Business process reengineering

PROJECT ON
MAHINDRA AND MAHINDRA

Business process
reengineering

SUBMITTED BY: SWAPNIL SRIVASTAVA

ENROLLMENT NO: 1085
PGDM 2

SUBMITTED TO:
MRS. PRIYANKA KALRA

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Business process reengineering

INTERNATIONAL INSTITUTE FOR SPECIAL EDUCATION

KANCHANA BIHARI MARG, KALYANPUR, LUCKNOW, PIN-226022

DECLARATION

I hereby declare that this project work entitled is PROJECT ON Mahindra

and Mahindra-bpr is my work, carried out under the guidance of my
faculty guide MRS. PRIYANKA KALRA. This report neither full nor in part
has ever been submitted for award of any other degree of either this
university or any other university.

SWAPNIL SRIVASTAVA

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Business process reengineering

Contents

1.1 Early toothpastes

1.2 Tooth powder
S.NO PARTICULARS PAGE
NO.
I Acknowledgement
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ACKNOWLEDGEMENT

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At the outset, I would like to thank my faculty guide, MRS PRIYANKA KALRA, for
coordinating the project work and giving me the guidance. This project would not have
been possible without his help.
Best of the opportunity provided. I am thankful to many individuals in the A heartfelt
thanks to the many respondents whose ideas, critical insights and suggestions have
been valuable in the preparation of this report. Last but by no means the least I would
like to convey my special thanks to all the faculty members of IISE BUSINESS
SCHOOL for giving me the opportunity to work on this project and for providing us the
computer lab and library facilities.

SWAPNIL SRIVASTAVA

INTRODUCTION
BUSINESS PROCESS REENGINEERING

DESCRIPTION

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Business process reengineering

Business Process Reengineering involves changes in structures and in processes

within the business environment. The entire technological, human, and
organizational dimensions may be changed in BPR. Information Technology plays
a major role in Business Process Reengineering as it provides office automation, it
allows the business to be conducted in different locations, provides flexibility in
manufacturing, permits quicker delivery to customers and supports rapid and
paperless transactions. In general it allows an efficient and effective change in the
manner in which work is performed.

BUSINESS PROCESS RE-ENGINEERING

The globalization of the economy and the liberalization of the trade markets have
formulated new conditions in the market place which are characterized by
instability and intensive competition in the business environment. Competition is
continuously increasing with respect to price, quality and selection, service and
promptness of delivery. Removal of barriers, international cooperation,
technological innovations cause competition to intensify. All these changes impose
the need for organizational transformation, where the entire processes, organization
climate and organization structure are changed. Hammer and Champy provide the
following definitions:
Reengineering is the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical contemporary measures of
performance such as cost, quality, service and speed.
Process is a structured, measured set of activities designed to produce a
specified
output for a particular customer or market. It implies a strong emphasis on how
work is done within an organization. " (Davenport 1993).

Business processes are characterized by three elements:

THE INPUTS, (data such customer inquiries or materials),

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THE PROCESSING of the data or materials (which usually go through several

stages and may necessary stops that turns out to be time and money consuming),
and
THE OUTCOME (the delivery of the expected result).
The problematic part of the process is processing. Business process
reengineering mainly intervenes in the processing part, which is reengineered in
order to become less time and money consuming.

Hammer and Champy (1993) define business process reengineering

(BPR) as:

" the fundamental rethinking and radical redesign of the business processes to
achieve dramatic improvements in critical, contemporary measures of
performance, such as cost, quality, service and speed".

THE BPR CHARACTERISTICS

 Several jobs are combined into one.

 Decision-making becomes part of the job of employees (employee
empowerment).
 Steps in the processes are performed in natural order, and several jobs get
done simultaneously.
 Processes have multiple versions. This enables the economies of scale that
result from mass production, yet allows customization of products and
services.
 Work is performed where it makes the most sense.
 Controls and checks and other non-value-added work are minimized.
 Reconciliation is minimized by cutting back the number of external contact
points and by creating business alliances.
 A single point of contact is provided to customers.
 A hybrid centralized/decentralized operation is used.

In resuming, the whole process of BPR in order to achieve the above mentioned
expected
results is based on key steps-principles which include redesign, retool, and
reorchestrate.

