6 MONTHS INDUSTIAL TRAINING

AT

HERO CYCLES

Training Manager: Mr V C Verma Submitted To: Prof. Rajeev Sukheja

Department: Industrial Engg. Submitted by: Sharanjeet Singh

Class: 8IE

Roll NO. : 1238/09

Univ. Roll No. : 90061529382

DEPARTMENT OF MECHANICAL AND INDUSTRIAL ENGINEERING

Baba Banda Singh Bahadur Engineering College

Fatehgarh Sahib – 140407, Punjab (India)

ACKNOWLEDGEMENT

I would like to thank Limited which has provided an important train session and to Mr V C Verma, TRAINING MANAGER, who organized my training schedule. I would like to thank MANAGER of various departments who have provided important information about their respective shop.

I also thank the workers who were always ready to clarify my doubts and also increased my knowledge by illustrating to as the finer points.

I wish to express my deep gratitude to all the concerned who’s cooperation and coordination I have successfully completed the Training in the organization.

INTRODUCTION

Introduction to bicycle industry:

Introduction to bicycle industry Bicycles were introduced in the 19th century. With an annual turnover of more than 12 million bicycles, the bicycle industry is one of the most established industries in India. Second largest bicycle manufacturer in the world, next only to China.

Introduction to hero cycles Ludhiana: 

Hero Cycles Limited was established by Munjal brothers: Satyanand Munjal, Brijmohan Lall Munjal and O. P. Munjal. The four Munjal brothers, hailing from a small town called Kamalia, now in Pakistan, are the men who are behind the mission. In the year 1944, they decided to start a business of bicycle spare parts in Amritsar. In the early days, the plant had a capacity for 25 cycles per day. Hero Cycles produces over 18500 cycles a day today, the highest in global reckoning. 1961, Rockman Cycles Industries Limited. 1963, Hero Group forayed into the international market with bicycle exports from India.1971, Highway Cycles was set up to meet the demands of Hero Cycles. In 1978, Majestic Auto Limited was formed and the Hero Majestic Moped was introduced. In 1981, Munjal Castings was established. In 1984, Hero Group started manufacturing motorcycles with the establishment of Hero Honda Motors Limited in joint venture with Honda Motors of Japan. In 1987, Gujarat Cycles Limited, presently known as Munjal Auto Industries Limited was established to manufacture and export state-of-the-art bicycles and allied products. In 2000, Hero Group diversified into IT and IT enabled services through its service segment - Hero Corporate Services Limited. In 2004, Hero Group forayed into retail insurance business with the establishment of Surplus.

The Vision: 

The Vision "We, at the Hero Group are continuously striving for synergy between technology, systems and human resources to provide products and services that meet the quality, performance, and price aspirations of the customers. While doing so, we maintain the highest standards of ethics and societal responsibilities, constantly innovate products and processes, and develop teams that keep the momentum going to take the group to excellence in everything we do."

The Mission Statement: 

The Mission Statement "It’s our mission to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of our customers. While doing so, we maintain the highest standards of ethics and societal responsibilities. This mission is what drives us to new heights in excellence and helps us forge a unique and mutually beneficial relationship with all our stakeholders. We are committed to move ahead resolutely on this path, shown to us by visionaries like Mr. Satyanand Munjal, Mr. Om Prakash Munjal, the late Mr. Dayanand Munjal and late Mr. Raman Kant Munjal.

- Mr Brijmohan Lall Munjal, Chairman & MD - THE HERO GROUP

The Hero Group

The Hero Group has done business differently right from the inception and that is what has helped us to achieve break-through in whatever product category we have ventured in. The Group's low key, but focussed, style of management has earned the plaudits amidst investors, employees, vendors and dealers, as also worldwide recognition. The growth of the Group through the years has been

influenced by the number of factors. The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory. The Group boasts of superb operational efficiencies. Every assembly line worker

operates two machines simultaneously to save time and improve productivity. The fact that most of the machines are either developed or fabricated in-house, has resulted in low inventory levels. In Hero Cycles Limited, the just-in-time inventory principle has been working since the beginning of production in the

unit and is functional even till date. The vendors bring in the raw material and by the end of the day the finished product is rolled out of the factory. This is the Japanese style of production and in India; Hero is the first company to have

mastered the art of the just-in-time inventory principle.

