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Catapulting Auto Ancillary Industry To The Next Level

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Anirban Mazumdar
Anirban Mazumdar

The automotive ancillary industry in India faces challenges such as low productivity, pressure on margins, and volatility in raw material prices, but it is at an inflection point as India becomes a hub for automakers and opportunities arise. Valcon, a consulting firm, helps clients in industries such as automotive and engineering address issues in areas like product development, procurement, manufacturing, and supply chain management to improve cost, quality, and efficiency. Valcon aims to create value for clients and take them further through its experienced team and focus on execution.

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Catapulting automotive ancillary industry to the next level
The auto component industry is at an inflection point ABOUT VALCON The automotive ancillary industry has come a long way in terms of quality Valcon is a consulting company with of products and technical capabilities. As India becomes the hub for Scandinavian roots and a global global automotive giants and Indian manufacturers alike, unprecedented reach. opportunities present themselves to the auto component industry. Our local presence and insights currently cover Denmark, Sweden, Norway, India, China and Eastern Europe. We help you manage both strategic Procurement and operational challenges to Managing costs growth, efficiency, innovation, supply globalisation and transparency. chain Continuous manufacturing capability and quality improvement However, challenges need to be overcome to unlock the true potential: ?? Low productivity ?? Pressure on margins ?? Raw material price volatility ?? Need for continuous technology and quality upgradation ?? Shortage of skilled manpower
Product development Robust product development process ensuring new product on time at the right cost Challenges Imperatives CLIENT A global renewable energy company VALCON INTERVENTIONS Partner in developing new ?? Significant differences in ?? Improve cost estimation by products actual and estimated cost of using scientific techniques like new product ZBC, ABC, etc. BENEFITS ACCRUED ?? Development time reduced to ?? High variability in process post ?? Improve process controls less than 6 months start of production (SOP) ?? Implement robust project ?? 3 patents ¨C allowing the company to take control of the ?? Delays in project delivery due management approach to solution space. Competitors are to multiple iterations in meet delivery and left behind with the traditional developing required proto- performance requirements heavy design solution parts ?? Establish system to study ?? Lack of understanding of export market requirements export market requirements using techniques like voice of for new products customer (VOC), quality func- tion deployment (QFD), etc. Valcon¡¯s value proposition ?? Product cost reduction ?? Product and technology planning ?? Manufacturing and process technology ?? Reduction in go to market time ?? Increase productivity ?? Innovation
Procurement Achieving highest value for sourced products and services at lowest prices CLIENT Challenges Imperatives An engineering major faced with high procurement costs VALCON INTERVENTIONS ?? Non standardised procurement ?? Creating standard Execution of procurement practices procurement document and transformation program ?? Multiple suppliers for indirect sourcing strategy BENEFITS ACCRUED items and services ?? Supplier rationalisation ?? Cost savings of INR 650 Million ?? High procurement costs of ?? Identification of localisation ?? Streamlined 80 processes imported components/raw opportunities ?? Improved visibility of procure- ment spend across categories material/technology ?? Alternate source development, ?? Low bargaining power with global sourcing bigger suppliers ?? Analysis of spend, setting up ?? Rising share of procurement category management costs in COGS Valcon¡¯s value proposition ?? Cost savings ?? Performance measurement ?? Risk management ?? Supplier development ?? Setting up international procurement offices
