The Tata Group comprises of over 90 companies in seven business sectors. Tata Motors Limited (TML) is India's largest automobile company, with consolidated revenues of Rs.1,65,655 Crores (USD 33 billion) in 2011-12. It leads the engineering sector and enjoys a flagship position within the group.

It is the leader in commercial vehicles in most segments, and among the top three in passenger vehicles with winning products in most segments in India.

The Managing Director, supported by a Senior Leadership team representing all the business functions and Heads of business play a pivotal role in shaping the strategy of TML. The Strategy is then discussed and iterated in a Committee comprising of the Chairman, Vice Chairman and the MD.

The strategy is then discussed in the Executive Committee of the Board (ECOB) comprising a few of the independent Directors before being taken to the Board of Directors for approval.

Once approved, the strategy is evaluated periodically for changes in the macro-environment or the industry which may impact the plan. These updates and any revisions in strategy arising thereof are also then discussed with the ECOB and the Board before being finalised for implementation.

Established in 1945, Tata Motors' presence cuts across the length and breadth of India. Over 7.5 million Tata vehicles ply on Indian roads, since it first rolled out in 1954.

Tata Motors, the first company from India's engineering sector to be listed on the New York Stock Exchange (September 2004), has also emerged as an international automobile company.

In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo.

The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and power trains. The company's dealership, sales, services & spare parts network comprises of over 3,500 touch points.

In 2005, it acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently acquired the remaining stake in 2009. In 2006,Tata Motors formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully built buses and coaches for India and select international markets.

In 2006, it entered into a joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. The Thailand plant of Tata Motors began production of the Xenon pickup truck in 2008.

Through subsidiaries and associate companies, it has operations in the UK, South Korea, Thailand, Spain and South Africa. Among them is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in 2008. JLR supports two engineering and design facilities and three manufacturing plants (Solihull, Castle Bromwich & Halewood) in the UK.

Tata Motors (SA) (Proprietary) Ltd., Tata Motors' joint venture with Tata Africa Holding (Pvt) Ltd., has its assembly plant in South Africa at Rosslyn, north of Pretoria, in the Gauteng province of South

Africa. The plant can assemble, from semi knocked down (SKD) kits, light, medium and heavy commercial vehicles ranging from 4 - 50 tonnes. Tata Motors is also expanding its international footprint, established through exports since 1961.

The company's commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, South East Asia, South Asia, CIS, Russia and South America. It has franchisee / joint venture assembly operations in Bangladesh, Ukraine, and Senegal.

The Company has recently setup a plant in Myanmar with the support of a LoC from the Indian Govt to manufacture heavy trucks from Knocked down kits. The plant is now owned and operated by the Govt of Myanmar.

The foundation of the company's growth over the last 65 years is an understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D. With over 4,500 engineers and scientists, the company's Engineering Research Centre, established in 1966, has enabled pioneering technologies and products. The company today has R&D centres in Pune, Jamshedpur, Lucknow and Dharwad in India, and abroad at South Korea, Spain, and the UK. With its R&D, Tata Motors developed the first indigenous Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of its launch, the Tata Indica became India's largest selling car in its segment. In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first indigenously developed mini-truck.

Tata Motors is equally focused on environment-friendly technologies in emissions and alternative fuels. It has developed electric and hybrid vehicles both for personal and public transportation. It has also been implementing several environment-friendly technologies in manufacturing processes, significantly enhancing resource conservation.

It is also committed to improve the quality of life of adjoining communities by working on thrust areas like employability, education, health and environment. Its CSR initiatives touch the lives of more than a million citizens. The company's support on education and employability is focused on youth and women. It ranges from schools to technical education institutes to actual facilitation of income generation. In health, the company's intervention is in both preventive and curative health care. The goal of environment protection is achieved through tree plantation, conserving water and creating new water bodies and, last but not the least, by introducing appropriate technologies in our vehicles and operations for constantly enhancing environment care.

Commercial Vehicles Business

Commercial Vehicles are harbingers of a country's economic prosperity. Road transport in India has steadily improved its share over rail in the past 50 years. This has led to continued growth in numbers and variety of commercial vehicles. It has grown from 157,000 sales in 2000-01 to 889,578 in 2011-12.

Attractiveness of Indian commercial vehicle industry in India has lured several leading European, American & Japanese brands. Some of them are already operational or setting up their shop shortly. Commercial Vehicle industry is expected to grow to 1.6 million by 2014-15 with large part of the growth expected in the small vehicles particularly for passenger movement in towns and villages. The primary drivers of growth are, improving road connectivity, especially between smaller towns and villages; urbanization of mind with exponential growth in mobile telephony (850+ million subscribers) and television; increased economic activities with high GDP growth.

TATA MOTORS

MANAGEMENT SUMMARY

I

Tata Motors Commercial Vehicle Business Unit (CVBU) is the market leader in India with market share of about 60% followed by Mahindra (19%) and Ashok Leyland (10%). It has the widest product range from a small 0.6 ton truck to a 49 ton truck for diverse applications and a 7 to 56 seater passenger carriers for buses and coaches.

Medium and Heavy trucks continues to be single largest segment in revenue terms. Despite the segment being cyclical in nature it has been seen as attractive by foreign OEMs like Volvo, Mercedes owing to less number of players and higher margins. However, they are currently present mostly in the high end with a niche market play. Tata Motors always had a leading position with a market share of more than 60%. With introduction of its new range, Prima trucks, Tata Motors expects to revolutionize the market in future with world class quality trucks at very competitive prices. The major competitors in this segment are Mahindra Navistar, Ashok Leyland (20.2%), AMW, MAN, Volvo-Eicher (11.2%), Bharat Benz (Mercedes).

Light Commercial truck (LCV), segment is relatively insulated from the cyclicality of the CV industry. Tata Motors has a sustained leadership with market share of about 70.2%. Volvo Eicher (12.5%), Mahindra (11.7%) and Swaraj Mazda are the major competitors. Tata Motors recently unveiled its new generation LCV, 'Ultra' which will offer higher payload with better fuel efficiency and longer service intervals for superior operating economics.

Small Commercial truck segment was created by Tata Motors with introduction of Tata Ace, India's first mini truck. Since its introduction in 2005 mini truck segment has shown explosive growth and has expanded this segment of the CV market and has significantly dented the large three wheelers.

Tata Motors also launched 0.6 ton Ace Zip to further strengthen its position and compete against with the small 3 wheelers. Competition came out with their equivalent products seeing the high volume potential of the segment, especially the 3 wheeler companies, like Piaggio, Force Motors. Mahindra and Mahindra has emerged as the number 2 player in this segment. The growth is expected to be high with continued investments in rural road connectivity.

Passenger carriers on the Ace and Ace Zip platform - Tata Magic and Magic Iris respectively - have also been introduced in the small passenger carrier segment as a substitute to big and small 3 wheelers which are run as shared and non-shared means of passenger transportation.

In response to the same the traditional 3 wheeler companies, Bajaj,

Piaggio, Force and Mahindras have also launched small 4 wheeler vehicles to protect their declining share in the segment. TML has more than 72% market share in the segment.

Bus Segment is insulated from cyclicality of the Commercial vehicle industry. So, it becomes an important segment to de-risk the business. Intercity coaches, sub-urban buses and city buses are expected to witness a high growth with improving highways, better rural road connectivity and implementation of Bus Rapid Transport System in several cities in India.

Tata Motors has taken a major shift in its strategy from being a mere supplier of bus chassis to fully built buses over the last decade. It has partnership with Marcopolo, Brazil and 100% ownership of Hispano in Spain to offer world class buses. Major competitors in light buses are local players- Swaraj Mazda, Eicher and Mahindra whereas in bigger buses and coaches Ashok Leyland is the major competitor. In high end coaches Volvo, Mercedes and Mahindra Navistar are present.

Going forward Tata Motors aims to maintain its market share at 65% in India. In exports, it had started a focused effort in growing its volumes from 2002-03, as a result of which it grew at 40% CAGR till 2011-12 to 41692 units.

Tata Motors international business has laid out a plan and aims to grow by strengthening its position in existing markets (SAARC and Africa) and enter high volume and high growth markets (Russia, Vietnam, Indonesia, Brazil, etc.).

Passenger Cars Business:

India represents one of the world's largest and fastest growing automobile markets. De-licensing in 1991 unleashed the latent demand in the Indian market and also attracted the global car manufacturers to set up their shop in India. Indian passenger car industry has grown with a CAGR of 10.3% over the last 10 years from 734,000 units in year 2000 to 24,66,814 units in 2010-11. The Indian passenger car market is now ranked seventh globally in terms of market size. However, with a car density of only 13 cars per thousand as compared to 400+ in developed markets leaves a huge growth opportunity for cars in India.

The overall robust growth in India during this decade has been

TATA MOTORS II

Fig. MS-01 Medium and Heavy Tata Trucks

Fig. MS-02 Light Commercial truck (LCV)

Fig. MS-03 Small Commercial Trucks & Small Passenger Carriers

Fig. MS-04 Buses

Magic IRIS

II

influenced by changing trends in income demographics, increased availability of finance, urbanisation, increased rural consumption, road infrastructure development, socio-cultural changes, evolution of customer preferences, regulatory impacts, technological changes, and increasing competition.

Even in the wake of economic slowdown in 2008-09, the industry sustained its positive growth momentum mainly because of strong domestic demand for passenger cars. These market factors and India's attractiveness as a low cost manufacturing base have attracted global giants seeking to gain a foothold in the region through setting up of new plants and forming joint ventures (JVs) with local firms.

Tata Motors Passenger Car Business Unit:

Tata Motors sales, since it entered the passenger car segment in 1999, crossed 3 million cars last year. Tata Motors overall domestic share in passenger cars in 2011-12 was 14%, and Maruti Suzuki (38.1 %) and Hyundai Motors (14.7%). The past growth and strong market position of TATA Motors has been supported by product innovations, value for money proposition and a strong network of dealerships across India.

Hatchbacks : Hatchbacks in India comprise of 57.3% of passenger car market, including the Utility vehicles. It has witnessed CAGR of more than 10% over the last 5 years. This segment has witnessed the most intense competition with products from Maruti Suzuki (800, Alto, A-star, Estilo, Ritz, WagonR, Swift), Hyundai (Eon, i10, i20, Santro), Chevrolet (Aveo-UVA, Beat, Spark), Fiat (Punto), Ford (Figo), Honda (Jazz), Nissan (Micra), Skoda (Fabia), Toyota (Liva).

Tata Motors developed India's first fully indigenous passenger car, Indica, in 1998. By doing so, it catapulted India into an elite group of just 10 nations that have designed and manufactured their own car. Tata Motors also unveiled the world's lowest priced car, 'Nano' in January 2008, this is considered as one of the greatest innovations in the automobile industry. In August 2008 new generation Indica Vista was launched. Tata Motors sold 180,000 hatchbacks in the year 2011-12 with a market share of 11.9% in an intensely fought segment having 26 offerings by different manufacturers.

Sedans: The segment contributes to 17.1% of overall passenger car sales in India, and has grown with a CAGR of 13% in the last 5 years. The major players offering products in this segment are Maruti, Tata Motors, Hyundai, Honda, Volks Wagon, Ford, Toyota and Nissan,.

Tata Motors, after the huge success of Indica, launched the sedan Indigo, station wagon Indigo Marina extending its platform innovatively. Tata Motors also launched a subcompact sedan Indigo CS in 2008, which received a very good response from the market. In October 2009, PCBU launched its new generation sedan, the

Manza. Tata Motors is the number 2 player in this segment next only to Maruti which leads the segment with its Dzire and SX4 models. Tata Motors sold 77733 sedans in 2011-12 with a market share of 17.2%.

Utility Vehicles: The Utility Vehicle segment accounts for nearly 14.3% of the Indian passenger car market with sales of 377,024 units (2011-12). It has witnessed a CAGR of 9% over the past five years. Top 3 players - M&M, Toyota, Tata Motors - account for nearly 84.7% of market share.

Tata Motors journey of Utility vehicles began with the launch of Sumo in 1994 followed by Safari in 1998. In October 2010, Tata Motors launched India's first Indian crossover Tata Aria packed with best in class features. Tata Motors share in the segment stood at 12.7% in year 2011-12 with sales of 47,775 units.

Jaguar & Land Rover: In June 2009, the exciting new range of premium luxury vehicles from Jaguar and Land Rover were introduced in the Indian market. Both the Jaguar and Land Rover brands are highly regarded and have a long heritage in their

TATA MOTORS III

Fig. MS-05 Hatchbacks

Fig. MS-06 Sedans

Fig. MS-07 Utility Vehicles

respective segments. Indian passenger car industry has come a long way from the year 2000 when 14 OEM's operated offering 35 models to today where 30 OEM's are operating and offering 83 models across all segments. Competition will intensify further with few more OEM's (Peugeot Citroen, Mazda) likely to start their operations in India and model offerings likely to increase from current 83 to 150 (estimate) by FY16.

Market size is expected to reach 6-8 million by 2020-21 and by 2016 India is likely to be the third largest market in the world.

Fig. MS-08 JLR Products

Tata Motors aspires to be a strong number two player with a market share of 20% by 2015-16 by leveraging current platforms, strengthening its network and introducing contemporarily styled, exciting to drive new products appealing the youth.

Range Rover

Range Rover Sport

Discovery 4

Freelander 2

Jaguar XK

Jaguar XF Jaguar XJ

Sumo Gold Safari Grande MK II

Xenon XT Aria Venture

Manza

Indigo

Indigo CS

Indigo XL

Nano

IndicaIndica Vista

III

P.1 ORGANISATIONAL DESCRIPTION

P.1 a ORGANISATIONAL ENVIRONMENT

Tata Motors is in the business of design, development, manufacturing and marketing of full range of Commercial vehicles, Passenger cars and UVs for domestic and international markets.

P1a1 Product Offerings

There are two business units - Commercial Vehicles (CVBU) and Passenger Cars (PCBU) - within Tata Motors.

The CV business (Fig. OP 12) comprises of the small commercial vehicles (e.g. Ace, Magic, Iris). Light Commercial Vehicles, Buses and Trucks, Tractor - trailers, Tippers and special vehicles. It has four business lines - M&HCVs, Buses, Small & LCVs, and Non Vehicle Business (NVB) includes spare parts and aggregates such as engines & gear boxes, and Annual Maintenance Contracts (AMC).

The PC Business (Ref Fig OP 12) comprises products from PCBU, Fiat JV and JLR. We market and sell cars like Linea, Punto, Palio and Fiat 500 of the Fiat JV, and luxury brands Jaguar and Land Rover of the JLR. TML takes pride in its capability to design, manufacture, market and sale of the only indigenous car range of the country with brands like Indica, Indigo, Vista, Manza and the Nano. UVs from our stable include Sumo, Safari, Venture, Winger and Venture.

Revenues for 2011-12 are distributed in the ratio of 7:3 between CV and PC businesses.

The complete range of products have equal relative importance to TML success, the emphasis is on newer vehicles that are launched using New Product Introduction (NPI) Process supporting existing range. NPI Process enables the product planning in the 5-10 year time horizon. Tata Motors is leading in launching new products and services every year. In last 60 months the company has launched several new products and variants.

Fig. OP-01 TML Other Services

Stakeholders Type of Services provided

Direct customers, Spares, Recon, AMC, Financial Services, DTC typeDealers and TASS, contracts, Insurance, Pre owned vehicles business,Parts Distributors Channel development, Tata Assurance, Tata Ok, Tata Alert,

Construck, Diagnostic tools,Training, Financial help and guidance, Process improvement services through supplier / vendors, spurious spare part control.

Other services to enhance the offerings are given in Fig OP- 01.

Delivery mechanisms for products, parts and services

The company has its Sales and Service Headquarters located at Mumbai and is supported by regional offices connected through area offices & distribution network across the country.

Tata Motors has formed a Premier Car Division for distribution of Jaguar and Land Rover products with retail outlets in select cities.

International Business explores new opportunities and delivers vehicles as per the country specific regulations and customer requirements.

The delivery mechanism of Tata Motors products and services is detailed in figure OP-02.

P.1a2 Vision, Mission and Organisational Culture

In the recent years the organisation is evolving and embracing a performance oriented culture as mentioned below.

�Customer Centric

�Value / Process driven

�Focused downward, empowerment

�Productivity driven, team working

�Collaborative approach

�High performance

Core Values, Vision and Mission

Currently CVBU and PCBU have distinctly demarcated MVVs and core competencies based on their individual contexts. TML is in the process of defining a unified MVV for the integrated corporation which will pave the way for determining the need for and thereby articulation of a unified core competency (Fig. OP- 03,04 and 05).

Policies related to Safety and Climate change

Tata Motors has committed itself to become an injury free organization and is aiming to achieve the goal of zero accidents. Towards this Tata Motors has adopted the OHSAS 18001 standard at all plants.

Both the CV and PC businesses are OHSAS certified and have a Occupational health and Safety (OHS) policy which is deployed across the company. Tata Motors has built a safety culture across the organization by following this process. The company is working closely with M/s. DuPont in CV and M/s. British Safety Council in our PC business for implementation of world class safety standards and practices, with a common SHE committee at corporate level.

Tata Motors has adopted Triple Bottom Line approach and is working on Climate Change and Low Carbon Growth Initiatives. It has adopted Green Building policy & designed new factories accordingly. Pune Pimpri plant has secured Golden rating Green

TATA MOTORS

Fig. OP-03 CVBU MVV

The organisational culture is open and participative thus promoting agility and innovation. The business at Tata Motors is run by a set of Systems and Processes. Cross functional teams and matrix organization structures for certain functions help to foster learning and an environment of co-operation.

Fig. OP-02 Delivery mechanism for Products, Service and Parts

Domestic Market - Delivery of Vehicles

TMLDistributionCompany

Domestic Market - Delivery of Service

Dealerships, TASC / TASS, TASP

Domestic Market - Delivery of Spare parts

Dealerships, TASC / TASS, Distributors

International Market - Delivery of Vehicle, Service and Spare parts

Country DistributorsDealers, Authorised

Workshops

Domestic Market - Pre-owned Car Business (TMA)

Dealership

Tata

Mot

ors

Ass

ured

(TM

A)

Institutional

RetailsInstitutional

Retails

Retails

End U

sers

Retails

RetailsInstitutional

Tata

Mot

ors

Vehicle Financing

DealershipsCustomer Access PointsTASC, SNAP (for Nano)

ORGANISATIONAL PROFILE

1

Canteens, Transport, Time-Off from work, Financial Support & Retirement benefits, Travel & Relocation, Maternity Benefit, Special Assistance Programs (Adarsh Nidhi, Suraksha Yojana), performance linked rewards and career progression opportunities.

Fig. OP-08 Key Workforce Benefits

VMCDRE and various communication mechanisms such as Maha Communication / Chairman's Address/Strategy Deployment sessions (Ref Cat 1.1), BSC reviews, Sunrise meetings and so on to translate its Business Vision and Mission into every individual's action plans, thereby setting clear goals and aligning each work unit to accomplish the strategic objectives of the organization. Apart from this various processes and methods (Ref Cat 5.0) such as performance linked rewards and benefits, performance based career progression, recognition and learning & development opportunities are some of the key factors that engages the employees to accomplish the organizations' business strategy & objective (Fig. OP - 08).

Being an integrated manufacturer, we have diverse job and skill requirements which require us to hire diverse talent in terms of skill, demographics (gender, age, language, and tenure) and educational background such as engineering graduates, management & non-management post graduates, Diploma holders, vocational training certificate holders (ITIs) and so on. This is met by recruiting Executive, Managerial/Engineering & Supervisory and Permanent Operatives, Diploma Trainees/Full Time Apprentices and flexible workforce from different parts of the country. The internally recognized unions' partner with the management to design processes and policies matching the requirements and needs of the operatives (organized bargaining units). All employees are covered under the company's medical scheme and have access to key workforce benefits as detailed below (Fig. OP - 07).

TATA MOTORS

Fig. OP-06 Work force Profile

Management Non ManagementTotal

Executive Managerial Supervisory Operatives

966 9055 4142 15054 29217

* Flexi workforce is also deployed based on market demands

Fig. OP-04 PC Vision Mission

Fig. OP-05 Core Competencies

CVBU

Ability to innovate low total cost of ownership solutions

PCBU

Ability to offer value for money through innovation, cost effective design, development and manufacturing of passenger cars

PPE & SHE provisions, Medical and Hospitalisation support, Health check-ups, various safety related training programs (e.g. Driver training, fire drills) are conducted and are tailor made for various workforce segments. Moreover, requirements of safety and health for women are also accounted and Lady Doctors are appointed who visit on retainer basis.

Fig. OP-07 Health & Safety Requirements

Certification from IGBC and our Dharwad plant is in pipeline. The Social and Environmental performance is also reported separately in the GRI based report which is 'A' level report, communication on progress submitted to the UN Global Compact, the CS Annual Report.

Going beyond ensuring that its products meet all the regulatory and environment standards, Tata Motors has its action plans in place for reducing the green house gas (GHG) emissions, and developing future technologies for products like Electric Vehicles (EVs) and hybrids. The products Indica, Indigo have already achieved 85% recyclability as per EEC directive. The Indica Vista has been awarded the prestigious European Recyclability Compliance Certificate, as per the EC Directives, by the Vehicle Certification Agency, UK.

Tata Motors Sustainability Report is published annually which includes performance data and information related to Indian operations. The report is based on Global Reporting Initiative's G3.1 Guidelines which serves as the company's communication on Progress on the United Nations Global Compact principles.

P.1a3 Workforce profile

TML's workforce is segmented (Fig. OP - 06) into Management and Non Management employees. Management employees comprise of Executive, Managerial and Supervisory employee groups and Non-Management employees comprise of Operatives. Flexible workforce is also employed based on market demands and production requirements which are cyclic in nature.

TML uses strategy cascade through BSC / PACT / SQDCME /

More details are provided in section: Workforce Focus

P1a4 Assets

Tata Motors has always kept itself ahead in technology through investment in R&D in the engineering sector by spending around 2.5 % of its turnover. The significant technologies (Fig. OP - 09) are deployed at Tata Motors. However we are not limited by the above. Apart from internal competencies, the company has instant connectivity to external competencies ('collaborators') through design houses in Europe and UK, JV's with world class technology partners like Delphi, Cummins, TACO, etc amongst others. Similarly we outsource styling and engineering services when the requirement arises. The acquisition of JLR, Daewoo and Hispano (and the JV with Marcopolo for Coaches) also gives it access to their expertise. Similarly in IT, Tata Motors is the first auto company globally to implement SAP and CRM in an integrated manner.

P.1a5 Regulatory requirements

In order to address the requirements of environmental standards

2

reviews which focus on business level strategic initiatives.

P1b2 Customer & Stakeholders

For Commercial Vehicle and Passenger Car business the Key customer groups, market segments and their key requirements are

Fig. OP-11 Governance Structure at Tata Motors

Shareholders

Audit Committee

ExecutiveCommittee of Board

RemunerationCommittee

NominationsCommittee

Investors GrievanceCommittee

Ethics andComplianceCommittee

Special Need basedCommittee

Tata MotorsOrganizational

Structure

Operations Committee

Management Committee

Operating Policies & Procedureswhich ensures compliance

Audits to ensure complianceStrong and full deployment

World Class guides

Board of Directors

and regulations, Tata Motors has defined and deployed policies for safety, health and environment.

Its record of compliance with regulatory requirements (Fig. OP - 10) such as emissions, safety and other clauses of the Motor Vehicles Acts has always been proactive and exemplary. Post listing on the NYSE the company also complies with the Sarbanes Oxley Act (SOX) guidelines.

P.1 b ORGANIZATIONAL RELATIONSHIPS

P1b1 Organizational Structure and Corporate Governance

As a global organisation the CG practices followed are compatible with international standards and best practices. Through the Governance mechanism, the Board along with it's Committees undertake its fiduciary responsibilities to all its stakeholders by ensuring transparency fair play and independence in its decision making (Fig OP 11).

The BODs along with Committees provide leadership and guidance to the Company's management and direct, supervise and control the performance of the company. Other than these committees, Tata Motors has CV and PC level Steering Committees to manage the business and report the Board on regular basis. The businesses are reviewed monthly through Steering Committee meetings and BSC

Fig. OP-09 Examples of Technologies

Areas

Product Design, Development and TestingLatest design capabilities at TML & JV design houses, Computer simulations, CAE/Digital validation, Digital mock-up, life cycle tests, NVH facilities, Cruise, BRS (Temp Control & Test Lab), Chassis Dynamometer Emission Lab -Euro V, Dynamometer with robotic driver, Mobile crash test barrier, Road Load Data (RLD) acquisition system, KNEXT, 3D for all, PLM, CATIA, Pro/E Wildfire5.0,Tata Motors European Technical Centre (TMETC) ,CAD and Simulation tools; Digital Prototyping laboratory; anechoic chamber NVH facility; Crash-testing facility etc.

ManufacturingRobotic Press & Paint shops, Rapid Prototyping, Delmia, five axis precision machine tools and laser cutting machines to fabricate production tools and dies, Automatic Welding robots, Ro -dip painting process, etc .

Internal Operations & SystemsOptimised operations and systems: KAIZEN, 3P, SAP, Legatrix, e -Procurement, NPI, BSES, e -connectivity, MES -IPMS, PLM, FDS -Production Planning.

Managing customers & Channel partnersState-of-the-art ‘Siebel’ CRM DMS, SAP, SRM, Web sites, especially product focused web sites, etc

Fig. OP-10 Regulations and Accreditations

Area Regulations / Acts Accreditations

Environment

GRI, CSR, Carbon Footprint mapped, CERs on Chicago Climate Exchange

ISO 14001, IFC certified,

Financial Company Law, SEBI, U.S. SEC, regulations -

Corporate Governance

SOX CG Report, CS Report, and Global Compact

Product regulations

CMVR, Euro and Bharat stage

ARAI guidelines for emission and safety aspects

Calibration & Measurements -

National Accreditation Board for Testing & Calibration Laboratories

Quality System-

ISO / TS 16949

Vehicle Sales to Army -

Approval as per contract terms with DGS&D prior to dispatch

Employees Factories Act Working hours, Employment of young persons, Annual Leave with wages etc., , SA8000

Health and Safety

No Smoking in premises, Helmets for 2-wheeler drivers compulsory

OHSAS 18001, British Safety Council, DuPont

Technology / Equipment/ Facilities Key examples

Fig. OP-13 Suppliers, Partners, Collaborators and Distributors

Role they play in our…

Systems and work processes

Prodn & delivery of key Products & Services

Organizational Innovation Processes

Early involvement for development of new parts; Optimum delivery times to reduce inventories, cost reduction

SAP -SRM, Vendor system, NPI, Kaizen, KM, Audits, Pricing System, MRP

Manufacturing,Supply of components, kits, assemblies, spares, Audits,

Integrated Cost Reduction, NPI, Early involvement of vendors, Value Engineering, Technology Day, Joint programmes

Oth

er V

endo

rs

deal

ing

with

C

onsu

mab

les,

oils

, etc

Quality, Cost and Delivery/ Time as specified

KM, Pricing System, MRP

Manufacturing,Supply of indirect material, audits, paints,

Cost Reduction, Early vendor involvement Joint programs

Con

trac

ts, t

rain

ers,

con

sulta

nts,

C

olla

bora

tors

Deliverables as specified in contract or assignments

Contracts Process, InternalAuditProcess, KM,

Conservancies, cleaning, maintenance, security, training, consultancy, designing, joint development, Third party logistics providers, Contract manufacturers

L&D, Contracts procedures, JVs

Dea

lers

, TA

SS

&

Par

t Dis

trib

utor

s

Market share, identify potential customers, right delivery at right time, sharing changing needs & expectations

S&M, CS, Dealer Dev,RO/AO, KAM, eCRM, Legal Cell, NVB, HR, Kaizen

Sales of products/spares/services, customer care and support, support in NPI,

CRM & DMS, Dealer Development, NPI, Market Research

Equ

ipm

ent

Man

ufac

ture

rs

and

Fac

ility

pr

ovid

ers

Agility, Safety, Quality, lowoperating cost, Flexibility, Timelines

Manufacturing Planning, Mfg. Strategy

Manufacturing, Meeting Mfg. & Quality requirements

Flexible Manufacturing, CAM, Flexible lines, Innovative solutions

Key

ven

dors

dea

ling

with

R

M, c

ompo

nent

s an

d P

ropr

ieta

ry it

ems

Key Suppliers, Partners, Collaborators& Distributors

Most important Supply chain& otherrequirements & expectations

3 TATA MOTORS

Fig. OP-12 Customers Present and Emerging Requirements

Market Segment Customer Usage Groups

Present Key Customer Requirements

Future / Emerging Key Customer Requirements

Competitors

CV Business

M&HCV including ICVs

Fleet Owners, Trailor operators, Construction / Mining sites, Goods Carriers

Fuel Efficiency, Low life cycle cost

Ease of Service, High Torque vehicles, Advanced features, Fits & Finishes, Driver comfort

Ashok Leyland, Mahindra Navistar, AMW, Mann, Bharat Benz (Potential)

BUS

Urban , Suburban, Intercity, school & staff

More no. of seats per ton of GVW, Easy entry & exit in city buses, safety as per norms, better kmpl , lower maintenance, high uptime, reliability

Affordable Climate control, comfortable ride ( air suspension), better braking, lowest NVH, better styling, luxurious seating for utmost comfort

Force motors, AL, Eicher, Swaraj Mazda, Mahindra Navistar , Volvo, MB, Foton, Bharat Benz, MAN, AL-Nissan, AMW

LCV

Transport operators, Goods Carriers,

Fuel Efficiency, Low life cycle cost

Low Repair time, Driver Comfort & Safety, Fits & Finishes

Eicher, Mahindra, Ashok Leyland (new)

SCV

Small Transport Operators, Intra City passenger transporters

Fuel Efficiency, Low life cycle cost, low turning radius

Ease of Service, Safety, Aesthetics, Driver comfort

M & M, Piaggio,

NVB

All Commercial Vehicle users, DG set manufacturers

Availability of spares, Finance availability

Convenience of distribution points Spurious part manufacturers

International Business

Customers in identified focused markets

Cost of Ownership

Performance features, fits & finishes including aesthetics, availability of spares

Global Automobile Players

PC Business

ULCC

A1 Segment Personal city car Small foot print, Spaciousness Low price, Low running cost

Two Wheelers, Maruti 800, Used cars

HatchbackA2 segment

Personal & Fleet

Low cost of operation, Space, Safety, Dealership Experience, After Sales Experience, Good Product Quality

Style, Performance, Luxury, Comfort

Swift, Ritz, Alto, Wagon R, EON, i10i20, Fabia, Jazz, Micra, Polo, Figo

SedanA3 Segment

Personal & Fleet

Space, Load Carrying Ability, Dealership Experience, After Sales Experience, Good Product Quality

Premiumness, Style, Comfort, Refinement

D'zire, Verna, City, Fiesta, Aveo, Sx4, Etios, Sunny

Full Size LuxuryA5 Segment

PersonalStatus, Comfort, Safety, Performance

Luxury, Advanced-technologyBMW 5 Series, Mercedes E-Class, Audi A6, Volvo S-80

Premium Coupe/RoadsterA5 Segment

PersonalStatus, Thrill, Sportiness, Performance, Safety

Luxury, Advanced-technologyBMW Z4, Porsche 911, Cayman, Boxter, 6 Series, Audi R8, Mercedes CL Coupe, SL Roadster

UV, SUV Segment

Personal & Fleet

Space, No. of Seats, Fuel efficiency, Dealership Experience, After Sales Experience, Good Product Quality

Looks, Appeal, Distinctiveness,Performance, Comfort, Style

Tavera, Bolero, Scorpio, Innova, Endeavour, Fortuner,Tucson,Captiva, Xylo, Xuv500

Cross Over Personal

Looks, Appeal, Distinctiveness, Performance, Dealership Experience, After Sales Experience, Good Product Quality

Luxury, Advanced-technologyInnova, CR-V, Endeavour, Fortuner,Tucson, Captiva, Outlander, Xuv500

Premium SUVUV Segment

Personal

Looks, Appeal, Distinctiveness, Performance, Dealership Experience, After Sales Experience, Good Product Quality

Powerful, Luxury, Status, Comfort, Advanced-technology

Audi Q5, Q7, BMW X3, X5, X6, Mercedes M Class, GL Class, Porsche Cayenne, VW Touareg, Toyota Land cruiser, Volvo XC90

Pick-up Segment PersonalStyle, Off-road Capability, Load Bed, Personalisation

Power, Comfort, Technology Scorpio Getaway

identified (Fig. OP-12). For International Business, the company has identified products to be marketed in focused countries. Differences in details in these requirements and expectations among segments, customer groups and customers can be shown during site visit.

Emerging requirements

Through regular environmental scans and deep understanding of customer requirements Tata Motors has been able to foresee emerging customer requirements. For e.g. the company understood the importance of climate change and safety requirements well within time to act on it.

TATA MOTORS 4

Fig. OP-15 Market Share and position

CVBU First 61.4 13

PCBU Third 14.0 29

PositionMarket

Share % No. & Types of competitors

Fig. OP-14 Partnering relationships

Relationship Communication Mechanisms

Key Suppliers

New product development, optimizing resources, Quality system support, training, Joint programmes, knowledge sharing, etc

Supplier meets, Technology Days, Value Chain Management web site, visits, at site representatives, training forums, engagement with seniors, 3P/Kaizen,Group discussions, surveys,Vendor Council meets

Joint Ventures and Subsidiaries

Sub system development at early stage of product development

Identified joint projects, Reviews in Management committees, reviews with functions & business, funding

Dealers

Sales & Service contact, financial support, product updates & training programmes, Key Account Management, Customer loyalty Programme (Tata Emperor for KA, TataDelight for Non KA, eCRM, AMCs

Wide Sales and Service network, , tatamotors.com, individual communication, direct visits, training forums, media, engagement with seniors, CRM-DMS, KAM, Dealer Audits, Dealer conferences, Dealer Connect,Senior Management visits, Training Centres

Financiers

Finance schemes, bill discounting, joint programmes

Meetings with Senior management, letters, mails, one-on-one meetings

Collaborators, Contractors

Need based help, technical & non-technical support

Meetings, emails, letters, one-on-one discussions, Minutes of meetings

Equipment Manufacturers and Facility providers

Equipment / facilities for New product development / capacity building, optimizing resources

RFQs, Purchase orders, letters, Joint reviews, Project timelines, Quality targets, Specifications, Technology days, Meetings etc.

International Business division of Passenger Car business explores new opportunities and delivers vehicles as per the country specific requirements and regulations. It has tapped the export potential in South Africa, Turkey, Sri Lanka, Nepal, Nigeria, Ghana, Tanzania, Congo, Saudi Arabia, Iraq, Angola, Italy, Spain, and Poland.

P1b3 Suppliers and partners

Suppliers and Dealers continue to play significant role (Fig. OP-13) in our growth and are involved in early stages of Product Design. Supplier base and Dealers have been rationalized on the basis of their performance. This can be seen from the fact that during the years key new suppliers are added to scale up our operations and yet remove costs from the system.

The distributors/ dealers bring the company near to its customers, help understand their needs, and tailor the product offerings. Moreover continuous feedback from suppliers/dealers helps to keep the product & service offerings current and updated.

TML uses various relationship and communication approaches with Key Suppliers, Customers, JVs & subsidiaries, and Financiers (Fig. OP-14).

P.2 Organizational Situation, P2a. Competitive Environment

P2a 1 Competitive position, relative size & growth, competitors

The company keeps track of industry and competition through various approaches (Fig. OP-15).

P2a2 Competitiveness Changes

Key changes taking place that affect competitive situation

P2a3 Key available sources of comparative & competitive data..

The number of key changes that are taking place will have an impact

on TML’s competitive position (Fig. OP-16). Tata Motors uses formal JVs for collaborative approach, e.g. joined hands with TMETC for technical excellence. Product benchmarking at Tata Motors is

Fig. OP-16 Key changes creating impact on TML

Non Favourable Changes Favourable Changes / Opportunities

�

Increasing Political uncertainty - forcing slow industrial & infrastructure growth (India)

Increasing Fuel Costs and decreasing fuel stocks (may create global unrest)

Increasing Interest Rate & Economic uncertainty (plus forex impact)

International Brands forcing Low cost high quality products increasing pressures on margins

Increasing job availability for Talent from national & international players

Increasing domestic & international government regulations and restrictions (Climate Change, Taxes, Duties)

Increasing shift in customer requirements - towards high end products at lower cost of ownership

�Increase in services demand

�Opportunities of low cost sourcing

�Availability & affordability of Spare Parts

�Emerging international markets

�Integrate back end processes/ leverage synergies with sister concerns in Tata / Tata Motors group for cost advantages, technical knowledge sharing

�Expansion in International Market -

Employee Career Progression

�Evolved hub and spoke model

�Evolved customer needs customized integrated Solutions

�

�

�

�

�

�

embedded in NPI process. ERC has a Benchmarking area where all vehicles are benchmarked with global best with teardown analysis is carried out. (Fig. OP17).

Fig. OP-17 Comparative data & Benchmarking

data/Information

Available sources

-

examplesLimitations, if any, on

obtaining data

Comparative

data from within industry

Product Benchmarking-PAT, ICM, ATS Process Benchmarking -SQI, NPI, QMSIAM, JD Power, KUKA, Benchmark partners, consultants, APQC, TKC,JUSE, Internet sites,Benchmarking Centres, Tata Group companies,Auto shows and exhibitions,Product benchmarking,Investor meets, Dealers, Suppliers,JVs, Regional & Area

within the Tata Motors group etc.

Long lead time for datacollection, analysis andimplementation

Competitive data from within industry

Data accuracy as data flows from other sources.NPI & Warranty data notavailable publicly

Comparativedata for similarprocesses fromoutside industry

Long time for collection of data, analysis & use

Types of Key

Manager network, Internal benchmarks

In PC business processes such as PAT, ICM, and attribute target setting are used for Product benchmarking. Process benchmarking is done for key business processes, such as Supplier Quality Improvement Process after benchmarking the same with Cummins, Volkswagen, and GM. Our NPI process is being upgraded after benchmarking with JLR product development process (Gen 3).

The key areas of benchmarking and agencies involved in it (Fig OP18).

P2b. Strategic Context

Key business, operational & HR strategic challenges …

The key business, operational and human resource strategic

Benchmark area Who does it

Product & Technology ERC (Product), NPI/Projects Facilities, Quality Assurance, Technical Services etc.

Finance Corporate Finance

Business Processes Process Owners (Plants / Non Plant)

Operational Processes Respective Divisions / Departments, Safety, Quality & HR

Fig. OP-18 Key Areas of comparison & benchmarking

5 TATA MOTORS

Fig. OP-21 Strategic Challenges and Advantages

CV Business PC Business

Strategic Challenges

Strategic Advantages Strategic Challenges Strategic Advantages

• Increasing Political uncertainty -forcing slow industrial & infrastructure growth (India)

• Increasing Fuel Costs and decreasing fuel stocks (may create global unrest)

• Increasing Interest Rate & Economic uncertainty (plus forex impact)

• Significant presence in Africa & South Asia

• Wide range of products with cost competitiveness

• Customer financing through Tata Motor Finance

• Strong platform with Tata’s brand name synonymous with trust.

• Tata Motors – India’s largest automotive company with experience of more than 50 years in design, development, manufacturing and sales of commercial and passenger vehicles.

• Access to new technologies & other global markets through Jaguar/Land Rover, Tata-Fiat JV, TMETC

• International Brands forcing Low cost high quality products increasing pressures on margins

• Increasing shift in customer requirements - towards high end products at lower cost of ownership

• Leadership position in domestic market

• Wide range of products with cost competitiveness

• Wide Dealer & Service Network

• International Brands forcing low cost high quality products increasing pressures on margins

• Emergence of new customer categories, e.g., nuclear families, working women, youth leading to emergence of niche segments (Compact UV’s, Compact MPV’s)

• Scale up and systematize key business processes - NPI, manufacturing process, Supplier Management process

• Improve customer facing processes

• Extensive network of dealers andservice support

• Existing products moving up onquality trajectory.

• Continuous focus on costmanagement through ICM and ICR.

• Structured New ProductDevelopment-eNPI

• Expertise from JLR• In-house cost effective design and

development.• In-house tooling development

• Increasing job availability for Talent

from national & international players

• Brand name in Domestic Market

& Tata Brand

• Scale & Size

• Increasing job availability for Talent from national & international players

• Leadership development at all levels

• Increasing domestic & international government regulations and restrictions (Climate Change, Taxes, Duties)

• Tata Brand Image, Track Record towards Regulatory Compliances

• Increasing domestic & international government regulations and restrictions (Climate Change, Taxes, Duties)

• Tata Brand Image, Track Record of going beyond RegulatoryCompliances

Benchmarking, NPIProduct Innovation

Process InnovationKaizen OC circle, Benchmarking

Engineering InnovationPAT, Benchmarking

Organisational Innovation

New initiatives and processes - Exact, ICR, ICM

Fig. OP-20 Innovation Structure

Business

Operational

Human Resource

Societal Responsibility

challenges are identified (Fig. OP-21) as a part of Strategy Planning System. The core competencies are integrated in the work systems and processes to achieve the strategic goals.

