457794 1..16

Anand Automotive Limited:leadership development process for creating strategic impact

Sumi Jha and Som Sekhar Bhattacharyya

PAGE 2 jEMERALD EMERGING MARKETS CASE STUDIES j VOL. 3 NO. 3 2013

DOI 10.1108/EEMCS-02-2013-0013VOL. 3 NO. 3 2013, pp. 1-16, Q Emerald Group Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1

Sumi Jha andSom Sekhar Bhattacharyya are both based at the National Institute of Industrial Engineering, Mumbai, India.

Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessfulmanagerial decision making. The author/s may havedisguised names; financial and other recognizable informationto protect confidentiality.

Mr Kawaljeet Singh Bhullar, the Group Head of Human Resources (HR) of Anand Automotive Limited (AAL) was sitting in the lounge of Mumbai airport. He was waiting to board his flight back to New Delhi (the corporate office), after a visit to the Pune plant. He felt that the difference in March temperature between Mumbai and Delhi was pretty perceptible. He was thinking that it was similar to the feelings on HRM practices he generally had, after visiting any of the 49 AAL manufacturing facilities and while heading back to the corporate office (AAL, 2012c).

Mr Bhullar was wondering what more possible efforts and direction were needed to diffuse an HR centric perspective, which touched the corporate office and all the manufacturing facilities alike. He thought, as he was taking the aerobridge to board the aircraft, that AAL had gone a long way to bring in a robust leadership development programme and activated an organization wide leadership development pipeline. In the last ten years, novel HR practices had been continuously designed and implemented to make AAL the revered employee brand that it had now become. He felt that the aerobridge for AAL had been built. Mr Bhullar was thinking what were the structural and leadership decisions he could initiate to pave the future path for a strong and sustainable AAL which could fly high in the open sky of the global market place. He believed strongly that the strength and essence of AAL resided in its HR capabilities. He contemplated that HR practices for leadership development at AAL should be able to identify the best talent, reward and retain them, and continuously groom them for higher leadership positions.

AAL, based in an emerging economy (India) and a part of a growing sector (automotive ancillaries), had to develop (by necessity not by choice) to maintain its leadership position, which it had gained since its inception. Mr Bhullar felt that the Anand leadership programme was a robust system. Though, he felt that the talent feed getting into it had to be of the desired quality and of sufficient quantity. He was contemplating increasing the spread and distribution of transformational leadership. Being an export-oriented firm catering to the needs of the worlds automobile manufacturers, he felt that the top management of AAL should have a requisite techno-managerial knowledge base, the ability to adapt to varying circumstances, be able to assimilate and tolerate different cultures and have a grand vision to hold leadership positions in the global market. The question was how to synchronize the corporate leadership development to create strategic impact at AAL. Mr Bhullar believed that then AAL would surely fly.

1. Anand Automotive Limited

AAL made its footprint in Indian business on 24 February 1961, when Gabriel India Limited started its operations for manufacturing shock absorbers in Mumbai, located in Western India (AAL, 2012c). Over the years, AAL had become one of Indias largest premier automotive systems. AAL had been a component provider catering to almost every vehicle

and engine manufacturer in India. AAL had reached a sales turnover of USD1.2 billion in2012 and had a target of achieving sales of USD2 billion by 2015 (Internal Documents of AAL, n.d.). As of January 2013, AAL had 19 companies spread across 49 plants in 11 locations in nine states of India (Exhibit 1) (AAL, 2012c). For business level details of AAL refer to Exhibit 2 (AAL, 2012b). Exhibit 2 lists the company names, its products, joint venture and technical licenses. AAL had also established successful partnerships with global firms (AAL, 2012b). Over the years these international firms were leaders in the auto ancillary sectors. AAL had established six technical licenses, 15 joint ventures and 21 global partnerships (AAL, 2012b). The top management of AAL was proud of these partnerships as it held testimony to Anands well-recognized spirit of partnership. Since inception, the company had been a market leader for auto ancillary products, a position unchallenged even in the new millennium. AAL objectives and vision are:

1. AAL organizational objectives:

B to be a world class manufacturing organization;

B to have people orientation;

B to grow ahead of the market;

B to maintain desired return on investment; and

B to have continuous improvement orientation.