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Each step-principle embodies the actions and resources as presented in the table
below.
REDESIGN
• Simplify
• Standardize
• Empowering
• Employeeship
• Groupware
• Measurements
RETOOL
• Networks
• intranets
• extranets
• WorkFlow
REORCHESTRATE
synchronize
processes
IT
human resources

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COMPANY’S PROFILE

Mahindra & Mahindra Limited is part of the Mahindra Group, an

automotive, farm equipment, financial services, trade and logistics,
automotive components, after-market, IT and infrastructure
conglomerate The company was set up in 1945 in Ludhiana as Mahindra
& Mohammed. Later, after the partition of India, Malik Ghulam
Muhammadreturned to Pakistan and became that nation's first finance
minister. Hence, the name was changed from Mahindra & Mohammed to
Mahindra & Mahindra in 1948.
Initially set up to manufacture general-purpose utility vehicles, Mahindra &
Mahindra (M&M) was first known for assembly under licence of the
iconic Willys Jeep in India. The company later branched out into
manufacture of light commercial vehicles (LCVs) and agricultural tractors,
rapidly growing from being a manufacturer of army vehicles and tractors to
an automobile major with a growing global market. At present, M&M is the
leader in the utility vehicle (UV) segment in India with its flagship UV, the
Scorpio (known as the Mahindra Goa in Italy).]
M&M is India's largest SUV maker.
Mahindra & Mahindra has controlling stakes in REVA electric and has
submitted letter of intent for South Korea's SsangYong Motor Company.
Mahindra & Mahindra grew from being a maker of army vehicles to a major
automobile and tractor manufacturer. It has acquired plants in China and
the United Kingdom, and has three assembly plants in the USA. M&M has
partnerships with international companies like Renault
SA, France and International Truck and Engine Corporation, USA.

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M&M has a global presence and its products are exported to several
countries. Its global subsidiaries include Mahindra Europe Srl. based in
Italy,[ Mahindra USA Inc., Mahindra South Africa and Mahindra (China)
Tractor Co. Ltd.
M&M is one of the leading tractor brands in the world. It is also the largest
manufacturer of tractors in India with sustained market leadership of over
25 years. It designs, develops, manufactures and markets tractors as well
as farm implements. Mahindra Tractors(China) Co. Ltd. manufactures
tractors for the growing Chinese market and is a hub for tractor exports to
the USA and other nations. M&M has a 100% subsidiary, Mahindra USA,
which assembles products for the American market.

AWARDS
1. Bombay Chamber Good Corporate Citizen Award for 2006-07
2. Businessworld FICCI-SEDF Corporate Social Responsibility Award – 2007

3. Deming Prize

4. Japan Quality Medal in 2007

MODELS
 Mahindra Bolero
 Mahindra Bolero Camper
 Mahindra Bolero Inspira
 Mahindra Bolero Stinger Concept
 Mahindra Scorpio
 Mahindra Scorpio Getaway
 Mahindra Scorpio First
 Mahindra Xylo
 Mahindra Legend
 Mahindra MM550 XD

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 Mahindra-Renault Logan (in cooperation with Renault)[30]

 Mahindra Axe
 Mahindra Major
 Mahindra Souvenir Concept
 Mahindra Commander
 Mahindra DI
 Mahindra Cab Chassis
CORE BUSINESS ACTIVITIES
 Automotive
 Farm Equipment
 Systech
 Financial Services
 Information Technology
 Infrastructure Development
 After-Market
 Two-wheelers
 Mahindra Partners Division
 Specialty Services

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OBJECTIVES OF BPR

When applying the BPR management technique to a business organization the

implementation team effort is focused on the following objectives:
Customer focus. Customer service oriented processes aiming to eliminate
customer complaints.
Speed. Dramatic compression of the time it takes to complete a task for key
business processes. For instance, if process before BPR had an average cycle time
5 hours, after
BPR the average cycle time should be cut down to half an hour.
Compression. Cutting major tasks of cost and capital, throughout the value chain.
Organizing the processes a company develops transparency throughout the
operational level reducing cost. For instance the decision to buy a large amount of
raw material at 50% discount is connected to eleven cross checkings in the
organizational structure from cash flow, inventory, to production planning and
marketing. These checkings become easily implemented within the cross-
functional teams, optimizing the decision making and cutting operational cost.
Flexibility. Adaptive processes and structures to changing conditions and
competition. Being closer to the customer the company can develop the awareness
mechanisms to rapidly spot the weak points and adapt to new requirements of the
market.
Quality. Obsession with the superior service and value to the customers. The level
of quality is always the same controlled and monitored by the processes, and does
not depend mainly on the person, who servicing the customer.
Innovation. Leadership through imaginative change providing to organization
competitive advantage.
Productivity. Improve drastically effectiveness and efficiency.
In order to achieve the above mentioned adjectives the following BPR project
methodology is proposed

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REASONS FOR BPR

(AT IGATPURI AND KANDIVILI)
 In the mid-1990s, India's largest multi utility vehicle (MUV) and tractor
manufacturer M&M was facing serious problems at its Igatpuri and
Kandivili plants in Maharashtra

 The plants were suffering from:-

1. manufacturing inefficiencies,
2. poor productivity,
3. long production cycle, and
4. sub-optimal output.

