Industry

Tata Motors realigns people strategy to be leaner and stronger

by Sumantra Barooah Aug 16, 2017

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From a mega re-organisation to ramping up collaboration with academia, the homegrown OEM is betting on people to not only come back stronger but also become a formidable competitor in the fast-changing automobile industry. 

Tata Motors is on a mission to turnaround its passenger vehicle business but, more importantly, it is on a drive to make the entire organisation agile and more competitive to not only realise its business goals at home but also overseas. To be among the top three passenger vehicle makers in India and to be among the world's top three commercial vehicle OEMs are key goals of the transformation journey.

The goals are lofty and therefore the means couldn't have been simple. "We said we need to have a re-look inside first, what is it that we are not doing right and what is it we were doing right at some point in time. We looked at various aspects including our structure, our cost and our governance structure, among other things," Gajendra Chandel, chief human resource officer, Tata Motors, tells Autocar Professional. The felt need was to "revamp/ revitalise/re-energise the organisation". 

CUTTING THE LAYERS TO GO THE LEAN WAY

By 2019-21, Tata Motors wants to transform into a fully revamped organisation. After nearly two years of deliberations and decisions, the restructured organisational processes have been implemented. Today, there are five management levels below the Executive Committee. This number stood at 14 before the organisational restructuring. There’s a similar story in the engineering side as well. Chandel knew that agility was a factor that was weak in Tata Motors due to its organisational structure. The management span of control was less than three. "Usually it is six to right," says Chandel. "We said that we need to set that also right and then based on our business plans and volumetric plans, what is the family size we want to have in different functional areas. We also looked at some of the functions which may not be required going forward and bring in certain functions which are definitely required," he adds.

As a result, mini business units with full P&L responsibility, from product conceptualisation till the end of the lifecycle have been created. The earlier Triple P (Programme, Planning and Product Management) concept has been done away with. This helps in better tracking of the project with quantifiable results and better utilisation of resources. These units have been decentralised and empowered to take decisions in areas like quality, purchase and supply chain, for example. Engineering, on the application side, has become part of the units while a central team exists to take care of core developments and developing next generation technologies.

Part of the reorganisation at Tata Motors was a designation-free policy. This idea wasn't received well enough. Based on employees' feedback from various locations, Tata Motors has decided to "continue the designations for our employees in the time being."

At one point in time, Tata Motors had over 190 different kinds of initiatives and teams and committees which were working on different aspects of management. Today there are twenty. "And these are also very specific projects with the deadlines with the definitive resources and definitive outcomes, not open ended in terms of time or resources. Very specific and it must contribute to the business competitiveness directly into our strategy and business plans," says Chandel. Tata Motors, with a total of 60,000 employees is like a huge ship. "From a ship, we are making it into a war frigate," says Chandel.

Ever since the organisational restructuring started, Tata Motors has started becoming leaner. It has "3,000-4,000" lesser employees (blue and white collared) than it had two years ago, due to a mix of reasons. Around 300-400 jobs became redundant as a result of the exercise, while some retired and some left the organisation. Also, there were a lot of people on contracts/ temporaries who exited the company after their contracts expired. Recruitments are frozen at Tata Motors, except very crucial ones.

The number of employees at Tata Motors has also come down due to the outsourcing of few non-core activities in the company. Logistics management, infrastructure and facilities management are some examples. Chandel says, "We need to be good at making automobiles and selling automobiles. So we said we’ll focus on that rather than focusing our energies on getting into those kinds of operations."

STRONGER COLLABORATION WITH ACADEMIA 

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Even as Tata Motors works on making itself lean and agile, it is strengthening and expanding its connect with the academia to skill current employees and prepare students in some to be industry-ready and enhance the organisation's competitiveness in an era of new-age technologies and mobility solutions.

2018 will see the first batch of 40 engineers from Tata Motors complete their Master of Technology course. "Instead of recruiting M.Tech engineers from outside, we said we have these people, they know our company, they know automotive, they are working in different functional areas – powertrain, engines, transmission. We put these people through the next-generation technologies’ exposure and they go through two years of M.Tech either in mechatronics or electronics or digital, or a combination of these," says Chandel. This year the company will sponsor two batches, each of 40 graduate engineers. The first batch went to BITS Pilani. The two new batches will go for studies in IIT Bombay and College of Engineering, Pune.

Chandel and his team have planned multi-dimensional partnership with academic institutions. For example, professors from IIT Bombay come to train people at Tata Motors, in addition to Tata Motors' engineers going to the engineering institute for higher studies. "We are also starting with some research projects with them, so we are sponsoring some of our people to do their doctoral program in specific technologies," says Chandel. The company will also sponsor fresh students who enroll in IIT Bombay for research, if the technology/area of research is of interest to the company. Tata Motors is close to sponsoring four to five research scholars Electric vehicles and fuels are some of the areas of research.

Tata Motors has already partnered with five engineering institutions, and will add 10 more this year, for graduate engineers. "That’s one dimension. The other is we said, let’s look at the complete pipeline. So what we are doing is in each of these locations like Jamshedpur, Dharwad, Pune, Lucknow, Sanand i.e (Pantnagar) where we have our plants, we will tie up with one or two government polytechnics," says Chandel. In addition to picking up students who complete the technical courses, Chandel is tapping students soon after they enter the engineering institute. "Once they come into the campus, then they start getting influenced by their seniors that this is the industry to look for. We said we need to work on the mindshare of these people and the best time is the first year itself," he says.

Tata Motors picks up 300-500 trainee engineers every year. With the opportunity to study M.Tech sponsored by the company after a couple of years on the job, Tata Motors hopes that the engineer would not move out of the company soon. Availability of quality graduate engineers is a challenge that the auto industry faces. With stronger industry-academia by Tata Motors, Chandel says, "The bigger goal is that we make the students industry-ready; they may join our suppliers or customers for example. They may even join our competitors, it doesn’t matter as long as we make a good crop available to the industry."

Skilling the engineers and doing cutting-edge research are key to building successful products. Equally important is skilling the people who market and sell them. Tata Motors will tie up with a few management institutions for training employees from the commercial divisions. It has concluded talks with Symbiosis of Pune, and is in discussions with a few other institutions.

These activities in the sphere of industry-academia collaboration will also have a bearing in the transformation of Tata Motors. With the organisational restructuring, Tata Motors is saving Rs 400 crore annually. A leaner and agile organisation with a good number of bright minds is key ingredients for success, and Chandel is busy working on both. 

 

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