scm at tata-nano

8/11/2019 SCM at Tata-Nano

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Introduction

The Cheapest Car in the world Mr. Ratan Tata calls it the Peoples Car

Result of a five year research anddevelopment project. The Supply Chain Members constantly

made efforts to reduce cost


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Idea conceived by Rattan Tata . Cost of development - 1700 crores. Manufacturing cost (excluding dealer margin and taxes) -

Rs 65,000per unit. Development of Design India. Time for designing the car - 4 years. Team - A team of 150 engineers, everyone below age 28. Biggest hurdle - To make a car cheap car withoutCompromising design .

Tata Nano - ONE LAKH CARPROJECT Peoples Car


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Details of Nano Specs: Engine: 624 cc / 33 bhp4 door.5 setter (and yes 4 Wheeled too)Rear EngineWeight: 600 kgs Mileage - 22-23 km/liter

Variants: StandardDeluxe (with AC)

Future: Diesel VariantExports outside India or assembly plantsoutside


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Tata Nano The Complete Supply Chain

Suppliers 100

suppliers Vendor

Park

ThirdPartyLogistics

Local 3PLinstitutions.

Tata Motors Leading auto

manufacturer Nano plant in

Sanand, Gujarat

3PLLeveraged

existingdistribution

network.Modular

approach

Customer Largest

distributionnetwork

Middle Class

families


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Drivers of Supply Chain

Facility Location

Transportation

Sourcing

Inventory

Information

Pricing


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Facility Location

Gujarat Industrial DevelopmentCorporation (GIDC)Land

Gujarat Agriculture University (GAU)

DMIC

SIR

Multi modal connectivity MICTInfrastructure andConnectivity

Rajkot Land for supplier parksSupplier proximity and

convenience

GM Industrial and Labor environ. Ahmadabad

Business Environment

Gujarat Industrial Development Corporation (GIDC) LandGovernment Regulation

and Support

Gujarat Agriculture University (GAU)Land

Delhi-Mumbai Industrial Corridor (DMIC) Special Investment Region (SIR)Future Prospects


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Transportation

97% local vendors Almost half located in

Vendor Park

Most of the suppliersare located acrossIndia.

JIT and JISrequirements

Truck optimizationsoftwares Lead Time Map

Increased modularity Local 3PL leveraged

OpenDistribution

Optimaltransportati

on network

ShorterLead

TImes

Distributed Assembly

Model


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SourcingSuppliers divided into Proprietary

and Non-proprietary.

97% parts sourced from localsuppliers.

Innovation in mfg. processes donelocally to avoid extra costs

Long term volume contracts ratherthan annual contracts

75% single source components


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Inventory

Just in timeInventory

Leveraging the proximity of suppliers Less number of suppliers

Multi-purposecomponents

Innovative but not too much complexity indesign Less number of total components

SeamlessIntegration

Accurate data on forecast Early Capture of design issues


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NANO IT strategy

Tata Motors investment in IT for efficientsupply chain Implementation of SAP 3.1 and 4.6c (Asias

largest implementation) SAP SRM (Supplier Relationship Management)

for end to end supply chain integration) SAP WM (Warehouse Management) combined

with barcodes to automate warehouseoperations)

Knowledge based Engineering (KBE) in design


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NANO IT strategy

SRM platform used for sustainablesavings and value generation

Benefits Reduction in procurement cycle time Improve process by e-procurement Real time supplier integration with business Knowledge sharing


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NANO IT strategy

SAP WM with mobile data entry iscombined with RF Technology (barcodes)to automate warehouse operations

Benefits Improved throughput at warehouses by RF

enabled processes Capability enhancement to handle more parts

and team size Real time inventory tracking


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NANO IT strategy

Knowledge based engineering in CAD/CAMwith help of KNEXT in house software

Benefits of KBE 30% reduction in cycle time Designers knowledge and companys best

practices retained


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Reducing Inventory

Eliminating waiting time and delays

Increasing utilization of warehouses & trucks

Optimizing location of warehouses and plants

Optimizing transportation networks

Pricing

NANO supply chain strategy


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Pricing:

Cost of the supply chainConventional StrategyCalculate Production costs+ Margin = Price

Tata Nanos strategySet price => Workbackwards & ChallengeSuppliers to lower costs


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Pricing:

Cost of the supply chain70% of the cost of the supply chain isfixed at the design stage

Upstream Supply chain timeLead Time map

Downstream: Functional Collaborationwith Suppliers at an early stageBosch & Delphi low cost components


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CONCLUSION

Tata Nano achieves what most people deemed impossible through originality andingenuity. It is a no frills car that serves the needs of the general public and India'sbad road conditions and heavy traffic. In this sense, the production and launch of TataNano can be called a revolution - not only to the consumers but also to industryplayers. The great wonder car by Tatas has stunned the entire world. Critics who

often said that it was not possible to make a car at a price below $3000 were taken toa back sit when Ratan Tata the chairman of Tata Motors unveiled this car in NewDelhi at a price of $2500. Since then it has been in lime light and has been makingnews in the auto sector throughout the world


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Thank You

scm at tata-nano

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