| TELCO - Managing The Supply Chain On The
Net by Chandan Dubey (The Financial Express) MUMBAI, March 23:
In May this year the country's largest commercial vehicle manufacturer Tata Engineering
Limited will start connecting its existing 130-strong dealer network online with the
company's Internet-based system.
Says Tata Engineering senior vice-president finance, Praveen Kadle:
"We have plans to bring all our dealers for commercial
vehicles and passenger cars, on the company network. Interfaces for this are being
developed with our back-end ERP ystems by group company Tata Technologies Limited."
While the company is targeting a 50 per cent coverage by the end of this year, the system
is expected to cover the entire dealer universe by mid-2001.
The company has already established online connections with its existing suppliers for
commercial vehicles and passenger cars.
The Internet-based system currently covers the company's major manufacturing locations in
Pune, Jamshedpur and Lucknow and its headquarters in Mumbai.
Suppliers and dealers simply need dial-up Internet connections to hook on to the company
systems.
Says Kadle: "Our current coverage is more than 90 per cent.. We are currently
reaching out to all the cities where the Internet is available."
The initiative is part of a business to business (B2B) effort the company has been working
on for the last two years. "Even as the need for an Internet-based solution for
supply chain was well recognised internally, the Internet infrastructure was not so strong
at that time," informs Kadle.
The company hence launched the first version of its B2B solution for a
select set of 30 suppliers in September 1998. After complete field-testing the company
released the operational version of the Value Chain Management in mid-1999. Tata
Engineering is currently in talks with a few banks to establish payment gateways between
the value chain at the company end and the banks.
Although the company refuses to commit any names, market sources say HDFC Bank is one of
the banks which has partnered the cash management for the company. Tata Engineering has
zeroed in on HDFC Bank after evaluation of four banks providing cash management services,
market sources say.
As part of the cash management initiative, the company dealers and suppliers will be
provided with financing facilities as well. The effort which has taken Rs 3 crore worth of
investment in infrastructure and eight man-years of system development and implementation
effort is expected to help Tata Engineering cut down conventional delays in the movement
of transactions. "We are expecting to cut down the existing transaction time at the
dealer end by 50 per cent. The system will also result in more accurate and secured
information resulting in no chaos and confusion.
The time saved will result in direct cost savings," says Kadle refusing to quantify
the extent of cost savings. Analysts estimate the numbers to be in the region Rs 400 to Rs
500 crore. Spelling out the benefits that will accrue to the dealer community, senior
vice-president commercial vehicle division, Tata Engineering, Ravikant says: "The
system is expected to become more transparent. Dealers will be able to book according to
their requirement and receive supplies faster. The initiative will help them keep
inventories under control. The company will also be in a better position to customise
products according to specific dealer requirements on a short notice."
Comments a Mumbai-based analyst: "Tata Engineering has always been a well managed
company-the B2B initiatives are likely to make processes even more efficient."
As part of the effort Tata Engineering has linked more than 300 suppliers
on to the company networks. Currently more than 95 per cent of the suppliers to the
company's auto plant at Pune are transacting through the system. The company has more than
50 major suppliers to the car plant on the network. The process of registering around 300
suppliers supplying to Tata Engineering Jamshedpur is currently on.
The optimists in the market are excited about the potential of the initiative.
Says a leading Tata Engineering dealer based in Mumbai: "The company's B2B initiative
is a step in the right direction. It will definitely cut down on the red tape and speed up
day to day processes. The system also promises improvement in customer service
levels." .
Copyright c 2000 Indian Express Newspapers (Bombay) Ltd |
