The curious case of Wunder Tractor Tyres

Manoj was confused. Although he was a Farm equipment industry veteran, the current issue that he was facing
was rather peculiar. He had joined Wunder Tractor Tyres as the Vice President of Sales about 6 years ago, and
had risen to become its CEO about 3 years later. He had just seen the data that the tyre quality had dramatically
improved in the last 1 year. Yet something was amiss.

Wunder Tyres – the beginning:

Wunder Tractor Tyres was founded in the USA during the 1890s. It was founded to cater to the local Tractor and
Farm equipment manufacturers. Wunder Tyres was truly a wonder during the early 20th century. At the time of
World war 1, Wunder Tyres entered into the non-Tractor segment. It manufactured and supplied tyres to military
vehicles. Technology transfer during world war helped Wunder tyres build a new plant in Detroit in 1921. It
supplied tyres to the car manufacturers in the automotive district. During this time, Wunder tyres built its vision
to become the No.1 tyre company in the world. However, the Great Depression hit USA in 1929. By 1931,
Wunder Tyres had to shut down most of its factories. The then CEO, Daniel took a strategic call to focus on
Wunder’s core competence of manufacturing tractor tyres. By 1933, Wunder has decided to focus exclusively on
being a supplier to the Farm equipment industry.
By the 1960s, Wunder had become a leading player supplying tyres to Tractors and other Farming vehicles. It
was also a period of globalization. During the mid-1960s, India was focusing on green revolution. India was an
obvious target market for Wunder. It entered India along with an Indian partner in 1960s. However, modern
farming and mechanized agriculture was still a far cry in India. Tractor and tractor tyres sales were modest.
However, the clocked turned 30 years later. The 1990s liberalized the Indian economy, and the restrictions placed
on foreign players to invest in Indian market was removed. There was rapid movement towards mechanized
farming too. A combination of labor shortage, and demand for increased productivity and time-efficiency resulted
in Indian peasantry moving towards tractors and other forms of mechanizations.
Wunder tyres set up factory in India during the 1990s. Wunder supplied tractor tyres to both OE manufacturers
as well as to the retail market. It set up a good network of distributors. The factory set up at Maharashtra was
operating at about 80% capacity.

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Wunder in India:
There was a flurry of activity around the Indian farming industry. Global players were entering the Indian market
in tractors and farm equipment sector. Manoj had spent the initial years of his career working in the Tractor
industry. He had joined the tractor industry as a trainee engineer. He worked in various roles in projects,
production and quality. He then moved on to Sales vertical which he realized he had a passion for. Manoj was
hired by Wunder Tyres as VP-Sales to boost growth. Manoj’s understanding of the Farm equipment segment
helped him boost the sales of Wunder Tyres. Within 3 years, he was promoted as CEO of Wunder Tyres India.
He was obviously elated. Wunder was #4 in the market within striking distance of #3. The market share percentage
of various players was:

2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Kohli Tyres 24.5 24.6 24.7 24.6 24.5 24.7 24.9 24.7 24.6 24.7 24.6 24.8
Dhoni
23.2 23 23 23.1 23 23.1 23.3 23.1 23.4 23.2 23.1 23
Tyres
Magarpatta
20.1 20.1 20.2 20.1 19.8 19.9 20 20.1 19.9 19.9 20 20.1
Tyres
Wunder
18.6 18.7 18.8 18.8 19 19.2 19.1 19.3 19.6 19.6 19.8 20
Tyres
Gayle
6.5 6.4 6.3 6.3 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.8
Tyres
ABD Tyres 4.2 4.3 4.4 4.5 4.6 4.6 4.5 4.4 4.3 4.2 4.1 4.1
Others 2.9 2.9 2.6 2.6 2.9 2.2 1.8 1.9 1.6 1.7 1.6 1.2
Total 100 100 100 100 100 100 100 100 100 100 100 100

Quality:
Being a global player, Wunder tyres had stringent quality tests. Every batch of tyres underwent rigorous testing
to test for quality. However, the tractor industry was prone to rough use which resulted in the parameter called
‘defect per thousand’ or ‘dpt’.
dpt of 3 means: For every 1000 tyres sold, 3 would be returned as ‘defect’ within 6 months of selling.
The defects could be of various forms – chipping, uneven wear etc. Largely these defects were manufacturing
issues, and not necessarily customer usage issues.

