A PROJECT REPORT ON

Supply Chain Management Of Mahindra Automobile

Submitted to

Prof. Suhas Rane

In partial fulfilment of
Term III
Submitted by
Group 2 of Section B

Anshu Mrinalini 180103039

Divyanshu Raghuvanshi 180103079
Himanshu Mehta 180102041
Shreya Garg 180103206

Shubham Jajoo 180102107

1
 Tejaswi T 180101114

Table of Content

Sr.No Topics Page Number

1 Business Model 3

2 Operations 3

3 Products and Services 4

4 Competitors and 5,6

Competitive Advantage
of Mahindra

5 Mahindra Automobile 7
Supply chain

6 Role of SCM Drivers 10

7 Learnings 18

8 References 18

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Business Model

M&M initially went through its share of learning and grew through pragmatic and,
orchestrated entrepreneurial risk. The group followed a proprietorship model
initially and made a transition to a professionally managed group at a later stage.
Innovation led collaboration led to rapid growth of the company. The group is
increasingly organizing its innovation activities around the development of
responses to specific challenges.
“Federation of businesses” Model - Banyan Tree symbolizes the business model of
M&M. It represents the way Mahindra as a company grows. Initially the company
had one central trunk in the form of parent company M&M and overtime that trunk
has sent aerial roots in the form of group investments and group companies and
nurtured them. These new roots found fertile soil and grown into new businesses.
As these businesses grew stronger, they became trunks themselves. In this way,
just like the Banyan tree, the group grows horizontally and vertically.

Operation at M&M

Domestic Operations
Mahindra has a connected network throughout the world and even has its own IT
infrastructure to support it. One of the subsidiaries of M&M, Tech Mahindra,
builds its own software for both in-house usage and it sells to other companies as
well. In India, its plants are located in Bangalore, Chakan and Nasik in
Maharashtra, Haridwar in Uttarakhand.
Mahindra stands as India’s largest utility vehicle manufacturer and it is also the
largest deployed fleet of electric vehicles on Indian roads. The Mahindra’s Farm
Equipment sector is the largest producer of agricultural tractors in India. It has a
unique automotive and farm equipment R&D facility in Chennai. The TQM
movement in this particular sector has brought accolades like the most coveted

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Deming Application Prize, making it the first tractor company in the world to win
recognition of this stature.

International Operations
M&M handles its international operations through its international operations
division. In USA, Mahindra stands in top 3 tractor manufacturers in the segments
that they operate in. It has tractor assembly and distribution centers in Texas,
California, Kansas etc. It has a workforce of 200 + engineers and technicians in
USA. In Europe, it has an Advanced Formula E racing technical development
center in Spain, an Automotive design and engineering facility at lengendary
Italian company Pininfarine. It is also into partnership with Finland based Sampo-
Rosenlaw, manufacturer of combine and forest harvesters.

Products and Services

Mobility
In 1947, Mahindra and Mahindra introduced India to utility vehicle. More than 68
years down the line, M&M still remains to be India's premier utility vehicle
company. Today, the company offers a wide range of mobility products and
solutions ranging from SUVs, electric vehicles, pickups, and commercial vehicles,
small aircraft and boats that are tough, rugged, reliable, environment-friendly, and
fuel-efficient.

Farm Equipment
Mahindra began manufacturing tractors for the Indian market during the early '60s.
It is the top tractor company in the world (by volume) with annual sales totaling
more than 200,000 tractors. Since its inception, the company has sold over 2.1
million tractors. Mahindra & Mahindra’s farm equipment division has over 1,000
dealers servicing approx. 1.45 million customers.
In addition to tractors, Mahindra sells another farm equipment. It has expanded its
product-line to include farm-support services via Mahindra AppliTrac (farm
mechanization products), Mahindra ShubhLabh (seeds, crop protection, and market

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linkages and distribution), and the Samriddhi Initiative (farm counselling and
information services).

