We aspire to make cars that are consistently world class in terms of quality and cost, built by a strong, highly

motivated & committed team. Maruti Suzuki is currently scaling up capacities by installing worldclass equipment and machines for cars and engines. At the same time, with the blend of Japanese fundamentals & locally built new techniques, we build flexibility in our operations that allows quick product mix changes to meet changing customer requirements. Our success has always been due to our people who have shown outstanding commitment, team work and a never ending urge to improve. The man on the shop floor will continue to lead us in our journey of a million promises. Maruti Suzuki has successfully leveraged the strengths of Suzuki Motor Corporation in the areas of technology, design and quality. We have now developed capabilities in design and development, and collaborated with Suzuki engineers in designing world strategic models like Swift and SX4. Going forward, Maruti Suzuki will rapidly scale up capability and infrastructure in R & D, so we can continue to offer customers many more new models, with the same bold and aggressive design, loaded with features and priced attractively. We will continue to apply Japanese-style attention to quality and processes, both within the company and at our suppliers. Our service network, widely acknowledged for its reach and quality, will expand further and touch many more Indian customers as we move forward to fulfill a million promises. Our suppliers make more than 70 percent by value of a Maruti Suzuki car. They have a critical role in ensuring that our customers get global quality and design, like customers in the developed countries. We will continue collaborating with our suppliers, as we always have, to reduce cost and enhance quality. But this partnership will now do more. As Maruti Suzuki develops R & D capabilities, our suppliers will also build design and development capability in their own areas. Together, we will fulfill the promise of more models, more upgrades, more features at attractive prices In pursuit of our ambitious growth & expansion plans amidst a competitive & tough business environment, our talent pool is going to be a key strength. We have made consistent efforts to create a positive, enabling and high performance work environment at Maruti Suzuki as a pre-requisite towards talent acquisition, talent nurturing and talent management. The people development roadmap at Maruti Suzuki also entails to build the leadership pipeline facilitating the high potentials to take up senior & top management roles, envision the future, define business innovation & strategies and lead high performing teams for us to achieve customer delight, organizational growth & strongly retain the leadership position in the Auto Industry in India.

At the Rs 30,000-crore Maruti Suzuki, India's largest carmaker, E. Nagare or 'electronic flow' is a religion. Simply put, this electronic flow is actually the sequence of production plans from the vendor to Maruti's shopfloor, which now sits at a two-hour cycle from 30 days in the past. As S Maitra, Managing Executive Officer (Supply Chain) of Maruti Suzuki indicates, "E. Nagare has completely transformed the supply chain at Maruti over the last four years." Across Maruti's twin sprawling plants in Gurgaon and Manesar, multi-coloured bumpers arrive in mobile trolleys and components line up outside factory sheds directly feeding the ever-hungry, multi-tasked assembly lines. For the company's 250-odd Tier I vendors and 20 global suppliers, supply is now a seamless activity. Maruti receives multiple supplies in a day within a slot of two hours based on the information given out to its vendors the previous night. That's a far cry from the initial 30-day or subsequent 15-day cycles Maruti drove in years ago. And that's what it takes to crank out 4,600 cars a day. Maruti opened shop in 1983. At the time, Phase Manufacturing Programme of the government was in vogue. That is, to produce any model in India, all components got shipped from Japan. But there was a catch. The government approved of manufacturing only on condition of localization of components. Maruti saw an opportunity and used it to effect by scouting for entrepreneurs and turning them into vendors, facilitating loans, licenses, technical know-how and even location in a phased manner. From 1.2 million cars a year, as Maruti eyes the two million mark in five years, it is setting a precedent for automakers countrywide. Along with processes like E. Nagare, new technologies and materials such as plastic instead of a metal fuel tank or light tinting of glass to keep the car cool, are now in the offing. Maruti's scale is hard to replicate and it is equally hard to ignore the frenetic pace with which the company has forged alliances with partners, both global and local, and now actively getting involved in their managements for better yield. Increased competition in the late 90s gave rise to global suppliers coming to India, like Delphi of GM. "Delphi came with a range of technologies, like wiring harnesses, chassis and powertrain components and AC components and they became our suppliers as well," says Maitra.

