SUPPLY CHAIN MANAGEMENT OF

SUBMITTED TO: ISHTIAQ ALAM

SUBMITTED B: MUHAMMAD KASHIF IQBAL (10-ARID-1404)

&
JIBRAN KHALIL (10-ARID-1395)
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Contents INTRODUCTION: ......................................................................................................................... 3 Company review: ............................................................................................................................ 5 Achievement of AHL (milestones) ................................................................................................. 6 Vision statement.............................................................................................................................. 7 Mission statement ........................................................................................................................... 7 ORGANIZATIONAL STRUCTURE ............................................................................................ 8 SUPPLY CHAIN OF AHL............................................................................................................. 9 Product offer by ATLAS Honda ................................................................................................... 10 Rival brands & models.................................................................................................................. 11 Procurement .................................................................................................................................. 11 Procurement process ................................................................................................................. 11 Ware house: .................................................................................................................................. 12 SAP (System application and production) ................................................................................ 13 Master production scheduling; .............................................................................................. 13 Material requirement planning.............................................................................................. 14 MANUFACTURING: ................................................................................................................. 14 Dealers .......................................................................................................................................... 16 Distributors .................................................................................................................................. 16 Transportation: ........................................................................................................................... 16 CONCLUSION: .......................................................................................................................... 17

INTRODUCTION:
Analysis of whole industry (car and bike)
The sector of automobile industry is the growing rapidly in the last few years. In GDP it is contributes U.S $ 3.6 million and also create the employment opportunity of around 192,000 people. In the last year total production of vehicle are 221,175 with the prediction of increase in 9% in the next year. The market of Pakistan is covered by only three giants assembler Honda atlas Pak Suzuki Indus motor

The motor cycle industry is also the growing sector as compare to cars. The historical trend show in PAMA report that there in a continuous increase in demand of motorcycle each year both local and international. Pakistan is currently now in number seven with 2 % contribute in total number of global motorcycle demand. Atlas is now leading the market in term of their sale and market share as compare to their rival firm. The most competitive brand of atlas Honda is cd-70 and it is so much popular in Pakistan due to cd-70 petrol efficiency, maintenance and resale. These are the some statistical figure taken from the PAMA to show the trend and demand of bike in Pakistan of different company.

Motorcycle

2010-2011

2011-2012

Honda

production

570,777

588,106

sales

570,168

587,866

Yahama

production

114,845

86,913

sales

113,903

86,000

Suzuki

production

20,259

21,396

sales

19,685

22,694

Sohrab

production

3,607

3,221

sales

3,920

3,101

Sohrab(tri wheeler) production sales

1,560

1,063

1,581

1,175

Quingqi( 2 & 3 wheeler) production sales

21,405

26,058

20,363

26,136

Hero

production

41,972

38,834

sales

42,270

38,928

Sazgar

production

26,882

22,308

sales

26,920

22,121

Ravi

production

15,699

16,328

sales

15,442

16,473

Habib

production

21,659

25,356

sales

21,203

25,399

Total motor cycle production sales

838,665

828,576

835,455

828,893

Company review:
Honda atlas
Atlas Honda is the result if the joint venture of two firm atlas group and the Honda motor company Japan. AHL manufacture and market Honda motorcycle in coordination with the Honda motor and also engage in hi tech component production in house with some major firm like atsumitech, Nippon & toyyo denso. AHS has currently two in house plant the first one locate in Karachi and the second one in sheikhupura to meet the demand of local and foreign, the Karachi plant manufacture only one product (cd70) while the other one manufacture all 4 types of product(cd70,prido,deluxe,cg125). The AHL export its products to Bangladesh and Afghanistan, the plants annual production capacity of 750,000, its also use cad / cam to assist in research and development, With the local vendor atlas has engage in 12 joint venture with them. The philosophy of atlas Honda is the hard/soft according to the condition of environment. Management structure is change according to the demand of customer, growth and adaptation of new technology. Atlas use management by objective to make sure the all the department involvement in decision making and to motivate employees and adapt team works and pursue on 7S vision (structure, strategy, skill, staff, share value, style and system) Atlas has 1600 distribution network all over the country to make sure the availability of their products and each dealer of atlas has main concern of 5s(sales, spare parts, safety, services, second hand) Atlas acquire many company all just to make sure that their business will receive the input as when they require and their business will remain in lead and competitive as compare to their rival firm. The companies are as following

Achievement of AHL (milestones)

AHl achieve following of the thing from the day of its incorporation till today. 2012 launch of pridor

2010 Deluxe launch 2010 SAFA award (for best corporate governance and disclosure of annual report) 2009 Award of excellence in HRM 2009 CD 100 introduce in market 2007 Successfully implemented SAP ERP to its business process, all over Pakistan 2006 KSE award due to lies in top 25 company 2006 Production annual increase 360,000 2004 KSE award due to lies in top 25 company

2001 5s dealership concept 1999 Certificate of ISO 9002 for both plants 1998 New model of CD-70 and CG-125 introduced in market 1995 Export Agreement signed with Honda Motor Company Limited Japan 1995 Company makes its first exports to Bangladesh, Nepal, Sri Lanka, Middle East and Central Asia.

