Operations management of the Tata Motors Group

Operations way of the Tata Motors GroupThe concept of operations c atomic number 18 is related to the optimum utilization of the resources in the best manageable way.In todays complex wadiness environment it is very consequential to understand the importance of any care process. operations management is a very important factor for the maximum utilization of resources in any(prenominal) firm.Introduction complete under the p arnt confederation, Tata Group, in 1945, Tata Motors Limited has become Indias largest political machine company. It was the early Indian railway carmobile company to list on the New York Stock Exchange. Tata Motors began manufacturing commercialised vehicles in 1954 with a 15- stratum collaboration agreement with Daimler Benz of Ger legion(predicate). This partnership has led Tata Motors to non only become Indias largest automobile company yet similarly Indias largest commercial vehicle industryr the worlds surpass five manufactures of medium an d corpulent trucks and the worlds second largest medium and weighted bus maker. Having just entered the rider vehicles merchandise segment in 1991, Tata Motors now ranks second in Indias rider vehicle marketplace. Tata has enjoyed the prestige of having developed Tata Ace, Indias jump indigenous slatternly commercial vehicle Tata Safari, Indias first sports utility program vehicle Tata Indica, Indias first indigenously manufactured passenger car and the Nano, the worlds least expensiveThe company that has been taken for the purpose of demonstrating operation management and its effectiveness is Tata locomotes India Pvt. Ltd. The fact that tata motors came up with a sm every(prenominal) car in the Indian market and has been very succesfull it needs to be understood that what it is that instigated the success to such a boundry.Tata Motors is Indias largest automobile company, with consolidated revenues of USD 20 meg in 2009-10. It is the leader in commercial vehicles and am ong the top three in passenger vehicles. Tata Motors has productions in the compact, midsize car and utility vehicle segments. The company is the worlds fourth largest truck manufacturer, the worlds second largest bus manufacturer, and employs 24,000 workers. Since first rolled come out of the closet in 1954, Tata Motors has produced and sold oer 4 million vehicles in India.Established in 1945, when the company began manufacturing locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors is a dual-listed company traded on both the Bombay Stock Exchange, as hale as on the New York Stock Exchange. Tata Motors in 2005, was ranked among the top 10 corporations in India with an annual revenue exceeding INR 320 billion. In 2010, Tata Motors surpassed Reliance to win the coveted title of Indias most valuable daub in a annual survey conducted by Brand Finance and The Economic Times.Tata Motors h as auto manufacturing and aggregation plants in Jamshedpur, Pantnagar , Lucknow, Ahmedabad, Sanand,Dharwad and Pune in India, as rise as in Argentina, south-central Africa and Thailand.Tata Motors aimed to annex its presence worldwide. In 2004, it acquired the Daewoo Commercial Vehicle Company of federation Korea. The reasons behind the science wereCompanys orbicular plans to reduce internal exposure. The domestic commercial vehicle market is highly cyclical in nature and pr maven to fluctuations in the domestic economy. Tata Motors has a high domestic exposure of 94% in the MHCV segment and 84% in the light commercial vehicle (LCV) segment. Since the domestic commercial vehicle sales of the company argon at the mercy of the structural economic factors, it is increasingly looking at the international markets. The company plans to diversify into various markets across the world in both MHCV as intimately as LCV segments.To expand the product portfolio Tata Motors recently introduced the 25MT GVW Tata Novus from Daewoos (South Korea) (TDCV) platform. Tata plans to leverage on the strong presence of TDCV in the heavy-tonnage range and introduce products in India at an appropriate time. This was chiefly to cater to the international market and also to cater to the domestic market where a major amelioration in the Road infrastructure was d iodine by agent of the National Highway Development Project.Tata remains Indias largest heavy commercial vehicle manufacturer and Tata Daewoo is the 2nd largest heavy commercial vehicle manufacturer in South Korea. Tata Motors has jointly worked with Tata Daewoo to develop trucks such as Novus and World Truck and buses namely, GloBus and StarBus.In January 2008, Tata Motors launched Tata Nano, the least expensive issue car in the world at about 120,000 (US $3000).The city car was unveiled during the Auto expounding 2008 exhibition in Pragati Maidan, New Delhi.Tata has faced controversy over developing the Nano as some environmentalists are concerned that the launch of such a low-priced car could lead to mass motorization in India with adverse effects on pollution and global warming. Tata has set up a factory in Sanand, Gujarat and the first Nanos are to roll out summer 2009.Tata Nano Europa has been developed for sale in developed economies and is to piddle markets in 2010 while the normal Nano should hit markets in South Africa, Kenya and countries in Asia and Africa by late 2009. A battery version is also planned.Tata Motors Limited is Indias largest automobile company, with revenues of 35,651.48 crore (US$7.74 billion) in 2007-08. