Atlas Honda Internship By Salman Awan 4ai6n

INTERNSHIP REPORT

Submitted To:

Mr. ATIF RANA Submitted By:

SALMAN AWAN MI-107-030 Program: MBA (HRM)

Department of Management Sciences The University of Lahore June 10, 2009.

Table of Contents LIST OF TABLES ....................................................................................................................... iv LIST OF FIGURES ...................................................................................................................... v

ACKNOWLEDGEMENT ........................................................................................................... 1 EXECUTIVE SUMMARY .......................................................................................................... 2 INTRODUCTION ....................................................................................................................... 3 1.

ORGANIZATIONAL GOALS & ACHIEVEMENTS ........................................ 4 1.1 1.2 1.3

2.

STRATEGIC GOALS ............................................................................................4-6 MILESTONES OF THE COMPANY ...................................................................7-8 CODE OF ETHICS .............................................................................................. 9-10

INDUSTRY REVIEW ................................................................................... 11 2.1 BACKGROUND .................................................................................................... 12 2.2 RESEARCH METHADOLOGY ....................................................................... 13-14 2.3 THE GLOBAL MOTORCYCLE INDUSTRY .................................................. 15-16 2.4 PAKISTAN’S INDUSTRY ................................................................................ 16-20 2.5 ORIGINAL EQUIPMENT MANUFACTURERS & STAKEHOLDERS ........ 21-22 2.6 COSTING OF CHINESE MOTORCYCLES ......................................................... 23 2.7 INCIDENCE OF TAXATION ............................................................................... 24 2.8 REGIONAL COMPETITOR ANALYSIS ........................................................ 25-26 2.9 MOTORCYCLE PRODUCTION POTENTIAL IN PAKISTAN .................... 27-28 2.10 PROBLEMS FACED BY COMPONENT MANUFACTURERS AND THEIR SOLUTIONS .................................................................................................................. 29-30

DEPARTMENTS UNDERSTUDY DURING INTERNSHIP ........................................... 31 HUMAN RESOURCE DEPARTMENT ............................................................................... 32 FUNCTIONS OF HUMAN RESOURCE DEPARTMENT ................................................ 33 3.

RECRUITMENT & SELECTION PROCESS ........................................... 34 3.1 STANDARD OPERATING PROCEDURES (SOPs) & RATIONAL FOR RECRUITING & SELECTION ........................................................................................... 35 a. INDUCTION PLAN ......................................................................................... 35-38

4. 4.1 4.2

TRAINING & DEVELOPMENT ........................................................................ 39 TRAINING OBJECTIVES ...................................................................................... 39 EMPLOYEE TRAINING & DEVELOPMENT STRATEGIES ........................ 39-40 i

Table of Contents

4.3 TRAINING POLICY ......................................................................................... 40-42 4.4 TRAINING PROCESS ........................................................................................... 43 4.5 STANDARD OPERATING PROCEDURES (SOPs) & RATIONAL FOR TRAINING & DEVELOPMENT ....................................................................................... 44

HUMAN RESOURCE HIERARCHY AT AHL ................................................................... 45 MISS ASMA (HR MANAGER) ......................................................................................... 46 SOPs & RATIONAL FOLLOWED BY MISS ASMA........................................................ 47 Mr. OMER AKRAM (EXECUTIVE HR) ........................................................................... 48 SOPs & RATIONAL FOLLOWED BY Mr. OMER AKRAM ........................................... 49 Mr. SYED ZEESHAN HAIDER (EXECUTIVE HR) ......................................................... 50 SOPs & RATIONAL FOLLOWED BY Mr. SYED ZEESHAN HAIDER ........................ 50 Mr ABDUL HAQ (EXECUTIVE HR)................................................................................ 51 SOPs & RATIONAL FOLLOWED BY Mr. ABDUL HAQ .............................................. 51