1991 CG 125 engine project initiate in sheikhpura plant 1988 agreement of joint venture signed with HMC Limited 1987 CD 70 engine project initiate in Karachi plant 1981 Commercial Production started at Panjdarya Limited 1981 Production capacity expansion II 1979 Incorporation of Panjdarya Limited as Joint Venture with Honda Motor Company Limited 1965 Share offer to general public 1964 Start production commercially 1962 Agreement of technical assistance signed with HMC Limited Japan 1962 Incorporation of AHL

Vision statement
Market leader in the motorcycle industry, emerging as a global competitive centre of production and exports.

Mission statement
A dynamic growth oriented company through market leadership, excellence in quality and service and maximizing export, ensuring attractive returns to equity holders, rewarding associates according to their ability and performance, fostering a network of engineers and researchers ensuing unique contribution to the development of the industry, customer satisfaction and protection of the environment by producing emission friendly green products as a good corporate citizen fulfilling its social responsibilities in all respects.

ORGANIZATIONAL STRUCTURE
Chairman

C.E.O

Human Resources

Finance

Marketing

Supply

Quality

R & D

Procurement

Ware House

Production Control

From local

From foreign (imports)

RM & CKD

SAP

SUPPLY CHAIN OF AHL

Customer

Dealer

Assemble

Ware house sheikhupura

Part assemble (Karachi)

Procurement

Suppliers

Imports CD- 70 (5%) Cg-125(15%)

Local cd-70(95%) cg-125(85%)

The supply chain business model of atlas Honda is anticipatory. The atlas sale the standardized bike by simply forecast and to manufacture those bike according to them.

Product offer by ATLAS Honda

Pridor: Pridor are launch in the market with some innovation as compare to previous design it has a aerodynamic and smooth style make it popular among youngster. In all sort of terrain the pridor is best due to its double cradle frame and strong suspension. Key feature of pridor: CD-70 Highly efficient in consumption with 2 year warranty and resale of CD- 70 make himself ideal for the customer. Key feature of cd-70 CG-125 This model is popular for long run and its speed and for the rough pathway. CG-125 deluxe Deluxe lies in the same 125 cc category. Deluxe target he high income segment group. Capacity of petrol tank is 9 liter 2 year engine warranty Stylish and visor headlight Full black painted exhaust system pridor CD-70 CG-125 CG-125 deluxe

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Rival brands & models

Yamaha Suzuki Shorab Pak hero Hero Eagle Star

Procurement
Overview Plant capacity Sheikhupura plant Karachi plant Total units 750,0000 656,400 93,600 750,000

Procurement process
1. Forecast procurement 2. B.O.M 3. negotiation of price 4. order place 5. letter of credit establish 6. revival & recovery of doc o B.O.L (bill of landing) o L.O.C (letter of credit) o Invoice

7. Clear agents

8. Delivery & possessions of good and material

9. Receipt note of materials and goods

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Ware house:
Stores: 1. AHL store department perform the following sort of functions 2. Receiving, stacking and issuance of material and parts to the shops 3. Ensure the material require by the Karachi and sheikhupura plant dispatch to them accordingly 4. Spoilage material handling 5. To handle the wastage and scrap that are generated In the factory

The store are further classify into sub stores according to their function and services they performed
Store Department

General store CKD store RMS store Scrap yard

Parts and material (in process)

In house parts (finish)

Contractor part (local)

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The major store of atlas Honda located in sheikhupura plant where all the finish assemble parts are stored and in two further sub store are in Karachi and their names are following CKD RM

CKD STORE: In this those parts are store which are basically import from Japan and Taiwan and the store has the capacity to store 2,000 parts and currently its has 300 item store of each product that represent that total 1500 ready to assemble part are in their store. RM STORE In RM those item are stores which are purchase from the local vendor and are in the raw form like gear, break part and steel for making body of the motorcycle. The capacity of RM stores is almost like the CKD store. Strategies for item handling Following strategy is use for material handling For the movement of material from one shop to another specialized trolleys and bins and pallets are used. It is quite easy and safe for the movement of material for short distance.