Manufacturing Creating a flexible, efficient production system that delivers highest quality at lowest cost Challenges Imperatives CLIENT Tier-one component supplier for the world¡¯s largest motorcycle manufacturer facing capacity and ?? Under-utilisation of plant ?? Implementing operational quality issue capacity due to poor asset excellence program to improve VALCON INTERVENTIONS performance OEE and throughput Implementation of operational excellence program ?? Cost leakages due to high ?? Focus on supplier quality rework/quality rejections improvement and achieving BENEFITS ACCRUED superior process control ?? Overall throughput increased ?? Rising conversion costs by 10-20% ?? Excess inventory affecting ?? Improving flexibility in ?? Increased up-time by 20-30% production ?? In-process rejections reduced turnover rate and space from 2.4% to 0.06% of net utilisation ?? Reducing inventory by sales ?? Demand fluctuations affecting improving flow of material on production scheduling shop floor ?? High plant wastages ?? Focus on cost reductions by improving process yield Valcon¡¯s value proposition ?? Operational excellence ?? Cost reduction ?? Quality improvement ?? Throughput and capacity enhancement ?? Lean manufacturing
Supply chain Developing an agile supply chain to deliver the right product at the right time with maximum cost efficiency CLIENT Challenges Imperatives World¡¯s leading heavy machinery manufacturer facing challenges in stabilising supplier operations ?? Inconsistent delivery ?? Implementing integrated VALCON INTERVENTIONS Implementation of supplier performance supply chain planning system development program involving ?? Volatility in demand affecting ?? Improving forecasting and ?? PPAP activities responsiveness demand planning ?? Capacity and production planning ?? Margin erosion due to rising ?? Implementing suitable ?? Material planning and supply chain and distribution inventory management system coordination ?? Delivery planning costs in supply chain ?? Poor delivery and quality ?? Developing supply chain BENEFITS ACCRUED ?? PPAP activities completed performance of suppliers performance scorecard within record 70 days ?? Ineffective supply chain ?? RCCP, WIP planning modules performance metrics implemented ?? Cost reductions by migration from air to sea freight Valcon¡¯s value proposition ?? Inventory optimisation ?? Inbound and outbound logistics optimisation ?? Sales and operations planning ?? Supply chain process planning
Valcon = Value Consulting Our offerings come with a promise of taking our clients further and leave lasting footprints Our areas of competence ?? Production ?? Business strategy execution ?? Logistics OUR CLIENTS We have worked with customers in ?? Marketing and sales ?? Procurement India across pharma, auto and ?? After sales service ?? Research and development engineering, EPC and FMCG sectors with prestigious companies like ?? Saint Gobain ?? FLSmidth OUR TEAM ?? Castrol You will always be assisted by a team of highly skilled and experienced management ?? Biocon consultants ¨C as well as seasoned subject matter experts. Every one of them is ?? Novozymes thoroughly competent within their area; a competence built through impressive ?? Chandra Pearls careers on the other side of the desk ¨C and in the field. ?? Rangsons Electronics Our consultants have previous working experience in Ford, Toyota, Suzuki, Ashok ?? Caterpillar Leyland, Volvo, Caterpillar, Nokia, Saint Gobain, Escorts Hospital, Motorola, Bajaj, ?? Hero Group McKinsey, PwC, Wipro, ISRO, Dalmia, Asian Paints, Castrol, Coca Cola, and Schlumberger. ?? Murugappa Group ?? Uniparts OUR PHILOSOPHY Value Consulting means that creating value is the starting point for our efforts. The values that we create are traceable throughout our client companies. We believe in professionalism as foundation of all our efforts . Valcon is action ¨C oriented. We will not only tell you what needs to be done- but also how. And if necessary we can do it for you as well. In short: Valcon will take you further.
Connect with us Our offerings come with a promise of taking our cli- ents further and leave lasting footprints Krishnan Naganathan CEO krn@valcon.in +91-97 9103 3967 & +91-44-4210 2121 Sandeep Dahiya Associate Director sada@valcon.in +91 9008 366300 Valcon Management Consultants Pvt. Ltd No. 608A, 6th Floor, Spencer Plaza, 768/769, Annasalai, Chennai, India-600 002 Anirban Mazumdar Associate Director anma@valcon.in +91-98 104 76116 Valcon Management Consultants Pvt. Ltd 001, U & I Corporate Center, Plot 47, Sector 32, Gurgaon, India-122 001 www.valcon.in

