Indian OEMs say good connect with suppliers key to achieving high-quality products

The ACMA annual convention today saw a panel discussion on the theme of ‘Winning with Quality and Innovation’, where the lead presentation was made by Shivanshu Gupta, partner, and David Keeling, senior partner, McKinsey & Company.

Girish Shankar, secretary, Department of Heavy Industry, government of India; Vinod Dasari, president, SIAM and MD, Ashok Leyland; Rajan Wadhera, president and chief executive (Truck and Powertrain), Head, Mahindra Research Valley, Mahindra & Mahindra; CV Raman, executive director (Engineering), Maruti Suzuki India; Malo Le Masson, Head – Global Product Planning, Hero MotoCorp; Christian Brenneke, vice-president, product engineering, Wabco Inc and Keeling of McKinsey were the panelists in the discussion, which was moderated by Ashok Taneja, MD and CEO, Shriram Pistons & Rings.

The OEMs were of the consensus that vehicle manufacturers and their component suppliers need to team up and work together to achieve global quality benchmarks in the product development processes and learn about the best practices with honesty, integrity and ambition to grow.

According to M&M’s Wadhera, design and engineering are the core parameters that drive quality culture in any auto manufacturing company. Early involvement of suppliers and front-loading in various product development programs by OEMs is very essential to help them (suppliers) evolve in terms of their quality practices and discipline.

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"While this has helped Mahindra in terms of upgrading its existing supplier base, many players still have to go a long way in terms initiating and experimenting with new technology. It’s the attitude that matters beyond passion."

"At M&M, we organise the Supplier Capability Building Program, which has had more than 50 suppliers participating for over two years. We also run the Mahindra Supplier Evaluation System, Supply Risk Management and other sessions to help them follow best practices. The top 100 ACMA suppliers today are very close to world class quality standards. The outcomes of our initiatives have been very encouraging. We have achieved 80-90 percent functionality with only 50 percent costs in the development of certain new technologies with the help of some of our partners. That represents the quality and innovation culture at M&M.”

Importance of the supply chain

For Maruti Suzuki India, the country’s largest carmaker, suppliers and the supply chain are critical to its smooth functioning. That’s just what CV Raman meant when he said, “Suppliers are our partners. Interventions are needed to guide the Tier 1 suppliers in terms of best quality practices. If you trace recent vehicle recalls, the bulk of them will point at the potential issues with the Tier 2 supplier base. We want Tier 2 component suppliers to become at par with their Tier 1 counterparts in terms of quality and best practices. At Maruti, the top management has a very focused approach when it comes to quality assurance; they follow a strong review mechanism to spot potential weaknesses. A line worker is the first person to make out if right quality practices are being followed. Strict adherence to global quality standards is required to become at par with the world by 2020.”

Hero MotoCorp, the leading two-wheeler manufacturer in India, also banks on good OEM-supplier understanding. According to Malo Le Masson, “Collaboration with suppliers and focus on R&D takes centrestage in the run to 2020. We have this gun on our heads for upgrading from current BS IV norms to BS VI norms by 2020. The answer to how to do this is with all our suppliers. A great example of internal technology development and collaboration with supplier(s) is the Splendor's start-stop iSmart technology. It highlights how an OEM can team up with its suppliers to produce world class products. Developing technology of global standards at Indian costs is a great opportunity we are looking at.”

Encouraging the industry, along with its value chain, to focus on R&D to drive its quality and innovation and level global counterparts, DHI’s Girish Shankar said, “For all automotive companies, the focus on R&D should come automatically. It should not come because the government is granting financial assistance to drive the same. The R&D should not be incentivised by the government all the time. The industry should take it up on its own.”

He also asked the automotive industry heads (including supplier base) to not look at the road-to-2020 as a threat from global counterparts, but as a great export opportunity in line with the Make-in-India campaign.

According to Brenneke of Wabco, almost 70 percent of its suppliers (Tier 2 and lower) meet the global standards. “20 percent of them are even exporting parts from India,” he added.

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