The Hindu Business Line : CII institute plans to rate auto, component cos

The CII Institute of Logistics, a centre of excellence established by the Confederation of Indian Industry, plans to rate automobile and auto component companies on their supply chain management (SCM) practices.

According to Mr R. Dinesh, Chairman, Auto SCM India 2006, a two-day seminar organised by the institute, the ratings concept was suggested by the industry to adopt efficient SCM practices. "We want to set a benchmark for companies so that more organisations adopt robust SCM practices," said Mr Dinesh, who is also a member of the Institute.

A document listing a set of parameters that will be considered for rating would be ready by early 2007, said Mr Dinesh. Some parameters include number of days of inventory on the road, planning aspects, turnaround time for trucks (in transporting goods and returning) and overall efficiency of supply chain.

The institute also plans to bring out a compendium of best SCM practices in the country. "Many companies are unaware of the scope of outsourcing in SCM. These best practices will benefit small companies and help them adopt outsourcing to a greater extent," he said.

As an example, he said only large companies today outsourced transportation. "But any company with a turnover of over Rs 50 crore should outsource transportation to third party logistics providers. This will cut costs by up to 25 per cent," he said. Besides, savings in administration costs would also be visible, he said.

The compendium would include case studies on outsourcing specific to `inbound' and `outbound' aspects of the supply chain. Special attention would be given to areas such as integrated inbound supply chain, outbound spare parts and finished goods supply chain.

The institute will also help companies adopt these practices to their workflow.

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