Maruti asks vendors to speed up capex plans Nandini Sen Gupta,ET Bureau,May 19, 2010, 12.06am IST NEW DELHI: Maruti Suzuki is pressing its vendors to speed up theirinvestment plans as a looming capacity crunch threatens to scupper its plans of growing sales and maintaining share in a hypercompetitive market. India's largest car maker has designed a new programme under which it is working with vendors to identify fund-raising problems, chalk out investment plans and plan capacity schedules, senior officials told ET. "We have been talking to vendors and telling them that it is time they looked at capacity in a somewhat proactive manner and invested earlier. Generally the tendency of a lot of vendors is that they wait till the demand is actually there and then they put new investments in place. They don't always trust what the management is telling them. In that situation, we are telling vendors 'you better start investing now because all indicators are that the market will grow so if you don't invest now, you will be in trouble and we will be in trouble along with you," Maruti Suzuki chairman RC Bhargava said. Maruti's new vendor engagement project was kicked off at a recent vendor conference in Hong Kong earlier this month. Its twin goal help vendors analyse and use their balance sheet for investments and free bottlenecks in the existing capacity to better manage vendor factories. Maruti is facing a sharp capacity crisis this year. India's largest car maker produced one million cars last year and has announced plans to increase it to 1.2 million through more efficient production management. But its new assembly, which will add 5.5 lakhs, will be ready only in about 12-18 months. "We are short of capacity in the conventional sense but our production team says they can give up to 1213% extra capacity over last year," Mr Bhargava said. Maruti's programme looks at both the vendor balance sheet as well as their factory lines. Top Maruti officials analysed the balance sheets of 60 key vendors at the conference looking at everything from EBITDA margins to the debt:equity ratio. "We are stressing on the need for building stronger balance sheets so investment needs can be met by our vendors," said Mr Bhargava. "The company shared its future plans with us and asked us to chart out investment, education, training and production plans to stay ahead of the demand curve," said Sona group chairman Surinder Kapur, a key Maruti vendor, who attended the Hong Kong conference. The balance sheet survey was followed by a capacity analysis. "We did a thorough check of how many of our vendors were working 24x7 on three shifts," said S Maitra, managing executive officer (supply chain), Maruti Suzuki. Typically capacity planning in the automobile industry works on a six day, two shift basis with the third shift acting as an emergency buffer. Maruti officials are now "going one-by-one to all those vendors that are having to work 24x7 at current demand levels and trying to work with them to see how capacity can be expanded," Mr Maitra added. The target is to cover the company's top 60 vendors in the next three months. "The programme has just started. It will involve us examining our vendor factories to look at processes which be debottlenecked and see where additional equipment needs to be put in place," said Mr Maitra. Once the company and vendor teams work out the problem spots, investments will follow. Maruti has earlier engaged vendors in lean production and just in time management as well as in quality audits and systems. But this is the first time the company is collaborating with its vendors on capacity and investment issues.

Oct. 28--NEW DELHI -- Adversity makes strange bedfellows. With high steel prices pinching, car market leader Maruti Suzuki and its two-wheeler-making cousin Suzuki Motorcycles India have joined hands to buy steel in a bid to save costs. That could blaze a trail in other companies and sectors. Joining them are their 200-odd vendors for whom steel is a major raw material. The process started in January this year after steel prices moved north late last year