2. AAL organizational vision:

B develop corporate competence to act globally;

B aspire and dare to be innovative;

B attain leadership in technology;

B achieve excellence through entrepreneurship; and

B bridge the gap between precept and practice.

India has tremendous opportunities in terms of automobiles and auto ancillaries business. Table I provides the details on growth of certain industries in the automotive sector for the year 2011-2012.

Table II shows the growth for the auto ancillary industry in the different segments.

Table I Auto industry growth rate

Industry Growth rate (%)

Two wheeler industry domestic 14.1Two wheeler industry export 35.0Commercial vehicles10-13Passenger car export 14Auto ancillaries28

Sources: Compiled from Ernst and Youngs (2012); CRISIL (2012); KPMG (2012)

Table II Auto ancillary Industry growth rate

IndustryGrowth rate (%)

Two wheeler18

Three wheeler2

Commercial vehicles21

Passenger car and utility14

Auto ancillaries53

Sources: Compiled from Ernst and Youngs (2012); CRISIL (2012); KPMG (2012)

India has also become one of the major centers for automobile manufacturing and Volkswagen, Ford, Honda, Hyundai, Skoda, BMW, etc. have manufacturing bases in India. This is in addition to indigenous Indian companies like Maruti, Tata Motors and Mahindra and Mahindra. As reflected in Table II, the growth in the automobile and auto ancillary sector in India brings many opportunities for firms like AAL. Also as reflected in Table I, the export opportunities of auto ancillary components have been rising, providing opportunities of growth for AAL. AAL from its very inception has been an exporter and a premium and reliable supplier for major Indian corporations. Table II indicates that this growth story should continue well into the second decade of the new millennium. Information provided in Tables I and II has been collected from Ernst & Youngs (2012), CRISIL (2012), KPMG (2012).

2. Leadership development at AAL

AAL, being a manufacturing firm, has been strongly dependent on the available HR for its value creation. AAL in the last five decades of its existence embarked on diversification and expansion of its business to cover a wide breadth of auto ancillary components manufacturing and their export. The technological progress and the growth of the market worldwide of the auto industry had constantly influenced AAL. As presented in Tables I and II, even in the domestic market Indian automotive industry underwent metamorphic changes and growth which also had a bearing on AAL. Generally, these changes required AAL to produce high quality, high value products. Thus, AAL as an organization had been constantly confronting changes to adapt to the changing needs of the auto industry.

AAL top management from the very beginning understood that organizations having a critical mass of employees who demonstrate leadership traits and qualities would be better able to embrace change and grow successfully (Ernst & Youngs, 2012). Leaders at AAL were expected to adapt to change comfortably and help others to be in tune with changing organizational needs. Hence, AAL was required to have an HR system which would be producing employees having leadership traits.

3. The Anand way model

Mr Bhullar, at the helm of HR affairs of AAL, with a lot of passion and energy, commented that he felt that he was as fresh as a young recruit in the organisation. Over the years, Mr Bhullar had ensured that he personally met and interacted with all the new recruits during their inductions (Internal Documents of AAL, n.d.; AAL, 2012d).

He stated that, when in the 1970s and 1980s the top management of AAL interacted with the clients of AAL in Japan or in Europe and globally in the various developed countries, they used to be both amazed and impressed by their work ethic, quality consciousness and their one firm and firm centric thinking. They had a dream of making AAL such an organization in future. Back home in India, the very senior leaders at AAL were searching for a perspective that could bind and build AAL for such a state in the future. The outcome of their considerations was the philosophy that was later christened as The Anand Way (Exhibit 3) (Internal Documents of AAL, n.d.; AAL, 2012d), the way AAL was to do its business in future.