The strategic challenges (Fig. OP-21) are well addressed while deciding the strategic direction and then in the Balanced Scorecard along with ST and LT strategic objectives and initiatives. The four perspectives of BSC hold focus on key processes. The reviews and audits have enhanced readiness for addressing the strategic challenges for Tata Motors.

P2C. Performance Improvement System

Tata Motors reviews Systems & Processes through assessment and feedback is given to process owners (Fig. OP-19) for improvements. The Company uses PDPI (PDCA) method to improve systems and processes regularly.

The organizational focus on performance improvement is maintained through the use of BSC with KPMs using- TBEM criteria-based evaluation; ongoing compliance with both TS 16949:2009 QMS, ISO 14001 EMS requirements, use of TPM methodologies and OHSAS 18001 for Safety. In addition to this, initiatives with

Fig. OP-19 Process Design and Process Improvement Process

Step 1 Step 2 Step 3 Step 4 Step 5

Establish processoutput requirementsName the processAssign the owner

Document theprocess

and sub processand its measures

Set targets for

measures

Identify needed improvements

through self asse-ssment and audits

Simplify/improve the

process

special focus on Safety, Quality, Cost, Productivity, and Supplier Enhancement & Employee care drive specific initiatives for improvement. SQDCME is a common system for monitoring performance on shop floors.

Tata Motors presence in the markets abroad enables it to learn about the emerging trends in performance, features, and safety. This knowledge is used in improving the effectiveness and efficiency of our product development, manufacturing and delivery processes. It also draws strengths from JLR, Tata - Fiat JV, TDCV, Hispano, Marcopolo, TMETC UK and other business units.

The Innovation Structure (Fig. OP-20) used to drive innovations. These innovations are captured and used in developing processes, business models, products, services and solutions.

• Increasing Political uncertainty - forcing slow industrial & infrastructure growth (India)

• Uncertainty with respect to Fuel prices (international fuel prices, subsidy policies) leading to unsustainable demand for certain kind of vehicles

• Increasing Interest Rate & Economic uncertainty (plus forex impact)

• Increasing competition as multinational OEM’s set up shop in India and also start introducing emerging market specific vehicles

• Build up on current “Value for Money” brand in to a more aspirational and desirable brandGain foothold in select international markets

• Brand name in Domestic Market & Tata Brand• Strong engineering team with a track record of

innovation (both discontinuous and incremental)Eg. Nano: Created a new ULCC market, Indica: First indigenous car, Indigo CS: Worlds first sub 4 meter sedan, Indica e V2 CRAIL, IndigoCS CRAIL, Manza Elan, Vista 90

6TATA MOTORS

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TATA MOTORS POLICIESTATA MOTORS POLICIES

TATA MOTORS POLICIESTATA MOTORS POLICIES

TATA MOTORS POLICIES

LEADERSHIP1

�

under the Chairmanship of Justice P N Bhagwati, former Chief Justice of India and Member, UN Human Rights Commission

�Conferred with the 'Best Audit Committee Award 2011' by the Asian Centre for Corporate Governance & Sustainability

�Golden Peacock Award for Excellence in Corporate Governance

�6 awards at the 51st Annual Awards Nite of the Association of Business Communicators of India (ABCI), for excellence in business communications

�'Amity Corporate Excellence Award for Corporate Social Responsibility', instituted by the Amity Global University, in association with Business Standard

�Lucknow plant conferred with the Greentech Environment SILVER AWARD for 'Outstanding achievement in Environment Management' in the automobile sector, for the year 2011

�Pantnagar plant bagged the second position in the Environment, Health & Safety (EHS) Competition 2011, organised by Confederation of Indian Industry (CII), Northern Region.

�Sanand plant wins Golden Peacock Eco-Innovation Award - 2011

�Passenger Car plant (PCBU) has received a 5-Star rating (Score: 97.19%) in the British Safety Council (UK) Health & Safety Audit.

�The Institute of Chartered Accountants of India (ICAI) has conferred Mr. C. Ramakrishnan with the prestigious Business Achiever Award 2011, in the industry category

�Mr. S B Borwankar conferred the IIIE Performance Excellence Award

Winner of 'Golden Peacock Award for Corporate Social Responsibility' for the year 2011 by the Awards Jury,

a unified MVV for the integrated corporation which will pave the way for determining the need for and thereby articulation of a unified core competency.

Deployment of MVV: While deployment of the MVV starts with communicating to all stakeholders, implementation is done through right structure and action plans so that the process of communication and getting commitment on these from the stakeholders is easy and smooth.

Internalisation of MVV starts with the OPSCOM, MANCOM and Steering Committee meetings. MVVs are used while formulating Strategic Objectives. Senior leaders reiterate these in town hall annual communications by explaining achievements and challenges ahead.

Individual MPAs are based on cascaded BSCs. For new employees - cadre and lateral, regular induction programmes are being held. Operators are communicated through interactions and displays on the shop floor.

Supplier base comprises global component manufacturers to single customer local SMEs. It is pertinent to convey to them TML's aspirations for better alignment and integration. Vendor councils and meets are important forums, where the two parties share their needs, long term vision and challenges from each other. In addition, vendors are connected through SRM website where all formal and informal communications are done. Functional heads like heads of Supply Chain, QA and Manufacturing visit the vendors and communicate the organisation's requirements.

The conferences and visits of dealers and their works managers to plants are some of the forums to share Core Values, MVVs and expectations from them. Communication on MVV is formally made through CRM-DMS website. Suppliers and dealers participate in Dipstick surveys as part of the process to revisit MVV.

MVV gets communicated to Customers through plant presentations during their plant visits. The Key Account Management process also helps the senior leaders understand customers' requirements, and hence acts as inputs for action / journey towards vision.

The leadership interact with key communities. These interactions reflect TML values and guide TML to understand way forward.

Financer meets / Shareholders meets and Investors' plant visits are also conducted on periodic basis to understand / communicate with them.

Actions reflecting commitment: Leadership team develops key policies that govern the way of conducting business with all stakeholders and ensures correct interpretations and implementation of such policies. The actions transmit a powerful message of fair play and trust amongst all the business partners / stakeholders and reflect the commitment of the leadership to the

The Leadership system (Fig. 1.1-01) is built on five core values. While steps 1, 2, 4, 6, 8, 10 and 12 are actions required from the leaders themselves, and cannot be delegated, steps 3, 5, 7, 9 and 11 require support systems and processes to assist leaders in accomplishing these tasks.

The effectiveness of Leadership System is reflected through continuous and breakthrough improvements in the overall performance of the organisation.

The leadership structure (Fig. 1.1-09) plays an important role in the functioning of TML. Apart from reviewing the business strategy, various Board Committees also formulate relevant policies for smooth running of the organisation. Among the guiding policies are those relating to Quality, Environment, Safety, Climate Change and Affirmative action.

The Operations Committee (OPSCOM) and Management Committee (MANCOM) continuously guide in setting TML's direction, strategy execution and performance reviews. These committees are headed by the Tata Group Chairman. BU level Steering Committees review performance every month. This is supported by Lead / Lag indicators and initiatives that are reviewed in BSC reviews. Steering committee has representations from all functions and this allows alignment and integration across the organisation.

1.1a1. Mission, Vision and Values (MVV)

Setting of Mission, Vision and Values: The process to set and deploy MVV is in place (Fig. 1.1-02). The first such MVV workshop was conducted in 2001, wherein Senior Leaders articulated MVV statements. Subsequently, the Leadership Team has revisited the same on periodic basis to verify its relevance. The various inputs from stakeholder interactions (Dealer / Customer / Vendor / Society / investors meets) and assessment feedbacks (TBEM, Certification Audits) are kept in mind while revisiting MVV. During one such revisit in 2010, Mancom decided to add “Innovation" as a Core Value.The defining statements of MVV guide the SPS (Fig. 2.1-01) in setting strategic objectives and goals.

Currently, CVBU and PCBU have distinctly demarcated MVVs and core competencies based on their individual contexts. Triggered by substantial growth opportunities and need for integration of business units to develop synergy, senior leadership teams decided to have a thorough re-look at the MVV. TML, thus, is in the process of defining

1.0 Senior Leadership

Tata Motors has evolved the Leadership System (Fig. 1.1-01) which provides the basic concept and approach for leaders to follow. The system acts as a catalyst to the leaders to understand stakeholder expectations, effectively lead their teams towards mission and vision, and to play active role in developing potential leaders for overall organisational sustainability.

1. LEADERSHIP

Fig. 1.1-01 Leadership System

Fig. 1.1-02 Set and Deploy MVV

Vision Workshop Tata GroupValues andObjectives

StakeholderExpectations

Sr Leadership / BOD

Setting / Reaffirming ofVision, Mission and Values

Communication, Cascading / deployment through

Feedback / Review /Revisit / updations

EmployeesCommunication Fora's

BSC/PMS/MPAs;Strategic initiatives;

Pocket cards;Posters; intranet

SuppliersCommunication Fora'sVendor meet/council;Technology day; SRM

Dealers/Partnersand other

StakeholdersCommunication Fora's

Dealer meet; CRM-DMS

Be a Role ModelSet Direction and Plan Communicate and

Build Commitment

Understand Vision,Stakeholder needs,

Higher Levelobjectives

Innovate, Learnand Share

Adapt to New

Challenges and

Raise theBar

Develop, Reward andRecognition Employees

Employees

Shareholders

Customers

Community

Partners

Communicate and Involve

Create a Cultureof High Performance

Review and Adjust toAchieve Plan

Build Motivate,Empower Team for

Accelerated Change

Organise, Align andAllocate Resources

12

11

3

2

4

510

1

9

8

7

6

Customer Focus Passion for Engineering Integrity Innovation Corporate Citizenship

Safety Tata Code of Conduct Environment

Mission

7 TATA MOTORS

TML Value System. Commitment of leaders to these values is evident in day to day work (Fig. 1.1-03).

1.1a2 Promoting Legal & Ethical Behaviour

Actions demonstrating commitment: The Governance Structure (Fig. OP-11) has committees on Audits, Investor grievance, Ethics and Compliance. Members of these committees dwell on and develop the related policies and interact with the Leadership to guide periodically on the aspect of legal and ethical behaviour. Similarly "Broadening Horizon" programme designed for senior leaders also gives key inputs on legal and ethical expectations to them.

Legal behaviour: The major step here is identification of all applicable regulations and rules and allocating clear accountability for compliance and quarterly compliance review (Fig. OP-10). Recently IT has implemented on-line Legatrix system to help users track progress on legal compliances and also provide alerts to Leaders. Leaders personally see that the Company files all legal information and the same is made available for public consumption.

Leaders also proactively support various audits for sustained compliance of certifications like SA8000, TS 16949, ISO 14001, OHSAS 18001, etc. The Audit Committee of the Board works with Internal Audit and Finance functions to ensure compliance to SOX, U.S. SEC guidelines, and SEBI guidelines.

Ethical Behaviour: Through approaches like (Fig. 1.1-04) / building structures / implementing policies, and personal actions, leaders ensure that workforce / partners understand the importance of adhering to ethical behaviour.

of top leadership. These committees will formalise policies and structures for achieving desired safety results. Each of the Executives has undergone Safety training regarding Safety Observations / Incident Investigation etc.

Safety is reviewed in SHE APEX, Steering and ManCom as well in Audit committee meetings. Leaders conduct safety observations and see that the gaps are closed immediately.

Safety Managers have direct access to the top management. Plant level leaders like the CX owners, line in-charges are also the Bay owners for their respective lines and CXs. Safety is primary focus area in daily management and safety parameters are part of BSC for Leaders. Administrative Officers, Customer Service Heads and Warehouse Heads get personally involved in taking safety initiatives in respective areas.

Quality : Quality and Customer focus are essential attributes to survive and thrive in a highly competitive business environment. Implementation of process based automotive specific TS 16949 Quality Management System has helped Senior Management to promote quality consciousness & guide their divisional teams to meet quality objectives. Action plans have been prepared to move towards World Class Quality (WCQ) level and Senior Management members are personally driving these teams.

Various initiatives like TQM, Project Terminate (Rust prevention), AUTONOVA, Launch Quality Operating System, APQP, PAT, Forward Model Quality, Six Sigma, Q-Star (Lucknow), and Logistics improvements are personally driven by Senior Management members. While some of these are initiated at the top and implemented at all plants in one go, a few of those start at one plant and are carried forward to the others.

Warranty reduction is achieved through leaders taking up responsibilities for models and top complaints. These are completed using DMAIC approach and improvements passed on to the customers.

In addition, CCT / PST meetings are held regularly for each of the LOBs and are attended by heads of ERC, Customer Service, Quality, Materials and other related functions. The action plans for resolving quality issues faced by Customers are reviewed in these meetings.

Operators are encouraged to take part in Self Directed Teams to resolve PDI and Quality issues. Leaders also review ISO Certifications status at Dealers / Vendors end, Supplier Process Audits, progress of Vendor Council quality committee etc to ensure that quality is focused at all stakeholders level.

Climate Change : Senior Leadership has formulated a climate change policy which is communicated across the Organisation. It is driving many climate change initiatives (Fig. 1.1-05) such as renewable energy through wind mills / solar energy, energy conservation projects, Green factory buildings, fuel efficiency improvement projects for vehicles etc.

TML has mapped its carbon footprint, and action plans with timelines has been developed for each of the plants. Leaders at these locations are directly responsible for completion of these action points. World Environment Day, Water Day and Energy week are celebrated every year, wherein senior leaders and union representatives guide and encourage environment related action plans. To create positive impact on the environment & society, tree plantation is held in chosen areas on regular basis with participation of senior leaders and union representatives and other stakeholders.

TML has created lakes and ponds at and around many Plant locations to help ecosystem grow.

Climate Change initiative is also been promoted at Supplier / Dealers end through actions like a) usage of reusable / returnable packaging, ISO 14001 EMS Certification, common milk route schemes, publishing Green Drive handbook etc.

Fig. 1.1-03 Living by Core Values

Values Associated processes and methods, few examples…

Integrity

Fair dealings with partners driven by a systematic TCOC, Structure for ensuring compliance eg. deployment of processes for SOX, SAP, CRM-DMS, SRM. Meritocracy when it comes to workforce, schemes such as FTSS are open for one and all

process, Governance,

Encourage actions out of VOC outcomes key customer accounts Top Leadership team question the plants/ functions as representatives of customers (e.g. CCT)

Personal visits to dealers and

Involvement in business associations like SIAM, CII, bodies Leaders’ involvement in educational institutions Participating as India representative in vehicle level regulatory making bodies Members of NGOs

automotive

Establish structures to propagate an innovative culture members in deciding good innovations. Encourage CFTs

Act as jury

Passion for Engineering

Leaders are always on look out for new developments in new learning from business environment and implement the appropriate for business benefit, giving stretched targets to realise potential

technologies,

Customer Focus

Corporate Citizenship

Innovation

Fig. 1.1-04 Approaches for Legal & Ethical Behaviour

Stakeholders Promoting Legal & Ethical behaviour

Employees Trained in TCoC, Declarations / pledges, Counsellor, Lady Ethics Counsellor

Appointment of Ethics

Suppliers,Dealers and Channel Partners

Chairman’s statement, Display of Customer bill with dealers, compliance audits, Training on recognition of genuine parts, Formation of Vendor & Dealer Councils to propagate culture of TCoC.

of rights, Agreements

Customers

Clear communication on price of vehicles, warranty terms and facilities such as free service; Billingthrough SAP system; Display of information for escalation of concerns; and fair terms for acceptance of warranty

services and parts;

Safety: Safety is one of the basic elements of Leadership system. Senior Leadership has demonstrated the importance and commitment to Safety by tying up with World class Expert / Consultant - Du Pont / British Safety Council. The mandate is to move towards Zero Accident through implementation of structure and processes. Specific committees on skill development, standards and procedures, safety observations and contacts, Incident investigations have been commissioned with participation

TATA MOTORS 8

and other Stakeholder Management Processes.

Leadership actively engages in these processes for creating a sustainable Organisation. Senior leaders are ensuring long term stability and sustainability through -

�Development of long term technology roadmap and product plans which continuously evolve new variants of vehicles as well new family of engines to meet or exceed customer requirements. Engagement with JVs to bridges gaps, Investments in R & D

�Active drive towards World Class Quality

�Enhanced safety, security & corporate ethics with opportunities for learning and growth (Ref. 1.1a2)

�Commitment to Triple Bottom Line drive (Ref. 1.2c1)

�Focus on various stakeholders (Ref. BSC - Fig. 2.2-05,07,08)

Performance improvement (Ref P2c): Senior leaders as part of deploying the Vision, Mission and strategic objectives, encourage and communicate to the entire workforce through strong, frequent and systematic communications. Through various communication forums like Town-Hall / Mass Communication / sunrise meetings, senior leaders continuously inspire employees for giving their best to the organisation. Keeping in view above critical sustainability factors, senior leaders have created an environment for organisational performance improvement by self championing of strategic initiatives, forming & reviewing CFTs on various topics, Drive for ICR, WCQ, Safety, Productivity, Environment and by

moving potential leaders to critical positions, thus challenging them to take higher responsibilities and deliver high performance.

Identification of output and in-process measures for each of the processes, and always focusing on Evaluation, Improvement, Learning cycle are some important criteria for organizational performance improvement.

Innovation: Innovation is the key to sustain & succeed. Senior Leaders have created a culture to foster and drive innovation. Using systematic approaches, teams and individuals are encouraged to explore new technologies, alternative methods and processes, and to submit ideas. Employees are encouraged to file and acquire Patents. Senior leaders also encourage risk taking and reward ideas. The innovation examples in products, process and system are given here with (Fig. 1.1-06).

Fig. 1.1-05 Climate Change Initiative: Gray to Green

�

Adoption of Corporate

Environmental Policy.

�

Implementation of

ISO 14001 EMS

�

Adoption of Energy

Policy.

�

Consolidation of

Energy Conservation

Activities.

�Driving EMPs

�Rain water harvesting

�GHG Reporting as

per GRI Guidelines.

�Wind Energy Project

receives

�Clean Development

Mechanism Projects

(CDM)

�Evaluation of

Carbon Footprint by

an external agency.

�Disclosure in

international domain

(CDP/UNGC).

�CERs traded &

monetary benefit

received.

�Simple Dos & Don’ts

deployed across TML

�Formulated Climate

change policy

�Environmental

Procurement policy

for Suppliers

�Green Building Policy

�Pursue innovative products with

lowest CO2 and

highest mileage

�Integration of

Climate Change

initiatives across

functions, locations, suppliers and

channel partners.

�Actions to minimize environmental

impact

�Suppliers and

dealers to adopt

Environment

Management

System -ISO 14001

Actions taken

since 2001

Actions taken

2012

Way Forward - Planning 2012 beyond

Action

Promote an organisational environment: The Leadership team has included these issues (Safety, Climate Change, Quality etc ) as part of BSC Objectives and also modified daily monitoring systems by incorporating E parameter (SQDCME and VMCDRE). Similarly a significant drive in ERC to develop alternate fuels, fuel efficient engines, reduction in GHG emission from products are encouraged by Senior Leaders. The Nano has lowest CO2 emission per kilometre of 101 Co2 g/km and Indica eV2 has highest certified milage of 25 kmpl in its segment.

1.1a3 Creating a Sustainable Organisation

Accomplishment of mission: As described earlier, Leaders participate in strategy development and its execution. Leadership System (Fig. 1.1-01) guides to accomplish strategic objectives. Frequent communications, cascading of BSCs, championing strategic initiatives, review mechanisms, creating a culture of high performance are some of the major focus areas of Leadership system. This is reinforced through a Robust Strategy Planning System (Fig. 2.1-01), Enterprise Risk Management Process, HR

Structure Processes / Examples

Leaders promote

innovation by

rewards / recognition

Product

Innovations

Ace (which created a new and establish world record of 1,00,000 sale in just 22 months), NANO (revolutionized global passenger car market with ultra low cost car segment), Indica 25 KmPl, Zip etc

segment -PACT to reward performers

high

- Meetings with top executives (Coffee with Boss)

- JRDQV Awards on 29th July to operators & Teams

Quality

- Suggestion Awards /points & recognition

- QCC/SDT Competitions- Felicitations in Communication meetings

- Challenging assignments- Innovision and awards

participations

Process

Innovations

Tata Nano Booking & Tata Magic -ITC Choupal sagar

rural initiative, Tat Alert, Sales force automation process etc

Allotment Process,

Engineering

Innovations

ECU arrangement for Magic; Estimation of Battery state of charge

Winger, Ace,

Organizational

Innovations

Various energy projects, Generating secondary paints from Paint, bricks from effluent sludge

conservation

Fig. 1.1-06 Innovations : Examples

Organisational agility: Fast and agile response in meeting customer requirements and expectations is the key to success in business. The process for design of Work System Structure (Fig. 6.1-01) ensures that organisational agility aspects, measures and targets get built into key work processes (Fig. 6.2-01). Senior leaders involve themselves and other employees at all levels to focus on key change initiatives driven by response to market scenarios. Rigorous reviews in the steering committee meetings enable to change and create action plans to meet ever-changing customer expectations.

TML's capability of making different models and ability to ramp up volumes for any particular model, wherever demand is very high is a good example of agility. To site few examples, TML had rolled out Nano vehicles from Ace lines in Pantnagar within four months, similarly last year, SUMO GOLD was produced and sold with speedy planning and execution to address sudden market demand .

Performance leadership: Leadership has always been competitive in creating new market segments & innovative products for those segments. There are many such examples like 407, EX Series vehicles, Ace, Nano, Prima, ARIA etc. Leadership always strives for giving value for money to customers through innovation while taking aggressive, stretch targets and implementing best practices which has helped Company to be a Number 1 in CVBU as well Number 3 in fiercely competitive PCBU segment.

Leaders have been awarded for being role models and for their contributions at different industry forums such as SIAM, ASCI, ISA, Cll and ARAI and as a part of key trade and business delegations.

Fostering Customer Engagement: Customer focus is one of the core values. It is reiterated and systematically driven by leaders all

9 TATA MOTORS

the time. Review forums like CCT reviews, as also internal reviews like NPI, ICR, WCQ etc. emphasize that Superior Customer Experience supersedes everything else while deciding any action plan. Customer Care Day, Tata Alert scheme, Customer Loyalty Card, service at construction sites, product websites, Customer focussed R&R system for employees etc are some of the recent actions to improve the customer focus in the organisation. The various mechanisms (Fig. 1.1-08) are used to ensure positive customer experience across levels in the organisation.

Organisational Workforce learning: Joint forums have been organized for learning and sharing with JV / Acquired companies. Benchmarking through tear down exercises and craftsmanship audits by TMETC has helped in promoting an environment for Organisational learning. In order to imbibe world class processes and practices, the leaders encourage employees visiting, learning and improving from auto exhibitions, seminars, workshops and other World Class Organisations.

Employees who show aptitude for engineering and management excellence are sponsored for advance technical / management programs in reputed institutes. Recently TML has launched Learning Advisory Council, which oversee the relevance of various training programmes. Technology day seminars are done on a regular basis to promote learning within organisation as well as with suppliers. Example of some initiatives taken in PCBU for customer focused culture demonstrate senior leadership commitment (Fig. 1.1-07).

programs based on Tata Leadership practices, transition point training programs at each vital level of leadership are the formal methods used for development and enhancement of personal leadership skills. The premier institutes like IIMs, SP Jain Institute etc through specialised courses in management help in keeping the leaders abreast of contemporary management tools approaches and thinking. Similarly various leadership development programmes such as 'Excelerate', Effective Team Leadership, TGSLS, TGELS, GEMS, Catalyst, EDP, Zenith, iTeach Train the Trainers, Gurukul, Art of living etc. hone the required leadership skills across the cross section of employees.

Succession planning: All senior leaders are expected to develop future leaders who can take up higher responsibilities or take up expanded roles at short notice. This is ensured through internal HR evaluation meetings conducted periodically. Succession planning process involves communication, BSC based performance evaluation, assignment on key projects, and feedback mechanism. Delegation, on-the-job feedback, handholding and mentoring are the tools used for this purpose. Promotions and job rotations are aligned to the requirements of succession planning as appropriate. Leaders are actively involved in various assessment centres, such as Development Centres, Fast Track Selection Schemes, Talent management, and Internal GET and OT schemes to identify & develop future leaders.

1.1b Communication and Organisational Performance

1.1 b1 : Communication is a very critical activity as mentioned in the Leadership system and at the individual level; each leader is responsible for communicating with and engaging the workforce at all levels, to build commitment. Various approaches like Town Hall meetings, Visual Displays, Sunrise meetings, CFT reviews, PACT interactions, etc are being used. Goals are discussed during such meetings with an element of stretch.

An environment of empowerment is continuously built through delegation of authority with trust and adequate support. This motivates employees to work for the stretched targets and find innovative ways to achieve these stretch targets. Apart from this various processes and methods such as performance linked rewards / benefits, career progression, Annual calendar for monthly engagement initiatives like Coffee with Big Boss, etc. recognition and learning opportunities are some key factors for employee engagement.

Frank and two-way Communication: All communication meetings are conducted in an interactive format that is conducive to free flow of ideas and feedback. Most of such review and communication sessions are followed by an open house where questions on subjects ranging from markets, customer preferences, new technologies, HR related and others are asked to the Top Management. These help clear any ambiguities regarding the way forward. Key issues raised in skip meetings are noted, tracked and closed appropriately.

While the annual meetings are followed by Q&A sessions and are two-way to a large extent, periodic communications are planned on specific agenda points for more thorough, dialogue based and action oriented interactions, e.g. Bay owners meeting on safety, Joint Management and Divisional council meetings for IR, safety and other related issues, skip level meetings with lower to middle management managers for ideation and understanding current issues.

In addition, weekly and daily meetings in Sales and service teams including Dealership members, SDTs, Sunrise meetings and functional sub-groups are also a means to communicate priorities of TML, and are two ways in nature. PACT programme necessitates Goal Setting / Mid Term Clarification / Final appraisal discussions with employees. System level checks have been installed to ensure that these are a two-way process e.g. Coffee with Big Boss.

Communication

customer experience

Steering

Committee

Leadership System, BSC, & Dealer Meets, Customer Centricity, CCT meetings, TCoC deployment

Customer Internal and External Customer and Dealer Feedbacks

Surveys,

(PMS, Compensation package)

Plants BSC, Key Customer and Customer Centricity, CCT meetings

Dealer Meets, External Surveys, Dealer, KAM Feedback, PQI

Customer,

Functions /Departments

CXs/Groups

Teams and

employees

Suppliers and Partners

Dealer Scorecard, Strategy vendor & channel meets, Kaizen events, Dealer Council & Meets

cascade, Audits, Complaint and analysis, ISO certification, Safety, e-learning, Proj Parivartan

Warranty

Processes to drive positive Organizational Level/Group

Processes to verify that this approach contributes to customer engagement

Fig. 1.1-08 Creating Culture for Positive Customer Experience

BSC, Key Customer and Customer Centricity, CCT meetings

Dealer Meets, External Surveys, Dealer, KAM Feedback

Customer,

BSC, Key Customer and Customer Centricity initiatives

Dealer Meets, External Surveys, Dealer, KAM Feedback, PQI

Customer,

BSC, Key Customer and Customer Centricity initiatives

Dealer Meets, External Surveys, and Dealer, Feedback, Customer& Warranty complaints, PQI

Customer,

Stake Holder Initiative for Customer focused culture

All

Deployment of the higher conversion through better customer experience

EXCEED program across all dealerships to focus on

Strengthening of PCBU Sales and marketing offices with 600+ customer facing employees in sales and service to be closer to customers

organisation - 45 Area

Focus on retail - Shifting all measures & incentives from primary sale to retail sale

Creation of a separate specialized function of Consumer Insights in PCBU

Dealer Senior Management

Incentives linked to a Dealer Score Card has 30% weightage

on customer experience parameters.

Dealer facing team

Customer Discussions and action taken on Sales PSF call at dealerships. Dealer Sales executive’s incentives linked to PSF scores.

results in regular meetings

TML Field team

High weightage of customer experience parameters (SSI,CSI,

complaint management parameters etc.) in individual KRAs

Fig. 1.1-07 Creating Customer Focus Culture

Develop and enhance personal leadership skills: Senior leadership regularly updates and hones their leadership skills through various formal and informal methods. Structured training

TATA MOTORS 10

Effectiveness of communication is validated through Employee Satisfaction surveys (Fig. 7.3-28) .

Communicate Key Decisions: Key decisions are taken in SC Meeting, Plant and Functional Level monthly / periodic meetings, agenda based meetings like cost reduction, NPI, Product Design, Product Quality, etc. Here the senior leaders either ratify the decisions taken by accountable heads or modify them based on organisational priorities.

Rewards and recognition: Leaders provide challenging tasks and projects to employees. Leaders are active in all phases of R&R programs - right from helping set stretch targets at organisational, plant/ function level, and factory/ division level, to reviewing achievements from time to time, guiding / coaching during interactions, thus motivating employees to do well, to finally recognising the best performers, and helping the others achieve targets.

Leaders play active role in designing performance assessment and reward programs. e.g. leaders were part of Focused Group Discussions to decide the nuances of the PACT program. Similarly Dealers and Vendors are recognised for their good performance (based on set parameters) during their respective meets. Contractors are recognised for their safety performance in annual meets.

Leaders personally recognise employees (Fig. 1.1-01) who have done well by sending them to premium training programmes. Members of Steering Committees at all levels personally review the projects and promote & motivate teams to present their success stories to higher organisational levels.

Innovative ideas, good suggestions, pokayoke implementation, SDT achievements in Regional / National levels, Safety improvements on shop floor by Safety stewards are also recognised and rewarded in functions by operating level managers. Shop floor operators are actively taking part in explaining their achievements to Chairman during his shop rounds in the Plant.

Key objectives and measures related to Ethics, innovation, safety and climate change form part of BSC, and also in the cascaded scorecards at plants / functions. During the periodic reviews, accountable heads present the performance against these parameters. Senior leaders provide their inputs to these teams.

Leaders have also framed many non-monetary recognition approaches. Suggestion scheme is one such example where both monetary and non-monetary rewards and recognitions (Fig 7.3-32 ) are provided to employees. Divisional suggestion co-ordinators are recognised for their efforts by participating in the get-togethers with senior management team.

1.1b2 Focus on Action

Senior leaders play lead role through the committee structure (Fig. 1.1-09) to drive short and long term strategy, which includes quality, innovation, safety, climate change along with the appropriate initiatives. The Performance reviews help to plan appropriate countermeasures keeping in mind changes, if any in external environment. These reviews include actions related to all channel partners and vendors / suppliers wherever relevant.

Balancing Stakeholders expectations: BSC is the mechanism to balance the values proposed to various stakeholders. The four

perspectives help in setting meaningful and balanced set of targets for customers, suppliers, workforce, environment/ climate change, and finally the shareholders.

During various reviews, it has been given prime importance that the stakeholders interest is guarded in-line with company's value system.

Various accolades received from stakeholders (Fig. 1.1-10) coupled with equally strong operational / financial and market performance establishes that TML does create appropriate balanced value for

Suggestions / Directions from the members are tracked through Action Taken Reports for implementation. Board thus promotes and is responsible for good governance within the company, ensuring strategic guidance to the company, and effective monitoring of the management.

Risk management and internal audit functions helped to understand any gaps if any.

In line with Tata Group's focus areas, management has appointed Corporate Heads for Safety, Sustainability and Legal to enhance

stakeholders.

The satisfaction levels are measured for stakeholders like Customers, Employees, Vendors and Dealers and action plans are prepared based on areas of improvement.

1.2a Governance

1.2a1

Providing oversight to the business: Organisational Governance and review mechanisms are explained in the P1b1. The BODs along with its committees provide leadership and guidance to the company's management. Each of the committees of BODs has either a Charter or Scope of Reference. These define each of these committees including composition, quorum of the meetings etc. Scope of reference to most of the committees are laid down by the Tata Group, however, some of the committees like Investor grievance committee are company specific.

The performance reviews by the Board is based on the various reviews of the above Committees and also the OpsCom and ManCom reviews (Fig. 1.1-09), including progress on Safety, Sustainability, Business Excellence and Climate Change. BoD meets eight-nine times in a year against the stipulated frequency of once in quarter.

1.2 Governance and Societal Responsibilities

Organisational

Governance System

Fig. 1.1-09 Leadership Structure and Performance Review

Committees & Members Key Objectives & Areas of Importance

Tata Motors Level

Executive Committee of Board (ECOB)Chairman,

BOD, ManagementCommittee

Operations Committee

(OPSCOM)Chairman, Vice Chairman,MD- Operations, Vice Presidents, Plant Heads & Invitees

India

Management Committee (MANCOM)

Vice Chairman, MD - Operations,Vice Presidents

India

Business Unit Level

Steering Committee

(SC)

MD-Vice Presidents,Plant/Functional Heads & Invitees

India Operations,

BSC reviews

NPI reviews

Divisional Committees

Divisional Head, All Dept Heads

�Review business opportunities and threats

�Strategy review and refinement

�Laying down policy framework for the company

�Guide the company’s strategic course and review progress

�Review of business performance

across the company

�Setting directions for the company

�Review progress of strategic

initiatives and achievement of long

term goals

�Identify organic / inorganic growth opportunities

�Monthly review of business unit operations relative to short term goals, objectives and targets

performance and

�Review of market place performance complaints

and customer

�Review of action plans and results of improvement initiatives �Making mid-

unit goalscourse corrections to achieve business

�Cascading the business unit goals to department levels

�Review of Business Excellence initiative.

�Progress on Strategic initiatives

�Progress of new projects.

�Deployment of action plans to achieve departmental goals

�Review of departmental performance

TATA MOTORS11

Stakeholders Engagement methods to determine requirements*

Shareholders & Investors

Shareholders/Investors Grievance Forum, Ethics Committee

Customers Customer meets, Customer Satisfaction Survey, Customer visits, Visit to key accounts/STUs

Suppliers Vendor meets, Vendor Satisfaction Survey, Vendor Council, Vendor mentoring

Dealers Dealers Council, Dealer satisfaction survey, Dealer visits

Employees H R Forum, Q12 tool, Skip level, Town Hall, Focused Group Discussions

Communities/

Govt

Regular interactions, Donations Committee, Disaster Relief Committee,

Govt Affairs Dept, NGO & Industry forums such as CII, MCCIA

Fig. 1.2-02 Collecting Stakeholders Inputs

and excel performance in respective areas. TML received the prestigious Golden Peacock Award for Excellence in Corporate Governance for 2011 at the 11th International Conference of Corporate Governance in London.

1.2a2 Performance

Performance evaluation for members of governance board: The Nominations committee evaluates performance of independent and non-executive directors of Board for deciding on re-appointment of Directors at the time of their retirement by rotation at end of three years. Remuneration Committee evaluates the independent and non-executive members for deciding on the compensation to be provided to each director.

The Board has self-evaluation process under the purview of Remuneration Committee and Nominations Committee. Audit Committee annually performs a self evaluation to appraise its performance vis-à-vis its Charter. The Audit Committee also reviews adequacy of internal audit function, coverage & frequency of audits & performance of the Chief Internal Auditor.

Performance evaluation and executive compensation for senior leaders: Based on company's strategy, the Balanced Scorecard is prepared and BOD reviews performance of the Managing Director based on achievement of strategic objectives for both the Business Units. Executive compensation is finalised by Remuneration committee and higher weightage is given to company and business performance. MD evaluates performance of the members of the Leadership System. These reviews are based on the achievement of strategic objectives and targets. Senior Leadership also has Performance Management System (PACT, Fig. 5.2-03) evaluation including compensation determination which assesses not only goal achievement but ability to display Tata Leadership Practices .

Improving Leadership effectiveness: As part of TML Leadership system, Senior Leaders review their own effectiveness (Fig. 1.1-01) and also that of the entire system annually.

The multiple inputs assessed through various stakeholders engagement approaches (Fig. 1.2-02) and Mechanisms to track leadership effectiveness (Fig. 1.2-03) are used to improve both individual leadership performance and that of leadership system.

Above feedback helps to identify areas of improvement and further develop their personal leadership and effectiveness. Reviews on identified attributes (Fig. 1.2-04) help to indicate whether performance is on track in improving effectiveness.

Tata Motors has been ranked as the Most Reputed Indian Firm.(No. 1 Company on Corporate Image) as surveyed by A C Neilsen in the current year.

1.2 b. Legal and Ethical Behaviour

1.2b1

Identifying concerns (Fig. 1.2-05) pro-actively: CMVR regulations

Evaluation

Legal and Regulatory Behaviour

Fig. 1.2-01 Corporate Governance

Fiscal Accountability and Transparency…

Tata Motors is one of the very few and only Engineering Indian companies whose depository programme is listed on the New York Stock Exchange. The company complies with USA regulations as applicable to foreign private issuers (Non-USA listed company), which casts upon the Board of Directors and the Audit's Committee's onerous responsibilities to improve the company's operating efficacies.

From SOX perspective, The company is open to scrutiny by USA SEC. SLT review the company's annual report (20F) rigorously and ask for explanations in respect of accounting treatment, additional disclosures, etc. The company replies to the same based on which the review is closed.

ADRs/GDRs has been doing well since 2004. Around one lakh shareholders are holding onto ADRs in the USA.

TML reports both as per Indian GAAP as also for USA GAAP. NYSE retail investors would look at the Annual Report (20F) as per US GAAP.

To increase the shareholders/investors awareness various initiatives like factory visits, investors meets and road shows (deal and non-deal), shareholder meetings, publication of quarterly/half yearly annual reports on websites etc are undertaken.

Selection…

Nominations Committee is entrusted with the responsibility of ensuring composition of the board appropriate to the requirements of the Organisation and evaluating the Directors' performance while deciding their remuneration/ commission. BOD keep assessing the gaps in the composition, and identify prospective directors for inclusion. Recent examples of inclusions are evidence of the same (Ref. Annual Report).

Protection of Stakeholder's Interests…

The Balanced Scorecard approach adopted by the Management ensures that expectations of various stakeholders groups are addressed. Review of Strategy implemented is discussed by the Board. In addition, while Investors' Grievance Committee oversees the redressal of investors' complaints, the Audit Committee reviews business risks every quarter. This involves TMLs ability to meet strategic objectives for other stakeholders.

Risk Management…

Risk Management program Owner facilitates review of top risks on regular basis. Risk Program Managers support the owner with overall and plant/ function level risks.

Independence of Internal/external Audits…

One of the highlights of the Audit committee composition is that all Audit committee members comprise only independent and non-executive members. Beginning of the year, a plan of audit is discussed and finalized. In each of the Audit committee meetings, members interact with management, internal audit team and the external audit team.

The statutory auditors give their findings on a quarterly basis. Clarifications are sought by the board from these three teams, and suggestions for improvement of the audit practices are also provided. The internal and external audit teams, sometimes, conduct audits in the same areas, thus facilitating calibration of the quality of the audits done.

Fig. 1.1-10 Balancing Stakeholder Needs : Awards and Accolades

Shareholder & Investors:Good Green Governance award

in Nielsen survey 'Company of the Year'

Green GovernanceCorp Platinum Award

S&P/ICRA rating Listing at NYSE

Suppliers:Deming AwardsACMA awards

QS9000 certificationsBest papers/Case Studies

Best case study on KAIZENeCRM-Siebel

IT Service Management

Community:JRDQV & CII-EximRajiv Gandhi NQA

Excellence in EnergyGolden Peacocks for Safety,

Quality, OHS & TrainingGeenTech Environment

Notable COP reportBest CFO, ABCI Awards

Channel Partners:Best Dealerships

High mileage awardsAll India Best Distributorship

awardWahtuk Mitra Award to

Pandit Auto

Customers:Golden Peacock forCustomer Training

Driver & Mechanics awardsSuperbrand India award CV manufacturer award

Udyog Ratna

Employees:SDT Awards

Best EmployerInnovation award - Orion

Excellence in SuggestionsAIMA's awards,

Handa Golden Key award

The leading market share and awards proves that we are balancingthe stakeholders needs

SPS

As a good corporate governance practice, the company has voluntarily undertaken an audit by Independent practising company secretary for secretarial records and documents in respect of compliance with the provisions of the Companies Act, 1956, listing agreement and applicable rules, regulations and guidelines of the SEBI.

Succession Planning….

The appointment and succession planning of MD and EDs is decided by BoD. Succession Planning of senior leaders is decided by MD and members of the Management Committee.

TATA MOTORS 12

are formulated based on safety and environment related concerns expressed by public forums. These concerns are converted into CMVR regulations by Government. It ensure that all products are 100% CMVR compliant. Many times TML is well ahead of CMVR regulations and also represent the country for deciding regulations at the international stage.

TML proactively capture current & future concerns and use them in Strategy Planning System (Fig. 2.01-01)

For Future Products, NPI and ERC teams are directly responsible for proactively identifying and mitigating such concerns. Various Gateways like DR2, DR3, DR5 etc check and addresses impact of Products, Processes, Services etc.

In addition, inputs from SIAM, visits to Auto Expo and NPI's VOC help us in identifying public and societal concerns from products.

These inputs act as guidelines to ERC / NPI teams for new product design as also for modification in the current range of products. ERC has facilities for testing compliance to requirements concerning Noise, Vibration, Harshness, Crash scenario, etc. so that it is able to deliver environmental and societal safe products. These facilities have been built as per international standards to have competitive advantage over domestic competitors.

