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TATA MOTORS
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
Global Footprint
2
TATA Motors: Commercial VehiclesTATA Motors: Commercial VehiclesProduct Range
3
Technological Resources 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.
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.
Organizational Resources
17
100
Process Approach – EPM (derived from APQC processes and TBEM model.
5
The Enterprise Process Model
6
• Sound leadership – JRD, Sumant Moolgaokar, Ratan Tata
• Ethical business practices – guided by the Tata Code of Conduct
• Successful handling of integration issues – Tata Daewoo, Jaguar
– Land Rover
• Reputation and recognition – Tata brand.
• CSR initiatives
• Adaptability to the changing business dynamics.
7
Financial Resources
Stable cash flows for the past five years
Cash rich corporate parent – Tata Sons
Strong reputation – access to capital markets
8
Value Chain & Value System
Inbound
Logistics
Operations Marketing ServiceOutbound
Logistics
Suppliers , Contractors
SAP , VCM
SAP , CRM - DMS
Strategic Alliances
Transporters, Convoy Drivers Association
Dealer Network, Marketing Research Firms, Vehicle
Financing
Regional Warehouses, Dealer Workshops, Distributors, TASS
9
Inbound Logistics Long term contract with service provider’s – transporters and
agents. Personnel at regional offices for over seeing the smooth transit
of goods. Transparency and monitoring through deployment of IT – all
transactions through SAP. DTL supplies for critical high value items. Efficient storage facilities – easy storage and retrieval.
10
Operations Capital Equipment Manufacturing division – tooling development
capabilities of global standard.
Apprentice Trainee Course – ensuring stable source of skilled
manpower.
Kaizen & TPM team – continuous drive to improve efficiencies.
Automated manufacturing processes.
Distributed manufacturing – Assembly units at South Africa,
Thailand, Bangladesh, Brazil etc.
Maintenance – technical competence.
Capacity Utilization – Mercedes Benz cars make use of Tata
Motors paint shop facilities. 11
Outbound Logistics Stockyards, all across the country.
Long term contracts with transporter’s – higher volume of
business to transporters ensures competitive price.
Regional Sales Office and Vehicle Dispatch Section linked through
SAP.
Efficient security system for prevention of any kind of pilferage.
12
Marketing & Sales Structured approach to understanding the requirements of
individual customers – QFD’s conducted at regular intervals. Clear identification of product requirements, leading to
development of innovative products – Tata 207 DI, Tata Ace Pan India presence and global footprint. Independent teams for addressing the requirements of institutional
customers – Defense, State Transport Units Helping to augment the scarce resources – Fiat selling vehicles
through Tata dealerships, in return Tata has access to Fiat’s technology and unutilized capacity.
Quick assessment of the changing market dynamics and consumer preferences – Tata 407 LCV
Large network of dealers – use of technology : DMS. 13
Service Easy availability of spare parts.
Efficient collection of data from field and communication to the
respective plants.
Pan India presence, as well as global presence.
Large network of workshops – Dealer workshops and TASS.
Training facilities – for dealer end and TASS personnel.
14
Procurement E procurement initiative. Global Sourcing Team – China , a key destination for sourcing
essential items like tires, power steering units etc., Steel procured from Belarus
Long term relationships with a stable and loyal pool of suppliers. Technology driven procurement – SAP and VCM. Strategic subsidiaries & JV’s – TACO group of companies , Tata
Cummins Centralized Strategic Sourcing for key components – FIP’s, Steel
etc. Group resources – Tata Steel and Tata International . Localized supplier base at mfg. locations – low inventory levels.
15
Technology Development Approximately 2% of the annual profits of the company invested
in research and development.
Knowledge portal – helps employees keep abreast with the latest
technologies.
Extensive prototype building and testing facilities.
Strategic partnerships – MDI (France), Fiat etc.
Formal benchmarking process.
“Technology Day” organized across all plant locations.
16
Human Resource Vast pool of technically competent engineers and managers.
