Hero MotoCorp

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<p>A Report on</p> <p>Management Information System of Hero MotoCorp</p> <p>Submitted To: Dr. Susheel Chhabra DATE OF SUBMISSION: November 25, 2011</p> <p>SUBMITTED BY: Group 11 Section B SONAM AHUJA 104/11 ANKITA AGARWAL 106/11 KUMAR SOMIL 108/11 N.VENKATA RAMANA REDDY 110/11 NISHANT SRIVASTAVA 112/11 MANISH THAKUR 114/11</p> <p>Lal Bahadur Shastri Institute of Management, DelhiTable of ContentsS.No. 1 2 3 4 Topics Acknowledgement Research Methodology Introduction Company Profile Supplier and Customer Relationship Management 5 6 7 8 10 11 12 13 eHR Implementation TPS and MIS Decision Support System Expert support System System Analysis and Design Virtual Private Network Information and IT Security Management Bibliography Pg. No. 3 4 5 6 12 15 16 18 19 21 22 23 31</p> <p>2</p> <p>ACKNOWLEDGEMENT</p> <p>We would like to express our deepest sense of gratitude to our project guide Dr. Susheel Chhabra for his invaluable guidance, inspiration and encouragement that we received from him throughout the project. Our efforts in accomplishing this project are a result of constant motivation and invaluable learning imparted by him.</p> <p>Group 11/ Section B Trimester II</p> <p>3</p> <p>RESEARCH METHODOLOGYThe project entitled as management information system at HERO MOTOCORP was undertaken and the research was conducted in two phases:</p> <p>1. Primary survey 2. Secondary survey</p> <p>Secondary survey: - We have collected some literature reviews and also some kind of relevant data for the project through internet and by using some books.</p> <p>Primary survey: - Primary survey was conducted by visiting the company. We asked about their management information system.</p> <p>The data provided by them was analysed by us.</p> <p>4</p> <p>INTRODUCTIONManagement Information Systems (MIS) is the term given to the discipline focused on the integration of computer systems with the aims and objectives on an organization. The development and management of information technology tools assists executives and the general workforce in performing any tasks related to the processing of information. MIS and business systems are especially useful in the collection of business data and the production of reports to be used as tools for decision making. Deconstructing the term MIS enables us to define each word in a business context: Management - being managed or people managing a business. Over recent years management has become more scientific and system-oriented. Information - knowledge made available to people within an organization. Systems - sets of connected things or parts within an organization which tie the planning and control by managers to the various operations.</p> <p>5</p> <p>COMPANY PROFILEOne of the biggest success stories in the Indian two wheeler segment, Hero MotoCorp is a household name today. Whats not so well known is the fact that the company has successfully used IT to help it reach the top. Hero MotoCorp formerly Hero Honda is a motorcycle and scooter manufacturer based in India. Hero Honda started in 1984 as a joint venture between Hero Cycles of India and Honda of Japan. The company is the largest two wheeler manufacturer in India. In 2010, When Honda decided to move out of the joint venture, Hero Group bought the shares held by Honda. Subsequently, in August 2011 the company was renamed Hero MotoCorp with a new corporate identity.</p> <p>For New Delhibased Hero MotoCorp, success has brought significant rewards and some daunting challenges. The company, established in 1985 as a joint venture between Hero Group of India and Honda of Japan, holds a 57% market share in India and has grown to become the worlds largest two-wheeler manufacturer. In the last six years Hero MotoCorps sales volume grew by 400%, and this year the company expects to manufacture and sell more than 3 million motorcycles. Its no wonder that Hero MotoCorp has won accolades in the New Delhi business press. In fact, in 2001 Hero MotoCorps chairman Brijmohan Lall Munjal received the Ernst &amp; Young Entrepreneur of the Year award for India, and in 2005 he was presented with the Padma Bhushan, a prestigious award from the Indian government. But growth has brought unique challenges, too. Hero MotoCorp now supplies motorcycles through more than 500 dealers and 700 service points, institutions, and overseas customers. In addition, the company calls on more than 240 suppliers for its parts and subassemblies. The challenge for Hero MotoCorp: cut time and waste out of its supply chain and add more flexibility in meeting the fast-changing dynamics of the modern market in India Hero MotoCorp is a leader in the two wheeler segment in the country, and even claims to be the worlds largest two wheeler company in its advertising. To reach the heights that it has, Hero MotoCorp has successfully leveraged the IT advantage, especially in recent times.