Maruti vendors to compete for efficiency New Delhi, Sep 17 (PTI) At a time when Maruti Suzuki India is up against rising input costs and a downturn in domestic sales, the company's vendors have come together to improve efficiency so as to keep production costs in check. Fifty four of the top 80 component suppliers of Maruti Suzuki India (MSI) would compete against each other in what has been called 'Quality Circle Competition', and the top three would get a chance to present their cases in Suzuki's Japan facility alongside other global vendors. The idea is for the teams from different vendors to identify, deliberate and resolve one core business issue that will add value to the overall functioning of the organisation, thereby increasing efficiency," Maruti Suzuki Suppliers Welfare Association (MSSWA) S K Arya said. "When the steel prices are shooting up and other costs are escalating such steps from vendors will ultimately help in keeping the final product prices in check without passing too much burden on end consumers," he added. This is the first time that the vendors of MSI have undertaken such an exercise, although Suzuki has been encouraging its global suppliers in a similar manner for a long time. "Maruti has encouraged the vendors to take up this as it gives all the vendors to learn from each other and how to be more efficient and more productive with lesser investment," Arya, who is also the Chairman of JBM Group, added. The North Zone leg of the competition would be held from September 18-20, followed by South, West and East zone competitions Maruti has halved man hours spent on each car in five years Drops of water make an ocean. That is the guiding philosophy at Indias largest car maker Maruti Suzuki when it comes to managing efficiency across its value chain, from the vendor to the dealer. Its ruthless focus on organisational efficiency has made it possible for Maruti to beat inflation, commodity prices and employee salaries, and yet offer the iconic Maruti 800 at a price of Rs 1.87 lakh today 19 per cent lower than its 2000 price of Rs 2.32 lakh. Maruti manages this through a host of initiatives that involve workers and up to Tier II vendors, as much as the management. For instance, by debottlenecking its production lines year after year, it has reduced the number of hours every worker spends in producing a vehicle by half of what it was five years ago. Mechanisation and optimal utilisation of manpower has raised service bay productivity of its dealer service centres by 20 per cent, saving them a few hundred crores in setting up new service bays. BWs Rajeev Dubey met Shinzo Nakanishi, managing director and CEO of Maruti Suzuki, to pick up some nuggets of this ant-like perseverance. Excerpts:

Manufacturing efficiency begins at the vendor end. How do you ensure vendor efficiency? For us, lean delivery is about vendor efficiency. The first thing we ask the vendor is timely delivery (including transportation and packaging) and appropriate quality and cost. Sometimes, they have problems such as labour or power shortage or hike in commodity prices. For vendor efficiency, we have a separate organisation called Maruti Centre for Excellence (MACE) to give vendor advice. We also have another activity. We invite vendors only CEOs or plant managers to see our factory or parts supply chain management to show them better efficiency. When we started this project, our people went to Japan to learn the procedures, factory operations, etc. We have been doing this for 25 years, but vendors should also learn from us. So far, this activity was only with vendors from Tier I cities, now we are focusing on Tier II also. We want them to see our productivity, our cost reduction and implementation.

Do you continue with the 5-per cent cost reduction target for vendors? Every year we set a target for cost reduction. The target can even be 1-2 per cent, depending on the product. We have a one part, one gramme scheme. We also ask the vendors to do so. Last year, we had 130,000 suggestions that resulted in saving Rs 70 crore. That is a big saving for us. So we have asked vendors to implement this too. For a vehicle that has 20,000 or 30,000 parts, even if it is Re 1 per gramme, the savings are Rs 30,000 per vehicle. Last year, Maruti produced 800,000 vehicles, imagine the cost reduction. Everybody must understand that. The weight (of a vehicle) can go down by up to 30 kg. Making parts with less weight is a tough challenge. If we achieve that, the vehicle weight comes down. That means the fuel efficiency can go up by up to 30 per cent. We also have quality circles. Right now, we have 265 quality circles in Maruti. We have asked our vendor also to join. Then, in Japan there are the 5S of lean manufacturing seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardise) and shitsuke (sustain). Without understanding those, manufacturing cannot be lean. We are trained to make smaller, shorter, lighter, fewer and neater. Those are tools to get more efficiency and make innovative products. What is the cost-reduction target for vendors this year? It depends on the vendor, but we have asked for at least 2-3 per cent. You had introduced the quality circle competition among vendors last year. What has been its impact on efficiency? These 265 circles have to show results of efficiency and productivity improvement. The final 10-12 will go and compete in Japan. We will have a competition there every two years. Vendors have been very impressive. For example, a wire harness firm that has only girls on its shopfloor, has been very impressive. Last year, we generated savings of Rs 50 crore through quality circles. How many such schemes would be on at any given time in Maruti, tactically aimed at efficiency within the plant? Productivity at plant is measured in hours per vehicles (HPV). We measure how many persons are required to make the car, and in how many hours. We have a benchmark from Japan. The best is from our Kosai plant. We should reach that level which I cannot disclose. Where are you now compared to the benchmark? We have reached 80-90 per cent. The rest 10 per cent is the toughest. But in some areas such as factorywise volume, we exceed them. Unit-wise, Kosai plant is 500,000 vehicles. We are already making

