Single Window Supply Chain Management to Global Customers

4th December 2009

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 The term supply chain management was

coined by consultant Keith Oliver of Booz Allen Hamilton in 1982

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Global Automotive market

Western Markets (US, Europe: 35+ million PVs) Markets saturated, and growth linked to economic cycles. Now flat growth. Competition is tougher every passing year and margins low Still the bread and butter of the large volume OEMs Products getting smaller, smarter focus on Energy efficiency, Safety, Environment, Style and Features Emerging Markets (China, India, Russia, Brazil: 10+ million PVs, growing to 25+ millions in next ten years) Large sales potential being limited by infrastructure and purchasing power Strong growth, focus on smaller and low cost cars Global entrants as well as local players globalising Key OEMs Toyota, Hyundai - strong and growing in Western markets Ford, GM - trying to contain losses in Western markets, grow in Emerging VW - facing high cost and brand overlap issues PSA, Fiat, Renault - cutting costs, working on collaborations Emerging players Tata, Chery, SAIC, Geely www.tacogroup.com
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Automobile Components-Industry Facts

LCC Buying US$ 375 Billion

Auto-Component Industry Turnover US$ 1.5 Trillion

Source Financial Express, ACMA, Mc Kinsey

Source ACMA

Source Business Express, ACMA

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Passenger Vehicle Production

3,500 3,000 2,500 2,000
1545

Qty in 000 Nos)

2001-2008 CAGR Cars =16.3% MUVs = 11% Overall=15.5%

PROJECTED CAGR 2008-2014 Cars = 8.6% MUVs = 4% Overall=8.5%

3.0m
277

2654

1778 1309 1323 1028 1113

1838

1,500 1,000 500 0

2001-02 2002-03 2003-04 988 669 564 722 608 842

1210

1532

1620

105

114

146

182
2004-05

196
2005-06

222

246 218
2007-08 2008-09

2006-07

Cars

MUVs

Total Pass Veh

2014-15

Source: SIAM & ACMA-McKinsey Report

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Market share- Passenger cars

Honda Siel 3.2% GM 3.0% Ford M.- Renault 1.7% 1.0% SkodaAuto 0.9% Others 1.9%

2008-09(Apl-Mar)

T ata Motors 10.7% Hyundai 32.1% Maruti 45.5%

GM Honda Siel 4.2% Tata M otors 12.7% 3.2%

M .- Renault Ford 2.4% 1.6, 2%

Others 2.9%

2007-08(Apl-Mar)
M aruti Hyundai 25.5% 47.4%

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Current Scenario-Indian Auto Components Industry

Source: ACMA

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Indian Auto Components Turnover

POTENTIAL CAGR 2008 2015 11%

In US$ Billion
25

40

20

2002 2008 CAGR 23.4%

18 15

19.1

20

15

12
10

8.7 5.4 6.7

2002

2003

2004

2005

2006

2007

2008

2009 ACMA 2016 Source:

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Source : MOHI Automotive Mission Plan (AMP)

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Automotive Vision for 2016 20 : 20 : 1 Growth of the Automotive Component Industry

directly linked with the growth of Automobile Industry. Over 70% sales to the OEM

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Achieve $20 billion in Domestic Sales Achieve $20 billion in Exports Sales

20:20:1

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Create 1 million additional Jobs

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The Surging Urban India

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The Emerging Rural India

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Need for an efficient SCM?

Rapidly changing business environment placing ever greater demands on business To provide products and services With greater added value To the correct location With optimum inventory levels

Customer wants more quality, design, innovation, choice, convenience and service at less cost, effort, time and risk

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Why is Supply Chain Management Important?

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Key Supply Chain business Processes

Customer relationship management Customer service management Supplier selection and management Product development and commercialisation Scheduling & Manufacturing flow management Outsourcing / partnerships Physical Distribution Information Management Performance measurement

The integration and management of these Critical processes is the key to Single Window concept of SCM

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SCM for Global Customer- Supply Chain Cycle

Production facilities

Pick-up at origin

Warehouse receiving

Consolidation & booking

Export compliance

Customer

Final delivery

Domestic delivery

Customs clearance

Arrival at destination

Actual shipment

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Single Window SCM for Global Customers

TATA Autocomp Systems AS A SUPPLY CHAIN INTEGRATOR

Procurement

Statutory compliance

Customer

TACO
Logistics Warehousing

Right Product Right Time Right Price

Customer provides product specs & deadline

TACO chooses the right source, develops the product, schedules, ensures quality, delivers finished goods to customer within deadline

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Single Window SCM for Global Customers

Single Window TATA Autocomp Systems Model

Europe customers

USA / Canada customers

Inventory management

S.E.Asia customers

Door delivery

W/H in USA
Customs Freight management-Air/sea

W/H in UK

TATA Autocomp Systems

In-land transportation Consolidation

Excise, VAT

Supplier selection / mgnt

Suppliers www.tacogroup.com

Product dev. / PPAP approval / PPM

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Single Window SCM for Global Customers

VALUE CHAIN

Supplier Management
Vendor evaluation Selection Facility audit Price negotiation Supplier rating Continuous Improvement

Product Development
Tooling development PPAP submission Testing & Approval PSO

Supplies

Logistics

Finance & Statutory req.

