Management Control System Project

on TATA MotorsAnkit Chauhan

Jagrut Patel

Pooja Raghuvanshi

Atit Shah

Pratibha Behl

Ashima Koul

GOOD BETTER BEST NEVER LET IT REST

Introduction Founded by JRD Tata in 1945

Consolidated revenues of INR 1, 65,654 crores for the financial 2011-12

Vision is to be '‘Best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics.'‘

The company’s Mission is “Leadership with trust.”

Jamshedpur, Sanand , Lucknow, Pune , Pantna Nagar, Dharwad with Internation Presence in

Presence

Malaysia*Thailand

Bangladesh *Nepal, Sri Lanka

Kenya*

Russia*Ukraine* U.K.

Italy

Senegal

Afghanistan Uzbekistan

Brazil

South Africa*

Egypt

Saudi Arabia Iraq, Iran

China South Korea*

LATAM

West Africa

North Africa

West Europe

Central Asia East Asia

South Asia

South East Asia West Asia

East Africa South Africa

* Assembly Operations also

OTHER COLLABORATIONS/M&A & JVs• Tata Daewoo Commercial Vehicle• Hispano in Spain & Marcopolo In Brazil• JV with Jardine Matheson for ConcordeMotors• Technology Tie Ups at Spain,Italy

Objectives

Employee Focus: Make the organization a Great Place to work

Community Focus: Be a responsible corporate citizen

Supplier Focus: Treat Suppliers as partners Shareholders Focus: Demonstrate superior

results Customer Focus: Improve Customer

Satisfaction.

Code Of Conduct 25 codes called clauses for its conduct with various parties

i.e. nations in which it operate, the public, the government, the customer, the employees, the stakeholders etc.

Financial reporting & records Competition Government agencies Quality of products Corporate citizenship Use of TATA brand Ethical conduct Regulatory compliance Reporting concerns

R & D establishments at Jamshedpur, Pune &

Lucknow – over 1400 engineers.

India’s only certified crash test facility for cars

and hemi anechoic chamber for testing of noise

and vibration.

Tata Motors European Technical Centre (TMETC)

set up in 2005 – primarily involved in design

engineering and development of products,

supporting Tata Motors skill sets.

Technological Resources

Tata Daewoo Commercial Vehicle Co. has

its R&D facility in Gunsan, South Korea.

Hispano Carrocera has its R&D facility at

Zaragoza in Spain.

Contd…

Stable cash flows for the past five years

Cash rich corporate parent – Tata Sons

Strong reputation – access to capital markets

Financial Resouces

Organizational Resources

17

100

Process Approach – EPM (derived from APQC processes and TBEM model.

10

Enterprise Model

Organisational Structure

Relatively flat structure Narrow span of control Based on the divisions, Tata Motors has a

mixed organisational structure. Two main divisions based on product type

viz. ◦ Commercial vehicle and ◦ Passenger cars division

Contd…

Tata Motors has newsletters and house magazines published monthly for each division.

ManCom meeting for all departments together.

All the departments are interconnected with intra networking and internetworking system.

Various periodic articles about the wellbeing of employees, promotions, deaths, etc. to make employees connected.

Coordination and Communication

SAP ERP•Supplier Collaboration•Knowledge Management•Monitoring And control

SEIBEL•inventory management•360-degree view of the customer •track each vehicle throughout its life cycle

CRM DMS •Dealer Management •Online Tracking OF all Leads & Sales

Information Systems at TATAMotors

During the manufacturing stage

In the post manufacturing stage

Measures Taken up to Maintain the Quality of Products

Techniques Used to

implement quality control

Balance Scorecard System

Value Engineering

kaizen

Material Management

R&D at TATA Motors

R and D in Tata Motor

ERC(Central level)

In Plant R and D

ProcessImprovement

Product Improvement

Research and Development Structure at Tata motor

International strategy based on the competitive advantage:

New product (eg. Tata Nano, the cheapest car in the World).

Acquisitions (eg. Land Rover and Jaguar brands from Ford Motors).

Partnership with established companies (eg. Alliance with Fiat since 2006) to enhance the product portfolio and knowledge exchange.

