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SUMMER PLACEMENT PROJECT

REPORT
AT
GENERAL MOTORS INDIA LTD

SUBMITTED BY:

Kingshuk Dutta
Roll no: 23
BBA Programme, Faculty of Commerce
Maharaja Sayajirao University,
Vadodara,
Gujarat
Acknowledgements

It is the duty of the trainee to acquire maximum knowledge and to inculcate the
necessary skills along with building a charismatic personality which will be an
inseparable asset throughout the trainee’s life.

Since the commencement of my training at GMI Halol, I have encountered many


people who have helped and guided me all the way. These people deserve a
special mention and my project report will be incomplete without acknowledging
them.

I would like to express my gratitude to General Motors India Pvt. Ltd for
enhancing my knowledge of the various systems, processes and functions
followed at GMI Halol. The key source of guidance was the HR Department with
which I could relate my learning to what I have studied theoretically.

It would be dereliction of duty if I do not extend my sincerest thanks to Mr.


Rakesh Mehta- General Manager HR for providing me with a golden
opportunity to pursue my summer internship at GMI Halol. My project report
will be incomplete without the invaluable support and guidance of Mr. Ranjan
Kumar, Mr. A Perumal, Mr. W Venkatesh.

Their Constant presence kept me all the more motivated and eager to learn more
and absorb the experience in order to make myself a better individual.

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Preface

Summer internships are a crucial aspect of a management student’s life. At the


MSU BBA programme under the aegis of M.S University, Baroda, summer
internships aim to give the students an opportunity to actually put their theoretical
knowledge into practical use. Undergraduate students with no or minimal
experience also get a chance to feel the processes, systems and functions at a
corporate level. The students get an exposure to the workings of a corporate
organization. This would further help the student to understand their level of
creativity and assist them to choose a field in which they would like to pursue
specialization in future.

In this report prepared by me on my summer internship at GMI Halol, I have


presented my understanding of the working of an enterprise which is one of the
major players in the automobile industry in India and the World.

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Entry of General Motors in India:
General Motors India Private Limited

3 major zones for Automobile Manufacturers in India

Clusters -
Maruti – Suzuki auto companies
[ Mktg Office ] Honda & component
suppliers

Delhi
Gurgaon

[ Present Mfg Plant ] Indore

Tatanagar
Halol
Kolkata
[ New Greenfield Site]
Mumbai Pune Nashik Telco
HM

Fiat
Bangalore
M &M
Telco
Volvo
Bajaj Tempo Chennai Toyota
DaimlerChrysl Ashok Leyland
GMI has regional
er Ford
Hyundai sales
Skoda Mitsubishi – HM offices at Mumbai,
BMW
[ Tech Center, Kolkata and Chennai
FSS Center ]

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Overview
General Motors India, incorporated in 1994 as a 50:50 joint venture company
with the CK Birla Group of Companies, became a fully owned subsidiary of
GM in 1999 when GMOC bought the remaining shares. The company was
restructured in 1999 and was converted from a Public Limited company to a
Private Limited company.

General Motors India is now a wholly-owned subsidiary of General Motors


Corporation, the largest automaker in the world. It offers products under the
Chevrolet brand in the country. Introduced in India in 2003, under the banner
“For a special journey called life”, Chevrolet has emerged as one of the
fastest growing brand names in India. Today, the Chevrolet brand clearly is
established for quality, reliability, safety, innovation, value for money
proposition, environment-friendliness and customer care.

GM India has expanded its dealership network to 95 sales points and over 110
service centers, so far. The network is still being expanded to cater to its recent
entry into the mini-car segment with the Chevrolet Spark. In addition, two new
parts distribution centers have also been set up in Maharashtra and Delhi to
supplement the two existing centers in Gujarat and Tamil Nadu.

GM India is the pioneer in introducing several industry-first programmes


including a centralized 24x7 call centre to attend to customer complaints and
provide any information related to GM India’s products and services through
just a local call to 3030-8080 from any landline or mobile phone in the country.
Chevrolet also provides additional peace of mind to its customers with an
industry-first assurance of fixed cost for 45,000 kilometers or three years on
service and maintenance with a "Cost of Ownership" program. A customer can
pay a predetermined, fixed amount while buying a Chevrolet product rest
assured that if its maintenance costs exceed this predetermined amount, the
difference will be reimbursed.

Other first programmes introduced by the company earlier included chauffeur


training programmes, mobile road show caravans, the OK 5-Star pre-owned car
program, and a best-in-class warranty of three-years/100,000 kilometers,
service holidays and fuel economy rallies.

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GM India presently produces the Chevrolet Optra Magnum (both
petrol and diesel), the Chevrolet Tavera, the Chevrolet SRV, the Chevrolet
Aveo, the Chevrolet Aveo U-VA and the Chevrolet Spark at its plant in Halol
near Baroda, Gujarat.

The Chevrolet Aveo U-VA, Chevrolet Spark and Chevrolet Optra Magnum
Diesel have all been rated best in class in their respective market segments
against stiff competition by auto journalists across the country. The Tavera,
Optra and Aveo-U-VA have, between them, won a number of automotive
excellence awards since launch.

Facilities
GM India’s state-of-the-art plant at Halol near Baroda has received the ISO
9002:1994 Quality Management System certification in 1999 and was re-
certified for ISO-9001: 2000 standards in April 2005. GM India also received
the
ISO 14001 certification for its Environment Management System in 2000,
which was re-certified for ISO 14001:2004 standards in November 2005. GM
India’s plant also received the prestigious 3 Leaves Award from the Centre for
Science and Environment (CSE) for overall environmental performance in
2001-02. Besides, it has also bagged Quality Circle awards instituted by various
state governments.

The capacity of Halol facility has been expanded to 85,000 units from 60,000
units in April 2007 to meet increased demand for Chevrolet vehicles. In the
meantime, GM India’s second plant is situated at Talegaon, near Pune in
Maharashtra. Envisaged with an initial annual production capacity of 140,000
vehicles, the plant commenced production by the last quarter of 2008.

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GM India – Greenfield, Pune Overview

• Site area : 172 Acres


• Start of Production : June 1996
• Capacity : 85,000 units / year
(expansions underway)
• Shifts : 2 shift, 5 days / week
• Management systems : GM Global Manufacturing System
: ISO 9001
: ISO 14001
• Automation level : Medium

Company Profile

 1928: GM enters India. Produces cars under the Chevrolet and Vauxhall
brands. It also produces Trucks under the Bedford brand.
 1954: GM exits India due to unfavorable business climate. It produces
386,000 vehicles during this period.
 1988: Hindustan Motors begin to manufacture Isuzu trucks at the Halol
plant. The plant is closed due to unfavorable exchange rate.
 1993: GM re-enters India by entering into a 50:50 joint venture with
Hindustan motors at Halol.
 1995: GM launches Astra under the Opel brand.
 1999: GM acquires 100% stake in GM India.
 2000: GM launches Corsa under the Opel brand.
 2003: The Company launches Chevrolet brand in India with the launch of
Optra.
 2003: The GM technical center was established at Bangalore.
 2004: Launch of Chevrolet Tavera

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 2006: Launch of Chevrolet Aveo
 2006:Launch of Chevrolet Optra-SRV
 2006:Launch of Chevrolet Aveo-UVA
 2007:Launch of Chevrolet Spark

Overview of GENERAL MOTORS:


General Motors (GM) was founded on September 27, 1908, in Flint, Michigan,
as a holding company for Buick, then controlled by William C. Durant. It
acquired Oldsmobile later that year. In 1909 Durant brought in Cadillac,
Elmore, Oakland (later known as Pontiac) and several others. In 1909, General
Motors acquired the Reliance Motor Truck Company of Owosso, Michigan,
and the Rapid Motor Vehicle Company of Pontiac, Michigan, the predecessors
of GMC Truck. Durant lost control of GM in 1910 to a bankers' trust because of
the large amount of debt taken on in its acquisitions coupled with a collapse in
new vehicle sales. A few years later, Durant started the Chevrolet Motor car
company and through this he secretly purchased a controlling interest in GM.
Durant took back control of the company after one of the most dramatic proxy
wars in American business history. Shortly after, he again lost control, this time
for good, after the new vehicle market collapsed. Alfred Sloan was picked to
take charge of the corporation and led it to its post war global dominance. This
unprecedented growth of GM would last into the early 1980s when it employed
349,000 workers and 150 assembly plants.

A joint venture (often abbreviated JV) is an entity formed between two or


more parties to undertake economic activity together. The parties agree to
create a new entity by both contributing equity, and they then share in the
revenues, expenses, and control of the enterprise. This is in contrast to a
strategic alliance, which involves no equity stake by the participants, and is a
much less rigid arrangement.The phrase generally refers to the purpose of the
entity and not to a type of entity. Therefore, a joint venture may be a
corporation, limited liability company, partnership or other legal structure,
depending on a number of considerations such as tax and tort liability.

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Reasons

1. Build on company's strengths


2. Spreading costs and risks
3. Improving access to financial resources
4. Economies of scale and advantages of size
5. Access to new technologies and customers
6. Access to innovative managerial practices
Competitive goals

1. Influencing structural evolution of the industry


2. Pre-empting competition
3. Defensive response to blurring industry boundaries
4. Creation of stronger competitive units
5. Speed to market
6. Improved agility

Strategic goals

1. Synergies
2. Transfer of technology/skills
3. Diversification

GM status as of now

GM is asking for $22.5 to $30 billion in loans, depending on how quickly the
economy recovers. They expect to begin repaying the loans in 2012 and fully
repay them by 2017. This amount breaks down like this:

• $18.0 billion (Original request on Dec. 2, 2008, for a downside scenario,


which is where industry volume is now tracking)

• 4.5 billion (Additional loan amount requested on Feb. 17 to cover an


existing revolving line of credit that rolls over in 2011)

• 7.5 billion (Additional line of credit that may be needed if industry sales
volumes deteriorate further, to 9.5 million units in 2009 and 11.5 million
in 2010)

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GM India is confident of achieving 20% growth in car sales
compared to last year in spite of the recession and the growing interest rates.
This is against the general Industry growth rate of 7%. GM targets to produce
80, 000 vehicles this year and even it falls short by even 10,000 it would still be
20% more than last years production According to General Motors India Vice-
President, Mr. P. Balendran, the market share of GM cars in Indian market
would grow to 10 % by 2010 from the current market share of 4%.

