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Supplier Quality Management Case Study -Tata Motors Ltd. (An Automotive
OEM in India)

Article · September 2023

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 Supplier Quality Management
Case Study – Tata Motors Ltd. (An Automotive OEM in India)

Dr. Prof Sasa Petar

Praveen Kumar Mishra

ABSTRACT
Automotive OEMs adheres to Quality processes in a bid to continuously improve in their working efficiency,
minimize the Cost of Poor Quality (COPQ) and improve the product line enabling them to become market
leaders thus improving brand value and never the least adhere to the quality compliances set internally or
by the government agencies. Total Quality Management (TQM) is not a new process and emphasizes on
various concepts involving Customer focus, Continuous Improvement, Employee Empowerment, Product
Design & Tools and Managing Supplier Quality. In this paper, we present a case study of how Tata Motors
Ltd (TML), an Automotive OEM giant in India, has successfully implemented Supplier Quality Management
(SQM) seamlessly integrated in its current manufacturing processes. It should be noted that TML started
Supplier Quality Improvement Program (SQIP) encompassing the 360 degree process of supplier quality
management starting from profiling and onboarding vendors – collaborating with vendors for design and
validation of parts – working along with vendors for Production Part Approval Process (PPAP) – and
finally collaborating with vendors for current quality process.

Keywords: Total Quality Management, Supplier Quality Management, Tata Motors, Quality,
Automotive Manufacturing Industries, PPAP, SQIP

1. INTRODUCTION
Since 1950, quality has received global attention in Automotive manufacturing and OEMs like
Toyota, Ford Motors, General Motors etc. have been spending money to achieve efficient quality
processes in their manufacturing units. Girish Wagh, Head Passenger Vehicle, Tata Motors Ltd.
says “India has made its mark within the automotive industry and has become a manufacturing
hub for multinational OEMs. India has also earned itself a reputation for manufacturing world-
class vehicles at lower costs.”
To sustain its brand image, Tata Motors Ltd. (TML), an automotive manufacturing OEM,
committed itself to producing world class quality cars at competitive cost. Tata Motors Ltd.
(TML), has six big manufacturing plants (Jamshedpur, Pune, Lucknow, Dharwad, Sanand,
Pantnagar) across India and took a big leap while designing Supplier Quality processes to bring
all suppliers for commercial and passenger vehicles in one unified umbrella.
For quite a while, TML had been rolling out various initiatives within the organization to eliminate
waste, reduce cycle time and increase productivity. These objectives however fall short of target,
if the supply chain is not fully engaged with these initiatives. It is then that Supplier Quality
Improvement Program (SQIP) was introduced in TML for Passenger Car Business Unit (PCBU)
to help achieve business objectives. The SQIP program had many departments integrated seamless
within the process to ensure successful implementation of Supplier Quality like Engineering
Research Center (ERC), Vendor Development (VD), Supplier Quality Improvement Group
(SQIG) and Suppliers.
In this paper, we will go through the SQIP process defined by TML SQIG team and the different
digital web applications developed by TML IT team to support the SQIP process.
2. SUPPLIER QUALITY IMPROVEMENT PROCESS (SQIP)
The TML SQIP process is divided into 5 phases and 16 process steps as given in diagram below.

Source: Supplier Quality Improvement Program (SQIP) Manual, Tata Motors Ltd.

Detailed view of the process as below:

2.1 Phase-1: Sourcing Decision and Agreement
Usually, in automotive manufacturing organization it is always a need to develop primary and/
or secondary supplier(s) to ensure uninterrupted supply of part(s)for new product(s) line or it
could be mass supply for existing part(s) for an existing product(s) line. In this phase, TML
creates a cross functional team (CFT), from various departments like ERC, VD, SQIG to
catalogue out all the suppliers who can deliver parts as needed. It should be noted that this is a
capability assessment to ensure that the supplier(s) is/ are capable to deliver and does not
 ensure capacity allotment of delivery. The CFT team in TML catalogues out suppliers in two
steps as mentioned below:
• In the first step, all prospective suppliers are catalogued for the parts they could deliver and
then a site assessment is performed to qualify the supplier based on TCO, Quality,
Technical, Regulatory, Financial, Warranty, Target cost & future cost reduction.
• As second step, the shortlisted suppliers from SAT are finalized based on mutual agreement
between the CFT team and the supplier on various documents and processes like RFQ,
Audit Checklist, QSS, Supplier APQP Plan, monthly & quarterly schedule delivery,
technical review, list of sub-suppliers and commercial negotiations.

