1. 
REVAMPING THE SUPPLY CHIN – THE
ASHOK LEYLAND WAY
Presented By:
Group No: 09
Gaurav Vishal- 500043212
Arup Ghosh- 500043114
Asmita Semwal- 500043086
Jatin Doseja- 500043249

2. 
 Ashok Leyland is a medium and heavy commercial vehicle
manufacturing company based in Chennai, India.
 The company is one of India’s leading manufacturers of
commercial vehicles , Such as trucks and buses ,as well as military
vehicles.
 Ashok Leyland has acquired 35% market share in the medium and
heavy commercial vehicle (M&HCV) segment in July 2015 on the
back of a strong demand, expansion of the dealership network in
the north and east India and high discounts on vehicles.
 The case issues concerning the revival of a Ashok Leyland effected
through a revamp of the supply chain.
 The case discusses various aspects of supply chain management
and its importance in the context of cost management.
BRIEF INTRODUCTION

3. 
 Ashok Leyland with an aim to reduce costs
improved the in-bound supply chain through several
important strategic revamping measures. Explain.
QUESTION 1

4. 
 To reduce costs and to improve the in-bound supply chain Ashok
Leyland take following outline:
 In 1999 Ashok Leyland launched project OSCARS ( Optimizing
supply chain and Rationalizing Sourcing). The basic initiatives of
OSCARS was:
* Single Window System
> The Strategic Sourcing and Corporate Quality Engineering
(CQE) teams jointly formed the single window vendor management
agency, bringing with them specialized commercial and technical
knowledge.
> For the suppliers, this had created a convenient single-point
contact with AL, for sharing drawings, for negotiating prices and long-
term business volumes, and for assistance and consultancy on quality
to management issues.
ANSWER

5. 
* Supplier Tiering
> Reduced the number of suppliers.
> Tier -1 supplier is supported by tire -2 and tire -3 suppliers.
> The benefits of system buying could be illustrated with the
example of the tool kits that accompanied every vehicle.
> To overcome this problem, AL aimed to supplier base from 1400
to 750.
* Just in Time ( JIT)
> The Push System and The Pull System.
> Classified the components used by the companies into
categories “A” ( 75% of total cost of components) , “B’ ( 18%) , “C”
(7%).

6. 
“ The revamp of the out-bound supply chain had the
twin objectives of the customer satisfaction and
reducing finished goods inventories”. Discuss how
Ashok Leyland re- engineered its out-bound supply
chain.
QUESTION 2

7. 
 Three main parameters:
1) Order to delivery
2) Reliability of deliveries
3) Availability of orders status information
• The customers could expect delivery in 5 days from the ate of payment for
regular models.
• The second promise was that the age of vehicle when delivered would be
maximum 90 days.
• Tight pipeline inventory norms were set for different models and markets
and were met through a new three tier distribution network.
• In the new structure , Plant sales yards acted as national pools to hold rare
models and excess of regional requirements.
• To understand customer needs and assimilate the knowledge, AL adopted
“4P” programme.
> Probe , Prioritize, Plan and Position.
• The CFT’s worked towards continuous improvement in the products and
marketing.
• AL also built a “ Marketing Information System ( MIS )” to monitor the
trends an forecast demand from input dealers an field executives.
ANSWER

8. 
Discuss in brief the quantitative benefits in regard to various
measures of supply chain revamping exercise for AL.
QUESTION 3

9. 
 In the first half of 1999-2000 Ashok Leyland
recorded profit of Rs 1.9 crores on sales of Rs 1092.8
crores against a Rs 36.7 crore loss in 1998-1999.
 In 1999-2000 raw material cost was down by 1-2%
and inventories reduced by Rs 300 crore.
 Operational profit in 1999-2000 was Rs 55 crore as
compared to 12 crore loss in 1998-1999.
 In the year 1999-2000 sold 37,859 HCV’S ,27% more
than 1998-1999.
 Total Income increased by 25% from 1998-1999.
ANSWER

10. 
 Ashok Leyland in order to sustain in the market
should :
> Provide world class technology
> Provide value to the customer
> Keep innovating there products
CONCLUSION

11. 
THANK YOU