Mr Bhullar, while addressing new recruits at a formal gathering at Parvanoo at the AnandUniversity (AU; CRISIL, 2012) (the corporate university of AAL) talked passionately aboutThe Anand Way, while the recruits listened intensely:

The Anand Way model is like an onion with three layers, the first layer guides the second layer and the second layer guides the third inner most layers. The innermost layer consists of the four corner stone philosophies of AAL. The four cornerstone philosophies help in developing the eight tenets which in turn help to define and reinforce The Anand Way. The outermost layer is all about a leadership focus of AAL. This helps AAL to achieve the aspiration to become a world class player. This is important for AAL because AAL is an export-oriented firm, in a highly competitive and quality conscious auto ancillary industry. The second layer is all about AAL being driven as a unified corporate entity (conceptualized as first pillar) to attain the organizational goals demonstrating a value focus, to provide equal opportunity to all (the second pillar) so that people get developed and found new ways for achieving organizational targets. The third pillar of the

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second layer was regarding being committed to social responsibilities that help in enabling people. The innermost layer had had four corner stone philosophies which led to The Anand Way. It is demonstrated by being value focused, develop people, find new ways and enable people. These four philosophies guide the eight tenets for achieving The Anand Way. The first philosophy of developing people is achieved by providing continuous education to all the layers of employees so as to nurture their talents and skills. This nurturing of skills and capabilities endow the employees with the capability to innovate. The philosophy of finding new way, works by recognizing and rewarding the work done by individuals at different layers. Plus, an atmosphere for encouraging innovation is created so that individuals think novel and would experiment.

See Exhibits 4 and 5 for the philosophy and values of organization.

One of the recent recruits during the coffee break remarked to a new recruit that:

At AAL we as youngsters are not afraid to experiment because we are always encouraged by our superiors to constantly improve things by generating new ideas and then experimenting. In the worst case if things do not work out at AAL we take the failure as a learning experience, a necessary evil in striving for growth.

Mr Bhullar supported the point made by commenting that:

The philosophy of enabling people work, as transparency in all forms is encouraged and individuals are empowered to voice their opinion and perspectives. The free movement of ideas and perspectives of employees across the organization help the organization to chart out the best possible course of action. Further, employees are bound with values and integrity, which results in honest communication. All these contribute towards working and building The Anand Way.

The Anand Way, the guiding force for managing AAL, set the direction for the ALDP for practicing the leadership process at AAL. The Anand Way channeled the ALDP process to emphasize nurturing talent and supporting continuous education. The objectives (Internal Documents of AAL, n.d.) of the ALDP programmes were to:

B improve operational effectiveness of employees in their current role;

B bring positive behavioural changes in the employee; andB prepare the leader for the transition from current role to possible future responsibilities. The mission of ALDP was thus to develop and maintain a pool of high potential and highperformance individuals. ALDP was expected to take care of leadership roles of futurebusiness and functional responsibilities across businesses and functional boundaries ofAAL and amongst its JV partnerships.

4. Anand leadership development programme

In 2000, AAL had put in place the ALDP (Exhibit 6) to create a sustained supply of leaders in the organization. The ALDP pipeline is shown in Exhibit 7. ALDP had five levels at which inputs were provided to develop an individual to become a top leader at AAL. The five levels of leadership are shown in Table III (Internal Documents of AAL, n.d.).

4.1 Selection criteria of different ALDP levels

The journey in the ALDP process for an employee begins with the selection as an Anand Mentee (AM). For selection as an AM a sr engineer/sr officer/sr executive/assistant manager in L1 and staff/operating engineer/jr engineer/engineer/officer/executive in L0, who simultaneously fulfills the following five criteria could enter the selection process (Internal Documents of AAL, n.d.; National Institute of Industrial Engineering, n.d.):

B having consistent very good performance in annual appraisal rating;

B minimum two years experience at AAL;

B being less than 27 years of age;

B merit listed in caliper profile (Caliper, 2013) as reviewed by an empowered panel, and finally; and

Table III ALDP Leadership levels

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Level/position Designation

ALDP levelnomenclatureRemarks

Level L1Sr engineer/sr officer/sr executive/assistant manager

AMA young professional with three to four years experience, who is at the threshold of changing direction from managing self to managing others and is required to develop new skill sets, having maximum age of 27 years

Level L2Manager/senior managerATA middle management professional below the age of 33 who needs to reorient himself/herself to becoming effective functional head

Level L3Deputy general manager/general manager

Level L4Vice president/senior vice president/director/sr directorLevel L5President/CEO

Source: Internal Documents of AAL (n.d.)

