Analyze and Identify any Cons 100 words

Case Study:

Ashok Leyland Ashok Leyland, one of India s largest private companies, is a part of HindujaGroup. It is one of the country s largest automobile and auto component com-panies. The company o ers a range of trucks, buses, special application vehiclesand engines across more than 40 countries.During 2005 06, the company produced a total of 65,000 vehicles out of which ithas exported 4,879. In the domestic market, it sold 56,776.Rising raw material cost has been a serious concern for the company. A steep risein steel and copper prices meant the company decided to streamline its supplychain process and start an SCM project to optimise its supply chain process andrationalise its sources. The project, Oscars Inbound, includes supplier partnershipvendor base rationalisation, tiering of suppliers and cluster information, inventoryoptimisation through JIT and LCL, total cost management, logistics initiatives,e-sourcing and global sourcing.Gains:asupplier partnership covers engineering and technical support, global marketleader, global availability of spares, testing capabilities, improved eld per-formance, system supplier, JIT supplies and world-class technology;bpartnership gains include vendor consolidation under tier-1, continuoustechnological upgrading of products without in-house investment, shorter technological upgrading of products without in-house investment, shorterdevelopment lead-time, value engineering and cost reduction, improved eldperformance, inventory eciency through JIT supplies and human powerrationalisation;cvendor base rationalisation. Gains from source reduction include pricingon volumes, improvement in quality and reliability, vendor improvementprogramme for continuous improvement, tiering for ease of tment, system buying and reduction in paperwork; d vendor tierisation includes economies of scale, system buying and rationali-sation of supplier base. Cluster formation includes 55 adherence-mistake proong, process improvements leading to self-certi cation; e inventory level has reduced from 23 days to 18 days; f total cost management includes various initiatives such as daily management,process control, design, technology and capacity. Total savings were 3 per centof total operating cost; g logistics initiatives include transporter-based rationalisation, Kanban pullfrom satellite warehouses, enhancement of truck, turnaround, load, space androute optimisation; h stores outsourcing covers activities outsourced to 4PL service providers. The services are receipt accounting/documentation, binning and debinning, issueaccounting, perpetual inventory and reverse logistics for pallets. All these services have saved 42 man-days; i e-sourcing includes global benchmarking, gain through bidding, identication of cost-competitive sources, introducing best sourcing practice, increasing eciency and minimising costs, improving the value chain s bottom line. All these activities saved 11.5 per cent of total material cost.