Tata motors

transcript

TATA MOTORS

Malaysia*Thailand

Bangladesh *Nepal, Sri Lanka

Kenya*

Russia*Ukraine* U.K.

Senegal

Afghanistan Uzbekistan

Brazil

South Africa*

Saudi Arabia Iraq, Iran

China South Korea*

West Africa

North Africa

West Europe

Central Asia East Asia

South Asia

South East Asia West Asia

East Africa South Africa

* Assembly Operations also

OTHER COLLABORATIONS/M&A & JVs• Tata Daewoo Commercial Vehicle• Hispano in Spain & Marcopolo In Brazil• JV with Jardine Matheson for ConcordeMotors• Technology Tie Ups at Spain,Italy

Global Footprint

TATA Motors: Commercial VehiclesTATA Motors: Commercial VehiclesProduct Range

Technological Resources R & D establishments at Jamshedpur, Pune & Lucknow – over

1400 engineers.

India’s only certified crash test facility for cars and hemi

anechoic chamber for testing of noise and vibration.

Tata Motors European Technical Centre (TMETC) set up in 2005

– primarily involved in design engineering and development of

products, supporting Tata Motors skill sets.

Tata Daewoo Commercial Vehicle Co. has its R&D facility in

Gunsan, South Korea.

Hispano Carrocera has its R&D facility at Zaragoza in Spain.

Organizational Resources

Process Approach – EPM (derived from APQC processes and TBEM model.

The Enterprise Process Model

• Sound leadership – JRD, Sumant Moolgaokar, Ratan Tata

• Ethical business practices – guided by the Tata Code of Conduct

• Successful handling of integration issues – Tata Daewoo, Jaguar –

Land Rover

• Reputation and recognition – Tata brand.

• CSR initiatives

• Adaptability to the changing business dynamics.

Financial Resources

Stable cash flows for the past five years

Cash rich corporate parent – Tata Sons

Strong reputation – access to capital markets

Value Chain & Value System

Inbound

Logistics

Operations Marketing ServiceOutbound

Logistics

Suppliers , ContractorsSuppliers , Contractors

SAP , VCM

SAP , CRM - DMS

Strategic AlliancesStrategic Alliances

Transporters, Convoy Drivers Association

Dealer Network, Marketing Research Firms, Vehicle

Financing

Dealer Network, Marketing Research Firms, Vehicle

Financing

Regional Warehouses, Dealer Workshops, Distributors, TASSRegional Warehouses, Dealer Workshops, Distributors, TASS

Inbound Logistics Long term contract with service provider’s – transporters and agents. Personnel at regional offices for over seeing the smooth transit of goods. Transparency and monitoring through deployment of IT – all transactions through SAP. DTL supplies for critical high value items. Efficient storage facilities – easy storage and retrieval.

Operations Capital Equipment Manufacturing division – tooling development

capabilities of global standard.

Apprentice Trainee Course – ensuring stable source of skilled

manpower.

Kaizen & TPM team – continuous drive to improve efficiencies.

Automated manufacturing processes.

Distributed manufacturing – Assembly units at South Africa,

Thailand, Bangladesh, Brazil etc.

Maintenance – technical competence.

Capacity Utilization – Mercedes Benz cars make use of Tata

Motors paint shop facilities. 11

Outbound Logistics Stockyards, all across the country.

Long term contracts with transporter’s – higher volume of

business to transporters ensures competitive price.

Regional Sales Office and Vehicle Dispatch Section linked through

Efficient security system for prevention of any kind of pilferage.

Marketing & Sales Structured approach to understanding the requirements of individual customers – QFD’s conducted at regular intervals. Clear identification of product requirements, leading to development of innovative products – Tata 207 DI, Tata Ace Pan India presence and global footprint. Independent teams for addressing the requirements of institutional customers – Defense, State Transport Units Helping to augment the scarce resources – Fiat selling vehicles through Tata dealerships, in return Tata has access to Fiat’s technology and unutilized capacity. Quick assessment of the changing market dynamics and consumer preferences – Tata 407 LCV Large network of dealers – use of technology : DMS. 13

Service Easy availability of spare parts.

Efficient collection of data from field and communication to the

respective plants.

Pan India presence, as well as global presence.

Large network of workshops – Dealer workshops and TASS.

Training facilities – for dealer end and TASS personnel.

Procurement E procurement initiative. Global Sourcing Team – China , a key destination for sourcing essential items like tires, power steering units etc., Steel procured from Belarus Long term relationships with a stable and loyal pool of suppliers. Technology driven procurement – SAP and VCM. Strategic subsidiaries & JV’s – TACO group of companies , Tata Cummins Centralized Strategic Sourcing for key components – FIP’s, Steel etc. Group resources – Tata Steel and Tata International . Localized supplier base at mfg. locations – low inventory levels.

