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Submitted to : Prof. A K Mittal Prof. Peeyush Mehta
Prof. Deepu Philip
GROUP - 3 (VLMP 2012-13)Anuj Parasar (12126006)Chetan Patil (12126008)Vivek Deshmukh ( 12126009)Kushal Bir Singh (12126014)Sitikantha Das (12126028)Sushanta Kumar (12126032)
Supply Chain
Presentation
Introduction- General Motors INDIA
Company Information
General Motors - At a Glance
• 1908Establishment Year
• 1928/1994Establishment in India
• Halol (Gujarat)• Talegaon (Maharashtra)
Number of plants in India
• 5th Largest car manufacturing company Position in India
• 3,500Number of employees in India
• 61% growth has been recorded in the sales of General Motors India (2010-11)
Growth rate in India
• Eight ( Brand : 1 : Chevrolet )
Number of car models in India
HATCH BACK
• Chevrolet Aveo U-VA
• Chevrolet Spark
• Chevrolet Beat
SEDAN
• Chevrolet Optra
• Chevrolet Cruze
• Chevrolet Aveo
MULTI UTILITY
• Chevrolet Tavera
SUV
• Chevrolet Captiva
Product Portfolio
ORGANISATION CHART
President & CEO
Vice President
SalesCFO
Vice President Human
Resources
Vice President
Engineering
Supplier Quality Director
Logistics Inward
Vice President
Global Purchase
LogisticsOutward
Purchase Director
(Commodity)
CommodityManager
Suppliers Suppliers
Buyers Schedulers
Suppliers
Quality Engineer
Supply Chain Org. Members
Tier 3 Supplier
Tier 3 Supplier
Tier 3 Supplier
Tier 2 Supplier
Tier 1 Supplier
Tier 1 Supplier
Design
Assembly
Engine, Transmission
Dealer
Dealer
DownstreamWithin GMUpstream
Tier 3 Supplier
Tier 3 Supplier
Tier 3 Supplier
Tier 2 Supplier
Customer
General Motors – Supply Chain
OWNERSHIP : GPSC
Responsibilities of GM-GPSC
Upstream
Strategy FrameworkCustomer Importance:
1. High 2. Medium3. Low Technology Clockspeed:
1. Fast2. Medium3. Slow Competitive
Position:
1. Advantage2. Parity3. Disadvantage
Capable Suppliers:
1. None2. Few3. Many
Architecture:
1. Integral2. Modular
Possible Decisions
1. Insource2. Outsource3. Partner/Acquire4. Partial Insource5. Partial Outsource6. Invest7. Spin Off8. Develop Suppliers
Competitive Position:
1. Advantage2. Parity3. Disadvantage
1. High customer importance and fast clockspeed means more strategic
1. Competitive position is critical for assessing value of outsourcing
1. Supply Base Capability must be present for successful outsourcing
1. Degree of modularity affects significantly the ease and risk of outsourcing
Demand Side Planning & forecasting : Centralized, forecast driven , Push based ( Downstream) and Pull ( Upstream)
Initial forecast for each brand / month divided between different GM business-commercial fleets, Engineering, internal use, retail dealership
Capacity allocated to Dealers based on previous Sales history (3 / 12 months)
Inventory quality of dealer assessed by – no of best selling configuration & total no of configuration in inventory Consensus Process – Order Portal for Dealers Variance Process – Modification of initial production plan based on actual sales
• Initial Production share for Dealers– Order – approve – Produce
• Order – Manufacturing Process – 30-45 days
• 36 HRS for actual Manufacturing, Rest for Planning / Scheduling / Sequencing
• Transportation to Dealership – 4~7 days
Planning and Forecasting
Identification of Supplier
Requirement
(PPM)
Supplier?
Supplier audit & qualification :Capability/Finance/Infrastructure
New
Old
POQuotations
Supplier EvaluationQuality / Cost / RiskDelivery / Capability
Purchase ProcessInitiate
Supplier Final
Procurement Process
WHAT GM BUYS
TYPES OF
MATERIAL
AGGREGATE ASSEMBLIES
COMPONENTS
DIRECT
CHASSIS / ICE Exteriors Tires, wheels, and steering columns.
