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FH FLENSBURG

2014

Tata NanoBalance scorecard and Vensim simulation

Submitted By:

Ashfaque Husain Nagpurwala

Mukund Padaki

Prajakta Kadu

Ibrahim Baba

A D V A N C E C O N T R O L L I N G



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Table of contents

S.No. Topic Pg. No.

1 Executive Summary 3

2 Introduction 3

2.1 Tata Groups 3

2.2 Tata Motors 3

2.3 Tata Nano 4

3 Balance scorecard 5

Cause and effect diagram 6

Strategic Map 10

4 The model 11

4.1 Learning and growth 11

4.2 financials 12

4.3 customer and market 14

4.4 business process 16

5 Scenarios and suggestions 17

6 Conclusion 20

7 Summary 20

References 21



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EXECUTIVE SUMMARY

Tata Nano is the cheapest car in the world. It is sold in home country India around Rs 1-lakh i.e.

approximately USD 2000 (€1300). It is manufactured by Tata Motor Limited, the largest automobile

company in India. It’s Chairman, Mr Ratan Tata envisions that Tata Nano to become a ―People’s car‖

which is affordable by almost everybody. Tata Nano was first launched in India on 1st April 2009 and

expected to be in Indian market by July 2009. Since launching, it has created a huge buzz all over

India. Within the first two days of lunching, it has received 5500 booking.

The car was the result of a five year research and development project carried out by Tata Nano

development team. While developing the car, Tata Motors and its Supply chain members constantly

made efforts to reduce the costs while ensuring quality of each and every component including

engine, steering, wheels, tires, windshield washing system, gear shifter etc.

INRODUCTION

The Tata Group comprises of 96 operating companies in seven business sectors: information systems

and communications; engineering; materials; services; energy; consumer products; and chemicals.

The Group was founded by Jamsetji Tata in the mid 19th century, a period when India had just set out

on the road to gaining independence from British rule.

The Tata Group is one of India's largest and most respected business conglomerates, with revenue of

over $100 billion, the equivalent of about 2 per cent of the country's GDP, and a market capitalization

of $109 billion.

The Group's 32 publicly listed enterprises — among them stand out names such as Tata Steel, Tata

Consultancy Services, Tata Motors and Tata Tea — have a combined market capitalization that is the

highest among Indian business houses in the private sector, and a shareholder base of over 2 million.The Tata Group has operations in more than 60 countries across six continents, and its companies

export products and services to 120 nations.

Every Tata company or enterprise operates independently. Each of these companies has its own board

of directors and shareholders, to whom it is answerable. There are 32 publicly listed Tata enterprises

and they have a combined market capitalization of some $109 billion, and a shareholder base of 3.5

million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS),

Tata Power, Tata Chemicals, Tata Tea, Indian Hotels and Tata Communications.

http://www.tata.com/0_about_us/history/pioneers/jamsetji_tata.htm

http://www.tata.com/tata_tea/index.htm

http://www.tata.com/tata_tea/index.htm

http://www.tata.com/0_about_us/history/pioneers/jamsetji_tata.htm



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Tata Motors:

Tata Motors was established in 1945, when the company began making trains, and is India’s largest

automobile company. The consolidated revenues of the company in 2013-14 was Rs. 2,32,834 crores

(USD 38.9 billion).

Over 8 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company’s

manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow

(Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad (Karnataka), with a total

employee base of over 60,000 people. The company’s dealer ship, sales, services and spare parts

network comprises over 6,600 touch points, across the world. Following a strategic alliance with Fiat

in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon

(Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains.

Tata Motors is also expanding its international footprint, established through exports since 1961. The

company’s commercial and passenger vehicles are already being marketed in several countries in

Europe, Africa, the Middle East, South East Asia, South Asia, South America, CIS and Russia. It has

franchisee/joint venture assembly operations in Bangladesh, Ukraine, and Senegal. The company has

its R&D centers in Pune, Jamshedpur, Lucknow, Dharwad in India, and in South Korea, Italy, Spain,

and the UK.