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles in India with products in the compact, midsize car and utility vehicle segments. Tata vehicles are sold primarily in India, and over 4 million Tata vehicles puzzle been produced domestically since the first Tata vehicle was assembled in 1954. The companys manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). Following a strategic bail bond with Fiat in 2005, Tata set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. The company is establishing a hot plant at Sanand (Gujarat). Tatas dealership, sales, go and spare parts network comprises over 3500 touch points. Tata Motors also distributes and markets Fiat branded cars in India. real SituationThe Tata Motors group is a passenger and commercial vehicle manufacturer based in India. The motor group was ceremonious in 1945 as part of the larger Tata Group. They have long been kn ingest for their commercial vehicles and in the past ten years entered into the passenger car market. Currently, Tata Motors has a mental strain of five passenger vehicles and a large line of commercial vehicl es producing pickups, trucks, tractor trailers, tippers, and buses. Both product lines of the Tata Motors group have seen success, but such(prenominal) of this has been built upon the to a greater extent deeply established commercial vehicle product line.Tata Motors commercial line has been established for several years in many market segments such as Europe, Africa, The Middle East, Australia, Southeast Asia, and South Asia. Tata Motors has expanded their business and market share around the world finished a series of acquisitions. In 2004, they acquired Daewoo commercial vehicle Company in South Korea which was South Koreas second largest truck manufacturer. This acquisition gave Tata Motors a significant presence in the Korean market. They have also entered into joint ventures with companies such as Thonburi self-propelling in 2006, which allowed them to manufacture and market pickup trucks in Thailand.Tata Motors have been making global headlines in the auto industry lately th e largest news being their acquisition of Jaguar and Land Rover from Ford. Tata paid 2.3 billion dollars to Ford for the two brands that appeal Ford 5.3 billion (Carty, USA Today). This is a major step for the company because it catapults them into the luxury car business whichthey are not known for at this time. Tata, like many new businesses it acquires, is allowing this new segment of the business to be run by previous management since they have more experience in the luxury self-propelled business. Tata volition give us some space. They inadequacy us to run our business, be a premium British car company (Mike ODriscoll, managing director of Jaguar). This is yet an opposite(prenominal) large acquisition for the Tata Motors group and could create great success for the company in the near future. corporeal GovernanceSince Tata Motors is a part of a large conglomerate company it needs to have a strong corporate governance to ensure that its employees act ethically and the busine ss continues to run smoothly especially during the ever changing and dynamic global economy. Tata Groups corporate governance is founded upon a rich legacy of fair, ethical, and diaphanous governance practices (tatacarsworldwide.com). atomic number 53 of the more important parts of this is the transparency of the company people have a right to know what the company is doing not only to ensure ethical practices, but for the insurance of their many shareholders whom have a right to know the inner workings of the companyTata has created some mannequins for employees to guide themselves through everyday business practices to ensure that the corporate governance is continuously being upheld. The Tata business excellence model is upheld by Tata quality management work. Quality management is an in-house group dedicated to helping the various Tata companies come upon their business objectives through specific processes. The two main processes that the quality management services emplo yees focus on are business excellence and business ethics. These two objectives have helped build Tata into the strong, dynamic company it is today. These models are entrenched in the companys ethnical standards and Tata feels strongly about enforcing both throughout the company. Tata quality management services plays the role of supporter and facilitator in the journey that Tata enterprises undertake to reach the peaks of business eminence while, at the comparable time, adhering to the highest ethical standards (Tata.com).To further prove their commitment to quality and ethical practices Tata has introduced annual quality awards for those companies conducting business with the finish quality. These awards are called the JRD quality value awards named after the late chairmen JRD Tata. These awards are presented annually on July 29th, the birthday of JRD Tata. Tata has affiliated to ensuring quality and ethical standards not only within Tata Motors, but throughout their many other branches and sectors of the Tata Group. They have done so by benchmarking quality standards through the Tata business excellence modelas well as providing incentives for companies to strive to improve the quality of their service, by awarding JRD quality management awards.Financial fleckTata Motors have increased its earnings over the years through their various acquisitions and joint ventures with truck manufacturers in Southeast Asia. Gross profit in the year 2006 was 