Direct on Line

1

DIRECT – ON – LINE’
SUPPLIES PROGRAMME



HERO HONDA MOTORS LTD.
2
CUSTOMER DRIVEN MANAGEMENT STRATEGIES
 FROM „COST-PLUS‟ TO „VALUE-ADDED
 COST / VALUE TRADE-OFF
VALUE-BASED COMPETITION
MANAGING UPSTREAM
 PREVENTION VERSUS FIXING
 DESIGN FOR QUALITY, MANUFACTURABILITY,
COST
3
EMERGING MANAGEMENT STRATEGIES
LEAN MANUFACTURING
ZERO DEFECTS FLEXIBLE MANUFACTURING
ZERO SETUP TIME CONTINUOS FLOW
BATCH SIZE OF ONE CELLULAR LAYOUT
ZERO INVENTORY PULL-BASED MANAGEMENT
4
OUR MANDATE
• BE A WORLD CLASS MANUFACTURER.
• BE A MARKET LEADER.
• PROVIDE HIGHEST LEVEL OF CUSTOMER
SATISFACTION.
• ACHIEVE EXCELLENCE THROUGH TEAMWORK.
• CREATE ENDURING RELATIONS WITH
STAKEHOLDERS.
5
Our Performance…
6
4.1
5.3
7.6
10.3
14.3
16.8
0
4
8
12
16
20
L
a
c
s

97-98 98-99 99-00 00-01 01-02 '02-03
OUR SALES (NOS.)
WORLD NO-
1 STATUS
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ALL-INDIA 2-WHEELER MARKET
2001-02 2002-03 Growth
Nos
(in lacs)
%
Nos
(in lacs)
% %
MOTORCYCLES 29.5 68.0 38.2 76.0 30
SCOOTERS 8.9 21.0 8.1 16.0 -9
MOPEDS 4.8 11.0 4.0 8.0 -15
TOTAL 43.3 50.5 17
8
MOTORCYCLE MARKET SHARE
95-96
OTHERS
3%
25%
TVS
15%
28%
BAJAJ
30%
HHML BAJAJ TVS
YAMAHA OTHERS
YAMAHA
HHML
02-03
24%
8%
19%
5%
44%
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STATISTICS OF VENDOR
& COMPONENTS
TOTAL NO. OF VENDORS 234
NO. OF COMPONENTS
BEING SUPPLIED
3045
10
TODAY‟S BUSINESS SCENARIO



 TOO MANY PLAYERS IN SAME BUSINESS
 BUYER‟S MARKET
 CUT THROAT COMPETITION
 HIGH QUALITY PRODUCT AT LOW COST
OPEN ECONOMY
GLOBALISATION &
LIBERALISATION IS
LEADING TO
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 INBUILT PROCESS QUALITY LEADING TO
 CUSTOMER DELIGHT
 IMPROVED EFFICIENCY
 UPGRADING VENDORS
“DIRECT-ON–LINE”
SUPPLY PROGRAME
Contd…..
OBJECTIVES:-
12
 REDUCED CYCLE TIME LEADING TO


 BETTER RESPONSIVENESS TO MARKET
AND CUSTOMER NEEDS

 REDUCED SUPPLY CHAIN COST
 INVENTORY REDUCTION
 SPACE SAVING

Contd…..
13

BUILDING THE EFFICIENT / ROBUST &



EFFECTIVE SUPPLY CHAIN FOR QUICK



RESPONSE TO MARKET NEEDS.
&
14
Insp. &
Desp.
Manf/
APPROACH TO ACHIEVE DOL
Receipt
STORES
User
point
PPC

OK Store
BOPI
(QA)
Existing
VENDOR
Material
flow
HHML
15
APPROACH TO ACHIEVE DOL
POST DOL
Insp.
&
Desp.
Manf/
User
point
VENDOR
H H M L
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“DIRECT - ON - LINE” PROJECT WAS LAUNCHED
IN THE MONTH OF JULY’02 TARGETING
30 SUPPLIERS MAINLY ANCILLARIES
DOL JOURNEY
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PROJECT INITIATED WITH 30 SUPPLIERS

DOL AWARDED TO 10 SUPPLIERS

IN PROGRESS 20 SUPPLIERS
CURRENT STATUS
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 APPROVAL BY SR.MANAGEMENT
 COMPANY WIDE PROGRAMME
 TEAM FORMATION AT HHML & AT
SUPPLIER END.
 DEPLOYMENT OF TEAM AT SUPPLIER
END.
 CONTINUOUS PROJECT MONITORING
METHODOLOGY ADOPTED
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40 SUPPLIERS HAVE BEEN SELECTED BASED UPON
FOLLOWING CRITERIA
 ST. PASS % AT HHML
 DEFECT PPM AT HHML AT FOLLOWING
STAGES :-
a) BOP STAGE
b) AT LINE
c) AT MARKET
DATA FOR FY 2002 – 2003 ANALYSED
TARGET FOR 2003 - 04
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BEST PERFORMERS SELECTED
&
YOU ARE ONE OF THEM
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S.NO. CRITERIA TARGET
1. ST. PASS AT HHML
100%
2. BOP PPM AT HHML
0
3. LINE PROBLEM PPM AT HHML
< 500
4 WARRANTY PPM
<200
5 PROCESS & SYSTEM AUDIT SCORE
> 7
6 SUPPLIER‟S SPECIFIC ACTIONS. ACCOMPLISHED
CRITERIA FOR DOL
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 ENROLLMENT MEET BY HHML.