GM sources about $300 million worth auto components from India for their
plants across the world. Talks are on with their suppliers to reduce the cost
as the sourcing volume is goring to grow to $ 1 billion per year in next two
years.

GMs Spark car is produced at the Talegaon factory in Maharashtra. This


plant is set up at a cost of $300 million.

THE SCENARIO IN INDIA FROM 1992 TO 2000


In anticipation of rapid growth, the passenger car market in India is crowded
with 18 companies trying to establish themselves. Most companies have
joint ventures with Indian partners and have entered the market in the last
two years. The number of new entrants over a narrow time window of two
years is unprecedented.

Demand forecasts vary and analysts expect anywhere between 2 and 3.5 million
cars to be sold in the next five years. Equity holding for the international
partner is usually over 50% and they retain significant managerial control.
Most of them have introduced cars in the $13,500 to $33,000 price range,
which is viewed as a luxury segment in India. Automobile companies have
also chosen to establish exclusive dealerships. Initially, companies have
chosen to import completely knocked down (CKD) kits and assemble
them in India.

However, this strategy is not effective in the long run since such imports attract
50% duty. The major implications are that a shake out is likely and that
companies would need to have alternate plans, including introduction of cars in
other market segments, lower prices, and exports from India if they cannot
establish themselves in the domestic market. The supplier industry is very small
and needs to develop simultaneously on all fronts including rapid capacity
expansion, acquisition of technology, improvement in manufacturing practices,
quality and productivity, adoption of lean manufacturing, and developing

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product design capabilities to meet the needs of assemblers.
Therefore, a critical requirement for rapid growth of the industry is adequate
assembler involvement in the suppler industry.

The Government of India's new automobile policy announced in June 1993


attracted a large number of automobile companies to India. These include
General Motors and Ford, and three Japanese, six European and two
Korean companies. Chrysler was also seeking to enter the country with a
suitable Indian partner. In addition, there are three existing Indian
companies, Hindustan Motors, Premier Automobiles and Telco, and one
Indo-Japanese venture, Maruti already in the passenger car market. Maruti
is by far the biggest player with about 70% of the market share.

The number of new entrants and the level of investment within a very narrow
time window of two to three years are unprecedented and seems unique to
India. Compared to three major models available in the Indian market until
recently, customers can now choose from a wide variety of products.

Some of the entry barriers faced by automobile companies in India are


relatively high levels of import duties, a nascent ancillary industry, and
product modifications required for relatively poor road conditions and high
levels of heat and dust. On the other hand, a rapidly growing middle class,
rising per capita income, and high levels of latent unsatisfied demand with
customers starved of world class options promise enormous opportunities.
For instance, from current sales of around 300,000 passenger cars in 1996-
97, sales are expected to rise to anywhere between 850,000 to 1.7 million
vehicles by the year 2000. Automobile companies have announced plans
to install capacity of around 900,000 vehicles by the year 2000.

The number of cars sold over the next four years is going to be anywhere
between 2 and 3.5 million vehicles.
It is not certain how exactly demand will grow and on what factors it will
depend, and whether there is room for so many players. The supplier industry
also faces enormous challenges to keep pace with rapid growth. Manufacturing
practices will have to change considerably to come closer to lean production. It
is also possible that some companies will increasingly use India as a base for
exporting vehicles to other countries. These issues will become clear as the
future unfolds. At this stage, we describe and analyze the entry strategies of
multinational companies in the Indian automobile industry.

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Entry Strategies prevalent during 1990s:

Entry strategy for international markets is a comprehensive plan, which sets


forth the objectives, goals, resources, and policies that will guide a company's
international business
Operations over a future period long enough to achieve sustainable growth in
world markets

For a company, each product in each foreign market has a different entry
strategy. The corporate international entry strategy is a combination of the
different entry strategies of its various products in various foreign markets.
There are various elements of entry strategy. In this paper, we have considered
the following elements:
o choice of product - choice of target market - choice of an entry
mode to penetrate the target country - timing of entry
o magnitude of investment and area of competitive emphasis
o marketing plan to penetrate the target market
o control system to monitor performance in the target market
o A close look at the entry strategies of the multinational companies
in the Indian automobile industry points to some distinct patterns.
Except for Audi, which is targeting a premium market niche, and
Hyundai, the rest of the companies have set up joint ventures with
Indian partners. Audi has announced plans for franchising
automobiles. Recently, Hyundai has announced plans to enter the
country with a wholly owned subsidiary. For most of the new joint
ventures, management control lies with the MNCs. For example,
though General Motors India is a 50:50 joint venture of GM and
Hindustan Motors, ten International Service Personnel from Opel
form the entire top management team of General Motors India.
Similarly, Daewoo in DCM Daewoo Motors, Ford in Mahindra
Ford, Mercedes in Mercedes Benz India Limited, Honda in Honda
Siel, and Volkswagen in Eicher Volkswagen exercise significant
management control. All these companies have expatriate
managers in top positions.

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Implications:

There were 18 automobile companies jostling for a market whose size by the
most optimistic estimates is around 1.7 million vehicles per year by the year
2000. Clearly, sufficient room for so many players was not there. This means
companies will need to have clear strategies on what they will do if they are not
able to establish a viable market presence. One alternative is to use India as a
manufacturing base to supply cars to other countries in South East Asia, Middle
East and perhaps the Eastern block countries.

The other major implication is that automobile companies need to pay attention
to the development of the supplier industry. Rapid growth in assemblers'
capacity is possible only if suppliers are able to keep pace with them. The
strategy used by Suzuki in 1980 of facilitating joint ventures between its
major suppliers in Japan and some Indian companies was a good one.

However, the supplier industry needs to grow, acquire new technology, improve
manufacturing practices, quality and productivity, and restructure itself into
first, second and third tier companies. There is also a lot of pressure on
suppliers from assemblers to acquire product design capabilities. Simultaneous,
fast development on so many fronts is possible provided assemblers facilitate
the process. Automobile companies may also need to rethink their strategy of
introducing models successful in developed economies into India.

GM Operations in present times:


“An Integrated Management System is a single integrated structure used by an
organization to manage its processes – or activities – that transform inputs of
resources into a product or service which meet the organization’s objectives and
equitably satisfy the stakeholders quality, health, safety, environmental,
security, ethical or any other identified requirement.”

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Principle characterstics of an IMS system:

A true IMS will typically have the following characteristics:

1. Its scope will cover the totality of the organization’s processes and
systems and embrace health, safety, environment, security, human
resource, finance, marketing, public relations, etc. as relevant to the
organization’s values, operations and objectives.
2. It is formally defined in a uniform style that only varies where necessary
to meet its purpose e.g. description of broad principles as opposed to a
defined sequence of steps to be followed in a process.
3. While ensuring the effectiveness of the IMS, replication of
documentation is minimised through a minimalist approach.
4. The structure does not slavishly follow that of a specific management
standard or item of legislation but is designed to control and guide the
organization’s processes in the most effective and efficient way.
5. Each component of the management system takes account of all of the
other components as appropriate.
6. It transparently addresses all relevant stakeholder key requirements
defined via relelevant standards, legislation or other defined
requirements.

Typical features of an IMS:

An IMS needs to be structred to enable the organization to effectively and


efficiently manage its processes and will depend on its’ size, number and
complexity of products and services, degree that it is regulated, national or
multinational nature, etc. The following features would be typically observed in
an IMS:

1. Single Policy Statement covering all relevant issues. This may include
subsections addressing specific topics.
2. Notwithstanding any specific stakeholder requirements such as licensing
and regulation, there is a single Management Manual describing the
formal management arrangements.

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3. Organization, responsibilities and authorities are defined such
that the job descriptiopn for any given post or individual is concise, clear
and complete.
4. The totality of the control of people issues, such as competency and
project employment life-cyclces, is defined in an integrated way and
promotes integrated processes.
5. Process controls are developed such that opportunity and all aspects of
risk are simultaneouly addressed.
6. Notwithstanding any specific stakeholder requirements such as licensing
and regulatuion, management control at company and project level are
defined in a single coherent set of documentation such as generic plans,
procedures, work instructions and forms e.g. an incident reporting form
would cover any issue such as complaint, personnel or environmental
accident, etc.
7. Reactive Monitoring (customer feedback, accidents, and incidents etc)
managed via a single integrated process. The resulting analysis would
cover all issues in an integrated way.
8. Proactive Monitoring (audits, inspections, surveys, benchmarking etc) are
managed together in a coherent way to effectively and efficiently
opitimize the management system, and the organization’s processes.
9. All types of change are managed through the same formal processes.
10.The Management Review process covers all the aspects of the operation
of the organization and shorter term review cycles are logically
embedded into longer term review cycles to form an integrated hierarchy
of management review processes apporpriate to the size and complexity
of the organizaion.
11.Tendency to use generic management tools and approaches for systems
and process ananalysis to identify opportunity and hazards and assess
risks.

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Fostering Global Partnerships and Consumer Relationships:
GM is the major shareholder in GM Daewoo Auto & Technology Co. of South
Korea, and has product, powertrain and purchasing collaboration with Suzuki
Motors Corp. & Isuzu Motors Ltd. Of Japan. It also has advanced technological
collaborations with DaimlerChrysler AG and BMW AG of Germany and
Toyota Motor Corp. of Japan. It has Vehicle manufacturing ventures with
several established automakers in the world such as Toyota, Suzuki, Shanghai
Automotive Industry Corp. (SAIC), AVTOVAZ of Russia and Renault of
France.

