Tata Motors History and Operation Analysis

Tata Motors Profile Established in 1945, Tata Motors is India’s largest automobile company, with revenues of Rs 24,000 crore (USD 5. 5 billion) in 2005-06. The company began manufacturing commercial vehicles in 1954 with a 15-year collaboration agreement with Daimler Benz of Germany. It is the leader by far in commercial vehicles in each segment, and the second-largest in the passenger vehicles market with winning products in the compact, midsize and utility vehicle segments.

The company is the world’s fifth-largest medium and heavy commercial vehicle manufacturer.

Areas of business Tata Motors’ product range covers passenger cars, multi-utility vehicles as well as light, medium and heavy commercial vehicles for goods and passenger transport. Seven out of 10 medium and heavy commercial vehicles in India bear the trusted Tata mark. The company developed India’s first indigenously developed light commercial vehicle, India’s first sports utility vehicle and, in 1998, the Tata Indica — India’s first indigenously manufactured passenger car.

Within two years of launch, Tata Indica became India’s largest selling car in its segment.

Commercial vehicle business unit The company has over 130 models of light, medium and heavy commercial vehicles ranging from two tonnes to forty tonnes, buses ranging from 12-seaters to 60-seaters, tippers, special purpose vehicles, off-road vehicles and defence vehicles. Passenger car business unit The company’s passenger car range comprises the compact car Indica, the midsize Indigo and Indigo Marina in both petrol and diesel versions.

The Tata Sumo, the Tata Safari and its variants are the company’s multi-utility vehicle offerings. In addition to the growth opportunities in the domestic market, the company is pursuing growth through acquisitions.

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In 2004, it acquired the Daewoo Commercial Vehicle Company, Korea’s second-largest truck maker, now named Tata Daewoo Commercial Vehicles Company. In 2005, Tata Motors acquired a 21-per cent stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, with an option to acquire the remaining stake as well. Research and development

Tata Motors invests approximately up to 2 per cent of its annual turnover on research and development, with an emphasis on new product / aggregates development and technology upgradation. Its Engineering Research Centre in Pune employs over 1,400 scientists and engineers and has India’s only certified crash-test facility and hemi-anechoic chamber for testing of noise and vibration. The company also draws on the resources of leading international design and styling houses like the Institute of Development in Automotive Engineering, SPA, Italy, and Stile Bertoni, Italy.

The company has also been implementing several environmentally sensitive technologies in manufacturing processes and uses some of the world’s most advanced equipment for emission checking and control. Environmental responsibility Tata Motors has led the Indian automobile industry’s anti-pollution efforts through a series of initiatives in effluent and emission control. The company introduced emission control engines in its vehicles in India before the norm was made statutory. All its products meet required emission standards in the relevant geographies.

Modern effluent treatment facilities, soil and water conservation programmes and tree plantation drives at its plant locations contribute to the protection of the environment and the creation of green belts. Exports Tata Motors’ vehicles are exported primarily to Europe, Africa, the Middle East, South and South East Asia and Australia. The company also has assembly operations in Malaysia, Bangladesh, Ukraine, Kenya and Russia. Over the years, the company has received more than 50 awards from the government of India’s Engineering Export Promotion Council, for its export initiatives.

While currently about 14 per cent (as on March 31, 2005) of its revenues are from its international business, the company intends to increase its international business through organic and inorganic growth routes. Associates Tata Motors has made substantial investments in building associate and subsidiary companies that complement and support its business activities. These include:

