Business process Re-engineering of Mahindra & mahindra
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This document presents a case study of Business Process Reengineering (BPR) at Mahindra & Mahindra (M&M). M&M implemented BPR due to manufacturing inefficiencies, poor productivity, long production cycles, sub-optimal output, and an unhealthy work culture with widespread corruption and union pressures. The first steps included restructuring programs and voluntary retirement schemes, but unions resisted reductions. Barriers included legal obstacles, IT issues, and employee resistance to changes. Firm steps overcame resistance, with management continuing work during strikes. BPR implementation occurred in stages, restructuring divisions and reengineering processes through cellular manufacturing and quality programs. Results included improved productivity, capacity utilization, costs, and integrated operations. Key
Business process Re-engineering of Mahindra & mahindra
- 1. A BPR CASE-STUDY PRESENTATION BY SANKET KULKARNI (1115098) Mahindra & Mahindra
- 3. 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
- 4. 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
- 5. Continued…. Three C’s 1. Customer 2. Competition 3. Change
- 6. 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.
- 7. BARRIERS Hard Barriers These are Legal obstacles and Technology issues Soft Barriers These are People Problem
- 8. Hard Barriers •Legal Obstacles •IT Integration Problems •Existing Bureaucratic structure
- 9. Soft Barriers These are People Problems 1. Employee and union Resistance Fear of downsizing Several jobs combined into one Fear of Job losses – Key personnel Inflexibility of Workers 2. Management Issues Lenient Approach Management accepting union demands every time Management skepticism about BPR Management lacking commitment
- 10. 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.
- 11. •After five months the workers ended the strike and began work in exchange of 30% wage hike. •And BPR gained momentum Continued….
- 12. 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)
- 13. 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
- 14. 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%
- 15. 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
- 16. 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…
- 17. THANK YOU