For international markets, TML has proactively identified safety and other product homologation requirements.

It has also tied up to collaborate with Department of Science & Technology to improve recyclability and thus conserving natural resources. TML has adopted Green Building policy and have designed new factories accordingly while Pune Pimpri plant has secured Golden rating Green Certification from IGBC and Dharwad plant is in pipeline. This certification ensures optimum utilisation of natural resources, energy, water and power over life cycle of the plant with enhanced comfort to employees and positive favourable impact on society and surrounding.

Impact of operations: Having understood product design requirements to address public concerns, Auto/ Central Planning function is responsible to plan the necessary processes for production. These processes take care of likely public concerns related to manufacturability, serviceability, maintainability, safety and productivity of the production processes. Public concerns with the operations are also clearly articulated in guidelines such as ISO14001, OSHAS18001, SA8000, regulations by the Pollution control Boards, SOX guidelines, etc. and TML address all these through periodic audits by Third Party validations.

Legal Cell, ERC's Technical Cell and Plants' Safety functions cull out the legal implications of its current and future operations through constant dialogue with government, research institutes, and other regulatory bodies. Finance interacts with national and international financial bodies to understand likely effects of actions in the market. TML also anticipate concerns proactively by collecting inputs for the Environmental Risk Management process from interactions with regulatory agencies and Standards Institutes (Fig. 1.2-06).

While designing the factories at Dharwad and Pantnagar, the factors related to effluents, exhaust, water consumption are critically checked and confirmed that there is no adverse impact on the community and environment. Green building principles have been used for example RO plant has been installed after tertiory treatment of effluent for generating processed water. Similarly power for office

TML products generally excel on these requirements and match international competition. TML launches environmental friendly products in the markets by using the latest technologies available. TML already have LPG & CNG vehicles in product portfolio and are pursuing on development of electric vehicles (e.g. DTC CNG bus fleet, Vista EV, Nano EV for developed countries).

It is committed to meet all emission norms on products that are enforced from time to time in India and the international markets where it operates Nano's safety & tailpipe emission performance exceeds regulatory requirements. There by providing twin benefits of an affordable transportation solution with a low carbon footprint.

Fig. 1.2-04 Leadership Effectiveness

Leadership attribute Measure Result

Leadership System effectiveness

Overall TBEM score

Communication12

Q attribute score 7.3-29, 30

Promote safety, innovation

and empowerment

Safety Observations, IPRs, Participation in Innovation Events like Imagineering, Innovision

12& Innovista, Q score

Suggestions,

Deployment of excellence

framework

Corporate Assurance Process

Survey score

Leadership (individual) effectiveness

Leadership style 12

Q score

Consistent performance BSC/ MPA performance vis-à-

vis Targets (Figs. 2.2-05, 07, 08)

BSC results

7.3-18 to 247.3-32 to 36, 38

7.3-26

Fig. 1.2-05 Anticipating Current and Future Public concernsfor Strategy Planning System

External/ governing agencies Input collected by

SIAM, ARAI, DGS&D, Centre for and Environment (CSE), SEBI, FIs

Science

Law making bodies, Technology Draft of International treaties and protocols,

providers,

Visits to Auto Exhibitions, Foreign Auto Companies, NGOs

Pollution Control Boards, State Electrical Regulatory Commission

Local and Regional agencies (by

Suppliers and Channel partners)

ISO Certifying agencies

Opinion makers, Communities,

Society

ERC, Govt. Affairs & Collaborations,

CC&E, Corporate Finance, HR/Legal, S&M, CC

Planning,

ERC, Planning, CC&E, Legal Cell

ERC, APL, NPI, Facilities Group

Utilities & Environment Management

All groups listed above

Environmental Aspect Impact (AI) Study Significance Evaluation of Environmental Aspects (SEEA)

and

Data on CS by CDDs at each location, (stakeholders feedback), Impact surveys

ISO 14001

Fig. 1.2-03 Senior Leaders - Evaluation and Improvement

Type of Review Frequency Changes Driven

Month, Quarter, Annually Personal, Team/Resources

Annually Personal and Policies

Annual with semi - annual updates Personal and Team

Monthly Personal and Policies

Half -yearly and Annually

Processes and linkagesImprovement initiatives

Half Yearly Personal Actions

Balanced Scorecard

Employee Survey (Gallup)

Performance Review

Focus Group & Skip -Level meetings

TBEM (Internal Process Assessments and External)

Self Evaluation

Personal Development Plan Half Yearly Personal and Team

Figure 1.2-06 Environment Risk Management Process

1) Inputs/Regulations 2) Planning & Goal Setting

Inputs - TCOC, Vision & Mission, SPP, SC reviews, Policies, Local Crisis Groups

Regulations:- Environmental Protection, CMVR Rules, International Draft standards, GRI/CSR, REACH etc

�FormProgrammes (EMPs)

Evaluate and Prioritize

Continuous improvement

ulate Environment

4) Strategy Planning System (SPS) (Fig 2.1-01)

3) Review, Mid course correction

�Qualitative/quantitative measures of the risk (e.g.environment impact of supply chain)

Action Plans for mitigation of risks

Performance measures/targets

�

�

�SC reviews, strategy/KRA reviews

Quarterly Divisional Managementreviews & annual management reviews

Ensure proactive action on futuretechnologies

�

�

�

��

�

TATA MOTORS13

block at Dharwad has been generated from wind mills at terrace.

Conserving natural resources: All Plants have a robust system of monitoring consumption and trends of natural resources as a part of climate change management. The Carbon Footprint is mapped every day and communicated. TML has also mapped Carbon footprints of all its Tier 1 suppliers (360) and communicated to respective suppliers with an appeal to have reduction targets year on year. Case studies on conservation of resources on continuous basis through website. Till date 192 case studies have been flashed.

These case studies have been appreciated by the vendors. Similar critical checks (e.g. Oil and waste disposal) are done while designing the services (and its impact) to customers at Channel partners. A process of certifying all dealers to ISO 9001 is currently in progress. Similarly, all vendors are either ISO 9001 or ISO/TS 16949 compliant organisations.

TML has taken many initiatives and actions as part of climate change

management programme in line with National action on climate change (Fig. 1.2-07).

Key processes: Various policies support all key compliance systems and processes to select and ensure that the measures, targets /goals address all associated risks and meet / exceed all regulatory and legal requirements. Management regularly gets this work inspected by internal and external agencies and validated by TS16949, ISO14001 and OHSAS 18001 certified company.

To move toward surpassing regulatory & legal requirements, it conducts training, audits and KAIZEN events at Vendors & Channel Partners. Dealers get covered through inspections / audits. Compliance is fully checked before awarding the dealerships & supplier code.

1.2b2 Ethical Behaviour

Senior leaders recognize the need to conduct the business in legal & ethical manner. The Tata Code Of Conduct (TCoC) guides employee behaviour and business operations. The Ethics and Compliance Committee was constituted to formulate policies relating to the implementation of the Tata Code of Conduct for Prevention of Insider Trading (the Code), take on record the monthly reports on dealings in securities by the "Specified Persons" and decide penal action in respect of violations of the applicable regulations / the Code.

Whistle Blower policy has been adopted which provides formal mechanism for all employees to approach Management and make protective disclosure regarding time frames prescribed in the policy.

1.2c Societal Responsibilities and Support of Key Communities

1.2c1 Societal Well Being….

Senior Leaders strongly believe that holistic growth of community especially of weaker and depressed section is an important contributor for sustainable growth of the Organisation. Senior Leaders believe in facilitating positive change in the community rather than be just the donor. The thrust areas identified for CS are Health, Education, Employability and Environment (Fig. 1.2-08). While every location based on local requirement implements various CS programmes in line with strategy, there is a common theme across the organization as well. TML has started its journey on Affirmative Actions and this has been well appreciated at Tata Group

Fig. 1.2-07 Climate Change and Low Carbon Growth

Area Work done (Few examples)

Green House Gas Reduction: Development of Fuel cells Use of diesel as fuel and fuel efficient products Although no regulatory standard for Co2 and fuel efficiency for different products are specified in India, care is taken to reduce the Co2 emission and increase the fuel efficiency from the product with introduction of advanced technology. Development and use of Common Rail Fuel Injection to bring down the CO2 emission Use of energy efficient AC systems, Heat exchangers & Condensers and restrict usage of the AC refrigerant HFC-134a All HVAC system components are 100% checked for refrigerant leakage - well below the specified limit (40 gms/ year)

Going Green : Bus development - Hybrid, Electrical, Fuel & CNG Use of Bio-diesel engine and use of Ethanol gasoline blend Use of Hydrogen in CNG for CVs Exploratory project along with IIT Chennai has been initiated for the use of Hydrogen fuel LNG Truck by TDCV, Korea . Bus Rapid Transit system to provide better service and to reduce load on traffic Lead free - wheel balance weights, printing inks, bulbs, alternate designs/coatings, coatings for fuel tanks, carbon brushes for electrical motors etc. Asbestos free brake pads & clutches introduced Water based paints are being used to avoid VOC emission Green buildings Waste land reclamation

Reducing Emission levels: Refrigerant CFC-12 (ODS) and will be phased out by the year 2010 Pollution level reduction for CVs (Diesel engines) thru BSIII & CNG vehicles, BSIV

Use of Non-Hazardous Material: Asbestos free brake linings For reducing noise levels, measures such as Acoustic shields, Silencer redesign, Viscous or Electric Fan were taken to reduce exterior noise of the vehicle as it is accelerated on road at high engine-speeds

Contribution towards Sustainable Environment: TML is working with the steering committee of National Hydrogen Energy board to find the ways where India may harness hydrogen potential energy of future TML representatives are on several National Committees working for improvement of environment throughout the country

Energy Conservation: Incorporated environmentally sound practices as one of its prime objective - in its processes, products and services. All Plants have achieved certification to the ISO-14001 & OHSAS 18001 Standards Energy conservation measures have been implemented at all the plants and offices. Company has already started Energy Accounting & Energy conservation programmes It traded the CERs through e-bidding on the Chicago Climate Exchange Use wind energy for last 7 years and has earned and encashed the carbon credit points (worth Rs 15 Crores) and has leadership in the Group, Mirrors used to dry waste at ETPs

Waste Management: The wastes are disposed by various pathways which include - direct incineration, direct landfill and landfill after treatment. Few innovations have been implemented in this area such as bricks from the sludge

Weight reduction, End-of-Life (ELV) Vehicle and Recyclability of products & of Packaging Materials: The treated effluent is re-used for various low-end purposes such as toilet flushing, floor washing, horticulture, etc and as make up water to various cooling towers. It is mandatory for each new location coming up. Lakes created at Plants receive ETP treated water in several lakh litres which enriches ecosystem and it bears testimony that ETPs are working effectively. Wood recycling by 90%, recyclable pallets, returnable pallets,

Rain water harvesting and water conservation: The rain water harvesting is done in a big way and re-circulate several lakhs litres of rain water every year

Activities

Description

Extent of Support

Results Area Benefiting

Senior

Leaders

Key Focus Area – Health

Maternal health care, Mobile Medical, Low cost toilets, Cleanliness drives, Preventive & curative health programmes

VHWs, villages around Plant & Non Plant locations

Panel of Senior Doctors & Health workers

Fig. 7.4-47

Key Focus Area – Education and Participation

Infrastructure, Teacher training, Extracurricular activities, Technical & Driver training, Enhance communication, Volunteering, etc

Schools at Plant & Non Plant locations, School committees, Employees,CVBU

SC members, Locational HR & CDD Heads, Volunteers

–

Key Focus Area – Partnering and Employability

Working with NGOs & Institutes, financially self-dependent women, Youth employability, profitable & self-sustaining enterprises and SHG women

Employees,Employment opportunities,Target project areas

SC members, HR & CDD Heads

Key Focus Area – Environment

Awareness, Tree cleanliness drive, Irrigation, recharging of existing resources

plantation, Target project areas

SC team, Locational HR & CDD Heads

Fig. 7.4-48

Fig. 7.4-49

Fig. 7.4-51

Fig. 1.2-08 Community Support Activities

14TATA MOTORS

level for its contribution so far.

CSR organisational structure is responsible for implementation of the Community Development programme. At the corporate level, 'Corporate Sustainability (CS) committee' guide and review the CS activities. It also lays emphasis on volunteering from all levels of employees.

Structured Implementation programmes are in place at various plant locations, e.g. Samaj Vikas Kendra and Gram Vikas Kendra for rural development; Parivar Kalyan Sansthan for providing health care; Navjeevan Manav Samaj for cure and rehabilitation of lepers; Shiksha Prasar Kendra for catering to educational needs of the communities etc.

Senior leaders have played a major role in creating different avenues for using the best skills, knowledge and aptitude available with employees and their relatives which can be suitably leveraged for this cause.

Employees' participation and motivational levels are high and are visible as seen in consistent increase in number of volunteers and increase in number of activities over the years.

Triple Bottom Line as a part of strategy: The strategy planning system (Fig. 2.1-01) considers Corporate Sustainability as an integral part of the strategy and it has been reflected in strategic objective OP5. TML has process for driving the CS activities. The objective gets cascaded through BSC process and is ingrained in SQDCME for daily management.

The contribution of employees on this front is well appreciated and rewarded in various functions. These activities are coordinated by Head, CS and the locational CS teams with the help of volunteers.

It has adopted Triple Bottom Line (Economic, Environment and Social factors) and has considered the well being of environmental, social and economic systems by way of strategy development and deployment.

1.2c2 Community Support

TML follows the Tata philosophy of community service.

Identified Key Communities…and the Basis for Identification..

Health, Education, Employability and Environment are TML's focus areas and therefore key communities are those sections of community who need the best use of TML capabilities for their benefits. People of different villages in and around the plant locations who are directly or indirectly impacted on account of operations and drivers who handles TML products have been identified as key communities.

Since Sales & Service operations are spread over the entire nation and identified under-served youth and SC/ST community as TML key communities.

Areas for Organisational involvement: TML has documented specific decision criteria (Fig. 1.2-09) for selecting and deploying CS projects and programmes (Fig. 1.2-08). TML largely cover, on the basis of priority, the stakeholders directly or indirectly impacted by operations.

With technician training programs as well Driver Training initiative for the under-served youth, TML has attempted to increase operational areas beyond the plant locations. Technical training is being imparted in Chennai, Coimbatore, Mumbai, Thane and Dehradun (Fig 7.4-44).

Kaushalya is the employability initiative of Tata Motors is the single largest skill development programme by any corporate in India. It aims at skilling over a million youth on commercial vehicle driving training in coming ten years. This initiative is Pan India initiative with multi-stakeholder participation of Dealers, NGOs, skill development organizations, State Development Corporate foundations etc. In the effort to improve technical education at Industrial Training Institutes (ITIs), Tata Motors has tied up with ten ITIs largely around its plant location. Now the Customer Support has taken an aggressive target

of tying up with another 117 ITIs.

AA is central to TML CS programs. Specific focus & priority is given to SC/ST communities on parameters like 'Education, Employment, Employability and Entrepreneurship'. Materials function has taken efforts to develop SC/ST vendors. In employability programs like drivers & technicians training, specific mention on prioritising SC/ST is done and a huge upside on beneficiaries from the communities through Affirmative Action focus (Fig 7.4-53).

Drinking water has been identified as a need from the communities around the plant locations. Under the aegis of Sumant Moolgaonkar Development Foundation's Amrutdhara project, an ambitious plan of providing Safe drinking water to 100 villages has been undertaken.

All initiatives are conceptualized and implemented through the stakeholder engagement (Fig 1.2-10). Inputs from TCoC, budget (Fig 1.2-09), understanding the needs of the community through interactions and study of capabilities in making the intervention fruitful are used to prioritise the area of emphasis and the amount.

Senior Leaders and Employees Contribute…

Senior leaders contribute in the CS activities and support the key

Identification &Selection ofcommunities

Needidentification ofcommunities

Prioritization &Selection of

identified needs

Designingprojects foraddressing

selected needs

Learning andFeedback

Phase out aftersustenance

Evaluation ofimpact of

project at end

Resourceprovision and

implementation

Fig. 1.2-09 Selection of Communities and Project Execution

Engage withStakeholder

Identify issuesand concerns

Prioritise theissues &concerns

Address theissues &concerns

Learning andFeedback

Report back tostakeholders

Implementstrategic

initiative andreview

Set goals andtargets

Fig 1.2-10 Stakeholder Engagement Process

communities by creating the policies and guidelines, making the right strategy and extending the support for deployments and implementation in areas concerned and by reviewing on monthly basis. SLT also participate as an individual employee (e.g. donations, tree plantation, health programmes) and by championing the projects in their own areas. The community support activities are reviewed by SCs at various levels and shared with employees through various media, site visits, and regional forums.

The involvement of senior leaders is decided at the management committee level and at the plant committee level based on the involvement having a potential impact which is worthy of their participation. The progress of all community initiatives is measured through CS Protocol, developed by the TCCI. CS assessment has been made a part of the internal TBEM assessment (Benchmark leadership in the Group) for better evaluation of impact and feedback for improvement.

Communication & Progress: The Social and Environmental performance is also reported separately in the GRI based report which is 'A' level report, Communication on progress submitted to the UN Global Compact, the CS Annual Report and the CS section in the Annual Report of Tata Motors.

Over the time the business has progressed in CS maturing from a 'largely community based focus' to a 'business linked strategic initiative with a nationwide footprint'. To synergise programmes across locations, key projects have been identified which will be implemented across. All the thrust areas have been branded for higher visibility and recall (e.g. Amrutdhara, Vidyadhanam, etc.)

TATA MOTORS15

� Launch of 'Tata Sumo Gold, Tata Venture, Tata Magic IRIS, Tata Ace Zip, Tata Aria 4x2, Tata Indigo e-CS VX and new Tata Indica Vista'.

�Tata Motors unveiled Assembly Plant in South Africa in just six months

�Tata Motors & Japan's New Energy and Industrial Technology Development Organization developed an environment-friendly dual-fuel based power generation facility

�Tata Nano launched in Nepal and Sri Lanka

� 'Significant Achievement Award' at the CII-ITC Sustainability Awards 2011

�Awarded for its organizational excellence at the 7th edition of the NDTV Profit Business Leadership Award 2011, in the Automobile (four-wheeler) category

�Lucknow plant has won the prestigious Golden Peacock National Quality Award 2011, for overall business excellence and quality standards, in the automobile category

�Ahmedabad plant wins a Merit Award at IETEX 2011

�Sanand plant receives Lakshya 2011 Awards in the Lakshya On the Job Achiever's Contest and Sparsha Awards, hosted by the National Institute of Industrial Engineering (NITIE), Mumbai

�Sanand plant won Gold in the large enterprise category, at the prestigious Economic Times India Manufacturing Excellence Award 2011, in collaboration with Frost and Sullivan.

�Western India launch of Tata Divo Luxury Coach and Tata Starbus Ultra

�DEFEXPO India 2012: Tata Motors showcased Anti-Terrorist Indoor Combat Vehicle concepts

�81st Geneva Motor Show: Tata Pixel, new city car concept for Europe, displayed

STRATEGIC PLANNING2

2.0 Strategic Planning

Tata Motors has a Strategic Planning System (SPS), which over the years has been updated with stakeholders' inputs and modified according to contextual changes of business environment in domestic and international markets.

The Senior Leadership at Tata Motors drives the SPS constituting of the following three stages:

1) Market Assessment & Strategic Options Finalization

2) Strategy Deployment

3) Review, Learn and Integrate

The business unit's have adopted the SPS and defined their strategies (separately for domestic and IB) for the 5 year period which includes the likely outlook on the economy, industry, competitive scenario, market share projections, targets and corresponding financial outcomes. After the sign off is achieved from the Board, appropriate communication is made across employees, vendors and dealers for effective alignment.

2.1 Strategy Development

2.1a Strategy Development Process

2.1a1 Strategic Planning Process

Strategy development at TML is a continuous process wherein the senior leadership is constantly deliberating and challenging the game plan for the business in the context of a dynamic environment. As an institutionalized mechanism, it is an 8 step process wherein the steps are either concurrent or sequential in nature. This mechanism is anchored strongly on periodic scanning of the environment and analysis to determine the key challenges and advantages resulting into the strategic direction setting. The outputs

of market assessment and strategic options finalization feed into the phases of strategy deployment, review and improve. (Ref Fig 2.1-01). The inputs to these stages are sought from a cross section of employees/ key customers, consultants, channel partners etc (Ref Fig 2.1-02). The SPS is integrated closely with the leadership system of the company. The Board and it's Committees such as Executive Committee, Audit Committee etc., and the MC, OC and SC (Fig 1.1-06, 1.2-01) contribute in the evolution of Strategic Plan.

Identification of potential blind spots…The leadership team at the strategic levels by way of their participation across various industry forums and interactions with customers, suppliers, dealers, reputed consultants and industry analysts try to understand blind spots and determine mitigation plans. The Board also provides it's inputs on possible blind spots.

In the current, year the Company has commenced a comprehensive process of scenario planning (Fig 2.1-03) with the aid of global experts. The initiative primarily focuses on preparing the organization to face the onslaught of multiple uncertainties in future. These can be in the nature of social, technical, economic, environmental and political uncertainties and can play out in various combinations vis a vis each other thereby creating multiple scenarios. The process identifies within each scenario the dynamics of the industry and it's implications on the fortunes of the company. The final step of the process incorporates specific strategic & tactical plans to help the organization proactively prepare and prevent any value erosion in the event of the occurrence of any of the scenarios.

Determine Strategic challenges, Advantages and Core Competencies…

TML follows the process (Fig 2.1-04) for determining the strategic

2. STRATEGIC PLANNING

Long Term Learning Cycle

Market Assessment & Strategic options finalisation Strategy Deployment Review & Improve

EnvironmentScan

AnalysisStrategic

Challenges &Advantages

Strategic Direction Setting

Target setting & Resourceallocation

BSCDeployment

Review Evaluation &Improvement

As listed in Fig2.1-2

Outputs as listedin Fig 2.1-2

Ref Fig 2.1-05, 07 & 08 (VMV)EnvironmentscansEnvironment & Capacity analyses

EnvironmentscansEnvironment & Capacity analysesStrategicchallenges

StrategicStrategicObjectives

BSCStrategicInitiatives andaction plan

Study the followingGlobal AutoindustryMacro EconomictrendsImpaction on PC & CVAnalyses of CountriesIdentify blind spotsRisk identification

ConductBusinessenvironmentanalysis andcapabilityanalysisAnalyse blindspotsRisk Mitigation

Identify Keychallenges forshort Term (upto 1 Year) &Longer Term (5years)Validate blindspots

Determine BUStrategy & PlansIdentify Strategicobjectives toaddress keyshort & long termchallengesPrioritise andplan actions onblind spots

Finallize-Operating Plans forProduct, Domestic &IB Marketing,ManufacturingSourcing, HR, CapexRevenue budgetsBU BSC - Goalsmeasures, timetable& Strategic InitiativesPlan & resource the balance

Develop next levelBSCs & initiativesforPlants / functionsFactories/ROs/Divisions, CXs/AOs/DepartmentsDeploy plans andbalance

BOD, Strategyplanning, LOB HeadsNVB, Country Managers,MR, IB, productmanagement team,CFTs, FIBERS, ERM,HR, CSR, CIO, CFO

Strategy planning, team, Bus, SC, OC,MC, ECOB, BOD

BOD, Strategyplanning, FinanceERM, HR, CSRMaterials, Mfg.,Internal AuditPlanning & Environ-ment, CFO, CIO

Strategy planning, team, Bus, SC, OC,MC, ECOB, BOD

Bus, Strategyplanning team, Corporate FinanceSC, OC, MC, ECOB, BOD, ErmResourceAllocation

All Scs

Impact Analyseson BusCountry analysisCritical blind spotsBreakthroughs &innovationsneededRisk Mitigationplans

LOB, Productdevelopmentanalysis, Financialviability analysis,Supply chainanalysis, ManpowerAnalysis & PlanRisk 7 otherAnalyses as

Strategic Challenges andadvantages(Ref OP 21)

Objectives andaction plans

BU Strategic Operating Plans-Product, Marketing,Manufacturing,Sourcing, HRCAPEX, Revenue,budgets BSC & initiatives / ActionPlans

CascadedBSCs (Ref Fig2.1-05, 07 & 08)

Five Year Plan 2010-15 and AOP/BSC every yearQuarterly / Half yearly / Annual Review

Quarterly Scan by Market ResearchMonthly Scan by Business Planning (Month Thru Lenses)

March-AprilEvery Year

April - Every Year

MarchTimeLine

Out

puts

Key

P

artic

ipan

tsA

ctiv

ities

Inpu

tsS

teps

Pha

se

1 2 3 4 5 6 7 8

A B

C

D

D

C

mpv

Iro

e

Review

eE

valu

at

Annual Learning Cycle

Impr

ove

iR

evew v

eE

alua

t

Monthly Learning Cycle

As listed in Fig2.1-2Monthly updatedBSCs

AssessmentFeedbackConsultantFeedbackS C Feedback

Review BUStrategyReview (& modify ifrequired) BSCsand initiativesST Blind spotsVerifyachievement of plans & balance

Evaluate theStrategic PlanningProcess & IncorporateImprovementsin next year’s SPP

All Scs monthlyOC, MC, ECOB,BOD

Strategy planning team, BOD

Modifications instrategy, initiatives & Action PlansAction Plans on‘Red’ areasReviews of Riskmitigation plans

Improvementsto the SPP

Fig. 2.1-01 Strategic Planning System (SPS)

16 TATA MOTORS

Fig. 2.1-04 Core Competency Determination Process

ST / LT

Cause:

Internal Factors

Core

competencies

Threats

Opportunities

Leverage on ST

advantages

Inputs from (Fig 2.1-02) Environment scan

Strengths

Weakness

Strategic

Advantages

Screen all Strategic

Advantages

Strategic

Challenges

Fig. 2.1-03 Scenario Planning Process

Key Focal Issue

Driving Forces

CriticalUncertainties

Early WarningSignals

Implications andOptions

Scenarios

Narratives

Scenario Framework

deployment of detailed goals down the organisation and to align it to the annual planning and budgeting cycles. The eight steps SPS addresses the short & long-term planning time horizons.

2.1a2- Strategy Considerations:

The SPS process framework (Fig 2.1-01, Fig 2.1-02) ensures that SPS addresses the key factors of SWOT, emerging trends in the market and the environment at large to arrive at the future projections keeping in mind the long term sustainability of the organisation. The mode of collection of data, it's sources and the corresponding tools and techniques deployed for analysis to arrive at the relevant outputs (Fig2.1-03).

challenges, advantages and core competencies.

The core competencies thus identified are put through the following test by the SCs while finalizing the strategy document to validate the parameters and address the potential need for new core competencies: 1. Does it provide potential access to different markets? 2. Does it make a significant contribution to the perceived customer benefits on the end product/ service?

3. Is it difficult for the competitors to imitate? Both CV and PC have distinct core competencies (as indicated in figure 2.1-04&05). The organization is currently deliberating on the need for a common core competency across the BUs.

ST and LT planning time horizons…

The planning horizons are systematically set to match with the Industry conditions:

• Long term planning horizons in the automobile industry globally are primarily dictated by product development cycles. These timeframes can extend from 3 to over 4 years for a full new product (from concept to launch). Hence long term planning horizon is set to 5 years However, this is a rolling plan which gets validated every year on account of dynamics in the operating environment.

• Short term horizon is set to 1 year (AOP/BSC) to cater to the

Fig. 2.1-02 Inputs and Outputs to SPS

All Functions :HR, PSD, SSG, Materials, NPI, S&MRegional Managers, Dealer Councils, IB Product Managers, Finance and Business Planning, Environment, CS, Scs, Risk Management, etc

Finance and Business Planning,ERC, Planning, NPI, Strategic Sourcing, IT, Environment, Risk Management, Corporate Planning

Finance and Business Planning,S&M, Dealer Council, CC, ERC/NPIStrategic Sourcing and IT, Risk Management

Finance and Business Planning,ERC, Planning, NPI, Strategic Sourcing, IT, Environment, Risk Management, Corporate Planning

Corp Planning, Finance and Business Planning, ERC/NPIEnterprise Risk Management, Md’s and Presidents Office

Md’s and Presidents Office, SPP team, Business Planning, All Functions

Strengths,WeaknessOpportunities &Threats

Early Indications ofmajor shifts in Technology

Early Indications ofmajor shifts Markets, Products,Customer preferences, Competition

Early Indications ofmajor shifts inRegulatoryenvironment

Long TeamOrganizationalSustainabilityincluding neededcore competency

Ability to Execute Strategic plan

Operations, Functions, HR, Vendor, Supply Chain, Customer needs, Competitive environment scan, Resource allocations, Community

Product & Process technologies, New products, innovations, blind spots

Sales & Marketing, Customer Care, QFD, Blind spots, VOC

Changes in regulations, draft regulations, blind spots

Risks (Financial, Regulatory, Political, Business, Social, Ethical etc)

Strategic objectives, inputs from all stakeholders

Process measures, PMS, Q12, Supplier Capabilities assessment, VOC, VOD, QFD, Product & Market Studies, FIBRES, SAM reports, channel partners,

Visit to Auto shows, ERC, NPI, Planning, Vendors, Consultants, Early Vendor Involvement, benchmarking

Visits to Auto shows, Sectorial studies, SIAM, VOC, VOD, QFD, FIBRES, Market Research studies, Segment studies

Regulations & drafts, interactions with regulatory bodies, ERC, NPI, Planning

Interactions with statutory bodies, Acts, WTO Audit reports, World Bank studies, CS reports, internal and external assessments

SPP process steps, interactions with stakeholders

Sigma levels, Trend analysis, Skill gap analysis, Demand analysis, Correlation, Cost benefit, product performance comparison

Product range comparisons, Product benchmarking, Process benchmarking, Tear down, scanning the web

Market and customers surveys, Regression analysis, VOC, Customer satisfaction surveys, QFD, etc

Liaisoning with Govt. bodies and authorities, interactions with Regulatory bodies, representation in various regulatory bodies, Scanning the web sites

Scenario analysis, Compliance analysis, Risk Heat map, COSO framework, GRI and CS framework, Risk analysis

Cost benefit analysis, Contingency plans, Trends and analysis

Product knowledge, Domestic & Country information, Customer information,Manufacturing road map, Manpower & high level skill overview, Breakthroughs and innovations needed, Economic & Regulatory Scenario, Trends in Transportation Specific competition studies, etc

Product knowledge, Technologies, Manufacturing and IT Roadmaps, Current and Potential Technology & Capability, Current & Potential capacity Breakthrough needed, innovations

Product knowledge, Market and Customer knowledge, Economics & Regulatory Scenario, Technology, Manufacturing and IT Roadmaps, Current & Potential Technology & Capability, Current & Potential Technology & Capability, Current 7 Potential capacity, Regulatory requirements breakthroughs needed, innovations through brain storming, Market Research reports

Economics & Regulatory Scenario, Technology, Manufacturing and IT Roadmaps, Current and Potential Technology & Capability, Current 7 Potential capacity, Regulatory requirements breakthroughs needed, innovations through brain storming

Mission, Vision statement Preliminary Strategic Challenges and CSFs, Current and Potential Capacity, Process linkages, shareholders / Analyst inputs, innovations

Scenario analysis documents, BSC reviews, Project Reviews

Group involved mainly... Key Factors Key inputs from... Collected through...Tools & Techniques used

for Analysis Outputs, few examples

A

B

C

D

E

F

Reviews the plans, achievements and gaps with respect to previous year are taken as inputs for next year

TATA MOTORS 17

LT sustainability…

During the SPS, the long term opportunities are discussed to include expansion into future potential markets - domestic and international. Product strategy and development plans are aimed at long term sustainability supported by improvement in NPI, supply chain and implementing new technologies.

Projections of future performance… As part of Environment Scan, it gathers critical attributes from the plans and strategies of competitors – domestic and international players. As an example, price positioning of various models, product portfolio and cost drivers (level of outsourcing and indigenisation) of existing and potential competitors are factored in the SPS.

Key changes taking place in the domestic and international markets are continuously monitored (Fig. OP 18) as part of SPS to keep the market-related action plans current. It also aids in exercising strategic options on new products and countries to be explored.

As a part of the strategy for identified international markets, country-specific inputs are considered for devising respective country’s strategies.

Ability to execute…

TML has over the years re-organized it's structure to enable seamless transition of customer needs into definitive products and customer experiences.

NPI synthesizes customer needs and interfaces across Sales and Marketing, ERC, Supply chain and manufacturing to develop and position product offerings in the market to retain leadership with respect to competition. In order to assess sufficiency of our processes to deliver as per the strategic plan, the process capabilities of the manufacturing, supply chain and support processes are assessed, action plans are developed and deployed within timelines to address the identified gaps. Various efforts like engagement of Dr N Kano, Dr Wolfarm Liedtke are undertaken periodically to strengthen the processes and enhance capabilities.

The HR Strategy supports this by developing talent and leadership, building a high engagement culture, a strong powerful brand, having a customer centric organization and driving excellence through seamless integration of verticals and business. There is a continuous attempt to simplify and enable technology driven people, processes embedded in high performance work systems to reinforce “ One Tata Motors Culture” which is truly merit driven.

The timely changes (Fig. 2.1-06) have enabled the organisation in rapidly and smoothly executing action plans to achieve objectives set by SPS (Fig. 7.1-134 to 139).

Once the strategies are firmed up, financial resources – both in long and short-term – are allocated in line with action plan requirements.

Budgeting is done for revenue and capital requirements.

2.1 b Strategic Objectives…

2.1 b1 Key Strategic Objectives…

Strategic objectives are derived at the end of step 4 of the SPS. Given below are the Strategic Objectives and important goals derived by the specific business unit's using SPP and considering a time frame of 5 years:

CVBU

1. Growth in volumes

• Achieve and maintain market share of 62%

• Expand presence in emerging global markets

2. Grow global MHCV trucks and IMHCV bus volumes to beamongst the top 3 in trucks & top 2 in buses

3. Lead creation of and aggressively grow SCV segment globally

4. Increase share of non-cyclical revenue from aftermarket and defence business

5. Generate target revenue & ROCE to be amongst the highest in the global CV industry in 2014-15

PCBU

1. EBIDTA > 7.5% by FY15

2. Be amongst top 2 by market share in India by FY15

3. Achieve top quartile performance in customer experience by FY15

4. Achieve significant presence in select International markets

5. Build up on “Value for Money” brand into a more aspirational and desirable brand

The Strategic objectives are broken down into four Balanced Scorecard perspectives, namely: Financial, Customer, Business process and Learning & Growth. This ensures a cause and effect relationship from action plans to the Strategic Objectives. Progress on each of the strategic objectives is monitored through identified KPMs. The targets for these KPMs are set for a time frame of 2-3 years. The BSC and strategic maps for specific BUs, the detailed strategic objectives, their time frames, related goals, KPMs and benchmarks for the BUs with performance projections and comparative data will be shown during the site visit. (Fig 2.2-05 to 08)

2.1 b2 Strategic Objective Considerations

Strategic Advantages and Strategic Challenges

Step 3 of the SPS identifies TML level strategic challenges and advantages. This forms the foundation for determining the strategic objectives in step 4 which are clearly articulated for the respective business unit's. The senior leadership team ensures collection and analysis of feedback in the context of strategic challenges and advantages (OP-21) from various stakeholders before defining & signing off the 3-5 year plans.

The Strategic Objectives are also developed to balance and address stakeholder needs and strengthen the performance (OP21 and Fig 2.1-01). Strategy map and BSC creation process help in deciding the strategic objectives in the Financial and Customer perspectives. Objectives in the Business process perspective address the operational challenges. The Learning & Growth objectives address the challenges faced in people-related issues.

Opportunities for innovation in products, operations, and in business model:

Key product and process innovation are integral to the SPS that provides significant competitive advantage to the business.

For example CVBU product innovations have stretched across Ace Zip, Magic Iris, CNG Products, Ultra and Prima Modular Chassis. Similarly in PCBU the focus has been in addressing the emerging

2006

Aligned with LOBs

ERC, Product Mgmt teams in IB

2007 Global Footprints TMETC, TMTL , South Africa, Business Development team in IB

2008

Synergy in S&M, CC andAssembly Plant in Thailand for Pick-ups

2009

Synergy with the partners

Vendor Council Support Centre

2010 Aligning S&M for future businesses

Restructuring at Sales & LATAM & ASEAN identified as focused regions

Marketing.

2011

To bring synergy faster learning & sharing &

focus on deliverables

across,

Quality and Safety as Central Functions

2012 Need for Workforce & Rural focus

PACT (HR), IR, Quality, Sales & Mktg, Rural Marketing

Fig. 2.1-06 Changes in Organisation Structure

Trigger for change Changes in Org Structure

Creating

differentiator

TATA MOTORS18

climate change needs through greater compliance of the regulatory requirements for emission controls, reduction in GHG emissions, and development of hybrid, electric vehicles on new product platforms eg. Vista EV, CNG and LPG vehicles are amongst the top quartile with high mileage and low emissions.

This is a continuous effort across the BUs and has most recently been exemplified by process innovations through deployment of TQM Framework in PCBU and increased sourcing from low cost countries, HR & field force re-organization etc .

The organization is evolving new business models such as DTC, CKD Operations outside India, Rural Marketing, Rural Financing Tie-up with financial and non – financial institutions, higher levels of outsourcing/contracting in new plants (Pantnagar, Sanand, Dharwad).

The cascade process (Fig 2.2-03 & 4.1-01) ensures that the opportunities for breakthroughs and innovations are identified and worked on systematically.

Capitalising on Current Core Competencies and address potential need for new Core Competencies

TML has a mix of strategic objectives to take advantage of the current core competencies and build abilities to acquire the future core competencies.

For example, The aspirational targets on cost, inventory and new products are set. These would be achieved by leveraging current core competency.

TML aspires to become a world class quality manufacturer while maintaining the current advantages on costs. Our strategic objective of enhancing in-house manufacturing quality as well as getting to the benchmark supplier PPM levels are a few first steps towards building future core competency.

Currently CVBU and PCBU have distinctly demarcated MVVs and core competencies based on their individual contexts. TML is in the process of defining a unified MVV for the integrated corporation which will pave the way for determining the need for and thereby articulation of a unified core competency.

Balance ST and LT Challenges and Opportunities

The BSC provides the organization, a mechanism to invest in the long-term, even as the measures and targets are outlined in time frames of a year and longer. Additionally, the BSCs are cascaded down to KPMs to monitor and review progress on implementation of various strategic objectives. (Fig 2.2-05 to 08)

The KPIs metrics are either strategic or tactical in nature. Resource allocation is balanced to address the near term needs (as in annual business plans, BSC for the year) and longer term requirements.

For example, the tactical goal of increasing the number of 1S/2S outlets in far-flung rural areas will give us a strategic advantage in the longer term of countering the aggressive entry of various MNCs in the domestic market by leveraging on wide spread network.

Emerging climate change needs

As part of the SPS, inputs are gathered from various stakeholders (fig 2.1-04) and analyzed before finalizing the strategies for TML. The interests of multiple stakeholders are covered through various strategic objectives (Fig 2.2-05 to 08)

For example - Strategic Objective “Enhancing Corporate

Sustainability” supported by key metric – Reduction of Carbon Footprint addresses the aspiration on Climate Change. This initiative is totally aligned with the National Action Plan on Climate Change.

Enhance ability to adapt to sudden shifts in market conditions

The review process enables the organisation to identify new challenges and make course corrections to ensure Strategic Objectives are realised. Sudden shifts in market conditions are addressed not only through the reviews on progress of key deliverables but analysis of changing trends and the responses to changes in external environment. The rolling plan at PCBU helped the organisation to respond to market requirements for a vehicle like SUMO GOLD.

2.2 Strategy Implementation

2.2 a Action Plan Development and Deployment

2.2 a1 Action Plan Development...

Action plans are developed during Strategic Direction setting (step 4) and Target setting phases (step 5) of the SPS by the OC, MC and SC.

ST and LT action plans…The strategic initiatives support in meeting various strategic objectives. (Refer Fig 2.2-05 to 08 for examples).

Key planned changes…

Some of the key planned changes are as follows:

• Focus on rural areas for PC and SCV business

• Introduction of Gen 3 NPI process for product development

• Introduction of M0 range (positioned between PRIMA and existing vehicles)

• Development and introduction of new products for Defence segments

• Four councils for overall supplier improvements

Operate with changes…

Key planned changes are introduced through the formation of CFTs whereby action plans with corresponding targets are developed by representatives across functions. The CFTs are resourced to execute the plans some of which are described as examples above.

2.2 a2 Action Plan Implementation...

Each of the Objectives within the BSC is owned by a Senior leader supported by a team. To ensure the realisation of the objectives, key strategic initiatives are deployed and assigned to experts / process owners. These teams are provided with time bound charters and resources to achieve the milestones. The teams then develop key metrics and milestones which are tracked periodically (Fig. 2.2-03).

CVBU

Ability to innovate low total cost of ownership solutions.

PCBU

Fig. 2.1-05 Core Competencies of PCBU & CVBU

Ability to offer value for money through innovation, development and manufacturing of passenger cars

cost effective design,

Status Update - B2: Offer financing at lower cost and improve availability of finance

Overall Status

Key Risks and Mitigation Plans

• Big players like SBI may go slow because of pastNPA losses

• Dealer does not put in adequate efforts to buildrelationship at grass root levels

• Have meeting withsenior management to resolve.Work with more players.

