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Mahindra and

Mahindra Case

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Case details

First Indian company to implement BPR

Compelling Circumstances

Ambitious plan for BPR and tried to Implement

But, lot of Challenges faced , massive trade unionproblems

Faced failure of BPR execution

Recovered and all challenges tackled

Finally, became successful

So, it is a holistic case study to analyse the challengesfaced in BPR execution and unique approach totackle to achieve success.

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Brief Profile of M&M

Established1945 - by J C Mahindra & K C Mahindra

1947- first batch of75 jeeps released

Next few decades..

Diversifiedinto other segments viz. Hotels, Financialservices, Auto Components, IT, Infrastructure Devp,Trading etc.

Undisputed Leaderin Tractor Market since 1983

UV- Armada, Bolero, MaXX

3 wheeler segment - Bijlee

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BPR EXERCISE : 1994

Discovered some of its businesses notrelated to the CORE businesses

Plants at Igatpuri and Kandivili had

Manufacturing Inefficiency

Low Productivity,

Long Production cycle,

Sub optimal output

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Reasons

Unhealthy work culture

Corruption was widespread

Management lenient & often crumbledunder pressure

Militantly Unionized

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BPR designed in two Parts

Ist Part - 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)

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IInd Part

Implementation ofBPR at

Igatpuri & Kandivili

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Developed with help UK based

Lucas Engineering System Re-engineering the entire layout & processes of

working Cellular Manufacturing

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

Implementation ofTotal Quality Management andKaizen

Formation of3 cross functional teams Horizon 1: Improvement in existing Product

Horizon 2: Up-gradation of existing Process

Horizon 3: Development of new Product

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Barriers/Challenges Model

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Soft Barriers

Employee & Union Resistance

Vendors Resistance

Top mgmt commitment lacking/Mgmtscepticism

Fear of downsizing

Several jobs combined into one

Fear of Job losses Key personnel

Idle Time available due to unorganizedProcesses

High Corruption

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Hard Barriers

Legal Obstacles

IT Integration

Existing bureaucratic structure &power Equation

Business partners i.e., vendors

apprehensive

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What happened

then.Demonstrate Strong Resistance , Union went on strike for 5 Months

Managements Stand

Keshub Mahindra, the Chairman became firm

Top Mgmt decided not to succumb to demands

Sacked Corrupted Employees

Introduced VRS

Formation of 3 Core full-time Teams

Production related team

BPR Execution team

Handling Unrest team

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Deploy

Testing the new improved processes and

demonstrated

Around 100 officers produced 35 Engines a day as

compared to 1200 Employees producing 70Engines in pre-BPR days.

Implementing new improved processes in regular

operations of organization

Union called off Strike

BPR further gained Momentum

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Benefits reaped due to BPR

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%

Better Inventory control

Online and Transparent access of data

Integrated sales and supply chain

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Group Learning

Barriers to be identified correctly

Sustained top management commitment

and leadership Formation of exclusive core team

Personal involvement of CEO must

Cultural resistance must be tackled

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Conclusion

BPR implementation in M&M had seen radical

change for the better not only in its functions

but also in its results.

"Let me put it in a simple way. If we have

facilities in Kandivili today, which are not

just surviving but thriving, it is all due toBPR.

Anand Mahindra