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Supply
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Our Suppliers Our Partners Our Strength |
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Our suppliers have been our partners in growth. The joint initiatives
taken by Maruti and its team of suppliers have generated over 29%
cost reduction over three years for Maruti. |
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Working
with Suppliers |
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Participation
has been the key to our success. Through a participative and collaborative
approach called Value Analysis & Value Engineering, we have been
successful in bringing cost reduction across all our models. The
localization levels are as high as 85 per cent. |
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Our
supplier partners have been major contributors to our turnaround.
Less than 20 per cent of a car is manufactured in-house. The rest
is accounted for by our 215 suppliers and hundreds of second and
third tier of vendors who, in turn, supply to them. |
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The
underlying basis of our relationship has been that rather than focus
on "price reduction" of the component, we have to work together
to bring down the "cost" of the component. |
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One of the ways to reduce their cost has been to replicate the Maruti
Production System on the shop floor of supplier companies. These
techniques have been transplanted through the Maruti Centre for
Excellence. The suppliers, too, have been able to reduce wastage
and make their operations lean and efficient. |
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Rather
than appropriate the entire gains, we have a system whereby suppliers
keep a part of the productivity and cost gains and pass on the rest
in the form of a price reduction. |
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The
other route to cost reduction has been Value Analysis & Value Engineering,
another collaborative effort between our suppliers and us. |
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Thanks
to our efforts to improve efficiencies and reduce cost, both in-house
and at our suppliers, we have been able to reduce car prices for
customers over the past 5-6 years |
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| Models |
Prices in 2001-02 |
Prices Today approx. |
| Alto LX |
299,615/- |
224,318/- |
| M800 (Std) |
159,747/- |
162,415/- |
| Esteem LX |
375,630/- |
369,041/- |
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These are Ex-Showroom (Indicative) prices as
of October 2007 |
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Emerging Trends
- Strengthening Supply Chain |
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For
attaining the million mark, Maruti Suzuki is aggressively working
on different facets of the supply chain.
The company is rapidly moving from 'Domestic Leader' stature to
'Global Leader' stature by adopting global practices.
Transition from Component supplier to System Supplier
Raising the quality and responsibility benchmarks for Tier-I or
primary suppliers, Maruti is encouraging its component suppliers
to graduate to system suppliers.
As number of system suppliers increases the model launch time reduces. |
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Involving vendors
at development stage |
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Another
interesting initiative is the early involvement of suppliers. It
triggers innovations at the designing stage itself. Suppliers are
being trained to evolve as innovation drivers by engaging them at
new product designing stage.
Perhaps that is reason why our models now are launched with as high
as 90 per cent levels of localization. |