• Dealer alignment to long term CVBU strategy.Appropriate incentive structure

1 % share of vehicles financed by PCG 14% 17% 12%

2 PCG banks targeted for tieups 16 30 19

1 Partnerships with PCG banks• Induction of 4 new large PSU Banks• MoUs signed with Allahabad Bank and Bank of Baroda

2Partnerships with regional rural banks

• Plan to target 10 banks in FY12

• Three states selected for pilot –AP, UP and TN

• MoU signed with Allahabad UP Grameen Bank

3Governance mechanism for managing PCG relationships

• Standard OperatingProcedure(SOP) for tie-up, roll outand increasing PCG penetration circulated to area teams

–governance mechanism to be institutionalized

• Pilot for portal based Yes/No : First time in CV industry.

Initiated with 2 largePSU banks (BOI, Allahabad Bank)

• Dealer incentive structure to be rolled out to otherregions

4Dedicated finance support organisation within S&M team

• 3-member teamat HO; 2-3FTE per region

Fig. 2.2-01 Initiative Tracking Examples

S.No MetricsTarget

(11 - 12)YTD Actual(Apr - May)

Baseline(10 - 11)

S.No Critical Milestones – FY12 Status Update / Remarks Status

TATA MOTORS 19

Fig. 2.2-02 Agility and Changes in Action Plans Identification & Execution

Establishing need for modified Action Plans Execution of modified Action Plans

Board Reviews Every Qtr.

Meets every

15 days* Environment

Scan

Step 1 Fig 2.1-01 Meets every

30 days

Meets every month

Esca

latio

n

Operational issues

Plant / Non plant / Ros /

Area offices CFTs

BreakthroughActions

required?

No

STOP

Yes

ModifyStrategy?

No

UpdateStrategy

Document

Yes

UpdateCapex ?

No

Update

Capital

Budgets

Yes

Modify ActionPlans?

No

Update

Action Plans

Yes

Modify KPIs /

KRAs ?

No

Update

KPIs / KRAs

Yes

Finalise

proposal and

implement

ManagementCommittee

OperationsCommittee

SteeringCommittee

The team gets in touch with members of the workforce, key suppliers and partners, as appropriate, to ensure action plan implementation as per timelines.( Example Fig. 2.2-02)

Another example is the EXCEED initiative to go beyond customer satisfaction for passenger car business. The initiative is being cascaded at multiple levels to ensure alignment with people and processes.

As the initiatives and their outcomes stabilize over time, the initiatives are redefined and / or absorbed as part of the work system. For example, the cost reduction initiative commenced a decade ago. This approach provided TML with consistent financial benefit's annually and was therefore included as part of the Vendor Management System as Integrated Cost Reduction (ICR). Similar is the example of the Design & Development Initiative of Integrated Cost Management (ICM) for new products. Related key metrics then become part of BSCs.

2.2a3 Resources Allocation

TML follows the Budgeting process comprising of Revenue and Capital Budgets for allocating the necessary financial and other resources to the business. A bottom up approach is used in deciding the budgets under the two heads. Revenue budget takes care of the current obligations of running the business.

Capital budget takes care of the medium and long term requirements. The allocation of the resources for the various initiatives is as per the plan of achieving milestones which is determined by the initiative owner.

The budgeting process is initiated once a year and the budgets are re-evaluated further, during the mid-term to ensure that budgets and initiatives are in synchronization with the current market conditions

The responsibility of the budgeting exercise finally lies with the MANCOM and approval for the same is sought from the Board. Assessment of risks inherent in the action plans are made by respective initiative owners. The risk assessment outcomes form a major factor in deciding resource allocation.

2.2a4 Workforce Plans

The HR Steering Committee (Fig 5.0 – 03 Integrated HR Planning and Execution Structure) conducts annual exercise to develop HR strategy and key HR Plans aligned to the overall TML strategy. This

gets cascaded into individual action plans/KRAs through PACT. An HR BSC (sample) detailing key workforce plan is in place (Fig. 2.2-01) which outlines ST&LT objectives and action plans.

HR Systems & Processes (Refer Cat 5.0) address the needs of the workforce and any potential changes to workforce capability and capacity needs. Refer Cat 7.3, for workforce focussed outcomes, which includes measures to track HR’s progress-to-plan in an integrated manner (Fig. 2.2-04).

2.2a5 Key Performance Measures The 40 initiatives/ action plans (22CV+18PC) identified for TML are tracked using identified metrics and targets with timelines. While status on these KPMs provide the achievement levels, the effectiveness of the initiatives are understood by tracking KPMs against the strategic objectives in the BSCs. The performance measures with targets for each initiative will be made available during the site visit.

KPMs in the BSCs and against the initiatives are cascaded to next levels. Each of these KPMs and targets are available as MPA target of a Manager/EG officer. This ensures that measurement systems and people are aligned to the action plans. The targets related to stakeholders other than workforce are communicated through periodic dealer and supplier meets, vendor quality councils, as also through channels like SRM and CRM-DMS.

2.2 a6 Action Plans Modification…

The SPS ensures that the changes in the environment are tracked and any changes required in the Action plans or the targets are

CVBU Level

Objective Flow

Plant/Function (Non Plant)

Factory/Region Office

Centre of excellence(Area office/Departments)

SQDCME/VMCDRE

EmployeeTargets

Reviews atEach Level

AOTargets

IndividualKRAs

Means of RO =Objectives of AO

Means of S & M =Objectives of AO

Objective : Low cost product through costreduction without affecting quality

Measures : Reduce cost at every plant

Objective : Cost saving through variousinitiatives like VE, Suggestions, DMCR, etc.

Measures : Reduce cost at every Model/Aggregate

Objective : Cost saving through valueEngineering

Measures : Find the opportunity and act toreduce cost without affecting quality

Objective : Cost reduction through directmaterial cost saving

Measures : Explore alternate materialalternate source to reduce cost

SQDCME Measurement

Impart training and work in teamsto reduce cost through value engineering

Major Performance Area

Cost saving target : Rs 15Lakhs/Year

Fig. 2.2-03 Strategy Cascade Example

quickly communicated to the respective agencies and acted upon across the customer response chain –from the front line to the back end on the shop floor through the Steering Committee mechanism.

With the recent commodity price hikes, action plans were modified such as launch of Project CREST, avoidance of non-essential expenditure, optimum utilization of human resource, etc. The robust review mechanism (Fig 1.1-09 and 2.2-02) and SPS helped TML in faster execution. The quick response helped the organisation to deal with the challenging situation (Fig. 2.2-02). Further this year 2011-12, due to the increase in demand of SCV products, Pantnagar plant responded positively and could surpass production of 1000 vehicles per day.

20 TATA MOTORS

Fig. 2.2-05 TML BSC

S. No. Strategic Objectives Key Metrics

OF 1

OF 2

OC 1

OC 2

OC 4

OC 3

OP 1

OP 2

OP 3

OP 4

OP 5

OL 1

OL 2

OL 3

OL 4

OL 5

Fin

anci

alP

ersp

ecti

veC

ust

om

er p

ersp

ecti

veIn

tern

al B

usi

nes

s P

roce

sses

Per

spec

tive

Peo

ple

, Lea

nin

g a

nd

Gro

wth

Per

spec

tive

Ensure sustainable profitable growth

Expand global market footprint with focus on emerging markets

Enhance India market share

Enhance customer satisfaction by offering immediate, accessible and affordable services through customer life-cycle

Widen sales, distribution and services network in India whileensuring quality and focusing on rural reach

Sales and service network expansion in key existing international markets.

Robust NPI processes to ensure flawless and timely new product launch within cost targets

Leverage strategic supplier relationships to sustain costleadership while improving quality

Improve warranty performance

Manage environment through enhanced climate changeprogramme and excellence in corporate sustainability

Ensure safe working conditions across the company

Enhance talent attraction

Increased employee engagement and creation of high performance culture by enhancing performance management system

Focus on developing leaders within the organisation

Enhance Innovations

Excel in journey to excel lance (TBEM)

Domestic vehicle volume

Total gross revenue

PAT as percentage of net turnover

ROCE

Cash Flow

IB revenue as a percentage of total revenue

Domestic market share (PC/CV)

Percentage of sales from new products (PC/CV)

Service / Customer Satisfaction Index (TR iM/JDP)

Dealer /Distributor Satisfaction index

Rural touchpoints as percentage of national touchpoints (CV/PC)

Number of IB dealers and workshops

New products / variants launched

Timeliness of NPI launchAverage Due Date Performance Vs Budget

First Time Right LaunchNo. of different type of problems / issues reported within 3 months of product launch

Deviation from stretched NPI cost targets at all NPI gates

Increase contribution from new products in last 5 years

Rationalise list of vendors and vendor managements organisation

In coming PPM levels (% Suppliers)

Vendor satisfaction index

Reduction in Warranty Costs

tCo per eq vehicle (CV/PC)

Severity rate (CV/PC)

Loss Time Injury Frequency Rate

Reporting of all Incidents major & minor and Investigation for Root Cause Analysis

Compliance to Regulatory Safety, Health & Environments requirements

Talent pool size

Talent Review Board for GM and above

Attrition rate: High performers (A and B+)

Employee engagement index

Succession plan readiness - number of key roles having identified successors (EG 2A and above)

IP Rs received during the year - Process

TBEM Score

2

Fig. 2.2-04 Human Resource Plan (HR Plans in detail can be shown at The Time of Site Visit)

Strategic Objective

Maximise return on human capitalEnhance Productivity

Optimise HR Costs

Manpower planning and Right sizingto be a lean and flexible organisation

Employee Engagement - EnhanceEmployee Satisfaction and Team work

Capability Building (Build strategicand leadership competencies)

OL2

OF1

OF1

OL3

OL4

Valuable added per unitwage bill

Wage bill - Deviation of -2% from approved budget

Linkageto TMLBSC

Key PerformanceMeasure

Headcount

Q12 Score

Training Effectiveness-CIRO I (all internalprograms)

6

2774

30691

Non-Management - 4.55Management - 3.80

3.64

5.08

2701

29217

Non-Management - 4.20Management - 3.63

3.46

6.2

3771

38581

Non-Management - 4.60Management - 3.85

3.55

6.1

3238

31928

Non-Management - 4.55Management - 3.80

3.50

6.2

4565

41422

Non-Management - 4.65Management - 3.90

3.55

2011-12 2012-13 2013-14 2014-15

Target Actual TargetTarget Target

2.2b Performance Projections…

TML analyses data and makes projections in the context of 5 year horizon for all key performance measures and compares (Bench Marking process, Fig 4.1-06) with the best available information about competitors.

If competitor information is unavailable, then use of other appropriate comparisons and benchmarks in addition to TML’s best post performance, projections are collated and determined from wide variety of sources like third party market research, FIBRES project, company data etc., to ensure reliability and accuracy, calculated performance levels based on current activities, Internet projections data of key factors, including - Industry performance, Industry studies, consultant forecasts, Financial institutions

forecasts, Governing body projections (e.g. SEBI), extrapolated from the historic performance, product or service ‘game changers’, if any.

Product life cycle or customer life cycle, sustainability of the current performance levels (e.g., an unsustainable market share may decrease), capacity or capability of people and capacity of facilities, etc. The SC uses these projections (Fig. 2.2-09) as an input during the SPS. SC addresses If there are current or projected gaps in performance against competitors or comparisons and drilled down for actions (Fig 2.2-02). Performance projections for some KPMs are illustrated in Fig 2.2-04.

21TATA MOTORS

Fig. 2.2-06A Strategy Map for PCBU Commercial 2012-13

Improve Nano Sales to match 10% of 2-wheeler volumes

Ensure leadership position in sub 5 lac product segments Improve sales in Emerging

Markets to 20 % of total sales

Focus and Grow additional revenue streams (TMA, TMI, Accessories, Ext.Warranty & VAS)

Improve Exchange Penetration to 25% Improve profitability

Improve market share with specific focus on UVEnsure warm and efficient Customer Experience at

all touch points for sales & serviceStrengthen and leverage Brand Image

amongst PC buyers

Make PCBU business the ‘most sought after’ business proposition amongst the channel partners

Ensure high referrals through consumers for PCBU products & services

Provide convenient access to customers through touch points at sub-district levels, including unconventional

Offer intelligent and innovative products and services by utilizing market and consumer insights and proactively participating in the NPI Process

Ensure efficient outbound supply chainImprove Sales and Service processes at all Customer

touch points by robust deployment

Enhance CRM and Analytics usage to strengthen Business decisions and growth

Establish Benchmarking and Knowledge Management Manage Risks at PC CommercialSafe working conditions at PC Commercial

and Channel partners

Attract, Retain and Motivate Talent Enhancing productivity at PC Commercial Build Strategic & Leadership competencies

Enhance Employee Engagement and team work Build a Customer Centric culture Create a culture of high performance through PMS

OF1OF2

OF3

OF4 OF5 OF6

OC1OC2

OC3

OC6

OC5OC4

OP1

OP2

OP3

OP4

OP5 OP6OP7

OL1 OL2 OL3

OL4 OL5 OL6

To be a formidable No.2 by 2015 in domestic market

The team here refers to the extended team - TML + channel partners

Fin

ance

Cus

tom

erP

roce

sses

Lear

ning

& G

row

th

Fig. 2.2-06B Strategy Map For Passenger Car Operations 2012-15

1. EBIDTA > 7.5% by FY15; 2. Be amongst top 2 by market share in India by FY15; 3. Achieve top quartile performance in customer experience by Fy15; 4. Achieve significant presence in select International markets

5. Build up on “Value For Money” brand in to a more aspirational & desirable brand

OPERATIONAL EXCELLENCE EXECUTION EXCELLENCE GROWTH

Achieve the stretched revenue and cost targets considered in budgetary projections

Meet revenue growth & operating margin improvements in new products as per strategy document

Achieve top quartile quality performance Build up on “Value For Money” brand proposition to a more aspirational & desirable brand

Reduce customer response time

Institutionalize the product planning process and develop product plans for domestic and international markets

Drive cost reduction in current and new products through ICR and ICM initiatives

Develop & institutionalize “Innovation framework” in an environment which promotes experimentation

Achieve Organisational Sustainability and Leadership development at all levels to empower and energize

the organisation

Leverage existing IT infrastructure to support above objectives through information, knowledge management

& business analytics

Be a good Corporate Citizen by strengthening key communities and deploy Climate Change Policy

Promote Safety, Quality and problem solving culture

Build a great place to work through enhancement of Employee Engagement

Fin

ance

Cus

tom

erP

roce

sses

Lear

ning

& G

row

th

OF1

OF2

OC1 OC3

OC4

OP1

Strengthen the NPI process and improve execution to achieve flawless launch quality, meeting cost & timeline target

OP3

Institutionalize Quality culture by achieving World Class Quality (Level 3)

OP2Institutionalize “16 step Supplier Quality Improvement

Process” through partnering approach OP4

OL1

OL3OL5

OL2OL4 OL6

OF2

Leverage existing partnerships with JLR, FIAT & develop new partnerships

to bridge gaps in products, processes & knowledge

OP5

Develop & execute an operations strategy to achieve flexibility and standardization

to meet growth & capex targetsOP7

Execute the platform strategy and aggregate commonalityOP6

22 TATA MOTORS

Fig. 2.2-07 CVBU BSC

S. No. Strategic Objectives

Ensure sustainable profitable growth and dominant

leadership position in domestic market

Be a low cost manufacturer of CVs leveraging

economies of scale and low cost of products

Enhance revenue from non-cyclical businesses

Expand global market footprint with focus on

emerging markets

Enhance India market share

Enhance customer loyalty and satisfaction by

offering services through customer life-cycle

Widest sales, distribution & services network in

india, ensuring quality and stakeholder satisfaction

Sales and service network expansion in key

international markets

Robust NPI processes to ensure flawless and timely

new product launch

Leverage strategic supplier relationships to sustain

cost leadership while improving quality

Leverage flexible manufacturing systems ensuring

improved quality level & employee productivity

Manage environment through enhanced climate

change programme and excellence in corporate

sustainability

Ensure safe working conditions across CVBU

Enhance talent attraction

Increase employee engagement and creation of

high performance culture by enhancing

performance management system

Focus on developing leaders within the organisation

Enhance Innovations

Excel in journey to excellence (TBEM)

Key Metrics

Domestic vehicle volume

Total gross revenue

EBIDTA as percentage of net turnover

ROCE (CVBU, pre-tax)

Cash Flow

Total cost reduction

Revenue from defence business, AMC, Recon, Insurance, Tata

OK, Telematics, spare parts and aggregates

IB volumes

International Business revenue (gross)

Domestic market share

Number of customer loyalty service programs launched

Dealer/Distributor Satisfaction index

Sales satisfaction index (TRiM)

Number of Sales Touchpoints

Number of Service Touchpoints

Service Satisfaction Index CSI (TRiM)

Number of IB dealers and workshops

New products/variants launched

Timeliness of NPI launch

Average Due Date Performance vs Budget

First Time Right Launch

Number of different type of problems/issues reported within 3

months of product launch

% Volume through new products (launched in last 3 years)

% of spend with suppliers of strategic importance

Vendor capacity expansion plan implementation achievement

Incoming PPM levels (% Suppliers)

Vendor satisfaction index

IPTV for MHCV / LCV / SCV / Bus

Productivity (J/P/L/UT) Improvement

tCo per eq vehicle2

Severity rate (JSR/P/L/U)

Loss Time Injury Frequency Rate

Total Recordable cases Frequency Rate

Attrition rate: High performers (A and B+)

% Adherence to 9 Box Frame work

Talent pool size

Employee engagement index

Adherence to Performance Differentiation Curve

Succession plan readiness-number of key roles having

identified successors (EG 2A and above)

IPRs received during the year - Process

TBEM Score

Fin

an

cia

lC

ust

om

er

Inte

ma

l B

usi

ne

ss P

roce

sse

sP

eo

ple

, Le

arn

ing

an

d G

row

th

OF1

OF2

OF3

OF4

OC1

OC2

OC3

OC4

OP1

OP2

OP3

OP4

OP5

OL1

OL2

OL3

OL4

OL5

23TATA MOTORS

Streategic Objectives Key Performance Measures

OF1 Achieve the stretched revenue and cost targets considered in budgetary projections

OF2 Meet revenue growth & Operating margin improvements in newproducts as per strategy document

OC1 Achieve top quartile quality performance

OC2 Reduce customer response time

OC3 Build up on "Value For Money" brand proposition to a more aspirational & desirable brand

OC4Institutionalize the product planning process and develop product plans for domestic and international markets

OP1Drive cost reduction in current and new products through ICR and ICMinitiatives.

Institutionalize Quality culture by achieving World Class Quality (Level 3)OP2

Strengthen the NPI process and improve execution to achieve flawless launch quality meeting cost & timeline target

OP3

Institutionalise "16 step Supplier Quality Improvement Process" through partnering approach

OP4

Leverage existing partnerships with JLR, FIAT & develop newpartnerships to bridge gaps in products processes & knowledgeOP5

Execute the platform strategy and aggregate commonalityOP6

Execute operations strategy which supports growth objective while achieving operating margins and Capex targets

OP7

Develop & institutionalise "Innovation framework" in an environment which promotes experimentation

OL1

Be a good Corporate Citizen by strengthening key communities and deploy Climate Change PolicyOL2

Active Organisational Sustainability and Leadership development at all levels to empower and energise the organisationOL3

Gross Revenue

EBIDTA Margin

Percentage revenue growth from new products

Operating margin growth

JD Power VDS (PCBU)

JD Power APEAL (PCBU)

Warranty IPTV 6 monthly

JD Power IQS (PCBU)

Customer rage issues pending for implementation ofdetection strategy beyond 90 days

Brand Track Survey Results

Progress against action plan for institutionalising Product Planning process

70% aggregate commonisation target for all new products within platform

30% aggregate target for all new products within platformcommonisation

Progress against Plan

Progress against plan for developing innovation framework

CSR Index

Achievement of Training Plan

Sustainability Index

Develop & Deploy knowledge management module

Gallup Employee Engagement Score

Severity rate, Frequency Rate (SR,FR)

ICR Percentage DMC reduction achieved against target

ICM: DMC Actual against target (Mean of all projects)

Nos of absolutes complied with for achieving Level 2

IT enablement of Gen 3 NPI process

Adherence to NPI Milestone for identified major projects

New Projects: Percentage of components through Step 9 (3 stage PPAP) by SOP

Progress against Plan

Fin

an

cia

lP

ers

pecti

ve

Cu

sto

mer

Pers

pecti

ve

Inte

rna

l P

roc

es

s P

ers

pe

cti

ve

Le

arn

ing

& G

row

th

Pe

rsp

ec

tiv

eFig. 2.2-08 PCBU Operations BSC (Illustrative)

S. No.

Fig. 2.2-09 Performance Projection Sample KPMs (CVBU)

2010-11 2011-12 2012-13

CVBU BM

Comp

CVBU BM

Comp

CVBU BM

Comp

CVBU BM

Comp

BM

Comp

CVBU

2013-14 2014-15ActualPerf.

Finance Perspective

Customer Perspective

Internal Processes

Learning and Growth

EBIDTA (%)

Market Share %

Outlets (Nos.)

Q.12 Index

153

61.4

975

3.63

81

15.9

592

3.83

160

62-63

1100

Top 25quartile

75

16-17

620

3.85

210

62-64

1250

Top 25quartile

80

17-18

700

3.95

215

62-64

1300

Top 25quartile

220

62-64

1450

Top 25quartile

82

18-20

750

4.0

78

17-18

650

3.90

+

+

+

+

Measures (examples)

OL5Leverage existing IT infrastructure to support above objective through information, knowledge management & business analytics improvements

Build a great place to work through Enhancement of EmployeeEngagement

OL6

OL4 Promote Safety, Quality and problem solving culture

24 TATA MOTORS

�CVBU Customer Support bags International Achievers Award for 'Best Practices in Business 2011'

�CVBU Spare Parts team has received the 'Automotive Supply Chain Excellence Award' in the 5th Express, Logistics & Supply Chain Conclave

�Ranked as the 2nd most trusted in the category of four-wheelers in The Economic Times Brand Equity 'Most Trusted Brands' survey for 2011

�Customer Care (CVBU) has won the 'International Customer Service Excellence Award - Large business', at the 10th Annual Australian Service Excellence Award (ASEA) 2011, held at Sydney

�Most Preferred Brand, in the Commercial Vehicles category, at the second edition of the North-east Consumer Awards 2011

�Customer Support (CVBU) was awarded the People's Choice Stevie Awards 2012 for 'Favorite Customer Service'

�Customer Loyalty Continues …… Silver jubliee year celebration of the Tata 407

�Launch of Tata Delight an exclusive Customer loyalty programme that offers great benefits, special privileges and fabulous rewards

�Brand promotional event of Tata Manza: Tata Motors partnered with ace fashion designer, Rajesh Pratap Singh

�Building Brand & Reaching to Customers - Successful participation in the Auto Expo 2012.

�Mr. S. P. Joshi (VP - Customer Care, CVBU) was conferred the 'Customer Service Leader of the Year' at the 6th Annual Stevie Awards 2012

CUSTOMER FOCUS3

3. CUSTOMER FOCUS

3.0 Customer Focus

TML has retained market leadership by anticipating customer needs / requirements in various segments and introducing a new series of products in addition to existing products . This enables TML to have large portfolio of products to satisfy customers . (Fig. 3.0-01).

3.1 Voice of the Customer

3.1a Customer Listening

3.1a1 Listening to Current Customers…

L&L approaches for different customer groups are (Fig. 3.1-01 and 06) essentially consist of a combination of secondary and primary sources eg. Sales / Market data, Satisfaction Surveys, Customer loyalty & retention data, Customer complaints, Post-launch surveys, Customer clinics, Win-loss analysis, QFD, Mystery Shopper etc. These approaches provide actionable data and information on customers' current and emerging needs, customer satisfaction / dissatisfaction levels, market / segment trends and shifts. Actionable information is also collected from data sources. This information helps to draw up action plans aimed at developing new products, improving existing products / processes / systems, and identifying new business opportunities.

Social media is an emerging medium with large future potential. TML has started to gather feedback from social media sites, automobile related sites and feedback submission websites like Facebook, Twitter, Teambhp, mouthshut.com etc. However its inputs are more relevant for PCBU than CVBU, due to different customer profiles. A formal process of treating Facebook as a source of complaints has initiated in PCBU. TML has created product specific websites to provide relevant information about products e.g.:

magiciris.tatamotors.com, ace.tatamotors.com, tatanano.com, tatasumo.com, tataaria.com, tataventure.com.

In important international markets for CVBU such as Turkey, South Africa, and Nepal and PCBU for Ghana, Nigeria, Turkey, Sri Lanka and Nepal, customers are contacted over the phone to ascertain their satisfaction with services provided to them. Instant Feedback & Instant Redressal Forms (IFIR) are used at workshops to obtain specific feedback on services offered. Any corrective action is instant & immediately actioned by the CRM / CRO at the dealership.

Voice of Dealer

As dealers are the 1st customers and form the main channel of doing business with the end-customers and are the key stake holder in supporting the promotion and usage of the company's products and services, the engagement of the channel partners form an important part in the strategy to improve the support mechanisms of customer for the use of TML products and services.

A cascaded structure of Regional Dealer Councils and National Dealer Council in PCBU helps to understand the "Voice of Dealers"

Dealer council acts the sounding board for strategic and tactical plans and as feedback mechanism about the competition and market. The action are taken with the help of dealer councils to improve products and services (Fig.3.1-02).

Customer's feedback is obtained through various means on quality of products, customer support and various transactions to receive immediate and actionable feedback (Ref. 3.1-08). This enables to tailor products and support services, new business positioning.

3.1a2 Listening to Former, Potential Customers……

TML also conducts surveys on competitors' customers in all Various market surveys are conducted to determine customer expectations, market trends, customer buying behaviour and product performance among different market segments to determine reasons for non-purchase of vehicles (Fig. 3.1-03). Such feedback provides a trigger to improve products / communication with customers. Potential customers (like owners of three-wheelers) are often interviewed to: i) seek their inputs on product features, and ii) find their acceptance of new vehicles like Iris, Zip which are positioned essentially to attract three-wheeler owners.

1. Data Source - Social media sites, Auto sites, SIAM, ARAI, VRDL, Channel Partners, Vendors, TNS JD Power Surveys

2. Listen from Current, Former, Potential and customers of competition.

3. Collect Data & analyze & develop action plans(Participants-S&M, Service, NPI,ERC, Plant)

5. Feedback from customer on improvements

4. Implement Action Plans to improve product & processes

Fig. 3.1-01 Listening & Learning Process

Fig. 3.0-01 New Product Introduced

Products CVBU PCBU

Ex CV range,LCV Pickup,Xenon Euro 5,

Sumo Gold,Nano 2012, Indica eV2, Indigo eCS

Magic Iris, Ace Zip Aria

Existing

New

Poor profitability of

dealerships resulting in

low engagement and low

interest in TML

dealership business

Special focus to improve dealer profitability through

specific actions like increasing dealer margins in line with

key competitors, improving dealer retention through dealer

friendly retail schemes, decreasing dealer inventory holding

through changing focus from off-take to retail based incentive

schemes.

Focus put for increasing revenue through non-vehicular

businesses like - TMI, TMA, service, accessories, AMC,

extended warranty, value added services etc.

Special actions have also been initiated to eliminate dealer

discounts and territory infringements.

Partnering with D&B, TML has started a process of

monitoring and improving the dealer profitability

Quality of products

needs a lot of

improvement to compete

with the highly market place.

competitive

formally involved into the new product introduction process

On the area of quality improvement - the dealers have been

in various stages through feedback, factory test drives and

interactions with the product development teams etc.

Dealers needed support

from TML on sourcing

and training quality

manpower for their

operations

To address the issue of quality training of dealer staff, TML

has started the Sales Training Academy and have

deployed 45 trained Dronas for the training and coaching of

dealer sales and service teams.

TML had tied up with recruitment process outsourcing

agencies for a structured and ready source of manpower for

the dealers

Fig. 3.1-02 Voice of Dealers and Actions (Few Examples)

Voice of Dealer Action taken

Customers Listen to Interact with Observe

VOC,House of Quality Customer clinic Auto Expo, Shows

Product specific websites Product Demos Naka Visits

Market Surveys Customer Visits / meetsProduct comparisons with competition products

VOC,House of Quality Product Demos Auto Expo, Shows

CSI Customer Visits Naka Visits

VOC,House of Quality Product Demos Auto Expo, Shows

Market Surveys Market Surveys Benchmarking

CSI CSIProduct comparisons with

competition products

Former Customers

Fig. 3.1-03 Listening & Learning Methods for Former, Potential andCompetitor Customers.

PotentialCustomers

Competitor Customers

The CRM-DMS data are analyzed for identifying new requirements/needs and developing product / service offerings. Introduction of ACE, Magic, ACE Zip, Magic Iris, Driver training schools, 25KMPL IndicaV2, Nano are some examples of product development based on the listening to customers.

The L&L continues to understand the customer's position on buying

25 TATA MOTORS

platform, PCBU classifies prospects into different categories like green form, pink form, yellow form and white form whereas CVBU classifies them as C0,C1,C2,C3 ( Fig. 3.2-14) . It uses call centres for customer follow up. The regular feedback is taken from lost prospects to identify reasons for not choosing TML product in spite of the initial interest shown.

3.1b Determination of Customer Satisfaction and Engagement

3.b 1 Satisfaction &

Tata Motors' journey on Customer Satisfaction (Fig. 3.1-04) began 14 years back, and during this period the process has developed and matured. Evaluation of customer satisfaction with Tata Motors is conducted through a syndicated survey - conducted by world renowned agencies: J D Power for PCBU and TNS for CVBU. Both surveys begin with an exploratory phase to determine attributes which influence customer satisfaction. Output of both surveys includes segment-wise data on : i) Customer Engagement Rating of Tata Motors vis-à-vis Competitors (Customer Engagement ratings are computed as a combination of Overall Satisfaction, Loyalty and Advocacy), ii) Areas of satisfaction and dissatisfaction on product, sales, service, cost of operation, brand image etc., iii) Action-plan for improvement.

Engagement

each customer group & Market segment (Ref. Fig. 3.1-05). To illustrate, in satisfaction surveys for vehicles owned by individuals, only one person is interviewed. However in satisfaction surveys on institutions like Dealers / STUs / Defence, i) parameters for customer satisfaction determination are widely different, and ii) a group of individuals are surveyed - including CEO, Sales Manager, Workshop Manager etc.

Methods of measuring

Customer Satisfaction

Frequency Measures Results

External third party

industry survey for SSI &

CSI

Annually Ratings, Scores

rankings

BU’s own Dealer wise

survey for Sales/Service

Quarterly/

Annually

Ratings, Scores

rankings

Analysis of

complaints

received through several

modes & resolution

Monthly CPTV, CCCT,

OCTV

PSF sales

through

internal tele

calling

Daily Scores stage wise

& Customer-

Advisor wise

PSF Service through

internal telecalling

Daily Scores Factor

wise & Service

Advisor wise

Exchange satisfaction

through internal

telecalling

Daily Exchange

Satisfaction

Scores

TMI - Policy sale and

Claim PSF through

internal telecalling

Daily Policy Sales &

Accident Claim

PSF

Dealer Engagement

Survey

Annually Scores

7.2-01,047.2-13

7.2-12

7.2-23 to 25

7.2-12

–

–

–

–

Fig. 3.1-05 Methods of Measuring Customer Satisfaction

1. Input from marketing &Customer Care fordiscovery phase

6. Decide Action plan forkey improvement areasBy concern agencies

1. Decide surveyscope (Subsegment,geography)

5. Data Analysis tounderstand SatisfactionDissatisfaction(Competitive)

3. Modify questioneras per Segmentrequirement

4. Conduct surveys -Mailers, calls,interviews etc.

Fig. 3.1-04 Process for Customer and Dealer Satisfaction Survey

Tata Motors treats intermediaries like Dealers / TASS / TASC as its first level customers and believes that only satisfied dealers can create satisfied customers. Hence an annual Dealer Satisfaction Survey is a part of its package of Satisfaction Surveys.

Dealer Satisfaction provides data on : i) relative importance of various attributes considered, ii) dealer satisfaction rating on various attributes and his position on dissatisfaction-satisfaction-delight zones; iii) Likely Impact of Marginal Improvement, and iv) Action-plan. PSF-CSI which is obtained through Post Service Feedback calling by Call Centre forms a major thrust area for ascertaining area of improvement which is used for identifying Non-performing dealers (NPD) & parameters where focused efforts are taken using Daily management & PDCA approach to bridge the gaps. Mystery shopper exercises also provide customers' perspective on satisfaction / dissatisfaction with dealers vis-à-vis competitors. This information is used to take corrective action like conducting training programme.

Since Global presence is an important objective of Tata Motors, Customer Satisfaction surveys are also conducted by IB. Satisfaction surveys in IB markets are conducted by international agencies like TNS and A.C. Nielsen. While selecting IB markets for conducting satisfaction surveys following factors are considered: i) importance of the market, ii) sales volume in the market to ensure that adequate sample size is available to ensure statistical significance of findings. Satisfaction surveys in IB markets provide segment-wise data on: i) Customer engagement vis-à-vis major competitors, and ii) action plan for improvement.

Determination Methods Differ among Customer Segments…

Process of customer satisfaction is tailored to suit individual needs of

Satisfaction Surveys on Spare Parts are conducted among a variety of stake-holders including: i) Retail customers, ii) Dealers,, iii) TASS, iv) Distributors, v) Mechanics, and vi) Reborers (Fig. 7.2-10 to 12). CEI indicators form an integral part of BSCs at various levels and its reviews.

Learning/ Improvements…

CVBU-IB uses expert agencies and consultancies for conducting CSI studies in High volume countries like SriLanka, Nepal and Highly competitive markets like UAE, South Africa. PCBU - IB does CSI studies in focus markets like Ghana, Nigeria, Nepal, Turkey and South Africa. These survey results are used to incentivise the dealerships and for modifying existing systems to support increase in sale. (e.g Customer Care Process Manual Implementation in South Africa).

3.1b2 Satisfaction Relative to Competition

Syndicated satisfaction surveys are conducted by JD Power and TNS .This provides relative satisfaction of customers in sales and service with TML vis-à-vis major competitors (Fig. 3.1.05). This is being done at an overall as well as at individual parameter levels. The information is derived from various satisfaction surveys and various L&L mechanisms. This further helps in understanding important factors that drive markets and long term competitiveness.

3.1b3 Dissatisfaction…

Customer dissatisfaction is measured separately and analyzed segment wise and further supported by action plans. (Ref. Fig. 3.1-08 and 7.2-04).

The dissatisfied customers are addressed through root cause analysis of complaints received through Complaint management process, (Fig. 3.2.-13,15) Customer Care Team -CCT approach and "Daily Service Synopsis". Regular reviews of customer complaints are conducted with the field team to provide necessary support.

26TATA MOTORS

Sr

No

L&L Methods

Customer type

Customer Segment

Freq.

Analysis of data

Use of Data

Form

er

Cur

rent

Pot

entia

l

Com

petit

ors

Per

sona

l

Taxi

/com

m.

Inst

itutio

nal

Dom

-Priv

ate

Dom

-Ins

t.i

IB NV

B

Def

ence

TML

PCBU

CVBU

1

Customer Meets

√

√

√

√

√

√

2/yr

customer expectations, Preferences

Product mix & service planning

2

Fleet operator/BPO operator meet

√

√

√

√

√

1/yr

Operating economics

Product mix & service planning

3

Customer calls

√

√

√

√

√

√

√

√

Regular

Service requirements, complaints analysis

Product mix & service planning

4

Call centre

√

√ √

√

√

√

√

√

Regular

Complaints, other requirements

Improvement of quality in cells & service experience

5

Customer Complaints

√ √

√

√

√

√

√

√

√

√

Regular

Product ,service quality

Quality improvement

6

Car / Customer Clinic

√ √

√

√

√

√

√

√

Schedule

Product needs & requirements

Product Design(NPI)

7

Channel feedback/ MIS&DQCTC

Audits

√ √

√

√

√

√

√

2/yr

Service needs, requirements

Input to SPP, Tactical Sales decision

8

Financier Feedback

√

√

√

√

√

√

√

√

1/yr

Customer credit rating, funds requirements

Input to SPP, Tactical sales decision

9

SIAM,ARAI meetings

√ √

√

√

√

√

√

√

√

√

√

Regular

Industry Trends, Regulatory direction

Input to SPP, Technology Roadmap

10

Usage & Attitude study

√ √

√

√

√

√

√

√

0.5/yr

Buying Behaviour

product &

service planning, Product positioning,

11

White form

√

√

√

√

√

√

√

√

Regular

Demographics & lifestyle habits

Customer Database, Marketing mix

12

Brand Track

√

√

√

√

√

2/yr

Media Habits Brand perception

Brand positioning & communication Strategy

13

TNS & JDP Survey

√

√

√

√

√

√

√

√

√

1/yr

Vehicle performance, design product quality

Product design & Brand position Quality& Process improvement

14

Post Ad test

√

√

√

√

√

√

√

Post Campaign

Comprehension, Recall, Likeability, Effectiveness

Communication & media Strategy

15

CRMDMS

√

√

√

√

√

√

√

√

√

√

Regular

Demographics & Win loss analysis

Sales

,Network planning, Service & Product performance

16

Sales, MS & Revenue trends

√ √

√

√

√

√

√

√

√

√

√

12/yr

Sales pipeline, sales trend, competition

Tactical sales Decisions

17

Win/ Loss analysis √

√

√

√

√

√

√

√

√

√

Regular

Product service improvements

Marketing And Sales Strategy

18

QFD / VOC

√ √

√

√

√

√

√

√

√

√

√

Need based

Product service opportunities

Input of SPP & NPI

19

Loyalty Programs √

√

√

√

√

√

√

Regular

Marketing Mix & service planning

Marketing Mix & service planning

√

Fig. 3.1-06 Listening & Learning Methods for Different Customer Segments

Customer Life

cycle stages

and Status.

A. Customer

Relationship status

level with TML

B. Approaches and Tools to

understand customer relationship

status - supported by QMS

C. Approaches & tools to

improve customer relationship

status -supported by QMS

D. Approaches & tools to track progress

on improving their relationship status

1.Do not know

(Potential

customer)

Has never used

product Customer Contact programmes,

Product promos, NPI/QFDs ,

Advertisements, CRM-DMS , Service

Policy design & development),

Marketing efforts – Customer

Surveys, advertisements and

commercials

Follow-up with the customers through

Mailers ,Out-calls, Number of visits to

web site ,mails received from customers,

Data updates on CRM-DMS

2.Heard about

(Potential,

Current & Past

customers)

Visits website,

showrooms, Call

Centre/Sales

people,

Customer Contact programmes,

Product promos, NPI/QFDs , Advt.

CRM-DMS , Service Policy design &

develop. Communication, Network

Mgt., Cust. Acquisition

Product Selection support,

Customer Sales survey, QFDs,

win-loss analysis, etc

Customer Acquisition, Adherence to

Customer Contact programme

3.Trying

offerings

Buys products and

uses services Channel Partner Mgt. Phone calls,

Service visits to workshops, Spare

Parts Mgt, AMC, Customer

Acquisition

Product & Service Selection

support, Customer Centricity,

After Sales survey, QFDs,

Finance & insurance Services

Data updates and analytics on CRM-

DMS, Customer Acquisition, Sales

reviews

4.Being

satisfied Uses Service

centres, Sends

appreciation letters,

Repeats purchases

Customer. Eng. Surveys, After sales

Service, Customer meets, Key

Account Management, Customer

Complaint Management

Customer Satisfaction &

Dissatisfaction Surveys, After

Sales Surveys, CAC, Customer

Clinics, Recon, Exchange offers,

TMA ,Pre owned vehicles

Customer Engagement Index, After

Sales satisfaction (PSF), Customer

Complaints resolution.

5.Being loyal Repeat purchases

Buys similar

products

Customer Surveys, Customer clinics,

Customer Acquisition Feedback from Customer

Surveys, Customer meets,

Channel partner meets,

Customer Clinics, KAM

Customer Engagement Index, After

Sales satisfaction (PSF), Customer

Complaints resolution, Service revenue,

Repeat Purchase , loyalty index

6.Becoming an

advocate

Positive referral for

products & services Customer Surveys, Customer clinics,

Customer Acquisition Customer Surveys, Key Account

Management Number of vehicles sold through positive

referrals, Advocacy index

7. Sale vehicle Sale old & buy new

TML vehicle Customer meetings, Phone calls,

Customer acquisition Recon, Exchange offers, Tata

Motor Assured second hand

vehicles

Revenue from Recon, Exchange offers,

Tata Motor Assured second hand

vehicles

Fig. 3.1-07 Customer Life Cycle Stages and Relationship Status.

