OPERATIONS MANAGEMENT

Operation Functions Report

PSDA 1

Research Company- TATA Motors

Group Members- Neetu Bhadana (B02)

Priyal Gulati (B12)
Divya Pandey (B13)
Steffan Jones (B31)
 CHAPTER 1- INTRODUCTION OF TRANSFORMATION
PROCESS AND PRODUCTIVITY

Transformation Process
Introduction
Operational processes represent the core of businesses. Whether it is in
manufacturing or in the service industry, operations play a major role in serving the
customers’ needs. Transformation processes are the key to delivering value to the
client by transforming inputs (such as materials, information...) into outputs, such as
products or services.
A transformation process is any activity or group of activities that takes one or
more inputs, transforms, and adds value to them, and provides outputs for
customers or clients. Where the inputs are raw materials, it is relatively easy to
identify the transformation involved, as when milk is transformed into cheese and
butter. Where the inputs are information or people, the nature of the transformation
may be less obvious. For example, a hospital transforms ill patients (the input) into
healthy patients (the output).
One way of categorising different types of transformation is into:
 manufacture – the physical creation of products (for example cars)
 transport – the movement of materials or customers (for example a taxi
service)
 supply – change in ownership of goods (for example in retailing)
 service – the treatment of customers or the storage of materials (for
example hospital wards, warehouses).

Transformation Process Model:

Quality of TRANSFORMATION Quality of

INPUT input output
OUTPUT
monitored. PROCESS monitored.

FEEDBACK
MECHANISM
Type of inputs:
a) Materials
b) Information (e.g., Consultancy firms and accountancy firms)
c) Customers (e.g., Hairdressing, Hospitals)

Transformation process includes:

a) Changes in the physical characteristics of materials or customers
b) Changes in the location of materials, information, or customers
c) Changes in the ownership of materials or information
d) Storage or accommodation of materials, information, or customers
e) Changes in the purpose or form of information
f) Changes in the physiological or psychological state of customers.

Nature of outputs:
a) Tangibility
b) Transportability
c) Storability (can be stored) 
d) Customer contact
e) Simultaneity
f) Quality

Feedback:
This used to control the operation system by adjusting the input and transformation
process that are used to achieve desired output.

Types of transformation process:

1. Continuous Process (Maximum efficiency, minimum flexibility): Products flow
continuously through linear process.
2. Semi- Continuous Process (efficiency reduced, flexibility increased): This is
assembly process which is repetitive in nature.
3. Intermittent Process: It stops at regular intervals of time because product
requires processing on variety of machines.
 Batch Process- In this, the job passes through different functional
departments in batches and each lot may have a different routing.
 Job Shop- In this, highly skilled operators take up each job due to its
uniqueness.
4. Project (One-time unique activity with a start and end time): Projects are the
processes which handles very complex and unique set of tasks or activities.
 Examples of various Transformation process:
1. Intangible Output

2. Tangible Output

Transformation is the process of changing the overall systems, business processes

