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
7
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%
9
STATISTICS OF VENDOR
& COMPONENTS
TOTAL NO. OF VENDORS 234
NO. OF COMPONENTS
BEING SUPPLIED
3045
10
TODAYS BUSINESS SCENARIO



TOO MANY PLAYERS IN SAME BUSINESS
BUYERS MARKET
CUT THROAT COMPETITION
HIGH QUALITY PRODUCT AT LOW COST
OPEN ECONOMY
GLOBALISATION &
LIBERALISATION IS
LEADING TO
11
INBUILT PROCESS QUALITY LEADING TO
CUSTOMER DELIGHT
IMPROVED EFFICIENCY
UPGRADING VENDORS
DIRECT-ONLINE
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
16
DIRECT - ON - LINE PROJECT WAS LAUNCHED
IN THE MONTH OF JULY02 TARGETING
30 SUPPLIERS MAINLY ANCILLARIES
DOL JOURNEY
17
PROJECT INITIATED WITH 30 SUPPLIERS

DOL AWARDED TO 10 SUPPLIERS

IN PROGRESS 20 SUPPLIERS
CURRENT STATUS
18
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
19
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
20
BEST PERFORMERS SELECTED
&
YOU ARE ONE OF THEM
21
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 SUPPLIERS SPECIFIC ACTIONS. ACCOMPLISHED
CRITERIA FOR DOL
22
ENROLLMENT MEET BY HHML.

SUPPLIERS 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

OCT03
NOV03

DEC03

JAN04

FEB04
ROAD MAP FOR DOL
23
INTERNAL AUDIT BY SUPPLIER BASED UPON
PROCESS / SYSTEM AUDIT CHECK SHEET
& RATING SYSTEM
HHML AUDIT - I
AUDIT RATING
> 7.0
AUDIT RATING
> 7.0
SUPPLIERS
SR.MANAGEMENT AUDIT
AUDIT RATING
> 7.0
NG < 7.0
OK (CLOSURE OF NCS)
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 NCS)
OCT. 2003
NOV. 2003
DEC. 2003
ROAD MAP FOR DOL
24
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
26
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 CFTS / SMALL GROUP ACTIVITIES

27
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
28
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