BAJAJ AUTO LIMITED OPERATIONAL ACTIVITIES

Contents• Introduction• Manufacturing model in 80s & 90s• Model in late 90s-early 2000s• Assembly line layout• Supply chain management• Different plant locations

Introduction to Bajaj Auto Limited

• Bajaj Auto Limited is an Indian motorized vehicle-producing company and a part of Bajaj Group

• Founded on 29 November 1945 as M/s Bachraj Trading Corporation Private Limited

• Currently the company is headed by Rahul Bajaj• It is based in Pune (Maharashtra), world’s third-

largest manufacturer of motorcycles and second-largest in India

• Bajaj Auto Limited, is an ISO-9001 company, having ISO-9001 (2000) Quality Management certification.

Introduction to Bajaj Auto Limited (cont..)

• The vehicles are manufactured in three modern mass production facilities in India with plants in Akurdi and Chakan (near Pune), Waluj (near Aurangabad) and Pantnagar in Uttaranchal and one in Indonesia.

• The combined manufacturing capacity is about 4 Million vehicles.

• The Product range covers motorcycles, un-geared scooters and 3-wheelers.

Manufacturing model in 80s & 90s

• The key objectives - Economies of Scale and High utilization of Investment

• Batch Flows with high Set-Up time on high cost machines / equipment.

• Model specific dedicated assembly lines• High raw material inventory in stores and high WIP

on shop-floors• Narrow, specialized Labour skills. Quality through lot

inspection, high rejection rates.

Result of Manufacturing model in 80s & 90s

• High fixed cost, high cost of change and lower flexibility.

• Large inventory with hidden quality issues.• In-efficiencies hidden under huge demand and less

competition.

Model in late 90s-early 2000s

• Economic scenario developing through liberalization• Strong competition.• Higher customer aspirations – More models and

upgrades• Move to Lean Manufacturing• Bajaj Auto did The Project 110% that involved the re-

organization and a fundamental re-design of the core business processes.

Model in late 90s-early 2000s (cont..)

• Manufacturing approach was changed towards• Lean Manufacturing (in lines of Toyota Production

System).• TPM (Total Productivity Management), a Japanese

methodology• SPC (Statistical process Control) in manufacturing

operation.• Furthermore, they follow the JIT(Just in Time)

philosophy to reduce manufacturing costs, improve quality, and reduce changeover times

Result of 90s Model

• Multi-model assembly lines, with off-the-line setups.• Flexible machining centers - quick change modules &

tooling.• Plant layout for single-piece & unidirectional flow.• In-process quality assurance (inspection).• Quality assurance through SPC & Poka-Yoke• Direct-On-Line Supply based on Pull System (Kanban)• No stores for in-coming material and WIP• Multi-Skilled labour; self-supervision & self-certification

Result of 90s Model (cont..)• Productivity - vehicles per employee - increase10 X.• The component inventory – reduced 1 week’s to half shift’s

stock.• The finished goods inventory - reduced 1 month to 3 days’

stock• The quality improvements - improved 20000 PPM to <2000

PPM.• Truck turn-around time - reduced 4 hours to ½ hour.• Material un-loading rate / person – increased 150 to 350

loads per shift.• Improved accuracy in invoice data - faster payment

processing.

Assembly line layout

• Bajaj Auto Ltd. have modern and technologically advance machines and state of the art assembly lines. These machineries are arranged in operation department systematically.

• The production process is step by step, the raw material move from one line to another line systematically

• Assembly line technology is for facilities that produce a narrow range of standardized products

Supply chain management

• Bajaj Auto Limited does not manufacture all the parts• Major portion are outsourced from various suppliers• Whitney Framework for Make or Buy Decision

Supply chain management (cont..)

• Bajaj Auto successfully implemented SAP’s my SAP Enterprise Portal simultaneously with the current SAP R/3 ERP implementation.

• Bajaj has linked 165 out of a total of 200 suppliers through this system.

• Helps in up-to-date information on purchase orders and contracts, material schedules, and payment details. This helps in streamlining the supply chain, optimizing inventories and reducing non-value-adding activities at both ends

Supply chain management (cont..)

INBOUND LOGISTICS• The raw materials and required components and spares are sourced

from selected suppliers/vendors. The inbound logistics are managed by third party logistic (3PL) operators as suppliers of Bajaj Auto spread across different states.

• Bajaj Auto maintains seven days (7) inventories; this sourced raw material will be stored in raw material ware houses in concerned plant.

• In manufacturing process, the final assembly unit will get all the assembled components from different assembly lines and assembles these components to body chassis of the the motor cycle.

• The assembled motor cycle has to pass through two levels of quality inspection to maintain Zero Defects in final product.

• After inspection process these motor cycles will sent to Factory warehouse for distribution.

OUTBOUND LOGISTICS

• The outbound logistic operations depend upon Bajaj Auto market segments. Bajaj Auto market is segmented by geographical wise. The geographical segmentation of Bajaj can be divided into two broad categories.

1. National Level Markets2. Global Level Markets

• The national and Global level segments are further divided into sub-segments for smooth logistic and physical distribution operations.

Akurdi, Pune Plant

• Manufacturing locations Akurdi, Pune This is one of the oldest plant 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

Chakan , Pune Plant

• Chakan Industrial Area, Chakan , Pune 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

Waluj Aurangabad Plant

• Bajaj Nagar, Waluj Aurangabad This is second plant with production capacity of 0.86 million/ year. Products manufactured here are Kristal, XCD and platina and commerial GC series

• Waluj is now the export hub of Bajaj Auto• The basic raw materials are steel and aluminium. Surface

treatment processes like heat treatment, painting and electroplating are carried out in the factory.

Pantnagar , Uttarakhand Plant

• 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.

• To maximize tax benefits available at Uttarakhand, the Company has shifted products like Discover and Pulsar 135 to Pantnagar

Pantnagar , Uttarakhand Plant (cont..)

• They outsource machinery and have four assembly lines which operate in two shifts with 950 manpower, manufacturing 6000 vehicles per day and targeting 1.5 Lakh vehicles per month. The efficiency of the plant is 96%.

Thank you