Shri.

Ramdeobaba College of Engineering and

Management, Nagpur
Industrial Engineering Department

Course: Supply Chain Management

Assignment – 1: Tata Motors Logistics System

Name: Ayush G. Agrawal

Roll No. : 22
Semester: 6th
Guide: Prof M.R Jain
INTRODUCTION:

Tata Motors Limited is an Indian

multinational automotive
manufacturing company headquartered in Mumbai, Maharashtra, India. It
is a part of Tata Group, an Indian conglomerate. Its products include
passenger cars, trucks, vans, coaches, buses, sports cars, construction
equipment and military vehicles. Formerly it was known as Tata
Engineering and Locomotive Company (TELCO). Tata Motors has auto
manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow,
Sanand, Dharwad, and Pune in India, as well as in Argentina, South Africa,
Great Britain, and Thailand. Tata Motors' principal subsidiaries purchased
the English premium car maker Jaguar Land Rover (the maker of Jaguar
and Land Rover cars) and the South Korean commercial vehicle
manufacturer Tata Daewoo. Tata Motors has a bus-manufacturing joint
venture with Marcopolo S.A. (Tata Marcopolo), a construction-equipment
manufacturing joint venture with Hitachi (Tata Hitachi Construction
Machinery), and a joint venture with Fiat Chrysler which manufactures
automotive components and Fiat Chrysler and Tata branded vehicles.

Founded in 1945 as a manufacturer of locomotives, the company

manufactured its first commercial vehicle in 1954 in a collaboration with
Daimler-Benz AG, which ended in 1969. Tata Motors entered the passenger
vehicle market in 1988 with the launch of the Tata Mobile followed by the
Tata Sierra in 1991, becoming the first Indian manufacturer to achieve the
capability of developing a competitive indigenous automobile. In 1998, Tata
launched the first fully indigenous Indian passenger car, the Indica, and in
2008 launched the Tata Nano, the world's cheapest car. Tata Motors
acquired the South Korean truck manufacturer Daewoo Commercial
Vehicles Company in 2004 and purchased Jaguar Land Rover from Ford in
2008.

LOGISTICS:
The term logistics is derived from the Greek word logistico meaning “the
science of computing and calculation.”

Logistics means having the right thing, at the right place, at the right time.
Logistics is 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
conforming the customer requirement. Logistical management includes the
design and administration of systems to controls the flow of material, work
in- process, and finished inventory to support business and unit strategy.

In a broader sense, logistics is seen to have developed as a society

transported from the stage of human self, sufficiency to the era of exchange
which was needed in the socio-economic system.

The logistical system of a company refers to an integrated effort towards

generating the highest value of customer satisfaction at the least cost
while delivering the highest values to the shareholders. Hence, the major
mission of logistics is:

1. To make available right quantity of right quality products at the right

time and right place in the right physical condition.
2. To offer the best possible customer service or core competency. In
the present-day scenario of intense global competition, for further
growth and more service from trade, corporate enterprises have to
largely depend on their customers (marketing intermediaries)
 because they are having final interface with end-users and the final
sales deal is swung by their push efforts.
3. To minimize total logistical costs by means of having better
coordination and integration of various logistical and non-logistical
functions of an enterprise along with higher level of productivity.

However, the implementation of effective logistical process costing

remains a challenge in the 1990s, many long -standing practices of account
continue to serve as barriers to fully implementing total-count logistical
solutions. Furthermore, there must be a trade-off between total logistics
cost and required customer service level.

LOGISTIC PROCESS:
When logistics have occupied a strategic value for a firm’s success then
quite obviously its formulation always needs involvement of the top
management. Hence, the specific process for logistics strategic
development and planning involves 4 important steps:
Step 1-Corporate Vision

It gives future direction to the firm as well as reflects the capability of the
management to think beyond the current way of thinking and operating.
The key elements of corporate vision towards logistics strategic plans
include:

1. recognition of service requirements for different market segments,

2. anticipation of key external environmental forces along with their
impact, such as industry trends, and
3. definition of the mission and objectives for the logistical functions in
terms of strategic direction and requirements for logistics.

