Calculation of steel consumption per vehicle at Tata Steel and supply chain

analysis of vendor ecosystem

By

Prashant Mishra 1302-193

IMT Ghaziabad

The context

• Jamshedpur : a manufacturing hub• Tata steel + Tata Motors- perfect location• Logistically well connected• Still poor efficiency in demand fulfillment

The problem

• Erratic behaviour of supply chain of Tata motors, and tracking of per vehicle consumption of critical grades of steel .

Research Design

• Primary data• Secondary Data• Qualitative design• Questionaire design• Data collection

Procedural steps :

• Understanding the manufacturing process flow at Tata Steel.• Understanding the manufacturing process flow Tata Motors.• Analyzing the demand demographics of Tata Motors• Identifying the role of TSPDL.• Conducting vendor visits and interaction• Data collection and analysis• Result generation

A bit about steel

• HR : Hot rolled - thickness of 2- 10 mm - poor surface finish - good mechanical strength• CR : Cold rolled - Thickness of 0.75 mm to 2 mm - good surface finish - not so good mechanical strength

The supply chain flow

TATA STEEL • VENDORSTSPDL

TATA MOTORS

Plan of study

• Study has ben planned in two phases 1) evaluation of the perception of tata steel among tata motors ancillaries and evaluation of problems 2) Evaluating the steel consumption per grade per vehicle, so as to facilitate better understanding of the consumption pattern

The Findings : Vendors satisfaction

Vendor satisfaction

Satisfied Unsatisfied

Problems faced by ancillaries

credit limit order quota incorrect schedules unavailiblity transportation packaging0

5

10

15

20

25

30

35

Problems breakup

Steel consumption per vehicle breakup

2012-13 2011-12 2010-11 2009-100

200

400

600

800

1000

1200

Average Steel Consumption Per Vehicle

CR SheetHR Sheet

CR steel consumption per month

D 513 DD 1079 DQ EDD 513 FE 4100

200

400

600

800

1000

1200

1400

1600

1800

Input weight for CR

Row Labels Sum of INP WT for CR(mT)

D 513 466.4633984

DD 1079 1657.411716

DQ 118.755

EDD 513 444.2152209

FE 410 578.9254902

Grand Total 3265.770826

HR steel consumption per month

D513 DD1079 E34 E38 E46 Fe410 Grade A0

200

400

600

800

1000

1200

Hr grade

Total

D513 370.109

DD1079 1057.585

E34 250.7443265

E38 533.557453

E46 831.3524

Fe410 677.5870022

Grade A 64.453

Grand Total 3785.388182

Per vehicle breakup

Average Steel Consumption

FY13-14 FY 12-13 FY 11-12 FY 10-11 FY 09-10

HR Sheet / Vehicle 825kg 722 kg 717 kg 780 kg 828 kg

CR Sheet / Vehicle 299kg 226 kg 253 kg 231 kg 242 kg

Steel consumption gradewise

44%

23%

16%

3%

1%3% 9%

1%

Steel Consumption

D513 DD1079 Fe410 Grade A E34 E38 E46 ERW1

The production quandry

june july august september october november december january february march april may june0

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3000

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6000

7000

8000

Tata Motors Production Chart

Month

Num

ber o

f Veh

icles

Safety stock deficit chart

SS march SS February SS January SS December SS November SS october0

500

1000

1500

2000

2500

3000

Safety stock Deficit

Month

Defic

it in

num

ber o

f com

pone

nts

Conclusion

• Demand supply gap for critical grades• Vendors wrongly influence demand• Scheduling on both fronts is defective• No adherence to the safety stock policy• No information management system for ancillaries• Unethical logistical practices

Recmmendations

• Reduce lead time for critical grades• Adopt appropriate sizing of finished coils.• Implementation of state of the art information system• The supply line should be properly maintained.• They should improve customer relationship.• Ensuring greater schedule accuracy• If possible engage the vendors directly• Investing in safety stock inventory storage capacity

Thank You !!

Questions please.