This initiative helps carve out career development for staff
When Mahindra & Mahindra decided to synergise back-end operations of its automotive and tractor businesses two years ago, the goal was largely to keep costs in check. However, the exercise has thrown up a pleasant surprise on the HR (human resource) front.
“What has been working very well for us is the synergy in team management. Two large businesses have a common talent pool and we are now able to move people from one business to another,” Pawan Goenka, President (Automotive and Farm Equipment Sectors), told Business Line.
For instance, the person heading tractor sales at Swaraj was formerly with the automotive sector. Likewise, the individual entrusted with sourcing for automotive was operating a tractor plant earlier. Yet another person in charge of manufacturing at Swaraj was carrying out this function at the Haridwar auto unit.
“There are lots of such instances where talent was tapped from one business to be used in the other,” Goenka said. From M&M’s point of view, this initiative has helped carve out career development paths for its employees.
On the business side, the integration spin-offs are already evident in sourcing of parts which is “working extremely well”. In addition, there are synergies in R&D and in technology areas such as engines, transmissions, electricals and computer engineering where common teams are working on the auto and tractor businesses.
Going forward, there will be other synergies with SsangYong Motor, the Korean entity now in M&M’s ownership. According to Goenka, this will create an “economic powerhouse” while dealing with suppliers.
Incidentally, on the tractor side, the company ‘down-stocked’ by nearly 4,000 units last quarter and, in terms of production, there were 5,000 tractors less than overall sales. “Our retails are higher than billing which means we have down-stocked at dealerships too. To that extent, our overall inventory situation is very good,” Goenka said.
These are not the best of times for the tractor industry. In January, the forecast was 8-9 per cent growth which was later pruned to five per cent and is now at a more realistic 2-3 per cent.
“The tractor industry is cyclical and has seen its share of highs and lows. Rains are not such an issue as they were once upon a time,” Goenka said. The bigger things to worry about are poor labour availability and overall farm income levels.