Launch of Strive V - Automobiles

The fifth edition of Strive, the biannual publication from OPEP (the Operations and Supply Chain Club of IIM Raipur), was launched on the 4th of October, 2013, by Prof. B S Sahay, Director, IIM Raipur together with Dr. Raghuram Rajan, Governor of the Reserve Bank of India.

Dr. Raghuram Rajan, Governer of RBI (left) and Dr. B.S Sahay, Director of IIM Raipur

This time around the central theme of the magazine is ‘Automobiles’. The main features of this publication include articles on Supply Chain Performance Measurement by Prof. Parikshit Charan (Prof.  IIM Raipur), Emergence of Supply Chain in Indian automotive industry by Dr. Tapan Sahoo (VP, Maruti Suzuki) and also an interview with Mr. Sanjeev Khapre (EVP, Exide Industries India Ltd.) The edition also features articles on the scenario of Hybrid Cars in the Indian context and reverse logistics in the Indian automotive industry. 

The publication presents articles written by students about some of the contemporary issues and trends in the automobile sector – ‘Green Revolution Part – III’ discusses the present trends in electric car industry in India and provides insights on the growth potential for these cars in the future. ‘Evolution of Supply Chain in Automotive Industry’ talks about the various stages of development in the concepts, philosophies and practices in the field of Supply Chain Management across the world in the automobile sector.

The ‘Regular’ section in the magazine covers Summer Internship experiences of students, Guru Mantra - which explains the concept of Car Sharing, Debate on Two Wheelers against Four Wheelers in India, Book Review – Lee Iacocca and a Crossword puzzle.

The magazine will now be available for students of all B-schools across India and abroad and also for industry-relevant professionals.

Click on the link below to read.
http://opepiimraipur.blogspot.in/p/e-magazines.html

Post by OPEP Club, IIM Raipur.

Best Practices In Automobile Companies

Automobile market in India is booming. Growth for the next five years is forecasted to be around 12-15% every year. Almost all the big automotive giants are in India or are planning to enter India very soon. This has increased competition in India like anything and is pressurizing the existing players on each prospects of market, be it cost, distribution, after sales service, features, mileage etc. Increased complex and technical products, narrow product launch window, shortened product life cycle and presence of global players adds to the cut throat competition today. Sustainability is the biggest challenge automotive companies are facing today.

Maruti Suzuki who is market leader in passenger car segment is losing its market share due to high competition but at the same time market is also growing. Hyundai and Tata Motors, being second and third position respectively in terms of market share are working hard to gain more market share every day. Indian market is very price sensitive and after sales service, mileage, resale value, and brand are the most important factors in decision making.

Manufacturers do their best to reduce cost of the car by Cost Reduction, Value Addition and Value Engineering ideas. Here few examples are given how manufacturers implement such ideas.

Daimler India Commercial Vehicle

Project Managers in Daimler are leaders and continuously inspire employees to think out of the box and reward them for the same. Daimler has many processes for such motivational activities which encourage employees to think out of the box and which are related to their day to day activities. One example is explained here :-

Mahindra and Mahindra

M&M encourages each employee at all levels to give their ideas which are not restricted to cost reduction but to improve safety, reduce energy consumption, improve 5S etc. They have implemented a process called “I” or ideas under engineer’s drive. Each employee is asked to submit twenty ideas a year. They are given the theme for the ideas and he/she is awarded based on the number of ideas implemented. This motivates employees to think about everything in the plant and even their working condition. M&M has implemented many such big ideas which have improved the efficiency in very significant manner.

Maruti Suzuki

Maruti is the market leader in passenger cars in India with approximately 50% market share. Maruti in strategic partnership with its suppliers continuously works hard to reduce its inventory and improve product design with lower cost. Maruti gives suppliers a target every year to reduce cost by implementing value added and value engineering ideas. It maintains one day of inventory in its plant through VMI (vendor managed inventory), which gives Maruti a competitive edge over others.

