Mahindra and Mahindra

Implementing BPR
Introduction
The Mahindra Group s history dates back to
1945
In October 1947, the first batch of 75 jeeps was
released for the Indian market.
Over the next few decades, the group promoted
many companies in areas as diverse as hotels,
financial services, auto components, information
technology , infrastructure development and
trading to name a few.
However, the two main operating divisions were
the automotive division and the farm equipment
division.
Mahindra employed over 17,000 people, had 33
sales offices with a network of over 500 dealers
across the country.
The Kandivili plant was the production hub for
farm equipment division. In 2001, this division
marked its 16
th
year as the market leader, with
its product being used by over 600,000 indian
farmers.

About BPR
The philosophy that BPR follows is that
radical redesign and reorganization is
necessary to lower costs and increase
the quality of service.
Instead of focusing on existing
business, it tries to determine what
business the company should be
involved in.
Thus BPR results in dramatic and huge
improvements.
Reasons for Implementing BPR
M&Ms ambition to become
the largest tractor
manufacturer in the world.
To enhance productivity
and deliver world class
quality at the least possible
cost.
M&Ms plants were
suffering from
manufacturing
inefficiencies, poor
productivity, long
production cycles and sub-
optimal outputs.
The plants at Kandivili and
Igatpuri in particular were
under-productive,
militantly unionized, and
had bloated workforces.
BPR Principles
PRINCIPLE EXPLANATION
Organize around processes, not tasks Keep interdisciplinary teams that
concentrate on completing a process.
Have output users perform the process Have one department responsible for
one complete process.
Have those who produce information
process it
One person generating a certain
information also processes it till end.
Treat geographically dispersed
resources as centralized
An organizations data should be
centrally located and made available
to all.
Link parallel activities in the workflow
instead of just integrating their results
Improve communication through
inter-linkage to better all processes.
Empower workers and use built-in
controls
Give more authority to those working
directly to enable quicker decision
making.
Capture information once and at the
source
Store all data electronically to avoid
inefficiency, resource wastage and
data discrepancy errors.
Effects of BPR
The effect of BPR
Work units change from functional to process teams
Jobs change from simple tasks to multi-dimensional
Roles change from control to empowered
Advancement criteria changes from performance to ability
Executives change from scorekeepers to leaders
Performance measures change from activity to results
BPR seeks to remove the belief that by focusing on the efficiency of the
tasks involved in carrying out a piece of work, the organization is doing its
best to complete the task in a timely and cost-effective manner. Instead, it
requires the organization to focus on the outcomes of its processes in the
way a customer would.
Phases involved in BPR
Understanding of the entire business cycle.
Improvements through eliminating non-
value added activities.
Process
Improvement
Total redesign of an end-to-end process.
Considerable performance improvements in
terms of cost, quality and cycle time.
Process
Redesign
Study of basic elements of people, processes
and IT involved by top management.
A top-down reappraisal and redesign of the
total business.
Business
Transformation
BPR success factors
BPR SUCCESS FACTORS
Strong and consistent top management sponsorship.
Addressing cultural transformation through effective change management.
Proven methodology including a vision process.
Reengineering team composition (in both breadth and Knowledge).
Compelling business case for change (with measurable objectives).
Strategic alignment with company strategic direction.
Line ownership (pair ownership with accountability).
Reengineering is usually opted when companies are in trouble, have
foreseen one or are avoiding landing into one. BPR exercises generally fail
because the concerned companies do not ensure the presence of critical
success factors.

Such factors are:
M&Ms experience with BPR
After BPRs implementation
around 100 officers produced 35
engines a day as compared to
the 1200 employees producing
70 engines in the pre-BPR days.
After the union strike ended
M&M could then focus on major
issues such as reengineering the
layout and method of working,
and productivity.
The entire company was
synchronized with the notion of
customer satisfaction, wherein
the end product was made
keeping the customers in mind
rather than going about their
usual way of being product
centric.
Features of concurrent
engineering were brought
in.
The R&D department was
divided into three phases,
with each having their
specific requirements.
IT was implemented soon
thereafter to integrate all
the information gathered
so that all departments
were up to date at all
times.
Results of implementing BPR
After the
implementation of BPR
the number of engines
produced went up by
125 per day on an
average.
The excess workers
could now be deployed
at different locations
where the workforce
was indeed needed.
Employee costs got
reduced significantly
from 12.4% in 1994 to
10.1% in 1996.
The number of vehicles
started increasing
rapidly per annum.
BPR initiatives enabled the
company to maintain steady
gross margins, reduce working
capital levels and rationalize
manufacturing process.
The manufacturing systems
were brought upto
international standards.
There was better inventory
control, better sourcing, better
order distribution across
plants, online availability of
data, transparent access to
data, process transparency and
an integrated sales and supply
chain.
The workers became more
productive where, instead of
earlier disputes during the pre-
BPR days, now they worked
more diligently.
The Future
The programs implemented
saved 20-30% on business
redesign, 10-15% on process
redesign and 5-10% on
engineering redesign.
The company also started
outsourcing its manufacturing
activities to improve quality
The company continued with its
efforts to further streamline its
operations by undertaking cost
saving programs to break-even
volumes in the automotive and
farm equipment divisions.
M&M decided to adopt other
globally accepted practices to
improve its business.
Future