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AUTOMOTIVE IndianAutomotiveSupplyChain ADiscussionPaper INDUSTRIAL MARKETS
Transcript
Page 1: Auto Survey for print:TP4 Survey A4.QXD - KPMG · KPMG Yezdi Nagporewalla National Industry Director Industrial Markets KPMG House, Kamala Mills Compound 448, Senapati Bapat Marg,

AUTOMOTIVE

Indian�Automotive�Supply�Chain�A�Discussion�Paper

INDUSTRIAL MARKETS

Page 2: Auto Survey for print:TP4 Survey A4.QXD - KPMG · KPMG Yezdi Nagporewalla National Industry Director Industrial Markets KPMG House, Kamala Mills Compound 448, Senapati Bapat Marg,

Table�of�contents

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

Background 1

Survey�Findings 2

Integrating�the�end-to-end�supply�chainis�the�key�challenge�in�the�Indian�autoindustry�today 2

Outsourcing�of�supply�chain�activitieswill�increase 5

Need�for�global�supply�chain�managementcapabilities�becoming�significant 7

Focus�areas�for�the�future 10

Conclusion 12

Page 3: Auto Survey for print:TP4 Survey A4.QXD - KPMG · KPMG Yezdi Nagporewalla National Industry Director Industrial Markets KPMG House, Kamala Mills Compound 448, Senapati Bapat Marg,

The�automotive�industry�is�a�key�contributor�to�the�Indian�economy,�accountingfor�about�4�percent�of�the�Indian�economy.�The�last�few�years�have�seen�greaterintegration�of�the�Indian�industry�with�its�global�counterparts.�What�is�interestingabout�this�is�its�almost�democratic�nature,�in�that�a�large�part�of�the�industry�hasseen�significant�changes.�While�the�changes�have�been�more�visible�in�the�autocomponent�part�of�the�industry,�with�key�players�having�a�significant�exportcontribution�today,�Original�Equipment�Manufacturers�(OEMs)�too�have�beenundergoing�their�own�set�of�changes.�

KPMG�in�India�has�been�fortunate�enough�to�see�this�transformation�take�place,while�participating�in�a�small�way,�through�its�work�with�key�parts�of�theautomotive�supply�chain.�The�wave�of�change�started�with�overseas�OEMswanting�to�enter�the�country.�A�natural�fall-out�of�this�was�the�large�suppliers�whoentered�the�country�as�part�of�the�‘follow�source’�doctrine.�The�last�couple�ofyears�have�seen�significant�interest�from�Indian�players�who�are�actively�lookingat�exciting�markets�to�enter�as�well�as�attractive�targets�to�acquire.�We�havewatched�and�assisted�a�number�of�players,�whether�it�was�assistance�related�totheir�‘India/�Overseas�Strategy’,�or�assistance�in�‘Mergers�and�Acquisitions’,�oradvice�on�‘tax’,�or�advice�on�how�to�‘manage�risks’.�

Going�forward,�OEMs�as�well�as�auto�component�players�will�evolve�further�asthey�become�more�and�more�‘global’�in�nature.�For�OEMs,�this�would�meanrising�competition�in�the�domestic�market,�and�hence�the�need�to�diversify�out�ofIndia.�For�auto�component�players,�this�would�mean�the�need�to�achieve�globalmanufacturing�standards�and�emerge�as�supplier�of�choice�for�global�companies.These�changes�would�have�a�significant�impact�on�the�automotive�supply�chain.Clearly�the�need�of�the�hour�is�for�various�players�to�identify�key�challenges�facingthe�industry�and�develop�strategies�to�help�mitigate�these.�

The�objective�of�this�study�was�to�analyze�the�key�challenges�facing�differentsections�of�the�Indian�auto�industry,�identify�areas�which�need�significantattention,�and�identify�opportunities�for�service�providers,�who�could�assist�autoplayers�in�meeting�some�of�these�challenges.�This�report�contains�the�results�ofour�analysis�including�a�dip-stick�primary�survey�with�supply�chain�heads�of�keyauto�companies.�

We�are�grateful�to�CII�for�giving�us�this�opportunity�and�to�all�respondents,�whocontributed�to�this�study.�We�hope�this�document�serves�as�a�quick�primer�forissues�facing�the�Indian�automotive�supply�chain.�It�also�seeks�to�provideanswers�to�some�of�the�key�questions�related�to�supply�chain�management(SCM)�facing�the�industry.

