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Purvodaya 2k17 |
VGSoM, IIT Kharagpur
The following case lets test your knowledge on operational concepts and logical reasoning
ability.
Weightage will be given to:
1. Problem identification.
2. Ingenuity and applicability of ideas.
3. Concrete solutions and recommendations with the implementation strategy.
4. Unnecessary theories or explanations will not invite any attention.
5. Analysis on the basis of various parameters.
In case of any queries write to scope.vgsom@gmail.com. Or contact the SPOC for the event.
Best Wishes!!!
The Indian automobile industry is one of the largest in the world. The industry accounts for
7.1 percent of the country's Gross Domestic Product (GDP). Sales of passenger vehicles
increased by 16.7 percent units in August 2016 driven by better-than-expected monsoon
and strong buying sentiment. The Government of India aims to make automobiles
manufacturing, one of the main drivers of Make in India initiative, as it expects passenger
vehicles market to triple to 9.4 million units by 2026, as highlighted in the Auto Mission Plan
(AMP) 2016-26. The Indian automotive sector has the potential to generate up to US$ 300
billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12
percent to Indias Gross Domestic Product.
According to an ICRA report, out of the total estimated turnover of $8 billion of the
automotive replacement market, excluding the sales of batteries and tyres, around 75
percent is contributed by passenger vehicles. As per the report the size of the replacement
market, including sales of auto spare parts and labour charges for car servicing, is estimated
to have grown at 15 percent CAGR over the last five years. The growth curve clearly
indicates the industry is likely to invite some more players. India is yet to witness any
specific government body or association backing automotive maintenance and repair
industry, and is, therefore, still lacking in quality and is fraught with price disparity.
From the days of Henry Ford's production line, the automobile industry has been based on a
"supply-push" philosophy -- a strong bias toward "filling the factories" to cover high fixed
costs. Dealer networks were created as logical extensions of the "supply-push" model. The
networks were designed to hold inventory, leverage private capital (without threatening the
manufacturers' control) and service and support what was then a less reliable and more
Motorzone
The service center has adopted the on-demand model, where customers can reach them
on-call and through their website for service requirements. The Service Advisor comes to
the door step of the customers to diagnose the problems and advice on the services
required and the cost involved. Motorzone also provides service-on-call facilities at
customer doorstep for minor services and repairs through its trained skilled force. The
company also offers annual maintenance contracts and provides various after-sales services,
concentrating on long lasting trust bond with customers.
The services of Motorzone for passenger cars of ATM Automobiles Ltd. are broadly under 3
categories:
1. Maintenance This comprises of oil changes, Filter changes, repairs in spark plugs,
lubricant replenishment, engine tuning, brake shoe repairs, minor suspension
Repairs, battery check-up, wheel balancing and alignment, cleaning, water wash,
polishing etc. These jobs take less turnaround time and cars are mostly delivered
within a day. Nominal charges apply to maintenance services. If the car is under
warranty (warranty decided by SOPs), the maintenance charges are billed to the
company. If the car is not under warranty, services are billed directly to the
customer.
2. Major repairs like gear box repair/replacement, engine overhauling, suspension
change, steering box repair/replacement which requires high turnaround time
Working hours of Motorzone are well suited to customer convenience. With trained and
experienced service personnel and customer centric approach Motorzone proves to be the
desirable service center for customers. The technicians are trained by ATM automobiles on
different repairs and Standard operating procedures which have to be maintained in the
service center. The service personnel are also educated on handling the advanced
equipment used in the center.
ATM Automobiles Ltd. the principal expects the authorized service dealer to maintain high
standards of service operations and aim for 100% customer satisfaction. The Service dealer
(SD here Motorzone) and ATM Automobiles Ltd. (ATM) are connected through an ERP
system. Each and every transaction of SD is fully known to ATM. ATM expects SD to deliver
services perfectly always (24*7).
Challenges
Motorzone, even though in the business for many, finds it difficult to rise to the expectation
of ATM on many factors. These factors include variation in delivery times, customer
Delivery time plays an important role in achieving customer satisfaction. The dealership
should ensure that the vehicle is ready and delivered to the customer as per the
commitment given to him/her. As per company norms, the vehicle is supposed to be
delivered within 24 hours.
The major challenge for the dealership is to cater to customers coming in at odd timings and
expecting delivery within 24 hours.
The first interaction with the customer plays an important role in building customer
relationship. Availability of trained receptionists round the clock (24*7) is a major challenge
for the dealership. Well trained receptionists are available only during normal business
hours. Security and front office personnel who are available during odd hours are not
competent enough to handle customer queries.
In recent times, customers have access to various options to get their vehicle serviced.
There are many third party service providers catering to multiple brands which provide good
service. The customers have high expectations from company authorised dealerships. They
expect the dealerships to have sound technical expertise and provide good service quality
using latest technology. Many vehicles are owned by call taxi service providers. They change
drivers every alternate day. This is a great challenge to Motorzone to score on ATM
expectations.
Proper Inventory management is one of the crucial factors responsible for providing
effective and timely service to the customers. There are three categories of spare parts -
fast moving, medium moving and slow moving. Maintaining sufficient inventory levels of
slow moving and expensive parts is a major challenge for the dealership because of high
inventory carrying costs and space constraints. Maintaining 5S on the shop floor is difficult
with high attrition rate.
Performance metrics help in assessing the performance of the dealership and provide the
company good insights to improve service quality. There are various parameters on the
basis of which the performance of the dealership is measured. Customer feedback is an
important parameter that is given directly to the company which dealership cant
manipulate. If the customer satisfaction score of the dealership is below a minimum
threshold consistently for a couple of quarters, the license of the dealership might get
revoked by the principal company. So, it is very important for the dealership to maintain
high customer satisfaction score. Maintaining high customer satisfaction score becomes a
challenge considering the shop floor problems, infrastructure and administrative hurdles.
As per companys norms, the vehicle has to run for a specified no. of kilometres without any
problem after following specified service schedule which doesnt happen practically due to
various factors like lack of awareness and technical expertise, because the service
technicians deployed at the dealership know the SOPs but lack knowledge about the design
aspects of the vehicle. The dealership has to explain to ATM Automobiles Ltd. regarding the
non-conformity which is a major challenge for them. This also plays a vital role in deciding
the service quality provided by the respective dealership.