1,160.9 million and increased to 1,510.1 million in the year 2007. Earnings after taxes also increased significantly between 2006 and 2007 increasing from 336.6 million to 405.5 million in 2007. After a large drop in revenues from 2004 to 2005 when the company first went public on the big board it has been increasing revenues greatly annually, from 4,422.0 million in 2005 to 7,354.0 in 2007.Core CompetenciesTata Motors is able to maintain, as well as increase, their market share by capitalizing on their core compet encies. Tata Motors is active, competitive, and dynamic in all aspects of the automotive industry, which means that there must be many different activities going on in all areas of the company. As a result of the ever evolving automotive industry Tata Motors must always be changing and one way to stay at the forefront of the industry is to make continuous improvements in technology through query and development. One way that Tata Motors has done this is by producing one of the most efficient and low cost vehicles on the market. Acquisitions, mergers, and expansion is another core competency that Tata Motors has is embedded in their company structure and philosophy. other core competency that Tata Motors holds is being located in the India. This location has allowed them to understand not only the Indian market but also the dynamics of emerging and developing markets. This market understanding and knowledge allows Tata Motors to manufacture their products at lower costs, sell them to emerging markets while making profits as well as take advantage of the strong labor base in India.PEST AnalysisPoliticalSince Tata Motors operates in multiple countries across Europe, Africa, Asia, the Middle East, and Australia, it needs to pay soaked caution to the political climate but also laws and regulations in all the countries it operates in while also paying attention to regional presidential term bodies. Laws governing commerce, trade, growth, and investment are dependent on the local government as well as how successful local markets and economies leave be due to regional, national and local influence. In accordance, Tatas headquarters in Mumbai, India, strictly controls and regulates operations in all dealerships and subsidiaries, in addition to knowing and abiding by all labor laws in the multiple countries where they have manufacturing plants it has to watch political change.EconomicOperating in numerous countries across the world, Tata Motors functions with a g lobal economic perspective while focusing on each single market. Because Tata is in a rapid growth period, expanding or forming a joint venture in over five countries world-wide since 2004, a global approach enables Tata Motors to adapt and learn from the many different regions within the unanimous automotive industry. They have experience and resources from five continents across the globe, thus when any variable changes in the market they can gather information and resources from all over the world to address any issues. For instance, if the price of the aluminum required to make engine blocks goes up in Kenya, Tata has the option to get the aluminum from other suppliers in Europe or Asia who they would normally get from for production in Ukraine or Russia. Tata Motors also has to pay close attention to shifts in currency rates throughout the world. Currency fluctuations can equate to higher or lower demands for Tata vehicles which in turn restore profitability. It can also mea n a rise in costs or a drop in returns. But they also have to pay attention to not just the domestic currency, the rupee, but also to the dollar, euro, bhat, won, and pound, to just name a few. Just because the rupee is strong against the dollar does not mean it is strong against all the other currencies. Attention to currency is important because it influences where capital investment get out develop and prosper.SocialUndoubtedly, the beliefs, opinions, and general attitude of all the stakeholders in a company impart affect how well a company performs. This includes every stakeholder from the CEO and President, down to the line workers who screw the door panel into place,from the investor to the customer, the culture and attitude of all these people will ultimately forge the future of a company and whether they will be profitable or not. For this reason, Tata Motors tends to use an integration and seldom separation technique with foreign companies they acquire. In 2004, Tata Mo tors acquired Daewoo Commercial Vehicles Company, which was at the time Koreas second largest truck maker. alternatively than using de-culturation or assimilating Daewoo, Tata took an integrated approach, and continued building and marketing Daewoos current models as well as introducing a few new models globally just as it had been done under Korean management.TechnologyTata Motors and its parent company, the Tata Group, are ahead of the game in the technology field. The foundation of the companys growth is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge RD (Tata). Employing 1,400 scientists and engineers, Tata Motors look and Development team is ahead of the pack in Indias market and right with the rest of the field internationally. Among Tatas firsts are the first indigenously developed Light Commercial Vehicle, Indias first Sports Utility Vehicle and, in 1998, the Tata Indica, In dias first fully indigenous passenger car, as well as the increasingly famous Tata Nano, which is projected to be the worlds cheapest production