Step 2-Logistics Strategic Analysis

The key functions of this step include:

1. development of various strategic alternatives and

2. review and final confirmation of detailed logistics plan.

Step 3-Logistics Planning

This step of strategic logistic planning process ensures effective

implementation of logistics strategy. The logistics plan in a blueprint of the
total logistics system in terms of:

1. functional goals to achieve pre-determined long-run logistical

objectives and corporate mission
2. programmes and procedures for new logistics projects
3. operational activities along with their coordination
4. time for framework
5. authority and responsibility, and
6. continuous evaluation and measurement of performance for further
improvement of the total logistics system.
Step 4-Managing Change

The final step is to deal with managing change by developing a cohesive

environment in the organization so as to ensure an efficient way of
conducting business. A new logistics strategy generally requires a new way
of thinking and performing and even restructuring the whole organization.
Hence, it is imperative to have a well-planned approach towards change
management. The key elements for managing change effectively are:

1. clear-out definition of the motion and objectives of the logistics

activities
2. communication of the logistical mission and objectives to
subordinates along with its contribution capabilities
3. comprehensive specification of authority, responsibility, role,
function, and tasks of each and every position in the organizational
hierarchy
4. coordination mechanism between logistics function and their related
functions and

INTEGRATED LOGISTICS MANAGEMENT SYSTEM:

Integrated logistics system refers to a set of activities concerned with
storage and flow of all materials, information and control system in a cost
efficient manner.
In order to sustain in the competitive market place and retail market
dominantly managers were of the opinion that it is the need of the hour to
develop an integrated logistics system which will be an interface of
procurement function, production function and physical distribution
function of total logistics management system with an intention to achieve
following objectives:

1. To ensure better customer service by appropriate value addition for

superior customer values,
2. To ensure higher productivity and further curtailment of logistics
cost by means of synergy between different business functions and
particularly all three logistical functions
3. To avoid a repetition of similar types of logistical functions by
different departments at different levels and the development of a
professional integrated approach.

COMPETITIVE ADVANTAGE:
"Competitive advantage cannot be understood by looking at a firm as a
whole. It stems from the many discrete activities a firm performs in
designing, producing, marketing, delivering, and supporting its product.
Each of these activities can contribute to a firm's relative cost, position and
create a basis for differentiation.”

Nowadays, company use logistics to create unbeatable long run core

competency, as product, price, and promotion (3p) do not bring
competitive edge largely due to quick imitation by competitors with
additional features. That is why, core competency by means of logistics
management is at the heart of a firm's performance in competitive and
maturing markets.

A firm gains a competitive advantage by performing these strategically

important activities more cheaply and better than its competitors. These
activities can be divided into two sets: Primary activities include in-bound
logistics, operations, out-bound logistics, marketing and sales, and service,
whereas, secondary activities involve infrastructure, human resource
management, technology development and procurement. Logistics
management has tremendous potential to contribute in gaining a
competitive advantage because it is a primary activity in the value chain
facilitating in the performance of others. Competitive advantage can be
created and achieved by logistics manager in two ways, namely: cost
advantage and value advantage.

The following five ways to significantly pain a competitive advantage by the

use of logistics management

1. Low cost
2. Superior customer service
3. Value-added services
4. Flexibility
5. Regeneration
Efficient performance of any logistics system needs carefully consideration
of following six hours about operational objective of the logistics manager.
Following are the six important R of operational objective.

1. Right Response
2. Right Quality
3. Right Quantity
4. Right Value
5. Right Costs Trade-off
6. Right Information.

LOGISTICS SYSTEM OF TATA MOTORS: Objective: To

innovate with passion, mobility solutions to enhance quality of life.

As a high-performance organization, by FY 2019 among the top 3 in

global and domestic market. Achieving sustainable financial performance
and delivering exciting innovations.