Tata Motors makes passenger cars, multi-utility vehicles and light, medium and heavy commercial

vehicles. Tata Motors is also the distributor of Fiat cars across India. The commercial vehicle range

extends from the light two-tonne truck to heavy dumpers and multi-axled vehicles in the above 40-

tonne segment. The company also manufactures and sells passenger buses of 12-seaters to 60-seaters

range, in the light, medium and heavy segments.

In January 2008, Tata Motors unveiled its People’s Car, the Tata Nano. The Tata Nano has been

subsequently launched, as planned, in India in March 2009, and subsequently in 2011 in Nepal and Sri

Lanka.

Tata Nano:

Tata Nano is a low priced vehicle Launched on blue ocean strategy. It targets the customer segment

which is unable to own a car due to its price. This segment is prevalent in India where most of the

people use a 2 wheeler for their daily travels.

The Idea of a low priced car was conceived by Mr. Ratan Tata with a vision of safety of families on

the roads of India and other countries, without any compromise on design.



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Tata Nano stood out of the competition because of the price range it is offered in, i.e. a half of the

then cheapest car. The cost of development of this model was around Rs. 1700 crores (around € 20

billion) and the manufacturing cost per car was around Rs. 65000/- ( € 850/- only.)

The manufacturing of Tata Nano is done in Sanand which is a rural area in Gujarat (India). Gujarat is

a labour rich as well as a industrial location which is having 2 major ports in the vicinity: the Pipavav

port and the Mundra port which are at a distance of around ~300 km from Sanand. This vicinity of

ports gives an strategic advantage of having quick access to multiple transportation mediums.

Specifications

The most attracting features of Tata nano is the price at which it is being sold. The other features

related to it are it is fully tested for safety and crash and its dimensions and capacity. Mr. Tata wanted

it to be a car which people would want to buy. The overall dimensions of the car is 3099 mm x 1495

mm x 1652 mm. it has a engine capacity of 624 cc, and a max speed of 105 km/h which clearly

indecates that it is ment for city ride only. The car comes at present in 2 variations of the basic model.

The Standard one which does not have an air conditioner installed and a Deluxe model (with AC).

The company has launched two versions for the European market which have been displayed in the

auto expo. These are pixel and megapixel which have various advanced features required in a car to

be driven on European roads and the emission as per the European standards.

Balance scorecard Approach:

This Part of the report deals with the balance scorecard approach followed to make the cause and

effect diagram and finally converted to the simulation model. This new approach to strategic

management was first detailed in a series of articles and books by Drs. Kaplan and Norton. The

balance scorecard approach follows the step wise evaluation of 4 different aspects of the company, asshown in the figure, i.e. the financial, the customer and market, the Business process and learning and



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growth. All of these aspects revolve around the company’s main vision, mission and goals. The

aspects are then evaluated and planning is made using 4 major questions. What is the objective to be

attained, what is the measure, what is the target of the company and what initiatives are taken by the

company to achieve the target?

In the lines with Tata motors and in specific with Tata Nano, the following vision and mission has

been coined by the company.

Vision: To be the most admired by our customers, employees, business partners and shareholders for

the experience and value they enjoy from being with us.

Mission: To be passionate in anticipating and providing the best vehicles and experiences that excite

our customers globally.

Values: Integrity, Accountability, Innovation, Concern for environment, Passion, for excellence,

Agility.

As the vision and mission clearly states that they are customer oriented and the company needs to

attract more and more customers towards its products, which is in itself the core objective to be

achieved by the company. The following text points out the various elements required to achieve the

objective for the product ―Tata Nano‖ Its effect on the mission of the company, and finally the

strategic map for the achievement of the objectives of the company.

Cause and effect Diagram

The diagram below shows the cause and effect diagram for the Tata Nano as formulated by the

group.