Focus on development of technical capabilities – Technical
Training Center’s, Alliance with technical Institutes
Focus on development of managerial capabilities – MTC’s , TMTC,
executive training programs at premier business schools
Career advancement schemes – ESS, FTSS
17
Firm Infrastructure Multi – Location facilities
Strong leadership – under the aegis of Tata Sons
Best in class prototype building facilities
Technology – SAP
Large product portfolio
18
Dynamic Capabilities• NPI Process – reduced time to market
Pha
ses
•Market analysis
•Competitor assessment
•Explore Prod. Options
•Product planning
Act
iviti
es
(Indi
cativ
e)
Gat
eway
D
eliv
erab
les
(Par
tial)
•Concept alternatives•QFD•Styling themes•Packaging•Manf. Feasibility•Cost targeting
•Performance & Weight analysis•Style & Spec’dev’mt. & Freeze•Vehicle & Aggregate plans•Product costing•Financial analys
•Design analysis & simulation•Alpha proto tests•Aggregate tests•Crash tests•Manf. Planning•Detail costing
•Full design validation •Beta proto tests•Production tooling•Vendor parts dev.•Install & comm. Facilities
•Quality Proving & Process validation•P0 & PP Builds•Vendor parts approval•Homologation
•9BOX & supporting docs
DR1 Sign-offs•Product Profile & tech targets•Recommended style theme•Prelim. Cost / wt targets•Prelim. Biz case
DR2 Sign-offs•Product spec & Features list•Vehicle Test Plan•Style & packaging sign off•Time & res. plan•Full Biz. case
DR3 Sign-offs•Design release•Long lead tooling signed off•Component reliability plan•Biz. Case validation
DR4 Sign-offs•Critical issues brochure•Vehicle test requirements met•Control plans signoff
DR5 Sign-offs•Launch volumes•QP build completion•Vendor partsfully approved
•Ramp up plan
•Ramp-up•PL Build
Product Strategy & Planning
Phase
Concept Evaluation
Phase
Concept Development
Phase
Product Design and
development Phase
Design Validation &
ProductionisationPhase
Pre-Production
Phase
Ramp-up Phase
Gat
eway
s
DR0DR0
Product Strategy Review
Product Strategy Review
Concept Selection
Concept Selection
Concept and Project
Approval
Concept and Project
Approval
Design Release
Design Release
Project Review
Project Review
Production Release
Production Release
Tata Motors Vehicle NPI Process – Conceptual Overview
DR1DR1 DR2DR2 DR3DR3 DR4DR4 DR5DR5 LLPIPI
Pro
ject
In
itiat
ion
Laun
ch
19
How did TATA create initial resource complement to overcome the disadvantage of being newcomers in passenger car business?
STRATEGY INSTITUTIONS
Government support (10Year Plan)
New institutions for trade promotion, technology up-
gradation, quality enhancement (ACMA:
Automotive Component Manufacturers Association,
SIAM: Society of Indian Automobile Manufacturers )
R&D
Acquisitions
Strategic partnerships
Joint ventures
Intensive management development
Leveraging the resources
20
Key StrategiesInternational 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 programmes for intensive management development.
Consolidate position in India by exploiting opportunities: New mobility of young Indians. Government’s substantial road-building program GDP growth
21
Optimize the value chain using distributed Manufacturing
The power of IT has been extensively leveraged State-of-the-art CAD and CAM services integrated
design across multiple disciplines
IT helped the company shrink the design cycle time
BSM tools from BMC Software played a key role TML decided to adopt IT service management
concepts outlined in the ISO 20000:05 international standards, as well as best practices outlined in the IT Infrastructure Library® (ITIL®) Version 3
Process Benchmarking
22
Process Benchmarking
service-oriented management architecture that treated services as assets and managed them on a life cycle basis.
In-house manufacturing capability with CNC manufacturing operations
have implemented Six-sigma, Kaizen & TPM.