800,000. Have you also been able to improve the vehicle changeover timings at the plant? In the press shop, if we were stamping the Swift door and we had to change the die to stamp the A-star door, we used to take two hours. We had to stop the line, change the mould and fix the A-star mould. Now, we are able to do the changeover within 5 minutes. We looked at the location of the dies and brought them closest to the line. Then, we looked at how the finished vehicle can be kept most efficiently for timely dispatch with least damage. These are inventory checks. They might seem small, but they deliver big results. The Gurgaon plant is 1.2 million sq. metres. It makes over 500,000 cars, so there is no parking space. With the slowdown, we have to bring the cars to Manesar. Inter-plant transfer means additional cost of transportation and manpower. We looked at how to reduce that. The Gurgaon plant was a U-shaped building. When we expanded, we built another U-shaped building opposite it. The central area cannot be used because it is for utilities. From the layout point of view, it is the worst. Plants now are being made linear. A vehicle enters from one end and goes out from the other in a straight line. Expansion is easier. In many countries, including Japan and Korea, companies have tried out multi-level production because of scarce land. Do you do that anywhere? I know GM does it in some countries, but that is their way. I am in no position to make any comment. But we believe production should be in a straight line. It is very simple. That is the most cost-effective way. You ship out 800,000 cars per annum. What is the most efficient way you have found in supply chain and fleet management of trucks that transport these cars? The most efficient is rail. One train can carry 240 vehicles in two levels. But we have just started with Astar. Containers are specially designed. Once the Delhi-Mumbai corridor starts, it will be very beneficial. Even for some domestic supplies, we send some models from Manesar or Gurgaon to our yard in Mundra Port. From there, they are sent by sea to Kerala, Cochin or Goa. This is also viable. We find it costeffective; time is predictable and damages are least, unlike roads. We would like to enhance non-road transportation of our vehicles. In Japan, Mazda does 88 per cent dispatches via sea. How much of dispatches are on trucks, and how much would you like it to be? About 90 per cent are on trucks. If I say, I want to reduce this by 100 per cent, the truckers association will complain! Have you been pruning dealers or vendors? In 2003, when Suzuki took majority control, we had over 400 vendors. We thought that was too much because if we could reduce the number of vendors, we could give more volumes to fewer vendors and it would reduce costs. We reduced to 200. After that, because of growth and India-specific conditions such as strikes, power shortage, we have increased the number to 300. Is there a component supplied by only one vendor? Some are still single vendors mostly high-end electronics and Suzuki Japans subsidiary Suzuki Powertrain, the diesel engine factory. Glass, we have only one Asahi Glass. In tyres, there are threefour vendors.

