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M&M Bpr Final

Case Study About Mahindra and Mahindra's Implementation of BPR

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M&M Bpr Final

  1. 1. Implementing BPR (Business Process Reengineering) Akshara Jain (045) Anant Jain (046) Neha Jain (047) Ningsang Jamir (048) Amitabh Jasuja (049) Varun Jindal (050) Pranav Joshi (051) Mahindra & Mahindra
  2. 2. Agenda <ul><li>Brief introduction of M & M </li></ul><ul><li>What is BPR </li></ul><ul><li>Principles of BPR </li></ul><ul><li>BPR success factors </li></ul><ul><li>BPR @ M & M Questions </li></ul><ul><li>Highlights </li></ul><ul><li>Key Events </li></ul>
  3. 3. <ul><li>Brief Introduction of M&M </li></ul><ul><li>Started in 1945 by J C Mahindra & K C Mahindra </li></ul><ul><li>In Oct. 1947 first batch of 75 jeeps released for Indian market </li></ul><ul><li>Diversified business in other segments viz. hotels, financial services, auto components, information technology etc. </li></ul><ul><li>In 1994 a major restructuring exercise was initiated as part of a BPR program. </li></ul><ul><li>The company was regrouped in six distinct clusters of related businesses </li></ul>
  4. 4. <ul><li>Contd….. </li></ul><ul><li>Current Price in the stock market at Rs 472 </li></ul><ul><li>Automotive divisions ( UVs & LCVs) </li></ul><ul><li>Farm equipment division (tractors and farm implements) </li></ul><ul><li>In 1996, Nagpur and Kandivali plants received ISO 9001 </li></ul><ul><li>In 2001 it was 4 th largest manufacturer of tractors in the world </li></ul><ul><li>Tractors were exported to countries viz. US, SA, Zimbabwe, Nepal, Sri Lanka and most of the European countries </li></ul>
  5. 5. <ul><li>Contd….. </li></ul><ul><li>Acquired Kinetic Scooters having 80% stake to strengthen its two wheeler segment </li></ul><ul><li>Amalgamation with Punjab Tractors Limited to strengthen its three wheeler segment </li></ul><ul><li>Current Price in the stock market at Rs 472 with a market capital of 143 billion </li></ul><ul><li>52 week Low/High 391/830 </li></ul>
  6. 6. What is BPR? <ul><li>BPR is about radical redesign and reorganization of an enterprise to lower the cost and improve quality and services </li></ul><ul><li>IT was assumed to be the key enabler for that radical change </li></ul><ul><li>Focus on reinventing the way of company carries out rather on improving or modifying process </li></ul><ul><li>It was recommended for the corporations where technology, people and organizational goals were no longer valid </li></ul>
  7. 7. Principles of BPR <ul><li>Organize around processes, not tasks </li></ul><ul><li>Have output user perform process </li></ul><ul><li>Have those who produce information process it </li></ul><ul><li>Treat geographically dispersed resources as centralized </li></ul><ul><li>Link parallel activities in the workflow instead of just integrating their results </li></ul><ul><li>Empower workers and use built-in controls </li></ul><ul><li>Capture information once and at the source </li></ul>
  8. 8. BPR Success Factors <ul><li>Strong and Consistent top management sponsorship. </li></ul><ul><li>Addressing Cultural Transformation through effective change management. </li></ul><ul><li>Proven methodology including a vision process. </li></ul><ul><li>Reengineering team composition. </li></ul><ul><li>Compelling Business for a change </li></ul><ul><li>Strategic alignment with company strategic direction. </li></ul><ul><li>Line Ownership. </li></ul>
  9. 9. BPR @ M&M Questions
  10. 10. Circumstances that lead M&M to implement BPR <ul><li>Factors </li></ul><ul><li>Manufacturing Inefficiencies </li></ul><ul><li>Poor productivity </li></ul><ul><li>Long production cycle </li></ul><ul><li>Sub-optimal output. </li></ul><ul><li>Unhealthy work culture </li></ul><ul><li>Corruption was widespread. </li></ul>
  11. 11. Continued……. <ul><li>Decision to focus on enhancing productivity and delivering world-class quality at the least possible cost. </li></ul><ul><li>Ambition to become the largest tractor manufacturer in the world. </li></ul><ul><li>The three C’s (customers, competition, change) </li></ul>
