A STUDY ON “SUPPLY CHAIN MANAGEMENT AT

MARUTI SUZUKI INDIA LIMITED”

A Project Work submitted to the
Jawaharlal Nehru Technological University, Kakinada
in Partial Fulfillment of the requirement for the Award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by
Mr. U. RATNA KAMAL KUMAR

Regd. No. 20KQ1E0075

Under the esteemed guidance of

Mr. S. GIRI MBA

Assistant Professor

SRINIVASA EDUCATIONAL SOCIETY’S

PACE INSTITUTE OF TECHNOLOGY & SCIENCES

(AUTONOMOUS)
Approved by AICTE, Accrediated by NBA & NAAC (A Grade), Recognized under 2(f) & 12 (B) of UGC
Permanently Affiliated to JNTUK, KAKINADA,A.P., An ISO 9001:2008 Certified Institution
NH-16, Near Valluramma Temple, ONGOLE-523272, ANDHRA PRADESH

2020-2022
 SRINIVASA EDUCATIONAL SOCIETY’S

PACE INSTITUTE OF TECHNOLOGY & SCIENCES

(AUTONOMOUS)
Approved by AICTE, Accrediated by NAAC (A Grade), Recognized under 2(f) & 12 (B) of UGC
Permanently Affiliated to JNTUK, KAKINADA,A.P., An ISO 9001:2008 Certified Institution
NH-16, Near Valluramma Temple, ONGOLE-523272, ANDHRA PRADESH

CERTIFICATE

This is to certify that the project entitled “A STUDY ON SUPPLY CHAIN

MANAGEMENT AT MARUTI SUZUKI INDIA LIMITED” is the bonafide work
carried out by U. RATNA KAMAL KUMAR, Regd. No. 20KQ1E0075 in partial
fulfillment of the requirement for the award of Degree of Master of Business
Administration.

PROJECT GUIDE HEAD OF THE DEPARTMENT

EXTERNAL EXAMINER
 DECLARATION

I hereby declare that the project entitled “A STUDY ON SUPPLY CHAIN

MANAGEMENT AT MARUTI SUZUKI INDIA LIMITED” submitted by me under the
guidance of Mr. S.GIRI, Assistant Professor, Department of MBA, PACE Institute of
Technology & Sciences, Ongole in partial fulfillment of the award of the degree of Master of
Business Administration, is the original work done by me and I have not submitted earlier in
part or full to any other university for any other degree or diploma.

U. RATNA KAMAL KUMAR

(20KQ1E0075)
 ACKNOWLEDGEMENT

I would like to express a deep sense of gratitude and thank profusely

Mr. S.GIRI, Assistant Professor, without whose counsel and able guidance, it would have
been impossible to complete the project in this manner.

I express my deep sense of gratitude to Dr. T.MARY JONES, Head of the

Department of MBA, for her continuous monitoring and support in the successful completion
of the project work.

I also express my gratitude to Dr. SREENIVASAN M, Principal of our college, for

his guidance and co-operation during my course of study.

I extend my sincere thanks to Mr. M. SRIDHAR, Secretary & Correspondent of our

college, for providing sufficient infrastructure and good environment in the college to
complete my course.

I am highly thankful to the authority of MARUTI SUZUKI for their kind permission
to undertake the present study as well as extending help in collecting the data. I express my
gratefulness to the company executives, supervisors and employees for sparing their valuable
time and courtesy during the period of study.

Great acknowledgment is expressed to Coordinator, Teaching and Non teaching staff

members whose guidance cannot be ignored in completing this project in time.

Special Thanks to my friends, for their co-operation during the course of the study

Also, I wish to thank my parents and family members without whom it is impossible
for me to stay at this level.

U. RATNA KAMAL KUMAR

(20KQ1E0075)
 CONTENTS

CHAPTER PARTICULARS PAGE NO.

CHAPTER – I INTRODUCTION 01-07

▪ Need for the Study

▪ Scope of the Study
▪ Objectives of the study
▪ Methodology of the study
▪ Limitations of the study

CHAPTER – II INDUSTRY PROFILE 08 -16

CHAPTER – III COMPANY PROFILE 17-35

CHAPTER – IV THEORITICAL FRAME WORK 36 -51

CHAPTER – V DATA ANALYSIS AND INTERPRETATION 52-69

CHAPTER – VI FINDINGS, SUGGESTIONS & 70- 81

CONCLUSION

ANNEXURE

BIBLIOGRAPHY
QUESTIONNAIRE
 INTRODUCTION
Introduction to the Topic

Supply Chain Management (SCM) practices govern the selection of an appropriate mode for the
movement of goods and materials within a given industry or geographical area. SCM has
undergone an evolutionary pattern. The pattern has progressed from utilizing a single mode in a
single region following the movement of raw materials, through manufacturing facilities, to the
consumer; to multi-modal solutions across a global landscape.

A variety of industrial, manufacturing, warehousing, and transportation sectors. Many of these are
not single points but facilitate the supply chain for local, state, and national needs. Understanding
the needs of SCM, particular to the state’s participants, will assist in guiding future planning for
infrastructure or promotion of a particular mode.

Maruti Suzuki India Limited has been in car manufacturing business for over 30 years and is the
largest car manufacturer in India. Maruti Suzuki India Limited has a nationwide dealer sales and
service network. The study analyzes various innovations implemented in supply chain and logistics
management and the benefits derived by Maruti Suzuki India Limited to gain competitive edge in
the Indian Automobile Industry. The study is based on secondary data comprising of literature
review. The findings suggest that Maruti Suzuki India Limited has been constantly implementing
many innovations in supply chain and logistics management which have given them many positive
results in terms of enhancement of operational efficiencies, cost reductions and attaining customer
satisfaction. Further study can be conducted on other car manufacturers in the India Automobile
Industry.

6
 OBJECTIVE OF THE STUDY

• To understand the implementations of innovations in supply chain and logistics

management at Maruti Suzuki India Limited.
• To analyze the exact segregation of the industry.

• To identify various dimensions of SCM systems in selected organizations in the automotive

sector.
• To analyze success and hindrance factors for SCM systems in the sector organizations.

7
 NEED FOR THE STUDY

Manufacturing industry including automobile companies has realized the importance of the
supply chain systems as it needs to keep control over costs at every stage to remain competitive.
Original equipment manufacturer (OEM) after integrating the functional areas through enterprise
resource planning (ERP) within the organization, shifted focus to integration of business
processes with trading partners. The emergence of e-business has thus led to different ways in
which enterprise communicate, transmit and receive information with the suppliers upstream and
customers downstream. However, the achievement of these above-mentioned benefits depends
upon the effective implementation of the system. Implementing these systems is a complex,
lengthy and expensive process. These systems require huge commitment of funds, time and
expertise. There isa strong evidence in the literature that implementation of SCMIS projects were
either not completed on time or did not bring about the planned effects, and even exceeded their
estimated costs.

8
Scope of Study

The company taken for the live study of the supply chain policies is the Maruti Suzuki India
Limited. Though the supply chain of the company is very big and intensive, we will be focusing
on the few aspects for the study of this project. The following points are being considered for the
scope of the study of the project:

To study the roles played by the various divisions in the company during the vendor
selection process and the vendor selection process. This will help us in correlate the theoretical
aspect studied as the different conflicts arising out of the different needs of the different supply
chain members.

To study the system of the company and how it does works to manage the inventory and
ordering of parts to the customers. This will help us understand how India’s biggest passenger car
manufacturing company is managing its supply chain operations andinventory levels.

Based on these studies we will try to link the various theoretical aspects learned vis-à-vis
how they are actually being followed in the companies. Also, we will try to find the potential
shortcomingsand the ways how that system can be improved further.

9
 METHODOLOGY OF THE STUDY

A research design is the arrangement of condition for collection and analysis of data in a manner
which may result in an economy in procedure. It stands for advance planning for collection of the
relevant data and the techniques to be used in analysis, keeping in view the objective of the research
availability of time.

The Research design used in this study was descriptive research design. It includes surveys and
fact-finding enquiries of different kinds. The main characteristic of this method is that the
researcher has no control over the variables; he can report only what has happened or what is
happening.

SIGNIFICANCE OF THE STUDY

Maruti Suzuki India Limited has been a market leader in the India Automobile Industry. The study
attempts to study the changes implemented in their supply chain and logistics management
process.

Research Design:

A two stage Research was conducted:

1. Secondary Research:

Data was collected from websites and catalogues to understand the product of the different
players

2. Primary Research:

A Primary Research was conducted:

10
 The questionnaire was prepared for the companies and following areas covered:

• competing retail stores

• Features offered by different stores

• Consumer profile

• Satisfaction level

• Reasons for their purchase.

Desirable features of the product and service

Sampling Plan: Elements: The target population of the study included the general population of
every age who enters to the Maruti Suzuki.

Sample size: 100 people.

11
 LIMITATION OF THE STUDY

• This study throws light on supply chain management process commenced at the Maruti
Suzuki.
• The SCM studied in this report focuses on the retail industry and it may differ from firm to
firm.
• The disadvantage of study SCM is investment of time, money and resources needed to
implement and overlook supply chain.
• Convenience sampling used here has its own limitations.

• There have been some inaccuracies due to non – cooperative and rude behavior of the
respondents.

12
 INDUSTRY PROFILE

The decade of 1985-1995 was an important watershed in the history of the international automobile
industry. World demand for automobiles had stagnated. Declining international competitiveness
had thrown North American and European automobile manufacturers into labor turmoil.
Overcapacity threatened home markets which had already achieved predictable and mature growth
rates, resulting in a glut of excess manufacturing capacity, now estimated at about 40 unneeded
assembly plants world-wide. Japanese-U.S. and Japanese-European Union trade relations were
increasingly strained, as Japanese automobile manufacturers penetrated western markets, while
carefully protecting their home turf. While these problems festered, the Asian auto market was
exploding. Economic growth rates were high throughout the region; a middle class with a
significant disposable income was emerging; and few people owned cars. But European and
American firms faced formidable Japanese competition; Japanese manufacturers had built an
important presence in Asia through decades of market penetration in sales and the location of
manufacturing facilities. Indeed, by 1996, Japanese firms dominated the Asian market, with
significant and growing European penetration of these markets, especially in China and Taiwan.
The automobile history dates back to the late 18th century. Nicolas Joseph Cugnot, a French
engineer is credited with inventing the first self-propelled automobile. Cugnot's vehicle used steam
power for locomotion. The vehicle found military application in the French army. Cugnot's
automobile was never commercially sold. In the beginning automobile industry was dominated by
steam-powered vehicles. The vehicles were expensive and difficult to maintain. The incidence of
frequent boiler explosions also kept potential purchasers away. Commercial history of automobiles
started with the invention of gasoline powered internal combustion engines. The German inventor,
Karl Benz constructed his first gasoline powered vehicle in 1885 at Mannheim, Germany.
Commercial production of Benz cars started in 1888. Panhard et Levassor of France was the first
company to exclusively build and sell motor cars from 1889.

The early 1900s saw many automobile manufacturing companies coming into existence in a
number of European countries and the United States. The first mass produced automobile in the
United States was the curved-dash Oldsmobile. It was a three-horsepower machine and sold 5,000

13
units by 1904. The economics of the US car market was disrupted by the arrival of Henry Ford and his
Model T car. The Model T was the world's first mass produced vehicle- a million units were sold by
1920- a space of 10 years. The History of the automobile actually began about 4,000years ago when
the first wheel was used for transportation in India. Several Italians recorded designs for wind-driven
cars. The first was Guido da Vigevano in 1335. It was a windmill-type drive to gears and thus to
wheels. Vaturio designed a similar car that was also never built. Later Leonardo da Vinci designed
clockwork-driven tricycle with tiller steering and a differential mechanism between the rear wheels.

