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Atlas Honda Pakistan

Presented by:
Bilal Hanif
TASHFEEN
MUJAHID ALI
ABSAR ALI AWAN

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winning with
SCM

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 About this
Presentation….
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You’ll Hear!
Industry Analysis
Atlas Honda Pakistan
Organizational Structure
Company Supply Chain
Become a member
Product Range
Manufacturing
Warehousing
Vendors/ Dealers
Transportation
Conclusion

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 Industry Analysis
Motorcycle Industry estimates show that last year a
total of over 750000 motorcycles were sold in the
country

The industry has been experiencing

a healthy growth rate of around 30%
per year for the past 4-5 years.

Pakistan came at number seven

with a production of 750,000 units
of motorcycles constituting to 2%
of the global total.

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Market Share of Motorbike in
Pakistan

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Company Profile
Atlas Honda Limited is a joint venture.
Country’s largest in-house manufacturing
capability at its Karachi and Sheikhupura plants.
14 Joint Venture/Technical Assistance
Agreements.
SKP Plant comprises of 500K plant.
Daily motorcycle production is 1325 units
comprising 4 models.
65.7 percent share in the total sales in Pakistan.
turn over is less than 3 percent.
307 dealers nationwide.
Technical Training Centers in Karachi and Lahore.

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Organizational Structure
Chairman

CEO

Finance Marketing Supply chain HRM Quality R&D

Procurement Warehouse Production Control

Imports
RM SAP
Local

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Company Supply chain
Customer Assembly / manufacturing plant
Dealers

Central Warehouse
(Sheikapura)

Import Local
5% CD-70 95% CD-70
15% CD- 125 85% CD- 125
Part assembling (Karachi)

Suppliers Procurement

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 Dynamics of Material Flow

Supplier Plant Warehouse Logistics Retailer

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 Dynamics of Order Flow

Supplier Plant Warehouse Logistics Retailer

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HOW TO BECAME A
MEMBER OF HONDA
SUPPLY CHAIN

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Purchasing Policy
Because of the established international nature of the purchasing function,
Honda is committed to maintain free trade, treating all suppliers equally
regardless of size, location, or national origin.
From this international environment, Honda has developed and maintains a
basic purchasing policy that can be described using the following principle:
Honda will buy from the most competitive suppliers in order to fulfill customer
satisfaction.
Customer Satisfaction
This principle is based on the idea that Honda's suppliers are not simply
selling their parts to us, they are selling their parts to our customers through
us. We expect each supplier to develop the same commitment and dedication
to customer satisfaction as we have. To accomplish customer satisfaction,
what Honda requires of suppliers is competitiveness in what we call
Q.C.D.D.M.
1. Quality
Quality is the most important factor in ensuring customer satisfaction. We
believe quality must be built into the product during the production process.
Quality cannot be assured in the final inspection process. It is the
responsibility of each supplier and each individual worker to ensure quality. A
commitment by the supplier at every level from the top management to the
individual worker is essential to continually improve quality.
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2. Cost
Competition in the parts supply industry has become very strong in recent
years. Honda is determined to provide products at competitive prices and
value for the money. Suppliers are expected to achieve target cost through
their ideas, technologies, improved productivity, plus joint efforts with Honda in
VE/VA (Value Engineering/Value Analysis) activities. We require
suppliers' continuous efforts to reduce cost year by year.
3. Delivery
Honda employs the just-in-time production system.
In order to respond quickly to our customer's needs, it is becoming more and
more critical to produce products with the shortest possible lead-time.
Suppliers are expected to have a reliable and flexible production system,
which can respond in a relatively short leadtime, and can be synchronized with
our assembly lines.
Suppliers will also benefit from just-in-time production system.
Just-in-time production reduces inventories, eliminates waste, and also
improves production efficiency.
Adopting just-in-time lean production will raise supplier's competitiveness in
cost and quality.

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4. Development
In responding to ever-changing customer demands, and to provide high
quality yet cost competitive products, Honda relies heavily on established
suppliers as a source for development and improvement of technology.
In the course of development, emphasis will be put on uniqueness. We believe
uniqueness in design or specification is a part of competitiveness. It is this
uniqueness that makes up the identify of our products.
Suppliers are expected to have ability to realize such demand of
uniquenessthrough their technology and know-how in development in a timely
manner with high cost performance.
5. Management
It is important for a supplier's management team to be strongly customer-
oriented and to provide effective leadership for the entire company that
expects to fulfill Q.C.D.D.
Such management effort promotes mutual trust between the supplier and
Honda.