and technology to achieve measurable improvements in efficiency, effectiveness and
customer or employee satisfaction.
Each step of the business transformation process should be carried out with open
communication, flexibility, and transparency. There is no one-size-fits-all map for
success. One should not hesitate to resort to outside help but at the same time your
internal team should be empowered and equipped to supervise the process as it
evolves.
Productivity
Introduction
Productivity is commonly defined as a ratio between the output volume and the
volume of inputs. In simple words, Productivity is the ratio of the amount of output
from a team or organization per unit of input. It measures how efficiently production
inputs, such as labour and capital, are being used in an economy to produce a given
level of output.
Productivity is considered a key source of economic growth and competitiveness
and, as such, is basic statistical information for many international comparisons and
country performance assessments. An example of productivity is how quickly a toy
factory is able to produce toys. It also allows analysts to determine capacity
utilisation, which in turn allows one to gauge the position of economies in the
business cycle and to forecast economic growth. Productivity is important because it
defines the efficiency of an organization in converting inputs into output. In the 20th
century, we got used to productivity being a relatively simple concept. Steel makers
take raw materials, people, and machines and create steel.  If we calculate the
productivity of a steel maker, we will measure the amount of steel created and then
divide it by the amount of raw material, cost of machines or the amount of effort
needed.
Types of Productivity:
 Labour Productivity
 Capital Productivity
 Material Productivity
 Total Factor Productivity (TFP)
Labour productivity:
It is the ratio output per person. Labour productivity measures the efficiency of the
labour in the transformation of something into a product of higher value. In software
development terms, labour productivity is a measure of the efficient use of the effort
needed to write and implement the code.
Capital productivity:
It is the ratio of output (goods or services) to the input of physical capital. Improving
physical capital (known as capital deepening) typically yields an increase in output.
In software development, physical capital includes the equipment, buildings or other
items like computers needed to develop and implement the code.
Material productivity:
It is the ratio of output to the input of materials (also known as natural resources). In
software development, there are very little material or natural resources that are
used. Material productivity plays a larger role when considering the manufacture of
hardware/software packages, such as an ATM.
Total Factor productivity (TFP):
It is not a simple ratio of output to input, but rather it is a measure that captures
everything that is not captured as labour, capital, or material productivity. Factors
included in total factor productivity include attributes like changes in general
knowledge, the use of particular organizational structures, management techniques,
or returns on the scale. The components in TFP are often the sources of productivity
changes in software development.
Benefits of productivity growth
Productivity growth means more value is added in production and this means more
income is available to be distributed.
At a firm or industry level, the benefits of productivity growth can be distributed in a
number of different ways:
 To the workforce through better wages and conditions.
 To shareholders and superannuation funds through increased profits and
dividend distributions.
 To customers through lower prices.
 To the environment through more stringent environmental protection; and
 To governments through increases in tax payments (which can be used to
fund social and environmental programs).
Productivity growth is important to the firm because it means that it can meet its
(perhaps growing) obligations to workers, shareholders, and governments (taxes and
regulation), and still remain competitive or even improve its competitiveness in the
marketplace. Adding more inputs will not increase the income earned per unit of
input (unless there are increasing returns to scale). In fact, it is likely to mean lower
average wages and lower rates of profit. But, when there is productivity growth, even
the existing commitment of resources generates more output and income. Income
generated per unit of input increases. Additional resources are also attracted into
production and can be profitably employed.

The eight main factors that affect productivity are:

 Technical factors
 Production factors
 Organizational factors
 Personnel factors
 Finance factors
 Management factors
  Government factors
 Location factors

Technical factors:
Productivity largely depends on technology. Technical factors are the most important
ones. These include proper location, layout and size of the plant and machinery,
correct design of machines and equipment, research and development, automation,
and computerization, etc. If the organization uses the latest technology, then its
productiveness will be high.
Production factors:
Productivity is related to the production-factors. The production of all departments
should be properly planned, coordinated, and controlled. The right quality of raw
materials should be used for production. The production process should be simplified
and standardized. If everything is well it will increase the productiveness.
Organizational factors:
Productivity is directly proportional to the organizational factors. A simple type of
organization should be used. Authority and Responsibility of every individual and
department should be defined properly. The line and staff relationships should also
be clearly defined. So, conflicts between line and staff should be avoided. There
should be a division of labour and specialization as far as possible. This will increase
organization's productiveness.
Personnel factors:
Productivity of organization is directly related to personnel factors. The right
individual should be selected for suitable posts. After selection, they should be given
proper training and development. They should be given better working conditions
and work-environment. They should be properly motivated; financially, non-
financially and with positive incentives. Incentive wage policies should be introduced.
Job security should also be given. Opinion or suggestions of workers should be
given importance. There should be proper transfer, promotion, and other personnel
policies. All this will increase the productiveness of the organization.
Finance factors:
Productivity relies on the finance factors. Finance is the lifeblood of modem
business. There should be a better control over both fixed capital and working
capital. There should be proper Financial Planning. Capital expenditure should be
properly controlled. Both over and underutilization of capital should be avoided. The
management should see that they get proper returns on the capital which is invested
in the business. If the finance is managed properly the productiveness of the
organization will increase.
Management factors:
Productivity of organization rests on the management factors. The management of
organization should be scientific, professional, future-oriented, sincere, and
competent. Managers should possess imagination, judgement skills and willingness
to take risks. They should make optimum use of the available resources to get
maximum output at the lowest cost. They should use the recent techniques of
production. They should develop better relations with employees and trade unions.
They should encourage the employees to give suggestions. They should provide a
good working environment and should motivate employees to increase their output.
Efficient management is the most significant factor for increasing productiveness and
decreasing cost.
Government factors:
Productivity depends on government factors. The management should have a proper
knowledge about the government rules and regulations. They should also maintain
good relations with the government.
Location factors:
Productivity also depends on location factors such as Law and order situation,
infrastructure facilities, nearness to market, nearness to sources of raw-materials,
skilled workforce, etc.
 CHAPTER 2- TRANSFORMATION PROCESS AND
PRODUCTIVITY OF TATA MOTORS