In the early 15th century, the Portuguese arrived in China and the interaction of the two cultures
led to a variety of new technologies, including the creation of a wheel that turned under its own
power. By the 1600s, small steam-powered engine models were developed, but it was another
century before a full-sized engine-powered automobile was created. A Catholic priest named
Father Ferdinan Verbiest is credited to have built a steam-powered car for the Chinese Emperor
Chien Lung in about 1678. There is no information about the automobile, only the event. Since
James Watt didn't invent the steam engine until 1705, we can guess that this was possibly a model
automobile powered by a mechanism like Hero's steam engine-a spinning wheel with jets on the
periphery. Although by the mid-15th century the idea of a self-propelled automobile had been put
into practice with the development of experimental car powered by means of springs, clockworks,
and the wind, Nicolas-Joseph Cugnot of France is considered to have built the first true automobile
in 1769. Designed by Cugnot and constructed by M. Brezin, it is also the first automobile to move
under its own power for which there is a record. Cugnot's three-wheeled steam-powered
automobile carried four persons and was meant to move artillery pieces. It had a top speed of a
little more than 3.2 km/h (2 mph) and had to stop every 20 minutes to build up a fresh head of
steam.

Evans was the first American who obtained a patent for "a self-propelled carriage." He, in fact,
attempted to create a two-in-one combination of a steam wagon and a flat-bottomed boat, which
didn't receive any attention in those days. During the 1830's, the steam car had made great
advances. But stiff competition from railway companies and crude legislations in Britain forced
the poor steam automobile gradually out of use on roads. The early steam-powered automobiles
were so heavy that they were only practical on a perfectly flat surface as strong as iron. A road

14
thus made out of iron rails became the norm for the next hundred and twenty-five years. The
automobiles got bigger and heavier and more powerful and as such they were eventually capable
of pulling a train of many cars filled with freight and passengers. Carl Benz and Gotttlieb Daimler,
both Germans, share the credit of changing the transport habits of the world, for their efforts laid
the foundation of the great motor industry as we know it today. First, Carl Benz invented the petrol
engine in 1885 and a year later Daimler made a car driven by motor of his own design and the rest
is history.

Daimler's engine proved to be a great success mainly because of its less weight that could deliver
1000 rpm and needed only very small and light vehicles to carry them. France too had joined the
motoring scenario by 1890 when two Frenchmen Panhard and Levassor began producing
automobiles powered by Daimler engine, and Daimler himself, possessed by the automobile spirit,
went on adding new features to his engine. He built the first V-Twin engine with a glowing
platinum tube to explode the cylinder gas-the very earliest form of sparking plug. The engines
were positioned under the seat in most of the Daimler as well as Benz cars. However, the French
duo of Panhard and Levassor made a revolutionary contribution when they mounted the engine in
the front of the car under a 'bonnet'. Charles Duryea built a car carriage in America with petrol
engine in 1892, followed by Elwood Haynes in 1894, thus paving the way for motor car s in that
country. For many years after the introduction of automobiles, three kinds of power sources were
in common use: steam engines, gasoline or petrol engines, and electrical motors. In 1900, over
2,300 automobiles were registered in New York, Boston, Massachusetts, and Chicago. Of these,
1,170 were steam cars, 800 were electric cars, and only 400 were gasoline cars.

In ten years from the invention of the petrol engine, the motor car had evolved itself into amazing
designs and shapes. By 1898, there were 50 automobile manufacturing companies in the United
States, a number that rose to 241 by 1908. In that year, Henry Ford revolutionized the manufacture
of automobiles with his assembly-line style of production and brought out the Model T, a car that
was inexpensive, versatile, and easy to maintain. The introduction of the Model T transformed the
automobile from a plaything of the rich to an item that even people of modest income could afford;
by the late 1920s the car was commonplace in modern industrial nations.

15
Herbert Austin and William Morris, two different car makers, introduced mass production methods
of assembly in the UK, thus paving the way for a revolution in the automobile industry. Austin
Seven was the world's first practical four-seater 'baby car ' which brought the pleasures of motoring
to many thousands of people who could not buy a larger, more expensive car. Even the 'bull-nose'
Morris with front mounted engine became the well-loved model and one of the most popular cars
in the 1920s. Automobile manufacturers in the 1930s and 1940s refined and improved on the
principles of Ford and other pioneers. Cars were generally large, and many were still extremely
expensive and luxurious; many of the most collectible car s date from this time. The increased
affluence of the United States after World War II led to the development of large, petrol-consuming
car s, while most companies in Europe made smaller, more fuel-efficient cars. Since the mid-
1970s, the rising cost of fuel has increased the demand for these smaller cars, many of which have
been produced in Japan as well as in Europe and the United States. The History of motor cars has
surely been a well-traversed one. The automobile, as it progressed, was a product of many hands,
of revolutionary concepts, and of simple, almost unnoticed upgrading. In the end, the one who
received the most for these challenges and changes was the motorist, whose interest, money, and
enthusiasm have forced the auto-moguls to upgrade, perfect, and add to previous achievements in
order to stay in the competition.

American automobile manufacturers, however, had failed to crack the Japanese and European
stronghold on the Asian market. The market’s close geographical proximity to Japan, the relative
unsuitability of American products in Asia (larger car sizes, greater fuel inefficiencies, and higher
average retail prices), the need to focus on protecting its share of the North American market from
Japanese and European penetration, and rampant protectionism in most Asian countries worked
together to weaken the American position. Even in terms of traditional firm competencies, US
firms were at a disadvantage. Their strengths in consumer driven production, purchase financing,
product marketing and product servicing were thwarted by the Asian markets’ structural
characteristics. Production, both in terms of levels and of variety of products, was often state-
determined. Financing tools were heavily influenced by host state credit decisions. Dealer
networks were strictly controlled, and service networks could not be easily created. Overall, the
1985-1997 Asian market experience for the American automobile manufacturers was one of
disappointment. Ironically, then, it was the Asian financial crisis that provided the opening in Asia
for American auto firms. At first glance, this is surprising because at the height of the crisis, sales
16
fell by over 50% in Thailand, Indonesia, the Philippines, Malaysia and China, and though less
dramatic, sales also fell in Korea and Japan. More importantly, however, the crisis put a break on

rapid expansion of the automobile sector. Nonetheless, it provided producers with the political
bargaining power to push for economic liberalization throughout the region. As we will
demonstrate below, American firms were able to use their considerable bargaining expertise in
multilateral institutions to press for acceleration and a deepening of the liberalization process.

The Automobile Industry of India

The history of the automobile industry in India actually began about 4,000 years ago when the first
wheel was used for transportation. In the early 15th century, the Portuguese arrived in China and
the interaction of the two cultures led to a variety of new technologies, including the creation of a
wheel that turned under its own power. By the 1600s, small steam-powered engine models were
developed, but it was another century before a full-sized engine-powered automobile was created.
The dream carriage that moved on its own was realized only in the 18th century when the first car
rolled on the streets. Steam, petroleum gas, electricity and petrol started to be used in these cars.
The automobile, as it progressed, was a product of many hands, of revolutionary concepts, and of
simple, almost unnoticed upgrading. India's transport network is developing at a fast pace and the
automobile industry is growing too. The automobile industry also provides employment to a large
section of the population. Thus, the role of the automobile industry cannot be overlooked in the
Indian Economy. All kinds of vehicles are produced by the automobile industry. It includes the
manufacture of trucks, buses, passenger cars, defense vehicles, two-wheelers, etc. The industry
can be broadly divided into the car manufacturing, two-wheeler manufacturing and heavy vehicle-
manufacturing units. The major car manufacturers in India are Hindustan Motors, Maruti Udyog,
Fiat India Private Ltd., Ford India Ltd., General Motors India Pvt. Ltd., Honda Siel Cars India Ltd.,
Hyundai Motors India Ltd., Skoda India Private Ltd., Toyota Kirloskar Motor Ltd., to name just a
few.

Automobile Industry in India has witnessed a tremendous growth in recent years and is all set to
carry on the momentum in the foreseeable future. Indian automobile industry has come a long way
since the first car ran on the streets of Bombay in 1898. Today, the automobile sector in India is
one of the key sectors of the economy in terms of the employment. Directly and indirectly it

17
employs more than 10 million people and if we add the number of people employed in the auto-
component and auto ancillary industry then the number goes even higher. The automobile industry
comprises of heavy vehicles (trucks, buses, tempos, tractors); passenger cars; and two-wheelers.
The heavy vehicles section is dominated by Tata-Telco, Ashok Leyland, Eicher Motors, Mahindra
and Mahindra, and Bajaj. The major car manufacturers in India are Hindustan Motors, Maruti
Udyog, Fiat India Private Ltd., Ford India Ltd., General Motors India Pvt. Ltd., Honda Siel Cars
India Ltd., Hyundai Motors India Ltd., and Skoda India Private Ltd., Toyota Motors, Tata Motors
etc. The dominant players in the two-wheeler sector are Hero Honda, Bajaj, TVS, Honda
Motorcycle & Scooter India (Pvt.) Ltd., Yamaha etc. In the initial years after independence Indian
automobile industry was plagued by unfavourable government policies. All it had to offer in the
passenger car segment was a 1940s Morris model called the Ambassador and a 1960s Suzuki-
derived model called the Maruti 800. The automobile sector in India underwent a metamorphosis
as a result of the liberalization policies initiated in the 1991. Measures such as relaxation of foreign
exchange and equity regulations, reduction of tariffs on imports, and refining the banking policies
played a vital role in turning around the Indian automobile industry. Until the mid-1990s, the
Indian auto sector consisted of just a handful of local companies. However, after the sector opened
to foreign direct investment in 1996, global majors moved in. Automobile industry in India also
received an unintended boost from stringent government auto emission regulations over the past
few years. This ensured that vehicles produced in India conformed to the standards of the
developed world. Indian automobile industry has matured in the last few years and offers
differentiated products for different segments of the society. It is currently making inroads into the
rural middle-class market after its inroads into the urban markets and rural rich. In recent years the
Indian automobile sector has witnessed a slew of investments. India is on every major global
automobile player's radar. Indian automobile industry is also fast becoming an outsourcing hub for
automobile companies worldwide, as indicated by the zooming automobile exports from the
country. Today, Hyundai, Honda, Toyota, GM, Ford and Mitsubishi have set up their
manufacturing bases in India. Due to rapid economic growth and higher disposable income it is
believed that the success story of the Indian automobile industry is not going to end soon.