Information Technology
Mahindra and Mahindra make the world smaller and faster by providing solutions
that optimize productivity. Today M&M is a full-service, global IT enterprise,
servicing several Fortune 500 companies. The company’s transformational journey
has led to M&M becoming India’s largest telecom IT services provider, and one of
its top 5 IT service companies.
M&M’s three distinct businesses, comprising Tech Mahindra, Bristlecone and
Mahindra Comviva, service varied clients with precision and unmatched reliability.
Their IT business impacts over 50 countries across the world. Network, mobile,
analytics, cloud, security, social or sensors - it doesn’t matter what the need is,
M&M IT is ever ready with solutions that just accomplish the task in hand.

Defence
The company has built and assembled military vehicles, commencing in 1947 with
the importation of the Willys Jeep that had been widely used in World War II. The
legendary Willys, a rugged and capable all-terrain vehicle, served the
transportation needs of the Defence and Police forces of a newly independent India
with distinction. Its line of military vehicles include the Axe. It also maintains a
joint venture with BAE Systems, Defence Land Systems India.
The defence offerings of M&M encompassess land systems, naval systems,
defence electronics and security consulting.

List of Competitors
It faces stiff competition and its chief competitors are as follows-
 Toyota
 Tata Motors
 Honda

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  Hyundai
 Maruti-Suzuki
 Ashok Leyland

Competitive Advantage of Mahindra

Market Leader in multiple automotive segments: Mahindra & Mahindra has

leading market share in a tractor as well as in the utility vehicles segment. Also, the
company has strong market share in the commercial vehicle as well as passenger
vehicle segment. Strong market share provides a competitive advantage to the
company and allows the company to focus on innovation.
Strong Research & Development (R&D): M&M has a highly focused R&D
department constantly focusing on developing new products and technologies.
M&M majorly focuses on Value addition and Value engineering (VAVE)
approach, designing modularity, use of alternate materials etc.
Excellent products according to Indian road conditions: Mahindra &
Mahindra’s SUVs are suited perfectly to Indian road conditions especially,
Mahindra Scorpio which has been an outstanding performer for many years.
Low after sale cost: M&M has a competitive advantage on after sale cost since it
is lower than the industry average and also have high availability of spare parts to
different parts of the country
Pricing Strategy: The pricing policy of Mahindra and Mahindra is dependent
upon various factors that determine the sales price of the vehicles. The costs
incurred at every stage includes manufacturing to assembling the parts and making
them a whole product and the costs to reach the product to the consumer. The
company has infiltrated in every corner of the country with products that are
reasonably priced and show quality.
The company follows the policy of both the premium pricing and the flexible
pricing to grasp the maximum consumer value. The rates of all its products are
very competitive, as it has taken a lot of market research as well as the cost factors
and the competitor’s rates to arrive at a particular sales price. In order to cater to
the whims of every section of the masses they have launched products with
different prices that are suitable for different sections. These noticeable changes
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are consciously taken decisions with appropriate prices to balance their portfolio
and garner more customers.

Mahindra Automobile Supply Chain:

