Manoj Solanki

29-06-2016

Public

India Purchasing Update &

Expectations

India ABO Purchasing Organization

2

Manoj SolankiPurchasing Leader – India ABO

Kshitija VyasExecutive Admin.

Zaki Ahmad Ansari

Engine Business

Prafulla NeemaCorporate Purchasing

Vijay InamkeTata Cummins

Sharad Manjrekar

Power System

Sanjay TamhankarABO Supplier

Quality

Guru RajABO PFE, VPI

Milind KelkarNRPI/ Recon Parts

Makarand JoshiDBU

Vipin KaulIndirect Purchasing

Hitesh DangComponents

Business

Vishal TapkireCGT Purchasing

Our Commodity Spend

2015 Total Spend : 5993 INR CrDomestic : 4271 INR Cr

Export : 1722 INR Cr

0

200

400

600

800

1000

1200

587 544

401273

500415

205311

226156 196

64166 147

73

569

81

215

3220

59

16151

92

58 0

1150 1

0

Export

Domestic

ACE Lever wise potential Ideas

ACE IV

Maintain Low Cost

Producer Status

1. Indigenization

2. Value Engineering

Consistent move towards Zero-defects

is necessary

9436

10895

5291

2065

22

14005

3314

1425 1154

3592

541

7109

3781 3698

1395

66

10684

3669

2350

931 732355

Block & Head Cooling System Forging &Bearings

Assembly OHPC Al Casting Iron casting SSF PM Electrical &Electronics

Hardware

2015

2016

Commodity Wise PPM

29% Supplier Base is Zero PPM

Winning at hand-offs

Journey towards zero defects

Tools Process Handling

Right tools and

equipmentRight process for fit, form

and function

Right handling for dent and

damage free products

What it means?

Non-adherence

Contribution in

Quality PPM

14% 58% 28%

T-P-H at all Hand Offs

Why?

“Improve your internal hand-offs”

Focus on Quality in Every Step

7

Supplier Selection Checklist

Warranty Agreements

MNC / SCAR Tier II Management Plant visits, Panel

Reviews SIP

Supplier Work Plan PPAP &PCC Quality Council SPC & SPQR MSME Lean Program

APQP Technical review, DQR Simultaneous Engineering DVP&R Task

Supplier

Selection &

Agreement

Technical

Integration

Supplier

Development

Ongoing

Performance

Management

Embrace Six Sigma in journey

towards Zero Defect

8

Model 2015 2016 2017 2018

QSK 60 16% 40% 54% 60%

QSK 50 37% 48% 50% 50%

QSK 23 30% 42% 45% 45%

QSK 19 30% 40% 48% 48%

Technological

partners

needed

>70%

Current Supplier Partners Support Cummins in

increasing localization percentage

Power Systems - Indigenization

Cummins wants to partner with our innovative

suppliers on our future products

Future Product Needs

Products impacting

electrification, emissions,

fuel economy, weight

Next generation materials

or processes

Adjacent technologies

interfacing to Cummins

products

9

Composites

Coatings

Parasitic reduction technology

Friction reduction technologies

Processes impacting surface roughness

Cooling technology

Sealing technology

Energy storage

Telematics

Examples

Technical Education for Community

(TEC)

10Insert Data Classification

An appeal….

Participate actively in TEC

Donate used CNC machines

Measuring equipment

Any other support

Reforming our Practices :Dealing With Non

Permanent Workers

1 CII Western Region Pilot

Pilot project by 12 Corporates under the leadership of Mr.

Muthuraman

3 Focus areas for Contract Workers:-

Hygiene : Personal Safety : Training and Equipment

Accident : Same “Treatment”

Uniform

Canteen

Number : Linked to Business Cyclicity

Temporary Worker Working Permanently !!

Compensation : Comparable pay for Comparable Work

Ensure Social Security

Cummins a Key Participant , Has Implemented across all Plants

Introspection Lead to Transformation – No Conditionality of Reforms or Returns

Reforming our Practices : Dealing with Non

permanent Workers

2 Fair and Responsible Workplace Guidelines

Flexibility vital for Enterprise viability

Fair Administration Enhances Employment

Compliance to all rules

Training / Equipment for personal Safety

Ensure Social Security reaches workforce

Fair and Reasonable Compensation – no discrimination

Numbers not driven by Cost Arbitrage

Seek Acceptance and Enforcement of these Guidelines in Your Enterprises

Transformational

Strategies

Increased Collaborati

on

29 Category Strategy

8 Tech Days128 Prototypes

100% Tier I Covered

50+ Supplier Work Plans

52% of Spend Dual sourced

35+ Senior Level Supplier engagement

Summary

BS IV 2017 Preparations & Leap jump to BS VI - 2020

TCL B Series

Ramp Up

Export –Systems ,

Parts

14

ZERO DEFECT

Innovation

GST

Category Strategy & SRM

Risk Manage

ment

TEC

New and ReCon Parts

Purchasing

Ben McGibbon

June 29th, 2016

Public

New and ReCon Parts Overview

• Aftermarket for Cummins products

• Central corporate entity providing service to all business units

• $2.7 billion annual sales

• 4,000 employees worldwide

• Parts distribution for multiple businesses– 14 PDCs

• Remanufacturing operations– 10 facilities

• Non-cyclical sales trend

NRP Purchasing Mission Statement

The mission of NRP Purchasing is:

Stimulating the growth of the Cummins Aftermarket

business by optimizing cost, quality and delivery at

all points of the product lifecycle.

18

The Lifecycle Curve

19

The Lifecycle Curve

20

Optimize Efficiency

Reduce Risk

India Supply Base Opportunity

• Migration of engine platforms

– Leading to lagging emissions markets

• Reduce risk and optimize efficiency

– Move aftermarket supply base to match production

footprint

– Maximize utilization of installed capacity

21Insert Data Classification