Themes: Supply Chain Management
Period : 1990 - 2001
Organization : Telco
Pub Date : 2003
Countries : India
Industry : Automobile
For instance, SBL, which supplied clutch-facings and rear (drum) brake linings for the Indica, developed them in-house. V.R. Janardhanam, President, SBL, remarked, "Despite its size, Telco has a lot of humility. It is willing to work with even the smallest of vendors to meet its targets." |
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To keep its transaction costs low, Telco configured its supply chain on a just-in-time basis. All high-value components were delivered daily, and in the case of nearby suppliers, twice a day. Vendors who were located far away from Pune set up local warehouses near the plant. The rationale for the relocation: transportation costs alone accounted for 45% of the total logistics costs for a company, delays in supplies added to costs in terms of machine down-time at the plant.
Meanwhile, on the shop floor, where the assembly line was located, Telco had done away with the traditional store function. There was no material store in the Pune plant of Telco. The truck loaded with the material first entered the factory at the material gate where there was a documentation center. A person at this center checked whether the material was scheduled to arrive or not, by keying in the part number and the supplier code. If the material was not scheduled to arrive, the documents were not processed further and the truck was not allowed to enter the factory premises.