Mahindra & Mahindra is proactively refining its extensive supply chain strategy to build structural resilience against the backdrop of ongoing geopolitical volatility, logistical bottlenecks, and regulatory challenges impacting global trade.
Key Points
- M&M has undertaken a granular exercise covering over ₹1 trillion in purchases, 100,000 parts, and 40 commodities to identify high-risk areas.
- The company has adopted a multi-layered mitigation strategy, including increased inventory, localising alternative suppliers, and creating an intelligence desk for quicker reactions.
- M&M's NU_IQ platform allows for flexible production of both internal combustion engine and electric vehicle models from a common base, enhancing fungibility.
- The company is tactically responding to component shortages, such as aggressively buying memory chips in the aftermarket to build inventory.
- M&M is also pruning underperforming international businesses in the farm segment to reduce supply-chain complexity and risk, focusing on core markets.
Mahindra & Mahindra (M&M) is refining its supply-chain strategy for geopolitical volatility.
Anish Shah, group chief executive and managing director, has detailed a granular exercise covering over ~1 trillion in purchases, 100,000 parts and 40 commodities.
It identifies 82 "part-families" and nine commodities as high-risk across geopolitical, logistical and regulatory dimensions.
Speaking to analysts after the company's Q4 results, Shah said the exercise reflects lessons from recent disruptions and marks a broader push to build structural resilience in the automobile business rather than relying on temporary fixes.
M&M has moved to a multi-layered mitigation strategy spanning operations, sourcing and design.
Strategic Mitigation and Intelligence
"Our teams have looked at everything we buy... and put that through multiple risks.
"For that, [we] took multiple actions — increasing inventory in many cases, localising alternative suppliers, creating an intelligence desk so we can act quicker on something that happens," he said.
The measures have helped the company manage disruptions in semiconductor, rare earth and memory chip supplies.
"It's never going to be perfect in the world around us", but the approach puts M&M "in a much stronger place to be able to react quickly."
The company's investor presentation cited supply-chain resilience as a pillar of the automobile and farm businesses, highlighting a structured response to risk exposure through planned inventory buffers, localisation of suppliers, multi-supplier sourcing, optimisation of high-risk material usage and a live "intelligence desk" for tracking and hedging support.
It listed "de-risking supply chain" and a "commodity hedging programme" as key business actions, signalling that these are embedded into operating strategy.
Responding to Global Disruptions
Global supply chains have been frequently disrupted by overlapping geopolitical shocks since 2020, forcing manufacturers to rethink sourcing and risk.
The pandemic triggered widespread factory shutdowns, logistics bottlenecks and a prolonged semiconductor shortage that hit the auto sector particularly hard.
It was followed by the 2022 Russia-Ukraine war, which disrupted energy markets, drove up commodity prices and constrained supplies of metals and rare gases used in making chips.
Simultaneously, a trade war between the United States and China and technology restrictions have fragmented global trade flows and increased compliance and sourcing risks, especially in electronics and electric vehicle supply chains.
More recently, shipping disruptions in key corridors like the Strait of Hormuz have added to freight volatility.
These events have made supply shocks frequent and unpredictable, pushing M&M and other companies to move from efficiency-led global sourcing to resilience-led, multi-supplier and localised supply-chain models.
Flexible Production and Market Focus
Automobile firms are de-risking operations by implementing flexible platform and product strategies.
Rajesh Jejurikar, executive director and chief executive officer of auto and farm at M&M, spoke about the company's NU_IQ platform, which allows internal combustion engine and electric vehicle models to be built off a common base to increase "fungibility" in production.
The platform allows M&M to calibrate mix according to demand, reducing exposure to supply bottlenecks tied to specific technologies or components.
The company is responding tactically to component shortages, with Shah saying: "Memory chips are being driven into vast artificial intelligence applications... so it's really a question of building inventory or buying in the aftermarket and we are aggressively buying in aftermarket to build inventory... we just have to keep building inventory, even if it is at a higher cost."
International Business Restructuring
Beyond operations, M&M's strategy reflects a recalibration of global exposure. Jejurikar said the group is pruning underperforming international businesses in the farm segment and focusing on core markets — a move that reduces supply-chain complexity and risk.
The emphasis is on tight control over sourcing and aligning product pipelines with markets where M&M has scale and visibility.
Jejurikar said the company has exited its stake in Sampo and begun the liquidation of its Mitsubishi agricultural machinery business in Japan.
With these restructuring actions, the company sees a clear path to profitability in its international farm business.
The resilience strategy extends beyond the automobile business.
Shah highlighted that each business has taken actions to "fortify and grow" in uncertain conditions: From secured funding buffers and tighter risk screening in financial services to diversified portfolios and lower import dependence in other verticals.
The common thread is building the ability to withstand shocks while continuing to grow, he said.