Core values:

• Integrity
• Teamwork
• Accountability
• Customer Focus
• Excellence
• Speed
Tata Motors have expanded their international footprint through exports
since 1961. In passenger vehicles, the company has a strong presence in the
hatchback and the sedan segment, going up to SUVs and MUVs. In
commercial vehicles, Tata Motors offers a wide spectrum of vehicles that
are customized for local conditions and meet the highest standards for
quality, safety, environment norms and user comfort.

Major brands:

• Jaguar Land Rover- The British company making Jaguar and Land
Rover (including Range Rover) cars.
• Fiat-Tata, was a joint venture with Fiat which manufactures
automotive components and Fiat and Tata branded vehicles. •
Tata Technologies
• Tata Daewoo
• Tata Marco polo
• Tata Hispano, coach builder

Advertising agency Maxus India, Group media planning and buying agency,
recently won the consolidated digital creative and media mandate for Tata
Motors. Maxus has set up a large exclusive team in its Mumbai office for
Tata Motors to handle the digital creative, media, social, and innovations
portfolio. Commenting on the win, Kartik Sharma, managing director,
Maxus South Asia, says in a press release, "We are delighted to be chosen
by Tata Motors as its digital partner. Maxus, today, handles several leading
brands from the Tata stable, and with this win we are truly humbled by the
Group's faith in our capabilities." Unny Radhakrishnan, chief digital officer,
Maxus South Asia, says in a press release, "It is a moment of pride for us.
Our focus will be to bring data, content, and technology together to deliver
effective and creative solutions for brands, and we look forward to do some
great work for Tata Motors in the coming months."
Tata Motor's commitment to sustainable development is deeply rooted in
the legacy of the Tata Group - to build businesses with social and
environmental consciousness and positively contribute to societal
wellbeing.
MARKET STRUCTURE

1. Oligopoly Market
2. Few Sellers and Few Buyers
3. Differentiated/Undifferentiated Products
4. Restriction in entry and exit
5. Interdependence

INBOUND LOGISTICS

1. Long term contract with service provider’s – transporters and agents.

2. Personnel at regional offices for overseeing the smooth transit of
goods.
3. Transparency and monitoring through deployment of IT- all
transactions through SAP.
4. DTL (daily transport logistics) supplies for critical high value items.
5. Efficient storage facilities- easy storage and retrieval.
OUTBOUND LOGISTICS

1. Stockyards, all across the country.

2. Long term contract with transporters- higher volume of business to
transporters ensures competitive price.
3. Regional sales office and vehicle dispatch section linked through SAP.
4. Efficient security system for prevention of any kind of pilferage.

LEVELS OF STRATEGY

Corporate level strategy (directional strategy)

1. Growth
2. Stability
3. Retrenchment

Business level strategy (competitive strategy)

1. Cost leadership
2. Differentiation (product)
Functional level strategy

1. Marketing strategy (4 p’s)

2. Financial strategy (sources of finance)
3. R&D strategy (technological leader, innovation)
4. Operation strategy (production strategy)
CORPORATE LEVEL STRATEGY
1. Tata & Fait (since 2006)
2. Tata Motors (SA) Tata Motors' joint venture with Tata Africa Holdings,
has an assembly plant in the Gauteng province of SA.
3. Tata Automobile Corporation SA- Tata Africa Holdings through a joint
venture between Accordion Investments and the Imperial Group, to
market and distribute Tata vehicles in SA.
4. Jaguar Land Rover is a subsidiary of the Indian carmaker Tata Motors.
GROWTH STRATEGY
1. Tata Groups strategic alliance with Japanese telecom major NTT
DOCOMO in November 2008.
2. Tata Teleservices has received a license to operate GSM telecom
services in 19 of India’s 22 telecom Circles-and has also been allotted
spectrum in 18 telecom circles.

BUSINESS LEVEL STRATEGY

1. Tata nano, the cheapest car in the world.
 2. Swach, the cheapest water filter from Tata Chemicals (less than Rs
1000).
3. Tata Motors launched the Ace truck in May 2005 for just above Rs
200,000.
4. Tata Motors new launches like Aria and the new 2011 Safari to regain
its lost market share.
5. Tata is looking at doubling SUV annual volumes to over 70,000 units
in the next 12-18 months, including exports.
6. Tata Motors is set to offer utility vehicles at every price point right
from Rs. 6.5 lakh to Rs. 15 lakhs.