BODY / EXTERIOR Exterior, framework and structure of vehicles such as steel, sunroofs and stampings.
ELECTRICAL SYSTEMS,
BATTERIES / HYBRIDS
Radios, switches, and electronic modules, wire harnesses, connectors, and batteries
HVACCompressors, hoses and lines, and other cooling components.
INTERIOR / SAFETY Seats, Steering Wheel, Center Console, Door Trim.
POWERTRAIN Assemblies, component parts that are used to make all engines and transmissions.
INDIREC
T
INDIRECT / MACHINERY & EQUIPMENT
Capital equipments ,indirect materials like machine oil , tools, jigs & fixtures etc
BASED ON STRATEGIC IMPORTANCE
STRATEGIC SUPPLIER HIGH TECHNOLOGY, NEW TECHNOLOGY, e.g. Delphi
CRITICAL SUPPLIER
COST EFFECTIVE, SINGLE SOURCE, COMMON INDUSTY
SOURCE e.g. Rico
COMMON SUPPLIERSTANDARD PARTS, COMMON
PARTS
GROW EXITFIX
Grow the best, Fix those that have strategic value, Exit the rest.
Supplier Base _ Classification
Part Sourcing is done based on Lead time of Product Development . Group A category parts need the longest time and the Group D
the least
Sourcing Process
# of Tier 1 suppliers in India: 95# of Tier 1 suppliers outside India: 14# of Tier 2 suppliers : 60
Transport agency: Transport Corporation of India, Tci.
Daily receipt of material : 7-8 trucks.Internal logistic outsourced : Leeway LogisticsStore area: 2600 Sqm
Immediate customer : General Assembly shop – next door# of engine models: 2 (Gasoline) + 1 (1.0 L diesel) + 2 (1.3 L diesel)# of parts : 193 cumulative
Supplier Base …Figures
Parts Category
Type of Parts Order to level/Pick Up
Logistics Mode
Imported Engine cylinder Parts
Safety critical parts
Precision parts Electronic parts
Weekly/Monthly
Domestic Bumpers Door Trims Seats Glasses
Daily/Weekly
In-house Engine Assembly Body Chassis
1~3 Days
Inbound Supply Chain: Cyclic Stock
Inter Modal
Parts Category
Type of Parts Order to level/Pick Up
Logistics Mode
Imported Engine cylinder Parts
Safety critical parts
Precision parts Electronic parts
Weekly
Domestic Bumpers Door Trims Seats Glasses
Daily
In-house Engine Assembly Body Chassis
Daily
Inbound Supply Chain: Safety Stock
Inter Modal
LEIF HOEGH & Co
UPS
SAFMARINE UTI
TRANSPORT CORPORATION OF INDIA
GM OUTSOURCED LOGISTIC SERVICES PROVIDER FOR
COMPONENTS
Description
Supplier Location
Mode of transport
Lead time
# of shipments
Cylinder Block
Bruehl Germany
Sea and road
6 weeks 1 per month
Cylinder head
Yanghwa metals
Korea Sea and road
5 weeks 1 per month
Crank shaft Thyssenkrupp
Germany
Sea and road
6 weeks 1 per month
Fuel pump Bosch India Road 4 days Per day
Turbocharger
Turbo Energy Ltd
India Road 4 days Per day
Bed plate Caparo India Road / Air!
4 days Per day
‘A’ class parts - configuration
Milk run
Matl. Schedule released to suppliers
16 Wks Tentative
4 Wks Confirmed Schedule is
released every Monday
SHIP Schedule for pick up
NOTIFICATION
Inhouse Supply Chain
1996 1998 2000 2002 20040
10000
20000
30000
40000
50000
60000
70000
80000
90000
SupplyDemand
Capacity Analysis
GM Added new
plant
2012 : Total Capacity in India =
2.5 Lkh/Annum
MANUFACTURING STRATEGY
Site selection: Pune, around 90 acre land
Investment: 1400 Cr
Sizing: 160 K car assemblies/annum
Process technology :Press shop – skin panelsBIW (Body in white)Paint Vehicle assembly.
