CASE STUDYMAHINDRA & MAHINDRA –

IMPLEMENTING BPR

PRESENTED BYDeepak Rawat 12Akbar Ziauddin 08Sandeep Jayaprakash 40Praveen Singh 10Prashant Gupta 11(PGDBM)Aarti Shende 01(PGDBM)Divya Yadav 18Arine Elavia 14(PGDBM)Mansi Desai 13(PGDBM)

ABOUT THE CASE

The case examines the reasons behind automobile major Mahindra & Mahindra’s decision to implement a business process re-engineering program. The case explores in detail the implementation procedure at the company and the benefits that accrued from the BPR program. In addition, the case discusses the concept of BPR, its benefits, and the steps that need to be taken to ensure the success of such initiatives.

M & M’s History

M&M was the flagship company of the Mahindra group , one of the top ten industrial houses in India .

Incorporated in 1945 by J C Mahindra , K C Mahindra and Ghulam Mohammed by the name of Mahindra & Mohammed Ltd.

In 1947, the first batch of 75 jeeps released for the Indian market.

In 1948, it was renamed Mahindra & Mahindra Ltd. 1994 marked the major restructuring exercise ,

Introducing new organization model

Received the ISO-9001 certification in 1996

Two main operating divisions of M&M 1) Automotive Division comprising of UV’s and

LCV’s 2)Farm Equipment Division comprising of Tractors

and Farm Implements.

By 2001,it established itself as one of the leading players in the Indian automotive sector with revenues of Rs 43.53 bn and profit of Rs 1.2 bn.

Problems faced by M&M

In the mid 1990’s Plants in Igatpuri and Kandivli were facing problems like -

Manufacturing inefficiencies , poor productivity , long production cycle and sub-optimal output.

The reasons for above problems are highly under productive, militantly unionized, bloated workforce, unhealthy work culture and widespread corruption.

Problem solving methods adopted by the company Sacking

VRS scheme

Implementing BPR

Problems in implementing BPR Unions expressed their displeasure by

having a strike.

Management did not want to succumb to the unions demand.

Thus both parties were not ready to comprise.

About BPR

The concept of BPR was popularized in early 1990’s by Michael Hammer and James Champy.

BPR means complete overhaul of the way an organisation does its business.

It focuses on reinventing the way the company carries out its business rather than focusing on improving or modifying processes.

It tries to determine what business the company should involve in rather than the already existing the business.

Principles of BPR

1. Organize around processes, and not task:-Instead of work being divided among different

people, one person given the responsibility for an entire process.

2. Output user perform the process:-Each department is required to take full

responsibility for a complete process instead of doing only their work.

3. Have those who produce information process it:- People responsible for generating a piece of

information should be involved in processing all information regarding.

4. Treat Geographical Dispersed Resources as Centralized:- To provide better customer service , companies decentralize

operation with current technology .With current technology, a company’s data can be centrally located and made available to all its geographically dispersed unitsThis way company can get the benefits of centralization as well as decentralization .

5 Link parallel Activities in the workflow instead of just integrating their results:-

Certain processes are performed in parallel and then integrated at the end . However , quite often, the teams involved do not communicate well . In such a scenario BPR would put people from various functional areas on the team in charge of a particular product

6 Empower workers and use Built –in Controls :- Most Organizations have many layers of

personnel working more to manage , and control them . BPR empowers the people actually doing the work by givining them to take certain decisions .

7 Capture information once and the source :- Different departments capturing their own place

leads to inefficiency , resources wastage and data discrepancy errors.By using information technology ,data can be captured electronically at source,entered in online,and available to all.

Effects of BPR

Work units change from functional to process teams

Jobs change from simple task to multidimensional

Roles change from controls to empowered Advancement criteria changes from

performance to ability Executives change from scorekeepers to

leaders Performance measures change from activity

to results

Categories of BPR

Process improvement --- Improving processes that are part of a single business function and are not cross functional.

Process Redesign --- Total redesign of an end to end process. This results in performance improvement in terms of cost, quality and time.

Business Transformation --- It begins with study of basic elements of process , information and technology involved by the top management.

M&M’s Experience with BPR M&M’s earlier resisted this attempt to

reengineer the organization . After the senior staff began working on the shop

floor ,the first sign of the benefits of BPR became evident.

Around a 100 officers produced 35 engines a day as compared to the 1200 employees producing 70 engines in the pre-BPR days.

M&M’s realized that it had focus on two issues when implementing the BPR program Re-engineering the layout and the method of working and productivity.

Change in Set up

M&M’s decided to replace its existing set up with “Platform Concept”.

Platform concept focus on customer requirement.

It requires the formation of cross functional team consisting of professional from R&D , Manufacturing ,Processing and Marketing

This team jointly work develop the product , keeping in mind the needs of final customer.

Implementation of Platform Concept Focus on customer requirement , M&M’s had to bring in

features of concurrent Re-engineering at the development phase itself.

This was accompanied by the operation of three full time teams to bring the product development process in line with the platform concept.

The teams were named as Horizon 1, Horizon2 Horizon 3 Horizon 1 -concentrated only on some improvements in

existing products. Horizon 2 -specialized in up gradation of existing product Horizon 3 -concerned with new product development.

Utilization of Information Technology M&M’s decide to utilize information technology To integrate all its business function and process

with each other. IT systems were installed at various locations

and various functions , and officers were directly linked with each other.

IT solutions were integrated with an ERP package by SAP

Success of BPR

Yes BPR was successfully implemented in M&M’s.

Reasons are as follows:

At Igatpuri plant number of employees declined to 760 , the number of engines produced went up by 125 per day

Nashik plant soon achieved a 125 percent improvement in productivity.

Employee cost went down

Inventory level came down

Value added per employee increased

BPR initiatives enabled the company to maintain steady gross margins ,reduce working capitals levels ,and rationalize manufacturing process.

REASONS CONTD.

Future

By summing up company’s BPR experience .We can put in a simple way .

Company is not Surviving but thriving it is all due BPR

M&M’s envisaged 10-15 percent savings on the process redesign .

The company also started out sourcing non-core manufacturing activities , sourcing most components of a particular model from same vendor ,and increase the volume of business.

Today atmosphere in the company is so different that every morning workers recite the company oath which is the biggest change from the situation 10 yrs back.

THANK YOU