No. 30, 1st Floor, Pride Quadra, Bellary Road, Hebbal, Bengaluru, Karnataka 560024

GROUP- 4Shaivi Kharbikar, Sekhar Choudhury, Swastika Kundu,T

arun Pandey, Ankit Kumar Singh, Pratikshya Sahoo, Ipshita Shukla,S wapnil Tiwari , Manal verma

LEADERSHIP1a. • The Vision & Mission are arrived through involving senior leaders,

employees and by the periodic review based on changes in the stakeholder’s expectations.

• To review effectiveness of personal leadership behavior 360 degree appraisal system is being introduced in 2011-12.

Eg :A.M.naik- Believe in scale and speed-scale in terms of largeness of plant and production. Speed in terms of organization change. From the time he became the director of the company, grew upto 80% in terms of financial statement. A.M. Naik never took any project less than 500 cr.

1b.• Leaders at LTK monitor and improve organizations

performance of interdependent functional modules (manufacturing, HR, finance, purchase, customer interface) driven by process owner (champion).

1c.• At LTK leaders engage with external stakeholders and

customers to understand their needs and expectations & develop appropriate approaches.

• Reporting to key stake holders & customers is done in very transparent manner.

• Leaders create systems for innovation (examples: new model PC 300 mighty excavator, new process)

1.d.• Leaders create culture of involvement with people by guiding &

empowering, developing ownership, entrepreneurship & improvement orientation.

• This is done by forming break through teams like COMET. Leaders inspire people by participating in Kaizen/ Suggestion / employee of the quarter / team of the quarter presentations and encourage them for their contributions. Leaders at all levels assess and refine the process of inspiring people.

1.e.• Leaders at LTK have initiated several change management initiatives like

BPR, project Lakshya, ERP introduction, right sizing, Script 6500, S&OP, COMET 2012 & ERP R12.

• Change manager is supervised by steering committee comprising senior leadership of LTK.

• Operational effectiveness is assessed in ORCs; strategic effectiveness is assessed in the board meetings as well as other forums such as war room meetings, quarterly review meetings.

STRATEGY2.a. • At LTK strategy is developed by Strategic Planning Group (SPG),

understanding the needs &• expectations of the stakeholders and external environment.• SPG is vested with responsibility of collecting/analyzing data from various

sources and also its assessment and refinement for adequacy. • SPG has defined approaches to assess stakeholder expectations (viz, from

shareholders, customer, employees, suppliers, society, dealers and Govt ). • SPG is the nodal group for understanding & anticipating political, legal &

regulatory changes & its impact on the organization.

2.b.• LTK follows a two stage strategic planning process. • In the first stage L&T-CMB will take the inputs of the external

environment including competitor activity, SWOT analysis and customer requirement to formulate plan for existing products and also any need for new products to plug the gaps in the portfolio to serve current / future customers.

• This forms one of the inputs for strategic plan of LTK.

2.c.• Strategic plan is developed based on understanding internal

capabilities focused on two pillars the first one ‘core competency’ comprising capabilities such as scale & speed. flexibility, technology, people capability & supply chain strength;

• the second one ‘Operational excellence’comprising of ‘production/quality/cost competitiveness capability, people capability, safety in operations, schedule adherence, Finance & risk management & sustainability reporting.

2.d.• As a part of Strategic planning process (SPP), 4 years (2010-13) Strategic Planning Document

(SPD) is made that lays down the strategic initiatives; key thrust areas, higher level objectives, deployment and yearly objectives.

• Incremental improvements are carried out in the form of kaizen, suggestions, value engineering exercises, cross-functional teams and small group activities.

• For breakthrough improvements, a special task force with full-time members is created with specific mandates to achieve clearly defined deliverables on a project mode.

• For the year 2011 strategic theme is cost competiveness (cost competency) a separate team named ‘COMET 2012’ is working on this.