Hero Group Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies, with an estimated turnover of US$1.8 billion during the fiscal year

2003-2004.

MANAGEMENT

The Hero Cycles was founded by Munjal Brothers in 1956 with an extraordinary vision. Under strong leadership, the Hero Group has soared to new heights of success.

PROJECT

PRODUCTION & OPERATIONS MANAGEMENT OF HERO CYCLE

ANALYSIS OF CASE HERO CYCLE

This case is about Hero Cycle that company can compete with their competitors in mass manufacturing. Co-Chairman and CEO of the company, Om Prakash Munjal is the close observer of the practices, his first priority of each day is to check that if there is any defective component returned by the dealer and to assemble a cross-functional team to solve the problem immediately. Company responses speedily to the changing market demand. Hero Cycle is the world’s largest bicycle manufacturer. As if we look the figures:

In 1956 – 639 (manufactured)

In 2011-12-- 6.1 million (manufactured)

Market share of the company in India - 50% plus.

Company’s 90% vendors are located within 10 km due to which cost of stock is reduced. And if we look from 1956 to now there is a continuous process of change and innovation. Company, also has the collaboration with National Bicycle industries, which is a part of the Matsushita group, to manufacture high-end bicycles. Company’s R&D is so strong that they response quickly to their competitors with a new product, if there competitors launch a new product, company can design a simple model in just 2 days and a more complex model in 10 days. Company has installed ERP software and it is technology-oriented company. This software helps them to coordinate between marketing R&D, tabular department, the paint shop and inventory. Company’s product development time is extremely fast. Company had fully focused on quality. They had a system called QMS (quality management system), this system helps them to audit the quality of their end product. For manufacturing a bicycle,

Quality raw material is used for each and every component and for this they have expert to decide. Company has 225 vendors and as there 90% of vendors are located in the radius of 10 km, this helps them to facilitate there product just-in-time. Company does not store raw material inventory for more than two days and there never allow overloading of shipment. Company does not store raw material inventory for more than two days, there WIP (work in progress) does not stay in factory for more than half a day and there FGI (finished good inventory) is either removed from the shop floor or sent directly to dealers. Company does not allow any kind of over loading of shipment.

For maintenance of machine and equipment, they have adopted various measures. As if any machine downtime and failure, it is recorded and corrective action is taken by qualified engineers. They also have adopted a concept of MTBF (mean time between failures) and MTTR (mean time to repair). Company has developed a 4E’s safety program i.e. Education, Engineering, Enforcement and Encouragement. At Hero they practice TQM (total quality management), TWE (total waste elimination), Pokayoke (zero defect or zero-proofing) and Jidoka ( automation with human touch) and various inspection and this has reduced defects in end product and due to this there market complaint has declined by 63% between January, 2001 and 2003.

To keep in touch with changing market trend, as there executive regularly takes feedback from there dealers and IT and R&D immediately respond to the market change. Hindustan Thompson, there advertising agency also helps them in delivering the product at the right time.

TWE TWE

TEI

TQC TQC TQMTQM

Company also has a concept Kaizen. Golden rules of Kaizen are:-

Clean and oil-free floor is the first index of the good shop management. Produce just in time. No storage of materials at work. No obstruction in material flow. Everything in place and a place for everything.

Therefore Company has adopted the entire key concept like TQM, TPM, Kaizen, TEI, TWE etc. Every employee Junior or Senior is treated equally and they trainee, educate, motivate and encourage their employees and to their dealers and vendors they also provide finance of 50% of cost of modification of showroom. They provide regular incentives and interest to their workers.

Operation management of Hero cycle is so strong that it can compete easily with other companies in mass manufacturing. Through this case we came to know that Hero cycle is focused on each and every work and everyone is dedicated to their work. Operation management of the company response quickly to the market need. And the company is fully focused on the quality of the product and speedy production.

Quality

Delivering speedy

Availability Innovation

HERO CYCLEHERO CYCLE

COMPETITIVE ADVANTAGE:-

Process of change, innovation: From 1956 to now there is continuous process of change at Hero and what has not changed there is commitment to change.

90 percent of vendors are located within 10 km 90 percent of Hero Cycle’s vendors are located within 10 km due to which cost of vendor is reduced as a percentage of sales.

