Introduction
The corporate environment is becoming increasingly dynamic. The emergence of digital
technologies, the fueling of a global consumer and supply base, and increased demand for
variety, combined with accelerated rates of change, the breakdown of innovation and technology
lifecycles, the emergence of digital technologies, the fueling of a global consumer and supply
base, and increased demand for variety, are all increasing the burden on businesses and
stimulating a shift in the supply chain's position. Although the fundamental market principles of
consumer purchasing, selling, and handling, suppliers, and capital remain valid, the environment
in which they must be handled is becoming more dynamic, unpredictable, and volatile; a
scenario made worse by the increasing rate of change.
Supply Chain Management
Supply Chain Management (SCM) is the centralized administration of the flow of goods and
services, and it encompasses all processes that transform raw materials into finished items.
Companies can decrease costs and deliver items to customers faster by optimizing the supply
chain. Supply chain management keeps businesses out of the news and out of costly recalls and
lawsuits. Developing a plan, obtaining raw materials, production, distribution, and returns are the
five most important aspects of SCM. Controlling and decreasing costs, as well as avoiding
supply shortages, are the responsibilities of a supply chain management.
Role of Supply Chain
The supply chain's role as a primary cost driver has long been recognized. According to some
estimates, the supply chain accounts for up to 70% of the cost of an item. As a result, the supply
chain presents a considerable cost advantage opportunity. In addition to maintaining
distinctiveness and cost advantage, the supply chain now has two additional dimensions as a
result of the requirement to ensure "resilience, responsiveness, and flexibility in an increasingly
dynamic and uncertain world."
Organizations confront additional issues when it comes to supply chains since they align
themselves with a big variety of objectives, which leads to increased complexity. They are
unable to settle on a particular goal, such as:
Reduce inventory levels?
Start making on-time deliveries?
Increase the number of people who fill out forms?
Reduce the cost of supply chain management?
Boost the flow of commodities across the supply chain?
Boost flexibility to meet fluctuating demand?
As a result, the primary responsibility of senior supply chain management is to align supply
chain strategy with company strategy and assure enhanced financial results.
Introduction of Maruti Suzuki
Maruti Suzuki, India's largest passenger automobile manufacturer, was started in Delhi
in 1981.
The corporation was formerly owned by the Indian government.
Involved in the manufacturing of automobiles and auto parts.
Later, a joint venture with Suzuki Motor Company was formed, and the company was
renamed MARUTI SUZUKI.
It produces about a million cars per year and is India's market leader, bringing a
revolution to the country's automobile industry.
It is also the first Indian firm to export 500,000 vehicles.
Maruti Suzuki has always been a leader in the automobile segment and is the market leader in
India. The company has also been a leader in using its supply chain design to stay ahead of the
competition in this segment, and has invested in a good infrastructure from the beginning to
ensure a smooth and efficient flow of goods and information.
Supply Chain Management (SCM) at Maruti Suzuki
Maruti now offers 17 different models with 1,480 different options. If colour variations are
included, the total number of variants surpasses 10,000. And, on average, each car comprises
almost 30,000 separate pieces. Standardization of modules to common platforms is a frequent
goal for market OEMs like Maruti Suzuki India Limited (MSIL) in vehicle manufacture.
Modules are collections of related components and systems that perform the same or similar
duties (for example, the front/rear axle, the entire front area of a body, or the steering system).
Platforms are made up of interconnected modules that are used to produce products for many
automobile brands. This means that cars can be customised to meet the needs of specific clients,
and delivery schedules allow OEMs (Original Equipment Manufacturers) to create various
models (based on different platforms) in the same assembly plant. This component sharing is
critical for cost reduction.
Order-to-delivery time is a crucial aspect in the automobile industry and production process, and
model diversity is an important sales argument. These changes need modifications in assembly
operations and working logistics, necessitating a more flexible and agile management of the
automotive supply chain. Maruti's supply chain consists of Tier 1 - 3 component or module
suppliers, logistics partners, dealers, and spare part distributors.
MSIL has relied heavily on logistics to keep total supply chain costs as low as possible,
particularly in terms of inventory reduction. MSIL is always looking for new ways to optimise
logistics, which includes looking at new routes and trade options. In terms of warehouse
management and shipping,
MSIL has outsourced the management of spare parts and components. MSIL's e-nagare system is
accessible to the outsourced logistics service partner. MSIL uses logistic service providers
(LSPs) as Tier I suppliers, with a warehouse inventory of three days and in-transit inventory of
two days. After receiving the indents through the MSIL system, the spare parts are immediately
shipped to the dealers.
Role of Information Technology (IT) in Supply Chain Management
(SCM)
The importance of IT in supply chain management (SCM) cannot be overstated. IT gives the
tools to gather important data, break it down for proper analysis, and execute it for optimal
supply chain efficiency. Data is critical to supply chain performance because it provides the
foundation upon which supply chain managers can make decisions.
The key to effective supply chain management is real-time or near-real-time data. Decision-
makers may plan, manage, and adapt operations to fulfil goals in procurement, inventory,
manufacturing, and other areas with information about the various phases of the supply chain.
Application of Information Technology (IT) by Maruti Suzuki in
streamlining Supply Chain Management (SCM)
Integrated and Coordinated Supply Chain
Maruti links and coordinates supply chain so that it can function effectively. This critical task is
performed by IT, which brings in numerous technologies and combines them to optimise the
supply chain. Data collecting is now possible, as well as much easier and more accurate, thanks
to these technologies. As a result, precise and extensive data analysis is possible, resulting in
good business decisions.
Increased Productivity
Maruti in the supply chain benefit from a smooth flow of information, innovative technologies,
and excellent communication. It acts as a catalyst for product mobility. Instead of moving back
and forth, IT provides a constant link that transmits the necessary data.
Cost Reduction
For the most efficient use of resources and assets, Maruti uses information technology. To
investigate patterns, old data is taken, and technology is employed to analyse it in order to
improve performance. When resources are utilised to their full potential, costs are reduced. In a
supply chain, IT plays a larger role since it encourages all stakeholders to use their resources in
the most cost-effective way possible. When information technology is applied properly, overall
costs drop dramatically.
Product Improvements
In order to increase revenue and profits, Maruti Suzuki make product improvements with the
application of IT. IT is made up of tools and programmes that can be utilised to raise awareness
early on. In a market where customers are continually looking for something new, the product
will either have to change or become obsolete. You must incorporate product enhancement and
innovation sooner rather than later if you want to stay in business. IT can be used to validate the
type and amount of product improvement.
Supply Chain Transparency
Supply Chain visibility is maintained in Maruti Suzuki with the help of IT. Information allows
supply chain managers to see the complete supply chain. Managers leverage the flow of
information from one collaborator to the next, as well as the impact it has on others, to make
strategic decisions.