Technology Development Approximately 2% of the annual profits of the company invested

in research and development.

Knowledge portal – helps employees keep abreast with the latest

technologies.

Extensive prototype building and testing facilities.

Strategic partnerships – MDI (France), Fiat etc.

Formal benchmarking process.

“Technology Day” organized across all plant locations.

Human Resource Vast pool of technically competent engineers and managers.

Focus on development of technical capabilities – Technical

Training Center’s, Alliance with technical Institutes

Focus on development of managerial capabilities – MTC’s , TMTC,

executive training programs at premier business schools

Career advancement schemes – ESS, FTSS

Firm Infrastructure Multi – Location facilities

Strong leadership – under the aegis of Tata Sons

Best in class prototype building facilities

Technology – SAP

Large product portfolio

Dynamic Capabilities• NPI Process – reduced time to market

•Market analysis

•Competitor assessment

•Explore Prod. Options

•Product planning

•Concept alternatives•QFD•Styling themes•Packaging•Manf. Feasibility•Cost targeting

•Performance & Weight analysis•Style & Spec’dev’mt. & Freeze•Vehicle & Aggregate plans•Product costing•Financial analys

•Design analysis & simulation•Alpha proto tests•Aggregate tests•Crash tests•Manf. Planning•Detail costing

•Full design validation •Beta proto tests•Production tooling•Vendor parts dev.•Install & comm. Facilities

•Quality Proving & Process validation•P0 & PP Builds•Vendor parts approval•Homologation

•9BOX & supporting docs

DR1 Sign-offs•Product Profile & tech targets•Recommended style theme•Prelim. Cost / wt targets•Prelim. Biz case

DR2 Sign-offs•Product spec & Features list•Vehicle Test Plan•Style & packaging sign off•Time & res. plan•Full Biz. case

DR3 Sign-offs•Design release•Long lead tooling signed off•Component reliability plan•Biz. Case validation

DR4 Sign-offs•Critical issues brochure•Vehicle test requirements met•Control plans signoff

DR5 Sign-offs•Launch volumes•QP build completion•Vendor partsfully approved

•Ramp up plan

•Ramp-up•PL Build

Product Strategy & Planning

Concept Evaluation

Concept Development

Product Design and

development Phase

Design Validation &

ProductionisationPhase

Pre-Production

Ramp-up Phase

DR0DR0

Product Strategy Review

Concept Selection

Concept and Project

Approval

Concept and Project

Approval

Design Release

Project Review

Production Release

Tata Motors Vehicle NPI Process – Conceptual Overview

DR1DR1 DR2DR2 DR3DR3 DR4DR4 DR5DR5 LLPIPI

How did TATA create initial resource complement to overcome the disadvantage of being newcomers in passenger car business?

STRATEGY INSTITUTIONS

Government support (10Year Plan)

New institutions for trade promotion, technology up-

gradation, quality enhancement (ACMA:

Automotive Component Manufacturers Association,

SIAM: Society of Indian Automobile Manufacturers )

Acquisitions

Strategic partnerships

Joint ventures

Intensive management development

Leveraging the resources

Key StrategiesInternational strategy based on the competitive advantage: New product (eg. Tata Nano, the cheapest car in the World). Acquisitions (eg. Land Rover and Jaguar brands from Ford Motors). Partnership with established companies (eg. Alliance with Fiat

since 2006) to enhance the product portfolio and knowledge exchange.

Facilities for learning from other companies. Developing programmes for intensive management development.

Consolidate position in India by exploiting opportunities: New mobility of young Indians. Government’s substantial road-building program GDP growth

Optimize the value chain using distributed Manufacturing

The power of IT has been extensively leveraged State-of-the-art CAD and CAM services integrated

design across multiple disciplines

IT helped the company shrink the design cycle time

BSM tools from BMC Software played a key role TML decided to adopt IT service management

concepts outlined in the ISO 20000:05 international standards, as well as best practices outlined in the IT Infrastructure Library® (ITIL®) Version 3

Process Benchmarking

service-oriented management architecture that treated services as assets and managed them on a life cycle basis.

In-house manufacturing capability with CNC manufacturing operations

have implemented Six-sigma, Kaizen & TPM.

Strategic Benchmarking

Objective: Innovation across the value chain leading to affordable products that can grow the market

Product innovation needs to be complemented with innovation in other parts of the value chain

• Co- location of suppliers• On- line bidding by suppliers• Reduction in the number of suppliers• Partnerships with vendors• Dedicated “Suvidha” service network in small towns

Strategic Benchmarking

The sole winner of the JRD QV Award 2005 was the commercial vehicle business unit, or CVBU, of Tata Motors

PCBU's business excellence initiative has come into its own.

