Report on Small wonder: the making of the Nano

Submitted to,

Malati Sriram

On

27th Jan 2012

By,

Ashiq N K (11067)

Deepak Semwal (11072)

AUTHORS 3

OBJECTIVE 3

CENTRAL IDEA 4

AUTHOR’S INTENT OF WRITING THE BOOK 6

DILEMMA AND SOLUTION 7

CONFLICTS WITH OUR THOUGHT 7

AFFECT ON THINKING 9

RELATING STORY TO OURSELVES 9

LEARNING FROM THE BOOK – ASHIQ N K 10

LEARNING FROM THE BOOK – DEEPAK SEMWAL 11

REFERENCE 12

Authors

Philip Chacko, Christabelle Noronha and Sujata Agrawal take us on the journey of the Nano, from when it was first conceived as a doodle by Ratan Tata at a boring board meeting to enthusiastic owners of the 'lakhtakia' car turning into overnight celebrities.

Philip Chacko, Christabelle Noronha and Sujata Agrawal work in the corporate affairs unit of the Tata Group. To the authors’ credit, they have managed to turn what might have remained a document of academic interest into a brisk narrative, by taking the story beyond the engineering — to the experiences and emotions.

Objective

The Making Of The Nano by Philip Chacko, Christabelle Noronha and Sujata Agrawal chronicles that journey to motoring history in a straightforward nuts-and-bolts manner, and justifiably so, as the story of how the world’s cheapest car got made doesn’t need any flourishes. What it does need is a thrilling ringside view, of people, places, events, disappointments and triumphs, yet this is where the book sometimes sputters.

Small Wonder has laid greater emphasis on practically every aspect of the development —from the setting up of the teams to the design to the interiors to various mules and Ratan’s growing frustration and enormous patience with the project. His uncompromising stance on having four doors and a highly reliable braking system, though he relented on different sizes of tyres for front and back. Or, that the Nano has only 2,000 parts against Tata Indica’s 3,000.

There are three defining, but disruptive, features of Nanovation: one, the pictures and the design blueprints have been chosen aptly. Two, it has plenty of intelligent trivia scattered through the pages. Sample this: “The social cost of road accidents is 3 per cent of India’s GDP.” Three, it seems the India edition of the book written by US writers has been — to borrow from automobile vocabulary — homologated for Indian readers by presenting figures in lakhs and crores rather than the oddity of Rupees million that barely a handful of Indians use.

The authors seem to have worked hard on sprinkling a plethora of quotes to connect with specific situations during the development of the Nano. From Albert Einstein to Marilyn Monroe to Benjamin Franklin and A.P.J. Abdul Kalam, all have been quoted. But since it has been done every so often, at times, the quotes seem forced. As is the entire concept of trying to take out ‘innovation’ lessons, which the entire book seems to be devoted to.

This effort to extract management lessons out of the development of the car is a laudable effort, but it fails to connect with the reader. Because it is right through the book and almost

seems like a boring mimicry. Perfunctorily comparing it with the iPod on one hand and the Nintendo Wii on the other, with no real insights on the latter two ads no value and serves no purpose except dampening the excitement of the reading. This is not the book you would want to read if your sole objective is to learn about the Nano. For that,  Small Wonder is more fulfilling. It does not have the quotes, the lessons, the intelligent trivia and all those sketches. Further, it has few pictures. Nevertheless, it satisfies you more than Nanovation does.

Central Idea

A promise is a promise.” This is what Ratan Tata said when everyone around him was sceptical about his promise of delivering a car for just 100,000.

Once upon a time there was a dream — born of the vision of Ratan Tata — to enable middle-class Indians to have a safe and affordable means of personal mobility, to break the shackles of the mind and go where no one had gone before, to create a motor car that would be more than just another automobile. This book tells the story of how that dream was realised. This is the story of the Nano, the Rs1-lakh wonder, and how it came to be.