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 Purchasing Process
There are several steps that must be taken when initiating a
relationship with Honda. Following these steps can make the
purchasing process smoother for everyone
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1. Initial Contact
Initial contact in the purchasing process may take place in two ways.
First, according to an established purchasing schedule, Honda may
contact suppliers in various areas to explore the potential of purchase.
The second way is direct contact by a supplier to Honda.  Please see
the appropriate contact listing at the bottom of the page.
If there is an initial interest in the product, a meeting will be arranged
between the supplier and a Honda purchasing representative. This
initial meeting will be arranged between the supplier and a Honda
purchasing representative. This initial meeting is of crucial importance
to the future relationship. This meeting should include a written
overview of the supplier's operations (present products and customers,
etc.) and experience as a parts manufacturer. The sample parts and
visual aids such as videos or slides can be helpful. A confidentiality
agreement will be signed by both parties before the initial meeting.
2. Preparation Investigation of Honda Parts (Homework)
Although it is of general interest to know what parts you presently
manufacture, Honda is much more interested in knowing, exactly what
parts you would propose to supply to Honda
what tentative price you will ask for that part.
Also, Honda wants to know, to what extent you have studied Honda
parts before making the presentation.
A thorough investigation of the part to be supplied should result in
knowledge about size, weight and how the parts affect surrounding or
attached parts. With this study and effort, beneficial discussions will
transpire.
The parts that we are most inclined to purchase first will be those parts
that have world class competitiveness. The study of the part at this
point does not require a detailed review of specifications for the part.
Your own engineers can look at the part or parts and make their own
assessment. Your initial efforts in this regard will be the most effective
way to begin a business relationship.
Also important to us is information of suppliers' development leadtime
to help us quickly understand a part of the suppliers' development
capability.
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3. Quotations
After evaluating the presentation and based on the tentative target
price information, Honda may issue a drawing and the accompanying
specifications for the part and request a more specific quotation. This
quotation should include first and foremost the quote as per the agreed
specification. It may also contain the supplier's own design quote and
possible adaptations of their own design to Honda's specifications.
Differences in these quotes should be clearly defined.
4. Initial Plant Visit
If the initial quote is found to be competitive. Honda will arrange a visit
to the company and its operations. This initial plant visit will be made by
a combination of purchasing, quality control, and R&D personnel. The
purpose of the visit is not only to inspect manufacturing processes and
quality assurance activities, but also to determine management policies
and 
Prototype Development
Following a favorable visit to the supplier, Honda will ask the company
to provideprototype sample parts. Along with the samples, we will ask
the supplier to provide its own testing and evaluation of the samples.
The resulting data, samples, plus an outline of the production
capabilities and schedules,

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6. Testing and Evaluation
Honda will require extensive testing of parts. Results will combine the
suppliers' own test data with that of Honda R&D divisions. Honda's
local capacity for testing and evaluation is developing quickly in
conjunction with manufacturing capacity. The testing process will
include many discussions between our technical staff and the supplier's
technical staff.
7. Mass Production Quotation
If the results of evaluations and testing are positive, we will move to
mass production price negotiations. Pricing is a very critical item and is
discussed continuously from the initial meeting. At Honda it is required
for suppliers to provide a detailed breakdown of the price. This
breakdown will include raw materials, labor, tooling, required
packaging, and delivery expenses, administrative expenses, and other
expenses.
We find the breakdown of costs is helpful in suggesting ways that
suppliers can seek to improve and thereby reduce costs.
8. Preparation for Mass Production
Honda will issue tooling orders after the successful completion of final
prototype evaluations.

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9. Trial Run
To confirm that the part will continue to meet requirements in volume
production, the supplier carries out trial runs under mass production
conditions.
10. QAV
Once trial runs are successfully done and mass production schedules
are determined, there will be a QAV (Quality Assurance Visit) for an
overall evaluation of the process.
11. Agreement
"General Agreement for Purchase of Parts" and "General Agreement for
Quality Assurance" and any other applicable agreements will be
mutually signed.
12. Purchase Order
After all the necessary procedures are completed, orders are placed
and mass production can begin.

