Project based on outsourcing manufacturing activity
MRC Logistics India Pvt. Ltd. has set up a state-of-the-art manufacturing facility at Panapakkam near Chennai for upfitment of engine assembly of Ashok Leyland Power Solution Business, through its division MRC Contract Manufacturing Logistics.
The concept of contract manufacturing is very popular in electronics and consumer durable industries. It is also widely adopted by automobile companies at the global level, and the trend is catching up in India. The main advantage here is that companies can outsource manufacturing activity to a contract manufacturing firm thereby keeping the capex low and go for a flexible and variable cost outsourced model.
MRC Logistics has been supporting Ashok Leyland in the area of transportation in the past. However, when Mr. Belsare, Executive Director, Ashok Leyland, saw the contract manufacturing factory established by MRC for KSB Pumps in Pune, he was impressed with the MRC’s professional capabilities. This led to an invitation to MRC to set up an engine upfitment facility in Chennai with a capacity of upto 3,000 engines per month. As per the requirement of Ashok Leyland, the company established the manufacturing unit over an area of one lakh sq.ft. with the entire infrastructure for assembly, testing and painting, supported by strong IT systems. The project went on stream on May 13 last.
The role of MRC will be to provide end-to-end solution to Ashok Leyland in terms of purchasing all the basic parts required for upfitment of 20+ variants of engines. It will assemble, paint, pack and transport the engines to Ashok Leyland GOEMS & Industrial Customers.
On the auspicious day of “Akshay Tritiya” this facility was inaugurated by Mr. Rajpal Arya, Chairman & Managing Director, MRC Group, in the presence of dignitaries from Ashok Leyland, customers and vendors.
Asked how the contract manufacturing fits in with logistics, Mr. Arvind Arya, Joint Managing Director of the MRC Group, said that companies today could focus on their core activities of R&D and marketing and outsource manufacturing activities on a variable cost method to enjoy cost leadership in the competitive markets. Besides the flexibility, relocatability and agility inherent in MRC, this can be a win-win situation for both partners. MRC, in line with its strategy of promoting the Contract Manufacturing Division, has accepted similar responsibility for a leading switch gear manufacturing company in Maharashtra.
Mr. Fadnavis, Executive Director, MRC Group, observed that in line with MRC’s TOC methodology, the packing and transportation cost is considered a key constraint for many organizations in their bid for cost leadership. To overcome this, MRC has designed and manufactured specialty skids suitable for transportation of engines in multiples layers in trucks, thereby substantially reducing the packing and transportation cost. In fact MRC has already earmarked its 25,000 sq. ft. industrial manufacturing plant at Pirangut in Pune for manufacturing skids and donnage for its customers.
Mr. C.G. Belsare, Executive Director of Ashok Leyland, said on the occasion that AL’s Power Solution Business is the fastest growing one in India and has made steady inroads into global markets. He was very happy with the enthusiasm with which the entire MRC team from the Project Management, Finance, HR and IT wings swung into action to establish the facility in just one month.