A single car consists of more that 7000 parts and when they come on assembly line
they get multiplied because of different variants. Engine is a part of car and
consists of more than 300 parts in it. Their models are sold all over the world and
parts are supplied across the globe as well. This is done to either maintain the
quality, cost or fight scarcity of parts. Different methods are used to decide the
pool of suppliers e.g. center of gravity method, load distance method, etc this is in
line with Mahindra’s supply chain strategy. Different OEM’s have their supplier
and these suppliers supply to different OEMs. Network Integrators make supply
chain more robust because of lot of data that is being generated and being shared.
It helps to decide the best cross dock location which minimizes the cost and does
effective information circulation among OEMs and the suppliers.
Mahindra prepares the body, engine of the car and does the assembly. They have
their own company to manage over thousand parts, they use sub assembly method
and for few parts like cockpit they have developed their suppliers inside the plant
so that they can follow Just In Time (JIT). They have six-seven sub-assemblies,
e.g. engine, transaxle, doors etc. Before 2014 they used to outsource knuckle from
Revolta auto industries Pvt. Ltd. a local supplier in Pune but now they make it
inhouse for cost optimization.
Mahindra’s Supply chain strategy is somewhat responsive, they Make to order
(MTO), Assemble to order (ATO) and keep small buffer with them to make their
delivery chain more efficient and achieve customer satisfaction. They have
approximately around 350 suppliers out of which 100 are in Pune. They have
planned to reduce their supplier base by 10% each year. They have vendor policies
as per parts. For few parts they have multi vendors and for others they rely on
single vendors. One of the most critical part of any car is seat, because seat
requires various safety regulation tests. Any change in mounting of these calls for
test again. Seat is a capital and tooling intensive part. In Mahindra supplier for seat
is Lear, they are the sole seat supplier for Mahindra. Lear supplies to many OEMs
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but tooling development is done by individual OEMS. Each OEMs have different
assembly line in Lear plant. Mahindra also has developed complete tooling of its
seat at Lear plant. Seats are being transferred through travelers because supplier is
closer to assembly plant and JIT concept is being followed by the supplier, there
are 6 variants in seat for XUVs information related to variants or assembly is
transferred one day before the production is scheduled and seats are made available
in the plant two hours before assembly. This further reduces the already low
inventory and transportation cost because supplier plant is closer to Mahindra’s
assembly line. Seats are stored in logistics area on the shop floor specifically
dedicated to seats and then transferred on the line through forklifts. Seats are
covered with non-recyclable plastics and are as it is transferred to the customer.
This is done simultaneously with ongoing assembly line. This method of
synchronization is called sequencing of material and helps in inventory reduction.
Similarly, for the supply chain of the tyres (again a class A part) Mahindra follows
multi-vendor policy for tyres due to price difference. Mahindra has three main
suppliers for tyres, Bridgestone, Apolo and JK tyres. JK tyres is the cheapest
supplier and is only used for low variants. Bridgestone is of the best quality and
being used for all export vehicles and higher domestic variants. Bridgestone plant
is in chakan and again small quantity of inventory is stored but it is higher than that
of seats because alloy rims are fit inside the plants itself. Supplier closer to the
plants send the tyres through truck, e.g. Bridgestone sends their tyres directly to
Mahindra’s manufacturing plants. But supplier like Apollo and JK tyres which
have their manufacturing plants outside Maharashtra have their warehouses in
Pune to avoid their lead time and demand fluctuations. These warehouses supply to
all the OEM’s nearby production schedule is sent to supplier and supplier informs
the warehouses and then material is sent to the Mahindra’s plant through local
transporters. This is how tyres reach the assembly plant and used buy the operators.
Different Parts follow different transportation methods, based on their class and
property.
Mahindra has a completely different logistics company to manage its operation.
Vehicle once completed is ready to be transported to the dealer. Prior to sending all
vehicles are stored inside the plant at a place called logistics yard. It is the place
where all the vehicles are handed over to Mahindra logistics, from here Mahindra
logistics transport it to all over the world. Various modes are used by the Mahindra
logistics, which depends on the distance and can be either be via travelers, ships or
trains. travelers are used to cover shorter distance e.g. within Maharashtra, one

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traveler can accommodate more than 10 vehicles. Trains are used for long distance
and deal with greater quantity. After unloading at one location trains then proceed
for other states. They are cost effective mode of transportation if transferred
quantity is higher. The third mode of transportation is marine, which is only used
to export the vehicles overseas, transportation date and time and destination is
decided well before and vehicles are only shipped if order is placed. Vehicles are
transported to the marine warehouse and from there with the help of traveler's
vehicles are loaded into the ships these vehicles are received abroad by Mahindra’s
vertical called international operations. They are counted and quality is checked by
the officers. Post transportations, the vehicles are received by the dealers and
handed over to them. Sold by the dealers to the customers, data of customer is
recorded and sent to Mahindra. Mahindra collects the sales data and servicing data
and use it for further forecasting.

