Ashok Leyland's ISO 14001 Journey

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Case Details:

Case Code : OPER018
Case Length : 13 Pages
Period : 1990 - 2002
Organization : Ashok Leyland
Pub Date : 2003
Teaching Note : Available
Countries : India
Industry : Automobiles

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note Contd...

The company's product range included buses, trucks, cargo, engines, defense and fire fighting vehicles (under the special vehicles category). It was one of the largest suppliers for India's state transport corporations. Reportedly six out of every 10 state transport corporation buses were manufactured by ALL (Refer Exhibit I for ALL's product profile).

To mitigate the negative effects of the recession in the Indian CV industry during 1997-99, ALL implemented various cost cutting measures including manufacturing practices such as Just-In-Time (JIT). To reduce inventory carrying costs, the company entered into agreements with its suppliers to get parts from them on a daily basis.

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

It also improved its communication systems to facilitate the smooth implementation of JIT. ALL began to work on a three-month rolling plan, which was intimated to the suppliers to facilitate timely planning of production cycles. In 1998, company implemented 'Improve 98,' an exercise that involved employees in the generation of new ideas for process improvements. ALL claimed to have saved lakhs of rupees as a result of this exercise.

It also focused on its warehousing practices to reduce inventory of spares and finished products. Besides ALL, the M&HCV segment in India had only one major player, the Tata owned TELCO. The MNC Volvo was only a small player. Unlike TELCO, which diversified into the passenger car segment, ALL and Volvo focused only on the CV segment of the automobile market.

In 2000, ALL's overall market share was 33%, with around 98.7% of its sales volume being accounted for by M&HCVs. Over the years, ALL became one of the largest manufacturers in India's CV segment through a number of technological innovations (Refer Exhibit II for ALL's financials).

About ISO 9000 & ISO 14001

The Geneva based International organization for standardization (ISO) was formed in 1947 as a non-government organization. It is a worldwide federation of national standards bodies from around 90 countries. The body promotes the development of standardization and related activities to facilitate the international exchange of goods and services and develop intellectual, scientific, technological and economic cooperation. Standardization at an international level was needed to reduce technological barriers, which resulted due to non-harmonized standards for similar technologies worldwide...

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