Tata Motors Group (Tata Motors) is a $35 billion organisation. It is a leading global
automobile manufacturing company. Its diverse portfolio includes an extensive range
of cars, sports utility vehicles, trucks, buses, and defence vehicles. Tata Motors is
one of India's largest OEMs offering an extensive range of integrated, smart, and e-
mobility solutions. TATA Motors are successfully driving the transformation of the
Indian commercial vehicle landscape by offering customers leading edge auto
technologies, packaged for power performances and lowest life-cycle costs. Their
automobiles are designed for superior comfort, connectivity, and performance.

Transformation Process:
In the case of Tata Motors, inputs of organisation are raw materials such as seats,
steering, clutch pads, etc. which will help to produce or assemble car, information
such as production process, People such as engineers, designers who will help to
design and assemble car, facilities and machinery for the production and assemble
different parts of the car. The transformation process includes manufacturing and
service operations which is must to change inputs into outputs which are different
types of automobiles such as, car, bus, truck etc.

INPUTS TRANSFORMATION OUTPUTS

Raw Material PROCESS Cars
(Seats, Steering, Manufacturing Buses
Clutch Pads etc) Process Trucks
People (Engineers, Service operations Army Vehicles etc
Designers etc) RESOURCES PRODUCTS
Facilities and
Machineries/
Equipments

Influence of Demand:
When the above viewpoint of the process might be used throughout the organisation,
it is not necessary that it should be follow in the same manner all the time. There are
variations in the processes which need to be considered. Four characteristics of
demand which are known as ‘four V’s’ processes which affect the method of
processes are required to be managed. The four V’s are Volume i.e., how many
products or services produced via operations, Variety i.e., how many different types
of products or services produced by operations, Variation i.e., amount of level of
demand changed over time and Visibility i.e., amount of visibility of its processes to
its customers. The product transformation process might need to be differentiated
depending on the effects of above four V’s. Four V’s dimensions are important in
assuming how easy it is for operation management to operate at low cost.
  Volume: In terms of Volume Tata Motors is high. Volume stands for number of
productions or services via operations. As a huge company in automobile
industry volume of production of vehicles through operations is high.

 Variety: In terms of Variety Tata Motors is medium to high. Variety stands for
different types of products or services produced by the operations. As a
largest Indian automobile company Tata motors is manufacturing wide range
of vehicles except two wheelers and luxurious cars. There are mainly deals in
different kinds of commercial vehicles, passenger vehicles, army vehicles etc.

 Variation: In terms of Variation Tata Motors is Medium to low. Variation stands

for amount of level of demand change over time. Demand for the Tata Motors
vehicles are predictable. Therefore, it is easy for the operations to produce the
products or services according to demand however if there is any change in
demand over time Tata’s operations are able to meet such change.

 Visibility: In terms of Visibility Tata Motors is medium to low. Visibility stands

for amount of visibility to its customer. It is unlikely that whole process is
visible to its customer however up to certain level it is possible for e.g., Via
internet or phone ‘track and trace’ facility customer can have visibility of where
their order is, or they can check the availability of products. Thus, visibility of
processes is low to customers compare to dealers or agents in Tata motors.

Suppliers:
The Company has an extensive supply chain for procuring various
components. The Company also outsources many manufacturing processes
and activities to various suppliers. In such cases, it provides training to
external suppliers who design and manufacture the required tools and fixtures.

The Company’s associate company, Tata Auto Comp Systems Ltd., or TACO
manufactures automotive components and encourages the entry of
internationally acclaimed automotive component manufacturers into India by
setting up joint ventures with them.