27 TATA MOTORS

Post Transaction follow-up process steps

Who is Involved Measurement

Timing of the Step

Actions Taken Based On The Feedback

Service Policy Design & Deployment for new/ existing offerings

LOB Heads New offerings and adherence to NPI service activities

Ongoing

Inputs are analyzed from various sources and the changes requirements in offerings

identified. New offerings designed to meet the requirements

2. Network Management

Head, Customer Support and Head, Network Management

No. of LOIs and COBs

Ongoing

After customer requirements, market is surveyed. Market Survey for prospecting fresh applicants is done

3. Service Process Management

RM (CCs) CSI on service parameters, Post Service Feedback

Service requests from customer

Vehicle reports for Warranty/ paid repairs, Free/Paid services, AMC repairs, Accident & Onsite repairs are analyzed and acted on

4. AfterCustomer Relationship Building

RM (CCs) CSI on service parameters, Service Market share

Customer surveys

Feedback from customer surveys are analysed and market coverage plan is made

5. AMC Business Management

Head, AMCChannel Partners

% PBT for AMC

Acquisition of customer

Claims raised by channel partners are settled by way of crediting the Amount. AMC process is improved, in case of opportunities

Spare Parts Management

Head, Spare PartsRM (CCs), RPMs, PMs

CSI on spares availability

In line with Business plan

Make part available & increase the reach as per demand

7. Customer Complaints Management

Head, Customer Complaint Mgmt

% of customer complaints resolved

Complaint made Complaints are analyzed & a monthly report is generated & disseminated to all agencies concerned in the company

RECON Business Management

Head, Recon and Channel Partners

No. of aggregates are made available

Business potential studies

Franchisees are selected for reconditioning of aggregates. Quality & inventory is controlled by processes

9. Warranty Management

Head, Customer Support, Channel Partners

DSI - Satisfaction with warranty & FS bill Settlement

Claims raised Warrant claim settlement time is reduced

Fig. 3.1-08 Post Transaction Follow-up

Product failure issues are reviewed regularly in Customer Service, QA and ERC meetings and specific action items are implemented as appropriate.

Learning and Improvements……

Initiatives like Project EXCEED, Tata alert, e-learning, Dealer Training, Service training are used further to reduce dissatisfaction levels. These dissatisfies are used in After Market support process to improve product/service offerings. The Post Sales and Post Service PSF results and the dissatisfied cases thereof are reported throughout the organization as well as to the dealers using the CRM Analytics platform for taking necessary and timely corrective actions. The actions are also integrated with the incentives of the Dealer Employees (Fig. 3.2-16).

3.2 Customer Engagement:

3.2 a. Product Offerings and Customer Support

3.2 a1 Product Offerings

The product portfolio is reviewed during Strategic planning process (Current, potential products, services) including opportunities for innovation. The identification of changes required is done through analysis of customer needs and requirements as a part of customer listening (Fig 3.1-06). The action plans are derived and implemented through NPI and after sales support processes.

NPI process helps in addressing the requirements and exceeding the expectations of customer groups and market segments based on Market research, QFD, VoC, Customer clinics, listening & learning.

Attract New Customers…

The processes like "Identifying customer requirements" (Fig. 3.2-01), "Innovation in Product Offering" (Fig. 3.2-02), "New Customers and Relationships" (Fig. 3.2-03), QFD , L&L and VOC are used to attract current, new and potential customers and markets. This is further supported by customer support approaches (Fig. 3.2-04), Customer Acquisition system and gates of NPI.

CVBU has engaged more than 1300 rural youth for initiative “Project Neev”. Project Neev coves 350 outlets in 3 States for promoting SCV's. Over 5000 SCV's have been sold. In PCBU emerging markets have been activated to tap rural markets, small cities and towns. Over last 36 months, TML added 150+ products and variants in the market place. Many new initiatives are deployed for improving customer support (Fig. 3.2-06).

Fig. 3.2-01 Customer Requirements Identification

1. Listen & LearningPosts (CustomerClinics / VOC)

2. InformationAnalysis andAction plan

3.a. New Requirementsb. Product (QFD)/Process(PDPI) Improvementsc. New Segmentd. Additional learningpost required

6. ChangeApproval

5. SPS &Reviews

4. Decide the scope and planfor product / service offerings

7.Implementation in Process/Product / Services SPS & Reviews

Methods used to validate

that the Offerings meet

requirements & exceed

expectations of Customer Groups

Methods used to validate

that the Offerings meet

requirements and exceed

expectations of Market

Segments

Stagegate NPI process (QFD; Sales & Marketing

processes;

usage and attitude

studies,

ethnographic /

observational studies;

Customer Support

processes;

TMA

QFDs, Customer Clinics,L & L

QFDs, JDP/ TNS, APEAL, IQS survey

Listening and Learning

approaches

Market Share, Sales

Volume; volumes;

New Product

JDP / TNS CustomerSatisfaction, Surveys

JDP CSI ,SSI Survey

/ TNS

DQCTC, Service Edge,AMC,

Performance on free &

paid ,service, AMCService Market revenue

Loyalty, repeat purchase

Pre-owned cars and exchange businessRECON

,

Processes used to

innovate Product

Offerings

Fig. 3.2.-02 Innovation in Product Offerings to Meet and Exceed Requirements

28TATA MOTORS

and warehouses in improving their safety performance by making norms, conducting audits and trainings.

The network expansion drive has led to PCBU network becoming stronger by 250 dealerships and 600 customer access points spread over 401 cities. After-sales support is extended through 837 service locations and 21 spare part distributors. CVBU is represented by 1350 sales touch points and 1500+ service touch points spread across the country

The network development decisions are based on a data driven analysis of various parameters like geographical market reach at district and city levels, total industry size in the geographical area, current dealership effectiveness and competitive network penetration. CVBU has rolled out "SCV-Platinum range" of 3S set-ups aimed at improving rural with optimal investments.

On opening up of Nano retail in different parts of the country, PCBU has taken several innovative measures to expand the reach to the target audience by the following means:

1. Using the existing authorized service center network of PCBU (TASCs) for display and sale of Nano

2. Opening up of small special Nano access points (SNAPs) in rural and semi urban areas,

3. Tying up with Big Bazaar outlets in select locations for display and booking of Nano

Vary for Different Customers, Customer Groups… The mechanisms and approaches (Figs. 3.2-05, 07) are customized and vary for different customers, customer groups and segments. For Govt. / Defense business, a separate group interacts with Govt agencies to understand and fulfill their requirements. Focused market development is performed through Sectorial process which addresses Industry-specific & customer requirements by designing products for reducing overall transportation cost and increased Safety, access customers through a widespread network touch points for Sales & Service and product specific websites.

Determination of Key Support Requirements

Standard formats are used to collect customer support requirements such as enquiry for sales, spares service (Fig. 3.2-03, 05) Through CRM-DMS system these requirements are deployed across geographies.

Using to attract new customers

New Product Introduction Process/QFD,Service Policy Design

Understanding the requirements of potential , future customers & deliver the product & services)

Creation of new L&L posts

Creation of new or modifying the contact and access mechanisms

Key Account Management

New Product offerings: Domestic - Star bus ultra, Magic IRIS & ZIP, Aria,

Sumo Gold, Indica eV2, Indigo eCS, Vista Sedan Class, Venture.

IB - Prima in South Africa, Tata Marco polo Bus, ACE EX Bangladesh, LPT 2116,

2123 in Myanmar, LPO 1618 with ABS in Kuwait, Xenon Euro 5 with Airbags and

ABS in Italy, ACE Left Hand Drive in Afghanistan, Nano in Nepal and Sri Lanka,

Manza in Sri Lanka.

Changes in Customer Support: Project EXCEED, Project 1660, Speedo Bay,

Tata Alert, Project Green, e-learning, TASS Council, STC modernization, Tata

Authorized Service Point, Focused network development in Rural areas, Works

Manager Certification Program, Driving license renewal reminder, Driver Training

Institute, Mobile training van, TASS Distributor Network, Part Distributor for Army,

Exclusive Dealerships for Nano and UVs, Refurbished Vehicle Business (TATA

OK), Insurance Business (TMI), Financing Initiative, Tata Motors Assured.

IB - Customer Care Process and FMC - Full maintenance Contract in South

Africa, Digital customer care in Nepal & Bangladesh.

Fig. 3.2.-03 New Customers and Relationships

Fig. 3.2.-04 Key Products & Changes to Customer Support

Process steps to identify Offerings

used Using to expand relationships with existing customers

3.2 a2 Customer Support.

Enable Customers to Seek Information & Customer Support….

Determine key mechanisms… Key access mechanisms (Fig 3.2-05) supports the use of products and enable customers to seek information and conduct their business to get meaningful feedbacks

Key means of Customer Support…

Key means of customer support are face to face interactions, web site , Internet etc (Fig 3.2-06). L&L methods and approaches give an opportunity to get in touch with customers for various purposes and facilitate meaningful interaction..While the dealer network is being expanded for customer reach, with specific focus to semi-urban and rural territories, the existing network is also being upgraded to enhance the quality of customer experience .It helps dealers, RSO

Fig. 3.2-05

Key approaches… Access mechanism Contact Performance Requirement Diff Customers,

Groups & market segments

�Seek information:

Enquiries and salesTata Motors’ website, Dealers, Offices near all major Markets

Response within 24 hoursAll

Information Request All access points/CAC-Toll Free/ Website

Same day fulfilment

�Conduct Business:

Sale of Products Dealerships, Govt., Institutional, Direct Sales

Driven by customer needs

All

Breakdown Assistance

24 hrs - call centre CAC, Key Account Portal

Report Action taken within 1 hour

AllAll dealer, TASS and service offices

Assistance within 24 hours

Vehicle Service Dealer / TASS

�

Customers to be acknowledged immediately�

Job card preparation <10 minutes

�

Delivery time< 24 hrs for minor repairs and < 3 days for major repairs

M&HCV, Bus, LCV

Vehicle repairsTASS - Reliable repairs –

no repeat complaints

M&HCV, Bus, LCV Dealerships and TASS

Easy accessibility

VOR due to parts Regional warehouse to supply parts Within 3 days NVB

Spare parts Dealers, distributors, retailers(>8000), e-cats Ready availability of parts and genuine spares NVB

�Make Complaints:

ComplaintsDealers / all offices Complaint resolution in 3 days

AllCAC Centre, Key Acct Portal, Website Acknowledgement within 24hrs

Results

7.1-05

7.5-36

7.1-06, 08, 13 - 157.1-11

7.1-14

7.1-13

7.1-03 - 05

Key Access Mechanisms and Key Contact Requirements - CVBU

29 TATA MOTORS

3.2 a3 Customer Segmentation.

TML uses Market and customer segmentation process (Fig. 3.2-08) inline with Industry, SIAM, RTA practises / guidelines. The customer needs like service, spares and other value added services are addressed through Non-Vehicle Business (NVB) line. In each of the segments mentioned above, there are smaller niche segments with peculiar / specific needs, e.g. cargo, construction, cement transportation, school buses etc. where TML develops specific products to cater to their specific needs.

These segments are analysed at least once a year in SPS (Fig. 2.1-01) which gives us gaps and opportunities for new product development (NPI process inputs) and improve the existing products. e.g. Star Bus Ultra . Channel partner network (Fig. 7.1-10) addresses various customer requirements of sale and service with reasonable proximity.

Trends in customer satisfaction (Figs. 7.2-01 to 13) and in market shares (Figs. 7.5-36 to 57) indicate that segmentation approach is effective. The effectiveness of the segmentation process is reviewed in SC.

The basis of segmentation, its advantages, impact to gain dominance in industry, is shared with channel partners and their views are incorporated while updating segmentation process on an annual basis, e.g. The channel partners are aligned towards segmentation through separate dealerships specific to LOBs.

For pursuing relevant market segments for growth; prioritization is based on

1. 'Market Attractiveness' (Total Industry Volume -TIV),

2. Market Strategy and

3. Organizational Capability (resources such as funds, people).

The process (Fig. 3.2-09) is used to determine which customers, customer groups, and market segments to pursue (Targeting) in the global auto scene. The entry into any potential market is evaluated on market accessibility, product suitability, market size and profitability. Once the market is deemed to be attractive, a systematic process is used to 'open up' and to 'develop' the market selection. The targeting of customers is also based on a detailed study focused on understanding which customer expectations influence and ultimately drive purchase decisions.

Consider Customers of Competitors…While identifying market segments & customer groups, all customers of competitor, potential customer and market are included.

Determine which Customers, Customer Groups… Segments…The Determination of the customer, customer groups

a. Face to face Interaction- Meets Campaigns Surveys Customer Clinics prima training for S/A Works mgr Aggregate Trg centre in Kenya & Mozambique Drivers training school in Nigeria& Bangladesh, Construk support, DTC Fleet Management, Key Account Management- KAM

b.Websites & Internet:- Product specific websites, CRM-DMS

c. Forums - 24*7 Toll Free Number, Mobile-SMS TASC, TASP,TASO, Distributers

d.Communication & Advertisements - Mailers Letters Demos and Promos Out-calls Publications, Exhibitions, Samarpit for customer support and 'STRIDE' magazine and Tata Reach newsletter for IB dealers, Samvad, CV Buzz, CV Talk,

Key communication mechanisms: Channel Partners -Dealerships, TASSs, Distributors, Part Distributors & retailers, Annual meets, Regional meets, SHQ/RO/AO, Web site, CRM-DMS, CAC and monthly report, CCT, excl dealerships, Service circulars, Daily Service Synopsis, etc

Processes - Market Development, After market support processes

Fig. 3.2-06 Customer Support Methods

Ensure Key Support Requirements Deployed…..

Customer support requirements become inputs to key customer facing process. These outcomes are measured and reviewed periodically. Performance gaps are identified and improved up on. This ensures that all customer support requirements are deployed to all processes and peoples. E.g. initiatives like Tata Alert, Onsite service support package.

Identify Current & Future Customer Groups & Market Segments

Various L&L mechanisms (Fig. 3.1-06) use information from expert's report, industry journals, SIAM reports to understand the needs and requirements and preferences of customers. Accordingly TML has organised itself into "Domestic & International Market." which are further classified based on product application like trucks & buses. It follows GVW based classification adopted by SIAM & RTA. SIAM provides competition data like volume & Mkt share on monthly basis.

SIAM has created Mini/ Micro truck segment where products like Ace, Ace Zip, Magic and IRIS are covered. It also caters to requirements of government and other institutional customers like STUs and Defence.

Fig. 3.2-07 Key Access Mechanisms and Contacts Requirements - PCBU

Exclusive CS website

Legend : Contact Requirements: I = seek Information, B = conduct Business, C = Complain

Fig. 3.2-08 Market and Customer Segmentation

1. L & L Posts - Products, Services, NVB2. Identity Customerrequirements anddetermine customersegments and marketgroups5. Create New L & L Post

4. Create New Segment 3. Existing Segment?No

IB

Yes

8. Address Segment

7. Address Segment

6. Domesticor

IB Segment?9.

Fee

dbac

k to

L &

L

Customer* = Current, Future, Potential, Competitors customer

Domestic

RTA

SIAM

30TATA MOTORS

and market segments to pursue business for current and upcoming products is done on the basis of market accessibility, Product suitability, Market size and profitability.

The segmentation process is revisited annually with inputs from multiple listening and learning, various feedback mechanisms, inputs from SC. The segmentation process gets revisited during deliberations for current and potential customer groups and market segments as part of the environmental scan of the SPS .

3.2a4 Use of Customer Data

Present and potential customer data is obtained from Customer Clinic, VoC, Customer Complaints etc. and is analysed for improvements, innovations, prioritisations and product launches. Market Development system uses directions from SPS to improve marketing and increase its focus on customers (Fig. 3.2-10).

Customer perspective in BSC ensures customer focus which is cascaded to operational level BSC and PMS, SQDCME, VMCDRE. e.g.LCV Fuel efficiency improvement by 8%,NVH reduction on MCV buses in Qatar, Colours in Nano 2012 model, etc.

3.2b Building Customer Relationships

3.2b1 Relationship Management

Build & Manage Relationships… TML use Customer Acquisition, to identify, acquire and maintain Customer Relationships. CRM-DMS tracks all the transactions with customer till the vehicle is sold by him after usage. Continuous communication mechanism like updated customer database in CRM-DMS, mailers/SMS with existing/lost customers, is used for product information, services campaigns, etc.

CVBU uses value added services such as Recon, Construck onsite support, Fleet Management, AMC, Refurbished vehicle business, Pre-Owned Business, TMI, Finance for dealers & customer, insurance for customers, loyalty programme etc. for relationship building. Customer Meets, Campaigns & technical seminars are conducted to build positive customer engagement.

Fig. 3.2-09 IB Market Attractiveness Matrix

Based on regulations,Country risk,localization, distribution& predictability

Future Possibility1. Market Accessible?

No

Includes products forpipeline for next 6 yrs

No

No

2. Product Suitable ? To await new product

Potential volumes 3. Market Large enough ?

No

Addn. resources notcommensurate withmarket yield - to exit

EBITDA to be Positive 4. Market Profitable ? Not to enter

Fig. 3.2-10 Analysis of Customer data

CustomerPresent

&Potential

3.2a4Customer

Data

4.1a3Selection ofmeasurement,InnovationPrioritization ofProductlaunches

2.1a2,2.1b,6.1 a &6.2b 3

VOC / Surveys

Complaints

Customer Clinic

CompetitiveInformation

TML builds and manages relationship with customers using approaches like KAM, Customer meets, Customer complaint resolution, (Fig. 3.2-11) for few examples of relationship building.

Fig. 3.2-11 Customer Relationship Building Approaches & Methods

Approaches for

Products

Cust. Life cycle stages

Private Institutional

1 to 7 IndvCust

Key Cust

STU Defence

Key Account Management *

2,3,4,5,6 ���� �

Customer Meets

1 to 7 ���� �

Training -Driving

3,4,5,6 ���� �

High Mileage Awards*

4,5,6,7 ���� �

Technical Seminars

3,4,5,6,7 ���� �

Customer newsletters*

3,4,5,6,7 ���� �

Complaints resolution

3,4,5,6,7 ���� �

Outcalls, Advts, meeting customers of competition

1, 2 ���� �

Approaches for Services

Fuel saving/service campaigns

3,4,5,6,7 ���� �

Customer Meets

1 to 7 ���� �

Training -Servicing

3,4,5,7 ���� �

AMC Contracts

3,4,5,6 ���� �

Parts retailers development

3,4,5,6 ���� �

Mechanic /retailers meet*

3,4,5,6 ���� �

Complaints resolution 3,4,5,6,7 ���� �

International

To Acquire New Customers

Customer Acquisition System (Fig. 3.2-14) establishes how it tracks the customers (new/ potential/ repeat / competition/ lost customers) for pre-sale & post sale of its products. It takes inputs from customers/ customer referrals, CRM-DMS and links to market development process. This helps to track sales performance against the targets virtually on a daily basis. The information gathered in L&L approaches get used to both for short term (ST) and long term (LT) to remain focused on changing needs of customers.

E.g LOB specific dealerships which were appointed for better business focus have resulted in increase of market share. e.g. In UV's the market share went up from 9% to 15%.

To Retain Customers, Meet their Requirements & Exceed their Expectations…

TML uses Customer life cycle approach right from 'Do not know' to 'Becoming an advocate (Figs. 3.1-07, 3.2-12,13,15).

The processes and approaches (Figs. 3.1-07, 08) are used in meeting customer requirements and exceeding their expectations at each stage of life cycle.

To Increase their Engagement…

TML ensures customer engagement through Customer Relationship Building process (Fig 3.2-03). This process is targeted to achieve Loyalty, advocacy and customer satisfaction (Figs. 7.2-14, 15). Relationship Building process is deployed with IT support thorough SAP and CRM-DMS. CRM-DMS is focused on customer relationship management providing entire tracking right from the enquiry, purchase of vehicle till resale.

The Analytics module provides results on Sales and Service performances on real-time basis. This triggers actions for acquiring new customers, repeat purchases, referrals and providing better solutions to customers. MIS of 'Lost Customer' gives an opportunity

31 TATA MOTORS

Fig. 3.2-12 Customer Relationship Building

Process steps for Customer Relationship Building

Who is involved

Kn

ow

ing

th

e im

pac

t o

f th

e st

eps

on

cu

sto

mer

loya

lty

-T

his

gets

trac

ked

in th

e T

NS

su

rvey

and

the

actio

n pl

ans

to im

prov

e it

acro

ss th

e O

rgan

isat

ion

Kn

ow

ing

th

e im

pac

t o

n r

epea

t b

usi

nes

s -Num

ber

of r

epea

t bus

ines

s tr

ansa

ctio

ns a

re

Kno

win

g th

e im

pact

on

posi

tive

refe

rral

s - N

umbe

r of b

usin

ess

trans

actio

ns th

roug

h po

sitiv

e -

refe

rral

s ar

e tr

acke

d an

d m

onito

red

by S

&M

. CR

M-D

MS

tool

giv

es th

e an

alyt

ics

1. Determine Customer contact requirements. Modify existing one

Sales & Marketing, Customer Support

2. Performance review and analysis of current approaches

Steering Committees, Process Owners

3. Deploy CRM approach Sales & Marketing, Customer Support

4. Acquire new customers, repeat customers, referrals

Sales & Marketing, Customer Support

5. Review Results -

Volumes, Growth in Customer base

Steering Committees, Process Owners

6. Determine customer contact requirements thru L & L approaches. Also collate and use inputs received from Channel Partners

Sales & Marketing, Customer Support

7. Review the process Process Owners

This process includes acquiring new customers, meeting & exceeding requirements, expectation and increasing engagement

to go back to them with better offerings.

TML is one among few CV manufactures globally & first in India to implement KAM (Key accounts Management) process. Key customers get preferences in delivery, services, Rate Contract, AMC contracts, RECON, plant visits.

Onsite Driver, Mechanic trainings & Veh. Check-up camps, etc. Further Key customers are entitled to free loyalty benefits under Tata Emperor Loyalty programme.

TML is driving a new initiative, 'Retail Channel financing' to provide competitive edge to its dealers and customers by optimizing 'financer spread' for arranging funds at low cost & fast disbursement. It is also driving innovative insurance solutions for protecting the

Fig. 3.2-13 Complaint Management Process at CVBU

AB C

D

F

E

G

a b c d

e f g

1 2 3 4

5

All types of Customer

Complaints/Issuesthrough all media

and from all touch points

Input toNPI for products

& variants

Is it Productrelated?

Is it Safety orCatastrophic?

Yes

Yes

No Root cause analysis andprepare periodical Product

performance reports

Discuss the complaint onIssue in Weekly

meetings

Log on thecomplaint in CMSand acknowledge

to customer

Allot the complaint to agency responsibleand keep the track

it get resolved

Inform Customer

Resolved instipulated time

frame?

Escalate to higheragency

RMCC alerts PartsDept. Head CC,

ED. CV and Plants

ReviewwithPlant

Heads

ActionPlan

Roll out

Yes

No

Yes

No

No

Urgent Stock to Request to parts

Dept

Arrange SwingUnits

Ready atRWH for

replacement

Resolved?

Input toNPI

Close theComplain / Issue,

Prepare MIS,circulate and share

the findings inSteering Committee

Take up thecomplaints or

Issues to SteeringCommittee level.Validate action

plans

Yes

Resolved?

Inform Customer

Inform Customer

Priorities andtake up the

complaints inPlant CCT

meetings basedon the incidence,

cost andcustomer issues

Inform the action taken, alongwith the Break Point to the Fieldthrough Circulars. Carry out the

action required in the Field(Retro fitments/Trials)

Monitor the complaintstatus and tends for

stipulated period.Monitor effectiveness of

the action taken Impr

oved

the

proc

ess

feed

back

loop

clos

ed

PDPI

No

Fig. 3.2-14 Customer Acquisition Process

Stage IEnquiry/Contact

Stage IIQuotation

Stage IIIAdvancePayment

Stage IVVehicledelivery

C0 C1 C2 C3

Prospect Customers(Universe)

Complaints Open > 3 days - Follow Up by R O with Dealer CRM

Complaints Open > 7 days - Follow Up by CH Q with OMRCCMRC M

Technical Issues : BOPSpare Parts : BPO

Pre-ciosure by Dealer & Closure conformation by Region based onallm Note/Closure Letter

Complaint closed in system by SHQ after final Verification

Escalation to CBM=TMLthrough c-7 (within + days)

Complaints received at TataMotors Area Office, Regionaloffices, BHQ to be forwarded

to Dealer Principal

Excalation to WM (1-days), OM and Owner (3-days)

90% CLOSURE AT THIS LEVEL

Escalation to C-7 Form forcomplaint greater than 3 days

Dally Report to Dealer Owner on Complaints by

CRO (C-0)

Acknowledgment to Customer through Letter

CRM DMS Complaint Modular

e-mails/Website/Toll-free P&F Complaints > 3 days oldVerbal Complaints

Fig. 3.2-15 Complaint Management Process PCBU

track

ed a

nd m

onito

red

by S

&M

. CR

M -

DM

S to

ol g

ives

the

anal

ytic

s. T

his

gets

revi

ewed

per

iodi

cally

32TATA MOTORS

Process to ensure that the complaint management …

Recovers customer confidence

Enhances customer satisfaction,

Enhances customer engagement,

-

Immediate recognition for issue.

- Closing the loop as soon as the complaint is

closed.

In case of design change where time line is long enough, keep in touch with the customer

-

Discuss and escalate the complaints when they are repetitive,

-

Provide training or awareness to customer to avoid future recurrences, Visits to plants, Ensure the processes are improved after the resolution of complaints

- Fast recognition of the complaint, Feedback andclosing within the committed time lines, Warranty and Goodwill claims are settled as per norms, Training, Customer meets/visits to plants, Melas, Seasonal Greetings, Maintenance seminars

Fig. 3.2-16 Complaint Management Process enables TML to…

Such complaints received are passed-on to the CAC for registration and resolution.

Ensure that complaints are resolved promptly…The process has in-built escalation loop (Figs. 3.2-13,15) for resolution. Senior management is kept posted about the key customers complaints in SC meetings and Customer Care Team (CCT) meetings. The resolution of complaints is shared with the customers by CAC. The time taken for resolution, improvement in performance, is a key measure of the process.

Enable to Recover Customers' Confidence…

The systematic process of CMP (Fig 3.2-13,15,16) to respond to customers and has in-built escalation mechanisms for appropriate actions on the complaints received.

This is supported by the approaches (Fig. 3.2-17) such as daily synopsis, CCT meetings, and warranty complaints are part of daily, weekly and monthly reviews to cater to customer complaints.

Customer dissatisfaction is minimized (as well as loss of repeat business) by ensuring complaints are promptly and effectively addressed, resolved and communicated to the customer.

Repeat complaints are tracked and reviewed to enhance customer confidence. It has achieved significant volume growth while improving customer satisfaction.

cash flow of its customer. Through AMC, Recon, Fleet Management businesses.

TML engages with customers on regular basis. Sales Planning, Project VISHWAS, Project Parivartan, Project Kaushal, Driver Training, KAIZEN, Construk, ISO, Green Workshops, e-learning, Proj Suraksha, WM Certification, etc (Fig. 7.1-09) are deployed at dealerships. These projects are aiding better service to the customers and build healthier relationships. The Customer Acquisition(Fig 3.2-14) is among the key processes of customer engagement. The focus is on migrating customers from need identification (C0) to purchase of the vehicle (C3) stage. This process facilitates building pre/ post purchase relationship leading to repeat purchase (C3 to C0) & positive referrals. CVBU uses '4 Box' approach as an input to NPI process (Figs. 6.2-06, 07) primarily addressing customer needs and expectations through innovative products. Non-product customer needs are catered thorough aftermarket support processes.

3.2b2 Complaint Management

The complaint management process (Figs. 3.2-13,15) ensures that complaints are addressed by respective functions such as ERC, Manufacturing, Vendor management, etc through timely resolutions. Root cause is analyzed and corrected for effective complaint resolution. Repetitive complaint data is tracked and result relation is reviewed up to the Steering Committee level. The effectiveness of this overall process is reflected in the Loyalty Index (Fig. 7.2-14). Complaints are captured 24*7 by the Customer Assistance Centre (CAC), channel partners and TML officers at various touch points.

Trigger/Findings

Source Improvements

Delay in warranty claim/free service settlement

DSI Survey Warranty on web. Warranty authorization to Channel Partner was fully empowered

Need to improve service levels of key customers

CSI survey Launched ‘Loyalty cards, Construck

Sampoorna Seva’,

High vehicle downtime due to non-availability of spares

CSI survey Set-Channel enhancement-42distributors, 5000+retailers

up of 4 Regional Warehouses.

Need to explore service

market

CSI Survey Bumper to Bumper Campaign, Focus on Services marketing

Integration of end customer knowledge

QFD Customer database extending into a comprehensive CRM-DMS package enabled through web

Fig. 3.2-17 Building Relationships Improvements

33 TATA MOTORS

MEASUREMENT, ANALYSIS ANDKNOWLEDGE MANAGEMENT

4

�17 Awards at the 22nd National Convention, organized by the Indian National Suggestion Schemes' Association (INSSAN), held at Jamshedpur

�The Indian Engineering Export Promotion Council (EEPC) has conferred Tata Motors with the 'Top Exporter for the Year 2010-11' (Silver Trophy), for its outstanding contribution in engineering exports, in the motor vehicle - large enterprise category

�Tata Safari enters the Limca Book of Records for highest raid by the paraplegic woman covering 3,000 km in 10 days.

�Jamshedpur plant bagged the Enterprise Performance Excellence for the Year Award 2010-11

�Lucknow plant won 12 awards in the 13th National Suggestion Summit, organized by the Indian National Suggestion Schemes' Association (INSSAN), which was held in New Delhi on 3rd and 4th June, 2011

�Safalta & Parivartan teams bagged the 1st prize at the 24th CII Quality Circle Competition 2011 (Northern region)

�Pantnagar plant won 1st Prize at the Indian National Suggestion Schemes' Association (INSSAN), Western India Chapter (WIC) Suggestion Competition

� Pantnagar plant has won the CII Environmental Best Practices Award 2012 in the Innovative Environmental Project category, for 'Recycling paint sludge into reusable industrial primer'. Not only did the plant win the award for the second consecutive year, but also was the only company short listed in the auto sector, amongst the 127 participants

�Total IPR crossed the milestone of 1500.

Align- Use of KPM tree is an approach for systematically cascading metrics and defining ownerships at the respective organizational levels. This helps to ensure organisational alignment. BSCs are cascaded (Fig 4.1-01) down to divisions/in BOS.

Integrate- As explained in the (Figs. 4.1-01 and 4.1-02), data and information are aligned and integrated for daily management and

Fig. 4.1-03 IT Landscape

TML Value Chain

Product Development

Sourcing ManufacturingSales

& Marketing

DistributionCustomerService

Retail

TML Core Business Function

PLM - Team Centre MES - RA SEIBEL - CRM /DMS

SAP ECC 6 - IS AUTO (MM, PP, QM, APO, SRM, SD, Logistic, BIW etc)

EuclidCatia V5

LM, SM - Is Auto SAP - Is AutoWarranty

Digital ManufacturingDELMIA

Customer Portal

SEIBEL - CRMSAP - BWPLM Team Centre

TML Strategic Function

TML Support Function

SAP ECC 6 (FI, CO, CRM, HR, PM, QM)

MES

4. MEASUREMENT, ANALYSIS & KNOWLEDGE MANAGEMENT

4.0 Measurement, Analysis and Knowledge Management

4.1 Measurement, Analysis and Improvement of Organisational Performance

The Performance Measurement system (Fig. 4.1-01) at the organisational level uses the business policies to drive and change the business, whereas at the operational level, the detailed work instructions and procedures (ISO/TS) are used to run the business.

4.1a Performance Measurement

The Performance Measurement System articulates and identifies organizational objectives. The process begins with gathering requirements and expectations of stakeholders. The data is then analysed and integrated with the Leadership System (Fig. 1.1-01), SPS (Fig. 2.1-01) and BSC (Fig. 2.2-07) for determining the goals, challenges and strategies.

Balanced Scorecard approach is used as a strategy implementation measurement tool to deploy the goals and strategies. Steering Committees (SCs/OCs/MCs and Board) at various levels (Fig. 1.1-09) analyse performance and evolve action plans for implementation.

Wide range of Engineering and Business Application Systems (Fig.4.1-03) are used including CAD/CAE, Product Life Cycle Management (PLM), ERP, Business Warehouse (BW), Supplier Relationship Management, IT service management, Customer Relationship Management - Dealer Management System (CRM-DMS), Digital Product Development, manufacturing execution system and Web Applications for managing its data andinformation.

It captures Knowledge assets, comparative data, best practices, learning and ensures transfer of knowledge across the organization through various Knowledge Management (KM) practices. TML is an industry benchmark for ERP, CRM-DMS and SRM Implementation.

Tata Technologies Limited (TTL), a subsidiary company of Tata Motors Ltd and IBM, are the major IT Service providers.

4.1a1 Performance Measures - Select, Collect, Align and Integrate…

Select - The strategic objectives (Figs. 2.2-05 to 08) form the basis for selection of performance measures (Fig. 4.1-04), which leads to the identification of various levels of process measures (Fig. 4.1-07). These are documented in the BSC as well as process charts.

The BSC development process (including target setting) ensures that the measures focus on stakeholders requirements, linked to the objectives and are a mix of leading & lagging measures as well.

Collect - Information is collected and integrated for review through the entire set of integrated Engineering and Information systems. All key data and information is captured at the source.

Fig. 4.1-01 Performance Measurement System

BSC/BOS

Supplierperformancerequirements

Employee’s Individual Targets - PMS-KRAs (PACT)

Alig

nmen

t

Obj

ectiv

es, M

easu

res

& T

arge

ts

Per

form

ance

Man

agem

ent S

yste

man

d S

teer

ing

Com

mitt

ee r

evie

ws

Plant Level Objectives(BSC/BOS)

Divisional Level BSCs/BOS

Departmental Level BSCs/BOS

SQDCM (daily workmanagement)

Commercial Objectives(BSC/BOS)

Sales, Marketing & CS BSCs/BOS

Regional Office Level BSCs/BOS

MIP & DQCTC (daily workmanagement)

TML Objectives

TML Vision & Strategy

Dealerperformancerequirements

Integration across units, work groups & Supplier / Partner

overall performance measurement as overall goals/targets gets cascaded in the BSCs and then to individual KPIs through PACT process.

Key Organisation Performance Measures: Each process contains relevant performance measures (Ref. Figs. 6.2-01 and Fig. 6.2-02). Key organizational performance measures including short- and longer-term financial measures are shown in BSCs (Figs. 2.2-05 to 08). PLM – ERP – CRM systems (Fig. 4.1-03) integrate information across the functions (e.g. sales, production and costing data are integrated) to enable organisational level decision making

Fig. 4.1-02 Business Alignment and Integration

directionIntegrate with various Functions

Top of Organisation

SPP

BSC

TML Steering CommitteePlant and Functional SCs and SLAs

Down in the organisation

MPAs and

Team Goals

ISO/TS procedures, Systems (IT), CFTs and SDTs

Business Application

on areas like product mix, business planning etc. Visual displays of performance on BSC/SQDCME/VMCDRE measures are used to integrate upstream/downstream organisation and systems/ processes supported by environmental, green and low carbon growth related measures in the BSCs. These are used for tracking and monitoring daily operations. Reviews of BSCs comprise performance analysis and corrective actions at operational levels.

Steering committee members own the processes and are supported by a team that is responsible for ensuring the relevance of the associated metrics, for gathering and reporting the information, as well as for evaluating/improving the processes. Process owners have the responsibility to learn from and share with other process owners.

Cross Location Teams and Central Process Teams (CLTs/CPTs, e.g. HR teams) approach has integrated learning and sharing into the processes. This has helped in commonisation of the processes

across locations and speedy adoption of the best practices of one location to other locations (KTL and KPO). This has led to substantial gains in terms of cost, quality, delivery of vehicles and new product introduction, etc.

Frequently measures are determined…Even though the measures are determined once during the creation of BSC in the beginning of year, the measures are reviewed every month and wherever required the changes are made. During the MTR, all parameters undergo review.

Align and integrate data & information for tracking: Data and information is aggregated in the monthly BSC/SQDCME/MIS for the respective area which are further aggregated at organization level.

Align with strategic

TATA MOTORS34

Information Sources: requirements, Benchmarks, Comparative information, customer & supplier feedback, surveys, process requirements and measures, strategic action plans, business results, existing performance results, changes in Govt. policies, employee and community diversity

Performance

To verify the of a measure with respect to: Benchmark measures, compatibility with existing ERP systems, addressing stakeholder requirements, action nature of outcome of the measure

comprehensiveness

Strategic Objectives

Identify the critical business/operational from the ISO/TS procedures for meeting each of the

strategic objectives

processes or

Select the measure the ISO/TS measures that

address the strategic objective completely

wrt to Select and drive the

that may support ISO/TS procedures or sub process

to address the strategic objective through its

measures

initiative

Determine the quantities and targets

Cascade to the nest level that contributes indirectly and align with strategic objectives to help in

meeting the targets

directly or

Analyze performance of measures with take corrective or preventive actions and review /

rationalize measures

respective targets,

�P

DP

IC

ontin

ue till la

st opera

tional m

onito

ring le

vel

Fig. 4.1-04 Process for Selection of Measures and Analysis

Level of Comparison KPM Source / Mode used Effective use in improvement

Global ROCE, EVA, NPI measures, EBIDTA

FIBRES Study, Acquisitions, APQC, JUSE, JVs, Collaborations, Research agencies, Consultants

Strategy process & doc, target setting, process improvements, market expansion

Industry/Competition/ Fuel Efficiency, New product features & pricing

Product Comparison by ERC, common suppliers/customers, Consultants, annual reports, Benchmarking Centre at ERC

Design Improvements & Product Positioning, product performance improvement,

Group Companies SLA, Processes, TCOC data

TBEM external Assessment, Group Company visits, Business Excellence conventions, TKC

Process & quality improvement, empowering the lowest level employees t

Inter Plant PDI Defects /Veh, PQI, Vendor Rating, Productivity

Warranty Data, Reviews, SAP, CFT/CLT sharing, Process Owner review, Internal Assessment, Monthly reports, Plant level VC sharing, KTL

Process Improvements, Ensuring Uniformity, best practices replication

Within Division BSC’s KPMs Divisional reviews, Systematic collection of data Process & performance Improvements

Fig. 4.1-07 Use of Comparative Data at Various Levels

Fig. 4.1-06 Benchmarking Process

1

Identifying performance parameters on which our

organisation needs to improve

2Selecting Competitors from both domestic and global

industry for benchmarks

3analysing our Gathering benchmark data &

performance levels on the parameters identified

4

Deciding upon the performance levels we need to

attain, resources available & extent of the gap to be

covered through the best practices available

5

Using the data & information and Best practices to

support operations and strategic decision making and

innovation to reach target

Impr

ove

the

benc

hmar

k pr

oces

s

Such performance reports are reviewed (Fig. 1.1-09) and analysed at various levels (Fig. 4.1-01), gaps are identified to develop further improvements.

The Process Owners identify opportunities to close the comparative gaps between actual, stretch targets, and initiatives/projects are launched for driving improvements. Analysis and findings of the daily reports (e.g. daily sales, production & productivity) are used to support operational decision-making. The monthly aggregated MIS/BSCs are finalized at all levels.

Innovation…BSC/SQDCME/VMCDRE and SLA reviews give opportunities for innovation in processes as well as products and trigger problem solving opportunities through CFTs. The formation of a Learning and Benchmarking Centre, IPR Cell, initiatives like ICR/ICM, KTL/KPO to drive innovations are using benchmarking data and information. Ace, Winger, Magic and Nano products have changed the urban transportation system and Nano being a case revolutionising the global passenger car market. Many of TML products and processes have received innovation awards and patents. Refer Figs. 1.1-06 and 4.1-08 for examples on business level innovation and process level innovations.

4.1a2 Comparative Data

There is an approach for selecting and using comparative/ competitive/ benchmark data (Figs. OP-17 & 18). That is obtained from sources such as Consultants, Industry Associations, Foreign Visits, trade shows, printed material, seminars, suppliers / customers, JVs, TKC, etc. (Fig. 4.1-05) While making the Short term and Long term strategy, external consultants helped to get global benchmarks. These data help in decision making and gap analysis triggering breakthrough improvements and innovations in products, processes and its performance (Figs. 4.1-04 and 4.1-06).

TML uses various types of comparisons target KPMs, sources of operational & strategic decision-making, comparative data, and its usage (Fig. 4.1-07). For obtaining competitive information, an approach is used to understand competitors’ strategies by working backwards from publicly available data and information, as one of the inputs to the SPS.

VOC and QFD studies are used for benchmarking product features for existing and new products. ‘Tear-Down Analysis’ and extensive in-house tests are conducted to compare and improve features, and performance of vehicles / aggregates / processes.

Innovation…TML has launched various innovative products and approaches (Figs. 4.1.06 and 8). Recently launched, ‘Magic Iris’ & ‘Nano 2012’ are an example of such innovations. The ‘Innovision’ as an internal programme and have captured more than 200 innovations from all spheres including non-plant functions. As a part of Tata Innovista, more than 193 innovations are captured in 2011.

4.1a3 Customer Data

The customer data (VOC, Surveys, Complaints, Customer clinic, competitive information) collected through various interactions are used for selection of measures, improvements, innovation prioritisation and products (Fig. 3.2-10).