The book starts by giving an insight into how Ratan Tata conceptualised the idea that the company should start working on a car that would be a replacement to the scooter for the middle class and emerge as a safer and affordable means of personal mobility. It tells us how a core team was formed with Girish Wagh as head of the Nano project and how each development was measured and reviewed by the chairman himself. The whole idea was to have technically and ergonomically the best and optimum design without sacrificing safety norms. The making of the Nano has been a struggle and a vindication, a long, arduous and expensive endeavour to cope with a wide range of problems. This, then, is also the story of how Tata Motors, the company behind the project, overcame the limitations imposed by conventional technology and traditional methods of manufacturing to craft a motor car that has changed the automobile world.

When Ratan Tata, head of the Tata group of companies, uttered the words “A promise is a promise” at the first unveiling of the Tata Nano at the Delhi Auto Expo in 2008, it was a telling expression of the effort that had gone — and would continue to go — into creating the famous Rs1 lakh car.

There are nuggets of trivia (some of the names considered for the car were Nio, Inca, Eon and Atom) but it’s the accounts of the people — of hours spent on a shop floor in Pune relentlessly whittling down costs, of being mobbed by angry protestors in West Bengal, of being shunted around the country leaving behind irate families — that make this an interesting story. The problem is, there aren’t enough of these. And so, what could have been a dramatic retelling remains a passive read.

The Nano emerged from the vision and — as the book reveals — doodles of Ratan Tata. But while the book continually emphasises Ratan Tata’s involvement and management of the

project, his voice is absent. You want to hear more from the man who even chose the 2001 Space Odyssey theme that would play at the car’s unveiling; about his fears, his beliefs and his thoughts. But you don’t. And this is, perhaps, the book’s biggest flaw. The launch of the Nano is a contemporary story that will find many interested readers.

This book depicts that "Nano" is not just another "Cheap" (in fact cheapest) car but it is outcome of "value engineering" and "cost targeting" (understanding what customer really wants in a certain module and eliminating everything else). It honestly accepts that key to control "value" of an automobile is not any technological breakthrough but many small improvements. I now understand that "Nano" methodology does not just mean the "stripping down of vehicle cost" but it also does mean innovation in manufacturing and planning set up, supply chain, inventory control, supplier management (less # of suppliers with more long term profit sharing and hence ownership and risk sharing). The term Gandhiyan engineering is really suitable for this approach. Indian entrepreneurs finally have understood power, importance and contribution of young design engineers and it shows that their talent has been explored very well. I hope Tata Motors continue on this path. It is too early to say if Nano will do the same to India as FORD's model T did to America. But one thing is for sure that Tata Motors has found recipe for competitive car design and value manufacturing organically on their own with very smart foresight form their chairman Ratan Tata. This seems true start of "self help" practiced by very successful OEMs around the world. I will not be surprised if Tata motor launches 'distributed manufacturing' in the near future

The cost factor could have ended up being an albatross around the Nano development team’s neck were it not for the level-headed manner in which the impediments arising from it were handled by Ravi Kant and Girish Wagh, the two leaders of the project. “I used to tell the team not to bother too much about cost,” says Wagh, “that the critical part was solving whatever engineering problems we faced and then addressing the cost issue. I didn’t want people to get bogged down and defensive about things.” Keeping up with and working on the suggestions Ratan Tata had whenever he visited Pune to review the project’s progress was another matter. The chairman took a particularly keen interest in the car’s styling, and his promptings tended to get Wagh and his boys worried because they inevitably meant an increase in cost. This was par for the course in a development programme where every penny counted, but that did not make it any easier for the Nano team. It got to a stage where Kant had to intervene. He pulled aside Wagh one day and said, “Don’t get stuck on one rupee and five rupees and ten rupees. Execute whatever he wants on styling and we will see how to compensate on the cost elsewhere.” Ratan Tata himself was acutely aware of the cost pressures on the team. Ideas from his end usually came with a question: “Girish, I know you will say this is going to increase costs, but can you do it nevertheless?” Wagh was never in doubt. “I would say, ‘Sir, you tell us what you want and we’ll take care of the cost.’ My team did not always take kindly to me saying such things. The way they figured it, this did not help them keep costs in check. To me, though, it was clear that Mr Tata’s forward-thinking suggestions had to be accommodated; that’s what the customer would want and no one understood the customer better than the chairman. We had to banish this image that Tata cars had of not being good enough in their initial run.” A far greater challenge was controlling cost at a time when the

