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
REVAMPING THE SUPPLY CHIN – THE
ASHOK LEYLAND WAY
Presented By:
Group No: 09
Gaurav Vishal- 500043212
Arup Ghosh- 500043114
Asmita Semwal- 500043086
Jatin Doseja- 500043249

 Ashok Leyland is a medium and heavy commercial vehicle
manufacturing company based in Chennai, India.
 The company is one of India’s leading manufacturers of
commercial vehicles , Such as trucks and buses ,as well as military
vehicles.
 Ashok Leyland has acquired 35% market share in the medium and
heavy commercial vehicle (M&HCV) segment in July 2015 on the
back of a strong demand, expansion of the dealership network in
the north and east India and high discounts on vehicles.
 The case issues concerning the revival of a Ashok Leyland effected
through a revamp of the supply chain.
 The case discusses various aspects of supply chain management
and its importance in the context of cost management.
BRIEF INTRODUCTION

 Ashok Leyland with an aim to reduce costs
improved the in-bound supply chain through several
important strategic revamping measures. Explain.
QUESTION 1

 To reduce costs and to improve the in-bound supply chain Ashok
Leyland take following outline:
 In 1999 Ashok Leyland launched project OSCARS ( Optimizing
supply chain and Rationalizing Sourcing). The basic initiatives of
OSCARS was:
* Single Window System
> The Strategic Sourcing and Corporate Quality Engineering
(CQE) teams jointly formed the single window vendor management
agency, bringing with them specialized commercial and technical
knowledge.
> For the suppliers, this had created a convenient single-point
contact with AL, for sharing drawings, for negotiating prices and long-
term business volumes, and for assistance and consultancy on quality
to management issues.
ANSWER

* Supplier Tiering
> Reduced the number of suppliers.
> Tier -1 supplier is supported by tire -2 and tire -3 suppliers.
> The benefits of system buying could be illustrated with the
example of the tool kits that accompanied every vehicle.
> To overcome this problem, AL aimed to supplier base from 1400
to 750.
* Just in Time ( JIT)
> The Push System and The Pull System.
> Classified the components used by the companies into
categories “A” ( 75% of total cost of components) , “B’ ( 18%) , “C”
(7%).

“ The revamp of the out-bound supply chain had the
twin objectives of the customer satisfaction and
reducing finished goods inventories”. Discuss how
Ashok Leyland re- engineered its out-bound supply
chain.
QUESTION 2

 Three main parameters:
1) Order to delivery
2) Reliability of deliveries
3) Availability of orders status information
• The customers could expect delivery in 5 days from the ate of payment for
regular models.
• The second promise was that the age of vehicle when delivered would be
maximum 90 days.
• Tight pipeline inventory norms were set for different models and markets
and were met through a new three tier distribution network.
• In the new structure , Plant sales yards acted as national pools to hold rare
models and excess of regional requirements.
• To understand customer needs and assimilate the knowledge, AL adopted
“4P” programme.
> Probe , Prioritize, Plan and Position.
• The CFT’s worked towards continuous improvement in the products and
marketing.
• AL also built a “ Marketing Information System ( MIS )” to monitor the
trends an forecast demand from input dealers an field executives.
ANSWER

Discuss in brief the quantitative benefits in regard to various
measures of supply chain revamping exercise for AL.
QUESTION 3

 In the first half of 1999-2000 Ashok Leyland
recorded profit of Rs 1.9 crores on sales of Rs 1092.8
crores against a Rs 36.7 crore loss in 1998-1999.
 In 1999-2000 raw material cost was down by 1-2%
and inventories reduced by Rs 300 crore.
 Operational profit in 1999-2000 was Rs 55 crore as
compared to 12 crore loss in 1998-1999.
 In the year 1999-2000 sold 37,859 HCV’S ,27% more
than 1998-1999.
 Total Income increased by 25% from 1998-1999.
ANSWER

 Ashok Leyland in order to sustain in the market
should :
> Provide world class technology
> Provide value to the customer
> Keep innovating there products
CONCLUSION