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Upon encountering any issue, the customer normally brought the tyre to the OE dealer or tyre shop. The Sales or
Service personnel of the company checked the tyre to see if the issue were genuine manufacturing defects or
customer-usage issues. If the personnel certified the tyre to be a manufacturing defect, the customer got a new
tyre as replacement. The ‘defective’ tyres got counted in dpt. In case the issue was with customer-usage (which
resulted in tyre problem), the customer got no replacement. This of course, created a lot of ruckus at both the
customer and dealer end.
The dpt factor for various countries is given below. The dpt given below if for the entire tractor tyre industry. All
the manufacturers provide the dpt factor to Industry Association that publishes it annually.
Dpt
USA 3.2
Phillipines 4.8
Germany 2.5
India 4.95
Japan 2.3
Vietnam 5.2
China 4.1
South
Africa 4.4
Turkey 4.4
UK 3.5

Dealing with defects:

Wunder tyres believed in expertise of its personnel and quick customer service. Therefore, it had trained its Sales
personnel on service too. This handling of both sales and service made Wunder personnel better experts and
respected in the market.
Sales process: Wunder billed tyres to its master distributors (1 per state). The Master distributor supplied tyres to
the retail market – both OE dealers as well as regular market. Wunder supplied tyres directly to the Tractor
manufacturers.
In case any customer had any problem with the tyres, the normal process was that the customer got the tyre to the
tractor showroom or tyre shop (mostly drives the tractor itself to the shop). The Tractor showroom or the tyre
shop informed the Wunder Salesman of the issue. The Salesmen normally reached the customer spot within 72
hours.

This is a fictitious case study prepared by OneHourLearning for the ‘Analytical Intelligence’ course.
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The dpt parameter for Wunder and other players in 2014 is given below:

2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Kohli 4.7 4.7 4.7 4.7 4.7 4.6 4.6 4.6 4.6 4.7 4.7 4.7
Tyres
Dhoni 4.8 4.8 4.7 4.7 4.8 4.7 4.8 4.8 4.7 4.7 4.8 4.8
Tyres
Magarpatt 5.2 5.2 5.3 5.2 5.1 5.1 5.2 5.1 5.1 5.1 5.1 5.1
a Tyres
Wunder 4.8 4.9 5 5.1 4.9 5.2 5.3 5.4 5.3 5.4 5.6 5.5
Tyres
Gayle 5.2 5.2 5.1 5 5.1 5.1 5 5.2 5.3 5.2 5.2 5.1
Tyres
ABD Tyres 4.9 4.9 5 5.2 5.2 5.3 5.3 5.2 5.1 5.2 5.1 5
Others 5.3 5.3 5.4 5.4 5.3 5.4 5.5 5.5 5.4 5.5 5.3 5.4

Manoj wanted to get an insight into this parameter. He called his Production Head Sanjay. Sanjay decided to
make a market visit to the nearby Pune market to understand the situation. Sanjay’s motto was ‘Seeing is
believing’. He asked the local Sales personnel to inform him whenever a defective tyre complaint propped up.
The very next day Sanjay received a call from the Pune salesperson. There was a defective rear tyre complaint.
Sanjay visited the customer premises. The customer had brought the tyre to a local tyre dealer from where he had
bought the tyre just 4 months ago. The Pune Salesperson, Sharath decided to check the tyre. Sanjay was observing
him.
After a few queries with the customer and the local dealer, Sharath started inspecting the tyre. The local dealer
kept emphasizing that the customer was a well-respected person in his village, and had recommended Wunder
tyres to all his villagers. After about 10-15 minutes of checking, Sharath informed the customer and dealer that
the tyre indeed had some minor defects. He advised the dealer to provide the customer with a new tyre.
Sanjay was startled at this entire exercise. He had over 25 years of experience in tyre production. He could say
whether a tyre was defective or not just by few minutes of observation. In this case, he clearly saw that the tyre
actually has no defect. The deformation of the tyre was clearly due to two issues according to him: (i) Overloading
the tractor (ii) Lack of alignment

This is a fictitious case study prepared by OneHourLearning for the ‘Analytical Intelligence’ course.
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Sanjay thought about this and wrote a memo to Manoj:

Subject: Insights from my market visit to Pune to check customer complaints

Hi Manoj … I must mention to you a startling observation. Our Sales team is settling claims with customers even
for tyres that are not defective. During my market visit at Pune to check on a customer complaint, I clearly
observed that the tyre was not defective. The fault was at the customer end – overloading and lack of alignment.
However, the local Salesperson decided to settle the tyre as defective and replace the tyre.
My conclusion is that such incorrect assessments are leading to a surge in dpt. The real no. of dpt could be far
lesser than the statistics show.
I must also mention my insight: The local tyre dealer was emphasizing on the fact that the customer was an
influential person. Being in this field for the last 25 years, I know that the dealers would mention this for all
customers; they simply do not want any trouble with the customer or an ruckus scene. The Salesperson too does
not want any trouble with the dealer or customer, and settle the issue as defective tyre. Now the reason for this, I
believe, is the skewed KRAs of the sales personnel. Their KRAs is given below. If the checking is done properly,
I believe that the dpt would come down to 3 dpt.

