Cummins Turbo Technology- Deciding the Global

Supply Chain

Bill, CTT UK account manager, had called Scott, Global Supply Chain director, early morning regarding

the new customer ABC trucks added in England. This customer manufactured premium trucks, and

offered high degree of customization to fleet owners. Although, volumes were not much, but the

margins are going to be very good due to successful negotiations. It seems ABC was not happy with

the earlier supplier of Turbos. They were not able to keep pace with the dynamic business model of

ABC. There were few quality concerns too.

Scott is evaluating the supplier plant for this customer. He remembers his discussion with Ashish,

Supply Chain director of India. Ashish was excited about this new business as many of these new

turbos were common with what Pithampur plant was already producing. He was confident that he

can meet the customer expectations by supplying the finished turbos directly from India. In fact

Pithampur does have a proven track record of highly consistent delivery performance, reliable quality

and lowest cost amongst all the CTT plants.

Scott was also aware of the fact that this new customer was only 20 miles away from Cummins Turbo

Technologies’s Huddesfield plant in UK. This was another open question before him. Was ABC

expecting a Just-in-time supplies? He needed that clarification but Bill was not willing to bother the

customer with such a trivial question. Scott smiled at the eagerness of Sales folks to close the deal.

But this was important for Scott he didn’t want customer issues later on. “Put customer first in

everything we do” was the first principal in Cummins Operating system.

Supply from Huddersfield would definitely mean higher cost to Cummins mainly due to higher

manufacturing cost at UK. Scott had briefly reviewed the Huddersfield option as well, and it was

apparent that although there was capacity for turbo assembly line, but some investment would be

required for component machining capacity. “Asking Mahesh for this capital is going to be tough”,

Scott said to himself. Mahesh was CTT’s global leader.

“DDVN could through some more light on this case.” Scott recalled the new tool which CTT had

adopted last year for classifying the Supply chains in the organization. Scott decided to run the DDVN

analysis for ABC trucks.