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In the cause and effect diagram we have given special emphasis on the attractiveness of the customer

and how the various measures result in the attraction of the customer. The elements in the diagram are

categorized under the 4 categories of the balance scorecard. The table below shows the belonging of

the individual element in the specific category

FINANCIAL CUSTOMER PROCESSES LEARNING AND

GROWTH

Revenue

Wage cost

Public budget

Operational cost

Depreciation cost

Mfg investment

Selling Price

Depreciation cost

Investment in HR

Cost price

Internal loans

Foreign loans

Public Budget

Net profit

Operating Profit

Product quality

Customer (sales)

Customer attractiveness

Total customer

Customer perception

Market share

Service quality

Process Quality

Production amount

Product flexibility

Safety

Production time

Depreciation of M/C

New Hiring

Production Capacity

Delivery time to market

Investment in S&D

Investment in HR

Investment in R&D

Training skills of staff

Knowledge level of staff

Innovation suggestion

Morality

New hiring

The detailed explanation as per the model will be given as and when the different segments are

unfolded. Here the report will concentrate on brief of the effects. As we can see the cause and effect

diagram is divided into 4 different parts as per the guidance of the balance scorecard.

The Learning & Growth Perspective focuses on the intangible assets of an organization, mainly on

the internal skills and capabilities of the employees that are required to support the value-creating

internal processes. These objectives describe how the people, technology, and organizational climate

combine to support strategy. Measures in this perspective are lead indicators for improvements in the

internal processes, customer and financial perspectives.

―Grooming the managers of today into the leaders of tomorrow‖ is the broad objective of the TATA

group’s leadership development programs and training processes. The group’s high value, superior –

quality training interventions are targeted at maximising the potential of its pool of managers. This is



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done by encouraging their cross functional exposure and by making cross-company mobility an

integral aspect of all leadership efforts.

Need of training:

1. New candidates on joining the organisation

2. For existing employees to refresh and enhance their knowledge.

3. To the employees in case of any updates in technology and in order to cope up with the

changes.

4. For promotion and career growth of particular employees.

5. For increasing the sense of responsibility and ownership.

Benefits of Training:

1. Improves efficiency

2. Fewer mistakes

3. Increased productivity and quality

4. Increase in morale and boost of confidence

For this Tata organizes various training & development programs (TDP) like: TAS, an entry-level

induction programme which provides young managers multiple opportunities for professional growth

and makes them part of a talent pool, TMTC, to provide training to high performers within the group

and act as a catalyst of change for TATA executives etc, dissemination of the latest knowledge and

skills among the practising managers is facilitated, facilitation of solution for organisational issues is provided. E-learning etc.

At any given point in time, there are several R&D projects going on both at the company and inside

many global universities, different start-up companies, and different vendor partners that Tata has

collaborated with across the US, Europe and India.

Coming back to the model, one of the main things which attract the customers is the feeling of

something new in it. This is driven by the innovation or the suggestion level of the staff or the R&D

personal. The ones that best exemplify thecompany’s innovative streak is the Nano, which caught the

attraction of the customer because of its affordability. This affordability was not possible without therequired training and inspiration of the employees. The other factor which Tata believes in is the

morality of the employees which is taken care by the spiritual trainings and workshops for the staff.



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The segment of the loop in the figure shows the effect of various elements on the knowledge level of

the staff. The loop can be explained as the more the number of training an employee goes through, the

more is his knowledge and skills affected which in turn results in a broader perspective of thinking

and hence innovation and suggestions from the employee. Similar effect can be observed due to the

spiritual trainings, which as per Tata, brings the feeling of ownership in the employees.

The Customer and market are basically affected by various drivers of the customer attraction. The

customer attractions is the key to increase the customer base and to its extension the revenue. In our

model we have considered the following elements which affect the customer attraction.

