Tata motors

Global Footprint
OTHER COLLABORATIONS/M&A & JVs
West Europe Russia*
• Tata Daewoo Commercial Vehicle
• Hispano in Spain & Marcopolo In Brazil U.K. Ukraine*
• JV with Jardine Matheson for Italy
ConcordeMotors Central Asia
• Technology Tie Ups at Spain,Italy Afghanistan East Asia
Uzbekistan China
North Africa South Korea*
Egypt
South Asia
West Africa Bangladesh *
Senegal Nepal, Sri Lanka

LATAM
South East Asia
Brazil West Asia Malaysia*
Saudi Arabia Thailand
Iraq, Iran
South Africa East Africa
South Africa* Kenya*

* Assembly Operations also
2

Product Range
TATA Motors: Commercial Vehicles

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

17

100

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
Transporters, Convoy Drivers Dealer Network, Marketing
Association Research Firms, Vehicle
Financing

SAP , VCM

Inbound Outbound
Operations Marketing Service

Logistics Logistics

SAP , CRM - DMS

Suppliers , Contractors
Regional Warehouses, Dealer
Workshops, Distributors, TASS

Strategic Alliances

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
Tata Motors Vehicle NPI Process – Conceptual Overview
Product Product Design Validation
Concept Concept Pre-
Phases

Strategy & Design and Ramp-up
Evaluation Development & Production
Planning development Phase
Phase Phase Productionisation Phase
Phase Phase Phase
•Market •Concept •Performance & •Design analysis •Full design •Quality Proving •Ramp-up
analysis alternatives Weight analysis & simulation validation & Process •PL Build
Activities
(Indicative)

•Competitor •QFD •Style & Spec’ •Alpha proto •Beta proto tests validation
assessment •Styling themes dev’mt. & Freeze tests •Production tooling •P0 & PP Builds
•Explore Prod. •Packaging •Vehicle & •Aggregate tests •Vendor parts dev. •Vendor parts
Options •Manf. Feasibility Aggregate plans •Crash tests •Install & comm. approval
•Product •Cost targeting •Product costing •Manf. Planning Facilities •Homologation
planning •Financial analys •Detail costing
Gateways

PI
PI DR0
DR0 DR1
DR1 DR2
DR2 DR3
DR3 DR4
DR4 DR5
DR5 LL
Initiation
Project

Launch
Product
Product Concept
Concept Concept and
Concept and Design
Design Production
Production Project
Project
Strategy
Strategy Selection
Selection Project
Project Release
Release Release
Release Review
Review
Review
Review Approval
Approval
DR1 Sign-offs DR2 Sign-offs DR3 Sign-offs DR4 Sign-offs DR5 Sign-offs
Deliverables

•9BOX & •Product Profile & •Product spec & •Design release •Critical issues •Launch volumes
Gateway

supporting tech targets Features list •Long lead tooling brochure •QP build
(Partial)

docs •Recommended •Vehicle Test Plan signed off •Vehicle test completion
style theme •Style & packaging •Component requirements met •Vendor parts
•Prelim. Cost / wt sign off reliability plan •Control plans fully approved
targets •Time & res. plan •Biz. Case signoff •Ramp up plan
•Prelim. Biz case •Full Biz. case validation 19

Leveraging the resources
How did TATA create initial resource complement to overcome the
disadvantage of being newcomers in passenger car business?

STRATEGY INSTITUTIONS

R&D
Government support
Strategic partnerships (10Year Plan)

Joint ventures
New institutions for trade
promotion, technology up-
Acquisitions gradation, quality
Intensive management enhancement (ACMA:
development Automotive Component
Manufacturers Association,
SIAM: Society of Indian
Automobile Manufacturers )
20

Key Strategies
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 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

Process Benchmarking

 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
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

Strategic Benchmarking

 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
25

Achievements

 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

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 fuels
Maintain 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
proposition
Deliberately created a young team with good
leadership capabilities who think differently
Excellence in outsourcing
 Reconceived its supplier strategy - 85% of the
Nano’s components
Fewer supplier (<60%)
28

 Acquisition : Land Rover and Jaguar for $2.3
billion - Complementing Resources - Blending
& Balancing
High Replacement cost
Complimentary to Tata Motor in the upstream
business
Access to global markets
Transfer of knowledge, technology from high end
market

29


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 launched
 1997– 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 Grande
 2008– Launch of Nano at ninth Auto Expo

35

But, the war is on…

Maruti Vs Tata Motors
36

The Preparations…

 Proper utilization of assets
 Motivating people to work hard
 Selective hiring
 Job fitting
 Training program
 Better working environment

37

HR Philosophy

 Caring, show respect, compassion and humanity
for colleagues
 Work cohesively with colleagues across the group
 Encourages self-sufficiency
 Employees' 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 Cost
42

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

Tata Tata Tata
TCS
Steel Motor Cummins

Sharing of Skills/Core Competence
Tata
Tata
Steel Cummins

Core
Competence

TAML TACO

46

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