ASSIGNMENT

ON

PRODUCTION & OPERATIONS MANAGEMENT OF 

HERO CYCLE 

SUBMITTED TO

PROF-HARSH SHARMA

SUBMITTED BY

PRATEEK THAKUR

SHUBHAM MOHABE

GAGAN SINGH

ANALYSIS OF THE CASE

Globally, a select few, exceptionally powerful brands, are recognized as Super Brands. Some of the Indian brands have made it into this unique hall of fame, and amongst that coveted group features Hero Cycles.At Hero Cycles, quality is a tradition, be it in the form of well trained labor, technically superb machines or world class quality. Today Hero Cycles is one of the handful companies in India which can boast of the global scale of operations, not just in size or superior technology, but also its innovative marketing strategies .At Hero, it’s always believed that there is much more to life than just business. As a company with a heart, it has certain commitments towards its employees, the society and the nation. Around the clock, every 9 seconds 1 cycle rolls out from the Hero plant. The Hero Cycle is designed with speed. It has speed in response to demand .The CEO of Hero cycle Mr Om Prakash Munjal’s check everyday any defective component returned by dealers and make a cross functional team from various departments to fix the problem immediately which shows how they are utilizing the time for solving the problem. The quality problem has reduced 63% between 2001 and 2003 which shows their continuous efforts help them to maintain the quality. The company manufactured more than 6 million bicycle per annum . Its strength is first – rate production with its operation are fully integrated with its operation are fully integrated with the use of contemporary management practices . The success is due to superior quality, reduced cost , higher productivity with the consistent in quality , reliability and continuous change . The company focuses primarily on quality because customer have always demanded and will accept things of quality through Quality Management System (QMS) . Today more than 50% of the exports from Hero cycle Lmt. Go to market in Europe and America. It has a collaboration with National Bicycle Industries. The process starts when orders are received from domestic and international markets.

Speed is the USP of the company, weather speed in development of a new product or responding to a complaint. Hero cycle can design a new product in 2 days and it takes only 10 days to design a complex product. Mr. Munjal

by himself check the complaints daily, this shows the intensity and determination of the person. Hero cycle greatest strength lies in the first- rate production competence. To meet the escalating demand the company had set up ancillary units for manufacturing bicycle components.

There are about 4000 workers, 225 vendors and 3500 dealers of the company, and it is only the family type culture that is holding all of them Mr. Munjal by setting up such environment has given the vision to all of them to move ahead in life and work with determination for success of company.

The company is having world best technology inside the plant , automatic polishing machines . They have bulk storage system for liquid argon and the entire shop floor was piped with the supply of mixed gases which helps in reducing the consumption of argon be-cause losses due to leakage and residual gas in empty cylinders were minimized. The companies’ total focus is on excellence. They have followed the concept like MTBF ( mean time between failure ) and MTTR ( mean time to repair ) for the maintenance of machine which helps them to save time and which make the production continue without any delay. The practice of TQM and TWE ( total waste elimination) . For finding the market trend their field executives regularly take feedback from dealers , they organize annual dealer’s conference where they take feedback on their product and designs and the changes that need to be made in the existing product . Employees, senior or junior are treated equally. All the employees are working with efforts because proper communication about their task is communicated to them . Wages are also given more than minimum they follow piece wage rate system and giving higher payments to the employee depends on the factors such as attendance , quality, cost control, and productivity improvements which makes the customer to work efficiently. Every employees in the company are given proper education and training about the task how they have do , how to handle the machine which makes them to work efficiently and effectively so which makes less wastage of material , saves time and how to maintain the quality .

The company by installing ERP software (SAP) which help in Integrating all departments from purchase , sales, distribution to production ,finance , inventory and quality control. The ERP software helps in perfect coordination between marketing , R&D , tubular department , paint shop and inventory because of which the information is easily transferred to each department easily and on time which makes the transparency in the organization . The use of engineering concept , the zero defect approach and ensure effective raw material utilization to deliver a safe quality product.

Ultimately, Hero Cycles has achieved the current level of manufacturing excellence mostly by doing simple things, but also by doing them very well and slowly improving them all the time. It is purely confidence that have gained Hero cycles a tag of biggest global manufacturer. In future also they promise to show there great confidence by more innovations in India and abroad.

HOW HERO CYCLES IS HANDLING COMPETITIONHERO CYCLE is one of the biggest cycles manufacturing company in India .The Company is not only doing business in India but also in overseas market .the company is successfully exporting their 50 percent of exports to Europe and America. The company is also having collaboration with national bicycle industries which is a part of Matsushita group to manufacture high end bicycles. The company is having more than 50 percent of market share in India and company is manufacturing around about ten million bicycles annually. Instead of having more than 50 percent market share in India the company has to keep their operations and marketing strategies up to date to counter the competition and the group by using various technologies and implementing various cost effective measures is being able to do so. The various measures that have been inculcated by the hero group are as follows;

SPEED-

The company takes only 2 days to make a new design product.

It takes only 10 days to design a complex product Hero cycle greatest strength lies in the first- rate production

competence. At such speed the company can counter any competition.