 The reason:
1. highly under-productive,
2. militantly unionized, and
3. bloated workforces.

 The work culture was also reportedly very unhealthy

 Corruption was widespread in various departments.

 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)

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CHALLENGES FACED WHILE

IMPLEMENTING BPR
 FEAR OF DOWNSIZING- the workers felt that if the new process
will be implemented, their job will be in danger as bpr implementation
would reduce a lots of extra work processes.
 SEVERAL JOBS WERE COMBINED INTO ONE- earlier lots
of activities were required for manufacturing a unit but after bpr
implementation the activies will be reduced thus eliminating
hierarchy( jobs were in danger)
 MANAGEMENT ACCEPTING UNION DEMANDS
EVERY TIME- management always had accepted union demand
earlier due to which the company faced many losses also.
 LENIENT APPROACH OF MANAGEMENT TOWARDS
RUNNING THE PLANT- no organized way of working was
present.
 INFLEXIBILITY OF WORKERS- workers were also not
at all dedicated.
 IDLE TIME AVAILABLE TO WORKERS DUE TO
UNORGANIZED PROCESSES- the working hours of the plant
gave workers a lot of time to relax which reduced the efficiency of the
production, hence less number of units were produced.
 Censorship of disclosure

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SCOPE AND TIME FRAME

The study covers the main outline of BPR that why and how it is implemented in
Igatpuri and Kandivili plants of Mahindra and Mahindra. In this study the main
focus in given to Mahindra and Mahindra’s igatpuri plant because first bpr
implementation took place at Igatpuri only. However, the same strategies may
apply to other plants(NASIK,ZAHEERABAD,HARIDWAR) also and even other
companies also.
The first bpr implementation started at Igatpuri in 1990’s time taken was 6-8
months.

TEAMS INVOLVED
TEAM INVOLVED INCLUDED:-
 Mr. K.G.Shenoy, GM - Operations, Igatpuri Plant
 Mr. Rajan Wadhera, Exec. VP - Order Management
 Dr. Pawan Goenka, President, Automotive Sector.

 Mr. Prince Augustin, along with Mr. Wadhera and Mr. Rajendra Kadam,
Unit President, Bhartiya Kamgar Sena, rechristened the Ingenious
Improvement as “i4” Teams (Ingenious, Idea, Incubation & Implementation
Teams).
 On behalf of the Union members, Mr. Razzak Shaikh, Unit General
Secretary, assured full co-operation in achieving excellence at Igatpuri.

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PROJECT DESIGN

 FIRST THE BPR IMPLEMENTATION EXERCISE WAS ANALYSED

IMPLEMENTATION
By the mid 1990s, BPR had become a popular tool globally, with many
leading organizations implementing it. However, when M&M undertook
the exercise, it was still a new concept in India.

 Implementation started in mid 1990’s

 Resistance from union-the union went on strike for 5
months. 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, the management did not succumbed to union
demands.
 Re-engineering the layout and method of working-
new method of workings were employed which were strick. Workers hav to
complete their work on fixed time, (fixed working hours)
 Cellular manufacturing
1. multitasking through multi machines manning- intermediaries machines
were removed and multitasking was done which helped in decreasing cost
also.
2. reduction in non- production activities- all those activities
which were of no use to the company(i.e. not generating profits) were
removed from the system
 Implementation of TPM and KAIZEN

TPM is a maintenance process developed for productivity. TPM focuses primarily

on manufacturing (although its benefits are applicable to virtually any "process")
and is the first methodology Toyota used to improve its global position

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Kaizen (Japanese for "improvement" or "change for the better") refers to

philosophy or practices that focus upon continuous improvement of processes in
manufacturing, engineering, supporting business processes, and management.

 After implementation the main focus of the

company was the customers-customers were given more
importance after BPR implementation
 Formation of cross functional team
 3 full time teams were formed
 Improvement in existing products
 Development of new products
 In 1994, a major restructuring exercise was initiated as part of a BPR
program. M&M introduced a new organizational model, in which various
divisions and companies were regrouped into six distinct clusters of related
businesses, each headed by a president.
 M&M's core activities, automotive and tractors were made
autonomous business units
 The other activities of the group were organized into infrastructure,
trade and financial services, telecommunication and automotive components.

