Tata Motors Limited - Vendors Meet 2017

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VCG employs the 'Theory of Constraints’ philosophy to bring about quantum jump in performance of organizations in its target industry clusters.

LEVERAGING THE POTENTIAL

RetailConsumerGoods

EquipmentManufacturing

Engineering& Construction

Automobile &Auto Components






Inherent Win-Win: there are no conflicts in reality







OEM does not achieve sales

targets

Sales people have targets and incentives

Blame it on insufficient / unreliable supplies from suppliers

Same supplier supplying in market at lower prices

Service centre complaining about

unavailability

Change supplier or Share of Business

Ask for reduction in price/ change

supplier/ VALUE parts

Supplier wants to utilize his capacity-Get other customers/ sell more in after market



Let us first evaporate the issue that supplier is sabotaging the OEM for deliver

Two reasons to think so-1. Suppliers fails to

supply according to schedule

2. Cannot react fast to last minute requirements

1. Suppliers have varying lead times due to their varying load profile

2. Forecast are not accurate and



Both parties will agree upon-• Great service levels – higher sales of the model• More sales of parts for both together• More parts in market, better service levels for modelThe question is- who will sell more…. and at what price?

Fact: In the market each brand has an accepted price

• Most supplier sell to the same big retailers of OEMs!!• OEM feels that it is doing marketing for the supplier,

through first fit branding,• And the supplier is misusing it by hampering its sale

through lower prices.



Facts:• 70% vehicles go to non OEM dealer workshops• These mechanics buy from the nearest retailer, which may be small retailers.• 60-70% sales in retail is from small retailers - in by lanes• Their tolerance time of the mechanic is very low, so they buy what is available

Most OEMs and suppliers- pursue monthly sales targets. They focus on sales to large wholesalers and retailers.Don’t reach small retailers/ don’t have capacity to develop that marketThis untapped market is over 40 - 50% of the total market.

Sales and price:If sales increases for both.. The questioning of prices will stop

Is there substantial the market for both to increase sales?



Proven in the TML dealer implementation… High availability- higher sales..

Price pressure is low.

If you both follow these tactics Now the competition is against the other suppliersPricing… decide based on your capacity and market demand


If price has to be reduced by OEM:Declare to suppliers that price has to be reduced.. But will help to maintain gross contribution

Take up improvement projects and provide help.Only when achieved, reduce prices

What is needed is not ideas, but faster implementation.

There will be exceptions- so what?



1. Near 100% delivery to OEMs and SPD in the last 9 years.2. Has accepted no branding in the first fit3. Has increased reach from 5000 retailers to 75000

retailers, and average range at retailers from 4 to 24.4. Prices higher than OEMs5. No discounts or schemes in market6. Sales has increased significantly.

Fleetguard Filters


More details……


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Automotive

Tata Motors Limited - Vendors Meet 2017