18
Automobile Market in India

Over the last few decades, the car market in India has been in a burgeoning stage with all types of
cars flooding the market in order to meet the demands of Indian customers who are increasingly
exposed to state-of-the-world automobiles and want the best when it comes to purchasing a car. It
is expected that by 2030, the Indian car market will be the 3rd largest car market across the globe.
Small cars seem to be ruling the roost in the Indian automobile market with over 7.5 lakh small
cars being sold in India in 2006-07. The main encouraging factors for the success story of the car
market in India are the increase in the opportunity for new investments, the rise in the GDP rate,
the growing per capita income, massive population, and high ownership capacity. The
liberalization policies followed by the Indian government have been inviting foreign investors and
manufacturers to participate in the car market in India. The recent trend within the new generation
to get work in the software-based sector has led to the rise in the income level and change in the
lifestyle which has further led to the increase in the demand for different varieties of cars among
them. Moreover, there are many financing companies providing easy car loans at reasonable
interest rates and affordable installments. The car Market in India is crowded with all varieties of
car models like the small cars, mid-size cars, luxury cars, super luxury cars, and sports utility
vehicles. Initially the most popular car model dominating the car market in India was the
Ambassador, which however today gave way to numerous new models like Maruti, Fiat, Hyundai,
BMW, and many others. Moreover, there are many other models of cars in the pipeline to be
launched in the car market in India. Some of the leading brands dominating the car market in India
at present are Hindustan Motors, Reva Electric Car Co., Fiat India Private Ltd., Daimler Chrysler
India Private Ltd, Ford India Ltd., Honda Siel Cars India Ltd., General Motors India, Hyundai
Motors India Ltd., Skoda Auto India Private Ltd., and Toyota Kirloskar Motor Ltd. Since the
demand for foreign cars are increasing with time, big brands like Mercedes Benz, Aston Martin,
Ferrari, and Rolls-Royce have long since made a foray into the Indian car market.

19
In India, the process of economic reforms started in 1983, which was followed by fierce
liberalization in 1991. The Indian market was opened up for foreign firms and Indian organizations
were allowed to compete in the overseas markets with local and multinational organizations. In
the wake of globalization of trade, commerce and industry, and liberalization of economies of the
various countries of the world, it has become mandatory for all the players to have a sound
technology base, without which accomplishing operational and strategic goals would become not
only uneconomical but almost impossible. The increasingly demanding global business
environment calls for a separate management function which looks after corporate interests on the
technology front. Many strategic alliances came into existence across a variety of industries to
make Indian firms compete not only in domestic but also in international market.

The Investment Information and Credit Rating Agency of India (ICRA, 2003) studies the
competitiveness of the Indian auto industry, by global comparisons of macro environment, policies
and cost structure. This has a detailed account on the evolution of the global auto industry. The
United States was the first major player from 1900 to 1960, after which Japan took its place as the
cost-efficient leader. Cost efficiency being the only real means in as mature an industry as
automobiles to retain or improve market share, global auto manufacturers have been sourcing from
the developing countries. India and China have emerged as favorite destinations for the first-tier
OEMs since late 1980s.There are only a few dominant Indian OEMs, while the number of OEMs
is very large in China (122 car manufacturers and 120 motorcycle manufacturers).

According to this study, the major advantage of the Indian economy is educated and skilled
workforce with knowledge of English. Disadvantages include poor infrastructure, complicated tax
structure, inflexible labour laws, inter-state policy differences and inconsistencies. The drivers of
Chinese economic growth are FDI, labour productivity growth, which was 1.5 times higher than
that in India in the last decade, and domestic demand. Fiscal pressure is mounting on the Chinese
government, while India is in a better state. Based on comparisons of cost composition to pinpoint
the areas in which the Indian auto industry is at a disadvantage, this study recommends a VAT
regime, speedy procedures, imports duty cuts on raw materials, common testing and design
facility, labour reforms, upgradation of design and engineering capabilities and brand building.

ICRA (2004a) analyses the implications of the India-ASEAN5 Free Trade Agreements for the
Indian automotive industry. ASEAN economies are globally more integrated than India. The
20
current size of Indian and ASEAN market for automobiles is more or less the same but the Indian
market has a larger growth potential than the ASEAN market due to the low level of penetration.
The labor cost is low in India but the stringent labour regulations erode this advantage. The level
of infrastructure is better in India than Indonesia and the Philippines but worse than that in other
ASEAN countries. The financial and banking sector is better in India than in the ASEAN countries.

The study notes that there is a huge excess capacity in ASEAN countries, in comparison with that
in India, which will help them to tackle the excess demand that may arise in future. The study finds
a 20-30 per cent cost disadvantage for Indian companies on account of taxation and infrastructure
and 5-20 per cent labour cost advantage over comparable ASEAN-member-based companies.
Similar findings are noted in a study by the Automotive Component Manufacturers Association of
India (ACMA, 2004), particularly in comparison with Thailand.

ICRA (2004b) analyses the impact of Preferential Trade Agreement (PTA) with MERCOSUR6
on the automobile sector in India. This study finds a significant threat of imports in sub-compact
and compact cars and certain auto-components. There is huge excess capacity and intense
competition in MERCOSUR countries, propelling them to look for export opportunities. This is
true especially of Brazil, which has a well-developed auto-component sector with huge economies
of scale. Further, weak currency in all MERCOSUR countries provides a natural tariff barrier. In
addition, MERCOSUR countries have an equitable arrangement within themselves to have a
balanced trade, with fair level of exports and imports. The Indian auto industry could gain from
this PTA with MERCOSUR only if it is assured of the balanced trade, as MERCOSUR countries
practice among them.

ICRA (2005) studies the possible impact of FTA with South Africa on the Indian automobile
industry. The study finds that there are a few policies in South Africa that indirectly subsidies the
auto industry, unlike India, in terms of financial grants. Hence it is suggested that India could
minimize losses only if it goes for inclusion of certain auto components, which involve huge
logistic costs of imports, creating a natural protection (for example, stampings, glass, seats, plastics
and tyres) and those in which India enjoys economies of scale and is cost-competitive (e.g. castings
and forgings) in this FTA. If South Africa is ready to discontinue the schemes such as Motor
Industry Development Programme (MIDP), India could include all automotive components in this
FTA. There should be a minimum local content of 60 per cent and the agreement should not be

21
trade balancing as India will not gain much in that case.

22
 COMPANY PROFILE

Cars are what Maruti Suzuki builds. Experiences are what it creates.

Experiences fueled by innovations, forward thinking, and a commitment to bring the very best to
Indian roads. From the day the iconic Maruti 800 was launched in 1983, the company has been
spearheading a revolution of change. Turning an entire country’s need for driving, into its love
for driving.
However, tastes and demands keep on evolving with each new generation of Indians. This has
not been looked at by Maruti Suzuki as a challenge, but as an inspiration to go beyond traditional
boundaries of car-making. Infusing design and technology is one such step it has taken to make
its cars meet new age expectations smoothly.
Today, Maruti Suzuki has its eyes set firmly on the possibilities of tomorrow. And everybody is
invited on this journey.

OUR VALUES

RESPONSIBLE

You can always rely on us and our network.

DYNAMISM

Always evolving with your needs

OPEN

All our actions are open and transparent.

23
 EFFICIENT

Expertise that ensures utmost efficiency.

RELIABLE

Your safety is our number one priority.

LEADERSHIP

MR. R. C. BHARGAVA MR. KENICHI AYUKAWA

Chairman Managing Director & CEO

24
 MR. OSAMU SUZUKI MR. KAZUNARI YAMAGUCHI

Director Director (Production)

MR. R.P. SINGH MS. RENU SUD KARNAD

Independent Director Independent Director

WIDEST NETWORK

Wherever you need us, just look around. We’ll be right there.

25
No matter where you go in India, you are never too far from a Maruti Suzuki Dealer or a Maruti
Suzuki Service Station. By taking care of over 46,000 cars a day and with an unbeatable first-
time right score, Maruti Suzuki has built a reputation of being one of the best automobile service
networks in the country.

▪ 3602 Service Workshops

▪ 3473 Sales Outlets

▪ 1773 Cities Covered by Service Network

Maruti Suzuki Service has been No.1 in the J D Power Customer Satisfaction Award for 16 years
in a row

History of Maruti

Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an automobile
manufacturer in India. It is a subsidiary of Japanese automobile and motorcycle manufacturer

Suzuki. As of November 2012, it had a market share of 37% of the Indian passenger car markets.
Alto, Ritz, Celerio, Swift, WagonR, Zen, Ciaz, Kizashi, SX4, Eeco, Omni, Ertiga, SCross, D-Zire.

The company's headquarters are at No 1, Nelson Mandela Road, New Delhi. In February 2012,
the company sold its ten millionth vehicle in India.

Maruti Udyog Limited was established in February 1981, though the actual production
commenced only in 1983. It started with Maruti 800, based on the Suzuki Alto key car which at
the time was the only modern car available in India. Its only competitors were Hindustan

Ambassador and Premier Padmini. Originally, 74% of the company was owned by the Indian
government, and 26% by Suzuki of Japan. As of May 2007, the government of India sold its
complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.
26
Chronology Beginnings

Maruti's history begins in 1970, when a private limited company named 'Maruti technical services
private limited' (MTSPL) was launched on November 16, 1970. The stated purpose of this
company was to provide technical know-how for the design, manufacture and assembly of "a
wholly indigenous motor car". In June 1971, a company called 'Maruti limited' was incorporated
under the Companies Act and Sanjay Gandhi became its first managing director. "Maruti Limited"
went into liquidation in 1977. On 23 June 1980 Sanjay Gandhi died when a private test plane he
was flying crashed. A year after his death, and at the behest of Indira Gandhi, the Indian Central
government salvaged Maruti Limited and started looking for an active collaborator for a new
company. Maruti Udyog Ltd was incorporated in the same year through the efforts of Dr. V.
Krishnamurthy.

Suzuki Enters

In 1982, a license & Joint Venture Agreement (JVA) was signed between Maruti Udyog Ltd. and
Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In India's closed market,
Maruti received the right to import 40,000 fully built-up Suzuki in the first two years, and even
after that the early goal was to use only 33% indigenous parts. This upset the local manufacturers
considerably. There were also some concerns that the Indian market was too small to absorb the
comparatively large production planned by Maruti Suzuki, with the government even considering

adjusting the petrol tax and lowering the excise duty in order to boost sales. Finally, in 1983, the

Maruti 800 is released. This 796-cc hatchback is based on the SS80

Suzuki Alto and is India’s first affordable car. Initial product plan is 40% saloons, and 60%

Maruti Van. Local production commences in December 1983.In 1984, the Maruti Van with the
same three-cylinder engine as the 800 was released and the installed capacity of the plant in
Gurgaon reached 40,000 units.

In 1985, the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, was launched. In 1986,
the original 800 was replaced by an all-new model of the 796-cc hatch back Suzuki

27
Alto and the 100,000th vehicle was produced by the company. In 1987, the company's started
exporting to the West, when a lot of 500 cars were sent to Hungary. By 1988, the capacity of the
Gurgaon plant was increased to 100,000 units per annum.

Manufacturing facilities

Maruti Suzuki has two manufacturing facilities in India. Both manufacturing facilities have a
combined production capacity of 14, 50,000 vehicles annually. The Gurgaon manufacturing
facility has three fully integrated manufacturing plants and is spread over 300 acres

(1.2 km2). The Gurgaon facilities also manufacture 240,000 K- Series engines annually.

The Gurgaon Facilities manufactures the 800, Alto, WagonR, Estilo, Omni, Gypsy, Ertiga,

Ritz, and Eeco. The Manesar manufacturing plant was inaugurated in February 2007 and is
spread over 600 acres (2.4 km2). Initially it had a production capacity of 100,000 vehicles annually
but this was increased to 300,000 vehicles annually in October 2008. The production capacity was
further increased by 250,000 vehicles taking total production capacity to 800,000 vehicles
annually.

The Manesar Plant produces the A-star, Swift, Swift DZire, SX4, Ritz and Celerio. On 25 June
2012, Haryana State Industries and Infrastructure Development Corporation demanded Maruti
Suzuki to pay an additional Rs 235 corer for enhanced land acquisition for its Haryana plant
expansion.

