Tata Indica Making of the small car Prepared By – Vivek Sharma Roll No. - 06 PGPIMC (2006-08)
Introduction 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.
Introduction 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.
Introduction 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.
Introduction 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.
About Indica 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“ .
About Indica 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.
About Indica 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 Availability of the product and raw material Strong channel of suppliers 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 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.
Competitive Analysis of Indica V2 & Santro 1800 1290 Front Legroom (mm) 1590 1485 Height (mm) 1525 1665 Width (mm) 3565 3675 Length (mm) 750 750 Rear Legroom (mm) Santro Indica V2 Diesel Dimensions
Competitive Analysis of Indica V2 & Santro 1220 1330 Rear Shoulder Room (mm) 800 870 Rear Knee room (mm) Santro Indica V2 Diesel Dimensions 63 PS @ 5500 rpm 53.5 PS @ 5500 rpm Max. Power 1086 1405 Engine Capacity (cc)
Main Competitors of Indica
Conclusion The main reason of Tata Indica success is low cost, good quality product and services, and also their supply chain management. The big competitor of Indica is Santro and Zen Estilo.
Tata Indica fulfilling the dream of Ratan Tata launching of small car in India.