Set in early 2009, Part (A) of the case describes the operational challenges faced by a growing subsidiary firm of a global auto major, in an emerging economy. The case illustrates how India emerges as a key market and the Indian subsidiary evolves into a material management and logistics (MM&L) hub for its Asia Pacific and Africa (APA) region. As the volumes of APA region begin to increase, the parent company realizes the need to automate material planning and scheduling-related processes across the plants in the APA region, which were being managed manually. The company takes this opportunity to virtually integrate the entire supply chain across all the plants in the APA region, by linking sales planning, material planning, procurement, production scheduling, and delivery activities, through a common order-to-delivery (OTD) system for the APA region.
The Indian subsidiary in the meantime decides to introduce a small car, specifically engineered to meet the requirements of a high-volume, but price-sensitive Indian market. The case then focuses on the challenges the APA MM&L team faces in implementing the OTD system, for the first time in India plant (to be followed by plants in Australia, South Africa, China, and Thailand), replacing the existing built-to-stock (BTS) model. Part (A) of the case ends by unfolding the age-old tension between the upstream material planning and scheduling activities and the downstream marketing and distribution networks. The various stakeholders in the system are left to grapple with these challenges before they can arrive at a consensus regarding “if and how to implement” the OTD system in order to enjoy the benefits of automation and virtual integration. Case (B) describes the outcomes of the actual implementation and provides scope for investigating the impact of OTD on the success of the small car introduced in the Indian market.
The case illustrates the complexities involved in synchronizing the entire supply chain in a discrete industry such as automobiles, when one aspires to carry out production of large volumes in a made-to-order fashion. The case also highlights the major differences between a BTS model and an OTD model; and how these differences manifest as costs and benefits to different stakeholders within and outside the organization. The case also demonstrates the importance of integrating various IT systems to reap the full benefits of supply chain integration.