The loop in the above figure shows the various elements which affect the decision of the customer to

buy or not a particular car. The major ones among them are the perception of the customer which

finally had an adverse effect on the sales of the Nano because of the major glitch in the marketing, i.e

projecting as a cheap car and the quality and the selling price of the car. The other ones, having

impact but not as huge as these, are the flexibility and the delivery time. As the sales to the customer,

depends purely on the customer orders and customer order come from the attracted and converted

customers, the customer attractiveness is the key element of the model. The other element which

describes the customer segment of the balance scorecard is the market share of the company and the

customer loyalty.

The business process loop is mainly driven by the final mission of the customer attraction and

satisfaction. The elements driving this loop is the process quality and the service quality, which

finally affects the production cycle time. The process quality is improved because of the innovation

and suggestions of the employees and the research and development. The service quality is improved

by the investment in the after sales team or in sales and distribution. As the automation level goes up

so does the process quality and the final result is the reduction in the process time which is a crucial

element, because if the customer is made to wait, he will switch to some other product.

The final motive of running a company is to earn shareholders confidence by earning them some

money, which is again dependent on the number of customers attracted and the margin at which the

product is sold. This profit can also be used for the companies own interest of developing new

products and expanding the business.



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The Strategic Map:

According to the cause and effect diagrams and the understanding of the model we came up with the

following objectives, measures, targets and initiatives for the balance scorecard as the strategic. We

have targeted some (not all) of the key elements and defined the target for them. The following table

shows the strategic map of the company based on the targeted key elements.

Objectives Measures Targets Initiatives

Financial - Increase

Revenue

- Increase

operational

profit

-Reduce

operational cost

-Percentage

-Percentage

-Percentage

3%

2%

2%

-Increase sales

-Reduce

operational cost

- Reduce the per

unit cost of

distribution

Customer and

Market

- Increase

customer

attraction

- Improve

customer

perception

- Increase

flexibility of

choice for the

customer

Numbers of

customers

Scale

-

10%

>5

More choices

Bring down

customer lost

rate

Introduce new

variants and

models.

Invest in R&D and

bring new ideas

Business process - Improve

product quality

- Reduce the

defects

- Improve

productivity

- Reduce the

inventory

- Reduce

depreciation

Times

% of defects

Percentage

Percentage

5 ppm

<1000

<1.5%

Investing in R&D

Increase

customer base

Better

maintenance



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Learning and

growth

- Increase the

employee

knowledge level

- Reduce the

employee lostrate

- Increase

suggestions

Ideas/

suggestions

Percentage

Number per

person

>2

<5%

>2

-Number of

trainings

-Reduce lost rate

-Impart the

feeling of

ownership in theemployees.

Better HR Policies

-Better hiring and

trainings

The Vensim Model:

The simulation model for Tata nano has been divided into 4 parts, each relating to the divisions

mentioned by the balance scorecard approach i.e.

1. Learning and Growth

2. Business process

3. Financials

4. Customer and Market

Learning and Growth:

This part of the report deals with the learning and growth part of the model. In this part of the model

we have taken the knowledge level, which is a qualitative variable, as a level because the training

once absorbed by the employee remains until the employee leaves the organization. The more the

investment in training would boost the no. of trainings for the development of the workforce. This

would enhance the quality and quantity of knowledge of the employees. The increase in knowledge of

the workforce would enhance the quality of the output in terms of a better product. Also the effect of



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training would have a greater positive impact on the confidence and the morality of the employees.

The increase in the morality of the employees would create a sense of belonging within them leading

to them being responsible and make them more accountable for the work they do and encourage them

to contribute more towards the organisation.

The investment capital provided to the HR has been divided into 2 segments. The one as discussed

above is for the training. The other part is for hiring new employees when the company is expanding

or when the old employees retire or leave the job. We have taken in our model the 20% part of the

total capital budget as the HR investment.

This timely loss of the skilled labour due to retirements, quitting of the employees etc. reduces the

knowledge level of the organisation as a whole, which has an after effect on the suggestions or

innovations by the employees. The effect of which can seen later in the report on the customer

attraction as well as on automation and productivity.