ALA senior executive under the age of 38 identified to headbusinesses and therefore needs to develop a strategic orientationTop leadership Senior most organizational executive handling strategic aspects of AAL

B demonstrating a desired level of coachability and commitment to practice as per the information gained by discussion and interviews.

AAL takes care of individuals who fall outside the AM criteria using routine Anand HR practices. The channels of entry for ALDP are shown in Exhibit 8. The selection for the next level in the ALDP is for Anand talent (AT). AT is selected from manager and senior manager levels. The selection criteria for AT remain the same as of an AM. The only two differences are in the age of individuals and the assessment of candidates by an empowered panel for exploring the potential of leadership in the candidates for AT which is not there at AM level. The age of the individuals for selection should not be more than 33 years. The selection process is elaborated in Exhibit 9.

The individuals to be selected at the Anand leader (AL) stage are drawn from deputy general manager and general manager levels. The selection criteria for AL (Exhibit 10) use the combined inputs from annual appraisal reports and information gained via discussion in interviews. The potential of the candidate for top leadership is assessed by an empowered panel (AU nominated individuals proficient in reading caliper profile and placed two levels above the employee). Further, the age of the candidate should not be more than 38 years. For the fourth and fifth levels, for top leadership selection, in-depth analysis and evaluation of strategic leadership skills of the candidates are carried out by AAL top management.

5. ALDP process

Upon successful selection into the ALDP program the AM is enrolled in a mentoring process. This mentoring is done by the mentees immediate superiors. AAL corporate university AU (see Exhibit 11) (AAL, 2012a) collect data on actions and behavior both technical and people oriented of the individual AM. The actions and behaviours of the individuals are classified in three categories start/continue/stop (Internal Documents of AAL, n.d.). An individual (mentee) might possess some desired actions and behavior. In the mentoring goal setting process, the mentor advises the mentee to continue and continue the desired actions and behavior possessed by the mentee. Certain behaviours of the mentee might be undesirable or might suffer from lacuna. Mentors engage with the mentee so as to stop the mentee from demonstrating undesired actions and behaviours. There are certain actions and behaviours in an individual which they might not possess but was desired to have for benefit of both the organization as well as the individual. The mentor and mentee would set up a goal in such cases to start and build up the required actions and behaviours. All mentor- mentee goals are set up based on multiple sittings and continuous dialogues. The goals set are time bound. Since, the individuals have a number of strengths and areas of improvements, vetting and prioritization of what actions and behavior have to be started,

continued and stopped are carried out. Once the prioritized goals of an individual mentee are identified, using Hoshin Kanri X matrix (Internal Documents of AAL, n.d.), organizational/departmental/mentoring goals and action plans are identified and aligned. In this process correlations between following aspects are explored (Internal Documents of AAL, n.d.):

B organizational and departmental goals;

B departmental and mentoring goals;

B mentoring goals and action plans; and

B organizational goals and action plans.

Subsequent to the prioritization and finalization of identified goals, force field method (Internal Documents of AAL, n.d.) is used to achieve the desired state of actions and behaviours. Force field analysis in general outlines a set of factors (forces) that influence a situation. In the force field method the mentors try to reduce the strength of opposing forces and amplify the forces pushing towards the achievement of the goal. The cycle of mentee start/continue/stop areas of intervention list preparation, area prioritization, goal congruence checking, application of force field method and detailed action plan preparation are done in three months. The mentoring process continues for 21 months. The mentor and mentee meet monthly to explore and clarify road blocks. This exploration helps in action, applications and for goal target achievement. The goal targets are measured in measurable outcomes. Once set goals are achieved, the next set of prioritized goals are addressed. Monthly mentoring reports are prepared and sent to AU. When all goals of the mentee have been achieved, the mentoring process is terminated and a final mentoring report prepared. To help the Anand mentee transform from just managing self to an expanded role of managing others, learning events (LE; Internal Documents of AAL, n.d.; AAL, 2012a) are employed. LE are carried out internally and with the help of external organizations. In the external LE engagements, AMs are sent to a 25 month sponsored distance learning programme in esteemed empanelled business schools in India. In the internal LE, which are carried out by AU, six compulsory LE are completed, namely communication Parts I and II, team building, supervisory skills, personality development and execution excellence. These LEs are conducted as short-term courses at AU. In the LE 85 percent minimum attendance is required to successfully graduate from the Anand Mentorship programme.