HUMAN RESOURCE PROJECT ..................................................................................... 52-53 ISTRATION & I.R HIERARCHY AT AHL .................................................... 54-55 Mr. RIZWAN RASOOL (EXECUTIVE . & I.R) ............................................. 56-57 SOPs & RATIONAL FOLLOWED BY Mr. RIZWAN RASOOL ................................ 57-58 MISS HUMAIRA (EXECUTIVE . & I.R) ............................................................. 59 SOPs & RATIONAL FOLLOWED BY MISS HUMAIRA ........................................... 59-60 Mr. SHAHZAD SARWAR ((EXECUTIVE . & I.R)............................................. 61 SOPs & RATIONAL FOLLOWED BY Mr. SHAHZAD SARWAR ........................... 61-65

5. 5.1 5.2 5.3

INSTITUTIONAL SALES ................................................................................... 66 SALES & SPARE PARTS HIERARCHY............................................................... 66 INSTITUTIONAL SALES PROCESS.................................................................... 67 SOPs & RATIONAL FOLLOWED IN INSTITUTIONAL SALES ...................... 67

6.1 a. b.

SPARE PARTS ...................................................................................................... 68 SOPs & RATIONAL FOLLOWED IN SPARE PARTS ........................................ 69 HUMS STRATEGY ........................................................................................... 69-70 CRITERIA FOR DEALER MAKING ............................................................... 71-72

6.

ΑΒ Table of Contents

ii

Table of Contents

7. 7.1 7.2

SERVICES ............................................................................................................. 73 SERVICES HIERARCHY ...................................................................................... 73 CUSTOMER CARE CENTER .......................................................................... 73-75

SWOT ANALYSIS ................................................................................................................... 76

RECOMMENDATIONS & CONCLUSION ....................................................................... 77

REFRENCES

................................................................................................................................. 83

Appendices Appendix A ...............................................................................................ABSENCE FORM Appendix B ................................................................. ACCEPTANCE OF RESIGNATION Appendix C.................APPOINTMENT FOR EMPLOYMENT INTERVIEW & TESTING Appendix D ............................................................... TERMINATION OF EMPLOYMENT Appendix E ......................................EMPLOYEE EMERGENCY NOTIFICATION FORM Appendix F ........................................................................... ACCEPTANC E OF TENDER Appendix G ......................................................................................JOB ANALYSIS FORM Appendix H ........................................................ LETTER TO CONFIRM EMPLOYMENT Appendix I ....................................................................................................... QUOTATION

ΑΒ Table of Contents

iii

Table of Contents

LIST OF TABLES TABLE 1:

WORLD PRODUCTO OF MOTORCYCLES…………………………………………………..15

TABLE 2:

SALES OF MOTORCYCLES I PAKISTA…………………………………………………….17

TABLE 3:

RELATIOSHIP B/W PER CAPITA ICOME & EW MOTORCYCLE PURCHASE……19

TABLE 4:

PROJECTED DEMAD FOR EW MOTORCYCLES…………………………………………20

TABLE 5:

MARKET SHARE OF MAJOR OEMs…………………………………………………………….21

TABLE 6:

IDUSTRY CAPACITY BY OEM ORIGI & MODEL………………………………………...22

TABLE 7:

COSTIG FOR 70-CC CBU MOTORCYCLE FROM CHIA…………………………………23

TABLE 8:

TOTAL TAXATIO DETAIL O OE UIT OF MOTORCYCLE…………………………..24

TABLE 9:

DURATIO OF IDUCTIO……………………………………………………………………...37

TABLE 10:

DURATIO OF IDUCTIO…………………………………………………………………….38

ΑΒ Table of Contents

iv

Table of Contents

LIST OF FIGURES FIGURE 1:

ATLAS GROUP COMPAIES……………………………………………………………………6

FIGURE 2:

MILESTOES OF THE COMPAY……………………………………………………………7-8

FIGURE 3:

RESEARCH METODOLOGY……………………………………………………………………14

FIGURE 4:

GROWTH I MOTORCYCLES SALE I PAKISTA……………………………………….18

FIGURE 5:

RELATIOSHIP B/W PER CAPITA ICOME & EW MOTORCYCLE PURCHASE......19

FIGURE 6:

PROJECTED DEMAD FOR EW MOTORCYCLES……………………………………….20

FIGURE 7:

