Case written on Bajaj Auto Ops Strategy

1. - C H A I T H A N Y A
- M U K U N D
- A N U R A A G
- A K A N K S H A
- P A V A N K
- A B H I N A V
Group – 01

2. Automobile Industry in India
 India is the 2nd largest two-wheeler market in the
world.

3. Industry growth factor and Key Market players
 The finance have become easier to access
 Introduction of international standards in India
 The economic and fuel-efficient engines
 The teenager and the youth using more and more motorcycles
Key Market Players:
 Hero Honda Motors India Limited
 Bajaj Auto Ltd. (BAL)
 TVS Motor Company
 Honda Motorcycle Scooter India (P) Ltd.
 Yamaha Motors India Pvt. Ltd.
 Suzuki Motor Corporation

4. Bajaj Auto Limited
 Founded in 1926
 India's largest and World’s third largest motorcycle
manufacturer and has presence in Asia, Africa and
Latin America.
 Bajaj Auto came into existence on November 29,1945
as M/s Bachraj Trading Corporation Private Limited.
 It started off by selling imported two- and three-
wheelers in India.
 In1959, it obtained license from the Government of
India to manufacture two- and three-wheelers and it
went public as Bajaj Auto Ltd (BAL) in1960.

5. More About the company
“The strategy of creative differentiation” – Rajiv Bajaj.
Have succeeded in capturing major, often leading, market shares in three
categories:
Financial Performance:
Net sales grew by 5.4% and operating income increased by 5.3%.
The operating EBITDA margin was 22.4% of net sales, highest in the
industry.
Profit before tax (PBT) increased by 31.8% to 5,385 crore.
Super Sports segment KTM and Pulsar RS 200
Sports Segment Pulsars and Avengers
Entry Level Segment Platina and CT 100

6. Bajaj Auto Limited has three plants in India:
The company has a total of 593 dealership outlets around 459 cities of
the country.
Capacity
Waluj: Bajaj range of motorcycles manufactured
at this plant include Discover, Platina, CT 100,
Boxer and three-wheelers (RE).
Chakan: The range of Bajaj motorcycles include
Pulsar, Avenger, KTM, Kawasaki Ninja.
Pant Nagar: Bajaj range of motorcycles such as
Discover and Platina are manufactured at this
plant.

7. Capacity

8. Sales

9. Facility
 Implemented Total Productivity maintenance(TPM) in all
the plants to build and continuously improve its core
competency.
 All plants has been using the continuous improvements in
performance through lean manufacturing, higher quality,
cost reduction, tight and lean supply chains, greater
throughput and the introduction of new products and
processes.
 Deployed direct-on-line supply based on Kanban, where all
vendors are online and aware of the production schedule,
the plants have very low inventory.

10. Technology
 Self-reliance in all aspects lead to technological breakthroughs
without compromises and at an affordable cost
 DTSi, 4 valve technology, EXHAUSTEC, SNS, Intelligent CDI
 Being one of the pioneers in automation, robotics Bajaj auto
has so far installed 120 Co-Bots, made at its own plant, at
Chakan, Pantnagar and Waluj.
 It operates close to 300 robots at its plant. A large chunk of
these robots are the ones the company has made on its own.
 The automation helped in cost reduction and making
motorcycles at costs difficult to replicate.
 “Build technology inside and parts outside”- sum-up the firms
manufacturing philosophy.

11. Sourcing/Vertical Integration
Around 60% by value of the Bajaj vehicles are
outsourced
180 vendors supplying components to Bajaj, they are
strategically located within Maharashtra.
Encourages its far away vendors to have a strategic
alliances with third party logistics providers.
Spare parts division has performed effective contribute
towards availability, affordability and greater penetration.

12. Human Resource
.
• Bajaj talent acquisition comb length and breadth
of India to engage promising candidates.
.
• Training programs include university professors as
resource persons to enlighten participants.
.
• Knowledge based development programs are
organized focusing on environment, industry and
management.

13. Capital Allocation
CSR expenditure amount to 86.46 cr which is 2% of
the net profit 2015-16.
Total research and development expenditure is about
1.71% of sales in 2015-16.
Annual savings of 3.57 cr is achieved with an
investment in renewable energy of 3.24 cr.

14. Inventory Planning/Control
 Bajaj Auto maintains seven days inventory
 Demand Estimations are based on Panel regression
 Time series and cross section variation in data are taken
into account
 Integrated ERP in procuring and inventory management
 Business information is now available to the company’s
external community in real-time which improves
decision making to meet customer requirements and
maintain efficient supply chain management
 Supplier gets purchase orders and contracts, material
schedules & payment details while Bajaj Auto gets
invoicing information in the automated material reciept
system

15. Quality Management
 To improve quality, Bajaj Auto has begun actively assisting its suppliers
in finalizing joint ventures with counterparts in Japan, Italy, Taiwan &
Spain.
 During 2007-08, the company extended BASS (Bajaj Auto Service
Standard) to standardize the workshops of 250 dealers & 50 authorized
service centers which improved work hygiene, promoted consistent &
better service quality & greater productivity.
 On the basis of all the inputs Service Quality Index for a particular
dealer is calculated
• On the basis of SQI
achieved by the retailer
over 1 year, dealer is
rated and type of credit
they receive depends on
it