LEs are also used to transform AT from functional roles to business head roles and ALs from business to strategic roles. LE for AT and ALs revolve around three compulsory and three optional courses. The compulsory courses are on introduction to coaching processes, inspired communication on business etiquettes and five-step discovery process. The six optional courses which are offered by AU are on innovation, project management, emotional intelligence, financial thinking, transaction analysis and execution excellence. Of these six optional courses candidates select three LEs. There is a minimum 85 percent attendance requirement for successful completion of the AT LEs. The generic area of coaching at LE comprises transcending beyond functional mindset, communicating effectively with all stakeholders and aligning with organizational imperatives.

The Anand leadership programme is a joint responsibility of the supervisor, mentor, mentee coach and coachee. AU deeply and continuously engages in successful administration of the AM programme while the chairmans office provides support as and when required.

6. HR practices support for ALDP

The ALDP ran with the support of the various AAL HR initiatives like recruitment, performance appraisal, training and development inputs and such others (Internal Documents of AAL, n.d.).

AAL engaged itself right from the inception in various HR initiatives. Regarding the importance of HR initiatives at AAL Mr Bhullar remarked that:

HR is in our genes. In HR investments we do not look for returns. Any HR input will have a positive output if one has patience. HR is like continuous education and it requires investments. It is wrong

to think that education or HR is expensive because if one thinks education is expensive, one can try ignorance.

The genesis of HR practices at AAL began with the training programme. It focused on leadership at AAL. The training and development at AAL also comprised cross-functional exposure, placement with collaborators, interaction with in-house faculty and AU and sponsorship for part-time and full time courses. The AU played a central role in providing training and development facilities at AAL. The impact of training and development is gauged by the training effectiveness monitoring (TEM) of Kirk Patricks model at four different levels namely reaction, learning, application and impact level. The training and development programme list for the employees of AAL were derived from the five Anand production system (APS) (Exhibit 12) sections. Different sections of APS required different set of training programme for employee development (Exhibit 13). The vital step of HRM at AAL was to deal with recruitment and induction of new recruits. According to the statement of a senior level HR manager (National Institute of Industrial Engineering, n.d.), involved in recruitment:

The recruitment policy of AAL comprise of a uniform process of recruitment followed throughout the Group. Equal opportunity and fair treatment is provided to all recruits at all the input levels. Women candidates are given preference, while employees from AAL are given preference over candidates coming from outside.

The manager further commented:

These aspects of recruitment help in attracting similar standard quality of candidates in the organization for all the 19 companies. The candidates once recruited slowly became part of the culture of AAL.

A point which can be highlighted in recruitment practices of AAL is its operating engineer (OE) model. This unique HR practice at AAL resulted in AAL not having a unionized work force. Instead of worker and management, all plants of AAL had only management classification. Generally, operating engineers had to work hands-on for three to five years; thereafter most of the operating engineers moved into the first level of supervisory job function like in maintenance, process quality and process engineering. AAL, because of this OE concept, had been able to not only maintain union free but also a young and agile work force. This had made AAL a flexible organization, plus one with a continuous improvement culture because of the over whelming presence of young people. Further, over the years career progression of the individual was progressive and synchronous with the growth of AAL as an organization (Internal Documents of AAL, n.d.). Another major practice of HR at AAL was the performance management system (PMS; Internal Documents of AAL, n.d.). The PMS had two objective components at AAL, appraisal and development, which contributed to leadership building in the organization.

The appraisal component of PMS had the objectives of:

B providing direction to employees to achieve organizational goals;

B providing the basis for compensation review for the HR department for employees; and

B identifying top and bottom performers amongst employees in the organization.

