Tata Indica - The Making Of The Small Car

            

Details


Themes: Supply Chain Management
Period : 1990 - 2001
Organization : Telco
Pub Date : 2003
Countries : India
Industry : Automobile

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Case Code : OPER002
Case Length : 08 Pages
Price: Rs. 200;



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Vendor Development Contd...

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."

A typical brake-lining usually went through the following steps: the raw material was converted into slabs; the slab was cut into the required length; the cut piece went through 2 stages of grinding for the inner and the outer diameters; then, the piece was drilled, and, finally, champered. But SBL brought down the number of operations to 3: the raw material was straightaway converted into pieces of required length, and the grinding was done to only the outer diameter. And the company saved 15% because of this single-piece flow technique. K. Pandarinath, Deputy General Manager (Research), SBL, commented, "Telco is a transparent company. It allowed us to use all their facilities as long as it helps develop a better product. Our engineers spent several weeks working with Telco's engineers on perfecting the brake-linings."

Supply Chain

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.

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