Tata Motors (TML) is India’s leading automobile manufacturer, which is established in 1945. It is amongst the top 5 manufacturers of commercial vehicles in the world. TMS is the largest Indian automobile company with consolidated Revenues of Rs. 92519 crores (USD 20 billion) in 2009-10″ (www.tatamotors.com). It has employed around 24000 employees. The manufacturing base of TML is spread around various Indian states.
TML is not only limited up to the Indian market, but it has also started expanding its footsteps into the international market. Today Tata Motors is a global player having markets in several countries around the world including Europe, Africa, etc. Tata Motors dealing in a wide range of vehicles such as passenger cars, utility vehicles, Trucks, Commercial passenger vehicles as well as defense vehicles. he main competitors of automobile companies such as Tata Motors are the large manufacturer of commercial and passenger vehicles in India who are, Ashok Leyland, Eicher Motors, Swaraj Mazda, Mahindra, and Mahindra, etc.
Supply chain management is one of the important and necessary functions of the organization. It concerns the flow of information as well as the flow of products and services. It is a management of the relationship between operations and processes. The concept of supply chain applies to the internal relationship between processes as well as the outside relationship between operations. Overall it is a management of activities and relationship which intends to achieve maximum customer value and sustainable competitive advantage. (Cowe, 2008).
In a supply-side normally organizations send the information to the first tier supplier about their needs such as quality of the material required, time limit, quantity, cost, etc. Based on this first-tier suppliers send the relative information to a second-tier customer and depending on this the second tier supplier supplies the products required to the organization via the first-tier supplier.
To manage the demand side well, the organization obtains the information from the end customer of the product directly or via second-tier customer and first-tier customer and send it to its suppliers. So we can see that the information obtained from end customer requirement reaches up to the last supplier via different channels such as second and first-tier customer, organization, first-tier supplier, and so on and depends on this end customer obtains required products.
Selection of supplier: One of the important activities of supply-side management is the selection of proper suppliers. To select the supplier, first of all, they have to understand the requirement of all processes within their operations as well as to understand the capabilities of the supplier, because they are going to provide products and services required for the operations.
To select the right supplier most of the firm mainly take up supplier scoring or assessment procedure which makes them able to evaluate different suppliers considering the relative importance of factors like, range of products or services provided, quality of products or services, awareness, delivery and volume flexibility, cost, ability to supply the required quantity as well as their potential for innovation, willingness to share a link, long term commitment to supply, etc.
Planning and controlling ongoing supply: Once the selection of suppliers is done the next activity of supply management is to plan and control the ongoing supply. Planning and control of ongoing supply about ensure that the suppliers are given the right information and encouragement to maintain smooth supply as well as to make sure that any internal discrepancy does not affect the supplier’s ability to supply. Therefore maintenance of ongoing process requires a relative method or system set up to ensure the two-way flow of information between customer and supplier.
To maintain this process well some organizations bring a degree of formality to supplier relationships by encouraging all suppliers to agree to service-level agreements (SLAs) (Cowe, 2008, p.60). Developing and improving supplier’s capabilities: Developing and improving supplier capabilities is an important issue in supply-side management.
To help the supplier to improve not only enhances the service from the supplier but it may also about lead to greater supplier loyalty and long-term commitment as it helps to enhance productivity, competitive advantage as well as to build a long term supply chain competitiveness which is necessary for the success of any process or operations.
To improve the suppliers’ capabilities a company can use cross sourcing. An organization can use a single supplier for certain sectors and another supplier with the same capabilities for a similar part of the business. Then it can give business to each supplier based on their performance which can motivate the supplier to improve its capabilities and performance. In this way, an organization can also have a backup if one supplier is not able to meet its requirement it can move to another easily.
Question # 05:
a) Explain the Tata Supply Management concerning this case study.
b) Suggest possible strategies to improve Tata’s Supply Management. Get assignment help.