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CHAPTER 5

SKODA: AN OVERVIEW

5.1 Introduction:

Skoda Auto is one of the wel-known and established brands in the market as it

is in existence for last 116 years. The researcher felt very interesting to know in detail

about the group which is present from such a long period. The objective of this

chapter is to study in detail about Skoda Group and SAIPL. Since the research was

carried on SAIPL, Aurangabad, it is essential to understand and know more about

Skoda Auto Group and SAIPL.

5.2 History of Skoda Auto:

The history of Škoda Auto dates back to 1895, when Vaclav Laurin and

Vaclav Klement teamed up to establish a bicycle manufacture and repair shop that

later expanded its range to include motorcycles. After a series of business successes, a

small step was all that was needed to manufacture automobiles. And they began to do

exactly that in1905 with the Voiturette A. In the period that followed, production

expanded and grew beyond the confines of a family company. In 1907 the operation

became a joint-stock company and, in 1925, economic pressure led the two founders

to join forces with the biggest machinery manufacturing industry in Bohemia at the

time Škoda. From that time on, vehicles manufactured in the factory bore the Škoda

brand name and the well-known logo of the winged arrow in a ring.

From there, Škoda’s road to becoming the prosperous and successful company it

is today, with active operations in almost 90 markets the world over, was winding and

difficult due to the political and macroeconomic circumstances of the time. The

political changes of 1989brought a new set of rules, and a return to a market

economy. The ensuing period was characterized by a search for a strong foreign

partner. It was necessary to bring new know-how and investment to Škoda. In

December 1990, the Government decided to co-operate with the German automotive

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group Volkswagen and, on16 April 1991, Škoda became the Group’s fourth brand

after Volkswagen, Audi, and Seat. In co-operation with the new partner, necessary

processes were put in place focusing on the general rationalization and transformation

of the Company. The core goal was to improve the quality of manufacturing and

products, expand the product range, build and optimize the dealer network, and, not

least, foster and systematically reinforce the Škoda brand image.

5.2.1 Skoda Logo History:

Chart 5.1

Skoda Logo History

Sr.No YEAR LOGO DESCRIPTION

1 1895-1905

First bicycles, motorcycles and

automobiles.

2 1905-1925

Laurels of success are justified

for the Laurin & Klements Co.’s

history.

3 1926-1933

Merger with Skoda Pilsen.

4 1926-1990

First version of the winged

arrow – the Co.’s emblem

5 Since 1991

The new era symbol of Skoda.

Source: Management Report-2011, Logistic Department, SAIPL, Aurangabad.

124

Chart 5.1 shows the history of Skoda Auto Logo that has evolved since its

inception till date. Logo of Skoda has represents the symbol of quality and carries

well defined meaning. Figure 5.1 shows the present logo of Skoda Auto along with

the meaning of symbol.

Figure 5.1

Skoda Auto Logo with meaning

Source: Management Report-2011, Logistic Department, SAIPL, Aurangabad

Thus it can be inferred that logo of Skoda Auto has changed over the period of

time. Present logo is entirely changed since its inception in 1895 and symbolizes the

principles of Skoda Auto.

5.2.2 Milestones of Skoda Auto (1895-2011):

Chart 5.2 shows the milestones achieved by Skoda Auto Group since its

inception i.e from 1895 to 2011. The chart represents the journey of Skoda Auto

Group towards achieving quality and higher customer satisfaction by consistently

working on product development to deliver quality product to customer.

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Chart 5. 2

Skoda Auto Group Milestones (1895-2011)

Sr.No YEAR PRODUCT DESCRIPTION

1 1895

The SLAVIA bicycle made in Mladá

Boleslav

2 1899

The first motorized bicycle named

L&K with 1.25 to 1.75 HP engine

3 1905

The first automobile by Laurin and

Klement, the Voiturette A model with

a liquid cooled “V”twin cylinder

engine with a cubic capacity of

1005cc and 7HP.Subsequently type B

and C Voiturette model were also

introduced.

4 1910

The first vehicle Model S with a

liquid cooled four-cylinder engine

with a cubic capacity of 1771cc and

14HP.

5 1915

L&K “M range” automobiles were

produced which were powered by a

four-cylinder engine with a cubic

capacity of 4713 and 50HP.

