“My direct involvement in the Defence industry started when I joined TVS SCS in 2012. Since then our Defence business has grown steadily, partially due to Supply Chain Management (SCM) becoming one of the strongest areas of Business Process Outsourcing, especially in the UK Defence market. We’re seeing large organisations and government departments revisit their strategy and pose the question, ‘What is our true ‘core’ business?’ The answer often leads to an exercise of reviewing what sits outside the core business – what processes can be delivered in a more efficient and cost effective way by outsourcing to a trusted partner? We’re constantly investing in developing our capability to underpin our growth as a leading provider of end to end supply chain solutions in defence and commercial markets and we have positioned the business as a trusted partner to organisations looking to outsource supply chain management.”
“How big is TVS SCS?”
“TVS Supply Chain Solutions (SCS) is a global provider of world class, end to end, supply chain services and part of the TVS Group which employs 60,000 people and generates revenues of $7.5bn. TVS SCS itself employs 15,000 people worldwide, has revenues of $1bn and operates in over 25 countries.
In the UK, the TVS Group employs 2500 people and the UK and European HQ of Supply Chain Solutions is based in an impressive 268,000 sq ft. facility in Chorley, Lancashire.”
“Have there been any key recent developments in the UK Defence market for TVS SCS?”
I believe the UK MoD is a leading player in redefining military logistics. Historically, military and commercial supply chains have been viewed and managed in separate ways, resulting in differences in service levels and cost. However, in the last 5 years there has been a significant move to integrate the military’s logistics experience with private-sector logistics expertise to optimise procurement, supply, maintenance, and distribution times. This means military supply chain management integrating commercial best practice, which is something we aspire to deliver at TVS.
TVS believes military and commercial supply chains have similar drivers; getting the right part, to the right place, at the right time, at the lowest cost, without compromising on quality. Whilst we recognise there are different challenges associated to Military and Commercial requirements both in terms of equipment and environment; the following fundamentals of supply chain management apply to both;
- Data management
- Order management
- Inventory management
- Strategic purchasing
- Manufacturing support
- Transport and Aftermarket support”
Around 500 B.C., Sun Tzu quoted, “The line between disorder and order lies in logistics.”
A mismatch between the operational plan and the logistics support capabilities can lead to military failures. Do you agree with the statement?”
“Today we witness many organisations, including large Defence departments and businesses, ‘drowning in data but starved of information’ thereby restricting the ability to make informed decisions.
In the military environment this can have serious consequences. Lack of visibility or control of logistics restricts the ability to enact an operational plan. This limits speed of response to incidents or threats.
Having reliable information is vital. We believe this is one of the main reasons that Armed Forces across the world are turning to industry to deliver this capability, typically though proven commercial supply chain systems. The added benefit of this approach is that it also comes with an improved level of service at a reduced cost.
In a military context, visibility is as important as communication. Having real-time information on the current supply status is a key attribute in achieving a military’s readiness, including the management of maintenance regimes.
TVS invests heavily in intelligent IT to ensure our clients have improved analytics embedded across the supply chain to help in problem solving and decision making. We have developed our own market leading system in the form of ‘MSys’ which is a suite of software solutions that have been designed and developed by TVS to meet the requirements of Blue Chip organisations and Government departments. The UK MoD is currently adopting MSys and deploying the system within its Logistics environment.
Integrated information about procurement actions, repair parts, stock and transport status is not only a military advantage but also a way of reducing costs i.e. stocks in warehouses being kept at a minimum through continuous resource reduction. Through the adoption of the Internet for electronic commerce, our customers have come to expect ready access to real-time inventory procurement, ordering, and tracking. The Information Revolution is leading the changes in supply chain management.”
“Could you give our readers a brief snapshot of how TVS established itself has become one of the world’s leading international logistics companies?”
“The TVS story is fascinating and a real inspiration to us all. The current CEO’s great grandfather started with a bicycle repair shop over 100 years ago which grew rapidly and in 1929 his grandfather sailed the Atlantic to sign a contract with General Motors in the USA for parts and services for its huge South Indiana truck plant. In 1940 a plant to build and repair buses was established with a finance arm being established in 1950. In 1974 the bus and finance arms were nationalised. In 1981 TVS added a motorcycle assembly and repair plant in India; in 1996 the business grew to a turnover of $1.5bn and it established a logistics business. Since then TVS Logistics Services Limited (TVS LSL) has made a number of key acquisitions including Multipart, now TVS SCS, and Mesco. In 2012 it acquired Universal Components and Rico.