28
Products and services
Current models

29
30
31
Sales and service network

As of 31 March 2014 Maruti, Suzuki has 933 dealerships across 666 towns and cities in all states
and union territories of India. It has 3,060 service stations (inclusive of dealer workshops and
Maruti Authorized Service Stations) in 1,454 towns and cities throughout India. It has 30 Express
Service Stations on 30 National Highways across 1,436 cities in India.

Service is a major revenue generator of the company. Most of the service stations are managed on
franchise basis, where Maruti Suzuki trains the local staff. Other automobile companies have not
been able to match this benchmark set by Maruti Suzuki. The Express Service stations help many
stranded vehicles on the highways by sending across their repair man to the vehicle.

In the year 2015 Maruti Suzuki launched a new premium sales channel called NEXA. Maruti

Suzuki India Limited’s Managing Director & CEO, Kenichi Ayukawa said: “NEXA provides a
new experience of hospitality from Maruti Suzuki. Indian market and Indian society are rapidly
changing and new segments of customers are emerging. We have to take new initiatives to meet
diversifying expectations from our customers”.

He added: “The mission of NEXA is to offer innovative value and direction so that we can
adequately respond to the new segments of Indian customers and offer them the experience which
they value. While we will of course continue to enhance customer satisfaction in our current
network, with NEXA, I am confident Maruti Suzuki will be able to cater to a broader range of
customers who value pampering, innovation and a personal touch in their car owning experience”.

S-Cross, India’s first premium crossover that debuts in August 2015 will be the first car to be sold
under NEXA. Several new models will be added to both channels as part of the Company’s
medium-term goal of 2 million annual sales by 2020.

Awards and recognition

The Brand Trust Report published by Trust Research Advisory, a brand analytics company, has
ranked Maruti Suzuki in the thirty seventh position in 2013 and eleventh position in 2014 among

32
the most trusted brands of India.

Blue bytes News, a news research agency, rated Maruti Suzuki as India's Most Reputed Car
Company in their Reputation Benchmark Study conducted for the Auto (Cars) Sector which
launched in April 2015

SWOT Analysis

1. Maruti is the largest passenger car company in India, accounting

Strength
for around 45% market share
2. Over 6,000 people are employed with Maruti

3. Good advertising, product portfolio, self-competing brands

4. Largest distribution network of dealers and after sales service centers

5. Strong brand value and strong presence in the second hand car market

6. Having different revenue streams like Maruti finance, Maruti Insurance

7. Over 700,000 units sold in India annually including 50,000 exports

Weakness 1. Inability to penetrate into the international

market

2. Employee management, strikes, worker wage

problems
1. Developing hybrid cars and fuel-efficient cars for thefuture
Opportunity 2. Tapping emerging markets across the world and building a global
brand
3. Fast growing automobile market and increased purchasing power

33
 1. Government policies for the automobile sector across the world
Threats
2. Ever increasing fuel prices

3. Intense competition from global automobile brands and cheaper

brands

4. Substitute modes of public transport like buses, metro trains etc.

Maruti Suzuki on raising the Indian supply chain

Sudam Maitra has worked to develop the Indian supply base for
much of his career. Maruti Suzuki and its top supply chain
executive are spreading expertise and efficiency across the sub-tier
chain Competition can do wonders for a business. When rivals
outdo a company, it is often forced to explore possibilities that
were previously unknown to it. This is something Sudam Maitra,
senior managing executive officer for supply chain at Maruti
Suzuki, realised early in a purchasing career that has spanned three
decades.

Had there been no competition, the soft spoken, meticulous

mechanical engineer would have possibly moved slowly on
creating new paradigms in procurement and supply chain at India’s largest carmaker. Instead, he
has been at the centre of a transformation that has not only allowed Maruti to prosper by working
with efficient, reliable material suppliers and logistics providers, but his work has also contributed
to the development of the entire country’s automotive supply base.

From monopoly to competitive supply chains

34
Until Suzuki entered India in the early 1980s – then in partnership with the Indian government as
Maruti Udyog – the motor industry’s supply base in India was extremely limited, serving only
Hindustan Motors and Premier Automobiles. Maitra recalls how the carmaker had to learn many
lessons to arrive at the generally well-functioning, lean and thriving supply chain we find today in
India.

During its first decade, Maruti faced limited competition and hence paid less attention to the vendor
base it had created to cater to its needs, or to rising costs. “Vendors used to come to us at the end
of the year and seek price hikes for their supplies, citing increases in input cost,” Maitra says. “We
invariably bowed to their demands because we enjoyed a monopoly situation and managed to hike.

That situation changed dramatically once competition increased and more carmakers entered the
market. Quality products had to hit the dealers at prices lower than those of the competition, and

achieving this cost began in purchasing, says Maitra. Maruti switched its procurement approach to
‘target costing’.

“It is sort of a reverse calculation,” says Maitra. “Once we arrived at the vehicle’s market price,
we fixed material costs. Vendors were shocked initially. We told them, ‘enough of this upward
price revision every year. Now you need to look at downward price revision every year’.”

While early in its history Maruti Suzuki could operate as a monopoly, its purchasing focus has
shifted strongly towards collaboration with suppliers

35
Suppliers met this change with stiff resistance, including walkouts. Sensing the challenge, Maruti
Suzuki’s executives eventually realised that to achieve deep cost reduction year on year, the
company would need to work together more with suppliers. “Unless this is carried out, we cannot
bargain with them to reduce the cost when their final product is ready for delivery,” Maitra says.
“It was then that we in purchasing truly realised that it is a chain. So, we also changed the name
from ‘purchasing and vendor development’ to ‘supply chain’.”
Global expertise for global products

This shift would become even more important as Maruti Suzuki built more global vehicles, the
production and launch of which coincided with those in other markets. Supply chain complexity
and coordination became even more complex. “Before 2005, [managers] would go to Japan where
all Suzuki models would be lined up and they would identify one or two models that may suit
Indian conditions and then bring them here,” he says. “Since Suzuki had taken a majority control
in Maruti Suzuki around that time, it was decided that henceforth all launches from its stable would
be global ones. For instance, Swift was launched simultaneously in Japan, Hungary, China and
India.”

That shift has had huge implications for the supply chain. “Earlier, we used to bring designs from
Japan and pass them on to vendors to copycat them,” Maitra explains. “Since 2005, things have
changed due to this simultaneous global launch phenomena. Here, the challenge was to ensure
Indian suppliers’ input on design should also be incorporated in the final design. This led to the
concept of ‘concurrent engineering’. In a way, we were moving towards collaborative modules
with our suppliers, which again was a paradigm change. Many vendors were unable to rise up to
that level.”

It was around this time that supplier development started to become even more important for the
supply chain team at Maruti, both in establishing global suppliers in India, as well as nurturing
smaller, local suppliers.

Generally, Maruti Suzuki defines three categories of suppliers: fully owned, global suppliers (such
as Visteon and Delphi, as well as logistics providers like NYK/Yusen); the second is large Indian
companies that went in for joint ventures with foreign companies (such as Sona Koyo, Krishna
Maruti, etc.); the third lot is small Indian suppliers, such as for sheet metal or plastic components,
that operate with no foreign equity or technological collaboration.
36
When Maruti switched to global launches, it was the third category that was largely unable to
participate in the ‘concurrent engineering’ route, according to Maitra. He says that they were good
at reading drawings and manufacturing them, but many lacked design skills.

To remedy this situation, Maruti set up a separate division within Maitra’s supply chain wing to
identify foreign technology firms and match them with Indian suppliers. Maruti advised the third
category of suppliers to get into tool design with these companies, which is generally considered
easier than product design. This matchmaking exercise began in 2006 and has so far led to 18
collaborations.

Maitra encouraged Indian suppliers to develop partnerships with global suppliers to help
improve their design and engineering capabilities

Not all of them have lasted. Some foreign partners, having tasted the Indian automotive market
through collaboration with local companies, wanted to then set up wholly owned subsidiaries.
“There is some amount of heartburn from the Indian companies but the positive factor is that
they have already imbibed or learned design capabilities,” says Maitra.

Today, the supply base in India has blossomed. Maitra works with more than 400 vendors,
including global, Indian and joint venture suppliers. He says that such a variety of choice is
important because of uncertainties in logistics, labour and infrastructure in India. For example,
Maruti Suzuki will often have three suppliers for some parts. “We just cannot afford to depend
on one or two,” he says. “In India you are not sure of many things: work stoppages at factories,
highway and transportation challenges or port challenges, for example. The availability or access
37
to more suppliers is a blessing.”
Maitra and his team remain highly focused on supplier development today, including helping
vendors to improve lean manufacturing and just-in-time logistics. “Our aim is to help them to
achieve manufacturing at absolutely minimum cost. Productivity at its highest and the best
quality.”

Suppliers are grouped into clusters and taught ‘pull’ and ‘just-in-time’ manufacturing in
classrooms for a fortnight. Following this, projects at vendor locations are taken up for
identifying where there is maximum pain: high inventory, low productivity and high manpower,
for example. Maruti experts then work with suppliers for six months to help them improve
further.
The company has even set up a special unit to work closely with suppliers. The Maruti Centre for
Excellence (MACE) is made up of a group of engineers that focus on supplier quality, including
periodic audits and consulting on project implementation.

The path to localization:

Maitra’s mantra for purchasing is simple: localise and keep the cost as low as possible. Do anything
and everything legally possible to achieve that goal. As well as dealing directly with suppliers,
Maitra has also done hedging in foreign currency for Maruti, as well as for commodities such as
copper, aluminium, platinum and palladium – a first in the Indian automotive industry.

Localisation of suppliers and components has been an important part of Maruti Suzuki’s supply
chain development over the past decade or more, not least to avoid exposure to currency shifts and
higher logistics costs. This process started with a redefinition of what ‘local’ meant. In the past,
the carmaker followed criteria for supplier localisation from India’s Directorate General of Trade
and Development (DGTD). These rules state that if a part is invoiced on Indian soil, it is considered
‘local’, even if most production happened abroad and the product was sequenced and packaged in
an Indian warehouse. This was the case with much of Maruti Suzuki’s own production, as well as
those of the suppliers that came over from Japan and other locations.

38
 The result was a distorted picture for localisation of the Indian supply base. According to the
DGTD definition, Maruti Suzuki already had a localisation rate of 99% in 1996. However, the
invoicing loophole could not hide risks from foreign currency exposure and other supply chain
costs, which were taking their toll on the carmaker’s global procurement bill.

“Our understanding was that if there were any foreign exchange variations, Maruti Suzuki would
compensate for them,” says Maitra. “But as the Japanese yen got stronger, leading to higher
outgoings for imports, it caused a big dent in our profitability.”

Maruti has since changed its definition for local suppliers. “Even if a ‘child’ part comes from
overseas, it will not be considered as ‘local’. As per our present definition, localization is around 80-
85%.”

Trying a pint or two of milkruns

Maruti Suzuki has started to experiment with milkruns near some of its plants

Maruti Suzuki spends about 2.5% of net sales on inbound logistics, as it relies mainly on vendor-
managed inventory. Maitra admits that milkrun processes had previously been indigestible for
him. However, the company has moved more towards using 3PLs to manage parts of inbound
logistics. “Toyota has gone in for the total 3PL route. We decided to get into these modern concepts
too,” he says. “But our experience has been that when the vendor manages his supply, the cost is
lowest when compared to the 3PL route.”

