AL India 2009 Deepak Jain Hero Honda Motors Ltd.

7/31/2019 AL India 2009 Deepak Jain Hero Honda Motors Ltd.

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The Logist ics Challengesof India

Aut omot ive Logist ics I ndia Conference3 rd December, 09, Pune


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Logist ics is an I nt egrated Management of t heFlow of Goods & I nformat ion from t he Suppliert o the Customer & Back

Logistics

Logistics

Supplier ReplenishmentTransportation

InboundOperations

TransportationOutbound

AssociateStores


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Perspectiveon

Tw o Wheeler I ndust ry


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Overall Volumes : I ndian 2-Wheeler I ndust ry

5.6

6.6

7.6

8.5

8.18.5

0

2

4

6

8

10

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Nos. in Million


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16%

4%4%

76%

Passenger Vehicles ( PVs ) Commercial Vehicles (CVs)

Three Wheelers Two wheelers

In terms of Nos.

Tot al Domest ic Vehicle Sales in 2008-09 : 9 .72 Mil lion

I ndian Automobile I ndust ry -

Segmentation


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Size ~ 7.5 million Unit s (08 09)

Tw o-w heeler Segment s - Domest ic

Scooter

16%

Mopeds

6%

Motorcycles

78%


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Second Largest in t he w orld

5 Tim es t he size of I ndian Passenger Car Market

1 m illion I ncrement al Cust omers every year

Over 16000+ Customer Touch point s

Over Half a mil l ion Employed Direct / I ndirect

I ndian Tw o Wheeler I ndust rySource: SIAM


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HERO HONDA MOTORS LI MI TEDA Joint Vent ure w it h Honda Motor Co. Ltd., Japan


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Plant s & Off ices

Haridwar Plant

Corporate Office, New Delhi

Registered & Corporate Offices

North Zone Office, New Delhi

West ZoneOffice, Pune

South Zone Office,Bangalore

East Zone Office,Kolkata

Zonal Offices

Dharuhera Plant

Gurgaon Plant

Plants


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Dharuhera Plant (Haryana)

Area 2,41,000 Sq. Mt rs.

Product ion Started- 1985

Capacit y 6000 VPD

Gurgaon Plant (Haryana)

Area 2,55,000 Sq. Mtrs.

Product ion St arted- 1997

Capacit y 6000 VPD

Haridw ar Plant (Ut taranchal)

Area 4,69,000 Sq. Mtrs.

Product ion St arted- April 2008

Capacit y 5000 VPD

PLANTS : Area & Product ion Capacit y


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Fig. in Million (Nos.)

Sales Trend 2 Wheelers

04-05 05-06 06-07 07-08 08-09

3.72

3.34

2.62

3.00

3.34


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PARTS OPERATI ONS


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9 To achieve the goal of Highest Customer Sat isfact ion

9 To obtain t he Best Serv ice Rat io

9 To make available t he Part s at Reasonable Pr ice

9 To deliver t he consignment s w it h Shor t est Lead Tim e

9 To maint ain t he Opt imum Safet y

Obj ect ives of Part s Division


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Service Support Coverage

Regular Models - 16

Non Current Models - 37

Tot al Models - 53

Tot al 2 Wheeler Populat ion - 25.5 Mil lion


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Nat ional Part s Cent re

Total Covered Area - 19500 Sq. Mt rs.

Par ts Range (SKUs) - 13000 Nos.

Manpow er - 510 Nos.

Operat ions Span - 2 Shif t s

Channel Coverage - 735


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HHML

Dealer Stockist

Other Channel Part ners/Replacement Market

Dist r ibut ion Flow


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Logist ics Challenges

How can I manage the stocksof Non Current Parts?

How can I manage the stocksof Non Current Parts?

How do I reduce the LeadTime for Order Execution?

How can I Identify and co-

relate Parts accurately?

How do I reduce the LeadTime for Order Execution?

How can I Identify and co-

relate Parts accurately?

How can I manageDemand Fluctuation?

How do I manageSKUs Proliferation?

How do I tackle the issueof Counterfeiting?

How can I manageDemand Fluctuation?

How do I manageSKUs Proliferation?

How do I tackle the issueof Counterfeiting?

How can I reduceInventory?

How do I controlDiscrepancy in Stocks?

How can I reduceInventory?

How do I controlDiscrepancy in Stocks?

InternalProcessing

InternalProcessing

InboundInbound OutboundOutbound

Complexity Management

Obsolescence Management

Delivery Management

Quality Management

Cost Management


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Demand Fluctuat ion

Const ant Monit oring t o capture dynamism ofCategory-f lip of Part s

Flexible Product ion Capacit ies at Vendors End

Logist ics Challenges & Solut ions


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Exponent ial Grow th in SKUs

Opt imal Ut il izat ion of Storage Space

Re-addressing of Part s t o accommodate Flexibil it y



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Counterfeit ing I ssue

High Secur it y MRP Label

Special Design Packaging

Customer Educat ion

- I nformat ion on I nternet- I nform at ion in Ow ners Manual



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High I nventory

Daily Supply of Fast Moving / High Volume Part s

DOL (Direct -On-Line) supply st atus conferredon Vendors



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Discrepancy in Stocks

Snap shot Alm anac at Receipt St age

End-to-End Bar Coding in Operat ions

Usage of Scanned Data for generat ion ofPacking Slip & I nvoice




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Higher Lead Time

On- line Punching of Orders

On- line Tracking of Various Stages of Order Execut ion

Loading of Out bound-shipment based on Scanned Data

Uploading of Despatch Details for Channel Part ners

Uploading of Receipt Det ails as POD



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Diff icult y in I dent if icat ion /

Co-relat ion of Part s

e-Catalogues for all Regular & Non Current Modelsfor Channel Part ners


e-Catalogue CD for Replacement Market


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Non Current / Obsolet e Part s

Maintenance of Dies & Gauges at Vendors End

I ncreased inventory t o accommodate Opt imumBatch Size



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Fut ure Out look


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Economy is show ing an upw ard t rend and expect edto stay on a decent Grow th Traject ory

Motorcycles w ill cont inue to be t he mainstay ofTw o-Wheeler Grow th

Motorcycles t o grow at CAGR of 8% to 10%

Gearless Scooters at 12% to 15%

Overall Tw o-Wheeler CAGR expected t o be

9% to 10% in t he next f ive years

Fut ure Out look


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Focus Area


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A more robust Solut ion needs to be ident if ied for Non-CurrentPart s in t he w ake of shor t ened Product Life-Cycle

Count erfeit Part s menace needs t o be curbed w it h t he iron hand in

associat ion w it h I ndust ry, SI AM & st rong enforcement of Law

Redressal of Logist ic I ssues associated w it h t he for t hcomingimplementation of t he GST

To share / exchange thought s amongst t he Logist ics Fratern it y t oimprove Genuine Part s Business for w hich Aut omot ive Logist ics

has provided a decent plat form

Focus Area


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THANKS

AL India 2009 Deepak Jain Hero Honda Motors Ltd.

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