The Global Reach of GM Parts & Accessories:


Genuine GM parts and accessories are sold under the GM, GM goodwrench,
GM performance and AC Delco Brands through GM Service & Parts
Operation, which supplies Dealerships and Distribution worldwide. The GM
engines and Transmissions are marketed through GM Powertrain.

IMS Policy:
We at General Motors India are committed to become a successful company by
providing vehicles and offering services which are best-in-class and continually
improve to exceed customers’ expectations and organization’s environmental
performance while complying with all applicable, legal, safety and other
requirements.

GM's Vision:
GM's vision is to be the world leader in transportation products and related
services. GM earns customers' enthusiasm through continuous improvement
driven by the integrity, teamwork and innovation of GM people.
Mission:
To profitably sell 200000 vehicles in 2010, achieve top 3 ranking in JD
power and be amongst the 50 most admired companies in India.

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Core Values:
Core values are what Company stands for, and are shared by everyone
throughout the organization.
1. Customer Enthusiasm
GM dedicates themselves to products and services that create enthusiastic
customers. No one will be second guessed for doing the right thing for the
customer.
2. Integrity
GM stands for honesty and trust in everything we do. They believe and do
what we say.
3. Teamwork
GM wins by thinking and acting together as one General Motors team,
focused on global leadership. Their strengths are highly skilled people and
diversity.
4. Innovation
GM challenge conventional thinking, explore new technology and implement
new ideas regardless of their source faster than their competition.
5. Continuous Improvement
GM set ambitious goals, stretch to meet them, and then "raise the bar" again
and again. They believe that everything can be done better, faster and more
effectively in a learning environment.
6. Individual Respect and Responsibility
GM respect others and act responsibly, so that they can work together to meet
the common goals.

Cultural Priorities:
 Enhance Product and Customer Focus
• Focuses on the customer: links customer needs and wants to innovation
and product development
• Integrates across functions to address customer needs
• Embraces excellence and innovation: Leads efforts to create value-added
products and services

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• Supports initiatives focused on "designing, building, and
selling" excellent products and services to customers
• Questions conventional thinking on products and services.

 Act As One Company


• Collaborates proactively on global issues and drives for team success
• Encourages teamwork
• Leverages ideas, concepts, products, and processes for GM units around
the world
• Leads teams effectively within and across organizations/borders
• Encourages others to look beyond individual organizations and focus on
GM's success
• Stimulates external and internal exploration, benchmarking, and learning
• Understands customers, markets, and competitors, and focuses on
customer requirements and customer enthusiasm

 Embrace Stretch Targets


• Sets and deploys high-impact, stretch goals and objectives focused on
making GM the best
• Makes stretch "the very best we can do" -- 1 in 10 -- benchmark
performance
• Understands, measures, and manages intelligent risks
• Motivates, stimulates, and supports efforts to deliver results that achieve
competitive advantage
• Monitors, evaluates, coaches, and rewards based on performance and
results that really make a difference

 Move with a Sense of Urgency


• Communicates a compelling and inspired vision for change; champions
fast implementation of leading-edge changes
• Eliminates bureaucracy and slowness; seizes opportunities, not fearful of
responding or reacting with minimal planning
• Ensures that speed and cycle times are understood, measured and
improved
• Inspires and leads employees and teams to pursue Go-Fast! opportunities;
shares ownership and implementation responsibilities

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• Drives self and others for results; makes employee feel his/her
work is important
• Is decisive and empowers others to make decisions based on performance
and integrity

 Business Strategy
Introduce great cars and trucks
("gotta-have" products)
Be aggressive in the market place
Reduce costs and improve quality
Generate cash

BUSINESS AREAS OF GM:

 GMC - Corporate Affairs (Detroit)


 NAO - North America Operations
Vehicle Sales, Service, & Marketing Group - Warren Michigan,
Midsize and Luxury Car Group - Los Angeles, California + Mexico
& Canada sales offices
 LAO - Latin America Operations
Brazil, Argentina
 GME - General Motors Europe
Poland, Germany, Egypt, South Africa, Hungary, Czech Republic
 APO - Asia Pacific Operations
Indonesia, Japan, China & Hong Kong, Philippines,
India, Australia,Malaysia, South Korea, Thailand

ARMS OF GM:

 Electro Motive Division (EMD)


 Allison Transmission Division (ALLISON)

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 Hughes Electronic Corporation (HUGHES)
 General Motor’s International Operation (GMIO)
 General Motors Acceptance Corporation (GMAC)

CORPORATE AFFAIRS:
GM has a significant stake in the Suzuki Motor Corporation of Japan. It will
soon phase out Oldsmobile brand line of vehicles oldest in America.
General Motors has been the No. 1 Company in the Fortune magazine’s
worldwide ratings; currently it is ranked at No. 3. It has been leading the
automobile sector for many years, although the competitors are gradually
closing in. Ford Motor Company (currently ranked 4th in the Fortune list)
and the Toyota Motors are its nearest competitors.

The General Motors Group worldwide consists of the various newly


acquired /partly acquired/ fully owned subsidiaries.
 Fiat Auto Spa (20% market share)
 Fuji Heavy Industries Ltd.
 Isuzu motors Ltd.
 Suzuki Motors Corp.
 Daewoo Auto & Technology Co (DAT)-now known as GM-DAT

GENERAL MOTORS PRODUCTS:

GM (General Motors) is best known as the world’s largest full-line vehicle


manufacturer. As a leader in the transportation business GM has products
catering to about every transportation need. These products include:
 Cars, trucks, vans, buses and sport utilities
 Locomotives, diesel engines, and gas turbines
 Heavy duty automatic transmissions
 Defense equipment

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 Financial products
 Information management and communication

BRANDS ASSOCIATED WITH GM:

GM is the majority shareholder in GM Daewoo Auto & Technology Co. of


South Korea, and has product, powertrain and purchasing collaborations with
Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan. GM also has advanced
technology collaborations with DaimlerChrysler AG and BMW AG of
Germany and Toyota Motor Corp. of Japan , and vehicle manufacturing
ventures with several automakers around the world, including Toyota, Suzuki,
Shanghai Automotive Industry Corp. of China, AVTOVAZ of Russia and
Renault SA of France.GM’s automotive brands are Buick, Cadillac, Chevrolet,
GMC, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. In some
countries, the GM Group distribution network also markets vehicles
manufactured by GM Daewoo, Isuzu and Suzuki.

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Genuine GM Parts and accessories are sold under the GM, GM
Goodwrench and ACDelco brands through GM Service and Parts Operations
through GM dealerships and distributors worldwide. GM engines and
transmissions are marketed through GM Power train.

GM operates one of the world’s leading financial services companies, GMAC


Financial Services, which offers automotive and commercial financing along
with an array of mortgage and insurance products. GM’s OnStar is the industry
leader in vehicle safety, security and information services.GM’s largest national
market is the United States, followed by China, Canada, the United Kingdom
and Germany.

MAJOR DEPARTMENTS AT GMI:


1. MANUFACTURING
2. BODY SHOP
3. PAINT SHOP
4. ASSEMBLY SHOP
5. PURCHASE
6. FINANCE
7. PRODUCT ENGINEERING
8. NEW BUSINESS DEVELOPMENT
9. QUALITY
10. MAINTENANCE DEPARTMENT
11. HUMAN RESOURCE
12. MARKETING

Responsibilities of the Major Departments at GM:


A) MANUFACTURING
It is responsible for assembling various components of the car to make the
final product. Manufacturing department consists of the body shop, where
the sheet metal parts are all assembled and the basic BIW (Body In White)
structure of the body is made; paint shop, where the body and its assembly
parts are chemically treated and painted; and finally Trim Line where the
vehicle is equipped with its various components, including chassis, engine,
wheels, seats, suspensions, etc.
The GMI manufacturing has in it three major shops as follows:
A.1 BODY SHOP

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Major activity carried out in body shop is the welding of all the press
components and assembling it to form the car body as per specified model.
The maintenance team 1 is responsible for this area. This team is split into
two groups which work alternatively in A and B shifts under leadership of
team leader and assistant team leader respectively. Major equipments in this
area are Weld Transformers, Weld Guns, Fixtures, Sealer Pumps, Stud
welders, Projection welders, Mig welders, etc.

A.2 PAINT SHOP


The paint shop is further divided into Body Paint shop and Plastic paint
shop. The output from the Body shop comes to the Body paint shop and
after the paint job is completed, the painted car body is transferred to the
Assembly shop for final assembly.
Major areas or booths in Paint Shop are Pre Treatment plant, electro dip
plant, electro coat oven, spray booths, prima and topcoat oven, paint shop
ventilators, body-carrying trucks, PT-Elpo conveyors and spray-booth/oven
conveyors. The Plastic parts like Bumpers are painted in the Plastic Paint
shop and once the paint job is completed it is send to the Assembly line for
final assembly. The Major equipments in the plastic paint shop are Flaming
Zone, Spray Booth and Humidifier; Sludge handling system, Oven and
plant ventilation. Maintenance Team 4 is responsible for this area.

A.3 ASSEMBLY SHOP


This is the last activity of the Production where the car is completely
assembled. The major areas in the Assembly shop are Trim Line, Chassis
Line, Car Final and Final Process. Currently two lines are running parallel
to each other. One is T&J line producing Optra, Aveo, UVA and Spark
under the brand name of Chevrolet & second one is I-163 line producing
Tavera under the brand name of Chevrolet.