Line design based on Lean manufacturing principles.
MANUFACTURING STRATEGY
Outsourcing: Powertrain from Korea.
Services Logistic + facility maintenance + die maintenance
Flexibility (Economies of Scope): Flexible to produce 2 models : Beat and Spark. No setup change involved at assembly line.
Recently invested Rs 80 Cr to accommodate sedan cars.
MANUFACTURING STRATEGY
Innovation: Designed xSDE SMARTECH engine for India market.
Powertrain shop in Pune: 2010
Capacity : 160K
Investment : 800 Cr
Process strategy : High tech machine shop for 3Cs - Cylinder block- Cylinder head- Crank shaft – Entirely automatic
MANUFACTURING STRATEGY
Salient features: Powertrain shop
• Flex level 4 plant : Highest level of flexibility so far.
• Absolutely zero setup change time among variants.
• Temperature controlled shop – 21000sqm : First and only plant in India in this industry.
• Focused only on manufacturing activities.
• High level of outsourcing of technical services. – Again first time in India. Operating with 30 % less manpower (industry average) e.g. Tool management, chemical management, gauge management & fixture management
• Logistic services: outsourced.
STORES
Crank shaft line
Cylinder block line
Cylinder head line
Engine assembly
General assembly
Finance
Material flow
Information flow
MATERIAL & INFORMATION FLOW IN POWER TRAIN PLANT
Downstream
GM Order Fulfilment Process
DOWNSTREAM EVENT & DURATION
15 Days
5 days
Type of Risk GM Strategy to handle Risk
Strategy Action
Supply Risk
•Disruption of supply• Capacity constraints• Incoming delays
• Reduce • Dual Sourcing •JV/Partner•Global Supply Chain•Online Tracking
Process Risk
•Failure or breakdown •Changes in technology
• Avoid •Adapt New Technology•System Development
Demand Risk
• Variations in demand
• Retain/• Reduce
•New Model Launches•Seasonal Offers•Aggressive Advtg.
Control Risk
• Bullwhip effect • Reduce •Online /POS (Daily ) info. to PPM
Environment Risk
•Labour Strike• Logistic Strikes
• Retain/ Reduce
•Logistics: Backup Plan available
Risk and Risk Handling Strategies
S W
O T
Highest market share in volume terms in 2 biggest economies
Global interconnected Supply Chain.
High leverage due to Size, Longevity and Global Operations.
Quality problems with imported products.
Declining financial performance.
Bureaucratic culture.
Individual brand positioning to distinguish eight distinct brands.
Opportunities in emerging markets /global expansions.
Increasing technological gain over competition.
Rising raw material and transportation cost.
Currency Fluctuation Increasing competition. Very High Overheads Uncompetitive
operational practises
General Motors Supply Chain SWOT Analysis
2009 2010 20110.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
26.2 23.4 24.2
65.4
57.9 59.5
32.9 37.2
39.9
Account Receivables Account Payable
In D
ays
Cash Collection in Days
2009 2010 20110%
20%
40%
60%
80%
100%
120%
77%74% 74%
85%81% 83%
107%
88% 87%
VW Ford GM
COGS in % of Revenue
Recei
vabl
es T
urno
ver R
atio
Inve
ntor
y Tu
rnov
er R
atio
Days CGS
in In
vent
ory
0
10
20
30
40
50
3.410.9
33
11.4 8.4
43Ford GM
References
• Strategies for high volume supply in India by Don J Palathinkal (MIT)
• Comparison and contrast of General Motors and Toyota Motors ----- By Thomas Hong 9University of Phoenix)
Research Journals
• Executive• Supplier• Employees
Interviews
• www.gm.com• www.covisint.comWebsites
Thanks
Cash Management