The Company's other suppliers include some of the large Indian automotive
supplier groups with multiple product offerings, such as the Anand Group, the
Sona Group, and the TVS Group, as well as large multinational suppliers, such
as Bosch, Continental, Delphi, and Denso, Johnson Controls Limited for seats
and Yazaki Auto Comp Limited for wiring harnesses. The company focuses on
optimizing procurement and sourcing certain company’s raw materials and
component requirements or co-development of various components such as
engines, axles, and transmissions from these suppliers.

As part of Company's pursuit of continued improvement in procurement, it has

integrated its system for electronic interchange of data with its suppliers. This
has facilitated real time information exchange and processing, which enables
the Company to manage supply chain more effectively.

The Company import some components that are either not available in the
domestic market or when equivalent domestically available components do not
meet company's quality standards. The Company also imports some products
based on competitive pricing and capacity/lead time where domestic suppliers
are not able to meet Company's requirements.

Automation in Transformation Process:

TATA Motors uses different equipment and processes, and the level of automation
are really high tech. It reduces the error of human intervention; high automation
leads to better safety and few incidents of accidents happening. By doing this the
quality is improved by a good amount. At every station, the material is prepared in
advance, the person on the line does not have to keep looking for materials. Benefits
of this production line are having very few chances of error and high degree of
accuracy.

Value Adding Process:

TATA Motors is mainly focused on specific areas of research and development and
engineering by which it can strengthen its HorizoNext Philosophy, a three-horizon
strategy. Their strategy changes according to the type of the car the plant is
producing. In the case of passenger cars, more emphasis is paid on creating
stunning designs, connectivity, and pleasurable driving experience. Therefore, the
research and development portfolio are aligned towards developing technologies,
core competence and skill sets in these specific domains to secure impactful delivery
of the future product with leading product attributes.

The Company uses a three-horizon strategy for managing its engineering and
technology initiatives. The components of this three-horizon strategy are:

 The first-horizon involves products that it is currently working on to bring to the

market.

 The second-horizon involves researching known technologies that the

Company may not be entirely familiar with at the present time but are needed
for future products.

 The third-horizon is for ‘blue sky' research projects and projects aimed at
fostering a culture of innovation in the company.

The Company has constantly adopted new technologies and practices in the digital
product development domain to improve the product development process. This has
led to better front loading of product creation, validation, and testing, which results in
greater likelihood of timely delivery and ensuring that new products are properly
developed from the beginning.

Lead Time:

 Manufacturing-
The divisions and assembly lines vary in accordance with the type of the car the
plant is manufacturing. For example, there are separate assembly lines for Heavy
Commercial Vehicles (HCVs), Medium Commercial Vehicles (MCVs) and Light
Commercial Vehicles (LCVs), Utility vehicles and for Passenger Cars (Indica and
Indigo). All plants apply the best manufacturing systems such as Just-In-Time,
KANBAN etc.

The Passenger Car Division, for example, executes the entire process of car
manufacture over five shops – the engine shop, the transmission shop, press and
body shops, paint shop and the trim and final assembly shop. These shops are fully
automated and there are robots at many places used for picking and placing to
automate the process. After the car is completely assembled, it goes through several
quality checks like wheel alignment, sideslip test, brake test, shower test, and a short
test run before it is ready for dispatch. 

 Supply-

Tata Motors is in the process of setting up at least seven regional stockyards as it

seeks to move to a leaner and efficient distribution system. This will ensure its
vehicles reach dealers much faster and delivered to buyers in a maximum of 3 days.

The move is also aimed at reducing the financial burden on dealers as it takes care
of inventory costs. For far-off locations in the east, sometimes, it can take up to 21
days for vehicles to reach there. That means 21-day inventory is lying on the wheel.
It adds to the interest costs in this period.

Irrespective of which part of the country a vehicle is booked from, a regional

stockyard will ensure the vehicle reach the customer within 3 days of booking. This
will bring down the inventory carrying costs substantially and these stockyards will be
set up and managed by third-party logistics providers. The initiative is part of the
company's strategy to focus on retail sales, and this will lead to a leaner and efficient
system based on demand forecast and big data.