Diagrammatic Representation of Supply Chain of Mahindra

Automobile

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Role of SCM Drivers Noticed in Mahindra’s/Industry’s Supply
Chain
Automotive companies in general have the most complex supply chain
architecture. Even though the Inbound Transportation and Production supply chain
requirements for Auto OEMs, Auto component manufacturers and Engineering
companies are quite similar, the scale and complexity differ. In order to
synchronize these two verticals of Automotive industry, Mahindra came up with
some unique solutions, under Mahindra Logistics division, as stated below
 Multi-modal Transportation
 Warehousing solutions
 Stores and Linefeed services
 Just in Time services
 Aftermarket Logistics and Return Logistics etc.

Warehouse Management System (WMS) of Mahindra Logistics

WMS helps transform conventional warehouses by improving efficiency and
productivity of operations within the warehouse. MLL WMS automates receiving,
put away, picking, and shipping in warehouses and supports inventory cycle count
planning and execution.
This system also adds levels of control that permit users to better plan and manage
resource and storage space in warehouse operations. It also provides management
with real-time visibility to inventory and order status across different warehouses
of the organization.
What They Do How They Do It Why Do They Do It
View Inventory across Inventory Management Minimise Stock-outs and
Multiple Warehouses at Module (WMS) reduce SKU
Real time obsolescence through

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 inventory management
Optimize Space Zone, Bin and SKU Maximise Space
Utilization Group Management Utilization in the
(WMS) Warehouse, thereb
increasing WH
throughput
Optimize Put-away and Put-away and Pick Minimise Bin Location
Pick Method Configuration Search, Put-away and
(WMS) Pick time for maximising
WH throughput
Provide Value Added BOM Management & Maximises operational
Services (Kitting, De- Packing Management visibility by ensuring all
kitting, Packing etc.) (WMS) VAS services are covered
under the aegis of a
single platform
Cycle Count of Inventory Inventory Management Minimise inventory sync
Module (WMS) errors between Physical
Inventory and System
Inventory
Manage Purchase Orders PO Management Module Reduces time to audit
and Work Orders (WMS) inventory as well as to
track unfulfilled Purchase
Orders; provides
visibility of receipts
against Purchase Orders
Automated Interfaces Standard Interface Minimise manual
with Customers' Toolkit (WMS) intervention through
ERP/TMS systems automated data
exchanges between
Customer's ERP and
TMS systems
Invoicing and automate Rate & Tax Minimises manual
calculation of Freight Configuration Module intervention in invoicing
Charges (WMS) and Freight Charges
computation
Operate Remotely HHT Integration Module Minimises Manual Data
(WMS) Entry Effort/time by
automating critical
Warehousing operations

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 like Receiving, Picking,
Cycle-counting, Shipping
and Dispatch through
comprehensive HHT
integration
Notify Stakeholders Alerts Module (WMS) Maximise visibility
through email based
automated alerts
(Workflow based)
Monitor and analyse Reports and Dashboard Maximise visibility
Operations Module (WMS) through online
dashboards; reduce time
for critical analysis
through various reports
available online
Secure Platforms Periodic Vulnerability Maximise data security
Assessment and through periodic
Penetration Testing Vulnerability and
Penetration Assessment
Tests and subsequent
incorporation of security
patches.
Ensure 99.99% Uptime NDR / FDR strategy Maximise platform
uptime through hot
mirroring (Near DR as
well as Far DR located in
a different siesmic zone )
Configure Platform as Multi-User, Multi-Site, Minimises configuration
per customer Multi-Company time and time to go-live
requirements Configuration Support through Multi-User,
Multi-Site, Multi-
Company Configuration
Support
Leverage Pre-configured Pre-configured Minimise configuration
Templates For Master Templates for Bulk time and time to go-live
Data Management Uploads by leveraging pre-
configured master data
templates for bulk
uploads