Facilities for learning from other companies. Developing programmers for intensive management

development

Key Strategies

Tata – Nano: The innovative small car for the urban middle class Fulfill the requirements of its customer value

propositionDeliberately created a young team with good

leadership capabilities who think differentlyExcellence in outsourcing Reconceived its supplier strategy - 85% of the

Nano’s componentsFewer supplier (<60%)

Stretch and Leverage

Acquisition : Land Rover and Jaguar for $2.3 billion - Complementing Resources - Blending & BalancingHigh Replacement costComplimentary to Tata Motor in the upstream

businessAccess to global markets Transfer of knowledge, technology from high end

market

Contd..

Overall .. Strong product development capability Manufacture products or deliver services of

highest quality at lowest prices Sufficiently widespread distribution and

service network working around offering more affordable,

more value-oriented products

Contd…

1977– First CV from Pune plant. 1983– First HCV rolled out. 1986– First LCV (Tata 407) launched

followed by Tata 608. 1991– First passenger car Tata Sierra

launched. 1992– Tata Estate launched. 1994– Launch of Tata Sumo.

Diversification

1997– Tata Sierra Turbo launched. 1998– India’s first indigenous Passenger Car

Indica launched. 2001– Second Generation Indica v2

launched. 2008– Launch of Suma Grande 2008– Launch of Nano at ninth Auto Expo 2011- Indica eCS, Manza 2013- Indigo eCS

Contd…

APPRAISAL & REWARD APPRAISAL

New appraisal system based on KRAs & targets

Review of targets at regular intervals People development an important KRA

REWARD

Promotions based on performance Productive and profit linked incentive

schemes Selection of supervisors based on

performance / attendance/ discipline etc. Job rotation (dept. shifting options) –

including inter functional

RETENTION AND EMPLOYEE WELFARE

Residential colonies for employees. Hospitalization reimbursement on actual

without ceiling. Vehicle loans Household equipment loans House building advance PF trust policy- for better mgt. Better pension scheme

HR INITIATIVES

Re-alining organisational culture according to the vision and values.

Performance linked reward and recognition system.

Career planning and promotion policy Revised recruitment policy Competency mapping Internal communication Union alignment policies Employee involvement and participation

HR Practices Regarding Recruitment. Performance Evaluation of Tata Motors. Providing equal opportunity. Rewarding union employees. Vehicle and profit linked payment Scheme. Employee engagement.

HR POLICIES AND PRACTICES OF TATA MOTORS

Interest rates and other inflationary trends Fuel Prices Input Costs / Supplies Restrictive covenants in financing agreements Environmental Regulations Exchange and interest rate fluctuations

RISK FACED BY TATA MOTORS

Reviewing the quarterly financial statements before submission to the Board

Reviewing with the management, external auditor and internal auditor, adequacy of internal control systems and recommending improvements to the management.

Recommending the appointment/removal of the statutory auditor, cost auditor, fixing audit fees.

AUDIT COMMITTEE

Reviewing the Company’s financial and risk management policies.

Reviewing the financial statements and investments made by subsidiary companies.

Look into the reasons for any substantial defaults in payment to the depositors, debenture holders, shareholders and creditors.

Contd…

GRIEVANCEThe usual steps in grievance procedure are:

Conference among the aggrieved employee, the supervisor, and the union steward.

Conference between middle management and middle union leadership.

Conference between top management and top union leadership.

Arbitration.

Benefits of having Grievance procedure

Compliance

Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management's investigation

Look into the reasons for substantial defaults in the payments to the depositors, debenture holders, shareholders and creditors.

Review the process of communicating the Tata Code of Conduct to employees

The Ethics & Compliance Committee was constituted to formulate policies relating to the implementation of the Tata Code of Conduct for Prevention of Insider Trading.

Whistle Blower Mechanism: The Company has adopted an unique Whistle-Blower Policy.

Contd…

The sole winner of the JRD QV Award 2005 was the commercial vehicle business unit, or CVBU, of Tata Motors

PCBU's business excellence initiative has come

into its own. Serious Adoption Award in 2004 Active Promotion Award in 2005

Tata Motors have crossed the level of 60% to win the JRD-QV award in 2001, 2004 & 2005 respectively

Achievements