MARKET SHARE OF PAMA & O-PAMA ……………………………………22

FIGURE 8:

TAX O OE UIT OF MOTORCYCLE………………………………………………………24

FIGURE 9:

RECRUITMET & SELECTIO PROCESS…………………………………………………...34

FIGURE 10:

TRAIIG PROCESS……………………………………………………………………………43

FIGURE 11:

HUMA RESOURCE HIERARCHY AT AHL………………………………………………...45

FIGURE 12:

IISTRATIO & I.R HIERARCHY AT AHL…………………………………………..54

FIGURE 13:

SALES & SPARE PARTS HIERARCHY……………………………………………………….66

FIGURE 14:

ISTITUTIOAL SALES PROCESS………………………………………………………......67

FIGURE 15:

SERVICES HIERARCHY……………………………………………………………………….73

FIGURE 16:

CHALLEGES 08/09…………………………………………………………………………….75

ΑΒ Table of Contents

v

ACKNOWLEDGEMENT Throughout six weeks duration of my internship period I got tremendous from all the staff at AHL (plant and sales office) office), they helped me in every possible way. Dr. Usman Zafar and Mr. Atif Rana ((internship coordinator) have been great motivators and ers of me for last 2 years years.

Page 1 of 83

EXECUTIVE SUMMARY

Atlas Honda Limited leads the list of fifty competitors in motorcycle manufacturing industry in Pakistan due to distinctive quality policy. Their corporate vision and values are the driving forces and at present Atlas Group spreads over 11 companies both private and public limited. Atlas Group is a responsible entity which iiss highly committed to comply with the corporate, environmental laws and to conduct their business with utmost honesty and sincerity. At AHL it is believed that development can only be achieved by equality and respect at work place. They have been doing it for decades and there is no doubt they are reaping its benefits. Human Resource plays its vital role to meeting the employee needs in collaboration with istration Department. AHL has a manufacturing capacity of 1600 units per day under strict quality standards and their sale network is well spread to sell all of them. They have a 5s dealer network to satisfy the customer to the optimum level.

Page 2 of 83

INTRODUCTION I am about to complete my MBA degree and after that I will start my practical life and looking at the grim employment situation worldwide it’s imperative to have something extraordinary in you. For that particular reason I selected the internship so that I can have a practical experience of what I will be doing for rest of my life. It was a sheer proud to have done my internship with Atlas Honda. Before starting the internship I was speculating a tense office environme environment with no respect for internee, but re really ally I was absolutely wrong about it as I entered the Honda premises. Of course there is a big influence of Japanese Culture but still to promote that culture is a difficult task. It was one of the most important experiences of my life where I learnt:

1. How to balance your social and work life? 2. You respect others and others respect you? 3. At work place everybody is equally important? 4. Work with honesty and company will regard your efforts? 5. Balance of authority. 6. Team work is more important.

Limitations: Being internee I was limited to specific departments, material and working procedure. I had no authority so I was not responsible for anything; this is great if you do not want to learn anything. But if you want to learn something you should be made respon responsible for different things so that you should feel yourself a part of the organization and then you will be able to add something to their culture. I would not call it a restriction by company but to be very precise it is a drawback of internship process.

Page 3 of 83

1. ORGANIZATIONAL GOALS & ACHIEVEMENTS Vision: Market leader in the motorcycle industry as a global competitive center of production and exports. Mission: A dynamic, profitable and growth oriented company through market leadership, maximizing export and excellence in quality and service; to ensure attractive returns to equity holders; reward employees according to their ability and performance; to foster a network of researchers and engineers ensuing unique contributions to the development of the industry; stry; customer satisfaction and protection of the environment by producing emission friendly green products and to remain a good corporate citizen fulfilling its social responsibilities in all respects.