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Catapulting Auto Ancillary Industry To The Next Level

  • 1. Catapulting automotive ancillary industry to the next level
  • 2. The auto component industry is at an inflection point ABOUT VALCON The automotive ancillary industry has come a long way in terms of quality Valcon is a consulting company with of products and technical capabilities. As India becomes the hub for Scandinavian roots and a global global automotive giants and Indian manufacturers alike, unprecedented reach. opportunities present themselves to the auto component industry. Our local presence and insights currently cover Denmark, Sweden, Norway, India, China and Eastern Europe. We help you manage both strategic Procurement and operational challenges to Managing costs growth, efficiency, innovation, supply globalisation and transparency. chain Continuous manufacturing capability and quality improvement However, challenges need to be overcome to unlock the true potential: ?? Low productivity ?? Pressure on margins ?? Raw material price volatility ?? Need for continuous technology and quality upgradation ?? Shortage of skilled manpower
  • 3. Product development Robust product development process ensuring new product on time at the right cost Challenges Imperatives CLIENT A global renewable energy company VALCON INTERVENTIONS Partner in developing new ?? Significant differences in ?? Improve cost estimation by products actual and estimated cost of using scientific techniques like new product ZBC, ABC, etc. BENEFITS ACCRUED ?? Development time reduced to ?? High variability in process post ?? Improve process controls less than 6 months start of production (SOP) ?? Implement robust project ?? 3 patents ¨C allowing the company to take control of the ?? Delays in project delivery due management approach to solution space. Competitors are to multiple iterations in meet delivery and left behind with the traditional developing required proto- performance requirements heavy design solution parts ?? Establish system to study ?? Lack of understanding of export market requirements export market requirements using techniques like voice of for new products customer (VOC), quality func- tion deployment (QFD), etc. Valcon¡¯s value proposition ?? Product cost reduction ?? Product and technology planning ?? Manufacturing and process technology ?? Reduction in go to market time ?? Increase productivity ?? Innovation
  • 4. Procurement Achieving highest value for sourced products and services at lowest prices CLIENT Challenges Imperatives An engineering major faced with high procurement costs VALCON INTERVENTIONS ?? Non standardised procurement ?? Creating standard Execution of procurement practices procurement document and transformation program ?? Multiple suppliers for indirect sourcing strategy BENEFITS ACCRUED items and services ?? Supplier rationalisation ?? Cost savings of INR 650 Million ?? High procurement costs of ?? Identification of localisation ?? Streamlined 80 processes imported components/raw opportunities ?? Improved visibility of procure- ment spend across categories material/technology ?? Alternate source development, ?? Low bargaining power with global sourcing bigger suppliers ?? Analysis of spend, setting up ?? Rising share of procurement category management costs in COGS Valcon¡¯s value proposition ?? Cost savings ?? Performance measurement ?? Risk management ?? Supplier development ?? Setting up international procurement offices
  • 5. Manufacturing Creating a flexible, efficient production system that delivers highest quality at lowest cost Challenges Imperatives CLIENT Tier-one component supplier for the world¡¯s largest motorcycle manufacturer facing capacity and ?? Under-utilisation of plant ?? Implementing operational quality issue capacity due to poor asset excellence program to improve VALCON INTERVENTIONS performance OEE and throughput Implementation of operational excellence program ?? Cost leakages due to high ?? Focus on supplier quality rework/quality rejections improvement and achieving BENEFITS ACCRUED superior process control ?? Overall throughput increased ?? Rising conversion costs by 10-20% ?? Excess inventory affecting ?? Improving flexibility in ?? Increased up-time by 20-30% production ?? In-process rejections reduced turnover rate and space from 2.4% to 0.06% of net utilisation ?? Reducing inventory by sales ?? Demand fluctuations affecting improving flow of material on production scheduling shop floor ?? High plant wastages ?? Focus on cost reductions by improving process yield Valcon¡¯s value proposition ?? Operational excellence ?? Cost reduction ?? Quality improvement ?? Throughput and capacity enhancement ?? Lean manufacturing
  • 6. Supply chain Developing an agile supply chain to deliver the right product at the right time with maximum cost efficiency CLIENT Challenges Imperatives World¡¯s leading heavy machinery manufacturer facing challenges in stabilising supplier operations ?? Inconsistent delivery ?? Implementing integrated VALCON INTERVENTIONS Implementation of supplier performance supply chain planning system development program involving ?? Volatility in demand affecting ?? Improving forecasting and ?? PPAP activities responsiveness demand planning ?? Capacity and production planning ?? Margin erosion due to rising ?? Implementing suitable ?? Material planning and supply chain and distribution inventory management system coordination ?? Delivery planning costs in supply chain ?? Poor delivery and quality ?? Developing supply chain BENEFITS ACCRUED ?? PPAP activities completed performance of suppliers performance scorecard within record 70 days ?? Ineffective supply chain ?? RCCP, WIP planning modules performance metrics implemented ?? Cost reductions by migration from air to sea freight Valcon¡¯s value proposition ?? Inventory optimisation ?? Inbound and outbound logistics optimisation ?? Sales and operations planning ?? Supply chain process planning
  • 7. Valcon = Value Consulting Our offerings come with a promise of taking our clients further and leave lasting footprints Our areas of competence ?? Production ?? Business strategy execution ?? Logistics OUR CLIENTS We have worked with customers in ?? Marketing and sales ?? Procurement India across pharma, auto and ?? After sales service ?? Research and development engineering, EPC and FMCG sectors with prestigious companies like ?? Saint Gobain ?? FLSmidth OUR TEAM ?? Castrol You will always be assisted by a team of highly skilled and experienced management ?? Biocon consultants ¨C as well as seasoned subject matter experts. Every one of them is ?? Novozymes thoroughly competent within their area; a competence built through impressive ?? Chandra Pearls careers on the other side of the desk ¨C and in the field. ?? Rangsons Electronics Our consultants have previous working experience in Ford, Toyota, Suzuki, Ashok ?? Caterpillar Leyland, Volvo, Caterpillar, Nokia, Saint Gobain, Escorts Hospital, Motorola, Bajaj, ?? Hero Group McKinsey, PwC, Wipro, ISRO, Dalmia, Asian Paints, Castrol, Coca Cola, and Schlumberger. ?? Murugappa Group ?? Uniparts OUR PHILOSOPHY Value Consulting means that creating value is the starting point for our efforts. The values that we create are traceable throughout our client companies. We believe in professionalism as foundation of all our efforts . Valcon is action ¨C oriented. We will not only tell you what needs to be done- but also how. And if necessary we can do it for you as well. In short: Valcon will take you further.
  • 8. Connect with us Our offerings come with a promise of taking our cli- ents further and leave lasting footprints Krishnan Naganathan CEO krn@valcon.in +91-97 9103 3967 & +91-44-4210 2121 Sandeep Dahiya Associate Director sada@valcon.in +91 9008 366300 Valcon Management Consultants Pvt. Ltd No. 608A, 6th Floor, Spencer Plaza, 768/769, Annasalai, Chennai, India-600 002 Anirban Mazumdar Associate Director anma@valcon.in +91-98 104 76116 Valcon Management Consultants Pvt. Ltd 001, U & I Corporate Center, Plot 47, Sector 32, Gurgaon, India-122 001 www.valcon.in