Background

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

Indian�Automotive�Supply�Chain� 1

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KPMG�conducted�a�dip-stick�study,�as�part�of�the�run-up�to�the�CII’s�AutoSCM2006,�across�participants�from�various�OEMs,�auto-component�players�andlogistics�providers�to�identify�key�issues�and�challenges�being�faced�by�them.�Thefindings�of�the�primary�survey�were�then�supplemented�by�KPMG’s�analysis.

The�conclusions�from�this�exercise�have�been�categorized�into�three�broad�areas:

• Integration�of�the�auto-Supply�Chain

• Role�of�outsourcing�in�auto�supply�chains�in�India

• The�global�auto�supply�chain�–�key�capabilities�required

Integrating the end-to-end supply chain is the

key challenge in the Indian auto industry today

Key�issues�/�challenges

Indian�automotive�players�today�face�several�key�challenges�in�managing�theirsupply�chains.�While�addressing�these�is�critical�for�success,�players�were�askedto�rank�the�challenges�in�order�of�priority.

2��Indian�Automotive�Supply�Chain

Survey�Findings

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

8%

15%

15%

62%

0 10 20 30 40 50 60 70

Managing product/Part Proliferation

Managing supply chain costs

Managing Inbound Logistics/JIT Supplies

Integrating the end-to-end supply chain

Percentage of respondents

Leading SCM challenge

Figure 1: Leading SCM challenge faced by Indian automotive sector

Page 5: Auto Survey for print:TP4 Survey A4.QXD - KPMG · KPMG Yezdi Nagporewalla National Industry Director Industrial Markets KPMG House, Kamala Mills Compound 448, Senapati Bapat Marg,

Our�analysis�revealed�that�the�most�significant�challenge�identified�by�automotiveplayers�in�India�is�‘integrating the entire supply chain’ and�managing�it�as�a�singleintegrated�entity.�While�past�efforts�of�OEMs�have�been�focused�on�streamliningand�improving�different�areas�of�the�supply�chain�independently,�through�efforts�indealer�management,�operations�planning,�vendor�rationalization,�IT�packageimplementation�etc,�it�is�expected�that�the�linking�up�of�these�activities�isexpected�to�provide�significant�benefits�to�players,�as�this�would�involve�aligningthe�entire�chain�to�meet�market�requirements�in�the�most�efficient�way.�

The�key�challenge�in�achieving�this�would�be�two-fold�–�to�align�the�differentstakeholders�along�the�chain�–�vendors,�transporters,�distributors�and�dealers�–along�common�goals�and�processes,�and�also�to�integrate�and�link�disparate�ITsystems�used�by�different�stakeholders.

‘Managing inbound logistics’ remains�a�key�concern�for�OEMs�as�well�as�autocomponent�players,�driven�more�by�challenges�related�to�reliability�of�data,�leadtime�and�absence�of�quality�logistics�players�on�the�upstream�side.�However,�allrespondents�felt�that�this�was�a�key�area�of�focus,�given�the�criticality�of�supplyfor�future�growth.�

‘Managing product and part proliferation’ is�one�of�the�second�significantchallenges�players�face.�Increasing�competition�in�the�Indian�automotive�industryhas�led�to�significant�shrinkage�in�product�lifecycles�and�the�need�for�regular�andfrequent�product�upgradation�and�new�product�introductions.�While�this�has�ledto�issues�of�managing�a�wide�product�portfolio,�a�related�key�issue�is�theproliferation�of�parts/components,�driven�by�the�need�for�providing�spare�parts�forcurrent�as�well�as�discontinued�models.�Respondents�across�both�OEMs�as�wellas�auto-components�indicated�that�increasingly�the�need�for�common�platforms,and�hence�common�parts�becoming�critical�pre-requisite.�A�key�role�played�byproduct�development�teams�today�is�the�identification�and�adoption�of�commonparts�and�components�across�models.�However�all�respondents�agreed�that�therewas�significant�scope�for�improvement�in�that�area.

