Supply Chain Management -MSIL
Content
Supply Chain
Project- Maruti
Suzuki India
Limited
Operations Management
Prepared ByAashish Biala - P301411CMG063
Aashish Gaur - P301411CMG064
Amit Rai P301411CMG068
Arun Swami - P301411CMG075
Manish Kumar -P301411CMG096
2
Table of Contents
About the Industry...................................................................................................... 3
Commercial Vehicles............................................................................................... 3
Financial Performance............................................................................................. 4
About the Company.................................................................................................... 5
Organization Structure............................................................................................... 5
Quality Policy.............................................................................................................. 6
Supply Chain Environment......................................................................................... 7
Drivers of Supply Chain- Maruti Suzuki India Limited..............................................8
Suppliers to Maruti Suzuki India Limited.....................................................................9
Multimodal Transport Methods.................................................................................11
Upstream Transport............................................................................................... 12
Downstream Transport.......................................................................................... 13
3
About the Industry
The Indian automobiles industry witnessed a moderation in demand in 2012,
after the double-digit growth in sales recorded in the preceding three years.
Weak macroeconomic sentiment coupled with subdued consumer confidence
pulled down sales, particularly in the latter half of the year. Domestic
automobile sales grew by 6.6% in 2012 (Jan-Nov), as compared to growth of
14-31% during 2009-2011. In view of the current macro environment, both
domestically and globally, it is good to remain cautiously optimistic about the
Indian automobile industry’s prospects in the near term. As a result,
achieving high growth rates is likely to be a major concern for the industry in
2013.
While the long term fundamentals of the Indian economy remain robust, the
sluggish global environment has impacted sentiments in the domestic
market in the short term. Growth in sales would be driven by the expected
improvement in macro conditions on the domestic front, moderation in
interest rates and revival in consumer confidence, mainly after the initial two
quarters. Consequently, the deferred purchases witnessed in 2012 are
expected to get converted into sales next year. The auto industry is likely to
gain considerably from the various initiatives on infrastructure development,
rural focus and the improved road infrastructure.
In 2012, all the segments, barring three-wheelers recorded higher exports.
Growth in exports of two-wheelers, which account for over 65% of
automobile exports, slumped to 1% in 2012, from 31% in 2011. Vehicle
exports have been on a downhill drive since mid-2012. The situation is not
likely to witness a sudden turnaround, particularly with the uncertainty
looming in the global economy. Moreover, with Sri Lanka recently announcing
steep increase in import tariffs and excise duties, it is likely to have an
adverse impact on India’s automobile exports, as Sri Lanka is one of the
important export destinations for the industry. Nevertheless, vehicle
manufacturers’ continued thrust on exploring newer export markets will open
growth opportunities for the industry.
Commercial Vehicles
The year 2012 saw a moderation in growth in domestic sales of commercial
vehicles (6.5%), after strong performance in the preceding years. This growth
was driven by the light vehicle segment (19.4%), even as sales of medium
and heavy vehicles (M&HCV) declined (-10%). Subdued macro-economic
4
environment, sluggish industrial demand and increase in diesel price led to
fall in sales of M&HCVs. Growth in overall domestic sales of commercial
vehicles is expected to be driven by the light vehicle segment in the year
ahead as well. The export environment for commercial vehicles is expected
to remain challenging, with demand expected to remain subdued in the key
overseas destinations. Nevertheless, CV manufacturers would increase thrust
on exploring opportunities in non-traditional markets (Africa, Middle East,
Thailand,
Afghanistan,
Latin
America,
Russia,
etc).
Passenger Vehicles
2012 was a challenging year for the passenger vehicle industry, as rising fuel
prices and high interest rates led to significant increase in ownership costs,
deterring customers from making vehicle purchases. Car sales crashed to a
negative in 2012-13, the fall coming after a decade, as the slowing economy
and continuance of high interest rates kept buyer sentiment at its lowest.
