Eight auto majors plan supply chain portal

By Our Special Correspondent

CHENNAI, JULY 25. Sensing immense opportunities in the fast expanding world of e-commerce, eight Indian auto majors - Ashok Leyland, Bajaj Auto, the Hero group, Hindustan Motors, Maruti Udyog, Mahindra & Mahindra, TVS Suzuki and Tata Engineering - have decided to jointly launch a vertical portal on the Internet.

These companies account for nearly four-fifths of the business transacted between vendors and original equipment manufacturers in India. The move comes close on the heels of a similar endeavour by global auto giants such as Ford, Daimler Benz and others.

The objective of creating a vertical portal for the automotive industry, it appears, is to facilitate a reduction in not only the cost of material but also of purchasing. The portal is expected to go a long way in helping the vehicle makers manage the inbound supply chain.

Initially, the portal will be targeted at the supplier- manufacturer segment of the auto industry. However, it is expected to evolve into a multi-purpose engine capable of managing customer relationship and further segments of the supply chain.

With this, the Indian auto industry appears to have arrived at the third stage of e-procurement. The first stage saw many going in for store fronts (that is, creation of websites). Vehicle manufacturers here essentially expected suppliers to visit their sites and meet their needs. In the second stage, they began to register themselves with the suppliers. Now, they are trying to aggregate their needs and speak to the suppliers in one voice.

Industry sources claim that the consolidation of demand will bring in its wake economies of scale. In the end, this is expected to help component suppliers and logistics operators alike via better planning and inventory management across the entire spectrum of the supply chain.

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Section  : Business
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