m & m case
TRANSCRIPT
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Mahindra and
Mahindra Case
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Case details
First Indian company to implement BPR
Compelling Circumstances
Ambitious plan for BPR and tried to Implement
But, lot of Challenges faced , massive trade unionproblems
Faced failure of BPR execution
Recovered and all challenges tackled
Finally, became successful
So, it is a holistic case study to analyse the challengesfaced in BPR execution and unique approach totackle to achieve success.
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Brief Profile of M&M
Established1945 - by J C Mahindra & K C Mahindra
1947- first batch of75 jeeps released
Next few decades..
Diversifiedinto other segments viz. Hotels, Financialservices, Auto Components, IT, Infrastructure Devp,Trading etc.
Undisputed Leaderin Tractor Market since 1983
UV- Armada, Bolero, MaXX
3 wheeler segment - Bijlee
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BPR EXERCISE : 1994
Discovered some of its businesses notrelated to the CORE businesses
Plants at Igatpuri and Kandivili had
Manufacturing Inefficiency
Low Productivity,
Long Production cycle,
Sub optimal output
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Reasons
Unhealthy work culture
Corruption was widespread
Management lenient & often crumbledunder pressure
Militantly Unionized
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BPR designed in two Parts
Ist Part - Restructuring of M&M Group
Regrouped in six distinct clusters of related
businesses as SBU Each headed by a President
Infrastructure
Trade & Financial services
Tele communication Automotive components
Automotive Div (UV, LCV, 3 wheelers)
Farm Equipment division (Tractors)
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IInd Part
Implementation ofBPR at
Igatpuri & Kandivili
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Developed with help UK based
Lucas Engineering System Re-engineering the entire layout & processes of
working Cellular Manufacturing
Multi-tasking through Multi-machine manning Reduction in non-productive Activities
Implementation ofTotal Quality Management andKaizen
Formation of3 cross functional teams Horizon 1: Improvement in existing Product
Horizon 2: Up-gradation of existing Process
Horizon 3: Development of new Product
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Barriers/Challenges Model
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Soft Barriers
Employee & Union Resistance
Vendors Resistance
Top mgmt commitment lacking/Mgmtscepticism
Fear of downsizing
Several jobs combined into one
Fear of Job losses Key personnel
Idle Time available due to unorganizedProcesses
High Corruption
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Hard Barriers
Legal Obstacles
IT Integration
Existing bureaucratic structure &power Equation
Business partners i.e., vendors
apprehensive
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What happened
then.Demonstrate Strong Resistance , Union went on strike for 5 Months
Managements Stand
Keshub Mahindra, the Chairman became firm
Top Mgmt decided not to succumb to demands
Sacked Corrupted Employees
Introduced VRS
Formation of 3 Core full-time Teams
Production related team
BPR Execution team
Handling Unrest team
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Deploy
Testing the new improved processes and
demonstrated
Around 100 officers produced 35 Engines a day as
compared to 1200 Employees producing 70Engines in pre-BPR days.
Implementing new improved processes in regular
operations of organization
Union called off Strike
BPR further gained Momentum
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Benefits reaped due to BPR
Igatpuri Plant : Employees declined by 400 but
productivity went up by 125 Engines per day
Nasik Plant : 125% Improvement in productivity
Reduction in Employee costs
1994: 12.4% & 1996: 10.1%
Better Inventory control
Online and Transparent access of data
Integrated sales and supply chain
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Group Learning
Barriers to be identified correctly
Sustained top management commitment
and leadership Formation of exclusive core team
Personal involvement of CEO must
Cultural resistance must be tackled
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Conclusion
BPR implementation in M&M had seen radical
change for the better not only in its functions
but also in its results.
"Let me put it in a simple way. If we have
facilities in Kandivili today, which are not
just surviving but thriving, it is all due toBPR.
Anand Mahindra