2.2 Phase-2: Product Design and Validation

In this phase, TML ensures that suppliers form integral part of supply chain for the OEM, and,
they are onboarded as early as possible in SQIP process so that they can contribute in part
design and/ or design validation process provisioning suppliers to voice their concerns and
share their knowledge. The two steps of this phase are:
• In the first step, supplier is expected to document failure mode assessment using DFMEA
document based on internal approved drawings, and is supported by APQP document
which leads to sample prototyping and undergoing fitment trial. OEM CFT team’s
feedback are implemented during this step.
• As a second step, supplier develops tooling plan and kick off the part development based
on identified part characteristics and design validations forming prototype part testing.
Good amount of collaboration is expected between supplier and TML OEM to ensure
COPQ is negligible and quality standards are adhered.

2.3 Phase-3: Process Design and Validation

In this phase, supplier initiates to develop parts based on mutually agreed design establishing
feasibility of manufacturing proposed design. The steps involved in this phase are as below:
• Supplier prepares for manufacturing (3P – Production Preparation Process): Suppliers
collect data based on their current production facilities and present to TML senior magnate
net where decisions of make vs buy, value chain analysis, critical process identification,
important milestone timelines are defined.
• Review supplier PPAP documents before part manufacturing initiates: A very important
stage where supplier APQP documents are shared and reviewed collaboratively between
suppliers and TML OEM. Once the feedback’s are implemented APQP documents are
evidences of production readiness and supplier facility.
• Establish PPAP Stage-1 (Quality and Capacity Verification of each manufacturing
segment): In this stage, supplier establishes acceptable quality and capacity by actually
making a fixed amount of parts and getting it verified with the internal quality team as well
as TML OEM by doing the fitment process of the part in the full blown design.
The steps taken by the supplier are:
o Identify each stream required for manufacturing the part at supplier facility
o Prepare capacity estimate sheet for each stream
o Conduct actual production run for each stream
 o Check for quality and capacity output based on the agreed format with TML OEM
o If quality and capacity is cleared by internal supplier quality team, then conduct
controlled fitment trial with TML team at TML premises.
o Validate for fitment and inspection method as per PPAP documents.
Supplier is deemed ready for PPAP stage-2 only if all above steps are done as per
acceptable parameters.
2.4 Phase-4: Product Part Approval Process (PPAP)
This stage, once successfully done, establishes supplier as a source-able supplier who can
manage to supply parts as per TML OEM production needs. Important milestones during this
stage are “Run@Rate”, “Part Submission Warrant (PSW)” and “Transfer to series production”
• Run@Rate process: This is done in two steps where-in the first step is achieved by doing
a one day part production run using the capacity estimates provided by TML. Supplier has
to integrate with raw materials, sub-suppliers, assembly stations etc to ensure successful
step-1 of Run@Rate. Data from the manufacturing and quality process are recorded and
shared with TML OEM and second Run@Rate is executed to check for consistencies. Once
every agreed parameters are met, the PPAP stage-2 batch is deemed accepted and clearance
is provided to the supplier.
• PSW Sign off: Post PPAP stage-2 clearance supplier has responsibility to submit
completed PPAP file to Vendor Development team of TML, who in turn, reviews the file
for correctness and adequacy. Once the correctness and adequacy is established a joint
exercise is done with TML and Supplier to sign off on PSW.
• Transfer to series production: Post PSW sign off, accepted PPAP assembly batch is
confirmed and the quantity is in-warded for primary production. At this stage a series
transfer note is produced and given to supplier who then is demanded for parts based on
production sequence.

