Turnaround Tycoon!

Investing in service
The Company also invested in network. Dasari explains why: "People describe our industry as a complex industry but I feel it is very simple. Nobody buys my vehicle for how it looks. Customers buy my truck for its good operating performance.

"Equally important is the need to ensure that the truck keeps operating. I need to have a service network that supports it. So, there are only two things in this industry - make a product that performs well and have a service network that ensures the performance is maintained. So, we have significantly expanded our network from what was seven years ago 270 outlets to 2,700 outlets at present! Earlier, more than fifty percent of our service outlets were in the South. Today, the spread has grown substantially across the country."

Apart from this wide spread network, Ashok Leyland is also taking its full-fledged containerised workshops to customers' sites like deep mines and other remote areas helping them save on precious time and cost. The Company also provides service on wheels for quicker resolution of the problem and ‘Knowledge On Wheels' that provide on-site training to channel partners and others. It has also introduced a digital Bluetooth based diagnostic and trouble-shooting application where the computer on the truck communicates with the truck driver's smart phone and helps him to understand and address basic problems in the truck all by himself. If he cannot solve the problem then it will connect him to the nearby service mechanics, who are rated by Ashok Leyland based on their training and facilities available. And the payment for the service can be made online.

The Company is now making full use of the digital platform as a tool to enhance its services for the customers. Importantly, it is making technology localised, relevant and user friendly. "We believe you have to innovate for India rather than introducing a fancy global technology. You cannot have a high-handed approach like that and call our innovation ‘Juggad'! That is disrespecting Indian innovation. Engineering is not just about solving the problem; it is about solving the problem at the right cost."

Of course, while product and service innovation have been the key pillars of the transformation process at Ashok Leyland, Dasari has also had to bring in a lot of changes at the organisational level. He is thankful that he has been supported by a great team and that the Board has showed complete faith in his decisions. Dasari selected his core team, which drove the transformation along with him, not just based on core competencies but also on their attitudes.

Focus on service
Ashok Leyland has, in recent years, expanded its network rapidly to cater to its wide set of customers. It has 1000 touch-points with an additional 5000 outlets for Leyparts, the genuine spare parts brand. A service centre at every 75kms on all major highways, Ashok Leyland delivers its "Tatkaal" promise of reaching customers within 4 hours and getting their vehicle back on-road within 48 hours. There are also a slew of initiatives and programs by Ashok Leyland for the aftermarket business in the CV industry. Some of these include Add-on service packages, Cabin Repair Facility, Knowledge On Wheels, 24x7 Accident care call centre, and so on.

How the turnaround started
It was in April 2013 that Vinod Dasari had taken full control of the Company as its MD. The business plan in 2013-14 said that the Company will sell 89,000 vehicles. "And I had a scenario where at 65,000 or something, we would lose a hundred crore rupees. My gut feeling was that we would actually do about 54,000. At that number, we would lose Rs.800 crore. And by the way, Ashok Leyland has never lost its money in its entire history! The question was, can we do only 54,000 vehicles and still not lose money.

"In June 2013 I went to London along with my CFO to meet the promoters and presented the scenario to them. They asked me if I was doing any cost cutting. And I explained to them that small cuts won't help and that I have to do some deep cuts and some of it will not be palatable. But I have to protect the company. I said there are a lot of risks but I am confident that I can execute it. They said go ahead," Dasari narrates.

So, Dasari launched a programme called K54, which basically aimed at breakeven at 54,000 vehicles. "By the way, that year, we finished at 54,050! And we just about broke even. That was the bottom for us. Since that time, our Ebitda has gone up for from about two percent at the bottom to nine straight quarters of double digit Ebitda, which is the highest in the industry. In terms of stock market performance, we were at about Rs.12 a share and we went up to about Rs.120 a share.

"In many ways, in terms of market performance, where the customer was rewarding us, we were doing very well. In terms of financial performance, we were one of the best performing companies not just in India but in the world," Dasari shares with pride. That, Dasari, describes as the Chapter one of his journey at Ashok Leyland. "Chapter two has now started," he says.

(Continued on the next page after the box)

The ‘Improve' initiative
Improve competition is one of the most important events in Ashok Leyland (AL) calendar which showcases the improvements done by all AL employees. The Spirit of Improve since its inception in 1998, was to involve all employees in the Improvement and growth journey of Ashok Leyland. True to its intent, we have seen the involvement of people spiralling year after year as also the number of Projects Implemented. The first Improve was at Hosur 1 with the participation of less than 50 teams, it then grew in size and depths covering the most relevant subjects connected to the AL's growth journey.

Improve has covered a long distance, the growing enthusiasm and the support from the management has been overwhelming. Even in the thick of times, Improve competition is one which was never stopped. The Project trend is tabulated.

With the aim of bringing in uniformity and improved effectiveness in the conduct of the competitions at all Ashok Leyland plants, many changes are being made in the Mini-Improve and Improve processes. Mini-Improve is another event which is handled at plant levels and scrutinized by a common jury panel to select best of the teams. Going from a plant quota system to merit based selection would ensure that the best teams of Ashok Leyland present their achievements in the Improve Finals. In all, there are is more than 70 teams comprising of manufacturing, manufacturing support service and corporate/ marketing. This is based on the Teams meeting the cut-off criteria during Mini-Improve competitions.

Next year, Ashok Leyland ‘Improve' will turn twenty. What started as a small HR initiative has grown leaps and bounces and has become every employee's dream.