TML listens to and interacts with customers to obtain actionable information and feedback on products and services through VOC / L&L processes (Figs. 3.1-01, 03, 06) Factors affecting their transportation needs, service requirements and other preferences are systematically collected. Customers, Channel Partners, Goods Producers, Government undertakings, Financers, Drivers and Mechanics are approached to understand their requirements comprehensively.

The data captured through VOC / L&L process (Figs. 3.1-02, 06) through formal and informal methods such as customer meets (external and internal), customer complaints, warranty information, STU technical seminars, Customer Satisfaction and Dissatisfaction studies, etc is used by the process owners in selective manner for operational and strategic decision making. The customer inputs

Fig. 4.1-05 Use of FIBRES Findings

Information collected Actions takenCompetitor’s Product Strategy

407 Pickup launched. Non Vehicle business -Volume of Engines

Competitor’s Distribution Strategy

Customer Contact Points increased in South, Pace with Ace project for increasing sales

35TATA MOTORS

Strategic objective Measures introduced Owner/Function

Cost reductionNo of Ideas captured and converted

Manufacturing

Dealer satisfactionLabour and spare parts earnings/day, Dealer Satisfaction at IB

Customer Support

Offer world class product & Service at the competitive price

Customer Satisfaction at IB Shipment sales Volumes in new markets

IB Group

Grow revenues from Fully Built Vehicles

Body Builder Quality rating % Body Builder > 80% rating Business Planning

Enhance value for channel partner

No. of Green dealerships Customer Support

Fig. 4.1-09 Some Examples of New Measures Taken Up

become the trigger for incorporating innovations to create value for the customer.

In International business customer contact, customer clinic, distributor meets, etc has been deployed in all focus markets to capture the VOC. VOC of competitors’ customers provides valuable inputs to improve product offerings. Customers rate TML on attributes relative to the competition. Product related inputs are taken up for product improvements / new products through the NPI process. Non-product attributes are taken up for service or work system improvements / changes. Customer Engagement studies include current, former and competitions’ customers. The periodic studies reveal the changes in the needs/expectations of customer.

4.1a4 Measurement Agility

The performance measurement system (Fig. 4.1-01) is evaluated as a part of SPS (Fig. 2.1-01), through Leadership System (Fig. 1.1-01), and BSC (Figs. 2.2-05 to 08). The performance is measured with the help of BSC and reviews at all levels. During monthly BSC reviews, KPMs are reviewed with the help of initiative templates /KPM performance analysis. This helps in keeping the KPMs current (Fig. 4.1-09).

Ensuring measurement system is sensitive… To keep the performance measurement system sensitive to rapid or unexpected changes, reviews are conducted such as monthly BSC/BOS reviews, fortnightly MC reviews for strategic / concurrent for short- and long-term actions. This is supported by systems such as SAP, BSC, BW. For example, Magic IRIS and Ace ZIP being the new addition in the LCV category, the reviews are done for LCV market share with and without ACE & IRIS to gauge the market response and trends. Products like Vista refresh and Indica eV2, Nano 2012 have come up through JDP analysis.

4.1b Performance Analysis and Review

Review of the Organisation Performance & Capabilities…

The performance and capabilities are reviewed during the monthly BSC/SC meetings at the organization level and the findings and action plans are communicated down to the departmental levels through various forums in plant and non-plant areas (Figs. 4.1-01 and 02), to align and integrate these in their reviews. The composition of each SC ensures the participation of all senior leaders.

Analyses performed to support the reviews…Several analyses (Fig. 4.1-12) and correlation of lead and lag measures (Fig. 4.1-11)

Fig. 4.1-08 Some Examples of Innovation

Areas/Function

Innovative Approach BenefitsProcess Innovation

Sales/Marketing

Sales Planning ProcessSMS on mobile to CROs

Customer to 15)

Engagement (7.2.1 -

Materials

e-Procurement, ICR

Step change in cost reduction (Fig.7.5-30 to 32, 35)

Product InnovationEngine

Fuel efficiency

Customers are happy, (Fig7.1-20)

Vehicle

Aggregate life

Cost of ownership (Fig. 7.1.1)

are performed to support senior leaders’ organisational performance review and SPS (Fig. 2.1-01). In addition, SCs at all levels analyse,

Fig. 4.1-10 Communication of TML’s Performance Analysis

Stakeholder Analysis of Results Communicated Medium of Communication Who Communicates

Employee

Company Performance, Expectations, Market Condition, New Trends

New Product Launches

Communication Session by senior leaders, Reviews, Internal magazines, e-flashes, intranet, KM Site posters

Corp. Communications, Mfg/Plant/HR/Divn Head, etc

Channel Partners Dealer Meets, Channel Chat SHQ, Corp. Comm.

Customers

Customers Meet, Advertisements, OK TATA, website, magazine, customer complaints call centres

Vendors Vendors Meet, Interaction during NPI, Kaizen, target & Performance sharing, Failed part analysis review

Materials, NPI Teams

Shareholders

Financial Performance

AGMs, Annual Reports, Quarterly Publications,Analyst reports, NYSE disclosure, Media release

Board of Directors

Society CSR, GRI reports, Energy Reports Advertisements, Society forums, website Corp. Communications

ensure that the conclusions drawn are valid and review performance measures using appropriate analysis and validation tools (to validate the conclusions and) to identify factors influencing performance and areas requiring actions for recovery. The services of reputed consultants and experts are also sought for analyses of future trends and validation, which is an input to the SPS. (e.g. recent exercise of scenario planning)

Use of the reviews to respond…During the BSC, MIS and Strategy reviews (includes project reviews) on various forums, organisational success is measured against targets, competitive performance is gauged against comparisons (e.g. market share) and strategic objectives & initiatives along with action plans are reviewed against QCD parameters (Fig. 4.1-10).

To assess ability to respond... The reviews of all strategic plans and goals take place at least once in a month (MC: fortnightly) (Figs. 2.2-02 and 1.1-02).

Operational reviews happen on weekly and daily basis at each location. These frequent reviews help to assess ability to respond to rapidly changing needs and challenges in the market place environment. (e.g. Adoption of WCQ, Gen3 NPI process, project EXCEED for PCBU).

Board Reviews the Performance…

Governance Board (OP-11) with the help of its committees and MC/OC/SC reviews (Fig. 1.1-09) the organization performance and the overall progress of the strategic objectives, initiatives /action plans, including progress on Safety, Sustainability, Business Excellence and Climate Change (Figs. OP-11, 1.1-09 and 4.1-01).

4.1c Performance Improvement

4.1c1 Best Practice Sharing

Findings of the organization level analyses are communicated through OC/SC reviews (Fig. 1.1-09) and priorities for improvements (e.g. Kaizen events at Vendors and Dealers) and breakthroughs (e.g. new markets, cost reduction) are communicated to plant/functional SCs, employees, channel partners and suppliers as

36 TATA MOTORS

expectations in terms of BSC objectives/ KPMs and initiatives and action plans. Innovations and breakthroughs are part of strategic goals of BSC and the stretched targets.

4.1c2 Future Performance

SPS (Fig. 2.1-01) describes the usage of performance review findings, comparative data to set the organisational targets. TML conduct a five-year projection analysis (ST/LT) for all key performance measures and compare (Benchmarking process, Fig 4.1-06) them with the best information available about competitors. Projections are collated & determined from wide variety of sources like third party market research, FIBRES project, company data etc to ensure reliability and accuracy, calculated performance levels based on current activities, internal projections data of key factors, including - industry performance, industry studies, consultants’ forecasts, financial institutions’ forecasts, Governing body projections (e.g. SEBI), extrapolated from the historic performance, product or service ‘game changers’, if any, product life cycle or customer life cycle, sustainability of the current performance levels (e.g. an unsustainable market share may decrease), capacity or capability of people and capacity of facilities etc. The SC uses these projections as an input during the SPS. Corrective/containment actions are initiated using CFT approach (Fig. 2.2-02 & 03).

4.1c3 Continuous Improvement and Innovation

Organisational performance review meetings are prioritized for continuous or breakthrough improvements leading to innovations and these are deployed across organisation (Fig. 4.1-08).

In addition to the extensive communication of appropriate business results and analyses (Fig. 4.1-12) through IT communication and cascading of the higher level BSCs to the next levels, ensures the alignment throughout organization. This ensures availability of information at the grass root level giving managers and employees the foundation for effective decision-making. Functional leaders, who participate in SC meetings and other reviews, initiate communication of the results of the organizational-level analyses by sharing learning at meetings with respective Division/Department SC members.

The members in turn disseminate key results to teams and

Strategic objective Lead Measures Lag MeasuresQuality % Processes improved Warranty Cost (Rs)

ProductivityKaizen (Nos. of exercise) 1st shot ok on process lines

Productivity improvement (%)

Cost % Ideas Syndicated Cost Red in Rs

Cost of Transaction Enforce electronic communication with all suppliers

Early Supplier Commitments on cost red (Rs)

Fig. 4.1-11 Lead and Lag Measures

Fig. 4.1-12 Examples of Analysis Performed

Reviews Areas Types of Analyses

Organisation Performance

Review(Run)

Finance EVA, Profitability, Variance, Ratio, Sensitivity, ICR, ICM

Market Growth, Market Share, Regression Analysis,

Customer Customer Value Analysis, JDPWon-Lost Analysis, Conjoint Analysis , Warranty analysis

Operational Cause-Effect Analysis, Regression Analysis, Pareto Analysis, Root Cause Analysis

Strategic Planning(Change)

Product Strategy

Project Appraisals, NPV, IRR(NPI, APL), Aggregate commonisation

Profit Strategy

SWOT, Decision Tree,

Scenario Analysis, Project Appraisals,Long Term Cash Flow

workgroups. Information thus flows in a waterfall manner throughout the organization. The action translates items from the reviews into department and work group action plans. SC members themselves drive the initiatives and the processes, which helps in fast dissemination/sharing of analysis/decisions to the related work group.

Organisation level analysis thus impacts the operations at plant /factory/CX level or other lowest level functions to create a focus on specific daily performance measures and the actions required. Results are communicated and improvement priorities are deployed to collaborators, suppliers and channel partners. This ensures alignment in improvement actions.

Strategic objectives (Figs. 2.2-05 to 08) are linked with processes (Fig 6.2-01) and its measures and focused strategic initiatives. Reviews of these objectives and measures identify gaps. Appropriate action plans are prepared and implemented to bridge these gaps.

Performance against the benchmarks and comparisons drive systematic evaluation & improvement of the key systems and processes. The assessments of processes also help in identifying process design gaps. For examples, CRM DMS process was added to the IT System set to bring more focus in the organisation. All the stakeholders are connected and are able to create, share and distribute information.

Business strategy is cascaded to IT strategy and roadmap using Gartner IT Strategy framework (Fig. 4.2-01), which address all 12 pillars in holistic manner.

4.2 Management of Information, Knowledge and Information Technology

4.2a Data, Information and Knowledge Management

The IT System is used to enable, improve and integrate TML business processes. This is reaffirmed by various awards won such as NASSCOM CNBC IT user award, IT service management award, Innovista award in recent past.

IT strategy is evaluated, improved, and deployed using an integrated framework of business context and IT services (Fig. 4.2-01). Corporate IT team and IT BRMs (Business Relationship Managers) spearhead the roll out of IT roadmap across business units and functions involving business process owners.

Information Management process is driven by the strategic direction set by the Corporate and Plant/Functional Balanced Scorecards.

Environment scan (Fig. 2.1-01) is done and Business strategy, user requirements are collated by IT team and BRMs to prepare background for IT Roadmap.

The process of drafting the IT roadmap includes Technology Environment Scan that is culled from global agencies such as ‘Gartner’ and other leading Research agencies, inputs from IT service providers (TTL and IBM), benchmarks relevant to IT from major automakers and user feedback from surveys (IT survey is improved this year and questions are made more stringent covering all the areas in IT). Based on Corporate and Functional BSCs a ‘Three year rolling IT roadmap’ is derived and segregated into Run, Grow, and Transform categories. This plan is shared with Mancom and SCs. The IT Roadmap is cascaded into an IT BSC.

IT Portfolio management process facilitates in monitoring IT projects (controlling document SOW: Statement of Work) and IT sustenance. In IT BSC, IT sustenance and improvement parameters are monitored (Controlling Document: SLA) and compared with the industry benchmarks. Every year the user feedback is taken through

37TATA MOTORS

Fig. 4.2-02 User Driven IT Governance at Tata Motors

Environment Scan

IT Governance

Assessment

IT Service Desk

Assessment

4.2a2

Business Strategy, User needs

collated by BRMs

Run(R)

Grow(G)

Transform(G)

IT Roadmap

IT BSC

Benchmarking with Best -in-class

IT Strategy and Roadmap is executed using

Project and Maintenance Governance

IT Portfolio Management

(RGT)

IT Sustenance/Improvements (R)

2

4

3

5

1

7

6

a survey (Fig. 7.1-83) and interactive sessions, which is consolidated and included in strategic/tactical initiatives. An integrated framework of IT based on world-class standard products and platforms (e.g. CRM, PLM, SAP, etc) exists. To address other employee needs, web based systems are used, e.g. intranet mytatamotors. It substantiates the alignment and integration of IT with the business (Fig 4.2-02).

The deployment of systems and applications typically includes super users and IT BRM as part of the project team to make sure that all user requirements are delivered to their satisfaction. User survey and Service Desk assessment give improvement leads to robust IT

Governance Framework. Governance meeting ensures proactive IT support beyond SLAs.

4.2a1 Data, Information, and Knowledge…

Properties of Data, Information and Knowledge are focused, critically assessed and action plans developed & deployed successfully through systematic approaches (Fig. 4.2-03). Properties like integrity are ensured through policies and procedures. Data integrity is ensured through ‘maker, checker & approver’ approach. Cross platform transfer of data is secured by automated link and in-built Audit Trail in the system. Validation is done through internal and external customer audits and surveys .

Reliability and accuracy is built into IT systems and technology-based conceptualizations that have heuristics embedded in procedures and programmed logic. In-built checks in the system help to detect and prevent occurrence of errors before the data enters into the system.

Additionally, audit firms provide periodic audit of reliability and controls on financials. ‘Vulnerability Assessment and Penetration Testing’ (neutral assessment) are conducted periodically to ensure system security and reliability.

TML is one of the few corporate listed on NYSE and mandatory SOX compliance is ensured through integrated IT systems addressing all the essential data and information properties. For ensuring integrity, reliability, security and confidentiality, a high level Management Information Security Forum (MISF) is formed to provide clear guidelines on security related initiatives. Chief Information Security Officer (CISO) co-ordinates the security initiatives and implementation across the organisation. This role also escalates the issues, if any. MISF consisting of senior management participation of all the functions is responsible for the periodic evaluation of the adequacy of security policies and procedures.

Timeliness is addressed through the real time system support (PLM and CRM)

Security and confidentiality is addressed through a series of

Fig. 4.2-01 IT Strategy Framework

Demand Control

IT Governance

IT Principles

IT Financial Management

Metrics

Supply

IT Services

People

Business Success

Business Capabilities

IT Contribution

Enterprise Architecture

Risks & Issues

Sourcing

Business Context

Demand Control

IT Governance

IT Principles

IT Financial Management

Metrics

Supply

IT Services

People

Business Success

Business Capabilities

IT Contribution

Enterprise Architecture

Risks & Issues

Sourcing

Business Context

Business

RelationshipIT Management

Technology/ Partner

Management

policies and procedures. Access controls, which are configured from the lowest level of transactions to the highest levels of MIS across the IT systems. Comprehensive IT management includes procedures like timely backup, archiving and disaster recovery of data.

4.2 a2 Data and Information Availability

Making data accessible to employees, suppliers Intranet web site ‘mytatmotors’ provides comprehensive data/systems (which won the award as best Intranet at ABCI in recent past) to all employees and internet website www.tatamotors.com facilitates accessibility of

Property of Data, Info. & Knowledge

Process to ensure this property is achieved and maintained: Few examples

Data

Information Knowledge

Accuracy Capturing at

Source Capturing at

Source/pointAudits, Variance Reports

Integrity User interface,

restricted access

Online analyses,Single server

Advance fault reporting facility

Reliability Online Data updation Systems

Accounting Process Integration

Strict schedules for batch reports, Audits

Timeliness Data entry at source

Automated thru barcodes

Audits, SLAs

Security

Access Control Configuration,

Backup policy for databases& server

Information Security Policy, Access through firewall, Disaster Recovery Policy

ConfidentialityFunction & role based information

User level access & authorisation

User codes & password, TCoCundertaking

Fig. 4.2-03 Ensuring Data, Information and Knowledge Properties

product and other company information to all stakeholders (Fig. 4.2-04). LAN (Local Area Network), VPN (Virtual Private Network) is being used to connect all locations, subsidiary companies and Internet to connect stakeholders (Dealers, Vendors, Suppliers, Community, Banks, etc). Customers can access the TML website and CAC. Vendors and channel partners/collaborators are connected through SRM and CRM. CRM is rolled out overseas in countries where infrastructure support is available such as Bhutan, Nepal, Bangladesh and Sri Lanka. Analytics has been provided to 20000+ users across TML and channel partners/collaborators.

The Analytics dashboards are being used to take effective decisions based on real time data across all the business aspects. The dash board also helps to track vehicles leads, vehicle application, workshop Profitability, customer satisfaction indices, complaints and failures. Dash boards are also made available for enterprise systems and being used in operations, service and quality related areas.

CRM, an innovation in IT - Tata Motors uses its rich customer database for customer centric activities using the SMS, Emailer and Portal media. CRM Call Centre has built innovative capability of

38 TATA MOTORS

Fig. 4.2-04 Data/Information Availability & Accessibility Mechanisms

Stakeholder Mechanism Type of Information

Employees

SAP, PLM, Daily, weekly, Regular review meetings, In-house magazines, Town hall meets , Intranets, E-mail / Internet, knowledge sites, Dept web sites or folders, SAP-BW, business analytics(SAP BI/BOBJ), MiNT, TML Global portal, SAP HR, KNOME

Transaction & MIS reports in Financial Accounting, Planning, Manufacturing, Materials, Sales & After Sales, Import, Export, Maintenance, Asset Mgt., HR Payroll, Functional data & information, Product & process information, Company policies/standards & information, Performance appraisals, Ideas sharing, Competitive Information

Vendors

Collaborators

Design Collaboration, SRM linked to SAP for vendors to access through Internet, Supplier meets, e-sourcing platform, SAP, Kaizen at Vendor, E-mail/phones, Supplier portal (SRM), PLM, add “c-Folder”, JIS through SRM / MES

Vendor schedules, performance, transaction details. Share of Business, resolution of issues, Warranty Data, Business Targets, Quality, Parameters such as rejection, segregation, etc

Channel Partners Dealer Analytics, Siebel-CRMDMS, SAP, Dealer meets,

Dealers magazines, Dealer Dashboards, Transactional information related to sales, after-sales, customers & Hire Purchase, Chassis Delivery, Company information, New products, Day to day interaction, Issues Resolution

Customers, Shareholders & community

Siebel-CRM, Key Account Portal, Call Centre, SMS, Remote training, Company web-site, Annual Reports, CAC, Print & TV advertisements, OK Tata, Customer meet, Service campaign, AGM, Press, Meeting with Government & local communities, complaints, quarterly meets, NYSE disclosure etc.

magazine, customer

Company Information, Product Information, Customer Complaints Resolution

Regulatory Agencies / Government

Statutory Information on web sites and Legatrix

MOUs / agreements Electronic reports and updates on statutory requirements, Periodic Reports

Frequency of review - As and when required for effective running of the business

converting warm leads into hot leads, thereby increasing the vehicle sales.

SMS is extensively used for sending information and reminders, some examples being an SMS to the customer on the completion of the servicing of his vehicle, hourly SMS to sales managers about retails during month ends, festive and birthday greetings to customers. Emails are used for promoting new vehicle launches and campaigns.

Portals are being used for both displaying information to customers as in the case of Key Accounts, or for enabling transactions like a Test Drive request, which gets close-looped by the request getting allotted to earmarked Dealership CR officers along with the Customer Relationship Officer details being sent to the customer via an SMS. Learnings from this system are getting horizontally deployed in manufacturing to provide information on breakdowns & hourly production.

These systems/platforms help to communicate with its extended enterprise on a real-time basis, e.g., material procurement, payment to vendors and delivery of vehicles and resolution of complaints from end customers. Organizational, policy and other HR information are disseminated among the employees through the Employee Self Service applications (SAP–HR) and Enterprise portal. Additionally Wi-Fi Connectivity has also been deployed selectively.

4.2a3 Knowledge Management

The three-tier KM structure (Fig. 4.2.05) uses various knowledge transfer mechanisms at strategic, business process and sub-process level, which delivers value to organisation and customers through improvement of processes, products and services.

Knowledge can be classified into three broad categories - knowledge of markets & competition, knowledge of delivery processes & technology and knowledge of operating practices.

As part of Knowledge Management, the focus has been on capturing of best practices, learning and ensuring transfer and the use of the knowledge across various KM practices.

Collection & transfer of workforce knowledge…Workforce knowledge is collected and transferred through sharing sessions, presentations, Ideas shared and suggestions given, horizontal deployment, ‘Panther’ teams, ‘KTL’ / KPOs and improvement formats, Inter-Plant Sharing sessions, Process teams, exhibitions

and auto shows, etc. Intranet provides opportunities for workforce to learn and share and also build knowledge repositories such as mytatamotors, locational updates, KNOME, SRM C Folder etc.

Transfer of relevant knowledge from and to customers: Customer feedback gathered from direct survey and QFD exercises (L&L) about their experience and knowledge provides important input to NPI and design modifications. Customer knowledge is gathered and transferred in the response chain on regular basis through communication sessions, customer meets, Naka, Panther & Field Visits, Vendor meets, Early Involvement of vendors, Technology days, Dealer meets and strategy sessions etc. help in sharing the knowledge from collaborators, suppliers and dealers (Fig. 4.2-06).

Knowledge of delivery processes & technology available globally is considered, analysed and benchmarked during the facility planning, selection & installation and the most suitable ones are selected to deliver the high quality products at the affordable cost. Regular upgrade projects are also taken for keeping the process technologies updated (collaborators & consultants).

Identification, sharing & implementation of Best Practices: Identification of best practises is done through TPM, Six Sigma, SDT presentations, Process reviews, SQDCME, SDT, Experts, and BSC

Strategic

EPM

Processes (Business)

Sub –

Processes (Operations)

Cu

sto

me

rs

Ch

an

nel P

art

ne

rs

Ve

nd

ors

Em

plo

ye

es

Measu

res :

Eff

icie

ncy a

nd

Eff

ecti

ven

ess

�Experts / CoPs

�Suggestion Schemes

�CX, SDT, Work Teams,

Improvement groups

�Mentoring, Training

�Periodicals

�Best Practice sharing sessions

�Review meetings

�Experts

�CFT, CLT

�Improvement, upgradation

and new Projects

�Mentoring, Training

�Strategic Planning

�OC, SC Meetings

�Review Forums

�Stakeholder Meets

�Consultants

�Market Scans

Supported by Knowledge Management tools (IT and non IT )

StakeholdersTransfer Mechanisms

Knowledge of

Product,

competition,

business,

customer, etc

Knowledge of

Technology,

engineering,

equipments,

other industries

Knowledge of

Practices,

processes,

operations,

methods, etc

Co

lla

bo

rato

rs

Imp

act o

n M

ark

et S

ha

re, C

SI,

ST

an

d L

T p

lan

s

Fig. 4.2-05 Knowledge Management Structure at TML

39TATA MOTORS

Knowledge IN Knowledge OUT Seminars, exhibitions, Auto shows, KAIZEN / 3P

KAIZEN at Channel partners

Technology Days by Suppliers Seminars / ExhibitionsEmployee Trainings , SDT Forum Vendor Processes Audit

BE Assessment / Audit Reports Training to Dealers

TKC, Group cos. and assessors Tata Group conventionsConsultants, Trainers, Dignitaries, Guests, APQC, JUSE, TQMS

TQMS studies, CII, FICCI, ASQ/ISQ Forums

Benchmarking: Tata Group & other organisations, JVs

Tata Group cos. & other industries

Process reviews, learning from other processes

Best practices shared with Tata Group companies

Gartner membership for best-in-class IT processes, CIO and ISMG Forum

Group IT Forum incl TML and subsidiaries

Fig. 4.2-06 Sources of Knowledge to Enrich Processes, Examples…

reviews etc. (Fig. 4.2-07). TQM and KTL initiatives help in sharing of the knowledge across & within the locations (horizontal deployment). Implementation groups (e.g. planning) and initiative owners help in implementing the ideas and best practices. Some of the Knowledge Management initiatives are also supported by IT.

The intranet mytatamotors has brought the various initiatives under one umbrella for consolidated knowledge base.

Assembly and Transfer of Relevant Knowledge to SPP …

All analyses such as vendor and channel partner capabilities, HR, Market and Customer knowledge (through Market Research and Channel partners), knowledge gathered from all stakeholders are used as a part of SPS . All input elements to the SPS are analysed through knowledge deposited in various databases. For example, FIBRES report, (Fig. 4.1-05) HR report, Sales Review report etc.

4.2b Management of Information Resources & Technology...

4.2 b1 Hardware & Software Properties...

A set of processes to ensure that hardware and software is reliable, secure, user friendly and environmental-friendly is detailed out (Fig. 4.2-07). Robust processes such as IT Governance Frame work, IT Strategy & Planning, Service Management, IT Security and control. Single data entry points ensure the data reliability, security and integrity e.g. ERC for Design BOM.

All the applications are electronically linked and there is no manual intervention in data transfer between applications and thereby leading to data integrity (Fig 4.2-09). Downtime metrics is maintained by Infrastructure Monitoring Team (IBM) for each server to ensure that uptime exceeds the contractual obligations (Fig. 7.1-84). In order to adopt best practices to keep the technology (Hardware and software) current, Enterprise Architecture processes are integrated with all IT processes.

The hardware selection process ensures that the hardware is environment-friendly and it is not only easy to dispose off but also consume less resource (e.g. water, electricity, use of flat screens etc.).

4.2 b2 Emergency Availability…

System criticality is analyzed and appropriate Disaster Recovery (DR) strategy is put in place to ensure the availability of Hardware, Software, System and data (Fig. 4.2-08). Regular scheduled mock drill is in place. A support team of IBM and TTL (Infrastructure and Business systems Service Provider), available round the clock, takes up troubleshooting through world-class ‘IT Service Management Process’ with inbuilt escalation and service level component.

Tools are implemented which give proactive alerts to Data centre teams by integrated Tivoli – Remedy alert (BMC – Remedy is

implemented in line with ITIL standards).

The complaints logged into system are addressed by domain experts. TML has adopted an Information Security Policy (10 domains of BS7799). A framework is established to initiate and control policy implementation (Fig 7.1-86).

A Disaster Recovery (DR) Policy document is prepared, circulated and implemented by CIO at all locations. A formal Disaster Recovery System is in place to protect the critical data and information. Reliable and secure network (VPN) is provided to all locations to access central systems that support the enterprise operations (Fig. 4.2-08).

As per the policy a parallel back-up server has been installed at other safe location which supports in case of emergencies and it is tested periodically as per the schedule. Apart from seeking user feedback after every service delivery, a formal comprehensive Users/customer satisfaction survey is carried out to assess and

Fig. 4.2-07 Approaches for H/W & S/W Properties

Reliability Security User FriendlinessEnvironment

Friendliness

Scalable Hardware purchases from OEMs like IBM, Compaq, Silicon Graphics, etc. AMCs cover 99% Uptime & Routine Preventive Maintenance

Hardware is manned & entry to data centre is restricted. Desktop protected with power on password

Open-ended world class OS like Unix, Linux, Microsoft NT & Windows, Procurement based on user requirements,

Demo by vendors for confirmation. World class data-centre

Desktop laptop in sleep mode setting, Implementation of server virtualisation, strategy of

replacing printing setup with Network printers

Usage of industry standard tested active and passive components for Network. Redundant paths for important network backbone segments. If one path is

down, the alternative path ensures connectivity. SLA with IBM to ensure uptime

LAN isolated from the external world. Security is ensured as high-end firewalls with deep inspection functionality in high availability configuration is

implemented which ensures internal network is protected from external attacks like unauthorized intrusion or access.

Standard software viz., MS-exchange, Internet Explorer etc. are used across network for communication locally and across

geographical boundaries.

Business systems with workflows developed to reduce paper consumption, e.g. online

travel, leave, PMS, suggestions etc. Conversion of all SAP reports to PDF format

World Class Products like SAP (ERP), Seibel (CRM) and Team Centre (PLM), Latest CAD-CAM Tools (Catia, PRO-E, etc), Delmia, etc.

User access based on need to know need to do, after pre-defined approval to relevant area & protected by username & password. Technical Security at Database,

Operating Sys& Application level, Virus protection at all network Entry points. SOX for security & confidentiality

Controlled Methodology of Deployment with joint teams from TTL & TML for requirement analysis, design &

testing, ergonomically designed software packages from world class vendors. User Acceptance Tests

Usage of WAN optimiser which compresses total data to almost one third hence reducing the data

consumption

24 Hrs x 365 days maintenance support for hardware & software as per user’s requirements. ITSM on ITIL foundation for management of IT infrastructure/services

Har

dw

are

Net

wo

rkS

oft

war

e

improve services and make it user-friendly, e.g. Introduction of IT annual report, IT tips/Newsletter to improve user awareness is appreciated by all the users.

‘Failovers and Redundancies’ are built into the systems wherein servers and networks always have failover mechanism, backups and DR critical systems have disaster recovery mechanisms.

Apart from data backup taken for all business critical applications, IT supports back of vital data stored in emails and personal machines depending upon criticality of the data and its business impact. For example, emails, business critical data on Personal Machines is backed up based on this criteria.

40 TATA MOTORS

Digital Product Development Fig. 4.2-10

Indica (Pre-IDeA), Zing, Magna, SFC Truck, LP 207

Introduction of 3D CAD/CAM

Indica (Post-IDeA), Zing, Magna, Safari, Modifications in Estate Sierra

Introduction of CAESimulation, CapacityEnhancement in CAD/CAM

Indica (Varient), Zing, Magna, Safari, Sumo DX, New 407

Maturity of CAE Simulation,Y2K Compliance, Maturity of 3D CAD/CAM and CAID

Indica & Variants, Sumo Faclit, Vista, Newsafari, World Truck, ACE & Variants, Indigo & Variants, Nano, Y1, Penguin, Dolphin, Winger, Xenon, Bus Programs

Maturity of CAE Simulation and 3D CAD/CAM Capacity Enhancement ib CAD/CAM, DP LAB, PLM, dNPI,Introduction of MPM Solution

New Vehicle

Programs

AddingBehaviorto DMU

1986 1992 1996 2000 2004 2008 2012 ....2014

3D for All

Digital Manufacturing

CFD

PLM

KBE (KNEXT)

Vehicle Performance

NVH Analysis

KBE (ICAD)

Sheet Metal Forming Simulation

Durability abd Crash Simulation

3D CAD Modeling

2D Manual Drawing

Fig. 4.2-08 Robust Disaster Recovery Process

Systems Criticality How data recovery is addressedPLM High Storage of backup tapes onsite

and offsite Fail Over server Disaster recovery server(Disaster Strategy is implemented depending upon system criticality)

APO High SCM High

SAP Logistics High SAP HR High

CRM High SRM High MES High

Messaging High

Web based systems Medium

Keeping the Mechanisms Current…

Data & Information Changes in the KPMs form the basis of changes in the corresponding data availability mechanisms. Digitised BSC/SQDCME audits lead to selection of appropriate KPMs that indicate effectiveness rather than activity completion. Once new KPMs are evolved, the methodology of data-capture, frequency of reporting and agency responsible are identified.

SAP (Fig 7.1-81) and its interface with the other systems helps to keep the data current, e.g., product price updation is synchronised with those in CRM such that the dealers have the current information. New Business requirements (Fig. 4.2.02) come from the user to IT BRMs.

The IT processes ensure that data and information availability mechanisms and systems, including software & hardware systems, are kept current with organisational & changing business scenario, needs and directions (Fig. 4.2-09). IT Governance Framework, IT Strategy and Planning, IT Service Management and Manage IT Security & Control, CRM processes are assessed, reviewed and improved every year. IT roadmap, IT BSC and SLAs are reviewed every month to see that latest requirements are considered.

Hardware, Software & Technological changes: To improve IT roadmap framework, The Gartner methodology is adopted (best-in-class BM partners) with detailed workout for all IT strategy pillars (Fig 4.2-01). Strategy execution plan is integrated with budgeting cycle.

Proactiveness of Enterprise architecture and IT services is ensured by revisiting software advancement in Engineering Systems (e.g. PLM), Business Applications (e.g. SAP) and IT Infrastructure (e.g.

Data classification

Creation, Change andMaintain in system

Usage in system

Integrity Check Reliability Check

Product PLM SAP

-Data created through Maker, Checker & Approver approach

-Across platform transfer of data secured by automated link

World class IT Solutions /Platforms (PLM-TeamCentre,ERP-SAP, SRM, CRM-Siebel,IPMS-SAP) are used.These are tested thoroughly before implementation and are periodically updated and checked

Process

SAPECC

SAP,

SRM In built Audit Trails in the SAP system

IPMS /

MES SAP Across platform transfer of data secured by automated link

SAP ECC, CRM

SAP,

CRM

1) Data created through maker, checker & approver approach

2) Across platform transfer of data secured by automated link

People SAP HR SAP

HR In built Audit Trails in the SAP system

MoneySAP ECC

SAP

Fig. 4.2-09 Interconnected IT Systems

Fig. 4.2-11 MiNT Utilisation

MINT Applications Launched

80

60

40

20

02007 2008 2009 2010 2011 2012

No

of A

pps

1

17

4552

68

10

Year 183 Applications as onMay 2012

CVBU

PCBU

ERC - Non vehicle

programs

IT Office

K-blk

MSD

PE

Sanand

Thiland

TMETC

565

1671

27

13

45

107

28

5

15

1

4924

21103

2273

344

2247

2676

209

659

7

3

Type Total Workflows Sum of issues

Grand Total 2477 34445

Hardware, Peripherals, Network, etc) (Fig. 4.2-10 to 13). IBM ensures availability of state-of-the-art technology and capacity in terms of hardware and storage. The SLA agreement between IBM and TML-TML controls the service standards and levels.

Monthly update on this is circulated to all concerned. Relevant upgrades and requirements are initiated and executed through an annual CAPEX exercise and also through periodic reviews.

41TATA MOTORS

PCBU PROJECTS

1. All Indica family2. All Indigo family3. Sumo Grande4. Safari major facelift

SMALL CAR/ SUVPROJECTS

1. Nano2. ARIA

CVBU DEFENSE PROJECTS OTHER PROJECTS IN MINT

1. Y1, BVW2. World truck3. MHCV Tipper / Tipper4. PRIMA, Pelican5. Penguin, Winger6. J&R Defence7. All Ace variants8. Hybrib and HCV Bus9. LKN Bus

1. MIRRP Carplant System2. BOM Dicorepancies Resolution System3. Proto Vehicle Tracking System4. PE PLM5. Diagnostics Project Audit6. Safety Monitoring System7. Customer Complaint Resolution System8. Stylling Issues9. PE MINT, PDM MINT

DEMERIT, ICR & SOFTWARETRACKING PROJECTS

1. Indicruz Demerit Tracking2. Indigo XL CNG Quality Matrix VLO3. Nano ICR4. ICR 1011 Carplant5. ICR Xets Carplant6. CAE Issue Tracker7. M8D D8, M8D PTC8. M8D 8GI, M8D M8C

PLM CAE PDM / INDENT Learning BOM

PE CIP Initiative Styling Demerit’s Tracking

MINT

Fig. 4.2-12 Management of Issues (MiNT)

From 2008 to 2011 all projects migrated to PLM

NewLCV

Jan 07

AggregateTPLs

Apt 07

AggregateTPLs

Jun 07

PhoenixSep 07

Auto Cluster server madeoperational

Mar 07 Jun 07 Sep 07 Nov 07 Jan 08 Mar 08

XenonMar 08

New IndicaEngine Aug 07

PCBU PlanningLive in PLM

Hinjewadi Clustermadefully operational

ERC groups moves toHinjewadi Nov 07

New LCVCarryover

May 07

IndicruzMar 07

AceApr 05 Hi Deck

BusApr 06

SmallCar

Jun 06

New IndicaOct 06

Mar 05 Mar 06 Jun 06 Sep 06 Dec 06

APL live in PLM for ACEand Small Car Nov 06

DicorEng

May 06

WorldTruck

May 06

Fig. 4.2-13 Project Migration in PLM

42 TATA MOTORS

WORKFORCE FOCUS5

�Tata Motors Hospital, Jamshedpur secured the 3rd Position at the 11th National Supervisory Skills Competition, organized by Confederation of Indian Industry, eastern region

�Jamshedpur plant bagged the First Prize at the NITIE Lakshya 2011 - 'On the job achievers contest', in the Operations Management module

�Pantnagar plant has bagged 07 awards in the 13th Indian National Suggestion Summit Schemes' Association (INSSAN)

�Pantnagar plant was adjudged to be in 5 Star (highest) category, in its Safety & Health Management Systems, by British Safety Council, UK

�Pantnagar plant was conferred upon with the Sword of Honor Award by British Safety Council, UK

�Pantnagar plant has been conferred with the prestigious 'Safety Innovation Award 2011' at the 8th Safety Convention of the Institution of Engineers (India), held in New Delhi

�The Sanand plant has won 10 awards at the Annual Regional Convention 2011, organised by INSSAN (Indian National Suggestion Schemes' Association), held in New Delhi

�Sanand plant receives the 'Golden Peacock HR Excellence Award-2011

�Tata Marcopolo Motors Ltd has been honored with Unnatha Suraksha Puraskara for Best Safety Performance in the category of Manufacture/Assembly of Transport Machinery, Motor Vehicle & Construction Machinery, awarded by National Safety Council, Karnataka Chapter at Safety Awards - 2011

�Kalasagar, the performing arts and cultural wing of Tata Motors Pune, has won the 1st prize (Best Diwali Issue) for its Diwali issue of 2011, in the competition held by Sukhkarta Sanskrutik Pratishthan (Pune)

5. WORKFORCE FOCUS

5.0 Workforce Focus

HR function establishes its objectives from the overall TML Strategy (OP-21 and 2.2.a4 response). The Human Capital Strategy is designed around TML's Vision for CVBU - 'Double revenues by 2015 and maintain market dominant position' and PCBU - 'Be a formidable No.2 by 2015 in domestic market'. The three planks of HR Strategy ‘Talent & Leadership', 'Organisational Renewal' and 'Organisational Enablers' are aimed at building sustained customer delight and business are performance.

HRF/HRP/HRC refer to Financial, Process & Customer Perspectives of HR BSC and each of the strategic objectives are mapped to corresponding category responses.

The nimble organizational structures are designed around customer requirements and drive business performance through clear accountabilities (Fig. 5.0-01). The structure is supported by powerful enablers on building a high performance work system through performance coaching and performance differentiation. There is a focus on technological enablement and high employee engagement to build a powerful "One Tata Motors Culture" through standardization and integration of HR practices. As part of organization renewal initiatives for organization redesign, role clarification and decision rights have been launched. Additionally, projects to ensure simplified and IT enabled people processes such as online travel claims, leave approval, suggestions management have been kick started. The Integrated HR Planning and Execution Structure (Fig. 5.0-02) ensure effective delivery of HR services across locations.

The verticals of 'Performance & Rewards', 'Talent Management', 'Learning & Development', 'Employee Engagement' and 'Talent Acquisition' are being replicated in business units in a matrix environment . This gives the benefits of integration and expertise and enables execution of Human Capital Strategy. The verticals improvise and institutionalize processes and execute the same with the support of Location HR. HR Processes and Practices have continued to evolve in line with the changing business realities to secure the delight of end-customer (Fig. 5.0-03). Given the entry of many international players in the Indian automobile space, customer-centricity has become the biggest differentiator. There is a surge to collaborate along the HR verticals to build a highly engaged organisation.

5.1 Workforce Environment

5.1.a Workforce Capability & Capacity

5.1.a.1 Capability & Capacity

To keep the business aligned and integrated, TML identifies the necessary capabilities and characteristics needed by workforce, both existing and potential through inputs provided to SPS (Fig. 2.1-02), HR Planning Activities (Fig. 2.2-04) and Learning Advisory Councils (Ref. 5.2.c.1). Manpower Planning Process (MPP) (Fig.5.1-01) is for mapping of Workforce Capacity and Capability needs, which includes critical skills, job requirements and staffing levels. Based on volume requirements, Plants and Functional Heads make their yearly resource plans which are discussed with HR//PSD/Manpower Planning teams for the assessment of total workforce capability and capacity for each area of operation. These requirements are then factored into ST and LT HR Plans. Industry benchmarks and internal benchmarks are compared with the workload derived (e.g. Standard Man Hours (SMH) per man) existing skills and competency database and HR plans are updated.

With this training, re-training, redeployment or phased movement of workforce is planned e.g. resource requirements for the new lines are worked out, experienced workforce is redeployed and some workforce is sourced based on the requirements of skills and competencies. Based on this, positioning or redeployment of manpower is done and/or additional manpower for skill sets and numbers is sourced. MPP gets revisited every year and changes are built in during Mid-Term Review (MTR). Workforce productivity is measured through various metrics such as value added per unit wage bill and equivalent vehicles per person per year or Actual man-hours (Fig. 7.3-7).

