Value chain of tata motors

This ppt about the value chain with the great example of TATA motors.

1. March 14, 2016 1

2. VALUE CHAIN Porter’s definition includes all activities to design, produce, market, deliver, and support the product/service. A value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market . Way of organizing the activities of a business so that each activity adds value (value added activity) or productivity to the total operation of the business. March 14, 2016 2

3. TYPES OF VALUE CHAIN Value Chain i s Categorized Based On The Type Of Organizations. Manufacturing based. Service based. Both Manufacturing And Service Based. March 14, 2016 3

4. VALUE CHAIN ANALYSIS   Value Chain Analysis  is a useful tool for working out how you can create the greatest possible  value  for your customers. In business, we're paid to take raw inputs, and to "add  value " to them by turning them into something of worth to other people. March 14, 2016 4

5. Porter’s Value Chain Model Overview March 14, 2016 5

6. Introduced by Michael E. Porter in his influential book “Competitive Advantage” in 1985. Can be used by companies to examine all of their activities in the process of converting inputs to outputs. How value chain activities are carried out, determines costs and affects profits. The value that's created and captured by a company is the profit margin (Value Created and Captured – Cost of Creating that Value = Margin ). March 14, 2016 6

7. 1 2 3 4 5 Primary Activities I nvolve the purchase of materials, the processing of materials into products, and delivery of products to customers. March 14, 2016 7

8. March 14, 2016 8 S upport primary activities and can play a role in each primary activity. It may also support each other within support activities . Support Activities

9. The  value chain is a very flexible strategy tool for looking at your business. Used to analyze and create competitive advantages on both cost and difference. Understand the organisation issues involved with the potential of making  customer value  commitments and potentials Adapted for any type of business (manufacturing , retail or service, big or small). The deeper understanding of your strengths and weaknesses to be included in your  SOWT analysis ( you vs competitors) Well known and has been a support plan for teaching in business schools (last 20 to 25 yrs.) March 14, 2016 9

10. It has to be adapted to a particular business situation and that can be a disadvantage since, to get the best from the value chain. Many people are familiar with the value chain but few are experts in its use . The scale and scope of a value chain analysis can be threatening.(full value chain is difficult)(your vs competitors) March 14, 2016 10

11. TATA MOTORS (A Manufacturing Based Company ) March 14, 2016 11

12. Value Chain & Value System of TATA Motors Inbound Logistics Operations Marketing Service Outbound Logistics Suppliers , Contractors SAP , VCM SAP , CRM - DMS Strategic Alliances Transporters, Convoy Drivers Association Dealer Network, Marketing Research Firms, Vehicle Financing Regional Warehouses, Dealer Workshops, Distributors, TASS March 14, 2016 12

13. Inbound Logistics Long term contract with service provider’s – transporters and agents. Personnel at regional offices for over seeing the smooth transit of goods. Transparency and monitoring through deployment of IT – all transactions through SAP. DTL (daily transport logistics) supplies for critical high value items. Efficient storage facilities – easy storage and retrieval. March 14, 2016 13

14. OPERATIONS Capital Equipment Manufacturing division – tooling development capabilities of global standard . Apprentice Trainee Course – ensuring stable source of skilled manpower . TPM(total productive management) team – continuous drive to improve efficiencies . Automated manufacturing processes . Distributed manufacturing – Assembly units at South Africa, Thailand, Bangladesh, Brazil etc . Maintenance – technical capability. Capacity Utilization – Mercedes Benz cars make use of Tata Motors paint shop facilities . March 14, 2016 14

15. OUTBOUND LOGISTICS Stockyards , all across the country. Long term contracts with transporter’s – higher volume of business to transporters ensures competitive price. Regional Sales Office and Vehicle Dispatch Section linked through SAP. Efficient security system for prevention of any kind of pilferage. March 14, 2016 15

16. Marketing & Sales Structured approach to understanding the requirements of individual customers – QFD’s conducted at regular intervals. Clear identification of product requirements, leading to development of innovative products – Tata 207 DI, Tata Ace. Pan India presence and global footprint. Various teams for addressing the requirements of institutional customers – Defense, State Transport Units Quick assessment of the changing market dynamics and consumer preferences – Tata 407 LCV Large network of dealers – use of technology (CRM- DMS). March 14, 2016 16

17. Service ( TASS ) Easy availability of spare parts. Efficient collection of data from field and communication to the respective plants. Pan India presence, as well as global presence. Large network of workshops – Dealer workshops and TASS. Training facilities – for dealer end and TASS personnel . March 14, 2016 17

18. SUPPORT ACTIVITIES March 14, 2016 18

19. Procurement E procurement initiative. Global Sourcing Team – China like tires, power steering units etc., Steel procured from Belarus. Long term relationships with a stable and loyal pool of suppliers . Technology driven procurement – SAP. Group resources – Tata Steel and Tata International . Localized supplier base at mfg. locations – low inventory levels . March 14, 2016 19

20. Technology Development Approximately 2% of the annual profits of the company invested in (R&D). Knowledge portal – helps employees keep up-to-date with the latest technologies . Extensive prototype building and testing facilities . Strategic partnerships – MDI (France), Fiat etc . Formal benchmarking process . “Technology Day” organized across all plant locations. March 14, 2016 20

21. Human Resource Vast pool of technically competent engineers and managers . Focus on development of technical capabilities – Technical Training Center’s, Alliance with technical Institutes. Focus on development of managerial skills – MTC’s , TMTC Career improvement schemes – FTSS . March 14, 2016 21

22. Firm Infrastructure Multi – Location facilities. Strong leadership – under the support of Tata Sons. Best in class prototype building facilities. Technology – SAP. Large product portfolio. March 14, 2016 22

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