THANK YOU

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BPR PPT

  • 1.  REVAMPING THE SUPPLY CHIN – THE ASHOK LEYLAND WAY Presented By: Group No: 09 Gaurav Vishal- 500043212 Arup Ghosh- 500043114 Asmita Semwal- 500043086 Jatin Doseja- 500043249
  • 2.   Ashok Leyland is a medium and heavy commercial vehicle manufacturing company based in Chennai, India.  The company is one of India’s leading manufacturers of commercial vehicles , Such as trucks and buses ,as well as military vehicles.  Ashok Leyland has acquired 35% market share in the medium and heavy commercial vehicle (M&HCV) segment in July 2015 on the back of a strong demand, expansion of the dealership network in the north and east India and high discounts on vehicles.  The case issues concerning the revival of a Ashok Leyland effected through a revamp of the supply chain.  The case discusses various aspects of supply chain management and its importance in the context of cost management. BRIEF INTRODUCTION
  • 3.   Ashok Leyland with an aim to reduce costs improved the in-bound supply chain through several important strategic revamping measures. Explain. QUESTION 1
  • 4.   To reduce costs and to improve the in-bound supply chain Ashok Leyland take following outline:  In 1999 Ashok Leyland launched project OSCARS ( Optimizing supply chain and Rationalizing Sourcing). The basic initiatives of OSCARS was: * Single Window System > The Strategic Sourcing and Corporate Quality Engineering (CQE) teams jointly formed the single window vendor management agency, bringing with them specialized commercial and technical knowledge. > For the suppliers, this had created a convenient single-point contact with AL, for sharing drawings, for negotiating prices and long- term business volumes, and for assistance and consultancy on quality to management issues. ANSWER
  • 5.  * Supplier Tiering > Reduced the number of suppliers. > Tier -1 supplier is supported by tire -2 and tire -3 suppliers. > The benefits of system buying could be illustrated with the example of the tool kits that accompanied every vehicle. > To overcome this problem, AL aimed to supplier base from 1400 to 750. * Just in Time ( JIT) > The Push System and The Pull System. > Classified the components used by the companies into categories “A” ( 75% of total cost of components) , “B’ ( 18%) , “C” (7%).
  • 6.  “ The revamp of the out-bound supply chain had the twin objectives of the customer satisfaction and reducing finished goods inventories”. Discuss how Ashok Leyland re- engineered its out-bound supply chain. QUESTION 2
  • 7.   Three main parameters: 1) Order to delivery 2) Reliability of deliveries 3) Availability of orders status information • The customers could expect delivery in 5 days from the ate of payment for regular models. • The second promise was that the age of vehicle when delivered would be maximum 90 days. • Tight pipeline inventory norms were set for different models and markets and were met through a new three tier distribution network. • In the new structure , Plant sales yards acted as national pools to hold rare models and excess of regional requirements. • To understand customer needs and assimilate the knowledge, AL adopted “4P” programme. > Probe , Prioritize, Plan and Position. • The CFT’s worked towards continuous improvement in the products and marketing. • AL also built a “ Marketing Information System ( MIS )” to monitor the trends an forecast demand from input dealers an field executives. ANSWER
  • 8.  Discuss in brief the quantitative benefits in regard to various measures of supply chain revamping exercise for AL. QUESTION 3
  • 9.   In the first half of 1999-2000 Ashok Leyland recorded profit of Rs 1.9 crores on sales of Rs 1092.8 crores against a Rs 36.7 crore loss in 1998-1999.  In 1999-2000 raw material cost was down by 1-2% and inventories reduced by Rs 300 crore.  Operational profit in 1999-2000 was Rs 55 crore as compared to 12 crore loss in 1998-1999.  In the year 1999-2000 sold 37,859 HCV’S ,27% more than 1998-1999.  Total Income increased by 25% from 1998-1999. ANSWER
  • 10.   Ashok Leyland in order to sustain in the market should : > Provide world class technology > Provide value to the customer > Keep innovating there products CONCLUSION