• Tata Daewoo Commercial Vehicle Company, manufactures heavy trucks ranging from 15T GVW to 45T GVW. Tata Motors acquired this company in March 2004.
• Tata Cummins, a joint venture with Cummins, USA, manufactures Cummins engines for Tata Motors. Telco Construction Equipment Company, a joint venture with Hitachi Machinery Company, Japan, is engaged in the manufacture and sale of earthmoving machinery and construction equipment such as hydraulic excavators, cranes and wheel-loaders.
• Tata Technologies, provides IT support in the areas of engineering design, development and validation, business information systems and ERP systems.
• HV Axles, manufactures axles for Tata Motors’ medium and heavy commercial vehicles.
• HV Transmissions, supplies gearboxes for the company’s medium and heavy commercial vehicles. Tata Holset, a joint venture between Holset Engineering Company, UK, a wholly-owned subsidiary of Cummins Engine Company, USA and the Tatas (Tata Motors, Tata International and Tata Industries are shareholders). Incorporated in 1994, this company manufactures turbochargers for engines made by Tata Cummins as well as other auto manufacturers.
• TAL Manufacturing Solutions, manufactures painting systems, welding lines, material handling systems and robotics. It also develops factory automation solutions and provides consultancy services in the field of manufacturing processes and factory layouts. Concorde Motors (India): Retails Tata Motors’ range of passenger vehicles.
• Tata Precision Industries, Singapore and Tata Engineering Services, Singapore, are engaged in the manufacture of high precision tooling and spare parts, and warehousing, respectively.
• Nita Company, Bangladesh, is engaged in the assembly of Tata vehicles for the Bangladesh market. Awards
• Tata Motors has been chosen as India’s Most Trusted Brand in cars in a Readers Digest-AC Nielsen consumer survey in 2006.
• Tata Motors’ mini-truck, Ace, which has created an all-new category in the commercial vehicles market, received the BBC-Top Gear’ Design of the Year 2006.
• The company’s Starbus low-floor city bus and the Novus heavy truck were adjudged second and third respectively.
• For the second consecutive year, Tata Motors was rated by Auto Monitor as the ‘Commercial Vehicle Manufacturer of the Year’ for 2006.
• The Commercial Vehicle Business Unit won the CII-Exim Bank Award for 2005 for Business Excellence, for being a role model of excellence in management. The award particularly recognises excellence in the management of quality as a fundamental process.
• The two divisions of the company also won the Tata Group’s JRD QV Awards for Business Excellence in 2005. The Jamshedpur plant and the car plant at Pune received the Union Ministry of Power’s National Energy Conservation Award, which recognise significant initiatives to reduce energy intensity and improve energy efficiency. The Jamshedpur plant won the award for the fourth year in a row. The Commercial Vehicle Business Unit and the Passenger Car Business Unit also received the CII’s National Award for excellence in energy management. The Foundry Division at the Pune plant received the Gargi Huttenes Albertus Green Foundry of the Year Award. Locations

Tata Motors has manufacturing plants at Jamshedpur (eastern India), Pune (west), and Lucknow (north) as well as a nation-wide sales, service and spare parts network focused on providing users with easy-access service solutions. Source: http://www. tatanagar. com/about-city/industries/tata-motors. html The company’s growing pains. TATA Motors use a manual dealer management system, where every dealer managed details. With legacy-based systems, the environment produced inconsistent data, making interpretations difficult and resulting in inefficient planning for capacity and spare parts.

The basic challenge was to provide a Dealer Management System (DMS) solution. All in all, TATA Motors required a standardised solution that would provide them with:

• Increase in sales and profitability by easy management.
• Improved accuracy of dealer-captured information.
• Collaboration between vehicle manufacturers and dealers.
• A strong feedback mechanism and interface for communicating with customers. The IBM solution. TATA Motors chose IBM as its partner to provide an infrastructure solution.

IBM created a Siebel solution to provide a DMS solution for TATA Motors and then provided a reliable and scalable IT infrastructure for developing and deploying its DMS application. The result – Motoring is child’s play. The IBM solution has simplified the IT infrastructure for TATA Motors. The benefits include – low total cost of ownership, a more comprehensive view of customers, enhanced customer experiences and improved loyalty. With reengineered business process, the company can also analyse customer interactions and other information more accurately, improve capacity planning and increase profitability.

The new infrastructure from IBM also gives the company a foundation to accommodate rapid future growth and ever-changing demands from the market place. Source: http://www-07. ibm. com/in/casestudies/case_tata_motors. html | October 2007 | Dhruv Tanwar| Where relationships matter| By making a success of connecting to dealers and customers, Tata Motors has got into cruise control in a critical sphere of its business| ; p; Given that the customer is king (or queen), it would be logical to presume that establishing — and nurturing — a relationship with such royalty is a priority for enterprises looking to sell a product or service.

Fact is, it may be a priority but organisations rarely pay more than lip service to what goes by the grandiose nomenclature of customer relationship management. For Tata Motors, though, this has always been an imperative. It made eminent sense for India’s premier automobile company — with over 1 million customers, 22,000 employees and a geographically fragmented business that operates out of 1,600 locations in a notoriously cyclic business environment — to put many eggs in the relationship management basket.

