Daimler’s India truck business financially ‘sick
The above news has been published in yesterday’s Times of India. However, I am not surprised as such.
About an year ago, I had conducted training on “Strategic Procurement” at Chennai. Two procurement professionals from Daimler India had attended it. In the course of discussion, they revealed that their company does not produce any component on their own and 100% parts are procured from suppliers. I felt something odd. In today’s world, neither you can have 100% in-house production, nor 100% outsourced. There has to be judicious mix.
I had asked the participants, by procuring all the components from suppliers, is the cost not shooting up? Taxes + transportation + margin of suppliers obviously account for 15% of the landed cost of the component. However, the participants told that their all the policies are decided in Germany and they do not have much say on this count.
Anyway, news can become case study for the procurement professionals.
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