SuppIy Chain Management

3upp|y cra|r |s lre sysler oy Wr|cr orgar|zal|ors source, ra|e ard

de||ver lre|r producls or serv|ces accord|rg lo rar|el derard.
3upp|y cra|r raragererl operal|ors ard dec|s|ors are u|l|rale|y
lr|ggered oy derard s|gra|s al lre u|l|rale corsurer |eve|.
8hok LeyIand
Ashok Leyland ls a commerclal vehlcle manufacLurlng
company based ln Chennal lndla
lounded ln 1948 Lhe company ls one of lndla's leadlng
manufacLurers of commerclal vehlcles such as Lrucks and
buses as well as emergency and mlllLary vehlcles
lL sells abouL 60000 vehlcles and abouL 7000 englnes
annually
CperaLlng slx planLs Ashok Leyland also makes spare parLs
and englnes for lndusLrlal and marlne appllcaLlons
lL sells abouL 60000 vehlcles and abouL 7000 englnes
annually lL ls Lhe second largesL commerclal vehlcle company
ln lndla ln Lhe medlum and heavy commerclal vehlcle
segmenL wlLh a markeL share of 28 (200708)
Ashok Leyland ls Lhe second Lechnology leader ln Lhe
commerclal vehlcle secLor of lndla behlnd 1A1A MoLors
Ashok Leyland nlssan vehlcles vL LLd Lhe vehlcle
manufacLurlng company wlll be owned 31 by Ashok Leyland
and 49 by nlssan
nlssan Ashok Leyland 1echnologles vL LLd Lhe Lechnology
developmenL company wlll be owned 3030 by Lhe Lwo
parLners
#ece88ion On SuppIy Chain
r 199Z-98, AL, recorded a prol|l-aller-lax (PAT) ol Rs. 18.1 crore or
sa|es ol Rs. 2,011.3 crore.
A |oo| al lre prev|ous l|rarc|a| year's PAT sroWed lral lre prol|ls lor
199Z-98 rad gore lor a severe oeal|rg.
r 199-9Z AL rad a PAT ol Rs. 121.9 crore or sa|es ol Rs. 2, 182.5
crore.
w|lr lre rarulaclur|rg rduslry ree||rg urder recess|or, lre lre|grl
gereral|rg seclors (rarulaclur|rg, r|r|rg ard quarry|rg) saW a
sleep dec||re resu|l|rg |r a severe doWrlurr ol lre|grl vo|ures.
or AL, Wrose ous|ress Was d|recl|y deperderl or rov|rg raler|a|,
goods ard peop|e across d|slarces, lr|s rad core as a severe o|oW.
AL's supp|y cra|r rad gore rayW|re urder lre recess|or Wr|cr rad
ealer aWay 1Z.2 per cerl ol |ls reverues |r ore year lorc|rg lre
corpary lo re|p|ess|y a||oW |rverlor|es lo ou||d up.
Tre resu|ls Were sroW|rg or Wor||rg cap|la|. l rad c||roed lror
33.31 ol sa|es |r 1993-91 lo 58.81 |r 199Z-98.
%ogether We Can Beat %he #ece88ion
AL corducled ora|rslorr|rg sess|ors |rv|l|rg |deas or cosl cull|rg.
0ua||ly C|rc|e lears Were lorred lor lr|s purpose.
3a|d Troras T. Aorarar, depuly gerera| rarager, Corporale
Corrur|cal|ors, '0ur 0ua||ly C|rc|e lears Were very re|plu| al lr|s
jurclure ard lre Wor|er |rvo|vererl rade |l eas|er lo address cosl
cull|rg.
AL loo| every erp|oyee's |deas |rlo accourl ard l|gured oul a Way lo
|eep lr|rgs go|rg ard reduce producl|or W|lroul |rl||cl|rg pa|r.
Tre recess|or saW AL Wag|rg a War or Waslage ard |rell|c|ercy.
Cont.
AL loo| rary |r|l|al|ves rarg|rg lror l|er|rg |ls verdor relWor| lo
reduc|rg lre ruroer ol verdors, ard corsequerl|y, rov|rg lo a jusl-
|r-l|re (J--T) order|rg sysler, lo jo|rl-|rprovererl prograrres
(JP), Wr|cr Were esserl|a||y exerc|ses |r va|ue-erg|reer|rg
urderla|er |r assoc|al|or W|lr |ey verdors.
r 2000, ore l|er- verdor sourced lre producls lror lre olrer
verdors ard supp||ed lre assero|y lo lre corpary.
Tr|s saved cosl ard l|re prov|ded lre verdor relWor| Was We||
coord|raled W|lr AL's oWr rarulaclur|rg operal|ors.
Al AL, verdor 0eve|oprerl ard 3lraleg|c 3ourc|rg Were rard|ed oy
Corporale Valer|a|s 0eparlrerl (CV0).