  12. 12. Why M & M faced resistance from unions while implementing BPR? <ul><li>Fear of Downsizing </li></ul><ul><li>Several jobs were combined into one. </li></ul><ul><li>Management accepting the Union demands every time. </li></ul><ul><li>Lenient approach of management towards running the plant. </li></ul><ul><li>Inflexibility of the workers. </li></ul><ul><li>Idle time available to workers due to unorganized processes </li></ul><ul><li>Censorship of disclosure </li></ul>
  13. 13. Analyze the BPR implementation exercise at M & M <ul><li>Implementation started in mid 1990s </li></ul><ul><li>Resistance from the unions </li></ul><ul><li>Re-engineering the layout and method of working </li></ul><ul><li>Cellular Manufacturing </li></ul><ul><ul><li>Multi-tasking through multi-machine manning </li></ul></ul><ul><ul><li>Reduction in non-productive activities </li></ul></ul><ul><li>Implementation of TPM & Kaizen </li></ul>
  14. 14. How do you think the ‘Platform Concept’ helped the company? <ul><li>Focus on customer requirement. </li></ul><ul><li>Concurrent engineering: Formation of cross functional teams </li></ul><ul><li>Formation of 3 full-time teams </li></ul><ul><ul><li>Horizon1: Improvements in existing products </li></ul></ul><ul><ul><li>Horizon2: Up-gradation of existing products </li></ul></ul><ul><ul><li>Horizon3: Development of new products </li></ul></ul>
  15. 15. Comments on the benefits M&M reaped as a result of BPR program <ul><li>Around a 100 officers produced 35 engines a day as compared to the 1200 employees producing 70 engines in the pre-BPR days. </li></ul><ul><li>Igatpuri Plant: Employees declined by 400 but productivity went up by 125 engines per day </li></ul><ul><li>Nasik Plant: 125% improvement in productivity </li></ul><ul><li>Reduction in employee costs </li></ul><ul><ul><li>1994: 12.4% </li></ul></ul><ul><ul><li>1996: 10.1% </li></ul></ul>
  16. 16. Continued…… <ul><li>Value added per employee increased from 0.3 million to 0.46 million </li></ul><ul><li>“ BPR was a way of reengineering our plants and making them viable in a competitive environment” </li></ul>– Anand Mahindra
  17. 17. Continued…… <ul><li>Better inventory control </li></ul><ul><li>Better sourcing </li></ul><ul><li>Better order distribution across plants </li></ul><ul><li>Online availability of data </li></ul><ul><li>Transparent access to data </li></ul><ul><li>Process transparency </li></ul><ul><li>Integrated sales and supply chain </li></ul>
  18. 18. How is BPR different from TQM? <ul><li>Continuous incremental improvement-Feature of TQM </li></ul><ul><li>BPR seeks breakthrough, not by enhancing existing process but by discarding them & replacing them with entirely new one </li></ul><ul><li>It is about inventing new approaches to process structure and no resemblance to those of previous era </li></ul>
  19. 19. Measures taken by manager in a shop floor to ensure BPR success <ul><li>Training and Motivating workforce </li></ul><ul><li>Identifying leaders </li></ul><ul><li>Creating a conducive environment and changing work culture. </li></ul>
  20. 20. Highlights <ul><li>Improve PTL’s capacity utilization from 45% to 55% </li></ul><ul><li>With the launch of Ingenio, 10-12% growth in the UV industry </li></ul><ul><li>6-8% growth in the tractor segment FY09 </li></ul><ul><li>Margins to reduce – increase in steel, fuel and raw material prices, to improve in FY10 </li></ul>
  21. 21. Highlights <ul><li>Net sales increased for the quarter Q1 increased YoY 26.1% to Rs. 32.9 bn </li></ul><ul><li>Sales volume grew 18.9% YoY to 90160 units </li></ul><ul><ul><ul><li>Automotive – 23.7% increase YoY to 60,054 units </li></ul></ul></ul><ul><ul><ul><li>FES – Revenues up by 27.5% to 13.2bn </li></ul></ul></ul>
  22. 22. Key Events <ul><li>Acquires Kinetic Motors </li></ul><ul><li>Talks to acquire Italian motorcycle maker Malaguti Moto </li></ul><ul><li>JV with Jiansu Vueda Yancheng Tractor Manufacturing Company (JVYTMC). 51% stake through Mahindra Overseas Investment Company </li></ul>
  23. 23. BPR implementation in M&M had seen radical change for the better not only in its functions but also in its results. This can be summed up with the statement of Anand Mahindra “Today the atmosphere is so different that every morning all the workers recite the company oath, which is a sea change from the situation 10 years ago when workers used to play cards on shop floor during working hours.”
  24. 24. THANK YOU