Bajaj auto Operations
- 1. Company: Bajaj Auto Operations Management Project_2nd Term By, Sindoor Naik (MBA) Universal Business School (sindoornaik@yahoo.com)
- 2. History • Bajaj Auto came into existence on 29 November 1945. • Bajaj Auto Limited is India's 2nd largest manufacturer of scooters and motorcycles. • The company generally has lagged behind its Japanese rivals in technology, but has invested heavily to catch up. • It is the lowest-cost scooter maker in the world. • Although publicly owned, the company has been controlled by the Bajaj family since its founding.
- 3. Introduction • Market Capital: INR 520 billion (On 31 March 2013) • One of the oldest and the 2nd largest manufacturer of automobiles in India • World's 4th largest two- and three-wheeler maker • Bajaj Auto makes motor scooters, motorcycles and the auto rickshaw. • Changed its image from a scooter manufacturer to a two wheeler manufacturer
- 4. Business; Partnership; Location BUSINESS: Bajaj Auto makes several kinds of motorcycles, scooters and three wheelers. PARTNERSHIP: Bajaj Auto has a technical tie-up with Kawasaki Heavy Industries of Japan to produce a range of the latest, state-of-art two-wheelers in India. LOCATION: Bajaj Auto has three plants in Maharashtra, at Akurdi, Waluj and Chakan.
- 5. USP of Bajaj Auto Ltd. • Style • Technology • Pricing Strategy • Innovation • Speed • Perfection
- 6. 0 5000 10000 15000 20000 25000 FY2009 FY2010 FY2011 FY2012 FY2013 Bajaj Auto Net Sales and Operating Income (in Rs. Crore)
- 7. Year ended 31st March Industry (Nos.) Industry ’s Growth Bajaj Auto (Nos.) Bajaj Auto’s Growt h Bajaj Auto’ s Marke t Share 2009 6806114 4.0% 1907853 10.8% 28.0% 2010 8444243 24.1% 2506791 31.4% 29.7% 2011 10500073 24.3% 3387043 35.1% 32.3% 2012 11943535 13.7% 3834405 13.2% 32.1% 2013 11952135 0.1% 3757105 2.0% 31.4% Bajaj Auto’s Sale of Motorcycles, Domestic + Exports (in numbers)
- 8. Land Waluj: Aurangabad (Maharashtra) Chakan: Mahalunge Village (Maharashtra) Patnagar: Uttaranchal Bajaj Autohas in all threeplants: The use of optimised resources and improved efficiencies at all levels has Helped the Plants to achieve superior results in: Productivity Product Quality Cost Reduction Company Culture
- 9. TheWaluj Plant wonthe TPMAward for ‘Excellence in ConsistentTPM Commitment’ from theJIPMin March2013. TheGreenManufacturingExcellence Award, 2012 was awarded to the Walujplant asthe ‘Challenger Award —Large Business’. TheNational EnergyManagementAward, 2012 hasbeen awarded to the Waluj plant as an ‘Efficient EnergyUnit’.
- 10. Chakanplants won the TPMAward for‘Excellence in Consistent TPM Commitment’ from the JIPMin March2013.
- 11. Patnagar Plant
- 12. Product Range Plant Output Capacity Products Waluj 2.40 million 2.22 million- 2 & 3 wheelers Boxer, Platina, Discove r, Pulsar and 3 Wheeler Capacit y Chakan 1.20 million 0.88 million- vehicles Pulsar, Avenger, Ninja and KTM Patnagar 1.80 million 1.12 million- vehicles Platina, Discove r, Boxer
- 13. Technology -R&D During 2003-04, the company's R&D team unveiled an innovative and path-breaking technology called DTSi (Digital Twin Spark ignition).
- 14. Technology -R&D Plugsprovide unprecedentedperformanceand efficiency. Fast and optimal combustion. Lower emissions. Controlled by an advanced Electronic ControlUnit, is the technology ofthe future. Combustion in a triple spark engine is 27% faster than a twin spark and 50% faster than a single spark engine. THE TRIPLE SPARK TECHNOLOGY Facilitates induction ofmore quantityof charge(air-fuelmixture)and complete evacuation ofall burnt gases. Resultsin increasedengine performance –power, throttle responseand pick-up at all enginespeeds. 4-VALVE 4-valve engines can be revved to much higher RPMs, without any engine strain, allowing the rider to experience superior performance. LIQUID COOLING Engine is kept cooled usingliquid coolant, which is better at heat dispension as compared to an air cooled engine. Ensuresthereis nopower fading due to overheating. Resultsin longer engine life. Thecoolant provides for a muffling effect which smoothensengine noises evenat high RPMs.Air Cooled Liquid Cooled 6SPEED GEARBOX Ensures optimal use of the wider range of power delivery.
