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Business Process Reengineering: Mahindra & Mahindra

Mahindra & Mahindra implemented a business process reengineering (BPR) program in 1994 to radically redesign and improve its manufacturing processes. The implementation faced initial resistance from unions but led to significant benefits. Productivity increased 125% at some plants and employee costs decreased as a result of combining roles and eliminating non-value-added activities. The BPR program helped Mahindra & Mahindra enhance productivity, reduce costs, and become a top global tractor manufacturer.

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101 views15 pages

Business Process Reengineering: Mahindra & Mahindra

Mahindra & Mahindra implemented a business process reengineering (BPR) program in 1994 to radically redesign and improve its manufacturing processes. The implementation faced initial resistance from unions but led to significant benefits. Productivity increased 125% at some plants and employee costs decreased as a result of combining roles and eliminating non-value-added activities. The BPR program helped Mahindra & Mahindra enhance productivity, reduce costs, and become a top global tractor manufacturer.

Uploaded by

rajeshsasi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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BUSINESS PROCESS

REENGINEERING
Mahindra & Mahindra
M.Gopalakrishnan
0991012
Introduction of M&M
 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.
 In 1994 a major restructuring exercise was initiated as part of a
BPR program.
 The company was regrouped in six distinct clusters of related
businesses
 Farm equipment division (tractors and farm implements)
 In 1996, Nagpur and Kandivali plant received ISO 9001
 In 2001 it was 4th largest manufacturer of tractors in the world
 Tractors were exported to countries viz. US, SA, Zimbabwe,
Nepal, Sri Lanka and most of the European countries
What is BPR?
 BPR is about radical redesign and reorganization of an enterprise
to lower the cost and improve quality and services
 IT was assumed to be the key enabler for that radical change
 Focus on reinventing the way of company carries out rather on
improving or modifying process
 It was recommended for the corporations where technology,
people and organizational goals were no longer valid
BPR implementation exercise at M & M

Implementation started in mid 1990s


Resistance from the unions
Re-engineering the layout and method of working
Cellular Manufacturing
◦ Multi-tasking through multi-machine manning
◦ Reduction in non-productive activities
Implementation of TPM & Kaizen
BPR Success Factors
 Strong and Consistent top management .
 Addressing Cultural Transformation through effective change
management.
 Proven methodology including a vision process.
 Reengineering team composition.
 Compelling Business for a change
 Strategic alignment with company strategic direction.
 Line Ownership.
Factors that lead M&M to
implement BPR
Manufacturing Inefficiencies
Poor productivity
Long production cycle
Sub-optimal output.
Unhealthy work culture
Corruption was widespread.
Decision to focus on enhancing productivity and delivering world-
class quality at the least possible cost.
Ambition to become the largest tractor manufacturer in the world.
The three C’s (customers, competition, change)
M & M faced resistance from
unions while implementing BPR?
Fear of Downsizing
Several jobs were combined into one.
Management accepting the Union demands every time.
Lenient approach of management towards running the plant.
Inflexibility of the workers.
Idle time available to workers due to unorganized processes
Censorship of disclosure
Result of BPR program
Around a 100 officers produced 35 engines a day as compared to
the 1200 employees producing 70 engines in the pre-BPR days.
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%
Value added per employee increased from 0.3 million to 0.46
million
“BPR was a way of reengineering our plants and making them
viable in a competitive environment” - Anand Mahindra
Measures taken by manager in a shop
floor to ensure BPR success
 Training and Motivating workforce
 Identifying leaders
 Creating a conducive environment and changing work culture
Key Events
 Acquires Kinetic Motors
 Talks to acquire Italian motorcycle maker Malaguti Moto
 JV with Jiansu Vueda Yancheng Tractor Manufacturing Company
(JVYTMC). 51% stake through Mahindra Overseas Investment
Company
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
THANK YOU

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