OPERATION’S STRATEGY
1. Tata Group companies cumulatively spend Rs.12,500 crore on
research & development.
2. Knowledge-based engineering application software from Tata
Technologies that speeds up results.
3. An engine ‘start-stop’ technology developed by Jaguar Land Rover that
stops an engine when the vehicle isn't moving, thus saving on fuel; 4.
High standard steel for safer and fuel-efficient vehicles from Tata Steel
Europe.
5. The world's cheapest car, Nano, an innovation from Group company
Tata Motors, launched in April 2009, has 37 patents, Swach, the
cheapest water filter from Tata Chemicals, has 14.
6. Tata Steel, which acquired British company Corus in 2007, meanwhile,
files around 50 patents each year.
7. Jaguar Land Rover has re-hauled its supply chain to secure cost
savings as well as a sustainability equation that gives the company a
green edge.
TURNAROUND STRATEGY
1. Tata Power Delhi Distribution by winning hearts and changing
mindsets, and through technology and commercial savvy. 2. Transformed
a loss-making government entity into an efficient and profitable
operation that has become a benchmark for public-private partnerships.
DIVESTMENT STRATEGY
1. Tata Oil Mill (TOMCO) was divested and sold to Hindustan Levers as
soaps and a detergent was not considered a core business for the
Tata’s.
2. The pharmaceuticals companies of the Tata’s- Merind and Tata Parma
– were divested to Wockhardt.
3. The cosmetics company Lakme was divested and sold to Hindustan
Levers, as besides being a non-core business, it was found to be a non
competitive and would have required substantial investment to be
sustained.

PRODUCT DIFFERENTIATION STRATEGY

 1. Tata Motors new launches like Aria and the new 2011 Safari to regain
its lost market share.
2. Tata is looking at doubling SUV annual volumes to over 70,000 units
in the next 12-18 months, including exports.
3. Tata Motors is set to offer utility vehicles at every price point right
from Rs. 6.5 lakh to Rs. 15.

VALUE INNOVATION
1. Value Innovation is the
cornerstone of
blue ocean strategy.
2. Value innovation is the
simultaneous
pursuit of differentiation and
low
cost.
3. Value innovation focuses on
making
the competition irrelevant by creating
a leap of value for buyers and for the
company, thereby opening up new and uncontested market space.
R&D STRATEGY
1. Tata Group companies cumulatively spend Rs.12,500 crore on
research & development.
2. Knowledge-based engineering application software from Tata
Technologies that speeds up results.
3. An engine start-stop technology developed by Jaguar Land Rover that
stops an engine when the vehicle isn’t moving, thus saving on fuel; 4.
High performance rail steel that saved £150,000 over five years was
developed by Tata Steel Europe
 5. High standard steel for safer and fuel-efficient vehicles from Tata
Steel Europe
6. The worlds cheapest car, Nano, an innovation from Group company
Tata Motors, launched in April 2009, has 37 patents.
7. Swach, the cheapest water filter from Tata Chemicals, has 14. 8. Tata
Steel, which acquired British company Corus in 2007, meanwhile, files
around 50 patents each year.

