TELCO

The case provides an understanding of the issue concerning the supply chain management system at TELCO in regards to its small car It outlines how Telco, Built the supply chain for the car by leveraging its existing competencies. It transformed itself for an integrated truck manufacturer to an automobile integrator And from a product centric company to a competence centric company

The case discusses:

The case discusses: - various components of the supply chain - and emphasizes how Telco orchestrated them with the objective of minimizing costs

How Telco came into the market

In 1960, the companys name was changed to TELCO from Tata Locomotive & Engineering Company. By 1961, it was manufacturing construction equipments. 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 indigenious design

 The product range of the company included passenger cars heavy commercial vehicles, trucks and buses. By the late 1990s, Telco had emerged as a leading name in - commercial vehicles -passenger vehicles - construction equipment - metal cutting and grinding machines -industrial shutters -high quality steel

Case - Indica
Birth of Indica takes place by the idea of developing small car in the mind of Telcos chairman Ratan Tata (1990) By mid 1994 the basic design was in place Tata Indica Indias first indigenously designed and manufactured car launched by Tata Motors, spearheading the Groups entry into the passenger car segment (1998) Main competitor Maruti

 The idea was to build a car almost equivalent to - Cost of Maruti 800 - Shape of Zen -Space of Ambassador For developing a new car, on average it takes 48 months and Rs. 12750 crores. But Indiace was developed in 31 months and the bill totaled to Rs. 1700 crores only! To evolve into global player, 1 important element is an effective Supply Chain network to cater the car market.

 Therefore, Telco had to put the Supply Chain Management in the prime slot.

Supply Chain Management system at Telco in regard to Indica and how Telco built its supply chain to become a comtence centric company?

 Just in time basis High value components were delivered daily In case of nearby suppliers, twice a day Advantages were: - Cost became low margins became high - Time spent in transportation got reduced

GLOBAL SCM OF TELCO

 The shift to buying over the Net is saving the company precious cash The idea was to leverage on the power of the Internet for global sourcing Free markets have held reverse auctions on the Net for Telco and through these, Telco has made purchases & makes it one of the biggest e-provurement initiative in the country Telco is still handling with the complex task of managing the trade-off between sizeable short-term cost savings and decades-old supplier relationships Eventually it invited 30 global and Indian suppliers. The result: a huge 50% drop in prices.

Discuss the various components of supply chain management and emphasize on how Telco orchestrated them with the objective of minimising costs

 SCM is the oversight of materials information, & finances as they move in a process from supplier to manufacturer to wholesale to retailer to consumer. SCM involves coordinating & integrating these flows both within & among companies. The ultimate goal of any effective SCM system is to reduce inventory which at last results in reducing the cost

 Tata engineering maker of the Indica, was aiming for the highest standard in minimum cost. Best quality components were used through the following: - technology outsourcing - strategic direction to look beyond local suppliers - most of the companies supplying components were the sider companies of Tata - due to option of reverse auctioning on the internet, they used tog et the components at cheaper rate. - tried to build relationship with suppliers for getting cheaper prices & promoted small companies who were supplying components -joint venturing with foreign companies to get better technology