You are on page 1of 28

ATLAS HONDA COMPANY PROFILE ..............................................................................

Karachi Plant ..................................................................................................................................................... 4

Sheikhupura Plant .............................................................................................................................................. 4

VISION OF AHL ......................................................................................................................... 5

MISSION STATEMENT ............................................................................................................ 5

STRATEGIC GOALS ................................................................................................................. 6

Customers ........................................................................................................................................................... 6

Quality ................................................................................................................................................................ 6

Local Manufacturing.......................................................................................................................................... 6

Technology ......................................................................................................................................................... 6

Shareholders ....................................................................................................................................................... 6

Employees ........................................................................................................................................................... 6

Corporate Citizens ............................................................................................................................................. 7

QUALITY POLICY .................................................................................................................... 7

COMPANY HIERARCHY ........................................................................................................ 8

PRODUCTION CAPACITY IN PAKISTAN OF 2 WHEELS ....................................................................... 9

SWOT ANALYSIS ............................................................................................................................ 10

STRENGTHS........................................................................................................................................................ 10

WEAKNESSES ..................................................................................................................................................... 10

OPPORTUNITIES................................................................................................................................................. 11

THREATS ............................................................................................................................................................ 11

MARKET SHARE OF MOTORBIKE IN PAKISTAN .............................................................................. 12

HOW SUPPLY CHAIN WORKS AT ATLAS HONDA? ..................................................... 13

1|Page
Institute of Business Management
FUNCTIONS OF SUPPLY CHAIN MANAGEMENT IN ATLAS HONDA ................................................ 15

Vendor Procurement: ...................................................................................................................................... 16

Vendor selection Criteria: ................................................................................................................................ 16

Outsource Processing (OSP): ........................................................................................................................... 18

Vendor Billing: ................................................................................................................................................. 19

Inventory Management: ................................................................................................................................... 19

Finance: ............................................................................................................................................................ 19

Logistic: ............................................................................................................................................................ 20

BRIEF ANALYSES OF ATLAS HONDA SUPPLY CHAIN ............................................... 22

MECHANISM: .......................................................................................................................... 23

Costing and Supply chain ................................................................................................................................. 24

BIBLIOGRAPHY ...................................................................................................................... 28

2|Page
Institute of Business Management
ATLAS HONDA COMPANY PROFILE
Atlas Honda Limited (AHL) is a joint venture between the Atlas Group and Honda Motor Co. Ltd., Japan.
The company was created by the merger of Panjdarya Limited and Atlas Autos Ltd. in 1988. Both these
motorcycle manufacturing concerns were established by the Atlas Group. In addition, a third concern,
Atlas Epak Ltd. was taken over by the Government of Bangladesh in 1971 after the fall of Dhaka. AHL
manufactures and markets Honda motorcycles in collaboration with Honda Motor Company. The
Company also manufactures various hi-tech components in-house in collaboration with leading parts
manufacturers like Showa Atsumitech, Nippon Denso and Toyo Denso. Honda motorcycles are by far the
largest selling motorcycles in the country with an unmatched reputation for high quality, reliability and
after-sales-service.

AHL has undertaken to develop local manufacturing capabilities to the highest, economically
feasible level. While a major role in localization has been assigned to vendor industries, Atlas
has the countrys largest in-house manufacturing capability at its Karachi and Sheikhupura plants. To
support the production facilities, the company has established an R&D wing and tool making facilities
through CAD/CAM which are growing rapidly in size and function as the company expands. Atlas has
managed to execute 12 Joint Venture/Technical Assistance Agreements between local vendors and foreign
manufacturers for transfer of technology. Besides, Atlas has directly executed 9 Joint Venture/Technical
Assistance Agreements other than Honda.

AHL management is striving to modernize company operations by adapting applicable aspects of research
and theory and more specifically, Hondas unique philosophy of hard/soft technologies to the realities of
Pakistani conditions. Company management structure, systems and processes are changed according to
the demands of the customer, growth and new technology. Efforts are being made to develop participation
at all levels of personnel in decision-making and a substantial and effective delegation has been established
at levels where applicable. Various participation programs such as Ala Mayar Quality Circles
movement, launched in 1985, are strongly encouraged to allow constructive self-expression and
teamwork. The Company training and development programs encourage all members to develop
themselves and contribute to their full potential.