6 1920

Motorized ploughs were

manufactured by joint enterprise of

Laurin & Klement and the Roudnice

Company of Rudolf Bächer.The

bulky P4 six-blade plough was very

successful and was manufactured

until the beginning of First World

War.

126

7 1925

Merger of L&K Company with

Škoda Pilsen after which the brand

name was Škoda.

The new L&K 100 model was

introduced in the market in 1923 later

its additional modifications

(105,110,120) appeared in the market

in 1925.

8 1930

Skoda model 860 was introduced.

Model 860 was equipped with 8-

cylinder engine with 60HP.

9 1946

A two door Tudor body was launched

in 1946 they were very successful and

were largely exported to Australia.

Skoda 440 Spartak model with a

1089cc, 40HP engine was introduced

it had an aluminum block engine and

a new intake manifold and a

carburetor.

10 1959

Skoda Spartak range of automobiles

were introduced, they were equipped

with front axle with coil springs and

telescopic shock absorbers.

Skoda 440 Spartak was introduced as

a new model in the name of Octavia

and skoda 450 was introduced in the

name of Felicia

Skoda 1000MB, 1000MBG,

1000MBX was introduced with liquid

cooled four cylinder engine with

988cc and 45HP.

11 1970

Skoda 110 R two-door sports car

with 1107cc 62HP engine was

launched

Skoda 130 model with five speed

gearbox, rack and pinion steering and

trailing rear axle was introduced.

Skoda favorite was introduced which

had OHV four cylinder engine of

1289cc and 40 to50 KW; it had

versions named Forman estate wagon

and utility pickup.

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12 1987

Favorit Model was introduced using

the Škoda-designed 1289 cc engine

13 1994

Felicia Model was introduced which

was effectively a reskin of the Favorit

model, but with quality

improvements.

14 2001

Skoda Octavia Model was launched

15 2005

Skoda Laura and Superb Model was

launched

16 2008

Superb B6 was launched

17 2010

Yeti was launched

18 2011

Citigo and Rapid

Source: Management Report, Logistic Department, 2011, SAIPL, Aurangabad.

128

Thus it can be said that present product of Skoda Auto is completely changed

as per the change in technology since its inception from 1895 i.e. from two wheeler to

four wheeler. Present nature of business is completely changed than that of initial

nature of business i.e. from bicycle to Car.

5.2.3 Worldwide presence of Skoda Auto Group:

Skoda Auto is one of the leading corporate groups in the Czech Republic. It

comprises the parent company ŠKODA AUTO a.s. and its fully consolidated

subsidiaries. The parent company is involved in development, manufacture and sale

of ŠKODA-brand automobiles, components and genuine parts and accessories and the

provision of maintenance services. Chart 5.3 shows the list of subsidiary companies of

Skoda Auto a.s as below:

Chart 5.3

Subsidiary Companies of Skoda Auto Group

Sr.No Subsidiary

Company Name

Year of

establishment

Country of

incorporation

Shareholding

%

Function

1 ŠKODA AUTO

Deutschland

GmbH

1991 Germany 100 Purchase and

sale of

vehicles,

genuine parts

and

accessories.

2 ŠKODA AUTO

Slovensko, s.r.o.

1993 Slovakia 100

3 Skoda Auto

Polska S.A.

1994 Poland 51

4 Skoda Auto India

Private Ltd.

1999 India 100

Source: Skoda Annual Report, 2011, P.206.

For above mentioned subsidiary companies they have production facilities at

various location of world. Figure 5.2 shows the worldwide presence of production

facility of Skoda Auto Group in Czech Republic, Slovakia, Russia, Ukraine,

Kazakhstan, China and India.

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Figure 5.2

Production facility of Skoda Auto Group

Source: Skoda Annual Report, 2011, P.78

It can be reveled from the chart 5.3 and Figure 5.2 that company has spread

from being Regional to National and to international( Multinational).

5.3 Skoda Auto India Private Limited (SAIPL) Aurangabad, Maharashtra:

Skoda Auto India is a fully owned subsidiary of Skoda Auto Czech Republic.