Salesperson %
KRA weightage
Tyre volume 30%
Revenues 25%
New dealers 20%
No. of
seminars 15%
dpt (target
4.5) 10%

Based on this input, Manoj decided to make a structural re-haul. Wunder tyres decided to appoint a new service
team. They appointed one service person per State. Structurally, the service personnel reported to the Production
Head (with intermediate Service Heads in between). The mission of Sanjay, the Production Head was clear – he
had to get the defective parameter to less than 3 dpt within a year. He started working on both the Production
quality as well as service parameters for the same.

This is a fictitious case study prepared by OneHourLearning for the ‘Analytical Intelligence’ course.
© OneHourLearning. This case cannot be copied or distributed in any form
Circa April 2016 – time for champagne:
The new structure was formed during April 2015. It was one year since the formation of the new service team,
and the ‘Mission 3.0 dpt’ project. The service team had a clear KRA – Mission dpt 3.0. Manoj also set a new
Quality team to improve the tyre quality.
It was time for champagne. The Service team had indeed delivered. Data showed the performance. Manoj was
pleased to see the data on dpt for the last 12 months ever since the formation of the Service team.

2015-16 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Kohli 4.7 4.6 4.7 4.8 4.7 4.6 4.6 4.7 4.6 4.8 4.6 4.6
Tyres
Dhoni 4.7 4.8 4.7 4.6 4.8 4.7 4.7 4.8 4.7 4.6 4.8 4.8
Tyres
Magarpatt 5.1 5.2 5.4 5.3 5.2 5.1 5 5 5.1 5.2 4.9 4.9
a Tyres
Wunder 5.4 5.1 4.9 4.5 4.2 4.1 3.9 3.6 3.5 3.4 3.2 3
Tyres
Gayle 5.2 5.1 5.1 5 5.2 5.1 5.1 5.2 5.1 4.9 5.1 5.1
Tyres
ABD Tyres 4.9 4.8 5 5.1 5.2 5.4 5.3 5.2 5.1 5 5.1 4.9
Others 5.3 5.4 5.2 5.4 5.3 5.4 5.3 5.5 5.4 5.4 5.3 5.4

Mission dpt 3.0 was successful. Wunder Tyres India had in fact better the dpt of companies in developed countries
like USA and UK. Sanjay was now planning for Mission dpt 2.0. This would make Wunder India the best in the
world. Sanjay set his goal to become the Asia Head of production after Mission dpt 2.0

This is a fictitious case study prepared by OneHourLearning for the ‘Analytical Intelligence’ course.
© OneHourLearning. This case cannot be copied or distributed in any form
But there was someone in the room that was not in the mood for champagne. The Wunder Tyres Sales Head. The
market share for the period is given below:

2015-16 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Kohli 24.7 24.6 24.7 24.8 24.9 25.1 25.3 25.3 25.2 25.2 25.1 25.3
Tyres
Dhoni 23.1 23 23.2 23.1 23.5 23.6 23.7 23.8 23.8 24 24.1 24.2
Tyres
Magarpatt 19.8 19.7 19.7 19.8 20.1 20.2 20.4 20.5 20.7 20.7 20.8 20.9
a Tyres
Wunder 20.4 20.6 20.7 20.6 20.2 19.8 19.4 19 18.8 18.2 18 17.8
Tyres
Gayle 6.4 6.4 6.3 6.3 6.3 6.3 6.4 6.5 6.6 6.5 6.6 6.5
Tyres
ABD Tyres 4.1 4.2 4.2 4.3 4.4 4.5 4.4 4.3 4.4 4.3 4.2 4.1
Others 2.9 1.5 1.2 1.1 0.6 0.5 0.4 0.6 0.5 1.1 1.2 1.2
Total 100 100 100 100 100 100 100 100 100 100 100 100

Manoj is confused:
Manoj was totally confused. At one end, Sanjay had just shown that the quality of tyres had improved
dramatically. Due to the improved quality, dpt had gone down dramatically. Wunder India tyres was better than
Wunder US & UK tyres in terms of quality. This should have meant that the Sales figures should have gone up.
The tyre price had changed little for all players in the last two years. Manoj could not make sense. He had thought
that with improved quality, the sales figure would increase, and Wunder could have taken a shot at being #2 in
the market. He had a secret desire to become the Asia Head to based on his performance. But now he was left
confused.
Manoj wanted an analysis of the situation. He wanted the brightest Analytical minds to analyze the scenario.
YOU are part of that analytical team. What is your reading of the situation?

This is a fictitious case study prepared by OneHourLearning for the ‘Analytical Intelligence’ course.
© OneHourLearning. This case cannot be copied or distributed in any form