The carmaker has experimented with milkruns from Faridabad, close to Gurgaon, with Ceva.
39
Maitra says all suppliers can track supplier movement on a handset. Now he is deliberating whether
to introduce milkruns at other locations, including Bawal, Rohtak and Manesar.

Components used to be considered local if they were invoiced in India, but today Maruti looks
more carefully at suppliers’ production origins

For operations and design, Maitra and his team have also targeted reductions in weight. “We have
a strategy called 1-1-1 on the raw material side, which is the brainchild of our chairman, Osamu
Suzuki,” he says. “The goal is to reduce the weight of every component by one gram. Costing is
based on weight, so every single gram of weight reduction is a positive.” According to Maitra this
has led to Rs120m ($1.9m) in savings each year.

Partnering with suppliers

A relentless focus on cost masks Maitra’s commitment to partnership in the supply chain. While
he wants to keep costs low, he is not looking to beat up on suppliers. “If we keep squeezing
suppliers in protecting our interest only, then in the long run we cannot sustain,” he says.
Maitra has implemented measures designed to help suppliers. Recently, India’s central bank gave
Maruti permission to hedge currency on behalf of Indian suppliers. The carmaker also buys raw
material for suppliers in bulk to help companies get a better price; it arranges low-cost funding for
suppliers. For a small fee, payments are also fast-tracked, with just a nine-day cycle from the date
of invoice submission.
40
Maitra admits that suppliers unable to meet cost targets will struggle. However, he recognizes that
it cannot be all pain and no gain. Maruti has introduced shared savings programmes with suppliers,
called ‘value analysis value engineering’. “If suppliers are going for localization of child parts
instead of importing, for example, we will share the savings,” says Maitra.

Maitra is proud of Maruti’s vendor relationships, something his tier suppliers have backed up.
Anand Swaroop, president and group chief financial officer of Indian tier supplier JBM Group
Limited, which has a joint venture with Maruti Suzuki, says that “it is not a buyer-seller
relationship, but a partnership”.

"These guys are different" – Anand Swaroop, JBM Group

JBM Group is an Indian tier supplier that has seen turnover rise to Rs1,200 crore ($192m),
including a large joint venture with Maruti Suzuki. Anand Swaroop, president and group CFO,
has been with the company from the beginning.

"Maruti Suzuki is a vendor-friendly company. Ours is not a saas-bahu [mother-in-law and

daughter in-law] relationship. They work with vendors and don’t thrust and impose their dictats.
They treat you like partners and bring you up. They are there at every single step giving you
support in terms of quality, production facility and logistics. Without this relationship, we would
have remained just a supplier of seat components. Today we are a systems supplier.

Localisation is the focus. It is not just a cost reduction approach, but an excellent learning
opportunity. Waste reduction is achieved through joint efforts and benefits realised thanks to a
transparent and collaborative relationship. Regular meetings at every level – right from CEOs to
the shop floor level – give you confidence and better future prospects.

41
Maruti is working with clusters of tier one and two suppliers to improve their production and
delivery quality

Maruti Suzuki’s vendor upgradation programme, scripted by MACE, is a wonderful experience.

Normally, you don’t find OEMs willing to deal with tier two vendors. These guys are different.
Today, based on MACE training, we are able to service other auto OEMs as well. However,
although we have no restrictive clauses, JBM caters almost 90% of its capacity to meet Maruti
Suzuki’s needs. We have even set up separate companies for other OEMs to focus our resources
on Maruti.

We no longer talk of ‘rejections’ at JBM. Terms such as lean manufacturing, supply chain and
zero defect are very common and familiar to us. At one point, we had 2,000 PPM. Today, it is 5-
10 PPM. We are trying to replicate what we have learned with our 40-odd vendors via clusters.
We can claim that we noticed a 60% improvement in the performance of our vendors after MACE
conducted training and upgradation of skills.

42
 THEORETICAL FRAMEWORK

The supply chain management has become an instrument for companies to compete effectively in
today’s challenging business environment. In today’s environment, there is a growing demand of
consumers, shrinking product life cycle, high buying power and competitiveness, eroding profit
margins. Therefore, it is not sufficient for a manufacturer to merely produce high quality products
and ward off the competition. Now they are forced to compete on the basis of the company's supply
chain strategies. According to Denolf et al. (2015), the success of an enterprise depends on how
well it cooperates and integrates with other businesses, as organization are no longer competing
on company versus company form, but on supply chain versus supply chain form.

SCM is an important management practice for determining world-class performance. It has been
recognized by many organizations as a strategy to attain business goals (Altekar, 2005; Chan &
Lee, 2005). “It is not the strongest who survive, nor the most intelligent— but those most
responsive to change” (Solkhe et al., 2015). SCM refers to the processes which aims for flow of
materials and information in the most effective and efficient manner between a company and its
immediate suppliers. Since its introduction in retailing, the supply chain concept has spread to
other industries including automotives, chemicals and electronics. For most companies, it is now
understandable that the supply chain that best manages the flows of both information and materials
can differentiate itself from its competitors. Thus, the competitive performance of the
manufacturing companies can be enhanced through SCM by effectively linking the internal
functions of a company with the external operations of suppliers and supply chain members.
Companies try to minimize risk related to supply chain during new product development as any
kind of anomaly developed can lead to considerable delay in product launch that can have with
severe implications on the financial front (Chaudhuri, Mohanty, & Singh, 2012). The challenge is
to determine how to successfully accomplish this integration.

According to Mohanty and Deshmukh (2005), key trends in supply chain management are
developing of long-term relationships based on mutual confidence; improving service level
through outsourcing; enhancing flexibility and reducing cost through third-party logistics. The

43
integration across organizational boundaries (Rajaguru & Matanda, 2009; Zhou et al., 2007) can
be through partnerships (Lee & Lim, 2005; McLaren et al., 2004; Mohanty & Deshmukh, 2004)
through information sharing (Yu et al., 2001; Zhou et al., 2007),through collaboration (Bagchi et
al., 2005)and with cooperation (Hsu et al., 2009). Therefore, the extent to which companies
undertake integration is affected by partner trust, interdependence, and commitment (Lee & Lim,
2005).

INFORMATION SHARING IN SCM

Information sharing plays a key role for any kind of SCM system (Moberg et al., 2002). The crucial
aspect to the performance of supply chain is the information flow. It must flow internally among
the various departments such as purchasing, manufacturing, marketing, finance, logistics etc., as
well as between the firm and its vendors, transporters, warehouses and customers. Thus timely and
accurate information availability is essential for effective SCM. SCM enables supply chain
partners to work in an environment of close coordination that helps to facilitate supplier – customer
interactions and minimizes the transaction cost through information sharing (Tarn et al., 2002). To
facilitate sharing of higher levels of information a good partner relationship must be established
build on trust (Sahay, 2003). The operational efficiency increases when information is readily
available to the trading partners (Gaur et al., 2005). Collaboration can provide the competitive
edge (Sahay, 2003) that enables all business partners of a supply chain to succeed and grow. To
enhance supply chain visibility and to improve the coordination between buyers and suppliers the
collaborative systems are increasingly being used by the firms (Grover, 2007).

Information is the basis upon which to make decisions regarding the four supply chain drivers
namely production, inventory, location and transportation. Information is the main component of
supply chain management that allows other supply chain drivers to work together with the goal of
creating an integrated, coordinated supply chain. Organizations use these drivers to support either
a supply chain strategy focusing on ‘efficiency’ or a supply chain strategy focusing on
‘effectiveness’. The efficiency and effectiveness of the supply chain can be improved by quickly
sharing the available data with the supply chain partners and responding to the changing needs of

44
the customer. Therefore, information sharing will bring the organization competitive advantage in
the long run (Li & Lin, 2006).

Information sharing provides tremendous benefits to all the supply chain members. It improves
coordination between supply chain processes to enable the material flow and reduces inventory
costs (Li & Lin, 2006). Sharing of information among members of supply chain can aid in reducing
different kinds of uncertainties that may be related to demand, product and technology (Khurana
et al., 2011). It also improves coordination and leads to high levels of supply chain integration.
Further, information sharing influences the supply chain performance in terms of both total cost
and service level. Thus, the core idea of SCM integration lies in ‘information integration’.

Another important aspect apart from information sharing is the quality of information that is being
shared among the supply chain partners. It has been observed that there is a built-in reluctance
within organizations to give away more than minimal information since it is perceived that
information disclosure may lead to loss of power and companies fear that information may lead to
potential rivals (Li & Lin, 2006).

To facilitate higher levels of sharing information and quality of information, a good partner
relationship must be established build on trust, loyalty, and shared vision. Thus, partner
relationship plays an important role in implementing SCM practice and improving SCM
performance (Li & Lin, 2006).

INFORMATION TECHNOLOGY IN SCM

The advancement of information technology (IT) has increased the ease of information flow and
has provided many alternatives to share and integrate information (Khurana et al., 2011). Many
business functions have been transformed due to the emergence of the Internet throughout the
world around 1995 (Mahajan & Mehta, 2012).IT has transformed the supply chain, increasing
information sharing within organizations and between organizations with inter-organizational
systems (Li & Lin, 2006). IT, by providing timely, accurate, and reliable information, has greatly
improved supply chain performance (Li et al., 2009). IT is used in supply chain for competitive
45
advantage (Singla, 2000).

The use of IT can be categorized into the following three groups, 1) transaction processing, 2)
planning and collaboration within supply chain, and 3) order tracking and coordinating delivery
(Auramo, 2005). In SCM, the transaction-processing role of IT is driven by the diminution of

manual work and costs, improving information quality, gearing up of information transfer, and
volume of transactions (Auramo, 2005).

Based on the study of consumer durables by Mohanty and Deshmukh (2004) the benefits of
integrating supply chain are elaborated in table 4.1.

Table 4.1: Benefits of integrating supply chain

Performance in delivery 15% - 30% enhancement

Reduction in Inventory
Completion of cycle time
Accuracy in forecast
Total productivity
Supply chain costs
20% - 50% improvement
30% - 60% improvement
10% - 80% improvement
10% - 25% improvement
25% - 50% improvement

Therefore, in the contemporary world, competitive advantage of an organization depends on the

information sharing and information flow among the supply chain partners with the help of
information technology. With information based on the use of information technologies, the
effectiveness and efficiency of supply chains can be significantly enhanced. Hence, the role of
information technology in supply chain integration, which coordinates and harmonizes all elements
from raw material to finished goods in order to achieve higher levels of overall performance, is
enormous and has gained momentum in the present-day situation.

46
SUPPLY CHAIN MANAGEMENT INFORMATION SYSTEM

Evolution: The growth of ERP can be attributed to the fast development of IT. Prior to 1960s, the
traditional inventory management methods were adopted. The most popular technique of inventory
management was economic order quantity (EOQ). Along with EOQ, various inventory models such
as the fixed order quantity, periodic order method, optional replenishment method, etc., were very
popular. In 1960s, a new technique was adopted popularly known as MRP (Material requirement
planning). It significantly reduces the inventory and lead-time, by improving coordination and
avoiding delays. It proved to be a good technique but was soon taken over by MRP II (Manufacturing

Resource Planning) in 1980s, which integrated financial resources with the manufacturing activities.
Transition from MRP II to ERP happened during 1980-90. Initially ERP systems were developed
which focused on the optimization of the organizations internal processes. Today our focus is on
integration of upstream and downstream partners through Supply Chain Management Information
System (SCMIS). Supply chain management system is a cross-functional, inter-organizational
system, which uses information technology for supporting and managing links within the company
for activities like buying, producing and moving a product. It further integrates supplier,
manufacturer and distributor’s processes to improve manufacturing efficiency and distribution
effectiveness. To ensure a competitive advantage, MNCs frequently need to transfer knowledge to
their subsidiaries (Suyanto & Salim, 2010).

