 |
| Pradip Chanda, is a turnaround consultant
based in Delhi. He is the author of The Second Coming--Creativity
in Corporate Turnarounds |
A
turnaround requires two qualities-commitment (to the company or
product) and passion (to succeed under the most difficult circumstances).
Telco made it to news several times last year,
and not for the right reasons. It has not only incurred the largest
losses in the private sector in recent times, but also failed to
convince its investors to subscribe to a rights issue. Many pondered
over whether Telco was a turnaround candidate, especially since
its fortunes were so closely linked to the fate of Indica.
The days of stand-alone auto companies seemed almost over when Telco
announced its plans to launch the Indica. The global automobile
market had seen large-scale restructuring and mega mergers in the
recent past. Countries like the UK, once significant players in
this market, had virtually no major company that was domestically
owned. Most companies had accepted the inevitability of alliances
and takeovers.
Analysts maintained cautious scepticism about
the Indica's future. Most saw the car as being too late an entrant
in a market that had rapidly changed from a duopoly to a market
on the radar screens of every big auto manufacturer. That apart,
conventional wisdom questioned the viability of an independent company
marketing a model, primarily in one market, having invested, by
Indian standards, very large sums of money to create a capacity
that seemed well beyond what the company could hope to sell in such
a crowded scenario. As projections of a million cars being sold
annually by 2001 fell through, Indica was required to attain a 15
per cent marketshare to break even.
I happened to visit the Indica plant in Pune
and was extremely impressed with the the management team's commitment
and passion.
The K Block, where Indica is produced, is a
world-class plant, given its size, scalability, process technology,
product management information systems, and R&D facilities.
The fully-integrated plant has a capacity of 2 lakh cars. The plant
is built with a mix of new and refurbished equipment and machinery
at a fraction of the investment that a comparable unit would require,
giving it a low-cost capability. Trained operators and strategically-placed
robots get on with the complex process of assembling 2,700 parts,
some fabricated internally, the rest bought from vendors cultivated
with the objective of achieving JIT efficiencies. The plant also
has the advantage of scalability-with small investments in balancing
engine assembly capacity with the car assembly capacity, it can
raise production to 4 lakh units.
A fully online product information management
system was not in place when I visited the plant, but an operative
version permitted the company to co-ordinate assembly of different
parts without any shop-floor pile-ups. Telco has also invested heavily
in its Engineering Research Centre since, and has developed world-class
techniques. That apart, all the units also have ISO certifications.
What really sets the Indica unit apart, however,
is the team running the plant. A quiet, confident lot who take pride
in the plant and the process, and are committed to continuous learning.
They reflect the passion out of which Indica was conceived-that
of making a world-class car-and the commitment that has driven the
group to make available all the resources needed to make this passion
a reality.
''If the factory is world-class, how come the
product is not?'' is a common question asked by early Indica buyers.
The answer is: yes, there were hiccups in the early models, but
the v2 has affirmed that Indica had got the three Ps-product design,
positioning, and price-right. How else would you explain 1 lakh-plus
bookings for a car that entered the market late?
|