FinanceManagement Insurance Statutoryrequirements

Planning & Scheduling Process audits PredespatchInspection Packaging Stocking in India

Consolidation Transportation Custom Clearance Freight Import clearance Warehousing Delivery On-site support

Meet 100% customer expectations

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Program Management System

Input
Customer Inputs Benchmark Data Product Reliability Studies Previous History Planning Design Goals Reliability and Quality Goals Preliminary BOM, PFC, SCs & CCs List Product Design & Development

Feedback, Assessment & Corrective Action

Production Trail Run MSA, SPC PV Testing Packaging Evaluation Production Control Plan PPAP & PSW sign-off

DFMEA Design Reviews & Verification Prototype Builds Control Plan Engineering Drawings & Specifications Facilities Planning Team Feasibility Commitment

Reduced Variation Customer Satisfaction Delivery and Service

Product & Process Validation

Output

PFMEA Process Flow Chart, Floor Plan Layout Pre-Launch Control Plan SOP, MSA, SPC Packaging Specifications

Process Design & Development

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TATA Autocomp Systems -SCM - Customer Support Structure

Customer Account Manager (Single Point customer and Program Manager) Technical & Quality Manager ( Product development & Technical problem solving)

Customer Support Team Head Customer Account Head Sourcing & Logistics Head Finance Dedicated Logistics Team Dedicated Quality Team CEO( TACO SCM )

Customer Account

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TATA Autocomp Systems SCM - Customer Base

Major Commodities Ferrous Casting- Machined Aluminum Casting- Machined Sheet Metal Assemblies Proprietary parts Machined Parts/Forgings Fine Blanking, Bar Turned & Machined Logistics Services

Current Export markets

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TATA Autocomp Systems -SCM- Sourcing Base

More than 100 empanelled Manufacturing Associates Spread across India Strong ties and positive relationships

All Manufacturing Facilities ISO Certified ISO TS 16949 : All suppliers within a year of SOP.

Selection by TACOs Supplier Selection Rating System (SSRS). Audit conducted by qualified ISO TS 16949 & QS 9000 auditors. Rating Score assessed on over 100 parameters. Facilities Rated on : Quality, Cost, Delivery, Financial Management, Shop Floor Practices, Logistics, Moulds, Tools & Gauges Management, Continuous Improvement, Supplier Management and Design & Development Support etc. Periodical Surveillance Audits

Strong Relationship with Raw Material, Machinery, Tooling and Inspection Equipment Suppliers

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Case Study- Cast Parts

Scope
* Identify & qualify supplier, tooling follow up / validation & PPAP sample approval

Inputs
* Specs * Engineering drawings * Annual Estimation Volume, Target costs etc

Outputs
* Supplier Quotations * Supplier identification reports * Factory visit by TATA Autocomp Systems * TATA Autocomp Systems Recommendations

Highlights
* 10+ potential Suppliers were contacted * Short list 5 candidates based on supplier evaluation * Recommend 1 supplier based on factory visit and quality system assessment * Lower Tooling and product cost

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Single Window Concept- Advantages to customers

TATA Autocomp Systems -SCM Savings for Niche Sports Car Manufacturer

TACO - SCM Manufacturers In India for: Steering Gear Assy + Ball Joint Assemblies + Wiper Set Assy + Hard Top Bag

Packaging & Transportation

Consolidation of Consignments

Unloading/Loading & Customs Clearance

Shipment & Consignment Tracking

TACO manages Complete Supply Chain Activities

Saving Per Vehicle ~ 8.00 Annual Savings ~ 40,000

TACO Warehouse, UK www.tacogroup.com (Kanban)

Unloading/Loading & Customs Clearance

Customer Plant

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Transportation in UK

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Single Window Concept- Advantage to Customers

One-point

contact & one stop-shop arrangement for a diverse sourcing and supply chain need of customers Savings due to cost reduction and optimisation of the value chain Product development assistance - For faster development cycle - To meet product specification - Substantial saving on tooling & development cost Production program to tie in with delivery schedule Order status reporting to customer Processing as per quality plan Quality Assurance to meet customer requirements Logistics, warehousing & delivery to customers door step Dedicated team of qualified & experienced Engineers & staff seamless management of the entire supply chain

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TATA Autocomp Systems : Products and Services

Products

Interiors
Seats Dashboard Instrument panel Cockpits Inner / Outer rear view mirrors Air vents Door pads / trims Tata Johnson IPD Tata Ficosa ACSI

Exteriors
Bumpers Side moldings Spoilers Tailgate Bonnet Roof Fender BIW parts IPD ASAL Tata Ficosa ACSI

Powertrain
Radiator Oil cooler Radiator fans Fuel tanks and oil sump Intercooler Gear shifter rod Tata Toyo Tata Ficosa ASAL ACSI

Electronics & Electricals

Windshield washing system Batteries Battery cables Wiring harness Vehicle tracking system

Ride controls
Power braking Coil spring Torsion bars Trailing arms Control cables Stabilizer bars Strut parts

Products

BUs

TC Springs Tata Yazaki TACO MobiApps TATA Hendrickson Knorr Bremse Tata Ficosa TACO GYIN

Services
TACO Engg.

Engineering
TACO Visteon IPD Technical

Supply Chain
TATA Autocomp Systems SCM

BUs

TJC Engg. TACO Faurecia Design

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TATA Autocomp Systems Group - Customer Base

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THANK YOU

Contact Details: Sudhir Gupta Vice President Supply Chain Management SBG Tata Autocomp Systems Limited TACO House, Damle Peth, Off Law College road, Pune 411004, India Email: sudhir.gupta@tacogroup.com

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Thank You

No part of this presentation may be reproduced, quoted or circulated without prior written approval from Tata AutoComp Systems Ltd. This presentation may include certain forward looking statements, based on current expectations, within the meaning of applicable laws and regulations. Actual results may differ and the company does not guarantee realization of these statements. The Company also disclaims any obligation to revise any forward-looking statements.

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