In total TVS LSL has made four acquisitions in the UK and operates over 47 locations, with a further four in Ireland and another 84 locations across Europe. Its business is primarily focused on providing supply chain services for clients in sectors such as; defence, industrial, automotive, beverage, technology and utilities. We now have a range of international customers across these sectors. The TVS Group now has over 60,000 employees in over 25 countries with a turnover of $7.5bn. In 2005 Goldman Sachs took a minority stake followed by KKR in 2012 and the Tata Opportunities Fund in 2015. TVS is quoted on the NASDAQ.”
“What size is TVS in Europe?”
“Europe is a key market for TVS SCS, we provide services to a range of clients in the Automotive and Beverage sectors. As well as servicing the European supply chain needs of Coca Cola, Diageo, and Amazon we see significant opportunity to grow our current business position with other European clients which will have a positive impact on facilities and jobs.
We provide a broad range of end to end Supply Chain Management Services tailored for Vehicle Manufacturers. These include Aftermarket Parts Management, Inbound to Production and most recently Sequencing and Sub-Assembly services which utilises our experience of working with General Motors in North America.
Our footprint in Germany is set to expand significantly in the next few months through a contract we are finalising within the automotive sector. Beyond Germany we are looking to expand in France and Spain through the work we are targeting in the Aerospace sector.”
“How did TVS establish itself in the UK?”
“TVS Logistics entered the UK through the acquisition in 2004 of CJ Components Ltd which later became TVS SCS Daventry. In 2009 TVS LSL acquired Multipart and formed TVS Supply Chain Solutions which has grown significantly over the last seven years. Whilst we have been working in the Defence sector in different guises since 1919 our highest profile contract came last year when TVS SCS, as part of team Leidos, won the Logistic Commodities and Services transformation (LCS (T)) contract with the UK MoD. Here, we will play a key role by providing data management, inventory management, procurement and product sourcing for the full range of MoD commodities including food, clothing, pharmaceuticals, medical equipment, some fuels and general supplies. As part of this £5bn contract, TVS will introduce improved procurement processes underpinned by our MSys IT system, providing reductions in stockholdings and commodity prices while improving availability, supporting £500m worth of savings to the UK MoD over a 13 year period.
Beyond LCS(T) we have a growing Defence business where we provide inventory management and procurement services to underpin, amongst other equipment’s, 12,000 UK MoD vehicles. Clients include Babcock DSG, ALC and MBDA.
“How do you intend to grow the business?”
“Our strategy for growth has three pillars:
- To maintain and grow our position with our existing customer base by going beyond expectations and introducing some of our wider services to help organisations reduce their operating costs and improve their customer service levels. A good example of this is the work we do in the utility sector which started by us providing warehousing but has now expanded into providing 4th Party Logistics i.e. inventory management and procurement services.
- To engage with new prime contractors and directly with government departments.
- To enter the Aerospace sector.
Whilst we have strong organic growth opportunities we are also acquisitive and will use this approach to underpin our strategic ambition.”
“What sets you apart from your competitors in winning new business?”
“I believe there are three key things that set us apart; the first being the fact that the supply chain management sector is competitive so it’s a prerequisite that we need to be able to compete not only with our industry competitors but also in comparison to an ‘in house’ solution. In the last 18 months we have transferred some 250 people under TUPE regulations which demonstrates that we do offer a very compelling alternative to an ‘in house’ solution. The second important point is our approach to delivering ‘Supply Chain Management as a Service’. Key to this is our talented people working with clients to look outside the process for current and anticipated needs and deliver business results by creating new value through smarter use of technology and automation. The third point is our global footprint which is becoming a vital component in the requirements we now address with defence and commercial clients. We are a truly global company and we can establish global teams from across the world to bid and deliver business which gives our client the comfort that we can supply them in every part of the world on a 24/7 basis.”
“Will your UK MoD win transition into winning Indian MoD business?”
“We very much hope so! This is one of the reasons for our high profile during Prime Minister Modi’s visit in November last year and our presence at DEFEXPO in April this year. Today, the Indian MoD’s supply chain is managed internally along the lines of the UK MoD before the reforms over the last few years. Using our expertise in Defence logistics, we aim to help transition this through Prime Minister Modi’s ‘Made In India,’ banner to bring a new streamlined logistic supply chain for the Indian MoD which has a huge amount of equipment dispersed across the country in outlying locations, very little of which has any service history or performance data. We would like to play a key role in changing all this.”
Our clients collaborate with TVS to acquire innovative supply chain solutions and it is through a continued investment in our people and facilities that we are able to meet and exceed their requirements and at the same time stay focused on our principles of Trust, Value and Service.”
Andrew Jones, CEO of TVS Supply Chain Solutions Europe is a candidate for BATTLESPACE Businessman of the Year 2016