How have you tried to improve efficiency of dealers? We are focusing on two areas inventory and delivery to dealer. Reducing working capital is very important because it reduces their costs. But for that, we have to deliver properly. A car is dispatched from the factory only after the dealer has made the payment. Earlier, we used to take up to six weeks to deliver a car. Now, it is down to less than four weeks. Since the slowdown, we have given special attention to dealer inventory. Dealer inventory has gone down from 80,000 to 50,000 cars. At an average price of Rs 4 lakh, that is Rs 1,200 crore of inventory reduction, which means lesser working capital financing cost for the dealer. We also help in their inventory management. We do analyse the market, and everyday inventory, inquiry, orders and sales. We tell them about their vintage stocks 3-4 month old stocks. That is money lying idle. Now our dealers do not have vintage stocks. Sometimes, they do not think about the age of the inventory, so this is education or cross-communication through our regional offices.

Maruti supports vendors in all possible ways, including finding technology partners, giving financial, technical and management support and bringing transparency in its dealings Fifty four of the top 80 component suppliers of Maruti Suzuki India (MSI) would compete against each other in what has been called 'Quality Circle Competition', and the top three would get a chance to present their cases in Suzuki's Japan facility alongside other global vendors. To cope up with the more efficient production systems and constant price reduction drives, Maruti Suzuki India has currently introduced the one component one gram drive which will reduce a weight of each Maruti car by a 2.5 kg Key learnings The different manufacturers have different strategy for their vendors. Based on the study, few findings that emerge are: All the Vehicle manufacturers have supplier development programmes for the Tier Is. They are expanding their supplier development programmes to the tier IIs also. The strategies employed are: o Campaigns o Incentives o Quality improvement programs o Quality audits o Material management Education Most of these programmes are orgnised internally. However some of them are co-ordinated with the associations. Maruti and Tata motors seems to have a mature vendor management system. Hero Honda motors is also known for its relationships with the vendors. Efficient synergising of the vendor development programme can happen by offering building capacity

in the associations for identifying the technology experts in Vendor education and development. NEW DELHI: Maruti redux. Its not size that the $3.7-billion carmaker is revisiting, but weight. Maruti 800 was the first bantam-weight fighter to c ruise Indian roads. Maruti Suzuki is now taking a leaf out of the past to gear up for what it claims as perhaps the lightest vehicles on Indian roads. In line with Suzuki honcho Osamu Suzukis lighter, faster, better comment in the Suzuki annual report, Maruti Suzuki MD Shinzo Nakanishi recently launched the one component, one gram drive in Istanbul. In a move aimed at paring costs in the ongoing slump, each vendor of the carmaker is now manufacturing every component and sub-component bearing in mind the one-gram principle. While Lumax is busy making its incandescent light components lighter by a gram each, Krishna Maruti, JBML, Shriram Pistons, Asahi India and other vendors are following suit. As for Maruti, its ringing in more savings per car and taking it to the next phase of efficiency improvement, from layout to design change. In short, a Maruti 800 weighs 665 kg, and 2,000 gram (2 kg) reduction could bring down costs for us, claims a Maruti spokesperson, adding that weight reduction will only enhance efficiency without compromising on functionality. Each year, Maruti sells about 7.5 lakh cars. According to the maths worked out by company executives, weight up to 2.6 kg is the target reduction per car, which works out to Rs 50 per kilo in cost saving, and further translates into savings of Rs 130 per car This back-of-the-envelope calculation suggests that if this programme is implemented across the carmakers range, the company could save close to Rs 10 crore on its annual numbers. Of course, the savings to the company may be more as this is the least Maruti expects from each vendor, adds the spokesperson. But a bigger gain could be in terms of fuel efficiency: lighter cars give more mileage. Admittedly, achieving it for all components is not going to be easy. In many cases, component makers will have to look at design changes so they can deliver within the same quality and functional parameters. Lamp-maker Lumax seems well set to combat the slump in the four-wheeler market. We have to be cost-competitive, says Lumax V-P (new product development) Prem Pardasani. And Marutis fresh diktat has come as a breather for Lumax since, on bulk orders, the vendor gets to save more. We supply approximately 50 parts for a Maruti, which translates into its weight going down by 50 grams. Say, for an Alto, well be able to save 8%, claims Mr Pardasani. Industry analysts point out that the larger issue is that component makers are now having to review

and rethink the entire manufacturing process and design. It is not just about one gram, it is about inducing a fresh approach to the operation. Krishna Maruti CMD Ashok Kapur contends his vendees move is nothing short of the best in Kaizen. Krishna Maruti supplies seats, road rims, roofs, mirrors, fuel tanks, axles, suspensions, warts and all to the auto major.