In January 2000 Skoda Auto marked its entry into Indian market. The plant is located

at Shendra Industrial area, five Star MIDC, Aurangabad, Maharashtra. It started its

operations from November 2001 in Aurangabad, Maharashtra and it has the capacity

to produce 40,000 units annually through its present facilities. It has the best engine

assembly plant in Asia. It is CKD (Completely Knock Down) type of automobile

Plant. Figure 5.3 and Figure 5.4 shows the production facilities of SAIPL,

Aurangabad.

The plant in Aurangabad is spread over 300,000 Sq.mt of area. At present the

manufacturing of models such as Octavia, Laura, Superb, Fabia, Yeti and Rapid takes

place in this plant. Total 1149 employees with average age of 28 years are working at

SAIPL, Aurangabad plant. Total of 101 dealers are associated with this plant. (see

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Section 5.7). All the sections further in this chapter discuses about facts and

Figureures related to SAIPL, Aurangabad plant.

Figure 5.3

SAIPL Plant in Aurangabad

Figure 5.4

SAIPL Plant in Aurangabad

5.3.1 Operational Representation of SAIPL:

Manufacturing of any product consist of three main operations that needs to be

managed- Input, Process and Output. A brief explanation of input process and output

(IPO) helps to know operational representation of SAIPL and managing these

parameters effectively as it results in the manufacturing of quality product (Figure

5.5).

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Figure 5.5

Operational Representation of SAIPL

(A) Input:

Various inputs for manufacturing an automobile at SAIPL is

i. Raw material imported from Mother Plant at MB which consist of

Completely Knock Down (CKD) car accessories and spare parts. Raw

material purchased from local suppliers such as tyres, Battery, Fuel, Music

Systems, Steel and alloy rims.

ii. Capital Goods: Goods that are imported from MB and purchased from local

supplier.

iii. Labour: Permanent and casual labour used to perform various activities to

manufacture final product.

iv. Management : Management people from SAIPL to provide inputs for

effective manufacturing of final product

(B) Process:

This step consists of various processes that are performed to manufacture final

product. Process such as unloading of imported material at unloading section, storage

Raw Material

(Imported/Loca

l Purchase)

Capital Goods

Imported/ Local Labour

Management

Unloading,

Storage,

Assembling of

Car,

Testing

Car Sale in

Maharashtra/

OMS

INPUT PROCESS OUTPUT

132

of this unloaded material in stores, assembling of car into final product, testing of

final product are some of the processes that are carried out at SAIPL.

(C) Output:

The output of SAIPL is final assembled car that is made available for sale in

Maharashtra and outside Maharashtra state.

Diagrammatical representation helps to know the net shell operation of

SAIPL.

5.3.2 Departments of SAIPL:

Figure 5.6 shows various departments that perform respective functions at

SAIPL. It consist of HR, Quality, Logistic, Production, Marketing, Finance and IT

department.

Figure 5.6

Department of SAIPL

5.4 Logistic Department of SAIPL:

The researcher has selected Logistic Department for study purpose among all

the departments of SAIPL. The Council of Logistics Management has defined logistic

as the process of planning, implementing, and controlling the efficient, effective flow

and storage of goods, services and related information from point of origin to point of

consumption for the purpose of confirming to customer requirements.

Skoda Auto India Private Limited, Aurangabad

Human

Resource

Quality

Logistic

Production

Marketing

& Sales

Finance

IT

133

5.4.1 Departmental Hierarchy of Logistic Department:

Figure 5.7 represents the departmental hierarchy of logistic department. It

shows the pyramid of leadership hierarchy in logistic department of SAIPL. There are

total 10 levels of hierarchy. At the bottom level of the pyramid i.e. at the 10th

level

officer is placed and Managing Director (MD) is placed at the top level i.e. at 1st level.

Figure 5.7

Departmental Hierarchy of Logistic Department

5.4.2 Sub Department of Logistic Department:

Logistic department is divided into various other sub departments performing

functions that are integrated to logistic functioning of SAIPL. Figure 5.8 shows sub

departments of Logistic department and functions they perform.

