A Supply Chain Perspective on Initiatives in the Casting Industry

With engineering companies opting for external sourcing of sub-assemblies to enable focusing on core activities and reducing inventory costs (lean manufacturing), casting suppliers have to gear up for new opportunities as well as challenges. This is particularly true in the case of automobile component manufacturers, where there is tremendous pressure from automobile assemblers looking for assured quality and reliable delivery of cast components from foundries. As a result, traditional one-time relationships between the customer and supplier are giving way to long term strategic partnerships. This paper presents a study of this shift taking place in the wake of liberalization and competitive pressures in India, focusing on the casting supply chain in the automobile industry. The study is meant to create an awareness of the potential benefits and concerns in partnerships for sourcing of cast components and is expected to be of value to both assemblers and suppliers in this sector.