B) PURCHASE
This is the largest department in GMI in terms of resources. This
Department is mainly responsible for procuring all the components of the
car at reasonable prices from potential auto part manufacturers. Supplier
Quality Assurance (SQA) looks after the quality issues relating to the parts
supplied by the supplier and checks the parts quality before accepting it
from the supplier. This checking is done to verify whether the supplier has
performed all the tests according to the specifications given by GMI, and
dimensions and tolerance and even part functionality is checked. Finally,

23
the required documents should be completed. Material, Planning
and Control (MPC) looks after the handling of material into the company,
stores in inventory and decides how much to be ordered as per daily
requirement

C) FINANCE
Finance Department looks after all the monetary transactions and is
responsible for budgeting.

D) PRODUCT ENGINEERING
This department is responsible for initiating the localization process like
releasing the required documents, specifications and drawings. After this,
the Lead Product Engineers are required to attend technical reviews along
with the Purchase Dept. In addition, choose the supplier(s) for a particular
part. This department does not involve in designing of the parts as mainly
the designs are reproduced from Isuzu and GMDAT drawings. However, it
tries to account for the value-engineering proposals i.e. VA/VE (Value
Analysis/Value Engineering) put forward by the employees in order to
improve the product efficiency. The product engineers constantly work
towards taking care of the field issues and incorporating location specific
features into the vehicles.

E) NEW BUSINESS DEVELOPMENT


This department plays a major role in suggesting new projects, leads the
Product Planning Task Force Team, then issues the Product Change
Notification and in a way is the heart of the company.

F) QUALITY
Quality department ensures the best quality to be delivered to the
customers. Quality department audits vehicles right from body shop until
final buyoff of the vehicle. This department has Global Customer Audit
area (GCA) where the vehicle is being inspected for quality, manufacturing
and engineering related faults in front of their respective dept. director and
vice-president. The faults are noted down in a book and respective actions
are then taken.

G) MAINTENANCE DEPARTMENT

24
The maintenance department at General Motors India has a lot of
responsibilities to be taken care of. We had an overview of Strategic Asset
Management and its implementation in GMI. Let us have a brief overview
of the responsibilities of the maintenance department.

H) HUMAN RESOURCE
This department is responsible for the company’s image and makeover. It
takes care of recruitments that occur. Security too comes under the purview
of this department. Employee satisfaction is its major agenda. Moreover, the
training of company employees is done by the HR dept. every month the
training is organized to teach employees the GMS (Global Manufacturing
System). Simultaneously, the training about safety and rules, working
ergonomically and other new systems is given to the employees to make
them more competitive.

I) MARKETING
The marketing department is located at Gurgaon (Haryana) & Halol and is
responsible for vehicle sales and distribution. Also market forecasting,
product features, variant suggestions and demand & supply analysis is
carried out by Marketing. Based on the demand & supply data by marketing
department the production planning is carried out so that there remains a
balance between demand & supply, thus inventory control is achieved.
The marketing activities relate to identifying the needs of the target
customers (end user) and converting them into potential opportunities for
GMI. It also is responsible for gauging the sentiments of the GMI present
customers as regard to their vehicle performance and the services rendered
to them by GMI retailers. This is done through an extensive survey carried
out periodically by an external agency. The formats are frozen by GM Asia
Pacific operations are cannot be modified by any business unit as they are in
line with regional objectives of GMC. It helps in taking necessary
corrective action and increasing the confidence of the GMI customers in the
product.

The selling activity is initiated at the Retailer level. The Retailer is the key
in product promotion, product sales and providing after sales support for
GMI products.As such the Retailer selection and appointment forms one of
the most important activities to ensure overall support to the customer and

25
customer enthusiasm. Retailers are continuously evaluated on the
requisite criterion to meet company objectives.

Another important activity is to provide a correct and timely forecast for


possible sales of various models in the GMI range. It helps the production
team to plan, produce and supply the vehicles accordingly. This also
ensures that the customer’s requirements are met and GMI maintains a
competitive presence in the market.

The vehicles are sold through the retailer network. The vehicles need
periodic care and attention while they are used by the customers (end users).

After sales activities provide the necessary support to the customers through
the retailer network by providing guidelines for work, receiving and
resolving customer complaints, taking product feedback for corrective
action, expanding its network and providing warranty to the customers as
per the warranty terms.
The retailers are provided with a copy of after sales operational manual, this
serves as a general guideline for regular operations.

The respective Department will identify their training needs & send to
training coordinator at Delhi who will compile and forward to HR Dept.
The records are available with Training Coordinator.

The Distribution department specifically is a support function to the Sales


and After sales departments. It executes the orders placed by the retailers
for vehicles for onward delivery to the customers (end users). It is also
responsible for coordinating the market requirements with the
manufacturing team for supply.

The parts distribution department also caters to procurement and


distribution of spare parts for the GMI range of vehicles. This includes
ordering & receiving of parts from vendors & receiving and executing
orders from retailers. It incorporates all the functions of a warehouse and its
related activities.
 PURPOSE:
• Carry’s out Marketing and support activities as relative to GMI
‘s present and future range of vehicles.

26

Page 8/35
• Selling the GMI range of vehicles through an extensive
retailer network throughout the country and in selected export markets.

• Provides supporting & guiding into the areas of operation of


after sales activities in context to vehicles sold by GMI.
• Ensure that all the activities are carried out in an
environmentally friendly manner.

27
GM India Organization Chart
Karl Slym
President & MD
Sheila Sarvar
VP - Engineering
Ankush Arora
Sunil Rekhi VP – VSSM
VP Finance Dr B G Prakash
Director �R&D
P Balendran Rakesh Sabbarwal
VP Corp. Affairs Dir.-Mfg, Talegaon Prashant Swadia
Director �SFO
Yash Yadav
VP - HR Vijay Kalra
VP – Mfg, Halol

Manish Patel
VP - IS&S M Venkatram
VP - GPSC
Vempati Sastry
Director �PPPM
Anthony C Bates
General Counsel

28
Human
Resources
Department

29
GM India, Halol - Human Resources Organization Chart
Yash Yadav
Vice President - HR

Rakesh Mehta
General Manager - HR

Nachiket Upadhyay Krunal Patel Yeshwinder Patial Sailesh Kumar Ranjan Kumar
Dy Manager- HR
Niraj Chaturvedi Dy Manager – HR Dy Manager-HR Asst. Manager – HR Dy Manager – HR
Manager-General Affairs HRIT Staffing Payroll & Benefits Training & Dev.

GR Arun Sanjeev Dumasia


Chirag Vaishnav Sr. Executive - HR
Sr Executive - Admin Asst. Manager - HR
Deepak
ER Assistant
Gaurang Pandya
Sr Executive - Admn
Randhir
Emp. Benefits
Rajiv Verma
Admin Assistant

Bhavesh
Brijesh Emp. Attn. & Leave
HRIT Support

This department is responsible for the company’s image and makeover. It


takes care of recruitments that occur. Security too comes under the purview
of this department. Employee satisfaction is its major agenda. Moreover, the
training of company employees is done by the HR dept. every month the
training is organized to teach employees the GMS (Global Manufacturing
System). Simultaneously, the training about safety and rules, working
ergonomically and other new systems is given to the employees to make
them more competitive.
The spectrum oh HR activities in General motors are as follows. But there are
five main important Aspects of HR department at GM.

They are as follows:-


1. Recruitment and selection
2. Training and development
3. Employee relation
4. Welfare
5. General affairs and security.

30
1. RECRUITMENT AND SELECTION:

MAN POWER PLANNING:-

PURPOSE: Manpower planning enables a department to project its short to


long term needs on the basis of its departmental plans so that it can adjust its
manpower requirements to meet changing priorities. The more changing the
environment the department is in, the more the department needs manpower
planning to show:

• the number of recruits required in a specified timeframe and the


availability of talent
• early indications of potential recruitment or retention difficulties
• surpluses or deficiencies in certain ranks or grades
• availability of suitable qualified and experienced successors

Key elements of Man Power Planning also include Successive Planning.

PROCESS: Steps of Man Power Planning in GMI:


 Coming Year (2008) business plans and budgets are been decided by the
GM’s global head which is situated in Detroit.
 Once it is been planned and decided it goes to the head of various plants
(GMI- Halol) by the month of September-October 2007.
 The entire plans is been discussed to the Staff Head.
 Accordingly the number of employees required in an organization along
with their experience, job description is been given to the HR Department.
 It goes for the approval to the HR Head and for the senior level position
even Managing Directors approval is required.
 Once the confirmation is made recruitment coordinators would try to find
out the source i.e. internal (promotion, up gradation) and external (from data
base, advertisement, e-recruitment, etc).

31
SELECTION PROCESS:-

(A)For internal promotion (Level 2PA to Level 3PB)


(B)Temporary Assignees
(C)Exit Interviews

PURPOSE:

 The Recruitment and Selection process promotes successful hiring decisions


that can truly impact the success of a department or faculty.
 The selection of a candidate with the right combination of education, work
experience, attitude, and creativity will not only increase the quality and
stability of the workforce, it will also play a large role in bringing
management strategies and planning to fruition.

PROCESS:
(A) For internal promotion (Level 2PA to Level 3B)
 Approximate 8 to 10 people had applied for interview for “Team Leader
Position” in various area in the shop floor
 I took part in the interview as a silent observant

INDUCTION:-

PURPOSE:

 The purpose of induction is to ensure the successful implementation of a


uniform procedure for introducing new employees and help our new
employees feel part of the organization by providing information and
assistance at the time it’s needed.

 It is important that the induction process is consistent to ensure that all new
employees have the same induction experience and receive the same
messages. Induction if implemented effectively has the potential to reduce
turnover, absenteeism and boost morale.

32
PROCESS:

 Once in a month induction takes place. Either its on the first week of every
month or on the last week of every month

 Induction goes for minimum 3 days for staff level.

 Movement the newly recruited employee has joint the company training
department gets the intimation and a schedule is prepared for newly joint
recruitees’ induction.