The industry is already worried as frequent production cuts and halt in
investments are raising doubts over the earlier perception of India being one
of the biggest-potential car markets in the world. High interest rates and
slowing economy have been the biggest dampeners for the car market. The
spurt in fuel prices has only added to the woes of buyers who have remained
away from the market for most part of the fiscal year. In the year ahead,
increased marketing efforts by companies and launch of new models/variants
would be directed at pulling customers into the showroom. However, the
demand momentum is expected to gain momentum after the initial couple of
quarters. Meanwhile, with the differential between petrol and diesel prices
continuing to remain large, the coming year would continue to witness strong
demand for diesel fuelled vehicles.
Financial Performance
Automobile companies across segments continue to face tremendous
pressure on profit margins due to elevated inflation levels. Added to this are
the heightened marketing costs incurred and heavy discounts offered by
vehicle manufacturers to attract consumers to the showrooms. This partially
explains the price hikes initiated by the vehicle OEMs to protect margins,
despite the weak demand environment. Going ahead, amidst rising market
competition, new product launches, as also product refreshes planned, OEMs
are expected to increase spend on marketing & promotional activities.
Although commodity prices are not expected to witness steep hikes, overall
5
cost and competitive pressures would keep the profit margins under
pressure.
About the Company
Maruti Suzuki is one of India's leading automobile manufacturers and the
market leader in the car segment, both in terms of volume of vehicles sold
and revenue earned. The company is a subsidiary of Suzuki Motor
Corporation, Japan, which owns 54.2 per cent of Maruti. The rest is owned by
the public and financial institutions. The company annually exports more
than 1 lakh cars and has an extremely large domestic market in India selling
over 1 million cars annually.
6
Organization Structure
Quality Policy
To increase consumer satisfaction through continuous improvement of
products and services the company uses many quality tools such as:
5S
4M
3M
3G
3K
7
5S Stands forSEIRI – PROPER SELECTION
SEITION – ARRANGEMENT
SEISO – CLEANING
SEIKETSO – CLEANLINESS
SHITSUKE – DISCIPLINE
4M stands forMan
Machine
Material
Method
3M Stands forMURI – INCONVENIENCE
MUDA – WASTAGE
MURA – INCONSISTENCY
3G stands forGENCHI – GO TO ACTUAL PLACE
GENBUTSU – SEE THE ACTUAL THING
GENJITSU – TAKE APPROPRIATE ACTION
Supply Chain Environment
In today’s automotive market, leading the competition means driving costs
out of your operation, balancing inventory and speeding products to market.
It also means adopting a flexible manufacturing model that adapts
effortlessly to shifts in consumer demand and industry trends.
When we talk about Supply chain environment we basically deal with finding
a win-win situation both for the customer as well as the manufacturers. This
is achieved by achieving strategic fit between competitive strategies
(customer priorities) and supply chain strategies. The failure of any one
function leads to the failure of the overall chain.
8
Automotive supply chain struggle with five primary challenges: visibility, risk,
cost containment, customer demands and globalization.
The competitive strategy and all functional strategy must fit together to form
a coordinated overall strategy. This in turn should help the firm reach its
competitive strategy.
For achieving a strategic fit the company must ensure that its supply chain
capabilities support its ability to satisfy the targeted customer segments.
Different companies follow different methodology to achieve this strategic fit
between their competitive strategies and supply chain strategies, in case of
automotive industry it initially started with Mass production was the standard
production strategy adopted. Mass production relies heavily on a company’s
ability to forecast demand accurately, which in turn guides the company’s
decisions regarding operations and production. Characterized as a push
system, forecast-driven production is a highly efficient but rather rigid
system that utilizes historical data and projections to create a production
plan and makes use of existing configurations to produce products for stock.
Due to changing demands in the business environment, the focus shifted to
mass customization. In this situation, a company’s operations are initiated by
the customers‟ orders rather than by a forecast, hence the employment of a
customer order strategy. A customer-order driven production approach is
9
characterized as a pull system that produces the products for specific
customer orders in a timely manner, thus, avoiding stockpiles
This move in automotive supply chain was done towards ensuring better
strategic fit between the customer demand and the supply chain capabilities.