SUSTAINABILITY STRATEGY

1. Corporate Sustainability (CS) is integral to value- creation in our

businesses through the enhancement of human, natural and social
capital complementing their economic and financial growth in order
to give the enterprise an enduring future and also help create and
serve a larger purpose, at all times.
2. It facilitates accountability to all stakeholders as a systemic practice. 3.
“SUSTAINABILITY IN MOTION”- The two main sustainable strategies at
Tata Motors:
4. Pollution Prevention (P2)
5. Resource Recovery (R2)
INVENTORY MANAGEMENT
Reasons to hold inventory:
1. Matching supply with demand
2. Prevent stockouts
3. Lower purchasing costs
Reasons not to hold inventory:
1. High maintenance cost
2. High protection cost
3. Depreciation and obsolescence
4. Taxes
PROCUREMENT:
1. E-procurement initiative.
2. Global Sourcing Team – China, a key destination for sourcing
essential items like tires, power steering units etc., Steel procured
from Belarus
 3. Long term relationships with a stable and loyal pool of suppliers.
4. Technology driven procurement – SAP and VCM.
5. Strategic subsidiaries & JV’s – TACO group of companies, Tata
Cummins
6. Centralized Strategic Sourcing for key components – FIP’s, Steel etc.
7. Group resources – Tata Steel and Tata International.
8. Localized supplier base at mfg. locations – low inventory levels.

The administrative process that takes place within a manufacturing

business and which involves making sure that sufficient raw materials, staff
and other necessary items are procured and ready to create finished
products the schedule specified.

1. To achieve its design goals, Tata refined the manufacturing process,

emphasized innovation and sought new design approaches from
suppliers. For example, many components of the Nano are made in
Germany by Bosch, such as Fuel Injection, brake system, Value
Motronic ECU, ABS and other technologies.
2. Cost cutting features- The Nano's trunk does not open instead the
rear seats can be folded down to access. It has a single windscreen
wiper instead of the usual pair and no power steering and no ABS. In
Base model, it has three lug nuts on the wheels instead of four and
only one side view mirror.
3. They introduced the car with an artificially low price through
government subsidies and tax breaks, forgoing profit on the car. 4.
Using vertical integration to artificially boost profits on cars at the
expense of their materials industries.
5. Partially using inexpensive polymers or biodegradable plastics
instead of a full metal body and thus raising the price of the car.

SCHEDULING:
Tata motors makes it production planning in such a way that sufficient raw
material, staff and other necessary items are available in proper way to
produce and make a product in finished goods during a given time period
without making any delay in production. Tata motors used to do scheduling
in such a way so that it minimizes the production time and costs, by telling a
production facility when to make, with which staff, and on which
equipment. It aims to maximize the efficiency of the operation and reduce
costs. They use production scheduling tools which greatly outperform older
manual scheduling methods. These provide the production scheduler with
powerful graphical interfaces which can be used to visually optimize
real-time workloads in various stages of production, and pattern
recognition allows the software to automatically create scheduling
opportunities which might not be apparent without this view into the data
along with this they uses backward (Backward scheduling is done to plan
the tasks from the due date or required-by date to determine the start date
and/or any changes in capacity required) and forward (Forward scheduling
is done to plan the tasks from the date resources become available to
determine the shipping date or the due date) scheduling to allocate plant
and machinery resources, plan human resources, plan production
processes and purchase materials.

The general framework of Tata Motor's supply chain consists of tier 1,

2 and 3 suppliers and original equipment manufacturers (OEMs)
representing the suppliers; the design group, engine and transmission
OEMs along with the assembly plant(s) representing the automaker itself;
and the third-party dealers, representing the distribution network. This is
similar to the traditional automobile supply chain designs of GM or Toyota.

THE AUTO-MANUFACTURER- TATA MOTORS: Tata

Nano's supply chain has some distinct features within this supply chain
design that separate it from the other car brands' supply chain designs at
Tata Motors. These unique aspects of the Nano supply chain have been put
in place to specifically bring down costs in order to justify the car's price
tag.

Suppliers:

