Tata Motors Supply Chain

“PROJECT REPORT”

Executive Summary
The Automobile Industry contributes to various important aspects of nation building which
ranges from government revenue to economic development, people development, as well as
research, development, and innovation.
Automobiles are heavily reliant on consumer trends and tastes. The large pool of skilled
labour and growing technology creates a high demand for automobiles in India, positioning
our country as one of the top five auto producers by 2015. The Indian Automotive Industry
grew significantly following the liberalisation of the Indian industry. Today, the Indian
automotive industry is a significant contributor to the Indian economy, accounting for nearly
7.1% of the country. The two most important factors are income and ownership costs.
The auto sector, with its wide penetration and strong influence on the country's economic and
industrial development, is one of the major drivers of our economy. India is becoming a
major exporter of sport utility vehicles (SUVs). Global automakers are looking to take
advantage of India's cost-effective manufacturing practises, as well as opportunities to export
SUVs to Europe, South Africa, and Southeast Asia. India is also a significant market for
hybrid and electric medium- and heavy-duty trucks and buses.

Major Market Players

Segments Indian Origin Foreign Origin
Cars/ SUVs Hindustan Motors Ford
Mahindra & Mahindra Hyundai
Maruti Udyog Ltd Suzuki
Tata Motors Ltd Honda
Toyota
GM
Skoda
Commercial Vehicles Ashok Leyland Tatra
Swaraj Mazda Volvo
Tata Mitsubishi
Mahindra & Mahindra

Tata Motors – Company Background

Founded in 1945, Tata Motors' presence stretches across India. More than 8 million Tata
vehicles have hit the roads of India since its first deployment in 1954. The company's
manufacturing facilities in India are spread across Jamshedpur (Jharkhand), Pune
(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and
Dharwad (Karnataka).
The company's dealer, sales, service, and parts network include more than 6,600 touchpoints.
Through its subsidiaries and affiliates, Tata Motors operates in the United Kingdom, South
Korea, Thailand, Spain, South Africa, and Indonesia. Among them is Jaguar Land Rover,
acquired in 2008. In 2019, Tata was named the most valuable corporate brand in India and
reported an annual revenue of approx. 30 billion USD in 2021.

Process Flow Charts

Supply Chain Flow: Inward to Dispatch
Flow of supply chain from Procurement - Payment

Drivers of Supply Chain

Inventory
Inventory plays a very critical role in the proper functioning of a supply chain. The term
inventory will include raw materials, work-in progress and completed products and Tata
Motors holds a combined average annual inventory worth $4.3 Billion.
Transportation
As India does not have much infrastructure to transport through rails or waterways
effectively, majority of the transportation required for different parts of the supply chain is
done through the road network. India has a sprawling network of trucks that form the
backbone of the logistics of the country.
Facilities
Being a multi-dimensional conglomerate has helped Tata reduce outsourcing any processes
of production and delivery to other companies. For example, Tata owns steel factories that
can produce raw materials for the automobile manufacturing process. Meanwhile TKM
Global Logistics, a logistics and supply chain company owned by Tata can look into the
transportation of raw materials and finished goods.
Information
By using forecasting, advanced accounting techniques as well as other data analytics
techniques to determine cost reduction and other crucial factors, Tata Motors is the leading
player in the automobile field because of their versatile management that embraces new
technology.
Sourcing
Raw Materials and majority of outsourced parts are obtained through either Tata family
companies or other Indian brands. Apart from electronics that are often sourced from China,
vehicles are often sourced and assembled in the country.

Value Chain

Inbound Logistic
 Long-term contract with service provider’s – transporters and agents.
 Transparency and monitoring through deployment of IT – all transactions through
SAP.
 DTL (daily transport logistics) supplies for critical high value items.
Operations
 Division for Capital Equipment Manufacturing – global standard tooling development
capabilities.
 Apprentice Trainee Course ensures that continuous skilled labor will be available.
 Kaizen and TPM teams are constantly striving to improve efficiencies.
 Manufacturing is distributed worldwide– Assembly plants in South Africa, Thailand,
Bangladesh, and Brazil, among other places
Outbound Logistic
 Sales Offices and Vehicle Dispatch Sections in the regional level are linked through
SAP
 Stockyards are located throughout the country.
 Efficacious security mechanism to prevent pilferage of any form.
Marketing & Sales
 QFDs are conducted at regular intervals and are a structured technique to
understanding the needs of specific clients.
 Clear product requirements resulting in creation of new products such as the Tata 207
DI and Tata Ace – with a pan India presence as well as worldwide footprint.

Service
 Easy access to spare parts.
 Data is gathered efficiently and delivered from field to factory.
 Training is provided for both TASS workers as well as dealers in dedicated centers.
Procurement
 Dedicated team for Global sourcing– major items such as China, tires, power steering,
major destinations for procuring steel from Belarus
 Procurement driven by technology– SAP and Value Chain Managament.
 JVs and strategic subsidiaries – TACO Group, Tata Cummins
 Strategic procurement of key components through centralized means.
Development and Technology
 7.1 percent of annual profits of the company is re-invested in R&D.
 Strategic partnerships such as Tac Net, MDI etc.
 Benchmarking process.

SUSTAINABILITY STRATEGY

P2 Strategy is a proactive strategy that is aimed at employing fewer or smarter resources to

begin with, requiring less clean-up at the end.
Nearly 70 percent of wood packaging used is recycled, eliminating the need for new wood.
The company intends to source 60% of its components through its parks, therefore increasing
overall resource efficiency and lower emissions due to reduction of overall logistics.

R2 Strategy is focused on getting more of the same strategy, thereby reducing wasted
resources by recovery through proper disposal by recycling or re-manufacturing.

Gravity Model for Stockyard location: CASE STUDY

Gravity Model is used to find the optimum location of a facility to minimise the cost of
transportation between the supply side and facility and the facility and the target market
The location coordinates of the factory at Pantnagar, Uttarakhand and Sanand Factory at
Gujarat and the showrooms at Jammu have been taken from Tata Motors Website.
Data and Methodology

The Cost of transportation and annual demand has been assumed in accordance to total sale
of motor vehicle in Jammu and Tata Motors market share for the year 2021
Applying the gravity model using solver the coordinates for the stockyard location was
calculated to be 32 ͦ 53.52 decimal minutes North and 74 ͦ 49.43 decimal minutes East.
The total Cost of has been calculated to be 94 lakhs INR

Conclusion

We have had a comprehensive overview of the supply chain of Tata Motors, and how supply
chain drivers are important in any supply chain. A supply value chain is very important for
any business and how ERP tools and proper adoption of technology is necessary to streamline
the operations of any business.
Gravity Model is one methodology that is used to find the optimum location of a plant or
stockyard facility which minimises the total transportation cost between the markets,
sources and the plant location.
In the above problem the warehouse location needs to be around the calculated coordinates
These are some major aspects of Supply chain that we had an overview of in this project
report.

Contribution Table
Arjun Pronit Rahul Yash
MBA21028 MBA21153 MBA21154 MBA21242
Problem C - C -
Identification
Data Collection C - C -
Analysis - C - C
Recommendation - C - C
Contribution 25% 25% 25% 25%
References

https://dealer-locator.cars.tatamotors.com/

https://www.tatamotors.com/press/tata-motors-registered-total-sales-of-76210-units-in-january-
2022-grows-by-27-over-last-year/