Mahindra & Mahindra: Implementing BPR
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Case Details:
Case Code : OPER008
Case Length : 12 Pages
Period : 1990 - 2001
Organization : Mahindra & Mahindra
Pub Date : 2005
Teaching Note : Available
Countries : Japan
Industry : Automobile
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Please note:
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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"In our never ending quest for quality and increasing
productivity at all levels, the various projects initiated by the company -
including BPR - are helping us achieve higher productivity, reduction in costs
and improved quality."
- Keshub Mahindra, Chairman, Mahindra & Mahindra (M&M), in
1996.
M&M's Problem Plants
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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 manufacturing
inefficiencies, poor productivity, long production cycle, and sub-optimal
output.
The reason: highly under-productive, militantly unionized, and bloated
workforces. The company had over the years been rather lenient towards running
the plants and had frequently crumbled under the pressure of union demands. The
work culture was also reportedly very unhealthy and corruption was widespread in
various departments.
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Alarmed at the plant's dismal condition, Chairman Keshub Mahindra tried to
address the problem by sacking people who allegedly indulged in corrupt
practices. M&M also tried to implement various voluntary retirement schemes
(VRS), but the unions refused to cooperate and the company was unable to
reduce the labor force.
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During this
period, M&M was in the process of considering the implementation of a
Business Process Reengineering (BPR) program throughout the organization
including the manufacturing units. Because of the problems at the
Igatpuri and Kandivili plants, M&M decided to implement the program
speedily at its manufacturing units.
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. |
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. With both
the parties refusing to work out an agreement, observers began casting doubts on
the future of the company's grand plans of reaping the benefits of BPR.
Mahindra & Mahindra: Implementing BPR
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