Drivers of Supply Chain- Maruti Suzuki India Limited
1. Facility - The Company has its plants in Gurgaon and Manesar, Haryana
with a dealer network spread all across the country. It has the highest
number of sales and service outlets in the country. In FY 2011-12, it opened
its 1000th sales outlet. The company with over 2950 service outlets reaches
its customers across 1400 cities. As a result the companies supply chain is
highly responsive.
2. Inventory - The dealers maintain an optimum level of inventory with
them, thus catering to the needs of the customer. Good inventory turnover
helps in keeping the inventory carry cost low and thus making the supply
chain more responsive and efficient.
3. Transportation - The Company has tie-ups with major transporters
across India for shipment of inventory from all its plants i.e. Gurgaon and
Manesar plant to various dealerships. This network helps them to meet
customer requirements.
4. Information - The Company has implemented VTS across all its
production facilities to make information available at all the steps of the
supply chain which would has helped in increasing the responsiveness of the
supply chain.
5. Sourcing - Apart from lateral recruitment, the Company picks students
from across the country. Its goes to all reputed engineering colleges like NIT’s
IIT’s etc. It has got a good talent pool.
6. Pricing - MSIL follows very competitive price strategy. Since there are
many players in the industry offering products with similar price ranges, it is
the service quality which proves to be a differentiating factor.
Suppliers to Maruti Suzuki India Limited
1. Caparo Maruti Limited –
10
Supplies Dash Panels for various models like Alto, WagonR, Omni
etc.
Supplies Chasis for various models
Tier- 2 Suppliers for Caparo Maruti Limited area. Caparo, Bawal
b. K R Rubberite
Customer – Maruti Suzuki India Limited
Multimodal Transportation – (In-house) in trolleys with tractor
(to Maruti) in trucks and trolleys
Driver of Supply Chain used – Cost settlement and New Business
Replenishment Cycle
replenishment cycle.
–
The
Company
follows
Kanban
System
of
Kanban is
a
scheduling
system
for lean
and just
in
time (JIT)
production. Kanban is a system to control the logistical chain from a
production point of view, and is not an inventory control system. Kanban was
developed by Taiichi Ohno, at Toyota, to find a system to improve and
maintain a high level of production. Kanban is one method through which JIT
is achieved. Kanban became an effective tool in support of running a
production system as a whole, and it proved to be an excellent way for
promoting improvement. Problem areas were highlighted by reducing the
number of Kanban in circulation.
11
12
2. Jay Bharat Maruti Limited
Assembly of fendor appron for different models like Echo, ZenEstilo, WagonR etc.
Tier- 2 Suppliers for Jay Bharat Maruti Limited area. K R Rubbrite for Sheet metal parts
b. Veenus Metals Industries for Sheet metal parts
Customers – Maruti Suzuki India Limited and Wholesalers (body part)
for car manufacturing.
Multimodal Transportation – (In-house) in trolleys with tractor
(to Maruti) in trucks and trolleys
Replenishment Cycle – The ordering of materials is done on the basis of
daily production plan. Supply ordering is done through nagare
(Schedule system which tells in how many lots the material will come)
and DI (delivery instruction – which tells what would be the lot size) on
daily basis with split timing. The supply is done on daily basis and the
materials are delivered by JBML in 24 hours of ordering.
13
Multimodal Transport Methods
Multimodal Transport Documents are governed by Article 19 of Uniform
Customs and Practices for documentary credits publication No. 600 which is
as under:
A transport document covering at least two different modes of transport
(multimodal or combined transport document), however named, must
appear to:
Indicate the place of dispatch, taking in charge or shipment and the place of
final destination stated in the credit, even if:
a. the transport document states, IN ADDITION, a different place of dispatch,
taking
in
charge or shipment or place of final destination, (emphasis added)
or
b. the transport document contains the indication "intended" or similar
qualification
in
relation to the vessel, port of loading or port of discharge.
The Parties Involved in Import and Export Transactions
The Buyer, who places orders and imports goods (meaning to bring
into the country).
The Seller, who manufactures and exports goods (meaning to ship out
of the country) and issues invoices.
The Manufacturer, if the seller does not make his own goods.
