The case provides an understanding of the issues concerning the supply chain management system at Telco in regard to its small car, Indica. It outlines how Telco, built the supply chain for the car by leveraging its existing competencies and how it transformed itself from an integrated truck manufacturer to an automobile integrator and from a product-centric company to competence- centric company. The case discusses various components of the supply chain and emphasises how Telco orchestrated them with the objective of minimizing costs.
The history of Telco, India's leading automobile manufacturer dates back to the early 1920s. The location of the Telco plant originally belonged to Peninsular Locomotive Company (Peninsular), which was established in Tatanagar, Jamshedpur in 1923. In 1927, Peninsular was taken over by East India Railway to manufacture passenger carriage underframes for the Indian Railways. In 1945, Tata Sons purchased the plant from the Government of India for manufacturing steam locomotive boilers and other engineering products, under the name Tata Locomotive & Engineering Company. Initially the company manufactured broad gauge open wagons for the Indian Railways. By 1947, it started producing boilers for imported locomotives. The company also entered into collaborations with Marshal Sons (UK) to manufacture steam road roller, and with Krauss Maffei (West Germany) to manufacture steam locomotives.
In 1954, the company entered into a technical collaboration with Daimler-Benz to manufacture automotive vehicles | |
The association with Daimler-Benz helped the company build up a strong in-house R&D center (Engineering Research Center - ERC) at Pune, Maharashtra. In 1960, company’s name was changed to Tata Engineering & Locomotive Company Ltd. By 1961, it was manufacturing construction equipments. Over the years, the company acquired technology from several collaborations and co-operation agreements with international companies (Refer Table I). TABLE I
TELCO - COLLABORATIONS AND JOINT VENTURES
Tata Cummins Ltd.|
Joint Venture with: | Cummins Engine Co. Inc. USA.|
Business: | Manufacture of Cummins ‘B’ Series engines for M/HCVs.| Tata Holset Ltd.|
Joint Venture with: | Holset Engineering Co. Ltd. UK.|
Business: | Manufacture of turbochargers.|
Concorde Motors Ltd.|
Joint Venture with: | Jardine International Motors (Mauritius) Ltd.| Business: | Retailing of Passenger Cars.|
In 1961, Telco produced its first crane in collaboration with M/s Pawling & Harnischfeger (P&H), U.S.A. In 1966, it acquired Investa Machine Tools Co and set up a machine tools division at Pune. In the same year, it started its Press Tool Division and vehicle manufacture facilities at Pimpri and Chinchwad (Pune). The first commercial vehicle was produced in 1977. In 1983, Telco started producing heavy commercial vehicles.
In 1986, the company rolled out its first light commercial vehicle - TATA 407 that had a completely indigenous design. In 1991, Telco produced indigenously - designed passenger cars - Tata Sierra and Tata Estate and in the same year it started its assembly and training plant at Lucknow (Uttar Pradesh). The product range of the company included passenger cars, heavy commercial vehicles, trucks and buses (Refer Table II). TABLE II
TELCO - PRODUCT PROFILE
Passenger| Tata Sierra, Tata Estate, Tata Sumo, Tata Safari, Indica, Indica V2.| Light Commercial Vehicles| Tatamobile, Turbo Truck, LPT 407 Turbo Truck.| Heavy Commercial Vehicles| LPT 1109 Turbo Truck, SE 1613 TC Turbo Truck, SE 1613 Turbo Truck, LPT 1613 TC Turbo Truck.| Buses| SFC 407 Turbo Mini- bus, LP 407 Turbo Mini- bus, LP 709 E Turbo Bus, LPO 1510 CGS bus (CNG bus).| Source: www.telcoindia.com
By the late 1990s, Telco had emerged as a leading name in commercial vehicles,...