- 16. Focus Market Youth Most of their Bikes Targets the Youth. Bajaj Pulsar 150cc is certainly one of them! Office Goers Discover 125 and 100 T, rather the Discover Brand is clearly aimed at Targeting the Office Goers, specially the Middle Class Segment. Sports Segment With the Launch of KTM DUKE 200, even KTM DUKE 100, as well as the PULSAR 200 NS, they are surely Targeting those who want Speed !
- 17. Focus Products
- 19. Pulsar 200NS
- 20. Has redefined the sports motorcycle segment in India. Set newbenchmarks in terms of performance, style, technology and affordability. Theaward for the best product design across the entire automobile segment. Pulsar 200 NS
- 21. Discover125 ST Discover125 ST TheDiscover 125 ST is equipped with a high performancefour-valveair cooled engine powered by twin spark ignition, delivering 13 Ps,and a 5 speed gear box suitably synchronisedto the power characteristicsofthe engine. Thisprovides the joy ofa powerful drive while maintaining the high fuelefficiency for which Discover is known for. Nitroxmono shock absorber Swing arms Big and stylish fuel tank
- 22. Bajaj Discover 100T Bajaj Discover 100T Smaller enginecapacity More fuelefficiency Thevehicle is powered by a high performancefour- valve air cooled 100 cc DTSi engine delivering 10.2 Ps,with a five- speed gear box. The Discover 100 T is Theworld’s first 100 cc single cylinder four-valve DTSiengine and also delivers best-in-class power and fuel efficiency.
- 24. KTMDUKE-125 and200 Anti-lock braking system(ABS) The KTM 200 Duke also won eight awards during the year. Thisincreasesdriver safety by not allowing the vehicleto skid even incasesofpanic braking on high skid surfaces. TheKTM200 Duke also won eight awards during theyear.
- 25. Value Chain Analysis of Bajaj Auto They select Suppliers that provide majority of the required Raw Materials! Suppliers and Raw Materials Minda Headlamps and Lights Suppliers Raw Materials JBM MRF Minda Reinder Frames Tires Locks and Ignition Systems Headlamps and Lights Endurance Varroc Max Auto Comp. Silico Cable Brakes, Clutch & Cast Vehicles Digital Meters & Plastic Parts Ignition Systems & Switches Wires & Cables
- 26. Inventory Management Bajaj Auto maintains 7 days Inventory Demand Estimation is based on Panel Regression Takes into accountTime Series & Cross Section Variation in Data All Mediators are connected with each other through IT Linkage
- 27. Manufacturing: • Bajaj Auto is the world's third-largest manufacturer of motorcycles and the second-largest in India. • Manufacturing locations: Akurdi, Pune, 411035 • This is one of the oldest plants of bajaj auto ltd with production capacity of 0.6 million vehicles/ year. The plant has been closed in order to equip for four wheeler production Bajaj Nagar, Waluj Aurangabad 431136 • This is second plant with production capacity of 0.86 million/ year. Products manufactured here are Kristal, XCD and platina and commerial GC series.
- 28. Manufacturing: Chakan Industrial Area, Chakan , Pune 411501 • This is the biggest plant of bajaj auto Production Capacity of 1.2 million/ year , Product manufactured here are pulsar and avenger and commercial Ge series Pantnagar , Uttarakhand • The most advanced plant of bajaj auto .It has Capacity of 0.9 million vehicles per year. Product manufactured here are platina and XCD
- 29. Cont…..
- 31. ISO • Bajaj Auto have Adhered to ISO9001(Quality System) . • It also posses ISO-4001(Environment System) Certification. • All plants of bajaj Auto is actively invovled in Afforestation with Plantation work in & Around plant premises. • It also made huge Investment in Effluent Treatment Plant(ETP)
- 32. ISO CERTIFICATE
- 33. DISTRIBUTION CHANNEL Various players involved in the channel design are: • Manufacturing Plant Depots • Carrying & Forward Agent • Dealers • Sub Dealers
- 35. • Setting up depots is a geographical strategy adopted by Bajaj Auto. • It has chosen strategic locations. • The key role played by depots is that they are meant to cater to any sudden rise in demand of vehicles, and to cover the existing geographic span of India. Ex : Due to extensive distance of manufacturing plants in Maharashtra from West Bengal and north-east India, there exist a depot in Kharagpur with capacity of housing 800 vehicles • There are similar depots in Punjab, Rajasthan and southern India. Depots:
- 36. Depots: • Reaching the states of the North-East takes 15 days if we go via the carrying and forwarding agent concept. • Generally bikes reach West Bengal in 7-8 days. • The bottleneck is the Darjeeling route. • Hence, came in the concept of a depot whereby we can reach the North-East in the same time, instead of experiencing a lag of almost a week.”