QUALIATY AT LOW COST

Hero cycles only as a “low cost provider” but also as “value for money” provider.

At hero cycle they follow TQM.

BETTER RELATIONSHIP AND SERVICES TO CUSTOMER

Strong culture of performance .Mr. Munjal by himself check the complaints daily this shows the

intensity and determination of the person. Build strong alliances and relationships with all Stakeholders in the

chain Better services in comparison to competitors. Better customer handling

INNOVATION AND USE OF INFORMATION TECHNOLOGY

Product Innovation keeping in mind the sensitivities of the target market

HERO CYCLE is an IT savvy company.varios software is being used by the company like SAP and ERP.these software basically help to integrate all the departments and ultimately it leads to reduction in use of manpower and other communication cost. this reduction in price ultimately help the company to sell their products at lower prices than their competitors.

The company’s R&D department is also very efficient and strong. It has been recognized by government of INDIA. They use 3d software

which has reduced design time significantly. If the competitors launch new product their R&D can immediately reply with the new design.

COST EFFECTIVE MEASURES

90 percent of hero cycles vendors are located within 10 km. it helps the company to save the cost of inventory as a percentage of sales.

Low defects; their system is so efficient that rate of defects is very low.

Use of Automatic robots for polishing and welding purposes which helps in reduction of manpower.

Reduction in downtime Reduction in cycle time and breakdown time. Waste elimination.

USE OF MANAGEMENT CONCEPTS

Just in time TQM TPM SIX SIGMA KAIZEN

These are all the factors and concepts that has been adopted by the company which differentiates the company from other competitors .For any company to compete in the global environment, better quality production with minimum cost is important and Hero cycles by adopting these concepts has been able to provide better quality goods to the customer and efficiently fight and survive in the competitive market.

CONCLUSION

By analyzing the case we came to know quality, speed, innovation, R&D, and customer service fast rate production is the success mantra behind the

success of hero cycles. Hero cycle by using simple things has achieved excellence in manufacturing and it presents a picture in front of every company that by doing simple things and doing it in a very well planned manner helps achieving what hero cycle has achieved in a limited span of time. By analyzing the case we also came to know that hero cycle is extensively using technology and heavily investing in R&D to always come out with a new design and counter the competition, they are also making use of various management concepts so as to make their system efficient and effective.

THANK YOU

HOW HERO CYCLES IS HANDLING COMPETITION

HERO CYCLE is one of the biggest cycle manufacturing company in India .the company is not only doing business in India but also in overseas market .the company is successfully exporting their 50 percent of exports to Europe and America. the company is also having collaboration with national bycycle industries which is a part of matsushita group to manufacture high end bicycles. The company is having more than 50 percent of market share in india and company is manufacturing around about ten million bycycles annually. Instead of having more than 50 percent market share in india the company has to keep their operations and marketing strategies up to date to counter the competition and the group by using various technologies and implementing various cost effective measures is being able to do so.the various measures that has been inculcated by the hero group are as follows;

SPEED-

THE COMPANY TAKES ONLY 2 DAYS TO MAKE A NEW DESIGN PRODUCT. IT TAKES ONLY 10 DAYS TO DESIGN A COMPLEX PRODUCT

Hero cycle greatest strength lies in the first- rate production competence. At such speed the company can counter any competition.

QUALIUTY AT LOW COST

Hero cycles only as a “low cost provider” but also as “value for money” provider.

At hero cycle they follow TQM.

BETTER RELATIONSHIP AND SERVICES TO CUSTOMER

Strong culture of performance

.Mr. Munjal by himself check the complaints daily this shows the intensity and determination of the person.

Build strong alliances and relationships with all Stakeholders in the chain

BETTER SERVICES IN COMPARISON TO COMPETITORS.

BETTER CUSTOMER HANDLING

INNOVATION AND USE OF INFORMATION TECHNOLOGY

Product Innovation keeping in mind the sensitivities of the target market

HERO CYCLE is an IT savvy company.varios software is being used by the company like SAP and ERP.these software basically help to integrate all the departments and ultimately it leads to reduction in use of manpower and other communication cost. this reduction in price ultimately help the company to sell their products at lower prices than their competitors.

The company’s R&D department is also very efficient and strong. It has been recognized by government of INDIA. They use 3d software which has reduced design time significantly. If the competitors launch new product their R&D can immediately reply with the new design.

Cost effective measures

90 percent of hero cycles vendors are located within 10 km.it helps the company to save the cost of inventory as a percentage of sales.

Low defects; their system is so efficient that rate of defects is very low.

Use of Automatic robots for polishing and welding purposes which helps in reduction of manpower.

Reduction in downtime

Reduction in cycle time and breakdown time.

Waste elimination.

Use of management concepts

Just in time TQM TPM SIX SIGMA KAIZEN

These are all the factors and concepts that has been adopted by the company which differentiates the company from other competitors .For any company to compete in the global environment, better quality production with minimum cost is important and Hero cycles by adopting these concepts has been able to provide better quality goods to the customer and efficiently fight and survive in the competitive market.