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Supply chain members of
honda
Paint Provider:
Berger Paints Ltd
Seat Provider:
SCL SEAT MANUFACTURER
special “vinyle” leather is used for
seats.
Tyre Provider:
tyres are provided by SERVICE
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Suspension:
Are directly imported from japan
Speed o Meter:
ACL SONS manufactures meters for
bike.
Petrol Tanks:
Is manufactured in pakistan by
different companies.
Chassis:
is directly imported from japan by
honda japan.
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Engine:
Engine and its spare parts are
imported from honda japan and it is
assembled in honda assemblying plant
Electric cables:
Electric cables are provided by FAST
CABLES.
Cylincer:
cylincers are made by Honda itself
Battery:
battery is provided by AGS
BATTERY 24
Product Range
CD 70
Key Features
» Big and Comfortable Seats
» New Beautiful Graphics
» Petrol Tank with 9 Liter
Capacity
» Super Econo Power, 4-Stroke
Engine
» New Mud Flap
» Strong Side Cover with Lock
» New Utility Box

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CD 100

Key Features

» Strong Footrest
» Fuel Guage Indicator
» Multi Reflector Head Light
» Winning Style
» Econo Power 4-Stroke Engine
» Double Cradle Strong Tubular
Frame
» Strong Suspension

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CG 125

Key Features

» Comfortable Seat with Rear Grip

» New Beautiful Petrol Tank with
Graphics
» Strong 4-Stroke Smoke Less
Engine
» Stylish Speedometer with
Economy Zone
» Elegant Front Light
» New Shape For Back Light

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CG 125 Delux
Key Features

» Attractive Fuel Tank with modern

graphics
» Speedometer with trip meter
» Tachometer with Fuel Gauge
Indicator
» Black painted silencer with stylish
cover
» Front hydraulic disc brakes
» Back light with aerodynamic cowl
» Stronger and adjustable cushion

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Competition
Yamaha

Suzuki

Sohrab

Pak hero

Hero

Star

Lifan

Jailing

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Production Planning
Atlas Honda total plant Long range capacity
capacity is 500,000 planning

units in Shaikhupura Aggregate Planning

and 105,000 units in
Karachi Master Production
Scheduling
planned to produce
400,000 units Production Planning &
control system

using both push as well

as pull system
Push System Pull System

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Manufacturing
CD 125:
CD 70:

Components Components

Imported Locally Imported Locally

5% Procured 95% 15% Procured 85%

Lead Time: Lead Time: 1 week Lead Time: Lead Time: 1 week
6 months 6 months

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Manufacturing Process
In Atlas Honda there are total fourteen processes, as follows:

Frame Assembling
Paint shop
Buffing
Alternative Current generation
Drum Gear Shift
Drum Gear Shop
Machine Shop
Fuel Cope
Die casting
Engine Assembling
Wielding
Ignition Coil Shop
Switch Assembling
Engine Machine Assembling

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Bottlenecks
In Atlas Honda supplier are considered
as bottlenecks…

Bottleneck

Part Assembling
Procurement (Karachi) Assembling/Man
Supplier Central ufacturing Plant Dealers
Warehouse
(Sheikapura)

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WareHousing
STORES
Stores dept. at AHL performs
following functions:

Manages the receiving,

stacking & issuance of parts &
materials to the shop.
Ensures the provision &
dispatches of required parts to
SKP & KHI plant, spares part
division & vendors.
Handles the rejections &
damages from all shops
Handles the scraps & wastes
generated in the factory

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Handling Techniques
At AHL, following handling techniques are used:

For handling from shop to shop especially

designed trolleys, bins and pallets are used.
Imported motorcycle components are received in
steel & wooden cases & pallets.
Local vendor parts are received from receiving
section in standard carton boxes.

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VENDORS/DEALERS
At present, 82 vendors are working with the
company.

Functions:

This department is responsible for all the

relations and dealing with different vendors.
This department motivates vendors to produce excellent
quality and train them to achieve the highest level of
quality.
This department also deals with the CKD (complete knock
down).
This department performs VIP (vendor improvement
programe). Under this programe, the department
representatives go to the vendors and train them for new
methods to produce better quality at reasonable price.

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Dealers
Atlas Honda has
established countrywide
dealers’ network..
“5S” dealers
5s stands for the following
five facilities
Sale
Service
Spare parts
Special sale
Second hand sales

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Major Selling Cities
Atlas Honda

Karachi Hyderabad Lahore Sheikapura Sialkot Gujranwala

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Transportation

Type of trucks and there

capacity:

HINO (125 motorbikes)

BEDFORD (110
motorbikes)
MAZDA (65 motorbikes)

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 CONCLUSION

…. “Right time delivery to the right

customers.”

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