Tata Indica Making of the small car Prepared By – Vivek Sharma Roll No. - 06 PGPIMC (2006-08)
In 1990, Telco’s chairman Ratan Tata flirting with the idea of developing a small car.
In 1994, Tata gave basic design to their car.
In 1995, Tata announced that they planned a car which would be closed to the Maruti 800, shaped like Zen and space like Ambassador.
Telco was the truck maker and they want to make a low cost car for the economy.
Telco outsourced 80% of the components(1200 of its 1500 plus parts) from 200 odd vendors.
Ford and General Motors having major global vendor base of automobile parts.
Talco want to create own vendor base.
Telco didn’t have any expertise in design a car or to build an engine.
Outsourcing the parts was one of the most difficult of producing the Indica.
Telco decided that to shop globally for the best deals and use its own expertise.
Most of the parts Telco were sourced locally, but t he car was not designed entirely in India.
Telco outsourcing some of the parts like sheet metal parts, cylindrical gaskets and belts. So the Indica was totally indigenous.
The main challenge of Telco was localization of components.
Another challenge of Telco was supply chain.
Another challenge of Telco was the image of a truck making company.
Tata Indica is a small passenger car manufactured by Tata Motors of India.
Indica is also exported to Europe as well as retailing in South Africa from late 2004.
In the UK Indica was imported by MG Rover and it was called the CityRover.
Indica marketed it self with the slogans like "The Big.. Small Car" and "More car per car“ .
Within a week of launching, company received 1,15,000 bookings.
In two years, the Indica became the number 1 car in its segment.
In India indica provide both the version petrol and disel because of the need of their consumer.
In India, 3 versions are available with 4 sub models each.
Indica V2 - 1.4L Diesel (DLE, DLS, DLG, DLX)
Indica V2 XETA - 1.2L Petrol (GV, GVE, GVS, GVG) and 1.4L Petrol (GLX, GLG)
Indicab - A low price car with same framework but less features & luxuries aimed at cab & contract transport business. Very popular amongst the transport business.
Highlight the supply chain management system at Telco in regard to its small car Indica, and how Telco, built its supply chain to become a competence centric company.
Supply Chain Management
Supply chain management is a process to provide the product or services from supplier to manufacturer to wholesaler to retailer to consumer. The ultimate goal of any effective supply chain management system is to reduce inventory cost and provide their goods and services very effective way.
Supply chain management of Telco
Telco chosen the supply chain management because they want to provide their product and service immediately to their client and customers.
Supply chain also reduced the cost of logistics.
Tata make joint venture with the manufacturers and transporters for improving their supply chain.
They want to create a positive image in the mind of customer through their proper supply chain.
Supply chain also create the reliability of the product in the customers mind.
Competence centric company
Strong transportation channel
Timely Delivery of goods
Availability of the product and raw material
Strong channel of suppliers
Strong vendor base
Availability of local warehouses
Availability of service centers
Discusses various components of the supply chain and emphasizes how Telco orchestrated them with the objective of minimizing cost.
Component of Supply Chain Management
Planning and controlling
Transportation structure management
Product flow facility structure
Information flow facility structure
Risk identification structure
Supply Chain Management
Telco create its supply chain on a time basis for reducing the logistics cost.
All high value components delivered daily and twice a day near by suppliers.
Set up local warehouses near the plant for those vendors who located far away.
The transportation cost alone accounted for 45% and delaying in supply adding the cost of logistics. So Telco using this supply chain for keep its logistic cost low.