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Hindustan Electronic Limited-Case Study
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Group Members
y Yash Sawant 0947
y Rahul Shankar 0950
y Rohan Trivedi 0953
y Niharika Verma 0954y Dhiren Pipaliya 0959
y Mayank Kothari 0958
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CASEy ATL & BTL
y Product Quality first
y SCM
y From made-to-stock to made-to-order
y Distribution Networky Logistics
y Forecasting
y Internet
y IT
y Warehousing & Transportation
y JIT
y
Layout
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Hindustan Electronic Ltd
y An Indian subsidiary
y HEL comparatively new player in industry
y In 2006 company achieved the growth rate of 25%
y Launched new models
y HEL competed:
First on product quality
Second on price front
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Supply Chain Management
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Supply Chain Management in HEL
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SCM - HEL
y First company to introduce supply chainmanagement
y HEL made a paradigm shift
y Distribution network - HEL
y HEL has lowest logistics cost
y Market penetration
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Efficient
Logistics &
Supply ChainRight Time
Right
Customers /
Suppliers /
Associates
Right Place
Least Cost
Right
Materials
And Products
Right Quality
& Performance
RightQuantity
7 RIGHTS OF LOGISTICS & SUPPLY CHAIN MANAGEMENT7 RIGHTS OF LOGISTICS & SUPPLY CHAIN MANAGEMENT
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Products Selling
HEL
Product
s
550
Service
Centers
5000
Dealers4 RDC
22
Branch
Offices
26 CFA
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Conty
HEL engineered their supply chain to the marketconditions
y The main stumbling block:
Accuracy in forecast
Frequency of forecast review
y Dealers requirement
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System & Softwarey
HEL uses EDI integrated with ERP system
y Online connectivity
y Two tier distribution/warehouse system
y System provides dealers:
Weekly production plan
Delivery schedule
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SUPPLIER 2
SUPPLIER 3
FINAL
CONSUMER
CUSTOMER 2
CUSTOMER 1
MATERIALS DISTRIBUTIONPRODUCTION
SUPPLIER 1
Funds & Infrm. Goods & Infrm.
FINANCE
H.R.D.
R.& D.
ERP
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MATERIALS PRODUCTION DISTRIBUTION
IMMEDIATESUPPLIER IMMEDIATECUSTOMER
IN - PLANT
LOGISTICS
OUT - BOUD
LOGISTICS
IN - BOUND
LOGISTICS
FLOW OF OUTPUTSFLOW OF INPUTS
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Cont.
Issue Related to distribution
y Solution Introduced a new system
Reduced the order cycle time
The system automation expected to reduce futureorder cycle time
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PROCUREMENT
COST
WAREHOUSING
COST
ORDER
PROCESSING
COST
PACKAGING
COST
INVENTORY
COST
INFORMATION
COST
TRANSPORT
COST
INSURANCE
COSTCUSTOMER
SERVICE COST
TOTAL LOGISTICS COSTSTOTAL LOGISTICS COSTS
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HEL - Imports
y HEL meets its requirements through import from itsparent company
y Ordering base of raw material
y Ordering of imported items
y Production schedule
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Vendor
55
Suppliers
6 are
located
overseas
11 are
beyond
100 kms
38 are
within
100
kms
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For High Storage Density &SpeedyPick Up
Company uses horizontal carousels:
Increased the picking speed
Loading capacity increased
All this helped HEL to achieve high level
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Increased Operations
y Due to rapid increase in operation companyexperienced:
Problem of data storage
Problem of order cycle time
y To shorten order cycle time- company invested incustom built automated order processing software
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Cont.
Internet
RDCBranch
Office
Manufactu
ring PlantHO
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Cont
y Dealers were connected through extranet
y
This new system helped:
Online order processing
Market improvement
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Concluding with the Learnings.
y Demand triggers must be identified as quickly aspossible
y Make sure the person who is supposed to take action
acknowledges andconfirms thisrequirement.
y Everything needs to remain in context.
y
Mechanisms for clarification are critical.
y Group similar tasks, not just similar priorities.
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y Evaluate risk :
1. The forecast
2. The demand data
3.The understanding that forecasts are skewed byprevious bad events.
y Dont reward bad suppliers with increased orders.
y Motivation should be a foundation, not anafterthought
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