- C H A I T H A N YA- M U KU N D- A N U R A A G

- A KA N K S H A- PAVA N K- A B H I N AV

Group – 01

Automobile Industry in India

India is the 2nd largest two-wheeler market in the world.

Industry growth factor and Key Market players

The finance have become easier to access Introduction of international standards in India The economic and fuel-efficient engines The teenager and the youth using more and more

motorcycles

Key Market Players: Hero Honda Motors India Limited Bajaj Auto Ltd. (BAL) TVS Motor Company Honda Motorcycle Scooter India (P) Ltd. Yamaha Motors India Pvt. Ltd. Suzuki Motor Corporation

Bajaj Auto Limited

Founded in 1926India's largest and World’s third largest motorcycle

manufacturer and has presence in Asia, Africa and Latin America.

Bajaj Auto came into existence on November 29,1945 as M/s Bachraj Trading Corporation Private Limited.

It started off by selling imported two- and three-wheelers in India.

In1959, it obtained license from the Government of India to manufacture two- and three-wheelers and it went public as Bajaj Auto Ltd (BAL) in1960.

More About the company

“The strategy of creative differentiation” – Rajiv Bajaj.Have succeeded in capturing major, often leading, market shares in three categories:

Financial Performance:Net sales grew by 5.4% and operating income increased by 5.3%.The operating EBITDA margin was 22.4% of net sales, highest in the industry.Profit before tax (PBT) increased by 31.8% to 5,385 crore.

Super Sports segment KTM and Pulsar RS 200

Sports Segment Pulsars and Avengers

Entry Level Segment Platina and CT 100

Bajaj Auto Limited has three plants in India:

The company has a total of 593 dealership outlets around 459 cities of the country.

Capacity

Waluj: Bajaj range of motorcycles manufactured at this plant include

Discover, Platina, CT 100, Boxer and three-wheelers (RE).

Chakan: The range of Bajaj motorcycles include Pulsar, Avenger, KTM, Kawasaki

Ninja.

Pant Nagar: Bajaj range of motorcycles such as Discover and Platina are

manufactured at this plant.

Capacity

Sales

Facility

Implemented Total Productivity maintenance(TPM) in all the plants to build and continuously improve its core competency.

All plants has been using the continuous improvements in performance through lean manufacturing, higher quality, cost reduction, tight and lean supply chains, greater throughput and the introduction of new products and processes.

Deployed direct-on-line supply based on Kanban, where all vendors are online and aware of the production schedule, the plants have very low inventory.

Technology

Self-reliance in all aspects lead to technological breakthroughs without compromises and at an affordable cost

DTSi, 4 valve technology, EXHAUSTEC, SNS, Intelligent CDI  Being one of the pioneers in automation, robotics Bajaj auto

has so far installed 120 Co-Bots, made at its own plant, at Chakan, Pantnagar and Waluj.

 It operates close to 300 robots at its plant. A large chunk of these robots are the ones the company has made on its own.

The automation helped in cost reduction and making motorcycles at costs difficult to replicate.

“Build technology inside and parts outside”- sum-up the firms manufacturing philosophy.

Sourcing/Vertical Integration

Around 60% by value of the Bajaj vehicles are outsourced

180 vendors supplying components to Bajaj, they are strategically located within Maharashtra.Encourages its far away vendors to have a strategic alliances with third party logistics providers.

Spare parts division has performed effective contribute towards availability, affordability and greater penetration.

Human Resource

.• Bajaj talent acquisition comb length and

breadth of India to engage promising candidates.

.• Training programs include university

professors as resource persons to enlighten participants.

.• Knowledge based development programs

are organized focusing on environment, industry and management.

Capital Allocation

CSR expenditure amount to 86.46 cr which is 2% of the net profit 2015-16.

Total research and development expenditure is about 1.71% of sales in 2015-16.

Annual savings of 3.57 cr is achieved with an investment in renewable energy of 3.24 cr.

Inventory Planning/ControlBajaj Auto maintains seven days inventoryDemand Estimations are based on Panel regressionTime series and cross section variation in data are taken

into accountIntegrated ERP in procuring and inventory managementBusiness information is now available to the company’s

external community in real-time which improves decision making to meet customer requirements and maintain efficient supply chain management

Supplier gets purchase orders and contracts, material schedules & payment details while Bajaj Auto gets invoicing information in the automated material reciept system

Quality Management

To improve quality, Bajaj Auto has begun actively assisting its suppliers in finalizing joint ventures with counterparts in Japan, Italy, Taiwan & Spain.

