Tata Motors to cut suppliers, revamp processes: Guenter Butschek
18 March 2016
Former Airbus COO Guenter Butschek, the newly-appointed chief of Tata Motors, says the company will undertake a transformation exercise, which would include a relook at brand positioning, revamping products and increasing its global footprint.
"Tata Motors will undergo a major transformation process in order to get future ready ... we would like to effectively review the entire setup of Tata Motors as far as its structure is concerned, as far as the processes are concerned and when it comes to manufacturing, as far as the equipment and tools are concerned," he told reporters in his first media interaction on Thursday.
Butschek, who took over as the managing director and chief executive of Tata Motors last month, hinted that the process will start with the re-launch of a focussed brand positioning in a fortnight.
"Instead of having a scattered brand identity where people have different interpretations internally as well as in the market, we would like to have a very strong brand statement which will serve as the backbone for an internal transformation process, but also serve as a reference point for product launches and expanding dealer network," he said.
Butschek added that there is room for improvement in the quality of manufacturing and the company is also looking at reducing the number of suppliers.
"We will certainly reduce the number of suppliers ... I would rather focus my energy and resources on development of my strategic supply partners instead of wasting an awful lot of effort on ones that would always remain sub-standard," he said.
He said focussing on producing more models from a single platform and quicker turnarounds in launching new models to address the opportunities will also be focus areas.
On the products side, he said the company has the right mix, from the lowest end to the high-end, on the commercial vehicles (CVs) front, which makes it possible for it to enter any market, but added that this requires investments on the distribution and sales front.
One of the markets which the company is planning to tap for CVs is Latin America, he said.
There will be more passenger car launches, starting with the hatchback Tiago soon, which will be followed up with the crossover Hexa showcased at the Auto Expo, he said, adding that there is at least one more car its engineers are working on at present.
"In the last couple of years, TM has taken a creative break in order to rethink its strategy in order to put the right product on the PV side in the pipeline and now ... we will deliver on the expectations," he said.
He called the launch of the Nano a "visionary decision" which created a unique market segment but conceded that the company has not achieved sales as per its expectations.
Butschek said the transport industry is at a crossroads at present, given the traffic problem in cities, which warrants a rethink at the solutions.
When asked about the recent strike at its Gujarat plant, Butschek said he would like to be more proactive when it comes to industrial relations rather than do firefighting once a crisis erupts.
He said the company will also work with its subsidiary -- the marquee Jaguar Land Rover - on the processes front, and would also explore leveraging on the product side synergies in the future.
Butschek said in the last four weeks, he has visited plants at Jamshedpur, Lucknow and Pantnagar, and also held meetings with the dealers to understand the company.
Senior executives had also gone out on a two-day offsite where the strategies around new branding exercise and organisational restructuring were discussed, he said.
The transformation will be carried out with to make the company faster, removing complexity and turning it into an agile organisation, he said.