Page 25 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes

Task Compare the concept of a modern supply chain with more traditional distribution
channels. Be specific regarding similarities and differences.

Self Assessment

Fill in the blanks:
16. Reduction in costs leads to increase in …………………….
17. In the …………………… concept of 21st century logistics quality can outweigh the product
itself in the competition among corporations.
18. …………………… is another area thought as one of the logistics actions starting point.



Case Study Strengthening the Supply Chain: A Case of
Delta-Sigma Pvt. Limited

elta Group of Industries had set up their plant to produce Backhoe Loaders and
Vibratory Compactors at Noida, near New Delhi in the year 1985-86. They started
Dmanufacturing Backhoe loaders in the year 1985 in the technical collaboration
with PI-Sigma of U.K. They introduced another product Vibratory Compactor in the year
1992. On October 1, 1999, Delta made collaboration with the Sigma Corporation of U.K.
and the company was renamed as DELTA-SIGMA Pvt. Limited. Sigma was world’s largest
manufacturer of Backhoe Loaders with more than 29% share worldwide and had
manufacturing plants in U.A.E., U.K., France, Germany, Brazil, and Japan etc. and had
headquarters in Tokyo, Japan. Sigma sold its products in 170 countries through a network
of approximately 6200 independent dealers. The factory was established in a lush green
environment, well laid out and spread over the area around 45 acres. It had its own
machine shop equipped with the CNC Machines, Fabrication Shop, Assembly Shop and
Paint Shop. A team of 220 persons were working in various departments. The company
was manufacturing various models of Backhoe loaders and Compactors. Backhoe loaders
were earthmoving machines used for loading, grading, ditch cleaning, trenching,
backfilling, while Vibratory compactors (Rollers) were used basically in road construction,
irrigation work, land developments and bridges. DELTA-SIGMA Pvt. Ltd. manufactured
three types of road Vibratory Compactors of 12, 8 and 3-ton capacity. These Vibrators
required 160, 180, 140 man-hours respectively. The strength of the Vibratory Compactors
manufacturing shop was 20 employees. On an average, a workman worked 26 days a
month and 8 hours in a shift. The market requirement of all the three types of Vibratory
Compactors varied from 10 to 35 machines per month. But, with the existing capacity,
only 26 Vibrators could be made per month. Peak requirement for the product existed
during January to April. As the cost of machine was very high and certain parts like, Tyres,
Batteries were to be delivered fresh to the customers, hence keeping inventories for more
than a month was not feasible.

Quality Policy
DELTA-SIGMA operated in a highly competitive environment, where quality was of
prime importance. Since, the company was in a service-oriented industrial sector, the
Contd...

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