Costs,�quality�and�timely�delivery�continue�to�be�key�concerns�for�players,�drivenby�increasing�competition�and�pressure�on�margins.�Many�OEMs�haveimplemented�‘Just In Time (JIT) supplies in their inbound logistics’.�However,�incases�where�this�is�not�accompanied�by�increased�visibility�across�the�supplychain�and�improved�planning,�it�has�only�resulted�in�the�burden�of�inventorygetting�shifted�from�OEMs�to�their�Tier-I�vendors.

Indian�Automotive�Supply�Chain� 3

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

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Key�initiatives�to�address�SCM�challenges

Several�strategies�and�measures�are�envisaged�by�different�players�to�addressthese�key�issues.�The�primary�focus�of�most�players�is�on�implementing‘improved processes and IT systems’ across�the�supply�chain.�In�view�of�the�factthat�most�OEMs�and�major�suppliers�have�already�implemented�integrated�ITsystems�(ERP),�this�feedback�indicates�that�they�have�not�been�able�to�leveragethe�benefits�of�such�systems.�A�key�reason�for�this,�is�that�business�processeshave�not�been�streamlined�or�aligned�with�the�needs�of�the�new�IT�system.�

In�addition�to�this,�as�companies�mature,�their�information�needs�to�move�beyondthe�capabilities�of�a�transaction�processing�system.�A�number�of�respondentscorroborated�this,�and�mentioned�that�they�were�in�advanced�stages�ofimplementing�decision�support�systems�and�dashboards,�which�facilitatemonitoring�of�summarized�information.

‘Vendor / dealer rationalization’ is�an�ongoing�focus�area�for�OEMs�to�reducecosts�and�tighten�management�of�supply�chains.�However,�most�respondentsagreed�that�the�Indian�industry�has�still�not�evolved�into�a�fully�tierized�structurewhere�Tier-I�vendors�take�on�responsibility�for�modules�/�sub-assemblies.

The�study�also�indicated�that�increasingly,�efforts�were�being�made�by�manyOEMs�and�Tier-I�vendors�to�‘outsource’ key�activities�along�the�supply�chain�tologistics�players,�in�an�effort�to�reduce�costs�and�increase�focus�on�theircustomers�and�core�activities.�This�area�is�discussed�in�greater�detail�in�the�nextsection.

4��Indian�Automotive�Supply�Chain

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

8%

23%

31%

38%

0 10 20 30 40

Addressing Infrastructure issues

Outsourcing to logistics service providers

Vendor/Dealer rationalization

Increased Investment in IT and processimprovements

Percentage of respondents

Leading strategy for SCM challenges

Figure 2 : Leading strategy to address supply chain challenges

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Outsourcing of supply chain activities will

increase

Implications�for�OEMs�and�auto-component�players

Most�OEMs�and�large�Tier-I�suppliers�have�already�outsourced�their�outboundlogistics�activities.�These�activities�include�carrying�out�‘milk runs’ to�collect�anddeliver�parts�to�OEMs�on�a�daily�basis,�transferring�materials�across�hubs�andwarehousing/inventory�management.�Key�logistics�players�have�startedmaintaining�warehouses�in�close�proximity�to�OEMs’�plants,�and�supplyingmaterials�on�a�JIT�basis.�Related�services�being�provided�by�large�third�partylogistics�service�providers�(3PLs)�include�consolidation�of�materials,�packaging,incoming�inspection,�cleaning,�etc.

The�fact�that�both�OEMs�and�suppliers�are�looking�at�outsourcing�providessignificant�opportunities�for�logistics.�Packaging�is�another�area�that�hassignificant�potential�for�being�outsourced,�as�this�is�a�natural�value-add�prior�totransportation�of�parts.

Indian�Automotive�Supply�Chain� 5

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

Outsourced elements in SCM

15%

54%

69%

77%

0

20

40

60

80

Packaging Inboundlogistics

WarehousingOutbound logistics

Perc

enta

ge o

f re

spon

dent

s

Figure 3: Increased level of outsourcing in the automotive supply chain

Page 8: Auto Survey for print:TP4 Survey A4.QXD - KPMG · KPMG Yezdi Nagporewalla National Industry Director Industrial Markets KPMG House, Kamala Mills Compound 448, Senapati Bapat Marg,

Implications�for�logistics�service�providers

Both�OEMs�and�suppliers�are�unanimous�that�in�the�future�outsourcing�in�SCMwill�grow,�and�logistics�service�providers�will�start�taking�on�more�complex�roles.These�include�kitting�/�module�assembly�(as�a�precursor�to�JIT�supplies),�partsand�inventory�management�and�also�sourcing�of�parts�within�India�and�globally.�Ineffect,�this�implies�that�logistics�service�providers�in�future�have�the�potential�totake�on�the�entire�physical�handling�/�movement�of�goods�in�the�automotivesupply�chain,�as�well�as�planning�/�scheduling.