During 2007-08, the company extended BASS (Bajaj Auto Service Standard) to standardize the workshops of 250 dealers & 50 authorized service centers which improved work hygiene, promoted consistent & better service quality & greater productivity.

On the basis of all the inputs Service Quality Index for a particular dealer is calculated• On the basis of SQI achieved by the retailer over 1 year, dealer is rated and type of credit they receive depends on it

Organization Structure

CEO & Principal

Consultant

Head Executive

Search

Manager Executive

Search

Executive Search

Consultants

Head Business

Development

Manager Business

Development

Business Development Executives

Head Client Relations & Retentions

Manager Client

Relations & Retentions

Product/Process Development

DTSi technology was major development project tested in Pulsar and applied in other bikes later on.

Strategic implementation of I.T in Bajaj Auto gives field Sales team full visibility on dealer activities and dealers get real-time access to relevant information on operational activities

Bajaj has linked 380 out of 483 dealers & 165 out of 200 suppliers through their SAP R/3 ERP database.

This helps in supply chain streamlining, inventory optimization and reduction in non-value-adding activities at both ends.

Bajaj also plans to extend the IT systems in rural areas along with a marketing initiative project but internet connectivity can be an issue.

Changing infrastructure with telecom majors might help this project.

Aldi’s Resource-Based Operations Strategy matrix

PHYSICAL RESOURCES

HUMAN RESOURCES

INTELLECTUAL PROPERTY, SOFTWARE AND METHODS

ECOSYSTEM RESOURCES

FINANCIAL RESOURCES

Resource Base (Typ

e, Capacity, and Utilizatio

n)

• Land• Buildings• water

pumps & reservoirs,

• plant & machinery,

• computers & IT equipment,

• dies and jigs,

• Electric installations,

• furniture,• office

equipment,

• aircrafts

• As on 31 March 2016, BAL’s employee strength stood at 9,347 persons,

• Efficient and motivated store staff

• The Employers’ Federation of India (EFI) conferred The National Award for Excellence in Employee Relations - 2015 on Bajaj Auto Ltd.

• 93 Patent filings in India, fewer records of Patent filings overseas (USA, China, Egypt and Singapore).

• BAL has filed majority of patents in the category of Transport and Engines. it has thirty eight (38) granted patents while rest of the applications (55) are in Patent Pending status.

• Bajaj Auto announced the successful “Go Live” of their External Portal Initiative for their sales and service employees, dealers and suppliers.

• SAP’s mySAP Enterprise Portal was implemented simultaneously with the current SAPR/3 ERP implementation.

• Huge supplier network,

• efficient IT system,

• a network of 498 dealers and over 1,500 authorized service centers and 162 exclusive three-wheeler dealers

• the Dealer Owned & Dealer Operated center are financial muscle for the company.

Terry Hill Framework

Corporate Objectives

Marketing Strategy

How do Goods & Services qualify and win orders in Market Place?

Operations StrategyOperations Design Choice

Infrastructure

Profitable growth and global reach

Operations in 50 countries with bikes targeted at entry level buyers

Largest producer and exporter of 3-wheelers

Low prices Quick

Delivery Customer

feedback Brand

Image Efficient

technology

Flow-shop process design

High level of automation

Capacity & facility size, location and clusters

Teamwork

Training programs

Health and safety of employees

Terry Hill Framework (contd.)

Corporate Objectives

Marketing Strategy

How do Goods & Services qualify and win orders in Market Place?

Operations Strategy

Operations Design Choice

Infrastructure

Innovation and technology

Develop new bikes, scooterettes and passenger vehicles

Capture every existing segment

Low prices

Quick Delivery

Customer feedback

Brand Image

Efficient technology

Equipment technology

High level of automation

Demand Analysis

Quality control

Test-runs Organizati

onal structure

Terry Hill Framework (contd.)

Corporate Objectives

Marketing Strategy

How do Goods & Services qualify and win orders in Market Place?

Operations Strategy

Operations Design Choice

Infrastructure

Diversity & Social responsibility

“Humara Bajaj” – providing employment and empowering Indians

Pollution-free environment through technology innovation

Low prices

Quick Delivery

Customer feedback

Brand Image

Efficient technology

Training & Development

Process performance

Package redesign, shipping & warehousing

Learning & innovation

Health and support services on-site

Recommendations

Bajaj should aggressively push sales of higher margin products & launch new products in niche segments.

Bajaj should evaluate the process of backward integration as it has huge cash reserves surplus which helps to achieve lower cost.

Increase its dealer network to tap rural growing markets by going in for tie-ups &offering better margins to dealer.

Thank You