prices of commodities and raw material were going through the roof, especially during the four-five years leading up to the Nano’s launch in 2009. “To add to the troubles, some of our cost targets were not well-defined,” says Wagh. “This was due to the evolutionary process through which the design and development of the Nano happened, and there was nothing we could do about that. We had a lot of iterations — at the layout level, the aggregate level, with subsystems and components — to see how best we could cut costs.” How much was all this worth? “I reckon our efforts brought overall costs down by 25-30 per cent.” There was no breakthrough innovation that made this cost saving a reality. Rather, it was a series of minute improvements even engineering boffins might labour to find interesting that did the job. “We finally found a solution that may not have achieved our objective to the fullest extent, but we got one that was acceptable,” says Wagh

The book takes the reader through the roughest patch that the Nano project faced — from Singur in West Bengal to Sanand in Gujarat. The Tata group had chosen Singur to fuel ‘industrial revolution’ in the belt and generate employment for the local population. It was, however, taken off-guard when the move boiled into a political battle.

When the lives of the employees were endangered, Ratan Tata decided to shift the plant from Singur. The shifting of the Nano plant from West Bengal to Gujarat was a tough call on part of the Tata group as it had already made huge investments in terms of manufacturing facility, vendor base and delivery schedule.

The book also provides an insight into how the Gujarat Government supported the whole project and appreciates Chief Minister Narendra Modi for running the State like a “professional chief executive” of a company.

Author’s Intent of Writing the Book

Much of what is there in the book has been read about in the newspapers and magazines but it does add some insider accounts that we always wanted to know.

The book is as much about the Nano as it is about Ratan Tata, the man whose vision made Tata Motors achieves the seemingly impossible. Ratan Tata is the hero of the story. To the authors’ credit they did not paint him as a larger-than-life figure. The book focuses on the biggest challenge that the team faced — price control. As a result, Nano became a product with some unique features — engine at the rear of the car, a single piece dashboard, separate size tyres for front and back and many more novel ideas.

The book is written in a lucid language and is worth reading, as it gives an insight into an automobile revolution in the country. Though I believe the book could have done more justice to readers by shortening the last two chapters, which seemed repetitive, it has been quite successful in communicating its core message — “if you want something very badly, the whole world conspires with you to achieve it”.

Dilemma and Solution

Making the Nano was a game changer in Indian automobile history. There were many dilemmas faced right from the start till the roll out of first car. Ratan Tata wanted to create a car around scooter because he considered them unsafe for Indian roads. So his team went on to think of a car more or less like scooter but with 4 wheels. It did not had glass windows but ones like autorikshaw. He dismissed the idea that it would be Rikshaw with four wheels. The whole team felt that they should give something more to Indian people. There was a dilemma of what is basic and what is nice to have. A basic car may not have all the niceties its fancier cousins has, and when looking at saving money on every single bit of the car — even parts that cost as little as Rs20 — they kept facing these dilemmas. Hundreds of such dilemmas have risen. They had choice between keeping a 500 cc engine which would save cost and a 624 cc which would look more car like. They chose the latter. The company resolved such dilemmas by looking at what image they wanted to portray of the car and went on about it.

Once decided on the parts to use, company soon realized that Nano would be a success only if sold in huge volumes. This was the dilemma of success; they were left betting on how much volume could they sold. There were no usual forecast techniques applicable to a “revolutionary” car. What if customers backed out due to delays? How many orders to take? These all dilemmas faced during planning phase.

It was March 21st, 2010 and one of the first cars was put into street. Suddenly the car’s engine was in flames and nobody knew what happened. This was a shocking decision and an ethical and business dilemma for the company. What about other cars which were put into road all over the country? What if other incidents of such nature took place? One way Tata Motors could soothe customer nerves is to recall all the vehicles sold till now, fix the problem and then re-release the product back in the market. In India, a full-blown recall would just hurt the brand very much.

