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