The performance appraisal at AAL happened twice a year. On the efficacy of the appraisal process Mr Bhullar remarked (AAL, 2012d):

AAL appraisal process is well defined. The performance appraisal is done taking into the views of the individual self, superiors and review by the next superior of the employee. In performance appraisal key result areas has 75 percent weightage while 25 percent weightage is given to competencies. The performance appraisal is used for deciding regarding the compensation of employees, promotion of employees, identification of talent and finally for figuring out the training and development needs of employees.

The KRAs of AAL employees were established starting with the companys objectives and subsequently narrowing down to the individual level. The company set its objectives in terms of quality cost growth delivery profit (QCDGP; Internal Documents of AAL, n.d.). The QCDGP

Keywords:Leadership development, Coaching,Mentoring,Strategic impact of leadership development process

objectives helped in identifying the projects and the people assigned to particular projects. QCDGP objectives were first set and then achieved by measurable targets and milestones at various meso-levels in the organization (like departments, teams and project groups). The KRA (Internal Documents of AAL, n.d.) of the individuals were deduced from these. The annual appraisal rating had been based on individual employees meeting the planned KRAs.

The compensation system in AAL had two components, fixed and variable. Compensation review (Internal Documents of AAL, n.d.) was done by an external agency once in two years. The variable component, management incentive bonus plan, for levels above Level 2 were7-15 percent of total compensation. The variable component of the compensation system aimed to suitably reward high performing employees (Internal Documents of AAL, n.d.). The HR function of AAL, to understand job and compensation structure in a better fashion, conducted job evaluation at a fixed cycle. Job evaluation at AAL consisted of three components given by Hays group. This comprised the know how factor, the problem solving factor and the accountability factor. The qualification, the experience and the technical competency of an individual demonstrated the know how available for a job to be done. Better quantity and quality of know how helped in better problem solving. The job evaluation process of problem solving consisted of scope of responsibility, authority and the job autonomy drawn from the job, the complexity of the job, the nature of communication associated with the job. The accountability factor of the job consisted of the revenue/budget performance, span of individuals impacted by the job, the influence of the job on geography of organizational facilities. Job evaluation helped in measuring the maximum job value and this was linked with the compensation package associated with the job. Compensation was supposed to adequately reward the high-performing talents at AAL.

The AAL talent management for leadership programme developed an individual for performing in the three components of know how, problem solving and accountability factors. These three components initially served as areas of input to identify talent for leadership development and to feed the leadership pipeline. Finally, the mentioned three components also serve as the performance measurement areas by which managers were judged and compensated. Mr Bhullar wondered what next could be done to better the ALDP process and further cement it with the AAL HR practices.

References

AAL (2012a), available at: www.anandgroupindia.com/anandu.aspx (accessed 22 May 2012).

AAL (2012b), available at: www.anandgroupindia.com/collaborators.aspx (accessed 22 May 2012). AAL (2012c), available at: www.anandgroupindia.com/group_companies.aspx (accessed 22 May 2012).AAL (2012d), Interview with Mr K.S. Bhullar, Interview with Mr. K. S. Bhullar, The Group Head of HumanResources (HR), Anand Automotive Limited, 20 March 2012, on his visit at Mumbai, India.

Caliper (2013), available at: www.calipercorp.com/Portals/0/Caliper_Profile%5B1%5D.pdf (accessed12 January 2013).

CRISIL (2012), CRISIL CRBCustomised Research Bulletin, available at: Marchcrisil.com/pdf/research/ CRISIL-Research-cust-bulletin_mar12.pdf (accessed 13 February 2013).

Ernst & Youngs (2012), Ready for the Transition, available at: http://emergingmarkets.ey.com/wp- content/uploads/downloads/2012/03/india-attractiveness-final-version1.pdf (accessed 13 February,2013).

Internal Documents of AAL (n.d.), Anand Leadership Development Programme Manual.

KPMG (2012), The Indian Automotive Industry, available at: www.kpmg.de/21604.htm (accessed13 February 2013).

National Institute of Industrial Engineering (n.d.), Interview with employees (Graduate trainees and Managers) on October, November 2011 and March May 2012, during their visit to National Institute of Industrial Engineering, Mumbai, India.

