Palathinkal (May 22, 2008) 1

STRATEGIES FOR HIGH VOLUME SUPPLY CHAINS IN INDIA

by Don J. Palathinkal

(May 22, 2008)

Advisor: Dr. Edgar Blanco

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Agenda

IntroductionIndiaResearch Questions

PepsiCo India CaseAnalysis

Tata Motors CaseAnalysis

ConclusionSummary & InsightsProposition & Future Research

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IndiaIndia: emerging market and consumer changeLarge Urban Sector, Larger Rural SectorLack of Transportation InfrastructureObsolete Practices in farming, manufacturing etc…

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Research Questions

Are there specific strategies that could be adopted for emerging markets like India?

Any general characteristics for emerging markets like India?

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PepsiCo India Case Study

Partnerships for success

Supply Chain

Challenges (Rural Sector) Procurement ManufacturingDistribution

ProcurementManufacturing & Production DistributionPlanning

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Analysis: PepsiCo India

PepsiCo India

Non-competitor CPG company

Distribution network

Outsourced production & distribution network

Urb

an a

nd s

ubur

ban

regi

ons

Rur

al

regi

ons

Experimental Partnership

Collaborative Partnership

Entrepreneurial Partnership

Large individual consolidator

Large supply company

Entrepreneur

Raw material imports

Small scale farmers or suppliers (individuals)

Customers

Suppliers Manufacturing & Production Distribution

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Tata Motors Case Study

Vertical IntegrationTata GroupSubsidiaries

ChallengesLack of skilled labor

Bad infrastructureUnreliable Supply

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Tata Motors Case Study

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Analysis: Tata Motors

Tata Motors Supply ChainRegular Framework

Adaptations to reduce CostsProduct DesignVertical Integration advantagesMix of US/Japanese practicesGovernment Support

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Summary

Successful strategies adopted

Partnerships to overcome fragmentationAlliances with multinationalsPromotion of entrepreneurs to overcome rural distribution woes

Key observations

Partnerships and collaborations customize supply chainsVertical Integration

Successful strategies adopted

Repetition of existing successful strategiesPart of Tata GroupCost reducing designUtilization of government supportSelective supplier base

Inherent problems

FragmentationObsolete practices and blue collared skilled labor shortageLack of transportation infrastructure

Challenges[1]

Transportation infrastructureSupplier unreliabilityLack of blue collar skilled workforce

Challenges

Obsolete practices of 3rd party bottlersEconomic conditions of rural IndiaInefficient retail practicesRural distribution fragmentation

Cross AnalysisTata Motors AnalysisPepsiCo India Analysis

[1] Challenges are characteristic of the automotive industry as a whole

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Key InsightsFragmentationVertical IntegrationPartnerships or Collaborations customize supply chains

Suppliers (upstream)

Manufacturing & Production

Distribution(downstream)

Experimental Partnership

Collaborative Partnership

Entrepreneurial Partnership

Partnerships situated at various points across the PepsiCo India supply chain

Proposition

Trends in emerging markets – further research

Ideal change

Emerging market variant

Developed market variant

Frag

men

tatio

n

Time

High

Limited Advanced

Low

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Thank You