Instruction, Electronic Card, Inventory, Bar Codes


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This caselet begins with a description of Maruti Udyog's (Maruti) falling market share on account of emerging competition. It discusses the use of technology in logistics and vendor management as a cost cutting measure. The benefits of each technology initiative are also discussed.


Impact of competition on profits
Effect of technology in reducing costs


The transport industry has witnessed dynamic changes over the years in India with the transition from the bullock cart as a means of transport to high-tech models of cars. Till the 1940s, cars were mainly imported into India. Set up in 1942, Hindustan Motors became the first automobile company in India.

Initially it manufactured auto components. Premier Automobiles Ltd., (PAL) was established in 1944 and it manufactured the first Indian car in 1946. At that time, there were industry barriers imposed by the Indian government that prevented the entry of foreign collaborators...

Questions for Discussion:

1. India's biggest car maker, Maruti Udyog Ltd. (MUL), reported a better-than-expected 70.3% jump in quarterly profit in 2003-04 due to cost cuts across the system. How did implementation of technology in the logistics system help MUL to cut down costs and benefit both dealers and vendors?

2. MUL was beset with a lot of problems in 2002 that resulted in its decision to cut costs and implement IT initiatives to improve supply chain management. Enumerate the various problems that MUL faced during that period.