</p> <p>6</p> <p>PRE SAP SCENARIOThe company has a highly efficient and reliable network today. But till 1998 Hero MotoCorp depended on legacy systems, which had a high failure rate. The set up was not in a position to cater to the expansion that Hero MotoCorp went through and was not suitably updated. Because it was obsolete, the management decided to revamp the entire IT set up according to S R Balasubramanian, vice president, Information Systems, Hero MotoCorp. MotoCorp had legacy systems working on different platforms, which were developed in-house and tailor-made to their method of working. Since the legacy systems took care of data processing, only some operational reports got generated by the system. Real MIS resided on Excel sheets along with different kinds of analysis. Information, therefore, was fragmented and the authenticity was questionable. Over a period of time, the systems underwent changes and represented a patchwork of several additions and modifications. They were loosely integrated across functional areas. There was duplication and information inconsistency as happens with most legacy applications. It was therefore important to migrate from this platform to something more stable and futuristic.</p> <p>MOTIVATION FOR CHANGEAt that point of time the management perception about IT was also changing and they decided IT would be part and parcel of Hero MotoCorp. This helped in modernizing the information systems at the company. Apart from this, competition in business and deployment of bandwidth hungry applications forced the company to migrate from a slower legacy network to the new faster and more reliable network. The managements vision was to align IT with business. IT was to be used as a strategic business tool rather than for a limited purpose of data processing. An information systems plan was drawn up, which besides other things, stated that the organization would go for common systems across the organization. It would also achieve integration between all systems; emphasis would be on improving business processes, to adopt best practices and to cover the entire supply chain. MotoCorp wanted to consider only state-ofthe-art systems and one which had a clear road map for the future including conduct of business over the net. Tired of in-house developed systems, they wanted a standard solution and in particular, an ERP. Their idea was to partner with a technology vendor capable of taking them forward as the business expectations increase.</p> <p>7</p> <p>THE IT INFRASTRUCTUREThe IT infrastructure of the company is connected over three major Local Area Networks (LANs). These connect the corporate office in New Delhi with three manufacturing plants (Gurgaon, Dharuhera and Haridwar), and other zonal and marketing offices. 21 locations are connected through its Wide Area Network (WAN) set-up. Most of these locations are connected with the corporate office through VPNs, leased lines, and at few places through VSAT connectivity. The motorbike major has a total of seven TDM/TDMA VSATs and two PAMA VSATs. As far as the VPN set-up is concerned, it is still a closed-user group. For connectivity between its Dharuhera, Gurgaon and Haridwar facilities the company uses a very fast radio link. The company has installed the PAMA VSATs from Comsat Max as a backup facility. The Hero MotoCorp network spans 750 nodes across the country. Hero MotoCorp uses 10/100 Mbps Ethernet switched technology for data transmission and is connected with both optic fiber and Cat 5 cables. Optic fiber is used for the backbone, which will also solve the future bandwidth requirements of the company. The company has three Cisco routers. The company also uses a mix of switches from three vendors: Cisco, IBM and 3Com. For non-critical applications, the company has opted for 3Com switches. As IBM switches are cheaper than Cisco ones, we will be going in for more and more IBM switches in the future, says Balasubramanian. All the switches and hubs at the company are managed devices. Apart from this the company also uses an IBM RS 6000 server for running SAP applications, and other midrange servers for running Ingres and Oracle. For Lotus Notes applications the company has opted for IBMs Netfinity servers. As far as other networking hardware is concerned, the Gurgaon plant has two Cisco routers, which are connected to an IBM LAN Route Switch, and the storage box is connected to the RS 6000 server. The company is also using a tape library, which works as a backup device. One of the key features of Hero MotoCorps networks is that most sites enjoy excellent backup facilities. For instance, Dharuhera is connected directly to Comsat Maxs PAMA VSAT main hub. The IT facilities at Gurgaon are connected with two electrical sources, two MCBs, and two UPSes. The company has also installed an extra server as a backup. It possesses a Network Attached Storage system, with plans to shift to a Storage Area Network. For this Hero MotoCorp has gone in for an IBM Trivoli solution. The whole idea was that information systems should be 8</p> <p>able to cater to 99 percent of availability. Even if a LAN or a switch fails it should just take 10 minutes to switch to another LAN or switch.