Professional Documents
Culture Documents
MCS On Maruti Suzuki PDF
MCS On Maruti Suzuki PDF
MARUTI SUZUKI
Submitted to:
Prof. C.ANAND Submitted by:
Manu Rajput
Sushmita Paul
Abhishek Periwal
Divya Bonagiri
Anju Maurya
Amarnath Kalyanram
ACKNOWLEDGEMENT
We are extremely grateful and remain indebted to our faculty Prof. C ANAND,
IBS Hyderabad for being a source of inspiration and for his constant support in
the preparation of this project. We are thankful to him for his constant
constructive criticism and invaluable suggestions, which benefited us a lot while
developing the project on the control systems of ―Maruti Suzuki‖. He has been
a constant source of inspiration and motivation for hard work. He has been very
co-operative throughout this project work. Through this column, it would be our
utmost pleasure to express our warm thanks to him for his encouragement, co-
operation and consent without which we mightn’t be able to complete this
project.
Finally, yet importantly, we would like to express our heartfelt thanks to our
beloved parents for their blessings, our friends/classmates for their help and
wishes for the successful completion of this project.
Regards,
Sushmita Paul
Manu Rajput
Abishek Periwal
Divya Bonagiri
Anju Maurya
Amarnath Kalyanram
i
TABLE OF CONTENT
1. Introduction........................................................................................... Pg 1
2. Organization Structure......................................................................... Pg 3
3. Management Style.................................................................................. Pg 5
5. Culture .................................................................................................. Pg 15
7. Rewards ................................................................................................ Pg 19
8. References ............................................................................................................. Pg 22
INTRODUCTION
India is multi-billion-dollar market for automobiles, accessories and
components. Apart from being the world’s largest manufacturer of two wheelers
and fifth largest manufacturer of commercial vehicles, India is the fourth largest
passenger car market in Asia. In recent years there has been a marked rise in the
number of international industrial concerns setting up a base in India. The
automotive industry is well represented among them. In 2008 three million
vehicles were manufactured in India.
Maruti Udyog Ltd. (henceforth, MUL) has been the market leader. After the
lifting of licensing in 1993, 16 new ventures of car manufacture have come up,
which has put the market and car manufacturers in the country under
unprecedented severe competition.
COMPANY BACKGROUND
Maruti Udyog Ltd. (MUL) was set up in 1980 by the government to produce
automobiles. By collaborating with Suzuki Motor Company in 1982, it was
hoped that the famed Japanese style of management would catalyze the small
and backward car industry and some of the others to which it was linked. Maruti
got off to an excellent start by public sector standards. However, by 1985,
fiscal, balance of payments, and technology transfer problems began to surface.
1
With current order books winding down by 1990, questions arise as to MUL's
mission, its product-market strategies, its pricing policy, and the value of
Japanese participation. Questions also arise regarding the coherence, long term
stability, and developmental aims of government's policy towards the
automobile industry.
The leadership of the world's 100 year old car manufacturing industry passed
from the extended monopoly of the US to far away Japan in 1980. In October
that year, the Government of India nationalized a defunct car company and
named it Maruti Udyog Ltd. Nearly two years later, MUL's Chief Executive, Mr
V Krishnamurthy, signed up a Japanese collaborator, Suzuki Motor Company
(SMC) which took a 26 per cent equity share and helped in commissioning a
gleaming assembly line about 30 km. away from Delhi in 13 months' time.
MUL made profits from the very first year, captured a 50 per cent market share
by 1985, and crossed the 100,000 vehicle (cumulative) sales mark in September
1986, a year ahead of schedule. With over 50,000 customers (each of whom had
made a 15 per cent down payment) still on its waiting list, the company re-
opened its order books in September/October 1986, for only the third time in the
hope that another hundred thousand or so would sign up for its new model
which had appeared just a couple of months earlier. But since early 1985, the
company, which had sparked off the long overdue process of modernizing
India's archaic car industry as well as triggering experimental changes in the
government's cumbersome licensing policy, began to encounter bumpy
conditions on both the supply and demand sides. Set up like a typical Japanese
car company with a maximum 30 per cent in-house manufacturing share in the
vehicle's overall value, MUL began to figure in some national forums with
regard to the 1988-89 target of 90 per cent local content. The company's
unexpectedly fast start as a volume car producer had left domestic parts
suppliers flat-footed. The parts suppliers were having trouble meeting the
company's Japanese-style quality, cost, and delivery standards, at what were
unprecedented levels of car production for India. Oh the demand side, a
combination of factors, including the sudden appreciation of the yen in 1985-86,
and hikes in import tariffs as well as excise duties led to a 15 per cent price
increase per car in a matter of months .This made it problematic for MUL to
follow its low price, high volume strategy. The foregoing developments led Mr
Krishnamurthy to declare that "the rules of the game" had changed. He was
concerned about the future development of the Indian car industry.
