A BPR SUCCESS STORYPresentation by

Ivan Samson Kasookar(0815040)

Hiten Dodeja(0815047)

Mahindra & Mahindra

VISION

• To create a fully collaborative environment in which suppliers can deliver exactly what the company needs, when it needs it, and at a competitive cost.

MISSION• To create India's largest automobile and

automobile-related products distribution network by providing dealers and customers with the largest choice of unique world-class products and services.

ANAND MAHINDRA

“Let me put it in a simple way. If we have facilitiesin Kandivali todaywhich are not just surviving but thrivingit is all due to BPR”

Topics to be covered

1. Introduction of M&M

2. Why BPR was needed?

3. The first steps

4. Barriers

5. Firm steps

6. Implementation of BPR

7. Results

Introduction Of Mahindra And Mahindra

•Started in 1945 by J C Mahindra & K C

Mahindra

•In Oct. 1947 first batch of 75 jeeps

released for Indian market

•Diversified business in other segments viz.

hotels, financial services, auto components,

information technology etc.

•Current Price in the stock market at Rs 676

•Automotive divisions ( UVs & LCVs)

•Farm equipment division (tractors and farm implements)

•In 1996, Nagpur and Kandivali plants received ISO 9001

•In 2001 it was 4th largest manufacturer of tractors in the world

Continued….

•Tractors were exported to countries viz. US, SA, Zimbabwe,

Nepal, Sri Lanka and most of the European countries

•Acquired Kinetic Scooters having 80% stake to strengthen

its two wheeler segment

•Amalgamation with Punjab Tractors Limited to strengthen its

three wheeler segment

Continued….

Why BPR was needed?

•Manufacturing Inefficiencies

•Poor productivity

•Long production cycle

•Sub-optimal output.

•Unhealthy work culture- militantly organized Unions

•Corruption was widespread.

•Management lenient & often crumbled under

pressure

Continued….

Three C’s

1. Customer

2. Competition

3. Change

The First Steps

•1994 – Major Restructuring Program was initiated as a part of

BPR.

•Program was Developed by UK based Lucas Engineering System

•People involved in corrupt practices were sacked

•Voluntary Retirement Schemes were introduced.

•But the unions refused to co-operate and the workforce could not

be reduced.

BARRIERS

Hard BarriersThese are Legal obstacles and Technology issues

Soft BarriersThese are People Problem

Hard Barriers

•Legal Obstacles

•IT Integration Problems

•Existing Bureaucratic structure

Soft Barriers

These are People Problems1. Employee and union Resistance

Fear of downsizingSeveral jobs combined into oneFear of Job losses – Key personnelInflexibility of Workers

2. Management IssuesLenient ApproachManagement accepting union demands everytimeManagement skepticism about BPRManagement lacking commitment

Firm Steps

•M&M's management was not surprised to learn that the unions expressed extreme displeasure at the decision to implement BPR and soon went on a strike. •However, this time around, the management made it clear that it would not succumb to union demands.

•Soon, the workers were surprised to see the company's senior staff come down to the plant and work in their place.

•Around 100 officers produced 35 Engines a day as compared to 1200 Employees producing 70 Engines in pre-BPR days.

•After five months the workers ended the strike and began work in exchange of 30% wage hike.

•And BPR gained momentum

Continued….

Implementation of BPR

Stage 1:- Restructuring of M&M Group

Regrouped in six distinct clusters of related businesses as SBU each headed by a President• Infrastructure

• Trade & Financial services

• Tele communication

• Automotive components

• Automotive Div (UV, LCV, 3 wheelers)

• Farm Equipment division (Tractors)

Continued….

Stage 2:- Re-engineering the entire layout & processes of working• Cellular Manufacturing

– Multi-tasking through Multi-machine manning– Reduction in non-productive Activities

• Implementation of TQM and Kaizen

• Formation of 3 cross functional teams– Horizon 1: Improvement in existing Product – Horizon 2: Upgradation of existing Product

– Horizon 3: Development of new Product

Results

• Igatpuri Plant: Employees declined by 400 but productivity

went up by 125 engines per day

• Nasik Plant: 125% improvement in productivity

• Reduction in employee costs

• 1994: 12.4%

• 1996: 10.1%

• Improve plant’s capacity utilization from 45% to 55%

Continued….

•Value added per employee increased from 0.3 million

to 0.46 million i.e., increase of 53.33 % per employee.

•Better inventory control

•Better sourcing

•Better order distribution across plants

•Online availability of data

•Transparent access to data

•Process transparency

•Integrated sales and supply chain

Barriers were identified correctly.

Sustained top management commitment and

leadership.

Formation of exclusive core team.

Personal involvement of CEO.

Cultural resistance had been effectively

tackled.

Factors responsible for success of BPR…

Keshub MahindraChairman (1996)Mahindra and Mahindra

“In our never ending quest for quality and increasing productivity t all levels, the various projects initiated by the company including BPR are helping us to achieve higher productivity, reduction in costs and improved quality.”

THANK YOU

References

•Dr. S. Balasubramanian, “Successful BPR

implementation strategy”

•www.wikipedia.org

•ICMR Case study on “BPR at M & M”