AHL is playing a pioneering role in creating conditions for easy and confident use of motorcycles all over
the country. A vast and growing network of over 1600 sales service and spare parts dealers has been
established. In order to back up this system, Atlas has set up Warranty & Training Centers (WTC) in
Karachi and Lahore which provide several courses of varying duration and complexity for motorcycle
mechanics and users each year. Mobile training facilities take the latest know-how, technology and
maintenance of motorcycles to major rural and urban centers around the country.
Annual Production Capacity

750,000
Authorized Capital

1.5 Billion (rupees)


Paid Up Capital

Rs. 1,034.066 Million

3|Page
Institute of Business Management
ATLAS GROUP CAMPANIES YEAR ESTABLISHED In.
Shirazi Investments (Private) Ltd. 1962
Atlas Honda Ltd. 1963
Atlas Battery Ltd. 1966
Shirazi Trading (Private) Ltd. 1975
Atlas Insurance Ltd. 1980
Atlas Engineering Ltd. 1981
Honda Atlas Cars (Pakistan) Ltd. 1992
Honda Atlas Power Products (Private) Ltd. 1997
Atlas Asset Management Ltd. 2002
Shirazi Capital (Private) Ltd. 2005
Atlas Power Ltd. 2007
Atlas Worldwide General Trading LLC 2007
Atlas Venture 2008
Atlas Autos (Private) Ltd. 2011

Karachi Plant
Company mother plant is based in the city of lights and provincial capital of Sindh, The Karachi
city. It is located at F-36, Estate Avenue, S.I.T.E. Karachi. Atlas Group signed technical
agreement with Honda in 1963 and plant started commercial production subsequently. Plant
spread over an area of 5 acres. In 1964, production began with 7 motorcycles per day. Now plant
production has reached to 300 units in a day. Plant manufactures CD 70 only.

Sheikhupura Plant
Another plant is situated in Sheikhupura city, Punjab. It is located at 26-27 KM Lahore- Sheikhupura Road
Sheikhupura. The plant was built in 1981 and spread over an area of 27 acres with the establishment of
modern and synchronized 500K plant in 2006. The plant manufactures all four models i.e. CD 70, Pridor,
CG 125 and CG 125 Deluxe.
Export

Bangladesh
Regional Offices

Lahore: 1 Mecloed Road Lahore-54000 [ (042) 111-111-245, 37225015-17,

37233515-17 ]

Rawalpindi: 60-Bank Road, Saddar [ (051) 5120494-6, 5120497 ]

Multan: Azmat Wasti Road Multan-60000 [ (061) 4540054, 4540028, 4571989 ]

Rahim Yar Khan: Atlas Honda Limited, 4-B Zamindara Colony [(068) 5888809 ]
National Tax Number (NTN)

0801063-3
Company Registration Number

CUIN 0001569

Symbol of the Company

4|Page
Institute of Business Management
AHL
Stock Exchange Enlistments

Karachi Stock Exchange

Lahore Stock Exchange


Auditor of the company

Hameed Chaudhri & CO Chartered Accountants.

Legal Advisors of the company

Mohsin Tayebaly & Co.


o Agha Faisal Barrister at Law
Name and Address of Share Registrar

Hameed Majeed Associates (Pvt) Limited.

H.M. House 7-Bank Square, Shahrah-e-Quaid-e-Azam, Lahore

VISION OF AHL
Atlas Honda limited, being Japanese, always believe in quality leadership customer satisfaction and
satisfaction of shareholders. The executives and managers at AHL are keen about the staff cooperation
and dedication. Thats why promoting teamwork culture is the core activity of the company. The
vision of AHL as follows:

To remain a market leader in the motorcycle industry and emerge as a globally

competitive center of production and exports.

The above statement clearly predicts the overall scenario of the management at AHL.

MISSION STATEMENT
Mission Statement, the statement that further reveals the practicalities of any organization,
comparable to its vision statement. The Mission Statement at AHL is highlighted below:

1. To be a dynamic profitable growth oriented company through market leadership


excellence in quality and service optimizing value for the shareholders and maximizing
exports
2. To give attractive return to business associates and shareholders as per their
expectations.
3. Be a responsible employer and reward employees according to their abilities and
performance.
4. To be a good corporate citizen in order to fulfill its social responsibilities.