1.1

STRATEGIC GOALS

Customers: Our customers are the reason and the source of our business. It is our t 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 motorcycle parts

Page 4 of 83

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, Payment of regular satisfactory dividends and adding value to the shares

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

Corporate Citizen: To comply with all government laws and regulations, to maintain a high standard of ethics in all operations and to act as a responsible member of the community

Page 5 of 83

Page 6 of 83

1.2

MILESTONES OF THE COMPANY

The company is engaged in the manufacturing, sales of motorbikes and auto parts. Since its inception the company has experienced an unprecedented growth in its operations from a small manufacturing company to the leading motorbike manufacturer of Pakistan. Following is the chronological order of the major events in the company's history:

Page 7 of 83

Page 8 of 83

1.3

CODE OF ETHICS

Atlas Honda Limited (AHL) conducts its operations with honesty, integrity and openness, and with respect for human rights and interests of the employees. It respects the legitimate interests of all those with whom it has relationships. AHL is committed to comply with the laws and regulations of Pakistan.

AHL is committed to create the working environment where there is mutual ttrust and respect and where everyone feels responsible for the performance and reputation of the company. AHL is equal opportunity employer which recruits, employs and promotes employees on the sole basis of the qualifications and abilities needed for the w work ork to be performed. AHL is committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child labor. AHL is committed to provide branded products and services, which consistently offer value in term s of price and quality. Products and services will be accurately and properly labeled, d and communicated.

AHL conducts its operations in accordance with principles of good corporate governance. It provides timely, regular and reliable informati information of its activities, structure, financial situation and performance to all the shareholders.

AHL is committed to establish mutually beneficial relations with its suppliers, customers and business partners.

AHL strives to be a trusted corporate citizen and, as an integral part of society, fulfills its responsibilities to the societies and communities in which it operates.

AHL is committed to make continuous improvements in the management of environmental impact. It works in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice. Page 9 of 83

AHL make innovations to meet consumer needs. It respects the concerns of consumers and of society. It works on the basis of sound research, applying high quality standards.

AHL believes in fair competition and s development of appropriate competition laws. AHL and employees conduct their operations in accordance with the principles of fair competition and all applicable regulations.

nce with business principles is an essential element. The Board of Compliance Directors of AHL is responsible for ensuring that these principles are communicated to, and understood and observed by, all employees. Assurance of compliance is given and monitored each ye year. ar. Compliance with the Code is subject to review by the Board ed by Audit Committee of the Board. The Board of AHL expects employees to bring to their attention, or to that of senior management, any breach or suspected breach of these principles.

Page 10 of 83

2. INDUSTRY REVIEW

A GLANCE AT ASIAN INDUSTRY (Yesterday, Today & Tomorrow): Following part of the project has been taken from a research study conducted by Competitiveness Fund (CSF) which is a t venture of the Ministry of Finance (MoF), Government of Pakistan and the United States Agency for International Development (USAID) on December 12, 2006.

The CSF has been established to Pakistan’s goal of a more competitive economy by providing input into policy decisio decisions, ns, working to improve regulatory and istrative frameworks and working to enhance public public-private private partnerships within the country. The CSF will also provide technical assistance and co co-financing for initiatives related to innovation and competitiveness competitiveness,, the private sector with research institutes, universities and business incubators that contribute to creating a knowledge knowledgedriven economy.

After showing a compounded growth rate of 58% in the past 5 years, sales of new motorcycles in Pakistan appear to b be e stagnating at between 750 – 775,000 units per annum. This Report titled “Policy Analysis on the Competitive Advantage of the Motorcycle Industry in Pakistan: Problems & Prospects” aims at identifying: • The reasons behind the rapid growth in the past 5 yyears. • Problems being faced by the key stakeholders, namely the Original Equipment Manufacturers, the component and parts industry and the final consumers. • Implement able solutions and their impact.

Page 11 of 83

2.1

BACK GROUND

The auto industry of which the motorcycle industry is a part has got deep backward (metals such as steel, aluminum. Copper, rubber, chrome, nickel, plastic, paint, glass, textiles, electrical, capital equipment, trucking, warehousing) and forward (dealerships, retailers, banking, credit and financing, insurance, logistics, advertising, repair and maintenance, petroleum products, services, parts) linkages as such any major shifts in demand are felt in a variety of other industries.

