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.