Tata Motors is looking overseas for e-sourcing (online sourcing) of components. It is looking at countries such as China, Thailand and Russia to source components at the most competitive prices without any compromise in quality, reports Business Line.
These countries are key players for capital goods purchase (machinery) in new plants and components for the new product range.
Tata Motors currently e-sources direct (batteries, tyres, bearings, etc.) and indirect (hand gloves for the workmen, helmets, uniforms, etc.) materials from local suppliers in the country.
The company initiated e-sourcing of components in 2002 with software help from Freemarket USA (Freemarket was later sold to ARIBA, another software solutions provider, in 2004) on a contractual basis for two years. Since then, the auto major has renewed it twice.
In e-sourcing, bids are put online for every project. The supplier with the most competitive pricing, quality assurance and prompt delivery of goods gets the order.
Since 2002, the company has undertaken 2,000 projects with a total turnover of Rs 60 billion or roughly 20-25% of total sourcing, thus saving Rs 4500 million.
Tata Motors now plans to extend its e-sourcing initiative to various services such as logistics and catalogue buying.