A Maruti spokesperson points out that further to the companys one component, one gram campaign, nearly 2,000 in-house suggestions towards design change were floated, of which 70 were found to be feasible. Earlier, the carmaker gained new ground in efficiency by changing the layout of the manufacturing line wherein productivity increased by 40%. The next phase will herald a design change, assures the spokesperson. JBML supplies about 350 sheet-metal components to Maruti. Its a value analysis-value engineering (VA-VE) activity that Maruti is spearheading to reduce the cost of components, particularly important during a downturn. With 350 components from our end, and 7-8 child parts to a component, we ensure a 3 kg reduction, says JBML-Plant 1 V-P (operations) AN Srivastava. Seconds Glassmaker Asahi Indias MD & CEO Sanjay Labroo: From the weight perspective, we are down to the lowest limit, but now we are using colours in glass to reduce solar radiation, so that lesser energy is required to cool the car and lesser fuel is burnt. Ask Shriram Pistons & Rings chief executive Ashok Taneja, and hes quick to point to the greater good. Theres a psychological advantage to it because any vendor giving less will feel the strain. So, Maruti is applying this VA-VE activity universally. While Marutis new move will induce vendors to revisit design and manufacturing processes, it also has the potential to tackle friction loss in the long-run, thereby further lowering the cost of running the car. http://www.indianauto.org/pdf/Supplier%20Development%20Programmes%20in%20Indian%20Auto%2 0ComponentSector.pdf

A peek into Marutis supply chain management Maruti Suzuki is one of the most successful stories in supply chain management in the Indian automobile market. Over the years it has worked to convert obstacles into opportunities. The company has 246 local suppliers and 20 global ones they all function in a seamless manner. The company strictly receives their supplies ordered the previous night in a two hour slot the next day. A far cry from the initial 30 day supply period.

Maruti was set up in the 80s, many of Suzukis global vendors set up joint ventures in the northern region.While setting up the plant the government had approved of manufacturing only on condition of localization of components. Maruti used this by scouting for entrepreneurs and turning them into vendors, facilitating loans, licenses, technical know-how and even location in a phased manner. Of the 246 suppliers, Maruti has joint ventures with 14 of them and hold strategic equity stake to have a say in production and quality issues. Maruti however was not satisfied with the delays in production due to the lag time in supplies. The company had adopted the Japanese system, Just In Time (JIT) to achieve higher operational efficiencies and reduce inventory carrying cost. Maruti Suzuki has adopted the e-Nagare system of electronic flow which has completely transformed its supplier chain. To achieve JIT material supplies, the company has given preference to locally based suppliers. Over 76% of the company's 246 suppliers are located within 100 kms of radius. They have strategically located the suppliers of bulky components such as instrument panels, fuel tanks, bumpers, seats, etc. adjacent to the company's manufacturing facilities in the Suppliers' Park. Maruti supports its vendors in all possible ways. This includes finding technology partners, giving financial, technical and management support and bringing transparency in its dealings. Of late Maruti has been collaborating with its suppliers to smooth HRD issues which had resulted in strikes and delays. Fifty four of the top eighty component suppliers of Maruti Suzuki India compete against each other in what has been called 'Quality Circle Competition', and the top three get a chance to present their cases in Suzuki's Japan facility alongside other global vendors. The idea behind the Quality Circle Competition was for the teams from different vendors to identify, discuss and resolve any one core business issue that will add value to the overall functioning of the company, thereby increasing overall efficiency http://indiatransportportal.com/2010/12/a-peek-into-maruti%E2%80%99s-supply-chain-management/

At Maruti Suzuki, electronic flow is a religion