The Shipping Company, (or Airline Company) who transport the
goods overseas and issue Bills of Lading (or Air Waybills) as receipt of
goods.
The Insurance Company which insures the goods against risk. An
insurance policy or certificate is issued to this effect.
Governments and Embassies who give permission to import or export
specific types of goods by issuing Import and Export Licenses, and
Consular Invoices respectively.
The Customs and Excise, who levy import duty and issue Custom’s
Invoices.
14
Various professional bodies, who issue Inspection Certificates
certifying that the goods have been inspected and meet certain quality
standards.
Lawyers, who draw up contracts of sale.
Agents, who represent either the buyer or seller overseas.
Shipping Registries, who ensure that the carrying ship is seaworthy.
Chambers of Commerce, who issue Certificates of Origin.
Banks, who participate in most trade transactions to some extent,
from full finance to the processing of simple remittances.
Automobile industry is dependent on the various modes of transport.
Transport is required for both the raw materials as well as the finished goods
that are there in the industry. On time and cheap transport is an important
factor in the industry as transportation cost for finished are high.
The various modes of transport that can be used in this industry are
Railways
Roadways
Ships
Aircrafts
Upstream Transport
Transport of the various raw materials and plant and machinery that is used
by the company is done through all modes.
Transport of Raw Materials: The raw materials as discussed earlier are
parts of engine and body parts. These are transported by road and rail to the
plant locations in Gurgaon and Manesar. Air Conditioners and other
components are locally arranged through road transport.
Transport of Plant and Machinery: Plant and machinery that is bought
from India is shipped by rail or road to the factories of the company.
Machinery purchased from foreign manufacturer is shipped to the company
via ships. The machinery is usually shipped from Japan.
Downstream Transport
15
Goods produced by the company are shipped either inside the country to
various distributors or is exported to foreign countries.
Goods manufactured for Export: The Company ships Goods on CIF basis.
The shipment is done from the Gujarat port in most cases via ships. The
company has various agreements with merchant vessels to enable quick and
easy transport.
Goods manufactured for domestic use: For models manufactured to be
sold in India, the company ships it via road to the company distributors.
Project- Maruti
Suzuki India
Limited
Operations Management
Prepared ByAashish Biala - P301411CMG063
Aashish Gaur - P301411CMG064
Amit Rai P301411CMG068
Arun Swami - P301411CMG075
Manish Kumar -P301411CMG096
2
Table of Contents
About the Industry...................................................................................................... 3
Commercial Vehicles............................................................................................... 3
Financial Performance............................................................................................. 4
About the Company.................................................................................................... 5
Organization Structure............................................................................................... 5
Quality Policy.............................................................................................................. 6
Supply Chain Environment......................................................................................... 7
Drivers of Supply Chain- Maruti Suzuki India Limited..............................................8
Suppliers to Maruti Suzuki India Limited.....................................................................9
Multimodal Transport Methods.................................................................................11
Upstream Transport............................................................................................... 12
Downstream Transport.......................................................................................... 13
3
About the Industry
The Indian automobiles industry witnessed a moderation in demand in 2012,
after the double-digit growth in sales recorded in the preceding three years.
Weak macroeconomic sentiment coupled with subdued consumer confidence
pulled down sales, particularly in the latter half of the year. Domestic
automobile sales grew by 6.6% in 2012 (Jan-Nov), as compared to growth of
14-31% during 2009-2011. In view of the current macro environment, both
domestically and globally, it is good to remain cautiously optimistic about the
Indian automobile industry’s prospects in the near term. As a result,
achieving high growth rates is likely to be a major concern for the industry in
2013.
While the long term fundamentals of the Indian economy remain robust, the
sluggish global environment has impacted sentiments in the domestic
market in the short term. Growth in sales would be driven by the expected
improvement in macro conditions on the domestic front, moderation in
interest rates and revival in consumer confidence, mainly after the initial two
quarters. Consequently, the deferred purchases witnessed in 2012 are
expected to get converted into sales next year. The auto industry is likely to
gain considerably from the various initiatives on infrastructure development,
rural focus and the improved road infrastructure.