Parwanoo

Pantnagar

Exhibit 2

Exhibit 1Figure E1 The geographical footprints of AAL

Gurgaon

Delhi (Corp.Office)

Dewas

Nashik

Pune

Satara

Hubli

Plants 38Locations 11

BangaloreChennai

Hosur

Table EI AAL business level units, products, joint ventures and technical licenses details

Company nameProducts Joint ventures/technical license

Behr India Limited Climate control, engine cooling module system Behr GmbH & Co. KG, GermanyRadiatorCharge air coolerCondenserVasco fan drive systemChang Yun India Limited Brass syncroniser rings CY Myutec, KoreaSingle coneMulticoneCY Myutec Automotive India Limited Syncroniser rings CY Myutec, Korea

Faurecia Emission ControlTechnologies

Exhaust systems Catalytic converters Side impact beamsReinforcement panel assembly

Faurecia Emission Control Technologies, FranceSango, Japan

Federal-Mogul Bearings India Limited Engine bearings, bushes, solid flanges, washers

Federal-Mogul Corp. USA

Gabriel India Limited Shock absorbers, struts, front forksKYB Corp. Japan, KYBSE, SpainYamaha Motor HydraulicSystem, JapanHaldex India Limited Manual Brake AdjustersHaldex AB, SwedenSelf-setting automotive brake adjusters(S-ABA) air brake components ConsepHenkel Teroson India Limited Adhesives, sealants, coatings Henkel Teroson GmbH, GermanySunrise MSI, Japan

MAHLE Filter Systems India Limited Air filters, oil filters, fuel filter, air handling systems

MAHLE Filtersysteme, GmbH Germany

Mando India Limited Hydraulic BrakesMando Corporation, Korea Shock absorbers Continental Teves, Germany Brakes systemsShock absorbersElectronic power steeringPerfect Circle India Limited Piston rings, castings MAHLE GmbH GermanyDuctile castingsStatic ironShims and plates

Spicer India LimitedAxlesDana Holding Corporation, USA

Driveshafts

Driveline components

Takata India LimitedSafety productsTakata Corp., Japan

Valeo Friction Materials India LimitedClutch facingsValeo, France

Victor Gaskets India LimitedNon-asbestos gaskets

Cylinder headHamamatsu Gasket Corp., Japan

Manifold exhaust & intake

Valve cover, oil pan

Heat Shield

Exhibit 4. The ten tenets of AAL philosophy, belief and style

B to have a grand vision;

B to manufacture using the latest technology;

B to be people centric;

B to be well planned and well prepared;

B to embrace globalization;

B to have customer focus;

B to respect organizational goals above individuals, teams and departments;

B to have strong quality consciousness;

B to communicate openly and widely; and

B to take care of community.

Exhibit 5. AAL values

B drive Anand as a unified corporate entity;

B aspire to be a world-class organization; B encourage organizational transparency; B value integrity;B encourage innovation;

B nurture talent;

B support continuous education;

B build trust and empower people;

B practice open and honest communication;

B recognize and reward achievement;

B equal opportunity employer; and

B committed to social responsibility.Exhibit 6

Exhibit 3Figure E2 The Anand way

Figure E3 The Anand Leadership Development Programme

INPUTTALENT PIPELINEDEVELOPMENT

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GETs/Ex-OEs

Young Talent (YT)

White Belt/GreenBelt IMPACT

YTs+ Bus. School Graduates with O/V rating

Anand Mentor Programme(AMP)

Mentoring bySr.Leadership

AMP + External Talent Acquisition with min.2 years service in Group

AT

Anand Talent (AT)

Anand Leader (AL)

