Operations Management at Tata Motors
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Case Details:
Case Code : OPEA003
Case Length : 22 Pages
Period : 2003
Organization : Tata Motors
Pub Date : 2004
Teaching Note :Not Available
Countries : India
Industry : Automobile
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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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Excerpts Contd...
Cost Cutting
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To cut costs, Tata Motors tried innovative techniques such as zero-based
costing. The company's engineers re-worked the cost of components all over
again. For example, earlier, Tata Motors paid for its forged components on a
cost-plus basis as claimed by a vendor. Under the new system, it paid a price
depending on the weight of the forging, leading to savings of 25%. Prakash M
Telang, senior vice president (manufacturing), was appointed as the
'cost-erosion champion' and put in charge of the entire initiative. Four
specific areas were identified:
• Direct material costs (which constituted roughly 65 % of all costs)...
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Quality Management
Tata Motors started a comprehensive quality improvement initiative in
September 2000. The initiative played an important role in the company's
turnaround, from a loss of Rs.500 crores in the year ended March 2001 to a
profit of Rs.28 crores in the first quarter of 2002-03.
Every year, about a quarter of Tata Motors' workforce went through training
courses, which were rated highly in the Indian engineering industry.
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Personnel were trained before building workshops. In case of imported
machines, engineers and workers were sent to the foreign manufacturer's
facilities to receive training well before the arrival of the machine...
Looking Ahead
Tata Motors planned to increase its production capacity, from 330,000 to
360,000 units, by the end of 2004. The Indigo Marina was expected to be
launched in the near future. Tata Motors planned to acquire the Daewoo
commercial vehicle company, which was the second largest auto manufacturer
in Korea... |
Exhibits
Exhibit I: Tata Motors-Products
Exhibit II: Manufacturing facilities
Exhibit III: List of TACO Joint Ventures - Suppliers for Tata Motors
Exhibit IV: Engine Testing Facilities at Tata Motors
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