Research & Development plays a crucial role in the addition to the knowledge base of an organisation

coupled up with innovation leading to better products. The Company's research and development

activities focus on product development, environmental technologies and vehicle safety. We have

allotted 30% of the total budget to R&D.

Finance / Financial:

The financial perspective of the company is a combination of various questions, all of which finally

merge up to one broad question that is, How profitable is the company or in this case, how well is the

product doing for the company? And are the shareholders benefitted from the investment? In

particular it encourages the identification of a few relevant high-level financial measures



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The financial perspective here in the model is split into 2 parts as can be seen, the first split deals with

the accumulation of the funds for investment and the second part deals with the costing of various

activities and the calculation of the profit.

The figure above deals with the first part. Here we have taken 3 variables as the source of fund for the

running operation; these are the loans, the shares issued and the net profit pitched in for the

companies operation. The loans and shares are taken as a continuous investment in one of the

scenarios, and as a onetime investment in the other.

The share from the shareholders and the loans charge the interest so no all the money can be used for

the next cycle therefore we have assumed 90% of the total funds divided into various investments, i.e.

1. Investment in the human resource

2. Investment in the research and development

3. Investment in the sales and distribution

4. Investment in the manufacturing

We have allocated different weights to all of these variables.

The next part of the financial segment, as shown in the figure above, deals with the costs and the

profit calculation. The cost of the car is calculated by adding all the cost associated with it. These

costs are broadly classified as the operational cost and the production cost.

The operational cost is taken as the sum total of the overhead, administration and distribution costs.

The administration cost is one of the main parts, which cover most of the expenses of the company in



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form of training of the employee, hiring of the new employees, salaries and wages etc. all these costs

sum up to the overall administration cost which sums up to a major chunk of the costs.

The overheads are not listed in the model but a constant figure taken as the total of the overheads

required for the production of the car. One of the ways to reduce the cost is to reduce these overheads.

This part is done beautifully by the Tata staff to make the world’s cheapest car.

The last part of the operations is the distribution cost which accounts for the various distributions in

and out of the house

The production cost is taken as the product of cost to produce one car given all the other expences are

covered separately under the operations cost.

The cost of cars sold is the total cost of producing the demand per month and its operational

overheads.

As we know that the Nano was the car which followed the backward pricing model, where it had

fixed the price of the car and everyone was motivated to bring down the cost of the operations to fit

into the price slab. That is why we have kept the price as constant. Though, the scenarios later will

show that the otherwise would have been better.

Customer and Market:

This part of the report deals with the most important segment that is the customer and the market.

This is also divided into 2 parts:

1. Customer attractiveness 2. Customer converted

The figure above shows the part of customer attraction. We have taken in the project the following

factors which play an important role in the buying decision of the customer. These are listed as under.

1. Price of the car

2. Income of the customer

3. Service quality

4. Safety of the passenger



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5. Mileage of the car

6. Timely availability in the market

7. Sales/perception of the customer

These factors will be explained in the following text.

The car in discussion is supposed to be the cheapest car which can be sold to the customers at a price

of Rs. 0.1million/- since this car targets a customer who cannot afford a car but can afford a bike.

Therefore this is one of the main factors of attraction of the customer.

The other major factor which affects the buying decision of the customer is his mental perception of

the product. If we talk about the Indian customers specifically, their buying decision is driven by the

society also, where a person before buying the car thinks about the reaction of the society to the car.

This was one of the major mistakes in the marketing of the product of Tata nano which said, in its

first marketing campaign as the ―cheap car‖. The Indian customer, whatever is his financial position,

does not want to be called as the owner of something cheap. Also after the few events which

highlighted the shortcomings of the product made the customer think of the product as not a safe

product even after the bottlenecks were removed.

This brings to the third criteria, the safety of the product. Any customer will think of the safety first

before the price. Though, this is not the case with the Indian buyers. Hence the weightage of safety is

small.