 It is a role of an HR professional to see to it that induction is properly carried


out and is been practiced in the right manner.
After induction process is completed a small multiple choice questions test is
conducted which will help the HR department to get the feed back and also for
the audit purpose.

2. TRAINING AND DEVELOPMENT:-

PURPOSE:

 The basis purpose or believes of GMI is upgrading the skills and knowledge
of its HR through comprehensive training to enable them to efficiently
perform their duties according to the GMI standards.

PROCESS: On Job Training (OJT)

1. Training Need Identification

Off the Job Training

1. Compilation and review of identified training needs

Computer Base Training

2. Training Execution In house Training

33
External
Training

4. Training Evaluation Steps:-

Off the Job Evaluation On the Job Evaluation

~ Pre/Post Training Test ~ it is designed and taken by Department


~ Post Training Skills Test Training Coordinator (DTC)
~ Short Term Evaluation
~ Long Term Evaluation

5. Corrective Action Procedure:-


~ Counseling with trainee by some trainer for better understanding of key
Issues.
~ Imparting training again (retraining) by same/new trainer
~ Supporting trainee for self learning approach (providing books, articles,
news
Papers cuttings, Cd’s, Videos, etc to read and understand).

6. Extra:
~ Training Coordinator maintains training records other then OJT
~ Training records are preserved for 2 years after the employees’ separation
~ HR department maintains records related to education qualification and
Experience of each employee.

 Coordinating 2 major Training Programmes:-


1. Communication & Presentation Skills of assistant team leaders (ATL)
– Mr. Ranjan Kumar.

34
2. Communication & Presentation Skills of team leaders – Mr.
Ranjan Kumar.

The Kirkpatrick's Four Level Model of Training


Evaluation:-
The "Kirkpatrick Model" is the most widely used approach for evaluating the
effectiveness of training in the corporate, government, and academic worlds. It
was developed (and subsequently refined) by Donald L. Kirkpatrick, professor
of education at the University of Wisconsin and former president of the
American Society for Training and Development (ASTD).

Kirkpatrick’s Four Levels of Evaluation are:


1 • Measuring REACTION: Getting feedback from participants describing
how they felt about the various aspects of the program.
2 • Measuring LEARNING: Quantifying the learning that took place by
measuring increased knowledge, improved skills, and/or changes in
attitudes.
3 • Measuring BEHAVIOR: Gauging changes in behaviour that result from
the training program.
4 • Measuring RESULTS: Determining the final results which have come
about because of the training program.

The model is a useful tool -- but one that is oftentimes difficult to implement. It
is deceptively simple. Kirkpatrick's categories for evaluation seem almost
obvious on first approach, but when an evaluator attempts to implement them in
a real context it is easy to become mired down in detail or factors that are
difficult to identify or measure. As a result, many organizations find themselves
implementing the lower levels of the model, and don't attempt the higher levels.
For example, trainers and training departments typically conduct Level 1 and
Level 2 evaluations of their training programmes. Level 1 evaluation might
consist of gathering feedback from learners or having them fill out a survey.
Level 2 evaluations can be conducted through delivering pre-tests to learners
before they take the training and post-tests after they have completed it.
Measuring Level 3, which involves assessing how the learner's behaviour has
changed, is more complex and difficult. Finally, measuring Level 4 -- which
some have interpreted as a financial evaluation (measuring the company's return

35
on investment (ROI) in relation to the training programme) -- can be
a very complex process.
The main point to keep in mind about the Kirkpatrick Model is that it is not a
rigid set of measurements that can be universally applied to any learning
programme to evaluate its effectiveness. Instead, it is a set of flexible guidelines
that should be used to help design and implement effective and appropriate
evaluation and assessment strategies.

The Kirkpatrick's Four Levels of Evaluation are as follow:-

Level 1 – Reaction
How did participants react to the program?
Level 2 – Learning
To what extent did participants improve knowledge and skills and change
attitudes as a result of the training?
Level 3 – Behavior
To what extent did participants change their behavior back in the workplace as
a result of the training?
Level 4 – Results
What organizational benefits resulted from the training?
The content or the data sources which will help in understanding and designing
each level are as follow:

Level 1 (Reaction)

• completed participant feedback questionnaire


• informal comments from participants
• focus group sessions with participants

Level 2 (Learning)

• pre- and post-test scores


• on-the-job assessments
• supervisor reports

36
Level 3 (Behavior)

• completed self-assessment questionnaire


• on-the-job observation
• reports from customers, peers and participant’s manager

Level 4 (Results)

• financial reports
• quality inspections
• interview with sales manager

Performance appraisal:
Performance appraisal, also known as employee appraisal, is a method by
which the job performance of an employee is evaluated (generally in terms of
quality, quantity, cost and time). Performance appraisal is a part of career
development.

Performance appraisals are regular reviews of employee performance within


organizations

Generally, the aims of a performance appraisal are to:

• Give feedback on performance to employees.


• Identify employee training needs.
• Document criteria used to allocate organizational rewards.
• Form a basis for personnel decisions: salary increases, promotions,
disciplinary actions, etc.
• Provide the opportunity for organizational diagnosis and development.
• Facilitate communication between employee and administraton
• Validate selection techniques and human resource policies to meet
federal Equal Employment Opportunity requirements.

37
A common approach to assessing performance is to use a numerical
or scalar rating system whereby managers are asked to score an individual
against a number of objectives/attributes. In some companies, employees
receive assessments from their manager, peers, subordinates and customers
while also performing a self assessment. This is known as 360° appraisal. forms
good communication patterns

The most popular methods that are being used as performance appraisal process
are:

• Management by objectives
• 360 degree appraisal
• Behavioral Observation Scale
• Behaviorally Anchored Rating Scale

Trait based systems, which rely on factors such as integrity and


conscientiousness, are also commonly used by businesses. The scientific
literature on the subject provides evidence that assessing employees on factors
such as these should be avoided. The reasons for this are two-fold:

1) Because trait based systems are by definition based on personality traits, they
make it difficult for a manager to provide feedback that can cause positive
change in employee performance. This is caused by the fact that personality
dimensions are for the most part static, and while an employee can change a
specific behavior they cannot change their personality. For example, a person
who lacks integrity may stop lying to a manager because they have been caught,
but they still have low integrity and are likely to lie again when the threat of
being caught is gone.

2) Trait based systems, because they are vague, are more easily influenced by
office politics, causing them to be less reliable as a source of information on an
employee's true performance. The vagueness of these instruments allows
managers to fill them out based on who they want to/feel should get a raise,
rather than basing scores on specific behaviors employees should/should not be
engaging in. These systems are also more likely to leave a company open to
discrimination claims because a manager can make biased decisions without
having to back them up with specific behavioral information.

In the PTF Report it was claimed that “although annual Reports by ministries
and departments are obligatory, they are hardly ever prepared and submitted to

38
government, and where they, they are scanty and hardly confirms
with any standards, either in terms of contents or format. The recommendation
was that there should be target setting by ministries where concrete and
measurable achievement can be inferred

THE PROCESS OF APPRAISAL:

39
EMPLOYEE RELATIONS:-
Employee Communication Channels:-

• Diagonal Slice Meeting (DSM): This is a forum for informal discussions


between the leadership of the plant & the employees. This provides a platform to
the plant leadership to get direct feedback from the employees. Alternatively, it
provides an opportunity to the employees to share ideas & concerns & to seek
clarifications on the various issues. This meeting is held once in a month (Based
on the availability of MD). All those employees whose Birthday fall in that
month are invited to participate in the DSM. President & Managing Director
chairs this meeting.

• Business Condition Sharing Meeting: This is a forum where the


President& MD shares information related to the business conditions with level 7
& above employees & is held once a month (Based on the availability of MD).

• Annual Roll Out: This is an open forum wherein Leadership shares the
business results of preceding year’s results & rolls out the business plan for the
current year. Roll out is held in the month of January every year.

• Human Resources Technicians Sub Committee Meeting (HRTSC):


This forum provides a platform for interaction between Human Resources Staff
& the representatives from the workplace. This forum has been a great success in
resolving various workplace concerns on the principles of mutual understanding.

• Canteen Management Committee: This forum has representation from


all the departments. This forum meets once a month to address various
issues/concerns relating to the canteen.

• Transportation Committee: This forum also has representation from all


the departments & meets once a month to address the concerns related to
employee commutation.

• Fun Time: This is an informal get-together of the families of the


employees. The employees organize this function once in a year, preferably in the

40
month of December. This is a time for general enjoyment with lots
of on-stage cultural activities.

• Heartbeat: It’s a quarterly magazine for GMI. Heartbeat is tool used to


communicate to all the employees on various activities, announcements, events
etc that takes place across all the units of GMI. This magazine is generated from
the corporate office with inputs provided by the internal communication personal
from all the locations. This is distributed to all the employees.

• Junction: It’s an in-house local monthly e-magazine. It covers all the


activities, developments and initiatives etc. that are location specific. This
magazine is drafted, designed and distributed by the internal communication
personal.

4.WELFARE:-

 Gratuity & PF – As per Statute. We are a member of RPFC. We


have our account with LIC Gratuity. Both the cases payment is as
per Statute.
 Term Insurance – Family protection against natural death of
salaried employee... The payout can vary from 15 – 40 Lacs
depending on level.
 Mediclaim – Family insurance cover for 2 Lacs. Additionally 3
Lacs for some special diseases. There is a waiting period of one
month for claim from the date of registration. For maternity, 9
months waiting is mandatory.
 GPA – Coverage for medicine as well as absence from workplace.

In addition to these facilities, there are various other statutory


welfare facilities such as,

 Well furnished canteen facilities


 First aid facility
 Cold drinking water
 Locker facility
 Urinals and toilets
 Washing facility
 Lightening and ventilations.