car (Tata). In the automotive industry, it is becoming increasingly crucial for manufacturers to stay on top of the technology curve with new problems always rising such as escalating gas prices and pollution problems. Tata recognizes this and dedicates a great deal of resources and time into research and development to be even with or preferably ahead of other competitors, global trends, and changing economies. In all, an automobile manufacturer must change, adapt, and evolve to stay competitive in the automotive game, and this is exactly what Tata is doing with their rapid growth, and extensive research and development.SWOT AnalysisStrengthsTata Motors excels when it comes to innovation through intensive research and development. Their ability to make the least expensive car on the market, the Nano which will retail for $2,500, is far be yond what any other car dealership has created. This innovation gives Tata Motors their main competitive advantage. Tata Motors makes everything from tractor-trailers to the worlds least expensive car. This product diversity grants them a competitive advantage over their competitors because they can satisfy more markets and customer needs. other strength that Tata Motors possesses is high corporate responsibility. They donate a portion of their profits from stock increases towards a specific charity. This highlights Tata Motors overall desire for community improvement while also emphasizing Tata Motors high morals and set which is something money can not buy. Tata Motors is unique in a way in which when it buys a company. Tata Motors keeps the maestro management of that company intact. The company that Tata Motors purchases will look exactly the same in terms of management and organizational structure as if it was never purchased by Tata Motors.WeaknessesThere are strings attache d with every new invention and improvement on products. These strings are Tata Motors weaknesses and what other groups perceive as their weaknesses. One weakness that Tata Motors faces is its inability to meet safety standards. Although they have made the most inexpensive car out on the market, it has yet to pass all the safety standards which is a legal factor. Some consumers and pessimists inquire as to how Tata Motors can make such a cheap car and withstanding a car accident or not just falling apart after hitting something once. Pessimistic people also want to believe that car manufactures are already doing everything they can to keep costs low for the consumer, and if that is the case, then displace the cheapest car out on the market automatically questions if it is safe to drive.Tata Motors only have been making passenger cars for the approximately last ten years. This can be viewed as a weakness from a customer standpoint since a decade does not seem like a lot to consumers and therefore they will think that Tata Motors is inexperienced car manufacturing.OpportunitiesTata Motors has already opened the doors for many new and innovative ideas, but not only for their company, but their competitors as well which could turn into a threat. One of the major opportunities that Tata Motor faces is that as of right now 90 percentof China and Indias adult population do not own cars, partly because cars are costly and require more expenses after purchased. So the market for a low-priced car is huge which benefits Tata Motors perfectly since they produce the lowest priced car on the market. This is a huge luck for Tata Motors because if they can get their feet into that market of people that do not have cars because they cannot afford them, then they will make large profits down the road. Chinas total car sales are estimated at over 8 million dollars annually and they were the worlds second largest car market in 2006. Chinas government forecasts that demand for car s will top 20 million by 2020. With Tata Motors in the market with the cheapest car, Chinas demand for cars will probably increase even more significantly which will in turn increase sales for Tata Motors. As of sue 2008 Tata Motors finalized a deal with Ford Motor Company to acquire the British businesses, Jaguar Cars and Land Rover. This is a huge opportunity for Tata Motors since they will acquire the large knowledge base and technologies for producing and marketing luxury vehicles. This acquisition helps them dive into the more mature markets in Japan, Europe and the U.S. The knowledge transfer from these two companies will greatly improve Tata Motors ability to continue to grow and flourish in both developing and developed market segments.ThreatsThe obvious threat to Tata Motors is intellectual property rights. Tata invented the cheapest car on the market and every automobile manufacturer wants to know how Tata did it. Headhunters are soon going to find out this valuable infor mation and make it acquirable to their own company. This is a huge threat to Tata Motors because at first they had low competition, but once other car manufactures find out how they invented such a low cost car, and then these companies too will jump on board and design their own line of low cost automobiles. On one hand this can be a threat, but on the other it may not affect Tata Motors at all because people will still want to purchase their product since they were the pioneers of all the excitement. some other main concern that Tata Motors faces is that cheap cars in India will have an adverse effect on pollution and global warming because most of the population will be able to afford the cars.