The 4th criteria which can be a bit confusing is the income of the customer. This factor in the model

has been programmed to show a non linear graph lookup. This is because, the car is targeted for the

customer segment of lower or middle incomes. Therefore from the affordability point of view it is

mostly preferred by the customers having a low income. But as the income increases, the customers

shift to the competitors. But again when the income is enough, the customers purchase these cars just

for the sake of pleasure or for gifting it to someone.

The other criteria’s are easy to understand.

The second part of the customers view point towards the customers and the competitors. The attracted

costumers out of the total pool of the potential customers result into the customers on the product.



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Others either select the competitors’ product which, in this case, is the Maruti Suzuki 800/ alto 800

brands which are in the market for a comparable price.

The customers are never loyal to a brand or the product. Some of them go away. This is depicted by

the lost rate, which is at present taken at a constant 5%.

Business Process:

This part of the report deals with the business process perspective, the learning and growth phase

brings about a radical and a progressive change in quality of the product and the implementation of

the strategies in the business. The defect in the products lowers its overall quality. A quality threshold

sets a benchmark for the product.

The business process part is divided into 3 parts as can be seen in the figure above. These deal with

the inventory, productivity and product quality respectively. The business process, just as the

customer and market view, is influenced by all the other views, i.e the business process, the customer

and also the financials. These will be explained in the later part of the text.

The productivity of the plant, as we have taken, is dependent on the automation rate and the

depreciation. The automation rate is a result of an over the time recommendations and innovations

and learning. From these many recommendations which come due to the different minds in the

organization and also the trainings given and the knowledge imparted, some of them actually results

in the betterment of the process cycle by either minimization of the cycle time and/or the increase in

the product quality. One effect of these is the better automization of the plant. This results in better

productivity of the plant and the better the productivity the better is the maximum capacity of the plant.



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The other factor having and obvious effect on the productivity of the plant is the amount of funds

pitched in for the manufacturing. It may be for the manufacturing or the technology. The tata nano

plant at its inception had complete robotic arms which drove the initial manufacturing of body, and

the paint shop. This required a high initial investment for the manufacturing division.

As the productivity increases with the increase in the innovation or investment, so also as the machine

is used regularly, due to wear and tear, its productivity gets decreased. This decrease in the

productivity is shown in the model by the element depreciation. This depreciation is controlled by the

depreciation factor. In order to avoid this decrease in the productivity of the plant there should be

regular maintenance so that the wear and tear can be countered.

The other part of the business process is the product quality which, in the model is directly affected

by the productivity and automation. Because the automation decreases the rate of human error, so in

the simulation a constant increase in the product quality can be seen. This product quality is having a

direct impact on the customers buying behavior because the quality of the product decides how safe

the product is. This safety or the product quality is decreased (in the view of the customer) by the

defects found in the product.

At last this section deals with the inventory, which ideally any company would prefer as low as

possible. This inventory is, as shown, increased with the increase in the production, and reduces when

the car is delivered to the customer or the distributor. The production here is governed by the

maximum of the no of customers smoothed over the time. Tata Motors decided to invest in a

CRM-DMS (Customer Relationship Management – Dealer Management System), to bring in

transparency in the operations and to get complete control over the business. Tata Nano ’s

plant functions at 20% capacity utilization. We have taken the same number as the utilization

factor in our project.

Scenarios and Suggestions:

To compare the change in various elements over the key areas of the running model, we will be

looking at the following scenarios and discuss the possible action Tata can take.

1. Increase in the operational profit. (or net proft)

2. Increase employee satisfaction/reduce employee turnover

3. Reduce inventory

The 1st scenario which we want to discuss, deals with the main reason for which any company is in

operation, i.e. to make profit. Unfortunately as the trend shows, when the car was launched it had a

good response because of the cost at which it was being sold. But later the demand of the product has



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decreased. There are multiple reasons attached to it. These include the safety issues, and the

marketing glitch of projecting it as the ―cheap‖ car. So in this case as can be seen from the graph

below, the line of the current situation shows the initial profit but later it goes down, and the customer

starts making a loss. Though the demand is not the only reason, the product price when promised was

looking into account the raw material prices, and the labour cost then. But the product was launched

after 5 years by which time the cost of raw materials had been increased many folds so the margin on

the product was less.