5|Page
Institute of Business Management
5. To create and foster a network of researchers, engineers, who will make unique
contribution to the development of motorcycle industry ensuring satisfaction of our
valuable customers and protection of the environment by producing emission
friendly green products. .

The Honda Companys purpose is indispensable to all Honda associates, when it comes to
understanding the reason for the existence of the company. Top management at AHL try to ensure
that mission statement:

a) Is appropriate to the purpose of organization.

b) Includes commitment to comply with requirements and to continually improve the effectiveness
of quality management system.

c) Provides a framework for establishing and reviewing the specified objectives. d) Is


communicated and understood within the organization.

e) Is reviewed for continual suitability.

STRATEGIC GOALS
Customers
Our customer are the reason and the source of our business. It is our joint aim with our dealers to ensure
that our customers enjoy the highest level of satisfaction from use of Honda Motorcycles.

Quality
To ensure that our products and services meet the set standards of excellence.

Local Manufacturing
To be the industry leader in indigenization of motorcycles parts.

Technology
To develop and maintain distinct business advantages through continuous induction of improved
hard and soft technologies.

Shareholders
To ensure health and viability of business and thus safeguarding shareholders interest by maximizing
profit. Payments of regular satisfactory dividends and adding value to the shares.

Employees
To enhance and continuously up-date each members capabilities and education and to provide an
environment which encourages practical expression of the individuals potential in goal directed team
efforts and compensate them attractively according to their abilities and performance.

6|Page
Institute of Business Management
Corporate Citizens
To comply with all government laws and regulation, to maintain high standard of ethics in all operations
and to act as a responsible members of the community.

QUALITY POLICY
Commitment to provide high quality motorcycles and parts.

Right work in first attempt and on time.

Maintain and continuously improve quality.

Training of manpower and acquisition of latest technology.

Safe, clean and a healthy environment.

Market leadership and prosperity for all.

7|Page
Institute of Business Management
Company Hierarchy
Board of Directors

Audit Committee

Corporate Governance
External Audit Secretariat Internal Audit

Compliance Officer
Financial Audit Management Audit

Social
Environment Risk Corporate
Responsibility Compliance
Health and Safety Management Ethics
Committee

Marketing

Finance

Supply Chain

Quality

Production

Information
Technology

R&D

Commercial

HR & Admin

Individual Level
Individual
Code of
Associates
Conduct

8|Page
Institute of Business Management
PRODUCTION CAPACITY IN PAKISTAN OF 2 WHEELS

Company Capacity

Atlas Honda Ltd. 1,000,000 units

Dawood Yamaha Ltd 200,000 units


(Discontinued)

Suzuki Motorcycles Pakistan


65,000 units
Ltd.

Saigols Qingqi Motors Ltd. 100,000 units

Sohrab 42,000 units

others 400,000 units

9|Page
Institute of Business Management
SWOT ANALYSIS
STRENGTHS
A cordial, friendly and frank environment free of any communication gaps.

MBO (Management by Objectives) Targets for the future are set well in advance by the
management at Atlas Honda, which provides the employees with goals to work upon and improve
any shortcomings.

Punch Card system, which creates a sense of accuracy and responsibility in the employees to reach
on time and helps to maintain discipline.

A standardized uniform for all, which removes any possibility of discrimination and promotes
cordiality.

Job Rotation is practiced on a regular basis aiding the employee to add to his skills.

Kaizen (Japanese principle of continuous improvement) and Ala Mayar (quality standards)
strictly followed. This makes sure that the organization and the team at Atlas Honda, keep
improving themselves and their surroundings.

Well-established brand name in the market.

Maximum employee satisfaction Turnover less than 1%

Adequate exposure to the surroundings to newly recruited employees before assignment of work
responsibilities.

Continuously growing demand for Honda motorcycles all over Pakistan.

Expanding network of dealers and service facilities.

Committed management and a dedicated workforce.

Transparent and merit-based selection program for new employees.

WEAKNESSES
Inadequate backup strategies and planning for unforeseen and unpredicted competition.

