Maruti Suzuki India and Hero MotoCorp, the largest passenger vehicle and two-wheeler OEMs in India respectively are learnt to take be taking ‘social distancing’ of their supply chain to the next level.
Sources have informed Autocar Professional that both the original equipment manufacturers (OEMs) who are market leaders in their segments are developing their own version of the contact-tracing Arogya Setu App which will help them in mapping their entire supply chain across the Tiers and geographies. Moreover, the OEMs App is being designed to sync with the original Arogya Setu itself so as to bring better accuracy and transparency in the system.
Arogya Setu is an Application developed by the Central government for tracking Covid19-infected patients by use of algorithms and machine learnings so as to prevent further spread of the pandemic in the country. Arogya Setu is programmed to alert the user if she/he comes across a person infected with Covid19. The App, which has crossed the 75 milliion download milestone, uses cutting-edge Bluetooth technology, algorithms and artificial intelligence, and location-generated social graphs.
An industry source, who prefers to stay anonymous, told Autocar Professional that the App developed by Maruti Suzuki and Hero MotoCorp will primarily be to access human body heat and other key details of the people and goods involved in the supply chain. While Maruti Suzuki is understood to have already given the App to its suppliers, Hero MotoCorp recently informed its component makers about the development of an App on similar lines.
An official email sent to both OEMs to find out more details about their Apps did not elicit any response till the time of this story going online.
The development of these Apps by the two leading OEMs is amongst the host of measures that are being taken for restarting the operations amidst the lockdown. Putting in place a fumigation tunnel, creating new Standard Operating Procedures (SOP)s for transport and delivery of components are some of the other important steps taken by the OEMs.
OEMs looking to recalibrate their supply chain
What has made the development significant is the fact that the supply chain in Indian automotive component industry is deeply intertwined, complex and at times global in its connections. According to industry estimates, India sources about 80-85% of components for all its vehicle needs domestically mainly from the National Capital Region (NCR), Pune, Mysuru, Sriperumbudur and Hosur clusters. Globally, China accounts for nearly 27 percent of component imports and is the single largest source country for India. On the other hand, Europe all together makes up for about 29 percent of the total component imports.
The changing scenarios arising out of Covid19 has made vehicle manufacturers sit up and take steps to recalibrate their strategies including those related to sourcing. OEMs are now looking to have multiple sources for the same part in different geographies albeit preference is still being given to the local ones. Further, the regulatory requirement of safety and social distancing for goods and people movements is pushing the conventional manufacturing processes upside down thereby forcing the companies to adopt better innovations and technologies.
Nonetheless, at a time when manufacturing plants remains shuttered amid the lockdown which stands extended to May 17, a successful restart of operations will depend upon how fast the component industry, especially Tier 3s and Tier 4s, are able to adapt to the changed circumstances. This make-or-break effort by the component industry, which contributes 2.3 percent to National GDP and provides employment to over 5 million people, will be closely monitored.