Procurement Process Of

Atlas Honda Limited

Company Introduction
 Atlas Honda Limited (AHL) is a joint
venture between the Atlas Group
and Honda Motor Co. Ltd., Japan.
 At present, more then 160 vendors
are working with the company
 On top end in two wheeler industry.
 Manufacture 5Models
CD-70
CD- Dream
Pridor CG
-125
Deluxe
Company
Introduction
Manufacturing Plants
 Karachi
 Sheikhupura

Annual Production
Capacity
 750,000

Export Countries
 Bangladesh
 Afghanistan
Product, Services & Brand:
 Procurement
Process
Procurement life cycle in modern
businesses usually consists of Six
steps:
o Identification of need
o Supplier Identification
o Supplier Communication
o Negotiation
o Supplier Liaison
o Logistics Management
Procurement
Process
The procurement process of Atlas
Honda Ltd. involve:
 Forecasting:
Demand drive from market
 03 yearly,
 Quarterly,
 Monthly
 Demand drive according to model
and color.
 Procurement
Process
 Production & Planning (P&P)
department receives requirement from
Forecasting department.

 P&P department then run MRP to find

out the total quantity of raw materials.

 BOM: System define Bill Of Material

Procurement
Process
 Pro forma Invoice Called
 Purchase Order Placed
Purchase Order Placed On Quota
Based
 Establish Letter Of Credit
 Revivals & Recovery Of Original
documents

Bill Of
Lading
Invoice
Letter of
Credit

 Clearing
Procurement
Process
 Delivery & Possession of Materials
 Check Quality Inspection
 Payments to Vendors
Paid Two Half Payments(10 & 25) in
One Month
Procurement
Process

Components Imported
From
o Japan
o Taiwan
Selection of
Vendors
 Selection of existing Vendors
for new parts
 Give Parts to Vendors for Development
 Receive develop parts from supplier
 Check Quality inspection
 Visit & inspection Vendor plant
 Checking Vendor Capability
 Price Negotiation
 If Select Give P\O to Vendor
Vendor Performance Evaluation
 Vendor is evaluated according
to following factors:

 Quality
 Cost:
 Delivery
 Reliability
Cost Calculation
Method
 Raw Material
 Labor
 FOH
 Profit margin

 Other Method
 Inflation rate
 Electricity charges
 New development of
vendor Jigs & Dais
Recent Initiatives
 Reduce vendor energy
consumption
 VIP (Vendor improvement
Program)
One – two months
project 2-3 person
Help to improve Quality
Better Production Planning
Resolve Supply Chain
Issues
Technical Help
Problems faced
 Late delivery from supplier
 Price negotiation issue
 Quality issue
 (Receive poor Quality
Material)
Key Performance Indicator (KPI)
 Ensuring annual target
accomplishment
 Overall cost
reduction
 Vendor consolidation
 Vendor development
/

Up gradation
Sourcing Strategy
 Multiple Sourcing
 Ensure compliance of
KPI
Future Plan
 Reduce the complexity of
supply chain
 Resourcing price & quality
 Localization
 B2B integration with suppliers
/partners
 Conclusion
Procurement Process of Atlas Honda
Ltd is well organized. All the
requirement of Production department
fulfilled in time because they forecast
procurement plan for upcoming 3
months. The reason behind for
forecasting for the next quarter is to
avoid the shortfalls.