• Some of the key outcomes of SPP are new product/ variant introduction, pricing decisions,CAPEX, fund management, New manufacturing line introduction, inventory control,Improvements in parts supply, career development, society development projects etc,

PEOPLE3.a. • At LTK; leadership, strategic plan, people strategy and HRM

processes are interdependent and systematically deployed.• People strategy that drives HR policy is arrived based on strategic

plan, findings from employee satisfaction survey, external assessments & benchmarking.

• People strategy is addressed through development of flexible work force, cross functional team approach for cost optimization, nurturing innovation and developing leadership.

3.b.• People knowledge and capabilities are developed through interventions like training,

job rotation, assigning to projects. • Functional and managerial competencies for the various roles are identified and the

gaps between needed and existing competencies are filled by training and non training interventions.

• Training and development address orientation training, functional / managerial and core development training like SDP, EDP and MDP. (SKILL, entreprenuer, managerial)

• Through leadership development process, top performers are assessed at assessment centers and their strengths and areas of improvement are identified and necessary interventions are provided to groom leadership talent.

3.c.• The performance of the employee is reviewed on regular basis,

based on which top performers are identified and people are rewarded.

• People are empowered to initiate improvements through kaizens, contribute innovative ideas through suggestion scheme and participate in teams. People are recognized by identifying employee of the quarter/team of the quarter and through monetary rewards for suggestions resulting in savings and also intangible benefits.

3.d.• LTK has various channels for communication to share;

policies and procedures, business related information, day to day communications, knowledge sharing etc,. Communication effectiveness is reviewed periodically. Various committees enable people engagement and involvement in operational improvements.

3.e.• People are cared through various welfare schemes for the

employee & family. Sports and finearts programs for employees and family members are enablers for work life balance. People are encouraged to participate in CSR activities as volunteers in various projects undertaken by LTK and ‘Surabhi’ which is team of female employees & spouses of LTK employees.

PARTNERSHIP AND RESOURCES

4.a.• Two main partners-model bucket and attachment pvt.ltd, Rishi

consfab pvt.ltd.• Partnerships and resources are the key enablers for deployment of

policy & strategy across the organization. • Partnerships in the area of material supplies, technology, services,

logistics, in sourcing are leveraged for mutual benefit. • Optimum utilization of resources & its conservation ensures no

adverse effect on environment.

4.b.• LTK leverages the competency of JV partners; Komatsu: for technology,

futuristic products, manufacturing know how & L&T: for Sales and Service. • LTK has forged enduring partnership with suppliers (dedicated vendors &

long term vendors) for supply of fabricated structures, excavator cabins, hydraulic hoses, precision castings etc,. In sourced partnerships for material handling and ware house management.

• Partnership in service areas like L&T-infotech for IT support; IIMs, XLRI, DDI (development dimensions international) for training & development (through Corp. HR).

4.c.• At LTK finances are effectively managed by well established budget and

performance• management system. • Treasury management ensures cash flow for CAPEX and working capital

requirements. • LTK leverages credit ratings from agencies like CRISIL/ICRA to keep down

the interest cost. During 10-11 LTK was able to borrow for short term at sub 7.25% rate & commercial paper market at 4.25% which is bench mark.

4.d.• Building, equipment, materials and natural resources are

managed in sustainable way. • Targets for equipment uptime is at 97%, utilization at 90%

and OEE of critical assets at 70%.

4.d.• LTK effectively optimizes natural resources by various

improvement projects. • Technology is effectively managed at LTK with road map for

product and process improvements over the years for ex: KOMTRAX technology for tracking m/c performance was introduced in 2010.

• Cylinder manufacturing process improvement technology of roller burnishing is in pipeline for the year 2011.

4.e.• At LTK Information and knowledge are effectively

managed. • Our IT policy states its commitment ‘to provide consistent

& reliable information to users to leverage IT for business benefit’.

• IT enables interface for real time transactions between LTK & suppliers. Oracle ERP custom built application facilitates knowledge sharing and decision support.