But this was an idea cooked in the cauldron of adversity. Tata Motors got started on what it has tagged the customer relationship management-dealer management system (CRM-DMS) at the turn of the millennium, when it was battling to regain relevance at a difficult time in its history. That’s when it realised that survival in the auto business depended on managing its relationships with its customers, dealers and anyone else who had a deep connection with the mother company. This was no mean task, considering the scale and complexity of the issues involved.

Two parameters — customers, and their interface with the company, the dealers — were the critical links in a complex chain that Tata Motors had to deal with. The solution led to the emergence of Tata Motors’ integrated CRM-DMS, which is today the largest such application in the automobile industry worldwide, linking to more than 1,200 dealers across India and tracking the needs of some 25,000 customers. Tata Motors had no standard or benchmark to model its solution on when the relationship concept was first considered, back in 2002. The company realised that it had to look at the business in a fundamentally different way.

Instead of selling to the customer, Tata Motors embarked on an ambitious programme to make its extended organisation get into the customer’s shoes and envision each little detail as if it was meant to serve him. | The challenge was taken on by over 40 cross-functional teams, comprising one member each from design, manufacturing, sales and marketing, and service. Based on the output of this ‘quality functional deployment’ exercise and customer satisfaction surveys, Tata Motors came up with the top 25 issues that it needed to address from the customer’s point of view.

To standardise the sales process, the company broke it up into a four-part cycle: enquiry, warm prospect, hot prospect (industry terminology for potential buyers), and completion of sale and vehicle delivery. Using statistical analysis on the segmented data, the company was now able to predict its sales patterns. Once standardisation was carried out across the dealer network, results were visible almost immediately. Accurate sales forecasts, reduced inventory for the company and the dealer, and better production scheduling were only some of the benefits.

A shorter delivery cycle for the customer was an important fringe advantage. Tata Motors then embarked on implementing a solution that also facilitated the free flow of information across the enterprise. It put in place a robust information technology platform in the form of an innovative dealer management system, which automated sales processes for its 1,600 dealer locations, allowing them more time to focus on the customer. Tata Motors chose Siebel for its CRM programme, which with its user-friendly interface simplified the process of training the company’s 15,000-plus dealer sales force.

To support each dealer — who is actually a business partner representing the company with the end customer — Tata Motors involved dealers throughout the configuration and deployment process. | “Integrating the Siebel Automotive CRM with our system ensured that our dealers would immediately see the value in the solution,” says KR Sreenivasan, head of CRM and DMS. “This helped us overcome the usual resistance to change and gain rapid acceptance from our dealers. Its CRM-DMS initiative, which has cost Tata Motors about Rs35 crore to date, has enabled the company to connect with 1,200 dealers online (the number is expected to rise to 1,600 in the next few months) and has allowed it to monitor finances and inventory at the dealer level, and services, spares and complaints at the customer end. CRM-DMS has helped Tata Motors enormously in getting a firmer handle on its business. The system was implemented in three phases, the objective being to achieve success in one before moving on to the next: * Phase 1 focused on capturing customer and vehicle data and automating routine tasks. In phase 2 this data was used to improve customer interactions and streamline product development and planning. * Phase 3, now underway, concentrates on tuning the system and delivering additional value-added services to customers. The CRM-DMS platform has been integrated with a wide array of back-office applications, including inventory management, fulfilment and parts location. Pricing and tax calculations can now be adjusted for each dealer’s requirements.

The comprehensive sales and reporting functionality built into the Siebel solution allows Tata Motors to distribute sales targets directly to its dealers and roll up sales numbers across the country in real time. Tata Motors’ dealers are a happy lot, too. The dealer management system has meant a gross reduction in the amount of working capital needed to run their businesses. Transactions between the company and dealers, which earlier took up to 60 days, are now completed online and sealed in under seven days. Even the service bays at the workshops have happy stories to tell.

The system-based job card enables the mechanic to follow a checklist and diagnose faults through a process of elimination of probable causes, slashing diagnosis time. Simultaneously, the stores manager uses the system-based job card to assort a basket of the spare parts needed to fix the fault, and they are ready for pickup even before the mechanic walks into the stores. With zero waiting times built into the service process, the system generates a dashboard for the workshop supervisor, indicating idle capacity and process times, and highlighting bottlenecks to optimise the use of service bays.

