This validates our strategy of “Become the Low Cost Producer”. AAA. Cummins Business model define the primary and secondary functions. Primary functions define as per model are Marketing & sales, Technical, Planning & Logistics, MFC and services. Secondary (Support) functions are Purchasing, Human resource, Information technology, Finance and Firm infrastructure like Legal, Facilities, ‘R, Government relations etc.. B. The business model has evolved overtime and few of the changes are I. Initially service was part was Marketing.
To have separate focus on service and spare parts separate unlit Is created unaware Illustration Dustless also centralize part distribution center built across globe for better availability of spare parts. It. Technical function which was support function is now made primary function and to be overall cost leader. We invest continuously in the product and process to be reduce and sustain cost. Iii. Quality function has been given central role as responsibility has been increase from product to process. They are responsible to ensure quality across function and deployment of six sigma. . Supply chain definition has been expanded to increase planning, logistics and manufacturing. The change is very recent and updated business model is to be release. C. Business model shows the linkage within the activities. Marketing and sales department forecast the demand and provide with the business plan for next 5 to 7 years. They decide on the new model to be developed base on market research. Base on Market demand and changes required in Current model or introducing new model, technology function do the design changes (PVC) or new product design (VII).
Resource required is arranged by HER and Procurement do the changes on existing parts or procure new parts as per design from supplier. Manufacture ensure capacity availability (Manpower ; Machine) and if required plan for new facility. Base on the demand Planning and logistic department procure parts and feed the assembly line. IT provide help synchronize flow of material, manpower and information and increases efficiency. All the above activity requires on-Time fund arranged by Finance. To ensure customer satisfaction quality ensure right process is allowed.
Facility team provide with infrastructure for office, canteen, security etc. Cummins treat suppliers as partners. This ensures we have right price, delivery and quality. Supplier is ensure of long term business and he invest in technology and process to improve productivity, quality, delivery and cost. The total linkage design is base on 10 practices (enclosed below). This ensures we do thing right first time; wastage is minimum reducing total cost. The value chain and linkages define are in line with generic strategy of “Become the Low Cost Producer”.