MD

Director

Sr. GM

GM

DGM

AGM

Sr.Manager

Manager

Assistant Manager

Officer

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Figure 5.8

Logistic Department of SAIPL

5.4.2.1 Production Planning and Control (PPC):

The basic function of PPC dept. is to coordinate among the marketing/ sales,

production & material planning. This department will prepare a working calendar for

the year and also looks into Ordering of Car kits. It gives the daily loading plan to

production & stores. Also it has to coordinate daily with the material planning

department for material availability in-house, in-transit & for future material

requirements. PPC breaks the plan on weekly basis and daily basis and delivers to the

production. It is only department which coordinates with Sales, Marketing, Logistics,

Material Planning, Procurement, RFD, Change Management, Production, Quality &

Finance department for their activities. Production planning and control department is

basically plan the production activity. Production planning department receives sales

plan (forecasted) from marketing department. PPC department gives 3 month plan to

Material Planning Ordering department (MPO), accordingly they plan for the Material

Procurement.

5.4.2.2 Material Planning Ordering ( MPO) :

Material planning works accordance with PPA. PPA set the production target,

accordingly material planning plan for the material required for the production. The

lead time of material form Czech Republic (mother plant) to SAIPL is around 11

week. 6 week is the transportation lead time form Czech to India and 5 week is the

transportation and customs lead time in India from port to SAIPL. Various activities

Logistic Department

PPC MPO ECN/

BOM LOGISTIC

PLANNING

STORES/

RFD

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of MPO are: Weekly Planning, Daily Planning and Import & Local Material

Ordering. Weekly Planning includes consolidation of Packing List, Packing Plan and

indicating shortages with respect to bodies expedition & buffer to MB. Daily Planning

includes preparation of Shortages report for 18 Days based on Production Plan and

container planning for Parts & Bodies. Import & Local Material Ordering includes

process material ordering to MB & Local Suppliers & Follow up with suppliers &

transporters for dispatch/ delivery of materials, Buffer stock updation in to system &

monitoring of buffer stock and inventory control activities.

5.4.2.3 Engineering Change Notes/ Bill of material (ECN/BOM) :

BOM – Bill of material - is a listing of all the subassemblies, intermediates,

parts, and raw materials that go into a parent assembly showing the quantity of each

required to make an assembly. ECN – Engineering Change Notes: It is generated due

to various issues arising in the parts of the cars. Issues such as Field complaint,

Capacity, Production damage, Process change, new higher quality material etc. For

each part a new ECN number is generated. Change management is coordinating with

production and quality people. Any quality issue for any part on assembly from

quality and production is taken care of by change management. Various activities of

change management are:

- Receive Bills of Material for New Models, identification of new and existing

parts and ensuring communication of the same to all concerned within SAIPL.

- New Launches

- Control SOP’s and EOP’s for models, variants and parts.

- ECN verification, implementation and communicate to all concerned within

SAIPL

- Monitoring of parts consumption in relation to the BOM

- Coordinate to obtain Part numbers for Local Components

- Troubleshooting & monitoring the system interfaces for data transfers.

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- Coordination of SAP activities

- New Logistics & Warehousing System requirements

- Coordinating between SAIPL and MB implementation teams

- Defining & Implementing Logistic Processes for Systems

- Dissemination of System Knowhow/Activities to Logistics Process Owners

- Sourcing of Feedback from Users for Continuous Improvement

5.4.2.4 Logistic Planning:

Logistic planning performs various functions such as:

- Work on New Development & Expansion Plans.

- Work on alterations / Modifications depending upon upcoming models

- Working on developments in packaging with respect to line

- Feasibility, Storage, quality and cost.

- Monitoring the Loading factor to reduce cost.

- Supplier Development / Co-ordination to get the work done related to Logistics

Operations.

- Working on Continuous Improvements leading to better quality, reduction in

work content, and cost savings.

- Pallets, Fixtures modification / Layout changes as per requirement.

- Co-ordination with Technical team to resolve day to day problems.

- Co-ordination for proper housekeeping of Stores.

- Maintain Material Handling Equipments.

5.4.2.5 Stores/ RFD:

After final inspection, the vehicle comes in Request for Dispatch (RFD) area.

