Tata Motors Limited - Vendors Meet 2017

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VCG employs the 'Theory of Constraints’ philosophy to bring about quantum
jump in performance of organizations in its target industry clusters.
LEVERAGING
THE POTENTIAL
RetailConsumer
Goods
Equipment
Manufacturing
Engineering
& Construction
Automobile &
Auto Components

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Inherent Win-Win:
there are no conflicts in reality

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OEM does not
achieve sales
targets
Sales people have
targets and
incentives
Blame it on insufficient
/ unreliable supplies
from suppliers
Same supplier supplying
in market at lower prices
Service centre
complaining about
unavailability
Change supplier or
Share of Business
Ask for reduction in
price/ change
supplier/ VALUE parts
Supplier wants to utilize his capacity-
Get other customers/ sell more in after market

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Let us first evaporate the issue that supplier is sabotaging the OEM
for deliver
Two reasons to think so-
1. Suppliers fails to
supply according to
schedule
2. Cannot react fast to
last minute
requirements
1. Suppliers have varying
lead times due to their
varying load profile
2. Forecast are not
accurate and

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Both parties will agree upon-
• Great service levels – higher sales of the model
• More sales of parts for both together
• More parts in market, better service levels for model
The question is- who will sell more…. and at what price?
Fact: In the market each brand has an accepted price
• Most supplier sell to the same big retailers of OEMs!!
• OEM feels that it is doing marketing for the supplier,
through first fit branding,
• And the supplier is misusing it by hampering its sale
through lower prices.

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Facts:
• 70% vehicles go to non OEM dealer workshops
• These mechanics buy from the nearest retailer, which may be small retailers.
• 60-70% sales in retail is from small retailers - in by lanes
• Their tolerance time of the mechanic is very low, so they buy what is available
Most OEMs and suppliers- pursue monthly sales targets. They focus on sales to
large wholesalers and retailers.
Don’t reach small retailers/ don’t have capacity to develop that market
This untapped market is over 40 - 50% of the total market.
Sales and price:
If sales increases for both.. The questioning of prices will stop
Is there substantial the market for both to increase sales?

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Proven in the TML dealer implementation…
High availability- higher sales..
Price pressure is low.
If you both follow these tactics 
Now the competition is against the other suppliers
Pricing… decide based on your capacity and market
demand

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If price has to be reduced by OEM:
Declare to suppliers that price has to be reduced..
But will help to maintain gross contribution
Take up improvement projects and provide help.
Only when achieved, reduce prices
What is needed is not ideas, but faster
implementation.
There will be exceptions- so what?

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1. Near 100% delivery to OEMs and SPD in the last 9 years.
2. Has accepted no branding in the first fit
3. Has increased reach from 5000 retailers to 75000
retailers, and average range at retailers from 4 to 24.
4. Prices higher than OEMs
5. No discounts or schemes in market
6. Sales has increased significantly.
Fleetguard Filters

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More details……

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