There was no formal recall. Only the customers with complaints were addressed. Thousands of people were left with electric circuits which could blow out anytime.

The third dilemma faced was choosing a suitable manufacturing location. When Tata’s were forced to close the plant it was a major jolt for the ambitious project. A lot of investments had already drained down into constructing the plant and closing it was not all good. Besides capital investments a lot of months were already bygone without project moving even an inch.

Conflicts with Our Thought

Both of us thought that this book was more of a eulogy of the Tata’s. It does not mention about the failures and disappointments faced by Nano, it does not mention the fire incidents

and such other events. The book focused on the point of view of Ravi Kant, vice chairman. Even the foreword is contributed my Mr. Ravi Kant himself.

A little research over internet revealed that this book was first circulated inside Tata offices in a compact little form which was around 40 pages thick. After the book got enough media attention it was published publicly.

We also noticed repetitions all along the way.

One sided accounts of the disputes were presented even in the Singur issue, no view was presented for the people who were against the land acquisition. The book concern itself with mostly senior-level employees, the book is as much an ode to the Tata Motors Chairman and the automobile company as it is about the Nano. 

The book talks about how employees had to move at short notice, children had to change schools mid-term and the whole operation had to be shifted in record time. The stories are touching but then so would be those of farmers who, today, are left without land, without jobs and without hope for a redressal of their grievances.

It could have been told in a better, neutral way which would appeal to a wider audience and provide a critical thinking into whole procedure .Such a way would point out design loopholes and things such as technical compromise which resulted in fire cases and land acquisition.

There is even a contest which states “grab a copy and win a Nano “on the cover of the book, which seems suspicious and publisher’s effort to ramp up sales.

There were several things in grey also, like Trinamool Chief Mamta Banerjee was not shown as a complete naysayer but little is said on the subject by the book.

There was some ambiguous information too.  In his foreword, Ravi Kant, Tata Motors vice-chairman, says that there were 1,000 people involved in the Nano project, whereas the book mentions a figure of 500 people.

The book also mentions that the Nano has a variable transmission instead of gears, while the opposite of that is true. These kinds of factual errors should not have been present in the book which was written and approved by the insiders.

Ratan Tata was always present in the book but his views and opinions about various matters were missing. It would have been good to listen to the man whose brainchild was “The Nano”.

Affect on Thinking

Nevertheless the book has affected both of us in great ways. This book emphasizes creative thinking. Einstein once said “Imagination is more important than knowledge “.Great men lives by this principle. Like Henry ford dreamt of creating an mechanic mode of transport, Ratan Tata thought of a revolutionary car which would change the face of automobile industry, an idea which nobody dared to think, let alone make it happen.

Such are characteristics of great men who grow and nurture trees under which countless men will rest. Mr. Ratan Tata is one such man.

The book also teaches us value of perseverance. The whole organization never felt helpless and tired after taking so many setbacks. As said in movie Rocky “It does not matter how hard you hit, what matters is how you rise with a blow after falling “.

Every time they faced tough times, Tata returned back stronger than ever. Be it design, be it Singur, and be it fire incidents.

Another lesson to be learnt from the book is having good, hard working and intelligent people around you, who can transform the idea or a dream. Tata had such people all around them. People like Ravi Kant, Wagh, Vikram Sinha and many others are crucial for the success of a project as ambitious as Nano.

The book also teaches us that profit is not the sole objective of business. We have to continuously grow ourselves and face challenges that come. Had Ratan Tata been looking to increase sales, probably he would not risk huge amounts of time and capital into Nano project which was not looking even viable before trying to go extra mile to achieve it.

Talking of travelling the extra mile, we have one more lesson from the Nano story. Tata was always prepared to do something extra. They did extensive research, excellent public relations and carved out a product which justified the hype surrounding the Nano.