• Serious Adoption Award in 2004 • Active Promotion Award in 2005

Tata Motors have crossed the level of 60% to win the JRD-QV award in 2001, 2004 & 2005 respectively

Achievements

Stretch and Leverage

Vision : “best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics”

Engineering, construction and automotive solutions R&D focus on environment-friendly technologies in

emissions and alternative fuelsMaintain cost competitiveness through continuous

improvements in control over key inputs and enhanced asset utilization

Best in class human capital that are constantly in touch with the industry, competitors, customers and the suppliers

Stretch and Leverage contd..

Tata – Nano: The innovative small car for the urban middle class Fulfill the requirements of its customer value

propositionDeliberately created a young team with good

leadership capabilities who think differentlyExcellence in outsourcing Reconceived its supplier strategy - 85% of the

Nano’s componentsFewer supplier (<60%)

Acquisition : Land Rover and Jaguar for $2.3

billion - Complementing Resources - Blending & Balancing

High Replacement costComplimentary to Tata Motor in the upstream

businessAccess to global markets Transfer of knowledge, technology from high end

market

Overall ..Strong product development capability Manufacture products or deliver services of

highest quality at lowest prices Sufficiently widespread distribution and

service network working around offering more affordable,

more value-oriented products

Technological Framework

Attribute: Innovation around cost “globally recognized” technological capabilities '50s and '60s technical collaboration with Mercedes

Benz to design and manufacture its chosen line of projects

Strong R&D at ERC Possess capability to develop and test durability,

engine performance, emission, safety, design and style, noise, hydraulics, tracks, and instrumentation.

Opportunity to experiment and learn from mistake

Technology Capability Hierarchy

Achievements

The company has the only world-class crash facility in Asia outside Korea and Japan

Developed an A-ECU (Electronic Control Unit) and low-cost accessories that would effectively manage critical engine and vehicle systems without calling for a full-fledged and expensive conventional ECU

Striding towards new emission standards Equipping vehicles of the future with technologies

for improving communication, navigation and entertainment- OneCat conceptual car with fiber glass powered by air and emission free.

Diversification

1977– First CV from Pune plant.1983– First HCV rolled out.1986– First LCV (Tata 407) launched followed

by Tata 608.1991– First passenger car Tata Sierra

launched.1992– Tata Estate launched.1994– Launch of Tata Sumo.

Diversification

1995– Mercedes Benz car E220 launched1997– Tata Sierra Turbo launched.1998– India’s first SUV launched.1998– India’s first indigenous Passenger Car

Indica launched. 2001– Second Generation Indica v2 launched.2008– Launch of Suma Grande2008– Launch of Nano at ninth Auto Expo

But, the war is on…

Maruti Vs Tata Motors36

The Preparations…

Proper utilization of assetsMotivating people to work hardSelective hiringJob fittingTraining programBetter working environment

To create….

HR Philosophy

Caring, show respect, compassion and humanity for colleagues

Work cohesively with colleagues across the groupEncourages self-sufficiencyEmployees' relatives at Pune have been

encouraged to form various industrial co-operatives

The Tata Motors Grihini Social Welfare Society caters to employees' women dependents'

HR Policies

Executive Selection Scheme (ESS) - fast track programme for accelerated growth

In-house vocational training and apprenticeship programme trains the technicians

Rotational assignments and cross-functional mobility allow employees to grow

All said and done…a new strategy is required…

The Blue Ocean Strategy

Blue Ocean Strategy

Red Ocean Blue Ocean

Compete in the existing market place Create unconsolidated market space

Beat the competition Make the competition irrelevant

Exploit existing demand Create and capture new demand

Make the value cost trade off Break the value-cost trade off

Differentiation or Low cast Differentiation and Low Cost42

Focus on the non-customers

Corporate strategy, parenting and synergies

To buy premium vehicle brands such as Land Rover and Jaguar bolster Tata Motors’ image as a global company and increase its global reach and scale

Overall, the Tata group has spent around $15.5 billion in acquiring foreign companies

The Tata name is a unique asset representing leadership with trust

Leveraging this asset to enhance group synergy and becoming globally competitive

Corporate strategy, parenting and synergies contd..

synergy developed as a result of the strengths of domestic and foreign market share, congregating under the umbrella of Tata group

The Tata Group as a whole has over 20 publicly listed enterprises and operates in more than 80 countries world-wide - lots of experience and resources to draw from for research and development purposes

Strong corporate governance based on “rich legacy of fair, ethical, and transparent governance practices” to ensure that its employees act ethically and the business continues to run smoothly

Corporate Advantages from Diversified Business

Sharing of Activities/Resource

TataSteel

Tata Motor

TCSTataCummins

Sharing of Skills/Core CompetenceTataSteel

Core Competence

TataCummins

TAML TACO

Thank you