Tikhvin Freight Car Building Plant submitted the programme of import substitution

The production activity of Tikhvin Freight Car Building Plant (TVSZ, is part of UWC holding) got started three years ago, and since that time the plant established and developed a full-rate supply system and organized work for supplier selection, development and second party audit. TVSZ gave the benefit of its experience at the IV All-Russian Conference "Management of internal procurement".

In his report, Sergey Belets, Managing Director for Working Capital Improvements and Logistics at TVSZ, acquainted the conference participants with the plant supply chain designed from scratch and based on the domestic market of components and materials.

The successful project of TVSZ import substitution engaged particularly the audience’s attention. In 2010, the new generation design of freight cars and the bogie of Barber S-2-R type were developed in conjunction with North American enterprises specifically for the Russian market. Today the plant imports only five units of more than 4,000 components and materials for the plant production needs, and the localization of them will be completed in 2015 on the basis of joint ventures created in Tikhvin.

Since the beginning of the plant work, it created a pool of suppliers, which allowed TVSZ to achieve freight car production capacity up to 1,000 cars a month since the beginning of 2014.

One of the basic elements of the TVSZ supply chain is the constant search for new suppliers and creating a competitive environment that offers significant benefits in the required products procurement. The enterprise has implemented an audit system and a system of supplier development that carry out regular checks of their manufacture and core business systems. As a result, they formed a provider rating, based on two criteria: the supply history (the timeliness and quality) and the audit findings. A supplier rating has a great influence on the tender board decision in the allocation of quotas for supply.

The plant goes on developing enterprise information systems of resource management, which provides automatic formation of procurement demands. High-quality materials and components for all production areas come in sufficient quantities within the prescribed period.

Sergey Belets mentioned: "In search of suppliers, we traveled all over Russia, sent out samples of three-dimensional parts, purchased trial batches of goods. When manufacturing experimental and pilot batches we accepted any compromises, but the quality. During our work more than 70% of the suppliers flunked out, and those who kept on working with us, saw the true value of this approach. Such serious companies as Siemens and Schneider Electric are interested in our experience. It is gratifying to emphasize that this practice is becoming nationwide."

Summarizing the conference results, the report on TVSZ import substitution acknowledged being the best one by leading representatives of the Russian industry such as KAMAZ, NLMK, United Metallurgical Company, Magnitogorsk Iron & Steel Works,  etc.