The recent implementation of an SMS capability means that the system directly pings the customer when the job card is closed on the system and his vehicle is ready. The company can also now track each vehicle right through its operating lifetime, giving it valuable insights on product performance over time (earlier this was limited to the warranty period, after which scant information was forthcoming). “Overall, we have transformed our organisation and made it truly customer-centric,” says Sreenivasan. One of our first dealers to install the system doubled his sales volume in three months without the need for additional manpower. Another said that he can, for the first time, view his entire stock of vehicles and see how his inventory was ageing. ”But, as the old cliche goes, the proof of the pudding is in the eating. The real reward comes from the customer. With a product line spanning commercial, utility, and passenger vehicles, Tata Motors is on the road to forging ever stronger relationships with the people who have bet their money on the company’s products. Source: http://www. tata. com/company/Articles/inside. aspx? artid=SZAxi/HHEQ4= Tata Motors supes up operations With rapid growth in both its domestic and international business, the vehicle manufacturer wanted to introduce a slew of products to cater to burgeoning demand. With a supplier relationship system that lacked transparency, accountability and was unable to scale—it was time for a change. Implementing a supplier relationship management system has helped Tata Motors fix things says Akhtar Pasha Probir Mitra, Senior General

Manager-IT, Tata Motors could not stop smiling as his team recently won the SAP Award for Customer Excellence (ACE) 2007 for the best automotive sector implementation (Large Enterprises) for Supplier Relationship Management (SRM) and Warehouse Management. The implementation has redefined supplier processes and leveraged technology applications in warehouse operations conferring operating benefits. The project has helped the company increase the overall efficiency of its operations helping it expand into new markets—around the world and at home with new product rollouts. Mitra said, “IT is not desirable. IT is essential.” While SAP ERP was the foundation for the company’s transactional systems, it has built a strong platform and the SRM and Warehouse Management solution have helped it reach the market faster. Let’s look at the ERP implementation first in order to better understand the SRM and Warehouse Management solution and get a 360 degree snapshot of the entire implementation. “The SRM system has helped reduce processing time for vendor payments from 48 to 24 hours. This reduction in vendor payment cycle time has enabled Tata Motors to get better terms and cash discounts in purchases”- Probir Mitra

Senior General Manager-IT, Tata Motors| The company’s manufacturing base is spread across Jamshedpur, Pune and Lucknow, supported by a nation-wide dealership, sales, services and spare parts network comprising over 2,000 touch points. Tata Motors was using functional and location-specific solutions developed in house. These solutions were built based upon local and individual perceptions and therein lay the rub. For example the Materials Management and Sales and Finance functions were on three different systems at Jamshedpur, Pune and Lucknow. Even the databases were different.

Since these systems had been developed over long periods of time, they were on multiple platforms and therefore it was difficult to consolidate the data and merge it. Mitra explained, “Common and rationalized processes and practices across all organizational units were not enforced. Therefore, managing functions like HR, sales and finance across three manufacturing units spread across the country and their corporate office was tedious and time-consuming. Integrated functions like materials management and payment processing were separate entities, causing delays in individual transactions.

This led to an unnecessary increase in overhead costs and duplicated efforts at each unit. ” Tata Motors soon understood that it needed a unified real-time database that gave up-to-date information to all of its stakeholders—both internal and external. It had to move from legacy decentralized platforms to a consolidated enterprise platform and rationalize business processes across various units. This would give it an enterprise-wide perspective across process and IT infrastructure. The company could then serve its customers much better and faster, all the while reducing operational costs and cutting manufacturing cycle times.

The company took the strategic decision to go in for a SAP ERP Solution with the goal of lowering customization and upgrade costs. Risks, which emanate from attrition or change of guard in the company, would also be minimized. “SAP has clear superiority in the market. It had a large presence, so we chose the SAP ERP R/3 solutions for our company. The results have definitely exceeded our expectations,” said Mitra. Tata Motors outsources its IT to Tata Technologies, which is a 100 percent subsidiary of the former. Tata Technologies became the implementation partner.