Lack of an established Marketing Research department, therefore lacking in proper forecasting of


future activities.

No major changes to existing models or introduction of a new model since past few years.

Lack of advertising campaigns for promotion of the product and entering newer markets.

Lack of extracurricular activities and sponsorship for sports etc.

10 | P a g e
Institute of Business Management
Supply Chain Management Project Report

OPPORTUNITIES
Huge market size covering all of Pakistan, with lots of un-ventured markets needing focus and
attention, for development into future profitable territories.

Population growing and youth need to be focused on, as future prospects of motorcycle customers.

Poor quality and performance of Chinese motorcycles can be enchased by Atlas Honda, to project
their ever improving quality and sustainability to the customers.

Various successful ERP implementations in organizations, supporting need for implementation at


Atlas Honda, aiding smooth and efficient flow of business processes.

Low prices by competitors induced Honda to decrease its prices resulting in excess demand
for the market leader, expected to grow at a larger scale.

Ever increasing media for advertising provides Honda with opportunities to project itself in the best-
suited way to its prospect customers.

Growing second hand exchange of Honda motorcycles due to the cost factor. Honda dealers now
practice this process, which gives Honda great deal of control over its circulation of motorcycles
in the market.

THREATS
New Entrants such as the growing brands of Chinese motorcycles in the market pose a serious threat
for Honda but due to the fact, that Honda has reduced its prices, they have increased their market
share.

Political Instability and Unhealthy Law & Order Situation are also a major threat for Honda. Honda
customers are reported to have said that they were robbed of their motorcycles after just having
taken the motorcycle out of the factory. Honda is reported to have lost quite a great deal of market,
especially in Karachi, due to these snatchings.

11 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Market Share of Motorbike in Pakistan

12 | P a g e
Institute of Business Management
Supply Chain Management Project Report

How Supply Chain works at ATLAS HONDA?


Atlas has commenced to develop local manufacturing capabilities to the highest, economically feasible
level. The company is producing 4 models of motorcycles at the same time. While a major role in
localization has been assigned to vendor industries, Atlas has the countrys one of the largest in-house
manufacturing capability at its Karachi and Sheikhupura (SKP) plants. Atlas Honda business is a network
of interconnected businesses involved in the ultimate condition of product and service packages required
by end customers. Atlas Honda supply chain spans all movement and storage of raw materials, work-in-
process inventory, and finished goods from point of origin to point of consumption (supplier to consumer).
The whole idea behind Atlas Honda supply chain is that the more you make simpler and declare what you
do, how you do it, and with whom you do it, then the more you can view the relationships between business
partners with confidence and the a smaller amount the need for distribution the risk. Atlas Honda knows
what your customer and your customers customer is going to want from you. It is also about knowing and
not guessing, what your supplier and your suppliers supplier will do for you.

13 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Hierarchy of Supply Chain Department

G.M Supply Chain

Billing A.M Executiv


Billing e
OSP A.M Executiv
OSP e
National Manager
Vendor Vendor SPD A.M Executiv
Procuremen Manager SPD e
Procureme
New A.M Executiv
Sourcing New e
Vendor A.M
Local Procure V.P
Purchase
Manager
National Local
Manager Purchase & A.M A.M
Logistics Logistics Local
Exec. Exec. Exec Exec.
Dispat Logisti . Local

Deputy Manager
Stores Manager Stores
CK R PP RP DC SCRAP
D M S S C YARD
A. A. A. A. A. A.
M M M M M M
EXE EXE EXE EXE EXE EXE
C. C. C. C. C. C.

14 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Functions of Supply Chain Management in Atlas Honda

1. Vendor procurement 2. Logistics 3. Local purchase

4. New sourcing 5. OSP 6. Billing

Atlas Honda Supply Chain

Vendor DCC Receiving area Quality Check

Unrestricted Restricted

Deliver If rejected then it


return to vendor
ERROR FREE Quality
Assurance
Manufacture/assemble bikes

CKD feed the


Khi line Dispatch Area
Frame Assy CKD Store
All finished SemAi-Finished Semi-Finished
parts
Paint Buffing Engine
Skp line
Shop Shop Shop

Finished part Finished part

15 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Vendor Procurement:
Procurement ingredients
Forecasted Production
Bill Of Material (B.O.M.)
Review order specification
Price Negotiation
Evaluation based On Cost Comparison
Purchase Order Generation
Delivery Against Delivery Challan
Invoice
Payment
Good Receipt Note
Functions
Responsible for all the relationship and dealing with different vendors.
Motivates vendors to produce excellent quality and train them to achieve the highest level of
quality.
Responsible for on time availability of the parts.
Responsible for vendor improvement program. Under this program, the department representatives
go to the vendors and train them for new methods to produce better quality at reasonable price.