2.5 Phase-5: Performance and Management

In this final phase of the TML SQIP process all suppliers undergoes quality inspection and
performance analysis process. Each identified defects, quality and delivery issues are logged
and various parameters like IPTV, PPM, Defect rates etc. are calculated and finally a supplier
rating is awarded identifying good and bad suppliers provisioning corrective action(s) along
with the suppliers to have a better quality approach.
As part of this phase:
• Firstly, as a controlled process, all parts of supplier for production use would undergo a
rigorous quality inspection program. The primary inspection is done visually at the
unloading bay while secondary inspection is done at the line while fitting the part in the
assembly line. The established and agreed defects uncovered are logged which impacts
supplier monthly performance score.
• Secondly, since all the suppliers fall in the performance review program hence the suppliers
performance ratings are shared every month, and expectations from suppliers are managed.
The consistently bad quality suppliers would be reviewed by senior management.
 • Finally, the suppliers with good quality ratings are certified as final suppliers for mass
production of parts by TML OEM.

3. THE DIGITAL WEB APPLICATIONS

To arrest manual process and induct automation and collaboration along with seamless
communications between all stakeholders, digital web applications were envisioned.
Brainstorming and process optimization led to develop the following three applications which
would bring in automation and transparency in the SQIP process and have timely communication
of supplier performance and rating.
3.1 Product Part Approval Process (PPAP) System
The PPAP standard was initially developed for the automotive industry by Automotive
Industry Action Group, AIAG. PPAP defines generic requirements for production part
approval, including production and bulk materials and its purpose is to determine if all
customer engineering design record and specification requirements are properly understood
by the organization and that the manufacturing process has the potential to produce product
consistently meeting these requirements during an actual production run at the quoted
production rate. It also ensures standardization of engineering changes and manufacturing
processes.
Table defining when PPAP is to be invoked:
# Reason for PPAP Description
1 New Part New part is released and purchasing activity is
initiated.
2 Engineering Change(s) Existing part undergone design revision as a
result it is a new part. Similar to #1
3 Tooling: Additional: Tooling transfer SAP document
• Transfer posted (movement 941) to a Vendor
• Replacement
• Refurbishment or
• Addition
4 Correction of discrepancy Discrepancy is noticed with reference to the
earlier PPAP in term of quantity and quantity.
5 Tooling inactive > one year Tooling appears at Vendor location
Part linked to Tooling is not supplied by the
Vendor for more than a year
6 Change to optional construction or Supplier has introduced optional material
material (alternate)
7 Sub-supplier or material source change Supplier has changed the source of his input
Parts.
8 Change in part processing Process of manufacturing part is changed e.g.
injection molding to vacuum molding.
9 Parts procured at a new or additional In context of OEM this is treated as ‘new
location source’ as new vendor location is separate
vendor code in SAP system.

Benefits of the application:

• Reduced process variation
• Statistically controlled processes
• Enhanced customer confidence in supplier’s capabilities
• Consistent approach in assuring quality and providing evidence
• Reduced COPQ (infant mortality escapes)
• Better controlled process changes

3.2 Problem Reporting and Resolution (PRR) System

Digital web application PRR is a centralized solution deployed by TML OEM to formalize
the standard quality problem reporting process across all plants and help suppliers to
collaborate with suppliers for resolving the problems.
As a process, TML supplier quality team would log the defects/ problems identified at the
assembly line using the application and suppliers (who also had access to the same
application), who immediately get notified by the notification system integrated with the web
application, had provision to analyze the problem, develop root cause of the problem, do
CAPA and Pokayoke for the problem/ defect raised.
Benefits of the application:
• Centralized repository of all quality problems logged by the supplier quality engineer
along with its resolutions given by supplier backed by audio and video files provisioning
searcher to immediately understand the problem and save time in to-and-fro
communication.
• Quick search of the problem and track its history saving time to re-invent the wheel
understanding and solving the issues.
• With every defect logged, the supplier rating had a direct impact bringing in the dynamism
in supplier rating every month.
• Containment Shipment (CS1 and CS2) provisioned OEM to have rigorous demand of
quality from supplier ensuring low or negligible COPQ.

3.3 Integrated Supplier Rating (ISR) System

Integrated Supplier Rating (ISR) is hosted in TML enterprise portal and is integrated with PRR
and STAR++ (a direct material procurement engine). The logics, formulae’s and algorithms
assists SQIG team to define whether they would like to continue business with the respective
supplier based on their supplier ratings. There are various parameters which play an important
role in calculating Supplier ratings, some of them are as follows:
• Inputs from Defects reported in Problem Reporting and Resolution system
• Inputs from Delivery performance from Supplier Delivery performance system
• PPM calculated against supplier for every defects raised
• Warranty – field level issues
 • Certifications preferably TS 1649