</p> <p>ENTERPRISE APPLICATIONSA good and reliable messaging system was a long-standing need at Hero MotoCorp. When they first introduced messaging, it took off very well. To ensure its success the management arranged training programmes at all the three major areas and also invited the regional offices to join in. The success of the messaging system was so good that people started overlooking the VSAT network. The company messaging set up evolved around Lotus Notes. They evaluated both Microsoft Exchange and Lotus Notes, and finally decided to go in for Lotus Notes. The Lotus Notes application at Hero MotoCorp evolved around those applications that users are familiar with. This is done as a part of the information systems plan along with the business plan to integrate information systems in the organization, integrate all the departments. As the management knew that the implementation of ERP would take some time, they wanted to use that time to introduce an IT culture in the company. After the successful implementation of this system, the IT set-up faced some problems during the first Diwali after the introduction of the messaging system. This happened because of huge number of greeting messages and card attachments. This prompted the company to introduce a new greetings system on the lines of Bluemountain.com. They opened up a car4.809 cmds library system and asked the users to go to the card library and select a card and send it across. By this, no attachment would go, but only the link. After this they were able to avoid a considerable amount of traffic. And users were quite excited about having a card application. People started enjoying the use of IT applications. Subsequently, the company put up an intranet and workflow applications.</p> <p>ERP IMPLEMENTATIONThe next move was to implement ERP in order to integrate various functions and control its operations. The company went live with SAP R3 on February 1, 2001. It uses modules like production, materials, finance, marketing, assets, quality sales and distribution. Siemens Information Systems was the implementation partner for this rollout. The ERP implementation 9</p> <p>presented a high level of data integration. ERP has helped the company immensely. Today nobody asks any other department for information. One can log in and see reports online, says Mukesh Malhotra, deputy general manager, Hero MotoCorp. They were able to implement better cost control measures. This had helped them in calculating the cost of consumables, tool inventory cost, power and fuel costs, and plant overheads. Because of this they also became ready for future SCM and CRM implementations.</p> <p>SAPS ROLEHero MotoCorp evaluated BAaN and Oracle. The overwhelming presence of SAP in the automotive sector was one of the important reasons for selection. The customer references spoke strongly about SAPs ability to address the needs. The project took off with a great start. It imparted one-day awareness training sessions to around 135 managers and key users explaining the project and roles of core team members and users. There were hiccups in between because of staff turnover at the implementation partners end because of which the project had to be extended by a month. However, they kept various activities on schedule. They were one week behind at the last stage of Go-Live preparation but made that up in the last month. The Steering Committee played a useful role and wherever some policy issues could not be decided, the CEO intervened to resolve. End users were involved at various stages and hence they adapted to the new systems well. The first few days saw several problems but the help desk (available 24 hrs) attended to them promptly. Every day thereafter saw lesser problems and the operations got streamlined in 15 days. The yearly closing ended on the 31st March 2001, (2 months from Go Live) and was completed in 24 days. Year closing for the following year was achieved in 11 days and Hero MotoCorp was the second company in India to declare results. This indicated the stability of systems and the efficiencies achieved.</p> <p>IMPLEMENTATION PARTNERS</p> <p>Siemens Information Systems Ltd (SISL) was the implementation partners. They imparted initial training to the users and core team members. They also helped in redefining various processes based on their experience. They gave valuable suggestions for improvement at various</p> <p>10</p> <p>stages. In the Steering Committee meetings they clarified various issues and helped in convincing the management to make various changes.</p> <p>RECORD-BREAKING IMPLEMENTATION TIME</p> <p>Hero MotoCorp also profited from services delivered remotely by SAP consultants in Singapore and software developers in Walldorf, Germany. This international approach ensured that any issues were dealt with rapidly and effectively. The speed with which technical issues were resolved was impressing. In some cases, SAPs German developers found answers overnight. Thanks t...</p>