Black Belt/VLFM Coaching byAPC/AMC Members Cross Functional/ Across JV Mobility

OXFORD Coaching byIndependent Directors Leadership Roles

Exhibit 7

Figure E4 The Anand leadership pipeline

Exhibit 9

Figure E6 Selection process for AT

Exhibit 10

Exhibit 8Figure E5 The channels of entry at Anand leadership development

Figure E7 Selection process for AL

Exhibit 11. Anand UniversityThe HR training programme focusing on leadership at AAL started in the early 1990s with the engagement of an external consultant to impart leadership skills to the managers. All the managers were trained in this programme. By 1994, since the demand for leadership training increased in AAL, the external faculty developed and certified senior level managers of AAL to become instructors in order to have more trainers internally at AAL. By 1994, the concept of lean thinking started making inroads in the AAL top management psyche. To percolate this thinking in junior and middle level management AAL established its first centre near its manufacturing facility in Parvanoo, Himachal Pradesh, India, to impart training programme on excellence in manufacturing. Over the years, the culture of getting training and education had caught momentum at AAL and the senior managers because of this demand made the small education centre located in Parvanoo into AU having full time faculty members. AU was headed by Mr Sai Ratnam who was a master black belt himself. Over a period of time many educational and training initiatives were undertaken at AU like training on black belt, white belt, green belt, manufacturing and other quality focused and related programmes. AU the corporate university had its main campus in Parvanoo, while it had four extension campuses one each in Gurgaon, Nashik, Pune, and Hosur. The focus of AU and its extension campuses was to link training and development of individual with Anand performance system. The day-to-day training programmes like Six Sigma and other operator training were also provided in the five campuses. Gurgaon Centre provides soft skill training, Nashik Centre provides worker training, Pune Centre provides maintenance and quality training and Hosur Centre provides Operating Engineer Training.

Exhibit 13

Exhibit 12Figure E8 Anand production system

Step One: People InvolvementInvolving people from the grassroots levels and sharing the vision of becoming a world- class company with them. This is the focus of people keys:--------------------------------------------------------- --Key 2 Small Group ActivitiesKey 3 Idea ImplementationKey 4 Management by ObjectivesKey 5 Skill Versatility

Step Three: Quality Maintenance Making processes capable, improving quality and solving problemseffectively,with a special focus on developing supplier.Keys for quality maintenance are woven around the Six Sigma concept of stabilizing the process and reducing variability for consistent quality. The quality key sare:----------------------------------------------------------Key 11 Process Capability Key 12 Quality Maintenance Key 13 Problem SolvingKey 14 Supplier Development

Step Five: Synchronized Manufacturing As we move to wards the last section of 20 keys we see that the improvements wemake have started to yield result in termsof synchronized flow throughout the value stream and this synchronize manufacturing comprises of three keys:----------------------------------------------------------------Key 18 Production schedulingKey 19 Delivery performance.Key 20 Coupled manufacturing and finally, Small Group ActivitiesIdea Implementation Management by Objectives Skill Versatility

Step Two: Standardizing work place Making the workplace organized, safe and visual and creating work standards to reduce variability. This is achieved using workplace keys:--------------------------------------------------------------Key 1 Value Stream DesignKey 6 SafetyKey 7 5SKey 8 Flow oriented Layout Key 9 Visual Management Key 10 Standardized Work

Step Four: Machine Effectiveness Producing quality products and delivering at customer send in time, would bepossible, only if we have reliable equipment.There are three keys in this section:-------------------------------------------------------------- Key 15 Productive MaintenanceKey 16 Efficiency ControlKey 17 Quick Change overThese keys help in improving equipment effectiveness through productive maintenance and quick change over and the benefits include Zero Breakdown Zero Accident and Zero Defect, which translate to higher productivity and lower production cost

Table EII APS and training at AAL

APS sectionTraining programs

PeopleTeam buildingCreativity Goal setting Skill buildingWorkplace Value stream mapping Layout and line balancing Standards work toolsQualitySix Sigma white belt: Basic statistical toolsCoverage 100 percent of the populationGreen belt:Basic plus advanced statistical toolsCoverage has to be 25 percent of the population (bench mark) Black belt:Advanced statistical and managerial skillsCoverage at least 1/100 (bench mark) Machine effectivenessAutonomous maintenance (AM)Planned maintenance (PM) Focused improvement (FI) Quick changeover techniquesSynchronized manufacturing KanbanProduction leveling

Corresponding authorSumi Jha can be contacted at: sumijha05@gmail.com