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Transportation Strategy of Mahindra Logistics
Mahindra has introduced Transport Management System (TMS) in order to
provide optimized routing solutions along with compatible modules for specific
business requirements. It enables collaboration with customers, BAs and partners.
Some of the unique features of their TMS are showcased in the table below -

What They Do How They Do It Why Do They Do It

Balance Loads across Load Balancer Cockpit Minimization of empty
Operational Lanes for Module (TMS) capacity across
Primary Transportation operational lanes while
ensuring committed
Service Levels
Plan Routes and Route Route Planning & Minimization of
Schedules for Secondary Optimization Engine transportation cost while
Transportation adhering to threshold
Service Levels, Delivery
Time Windows, Load
Factor Utilization, Road
Traffic Conditions, and
Allocation Rules based
on Share of Business
Fast Configure Master Configuration Minimise time to go-live
Transportation & Freight Module (TMS) by leveraging pre-
Billing Models for rapid configured templates of
Account On-boarding transportation and
Freight Billing models
and applying delta
changes on them to meet
individual customer
requirements.
Initiate a Private Freight Freight Exchange Minimization of Freight
Exchange Module (TMS) Cost as well as Reduction
in time required to

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 finalize Business
Associates (Transporters)
and awarding of contracts
for lane(s) through e-
auctions
Track and Trace Shipments Tracking Increased convenience
Consignments (on-the- Module & Mobile Apps through on-the-go
go) (TMS) information facilitated by
Mobile Apps as well as
minimization of time
required to track/trace a
consignment while
providing accurate ETA
through advanced
algorithms and
automated logging of
geofence entry and exit
times for consignments at
every waypoint
configured en-route
Capture e-PoDs PoD Mobile App (TMS) Increased transparency
for customers by
enabling real-time
visibility. Reduction in
time for billing
reconciliation through
digital POD capture
(enabled through
consignee's e-signature)
while ensuring accuracy
of consignee location
through live geolocation
cross-referencing.
Manage Vendor Vendor Management Increased OTIF ("On-
Performance Engine Time-In-Full") enabled
through Vendor Rating
and Continuous
Performance Monitoring
and Management
Self-Service Portal User Access Maximise Transparency
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access to Customers and Configuration (TMS) to Customers and
Business Associates Business Associates
(Transporters) by
enabling direct access to
the TMS platform
(reports, live status
updates) through
customizable data views
while ensuring optimum
data privacy and security.
Automated Interfaces for Standard API Toolkit Maximise consignment
Live Data Feeds from (TMS) visibility through live
other Carrier Portals integration with other
Carriers' Web Services
Automated Interfaces Standard API Toolkit Minimise manual
with Customers' (TMS) intervention through
ERP/WMS systems automated data
exchanges between TMS
and customer's
ERP/WMS systems
Monitor and analyze Data Visualization Minimise time for
Transportation Statistics Engine (BI) conducting Root Cause
Analysis for exceptions
management. Minimise
time for validating
hypotheses on Business
Process Optimization
through OLAP
Secure Platforms Periodic Vulnerability Maximise data security
Assessment and through periodic
Penetration Testing Vulnerability and
Penetration Assessment
Tests and subsequent
incorporation of security
patches.
Ensure 99.99% Uptime NDR / FDR strategy Maximise platform
uptime through hot
mirroring (Near DR as
well as Far DR located in
a different siesmic zone )
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Automate Shipment HHT / Mobility Minimise Manual
Handling Integration (TMS) Intervention and
maximise data accuracy
by automating Shipment
Handling through
incorporation of TMS-
integrated HHTs/mobility
devices.
IVR based Delivery IVR Platform Minimise lags in up-
Updates country and ODA
shipment delivery status
updates through IVR
based delivery
information logging.
Notify Stakeholders Alerts Module (TMS) Maximise visibility
through email/SMS
based automated alerts;
configurable for specific
events in the shipment
lifecycle
Scale Platform (on-the- Hosted on IaaS (Azure Minimise downtime by
go) Cloud) ensuring rapid scale out
of resources (CPU,
memory) as and when
required

Advantages of using Mahindra Logistics

 Strong presence and localized support in transportation and warehousing

solutions
 Collaborative synergies with automotive OEMs leading to optimized
solutions
 Regulating end-to-end management for Cross docking and Milk-run.
Inbound/Outbound and In-plant stores.