RFD area is where all the vehicles are stored for dispatch to the dealer. RFD officer

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keep track of the record for each and every vehicle. They record contains

manufacturing date, engine no, model no, model name, colour, date etc. Sales

department gives details like name of the dealer, address, type of model and colour

required etc for dispatching of cars to RFD. Accordingly RFD arranges the vehicle for

loading in to the trailer. RFD loads the vehicle according to FIFO. Main function of

RFD are: i) Receiving the cars after inspection ii) Moving the car to RFD Yard iii)

Receiving order from sales and obtain finance clearance iv) Lining of cars as per

FIFO against order v) Preparing of invoice vi) RFD officer moves the car with

required documents and accessories to transporter vii) Dispatch of car.

5.5 Material Flow from MB to SAIPL:

Figure 5.4 shows the flow of material to assemble the car at SAIPL. Car body

pallets and required material to assemble car is imported from mother plant based in

Mlada Boleslav (MB), Czech Republic. The required material is transported from MB

to Germany port by road. From Germany Port to Mumbai JNPT port the material is

transported by sea route. After custom clearance, material is transported from

Mumbai JNPT port to SAIPL, Aurangabad by road ways. The transit time of Material

from Czech Republic (i.e. from MB) to SAIPL around 06 week. Out of that 5 weeks

required to reach material from MB to India in Mumbai by Sea, 1 week required for

custom clearance and for transportation of goods from Mumbai to SAIPL by road.

After reaching unloading section of SAIPL, the material is unloaded from the

container and transported to stores area. As per the requirement of assembly line the

material stored in stores area is transported to assembly line to assemble into car.

Final product from assembly line is stored in yard for sales purpose.

138

Chart 5.4

Steps to Deliver Final Product from SAIPL

Flow of Material in India

Step 1 Car Ordered by SAIPL from MB. Parts are generated at MB.

Step 2 Packing and dispatching of material to Port.

Step 3 Material will reach MB – Melnik Port.

Step 4 Loading in Vessel at port Bremerhaven/Rotterdam

Step 5 Arrival of vessels at JNPT Port, Mumbai.

Step 6 Port to CFS custom clearance

Step 7 Transport to SAIPL, Aurangabad by Road

Step 8 Unloading at SAIPL ,Aurangabad

Step 9 Stores

Storing the correct parts in Stores.

Rejecting the wrong supply discrepancy for claims.

Step 10 Issue the correct material to line trolleys and on assembly line.

Step 11 Assemble the car at assembly line

Step 12 Testing of assembled car

Step 13 Send to dispatch yard

From MB Port to SAIPL – 39 Days Transport Time

5.6 Process flow of Activities in Logistic Department of SAIPL, Aurangabad:

Figure 5.9 shows the process flow of the activities performed in logistic

department.

139

Figure 5.9

Process flow of Activities in Logistic Department

5.6.1 Unloading Section:

The Unloading area represents the first step of the logistics chain of supply of

the material to the warehouse and subsequently to the assembly line. Trucks which

come from the Mumbai port dock at the unloading station. At this point of time the

material has to be identified in terms of the quality and quantity mentioned in the

labels from the expedition center, then this has to be put in to the IT systems –SAP at

the SAIPL .As a matter of organization within the company, this process is covered &

handle by the separate team of employees and has impact on the processes describe in

this manual. Hence the unloading plays a vital role in the processes of the logistics.

There are two unloading dock, one is for unloading the body and other one for

unloading the material in box. Generally 20-22 containers are been unloaded in a

shift. With the help of fork-lift the container are been unloaded. While unloading by

using the LOGIS generate a LOGIS Tag. This tag is similar as MB’s tag. Operators

check the material as per the material list. Material list comes with the material from

MB. LOGIS tag shows information of the material like address of the material

(Location) in the store, part no, material description etc. There are total of 21 labours

working in unloading section of logistic department.

