A Report On Study of Logistics Case Study: Smart Cars Submitted by Arvind Verma Roll No 27 PGDM(Telecom Management & IT) Symbiosis Institute of Management Studies, Pune INDEX 1. EXECUTIVE SUMMARY 2. ABOUT MCC SMART AND ITS PRODUCTS a. VISION b. Mission c. History of Smart d. Segmentation, targeting and positioning e. Product line f. Safety features g. Smartstart- finance options h. Smart Service i. Ansoff’s model j. BCG Matrix 3. QUALITATIVE APPROACH a. Smart Product Concept b. Smart Manufacturing and supply chain Concept i. Smart plant in hambach- factory within factory ii. Future challenges for Supply Chain iii. Sourcing in 21st century iv. Sourcing system c. Smart Distribution Concept d. Smartville production 4. QUATITATIVE APPROACH a. Investments b. Technical data samrt cars c. Smart car price list 5. MARKET PLACE AND COMPETITORS a. Perception maps vis-à-vis competition b. Compact cars rating 2003 6. RECOMMENDATIONS AND FUTURE TRENDS a. Trends b. Recommendations 7. REFERENCES EXECUTIVE SUMMARY The present MCC smart GmbH was founded in April 1994 in Bienne in Switzerland as a joint venture between the then Mercedes-Benz AG, Stuttgart and Schweizerische Gesellschaft für Mikroelektronik und Uhrenindustrie AG (SMH), Bienne. Following the 100-percent takeover by the then Daimler-Benz AG in November 1998, the business activities were transferred from Bienne to Renningen in January 1999. Parallel to this the former Micro Compact Car AG was renamed Micro Compact Car smart GmbH. The tiny car looks like something used in a sci-fi movie for personal transportation on the elevated highways of Planet Xenia. The Smart, as it's called, is a tw-oseater intended principally for tooling through crowded streets. Five feet shorter and a foot narrower than the new Volkswagen Beetle, it's nearly as lithe and easy to park as a motorcycle. Three of them, nose to the curb, can fit in a single parallel-parking space. The factory in which the Smart is assembled is in France's Alsace-Lorraine region hard by the German border. It's not quite as odd as the car but is definitely different: a windowed cruciform structure connected by enclosed conveyor lines to a surrounding cluster of more conventional buildings. The factory complex is smartville, the production center for Micro Compact Car smart GmbH. (The lowercase "s" is a corporate affectation.) MCC was born of a meeting of minds in 1994 between Mercedes-Benz and Nicolas Hayek, the creator of Switzerland's Swatch. Today the operation is wholly owned by DaimlerChrysler, for which Swatch is likely thankful. The German-American parent has poured at least $2.5 billion into the project to date and doesn't figure to book the first euro of profit until 2004. Still, the mere prospect of breakeven is significant, since this is a car the automaker was often rumored to be junking. Although the Smart is said by some to be like driving a telephone booth, it has slowly gathered a crowd of enthusiastic owners who need to maneuver in the madness of traffic in big European cities. Now that we have entered a new millennium we have begun to take a closer look at the quality of urban life. We would like to see less traffic and more mobility, more open spaces and less built-up areas. MCC (Micro Compact Car),a subsidiary of Daimler-Chrysler, have come up with a logical and practical solution to this problem - the New Smart City Coupe. The Smart is more than a car; it is a totally new concept in motoring being both innovative and immense fun to drive. The Smart is revolutionary, making the most of any available parking space - at only 2.5 metres long and 1.51 metres wide coupled with an excellent turning circle, parking anywhere is made easy. The interior is amazingly spacious, with the passenger seat set back a little to improve the driver's vision, and enough luggage space for the golf clubs or weekend shopping. Engineered by Mercedes-Benz, the 599cc, three cylinder Suprex turbocharged engine is situated at the rear. The output is 44 bhp on the Pure, 60 bhp on the Pulse, and 54 bhp on the Passion models. Fuel consumption is low at approximatly 48 mpg around town, 67 mpg out of town making an average of 56 mpg. Acceleration is reassuringly responsive with the maximum speed governed to 84 mph. Transmission is via the unique ©Softip© (se-miautomatic gearbox with six gears and no clutch) on the Pure/Pulse this is combined with a fully automatic ©Softouch© gearbox of the Passion model. ©Design your own Smart©- with many optional extras you can create a car that is as individual as you are. Options include; leather upholstery, radio/cassette/CD player, interchangeable coloured body panels, alloy wheels, air conditioning, rev. counter, baby seat, drinks tray and racks for bicycles and skis. ©Safety-© T he Smart has been designed with the same levels of collision