M&M asks suppliers to focus on cost reduction, on-time delivery

In the wake of Indian automobile industry facing the heat from higher interest rates and rising inputs costs, Mahindra & Mahindra (M&M) has asked its suppliers to focus on cost reduction while also stressing on the need for on-time delivery.

The company, which held a conference of around 150 suppliers from India and abroad in Korea last month, has also asked them to build capacity and capability for future.

When asked what M&M had spelt out to suppliers in terms of expectations during the meet in Korea recently, a company spokesperson said it included “active participation for cost reduction, on-time delivery, and build the capacity and capability for future”, among others.

Other issues, such as designing capability from performance specification, improve Tier-II control and capability, sustainability of supply chain were also discussed with the vendors.

“The supplier meet was an ideal opportunity for us to discuss challenges faced by the Indian automobile industry such as impact of input costs, rise in interest rates and rising commodity prices,” M&M Chief Executive (Technology Product Development & Sourcing), Automotive & Farm Equipment Sectors Rajan Wadhera, said.

The Indian automobile industry had witnessed increased input costs due to rising commodity prices, which went up to about 8-10 per cent in the last financial year. A similar trend is expected in the ongoing year.

Wadhera further said the possibility of opting for appropriate areas of cost advantages in the zone of new technology and new processes was also discussed.

“It was also an occasion to share efforts made by the supplier community to change the image of the Indian automotive industry,” he added.

This was the second consecutive year when M&M had organised a joint supplier meet for both its automotive and farm divisions.

Common suppliers of Swaraj division, Mahindra Navistar and Mahindra Reva were also present at the meet along with 30 suppliers of SsangYong.