41
Non-statutory welfare facilities:-
 Medical facilities
 Uniforms and shoes.

Security & General Affairs:

Security:

1. ID Card at Main Entry Gate.


2. Mobile with Camera is not allowed.
3. Fire Safety.
4. Visitor Security

General Affairs:

1. Pool Car - Online through Lotus Notes.


2. Canteen - Coupons issued on Tuesday & Thursday 1030 – 1130 hrs &
1930 – 2030 hrs
3. Transportation – Bus
4. Courier Services – 11 p.m. – 05:00 p.m. (Admin Room behind reception)
5. Statutory Compliances & Liaison with Government Agencies like – police,
Administration etc,
6. Corporate Social Responsibility.
7. Event Management - Business Plan rollout, Fun Time, Product Launch etc.

Career Movements:

Levels & Designations


• Level 1C/1B/1A – Team Member
• Level 2C/2B/2A – Certified TM
• Level 2PB/2PA – Asst. Team Leader
• Level 3B/3A – Team Leader
• Level 3PA/3PB – Area Leader
• Level 4C/4B – Sr. Exe /Sr. Eng
• Level 4A/5C – Asst. Manager
• Level 5B/5A – Dy. Manager
• Level 6C/6B/6A – Manager

42
• Level 7C – Div. Mgr
• Level 7B – Sr. Div. Mgr
• Level 7A – Dy. Gen. Manager
• Level 8C – General Manager
• Level 8B – Director
• Level 8A – Vice President

Communication Channels:
• GM believes in Open Door Policy and strongly encourages its employees
• To express their opinion
• To challenge status quo.
• We have several communication forums where senior managements meet
employees
• DSM (Diagonal Slice Meeting)
• Biz Information Sharing Meeting
• New Joiners’ meeting with MD
• Departmental Team Meeting
• Functional Meeting.
• Additionally all the senior people are open to discuss any
ideas/suggestions/observations/issues.

HR Policies:-

1. Recruitment and selection policy


2. Performance management policy
3. Training and development policy
4. Leave policy
5. Disciplinary code
6. Grievance code
7. Termination of employment policy
8. Retrenchment policy
9. Compensation policy
10. Policy for temporary employees
11. Health and safety policy
12. Conflict of interest policy
13. Gift policy.

43
VIKAS VARMA
GPSC M VENKATRAM
VICE PRESIDENT GLOBAL PURCHASING
AND SUPPLY CHAIN

PURCHASE
SECRETARY

Department
GM – INDIRECT/ POWERTRAIN
AC DELCO/ PROGM. MGT/ COST/
PROCESS
RAKESH MISTRY
DIRECTOR SFO & SQA

BHOLA SINGH PARAG SHARMA Neelesh ASIT ASHOK


Dange CHATTERJEE MANISH
BAGGA SR. MANAGER TIWARI KANSARA
SHAILESH HAZELA SYRUS VASANIA DEPUTY MGR EXTERIOR/ GLASS/ CHASSIS DIV MGR
SMT LEADER
SR.MANAGER – AVADHUT SR.DIV MGR – STRUCTURES & HVAC/ELECTRICAL
INTERIORS RAW MATERIALS ELECTRICAL
POWERTRAIN/ DESHPANDE INDIRECT CLOSURES
PROCESS/ COST MGR – PUR. PPM MATERIALS
/ AC DELCO PANKAJ
DHANSHETTY
Sanjeevkumar BUYER
AMIT KUMAR MUKUL KUMAR
PANDEY Sharma ASST. MANAGER
DHARMESH SHAILESH
PARMAR NERIKER
RASHMI NAIR SNEHAL KHURGE DY. MGR BUYER BUYER BUYER
BUSINESS PROCES DHAVAL SR. EXECUTIVE
& COST MGT. CHANDAWALLA DURGESH
PROG. MNGT. SRIVASTAV
RAKESH RANA BUYER JAYANT
ASST. MANAGER BUYER
ARINDAM GAURAV
VIKAS GOEL
GOSWAMI GUPTA
VAIBHAV DEVKAR BUYER
AM Anilkumar BUYER
SR. EXECUTIVE
Vacant RAJNISH SHARMA
Raghavendra
SR. EXECUTIVE Dubey SAMEER
Buyer Hatwar BUYER SHARMA
RADHESHYAM BUYER BUYER SUBHOJIT PRADEEP
MAURYA CHATTERJEE
ALINJAN BUYER BARTAKKE
BUYER
AMIT MUKHERJEE BUYER
CHOUDHARY BUYER
SR. EXECUTIVE

BIMAL CHOPRA
PRASHANT MANAGER
SHIMPI
AC DELCO
BUYER

SUMIT SARDANA
(ASST. MANGER)
FRESHTEENA
EXECUTIVE
`

BHAVIN SHAH
DY, MANAGER

PANKAJ
UPADHYAY
BUYER

ABHIJIT SINGH
BUYER

VACANT

44
Global Purchasing and Supply Chain(GPSC) is headed by Bo Anderson at the
Global level and assisting him at the Asia Pacific Operations is James Bovenzi.
Mr. M. Venkatraman is the leading authority of the GPSC in India.
GPSC can broadly be divided into 4 areas:

45
1. Direct Purchase: This department is responsible for sourcing and procuring
the parts which are directly required for the manufacturing of GM vehicles. For
Example; Powertrains purchase, chemicals, rubber etc.

2. Indirect Purchase: This department is responsible for the purchase of


products which are indirectly related to the manufacturing of the vehicles such as
Machinery, Equipments, and Office Stationery etc.

3. Supplier Quality Assurance: The SQA department is responsible for


ensuring that the materials and products purchased conform to the GM standards.
There is no compromise on the quality of the parts and products purchased by
GM.

4. Material Planning and Control Logistics: The MPCL department is


responsible for the scheduling and the shipment of parts which are local or
overseas from the supplier to the Manufacturing Line. It also looks after the
logistics, warehousing etc.

Roles of Purchasing
ADVANCE/DIRECT PURCHASING

SUPERIOR
IN
CHA
PLY
QUALITY
SUP

INDIRECT/MACHINERY & EQUIPMENT

Direct Purchase:

46
Direct Purchase has 7 sub systems and each sub system has its own
management team. The team consists of a leader at regional and global level and
buyers to buy parts relating to their sub systems and manufacturing of GM
vehicles. The parts are categorized into commodities and each commodity has a
global commodity manager. A subsystem may consist of one or more
commodities.

The seven sub systems are:


1. Interiors
2. Exteriors
3. Structures and Closures
4. HVAC and Electrical
5. Chassis
6. Power Train

Global Sourcing:

“Global Sourcing” (GS) is a tool to ensure quality, services and prices of current
parts and materials which are directly required in the manufacturing process.
Sourcing activities involving current production parts and parts with PPAP status
requires a request for quote (RFQ) to be sent to one or more suppliers. Global
sourcing does not occur once or twice a year but it is an ongoing process to
identify the best in class supplier based on cost drivers. Global sourcing starts
with the comparison of the existing conditions such as quality service ratings
towards GM and price quotations of the current suppliers with the world wide
competitors.

Functions in Purchasing:

• Supplier Quality Assurance


• Supply Chain
• Purchase Planning
• M&E & Indirect Purchasing
• Powertrain
• GM Service Parts Operation & AC Delco

47
• SFO

Identify global Develop


sourcing bidders list

Prepare
Implement source
recommendation
distributors
list

Receive,
Obtain sourcing
analyze &
recommendatio
summarize

Receive,
Prepare
analyze and
distributors list
summarize

Fundamentals of Working Together:

Expectations of the Supplier from GM India

• Equal opportunity for capable suppliers


• Integrity in everything we do
• Clearly defined expectations and rewards
• Simple and common performance metrics
• Assistance when needed
• Prompt payment

Expectations of GM India:

• Be clear on where you want to be with GM – What is supplier’s vision?


• Integrity in everything supplier does
• Alignment to GM priorities
• Focus on the right things
• Fast awareness of potential issues
• Be a GM ambassador

Prerequisites for Potential Suppliers:


48
• Monitoring of Tier 2/3 Suppliers
• Launch Readiness for New Programs
• Strong Logistics Systems
• QS 9000/TS 16949 Certification
• Engineering/technical Capabilities
• Testing and Validation Capabilities
• Production Capacity
• Financial Strength
• World Class Quality
• Flawless Execution
• World Class Technology
• Competitive Advantage
• Continued Process Capability Reviews
• Focus on Reliability and Durability
• Language/Cultural Understanding
• Human Resource & Talent Base

What do Customers “Want”:


• Emotional and compelling designs
• Rich value-transmitting interiors
• The best powertrains
• Competitive technology
• Superb quality and reliability

What Makes a World Class Supplier?

49
Superior Superior
Competitiv Organizatio Superior
e + nal + Culture
Advantage Capability

Best-in-Class Value Bring Best-in-Class “Can Do” Attitude


Quality Performance Designs Obsessed with
Sustainable Cost Breakthrough Continuous
Advantage Technology Improvement
Flawless Launches Go Fast Team Spirit
Saying “No” the Right
Way

Sustainable Contribution and Value

India: An economy ready to take-off:


 Sustained Economic growth - GDP growth outlook:
Next Decade: 8%* Next 50 years: 6%*
 FII Investment: Over US$ 7 billion so far this year
 All Time High Forex Reserves: US $ 125 Billion
 Currency: Stable, Will be Fully Convertible in 2 years
 Healthy Savings Rate: Gross domestic saving – 24.2 % of GDP
 Exports growth: Over 19 % p.a. in the last 2 years
 Growing Consumerism: Easing Interest rates
Source:
Goldman Sachs

50
Supplier
Supplier Performance
Performance Strategy
Strategy

GROW FIX EXIT

Performance is based on All Priorities


Quality/Launch/Current-Future Business

Grow the best


Fix those that have strategic value
No choice but to Exit the rest

Need to be the best to grow with GM

Asia Pacific – An opportunity to Indian Suppliers:

Opportunities:
•Highest Growth Market for OEM’s in the world – especially India,
China, ASEAN and Korea
• Supply base opportunities in many countries for Tier 1/2/3 content
• Delay in taking advantage as either a supplier or a customer of
regional opportunities will mean your competitors are gaining
momentum

Focus for Indian Suppliers:


• Migrate to contemporary technology
• Dynamic FMEAs / Control plan and strict adherence
• Continued Process capability reviews
• Focus on reliability and durability
• Monitoring of Tier 2/3 suppliers
• Launch Readiness for new programs
• Improved logistics systems to support export customer

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Supplier Details:

• Total Suppliers: 119nos.