Relating story to ourselves

We find Tata Nano story very meaningful and trying to extract as much as we can do. We can apply creative and out of box thinking to ourselves. We can be more innovative and productive doing so. Such thinking is need of the hour has became a dire need of the country.

We can have many more companies running and very large employment generated.

Never say die attitude which is one of the important morals to be learned from the story. We should not boggle down with all the pressures but get up and face them.

The book also tells us that nothing is impossible in this world if we have a positive attitude towards life and people all over. These are some of the lessons which can be applied to everybody’s life.

Learning from the book – Ashiq N K

This book can be considered as a good book for a management student like me. In this book there are many lessons that can be learned. As a management student i looked mainly on management aspect rather concentrating on the technical. Some of the points that i found valuable are mentioned below.

Target costing: The design of Nano started by keeping the target cost of Rs 1 lakh in mind. This is a kind of strategy used in management to control the cost of the product.

Values and integrity of an entrepreneur: The great visionary Mr Ratan Tata can be a role model for a management student like me. There are lot of lesson that someone can learn from him. How he motivates people? How he himself attend all the meeting and give suggestions? Etc are various example. A brave person like him will never give up the promise that he made to the common people. Ratan Tata himself drove the vehicle to test the engine capacity and gave fruitful suggestions. They remade the engine until Ratan Tata approved the efficiency of the engine.

Many insights on operating context of business and political challenges of India: This book gives us idea about many operations followed in a manufacturing company and the difficulty that a big company needs to face to start operation in India.

Management decision making: The various decisions that need to be taken by a manager. The decision to move the plant from Singhur to Sanand is a great example. The problems that faced and how they tackled the problem all gives us various aspects of problems faced by a Manager. There can be many problems and issues associated with this a decision.

Various parameter that need to considered while design, production phases: The various parameter that needs to considered while the manufacturing of a product. How each and every single step count? All this are mentioned in the book and which can be even understood by a layman.

Various challenges that need to be faced: One of the main challenges that they faced were to limit the price of the vehicle to 1 lakh. Then the technical and political problem they faced. How they overcome all those problems give as great learning.

How to motivate as a manager: The motivation that each every one gave others was of great effect in the over all process. Ratan Tata motivated the chairman and the chief managers. Chairman and chief managers motivated the workers under them. All this small motivation helped very much in confidence building. The hard work that each and every one put in the design and manufacturing process was marvellous.

Learning from the book – Deepak Semwal

First and foremost creative thinking has always inspired me right from my childhood. Someone has rightly said that,” Innovation and marketing are the sole attributes necessary for business”.

Ratan Tata is a living example of not falling into vicious circle of daily chores, keep on dreaming to improve and make the world more efficient.

Another inspiring lesson to be learned is that winners never quit. Time tests each one of us. What is required is not to lose patience and keep on working hard towards the goal till it is not achieved.

One has to always keep on improving, keep on moving because life is a race. Keep on innovating and come up with inspiring ideas.

Before setting up a goal, a man has to believe in himself and his goal, even if the world is against. Majority does not prove anything about right or wrong. A truth will be truth just like everyone can ignore law of gravity but its always there. We need to stick to our conviction and live by principles.

Ratan Tata promised to the nation and he kept his promise. “A promise is a promise”. No business can prosper without trust and it is the foundation of every relationship. A promise is not meant to be broken.

We have to look at our “Shreyas- good in long term”. Without trust it cannot be possible. Trust with suppliers, trust with customers, trust with shareholders, trust with people of the country is very necessary for a mutual welfare of society and Tata is one organization which is years ahead of its time.

As I aspire to be an entrepreneur, these principles are timeless for a person like me. We need to hold on to them and follow them religiously.

The book is an exhilarating read despite being a one sided affair. It takes us through the journey of one of the most revolutionary product of our lifetimes. As I continue to read further I am sure I will be able to understand the man, Ratan Tata and the organization more intimately and come up with hidden jewels inside this little book.

Reference

Small Wonder: the making of the Nano – By Philip Chacko, Christabelle Noronha and Sujata Agrawal

http://www.tata.com

http://www.businessworldindia.com/