The major aspects of the Nano's supplier network are

1. Proximity to assembly plant

2. Local and single sourcing

3. Tata group subsidiaries

4. Two and three-wheeler market suppliers

The Tata Nano's supplier network consists of approximately one hundred

tier one suppliers. The supplier selection process was highly selective.
Invitations were extended to almost a thousand suppliers but the selected
100 were based on their expertise, capacities and reliability in terms of
quality. The suppliers also took part in the design process of the Nano
through unique vendor initiatives such as 3P: Production, Preparation
and Process Methodology. In addition, the suppliers were also asked to set
up facilities near the assembler. Fifty suppliers were confirmed to have co
located with the Nano's assembly plant in Singur, a region in the eastern
Indian state of West Bengal. Of these 15-20 are integrated facilities. Other
subsidiaries are considered to be close enough. For instance, the Tata steel
plant is in Jamshedpur, a city that is approximately 250 kilometres from
Singur but with access to rail networks. Most of the suppliers are also single
sources for the components and only 3% of the components are imported.
For all the outsourced design components, it made sure that the suppliers
were well established and that there was a local presence. An example is the
alliance with Bosch for the engine management system which had centres
in both Bangalore and Germany. Likewise, Tata Steel is in an evenly split
joint venture with Ryerson to make all the chassis and a few non-load
bearing components of the vehicle. Like the steel plant, several other
subsidiaries of Tata such as Tata Auto Comp Systems (TACO) and HV axles
are also involved. Beside the Tata subsidiaries, Tata also has some unique
suppliers providing components for the Nano. Some of the suppliers for the
Nano are suppliers to the two-wheeler and three-wheeler industries. For
instances, the continuous variable transmission (CVT) engines (automatic
transmission engines) utilize gear boxes made by Kinetic Motors, the first
indigenous developer and largest manufacturer of CVT engines in India.
Kinetic Motors makes CVT equipped scooters in India as well. Similarly,
Caparo a parts supplier used to cater to the two-wheeler and three-wheeler
markets was roped in for making the composite material used in the body
of the Nano (Group C., 2008). This was a repetition of a strategy used for
component suppliers for the Tata Ace truck.

Beside the major function of marketing the car, Tata Motors's major
roles from the supply chain perspective of the Tata Nano are in design,
manufacturing and assembly.
1. Design: The design of the Tata Nano is often credited for the cost
effectiveness of the Tata Nano's supply chain and the reason for the car's
low price. Due to this reason, it is included within the supply chain
framework of the Tata Nano. The $2500 version of the Nano comes in one
basic format and any customizations add to the cost. Simply put, the Tata
Nano is designed to reduce costs from bumper to bumper. The main
aspects of the design of the Tata Nano are a critical design teams,
innovative design and multi functionality. The design team was crucial to
the development of the cost constrained car. The reputed team did not
solely consist of employees from Tata. When the designing phase of the
Nano was in progress, Tata Motors invited suppliers with strong resources
to take part in the idea generation and design inputs. In addition, they also
took trainee engineers from the Indian Institute of Technology at
Kharagpur and, Jadavpur University, both of which are universities within
West Bengal, for its original Nano design team. This combination enabled
them to bring about the innovative features of the car. The innovations of
the Nano's design are abundant. For instances, the body structure of the
Nano is not made entirely of steel but a composite material. Wheels are
made of pressed steel but looks like alloy. These wheels
are called style-in-steel wheels. Innovations are also present within the core
components of the car. The engine of the Nano is small enough to fit
underneath the back seat which is similar to the design of certain auto
rickshaws in India. Manufacturing practices of Tata motors are also in place
to control costs.

2. Manufacturing and assembly: Tata Motors's manufacturing division is

responsible for its core competencies such as engines and manual
transmissions. It also encompasses the assembly plant and the paint shop.
Tata Motors has plants in cities such as Pune, Singur, Lucknow, Jamshedpur
and Uttarakhand in India. The Tata Nano's plant is in Singur. This plant is
also integrated with some of its supplier facilities and is in close proximity
to other key suppliers such as the Tata steel plant. It is also expected to run
in three shifts to produce 350,000 units a year. This is expected to reach
500,000 in three years and the eventual goal of 1,000,000 units should be
realized with the opening of additional plants in three other geographical
regions. Tata Motors's manufacturing division is renowned in India and is
considered world class. It introduced the first indigenously designed diesel
engine in India. As a result, Tata Motors's advanced manufacturing
capabilities are sought after by other car makers as well. While the Singur
plant will not initially be used for such purposes, it is known that Tata
presses body panels for Mahindra at its Pune plant. Tata Motors also utilizes
its highly advanced paint shop in Pune to earn revenue from other car
manufacturers such as Mercedes Benz. Manufacturing practices have been
set to follow the Japanese processes of lean manufacturing and continuous
improvement. Tata Motors takes important measures to ensure that these
practices are followed as well. All Tata plant workers receive training in
Japanese manufacturing techniques and the smallest of measures are
adopted to improve performance. Forbes cited an instance regarding waste
control (Meredith, 2007). The Pune plant used to have consistent problems
with damaged front grills for a particular passenger car model. It was found
that, when employees leaned over, the belt buckles tore the grills making
them unusable. Tata Motors found a simple solution by providing belt caps
or the plant workers thus saving around $17,000.