The industry Worldwide has seen a tremendous growth in tthe he past two years. Production in 2005 has been estimated at 40.0 million units with China producing 17.0 million units. This global surge in demand has also been felt in Pakistan where the industry in the financial year ending June 2006 manufactured more tthan 750,000 units. There are currently 43 Original Equipment Manufacturers (OEMs) in the Industry. These include 6 OEMs who are of the Pakistan Automotive manufacturers Association (PAMA) and 37 OEMs who are not PAMA . These OEMs are ed ed by nearly 2,000 parts and component manufacturing units employing close to 50,000 persons.

The development of China as the major player in the global motorcycle industry has been achieved by linking its strong domestic demand to the abundance of low technology chnology dependent manufacturing or cloning. Pakistan faces a similar situation with its current suppressed demand. As compared to other industries in which competitiveness can only be achieved with high levels of human capital, the motorcycle industry is more concerned with better management of human resources and high levels of productivity at all levels, i.e. OEMs as well as parts and component manufacturers.

Page 12 of 83

2.2

RESEARCH METHODLOGY

The various steps followed in the completion of this Study include:

Step 1: Orientation session with the CEO of CSF to develop a better understanding of the requirements of the study.

Step 2: Secondary Data Collection and review, list of literature reviewed.

focusing using on the problems being faced Step 3: Primary Data Collection mostly related to foc by the OEMs, parts and component manufacturers. This involved conducting surveys of OEMs and vendors as well as having discussions with industry experts and officials of EDB, PSQCA, CBR and banks.

Step 4: Analysis of the Secondary and Primary data

Page 13 of 83

Page 14 of 83

2.3

THE GLOBAL MOTORCYCLE INDUSTRY

Global motorcycle production increased from 30 million units in 2004 to 40 million units in 2005 with China alone producing 17 million units. The second largest producer was India with 7.7 million units while Pakistan came at number seven with a production of 751,000 motorcycles or about 2% of the global total. The World market for motorcycles is dominated by the Japanese brands, namely Honda, Suzuki, Yamaha and Kawasaki. Although Japan itself produced only 700,000 motorcycles, its brands with strong presence in the Low Cost Countries (LCC) like China, India, Indonesia, Thailand etc., control 50% of the world market.

Even in China where the local Chinese brands control more than two thirds of the market, the basic designs are still modeled round the popular Japanese models. Indian companies like Hero Honda and TVS rely heavily on their Japanese partners for basic designs ns and model innovations. This is perhaps because of the fact that R&D for Page 15 of 83

the industry is both expensive and time consuming. The Japanese manufacturers named above have both the financial muscle as well as the technical capability to undertake the require required R&D. 2.4

PAKISTAN’S INDUSTRY

In Pakistan, motorcycle assembly started in 1964 when the local Atlas Group started assembling Honda motorcycles in Karachi. Currently in addition to Honda, the other Japanese brands being manufactured in Pakistan include Yamaha and Suzuki. The most successful design among the Japanese brands has been the Honda 70CC which enjoys tremendous popularity on of its fuel economy, resale and low maintenance features.

The Pakistan Automotive Manufacturers Association (PAMA (PAMA)) was formed in 1984. Initially three motorcycle OEMs namely Atlas Honda, Dawood Yamaha and Suzuki Motorcycles Pakistan became PAMA . The other founding of PAMA were OEMs manufacturing enger Cars, Tractors and Light Commercial Vehicles (LCV’s), LCV’s), Truck & Bus manufacturers etc. In the 1990’s, three more OEMs ed PAMA, these were, Fateh Motors, Pakistan Cycle Industrial Cooperative Society Limited and Siagol Qingqi Motors Ltd (subsequently renamed Qingqi Motors Ltd.).

The Non-Japanese OEMss entered the Pakistani market in the late 1990’s by introducing clones of the popular Honda 70CC motorcycle using critical parts and components imported from China. For the basic frame and other low tech parts they used the local vendors (part suppliers) whose development had been facilitated by the Government of Pakistan’s indigenization / localization programs for the motorcycle industry. Other than the original 3 Non-Japanese Japanese OEMs who became PAMA , the new entrants preferred to form their own tra trade de bodies and as such are referred to in this study as Non-PAMA .