This�would�emerge�as�a�huge�opportunity�for�these�players,�however,�enteringthis�space�would�require�several�strengths�and�capabilities�such�as�national�/

global�presence,�relationships�with�transporters�/�shipping�lines,�deep�knowledgeand�skills�in�planning�and�project�management,�customized�IT�capabilities,�andthe�ability�to�integrate�these�to�provide�solutions�customized�for�the�OEM�/supplier.�It�appears�that�the�growth�of�outsourcing�in�automotive�SCM�in�future,would�be�limited�only�by�the�capability�of�logistic�players�to�gear�up�to�deliverthese�services.

6��Indian�Automotive�Supply�Chain

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

38%

46%

46%

69%

0 10 20 30 40 50 60 70 80

End to end SCM

Parts sourcing

Planning & Scheduling/Inventorymanagement

Module assembly

Percentage of respondents

Future outsourcing in SCM

Figure 4: Future operations which could be outsourced

Logistics�serviceproviders�in�future�havethe�potential�to�take�onthe�entire�physical�movement�of�goods�inthe�automotive�supplychain,�as�well�as�planningand�scheduling

Page 9: Auto Survey for print:TP4 Survey A4.QXD - KPMG · KPMG Yezdi Nagporewalla National Industry Director Industrial Markets KPMG House, Kamala Mills Compound 448, Senapati Bapat Marg,

Need for global SCM capabilities becoming

significant

While�the�challenges�and�imperatives�discussed�till�now�have�been�driven�bychanges�in�the�domestic�automotive�market,�a�more�significant�trend�is�the�rapidglobalization�of�the�Indian�auto�industry.�As�global�OEMs�and�Tier-Is�seek�tosource�more�parts,�components�and�vehicles�from�India,�and�Indian�players�seekto�leverage�this�opportunity�to�increase�their�global�footprint,�supply�chain�formany�Indian�auto�players�today�extends�across�several�countries.

Exports�are�a�key�part�of�global�strategy

Most�Indian�players�already�have�a�global�presence,�and�are�looking�at�furthergrowth�from�overseas�markets.�Managing�the�global�supply�chain�has�thusbecome�a�significant�challenge�for�Indian�automotive�players.

Most�of�the�respondents�indicated�that�exports�constitute�a�key�part�of�theirstrategy�today,�further�over�the�next�five�years,�these�players�expect�to�nearlydouble�their�share�of�exports.�Most�of�the�players�who�have�nascent

(�<10�percent)�exports,�expect�to�significantly�improve�and�have�exports�of�10percent�to�20�percent�in�five�years.�While�none�of�the�respondents�had�morethan�40�percent�exports�currently,�nearly�29�percent�expect�to�be�there�in�fiveyears.�

Indian�Automotive�Supply�Chain� 7

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

Revenues from exports

44%

22%

34%

12%

38%

25% 25%

0

10

20

30

40

50

0-10 percent 10-20 percent 20-40 percent more than 40percent

Percent revenues from exports

Today

In 5 years

Figure 5: Revenues from exports, today and five years from now

Page 10: Auto Survey for print:TP4 Survey A4.QXD - KPMG · KPMG Yezdi Nagporewalla National Industry Director Industrial Markets KPMG House, Kamala Mills Compound 448, Senapati Bapat Marg,

At�present,�the�Gulf�countries,�Europe�and�North�America�are�the�key�marketsIndian�players�are�looking�at�for�exports�currently.�While�these�will�continue�toremain�significant�over�the�next�5�–�10�years,�ASPAC�and�Japan�are�seen�as�newpotential�markets�for�exports.�

Different�models�are�possible�to�address�global�markets

In�addition�to�exporting,�many�large�Indian�suppliers�and�OEMs�have�alsoestablished�their�manufacturing�presence�in�other�countries.�Several�businessmodels�have�been�used�by�Indian�players�to�venture�into�other�countries,including�setting�up�own�ventures,�acquisitions�and�joint�ventures.�In�our�study,the�majority�of�respondents�felt�that�setting�up�own�operations�in�other�countriesis�the�most�preferred�option�followed�by�acquisitions�and�JVs.�The�model�for�eachplayer�would�depend�on�the�opportunity�and�their�own�investment�and�riskappetite.�Most�suppliers�in�India�see�acquisitions�as�a�means�to�get�anestablished�customer�base,�which�can�then�be�served�out�of�India.