In 2012, all the segments, barring three-wheelers recorded higher exports.
Growth in exports of two-wheelers, which account for over 65% of
automobile exports, slumped to 1% in 2012, from 31% in 2011. Vehicle
exports have been on a downhill drive since mid-2012. The situation is not
likely to witness a sudden turnaround, particularly with the uncertainty
looming in the global economy. Moreover, with Sri Lanka recently announcing
steep increase in import tariffs and excise duties, it is likely to have an
adverse impact on India’s automobile exports, as Sri Lanka is one of the
important export destinations for the industry. Nevertheless, vehicle
manufacturers’ continued thrust on exploring newer export markets will open
growth opportunities for the industry.
Commercial Vehicles
The year 2012 saw a moderation in growth in domestic sales of commercial
vehicles (6.5%), after strong performance in the preceding years. This growth
was driven by the light vehicle segment (19.4%), even as sales of medium
and heavy vehicles (M&HCV) declined (-10%). Subdued macro-economic
4
environment, sluggish industrial demand and increase in diesel price led to
fall in sales of M&HCVs. Growth in overall domestic sales of commercial
vehicles is expected to be driven by the light vehicle segment in the year
ahead as well. The export environment for commercial vehicles is expected
to remain challenging, with demand expected to remain subdued in the key
overseas destinations. Nevertheless, CV manufacturers would increase thrust
on exploring opportunities in non-traditional markets (Africa, Middle East,
Thailand,
Afghanistan,
Latin
America,
Russia,
etc).
Passenger Vehicles
2012 was a challenging year for the passenger vehicle industry, as rising fuel
prices and high interest rates led to significant increase in ownership costs,
deterring customers from making vehicle purchases. Car sales crashed to a
negative in 2012-13, the fall coming after a decade, as the slowing economy
and continuance of high interest rates kept buyer sentiment at its lowest.
The industry is already worried as frequent production cuts and halt in
investments are raising doubts over the earlier perception of India being one
of the biggest-potential car markets in the world. High interest rates and
slowing economy have been the biggest dampeners for the car market. The
spurt in fuel prices has only added to the woes of buyers who have remained
away from the market for most part of the fiscal year. In the year ahead,
increased marketing efforts by companies and launch of new models/variants
would be directed at pulling customers into the showroom. However, the
demand momentum is expected to gain momentum after the initial couple of
quarters. Meanwhile, with the differential between petrol and diesel prices
continuing to remain large, the coming year would continue to witness strong
demand for diesel fuelled vehicles.
Financial Performance
Automobile companies across segments continue to face tremendous
pressure on profit margins due to elevated inflation levels. Added to this are
the heightened marketing costs incurred and heavy discounts offered by
vehicle manufacturers to attract consumers to the showrooms. This partially
explains the price hikes initiated by the vehicle OEMs to protect margins,
despite the weak demand environment. Going ahead, amidst rising market
competition, new product launches, as also product refreshes planned, OEMs
are expected to increase spend on marketing & promotional activities.
Although commodity prices are not expected to witness steep hikes, overall
5
cost and competitive pressures would keep the profit margins under
pressure.
About the Company
Maruti Suzuki is one of India's leading automobile manufacturers and the
market leader in the car segment, both in terms of volume of vehicles sold
and revenue earned. The company is a subsidiary of Suzuki Motor
Corporation, Japan, which owns 54.2 per cent of Maruti. The rest is owned by
the public and financial institutions. The company annually exports more
than 1 lakh cars and has an extremely large domestic market in India selling
over 1 million cars annually.
6
Organization Structure
Quality Policy
To increase consumer satisfaction through continuous improvement of
products and services the company uses many quality tools such as:
5S
4M
3M
3G
3K
7
5S Stands forSEIRI – PROPER SELECTION
SEITION – ARRANGEMENT
SEISO – CLEANING
SEIKETSO – CLEANLINESS
SHITSUKE – DISCIPLINE
4M stands forMan
Machine
Material
Method
3M Stands forMURI – INCONVENIENCE
MUDA – WASTAGE
MURA – INCONSISTENCY
3G stands forGENCHI – GO TO ACTUAL PLACE
GENBUTSU – SEE THE ACTUAL THING
GENJITSU – TAKE APPROPRIATE ACTION
Supply Chain Environment
In today’s automotive market, leading the competition means driving costs
out of your operation, balancing inventory and speeding products to market.