Productivity:

TATA Motors characterizes its productivity with the following aspects of

management:

1. HUMAN RESOURCES MANAGEMENT:

The Company considers its human capital a critical factor to its success. Under
the aegis of Tata Sons and the Tata Sons promoted entities, the Company has
drawn up a comprehensive human resource strategy, which addresses key
aspects of human resource development such as:
The code of conduct and fair business practices. A fair and objective
performance management system linked to the performance of the businesses
which identifies and differentiates employees by performance level.
Creation of a common pool of talented managers across Tata Sons and the
Tata Sons promoted entities with a view to increase their mobility through job
rotation among the entities.
Evolution of performance-based compensation packages to attract and retain
talent within Tata Sons and the Tata Sons promoted entities; and Development
and delivery of comprehensive training programs to impact and improve
industry- and/or function specific skills as well as managerial competence.

2. RAW MATERIAL MANAGEMENT:

The company considers materials management as a major part of productivity and
ensures materials going into production are correct and of high value which helps to
keep production running smoothly and improves overall finished goods quality, such
as:
The company has long-term purchase agreement with their suppliers and has taken
initiatives to reduce the material consumption through and value analysis techniques.
The Company uses an e- sourcing initiative to procure supplies through reverse
auctions. They use external agencies such as third-party logistics providers. This has
resulted in space and cost savings.
TATA Motors has an established a sixteen-step supplier quality process in order to
ensure the quality of outsourced components.
They also maintain a stringent quality assurance program that includes random
testing of production samples, frequent recalibration of production equipment and
analysis of post- production vehicle performance, as well as an ongoing dialogue
with supplier partners to eliminate production defects.

3. TECHNOLOGICAL MANAGEMENT:
The Company’s enhanced focus is on developing products/services and action
plans that are based on safer, smarter, and cleaner technology. The powerful
action plans are also aligned towards meeting this requirement such as:
Product design quality and manufacturing quality is enhanced by implementing tools
& processes like Dimensional Variation Analysis (DVA), while product design and
manufacturing process simulations.
The company is playing a lead role in proactively driving electric mobility in the
country. To build a sustainable future, company has been working collaboratively on
various electric and hybrid vehicle solutions.
To make information available to right stakeholders at right time, latest technology of
BOTs based apps are deployed for multiple agencies, which help them to verify data
and take decisions.
Subjective analysis forms big part of testing and validations and require huge data
collection through physical means for each vehicle product. To reduce physical
testing cycles by building predictive models, Deep Learning (AI) based algorithms
and apps are introduced into design process.
Trained AI models help in synergy between physical & digital simulations and better
co-relation. GPGPU (General Purpose graphics Processing Unit) based computing
infrastructure is deployed for deep learning and machine learning.

4. RESEARCH AND DEVELOPMENT:

Aiming to become the most aspirational auto brand by 2024, Tata Motors is investing
heavily in research and development. In 2019-20, the auto giant spent a record 7 per
cent of its standalone revenues on R&D.
The Company is mainly focused on specific areas of research and development and
engineering by which it can strengthen their strategies that changes according to the
type of the car the plant is producing.
The research and development portfolio are aligned towards developing
technologies, core competence and skill sets in these specific domains to secure
impactful delivery of the future product with leading product attributes.
 CHAPTER 3- LEARNINGS AND SUGGESTIONS

Transformation is the process of changing the overall systems, business processes

and technology to achieve measurable improvements in efficiency, effectiveness and
customer or employee satisfaction.
Each step of the business transformation process should be carried out with open
communication, flexibility, and transparency. There is no one-size-fits-all map for
success. One should not hesitate to resort to outside help but at the same time your
internal team should be empowered and equipped to supervise the process as it
evolves.
Product quality is an important part of TATA’s business. Keeping this in mind TATA
leaves no gap in the market unoccupied. They manufacture automobile with variants
that are accepted in India as well as other foreign countries. This allows the
company to instil features in advance winning them first mover advantage over their
competitors in many cases. However, in terms of production figures, and production
techniques and their effects, TATA can be seen behind its competitors including
Toyota, Volkswagen, and Hyundai.
TATA Motors has successfully applied the best production systems including JIT,
KANBAN etc. It has high degree of automation involved this minimizes manual
labour. The materials are placed very close to the line to decrease travelling time.
Tata Motors Ltd is rolling out major initiatives that will boost employee productivity at
its car factory. It will do this through automation and by asking more suppliers to
provide pre-assembled components. The high-automation and numerous in-process
quality checks also indicate that Tata Motors is keen on changing the perception
consumers and industry in general has about it, both locally and globally.