The Hand Behind The Wheel

The Hand Behind The Wheel

Indian company Ashok Leyland says IT masks the auto major’s mammoth size. It also gives it innovation and agility — allowing it to go places more compact firms typically reach

In a country with one of the largest and busiest rail systems in the world, Ashok Leyland's buses carry more people than the entire Indian rail network. It's a statistic that proves the auto giant's leadership, but it also says a lot about its dedication to staying a leader and its resistance to resting on its laurels.

And in the last few years, it has had more reason than ever to sit back and let the market drive in the profits. With the buoyant economy, the robust growth of freight carriers and the Supreme Court's strict enforcement of payload restrictions, the enterprise could have gone with the flow and still kept investors happy. It didn't. While the commercial vehicle industry grew at 33 per cent, Ashok Leyland grew 37 per cent.

How does it do it? In an industry rife with competition, Ashok Leyland has to imitate the reaction time of smaller, more agile companies. R. Seshasayee says that it stays ahead with innovation. And IT makes that possible. Ashok Leyland stands by five values: being international, speedy, innovative, ethical and value creating. Seshasayee elaborates how IT helps the company meet these needs.

What is IT's place at Ashok Leyland?

Obviously, IT is very important to us. To use an automotive metaphor, I'd say that if people were the main engine for movement and growth, IT is the transmission. IT is the system through which the power of people is transmitted into movement -- the organization's movement. IT has been pretty important to our set up. Over the last several years, we have evolved our IT architecture from a purely transaction-based architecture -- which was our starting point -- to a stage where IT is integral to product development and our marketing strategies. IT is totally interwoven into the DNA of the company.

How have you optimized your processes and has this had an impact on costs?

Yes, of course. If you look at the last nine years, there is no doubt that we have achieved cost optimization. We started this journey about 10 years ago when we put together a long-term IT strategy.

That roadmap has become integral to the profit plan of the company. Since then, we have had 30 per cent growth in production and sales. Return on investments has also moved steadily upwards during this period -- without a single year of backtracking. We've had steady improvements year after year on all parameters related to asset and inventory turnaround. This progress has also shown up in manpower productivity analysis. None of this would have been possible without making IT an integral part of our growth strategy.

At a sublime level, the results are evident. And, at more specific levels, the use of IT has certainly enabled us to take critical action with regard to inventory -- and with fairly impressive results. It has also improved our efficiency in terms of logistics since we have a hundred thousand vehicles moving around the country.

What about innovation? How has it contributed to the organization?

One of the interesting things we have today is a huge program that connects thousands of mechanics directly to us. We are looking at state-of-art-technology using voice recognition, etcetera. With this, we will be able to reach out to a much larger universe of customers -- not necessarily direct customers -- but indirect ones like mechanics and retailers. That's a part of our innovation, and while we are still studying it, it is most likely to be Web-based technology.

Also, we were one of the first few in the industry to have supply chain automation. We have an active portal, which enables all our suppliers to appraise vendor quality for themselves. It allows complete transparency; everybody can access information on the transactions of the company and so on. It's an active portal.

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