OTHER STEPS
 Corrupt employees were sacked- Alarmed at the plant's dismal
condition, Chairman Keshub Mahindra tried to address the
problem by sacking people who allegedly indulged in corrupt
practices
 New technologies were employed- sap, The program,
developed with the help of the UK-based Lucas Engineering
Systems, was first implemented on an experimental basis at the
engine plant in Igatpuri. Simultaneously, an exercise was
initiated to assess the potential benefits of implementing BPR
and its effect on the unions.

 functional system was converted into processes

 intermediaries activity were removed
 M&M also tried to implement various voluntary retirement
schemes (VRS

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SUPPORTIVE TOOLS AND TECNIQUES

Methodology of a BPR project implementation / alternative
techniques
BPR is world-wide applicable technique of business restructuring
focusing on business processes, providing vast improvements in a
short period of time. The technique implements organizational change
based on the close coordination of a methodology for rapid change,
employee empowerment and training and support by information
technology. In order to implement BPR to an enterprise the
followings key actions were taken place:-
· strategic selection (added-value) processes for redesign.
· Simplifying new processes - minimize steps - optimize efficiency -.
(modeling).
· team of employees was organized for each process and assigned a
role for process coordinator.
· workflow was organized - document transfer and control.
· responsibilities were assigned and roles for each process.
· processes automated using IT(Intranets, Extranets, Workflow
Management)

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· process team trained to efficiently manage and operate the new

process
· the redesigned process was introduced into the business
organizational structure
Most reengineering methodologies share common elements, but
simple differences can have a significant impact on the success or
failure of a project. After a project area has been identified, the
methodologies for reengineering business processes may be used. In
order for a company, aiming to apply BPR, to select the best
methodology, sequence processes and implement the appropriate
BPR plan, it has to create effective and actionable visions.
For creating an effective vision, five basic steps are mentioned below.
- the right combination of individuals come together to form an
optimistic and energizedteam
- clear objectives exist and the scope for the project is well defined
and understood
- the team can stand in the future and look back, rather than stand in
the present and lookforward
- the vision is rooted in a set of guiding principles

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IMPACT OF PROJECT
 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 thye productivity
went up by 125 engines per day
 Reduction in employee cost:
 1994-12.4%
 1996-10.1%
 Value added per employee increased from 0.3 million to 0.46
million
 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

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MEASURES TAKEN BY MANAGER IN A SHOP

FLOOR TO ENSURE BPR SUCCESS
 Training and motivating work force
 Identifying leaders
 Creating a conductive environment and changing work culture

SUCCESS AFTER IMPLEMENTATION OF BPR

 Improved capacity utilization from 45% to 55%
 6-8%growth in the tractor segment
 Net sales increased to Rs 13.2bn
 The company employed over 17,000 people and had six state-
of-the-art manufacturing facilities spread over 500,000 square
meters.

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KEY EVENTS
 Acquires kinetic motors
 Talks to acquires Italian motorcycle maker malaguti moto
 JV with Jiansu Vuenda Yancheng Tractor Manufacturing
Company (JVYTMC), 515 STAKE THROUGH Mahindra
Overseas Investment Company

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CONCLUSION
Though M&M had established itself in the markets and was among the
leading players in many of the segments it operated in, it realized that
some of its businesses were not closely related to its core business. This
realization marked the beginning of the biggest change exercise since
the company's inception. By the mid 1990s, BPR had become a popular
tool globally, with many leading organizations implementing it.
However, when M&M undertook the exercise, it was still a new concept
in India.
 Bpr implementation in M & M had seen radical changes for the
better not only Units functions but also in its results.
 The changes brought reductions of costs in the company, better
quality (as far as price, promptness of delivery and offerings of
related services) in the products and services provided to the
customers.

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The expected outcome from a successful BPR process was the desired
one for the favor of the business concerned. The dramatic changes that
occurred involved people's jobs and working relationships as it is very
often that jobs are eliminated and the entire process is not as beneficial
for all.

THE FUTURE
With increased globalization and increased competition and demand
uncertainty most companies face the challenge of making their company
more nimble, responsive, reliable and cost-efficient for taking advantage
of the ever reducing windows of opportunities
Summing up the company's BPR experience, Anand Mahindra said,
"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 to BPR...

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BIBLIOGRAPHY
 www.google.com
 www.mahindra.com
 Various other related websites
 Newspapers
 Magazines

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