Tata’s Nano Vs Bajaj’s RE 60 : Innovative Product Designs and Similar Supply Chain Strategy
A comparison of product design and supply chain of the two automobile giants in India – Tata and Bajaj, at a time when both are
entering a niche space of low priced cars.
Product Design: Though Bajaj doesn't brand itself as
a car company, it is launching what it calls the quadricycle (and not a car);
the “RE 60” – a
low cost (approx. $2000), high mileage, small build and eco-friendly
quadricycle similar to the Nano or maybe even a little better than the Nano due
to the different look given by the body colored bumpers, stylish wheels and
other features like the folding front windows, central speedometer cluster,
prominent seatbelts, 44-litre boot space etc,. It will also have the digital
twin spark tech engine that is expected to deliver decent performance on all
types of terrains and the new water-cooled DTSi 4 (Digital Twin Spark Ignition)
engine that will help it accelerate to 70 kmph”.4 These features seem a little better than those of Nano but given all this, will the RE 60 still make it big in the Indian and
overseas market? This is a difficult question to answer because with a
groundbreaking product that creates a new category, quantitative predictions
don’t work because there is nothing to base them on. 5
This was one of the reasons Tata
Nano did not live up to media expectations. The discussion brings us to an
important point about product design being ‘emotionally resonant’. The low success of Tata Nano could be
attributed to the fact that consumers did not want to be noticed travelling in
a low price car. Will RE 60 get better at this?
The Supply Chain: While Tata is moving towards standardization
and fewer business partners; Bajaj on the other hand has also taken a similar
move by cutting down to 125 suppliers from nearly 1000 suppliers in the past. This
revelation forced me to think about these two companies deciding to compete in
the same niche and also having a similar supply chain strategy. They are
focused on consolidating volumes with lesser number of suppliers who are
expected to supply 'on-line, in-time.' Also their supply would be divided into categories
that are homogeneous and will reflect similarity in innovation, development and
manufacturing skills. I was wondering if this is the scenario with other
industries too. If so, then it would be surprising because the previous article
we read about HP speaks about the risks of restricting major portion of supplies
to a fewer number of manufacturers whereas these articles on Tata and Bajaj, on
the contrary, talk about defining a "sourcing structure with no more than
two suppliers for a given family of assemblies3.”
Does this significant reduction in number of suppliers suggest something more
than just the optimization of supply process? Is it creating a trend? Will this
trend eventually lead to innovation in SCM globally?
References:
1: Bajaj RE60 Vs Tata Nano Vs Maruti 800
2: The Quadricycle wins. So does Rajiv
Bajaj by Ashish Mishra
3 : Bajaj Auto to revamp supply chain by Nandini Sen
Gupta & Rajiv Nagpal
4: Emerging Leader: Rajiv Bajaj by http://www.thomaswhite.com/global-perspectives/rajiv-bajaj-managing-director-bajaj-auto/
5. Bajaj's RE 60: an auto, a car, a nano killer?
Picture : reviews.in.88db.com
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