G8 Project Scorpio

8/10/2019 G8 Project Scorpio

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Project Scorpio: The Making

India's First Indigenous Sports UtilVehicle

Presented B


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Background

M&M was setup in 1945 to manufacture general-purpose utility

Diversified into the manufacture of tractors for agricult

commercial vehicles (LCVs).

Diversified into other sectors through JVs.

M&Msfarm equipment division received many awards & reco

Enjoyed a Monopoly in the Utility Vehicle segment till 1990s

Toyota entered.


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Why M&M needed to diversify its produc

Vehicles like Armada, Pick-up, CL, MaXX started to face t

Fierce competition from Telco after launch of Sumo and later

like Sierra, Safari and Qualis.

Sumo sold 1,00,000 units between 1994-97 while M&M was 26

While Qualis sales were more than 50000 units within 2 yea

This immense competition was the cause of M & Msstagnant

2000, listing its share price at all time low of Rs 100.


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The Scorpio Project and its Stages

Scorpio project was very important as it shed its image as a ma

vehicle for rural and break into urban market.New world class line were set up by M&M at the plant by

manufacture component.

Existing facilities were used for other products too in M & M.

Integrated and design manufacturing (IDAM) was used, which w

with the help of Lucas Engineering.

IDAM helped them to easier to make what you can sell rather have made.


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Indian automobile was divided into four segment and Scorp

themselves in luxury segment.

Scorpion was designed to fall between passenger car and SUV.

QFD was used to analysed key buying factor.

Stage I: Pre- Production (contd.)


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Stage II: Supplier Involvement

One of the few vehicles to be built with complete supplier invo

beginning till the end.

Identified the best vendors in their fields and collabor

Bridgestone USA for tyres, Samlip from Korea for suspension

from France for Petrol Engines and AVL from Austria for Diese

Introduction of innovative sourcing system helping M&

Reduction.

Setting up Supplier's facilities at the companysplant.


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Stage III: Team Scorpio

A total of 120 people comprised of the team that was involved i

project, under the leadership of Mr. Pawan Goenka.

These 120 people had average age of 27 years which gave the

experience and also they were divided into 19 multitasking grou

The teams were given autonomy and had to take ownership of th

The teams were made responsible for delivering quality at l

which made possible to the making of Rs. 5.50 Billion, alm

worldwide expenditures for making SUV project.


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Stage IV: Testing & Validation

Like very few companies in India, M&M launched Scorpio

was completely ready, in contrary to launch it first and thenalthough the process of launching the vehicle was delayed.

Hence, M&M didnthave to recall any of their vehicles.

STEP (Simultaneous Testing and Examination Process) Test:

Built 74 vehicles for testing.


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Production Stage:

Each component and combination was tested vigorously tethat only the best combination of form and function remained

NOVAC (New overall vehicle audit-customer) System:

The complete vehicle was put through the NOVA-C system toverall quality of the production process.

Road worthiness was also tested for 2 years approximate

launch.


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The Launch and After

Launch of a proud product.

Preferred SUV in the Indian automobile market.

Companysincome rose by 22% for the fiscal ended March 200

The customers felt a pride of ownership.

Gave a touch of class to the ownersimage.

Aggressive marketing boldened by flawless manufacturinpurchasers happy.

Some criticisms:

Doubt in its capability to produce in-house.

The product was not crash tested.


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Scorpio's Specifications QFD Process:

Customer

attributes

P

S


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SWOT AnalysisStrengths Weakness

1. Good performance for long distances

2. Powerful player in the taxi/rental segment

3. Good presence in the rural and tier-2 cities segment

4. Maintenance cost is low

1. Overall vehicle performance n

standards

2. Low advertising and brand visi

Opportunity Threats

1. Increasing purchasing power and growing target

2. Leverage strong brand name by more advertising

3. Newer innovations

1. Competition

2. Government regulations & incre

3. Improvement in public transpor


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Product Innovation Charter

Background

Key ideas from situation analysis

Urban market needed a vehicle that looked like an SUV bucomfort and aesthetic of a passenger car, Scorpio catersegment which was neglected earlier.

Managerial dicta

Their aim was to develop an innovative and flexible msystem which catered to the demands of the customers. Thtarget urban population who thought that M&M produces vare suitable only for rural use.


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Reasons for new PIC

Increased competition in UV market in 1990s, market shrapidly

TelcosSumo was much more aesthetic looking than M&Mmade them popular in urban market. M&M did not catermarket.

Sales stagnated by early 2000s and share price touched an aRs. 100


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Focus

Technological Dimensions

Product will be available in three variants2 in Diesel ,1

Color variantsRed , Blue , Silver, Black.