• TS16949 Certified: 96nos.
• QS9000: 17nos.
• ISO 9000: 1no.
• Waiver: 5nos.
• ISO 14001 Certified: 67nos.
• Planned: 8nos.

Transition to a low cost base:

f
Isuzu- Japan
5%

GMDAT 52

35%
Vehicle
Distribution
Department

53
BLOCK DIAGRAM OF DISTRIBUTION PROCESS:

GMI GMI FINANCE - GMI GMI FINANCE


End User Dealer DISTRIBUTION CREDIT DISPATCH - ACS
Customer STAFF MANAGEMENT INVOICING

Check for the Goods Issue to be Recheck the


Order legibility of Check Credit done of Sales Pricing & Save
Limit against Order the Invoice in
Places entered into order(WCO) recd. SAP
Order with By Fax/ E mail Order
DMS & Print the invoice
the Dealer Upload on copies & Form 22
thro' SAP
WEB Check the stock Release the
OR availability for the Sales Order
order In the SAP
Filled Order Hand Over the
Form sent to car along with REFERENCES
Check the Limit for documents to
GMI transporter FMT/VSSM/DIS/001
the Dealer
Distribution
thro' Fax, Mail
Hand Over the
or Informed on Create Order into SAP if
car along with CONTROL POINTS
Telephone received thro' Fax, Mail
documents to
or Phone
transporter
99% Invoicing
Give the Sales Order on Same Day of
Transporter to Credit Release
to ACS (Bangalore)
dispatch the car as
Dealer gets the & get the Sales
per GMI Dispatch
desire Order released
information
from the WEB
Upload the
dispatch Info. In
Create Delivery in WEB
SAP

54
DISTRIBUTION DEPARTMENT:

The distribution department is located in GMI Halol plant. It is one of the most
important departments of the company. Distribution department is a part of
marketing department which handles all the sale & clearance of vehicles which
are distributed all over the country as well as to Nepal & Sri Lanka. Distribution
department is linked with many other departments i.e. production planning,
finance, dispatch, paint shop & body shop. It is also linked with various dealers
present in India, respective regional office & stockyards in Mumbai, Kerala &
Karnataka. In distribution the process starts from requirement given by the
dealer till the final allotment of vehicles & dispatching them to their respective
areas.

Distribution department is responsible for all the activities happening in the


plant. They are responsible for how many vehicles are to be taken into
production in the plant & how many vehicles are to be allocated for sale every
day.
The department generates various reports which give complete details about the
sales, how many vehicles are in production, number of vehicles lying in
stockyards, number of vehicles in dispatch, number of vehicles invoiced,
pending orders etc.

Distribution department also takes care of government sales which is called


DGS&D (Directorate General of Supply & Disposal). Government has enforced
certain norms which are to be followed while billing the vehicles to them. The
department follows a predefined procedure to bill the vehicles to government.

Distribution department keeps all the records of customers by whom the


vehicles are purchased. On an average GM sells around 2000 vehicles every
month all over India. Its major markets are north & west India. At present
highest sale is of Chevrolet Aveo- UVA, a new model introduced by GMI.

The marketing department is located at Gurgaon (Haryana) & Halol and is


responsible for vehicle sales and distribution. Also market forecasting, product
features, variant suggestions and demand & supply analysis is carried out by
Marketing. Based on the demand & supply data by marketing department the
production planning is carried out so that there remains a balance between
demand & supply, thus inventory control is achieved.
Another important activity is to provide a correct and timely forecast for
possible sales of various models in the GMI range. It helps the production team

55
to plan, produce and supply the vehicles accordingly. This also
ensures that the customer’s requirements are met and GMI maintains a
competitive presence in the market.

USING OVAAP SYSTEM:

OVAAP system is a web based system used by dealers to send orders. OVAAP
stands for Online Vehicle and Parts Processing. It’s a more efficient way to
place order from the customer.
As it was introduced, it is not being used extensively by the dealers to place
order. Dealers are at present placing orders via fax, telephone, e-mails. This
creates a chaos in the distribution process as all the orders are to be stored for
future reference.

Reasons for not using OVAAP facility are:


1. Dealers reluctant to use the facility.
2. Less knowledge of how to use it.
3. Finding it fax, e-mail & telephone easy to use to place orders

Troubles which may occur by not using it:


1. Difficulty to store orders given.
2. More time consumption.
3. Stressful activity for the team.
4. Wrong orders can be punched.
5. Wrong delivery is made.
6. More paper work done.

56
VEHICLE DISTRIBUTION PROCESS FLOW
CHART:
START/CUSTOMER

DEALER AREA
MANAGER

DISTRIBUTION GMI

PERFORM
YES NO MAKE
S
AVAIBILITY OF
SEND DETAILS DETAILE
STOCK/FUNDS
TO FINANCE D
PROCESS
BY GMI

NO
ACS INFORM
DIST/FINAN & GMI
(PRICING SEC)

YES

CREDIT RELEASE /INVOICE

CHECK FOR WAIT TILL


TRANSPOR AVAIBILITY
T

SEND VEHICLE END

57
PROCESS DESCRIPTION:

1. The whole process is initiated by the customer. Customer selects the car
from the respective retail outlet to buy. He gives the complete description
as to what model he wants, engine type, color, accessories etc. He places
the order to the dealer with the required specifications. Customer books
the vehicle by giving some token money.
2. After getting all the details from the customer, the dealer will check the
stock on OVAPP (Online Vehicle and Parts Processing). If the stock is
available he places the order & arrangers the funds for billing the
vehicles. If the stock is not available then he contacts the area manager &
gets the tentative availability of the vehicle & continues with the same
process stated above. Each area manager has been assigned regions
which he would be responsible for. At present their 15 area managers all
over India who are looking after the sales in their respective regions.
3. GMI distribution department accepts all the orders from the dealers/ area
managers.
4. GMI distribution checks the legibility of the orders. After that they check
the stock for availability of the vehicle that has been ordered. If the
vehicle is not available in the stock, they place the order to production
department for making the vehicle.
5. The credit limit is checked & it is then send to finance department for
further processing.
6. The finance is handled by ACS an outsourcing company in Bangalore.
The sales order from distribution department is sent to ACS. ACS
reconciles the payment against the order as well as price of the order.
After doing this it gives order to release the vehicle in SAP after
removing credit block.
7. Entry is made into SAP of creating delivery.
8. After creating delivery in SAP, the details are send to GMI Dispatch
department. Here the goods issued & are created in SAP.
9. Dispatch sends the details to ACS finance for a final check of the pricing
& saves the invoice into SAP. The details are then send back to dispatch
department.
10.Then dispatch prints the invoice cum delivery form along with challan &
form 22.
11. It checks the availability of transportation. Vehicles are send by trailers
to respective locations. Dispatch hands over the necessary document, to
transporter along with the vehicle.

58
12.If the transportation is not available, dispatch makes the
availability of the trailers as quickly as possible so that the vehicles are
not delayed & can reach the destination on time.
13. As the vehicle is received by the dealer, he does PDI (Pre Delivery
Inspection) Before delivering the vehicle to the customer.

WHOLESALE CAR ORDER FORM (WCO):


Upon opening of a Retail Sales order (RSO), the dealer will raise Wholesale
Car Order (WCO) on OVAPP (Online Vehicle and Parts Process) through
WWW.GMINDIADISTRIBUTION.COM site or EXCEL base WCO
(Wholesale Car Order) format. The WCO will clearly identify the details of the
car, shipment, payment, options, fleet, pricing structure, date of delivery to the
customer etc. One Wholesale order sheet may be used to place 20 WCO’s of
any vehicle.

The numbering of Wholesale Car Order would be first 6 characters for


dealership code, followed by a slash “/” and then a running 6 digit serial
number, i.e. Wholesale Car Order No. NDL001/005001, first six digit indicate
dealership code, British Motor Car Co. & last six digit order serial number.

WCO includes the following:


• Full description of the variant ordered
• Finance name
• Full shipping and billing address
• Mention the options for e.g. Alloy wheels clearly in bold letters
• Write the Dealer Code
• Maintain the wholesale car order series and pay accordingly
• Mark a copy to your Zonal Sales Manager for information

59
Specimen of wholesale car order form:

CAR SCHEDULING PROCEDURE:


1. Sales Planning is done by sales team. They forecast the plan & direct the
plan to GMI Distribution team. GMI Distribution team reviews the
wholesale plan & makes notes as to number of vehicles that they have to
sale in particular month.
2. GMI Distribution dept initiates according to the plan & makes strategies
accordingly.
3. Cars are scheduled according to the pre-sales plan. The procedure as
follows.
o Orders are received from dealers, zonal managers & area managers
via phone, e-mail or fax.
o Credit limits for the orders placed are reviewed by finance.
o After completing the process invoicing is done as per priority
given by sales team.

60
GMI- STOCKYARD:
GMI maintains 3 stockyards i.e. Mumbai, Kerala, Karnataka. The stockyards
can hold approx 250-300 vehicles at one time. Stockyards cater to the sale of
vehicles in their respective states because of high demand of vehicles there. E.g.
Mumbai stockyard caters to sale of vehicles in Maharashtra. If the vehicles are
sold to other states, the company will have to bear sales tax. Vehicles are send
to these stockyards from Halol plant.