Having�the�right�partner�–�key�to�success�in�global�markets

Managing�a�global�supply�chain�that�spans�different�countries�poses�severalchallenges�unique�to�automotive�players�in�India.�The�complexity�of�operations�isincreased�by�having�to�manage�longer�lead�times,�more�number�of�stages,�andmultiple�stakeholders�involved,�higher�expectations�of�customers�with�regard�toquality�and�delivery,�and�maintaining�cost�competitiveness.

8��Indian�Automotive�Supply�Chain

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

31%

54%

54%

62%

0 10 20 30 40 50 60 70

Leveraging global parent/ technology partner'soperations

JVs with local players in other countries

Acquisition of local players in other countries

Own operations in other countries

Percentage of respondents

Business models for global markets

Figure6: Business models that are being adopted for global operations

The�majority�ofrespondents�felt�thatsetting�up�ownoperations�in�othercountries�is�the�mostpreferred�option�followedby�acquisitions�and�JVs

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In�our�study,�respondents�identified�several�key�success�factors�necessary�formanaging�global�supply�chains�effectively.�The�key�requirement�perceived�is�the

need�to�have�a�strong�logistics�service�provider,�who�has�global�reach�andexperience�in�operating�in�different�markets.�Such�players�could�help�to�cut�downthe�time�for�entering�the�new�market�significantly,�as�they�would�be�able�toleverage�existing�infrastructure,�business�relationships�and�experience�in�eachmarket�to�crunch�lead�times.�They�would�also�be�able�to�identify�key�risks�andprovide�adequate�advice�on�addressing�them.

While�a�strong�logistics�partner�is�a�key�requirement,�many�players�underscoredthe�need�for�a�local�presence�in�the�market�addressed,�to�be�able�to�assess�themarket,�take�decisions�and�leverage�/�manage�local�talent.�

As�the�challenges�and�requirements�for�managing�a�global�supply�chain�aresignificantly�different�from�that�for�domestic�market,�having�a�dedicated�internalorganization�to�focus�completely�on�the�global�SCM�was�identified�as�another�keyrequirement.

Indian�Automotive�Supply�Chain� 9

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

8%

17%

33%

42%

0 10 20 30 40 50

Process / IT capability

Dedicated internal organisation

Local Presence

Percetage of respondents

Leading success factor for global SCM

Good logistics service providerwith global reach

Figure7: Key factors for success in managing global supply chains

Page 12: Auto Survey for print:TP4 Survey A4.QXD - KPMG · KPMG Yezdi Nagporewalla National Industry Director Industrial Markets KPMG House, Kamala Mills Compound 448, Senapati Bapat Marg,

10��Indian�Automotive�Supply�Chain

Focus areas for the future

The�rapid�transformation�and�globalization�of�the�Indian�auto�industry�has�resultedin�significant�opportunities�and�challenges�for�players�in�managing�their�supplychains.�Most�players�are�aware�of�these�and�have�developed�strategies�foraddressing�them.�Several�key�focus�areas�have�been�identified�whereinvestments�are�planned�over�the�next�five�years.�

‘Vendor management’ would�continue�to�remain�the�primary�focus�area�forOEMs,�in�managing�their�supply�chains.�However,�in�future,�vendors�wouldinclude�service�providers,�as�well�as�parts�suppliers.�Also,�the�vendor�base�couldinclude�those�in�other�countries�as�well,�as�OEMs�look�at�global�sourcing�forparts�and�services.�As�discussed,�developing�and�managing�‘global supply chains’would�be�a�key�focus�area�over�the�next�five�years.��

‘Dealer management’ is�emerging�as�a�significant�focus�area,�as�dealers�form�theprimary�interface�with�customers�and�hence�are�critical�for�customer�retentionand�relationship�building.�Many�OEMs�see�significant�potential�for�top-line�andbottom–line�growth�by�tapping�greater�customer�value�across�the�product�cycle.