Page 16 of 83

Presently there are 43 OEMs producing various brands of motorcycles. Out of these 6 are PAMA and the remaining 37 Non Non-PAMA PAMA . The Engineering Development Board (EDB) issues sues licenses to the OEMs for undertaking assembly operations. The Pakistan Standards & Quality Control Authority (PSQCA) is responsible for monitoring the production of quality products by the OEMs. As such both the EDB and the PSQCA play an important rol role e in the establishment, licensing and monitoring of the technical operations of the motorcycle assemblers. The entry of the Non-PAMA PAMA OEM’s with a competitive price difference of approximately 25% (Rs.52,000 Vs. Rs.68,000 for the Honda 70CC in 1999) and con continuous price reductions (2006 price for av average Non-PAMA PAMA OEM 70CC clone was Rs.40,000 Vs. Rs.54,000 for a Honda 70CC). This has seen the total motorcycle market increase from 120,627 in 2001 – 02 to 751,667 in 2005 – 06. Following Table shows the sales increases creases in the past 5 years.

Page 17 of 83

Although the number of assemblers has increased from 3 to 43 the PAMA continue to hold the dominant market position with 79% of the market share with Atlas Honda alone ing for 55% of all new motorcycles sold in Pakistan.

With the increase in production, the prices of motorcycles have come down considerably. In 1999 – 2000, the price of a Honda 70CC motorcycle was Rs.68,000. The same year the Non-PAMA PAMA OEMs supplied 70CC clones for Rs.50 – 52,000. In order to compete with the Non Non-PAMA PAMA OEM products, Atlas Honda and other PAMA considerably reduced prices. As a result of these price reductions, the Honda 70CC is currently selling at Rs.54,000, Non Non-PAMA PAMA member clones are available in the Rs.35 – 42,000 range. If this trend in prices continues, the market is likely to expand further.

Page 18 of 83

Following Table shows a positive trend between increases in per capita income and motorcycle sales. Internationally a positive relationship has been seen between per capita income increase and new motorcycle ownership.

Page 19 of 83

Per capita income in Pakistan has increased in the past 5 years at an average annual rate of approximately 14.0%. The economy is projected to continue to grow at more than 7.5% in the coming g decade. Assuming an annual decrease in number of persons per new motorcycle purchased in the next 5 years at 14% demand for new motorcycles in the coming years may be forecasted as shown in the following Table.

Page 20 of 83

2.5

ORIGINAL EQUIPMENT MANUFACTURERS AND STAKEHOLDERS

Currently there are 43 Original Equipment Manufacturers (OEMs) operating in Pakistan’s motorcycle industry. These include 6 OEMS who are of PAMA including the 3 Japanese OEMs and 37 OEMs who are non PAMA . The total installed ed capacity of the OEMs is approximately 1.310 million units per year as per the Engineering Development Board (EDB). The OEMs are located in and around the cities of Karachi (Karachi, Hyderabad & Hub) and Lahore (Lahore, Gujrat and Gujranwala).

Market shares of the major OEMs are shown in following Table.

Page 21 of 83

Market Shares of PAMA & NON NON-PAMA PAMA :

The total installed capacity of the industry is 1.31 million units as stated earlier. Above chart shows distribution of capacity by OEM hip and Model: Model

Page 22 of 83

2.6 COSTING OF CHINESE MOTORCYCLES

Non- PAMA industry is intensively Chinese oriented and they are managing a price lower than the PAMA member companies. No doubt price is very low but they lack quality in big way so let us see how they manage to make such cheap motorcycles.