Supply chain management information systems are developed using Internets or Extranets.
Technologically, SCM is based on ERP systems. Table 1.2 explains the difference between ERP and
SCMIS.

Table 1.2: Comparison of SCM and ERP systems (Tarn et al., 2002)

SCM systems ERP systems

Objective Integrating and optimizing internal business Integrating and optimizing
processes of a single organization as well as the internal business processes
interaction of the organization with its business within the boundary of a single
partners across the entire supply chain organization

47
 Focus Optimizing information flow, physical Optimizing information flow
distribution flow, and cash flow over the entire and physical distribution flow
supply chain within a single organization
Function Manufacturing management, inventory Manufacturing management,
management, logistics management, financial management, and
and supply-chain planning human resource management

These systems lower costs, increase information speed, timely information flow and reduce
information errors. It integrates supplier, manufacturer, distributor and customer logistics processes
to improve manufacturing efficiency and distribution effectiveness. SCMIS is an extension of
enterprise resource planning (ERP) as shown in Fig 4.1 which integrates companies beyond the
boundaries of an organization and with the advent of globalization it has further gained more
importance (Gunasekaran, 2004; Marwah et al., 2012).

Figure 1.1: SCMIS as an extension of ERP (Moller, 2005)

SCMIS involves managing and coordinating all activities associated with goods and information
flow from raw material source to product delivery, and finally to the end customers (Wei &
Chen, 2008). It provides high quality, relevant and timely information flow that effectively
supports decision-making for inventory replenishment, capacity activation and for synchronizing
48
 material flows at all tiers within the supply chain. Thereby it plays an increasingly critical role in
the ability of firms to reduce costs, increase responsiveness (Chopra & Miendl, 2005), gain
competitive advantage (Dezdar, 2011) and achieve better coordination.

Benefits of SCMIS (Wang& Sedera, 2011) are enormous as outlined below and that is why
companies are willing to implement these systems, which require huge commitment of funds,
time and expertise (Motwani et al., 2008).

1. Strategic Benefits

a. Improved customer satisfaction

b. Improved business performance

c. Improved partnerships among the supply chain members

d. nformation sharing & transparency

e. Integration of supply chain

f. Improved effectiveness in supply chain

2. Managerial Benefits

a. Better analysis and reporting

b. Better communication

c. Better management of business

49
 d. Better forecasting & planning

e. Better management of assets

f. Better management of inventory

g. Better management of production

3. Operational Benefit

a. Cost reduction

b. Cycle time reduction

c. Improved customer service

d. Improved productivity

e. Staff empowerment

f. Improved data quality

g. Improved system capability

However, the achievement of these above-mentioned benefits depends upon the effective
implementation of the SCM system. Implementing these systems is a complex, lengthy and expensive
process. There is a strong evidence in the literature that implementation of SCMIS projects were either
not completed on time or did not bring about the planned effects (Holland, 1999) and even exceeded
their estimated costs (Davenport, 1998).

50
 DIMENSIONS OF SCMIS

Dimensions are all about different angles or approaches to understand something. The post
implementation review of IS can be done based on various dimensions. For reviewing SCMIS,
dimensions can be grouped as follows:

a) Product-based review

b) Process based evaluation

Product based review: This type of review focuses on the product of the IS. Product success
determines the value that the implemented system provides to the organization when the ultimate
users use it. The product-based review can be divided into two parts: SCMIS features in terms of
reliability, user friendliness etc. and SCMIS support in terms of integration support, decision
support and strategic support.

Process based evaluation: This type of review focuses on the processes, which are followed in
implementing SCMIS. Process success measures the effectiveness of the organization for
implementing SCMIS to the end user. The various sub-processes involved in the SCMIS
implementation include pre-implementation analysis, project management, BPR, change
management, project champion, and so on.

Supply Chain Management is management of material, money, men, and information within
andacross the supply chain to maximize customer satisfaction and to get an edge over competitors.

51
Evolution of SCM:

In the 1950s and 1960s, most manufacturers emphasized mass production to minimize unit
production cost as the primary operations strategy, with little product or process flexibility. In the
1970s, material requirements planning (MRP) was developed and managers realized the impact of
huge WIP inventories on manufacturing cost, quality, product development, and delivery lead-
time. The intense global competition of the 1980s forced world-class organizations to offer low-
cost, high-quality, and reliable products with greater design flexibility.
Manufacturers utilized Just-In-Time (JIT) and other management programs to improve
manufacturing efficiency and cycle time. The evolution of SCM continued into the 1990s as
organizations further extended best practices in managing corporate resources to include strategic
suppliers and the logistics function. Many manufacturers and retailers are embracing the concept
of SCM to improve efficiency and effectiveness across the supply chain. The following table
explain the evolution of supply chain management.
Just in Time Supply chain

52
Recent trend is to strengthen Supply chain Management by improving procurement of raw
materials, manufacturing process, distribution process of finished goods and improving
information flow. The contribution of Mistry (2005) in this field has been taken into accounts.
The author has emphasized compression of lead time, removal of all non-value adding activities,
maintaining low level of inventory and utilizing the entire human resources in optimized way.
Following definition can be cited of JIT supply chain.

“A just-in-time supply Chain Management (JSCM)” manages the supplier, manufacturer and
distributors in philosophy of reducing the inventories, removing the wastes, improving the
quality, speeding up the flow of material and information, building up long term relationships
and after all establishing the cooperative working cultures”.

Forty six attributes and fourteen performance factors of JIT Supply Chain are recognised in the
literature. With the help of experts, five dimensions of attributes and factors of performance of
JIT supply chain are proposed here. The brief discussion of relevant attributes and Performance
factors under suitable dimensions are done below.

Dimensions of JIT supply chain

Supply chain management is integration of procurement, manufacturing and distribution process

to get the seamless flow of material and information. Following five dimensions of JIT supply
chain can be laid down.

1. Procurement process

2. Manufacturing process

3. Distribution Process

4. Information sharing

5. Human involvement

53
 Procurement process

Purchasing of raw material from the vendor by the manufacturer has been termed as procurement
process in this thesis. In JIT Supply chain it is desired that the supply of the raw material by the
supplier/ vendors should be flexible, frequent, certified, as per quality demanded and economical.
(Goyal and Deshmukh 1992; Garg et al.1999; Joe et al. 2012). The following are brief discussion of
attributes under this dimension.

i. Supplier Selection: supplier selection for JIT manufacturer is mandatory. Only those suppliers
are given contract/ order of supply, which are well aware of JIT philosophy and is willing to practice
at his level.Wu and Pheng, (2006) and Joe et.al, (2012) are reporting that to supply the raw material
and other services firms seek the good and responsive vendors who can meet the supply requirement
as and when required. For finding the suitable vendor auditing of his supplying capacity, quality,
prices and timeliness are to be carried out.

ii. Supplier evaluation: Garg et al. (1999) states that each supplier is to be evaluated for his
quality standard, timeliness and preparedness to supply the material at any time. While doing
evaluation, the experts scrutinise vendor’s capacity, history and technological supports too.

iii. Fewer suppliers: Researchers support few suppliers in JIT manufacturing. With few suppliers,
manufacturer is able to control, maintain long term relationship and extends thetechnical supports.

iv. Supplier Training: Once the supplier or vendor is selected the firm gives the technological
support in terms of training. The manufacturer involves supplier to learn how to maintain the
quality and standard of the firm with supply of right material in time. Zhuang (1994); Wu
andPheng, (2006) describe training and support to the suppliers which are to be extended by firm tomeet
the required standard of the supplied material enhances the quality assurance programme.

v. Long term contract: generally long term contract provides better relationship between
supplier and receiver. This would give benefits of cost, quality and timeliness. Expected fare
practices by supplier will depend upon long term practices and well coordination between buyer
and suppliers (Hong and Hayya, 1992).

vi. Mutual trust and cooperation: Seongje et.al. (2008) explains that the firm and supplier must
54
have faith in each other and should share the informative material readily. The mutual trust will
be based upon long term contract between buyer and supplier of the raw materials.

vii. Supplier’s participations: Joe et.al, (2012) suggests that Supplier of the firm must actively
participate in technological development with the firm for the improvement of raw material
supply. This act will improve the product design, requirement of the manufacturer, difficulties
and opportunity in supplying.

viii. Small lot production: Garg, (1999), describes JIT procurement is management’s decision
to maintain a smaller inventory by regularly purchasing goods in smaller lot size. He stresses that
in manufacturing firm there is a continuous requirement of raw material as its input. By small lot
sizing inventory level can be reduced at low levels Pamela, (2012) and Emerson et al.(2009)
reported that the low level inventory at all time in form of raw materials will lower the other
inventories of semi-finished and finished products.

ix. Short lead time: Mistry (2005) have mentioned about the supply of the material at the
shortest possible time to avoid delay in manufacturing process.

x. Flexible supply: Fararhani and Elahipanah (2008) have reported a very urgent requirement to
have flexible supply of raw material in order to meet varying production requirement. The
flexibility is in terms of time and quantity.

xi. Quality at the source: The quality of raw material if good at source itself, the further
processing on it takes lesser time, efforts and investment.

xii. Frequent supply: Emel et al. (2013) suggest that Supply of the material in JIT system is
exactly as per requirement of the production process on daily basis, as carrying the minimum
inventory even tending to zero. This requires frequent shipping of raw material in small lot. In recent years,
researchers have extensively studied small lot sizing as a means of implementing successful JIT purchasing,
with the buyer–supplier coordination. However there is a chance of possible higher delivery costs and loss
of discount rates, because implementation of frequent deliveries in small lots requires firms to reduce the
number of suppliers even to a single supplier(Nassimbeni, 1995).

xiii. Reduced paper work: Paper work is drastically reduced due to use of electronic media. The
buying and forwarding of demand is conveyed through use of internet. E-biding, e-tenderingetc. are
helping in procurement process of raw materials.
55
 xiv. Supplier certification: The supply of raw material is preferably demanded by certified
firms. For example firms seek ISO, ISI, and other quality certificates for better marketing which
give them competitive advantages.

