Tata Indica - The Making Of The Small Car
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SUPPLY CHAIN
To keep its transaction costs low, Telco configured its
supply chain on a just-in-time basis. All high-value components were
delivered daily, and in the case of nearby suppliers, twice a day. Vendors
who were located far away from Pune set up local warehouses near the plant.
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The rationale for the relocation: transportation costs
alone accounted for 45% of the total logistics costs for a company,
delays in supplies added to costs in terms of machine down-time at the
plant. Meanwhile, on the shop floor, where the assembly line was
located, Telco had done away with the traditional store function.
There was no material store in the Pune plant of Telco. The truck loaded
with the material first entered the factory at the material gate where
there was a documentation center. A person at this center checked
whether the material was scheduled to arrive or not, by keying in the
part number and the supplier code. |
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If the material was not scheduled to arrive, the
documents were not processed further and the truck was not allowed to
enter the factory premises. Once it was cleared at the gate, the truck
proceeded to the receiving center.
Once the items were unloaded, unpacked and cleared for quantity and
quality, they were moved into the transit area. From there they went
into what was called the ‘super market'. The super market was close to
the assembly line. In the super market, the materials were arranged in
such a way that the workers could easily access all the material
required on the assembly line without wasting much time and effort.
The benefits of this just-in-time inventory system were that the
inventories were low and so the interest costs were also low. Again the
manpower required to handle the inventories was also low.
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LEVERAGING THE SUPPLY CHAIN
QUESTIONS FOR DISCUSSION
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