MUMBAI
STOCKYARD

HALOL PLANT
GMI STOCKYARD KARNATAKA
STOCKYARD

KERALA
STOCKYARD

4. USE OF 4P’s OF MARKETING BY G.M.I


Definition of Marketing

PUTTING THE RIGHT PRODUCT AT THE RIGHT PLACE, AT THE


RIGHT PRICE AND AT THE RIGHT TIME
Marketing mix" is a general phrase used to describe the different kinds of
choices organizations have to make in the whole process of bringing a product
or service to market. The 4 Ps is one way – probably the best-known. All the 4
strategies of marketing mix are interrelated. Having a powerful marketing mix
will not only help the company in acquiring market share but will also have a
good sale & good impact in the mind of the masses.

61
The 4Ps are
• Product
• Place
• Price
• Promotion

We all know about the 4P’s of marketing viz. Product, Place, Price &
Promotion. All the 4P’s play a very important role in marketing strategy for the
company. The image of the company is built with a proper blend of all the 4P’s.
4P’s for GMI are as follows:

1. Product:
This implies to the all the vehicles that are produced at GMI plant for sale in the
market.
Different products cater to different levels of society. Different products of
GMI are.
 Tavera
 Optra
 Spark
 Aveo- UVA
 SRV

All the 5 vehicles have different variants according to the requirement of the
customer’s choice. Each variant is priced differently. GMI does this so that the
customers are given enough options to choose from. The simplest model is
“base model” which has the lowest price & the highest model is “LT” which
has the highest price. Both these variants are available in all the vehicles.

Every product is designed & in competition with other vehicles in the market.
The company keeps making changes in the features of the vehicles over a
period of time which keeps them in demand in the market as the customers are
always interested in new designs of the vehicles. New designs helps in keeping
in pace & maintain a position within the market place.

Customer always chooses the vehicles according to his needs & requirements’.
As there are many vehicles available in the market, so many choices also. GMI
vehicles are available in all the categories right from 3.5laks to 11laks with

62
different variants available which adds into the uniqueness on the
vehicles.
For e.g. Chev Spark with basic features would cater to small families where
as Chevy Optra LT model will cater to customers in the higher segment i.e.
the upper-middle or the upper class of customers.
GM is a world recognized company, so its vehicles are also manufactured
keeping in mind the global standards. All GMI vehicles are stylish, fuel
efficient, affordable, and very safe. This makes GM one of the topmost
vehicle manufacturing company in the world. GMI follows a rigorous
quality check before selling the vehicles to its customers. The process
involves many criteria on which the quality of vehicles depends on various
globally approved standards which are followed in all GM plants.

2. Place:
This is one of the important factors in marketing. GMI sells the vehicles all over
the country. They have divided India into north sales, east sales, west sales &
south sales. Major sales of vehicles are manly in metros like New Delhi,
Mumbai, Bangalore, Chennai, Hyderabad, Calcutta, Poona etc... Deliveries of
vehicles to their respective areas are managed by coordination between GMI
Distribution & Dispatch Depts. This is the most challenging job as the vehicles
should reach in the customers hand in the quickest time. They cannot afford any
delays as they could loose the customer. Therefore we need a very effective &
right distribution channel to cater to our customers. The dealers are the face of
the company in the market.

3. Price:
Pricing of the vehicles is the most crucial factor for any organization. Pricing is
done with taking into consideration of the following factors.
a) How much a customers can pay
b) Governmental policies i.e. VAT, Taxes
c) Competition with other players in the same field
d) Market condition
Indian automobile market is flooded with many local as well as international
players. Every one has a wide range of pricing strategy that attracts the
customers to them.
Any Indian customer will consider the following factors before buying the
vehicles.
a) Is the price affordable
b) What benefits is he getting from buying the vehicle.

63
c) Will the vehicle satisfy his needs
d) How cost effective will be the vehicle
E.g. if the customer has a budget of around 8 lacks, he would have a wide range
of cars to choose from. The customer will only opt for that car that will qualify
in all this criteria. GMI should implement a 3 stage pricing strategy to its
vehicles to attract customers.

In the 1st stage GMI should have an introductory price to attract the customers.
It would be a tempting offer to the customer as he is getting more facilities in a
less price. In this way the customer will be attracted & thus sale of vehicle can
pick up right from its launch into the market.

In the 2nd stage as the sale would have picked up, GMI should increase the price
by few percent. As the sale has already picked up & customers satisfied, more
customers would initiate buying the vehicles even at a slightly higher price as a
good word of mouth has already been spread by previous customers. This
would keep the market hot & demanding.

In the starting of the 3rd stage, the market has picked up pace, now when the
company wants to decline the product from the market; they should reduce the
price again so that maximum vehicles are sold in that period before the product
is taken off from the market.

Pricing can also be done my keeping festive seasons in mind. In India there is
vast sale of all kinds of vehicle’s during festivals. Initiating this kind of pricing
strategy would work wonders for the company & help them acquire a good
market share & it would also create a good impact in the customer mind. There
are always fewer sales in the months from May till August; here the company
can reduce the price of some vehicles of come up with various offers to keep
attracting more customers.

4. Promotion
Promotion plays a very important role in marketing. It is the method by which
any organization spreads awareness to the customers about their products.
Promotion is done many by using all types of media. Customers are more prone
& depended on media to gather information about the product. Promotion
educates the customers about the product is being launched in the market, how
it will be useful to customer, will the customer afford to buy it etc. The
customer pays a lot of attention to what the media says. Doing this creates a
very good image of the company in the minds of the people.

64
GMI had “Club Astra” as the time of when they sold Opel Astra into the
market. The members were Astra owners. There were get together, parties,
picnic etc... That was organized by “Club Astra”. It worked off well for GMI.
GMI should initiate more such promotional ways to attract its customers. This
would also create a brand image of the company in the market. In festive
months promotion should be in a different manner & there should be many
offers to attract the customers.

At present GMI has approx of 8-9 percent of market share. To pick up a good
share into the market GMI should concentrate more on right kind of promotion
for right kind of vehicles so that it would create a good image in the minds of
the customers & thus attract them. In this way we can say that using the basic
4P’s of marketing can be of great value to the company as well as to the
customers. This will also add to good image & more sales for the company.

65
PDCA ("Plan-Do-Check-Act") is an iterative four-step problem-solving
process typically used in business process improvement. It is also known as the
Deming Cycle, Shewhart cycle, Deming Wheel, or Plan-Do-Study-Act.

• PLAN: Establish the objectives and processes necessary to deliver results in


accordance with the expected output. By making the expected output the
focus, it differs from other techniques in that the completeness and accuracy
of the specification is also part of the improvement.
• DO: Implement the new processes. Often on a small scale if possible.
• CHECK: Measure the new processes and compare the results against the
expected results to ascertain any differences.
• ACT: Analyze the differences to determine their cause. Each will be part of
either one or more of the P-D-C-A steps. Determine where to apply changes
that will include improvement. When a pass through these four steps does not
result in the need to improve, refine the scope to which PDCA is applied until
there is a plan that involves improvement.

Feed-forward is a term describing an element or pathway within a control system


which passes a controlling signal from a source in the control system's external
environment, often a command signal from an external operator, to a load elsewhere
in its external environment. A control system which has only feed-forward behavior
responds to its control signal in a pre-defined way without responding to how the
load reacts; it is in contrast with a system that also has feedback, which adjusts the
output to take account of how it affects the load, and how the load itself may vary
unpredictably; the load is considered to belong to the external environment of the
system.

66
Some prerequisites are needed for control scheme to be reliable by
pure feed-forward without feedback: the external command or
controlling signal must be available, and the effect of the output of the system on the
load should be known (that usually means that the load must be predictably
unchanging with time). Sometimes pure feed-forward control without feedback is
called 'ballistic', because once a control signal has been sent, it cannot be further
adjusted; any corrective adjustment must be by way of a new control signal. In
contrast 'cruise control' adjusts the output in response to the load that it encounters,
by a feedback mechanism.

A lead time is the period of time between the initiation of any process of production
and the completion of that process. Thus the lead time for ordering a new car from a
manufacturer may be anywhere from 2 weeks to 6 months. In industry, lead time
reduction is an important part of lean manufacturing.

Lead time in Supply Chain Management:


A more conventional definition of Lead Time in the Supply Chain Management
realms is the time from the moment the supplier receives an order to the moment it is
shipped. In the absence of finished goods or intermediate (Work In Progress)
inventory--it is the time it takes to actually manufacture the order without any
inventory other than raw materials or supply parts.

Lead time in Manufacturing:


In the manufacturing environment, Lead Time has the same definition as that of
Supply Chain Management, but it includes the time required to ship the product to
the purchaser. The shipping time is included because the manufacturing company
needs to know when the parts will be available for Material requirements planning.
It is also possible for lead time to include the time it takes for a company to process
and have the part ready for manufacturing once it has been received. The time it
takes a company to unload a product from a truck, inspect it, and move it into
storage is non-trivial. With tight manufacturing constraints or when a company is
using Just In Time manufacturing it is important for supply chain to know how long
their own internal processes take.

67
Example:
Company A needs a part that can be manufactured in two days once Company B has
received an order. It takes three days for company A to receive the part once
shipped, and one additional day before the part is ready to go into manufacturing.

• If Company A's Supply Chain calls Company B they will be quoted a lead
time of 2 days for the part.
• If Company A's Manufacturing division asks the Supply Chain division what
the lead time is, they will be quoted 5 days since shipping will be included.
• If a line worker asks the Manufacturing Division boss what the lead time is
before the part is ready to be used, it will be 6 days because setup time will be
included.

68