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

Leading SCM investment requirement for future

8%

23%

31%

38%

0 10 20 30 40

mproved planning & process improvements

Dealer management & distribution

Vendor Management

Global supply chains

Percentage of respondents

Figure 8: Investment requirements for future supply chains

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Key�learnings�from�the�study

Based�on�the�study,�the�trends�and�challenges�in�automotive�SCM�in�India�throwsup�several�imperatives�for�players�in�the�industry:

For�OEMs�and�suppliers

1 Focus�on�integrating�the�end-to-end�supply�chain�and�improvingtransparency.�This�primarily�involves�process�alignment�with�IT�systems

2 Managing�inbound�supply�chain�needs�additional�focus�to�ensure�capability�to�support�growth.��

3 Manage�parts�proliferation�to�significantly�cut�down�supply�chaincomplexity

4 Identify�and�develop�relationships�with�strong�logistics�service�providers�–�look�at�opportunities�for�more�outsourcing�

5 While�addressing�global�markets,�work�with�a�strong�partner�who�knowsthe�local�market�well

6 Continuous�focus�on�process�efficiencies

For�logistics�players

1 Develop�capabilities�in�areas�of�material�handling�and�movement,�across�geographies,�either�independently�or�through�tie-ups

2 Look�at�developing�complete�solutions�for�automotive�supply�chain�needs,�rather�than�piece-meal�services.�This�would�involve�providing�knowledge�/�technology–based�services�such�as�planning,�scheduling�and�material�tracking

3 OEMs�and�suppliers�could�look�at�the�service�provider�as�the�integratingfactor�across�the�supply�chain�and�hence�develop�processes�and�systems�to�facilitate�providing�services�across�the�supply�chain

Indian�Automotive�Supply�Chain� 11

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

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12��Indian�Automotive�Supply�Chain

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

Conclusion

The�Indian�Automotive�industry�is�currently�poised�at�a�stage�of�transformationwith�challenges�and�trends�which�are�unique.�Clearly,�players�in�India�will�have�toremain�globally�competitive�to�sustain�the�levels�of�growth�they�have�beenenjoying�over�the�past�few�years.

As�the�Indian�industry�matures,�the�key�imperative�for�players�will�be�to�manageglobal�supply�chains,�which�will�play�a�vital�role�in�ensuring�that�the�impetusgained�over�the�past�few�years�is�sustained.�This�would�impact�all�stakeholderswithin�the�value�chain�(including�OEMs,�suppliers,�distributors�and�dealers).

To�that�end�integration�of�the�end-to-end�supply�chain�should�be�viewed�as�thebiggest�imperative�for�the�auto�industry�along�with�an�all�encompassingIT�system.

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13��Indian�Automotive�Supply�Chain

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

KPMG’s�member�firms�in�India�were�established�in�September�1993.�Asmembers�of�the�cohesive�business�unit�that�serves�the�Middle�East�and�SouthAsia�(KPMG’s�MESA�business�unit),�they�respond�to�a�client�service�environmentby�leveraging�the�resources�of�a�globally�aligned�organization�and�providingdetailed�knowledge�of�local�laws,�regulations,�markets�and�competition.

In�India,�KPMG’s�range�of�services�includes�Audit,�Tax,�and�Advisory�services�toover�2,000�international�and�national�clients.�Clients�range�across�five�sectorsnamely�financial�services;�consumer�markets;�industrial�markets;�information,communication�and�entertainment;�and�infrastructure�and�government.�KPMGhas�offices�in�India�in�Mumbai,�Delhi,�Bangalore,�Chennai,�Hyderabad,�Kolkata,and�Pune.�The�firms�in�India�have�access�to�more�than�1,700�Indian�andexpatriate�professionals,�many�of�whom�are�internationally�trained.

KPMG�provides�rapid,�performance-based,�industry�focused�and�technologyenabled�services,�which�reflect�a�shared�knowledge�of�global�and�local�industriesand�experience�of�the�Indian�business�environment.