2
THE ORGANISATION STRUCTURE
3
Their product is car and its production occurs on a large scale, it includes
assembly lines in which parts are added to a product in a sequential
manner using optimally planned logistics to create a finished product
much faster than with handcrafting-type methods. This ensures
standardization of product and for fixed steps in a process to be followed
a no of fixed rules and standard operating procedures need to be
followed.
4
THE MANAGEMENT STYLE
There are a variety of management style types that exist. Some of them are as
follows:
1) Autocratic style of management
2) Paternalistic style of management
3) Laissez-faire style of management
4) Democratic style of management
5) Informal style of management
6) Participatory style of management
7) Supervisory style of management
Maruti Suzuki follows a balanced mix of both Indian and Japanese styles of
management. Large numbers of Indian managers as well as workers are
regularly sent to Suzuki plants in Japan for training purpose. Apart from this
there are batches of personnel coming from Japan to India to train, supervise
and manage. Following are the features of the Japanese and the Indian style of
management:
5
Maruti follows ―A path to success‖, which is as follows:
6
CONTROL PROCESS OF MARUTI SUZUKI
The control process involves carefully collecting information about a system,
process, person, or group of people in order to make necessary decisions about
each.
The top Management at Maruti has always known the Secret that:
Therefore, Right from the inception, Maruti has always tried to improve the
condition at vendor’s end. Moreover the Best Practices at Maruti has been
applied to vendors through MPS & Lean Projects.
7
VENDORS QUALITY CONTROL
In order to improve quality and generate economies of scale, MUL has reduced
the number of vendors of components in India from 370 to 175. In order to
reduce time and cost involved in dealing with more vendors, they have
increased their supply chain efficiencies. For example they are using Inbound
Logistics i.e. the receiving and warehousing of raw materials, and their
distribution to manufacturing.
Vendors are linked to the MUL through the Internet-based information network,
which maintains online information regarding order status and delivery
instructions. In order to ensure quality standards, Vendor Quality Control
Management System such as ISO 9000/ QS 9000 forms the basis for producing
a quality product.
VENDOR RATING
They have a system for evaluation of vendors. The vendor rating is based on the
objective data compiled about the vendor which is used for defining the -
1) Future Business Dealings
2) Share of Business
3) Vendor awards
4) Improvements
8
BUDGETRY CONTROL PROCESS
In Maruti Zero Based Budgeting system is followed, which is a top down
budgeting system. Resource allocation decisions are made through a function-
by-function assessment. The criteria for evaluation is passed down from higher
levels, enhanced and made more appropriate for each area as the criteria are
passed down to office and department heads. Department and office heads
develop justifications within these evaluation guidelines for each function and
justifications for increased resources. These pass back up through the
organization with each level setting priorities for resource allocations to
individual functions from the levels below.
Maruti Suzuki follows a unique process of budgetary control, which ensures
proper utilizations of funds by different departments of the company. There are
more than 350 departments in the company. So without effective budgetary
control system in place, it would be impossible for the company to ensure
proper utilization of the funds in the company.
(iii) Output is goods and services (e.g. products, parts, paper work, served
customers etc.
The combination of operations and activities stated above employed to create
goods and services are known as manufacturing system. A manufacturing
system therefore may be looked upon as an independent group of sub-systems,
each sub-system performing a distinct function. Different sub-systems may
perform different functions, yet they are inter-related and require to be unified
to achieve overall objectives of the organization. Manufacturing system needs
to interact with both internal and external environment. The internal
environment is the combination of engineering, marketing, personnel and
accounts activities whereas external environment comprises of customers,
competitors, suppliers, labor unions etc. The selection of the manufacturing
system is a strategic decision for most organizations since changes at a later
date arc very expensive to make. The systems selected should be such that it can
give the desired output, required quality and is cost-effective.
10
LEAN MANUFACTURING- MPS (MARUTI’S
PRODUCTION SYSTEM)
In Maruti, lean is both:
1. A business operating philosophy
2. A set of proven tools and solutions-that accelerates speed and reduces cost
Thus Value is defined by the customer, and all activity is aligned to provide
maximum value to the customer.
QUALITY POLICY
11
QUALITY TOOLS
1) 5S
2) 4M
3) 3M
4) 3G
What is 5S?
