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How Maruti Identified a Smart Supply Chain System

Maruti Suzuki shows the benefits of bringing suppliers and dealers on the same page as your organization.

Rajesh_Uppal

Business Strategy

By its very nature, the auto industry cannot work in isolation. It needs to perform in conjunction with two parties like cogs in a wheel. These are suppliers or component manufacturers on the supply side, and dealers on the distribution side. That's why it makes sound business sense to take them into our fold. Extending our enterprise to them is the best way of aligning their efforts with ours and improving the company's level of operational efficiency.
We realized this early on and since 1983 (the company's inception) Maruti has embarked on extended enterprise initiatives. Back then the concept of an extended enterprise did not exist in the Indian automotive industry, so we were heralding a revolution.

Challenging Start

When we included suppliers and dealers into our fold, we affected significant cultural changes in the way they conducted their operations. We introduced them to a host of Japanese manufacturing practices like Kaizen, lean, cost reduction system, quality circle and a suggestion scheme. We gave them technological support to produce components that are cost effective and have consistent quality. On the distribution side, we helped dealers design showrooms, interact with customers, and meet servicing requirements. Back then, this was a phenomenal challenge. Technology was not as advanced and the cost of training and providing support to dealers and suppliers was prohibitive.

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