Hierarchy of Vendor Procurement

Vendor selection Criteria:


This is the vendor selection criteria, AHL believes on the QCDR when it comes to select any vendor. AHL want
quality oriented parts/material in the low cost. Delivery must be on time in all the difficulties. Reliable implies that

16 | P a g e
Institute of Business Management
Supply Chain Management Project Report

the vendor should financially sound to manufacture or to procure the goods for an order. These difficulties are
challenged by Vendor procurement.

Cost
Quality
Reliability
Delivery

How it works?
Once the vendor selected on the basis of QCDR then these process take into account for product
development and resourcing.
Process A: process A contains the Sample of the product, drawing of the product and CAD data
(computerized aided design). CAD data is the drawing softcopy of a car/bikes part design which usually
provide to vendors for manufacture. AHL provide sample to vendors and hard copy of the products
drawing to facilitate vendors for manufacturing. AHL do not share CAD data with the vendors.
Process B: a quotation is received from the vendors to construct the particular product. This quotation
contains the price of manufacturing the particular part on the basis of material, labor, overheads, power
consumption, depreciation cost, packing cost, transportation cost and profit margin.
Process C: after obtaining the quotations from different vendors or single vendor, Price committee is
settling down. In which issues of price bargaining and price settlement is taking into account in front of
concerned persons and vendors.
Process D: once the price is settled down then Vendor submit a sample to AHL.
Process E: QA (Quality Assurance) verify and scrutinize the quality of the product with respect to the
different deviations.
Process F: if the quality assurance department verify the quality of the product then a vendor submit a Pilot
Lot which is from 100 and 500 parts.
Process G: If quality assurance verifies the pilot lot then it transfers to the procurement department.

17 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Sample & Drawing of Part


Process A
Quotation
Process B
Price Committee/bargaining and statements
Process C
Sample Submission
Process D
Pilot lot (100 to 500 lot)
Process E
Quality Inspection (QA)
Process F
Provided to Supply chain
Process G
Outsource Processing (OSP):
This section deals with the import material which is imported from commercial department as per
production plan. There are approximately 145 parts which are imported from different international sources
and then it outsource to different 20 vendors to manufacture the required part.
The imported material categorized into different classes
1. Raw Material
2. PPS ( Press Part Store)
3. CKD (CKD Kits)

Raw materials includes all pipes, sheets, stripes, aluminum etc which then transform into a motor
bike parts. There material outsourced to vendors for manufacturing motor bikes parts.
PPS (Press Part Store) are those parts which can be manufactured In-House.
CKD (CKD Kits) includes all finished and semi-finished parts like jumps, tires, rims etc.

18 | P a g e
Institute of Business Management
Supply Chain Management Project Report

After bringing in the material next it is outsourced to different selected vendors for manufacturing. Once
the vendor got material for manufacturing then Atlas Honda physical count and audits the material two
times i.e.; half yearly and annual audit.

Vendor Billing:
The bills received from vendors are sorted alphabetically.
GR received from stores are also sorted
Then bills & GR are matched & after confirmation bills are fed in computer and system SAP. Then
these are forwarded to accounts section.

Inventory Management:
Inventory management at accompany can be very difficult where thousands of inventory in and out on a
daily basis. For this purpose file is maintained which enclosed the entire part data with reference to part
codes. Inventory in the form of:
Raw Material
Imported
Vendor Parts
Machine Spares
Consumables

The question is why we have to manage the inventory because to know that how much inventory we have
at the end of the day or at the beginning of the day to produce the goods and how much we need more.
Second reason is that to minimize the inventory as much as possible with the help of demand forecasting.
There are such parts that are being manufactured by Vendors in Karachi and are sent to Sheikhupura for
the final assembly and the same occurs for some Sheikhupura Vendors. These parts have high interplant
transportation costs. The Vendors should be developed in their respective cities of Production. There are
also some parts which have few manufacturing processes in the Karachi plant and the rest of the processes
on these parts have to be done in Sheikhupura or may have to be assembled there.