Block Storage

Unloading

Area

Body Storage

Heavy Duty

Racks

KLT Storage

Super

market

Trolley

Filling

Production

Line

140

Unloading Process:

Chart 5.5

Unloading Process

Step 1 Security at SAIPL gate provides container reporting details

Step 2 MPO department releases unloading plan

Step 3 Stores department receives container unloading schedule for the day

Step 4 Unloading of container at dock area as per schedule

Step 5 Verify the material received

- if the material is verified as OK then go for step 7

- if material is verified as NOT OK then discrepancy in physical

verification is informed

Step 6 Packing list is then handed over to data procedure for

generation of identification tag

Step 7 Quality Check of Material Received

- Check for any transport damage

- if damage is observed then reject ot Hold material for further

investigation

Step 8 Unload pallet for parts received

Step 9 Tag the material received

Step 10 Transfer to stores

Chart 5.5 shows the steps that are followed in unloading section. When

container is received at SAIPL gate, security at the gate will inform the logistic

department about it. Meanwhile MPO department releases unloading plan for the day

and stores department receives container unloading schedule for the day. Accordingly

containers are unloaded at the dock area of unloading section. This unloaded material

is verified by the operator. If the material is verified as OK then it goes to further step

but if material is verified as NOT OK then discrepancy in physical verification is

informed to MPO department. After verification of material packing list received with

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the material is handed to system operator who enters the required information in

system to generate identification tag to stick on material received. The material is then

inspected for any in transit damages. If damage is observed then material is kept on

hold or rejected as per decision taken by officers. The pallets received in the container

are unloaded and transferred to stores area.

5.6.2 Stores:

All the material from the unloading dock comes directly to the store. Address

of the material is on the LOGIS tag. Accordingly material are been stored in the store.

Following activities are performed at stores as shown in Chart 5.6:

Chart 5.6

Main Activities of Stores

Sr.No Main Activities of Stores

1 Monitor and control Unloading, Stores and Line feeding (All SKODA

models & Concerned Hall cars – VW and AUDI)

2 To ensure proper handling and functioning of all Material Handling

equipments

3 Monitor proper Manpower distribution and optimum utilization.

4 Coordination with other related departments

5 Address issues related to team members to achieve their targets

6 Monitor and report Inventory Status.

7 Control on extra hours working of operators.

8 Comply on ISO procedures and norms.

9 Ensure FIFO issuance of all materials.

10 Control on Loss of production due to Logistics

11 To control materials rejections due to Logistics.

12 Control on statutory requirements for material transactions.

13 To ensure optimum productivity and continuous improvement.

14 Control on adherence to all procedures, processes, guideline and

instructions.

142

5.6.3 Storage Area:

The storing of the different part numbers of the material in the different

locations represents the second step of the logistics. Regarding to the size &

prerequisites of the treatment of certain material, different storage places, locations

are necessary to ensure effectiveness & quality requirement. The storage location in

the warehouse is allotted once the received material information is entered into the

system. Mainly the storage section is classified into: Block Storage, Body Storage,

KLT Storage, GLT Storage (Heavy Duty Racks) and JIT Trolleys. The Block Storage

contains the parts which are not able to handle in the GLT/KLT storage. For example

Gear Box, Engines, Aggregate Assembly parts etc. The Body storage contains only

the car bodies with the JIT parts coming with body. The bodies placed on the SUZ

pallet & can be in stack in multiple of the three. The KLT storage (Catwalk) collects

the very compact , a wide range of the parts which are well known as small parts of B

& C class parts. The KLT storage contains the most of the parts which area below

predefined cubic volume. The KLT storage is the previous stage of the supermarket &

therefore the filling of the supermarket is basically done from KLT storage except

some parts from the GLT storage which are shipped in very big lot sizes. The parts

which are very big & heavy have to be stored in the GLT Storage. Basically these are

the parts which are shipped in the CKD boxes stored in the HDR. The issuing of

material from stores to assembly line is another important activity. Issuing activity is

control with KANBAN system. It is done using following concepts: Lean Concept,

Supermarket concept and Warenkorb concept. Lean concept is to make assembly line

more flexible & capable for multimodal & multi variants. In supermarket concept

according to the production planning of the next day, material required for the

production is stored in the super market area. Basically most frequent and high value

part is store in super market area. The purpose of Warenkorb concept is better

utilization of space available on assembly line to feed different variant as per

requirement and to make available the material ready to fit to car for better time

utilization towards productivity.

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5.6.4 Trolley Filling Section:

Supermarket and trolley filling Area (TFA) is the same as trolley is filled with

the material from supermarket. Material is stored in the supermarket and trolley is

carried to this area to fill as per the requirement of assembly line. There are total of 5

labours working in this section. Thus to understand the process of trolley filling first it

is important to know the activities of supermarket.

