Presented to Sir Sajjad Muhcin

Presented by
Yasir Sultan Faiq Naeem Muhammad Fareed Azher Anas Abdullah Sajid BIN Basheer M09MBA032 M09MBA063 M09MBA070 M09MBA075

Introduction
Japanese Multinational Corporation. Primarily Known as a manufacturer of Automobiles and Motorcycles. The world largest Motorcycle manufacturer. The 4th largest Automobile manufacturer in USA and 6th largest Manufacturer in the WORLD. Spend 5% of its Revenue on R&D Headquarter is situated in Minato, Tokyo Listed in Tokyo Stock Exchange & New york stock Exchange.

History
Founded BY Mr.Soichiro Honda on24,September 1948 in Japan

Due to a gasoline shortage, to develop and produce small 2-cycle motorbike engines in 1957. First car(S500)was Build in October 1963

Products

 Joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan. The company was incorporated on November , 1992. Listed on Karachi, Lahore and Islamabad Stock Exchanges. First car rolled off the assembly line on May 26, 1994. .July 14, 1994, car bookings started at six dealerships in Karachi, Lahore, and Islamabad.

Products
City

Civic

OPERATIONS STRATEGY
Product Plans Assemble to order strategy Competitive Priorities Low cost Consistent quality On time delivery Process Design Labour + Moderate technological intensive.

OPERATIONS STRATEGY

Material Management
Formal Supplier Relations.

Production Plans
For 1 month.

Scheduling
Planned for ahead.

Capacity
Lower utilization.

Location
The factory is situated near Manga Mandi at a distance of 43 km from Lahore. A network of 20 dealers. Out of these,14 dealers are located within a radius of 400 km from the factory. Highly skilled labour is available, large number of industrial units are operating here.

Location

Infrastructure is available, Is rapidly becoming an industrial zone. Transpotation cost is High, 62% of the parts used in Honda Cars are imported.

Plant capacity
Currently plant capacity is 83 car per day and yearly Production is 30000 In 2010, only 11890 cars are produced . In 2007 32000 cars are produced.

Reasons
1. 2. Economic instability Decrease in the purchasing power of customers

Currently plant capacity is 83 car per day and yearly Production is 30000 In 2010, only 11890 cars are produced . In 2007 32000 cars are produced.

Reasons
1. 2. Economic instability Decrease in the purchasing power of customers

Faiq Naeem

M09MBA063

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Forecasting Techniques
Sales Force Estimate Executive opinion Naive Method

Product demand on the basis of several factors

The trend in the economy Annual budget of the country The policies of government The inflation rate The policies of large companies regarding the provision of transport facility to their executives. The cotton crop ( to some extent ) The past sales data

Process Design
1. 2. 3. 4. 5. 6. Vendor Section Engine Section Welding Section Maintenance Section Paint Vehicle Quality Control

 Slip / Shower testers

Machinery
Boilers Compressors Water treatment plant Ovens (for backing the body of cars) Spot welding guns. Two-post lifts G-SWAT/ B-S / S Side

Quality Control
When purchase material arrives, thorough checking of that material is made. If any deficiency is found then it is reported. Similarly, the finished product is tested before delivering it to the customers in order to assure the quality standards. HACPL is successfully using "Kaizen" system for quality control. Employees are encouraged to improve quality and reduce cost. Every month, about 20-25 prizes are given on showing good performance. HACPL is ISO 9002 certified. It was the winner of "Best Quality Award for Asia" in 1996,1997 & 1998.
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R&D Department
Unfortunately, there is no research and development department in HACPL. This function is performed by Honda Motor Company, Japan. All major changes in models of Honda cars are introduced there. Employees of HACPL are sent to Japan, where they are trained according to new conditions. Later on, these changes are introduced in the models offered in Pakistan.