A Daily activity report is managed on a daily basis by which we come to know the minimum and maximum
level of the stock.

For vendors parts SAP reports are generated to know the shortages and minimum/maximum level of stock.
ZMMDS report shows the daily receiving report on SAP against the P/O and also highlights the shortages
and scheduled quantity.

Finance:
Finance department is the backbone of any company and plays a vital role as a custodian of the stake holders
as well as share holders of both public and private companies. Its safeguarded the interest of stake holders
and ensures the safe and healthy return on investment. Atlas Honda has a well-established finance
department. It is totally computerized .it has its own system which is prepared by IT department. Finance
department has further following sections.

General ledger
19 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Costing
Taxation
Treasury
Payables
Payroll

Costing General Ledger Taxation

- Generate Part code All the transactions are recorded in It deals with all tax and
- Maintain inventory general ledgers. General ledger for each Custom duty related
- Maintain GR and RR account is maintained separately. There affairs.
- Assign unit of measurement
is a computerized system, which then
- Cost of local and imported - Service tax
parts produce different statements.
- Sales tax
- Cost of Karachi parts and - Supplies tax
SKP parts - Transportation
- Operating cost - Commission
- Operation cost - Rent
- Overheads - Income tax
- Duties

Payables Payrolls Treasury

- This section deals with the This section controls the salary system of - Management of
following activities. the organization. funds
- Vender payables - Tax deductions, absenteeism - Allocations of
- Utility payables deductions and all other funds
- Insurance payables deductions - Payments of bills
- Tax payables - Overtime payments - Risk evaluation of
- Club payments - Manage COD (chartered of currency rates and
- Other payable demand Agreement) interest rates
- Provident fund - Paying money ,
- Petrol, newspaper, and bonuses taxes

Logistic:
Logistics department provides services and the management of the good between the point of origin and
the point of consumption. It is responsible to deliver the goods to the consumer on time and safely. Logistics
department plays multiple tasks in Atlas Honda like material management, transportation, inventory

20 | P a g e
Institute of Business Management
Supply Chain Management Project Report

handling and often packaging.


Logistics movement characterizes in four parts
By air (in case of emergency)
By containers
By truck Atlas Honda
Small Mazda trucks Services
Containers Monitoring Sheet: Special symbols and code are used in logistics department to
understand the containers monitoring sheet such as:
D----Dispatch from Karachi

*----Available at Karachi plant

# ----Expected at Karachi

A ---- arrival at SKP

@ ---- under repair

~ ----- On the way towards Khi Plant

> ----- On the way towards SKP

There is a convoy of 11 containers that is possessed by the company and is devoted for the interplant transfer
and for the allocation principles. The interplant transfer usually takes 36 to 40 hrs for a trip. The parts in
the critical zone may be transported by air. The parts may be shifted directly to SKP or may be through
Karachi plant if it is found that the container may be partially vacant in the direct transfer of units to SKP.

Responsibilities
The major responsibilities of the logistics department are;
Manage dispatch and upload report in which engine and chassis number are saved according to the
dealers contract.
Manage barcode report and allocation report
Transportation rates are set
Coordinate with all the regions
Transportation of Raw Material from port.
Transportation of CKD from port
Transportation cost is analyzed

21 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Logistics Monitering and Controlling

BRIEF ANALYSES OF ATLAS HONDA SUPPLY CHAIN


To understand the Supply chain of ATLAS HONDA, we need to draw the concept of how a product is
produced by the firm or what are the ways through which product suffers while being made.

CEO of the firm decides the on following demands

Seasonal Demand
Cost push Demand
Cost pulls Demand

In Pakistan Production of Automobile is more elastic in Rural areas rather then Urban due Rational
Behavior of Consumer belonging to deferent Villages.

In season of rising in cotton, wheat, Rice and other crops i.e. Sugar cane rise in selling so as firm has to
increase the production. HONDA at its best can survive in all circumstances that might be the plus point to
be noted and not be easily ignored where as the in cities situation is deferent due low enforcement problems
people are scared of loosing their automobile i.e. Hence Other Small Companies take its advantage.

