Auto Parts Asia — November 2017

AutoPartsAsia | NOVEMBER 2017 | 29

their scale and global outreach for
different sectors and increase visibility
for them.

Strategy Suppliers

Product standardisation presents
many opportunities for Mahindra.
Standardised parts like pistons,
rings and connecting rods etc. can
be transferred from automobiles
to tractors and moved across
businesses. The company has 300
core suppliers that are categorised as
‘Strategy Suppliers’ on whom it invests
maximum time and effort. Some of the
strategy suppliers are in self-certified
status and all the new businesses
would naturally go to them. Their
supplies are not checked on arrival at
the site as all inspections are done at
the source. Sikka feels it is better to
work with the suppliers at their site,
doing a complete PPAP (Production
Part Approval Process) there.

The company has skilled manpower
to do all kinds of audits

• in-process as well as
  regular. However, not all
  suppliers deliver at zero
  PPM, though that is the
  goal. The current average
  PPM levels will be around

100. He believes that “even
     if the PPM is higher, you
     can never inspect and
     take those parts out, it is
     almost impossible to take
     them out. So on-receipt
     inspection adds no value,
     irrespective of PPM levels.”

JIT Delivery

Next to quality, delivery is key for any

OEM. For optimum efficiency, OEMs

insist on vendors to supply just in

time (JIT). For Mahindra, JIT delivery

depends on the sequencing done at

their plants. All the suppliers for the

Chakan plant are JIT while for Nasik

and Pune only 15 percent. JIT for

Mahindra means going directly from

the suppliers’ site to the assembly line.

For Nasik and Chakan, the Group’s

biggest automotive plants, about

70 percent of suppliers are in close

vicinity.

About eight percent of the company’s

total buying is imported. Most of it is

from Germany, Korea and a little bit

from China and other places.

For the imported parts, Mahindra

maintains an inventory of about three

months. Almost 72 percent of the

purchase is bought out. Some very

critical operations like cylinder block

machining, block boring, body framing

and assembly, and painting are done

in-house. In certain cases, some

critical operations are outsourced to

suppliers if they come up with state-

of-the-art facilities. All kind of stamping

is done at the Mahindra factory. Its

Kandivili axle shop makes all axles,

though for some new projects they

may be occasionally outsourced.

Selection Process

For any manufacturer of automotive

components in India, becoming a

vendor to Mahindra is a dream, owing

to its presence across segments.

Mahindra has a very elaborate

system to certify a supplier. “We

have checklists where our teams

visit a supplier and do checks on

quality, process and management, as

also on the financial strength of the

prospective supplier. Once a supplier

qualifies on all these he gets into our

basket; this doesn’t mean he will get

business immediately; he gets into our

panel of suppliers. After he gets the