In 1997, when the seed of implementation was sown, the WAN infrastructure in India did not permit a single server implementation. Hence a distributed server implementation was done in stages over a period of two years between 1998 and 2000. The SAP version used was 3. 1H. In August 2003, the company moved from SAP 3. 1H to 4. 6C on a single server platform. Today, there are 3,500 users across the country. Once R/3 was implemented, extensive rationalization of processes took place. Various business processes like materials, finance, logistics, etc. ere stripped down to their basic components and a lot of re-engineering had to be done, as all these processes became location-independent. Tata Motors also opted for the standard cost functionality, which was a significant business process change for the company. With the SAP ERP Solution in place, Tata Motors has experienced significant benefits in terms of productivity and cost control. The number of servers as well as the number of different applications that run on them has been greatly reduced. Disaster recovery management is being done only for one entity rather than for every application.

Non-value-add activities have been put on the back burner. The implementation of a single SAP instance forced a much required change in the organization. There is a significant reduction in inventories and better control over receivables and other forms of credit control. A shared services platform has also been created for IT and shared financial services. The financial consolidation time has been reduced to almost two weeks. The statutory compliance of quarterly closing of books and audit has been largely facilitated by SAP.

Compliance activities have become more structured and easier to manage. SRM for accountability and efficiency Rapid growth in its domestic and international business led to the introduction of many new products. During the past four years, Tata Motors has launched about 55 new products in the commercial vehicle space alone. The company found itself supporting about 1,500 plus product variants, consequently transaction volumes increased exponentially. The increase in transaction volume strained and overstretched the infrastructure and human resources.

The existing VCM system (Value chain Management; a homegrown Win dows-based system using an Oracle database) that managed supplier relationships could not scale up to meet the diversifying demands of the function as VSM was old technology. Mitra said, “The number of Goods Receipts Notes (GRN) increased significantly from 6,000 to 16,000. The time required for new projects is heavily dependent upon supplier collaboration. ” For any tenders it took 20 to 60 days for approval of quotations from suppliers because a number of processes had to followed, there would be much iteration before a tender was cleared.

As supplier management was fragmented it was difficult to do global spend analysis for all our plants and give advice to suppliers on total volumes. Additionally the vendor (supplier) bill payment system was not in place. Suppliers used to do 15,000 to 20,000 transactions per day and 80 percent of these were covered under the Bill Market Scheme (BMS), which was a invoice verification program that had to be complied manually. The vendor payment window was long (48 hours) and the company wanted to shrink this process. Now with SAP SRM, bill payment is done electronically.

Scheduling agreement is done in R3 and schedule lines are created through MRP and transferred to the SRM system. A vendor accepts schedule lines and sends a confirmation through the SRM system and creates invoice details and the same are uploaded as ASN (Advance Shipping Notification) in the system. The ASNs are grouped by vendor into one or multiple consignment numbers with bar codes having consignment numbers and item details. The consignment is converted to inbound delivery in R/3 from the SRM. The vendor physically brings goods along with a consignment barcode printout to the gate of Tata Motors.

For a given consignment, GRS will be created for the included ASNs. Stores are updated and quality checks carried out. Invoice verification is done by authorized users and those that match the Purchase Order and vendor invoice are directly posted and a payment list generated based upon payment terms. Mitra said, “The SRM system has helped reduce processing time for vendor payments from 48 to 24 hours. This reduction in vendor payment cycle time has enabled Tata Motors to get better terms and cash discounts in purchases. It has consequently reduced the manpower required for processing vendor payments in Tata Motors.

The manual work has gone down by 60 percent. ” For e. g. there has been a significant reduction in manpower deployed in the Materials Receiving function. A single bar code enables multiple supplier shipments reducing the goods receipt cycle time at the entry gate leading to a reduction in turnaround time for vehicles by 50 percent. The SAP solution has helped Tata Motors serve its customers better and meet all their needs. Since information is now available in real-time, they are able to respond quickly to their customers, vendors and suppliers. Previously, you had to pick up data from four different locations and consolidate it before you could update your customer. Now, we have up-to-date information about the customer right up to his last transaction,” said Mitra. The project began in November 2004 and went live in April 2005 for 1,100 vendors. The solution was rolled out to other vendors in all locations from April to June 2005 adding up to a total of 1,700 vendors. Flexibility in floor space; optimizing warehouse costs The company’s Spare Parts Division operates a number of warehouses across the country—it has regional warehouses in Gurgaon, Kolkata, Pune and Bangalore.

The spare parts business is considered a strategic part of the company’s business. A study of the warehouse operations revealed that customer satisfaction levels were low because of poor order fulfillment. Many a time the customer was either under or over served and sometimes with the wrong products. To raise efficiency levels and revenue, the decision was taken to implement a RF-based Warehouse Management Solution (WMS). There were a couple of issues that the company wanted to sort out with a proper WMS. It’s goal was to reduce errors in order fulfillment, increase warehouse output and eliminate potential loss of sale.