 SUPPLIER’S SELF EVALUATION FOR
CONFORMANCE W.R.T HHML REQUIREMENTS

 AUDIT BY HHML TEAM AT SUPPLIER END


 DOL PROGRESS EVALUATION BY HHML FOR
THE SUPPLIER

 FINAL AUDIT OF THE SUPPLIER BY HHML
SENIOR TEAM


 RECOGNITION FOR DOL STATUS
WE ARE
HERE
SEPT.03

OCT’03
NOV’03

DEC’03

JAN’04

FEB’04
ROAD MAP FOR DOL
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INTERNAL AUDIT BY SUPPLIER BASED UPON
PROCESS / SYSTEM AUDIT CHECK SHEET
& RATING SYSTEM
HHML AUDIT - I
AUDIT RATING
> 7.0
AUDIT RATING
> 7.0
SUPPLIER’S
SR.MANAGEMENT AUDIT
AUDIT RATING
> 7.0
NG < 7.0
OK (CLOSURE OF NC’S)
G
A
P

A
N
A
L
Y
S
I
S

G
A
P

A
N
A
L
Y
S
I
S

SCHEDULE
NG < 7.0
NG < 7.0
OK (CLOSURE OF NC’S)
OCT. 2003
NOV. 2003
DEC. 2003
ROAD MAP FOR DOL
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S.No Controls ( Risk coverage) Freq Resp
1 PDI reports Every lot Supplier
2 Internal audit Report submissions MONTHLY Supplier
3 IPPT ( Initial Production part Tag )
As & When
Reqd.
Supplier
4
System & process surveillance audit & Rating
Timely duplication/repair of dies/moulds
Std,Validation & calibration of Jigs/fixture/
Gauges.
Monitoring of supplier BOP control
Deployment of skilled manpower on critical
W/S
QTLY HHML
DOL SCENARIO CONTROLS
CONTD…..
25
S.No Controls ( Risk coverage) Freq Resp
5 Validation of the components Quarterly Supp.
6 Monitoring of management issues Monthly HHML
7
Monitoring of Line PPM & communication
Suppliers
weekly HHML
8
Monitoring of Warranty PPM &
communication Suppliers
Monthly HHML
9 Monthly reviews/evaluations of Supp. Quarterly HHML
DOL SCENARIO CONTROLS
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HAPPENINGS AT H H M L
SAP IMPLEMENTATION
 IMS AWARD
 WEBSITE ACCESS TO SUPPLIERS
 EFT FACILITY
 DOL PROJECT LAUNCH
 FREQUENT NEW MODEL LAUNCHES
 LAUNCH PLAN OF GSCM
 FLEXIBLE PRODUCTION
 PASSPORT PROGRAMME
 FOCUS ON INPLANT COST CONTROL
 IMPROVEMENTS THRU CFT’S / SMALL GROUP ACTIVITIES

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OUR EXPECTATIONS FROM YOU
 FLEXIBLE MANUFACURING FACILITIES.
HIGH REPONSE TIME
COMPLETE OWNERSHIP OF MATERIAL W.R.T. TO QUALITY
DELIVERY AT FIXED TIME AT DESIRED FREQUENCY
QUICK DEVELOPMENT CAPABILITIES
 ROBUST PROCESSES AND SYSTEMS.
 PROMPT RESPONSE.
 EFFICIENT LOGISTICS CONTROL
 SUPPLY IN REUSABLE PACKING
 SERVICE POINT NEAR TO OUR PLANTS.
 KIT SUPPLY.
 EFFICIENCY IMPROVEMENT FOR COST ADVANTAGES
 WIN – WIN APPROACH
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TAKE AWAY( ACTIONS)
 LAUNCH OF COMPANYWIDE PROGRAME
BY SUPPLIER

 TEAM FORMATION AT SUPPLIER END

 SETUP A PDI STAGE

 SUBMIT UPDATED PQCS FOR ALL
COMPONENTS FOR APPROVAL TO HHML

 COMPONENT WISE PDI CHECK SHEETS TO
BE MADE AND SENT TO HHML FOR
APPROVAL .

 CONDUCT SYSTEM & PROCESS AUDITS ON
THE LINE OF ISO/ TS 164949 / ISO 9000:2000
& 30 ATTRIBUTE SHEETS.
SEPT 2
nd
WEEK


SEPT 2
nd
WEEK

SEPT 2
nd
WEEK


SEPT 4
th
WEEK


SEPT 4
th
WEEK




OCT 1
st
WEEK
29
TAKE AWAY( ACTIONS)
 CONDUCT GAP ANALYSIS & BRIDGE THE GAP

 STRICTLY FOLLOW & ADHERE IPPT SYSTEM

 STANDARDIZE ALL TOOLING / JIGS & FIXTURES

 STRICTLY FOLLOW SUPPLY PATTERN AS GIVEN BY HHML

 PERIODICALLY CONDUCT AUDITS & SUBMIT THE REPORTS
TO HHML

 VALIDATE ALL THE COMPONENTS ON QUATERLY BASIS &
SUBMIT THE REPORTS TO HHML
30
 CEREMONY FOR AWARDING THE CERTIFICATE

 SIGNING OF MEMORUNDUM OF COMMON
UNDERSTANDING


RECOGNITION FOR DOL STATUS
31