22 | P a g e
Institute of Business Management
Supply Chain Management Project Report

By Production Atlas Honda Produce 4 main automobile as per Percentage Observed as;

Sales
Honda CD 70 Honda Pridor CD 100 Honda CG 125 Honda Deluxe

10%
18% 48%

24%

Mechanism:
Working in condition where your are ultimately responsible if production chain stop due to any reason.
Dealing with vendors, supplying items what are required for making an automobile, having relations in fact
the mirror and the only to communicate with local and international industry hence the work become more
competitive.

23 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Production
Plan and
Control
Devidient
Local Parts
and Bonuses

Retained Imported
Earning Parts

Cash
Supply Material
Managment
Chain

Quality
Consumer
assurence

Dealer Production

Logistic

Costing and Supply chain


Things never going to be easy when there is talk about costing of an item and expenses of the firm especially when
you have massive impact in marketing and the huge amount is paid to the govt. in form of Taxes and others expenses.

Basically firm contains following types of cost as

Variable cost

24 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Fixed cost

To understand the phenomena of costing we keep some of most important following cost.

Material cost
Labor cost
Over Head
Transportation cost
Packaging cost
Dies/Mole/Tooling case
Rejection cost
Energy cost

To understand why its important in Supply chain or what really the role of costing in supply chain can be shown as
in following table ;

Material
Labor

Over
heads

Cost sturucture
Other costs may be from admin/marketing/finance/profit.

Vendor itself costing up to 60% to 75% of Total cost then to find the profit is very difficult task.

Meanwhile reporting it in supply chain can be accordingly with following methods as;

Internal reporting
External reporting

25 | P a g e
Institute of Business Management
Supply Chain Management Project Report

Internal reporting refers to Top management; meanwhile external reporting contains the formulation of report on the
basis of particular style made by HONDA and for price negotiation with suppliers.

Making plans for future has got it worth and cost too. In other words some time your forecasting about the product
due to asymmetric information or wrong estimation, firm can bear the cost.

Supply
Demand

If HONDA Karachi Plans to make 10 Million Motor Bikes for year in KARACHI PLANT and they are aimed to
create demand but the actual demand is not meet, whether a shortage or the excess.

26 | P a g e
Institute of Business Management
Supply Chain Management Project Report

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
DELUX PRIDER CD 125 CD 70

Blue rising line shows what actual demand is and the straight line colored as Brown shows the firm target thats not
achieved yet. (From Karachi Plant)

Targeted units for sale Actual unit for sales = Paining cost or forecasting cost.
However Vendors are grown up under the tyranny of HONDA, But if today they are grown next Day they
can be Monopolists too. Honda has a big role in meeting There Local Vendors to Foreign vendors so that
they could reduce there importing cost. This is time to make a plan How to save Vendors Because Creating
Venders is not much good for continuous Production.

Try to minimize the element of inefficiency that may have seen while moving and surveying every morning
in DCC then CKD, By Introducing the software other then SAP that only adjusts the entries and reported
to Vender Procurement section.

This is the Time to get the opportunity in terms of purchasing Raw Fields i.e. Oil and Gas Field in other
words Atlas should not only relaying the projects its is doing now i.e. ATLAS ENGEENIEERING LTD,
AGS and Others. As Now they are found in Pakistan especially in province of Sindh most nearest place. In
future that might be requirement of every Multi corporation and who may not do that, wish that they could
have purchased these fields.

Try to make better communication among Govt. and Make a Department of I.R International Relations that
may help in making Delegations at Domestic Level and Internationally too. Also the Planning commission
and Forecasting so that Supply chain work become Minimize and Efficient.
27 | P a g e
Institute of Business Management
Supply Chain Management Project Report

BIBLIOGRAPHY

As the data for Pakistan automobile market and especially the motorcycle market is skater on the cyber
space so here are some links from which data about the particular market obtained.

https://en.wikipedia.org/wiki/Atlas_Honda
http://atlashonda.com.pk
https://www.facebook.com/Atlas.Honda.pk/

28 | P a g e
Institute of Business Management