5.1.a.2 New Workforce Members

Recruit, Hire, Place and Retain New Members…

As an equal opportunity employer, fair work practices are built into Talent Acquisition (TA) process (Fig. 5.1-01).

Fig. 5.0-02 Integrated HR Planning and Execution Structure

HR Structure &

Framework Participants Roles Org. Loc.

A I A I

Management

Committee Ref Fig 1.1-09

Review and Approval

of all major HR

Systems and

Processes�

�

HR Steering

Committee

Head HR, Loc.

HR/IR Heads, HR

Vertical Heads

Prepare and review HR

Plans and Processes���

Location HR

Structure

Location HR

Heads and

Location HR

Teams

Execution of HR Plans

and Processes

��

CFTsHR Members from

locations

Standardize/customize,

improve/change

systems

����

Org: Organisational, Loc: Locational, A: Alignment and I: Integration

Fig. 5.0-01 Human Capital Strategy

PowerfulEmployer

Brand(HRP/5.1.a.2)

OrganizationalEnablers

People to be Driver of ResultsOP 1.a.3

OrganizationalRenewal

Talent &Leadership

EnablingOrganizationDevelopment

(OP 2.b)

EnablingBusinessGrowth(OP 2.b)

SeamlessIntegration

Customer-centicOrganizationRe-Design

HighEngagement

Culture(HRC/5.2.a.1)

Strategic TalentManagement and

Leadershipdevelopment

(HRP/5.2.c.1/3)

Learning andCapacity

Development(HRP5.2.c.1/2)

Sustained CustomerDelight and BusinessPerformance (OP2.b)

Performance and rewardsmanagement to inculcate

Meritocracy andHigh-Performance Culture

(HRF/HRP/5.1.a/b.2, & 5.2.a.3)

Reinforce‘One TATA Motors’

Culture(HRC/5.2.a1/2)

Simple andIT Enabled People

Processes

Fig. 5.0-03 Evolution of HR Systems and Processes

Maturity ofHR

Systemsand

Process

All processrevisited

against theglobal

benchmarksand improved

Strengtheningof verticals

andhorizontals to

take HRmanagementto next higher

level

Restructuringand

revampingthe HRstrategy

androadmap to

enhancesustainedcustomer

delight andbusiness

performance

Creation ofmatrix

structure forHR,

organization,implementation

of newPerformanceand Rewardssystem andincreasingthrust onemployee

learning andengagementto built globalcompetencies

2008-09 2011-122010-112009-10

TATA MOTORS43

It ensures that the recruitment catchment area is spread across the country which ensures diversity in ideas, culture, experience and approaches. For specific projects, employees across locations, functions and cultures form CFTs and work on critical assignments. To build in diversity in the workforce through recruitment, multiple sourcing channels are used as outlined in table below (Fig. 5.1-02)

Evolution and Improvement of Talent Acquisition Process: TA team constantly endeavours to improve recruitment efficiency (Fig. 5.1-04). To explore an alternate channel for sourcing talent Employee Referral Program "Friend++" was revamped. It has also established IJP Policy "Opportunities++" where internal job openings are posted on intranet and employees get preference in taking up challenging roles in the organisation.

Talent intake at entry level is through hiring from premier engineering and management institutes for the managerial cadre and through technical trainee schemes for the operatives. Cadre recruitment process selects talent and grooms them with a view to developing 'Future Managers' in line with the strategic objectives of the organisation. The intake process is established and continuous efforts are made towards brand building at premium campuses. Initiatives such as summer internships, case study competitions, sponsorship of technical and cultural events, guest lectures are some of the efforts to become the Employer of Choice which is tracked through annual A C Nielsen Campus Track Study (Fig. 7.3-13).

TML is ranked seventh among Top 15 Companies visiting Top 25 Business Schools (Source: Outlook-MDRA ranking 2011). It hires PG students with specializations in HR, S&M, Operations, Safety and other functions. Further, fresh talent with PG in Economics, Psychology, Commerce and Statistics is recruited through the OT Scheme. The Cadre recruits undergo a 6-12 month on the job training period with various rotational assignments. These assignments may be cross functional and are chosen to give them exposure across locations and business units. Post training, the trainees are placed in functional areas based on their performance reviews and overall organizational needs. IJPs enable movement of employees across functions and business units ensuring transfer of knowledge and learning within the organization. Systematic approaches ensure capitalisation of diverse ideas (Fig. 5.1-03). A transparent hiring and induction program, employee-friendly policies and benefits, motivational schemes, grievance redressal, informal mentoring and other such initiatives help in employees' assimilation/retention. IB resource requirements are addressed by selecting candidates from the domestic talent pool who are then provided culture and language trainings to prepare them for international assignments.

Tata

Gro

up

So

urc

es

TAS Officers, HRDP Managers, Group CA Trainees, Tata Group Career Opportunities (tataworld.com), Second Career Internship Program (SCIP), International Internship Program

Tata

Mo

tors

Sch

emes Managerial Workforce: IJP; ERP; Cadre

Recruitment Processes: PGT, GET, OTschemes; DET; Lateral Hiring andProject Based Deployment.

Non - Technical Trainee Scheme andpool of FTAs / TMSTs

Management Workforce:

Fig. 5.1-02 Sources of Hiring Talent

Fig. 5.1-01 Manpower Planning and Talent Acquisition Process

At half year a Mid Term review (MTR) ofwage bill and manpower requirement

is done jointly by Plant PSD’S,Commercial and Corporate HR based on

fresh volume projections

Implement hiring processfrom CV short listing,

Prelim/Final Interview, OfferMaking and Negotiation

Offer Acceptance, Medical fitness,

On boardingand Background

Verifications

Plant PSD’s validate themanpower requirementevery month for resp.

plants. based on monthly production plans

Workout granular details around job description/

specification

Workout Sourceof Hiring

Including Internaland External

Approval of

wage bill by Mancom

Collation and Validation ofrequirement centrally byCorporate HR along with

Location HR/PSD’s

Communication ofapproved budget (manpowerand costs) to all PSD’s and

Commercial HR byCorporate HR

BusinessStrategy

Preparation of Wage bill byCorporate HR incorporatingthe projected manpower and

other salary assumptions

Receive Plant wise yearlyProduction, Sales and Outsourcing

plans form Business Planning

Plant PSD and Location HR assess workforce capability andcapacity considering new start ups, no. of shifts required,

also taking stock of skill matrix, productivity indicators like HPV, Eq. Veh/person/year etc.

Plants PSD’s, Location HRthen workout the manpowerrequirement for Plants and

Commercial HR forcommercial functions

5.1.a.3 Work Accomplishment:

Manage & Organise Workforce to Accomplish…

Individual work and performance objectives of the workforce are directly linked to business objectives to be accomplished at the highest level (Ref. response to 2.1.b.1). The systematic BSC/SQDCME/ VMCDRE/PACT cascade (Fig. 5.2-03) breaks the work down to individual action plans/objectives. Each work unit is staffed based on a process (Fig. 5.1-01) which assesses the amount of work, layout, production rate and space required.

TML addresses factors of 'managing and organising the workforce to accomplish' desired work in a systematic way (Fig. 5.1-05).

Accomplish the work of the organization: Work system structure (Fig. 6.1-01) determines work content, volumes and quality specifications. With this, capability and capacity requirements are matched to the cascade of goals (Fig. 4.1-01) during deployment.

5.1.a.4 Workforce Change Management

TML prepares its workforce for changing capability and capacity needs through continuous review and course correction. Review and Improvement processes (Fig. 2.1-01, Fig. 1.1-09, OP-19, Response to 5.2.c) enable to anticipate and capture changes in the external market and their implications on the business and organization strategy (Fig. 5.1-06). It prepares workforce for changing capability through training and education, with the aim of enhancing their knowledge, skills and abilities and investing in their

Fig. 5.1-03 Capitalising Diverse Ideas

From Employees

Team structures/CFTs/SDTs, Suggestion Scheme, Innovision, Job Rotations & IJPs, Systematic employee movement within domestic and international business, Parivartan, Gallup survey, FGDs and online mechanisms

Special task force formed by Pune HR team to support hiring when setting up Dharwad plant; Innovation:: Driverless Chassis Dynamometer, Noise Pollution Control using in - house developed KBE Application

Examples of ideas captured andimplemented

Processes to capideas and thinking

italize on diverse

Area Trigger

Year Improvement & Innovation done

Freeze on

Talent

Acquisition

Slow Down

08-09 External recruitment process frozen.

Workforce from manufacturing

locations trained and deployed on short

term sales assignments . e.g. Panther

Project

Cadre

Employees

Towards One

Tata Motors

Culture

09-10 Internal and External Studies carried

out for GET program. Programs

standardised across locations and

deployed.

Talent

Acquisition

Process

Enable

Continuous

Improvement

11-12 Change in Notice Period to align with

external talent market; Launched

ERP; Re-articulated Compensation

Philosophy and changes in

compensation structure; Launched

Applicant Tracking System and Online

Onboarding System Project to provide

consistent experience for all new

hires; Leverage technology (VC) to

reduce cost of hire.

Fig. 5.1-04 E & I in Talent Acquisition Process

44TATA MOTORS

Area Managed: Approaches & processes for preparing the

workforce for changing needs in:

Capability Capacity

Workforce NeedsTNI, IRC/JDC Meetings;

CFTs/SDTs; Job Rotations

Manpower

assessment

and Manpower

planning,

Rightsizing;

Recruitment of

Temps; Job

Rotations,

Redeployments

CFTs; Training

and

Development.

Organization need

for continuity

Training & Development ;

Succession Planning/Talent

Pipeline; Knowledge Management.

Org. need to

prevent and

minimize impact of

workforce

reductions

Use of flexible workforce,

outsourcing, redeployment to other

lines/locations, cross trade

training/multi skilling.

Prepare and

manage periods of

workforce growth

The increased volume requirements

are met by pool of skilled temporary

workforce.

Fig. 5.1-06 Preparing for Changing Capability and Capacity Needs

Fig. 5.1-05 Methods to Manage and Organise Work

Organize and

manage

workforce to:Approach

Deployment

Capitalise on

Core

Competencies

Matrix structure;

CFTs/SDTs ;

Knowledge/best

practise

sharing;

Process and

systems

cascade

Systems and processes linked to the

overall business output (Fig. 6.1-02).,

e.g. In plants, team members are

aligned to business targets of

SQDCME, through SDT, and on

monthly basis make business gap

presentation to senior management.

Innovations linked to the strategic

advantages (Figs. OP-21, 2.1-04, 05),

e.g. rewarding low lifecycle cost

innovations such as Ace & reporting to business & corporate functions, international deployment of talent for Greenfield projects.

Magic, dual

Reinforce

Customer and

Business Focus

SPS, strategy

cascade and

implementation,

customer

feedback,

midyear reviews

and course

correction (Fig.

1.1-09), LACs

(Ref 5.2.c.1) and

exposure to sales

environment.

(Fig. 2.1-01) Customer and business

focussed objectives get cascaded to

Address

Strategic

Challenge and

Exceed

Performance

expectations

Rigorous strategy

planning (SPS),

BSC approach,

SQDCME/VMCD

RE and PACT

cascade,

Performance Pay

Each strategic challenge is identified and then interpreted as wide range of strategic initiatives through SPS (Fig. 2.1-01), action plans to address challenges are developed and cascaded through BSC/PACT. (Fig. 1.1-01) for review structure. BSC cascade and individual performance linked goal setting, coaching and midterm review/feedback through PACT. Ratings and compensation based on performance achieved vs. goals

individual work plansis done through MTRs, feedback/performance coaching for managers and sun rise meetings for operatives.Managers and Senior Leaders are assessed and held accountable for results based on metrics that focus on enhancing customer satisfaction (Fig 2.2-05, 07 & 08) and achieving business objectives. Skill gaps or capability requirements reinforce customer focus identified through LACconsidering the inputs received from customers by the business.

. Course correction

continuous development to meet the demands posed by changes in the external environment. Manpower planning process (Fig. 5.1-01) is used to prepare for and manage changing workforce capacity requirements based on market demand and fluctuating volumes.

5.1b. Workforce Climate

5.1b.1 Workplace Environment

To ensure health accessibility, TML has medical centres across all plant locations and external tie-ups with hospitals at both plant and non-plant locations. It complies with statutory requirements such as bi-annual health check-ups for employees working in hazardous areas. Workplace assessments by external agencies and OHSAS 18001 certification result in proactive action such as preventive health check-ups and awareness programs. It also customizes medical support provided based on different workplace environments/workforce segments such as audiometry for employees working in high noise areas, lady doctors for female employees and so on.

Security department ensures protection of company property and personnel through patrolling, gate manning, installation of CCTV cameras for surveillance and so on. It has laid down security procedures such as gate check-in check-out, vigilance, investigation of security incidents and complies with all statutory requirements. It also proactively undertakes preventive initiatives such as mock drills, surprise checks and education on security policies and procedures.

Employees participate through initiatives such as Kaizen, 5S and Suggestion Schemes in improving the health and security related processes. Performance measures and improvement goals on workplace health and security can be presented during site visit.

In an effort towards continuously improving and ensuring high safety standards, this year TML has engaged with M/s DuPont for a 3 year period in CVBU plants and with British Safety Council for PCBU plants.

The engagement was preceded by Safety Assessment/ Diagnostic of the As-Is situation which involved: a) Safety Perception Survey b) one on one interviews with the leadership at various locations and c) Site visits by DuPont team. The Objective is achievement of safety excellence and transformation of safety culture in a compressed time frame. The current status of engagement is as under:

1. EGs at all the locations have been trained on 'Leading Safety Efforts' and Safety Professionals have been trained on 'Safe Pro' tailor made for them.

2. Corporate sub-committees are formed to facilitate key initiatives on safety. SHE Council meets monthly where Senior Leadership reviews progress and quarterly updates are shared with the MANCOM.

3. The 5 point approach followed: 1.Safety Observation, 2.Standards & Procedures, 3.Training & Capability Building, 4.Incident Investigation and 5.Contractor Safety Management.

4. Skills' building in Safety observation process and Incident investigation has been done rigorously through training, coaching and hand holding.

5. Ten key standards and procedures have been identified on priority which would be common across all plants.

6. Driving Safety initiative under i-drive safe encompasses DDT (Defensive Driving Training). This classroom training is followed by on the road practical assessment and the driver is classified under high risk, medium risk and low/no risk.

Office and Establishments Safety: There is also a focus on enhancing safety standards across offices, warehouses, dealers, TSS, FBV and RSO. The safety norms for dealers, warehouses and offices are developed, safety audits are conducted and safety committees are formed in some of these establishments. Office Safety Auditing Procedure and checklist made for TML has been adopted by the entire Tata Group through the Tata Group Safety Steering Committee. Capability building on audit requirements has been conducted through TQMS.

45 TATA MOTORS

5.2 Workforce Engagement

5.2a Workforce Performance

5.2a.1 Elements of Engagement12

Gallup Q tool, an employee perception survey, has been adapted to measure employee engagement across all employee groups including the enterprise level factors affecting employee engagement, satisfaction & morale.

Employee feedback on various parameters which emerge through the discovery phase of the engagement survey, exit interviews analysis and focus group meetings help review and revise the

questionnaire. This survey is done annually for all management employees and on sample basis for non-management employees. A separate survey is administered to the sample population of the flexible workforce by the IR team to gauge their satisfaction levels. Analysis as shown in (Fig. 5.2-01) Step 4 done on the results received helps determine the key factors that affect employee satisfaction (Ref. response to 5.2b.1). Based on Gallup Q12 action plans are put in place at three levels - Organization, Business Units and Line Manager Level - to enable workforce engagement.

Fig. 5.1-07 Policy Review Process

Captureemployee

feedback andconcernsthrough

PARIVARTAN,Gallup Surveyand locationHR teams

ExternalBenchmarking

of benefitsand policies

(with representativecompanies,

includingAutomobilecompanies ,TATA groupcompanies

andcompaniesfrom othersectors)

Designpolicies indiscussion

with HRleadership,

Business HRteams and

subsequentlyvalidate with

businessleaders,Mancommembers

Safety communication and branding has been implemented to promote a culture of safety in office. A number of initiatives and proactive steps have been taken to increase safety awareness and seek employee participation such as Chemical Safety, Disaster Management National Safety Week Celebrations and so on. LOTO implementation has been done for all plants to ensure safety during maintenance. For PCBU plants, Safety Score cards have been implemented for monitoring and reviewing safety parameters. Contractor Safety Management has been strengthened through monthly reviews, tool box talks and reduction in accidents.

PCBU Pune has developed in-house HIRA software for standardizing HIRAs and minimizing perception errors. This year Pantnagar plant won the prestigious "Sword of Honour" for adopting best in class safety standards. Ref. Cat 7.3 for performance measures and improvement goals on workplace environment. (E.g. British Safety Council Health and Safety Management Audit results)

5.1.b.2 Workforce Policies & Benefits

People Policies and Practices are being reviewed (Fig. 5.1-07) to put in place policies and benefits that are in line with changing workforce demographics, progressive, best in class, employee friendly as well as ensure long term viability for the organisation. The current policy revision focuses on the employee groups in the EG, TM and Supervisory segment. This year Perquisite Car, Mobile and International Assignments Handbook for international business were revised.

The policies and benefits for Operatives will be reviewed subsequently. 'Parivartan', a listening post to engage with employees on the entire gamut of people policies and practices segment is an effort to make policy design a participative and inclusive process. Policies are being designed to support different workforce segments and help addressing different requirements. Participative wage settlement and negotiation process with union captures diverse needs of non-management workforce at various locations and helps improve services and benefits. Crèche facility and superannuation allowance are a few examples of policies catering to the needs of different workforce segments.

Fig. 5.2-01 Engagement Process for Management & Operatives

Discovery Phase:

Structured interviewwith key stakeholdersand high Performance

Questionnaire Development:

Separate questionnaire for themanagement and the

non-management in 2 and 4languages respectively

Data Collection:

100% managerial and10% Non-managerial

identified through randomsampling

Determine the keyfactors that affect

results:

Determine what arethe needs of the key

groups

Understand correlation

Update theQuestionnaire

Analysis:

Organizational, andBusiness unit, Location,Grade, Divisional levelanalysis on Manager’s

Score card, Managementand Non-Management

Results Communication andImpact Planning:

Survey Result roll out anduse of Gallup online tool foraction planning at 3 levels :

Organizational, Business unitand Line Managers

Reviewed at 5 Levels:

Organization, Linemanagers, HR,Feedback Loop,

Process champions

1 2 3

456

5.2a.2 Organisational Culture

The Organisational Leadership System (Fig. 1.1-01) and matrix reporting relationships drive and foster an organisational culture that is characterised by open and two-way communication, high performance and an engaged workforce with the help of various methods, approaches and processes (Fig. 5.2-02) that ensures empowerment, alignment and integration.

The strategic direction and goals are determined at MD's level and are cascaded through BSC and PACT. Review mechanisms (Fig. 1.1-09) are in place to monitor the same.

The culture benefits from the diverse ideas, backgrounds, and thinking of our diverse workforce (Fig. 5.1-03).

Fig. 5.2-02 Fostering an Organisation Culture Characterised by

Open

Communication

High

Performance

Engaged

Workforce

Open door policy; Town hall meetings; Chairman’s Address; Internal newsletters/magazines and CorporateCommunication; mytatamotors - intranet; Knowme -skip levels, Parivartan and FGDs

BSC cand promotion; identification of top talent; executive selection scheme/FTSS; Individual goal setting through PACT and relative grading/normalisation exercise:CFTs/SDTs and special programs such as to achieve operational excellence, PCBU plant shave embarked on a journey of TQM there by developing problem solving attitudeand making it an organizational DNA

ascade sessions; performance linked pay, rewards

Gallup Q12 and enterprise levels to identify opportunity areas, action planning and implementation of engagement initiatives, performance feedback, coaching and mentoring, job rotations, learning and development opportunities, multiskilling, faster careerprogressions and other such mechanisms are utilized to better engage the workforce.

level surveys, FGDs and skip

5.2.a.3 Performance Management

Gallup survey analysis suggested that employees wanted a change in the existing PMS. To address the need for change, a modified PMS framework and the revamped system - Performance Assessment and Coaching Tool (PACT, Fig. 5.2-03) was introduced this year, which is applicable to all full time employees from supervisory grade onwards. PACT communication has been completed across business units and locations explaining the shift in philosophy and the process details on handling various aspects of the PMS.

46TATA MOTORS

Organization level BSC is cascaded into various BU Scorecards and then into individual goals through PACT. Individual goals are further classified into strategic, tactical and individual to ensure balance and alignment of organization, department andindividual objectives. This SMART goal setting process aligns individuals to the strategic objectives of the organization thereby reinforcing customer and business focus. Additionally, over the last two years competitions like "Imagineering", "Innovision", "Innovista" and "Innomatix" have been conducted to promote risk taking for innovations. Innovation is also formally fostered through appropriate MPA as part of individual goal setting to address business requirements.

Objective of PACT is to enable setting of performance standards and goals for the employee, clearly communicating performance expectations, support employee in accomplishing goals by maintaining dialogue between employee and appraiser, ensuring that the employee's performance is on track by assessing performance formally at mid-year and end of year, identifying top talent as well as employees whose contribution needs improvement, linking the rewards received by employees to their performance and identifying training needs of employees.

The table below outlines the PACT process and timelines: (Fig. 5.2-03)

capability development (Fig. 5.2-04) will create a healthy performance spiral which will support high performance culture and work force engagement. Non-management employees are assessed on SQDCME parameters as per Performance linked benefit/Promotion scheme.

High performance in plants is sustained through performance based payment system and SDT formation, which takes into account performances on SQDCME parameters whereas for commercial functions VMCDRE index forms the basis for performance linked payment. Team performance at team member level is managed through monthly SDT audits and subsequent review of top teams by Senior Management. PACT's effectiveness is measured by employee feedback through various two way forums such as IRC / JDC, skip level meetings, Gallup and Dip stick surveys.

Employee Rewards - The workforce performance management system is directly linked with compensation related decisions such as increments and performance pay. TML follows an annual salary revision cycle and outputs from PACT such as individual ratings, company performance and promotion recommendations are used to decide the employee salary revisions.

Annual surveys provide information on industry trends and company positioning with the competition. The data, along with business performance during the year, are used to decide on the increments.

The performance pay plan is designed to differentiate in payout based on the performance. It is driven by both individual and corporate performance. The corporate factor of performance pay is higher for higher work levels, reflecting the increased responsibility for business results.

Develop BUScorecard

Cascade BSC toDepartment

level

1st Feb to 1st Mar

Assessing Performance

Share Ratingand Feedback

NormalizeRatings

ConductClarificatoryDiscussions

Conduct Mid-term Review

Set IndividualGoals

Planning Performance

1st Mar to 15th Mar 15th Mar to 30th Apr

15th May to 30th Jun 30th Apr to 15th May 15th Mar to 30th Apr

1st Oct to 30th Nov

Fig. 5.2-03 PACT Process Flow

5.2b Assessment of Workforce Engagement

5.2b.1 Assessment of Engagement

The Organization assesses (Fig. 5.2-01) workforce engagement by way of structured surveys administered to the different workforce groups and segments.

Various formal & informal methods are used to determine key factors affecting employee engagement & satisfaction (Fig. 5.2-06).

It describes various qualitative and quantitative methods used to capture feedback of diverse workforce & segments that enables HR and Senior Leadership to identify critical issues which are consistent across employees.

Additionally, with the objective of reinforcing 'One Tata Motors Culture', VConnect - Tata Motors Employee Engagement Initiative has been launched (Fig. 5.2-05). VConnect encompasses both elements of 'Fun at work' and Q12 action planning to drive engagement. This year also saw the launch of ONE thematic engagement calendar across locations, Gallup online tool for action

PACT as a philosophy encourages managers to provide continuous and timely feedback to employees on performance and behavioral dimensions; the intent is not only to review past performance but also to provide coaching to enable and sustain high performance by removing road blocks. Employees are rated on a 4 point behaviourally anchored rating scale - Exceptional Contribution, Strong Contribution, Satisfactory Contribution and Contribution Needs Improvement: (CNI). PACT has introduced the concept of PIP (Performance Improvement Process) at the BU/ Function level for CNI cases. In the event that after providing all support (via PIP) for a period of 6 months, the CNI population does not come up the curve; the management may take a performance outplacement decision.

Post ratings, normalization by an independent PAC ensures fair discussion and assessment of talent in an unbiased manner. This process has yielded good dividends as a result of which number of appraisal grievances came down substantially last year, thus, we have moved away from appraiser centric decisions and towards creating a high performance work culture through PACT. PACT process has major linkages with other HR systems as shown below:

PACT ratings also have an important bearing on career growth of all employees. Variable pay component is based on individual and company performance. Increments are also a function of the employee's rating.

The multi pronged approach of early talent identification, coaching, mentoring, clear goal setting coupled with robust PACT process steps (Fig. 5.2-03) and strong inter linkages with rewards and

Fig. 5.2-04 Linkage of PACT with other HR processes

Q12, EmployeeForum

PACT

Training, TalentManagement/Promotions,

Rewards

2007-08 - Increased survey participation rate through a blended survey administration method, extensive communication of Employee Engagement Survey to specific teams, employee involvement in action planning, Train the Manager Workshop, Review of Action Planning across locations

2009-10 - On-line survey and presentations across all locations for reviews. Train the trainer for process champions

2010-11 - Instructional design programme for train-the-trainers

2011-12 - Gallup online tool launched - An interactive platform that provides local teams and leaders with a suite of tools that drive action, accountability and sustainability.

Fig. 5.2-05 Enhancement in the Engagement Process

47 TATA MOTORS

planning & Engagement scores becoming part of Leadership BSC.

5.2b.2 Correlation with Business Results

Contrary to the classical thinking on Employee Engagement, Tata Motors believes it to be a perceived state of an employee's mind of what and how it makes him/her feel at Tata Motors. It therefore does not have a mathematical formula or statistical relationship to prove its co-relation with Business results. Various employee engagement programs/ interventions under the flagship brand VConnect, the Tata Motors Employee Engagement initiative are a step in the direction to create positive impact on employee morale thereby fuelling productivity & sustaining business in the markets we operate in and wish to grow our footprints as a strategic intent.

capturing needs, designing and deploying learning programs in domain. CoEs are structured to focus on building functional and technical capabilities (Manufacturing Excellence & Innovation, Operator Training, Dealer Training, Commercial and Corporate CoE) and behavioural capabilities (Global Leadership and Management CoE) (Fig. 5.2-08).

Tata Motors Academy is a defined structure that has enabled to

Management

Workforce

Processes Application of outcomes Measures

Q12 Gallup

To identify thrust area and use findings toalign and prepare action plans at three levels

Q12 Index

Dipstick

Survey

To identify progress on survey results

communication and action planning

Scores and qualitative inputs on Process improvements

Exit

Interviews

Capture satisfaction, motivation and retention related inputs to improve processes - action by Line HR

Exit Analysis

ParivartanFeedback on people policies and practices

Process improvements & Policy changes

New Hire

Feedback

Feedback on Recruitment, Joining experience and Engagement

Process improvements

Non-Management Workforce

Q12 Gallup

To identify thrust areas and use

findings to align and prepare action

plans.

Q12 ndex

IRC / JDC

Interactions

Track and resolve issues around

absenteeism, grievances, safety, and

health and productivity. Actions by the

IR team.

No. of issues &

grievance

resolution

Fig. 5.2-06 Formal & Informal Assessment Methods

balance focus on various forms of capability development. Different verticals ensure that the learning agenda is aligned with the business objectives and functional strategies. Currently, TMA intends to direct 60% focus on technical and functional capability development and balance on leadership and managerial skills development (Fig. 5.2-09).

5.2c.2 Effectiveness of training: is evaluated through CIRO

Fig. 5.2-07 Learning Advisory Council (LAC) Structure

3 tiered structure of LAC

Setting broad level directions for learning in line with the vision of the organisation

The Functional/BU councils ensure alignment between the directions set by the apex council and what happens at the operational level.

Implementation of strategy in location is carried forward by location councils.

BU/Functionat council

Apexcouncil

Location council

5.2c Workforce And Leader Development

5.2c.1 Learning And Development System

Workforce and Leader Development Processes focus on identifying knowledge and skill gaps (Fig. 5.2-08) and preparing employees for the changes in external environment to meet organization's strategic objectives. The processes of workforce development are closely aligned with learning governance body called Learning Advisory Council (LAC) (Fig. 5.2-07). LACs ensure alignment of learning to business and functional strategic objectives by involving all stakeholders and capturing their requirements. Three key roles of LACs are designing, implementing and reviewing learning efforts.

L&D system addresses the various segments of workforce through a systematic approach with inputs flowing from the LACs. The Tata Motors Academy (TMA) has been created with different verticals for covering diverse needs of different categories of employees and functions. L&D is structured into CoEs. CoEs are instrumental in

Fig. 5.2-08 Tata Motors Academy (TMA)

Learning Centres of Excellence

Functional and Technical Capabilities(Manufacturing Excellence and Innovation, Operator

Training, Commercial, Dealer and Corporate Learning)

Behavioural Capabilities(Global Leadership andManagement Learning)

Cross Functional Programs and Processes(Project Management, Conflict Resolution, Innovation and Working in Teams)

Learning Support Services(Continuing Education, Learning Technologies, Instruction Design, Performance

Consulting and Organization Development Learning Infrastructure and Communication)

Strategic Learning Partners(TMTC, B-Schools/Universities, Training Consultants and other Partners)

Fig. 5.2-09 Learning Needs Identification Sources

Business capability building Functional/Technical Individual learning needs needs identified by LAC learning needs identified identified through PACT

by Functional Heads andvalidated by LACs

model. CIRO-II measures participant's as well as superior's feedback on the outcome of the training against the program's objectives. It focuses on transfer of knowledge/skills at the workplace by the participants as endorsed by their superior.

Efficiency: CIRO-I measures efficiency of the training program delivered, gathered as feedback from the participants immediately post training completion. It focuses on pre-programme information, learning environment and faculty evaluation. Corrective actions are initiated based on the CIRO feedback (Fig. 5.2-10) received leading to improvements in the programs. (Ref. Fig 7.3-40 to 48 for L&D efficiency and effectiveness measures).

Fig. 5.2-10 CIRO Feedback Process

Get participants feedback for all

programmes

Within 3 months sendfeedback Form to supervisor of

participant for identifiedkey programmes

CIRO 2 score is less

thanthreshold

CIRO 1 score is

less thanthreshold

Continue theprogramme

Review programme design, content &

faculty

Use the data to:� Improve training coordination� Modify the programme/faculty� Future programmes

NoYes

Yes

No

Operative training involves preparing the workforce to meet changing business requirements through knowledge, skills and behaviour-based programs. Operatives are trained in apprenticeship schools, as well as on-the-job by the managers. Location Technical Training set-up caters to all the training requirements falling in its area, e.g. Jamshedpur, Pune and Lucknow plants provide NCVT training for potential operatives.

48TATA MOTORS

The technical training set-ups have been consistently rated as the 'Best Training Establishment' in the country. The prime objective is to develop, sustain and continuously upgrade the workforce to keep pace with enhanced customer needs and expectations, increased competition, ever-changing technology and stringent legislative provisions.

5.2c.3 Career Progression

Different approaches are followed to manage careers of management and non-management employees. Management employees are given the opportunity to apply through internal careers within Tata Motors and also at the Tata Group level. Employees get the opportunity to move to higher levels through voluntary and non voluntary mechanisms. A fair and transparent

selection process is in place to support it (Fig 5.2-11) Employees from talent pool are handpicked for specific assignments and new projects such as for IB operations employees from talent pool or with the relevant domestic experience are given priority. ESS provides career progression opportunities in general management.

Other schemes such as TSS, CMS and OMS provide faster career progression in the specific functional area. Employees are also encouraged to apply to group level TAS scheme. The MAC and DC process assess and hone skills of employees to be a part of the talent pool. Careers of Officer level employees are managed through PACT and Internal Officer Trainee Scheme. Career progression opportunities are available to Non-Management employees on gaining respective educational qualifications and skills (Fig. 5.2-12).

Parameters

Approach

Core competencies,

strategic challenges,

and accomplishment

of ST and LT action

plans

Apex LAC defines the broad level learning and

development strategy (both ST and LT) in line with

the organisation’s core competencies, strategic

challenges and action plan. This strategy breaks

down in to BU level and then into location level

strategies, which capture both LT and ST learning

needs and focus areas.

Organisational

Performance

Improvement and

Innovation

While focusing on the Business Strategy BU/

Locations

LACs identify areas of improvement in

terms of

capability and performance. The focus

areas/skill gaps identified are then built into the

Annual Learning Calendar in the form of various

initiatives/learning programs such as Autonovatx, a

functional capability building initiative that focuses on

6 key technical areas of improvement.

Ethics and ethical

business practices

All new hires are sensitized towards high standard of

ethics which prevails in Tata Motors through the

Induction process, which make it compulsory for new

hires to complete TCoC module and certification.

Customer Focus

Processes are in place to identify customer centricity/

satisfactionn of both internal and external customer

(e.g. Parivartan, CSI). The results serve as triggers/

inputs towards identifying skill gaps and designing

learning programs such as coaching skills for

appraisers or customer focus module in Certified

Sales Manager training.

Learning and

Development Needs:

Self-identified and

those identified by

Supervisors,

Managers and Senior

Leaders

Self-(Fig. 5.2-09) are captured through PACT in discussion

identified learning needs and career aspirations

with immediate manager/supervisor. Managers and

senior leaders can nominate direct reports for

Invitation only learning programs. Needs identified by

senior leaders at locations are captured, prioritized

and approved by location LAC. All these approaches

provide inputs to the design of learning calendar and

individual learning plans.

Transfer of

knowledge from

departing or retiring

workforce members

To tap huge resources of knowledge residing inside

the organization and to facilitate transfer of knowledge

from retiring workforce members - subject matter

experts actively participateare identified by LACs who

in delivery of functionalcontent development and

learning programs through iTeach (Internal Trainer

Development Program) Successor handover, ;

shadowing and on-boarding.

Reinforcement of new

knowledge and skills

on the job

Participation in CFTs, rotational assignment/projects,

international assignments, redeployment and

exposure to green field setups. Stretch roles/

assignments, cross - functional assignments,

certification exams, Executive Development Program

(EDP),transition point trainings, access to learning &

development opportunities at TMTC, visit ing external

speakers, coaching and feedback and LMS.

Safe and carbon

conscious work

environment

Safety awareness and education through focused

learning efforts such as ‘Safe Pro’ for location safety

teams, internal communication and so on. Skill

building for safety observation, incident investigation

and safety audits. Carbon footprint mapping and

awareness programs to create environmental

consciousness.

Fig. 5.2-11 Approach towards addressing Workforce Development

Fig. 5.2-13 Nine-box Framework

DELIVERED PERFORMANCEL H

LEA

DE

RS

HIP

PO

TE

NT

IAL

L

H Box 4 Box 7 Box9

Box 8

Box 6

Box 3Box 1

Box 2 Box 5

cu

v

lm

e

oh

Fos on

Dee

op

nt & Grwt

Focs on E

gagement and Retention

u

n

us

anng

Foc on M

agi

n

oa

e

Uder-perf

rmnc

Fig. 5.2-12 Career Progression Methods

Fast Track Selection Scheme is identified as best practice and learned by other group companies

Bargainable

Officer

e.g. Internal Graduate trainee

engineer, officer trainee scheme,

Master Craftsman, Mechatronics

Executive (TM/EG)

e.g. Fast track selection, Technical

specialist, Talent management,

Development centres

Officer

Managerial

Cadre

Officer to Managerial

Cadre scheme

e.g. SVCVP scheme,

Master Craftsman,

Mechatronics scheme

Bargainable to

Supervisor scheme

Succession Planning is currently focused on senior management positions only. It involves detailed discussions between HR and Senior Management to identify possible successors. The process involves identification of 'drop dead' and two 'successors' to prepare for the short and medium term. The shortlists are determined through discussion between HR and Business Leaders based on the needs of the role/position by studying candidate's profile, performance history and career aspirations. The shortlists may consist of people from the talent pool as well as employees from subsidiaries/associate companies. Identified successors are groomed through pre-defined business and leadership programs and on-the-job coaching.

This year a new approach towards succession planning has been adopted. It has implemented 'Leadership Pipeline Model' (Fig. 5.2-13 Nine Box Framework) to calibrate senior leaders based on their exhibited performance and existing potential. The outcome of this calibration will help identify, develop and nurture leadership talent and enable succession pipeline readiness as well as groom or hire decisions. The first phase has commenced with the calibration of senior management.

49 TATA MOTORS

�Top spot in the Manufacturer SUV Class and the top 2 positions in the Manufacturer Car class at the Dakshin Dare 2011 Rally.

�Company of the Year for the Automotive & Transport Equipment category in 2011 International Business Awards by M/s.Stevie Awards Inc, USA

�Winner of North American Die Casting Association's (NADCA) International Die Casting Competition Award 2011, in the Aluminium category, for excellence in Aluminium Die Casting (over 10lbs.)

�Tata Genuine Parts team was conferred with the 'Corporate Excellence Award' at the 66th Annual All India Achiever's Forum (AIAF), for its supply chain innovation of delivering parts for designated vehicles, anywhere in India, within 24 hours

�Tata Genuine Parts (CVBU) bagged the Indian Achievers Forum Award 2011-12 in the manufacturing category, for Best Practices in Business

�Lucknow Plant won the second prize, at National Energy Conservation Award (NECA)-2011, in the automobile manufacturing category

�4 CVBU members from Lucknow plant won laurels at the Indian Society for Quality (ISQ) Awards 2011

�Lucknow plant has bagged 5 awards at the 24th CII Quality Control Circle Preliminary Competition (QCCPC) 2011 in the northern region

�Pantnagar plant has won the Best in Class Manufacturing Award 2011-12 for its 'Operational Excellence'

�Pune plant won the Certificate of Merit at the National Conservation Award 2011 in the automobile manufacturing category

OPERATIONS FOCUS6

6. OPERATIONS FOCUS

6.0 Operations Focus

Over decades of automobile manufacturing, focus on operations has been key to TML's business across plants and business units. All stakeholders' requirements are well integrated in organizational strategy and its work systems & processes. This leads to systematically designed work processes across all functions where the respective process owner manages, reviews, innovates its processes. Adherence and innovation in work systems and processes provides the much needed improvements in efficiency and high standards of quality. Over years these systems and processes have been revisited and refined to incorporate changes in business environment and stakeholder requirements.

TML adopted ISO/TS 16949 Quality Management Systems, automotive-specific ISO standard. TML also adopted OHSAS 18001, Du Pont and British Safety council for safety, ISO 14001 EMS system, SA 8000, and the TPM methodology. These help the organization to sharpen focus on quality, productivity, safety, cost and customer, as also standardize it's processes and drive continuous improvements across the organization.

6.1 Work Systems

6.1a Work Systems Design

6.1a1 Design Concepts

The work Systems have evolved over a period of time. TML designs and innovates the work systems to achieve vision and meet changing customer requirements. The work systems structure (Fig 6.1-01) in organization, engages with stakeholders to design, manage and improve and innovate work systems on continuous basis. The redesign of work systems, when indicated by a change in internal or external environment, begins with strategic planning, which incorporates feedback from customers, suppliers, partners and market sources, as well as information from audits/ TBEM Assessment/Consultants. These inputs are also used to validate or update the current work system design.

PDPI and PDCA are the frameworks used for system design and improvement. Innovations in work systems are also driven through listening and learning posts and initiatives like Imagineering,

quarterly technical seminar, Technology days, and needs faced by the business. IT enabled eTS for Project monitoring, e-CAPEX for budget monitoring, Digital Mock up for virtual product development are few examples of improvements and innovation in work systems design to improve effectiveness.

Capitalize on core competency -

The work systems & key work processes (KWPs) are designed to strengthen and capitalize on core competencies of business units of the organization (Fig 6.1-02). All the systems & work processes are managed and evaluated and improved on regular basis to ensure capitalisation on core competencies. The core competencies are delivered with the active support of work systems and processes.

Deciding which processes are internal…

'Make Vs Buy' (Fig 6.1-03) process is used to decide which processes within the overall work systems will be internal and which will need and use external resources to the benefits of TML based on existing Core Competencies, time to acquire new competencies, use of the new competencies in future, overall cost effectiveness, availability of technology, and resources.

Based on the above whenever any product, process or service is being designed and developed for the customer (Internal and External both), the concerned system owner, decides the design parameters or criteria. For example, in ERC - styling, craftsmanship, Engine Management Systems are outsourced for capability; activities like vehicle calibration and testing for capacity constraints and certain technology items like AMT (Automatic transmission) after evaluating cost benefit analysis. In manufacturing, in-house critical finishing operations of engine components such as cylinder block & cylinder head are done while many other components such as pistons, valves, FIPs, electrical items are outsourced.