Mitra added, “We were wasting floor space and we wanted to optimize our warehouse costs. For example, we had to keep dedicated bins to stock all the materials in different locations within the warehouse. ” If Tata Motors had 11,000 items, each of these had to be kept at a fixed location. In other words, if the company had 11,000 items then it would require that many locations to store them. Even if 40 percent of those items had zero stock a separate bin was allocated—leading to space being wasted. “We wanted a flexible approach for optimizing the floor space.

With SAP WMS the fill rates are higher leading to less storage space [being required]. We have increased the throughput of warehouses by 40 percent. There is 100 percent accuracy in physical inventory. We are using Radio Frequency enabled Dynamic Binning (Put Away) that has eliminated manual procedures for tracking inventories,” added Mitra. The WMS project kicked off in January 2006 and went live that April. The Tata Technologies team that implemented the solution consisted of three functional consultants, one ABAP consultant and one Project Manager.

The business team from Tata Motors comprised of a Project Manager and a Business Process Owner. The ASAP methodology was followed for this project. The SRM deployment has resulted in seamless integration with suppliers and streamlined the warehouse management at Tata Motors. The biggest benefit has been the creation of a large, unified database for the entire company. “Now anyone across the enterprise can just look in and easily find out what customers we have, who our suppliers and vendors are, what prices we offer, etc.

It brought a synergy in purchasing by strategically sourcing critical components for the entire organization. This has resulted in strategic partnering with vendors with volume discounts,” concluded Mitra. Source: http://www. expresscomputeronline. com/20071029/management01. shtml In the Fast Lane IT usage in the auto sector is not just limited to MIS reports and financial accounting, but providing real time manufacturing support | Of late, technology has become imperative to run any decent-sized automotive industry; Whether it is a vehicle manufacturer or an auto components upplier, IT has found widespread usage in the sector. As one of the most mature verticals, the Indian automotive industry has for long used IT in various facets since the 1960s when IT usage was limited to data processing and technology including accounts processing, maintaining inventory transactions, records and related MIS. The focus then was on Batch Mode of operations. As one of the earliest adopters of IT, the automobile sector has always deployed the latest cutting-edge technology right from projecting the costs involved in doing business to using IT as an important tool to counter competition.

The key drivers responsible for the increased adoption of technology in the automotive sector are the two Cscustomer and competition. The customer is the king here and the two Cs indicate the responsiveness toward the customer, whether proactive or reactive. For instance, if a company needs to be proactive, it also needs to understand the customer pain points and collate data from primary sourcesdealers and customers.

A strong method of data collection is required, ie, when the customer walks into a showroom, it is imperative that all the relevant information is captured, which can be used later to define the customer requirements, says Hilal Isar Khan, CIO, Honda Motors. And this data collection can only be done with the enablement of systems to collect data in order to play with data to arrive at the management information system. This enables the management to chalk out a strategy in terms of product launch and product positioning. The second important driver is competition, ie, reducing the time to market.

With growing cutthroat competition, companies are feeling the heat to penetrate newer markets. And this can only be achieved by shortening the product lifecycle, which, in turn, is possible if data is collated from suppliers in time. Cost reduction, too, is an important element in an industry where material costs assume a huge proportion of the total cost; it is the customer value which drives IT deployment. And this customer value, meanwhile, is linked to the changing expectations of the customer in an environment where he has a choice, says N Chandrasekaran, special director, Information Management Systems, Ashok Leyland.

Driving IT Adoption The T of IT has found a place on the shop floor through control systems used with plant machinery while the I has been deployed in the back-office stage. In the early stages of IT infiltration, organizations used computers for payroll processing, financial accounting, resource management, procurement, and IT enabled MRP followed by integrated ERP, says N Chandrasekaran. Technology is an important tool to capture data from end-to-end transaction and this data is then used in supply chain, dealer, and finance management. | | | |

I believe that benefits are much more than cost reduction and automationArvind Tawde, Group CIO, Mahindra & Mahindra| We are able to design products much faster and are developing complex and advanced products using ITManish Gupta, head IT, Tata Motors| Agility is the name of the game and as an automotive company we constantly need to work on increasing agility Rajesh Uppal, CIO, Maruti Udyog| Customer value drives IT, and is linked to the changing expectations of the customerN Chandrasekaran, special director, Information Management Systems, Ashok Leyland | The key requirement in the automotive sector originates from the shop floor, which requires a lot of system support in terms of material planning, production planning, and quality control. But, most importantly, technology is used to define business strategy in such a way that business objectives are met and at the same time product quality is not compromised.