16. Organization Structure
CEO &
Principal
Consultant
Head Executive
Search
Manager
Executive
Search
Executive
Search
Consultants
Head Business
Development
Manager
Business
Development
Business
Development
Executives
Head Client
Relations &
Retentions
Manager Client
Relations &
Retentions

17. Product/Process Development
 DTSi technology was major development project tested in Pulsar
and applied in other bikes later on.
 Strategic implementation of I.T in Bajaj Auto gives field Sales team
full visibility on dealer activities and dealers get real-time access to
relevant information on operational activities
 Bajaj has linked 380 out of 483 dealers & 165 out of 200 suppliers
through their SAP R/3 ERP database.
 This helps in supply chain streamlining, inventory optimization
and reduction in non-value-adding activities at both ends.
 Bajaj also plans to extend the IT systems in rural areas along with
a marketing initiative project but internet connectivity can be an
issue.
 Changing infrastructure with telecom majors might help this
project.

18. Aldi’s Resource-Based Operations
Strategy matrix
PHYSICAL
RESOURCES
HUMAN
RESOURCES
INTELLECTUAL PROPERTY,
SOFTWARE AND METHODS
ECOSYSTEM
RESOURCES
FINANCIAL
RESOURCES
ResourceBase(Type,Capacity,andUtilization)
• Land
• Buildings
• water
pumps &
reservoirs,
• plant &
machinery,
• computers &
IT
equipment,
• dies and
jigs,
• Electric
installations
,
• furniture,
• office
equipment,
• aircrafts
• As on 31 March
2016, BAL’s
employee
strength stood at
9,347 persons,
• Efficient and
motivated store
staff
• The Employers’
Federation of
India (EFI)
conferred The
National Award
for Excellence in
Employee
Relations - 2015
on Bajaj Auto
Ltd.
• 93 Patent filings in India, fewer
records of Patent filings overseas
(USA, China, Egypt and
Singapore).
• BAL has filed majority of patents
in the category of Transport and
Engines. it has thirty eight (38)
granted patents while rest of the
applications (55) are in Patent
Pending status.
• Bajaj Auto announced the success
ful “Go Live” of their External
Portal Initiative for their sales
and service employees, dealers
and suppliers.
• SAP’s mySAP Enterprise Portal
was implemented simultaneously
with the current SAPR/3 ERP
implementation.
• Huge
supplier
network,
• efficient IT
system,
• a network of
498 dealers
and over
1,500
authorized
service
centers and
162 exclusive
three-
wheeler
dealers
• the Dealer
Owned &
Dealer
Operated
center are
financial
muscle for
the
company.

19. Terry Hill Framework
Corporate
Objective
s
Marketing
Strategy
How do Goods
& Services
qualify and
win orders in
Market Place?
Operations Strategy
Operations
Design Choice
Infrastruct
ure
 Profitabl
e growth
and
global
reach
 Operations in
50 countries
with bikes
targeted at
entry level
buyers
 Largest
producer and
exporter of 3-
wheelers
 Low prices
 Quick
Delivery
 Customer
feedback
 Brand Image
 Efficient
technology
 Flow-shop
process
design
 High level of
automation
 Capacity &
facility size,
location and
clusters
 Teamwo
rk
 Training
program
s
 Health
and
safety of
employe
es

20. Terry Hill Framework (contd.)
Corporate
Objectives
Marketing
Strategy
How do
Goods &
Services
qualify and
win orders
in Market
Place?
Operations Strategy
Operations
Design Choice
Infrastructure
 Innovation
and
technology
 Develop new
bikes,
scooterettes
and
passenger
vehicles
 Capture
every
existing
segment
 Low prices
 Quick
Delivery
 Customer
feedback
 Brand
Image
 Efficient
technology
 Equipment
technology
 High level
of
automation
 Demand
Analysis
 Quality
control
 Test-runs
 Organizatio
nal
structure

21. Terry Hill Framework (contd.)
Corporat
e
Objectiv
es
Marketing
Strategy
How do
Goods &
Services
qualify and
win orders
in Market
Place?
Operations Strategy
Operations
Design Choice
Infrastructur
e
 Diversit
y &
Social
respons
ibility
 “Humara Bajaj”
– providing
employment and
empowering
Indians
 Pollution-free
environment
through
technology
innovation
 Low prices
 Quick
Delivery
 Customer
feedback
 Brand
Image
 Efficient
technology
 Training &
Developmen
t
 Process
performance
 Package
redesign,
shipping &
warehousing
 Learning
&
innovatio
n
 Health
and
support
services
on-site

22. Recommendations
 Bajaj should aggressively push sales of higher margin
products & launch new products in niche segments.
 Bajaj should evaluate the process of backward
integration as it has huge cash reserves surplus
which helps to achieve lower cost.
 Increase its dealer network to tap rural growing
markets by going in for tie-ups &offering better
margins to dealer.

23. Thank You