Big in size, as size matters , using latest technology .

Key buying factors to be analyzed using a QualDeployment Process (QFD).To be able to deploy funcquality, with complete supplier involvement.

The vehicle have to be cooled from 40 degrees to 27 minutes.

Use of IDAM (Integrated Design & Manufacturing)


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Market Dimensions

Scorpio would be somewhere between a passenger car an

Scorpio would be in C segment of the market (luxurious).

The approach shall be of a car+, offering benefits of car

an SUV.

Power of the vehicle shall make a statement.

Stick to the design of the car through out the development

On par with world class vehicles- Pajero, Landcruiser.


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Goals

Profit

To achieve 22% increase in companys total income

product. To increase revenues from the auto sector by 3billions25 billions)

Growth

To become a preferred SUV in the market. Increase shareho

Market Status

Increase market share from 15%- 22% by fiscal year 2004

Further increase to double to 49% by fiscal year 2005.

Ruggedness with comfort and aesthetic appeal.


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Guidelines

General

To be launched after complete testing.

Degree of Innovativeness- New to the Market

Timing

Product should be developed in a time period of 5 yea


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Question: 1

Scorpio was said to be M&Ms attempt to reinvent itself

automobile market. How did Scorpio help M&M improve i

counter competition from giants like Telco and Toyota? Do you

was right in departing from its traditional forte and positioning

urban UV?

S i h l M&M i it i d t


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Scorpio help M&M improve its image and counter compgiants like Telco and Toyota:

Scorpio turned out to be a winning move by M&M.

Helped shed its image as a maker of vehicles for rural use.

Got a foot-hold of the urban market.

After launch, it gave stiff competition to others.

Bestowed a pride of ownership and had a powerful appeal, usuits closest competitor like Qualis.

Used state of the art technology and materials to give a world cla

I l ti th t f D i


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Implementing the concepts of Design:

Design for Speed to Market

Design for Use of Manufacture

Design for Differentiation

Design to meet Customer needs

Design to build or supportcorporate identity

Design for the Environment

Reduced the manufacturing cost

They adopted QFD technique to gath

needs and turned them into product sp

Quality, Ruggedness, Reliability

Established brand name in UV m

Integrated Quality Products with Bett

Use of Cross-functional teams & out

best suppliers


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Mahindra and Mahindra was very much on path in positionian urban UV because:

There was a huge potential in the urban market.

Scorpio combined ruggedness with comfort.

Expectations and perceptions of the buyer matched with Scorpio

By end of 2004 Scorpio survived the trend of being used as vehicle, but being used primarily as a personal vehicle due to itand impressive interiors.


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Question: 2

Suppliers played a vital role in the success of Project Scor

M&Ms supplier strategy for Project Scorpio. How important

suppliers autonomy? Also, comment on the rationale behind the

cross-functional teams for the project.

Source: Economic Times, Corp


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, p

Mahindra and Mahindra Supplier Strategy


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Mahindra and Mahindra Supplier Strategy

Supplier involvement from beginning to end.

World Best companies were chosen by M&M as suppliers of Scorpio.

Outsourced multiple suppliers.

Importance of supplier autonomy

M&M gave autonomy and decentralized the supply system.

Freedom to do anything as long as it comes in budget constra

Rationale behind the formation of cross-functional teams

Customer centric.

Well balanced.

Faster pace of work.


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Question: 3

Scorpio proved to be an immense success. What were the re

success? Comment on the importance of testing and valid

automobile industry. What were the main criticisms against Scorp

Reasons for success:


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Target market:C Segment of Auto segment in India.

Product positioning:Intermediary of a Passenger Car & SUV

Competitive comparison: Looks & Styling, Refinement

Augmentation dimensions:

Reasons for success:

Applying the concept of Product Protocol


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Timing: Launch of the product in highly potential market

Marketing requirements: Aggressive & Ubiquitous advertising

tagline of Nothing Else will Do

Financial requirements: Design to Cost, 1/5th of the total glob

expenditure on a similar project.

Production requirements: Outsourcing from Bestin Class

Corporate strategy requirements: To get a foothold in the Urb

Potholes:No crash test, Doubts in M&Mscapabilities to produ


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Source

Mahindra Scorpio used by Italy's CNAS


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Criticism:

Few criticism raised were:

Amount of outsourcing that went in the making of Scorpio

Collaboration with Foreign companies

Not Crash Tested

Despite the shortcomings, Scorpio proved to be a milestone for

Indian automobile industry


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G8 Project Scorpio

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