TATA MOTORS

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

East Asia China South Korea*

* Assembly Operations also

2

Product Range
TATA Motors: Commercial Vehicles

Technological Resources
R & D establishments at Jamshedpur, Pune & Lucknow over 1400 engineers. Indias 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

The Enterprise Process Model

 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.

Financial Resources
Stable cash flows for the past five years

Cash rich corporate parent Tata Sons

Strong reputation access to capital markets

Value Chain & Value System

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

SAP , VCM Inbound Operations Logistics Logistics SAP , CRM - DMS Outbound

Marketing

Service

Suppliers , Contractors

Regional Warehouses, Dealer Workshops, Distributors, TASS

Strategic Alliances
9

Inbound Logistics
Long term contract with service providers 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 transporters 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 QFDs 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 Fiats 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 & JVs TACO group of companies , Tata Cummins Centralized Strategic Sourcing for key components FIPs, 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 Centers, Alliance with technical Institutes

Focus on development of managerial capabilities MTCs , 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

19

Leveraging the resources

How did TATA create initial resource complement to overcome the disadvantage of being newcomers in passenger car business?
STRATEGY
R&D
Strategic partnerships Joint ventures Acquisitions Intensive management development Government support (10Year Plan)
New institutions for trade promotion, technology upgradation, quality enhancement (ACMA: Automotive Component Manufacturers Association, SIAM: Society of Indian Automobile Manufacturers )
20

INSTITUTIONS

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. Governments 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 Nanos components Fewer supplier (<60%)
28

Stretch and Leverage contd..

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

Stretch and Leverage contd..

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 Indias first SUV launched. 1998 Indias 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

To create.
Firms Resources

Resource Gaps

Rent Generating Potential

Strategy to best use the capabilities

38

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 cooperatives 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 donea new strategy is required

The Blue Ocean Strategy

41

Blue Ocean Strategy

Red Ocean Compete in the existing market place

Blue Ocean 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 Differentiation or Low cast

Break the value-cost trade off 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 Steel Tata Motor TCS Tata Cummins

Sharing of Skills/Core Competence

Tata Steel
Core Competence Tata Cummins

TAML

TACO
46

Thank you
47