Postponement Strategy – Reducing Inventory in Automobile Industry

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In today’s customer friendly world, customer has plethora of options to choose his
product from. The fierce competition demands industries to provide more
customized products with competitive prices. But manufacturing customized
products calls for additional cost and investment. When industries compromise on
separate investments for each customized product, the customization gets
converted into building of multiple finished goods inventory for the base product.
A good example can be from the Automobile industry. The dealers must maintain
inventory of cars of the same model with different colors. And this is mainly
because car color is an important criterion for the customer while choosing the car
of his choice. According to stats from automobile industry, the car distributor on an
average maintains eight different color cars for the same base model. This means
that, for a single model, the car manufacturer has to build inventory to the order of
8 times, and this multiple inventory is maintained by all the players down the
supply chain.

Postponement Strategy:
Step 1: Break the manufacturing process into two types: manufacturing base
product and customizing base product.
 Manufacturing base product – Make this as continuous process to achieve
economies of scale.
 Customizing base product –This process can be classified under job-shop
and can be carried out to add value to the customer.
Step 2: Use a postponement strategy, wherein you maintain inventory of only the
base product at retailer/distributor. The product is further customized at
retailer/distributor end based on the demand from the customer (pull strategy). By
locating the customization process close to the customer, we can increase the
responsiveness and at the same time can save the multiple inventory of the base
product maintained in the entire supply chain.

Impact on automobile supply chain:

Applying above postponement strategy to the automotive industry, only the base
models with protective coat will be manufactured at the manufacturing unit and
shipped to the distributor. Hence, the multiple inventories of the order of 8 times at
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the dealer’s end can be reduced by maintaining the cars with only a protective coat
at the dealer’s end. The final color coat will be applied as per the choice of
customer on order confirmation. For this to work, the manufacturer has to keep his
paint-shop at the dealer’s end which further helps in reducing the lead time after
order is placed. Also, with this setup, the manufacturer now can offer more variety
of colors to the customers as he need not manufacture and maintain inventory of
the car with each color.
Implementation of postponement strategy will:
 Reduce the multiple inventories in the entire supply chain
 Provide the flexibility to the manufacturer to offer cars of different colors
 Increase the service levels.

Key Learnings
 While trying to understand the complete flow of supply chain management
of Mahindra Automobile, we came across some unique practices and
technologies being used by Mahindra Logistics team.
 The technologies that we learned in specific are the Warehouse Management
System (WMS) and the Transport Management System (TMS).
 Some of the unique features of TMS which stand out are PoD Mobile App,
Periodic Vulnerability Assessment and Penetration Testing, and Mobility
Integration. These features help in increased transparency for customer by
enabling real time visibility, improve data security through periodic
Vulnerability and Penetration Assessment Tests, and minimize Manual
Intervention and maximize data accuracy by automating Shipment Handling
respectively.
 Similarly, when we look into the features of WMS, few of them which we
found to be very interesting are Alerts Module, Inventory Management
Module, and Zone, Bin and SKU Group Management. These practices
enable increased visibility for different stakeholders involved, simultaneous
view of multiple warehouses in real time and optimized space utilization
respectively.
References
https://www.mahindra.com

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http://www.mahindralogistics.com/
https://www.marketing91.com/marketing-mix-of-mahindra-and-mahindra/
http://airccse.org/journal/mvsc/papers/5214ijmvsc06.pdf

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