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Yasir Sultan

M09MBA032

Deletion Programme
HACPL is persuing a realistic and progressive deletion programme for indigenisation of assemblies, parts and components. This dynamics programme is being implemented through inhouse assemblies and manufacturing operations, and is being supplemented by vendor development. HACPL is almost same as that of its major competitor, i.e. the manufacturer of Toyota Cars. Efforts are being made by top management to increase this percentage.
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Achievement of Objectives Through Operations

The production department of HACPL is playing a vital role in achieving the overall objectives of the company through efficient utilization of resources. HACPL is achieving production efficiency through: Evaluation & improvement of quality control. Training of production employees. Modernization of plant and machinery Similarly cost minimization objective is being achieved through:

Deletion programe Avoiding poor quality products, which are a loss for the company. As mentioned earlier, HACPL is achieving excellent quality levels through giving training to personal plus proper use of technology.
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Inventory
There are three types of inventory: Raw material inventory W.I.P. inventory Finished goods inventory. The basic objective of any firm is to minimize total inventory cost (ordering & carrying). The same is the case in Honda Atlas Cars (Pakistan) Limited. In HACPL, the whole inventory system is computerized. Following are the advantages of this computerized system. Updating records. Providing management reports. Automating the recording process. Re-computing decision parameters.
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Safety Stock
HACPL maintains a safety stock of 2 to 3 months. The reason for maintaining a safety stock is as follow: To protect against shortage that occur due to suppliers. To protect smooth and continuous operations. In HACPL, the inventory is held in the following forms: Inventory of imported parts. Inventory of local parts. In order to avoid stock out, they have more safety stock of imported parts as compared to that of local parts.

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Safety Stock
Shortage Of Inputs There are special warehouse for the purpose. Both imported and local parts are stored here. Storage Of Output (Cars) There is no proper warehouse for parking of cars moving out of assembly line. A place has been assigned for this purpose but there is no roof over it.

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Fareed Azhar

M09MBA070

AGGREGATE PLANNING
Aggregate planning is a statement of production rates, work force level and inventory holding based on estimates of customer requirements and capacity limitation.

Production Plans The production plans are prepared for three months based on the customers orders and uncertainty in demand, Work Force Level

AGGREGATE PLANNING (CONT)

In HACPL, work force schedules are arranged on the basis of production plan. If demand is high, then extra workers can be hired on contract basis or the existing permanent employees can be employed in extra work to meet the targets. When I visited the factory of HACPL, the daily production was 15 cars. For this reason, there was a single shift except for maintenance department

Purchasing
Purchasing in the management of the acquisition process includes deciding which supplies to use, negotiating contract and deciding whether to buy locally or centrally. Purchasing must satisfy the firm s supply needs and support the firm s production capabilities. HACPL imports materials from the parent Honda Motor Co, Japan in the CKD (complete Knocked down)) form and also from the Local Vendors.
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Supplier Selection
HACPL prefer those suppliers who fulfill the following requirements: Provide best quality material at low cost. Shorter Lead Times Provide material to production plant of HACPL. (i.e. provide material at destination). On time delivery These are the reasons which forces HACPL to go for local contracting.
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Distributors
To store the finished products, (Honda Civic & Honda City), HACPL uses both FORWARD BACKWARD PLACEMENT. HACPL has a country-wise network of Sales Dealers who are actively engaged in promoting the image of HACPL and its cars.

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2S Dealers 3S Dealers
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TOTAL QUALITY MANAGEMENT

T.Q.M. stresses three principles: Customer Satisfaction Employee Involvement Continuous Improvement

SUGGESTION

Efforts should be made to reduce the cost of Honda cars. There should be more coordination between HACPL and its suppliers. A low-priced model should be introduced to capture the market share of SUZUKI. Deletion program should be implemented rapidly.

SUGGESTIONS

Although HACPL has taken some steps for environmental protection, more efforts should be made in this regard. The dealership network should be widened. Employees should be encouraged to give suggestions. Some sort of research should be done at HACPL. Efforts should be made for better utilization of capacity.