Manufacturing process

Earlier finished goods were stored and were supplied to the market whenever demands were raised.
Iwase and Ohno, (2011); Fredendalland and Hill, (2012) have reported the overall result of JIT
manufacturing extremely appreciable.Kang, et.al. 1994;Christensen, et.al.(2005) indicated the
advantages of JIT in reducing set up time, scraps generation, rework/ reprocess, ideal manpower and
overall inventory. Along with reduction in inventory JIT also worked as catalyst of continuous
improvement programme in manufacturing processes as a regular routine and was termed as Kizen
(Broxand Fader, 1997). The important manufacturing attributes of JSC encountered in Literature
survey are briefly discussed.

i. Produce some product each day: Vokura and Lumuns (2000) have mentioned that some fixed
quantity of the product should be manufactured every day to avoid the inconvenience when some
changes in demand are forwarded from distributors within short notice to the manufacturer. The
minimum quantity of production on every day is also required to ascertain the good functioning of
machinery.

ii. Quick equipment change over: Kumar et al. (2002) suggested that tool changing time is period
during which new set up is prepared for other work. This is very critical because till that time
production and the working force remain stand still. In this period, inventory and other

56
associated investment add no value in supply chain process. For JIT production low tool settingup time
is highly appreciated.

iii. Standard work: The Toyota Production System organizes all jobs around human motion and
creates an efficient production sequence without any "Muda" (waste). Work organized in such a way
is called standardized work. It consists of three elements: Takt-Time, Working Sequence and Standard
In-Process Stock.

iv. Produce to replenishment: Brox and Fader, (2002) suggest that JIT also allow to produce some
product every day to replenish the product kept in shelves, so that old stock may be replenished at
marginal profits even in case the product selling in market has come on halt.

v. Waste elimination: Non-value added activities are termed as waste. It is also called Muda. There
are seven types of Muda: (Overproduction, waiting, conveyance, processing, inventory, motion and
correction). JIT philosophy always supports the nil waste occurring due to any reason.

vi. Visual control: Go and see the problem. It is the belief that practical experience is valued over
theoretical knowledge. Visualization is very important to understand the real problem. JITencourages
the top management and other supervisors to visualise the process for better controland not by mere
remote control.

vii. Pull production system: It refers to the manufacturing and conveyance of only “what is
needed, when it is needed, and in what amount needed.” It is based upon order to build. It was also
felt that production should be demand driven. The practices in turn reduced ideal inventoriesof
finished/ semi-finished goods at all levels of supply chain.

viii. Total productive maintenance: For smooth running of machines, a concept of total productive
maintenance (TPM) is scheduled in the firm. This includes, scheduled preventivemaintenance,
overhauling and time to time machine replacement programs. Operators are actively responsible for
the maintenance of their machines.

ix. Kaizen events: Kaizen means continuous improvement in terms of quality practices, time
compression, innovations and maintenance programme. Kaizen events can be as short as four hours
or as long as five days depending on the improvement opportunity that is being addressed.

57
x. Quality product: Quality of product is what it was expected from it to do. The customer always
expects better quality of a product. If his expectation is met, the product gains the customer value.
However quality practices required technological supports, good infrastructures,clear policies of top
managements, skilled man power and after all good financial supports.

xi. Group Technology (GT): For speedy manufacturing process use of group technology is usedin
which similar processes are done on a group of machines at one place/floor area? Thus, there is ample
saving of time of travel of material from one work bench to another.

xii. Team-Based Problem Solving: In case of problem in processing line, workers are assembled
together and remove the snags in joint efforts. This makes the workers self-dependentand conversant
of all types of snags in the line.

xiii. Point-of-Use Material Storage: It is always advisable to store the working material right tothe
workers approach in order to avoid the walking and bringing the material for processing. Forthis,
provision is done to store the material nearer to the workers coming from store or other work bench.

58
 DATA ANALYSIS AND INTERPRETATION

1. Gender of Respondents
Table no. 1

Gender No. of Respondents Percentage

Male 67 67%
Female 33 33%
Total 100 100%

Chart no. 1

Gender

33%

Male
Female

67%

Interpretation:

From the above table it is clear that 67% of the respondents are male and 33% are females.

59
 2. Age of the respondents

Table no. 2

Age group No. of Respondents Percentage

18-25 years 12 12%
26-35 years 29 29%
36-45 years 36 36%
46 years and above 23 23%

Chart no. 2

Age Group
40

35
36
30
29
25

20 23

15

10 12

0
18-25 years 26-35 years 36-45 years 46 years and above

Age Group

Interpretation:

The above table gives us a description about the age group of the 100 respondents included for the
study and its reveals that 36% of the respondents are of the age group of 36-45 years, 29% are 26-
35 years age group, 23% are 46 years and above and 12% of the respondents are of the age group
of 18-25 years.
60
3.Marital Status of the Respondents

Table no. 3

Marital Status No. of Respondents Percentage

Married 61 61%
Unmarried 39 39%

Chart no. 3

Marital Status

39%
Married
Unmarried
61%

Interpretation:

From the above table it can be seen that 61% of the respondents are married and 39% of the
respondents are unmarried.

61
 4.Family size of the respondents

Table no. 4

Family size No of Respondent Percentage

Nuclear 55 55%
join family 45 45%
Total 100 100%

Chart no. 4

Family size

45% Nuclear

55% Joint Family

Interpretation:

The above table shows that 55% of the respondents are from nuclear family, and 45% of the
respondents are joint family.

62
 5.Monthly Income (in Rs.)

Table no. 5

Monthly Income No. of Respondents Percentage

Less than 20,000 18 18%
20,000 – 30,000 26 26%
30,000 – 40,000 37 37%
More than 40,000 19 19%

Chart no. 5

Monthly Income
40

35 37

30

25
26
20

18 19
15

10

0
Less than 20,000 20,000-30,000 30,000-40,000 More than 40,000

Monthly Income

Interpretation:
From the above table it is clear that 37% of the respondents have a monthly income of 30,000 to
40,000. 26% of the respondents have a monthly income of 20,000 to 30,000. 19% of the
respondents have a monthly income of more than 40,000 and 18% of the respondents have a
monthly income of less than 20,000.

63
 6.Our organisation rely on few dependable suppliers.
Table no. 6

Opinion No. of Respondents Percentage

Strongly disagree 6 6%
Disagree 23 23%
Neither agree nor disagree 31 31%
Agree 29 29%
Strongly agree 11 11%

Chart no.6

Opinion

31
29

23

11

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:

From the above table it is clear that 29% of the respondents agree and 11% strongly agree that the
organisation rely on few dependable suppliers, 31% of the respondents were neutral whereas 23%
of the respondents disagree and 6% strongly disagree.

64
 7.Our organisation consider quality as number one criterion in selecting suppliers.
Table no. 7
Opinion No. of Respondents Percentage
Strongly disagree 8 8%
Disagree 27 27%
Neither agree nor disagree 25 25%
Agree 35 35%
Strongly agree 5 5%
Chart no. 7

Opinion

35

27 25

5
STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE
DISAGREE

Opinion

Interpretation:

From the above table it is clear that 35% of the respondents agree and 5% strongly agree that the
organisation consider quality as number one criterion in selecting suppliers, 25% of the
respondents were neutral whereas 27% of the respondents disagree and 8% strongly disagree.

65
 8. Our organisation strive to establish long term relationship with its suppliers.
Table no. 8

Opinion No. of Respondents Percentage

Strongly disagree 9 9%
Disagree 20 20%
Neither agree nor disagree 25 25%
Agree 43 43%
Strongly agree 3 3%
Chart no. 8

Opinion
43

25

20

9
3

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:

From the above table it is clear that 43% of the respondents agree and 3% strongly agree that the
organisation strive to establish long term relationship with its suppliers, 25% of the respondents
were neutral whereas 20% of the respondents disagree and 9% strongly disagree.

66
9.Our organisation helps its suppliers to improve their product quality.

Table no. 9

Opinion No. of Respondents Percentage

Strongly disagree 5 5%
Disagree 26 26%
Neither agree nor disagree 17 17%
Agree 42 42%
Strongly agree 10 10%

Chart no. 9

Opinion

42

26

17

10
5

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:
From the above table it is clear that 42% of the respondents agree and 10% strongly agree that the
organisation helps its suppliers to improve their product quality, 17% of the respondents were
neutral whereas 26% of the respondents disagree and 5% strongly disagree.

67
 10.Your organisation include its key suppliers in its planning and goal setting activities.

Table no. 10

Opinion No. of Respondents Percentage

Strongly disagree 13 13%
Disagree 44 44%
Neither agree nor disagree 17 17%
Agree 16 16%
Strongly agree 10 10%

Chart no. 10

Opinion

44

17 16
13
10

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:
From the above table it is clear that 16% of the respondents agree and 10% strongly agree that the
organisation include its key suppliers in its planning and goal setting activities, 17% of the
respondents were neutral whereas 44% of the respondents disagree and 13% strongly disagree.

68
11.Your organisation actively involves its key suppliers in new product developmentprocesses.
Table no. 11

Opinion No. of Respondents Percentage

Strongly disagree 4 4%
Disagree 7 7%
Neither agree nor disagree 18 18%
Agree 51 51%
Strongly agree 20 20%

Chart no. 11

Opinion

51

20
18

4 7

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:
From the above table it is clear that only 51% of the respondents agree and 20% strongly agree
that the organisation actively involves its key suppliers in new product development processes,
18% of the respondents were neutral whereas 7% of the respondents disagree and 4% of the
respondents strongly disagree.

69
 12.Our organisation regularly solve problems jointly with its suppliers.
Table no. 12

Opinion No. of Respondents Percentage

Strongly disagree 5 5%
Disagree 30 30%
Neither agree nor disagree 17 17%
Agree 38 38%
Strongly agree 10 10%
Chart no. 12

Opinion
38

30

17

10

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:

From the above table it is clear that 38% of the respondents agree and 10% strongly agree that the
organisation regularly solve problems jointly with its suppliers, 17% of the respondents were
neutral whereas 30% of the respondents disagree and 5% strongly disagree.

70
 13The company is committed to provide quality service to all its customers.
Table no. 13

Opinion No. of Respondents Percentage

Strongly disagree 5 5%
Disagree 9 9%
Neither agree nor disagree 17 17%
Agree 44 44%
Strongly agree 25 25%

Chart no. 13

Opinion

44

25

17

9
5

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:

From the above table it is clear that 44% of the respondents agree and 25% strongly agree that the
company is committed to provide quality service to all its customers, 17% of the respondents were
neutral whereas 9% of the respondents disagree and 5% strongly disagree.

71
 14.Maruti Suzuki has a good technical support team.
Table no. 14

Opinion No. of Respondents Percentage

Strongly disagree 15 15%
Disagree 38 38%
Neither agree nor disagree 18 18%
Agree 25 25%
Strongly agree 4 4%

Chart no. 14

Opinion

38

25

18
15

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:

From the above table it is clear that only 25% of the respondents agree and 4% strongly agree that
Maruti Suzuki has a good technical support team, 18% of the respondents were neutral whereas
38% of the respondents disagree and 15% of the respondents strongly disagree.

72
 15.Our organisation informs its trading partners in advance of changing needs.
Table no. 15

Opinion No. of Respondents Percentage

Strongly disagree 4 4%
Disagree 32 32%
Neither agree nor disagree 26 26%
Agree 18 18%
Strongly agree 20 20%

Chart no. 15

Opinion

32

26

20
18

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:

From the above table it is clear that only 18% of the respondents agree and 20% strongly agree
that the organisation informs its trading partners in advance of changing needs, 26% of the
respondents were neutral whereas 32% of the respondents disagree and 4% of the respondents
strongly disagree.
73
16.Our organisation’s trading partners share proprietary information with yourorganisation.

Table no. 16

Opinion No. of Respondents Percentage

Extremely dissatisfied 4 4%
Dissatisfied 7 7%
Neither satisfied nor dissatisfied 18 18%
Satisfied 51 51%
Extremely satisfied 20 20%
Chart no. 16

Opinion

51

20
18

4 7

EXTREMELY DISSATISFIED NEITHER SATISFIED SATISFIED EXTREMELY SATISFIED

DISSATISFIED NOR DISSATISFIED

Opinion

Interpretation:

From the above table it is clear that 51% of the respondents are satisfied and 20% extremely
satisfied that the organisation’s trading partners share proprietary information with your
organisation, 18% of the respondents were neutral whereas 7% of the respondents dissatisfied and
4% of the respondents extremely dissatisfied.