6.1a2 - Work System Requirements -

The key Work System requirements are determined from key Strategic Objectives / Goals and stakeholder expectations which are set during Strategy Planning System (SPS) (Fig 2.1-01). Inputs captured through mechanisms like VOC, QFD from the end customers and through SLA's from the internal customers are

P

DC

A

Priorities for Improvements and

Innovation 4.1.a.1 & 5.1.a.2

Inn

ova

tio

n –

NP

I P

roce

ss

Cu

lture

VMC

CC

SPP

ERM

Mfg.

Vendor Management Market Development

NPI

Sales

Planning

Acquisition

After Market Support

Channel Management

Partner

P

DC

A P

DC

A

Create Mechanisms : Kaizen events, WCQ - BIQ events, Imagineering, Suggestions, CFTs, Quality Circle

Build innovative mindset amongst People : seminars, auto -shows etc.

Through Training Inputs, concepts of stretch targets, Empowerment, Exposure through various forums viz ., exhibitions,

Promote Innovation culture: Leadership drives Performance improvements and change management process. Eg. ICM, ICR drives

Priorities for Improvements and

Innovation 4.1.a.1 & 5.1.a.2Priorities for Improvements and

Innovation

Benchmark Data / New Trends Thro' Industry Surveys / Business Society & Forum

Need & Feedback Internal / External surveys (Fig 3.1.04)Listening and Learning Mechanism (Fig 3.1.06 / 4.2.01) Complaint Mgt (Fig.3.2.13 and 15) Customer Loyalty & Retain

Environment scanning /

Technology / Infrastructure / Facility / Sharing Thro' Alliance / JV / License

Knowledge

Outsourced Product / Services Review / SAT Audits / Technology Days

SCM / Contract

Inn

ova

tio

n –

NP

I P

roce

ss

Culture

Customer

Dealers and

Service

Centres

Competitors

Suppliers

Collaborator

Government

Agencies

VMC

CC

HR

IT&

KM

Environment ManagementUtilities

Facilities

Finance

VMC

CC

Communication

Governance

Leadership

Process management through ISO/TS 16949, OHSAS, EMS, SOX

Productivity driven, team working

Fig. 6.1-01 Work System Structure

Collaborative approach High performance

Customer Centric Value / Process driven Focused downward, empowerment

Strategic Advantages

Core competencies

Regulatory and Statutory NormsThro' Legislations / Consents

50 TATA MOTORS

converted into requirements of systems and processes (Fig 6.2-01, 02 ). TS 16949, SA 8000, ISO 14001, OHSAS 18000 are also used as key requirements for design of work systems and processes.

The changing customers, collaborators, channel partners, suppliers and other stakeholder needs are incorporated (Fig 1.1-1&10) in real time through periodic BSC reviews, Process reviews (Fig 1.1-09). Safety and Climate Change are the integral part of overall work system. Vendor parks at Pantnagar, Sanand are some of the examples where work system design has helped in reducing carbon footprints etc.

6.1b Work System Management

6.1b1 Work System Implementation

The work systems structure (Fig. 6.1-01) details the basis of managing and implementing the work systems at Tata Motors. TML uses PDCA in implementation to improve overall work system effectiveness. BSC covers requirements of all stakeholders and periodic reviews of BSCs at various levels help in identifying gaps and actions for improvements. These reviews incorporate inputs from JV partners, dealers, customers, government and regulatory agencies, and vendors to capture changing requirements and expectations. These help in delivering customer value,

organizational success and sustainability (Fig. 6.1-04).

6.1b2 Cost Control

Integrated cost reduction (ICR) supported by CREST initiative plays the key role in continuous cost reduction of products.

Integrated cost management (ICM) during the development of new products helps in launching the cost effective new products. Various initiatives by manufacturing teams help in reduction of variable conversion cost (VCC) in a systematic way. This focused approach towards systematic cost reduction helped TML to deliver cost effective products and build it's core competencies over the years. As part of work systems management, a variety of control mechanisms, tools & techniques (Fig 6.1-05) are used to control & minimize overall costs related to defects, rework, warranty cost, customer productivity losses and inspection & audit costs.

Prevention of defects, service errors and rework …The "in-process" measures help processes to become more predictive wrt likely defects & reworks and thereby helping in addressing their prevention proactively. The tools such as DFMEA, DFM, DFA, IT enabled digital simulations, CFT approach, benchmarking, pilot runs (Alpha, Beta, PO, PP, PL) for robust product development during product design, and PFMEA is used for designing / controlling manufacturing processes.

Poka-yoke, Kaizen, Suggestion Schemes etc (Fig. 7.1-54 and 7.1- 56) are used extensively in-house and at suppliers end to proactively prevent defects and rework. With substantial increase in the number of ISO/TS certified suppliers (Fig. 7.1-64) the defect prevention is further enhanced.

The system and process owners review the service errors (through SQDCME / VMCDRE / SLAs) and rework based on external and internal customer feedback to minimise cost and improve effectiveness. The checks and balances (Eg. SOX, SAP & CRM DMS) ensure prevention of service errors. Gunwatta Rakshaks/ SDT QP leaders are empowered to raise the alarm or even to stop the line for any serious quality defect found which in turn helps in reduction in rework.

Minimising warranty cost… With the help of systematic processes for selection of vendors and continuous monitoring of incoming material ppm levels, deployment of SQIG/ VQA teams to support vendors in improving their quality management systems helped organization in reduction of warranty cost on regular basis. To minimize warranty cost, failed warranty parts are taken up for root cause analyses. Action plans are carried out in association with internal agencies as well as vendors.

Minimising customers' productivity losses… In line with the organizations core competencies, all the key work systems are designed and managed to ensure manufacturing and delivery of reliable products and services. This helps the customers to run their products with minimum interruptions/ breakdowns. The Customer

Fig. 6.1-02 Capitalising on Core Competency

CVBU PCBU

Information and KM:

To strengthen innovative work culture, develop trainedand skilled workforce-both back-end and front-endmanage safety

Human Resource Management

Optimisation of resources, innovative and optimisedplan and facilities to help manufacturing delivery ofvalue for money products

FacilitiesManagement

Delivery of Quality, cost effective and reliable products,support to key customers & institutions, manage safe,working conditions.

Manufacturing

Provide cost effective service, extended hours, providespare, AMC, reconditioned engines and refurbishedvehicles to customers for maintaining low life cycle cost

After Market Support

Development of product what customers and marketwants with safe reliable and environment friendlyvalue for money products with low life-cycle cost

New ProductIntroduction

Increase penetration and enhance reach providecost effective sales & service , extended hours.

Channel PartnerManagement

Developing reliable & cost effective sources, ensuringlow ppm levels to improve product quality andcustomer satisfaction, Value Engineering

Vender Management

CVBU PCBU

Ability to innovate Low LifeCycle Cost solutions

Ability to innovate Value formoney solutions.

E-of knowledge back into the processes and productsto make more efficient and cost effective product,Suggestion Scheme Portal.

CRM strong support through better IT support, use

Fig. 6.1-03 Decision making Processes (Make) VS (Buy)

Market competitive Scenario

dynamics &

Strategic Priorities

Customer / End User Feedback

Internally Design,Prove / Validateand Incorporate Technology (ERC)

Quality, Cost , Productivity, Cycle time TAKT time other performance criteria

Outsource Product / Service (Purchase)

New Need/Compliance

DefineDeliverables:

Triggers Make or Buy Decision Criteria

Buy/ Collaborate Technology(ERC/ I.T.)

Internally Plan ,Prove / Validate and Hand over Process (T.& PS.)

Execution of Decision

Make

Buy

-Core competency-Cost Benefit Analysis-Availability of Technology-Resource availability -Past performance

51TATA MOTORS

Support monitors, evaluates and implements necessary actions to minimize losses to customer on account of VOR. If required, customer is given service vehicles to ensure customers' business continuity. CVBU has started initiative to pay customer in case of vehicle is not serviced in specified time period under customer friendly initiative -- 'Tatpar'. RECON Business helps the Customer to avoid their productivity losses during critical / aggregates failures.

Minimising cost of inspection, audit cost… With the increasing number of CQ vendors and ISO/TS certified vendors, the cost involved in inspection and audits of incoming material is reduced on consistent basis. The overall costs associated with the inspections, tests & process performance are controlled & minimized by ensuring that the systems and processes remain in-control to deliver desired output from both in-house and suppliers operations and processes. The processes are further supported by in-process inspection and "self certification by operator". (P2C and SPS ).

6.1c Emergency readiness

The operations and validations (Fig 1.2-06, 6.1 - 06, 6.1-07) ensure workplace preparedness for disasters or emergencies, business continuity of operations and recovery. The plant operations, RO/AO/country offices, stockyards, and suppliers & dealers network situated across the country and in some international locations, decentralizes risk of natural calamities and ensure business continuity for customers and temporary redeployment option for employees. Continuity of operations is ensured in totality by the Emergency Preparedness and Procedures at each location.

All systems at each site have been designed to function independently to minimize the risk. The operations are successfully managed for last five decades without a single break.

As a part of Disaster Recovery Systems (Fig 6.1-07), on site emergency action plans ensure preparedness in the event of any major accident/ incidents and give guidelines for employees,

contractors and transporters. It defines responsibilities and prompts the key personnel to carry out rescue operations, evacuations, fire-fighting, co-ordination and communication. Disaster and Fire control rooms are maintained.

6.2 Work Process

6.2a Work Process Design

6.2a1 Work Design Concepts

The key work systems structure (Fig 6.1-01) includes collating requirements of process, understanding of the requirements, identification and design of key process steps, performance measures and the control mechanisms.

The work process design approaches are based on the competitive environment (OP-12 and 17) & complexity of manufacturing, product life cycle, nature of new products (new platform, facelift, variants, etc), changing customer needs & expectations (Fig 3.1-03 and 06). Various factors such as safety; reliability & durability; statutory & regulatory requirements; environmental impact; "green" design & manufacturing; DFM, DFSS, measurement capability, process capability ; supplier capability & supply chain requirements are considered during work process design.

The Process Owners / Functional Heads design and implement work processes to ensure that processes meet key requirements. cycle time, incorporation of organizational knowledge, efficiency and effectiveness factors are also built into the design.

Product Excellence and New Product Introduction

To achieve business objectives, New Product Introduction process is designed to execute TML's product plan using market trends, customer insights, competitors' actions, regulatory and statutory requirements and technology roadmap.

A process with six distinct milestones/ gateways, NPI process starts at the product conception stage and extends up to launch. (Fig. 6.2-05, 06) The process uses CFT approach and integrates various functions, e.g. Marketing, ERC, Quality Assurance, Vendor Management, Engineering Change Management to ensure smooth delivery of new products.

To handle complexity without compromising on productivity, this

Fig. 6.1-04 Key work Systems & Improvements

No Process Customer Value Organisation Success Sustainability

1 NPI

Embedding latest Technology offeringsin products based oncustomer ExpectationsOffering Value for money proposition

Well designedproducts increasesmarket acceptabilityand leads toorganizationalsuccess Timelyintroduction ofnew products tomarket

Design of newproducts/newplatform helps in maintaining acompetitive edge in the market and brings long term sustainabilityContinual productup gradation to meet market expectations and customerpreferences

2 Manufacturing

Achieving product performance through capable andReliable processesBetter Quality Product

consistency in Maximum utilizationof Platform method-ology Delivering thechanging productmix requirements

Flexibility & scalability to accommodatechanging requirem-ents. ContinuousQCD improvements

3Vendor Managementprocesses

Development of capableand reliable supplierbase

Strategic Sourcinginitiatives SRM

Alliance with suppliers pioneer in latest technology products

4Marketing,Sales &

Prompt response tocustomer concerns andescalate it to appropriateagencies for fasterresolution Throughappropriate communica-tion channels, DQCTCMIP, Daily ManagementCompetitive WarrantyOfferings Spare Partsavailability

Market Research,CRM DMS

CustomerEngagement,Retention, andLoyalty

5

QA,HR, IT, Finance,Cost Mgmt.

Ensuring processadherence drivingexcellence

Controlling key value creation processes

Supports in meetingthe organizationalagility

Fig. 6.1-05 Controlling & Minimising overall costs : examples

BPR, Redesigningof the processes,error-proofing,Role based authorisation

Creation ofShared Services’ tohelp Suppliersas Single point window

Businessanalysis, benchmarking

Response time,Funds disbursement

Finance

Cross Functionaland LocationalTeam working,Brainstorming

CPTs to improve processes by removing mudas

formedBSC andprocess reviews

On-man-days lost

time services,

Human Resource

Warranty on web,Use of CRM

Dealersempowered to settle warranty

BSC andprocess reviews

Response time,cycle time ofwarranty

After Market Support

Vendor AssessmentRating system,Cost benefit analysis, SRM

Self certifiedVendors, Out sourcingand kitting of assemblies

Vendor meet,BSC andprocess reviews

Vendor rating, Procurementcost, incomingparts ppm levels

Vendor Manage-ment

Kaizen, ValueEngineering, Poka-Yoke, DOE, TQM Initiative (CLT)

Cost reduction, reduction in rework / rejections

Marketimpact, BSCreviews

st1 Cpk and Ppkstudies, Near Misses, PDI gates

shot ok,

Manufact-uring

Key Systems and processes, examples

Tools &techniques

used

Actions takento minimise

overall costs

Triggers for actions

In-controlprocessSystem

Support Systems and processes, examples

52 TATA MOTORS

process is deployed with a strong IT backbone: eNPI portal. It supports Product Portfolio Management (PPM), event tracking, CAPEX management and issue management.

For example, whenever a new product has to be developed, it is discussed in the steering committee and then marketing gives inputs through IT enabled PPM module whereupon technical and financial feasibility is worked out and if found feasible and approved by the Senior Management, the project is executed through IT enabled eTS and budget is monitored through e-CAPEX module.

PCBU has benchmarked it's NPI process with JLR and has adopted 'attribute focused' product development structure and subsequently customized it to the local culture and environment with a strong customer focus. 13 Product Attribute Teams (PATs), consequently formed, define, establish and aid the delivery of key attributes on products. Based on learning from JLR, this process is being

upgraded from Gen 2 to Gen 3.

Incorporating new technology and organizational knowledge

TML has drawn up Technology Roadmap with a planning horizon of ten years, for development of various vehicle systems e.g. powertrain, electronics, active and passive safety, climate change. This is integrated with the 5-year product development plan. Based on this technology road map, the main activity of product design, analysis, prototyping and validation is carried out at ERC.

Product design and development processes at ERC are

Fig. 6.1-06 Disaster and Emergency Preparedness

Ensuring supplyto work stations by on-loading or by another supplier, keeping on-linesystems up

Loadingback ups,supply ofpower,water,ProductionRelatedmaterials,

Training,5S, Safetydrillsand audits,OHSASaudits,

Mock drills,Audits,DailyOfficers,Training

On-Emerg-encyPlan,Medical& Healthsupport,

siteBusinessRisk plan,Medical &Healthsupport,Training

Workplace

PDPI, ERM,Vendor and Dealer management,On-loading,Training

PDPI, ERM, Vendor and Dealer management, Data recovery,

PDPI,ERM,OHSAS,Audits, Improve-mentson theauditfindings

PDPI, ERM,Mock drills,5S, Regula-tory norms, Databack-up

ERM &Blindspots,On-siteemerg-ency plan,Training

ERM &Blind spots,EMS,DataDisastermanage-ment,Training

WorkSystem

RecoveryManage-ment

PreventionEmerge-ncies

Disasters

Process used to incorporate these factors intothe readiness of Key Work Processes:

Processes toensure

Preparedness for:

ContinuityOf

Operations

strengthened by TMETC, TDCV, Hispano, FIAT; design houses like Trilix with specialization in different aspects of vehicle design; and product prototyping and test facilities abroad. Relevant new technologies incorporated in products include state-of-the-art advanced engine technology, dynamic stability controls emergency brake assist, EPS, ABS & Airbag technologies, GPS systems, IVN, CNG Bus, Ambulance Winger and Prima series of heavy trucks, Ace Electric Hybrid Bus, DIVO, Y1 Platform.

TML is an industry leader in the use of IT for Product Lifecycle Management as also managing the business operations. It has pioneered in deploying processes such as SAP, CRM-DMS, sourcing.

Potential need for agility

TML has continuously improved it's product portfolio. In view of fierce competition and requirement of reduced cycle time for the introduction of new products, a separate unique organizational set up has been created in record time for development of Ultra low cost car-Nano.

Cycle time, productivity, cost control, efficiency and effectiveness

Cycle time, productivity, cost, cycle time, productivity, cost control and other efficiency and effectiveness measures are incorporated during design of process using PDPI (OP 19) and also based on inputs from various organizational reviews. All key processes have defined effectiveness and efficiency measures which are customer/user driven (Figs. 6.2-01 & 02). In-process measures and tools and techniques (Fig. 6.1-05) are used for controlling overall cost of processes.

6.2a2 Work Process Requirements…

KWP's requirements (Fig. 6.2-01) are determined through a collaborative approach with process users and owners, where changes incorporated based on strategic objectives (Fig 2.2-05, 07 and 08), action plans, daily operating measures (SQDCME & VMCDRE), order & delivery plans. The changing needs of customers, collaborators, channel partner, supplier and other stakeholder are incorporated.

All Systems are designed considering requirements including safety and green requirements from internal customers (e.g. IT satisfaction), external customers (e.g. delivery), suppliers/ vendors (e.g. vendor satisfaction), channel partners (e.g. Channel partner satisfaction) and collaborator's feedback (e.g. SLAs) as well as other stakeholder feedback such as ERM, NPI, OHSAS, and Vendor Management. Each system and process responds to these requirements at their design stage. The key work processes and their Key requirements are identified and listed.

6.2b Work Process Management

6.2b1 Key Work Process Implementation…

Process management is characterized by mechanisms such VOC and other listening and learning systems for external customers and SLAs for internal customers.

In-process (Efficiency) and end-process (Effectiveness) measures (Fig. 4.1-04) are selected keeping in view the stakeholder requirements .

These set of measures are part of BSCs, SQDCME/VMCDRE and individual MPAs. Implementation of work processes ensures meeting desired design requirements.

Respective process and measure owners analyse performance trends during regular reviews. Action plans are developed, implemented and monitored through these reviews. Changing performance requirements get included during the regular BSC, SQDCME and VMCDRE reviews.

Fig. 6.1-07 Disaster and Recovery System

For shareholders and customers

Financial, Societal and other business risk management: Interest rate, foreign exchange, Regulatory norms, National and international market, etc.

Risks due to Credit, liquidity,

Data Security and information storage / retrieval system: services for managing system security and data access control configuration, Information storage, retrieval and recovery of data

Information technology

For shareholders and customers

On Site emergency Action Plan (location specific): like building collapse etc. Installation of EMS system (Fig 1.2-3)

Fire / Explosion, Major accidents

For Business (Plants & Non Plants, IB)

For Data (Plants & Non Plants, IB)

For employees and facilities (Plants & Non Plants, IB)

Business Risk Plan : Operational risk, Financial risk, Risk of Fraud. Periodic “Due Diligence Audits” to mitigate the risk of non-compliance with statutory requirements.

53TATA MOTORS

Quality Management Systems are linked to the higher-level processes and get implemented through established ISO/TS processes and work instructions.

For After-Sales-Service process, the system owner tracks measures like CSI, DSI and complaint response time to ensure overall process effectiveness.

6.2b2 Supply-Chain Management…

TML uses Vendor Management System (also supported by Manufacturing System) to manage the supply chain across all locations. It helps to improve the performance of suppliers. It includes processes for selecting suppliers with the aim of optimising supplier base and increasing supplier partnering relationships. Enlistment of New Vendors, Development of Item, Early Vendor Integration, Material Scheduling, Procurement & Logistics, Monitor & Improve Vendor Performance, Make Vs Buy Decision making and Integrated Cost Reduction are also part of vendor management system.

More than 900 vendors support for producing the vehicles and some of them are common across all locations. These vendors are categorised in various material groups such as Sheet metal, Castings/Forgings, Rubber/Plastic, Proprietary/Aggregates, etc.

Managing supply chain… TML is proactive in dealing with Vendors. Vendor meets are organized on monthly and yearly basis. Plant level monthly vendor communication meetings focuses on next month's production plans which are emerged out of Sales & Operations Planning CFT. Vendors expectations, needs and requirements are also understood and resolved subsequently. Yearly vendor meet is organized which has participation from Top Strategic Suppliers & Senior Management of Tata Motors. It is a forum where TML highlights recent achievements and the future challenges and also felicitates the excellent performing vendors for their invaluable efforts towards the contribution to company's growth.

A unique initiative i.e. 'Vendor Council' is formed to leverage mutual strengths of suppliers and Tata Motors to achieve business goals . The council steering committee has 36 members (equal representation from vendors and TML senior leadership) which is further divided into four subcommittees' i.e. Quality, technology, Efficiency and Relationship. These subcommittees meet on quarterly basis to discuss issues and concerns of common interest. The structure is supported by regional chapters of the council which disseminate council work among 550+ members throughout the country. These committees have not only strengthened the relationships but also improved overall way of working as many projects such as training, Joint technology development (more than 100 projects are being evaluated) capacity planning, consolidated buying, Best practices knowledge book publication etc are being executed through this platform.

Last decade thrust is given to build vendor parks nearby (e.g. Pantnagar, Sanand and Dharwad locations) the new plants or upcoming plants to resolve logistics issues and also to improve the supply chain efficiency.

SRM - is deployed to benefit both suppliers and TML. All material schedules and performance of the suppliers is displayed on this web site. SRM is further extended to share technical and commercial data with supplier through "C folder" portal which helps for collaborative product development.

Ensuring that selected suppliers are qualified and positioned

All Vendors are selected as per "New Supplier Selection Process" (Fig 6.2-03). In-depth CFT audit, verification of vendors capabilities are the steps followed to select a vendor. Once on board, vendor participates in the product development and prototyping phases. Before launch of the product, once again supplier readiness,

process establishment, ability to deliver at set rate is verified through PPAP. This ensures proper selection and vendors capability to deliver.

Vendors are encouraged to accredit themselves to ISO 9001/ ISO TS 16949 which become part of their vendor rating system.

Evaluating supplier performance… The Quality, Cost and Delivery performances of the suppliers are maintained on transaction basis in SAP and used in deriving the quarterly 'Vendor Rating'. The performance of the suppliers is communicated to all concerned on periodic basis. Regular audits are carried out to check the performance of the vendors The QCD performance is used to allocate the share-of-business to vendors and suppliers by Head, Materials and MPC jointly.

Suppliers are audited for quality compliance and improvement as per plan. Their Share of Business (SOB) variance report is analysed for delivery. Suppliers with high vendor rating are considered for new part development and higher SOB.

Dealing with poorly performing suppliers… Daily rejection booking in SAP, rework and delivery data captured gives early indications on supplier performance which are discussed internally for further investigations and improvements. In case of gaps against the targets, VQA/SQIG teams are deputed to support and improve vendor performance. Systematic process (Fig. 6.2-04) is followed to improve vendors performance. Even though there are financial penalties, reduction in SOB and shifting to an alternate supplier as an extreme measure in case of repetitive rejections and rework, thrust is given to extend support to suppliers (by way of training, audit feedbacks, deputation of internal experts, tools/aids etc) in improving their overall performance.

TML takes services from TRIGO, QGS for improving outgoing quality from suppliers. Vendor support centre (VSC) extends support to the vendors with Kaizens events to improve their processes. Vendors are rated on scale of A to E and suppliers with rating D & E are asked to present improvement action plans.

Suppliers are also involved in discussions related to customer feedback. Vendor council meets have agenda to discuss on warranty and SPD related issues, suppliers are involved in failed part analysis. Also, in supplier selection for proprietary items, emphasis is given to suppliers having wide service network, e.g. Batteries, FIP, alternators and starters. This helps in further getting closer to customers.

6.2b3 Process Improvement…

Key work processes have efficiency measures to track process level controls and effectiveness measures to track the final outcomes. System and Process owners conduct periodic reviews for better performance and improvements with respect to quality, cost and productivity. In case of any gaps in performance PDPI / PDCA process is used.

The tools and techniques such as PDCA, Pareto Analysis, Cause & Effect Diagram, Why-Why Analysis, Six Sigma (DMAIC), Benchmarking etc are used to reduce variability and to improve products and services. Central Quality supports in conducting studies and suggests improvements in process capability (Cp, Cpk), DoE, Process Control Charts / CTQ charts etc. After analyses of existing procedures / work instructions, necessary changes are planned, implemented and reviewed with respect to it's impact on the overall process and business. These process improvement approaches are extended to suppliers as well as even to channel partners and customers. QMS audits and reviews of performance against BSC targets further drive process improvements.

World Class Quality…It is a Global Manufacturing System (GMS) adopted by GM, Toyota, Suzuki etc. It calls for involvement of all people including vendors. The major pillars of WCQ are, a) People Involvement, b) Standardization, c) Built in Quality (BIQ), d) Short

54 TATA MOTORS

Fig. 6.2-04 Supplier Performance Enhancement

Supplier Performance Enhancement

Gradation basedon ratings

Communication to suppliers with OFIs Identified

Performance Monitoring

Meeting with Supplier Senior Management with action plan for OFIs

CFT Supplier Visit - Generate time bound action plan

Review action plan generated with supplier for execution

Critical issues . bottleneck to be reviewed for resolution

Lead Time, and, e) Continual Improvement.

Forward Model Quality…Structured method of APQP defines and establishes steps necessary to ensure product meets customer requirements with Quality in house and vendors. It also supports to:

�Move from understanding customer needs to getting customer perceived quality in the product

�First time right product with no failures

�Manage change effectively and Control deviations

�Percolate process approach across the organization

Process owners improve their processes every year. These improvements help improve overall health of work processes, that

further strengthens work systems.

The overall process improvement culture enables receiving national and international recognitions throughout the year. The above initiatives are aimed at strengthening process improvements across the value chain.

Fig. 6.2-03 New Supplier Selection Process

1. SupplierDatabaseCapacity,Capability,Specialty

2. ProspectiveSuppliers

3. PerformanceAssessment ofProspectiveSuppliers by CFT

4. Matl. Head & MPCProposed and PlantHead approvessupplier

7. Performance Assessmentof Existing Suppliers onmonthly basis.

6. Current Supplier 5. Finance divn.generate Suppliercode, updatesupplier database.

Fig. 6.2-01 Key System and Work Processes

System Method To Determine Requirements

Requirements

*Few In - process/Efficiencymeasures

Results

Market

Development

Analyse inputs from

strategy on areas to focus on; Study requirements of

various customer groups, Analyse products and markets of competition

Understand

Domestic & International

Markets, Explore opportunities and

Market Share

VolumeDelta market share y-o-y

Key accounts touched

CE I DSI

Channel partner Management

Country Scan for new dealer/ TA SS locations, Customer/ CP Feedback

Service, Touch points and reach, targeted retail Sales, CPs to meet access requirements, markets, CSI, DSI

No. of CPs No. of TASSsSpare part performance

No. of CPs and outlets availableCSI

DSI

Customer

Acquisition

Forecasting, sales

targets (Domestic & IB ), Sales Pipeline analysis

Achieve targeted Sales (domestic &IB)with better predictability

C0 to C3 pipeline

Monthly reviews

Monthly pipeline

Sales Volumes

New Product

Introduction

Study best practices from global auto companies, Competitive analyses, Compare with best-in-class performance data on NPI measures. Feedback from Channel partners,Institutional Customers

Develop products / Classifications as per strategy to meet Domestic Market requirements &country specific requirements by IB

Adherence to time schedule

(part of NPI index)

New Products introduced

NPI Index

S & O PPlanning

Analyse requirements of Sales, Manufacturing and customers

Convert sales requirements into plant wise production for on time delivery

Adherence to S&OP Schedule Fulfilment of market demand, Model wise production as per schedule

Vendor Management

Analyse requirements from suppliers for support, Analyse

strategy and sourcing strategy

Develop & maintain bank of

reliable vendors

Vendors wi th VQR>80%,SSI

Competent vendor base, Satisfied vendor base, Cost

Reduction, Vendor satisfaction

Manufacturing Analyse inputs from Sales & Marketing, ERC, NPI & PSD, Despatch plan s from

domestic sales/ IB. Warranty & PDI analysis. SQDCME Analyses, Safety Process

Product Quality, Cost, On -time delivery

Cpk, PDI, Inventory Levels, Productivity, VCC, DMC,PQI, Asset Turns, Warranty

Cost , BEP , Transit Accidents , SR, FR, Near Misses.

Vehicles, Aggregates,component , Spare parts as per call up, Improvement in

complaints trend, Machine availability

After -Market Support

Analyse Customer feedback through questionnaire and direct interactions, Analyse

CP capability to deliver , Study competition offerings

Providing Efficient and Cost Effective After Sales

Services

CSI/DSI , Complaint response timeWarranty settlements

Satisfied customers and dealers

7.2-01 to 177.5-33 to 61

7.2-01 to 177.2-27 to 30

7.5-33 to 61

7.1-57 to 59

100%achieved

7.1-60 to 64,687.1-51 to 52

7.1-53, 65 to67, 71, 75,76, 77

7.2-11 to 17

Outputs (Effectiveness measures)

Strengthen presence in chosen segments

Key Work Processes

55TATA MOTORS

Fig. 6.2-02 Key Support Process

Compliance with Statutory andEnvironmental NormsEnergy ConsumptionWater Consumption, Carbon footprint

Provide facilities, ensure compliance with

Environment Policy & Statutory Requirements, Climate Change and Low

carbon growth

TML strategy & LT plans, Statutory &

regulatory requirements,EMS requirements,Climate change & carbonfootprint

OperationsFocus

Utility and Environment

Management

IT Roadmap,

IT Capex, Knowledge repositories

and platforms for sharing

System up time,

Customer Satisfaction, Adherence to IT

roadmap, Ideas shared & replicated

Systematize Data collection,

analysis and reporting Knowledge gathering, storage and sharing

Analyse TML SC needs

and expectations, Global best practices, users requirement on IT

Measurem

ent & Knowledg

Information

and KM

Statutory

Receivables (Days of

Sales), Working Capital, Interest Cost,

Efficient Funds Management

Statutory ComplianceSupport for Decision Making

BU and Finance

strategy, Analyse inputs from GAAP regulations, SC requirements for

financial operations required, global best practices, Audit reports

Strategy

Planning

Finance &

Budgeting

Facilities / Tooling for Production /

Services

Adherence to schedule

Provide infrastructure facilities & Tooling to Plants, adhere to project

requirements

TML and Manufacturing strategy and LT plans, Statutory requirements

& regulations,

OperationFacilities Management

Competent,

motivated and satisfied employees in

required strengthCulture of

High

ESI, Employee Cost

Attrition Rate, Value Added per Unit Wage Bill, Safety,

Competency index

Source/ enhance Human

Capital, Attract, retain & motivate talent, Create & maintain high performance

culture, improve quality of life of employees, competency building, Build safety culture

Employee satisfaction

surveysTML’s requirements from HR systems. TML

strategy

Workforce

Focus

Human

Resource management

Key Support work systems (* While measures in italics are in-process measures, others are end-process measures)

ResultsOutputs

*Few In-process measures Requirements

Method To Determine Requirements

Reference ProcessesProcess

Facilities/Toolingfor Production/ Services Statutory ComplianceEnvironment Protection

IT Roadmap,

IT Capex, Knowledge repositories

and platforms for sharing

System up time,

Customer Satisfaction, Adherence to IT

roadmap, Ideas shared & replicated

Systematize Data collection,

analysis and reporting Knowledge gathering, storage and sharing

Analyse TML SC needs

and expectations, Global best practices, users requirement on IT

Measurement

andKnowledge

Management

Information

and KM

Funds Availability, Low Interest Cost, Financial Analysis, BudgetControls WCControl, Statutory Compliance

Receivables (Days of

Sales), Working Capital, Interest Cost,

Efficient Funds Management

Statutory ComplianceSupport for Decision Making

BU and Finance

strategy, Analyse inputs from GAAP regulations, SC requirements for

financial operations required, global best practices, audit reports

Strategy

Planning

Finance &

Budgeting

Facilities / Tooling for Production /

Services

Adherence to schedule

Provide infrastructure facilities & Tooling to Plants, adhere to project

requirements

TML and Manufacturing strategy and LT plans, Statutory requirements

& regulations, Requirementsfrom Mfg. units

OperationsFocus

Facilities Management

Competent,

motivated and satisfied employees in

required strength Culture of High Performance.

ESI, Employee Cost

Attrition Rate, Value Added per Unit Wage Bill, Safety,

Competency index

Source/ enhance Human

Capital, Attract, retain & motivate talent, create & maintain high performance

culture, improve quality of life of employees, competency building, Build safety culture

Employee satisfaction

surveysTML’s requirements from HR systems. TML

strategy

Workforce

Focus

Human

Resource Management

easures in italics are in-process measures, others are end-process measures)

ResultsExamples

Outputs*Few In-process measures

RequirementsMethod to Determine

RequirementsReference Processes

Process

7.3

7.1

7.5

7.1, 78 to 86

7.4, 21 to 43

Fig. 6.2-05 NPI Process (CVBU)

1. Product Strategy & Planning

2. Concept Evaluation 3. Concept Development

4. Product Design & Development

5. Design validation & Productionisation

6. Pre Production 7. Ramp Up

•Market analysis•Competitor

assessment•Explore Production

options•Product Planning

•Study of Low Life Cycle cost

• Concept alternatives• QFD

• Styling themes• Packaging

• Manufacturing Feasibility

• Cost Targeting based on low life cycle cost

• Performance & weight

analysis• Style & specification

development & freeze• Vehicle & Aggregate

plans• Product costing

• Financial analysis

• Design analysis & simulation

• Alpha prototype tests• Aggregate Tests

• Crash Tests• Manufacturing

Planning• Detail costing – Low

life cycle cost

• Full design validation• Beta prototype test

• Production tooling• Vendor parts development

• Install & commission facilities

• Quality proving & process validation

• P0 & PP Builds• Vendor parts

approval• Homologation

• Service design & related activities

• Ramp up• Pre-Launch Build

Product Strategy Review

Concept selection Concept & project approval

Design Release Production Release Project Review

DR1 Sign offs• Product profile &

tech targets• Recommended style

theme• Preliminary cost with

targets• Preliminary business

case

DR2 Sign offs

•Product specs& features list

•Vehicle test plan•Style & packaging

sign off•Time & Resource

Plan•Full business case

DR3 Sign offs•Design release

•Long lead tooling signed off

•Component reliability plan

•Business case validation

DR4 Sign offs•Critical issues

brochure•Vehicle test

requirements met

•Control plans sign off

DR5 Sign offs•Launch volumes

•QP build completion

•Vendor parts fully approved

•Ramp up production

Act

ivit

ies

Gat

eway

s

Project Initiation

Gat

eway

Del

iver

able

sK

ey p

arti

cip

ants

Launch

Duration of Projects range between approx 6 to 40 months accordito type of product/variant

Ph

ases

Pl DR1 DR2 DR3 DR4 DR5

DR0 Sign offs•Nine Box &

supporting documents

DR0

Project Manager, ADD,

L

SPP(Fig 2.1-01

step 2)

Innovate Low Life Cycle Cost solutions through out all phases

1. Product Strategy & Planning

2. Concept Evaluation 3. Concept Development

4. Product Design & Development

5. Design validation & Productionisation

6. Pre Production 7. Ramp Up

••

•

•

•

••

••

•

•

•

•

•

•

•

•

••

••

• –

••

••

•

•

••

•

•

••

Product Strategy Review

Concept selection Concept & project approval

Design Release Production Release Project Review

•

•

•

•

•

••

•

•

•

•

•

•

•

•

•

•

•

•

•

Act

ivit

ies

Gat

eway

s

Project Initiation

Gat

eway

Del

iver

able

sK

ey p

arti

cip

ants

Launch

Duration of Projects range between approx 6 to 40 months according to type of product/variant

Ph

ases

Pl DR1 DR2 DR3 DR4 DR5

•

DR0

Matls,

L

SPP(Fig 2.1-01

step 2)

DR0 L

SPP(Fig 2.1-01

step 2)

CFT Leader, LOBs, ERC,

Planning, Market Research

DR0

NPI Office

Project Manager, LOBs

ERC, MFG, Finance, Planning, ADD

Project Manager, PE,

LOBs, ERC, ADD, Finance, Planning,

MFG, CQ, S&M, CC

Project Manager, ERC,

ADD, CQ, Finance, Planning, PE, CC

Project Manager, ERC,

CQ, PE, Finance, Planning, CC

Project Manager, ADD,

MFG, CQ, Finance, Planning, LOBs, CC

Project Manager,

LOBs, ADD, MFG, Planning, CQ,

Finance, S&M, CC

L

SPP(Fig 2.1-01

step 2)

• Integrated product

development and

involved all important

Departments and

Functions (Fig 6.1

• Benchmarked by many

Tata and Non Tata

companies

• More than 160 launches

in last 6 years

• We have Industry

leadership

• Integrated product

development and

involved all important

Departments and

Functions (Fig 6.1

• Benchmarked by many

Tata and Non Tata

companies

• More than 160 launches

in last 6 years

• We have Industry

leadership

• Integrated product

development and

involved all important

Departments and

Functions (Fig 6.1

• Benchmarked by many

Tata and Non Tata

companies

• More than 160 launches

in last 6 years

• We have Industry

leadership

• Integrated product

development and

involved all important

Departments and

Functions

• Benchmarked by many

Tata and Non Tata

companies

• More than 160 launches

in last 6 years

• We have Industry

leadership

NPI system takes care of Safety

and environment related concerns

right from the concept stage

START

56 TATA MOTORS

Fig. 6.2-06 NPI Process (PCBU)

Launch

Quality Verification Quality Consistancy Audits

E-Cube, Blue buck Audits Vehicle Dmerit Audits QIB Handover to Plant QA

Final Class A

Component level Testing Complete

Product Definition

Product Profile

Sign off

Concept Freeze,

Eng. Targets Sign off

PIP

Complete

Project Approval,

Digital ValidationPencil Down Quality

Verification

Production

sign off

PIPTheme

Selection Selection (UN) (UP) Validation Verification Build PPAP Build

Aggreagte Options Finalization DVP Sign off

Sign off

Half tub

off

Confirmation

SRM TRM Sing off

DR Gateays PI L

Project Milestones

Marketing Product Definition Launch Preparation

PAT Process Engineeing Target book sign off 1:1 Scale ModelFinal Ext + Int

Aesthetic Digital Optical

Design (Styling) - Ext. Theme Selection Exterior ModelQuality Sign off Data Released

for E Cube &

Design (Styling) - Int.release

Theme Selection interiorC & T Document Release

Model SignBlue Buck Mfg

Engineering Feasibility Check Vehicle Design & Development Vehicle Testing and Validation Complete Engineering Sign offPackaging Sign off

Underbody (UN) UN0 UN1 UN2 UN3

Upperbody (UP) UP0 UP1 UP2 UP3Upperbody (UP)

Digital Validation (CAE)

Build/Proto

Tooling KO and Part Avl.

SQIP (Vendor Dev.)

Simultanious Engg.

Mfg. Planning

BIW Tooling & Panels

Cost Management (ICM)

Forward Quality / APQP

LQOS / Launch Management

UP0 UP1 UP2 UP3

Alpha 2

Beta Verification

PO PP

LOI

Selection of SE

Consultant

Facilities

installation complete

SOP

V0 Release V1 Release V2 Release

PPAP

Level 2

V3 (Beta) Release

3 Suppliers onboard for EVI

PPAP

LQOS Process

Aggregate DMC estimate DMC report for

PricingDMC Sign off DMC tracking - Target Vs Actual status

Beta

Alpha Validation

Mule ABuck

Feasibility CAE CAE 1 CAE 2/3 CAE FinalCAE 0

Mule Validation

Alpha 2 Release

Alpha 1Mule B

UNTKO

UP LLTKO

UP SLTKO TF Parts

FTN sign off

SupplierDrawings

receipt

T0 Parts Textured Parts

Part Development DVP CompletionAlpha

parts

ordering

Quality Target

sign off

Production

Sign off

PO, PP VerificationBuck

Feedback

Early Feasibility Study Process Simulations

DFMs

Digital build

Equipment

Supplier SelectionEquipment

Ordering

Equipment trials Process ProvingInspection

Fixtures ordering

Equipment

Pre-acceptance

HOQ

PrepQIB Actions

Quality Plan

Sign off

DFMEA

Effectiveness

Check

DVP

Check

Inspection Fixtures,

gauges identification

Proto

Quality

Audit

QIB Verification

TTO

Shipment & HLTOBuy offAssembly & TryoutMachiningPattern &

Pre-Machining

Design

Laser cut parts Die cut parts

HOQ

Sign off

1 2 3 16 1714 15

PO PPPAT

10 11 12 13

Component

9Tooling Kick off

8

Tooling Kick off

76

Supplier

4 5

Complete

DR0 DR1 DR2 DR3 DR4 DR5

(SOP)

Homologation

Process overview

Market equation sign off

(Volumes, Price & Contribution)

Physical Validation &

Feedback

SAT Visits

RFQrelease

Tech. review Level 1

E-Cube, Blue buck Audits Vehicle Demerit Audits QIB Handover to Plant QA

Quality Verification Quality Consistency Audits

LaunchRequirements and Concept Development Engineering & Process Design ,Validation

Customer Support Service ability, Maintainability and Wire & Tube WorkshopsService

Strategy

EPC, Technical

Literature releaseProduct Audits & Field Testing Dealer Training

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