To overcome this situation we, in our model, suggest 2 things.

1. Increase the cost of the product

2. Change customer percption

3. Get rid of the borrowings.

The first point is shown graphically in the figure below. By increasing the price of the product to Rs.

200000/- the loss can be converted to the profit overtime. But increasing the price of the product will

counter the motto of the product, ―affordability‖.

So then we come up with the second suggestion, i.e. to increase the number of customers attracted.

This can be done in several ways. One way is to re-launch the car with a different marketing theme so

that it is not projected as a cheap car. This Tata saw much in advance and has lauched various new

variants of the car in order to attract not only the customers from the lower income group but higher

too. For this the company has launched Indian variants of Tata Nano Twist and Nano youth models.

Also it would be better if the product is not confined to the roads and customers of India alone. The

marketing of the product in other countries can also result in good profit. For this also tata has

introduced two concept cars; Tata Pixel, and Megapixel for the European roads.

As we had mapped the customer perception table in the customer and market perspective of the

model on the scale of 1 to 10, we can see in the figure below that as we increase the customer



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perception from to above 5, more customers are added, and the direct effect can be seen on the

operational as well as the net profit of the company.

The third strategy we can suggest is to get rid of the borrowing as early as possible. The effect of this

can be seen in the figure below and is self explanatory.

The second suggestion we will discuss is the increase in employee satisfaction or the reduction in the

employee loss. This is possible by better HR policies and better working conditions. Tata can take

care of this by increasing the number of trainings given to the employees. This will benefit in number

of ways. As is already explained in the text, how the Tata believes in imparting morality to the

employees by the means of religious trainings, this increase in the number of trainings will result in

the increase in the ownership level of them, which will directly result in the employee retention in the

company. This retention is very helpful because at any point in time a trained and experienced

employee is better than a new one. Now since the employee is staying with the organization the

knowledge lost is less and hence the knowledge level of the organization as a whole is high, which



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finally means that there is an increase in the innovations and the recommendations by the employee,

and hence greater flexibility and better product.

The third point suggested is the reduction in the inventory and in turn the inventory costs or

overheads. This inventory can be brought down, keeping the company profitable, by bringing more

and more customers. This increase in the customers and the higher utilization factor will not only

increase the operational profit but also the inventory can be better forecasted and reduced.

Conclusion:

The car, Tata Nano, is a car which if marketed well, could have risen the revenues and profits of the

company ―Tata‖ manifolds. This can be achieved yet by changing the style of marketing of the

product and improving the positioning of the product in minds of the customer. Some of the strategies

we have suggested in the text are either on the basis of personal views or as per the simulation of the

model. But there are many strategies which can be adopted by Tata to increase the sales.

The model in concern is prepared from either the knowledge available from the official website of

tata and balance scorecards, or from personal knowledge level.

Summary

In the report we discussed about the company of Tata and its product Tata Nano. The model has been

divided into 4 categories, that is the financial, customer and market, business process and learning

and growth. This model mainly focuses on the customer’s attraction, sales and profit of the company.

The report talks in details about why a particular element in the model is taken and what are the

effects of the element. Finally the report talks about the various scenarios which the company can

face by the change in the variables in the model. And the strategies based on the scenarios.

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References:

1. www.tata.com

2. www.wikipedia.com/tata

3. www.google.co.in/supply_chain_in_tata

4. Tutorials of vensim

5. Annual report of tata motors

http://www.tata.com/


http://www.wikipedia.com/tata


http://www.google.co.in/supply_chain_in_tata





Advance Controlling

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