74
 17.Our organisation’s trading partners keep your organisation fully informed about
issues that affect its business.

Table no. 17

Opinion No. of Respondents Percentage

Strongly disagree 8 8%
Disagree 11 11%
Neither agree nor disagree 30 30%
Agree 33 33%
Strongly agree 18 18%
Chart no. 17

Opinion

33
30

18

11
8

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR AGREE STRONGLY AGREE

DISAGREE

Opinion

Interpretation:

From the above table it is clear that only 33% of the respondents agree and 18% strongly agree
that the organisation’s trading partners keep your organisation fully informed about issues that
affect its business, 30% of the respondents were neutral whereas 11% of the respondents disagree
and 8% of the respondents strongly disagree.
75
18.Information exchange between our organisation and its trading partners is timely.
Table no. 18

Opinion No. of Respondents Percentage

Extremely dissatisfied 8 8%
Dissatisfied 11 11%
Neither satisfied nor dissatisfied 30 30%
Satisfied 33 33%
Extremely satisfied 18 18%
Chart no. 18

Opinion

42

22
18

11
7

EXTREMELY DISSATISFIED NEITHER SATISFIED SATISFIED EXTREMELY SATISFIED

DISSATISFIED NOR DISSATISFIED

Opinion

Interpretation:
From the above table it is clear that 42% of the respondents are satisfied and 18% extremely
satisfied that Information exchange between our organisation and its trading partners is timely,
22% of the respondents were neutral whereas 11% of the respondents dissatisfied and 7% of the
respondents extremely dissatisfied.

76
 FINDINGS

o 67% of the respondents are male and 33% are females.

o 36% of the respondents are of the age group of 36-45 years, 29% are 26-35 years age
group, 23% are 46 years and above and 12% of the respondents are of the age group
of 18-25 years.
o 61% of the respondents are married and 39% of the respondents are unmarried.

o 55% of the respondents are from nuclear family, and 45% of the respondents are
joint family.
o 37% of the respondents have a monthly income of 30,000 to 40,000. 26% of the
respondents have a monthly income of 20,000 to 30,000. 19% of the respondents
have a monthly income of more than 40,000 and 18% of the respondents have a
monthly incomeof less than 20,000.
o 29% of the respondents agree and 11% strongly agree that the organisation rely on
few dependable suppliers, 31% of the respondents were neutral whereas 23% of the
respondentsdisagree and 6% strongly disagree.
o 35% of the respondents agree and 5% strongly agree that the organisation consider
quality as number one criterion in selecting suppliers, 25% of the respondents were
neutral whereas 27% of the respondents disagree and 8% strongly disagree.
o 43% of the respondents agree and 3% strongly agree that the organisation strive to
establish long term relationship with its suppliers, 25% of the respondents were
neutral whereas 20%of the respondents disagree and 9% strongly disagree.
o 42% of the respondents agree and 10% strongly agree that the organisation helps its
suppliers to improve their product quality, 17% of the respondents were neutral
whereas 26% of the respondents disagree and 5% strongly disagree.
o 16% of the respondents agree and 10% strongly agree that the organisation include
its key suppliers in its planning and goal setting activities, 17% of the respondents
were neutral whereas 44% of the respondents disagree and 13% strongly disagree.

77
o 51% of the respondents agree and 20% strongly agree that the organisation actively
involves its key suppliers in new product development processes, 18% of the
respondents were neutral whereas 7% of the respondents disagree and 4% of the
respondents strongly disagree.
o 38% of the respondents agree and 10% strongly agree that the organisation regularly
solve problems jointly with its suppliers, 17% of the respondents were neutral
whereas 30% of the respondents disagree and 5% strongly disagree.
o 44% of the respondents agree and 25% strongly agree that the company is
committed to provide quality service to all its customers, 17% of the respondents
were neutral whereas 9% of the respondents disagree and 5% strongly disagree.
o 25% of the respondents agree and 4% strongly agree that Maruti Suzuki has a good
technical support team, 18% of the respondents were neutral whereas 38% of the
respondents disagree and 15% of the respondents strongly disagree.
o 18% of the respondents agree and 20% strongly agree that the organisation informs
its trading partners in advance of changing needs, 26% of the respondents were
neutral whereas 32% of the respondents disagree and 4% of the respondents strongly
disagree.
o 51% of the respondents are satisfied and 20% extremely satisfied that the
organisation’s trading partners share proprietary information with your organisation,
18% of the respondents were neutral whereas 7% of the respondents dissatisfied and
4% of the respondents extremely dissatisfied.
o 33% of the respondents agree and 18% strongly agree that the organisation’s trading
partners keep your organisation fully informed about issues that affect its business,
30% of the respondents were neutral whereas 11% of the respondents disagree and
8% of the respondents strongly disagree.
o 42% of the respondents are satisfied and 18% extremely satisfied that
Information exchange between our organisation and its trading partners is
timely, 22% of the respondents were neutral whereas 11% of the respondents
dissatisfied and 7% of therespondents extremely dissatisfied.

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 SUGGESTIONS

On the basis of the above the following recommendations are made: -

➢ Maruti Suzuki needs to investigate ways of improving and establishing relationship alongthe
entire value chain. There are competitive advantages.
➢ The organisation must focus on empowering designated groups. As such special training and
development initiatives should be investigated which focus on providing respondents with
the tools for effective decision making. Maruti Suzuki should pursue empowerment by
encouraging employees to develop their own abilities through company sponsored training
and development and to accept as mush responsibility within their capability.
➢ A highly important element of this strategy is EDI, an electronic data interchange system
that directly connects customers to the overall Maruti Suzuki distribution system. Point-of
➢ -sale information from Maruti Suzuki major accounts provides the ability to generate
instantaneous data relevant to reorders, invoices and shipments. This distribution system,
while costly, would enable major customers of its products, to avoid having to place orders
and coordinate logistical arrangements. It would also help sales to maintain the appropriate
product inventory at any given time
➢ Low inventory levels can contribute vastly to a firm’s efficiency and cost. Inbound logistics
revolve around supplier relationship. Greater collaboration needs to be established with
suppliers to support a JIT system of manufacturing. With overseas suppliers a local
warehouse could be established as an intermediate supply.
➢ Effort is required to reduce work in progress before normal production resumes. If work in
progress goes over a pre-determined value, all production needs to stop. The situation needs to
be analysed for the reason for the buildup and corrective action implemented. Trials need to be
conducted for increase in machine speed so as to reduce production time. If the physical
properties do not change then the new machine speed to be specified in the specification.

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➢ ‘First off’ is important to ensure the process capability of the production lines. The ‘first off’
is the first sample from the production line that is inspected against the specification. If it
conforms then only is the production line allowed to continue. If the product does not
conform, then adjustments are made to the process or the machine and another sample is

80
tested. At key points in the production process, quality inspectors need to monitor every
meter of the process. Extra personnel need not be employed. The current line operators
could be multiskilled so that they become aware of the requirements of the product. They
will be performing dual functions. Important tests can be performed on the line instead of
this sample being tested in the laboratory. The instant feedback to the line can save
hundreds of meters of defective product being produced. Therefore, the relevant equipment
needs to be purchased and line personnel trained for effective utilisation and feedback.

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 CONCLUSION

This study contributes to a better understanding of the direction in SCM research. Regarding the
methodologies used by researchers, the Exploratory reviews has been the most used, followed by
the Normative study, Methodological reviews, Literature review and Hypothesis testing. This
literature review finds that exploratory type of research is mostly preferred it is expected that
with the maturity of SCM the hypothesis testing method will pick up. Content wisecategorization
revealed that paper on supply chain strategy dominates over others so the papers in the field of
supplier development and management and environmental and socially responsible categories
should also be promoted.

There is an increased interest in SCM and Internet by academicians and practitioners. Some
directions for further research that we have identified are: to conduct empirical studies about the
impact of Internet on several e-SCM processes, as for example the reverse and demand
management processes which, so far, have only been considered by a couple of authors. Another
important area of research is the application of decision models and technologies on Internet. As
more and more firms have high quality and real-time information available, the use of these
decision technologies will increase, since they add significant value to the members of a supply
chain.

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The Indian Automobile Industry has been very competitive and will further get more competitive.
Continuous innovations in supply chain and logistics management will contribute positively to the
overall efficiency of the entire value chain and will offer many benefits to all the partners in the
value chain. MSIL has been responsive to the dynamic market and has been innovating their supply
chain and logistics management process. The changes implemented have benefited all the partners
in terms of lean operations, integration of partners in the value chain, lowering of cost, inventory
reduction, lesser transit time of finished vehicles and spare parts to their dealers, and fulfillment
of ever-changing customer expectations. The future will present further challenges, MSIL will be
required to be flexible and responsive towards their supply chain and logistics management process
and consistently introduce innovations in order to further improve operational efficiency, quality
and cost effectiveness. The study has been restricted to only Maruti Suzuki India limited and it is
recommended that further study may be conducted on other players in the Indian Automobile

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Industry to understand the innovations in their respective supply chain and logistics management
process and the benefits which have been derived.

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 BIBLIOGRAPHY
References:
➢ Paul Myerson, “Lean Supply Chain and Logistics Management” McGraw-Hill Professional:
USA, 2012.

➢ Peter M. Ralston, Scott J. Grawe and Patricia J. Daugherty, "Logistics salience impact on
logistics capabilities and performance" International Journal of Logistics Management, vol. 24,
no. 2, pp.136 – 152, 2013.

➢ T.H. Davenport, “Process Innovation: Reengineering Work through Information

Technology” Harvard Business School Press: New York, 1993.

➢ T.M. Frohlich and R. Westbrook, “Arcs of integration: an international study of supply chain
strategies” Journal of Operations Management, vol. 19, no. 2, pp. 185-200, 2001.

➢ T.Y. Choi and Y. Hong, “Unveiling the structure of supply network: Case studies in Honda,
Acura, and Daimler Chrysler” Journal of Operations Management, vol. 20, pp. 469-493, 2002.

WEBSITES:
➢ https://www.marutisuzuki.com/

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 QUESTIONNAIRE

1. Gender

a) Male

b) Female

2. Age group

a) 18-25 years

b) 26-35 years

c) 36-45 years

d) 45 years and above

3. Marital Status

a) Married

b) Unmarried

4. Family size

a) Joint

b) Nuclear

5. Monthly Income (in Rs.)

a) Less than 20,000

b) 20,000 – 30,000

c) 30,000 – 40,000

d) More than 40,000

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6. Our organisation rely on few dependable suppliers.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

7. Our organisation consider quality as number one criterion in selecting suppliers.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

8. Our organisation strive to establish long term relationship with its suppliers.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

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9. Our organisation helps its suppliers to improve their product quality.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

10. Your organisation include its key suppliers in its planning and goal setting activities.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

11. Your organisation actively involves its key suppliers in new product development
processes.
a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

12. Our organisation regularly solve problems jointly with its suppliers.

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 a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

13. The company is committed to provide quality service to all its customers.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

14. Maruti Suzuki has a good technical support team.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

15. Our organisation informs its trading partners in advance of changing needs.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

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 d) Disagree

e) Strongly disagree

16. Our organisation’s trading partners share proprietary information with your organisation.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

17. Our organisation’s trading partners keep your organisation fully informed about
issues that affect its business.
a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

18. Information exchange between our organisation and its trading partners is timely.

a) Strongly agree

b) Agree

c) Neither agree nor disagree

d) Disagree

e) Strongly disagree

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