Usage of technology is not just limited to offices generating a few MIS reports and doing the financial accounting but for providing real time manufacturing support for tracking inventory; planning procurement, planning production on the shop floor; tracking quality-related issues like vendor rejections, shop floor rejections, jigs and fixture tracking, defect analysis and quality improvement support systems, says Prabhakar Deosthali, consulting head, IT Solutions, Kinetic Communications (the IT arm of Kinetic Group). The demand of the automotive segment in terms of IT solutions can be broadly divided into three categoriesend-to-end ERP package for complete coverage of transactions within the enterprise; extended system for the ecosystem and partners like dealers (dealer management system) and suppliers (supplier collaboration system) and a supply chain management; and specific technology solutions that go into the manufacturing of cars, like Telematics solutions, navigation system, air bag system, key-less entry system, etc.

Any automotive unit would also require IT support in terms of various systems including product development, manufacturing resources planning, inventory control, depot and branch operations, integration of the system with dealers and service centers, business intelligence systems for market analysis, real time interaction between the plant systems, and the business and MIS systems at the head office. Benefiting from IT Complex supply chain and end-to-end processeswith suppliers at one end and dealers, customers at the otherare seamlessly integrated and effectively manage using IT. I believe that these benefits are much more than cost reduction and automation, says Arvind Tawde, Group CIO, Mahindra & Mahindra.

The initial wave of IT adoption involved getting the end-to-end basic transaction systems in place, essentially the ERP. The opening up of the organizations boundaries to include partners like dealers and suppliers followed this up. The earliest IT initiatives were related to the optimization required on the shop floor. These initiatives, known as MRP (manufacturing resources planning), resulted in IT systems vendors offering solutions called MRP-I and MRP-II, says Deosthali. Even as dealers and suppliers have been connected individually to the companys enterprise system through dealer management system and material transaction system, the two (dealer and ERP and supplier and ERP) have been disjointed from each other.

The focus is now on integrating dealers, suppliers, and enterprise systems into a seamless system and creating a real-time Web-based end-to-end system. Tata Motors, for instance, even connected its dealers online for all sales transactions including after-sales, thereby achieving greater market-related efficiency and higher customer satisfaction. Significantly, Tata Motors is the only company in the world where dealers work online on a common database shared with the OEM. It helps us capture market demand on a real-time basis and align supply chain accordingly, says Manish Gupta, head, IT, Tata Motors. Ashok Leyland, too, is not far behind when it comes to using the online medium for better dealer-supplier coordination with the main unit.

While a Web-based portal is in place for supplier performance management, dealers can order their part requirements via the Web, says N Chandrasekaran. The dealer management systems are in the process of moving from a decentralized to a centralized architecture. Most of the auto companies are now looking at a common system hosted at their website with the availability of real-time dealer data so that inventories, back orders of dealers, transportation, and dispatch details can be done effectively. Manufacturing processes have come out of the boundaries of the organization and have extended much beyond it. With suppliers and service providers becoming partners in manufacturing, the challenge is to manage business partners effectively and efficiently.

The increasing complexity of products and processes is also becoming a key challenge, says Tawde of M&M. The other area where IT is increasingly finding usage is product designing. Gupta of Tata Motors believes that automotive companies are able to design products much faster and are developing complex and advanced products using IT. The complete design can be simulated using IT, which enables auto companies to crash the time to market and bring in better design quality. So, for instance, if you have a good drawing system, you have the ability to interact with the principal and the supplier, thus bringing in the benefits of both time and cost.

Increasingly, a majority of auto companies are now beginning to use IT in providing improved customer experience. With customers being the kings here, the product has become an important part of the overall customer offering. Other aspects like after sales service, product presentation, and customer interaction form an integral part of the customer experience. On the Horizon Technology in an automotive company has moved from its initial stages when it was seen as a cost of doing business; at that time one needed to provide systems for function processes. This stage also included integrating all these diverse processes since it was advisable to have minimum islands of applications for ease of integration.