Most notable is the Indian car purchasing scenario which enables "make to
assemble" manufacturing for new models. This is because customers in
India are accustomed to long waiting periods for newer models of cars
once orders are placed.

This benefit provides assemblers lead times of 3-4 months for urban
customers and as long as one year for a rural customer. Even though the
$2500 version of the Nano comes in a standard format, customized versions
are available for additional costs. However, the distribution network also
plays a role to advance this benefit, in spite of the unintentional nature.

DISTRIBUTION

Tata Motors has dealer networks similar to that of GM in the United States.
It requires its dealers to have substantial land holdings and inventory
available for customers to take cars with them immediately, once financing
is complete. However, this is only relevant for existing models of cars. The
new models such as the Nano require lead times as mentioned earlier due
to which their stock is usually limited. Tata's dealers are predominantly
existing dealers from the commercial vehicles’ unit of Tata.

There are applications and a selection process for dealers. Existing dealers
get preference over new dealers when new dealer locations are announced.
However, unlike Western car manufacturers such as GM, Tata does not have
government regulations that reduce the influence it can exert on dealers.
International manufacturers give their dealers higher margins whereas
Indian dealers usually make 3-4% margins on their car sales (Hindu
Business-Line, 2001). Tata Motors also has stakes in some dealers and is
efficiently synchronized with the dealers. For example, changes made to an
order are received immediately and electronically at the marketing division
of Tata Motors. However, all the advances made by Tata Motors in the
production of the supply chain aside, there are some challenges that face
Tata as well as the other automobile manufacturers in India.

CHALLENGES AND SUCCESSES OF TATA

MOTORS'S SUPPLY CHAIN LOGISTICS SYSTEM:
Challenges are described in relevance to the auto industry as a whole as this
is a recurring theme for the entire industry. The successful strategies seen
in the Tata Nano's supply chain framework could be viewed as attempts to
overcome some of these challenges. More importantly these strategies are
discussed to emphasize on how these helped Tata Motors to develop the
cheapest car in the world at a time when other manufacturers are facing
issues of cost reduction. The challenges and strategies are also compared
with trends observed from the U.S. market based on data obtained from GM.

Transportation infrastructure is a recurring theme in the discussions

of obstacles that hamper growth in the Indian economy but it is a problem
that requires adaptation till the Indian government and private
infrastructure developers can make significant headway. The lack of a good
transportation network in India is one of the reasons that there are long
waiting lists for new cars as well. Since demand for new models of cars are
usually high following the immediate launch, dealers often have to resort to
setting long waiting lists for the customers before fulfilling orders. This
provides an advantage for manufacturing but there are instances when long
waiting lists could turn to lost sales as well. However, the greatest
disadvantage of this challenge is when transporting unassembled cars or
components result in delays as that prove costly, especially when a plant has
to remain idle while waiting for a critical component. In the U.S. however,
transportation issues are rarely a problem for the OEMs and automakers.

