Presented by Group 3

Ashutosh Karan 25NMP11 Kritagya Vairagi

25NMP20

Diwan Singh Negi

HMCL is a leading player in the Indian Two-wheeler market with more than 40% market share. Honda Motor Company of Japan and Hero Group entered into a joint venture in India on April 1984. The companys two wheelers are manufactured across three globally

benchmarked manufacturing facilities. Two of these are based at Gurgaon and Dharuhera,Haryana and the third and the latest manufacturing plant is based at Haridwar, Uttarakhand.

In 2001, the company became largest two-wheeler manufacturing company in India and also, the 'World No.1' two-wheeler company in terms of unit volume

sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this position
till date.

In 2010, Honda decided to move out of the JV and the company was rechristened as Hero MotoCorp. Ltd.

Information Technology (IT) forms a crucial part of the operations at HMCL. HMCL deployed a SAP R/3 enterprise resource management (ERM) system in 2001 to standardize and streamline its internal processes,

With an integrated ERM backbone in place, HMCL began shifting attention to its external supply chain.

HMCL's plant operations are supported by a national network of 400 vendors (including 36 ancillaries). This translated to requirements for a supplier relationship management (SRM), a dealer management system (DMS) and a customer relationship management (CRM) solution.

This case study elaborates on the IS planning process at HMCL in the implementation of the SRM initiative

Important Milestones

Important Milestones
1986 2001
Implemented SAP ERP . This included PP,SD, MM, F/CO and QM modules.

2002
ERP was expanded with addition of PM & HR module

Legacy systems at HMCL were disparate and stand alone systems

Important Milestones

Important Milestones
2005 2008 2009

2004

The company MySAP SRM upgraded the and CRM MySAP SRM went live version 3.0 to version 4.0

The company decided The company upgrading the implemented automation for its dealers Oracles Siebel through the Dealer CRM solution Management System (DMS)

IS planning is an annual exercise. It is initiated by the IT department and led by the Chief Information Officer (CIO). The IS department of HMCL consists of about 20 IS professionals. The average size of the IS planning team is 4 people. The IS planning document includes recommendations on IS policies and procedures for business network, investment priorities for IS, resource requirements for new IS/ IT projects. The IS plan is a broad based, macro level plan which includes overall

recommendations for the IS projects.

When an IS project is taken up for implementation, the detailed micro level issues such as application, technical and service architecture are decided.

HMCL decided to put in place the SAP R/3 system in 2001. To begin with, HMCL implemented the following modules of SAP R/3 suite: Financial accounting (FI) Cost controlling (CO) Sales and distribution (SD) Materials management (MM) Production planning (PP), Quality management (QM) In 2002, the company extended its SAP R/3 system capabilities by implementing SAP plant maintenance (PM) and SAP human capital management (HCM) applications. The PM Module automated the Material Resource Planning (MRP) process, Capacity Planning and Resource Optimization processes. The benefits from the PM Module can be described briefly as below:

The PM Module automated the Material Resource Planning (MRP) process, Capacity Planning and Resource Optimization processes. The benefits from the PM Module can be described briefly as below:

Real time status of Production Plans, Production quantities, Vehicle dispatches etc. Availability of on line stock Synchronized planning across the organization for Procurement, Manufacturing etc. Coordinated plan for each shop is generated through system based on shop stocks & safety stocks at plant level. Earlier each shop did independent planning based on physical stocks. Reduction in Planning cycle time Stock status at both plants is visible & Stocks can be transferred to the other plant incase of shortages in one plant, to reduce production losses & better Production Control.

Better visibility of dead stock / slow moving parts for inventory controlling. Reduction in inventory due to continuous monitoring of inventory cost and accurate planning through MRP. Better control over Material issues & Consumption. Real Time Data availability for Analysis & Monitoring of parameters such as Rejection Cost per vehicle, Consumables Cost per vehicle, Tools Cost per vehicle, Maintenance spares cost, Power & Fuel cost, Warranty Cost. Possibility of Intra /Inter plant comparisons etc. leading to better visibility of best practices in both the plants. Also in depth analysis of any factor is possible due to ease in mining & analysis of past data.

Need Analysis: The requirement for SRM initiative came from the purchase department. The SRM solution would also help to achieve the objective of information integration and timeliness of information exchange. An external consultant, Gartner was hired at this stage. After short-listing the i2 SRM solution from Logis and the mySAP SRM from SAP, the company finally chose to deploy the latter. HMCL's IT team along with SAP technicians implemented the Supplier Relationship Management (SRM) system in three months (From Feb 2004 to May 2004) for a better connected and transparent business process. HMCL opted for pilot implementation strategy for its SRM solution. The entire project budget was USD 0.2million.

The entire project was structured to include a pilot and three phases. The implementation strategy was for:

Pilot: To include five vendors Phase I: To extend the system to another 20 vendors Phase II: To extend the system to a further 50 vendors Phase III: To complete roll out to the rest of the vendors, bringing the total to 400 vendors.

Benefits of implementing CRM to HCML Improved collaboration through real-time transactions with suppliers Compressed cycle times from automation and online approvals, leading to lower connectivity costs and quicker supplier response Reduced process costs from automating streamlined processes and greater compliance Reduction in communication errors The suppliers of HHML benefited from the SRM systems in the form of Increased process transparency Reduced phone/fax traffic More integrated process and data Reduced order and delivery mismatch Better decision making from self-analytic reports

Other significant benefits: Inventories declined by 6.3%. Inventory days declined from 14.4 days to 11.8 days. HHML now accesses 70% of the materials in value terms by maintaining zero inventory. The purchase order is released online enabling suppliers to respond quickly.

Thanks