#educe Co8t and Improve the In-bound SuppIy Chain
Asro| Ley|ard la|e lo||oW|rg reasures:
r 1999,AL |aurcred Projecl 03CAR3( 0pl|r|z|rg 3upp|y Cra|r
ard Ral|ora||z|rg 3ourc|rg). Tre oas|c pr|rc|pa| ol 03CAR3 Was:
SingIe Window Sy8tem
Tre 3lraleg|c 3ourc|rg ard Corporale 0ua||ly Erg|reer|rg(C0E)
lears jo|rl|y lorred lre s|rg|e W|rdoW sysler or|rg|rg W|lr lrer
spec|a||zed correrc|a| ard lecrr|ca| |roW|edge.
or lre supp||ers lr|s rad crealed a corver|erl s|rg|e-po|rl corlacl
W|lr AL, lor srar|rg draW|rgs, lor regol|al|rg pr|ces ard |org -lerr
ous|ress vo|ures ard corsu|larcy or qua||ly lo raragererl |ssues.
SuppIier %iering
3upp||er T|er|rg AL prured |l's pare| ol 0|recl supp||ers lrrougr
l|er|rg ard sysler ouy|rg. urder lr|s AL dea|l d|recl|y W|lr l|er ore
supp||ers Wro, |r lurr, Were supporled oy l|er lWo ard l|er lrree
supp||ers.
Tre oerel|ls ol sysler ouy|rg cou|d oe |||uslraled W|lr lre exarp|e
ol lre loo|s ||ls lral accorpar|ed every ver|c|e .
Tear doWr slud|es ard va|ue erg|reer|rg ara|yzed lre corsl|lul|or
ard corpos|l|or ol a parl lo prure cosl lrrougr suosl|lul|or,
reducl|or or e||r|ral|or ol raler|a|s/ suo-assero||es W|lroul
allecl|rg qua||ly ard perlorrarce.
u8t In time(%
Jusl r l|re(JET) AL locused or JT approacr lor r|gr va|ue/r|gr
vo|ure |lers ard |oW cosl |og|sl|cs lor |oW va|ue r|gr vo|ure |lers.
Projecl 03CAR3 orougrl aooul a leW lurdarerla| crarges. Tre
pusr sysler Wr|cr rears |el us ra|e a|| We car jusl |r case We
reed . Tr|s sysler g|ver a Way lo pu|| sysler Wr|cr rears 'ra|e
Wral lre cuslorer reeds, Wrer re reeds |l .
Eacr slage produced or|y as rucr as lre rexl slage reeded. Tr|s
resu|led |r sav|rgs ol Rs 8.50 crore a year ard a |ear supp|y cra|r.
8hok LeyIand re-engineered it'8 out-bound 8uppIy chain
A cuslorer survey ard a sludy ol oercrrar|s rad core oul W|lr
lrree rajor pararelers lor serv|ce |eve| largels:
0rder lo de||very l|re
Re||ao|||ly ol de||ver|es ard
Ava||ao|||ly ol order slalus |rlorral|or
Tre cuslorers cou|d expecl de||very |r 5 days lror lre dale ol
payrerl lor regu|ar rode|s lor ru|l|-ax|ed ver|c|es lre pror|sed
per|od Was lWo -lour Wee|s. Tre secord pror|se Was lral lre age ol
lre ver|c|e Wrer de||vered Wou|d oe rax|rur ol 90 days. T|grl
p|pe||re |rverlory rorrs Were sel lor d|llererl rode|s ard rar|els
ard Were rel lrrougr a reW lrree l|er d|slr|oul|or relWor|.
Benefit8 of #evamping SuppIy Chain
r 1999-2000, AL recorded a rel prol|l ol Rs. 1.9 Crore or sa|es ol
Rs. 1,092.8 Crore, aga|rsl a |oss |r lre prev|ous year 1998-1999.
Tr|s rave oeer poss|o|e due lo operal|ora| ell|c|ercy resu|l|rg lror
slraleg|c raW raler|a| sourc|rg, W|lr leWer sources ard r|grer
vo|ures:
wr|cr culs cosls.
8eller corlro| over process |rpuls oy l|grler|rg supp|y cra|r ard
|rverlor|es.
Reduced operal|rg experses lrrougr cosl sav|rg or erergy, loo|s,
spare ard adopl|or ol preverl|ve ra|rlerarce po||c|es.
r 1999-2000, AL so|d 3Z,859 reavy correrc|a| ver|c|es, 2Z rore
lrar prev|ous year.
AL's lola| |rcore |r 1999-2000 Was Rs.211.11 Crore Wr|cr Was
25r|grer lrar lre prev|ous year l|gure.
l's operal|ora| prol|ls |r 1999-2000 Was Rs.55 Crore.