- 37. Dimensions for Choosing Depot or Factory Approach • A dealer needs to consider his order requirements and then come up with an order to place to the regional office. • If the demand is immediate, he may approach a Depot for the load. • Else, he has to try to stick to factory load. • Generally, orders are placed to the factory but in case of urgent requirement, due to which the lead time reduces considerably, the order is procured from the depot.
- 38. Dealers: • Bajaj Auto has a network of 498 dealers and over 1,500 authorized service centers and 162 exclusive three-wheeler dealers spread across the country. • Around 1,400 rural outlets have been created in towns with population of 25,000 and below. • The current dealer network is servicing these outlets.
- 39. Company Owned & Company Operated showrooms. • These concepts exists only for Pro-Biking showrooms. ( Ex: Bajaj Kawasaki Ninja and Bajaj KTM Duke) • Bajaj Auto has tried showcasing their muscle power in high end biking segment. • The concept has evolved very fast and now there are 52 Pro-Biking showrooms in the country. • The company itself does not take any order from the customer in these showrooms. • The giant dealer of the region who is acting as a logistics partner for the pro-biking concept takes the order on behalf of the company and fulfills the customer requirement.
- 40. Dealer Owned & Dealer Operated • These dealers are fewer in number because they are generally the giant dealers who are the financial muscle for the company. • In the future years Bajaj wants to do away with this concept. • The reason behind this is that the bargaining power increases in the hands of the dealer, which puts the company in a knotty situation.
- 41. • This function of distribution is not owned by the company in any form. • This is outsourced to the third party vendors. • The third party here is Transport Corporation of India (TCI) and a few other private vendors namely OSL Jamuna Transport ,Sumit Transport etc. • The fleet to be transported is custom-designed for Bajaj Auto by the vendor.
- 42. Transport & Logistics: • A Transit Insurance Compliance Letter (TICL) is signed between the two parties • The local level sub-dealer sometimes gets to decide the last mile logistics, as he can decide to pick up the vehicles himself or have it transported to him. • Logistics of the vendor is decided by the company. • Freight charges are built in the product price.
- 43. Services to Dealer : Workshop Training In a month: • 30-40 Mechanics can be trained per dealer • 15-20 Sales personnel can be trained per dealer
- 44. Order Tracking: • Taking a daily account of the order received from various dealers and Regional Offices (RO). • Orders from dealers are punched in by dealer themselves. • Orders are followed up in the system only if the credit limit is not crossed. • This credit limit is preset into the system depending upon the dealer and his/her track record.
- 45. Packaging: • Packaging in factory is outsourced to third party vendor. These vendors are generally from the Transport & Logistics partners
- 46. Dispatching Goods: • Goods need to be dispatched via third party vendor TCI. State corporations and other private players are also part of the vendor list
- 47. Generating Invoice & Waybill: • These documents need to be generated and dispatched to the respective dealer.
- 48. Key Players in Market • Hero Honda • Bajaj Auto • TVS • Honda • Yamaha • Suzuki • LML • Royal Enfield
- 49. Market Share Hero Honda TVS Motors Bajaj Auto Others 41% 31% 14% 14%
- 50. Bajaj Investment Particular As at 31st March 2013 Govt. Securities & Bank deposits 8653 Mutual funds including UTI 1739 Debentures & Bonds 8698 Preferences shares 854 Inter corporate Deposits 1651 Fixed income investments 21735 Market value 29433
- 51. Particulars As of 31st March Share Capital 2893.70 Inventories 6362.80 Sundry Debtors 7675.80 Cash & Bank 5588.50 Sundry Creditors 5461.60 Liabilities & Assets
- 52. Turnover €612 million Net Profit € 25.3 million Share of dividends € 3.64 million Total production 4237162 units Net sales 20,792.74 crore Total exports 1,547,157 units Market capitalization €61 million FINANCIALS 2013