For those item which are important and sensitive are received in the wood and steel case. For those part and item which are received from local vendor are packed in special carton box.

SAP (System application and production)

Master production scheduling;

MPS is sort of the plan that predicts the production. Staffing (no of employees use for the production) and inventory level, the prediction is base of some input variables and these input will lead to generate some output. Mps also help to tell the other resources for obtimun production.

Input variable

output

Forecast demand Cost of production no to be produced

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Cost of inventory Level of inventory Order by the customers Supply available Size of the lot Lead time Capacity of plant staff requirement

The main concern of this mps is to figure out the storage before it will actually occur. The no of purchasing, manufacturing and sales order along with the existing stock of the company will forecast your stock from week to year in advance. Mps help in decision making to when start the production because it tell use in advance when will shortage appear. Material requirement planning MPR is also use to control inventory it will tell us which item purchase order we place and with how much quantity so that they require material will reach at the desire time.

MANUFACTURING:
The manufacturing of Honda bike comprises 14 step which are explain below

a) Frame assembling b) Paint shop c) Buffing d) Alternative current generation e) Drum gear shift f) Drum gear shop g) Machine shop h) Fuel cope i) Die casting j) Engine assembly k) Wielding l) Ignition coil shop m) Switch assembly n) Engine machine assembly
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A. Frame assembly: In this step the frame of motor bike are produced B. Paint shop 110 components of the motor bike are paints in this shop C. Buffing 35 components of the bike are buffer in this shop D. Alternative current generation This shop of the process deal with the electric work for example engine wire to start switch and light E. Drum gear shift Gear and chain related work is done in this shop F. Drum gear shop The drum work on front and rear drum Is done in this shop G. Machine shop Miscellaneous work is done in this shop which are not done in the other steps H. Fuel cope Fuel related work like fuel tank and assemble in this steps and shop I. Die casting In this shop metal related work is done J. Engine assembly In this engine is properly and completely fit into the frame K. Wielding Frame related wielding are done in this shop L. Ignition coil shop This part is right behind the engine the purpose is to provide electric to engine M. Switch assembly Starting switch of the bike are assemble in this shop N. Engine machine assembly In this department work is done to make sure that the engine is attach properly and work fine

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Dealers
The total no of vendor that are deal in motorcycle part are 250 out of them 120 are located in Karachi and rest of them are situated in various domain of the country other than Karachi. At present atlas Honda deal with the 82 vendor the department who deal with the vendor are responsible for the following thing.

1. To make and maintain the relationship with desire supplier 2. This department also deals with the import part (CKD) 3. The department also engage in the training of vendor so that they consider them self as the part of the organization and their motivation level will remain and continue to increase and also to make sure that vendor produce excellent quality. 4. The department also responsible to make sure the availability of material by situated organizational employee in supplier premises. 5. This department deals with the vendor billing and consolidated billing and price negotiation with supplier is also the responsibility of this department

Distributors
Distributors are deal in the sale of the atlas Honda in different domain of the country For distributors to act nice and warm they set the standard for the distributor which called them 5s. 5s stand for 1. Sale 2. Services 3. Spare parts 4. Special credit sale 5. Second hand sale

Transportation:
To transfer various part from gwader to Karachi and from Karachi to sheikhupura plant and then the final good are deliver to distributor to atlas Honda make a contract with three different transport facilities, each one use different truck and has the different capacity. Mazda carry 65 bikes while the HINO and Bedford carry 125 and 110 bike respectively.

MAZDA HINO BEDFORD

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Major city for atlas Honda sale:

1. Lahore 2. Karachi 3. Sheikhupura 4. Gujranwala 5. Sialkot 6. Hyderabad

Market share
Honda Yamaha Suzuki Shorab Hero 65.7% 19.3% 6.2% 6.6% 2.2%

Sales
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 5th Qtr

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CONCLUSION:
Now a days all the organization realize that if they want to remain competitive then they must have to take care of their supplier they should provide and associate such benefits to their offer which they gave to supplier so he will remain with you whenever you need, The supply chain management of Honda atlas is quite well as compare to the rival that why the Honda maintains its first position in market share currently Honda has 65% share of market and Honda lead the market. Honda acquire many company all just to make ensure the availability of input when desire. Like shirazi investment, capital and trade, atlas insurance and engineering, atlas asset management and power product and auto part. These group companies work well to support the atlas to achieve what he want to and they serve all as a input to atlas.

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