The second stage was when IT was used as a medium of growth; in this stage, automotive companies started using the data gathered because of system enablement for business understanding. The current stage is using technology more as a strategic tool for gaining the required edge in the market on the basis of data gathered under which automotive companies are doing dashboard solution and analytics, says Rajesh Uppal, CIO, Maruti Udyog. Agrees Gupta that IT has moved from basic back office functions like ERP to manufacturing, design, and customer care. Moreover, automotive companies are looking to strengthen their manufacturing and design processes and deploy solutions to engage customers, he adds. The technology trends in the segment are on par with, or even ahead, of global trends.

The competitive environment, customer expectations, need for faster turn-around time in bringing new products, and infrastructure development are all making the auto sector look at global sourcing, lean development, lean manufacturing, supplier collaboration, extensive MES deployment and integration, engineering research, embedded vehicle intelligence. IT has gone beyond the conventional ERP, and IT solutions are increasingly becoming a strategic need rather than playing the support role, says Ashok Leyland. Essentially IT in the automotive segment is all about how fast a company can adjust to the market requirements and bring about the resultant change on the shop floor.

Agility is the name of the game and as an automotive company we constantly need to work on increasing agility, says Uppal. In the coming times, the trend for IT solutions would be tilted more toward integration on the shop floor such as interfacing the plant automation systems and the supervisory control and data acquisition systems (SCADA) along with IT systems for job shop scheduling and planning processes. On the business front, there could be dependency on business intelligence for market analysis, product mix strategies, and sales forecasting. Source: http://dqindia. ciol. com/content/verticals/2008/108060901. asp Tata Motors Transforms I. T.

Organization with BMC Software and Business Service Management

• Sophisticated, efficient BMC IT processes and solutions add power to Tata Motors business initiatives
• BMC Remedy IT Service Management increases service quality and availability
• Combination of BMC solutions, ITIL best practices and ISO-20000 certification deliver robust culture of continuous IT improvement

HOUSTON, January 21, 2008 – BMC Software (NYSE: BMC) today announced that Tata Motors Limited (NYSE: TTM), India’s largest automobile company, has selected BMC’s Business Service Management (BSM) to assist and empower Tata Motor’s IT initiatives to support the company’s business goals. “The goal of our IT organization is to be strategic to the business, and proactively help drive business goals, rather than reactively respond to IT outages and service issues,” said Probir Mitra, chief information officer, Tata Motors. “BMC’s BSM approach enables us to align our IT services with business needs and proactively manage the availability of business services powered by IT components. In the past few years, Tata Motors has expanded its footprint in the automotive industry both nationally and internationally through new business initiatives and strategic alliances, The recent unveiling of NANO, the $2500 people’s car and the impending acquisition of Jaguar and Land Rover are some significant milestones. With rapid growth and increasing demands on the IT organization, Tata Motors looked to streamline IT services delivery and ensure that its systems and infrastructure are agile and aligned consistently, with business needs and objectives. To do this, Tata Motors required a solution that standardizes, governs and controls support processes while providing greater visibility and measurement of service level agreements and performance.

Mapped to IT Infrastructure Library (ITIL) processes, the BMC Remedy ITSM solution aligns IT with business by managing assets to optimize business value and increasing responsiveness and reducing downtime. It offers in-depth visibility into the IT infrastructure to provide the highest level of service quality, and improving customer satisfaction with a greater understanding of the business’ IT needs. Tata Motors will also leverage BMC solutions, as the foundation for implementing ITIL best practices and for achieving certification on the global standards and processes outlined in ISO 20000. “In our highly competitive industry, it is important to provide the highest service levels possible to our customers and seek continual quality improvement. With ITIL and ISO 20000, we want to create a culture of continual improvement and best practices.

BMC has in-depth knowledge about ITIL and provides automated solutions mapped to ITIL processes that will help us achieve ISO-20000 certification,” Mitra continued. “Companies have become increasingly aware that any IT disruptions, however major or minor, have the potential to cause significant losses in sales and customer service that can affect a company’s bottom line,” said Pankaj Dhume, general manager, BMC Software India. “As the leading provider of BSM and ITIL-aligned solutions, we are committed to ensuring Tata Motors’ IT organization not only supports the business, but is a strategic business advantage delivering the highest levels of service quality and availability. ” Source: http://www. bmc. com/news/press-releases/2008-archive/101472953-4341. html