protection as the Mercedes-Benz ©A© Class. Onboard safety equipment includes; aira gbs for driver and passenger, integral safety seats, ABS brakes, ©Trus-tPlus© (electronic traction and stability control), ©Tridion© safety cell, inertia seat belts with force limiters, with side airbags as an optional extra. All materials used are designed to give maximum protection in the event of a collision. At every stage the Smart is designed to be environmentally friendly and at the end of its days it is nearly 100% recyclable. In automotive manufacturing circles, the way the Smart is built has attracted as much attention as the vehicle. Though the Smartville complex may never be completely duplicated, it is a test bed for integrating a supply chain to the maximum, pushing production--and part of the capital expense burden--out to suppliers. Just about everything in Smartville is outsourced, from inventorying nuts and bolts The supply chain are completely new in the market and go beyond such existing practices as supplier involvement, outsourcing and modular production in the industry. Modules such as complete frontor rear ends are pre-assembled on site and suppliers are involved in design and final assembly through coownership of the site, co-design and some major share in the manufacturing activities. Given the untraditional approach, MCC executives face some fundamental challenges including how to manage and control a supply chain in which MCC only adds some 15% of the operational value added. MCC can be seen as a pilot for implementing mass-customisation in an automotive supply chain. ABOUT MCC SMART AND ITS PRODUCTS Vision To provide unparalled safety and comfort on the roads along with the options to choose from a lot of versions. Mission To become market leader in 2 door compact car in Europe by the year 2010 Smart is moving into the future with a new company logo and the new brand slogan "open your mind.". The brand slogan applies to the customers, the products and the smart corporate philosophy. smart cars are full of ideas and offer their drivers individual solutions. Drivers of a smart see the world with their eyes wide open, they are unprejudiced and open to new experiences. Last but not least "open your mind." also embodies the spirit of the company itself The unique selling points of the car are technology, design, customization, channels, safety, space (small size large interior) and environment. Micro Compact Car AG (MCC), a wholly owned subsidiary of Daimler-Benz (formerly a joint venture of Daimler-Benz and Swatch), is the company behind Smart. Together these manufacturers have developed what they call a new mobility concept that relieves the heavy environmental pressure caused by present traffic while still ensuring continuous individual mobility. Overlooking the period preceding the introduction of the car, MCC management could look back on many peaks: a completely new brand had been developed; pilot marketing of brand and product concept had raised high levels of customer awareness and interest in European markets; a production site of 68 ha. had been developed and constructed from scratch, a dealer and marketing organisation had been developed and was ready for product launch. Moreover, the supply-chain concept developed went beyond existing practices in the automotive industry on a number of points: Customers can contribute to the configuration of products; lead-times for cars are counted in weeks; suppliers have co-invested in the production location and have taken over shares of primary assembly beyond existing levels; the added value of MCC during production is approximately only a remaining 10% of the production cost-price; and suppliers and MCC are integrated in a sense that the premises of the suppliers adjoin the assembly hall of MCC. Overlooking the development and installation of the supply chain, all of which had been done since the first feasibility study of Mercedes in 1993 and the foundation of MCC in 1994, the management team realised it was facing a new set of challenges. How to manage, co-ordinate control and further develop such a supply chain when operational? This question is not only of relevance to MCC but to the Daimler- Benz Corporation as a whole, which has earmarked Smart as a strategic learning project. Moreover, the concept being brought to practice by MCC is generally accepted by leading car-manufacturers as of key importance to future industry developments. Manufacturers and suppliers therefore monitor the successes and failures of MCC, as the results will by and large mark the future organisation of their companies and of the supply chain. History of Smart Car smart in short April 1994: Creation of company MCC Compact Microphone Bus with Bienne in Switzerland. October 1995: First stone of the factory of Hambach in Lorraine.