Optimizing Inventory Efficiency in Hyundai Motor India: A Strategic Evaluation of Practices and Outcomes

Abstract

This paper investigates the strategic inventory management practices at Hyundai Motor India Limited (HMIL) and evaluates their operational, financial, and strategic outcomes. HMIL demonstrates robust inventory efficiency, as evidenced by a strong inventory turnover ratio of 15.34× in FY 2024, reflecting a 7.2 % improvement over the previous year and signifying high demand and swift asset utilization. Complementing this, “day’s inventory” metrics have steadily declined, reaching 23.8 days in March 2024, down from 29.8 days in March 2022 a sign of enhanced inventory control. At the core of HMIL’s optimization strategy are practices such as Just-in-Time (JIT) procurement, Kitting, vendor-managed inventory, and real-time integrated ERP/barcode systems. These are facilitated by a localized supplier base within 50 km of the Sriperumbudur plant, enabling both cost efficiency and logistical agility. Digital infrastructure including vendor portals and real-time inventory systems supports dynamic supply coordination, minimizes stock imbalances, and significantly reduces line stoppages.
The combination of lean logistics and digital systems translates into tangible benefits: reduced lead times, minimized working capital investment, and improved throughput. COO Tarun Garg noted that HMIL maintains inventory buffers of less than one month, eliminating pressure for dealer-level discounting. The paper employs a mixed-methods approach, synthesizing secondary data on key performance indicators with global benchmarking against lean-manufacturing standards. The analysis highlights both achievement such as fast-moving inventory cycles and challenges, including dependency on vendor readiness and exposure to external supply chain disruptions. The paper offers strategic recommendations for HMIL to further refine inventory efficiency: (1) integrating advanced AI/ML-driven demand forecasting into ERP systems; (2) expanding vendor-managed inventory practices and supplier training programs; and (3) leveraging predictive analytics to buffer against geopolitical uncertainties. These actionable insights provide significant value to automotive supply chain literature and offer a practical blueprint for OEMs in emerging markets aiming to achieve lean, responsive, and resilient operations.