We study the evolution of the supply chain management of Tata Motors Ltd. using a combination of firm product specific data measures, firm level performance and industry performance. Our goal is to assess the current state of Tata Motors Ltd. and identify both the potential and the management realities associated with developing globally competitive auto supply chains.
We use empirical data and anecdotal information to offer our best guess answers to the following questions: Will the future of Tata Motors Ltd. be that of a globally competitive car producer that can offer quality at a competitive price point? Will the company mainly compete at the component level, focusing on design intensive and process intensive engineered products? Will the domestic car market provide sufficient incentives for the company`s suppliers and distributers?
“To study the Supply Chain Management of Tata Motors Ltd.” METHODOLOGY:
The study can be said to be exploratory in nature as it is unknown to the researcher if any such study had been conducted in the past and thus has not been considered here. It is also descriptive in nature as it lays down the SCM activity of Tata Motors Ltd. and its prospects and potentialities. The research plan has been designed keeping in mind both the qualitative and quantitative data that the researcher had to deal with during the analysis phase. In order to get the picture of the SCM activities of Tata Motors Ltd. a meeting was held with Mr. Nilimoy Nath, Manager- Fleet Sales, Tata Motors Ltd.
Structured Interview (personal).
Structured interview and questionnaire distribution. Secondary Data:
Statistical data from Tata Motors Regional office, Guwahati and official websites. SIAM (Society of India Automobiles) websites.
Overview of India Auto mobile Industry
Indian automobile industry is riding high with overwhelming economic growth rate of 7-8% till 2008. The industry has been growing at around 16% per year from 2002-03 to 2005-06 in terms of production, after which the production is more or less uniform at around 11 million per year. If we take the growth from 2002-03 to 2008-09, it has grown 77.95%. Booming IT/ITES sector, manufacturing industry (namely textile, pharmaceutical and engineering) and real estate have contributed to this high growth in automobile industry in the country. This is easy to understand because the per capita disposable income of the people has gone up remarkably. Over the last five years, per capita personal disposable income has gone up by around 8%, which has increased purchasing capacity of the people in the country. Other factors have also contributed to this high growth in Indian automobile sector. These include lowering age of first car users, shorter replacement cycles, rising duel income families, new technology, which is lowering cost of ownership, low car penetration in the country and most importantly growing steel production in the country. In addition, wide variety and easily available financing options are also some of the major reasons for surge in demand for automobiles in India. In terms of production, commercial vehicles have registered a growth rate of 104.78% from 2002-03 to 2008-09; while passenger vehicles have registered a growth rate of 154.2% in the corresponding years. Three Wheelers and Two Wheelers have also shown the same trend of growth of 81.06% and 65.84% respectively.
Table 1: The production profile of vehicles in India
2008-09 Passenger Vehicles
1,838,697 Commercial Vehicles
417,126 Three Wheelers
501,030 Two Wheelers
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