About�KPMG

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About�Confederation�of�IndianIndustry

The�Confederation�of�Indian�Industry�(CII)�works�to�create�and�sustain�anenvironment�conducive�to�the�growth�of�industry�in�India,�partnering�industry�andgovernment�alike�through�advisory�and�consultative�processes.

CII�is�a�non-government,�not-for-profit,�industry�led�and�industry�managedorganisation,�playing�a�proactive�role�in�India's�development�process.�Foundedover�111�years�ago,�it�is�India's�premier�business�association,�with�a�directmembership�of�over�6000�organisations�from�the�private�as�well�as�publicsectors,�including�SMEs�and�MNCs�and�indirect�membership�of�over�98,000companies�from�around�342�national�and�regional�sectoral�associations.

A�facilitator,�CII�catalyses�change�by�working�closely�with�government�on�policyissues,�enhancing�efficiency,�competitiveness�and�expanding�businessopportunities�for�industry�through�a�range�of�specialised�services�and�globallinkages.�It�also�provides�a�platform�for�sectoral�consensus�building�andnetworking.�Major�emphasis�is�laid�on�projecting�a�positive�image�of�business,assisting�industry�identify�and�execute�corporate�citizenship�programmes.

With�56�offices�in�India,�8�overseas�in�Australia,�Austria,�China,�France,�Japan,Singapore,�UK,�USA�and�institutional�partnerships�with�240�counterpartorganisations�in�101�countries,�CII�serves�as�a�reference�point�for�Indian�industryand�the�international�business�community.

Indian�Automotive�Supply�Chain� 14

©�2006�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.�Printed�in�India.

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in.kpmg.com

KPMG�in�India

MumbaiKPMG House, Kamala Mills Compound448, Senapati Bapat Marg,Lower Parel, Mumbai 400 013Tel: +91 22 39896000Fax: +91 22 39836000

Delhi4B, DLF Corporate ParkDLF City, Phase IIIGurgaon 122 002Tel: +91 124 2549191Fax: +91 124 2549101

BangaloreMaruthi Info-Tech Centre11-12/1, Inner Ring RoadKoramangala, Bangalore – 560 071Tel: +91 80 41766000Fax: +91 80 41766999

ChennaiWescare Towers16 Cenotaph Road,TeynampetChennai 600 018Tel: +91 44 24332533Fax: +91 44 24348856

HyderabadII Floor, Merchant TowersRoad No. 4, Banjara HillsHyderabad 500 034Tel: +91 40 23350060Fax: +91 40 23350070

KolkataPark Plaza, Block F, Floor 671 Park StreetKolkata 700 016Tel: +91 33 22172858Fax: +91 33 22172868

Pune703, Godrej CastlemaineBund GardenPune - 411 001Tel: +91 20 30585764/65Fax: +91 20 30585775

CII�Institute�of�Logistics

Chennai98/1,Velachery Main Road,Guindy,Chennai-600032 Tel: +91 44 42444555Fax: +91 44 42444 510www.ciilogistics.com

©�2006�KPMG,�an�Indian�Partnership�and�a�member�firmof�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.All�rights�reserved.KPMG�and�the�KPMG�logo�are�registered�trademarks�ofKPMG�International,�a�Swiss�cooperative.

The�information�contained�herein�is�of�a�general�nature�and�is�not�intended�to�address�the�circumstances�of�any�particular�individualor�entity.�Although�we�endeavor�to�provide�accurate�and�timely�information,�there�can�be�no�guarantee�that�such�information�isaccurate�as�of�the�date�it�is�received�or�that�it�will�continue�to�be�accurate�in�the�future.�No�one�should�act�on�such�informationwithout�appropriate�professional�advice�after�a�thorough�examination�of�the�particular�situation.

Key�contacts

KPMG

Yezdi NagporewallaNational Industry DirectorIndustrial Markets

KPMG House, Kamala Mills Compound448, Senapati Bapat Marg,Lower Parel, Mumbai 400 013Tel: +91 22 39835101Fax: +91 22 39836000E-mail: [email protected]

Arun KrishnanE-mail: [email protected]

Ashwin JacobE-mail: [email protected]

Preet Mohan SinghE-mail: [email protected]

CII�Institute�of�Logistics

Anuradha ParakkatDirectorE-mail: [email protected]


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