TATA MOTORS- A Case Study.

Organizational change & Organization development
By Sashi.Prabhu Context: individual presentations –ICFAI -CASE STUDY.

Financials of Tata motors – at a glimpse.
TURNOVER IN (Rs) CRORES 20602 2005-06 17419 2004-05 13223 2003-04 9097 2002-03 2001-02 0

PROFIT AFTER TAX IN Rs.Crores
2005-06 2004-05 2003-04 2002-03 2001-02 -500 0
-54 300 810 1237 1529

7506 5000 10000 15000 20000 25000 500 1000 1500 2000 PROFIT AFTER TAX IN Rs.Crores

Sales volume in units.
189000 2005-06 2004-05 2003-04 2002-03 2001-02 0
215000

179000

190000

140000

152000

104000

106000

89000

81900

50000

100000

150000

200000

250000

300000

350000

400000

450000

passenger vehicles commercial vehicles

Turn around………………………..
a turn around from a 500 crores loss in 2001 (5 years) to… A 1509 crores profit in 2006……….. the fifth largest manufacturer of commercial vehicles in the world. 3 manufacturing facilities located strategically at Jamshedpur, Pune, & Lucknow employing 18000 employees and producing 150 products with 250 variants.

CHANGE INITIATIVES……………
formulated a six year road map . 3 phases of two years each…… Of turnaround…..domestic growth …and international growth…. Revenues have doubled ROCE have increased Six Times EVA has Quadrupled. long term strategy &vision of driving improvements through out the Organization. recognition of people,suppliers/vendors,dealers as vital links in the Transformation process. brought in improvements in the management systems & process To establish itself as a “high learning” organization. people : Measures of leadership effectiveness was established. Fast trackers were identified & encouraged to take more responsibility.

key strategies deployed

• DeRisk the business model & create a growth plan that would give Sustained profits by getting less cyclic segments in a big way. • Focus on non-vehicle businesses like spare parts,finished products And bus body parts.( 3.79% to 4.05% 2003-04 viz a viz 2005-06). •Thrust on exports •Overseas acquisition,alliances & technology partnerships. Acquisitions: in 2005 acquired 21% stakes in HISPANO .S.A a Spanish high end luxury bus manufacturer with an option of 100% Holding to tap new business avenues overseas. • Acquisition of Daewoo Motors leading to doubling of exports to 874 vehicles and an overall sale of 4590 units. • Rs.10000 crores of fresh investment in the next 3-4 years into Manufacturing facilities & new products. •Prune export focus from 70countries to 15-20 countries and have bigger Volumes and greater market shares. Look at Russia as a growth market To sell light trucks,buses and pickup.

• Set up a new engineering set up linking vendors who are technology Houses as well as export houses. Working with Koreans to develop Advanced version of truck which will be launched in the next 4-5 years

Strategic Planning Process

 LOW COST APPROACH: a deliberate position of “ low cost & Acceptable features” with focus on fuel efficiency.– world class product at Asian cost.

 Partnerships outside organizations:work with vehicle factory –Jabalpur Cummins, Holset and Taco.  New Technology Road Map: 2009-10 with “ACE” and having 70% Standardized parts.  Identification & instutionalisation of of 19 top level process owners & 90 sub-process owners. These have been documented & put in place.  Vendor involvement in product development.

 To transform from a bureaucratic, inward looking organization to a Customer centric one.  put an IT Policy and CRM in place.  A new process Management Manual to ensure that the inputs give Required outputs. Every process has an owner and other individuals Have to provide data & info to make the process robust e.g the M.D Is the process owner to develop Vision &Mission.  New Product Development and e-sourcing process.  Implementation of Balance –Score Card: High Performance culture All critical positions to be mapped and fill up the competency gaps. Employee training and empowerment have paid dividends.80% of Employees covered in 1700 teams . Revenue per employee is at 60 Lakhs … triple in 3 years……..

 Benchmarking of processes with GLOBAL best.  Out source manufacturing of low end items which will help organization to focus on 2 key strategic dimensions. c) Understanding and developing market segments d) Commitment to customers

Now sustainance

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