PROCESSES, PRODUCT AND SERVICES

5.a.• At LTK Processes are designed & managed to optimize stakeholder value.• Over the years distinct strategic planning phases have driven the key

processes, the current period 2010-13 being guided by SPD. • All key processes viz,. strategic planning process, Manufacturing, SCM,

new product introduction, quality, HR, finance, IT & S&OP are effectively managed by designated process owners with defined agenda having critical success factors.

• The processes are audited periodically by certified auditors.

5.b.• Products and services are developed to create optimum value for the customer.• Voice of customer is captured through customer satisfaction survey, customer meets,

feedback from sales and service engineers and through customer complaints. • The same is one of the factors considered in introducing new products/

variants/applications or improved features in the product.• Apart from introducing new products and variants innovative ideas like speed

controller and auto decel feature has potential for in reduction of fuel consumption upto 25542 kilo litres and CO2 emissions upto 69046 tons per year.

• Some of the value added services to customers are special applications like cutter & pile driver and tunneling attachments.

5.c.• Strong manufacturing base and skilled manpower of LTK

and country wide distribution and service network of L&T, its brand equity and latest technology products & superior reliability are the USP for our products.

5.d.• Products of LTK are produced and delivered through

operations that has been continuously evolving. • Manufacturing organization has been stream lined

through BPR. Manufacturing flow lines are introduced in all PUs in phased manner.

• S&OP cell is formed to optimize resources by accurate / stable forecast and to enhance product & spare parts delivery efficiency.

5.e.• Customer relations are managed & enhanced through

effective customer access mechanism.• Customer relationship is managed by sales and service

engineers at territories, backed by zonal & divisional and marketing team. For better upkeep and maintenance of products, training is provided to customers at dedicated product training centre.

CUSTOMER RESULTPerception Measures• New products developed on the basis of market research.• Segment analysis carried out in 6 regions infer that LTK’s product

enjoy higher rating than competitors.Performance Indicators:• Market share of LTK products has increased from 28% to 29.4% .• LTK has fulfilled the Emission norms, as a result less complaints.• MTBF for all models show positive trend.

PEOPLE RESULTPerception Measures:Analyzing Executive Support System data from 1998 to 2010 shows consistent and positive trend in people perception under various parameters such as: (1) organizational values & ethics (2) work environment (3) team work & communication (4) compensation & benefits is not favorable as this is an attribute influenced by collective bargaining. (5) employee relations (6) employee welfare schemes (7) motivation & job performance (8) leadership & training (9) career development as well as overall employee satisfaction index.

The perception of unionized employees for Gap analysis for key issues for improvement are done and addressed through suitable enablers. People perception on service functions like HR, administration and IT show favorable response.

Performance Indicators:Internal performance indicators over the years show favorable trends in various parameters like (1) number of people promoted (2) participation in cross functional team.(3) training man-days (4) training effectiveness (5) participation in safety programs (6) awards to employees children. CTC for unionized employees compares favorably being more than industry average. Incentive analysis shows favorable trend. Attrition rate over the years has remained < 3%.

SOCIETY RESULT

• Perception MeasuresSociety perception survey conducted at Dyavarahalli village shows favorable response. LTK has won several awards & accolades such as safety awards from CII(SR) & Genentech foundation, innovative company in energy efficiency from BCIC, certification for EHS(EMPLOYEES HEALTH SCHEME) by BV and outstanding garden award from horticultural dept. Govt. of Karnataka.

• Performance Indicators:LTK subscribes to corporate sustainability reporting as per GRI G3 guidelines. LTK has defined objectives and targets for economic, environment and society development initiatives. Thrust areas for CSR are education, health, environment and rural development. Several programs are carried by Surabhi over the years & number of project beneficiaries show positive trend. EHS management ensures improvement in safety performance, conservation of natural resources and compliance w.r.t environment issues.

KEY RESULTS

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