Through above examples, we saw how excellence is achieved by companies by involving their employees and suppliers in order to achieve high operational efficiency by implementing value added, value engineering ideas, inventory management etc. This helps them to sustain in such a highly competitive market.

I would like to thank Mr. Niranjan Deshamane from M&M and Mr. Satyendra Kumar from DICV for their valuable support.  

 Ranjit Ram has done his B.Tech in Mechanical Engineering from IIT Madras. Before joining Indian Institute of Management, Raipur, he had a combined experience of 51 months in Renault Nissan and Sterlite Optical Technology. 

Japan Earthquake: A supply chain catastrophe

Japan suffered from one of the most devastating earthquakes in the nation’s history. The lives lost and damage done to the property is irreparable. We shall take a look at the adverse effect this tragedy has on the global supply chain.

Worries about supply-chain disruptions from Japan's earthquake continue, with some Asian businesses slowing production to preserve stockpiles of crucial components.

But some Japanese factories reported progress in restarting operations, raising hopes that long-term disruptions might be avoided. Japanese-made equipment and materials play a key production role in many of the region's main industries, from automobiles in Thailand to semiconductors in the Philippines. While many businesses said they have adequate inventories of materials for the time being, some were cutting output as they attempted to gauge the impact of the earthquake and disruptions caused by continuing problems at the Fukushima Daiichi nuclear power plant.

In Thailand, Toyota Motor Corp., Thailand's single biggest auto maker is slowing production to preserve stockpiles of Japan-made components, such as the transmission for Camry and Prius hybrid models. "Slowing production now is better than maintaining full output and having a problem later," a Toyota executive said. He declined to say how much production would be reduced.  Other Toyota models face less of a problem because they use a higher percentage of Thailand-made parts. Some 90% of the components used to make Toyota's Thailand-made pick-up trucks are made in the country, compared with 60% for its passenger cars. In Japan, Toyota said it would resume production of replacement auto parts for the domestic and overseas markets soon.

Nissan said it will resume output at two plants in Japan but keep operations at three other vehicle assembly plants in Japan closed until later. Some other factories in Japan have reopened, except for Suzuki and Honda.

Production problems continued in other industries. In a possible blow to global production of consumer gadgets such as smartphones, Mitsubishi said the building and equipment at a plant in Fukushima prefecture had been damaged by the earthquake and that operations were suspended. The plant produces materials for printed wiring boards for use in smartphones and other consumer electronics and makes up to 60% of the global market for wiring-board materials.

The Philippines semiconductor industry association said it was concerned that the disaster in Japan could disrupt the supply of raw materials from the country and affect the export of Philippine-made components back. "A prolonged abnormalcy in Japan will certainly affect the material supplies in the Philippine electronics industry," said Ernie Santiago, president of the Semiconductor and Electronics Industries in the Philippines.

Some of those raw materials include substances such as bismaleimide-triazine, or BT, resin, which is used in making printed circuit boards. Japan provides around 90% of the world's supply of BT resin, Credit Suisse Group AG said.

In some cases, manufacturers will be able to shift to chip suppliers outside Japan. But that can be difficult if product specifications call for a particular brand, said Paul Romano, chief operating officer of Fusion Trade, an Andover, Mass., company that helps manufacturers find sources of scarce components. He said the company has been retained to find components by more than 15 clients. He said they don't allow his firm to disclose their names.

This just shows the side effects of a global supply chain. In a country like Japan, which is home to many high technology industries like automotives and electronics, a natural disaster of this magnitude can cripple supply chains of even major corporations. The indispensable nature of Japanese parts and finished goods will create a ripple effect across many industries for a long time. At a time when the world is just coming back on its feet from the global financial crisis, a production slowdown will further dent the economic recovery shown in the developed nations.

Vishwajit Vyas has done his B.Tech. in Electronics Engineering from Wayne State University, Detroit,  Michigan and can be reached at vishwajitvyas @ gmail . com.