The challenge posed by transportation infrastructure is further

aggravated by the unreliability from the suppliers' end. In the past and even
today local Indian suppliers were notorious for their quality deficiencies.
Automakers attribute this to lack of blue-collar skilled labour to maintain
quality assurance practices. While there are local suppliers that can be
considered leaders or "world class", the majority of the local component
parts makers are below par in customer service and delivery of quality
products. As a result, most automakers have to import certain components
due to which production costs are driven up as a result of the costlier parts
and tariffs associated with imported parts. While a completely assembled
car incurs the highest tariffs, component parts also incur heavy tariffs
(Currently at 100% but expected to be reduced to 65%). Not helping the
situation is the fact that some suppliers are faced with international orders
and deadlines as well. The situation is worsened for international
automakers as some of the suppliers who cater to multiple automakers
have to deal with the different ordering processes from each car maker.
Most of the time, local suppliers are not equipped to deal with multiple
variations of order processes due to which complications arise in the form
of mismatched orders and delivery schedules. Regional and political issues
are also challenging that occasionally trouble automakers.

SUCCESSFUL STRATEGIES FOR TATA SUPPLY

CHAIN LOGISTICS SYSTEM:
Tata Motors's success up to date and its future positioning as a global player
can be attributed to a variety of strategic approaches whose cumulative
impacts have made the much-needed difference. Some of the successes are
not due to strategies as such but rather by association. This association and
the key approaches that have helped Tata Motors to improve its supply
chain to a standard that enables it to produce a cheap car like the Nano are:
1. Tata Motors is part of a larger conglomerate

2. Product design of the Nano

3. Repetitive strategy

4. Utilization of government support

5. Selective supplier base and its specifics

Tata Motors is the world's youngest passenger car manufacturer. While the
automobile market was open to local players before the nineties and while
Tata was already involved in the commercial vehicle segment since 1945, its
first entry in passenger car segment was in 1991 with the launch of the
Tata Sierra. It was only after the later launch of the Estate, Sumo and Indica
models from the mid through the late nineties that Tata started to become a
major player in the Indian passenger car market. However, Tata Motors is a
part of a bigger conglomerate, the Tata Group which manufactures
everything from tea to steel. The Tata Group had established subsidiaries
catering to the automotive market before the launch of the Nano and before
it moved full steam into the passenger car market with Tata Motors. For
example, Tata Auto Comp Systems or TACO was launched to provide
products and services in three areas of business - namely manufacturing,
engineering and supply chain management. The main purpose of TACO was
to establish itself as a modem leader and provider of superior automotive
components in India and abroad.

The Tata Nano's supply chain has innovative and unique aspects that are set
to adapt to the Indian market conditions as well as to reduce costs.
However, the analysis of the case study reveals the following main
characteristics.

CONCLUSION:

TATA motors is a leading automobile industry with tremendous work

culture and customer orientated environment. Each step involved in the
supply chain and logistics system of Tata motors is very well managed
without compromising the quality for speedy transitions. Thus the success
of it can be accounted to the following:
Customer-desired service -Tata Motors Service rests on three core
customer-desired service promises:
1. Responsive: Tata Motors Service will bring speedy assistance through
five responsive service offerings.
• Doorstep service,
• Online service,
• Speed-O service,
• Quick repairs,
• 24X7 on-road assistance programme
2. Reliable: Quality service is a key deliverable across all Tata Motors
Service stations. Nearly 20,000 technicians and 20,000 staff members,
which includes workshop supervisors and front office staff, have been
trained and certified by Tata Motors. There are two service offerings
under this promise.
3. Best value: Tata Motors is known for delivering best value products
which give value for years. Service products are also designed on the
same philosophy. This promise has four offerings.
• 1)Rapid Repair,
• 2)Value Care,
• 3)Tata Motors Original Parts,
• 4) Extended Warranty.

Maintenance Management - Systematic approach to planning the

maintenance activities, using decision making tools to improve overall
efficiency and effectiveness of the operating system. Tata motors uses
regular maintenance check-up for its various machinery so that production
can be done in a systematic and smooth way. They use spare parts which is
original and has good quality standards so that it runs for a longer period
od time and even the maintenance cost is reduces thus, satisfy customers.
This act also gives tata motors an edge in today’s competitive markets.

The name of Tata itself says

T- Trust

A- Acceptability

T- Transparency

A- Accountability.