Benefits of the ISR application:

• Each supplier performance is registered in a structured manner and tracking of the
performance of a broader portion of the supply base for Direct Materials.
• Because of the better insight into supplier performance, incidents and escalations can be
detected early, enabling to standardize supplier performance measurement procedures
across the enterprise.
• Collaborate with suppliers on performance metrics, reporting, and improvements. By using
Vendor Rating System regularly, negative and positive trends in supplier performance can
be seen. This also leads to bench mark opportunities.
• To motivate suppliers to improve performance and reduce cost of inspection
• To apportion orders to deserving vendors for overall cost reduction
• Supplier rating would be available at Enterprise, Plant, BU and commodity level which
will help to hold or allot the business to the Suppliers
• Giving trigger during bid list creation on source-able and non-source-able Suppliers along
with their rating which would help Buyers to select the right vendor

4. KEY BENEFITS OBTAINED BY SQIP IMPLEMENTATION

It was in the year of 2013 that, Tata Motors Ltd., chalked out a strategy to reduce cost and supplier
overheads, optimize process for better efficiency and ensure quality in products. The strategy paid
off, and in couple of years in various phases and some of the key benefits reaped were:
4.1 Centralized supplier quality process horizontally deployed to all manufacturing sites
Centralized supplier quality process directly brought in positive impact on operational
efficiency, collaboration, controlled COPQ, transparency in process, quality management,
satisfied suppliers and timely communication. Centralized and horizontally deployed process
across all OEM plants, brought in accountability and responsibility thus provisioning
transparent view from OEM senior leadership to the last supplier which created a envelope of
trust and high collaboration for better work ethics and higher standard of party quality.

4.2 Centralized, Automated and Transparent digital web apps removing process inefficiencies
With centralized supplier quality process in place, the digital applications were envisioned
which would bring following benefits to the OEM ecosystem:
• Transparency in the process at all level based on checks and controls implemented in the
digital applications.
• Automation via digital application led to fast adherence of business routines and it
removed dependency on individuals. This removed the clog in business decisions.
• Manual malpractices were automatically removed based on the logical checks and
controls implemented in the application. This ensured that either right process is adhered
or the process stall there for an arbitration by right stakeholder at OEM level.
 • Effective and fast communication and collaboration between all hierarchies of OEM and
suppliers which ensured high collaboration and transparency of information between all
stakeholders.
• The digital app provided a great opportunity to store every stage of SQIP process as a
data in the system which could be further used for regular operational analysis, reporting,
intelligent strategical analysis.
• The stored data could be retrieved based on search parameters quickly and effectively and
this provisioned for setting up a large knowledge base which was used by the Supplier
quality engineer, suppliers themselves and the other stakeholders. This assisted a lot in
reducing time for RCA and defect closure based on the historical references which was
already faced within the OEM ecosystem and supplier ecosystem.

4.3 Right classification of suppliers based on their performance rating

One of the major challenges TML OEM was facing was to segregate it’s long list of 1200+
suppliers into right mix of “sourceable suppliers” and “non-sourceable suppliers”. With the
implementation and deployment of digital applications like PRR, PPAP, SDP and ISR the
performance of the suppliers were tracked which assisted to optimize the suppliers list from
1200+ to apx. 450. With the right set of suppliers, TML OEM was able to establish right
quality standards, transparency in communication, transparency in business process
adherence, ideation for innovative ways to operate and manufacture parts etc. to name a few.

4.4 Increase in Market Share

All benefits mentioned above led to tangible benefit of reduced COPQ which allowed TML
OEM to launch quality vehicles at a competitive price with product line Tata Nexon, Tata
Tiago, Tata Harrier and many to be unveiled in the year 2023.
In 2013, Tata Motors witnessed their market share falling from 11.8% to 8.9% by 31st March
fiscal year, and with SQIP process, it is not surprising that the current market share of Tata
Motors passenger vehicle has jumped from 8.9% in 2013 to 18.70% in 2022. In a leading
newspaper, it was declared on 1st Dec-22 that Tata Motors has seen 21% growth sales in Nov-
22 and clipping of that paper is as below.

5. REFERENTIAL LITERATURE
1. Supplier Quality Improvement Program Manual of Tata Motors Ltd, 2013
2. Times of India newspaper 1st Dec 2022

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