23
Strategic Benchmarking
24
Objective: Innovation across the value chain leading to affordable products that can grow the market
Product innovation needs to be complemented with innovation in other parts of the value chain
• Co- location of suppliers• On- line bidding by suppliers• Reduction in the number of suppliers• Partnerships with vendors• Dedicated “Suvidha” service network in small towns
Strategic Benchmarking
25
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
26
Stretch and Leverage
Vision : “best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics”
Engineering, construction and automotive solutions R&D focus on environment-friendly technologies in
emissions and alternative fuelsMaintain cost competitiveness through continuous
improvements in control over key inputs and enhanced asset utilization
Best in class human capital that are constantly in touch with the industry, competitors, customers and the suppliers
27
Stretch and Leverage contd..
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%)
28
Stretch and Leverage contd..
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
29
Stretch and Leverage 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
30
Technological Framework
Attribute: Innovation around cost “globally recognized” technological capabilities '50s and '60s technical collaboration with Mercedes
Benz to design and manufacture its chosen line of projects
Strong R&D at ERC Possess capability to develop and test durability,
engine performance, emission, safety, design and style, noise, hydraulics, tracks, and instrumentation.
Opportunity to experiment and learn from mistake
31
Technology Capability Hierarchy
32
Achievements
The company has the only world-class crash facility in Asia outside Korea and Japan
Developed an A-ECU (Electronic Control Unit) and low-cost accessories that would effectively manage critical engine and vehicle systems without calling for a full-fledged and expensive conventional ECU
Striding towards new emission standards Equipping vehicles of the future with technologies for
improving communication, navigation and entertainment- OneCat conceptual car with fiber glass powered by air and emission free.
33
Diversification
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.
34
Diversification
1995– Mercedes Benz car E220 launched1997– Tata Sierra Turbo launched.1998– India’s first SUV launched.1998– India’s first indigenous Passenger Car
Indica launched. 2001– Second Generation Indica v2 launched.2008– Launch of Suma Grande2008– Launch of Nano at ninth Auto Expo
35
But, the war is on…
Maruti Vs Tata Motors36
The Preparations…
Proper utilization of assetsMotivating people to work hardSelective hiringJob fittingTraining programBetter working environment
37
To create….
Firm’s Resources
Rent Generating Potential
Strategy to best use the
capabilities
Resource Gaps
38
HR Philosophy
Caring, show respect, compassion and humanity for colleagues
Work cohesively with colleagues across the groupEncourages self-sufficiencyEmployees' relatives at Pune have been
encouraged to form various industrial co-operatives
The Tata Motors Grihini Social Welfare Society caters to employees' women dependents'
39
HR Policies
Executive Selection Scheme (ESS) - fast track programme for accelerated growth
In-house vocational training and apprenticeship programme trains the technicians
Rotational assignments and cross-functional mobility allow employees to grow
40
All said and done…a new strategy is required…
The Blue Ocean Strategy
41
Blue Ocean Strategy
Red Ocean Blue Ocean
Compete in the existing market place Create unconsolidated market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value cost trade off Break the value-cost trade off
Differentiation or Low cast Differentiation and Low Cost42
Focus on the non-customers
43
Corporate strategy, parenting and synergies
To buy premium vehicle brands such as Land Rover and Jaguar bolster Tata Motors’ image as a global company and increase its global reach and scale
Overall, the Tata group has spent around $15.5 billion in acquiring foreign companies
The Tata name is a unique asset representing leadership with trust
Leveraging this asset to enhance group synergy and becoming globally competitive
44
Corporate strategy, parenting and synergies contd..
synergy developed as a result of the strengths of domestic and foreign market share, congregating under the umbrella of Tata group
The Tata Group as a whole has over 20 publicly listed enterprises and operates in more than 80 countries world-wide - lots of experience and resources to draw from for research and development purposes
Strong corporate governance based on “rich legacy of fair, ethical, and transparent governance practices” to ensure that its employees act ethically and the business continues to run smoothly
45
Corporate Advantages from Diversified Business
Sharing of Activities/Resource
TataSteel
Tata Motor
TCSTataCummins
Sharing of Skills/Core CompetenceTataSteel
Core Competence
TataCummins
TAML TACO
46
Thank you
47