Speed in development of new product: Company can design a simple model in just 2-3 days; more complex model can be done in 10 days.

Manufacturing Capability: Bicycle manufactured in 1956 is 639 and bicycle manufactured in 2002-03 is 6.1 million. Bicycle manufactured per day is 16000 approx. and market share of Hero Cycle in India is 50% plus.

Technical Collaboration with National Bicycle: Hero Cycle has a technical collaboration with National Bicycle industries, which is a part of the Matsushita group, to manufacture high-end bicycle.

Strong R&D and IT: Hero is an IT-savvy, technology-oriented company. Company’s R&D response quickly to the changing market demand. If there competitor launches any new product, they response quickly to that need.

Specialization is the hallmark: Specialization is the hallmark of the manufacturing process at Hero Cycle. Experts are involved right from the stage of choosing the highest quality raw material to applying to various techniques.

TQM (total quality management): Company provides a best quality product to their customers. For this they has a concept called QMS (quality management system), this system audit the quality of the end product.

Various inspection stages: This inspection has dramatically reduced defects in end-products. Market complaint has declined by 63 percent between Jan, 2001 and 2003.

Concept of Kaizen: Kaizen is a concept that’s midway between an existing situation and striking innovation. It means common sense and continuous improvement, which comes from people themselves.

Helps Vendors and dealers: They supports there vendors by providing them the tools for manufacturing apart from drawings, specifications and financial help. There dealers are provided with standard showroom design specification and they finance them up to 50 percent of the cost of modification.

Feed backs from Dealers: To keep in touch with market trend there field executives regularly takes feed backs from there dealers. And there Advertising agency, Hindustan Thompson, also does research work for them and tells them when is the right time to launch a product for a particular segment.

Make to Stock: Hero cycle is a make to stock kind of company. There Raw Material and Finished goods is always high while work-in-progress is low.

Education and training: Every employee, senior or junior, is treated equally at Hero and they regularly discuss issues with engineers that how to prevent machine downtime and increase productivity.

Quality Control: Company just check if any defective component returned by there dealers. And if there is any they held a meeting and corrective action is taken by the department.

Does not store stock for more than two days: Company does not store raw material inventory for more than two days. Work-in-progress does not stay to factory for more than half a day and finished good inventory is either removed from the shop floor or sent directly to the dealers.

World’s largest manufacturer: Hero Cycle is the world’s largest bicycle manufacturer, whose core strength is the first-rate production competence.

All key concepts such as TQM, TPM (total productive maintenance), Just-in-time (JIT), Kaizen and sex sigma.

Concepts like MTBT and MTTR for machine: In day to day maintenance, they has adopted concepts like MTBF (mean time between failure) and MTTR (mean time to repair). They has also developed a 4E’s safety program i.e. education, engineering, enforcement and encouragement.

Availability: Due to easy reach to vendors deliver of the products become easy, so products are easily available for their customers.

These all characteristics and uniqueness in their productions and operations management makes Hero Cycle a different company. These all helps in the successful inventory management which makes the company a profitable organization. The changes which make in their model are minor which means that low variety but high volume. This is the characteristics of Make to Stock organization.

SWOT ANALYSIS OF HERO CYCLES LIMITED

STRENGTHS :

1. Management with vision2. Strong brand image3. Better quality4. Own R&D center5. High quality standards 6. High production capacity7. Upgrading technology both in domestic and exports8. Increasing reputation in industry

WEAKNESS : 

1. Non-up gradation of foreign technology

2. Advertisements of products are not done regularly.

3. Packaging material not of the required standards. This cause damages during transportations

OPPORTUNITIES :

1. Government is also helping in promoting their business as their R&D center is being recognized by the government.

2. Potential growth in e-bikes.3. Direct/indirect export opportunities to increase the market.4. Quality should be used to cover the price5. By supplying right quantity at time , satisfaction of the customer can

be increased.6. The company can increase its market share by increasing its

production capacity.

» THREATS : 

1. Smaller players in the market are using hero’s prices as a shield to push their products at lower prices.

2. Chinese cycles entering in India in big way.3. Fluctuating steel prices.4. The policies of the competitors are flexible as compared to hero

cycles.5. High transportation costs .