SEIRI
– PROPER SELECTION
SEITION
– ARRANGEMENT
SEISO
– CLEANING
SEIKETSO
– CLEANLINESS
SHITSUKE
– DISCIPLINE
What is 4M?
The factory is essentially a mix of man, materials, machines and methods.
These should move continuously and effectively to produce a quality product at
low cost. The most essential work in quality control is to thoroughly investigate
regarding the problems
concerning quality, decide suitable counter measures and carry out improvemets
accordingly.
MAN
MACHINE
MATERIAL
METHODS
What is 3M?
In Japanese Language 3M is:
MURI – INCONVENIENCE
MUDA – WASTAGE
MURA – INCONSISTENCY
What is 3G?
In Japanese Language 3G is:
GENCHI – GO TO ACTUAL PLACE
GENBUTSU – SEE THE ACTUAL THING
GENJITSU – TAKE APPROPRIATE ACTION
12
NEW METHOD OF EFFICIENT PRODUCTION
Yield improvement
SEVEN Mantras of Yield Improvement followed by Maruti Suzuki are
Mantra 1 : Die Face modification
Mantra 2 : Modifying the bead design
Mantra 3 : Residual flat parts (scrap) utilization
Mantra 4 : Reducing the blank size by guage adjustments
Mantra 5 : Changing the blank shape
Mantra 6 : Modification of the punch profile
Mantra 7 : Open draw technique
Maruti Production System or MPS draws learning's from its parent company.
Suzuki Motor Corporation's concepts which follows-―Do it right the first time‖
approach
Under the Maruti Production System (MPS), Maruti engineers capture all
aspects of operation on video and scrutinize the each process to identify
wastage. Together with workers on the shop floor, layouts were altered,
innovative equipment and processes were introduced and operations relentlessly
13
made lean and efficient. According to MPS, there are eight types of wastages in
any process namely,
1. Idle Time,
2. Inventory,
3. Over Production,
4. Production Defects,
5. Un-necessary man movement,
6. Un-necessary material movement,
7. Un-necessary inspection and
8. Un-necessary processing.
However, if every employee tries to do the job right the first time, wastages due
to un-necessary inspection and processing are eliminated from the system and it
is a cost effective approach. A product of poor quality requires repeated
inspections, entails wastage in terms of repairs and replacements and causes loss
of time and morale. If we could 'do it right first time', wastage would
automatically come down.
14
ORGANISATION CULTURE
The Company has always striven to offer a positive, supportive, open and high
performance work culture. Over the years its unique work culture has evolved
with learning from Suzuki, Japan in terms of Japanese systems, processes and
work practices and also from the experience of local context and expectations of
its people. Some of the key constituents of the work culture are fairness, equal
opportunity, participation and involvement and team work.
The induction of a young workforce over the last five years and enabling their
smooth settling down in the Company work culture has been a challenge. The
emphasis has been on increased two way communication, stay interviews,
creating job excitement, education and learning towards career development.
The Company provides tremendous learning and development opportunities to
its employees starting from induction and orientation when a new employee
joins the Company. The Company believes that to have a sustainable
competitive advantage in the new knowledge economy, learning would be the
key catalyst for an organisation’s survival and success. The Company’s
extensive training calendar encompasses training programs for all categories of
employees i.e. associates, supervisors and those at junior, middle, senior and top
management level. To have a well rounded development of employees, the
training calendar comprises of behavioral, functional and safety trainings. The
training programmes vary according to the need of the employees at various
levels and business requirements and are designed after doing a thorough
process of three stage need identification. In 2011-12, a total of 47,000 man-
days of training were conducted for employees across all the levels. This
translates to an average of 5.15 days of training per employee. Functional and
technical trainings form an important part of the Company’s annual training
calendar as they are directly linked with employees’ on the job performance.
These trainings are imparted by in-house subject matter experts as well as by
external trainers. Some of the functional trainings imparted internally are 3G,
3K, 5S, DFMEA and QC tools. Few functional trainings which are being done
by external trainers are finance for non-finance, six sigma, project management,
inventory & warehouse management, world class manufacturing practices, auto
cad, MS excel, etc. Behavioral trainings also form a considerable portion of the
training calendar and include trainings like negotiation skills, problem solving
& decision making skills, presentation & communication skills, conflict
15
management & resolution, assertiveness & self confidence, time management &
multi tasking skills, leading effectively, inter personal relationships, etc. The
Company also has higher education schemes for its employees. It helps not only
to groom and retain high potential young managers but also enables employees
to fulfil their career enhancement aspirations. The scheme includes programs
like – executive MBA (full time and part time) at select campuses. The scheme
is available for employees at levels of assistant managers to managers and is
guided by eligibility and selection criteria.