It also means adopting a flexible manufacturing model that adapts
effortlessly to shifts in consumer demand and industry trends.
When we talk about Supply chain environment we basically deal with finding
a win-win situation both for the customer as well as the manufacturers. This
is achieved by achieving strategic fit between competitive strategies
(customer priorities) and supply chain strategies. The failure of any one
function leads to the failure of the overall chain.
8
Automotive supply chain struggle with five primary challenges: visibility, risk,
cost containment, customer demands and globalization.
The competitive strategy and all functional strategy must fit together to form
a coordinated overall strategy. This in turn should help the firm reach its
competitive strategy.
For achieving a strategic fit the company must ensure that its supply chain
capabilities support its ability to satisfy the targeted customer segments.
Different companies follow different methodology to achieve this strategic fit
between their competitive strategies and supply chain strategies, in case of
automotive industry it initially started with Mass production was the standard
production strategy adopted. Mass production relies heavily on a company’s
ability to forecast demand accurately, which in turn guides the company’s
decisions regarding operations and production. Characterized as a push
system, forecast-driven production is a highly efficient but rather rigid
system that utilizes historical data and projections to create a production
plan and makes use of existing configurations to produce products for stock.
Due to changing demands in the business environment, the focus shifted to
mass customization. In this situation, a company’s operations are initiated by
the customers‟ orders rather than by a forecast, hence the employment of a
customer order strategy. A customer-order driven production approach is
9
characterized as a pull system that produces the products for specific
customer orders in a timely manner, thus, avoiding stockpiles
This move in automotive supply chain was done towards ensuring better
strategic fit between the customer demand and the supply chain capabilities.
Drivers of Supply Chain- Maruti Suzuki India Limited
1. Facility - The Company has its plants in Gurgaon and Manesar, Haryana
with a dealer network spread all across the country. It has the highest
number of sales and service outlets in the country. In FY 2011-12, it opened
its 1000th sales outlet. The company with over 2950 service outlets reaches
its customers across 1400 cities. As a result the companies supply chain is
highly responsive.
2. Inventory - The dealers maintain an optimum level of inventory with
them, thus catering to the needs of the customer. Good inventory turnover
helps in keeping the inventory carry cost low and thus making the supply
chain more responsive and efficient.
3. Transportation - The Company has tie-ups with major transporters
across India for shipment of inventory from all its plants i.e. Gurgaon and
Manesar plant to various dealerships. This network helps them to meet
customer requirements.
4. Information - The Company has implemented VTS across all its
production facilities to make information available at all the steps of the
supply chain which would has helped in increasing the responsiveness of the
supply chain.
5. Sourcing - Apart from lateral recruitment, the Company picks students
from across the country. Its goes to all reputed engineering colleges like NIT’s
IIT’s etc. It has got a good talent pool.
6. Pricing - MSIL follows very competitive price strategy. Since there are
many players in the industry offering products with similar price ranges, it is
the service quality which proves to be a differentiating factor.
Suppliers to Maruti Suzuki India Limited
1. Caparo Maruti Limited –
10
Supplies Dash Panels for various models like Alto, WagonR, Omni
etc.
Supplies Chasis for various models
Tier- 2 Suppliers for Caparo Maruti Limited area. Caparo, Bawal
b. K R Rubberite
Customer – Maruti Suzuki India Limited
Multimodal Transportation – (In-house) in trolleys with tractor
(to Maruti) in trucks and trolleys
Driver of Supply Chain used – Cost settlement and New Business
Replenishment Cycle
replenishment cycle.
–
The
Company
follows
Kanban
System
of
Kanban is
a
scheduling
system
for lean
and just
in
time (JIT)
production. Kanban is a system to control the logistical chain from a
production point of view, and is not an inventory control system. Kanban was
developed by Taiichi Ohno, at Toyota, to find a system to improve and
maintain a high level of production. Kanban is one method through which JIT
is achieved. Kanban became an effective tool in support of running a
production system as a whole, and it proved to be an excellent way for
promoting improvement. Problem areas were highlighted by reducing the
number of Kanban in circulation.
