Company: Bajaj Auto
Operations Management
Project_2nd Term
By,Sindoor Naik (MBA)
Universal Business School([email protected])
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.
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
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.
USP of Bajaj Auto Ltd.
• Style
• Technology
• Pricing Strategy
• Innovation
• Speed
• Perfection
FY2009 FY2010 FY2011 FY2012 FY20130
5000
10000
15000
20000
25000
Bajaj Auto
Net Sales and Operating Income (in Rs. Crore)
Year ended
31st March
Industry (Nos.)
Industry’s
Growth
Bajaj Auto
(Nos.)
Bajaj Auto’
s Grow
th
Bajaj Auto
’s Mark
et Shar
e
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)
Land
Waluj: Aurangabad (Maharashtra)
Chakan: Mahalunge Village (Maharashtra)
Patnagar: Uttaranchal
Bajaj Auto has in all three plants:
The use of optimised resources and improved efficiencies at all levels has
Helped the Plants to achieve superior results in:
Productivity
Product Quality
Cost Reductio
n
Company
Culture
The Waluj Plant won the TPM Award for ‘Excellence in Consistent TPM
Commitment’ from the JIPM in March 2013.
The Green Manufacturing Excellence Award, 2012 was awarded to the Waluj plant as the‘Challenger Award — Large Business’.
The National Energy Management Award, 2012 has been awarded to the Waluj plant as an
‘Efficient Energy Unit’.
Chakan plants won the TPM Award for ‘Excellence in Consistent TPM
Commitment’ from the JIPM in March 2013.
Patnagar Plant
Product Range
Plant
Output
Capacity Products
Waluj 2.40 millio
n
2.22 million-2 & 3
wheelers
Boxer, Platina
,Discov
er,Pulsar and 3 Wheel
ers
Capacity
Chakan 1.20 millio
n
0.88 million- vehicle
s
Pulsar,Avenger, Ninja
and KTM
Patnagar
1.80 millio
n
1.12 million- vehicle
s
Platina,
Discover,
Boxer
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).
Was world
's first
on
small d
isplacement
two-wheelers
Technology-R&D
Plugs provide unprecedented performance and efficiency.Fast and optimal combustion.Lower emissions.Controlled by an advanced Electronic Control Unit, is the technology of the 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 of more quantity of charge (air-fuel mixture) and complete evacuation of all burnt gases.Results in increased engine performance – power, throttle response and pick-up at all engine speeds.
4-VALVE
4-valve engines can be revved to much higher RPMs, without any engine strain, allowing the
rider to experience superior performance.
LIQUIDCOOLI
NGEngine is kept cooled using liquid coolant, which is better at heat dispension as compared to an air cooled engine.Ensures there is no power fading due to overheating.Results in longer engine life.The coolant provides for a muffling effect which smoothens engine noises even at high RPMs.
Air Coole
d
Liquid Coole
d
6SPEED
GEARBOX
Ensures optimal use of the wider range of power
delivery.
FOCUSMarket
Customer
Segments
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 !
Focus Product
s
Auto-Rickshaws
Bajaj-Pulsar 150 cc
Bajaj-Avenger
Pulsar 200NS
Has redefinedthe sports
motorcycle segmentin India.
Set new benchmarksin terms of
performance, style,technology and
affordability.The award for the best
product design across the entire
automobile segment.
Pulsar 200 NS
Discover 125 ST Discover 125 ST
The Discover 125 ST is equipped with a
high performance four-valve air cooled engine powered by twin spark
ignition,delivering 13 Ps, and a 5 speed gear box suitably
synchronised to the power
characteristics of the engine.
This provides the joy of a powerful drive
whilemaintaining the high
fuel efficiency for which Discover is
known for.
Nitrox mono shock absorber
Swing arms
Big and stylish fuel tank
Bajaj Discover 100T
Bajaj Discover 100TSmaller engine capacity
More fuel efficiency
The vehicle ispowered by a high performance four-
valve air cooled 100 cc DTSi engine
delivering10.2 Ps, with a five-
speed gear box.The Discover 100 T is
The world’s first 100 cc single cylinder four-valve DTSi engine
and also delivers best-in-class power and fuel efficiency.
KTM DUKE-
125
KTM DUKE-125
KTM DUKE-200
KTM DUKE-125 and 200
Anti-lockbraking system (ABS)
The KTM 200 Duke also won eight awardsduring the year.
This increases driversafety by not allowing
the vehicle to skideven in cases of panic
braking on highskid surfaces.
The KTM 200 Duke also won eight awardsduring the year.
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
Inventory Management
Bajaj Auto
maintains
7 days Invento
ry
Demand Estimation
is based on
Panel Regression
Takes into
account
Time Series & Cross Section
Variation in Data
All Mediators are connected with each other through IT
Linkage
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.
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
Cont…..
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)
ISO CERTIFICATE
DISTRIBUTION CHANNEL
Various players involved in the channel design are:
• Manufacturing Plant Depots
• Carrying & Forward Agent
• Dealers
• Sub Dealers
• 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:
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.”
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.
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.
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.
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.
• 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.
Transport & Logistics:
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.
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
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.
Packaging:
• Packaging in factory is outsourced to third party vendor. These vendors are generally from the Transport & Logistics partners
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
Generating Invoice & Waybill:
• These documents need to be generated and dispatched to the respective dealer.
Key Players in Market• Hero Honda• Bajaj Auto• TVS• Honda• Yamaha• Suzuki• LML• Royal Enfield
Market Share
Hero Honda
TVS Motors
Bajaj Auto
Others
41%
31%
14%
14%
Bajaj InvestmentParticular 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
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
Turnover €612 millionNet Profit € 25.3 millionShare of dividends € 3.64 millionTotal production 4237162 unitsNet sales 20,792.74 croreTotal exports 1,547,157 units Market capitalization €61 million
FINANCIALS 2013
Hamara Bajaj!!!
Thanking You