Maruti Udyog: Mulling Over IT

With its strong dependence on the supply chain network, Maruti needs to
manage its dealers and suppliers together in a synchronized manner while also
managing complexities in terms of sensing the demand and getting the right mix.
It has to plan nearly four to five months in advance about the products that
would sell and in what quantities. As a result, the company has a very strong
focus on Supply Chain Management (SCM), which forms the core of its IT set-up.

The SCM system from i2 includes marketing & sales and production systems
as well as plant and material systems and spares systems. These applications
take care of some key aspects like demand forecasting (which is the i2 Demand
Planner), production planning, vehicle production tracking, stock etc. It is
currently rolling out the Dealer Management System, a centrally hosted
application, which will be internally linked to MUL's systems and will support
all their business processes like sales ordering, invoicing, sales, service,
spares, etc. Similarly, the suppliers can also log into MUL's system, which
outlines the supply requirements from a particular supplier. This has led to
effective synchronization of the supplier resources to the company's
requirements.

Apart from SCM, e-procurement has been taken up as one of the key focus areas
for cost reduction and improved procurement processes. The Spares Warehouse
Management system has automated the spares warehouse processes for greater
efficiency, lower warehousing costs, increased inventory turnover and faster
turnaround times. The Vehicle Tracking System, which has been implemented at two
plants, is a middle tier layer between business systems and shop floor systems
that provides correct and timely instructions to the shop floor along with
feedback to the business systems, thereby enhancing the efficiency at the shop
floor. It has implemented 'Hyperion' tools for planning, consolidation and
business reporting requirements. The tools integrate with the transactional
systems for data capturing and implementation of plans.

Looking ahead, Maruti is undergoing an information security and IT security
drive, aimed at protecting the company's IP and critical business information
from external and internal threats. Also on the anvil are applications, which
provide the capability to quickly pick up market feedback, sales and demand
forecasts-issues like how much will be the sales in a particular city in a
particular month, any fluctuations expected in demand, etc. so that these can be
incorporated into any strategic decision making process.