Tier Five Components Of The Auto Industry

Inventory management and supply chain management are the backbone of any business operations. With the development of technology and availability of process driven software applications, inventory management has undergone revolutionary changes. In the last decade or so we have seen adaptation of enhanced customer service concept on the part of the manufacturers agreeing to manage and hold inventories at their customers end and thereby effect Just In Time deliveries. Though this concept is the same in essence different industries have named the models differently. Manufacturing companies like computer manufacturing or mobile phone manufacturers call the model by name VMI - Vendor Managed Industry while Automobile industry uses the term JIT -

They manufacture equipment and products used in the most advanced and specialized components of the automotive industry: forged, stamped parts, die casting, plastic parts, machined parts, etc.
• Tier 3: They provide inputs and raw materials to Tier 2 manufacturers complying with the highest quality requirements of the automotive industry.
On the other hand, support processes to develop and manufacture components or parts that are included in the industry are also essential for the auto parts industry.
Supply chain of the auto parts industry:
The supply chain of the auto parts industry is based on companies which perform processes such as forging, machining, welding, etc., because they supply material at various production levels of the industry, to produce major and minor components that will be supplied to assemblers or original equipment manufacturers (OEM).
In addition, companies in charge of the various processes also supply distributors of the aftermarket or spare parts segment, including spare parts or garage chains.
The following figure shows the structure of the auto parts industry supply chain:
2.1.2 Global Scenario of Auto Parts & Accessories Manufacturing

Import dependence is low, approximately 13% of domestic demand, and usually restricted to items requiring special steels and materials or precision engineering (gearboxes for instance).
The mainstay of auto component industry is auto industry. The annual production of auto industry is US$ Million 10000 (Rs. 50000 Crores app). It is large in size compared to other ‘priority’ industries and has great employment potential. The auto industry has strong backward (component, basic material) and forward linkages (Insurance, Financing, Oil Industry & Roads). The industry contributes 17% of the total indirect taxes collected by the exchequer and is a driver of product and process technologies. Annexure details out production of passenger vehicles and commercial vehicles during the past decade.
There are 402 medium and large key players in auto components in the organised sector along with 6000 ancillary units. However in the unorganized sector there are approximately 5000 SSIs. The direct employment generated by the medium and large firms in the organized sector is 2,50,000. No figures are available for unorganized