5.6.5 Supermarket Concept:

Supermarket concept is very useful and sophisticated method of storing and

issuing the material on assembly line. In this concept according to the production

planning of the next day, material required for the production is stored in the super

market area.

Basically most frequent and high value part is store in super market area.

Following are various activities of supermarket:

- To make the work place more flexible to accommodate multiple variants.

- Better utilization of space available on assembly line to feed different variant

as per requirement.

- To make available the material ready to fit to car for better time utilization

towards productivity.

- To prepare advance triggering for material shortages & flexibility in car

production.

- To maintain best ergonomics.

Advantages of supermarket:

- Production loss is with in control.

- Any shortage in the material can be identified earlier in time

- Easy and sophisticated while issuing the material on assembly line.

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Disadvantages of supermarket:

- Extra handling of the material.

- More space is taken by storage area.

- Chances of damages of material due to extra handing, chances of increasing the

rejection.

Trolley is filled from the material stored in the supermarket as per the

requirement of assembly line. Supermarket section is also called as Trolley filling

Area (TFA). Following are the steps performed in trolley filling as shown in chart 5.7:

Chart 5.7

Trolley Filling Process

Sr.No Trolley Filling Process

Step 1 Empty trolley from line to be parked at specified location for trolley

filling by line operator

Step 2 Stores operator collects empty trolley for filling

Step 3 Material to be picked from supermarket location as per part label

given on trolley

Step 4 For concern hall material to be picked as per Warenkorb list

Step 5 Trolley to be moved to respective supermarket location for filling of

material

Step 6 Heavy boxes material to be retrieved by reach truck and kept at

trolley filling area for filling

Step 7 Concern hall-Ladder trolley can be used

Step 8 After filling required quantity as indicated on trolley label/wk list,

balance material to be moved once again to super market location

Step 9 Filled trolleys to be moved in trolleys parking area specified by

supermarket operator

Step 10 Supermarket material replenishment to be done by Kanban system as

per FIFO by supermarket operator

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5.7 Dealer network of SAIPL:

SAIPL has huge dealer network in India to make their product reach to the

customer. Out of total cars manufactured at SAIPL 80 Percent cars are delivered to

dealers of Delhi, Mumbai and Pune from stock yard. Remaining 20 Percent is

delivered directly to rest of dealers in India from SAIPL. There are total of 101

dealers of SAIPL spread across India.

Figure 5.10

Dealer Network of SAIPL

Source: Deshpande Chaitanya , ‘Study of Supply Chain management of Skoda Auto’,

Project Report- SAIPL, Sinhgad Institute of Management, Pune, 2010.

146

5.8 Some financial performance facets of SAIPL:

Table 5.1 presents some financial perfromance facets of SAIPL (including

pune and Aurangabad plant).

Table 5.1

Financial Performance of SAIPL (includes Aurangabad and Pune Plant)

Sr.No Indicators 2010 2011

1 Delivery to Customers for SAIPL (Sales in Number) 20,011 30,005

2 % Change to previous year of sales for SAIPL -- 49.9

3 Share of passenger car for SAIPL (in Percentage) 0.9 1.3

4 Employees of Skoda worldwide 24,704 26,565

5 Total employees at SAIPL 1149

6 Sales to SAIPL from MB (in CZK Million) 4049 4449

7 Purchase from SAIPL to MB (in CZK Million) 718 94

8 Receivables from SAIPL (in CZK Million) 1367 786

9 Liabilities from SAIPL ((in CZK Million) 1 669

Source: Skoda Annual Report, 2011.

India is considered as an important centre of growth since the company’s entry

in the Indian market in 2001. In 2011, a total of 30,005 ŠKODA automobiles were

delivered to customers on the Indian subcontinent, an increase in sales of 49.9%

compared to 2010. The positive trend in sales was reported across the model lines

ŠKODA Fabia and ŠKODA Yeti. Production of the ŠKODA Rapid developed

specially for the Indian market will open up further growth opportunities for the

ŠKODA brand in India. The Indian subsidiary’s 2011 revenues totalled CZK 15.4

billion, a 23.4% increase year-on-year. Profit before tax increased in the reporting

period to CZK 63.7 million, surpassing the previous year’s Figureure by 62.9%.