The experience of handling the Manesar Plant labour issue during the last year
further highlights the need for the management focus on effective induction,
total involvement, training and mentoring of the young team members at the
shop floor level. The new initiatives in this direction over the last six months
have given positive results. One of them is the outbound training initiative
where a diverse population of associates, supervisors, young managers and
middle management team members are taken to mountains or areas of natural
challenges and imparted learning through the experience of group exercises. Till
now 14 such programmes have been conducted covering more than 300
employees. This initiative is planned to cover more shop floor employees of the
Company. With strong growth and expansion of the business and more and
more young new team members likely to join its team, the Company plans to
lay the highest emphasis on reinforcing a positive work culture, internal
communications and continuous training and mentoring.
16
COMMUNICATION AND COORDINATION
COMMUNICATION
The open office system of the Company ensures transparency, aids faster
communication and creates the physical structure for a boundary-less
organization besides strengthening the feeling of oneness and team-work.
Press release i.e. through TV media and newspaper and majorly done by VP or
CEO of the company through notification on website of Maruti.
Any new launch of car is done through various news channel and daily
newspaper by the top management of the company.
They have a 24 hours service call centre serving their customers anywhere in
India.
They take feedback of their customers through feedback form available online
& through physical submission of forms in their own outlet or dealer’s outlet.
Newsroom of their website where every details like financials, number of cars
sold per month, annual reports & media contacts are available which is a very
controlled system of communication.
Now a day any update regarding the company is updated though social media
like facebook & twitter.
17
COORDINATION
They have largest number of car dealers available in India throughout cities &
towns.
Even a local mechanic can repair the Maruti car as they have well developed
service centre across the India which helps in delivering the finest service to
their customers by way of coordinating various points of services.
Authorized dealers of Maruti coordinate the work and make the customer
delight by the services they offer.
Maruti coordinated well with their suppliers like ceat for tyres, auto part makers
from Ludhiana, Pune etc
Coordinating well with their dealers through which they are able to be the
number one car maker in the small & mid segment
18
REWARD SYSTEM
Promotions based on performance.
Productivity & Profit linked incentive schemes.
Training including long term SMC Japan training.
Highest paid work force in the industry.
APPRAISAL
1) A systematic, periodic and so far as humanly as possible, an impartial
rating of an employee’s excellence in matters pertaining to his present job
and to his potentialities for a better job.
2) New appraisal system based on KRA’s (key result area) & targets
3) Review of targets at regular intervals
4) People development an important KRA
LEADERSHIP
1) Vision, value and team building workshops for top management
2) CFT (cross functional teams) of managers for major thrust areas
3) Managers sent to joint ventures to upgrade their practices to MUL
(Maruti Udyog Limited) standards.
CAREER DESIGN
It is defined as the process of deciding on the content of a job in terms of its
duties and responsibilities on the methods to be used in carrying out the job, in
terms of techniques, systems and procedures and on the relationships that
should exist between the job holder and his superiors, subordinates and
colleagues.
19
SELECTION OF SUPERVISORS:
1) Performance / Attendance / Discipline record
2) Written Test & Interview
3) Job Rotation - including Inter-functional
OUTSOURCING HR:
4) Part of our Long-term Strategic Plan
5) Currently Trainers hired from outside
EMPLOYEE WELFARE:
1) Residential Colonies for Employees – Chakkarpur & Bhondsi
2) Hospitalisation Reimbursement – on actuals without Ceiling
3) Vehicle Loans
4) Household Equipment Loans
5) House Building Advance
6) Annual Advance
7) MUL PF Trust – for better Mgt., Service & speedy redress
8) Proposed MUL Pension Scheme
9) Learning Opportunity - Benchmark in Auto Technology
10) Professional Value addition through Training
11) Opportunity for foreign training at SMC, Japan
12) Job Rotation & Job enrichment
20
POST EMPLOYMENT AND OTHER LONG TERM
EMPLOYEE BENEFITS:
21
REFERENCES
a. Satia, J K and Thomas, P S. Maruti Udyog Limited, The
Diagnostic, Vol. 14, No.3, July-September 1989
c. http://www.marutisuzuki.com/sustainabilityreport/organizational-
profile.html
d. http://www.scribd.com/doc/45198169/Maruti-as-an-Organization-
project-Report
e. http://www.marutisuzuki.com/sustainabilityreport/sustainability-
approach.html
22