11
12
2. Jay Bharat Maruti Limited
Assembly of fendor appron for different models like Echo, ZenEstilo, WagonR etc.
Tier- 2 Suppliers for Jay Bharat Maruti Limited area. K R Rubbrite for Sheet metal parts
b. Veenus Metals Industries for Sheet metal parts
Customers – Maruti Suzuki India Limited and Wholesalers (body part)
for car manufacturing.
Multimodal Transportation – (In-house) in trolleys with tractor
(to Maruti) in trucks and trolleys
Replenishment Cycle – The ordering of materials is done on the basis of
daily production plan. Supply ordering is done through nagare
(Schedule system which tells in how many lots the material will come)
and DI (delivery instruction – which tells what would be the lot size) on
daily basis with split timing. The supply is done on daily basis and the
materials are delivered by JBML in 24 hours of ordering.
13
Multimodal Transport Methods
Multimodal Transport Documents are governed by Article 19 of Uniform
Customs and Practices for documentary credits publication No. 600 which is
as under:
A transport document covering at least two different modes of transport
(multimodal or combined transport document), however named, must
appear to:
Indicate the place of dispatch, taking in charge or shipment and the place of
final destination stated in the credit, even if:
a. the transport document states, IN ADDITION, a different place of dispatch,
taking
in
charge or shipment or place of final destination, (emphasis added)
or
b. the transport document contains the indication "intended" or similar
qualification
in
relation to the vessel, port of loading or port of discharge.
The Parties Involved in Import and Export Transactions
The Buyer, who places orders and imports goods (meaning to bring
into the country).
The Seller, who manufactures and exports goods (meaning to ship out
of the country) and issues invoices.
The Manufacturer, if the seller does not make his own goods.
The Shipping Company, (or Airline Company) who transport the
goods overseas and issue Bills of Lading (or Air Waybills) as receipt of
goods.
The Insurance Company which insures the goods against risk. An
insurance policy or certificate is issued to this effect.
Governments and Embassies who give permission to import or export
specific types of goods by issuing Import and Export Licenses, and
Consular Invoices respectively.
The Customs and Excise, who levy import duty and issue Custom’s
Invoices.
14
Various professional bodies, who issue Inspection Certificates
certifying that the goods have been inspected and meet certain quality
standards.
Lawyers, who draw up contracts of sale.
Agents, who represent either the buyer or seller overseas.
Shipping Registries, who ensure that the carrying ship is seaworthy.
Chambers of Commerce, who issue Certificates of Origin.
Banks, who participate in most trade transactions to some extent,
from full finance to the processing of simple remittances.
Automobile industry is dependent on the various modes of transport.
Transport is required for both the raw materials as well as the finished goods
that are there in the industry. On time and cheap transport is an important
factor in the industry as transportation cost for finished are high.
The various modes of transport that can be used in this industry are
Railways
Roadways
Ships
Aircrafts
Upstream Transport
Transport of the various raw materials and plant and machinery that is used
by the company is done through all modes.
Transport of Raw Materials: The raw materials as discussed earlier are
parts of engine and body parts. These are transported by road and rail to the
plant locations in Gurgaon and Manesar. Air Conditioners and other
components are locally arranged through road transport.
Transport of Plant and Machinery: Plant and machinery that is bought
from India is shipped by rail or road to the factories of the company.
Machinery purchased from foreign manufacturer is shipped to the company
via ships. The machinery is usually shipped from Japan.
Downstream Transport
15
Goods produced by the company are shipped either inside the country to
various distributors or is exported to foreign countries.
Goods manufactured for Export: The Company ships Goods on CIF basis.
The shipment is done from the Gujarat port in most cases via ships. The
company has various agreements with merchant vessels to enable quick and
easy transport.
Goods manufactured for domestic use: For models manufactured to be
sold in India, the company ships it via road to the company distributors.