Page 23 of 83

2.7 INCIDENCE OF TAXATION Currently there is a very high rate of indirect taxation on the manufacture and sale of Motorcycles. On a CD70CC the total incidence of Indirect Taxation is around Rs.17,124 as shown in the following Table:

Page 24 of 83

2.8 REGIONAL COMPETITORS ANALYSIS CHINA As already stated above, China is the largest exporter of motorcycles. Some of the advantages which the Chinese industry enjoys are:

Strong domestic demand of more than 10.0 million units Huge investment by Japanese OEMs Low cost of infrastructure – land, utilities are all state subsidized Government to export industries in general Encouragement to component manufacturers who supply to the OEMs Market presence in 200 Countries Worldwide Availability of most raw material locally China’s indicators are more favorable than all its competitors

INDIA The Indian industry enjoys the following benefits in pursuit of its export strategy: Strong ng domestic demand of more than 7.2 million units Vibrant component manufacturing industry with a strong technical base Comprehensive consensus built road map for development of both OEMs and component sector through both SIAM & ACMA Most raw material locally available Strong presence in regional and African markets Japanese OEMs exporting local JV production, also participating with local companies in forming JVs in third countries Strong manufacturing capability, eyeing the quality conscious European markets

Page 25 of 83

THAILAND The Thai industry is being driven by “Detroit of Asia” Vision. 3rd largest auto industry and motorcycle producer (3 million units in 2005) Aiming to become regional assembly hub, strong infrastructure program provided by the government including auto clusters, training, component development etc. Preferential exports to ASEAN countries Japanese brands dominate

VIETNAM The Vietnamese industry has emerged stronger after the recent failure of a large number of smaller companies where the number of producing units came down from 60 to 12. The current export strategy being followed by Vietnam includes: Short term strategy aimed at clearing stocks, dumping at below costs in certain instances Exporting to ASEAN due to pref preferential treatment

Some penetration of the African market Presence of Japanese OEMs and low costs coupled with strong domestic demand of 1.9 million can help make it a major player

Page 26 of 83

2.9

MOTORCYCLE PRODUCTION POTENTIAL IN PAKISTAN

As stated before the total production of motorcycles is likely to reach 1.7 million units by 2010 – 11. Out of this, the local OEMs should aim to export 100,000 units to Bangladesh, Sri Lanka, Afghanistan, the six Central Asian Republics and selected East African co countries untries like Eritrea, Somalia, Ethiopia, Djibouti, Kenya, Uganda, etc. ATLAS HONDA: In anticipation of being able to export from Pakistan, Atlas Honda has taken the following measures: Setup a new world class production facility near Lahore which can assemble semble a motorcycle in 35 seconds. This is regarded as one of the most modern Honda plants worldwide Atlas Honda has successfully negotiated global rights with Honda Japan to export the 70CC motorcycle and regional rights for the 125CC motorcycle Honda Japan has acknowledged the quality standards and commitment of Atlas Honda Atlas Honda has helped upgrade capabilities of its component manufacturers to international standards Achieved 93.0% localization which gives them a cost advantage Worked actively with their supply chain to reduce costs of the components As arranged over 20 technical collaborations for its vendors in Pakistan with the Japanese manufacturers Forcefully presenting their case at all forums DAWOOD YAMAHA Dawood Yamaha is manufacturing the 100 CC Yamaha motorcycles, it has taken the following steps to increase production and start exports: Increased plant capacity from about 72,000 units to 100,000 units per annum. Negotiated with Yamaha exclusive marketing rights for Afghanistan and exported xported some units in 2005. Dawood Yamaha has not been Page 27 of 83

refunded customs duty by the CBR on CBUs exported to Afghanistan. The local al sponsors of Dawood Yamaha have setup Baluchistan Engineering, a most modern motorcycle component manufacturing unit SUZUKI MOTORCYCLES The Suzuki Motorcycles Pakistan Limited is 84% owned by Suzuki Japan. It is currently producing only 20,000 units of 100, 110, 125 & 150CC capacity. The installed capacity of the plant is over 100,000 units which the management is planning to utilize in the next five years.

Suzuki is currently concentrating on the domestic market where it is investing in developing it dealer network. Also the company is investing to develop its vendors The Company at the moment has no rights for exports, however on country to country basis permission maybe obtained.

Page 28 of 83

2.10 PROBLEMS FACED BY COMPONENT MANUFACTURERS & THEIR SOLUTIONS Survey of the component manufacturers supplying to both the Japanese and the Chinese OEMs revealed a number of problems being faced by them. The following paragraphs contain a summary of the problems being faced along with their solutions. The percentage signs in brackets indicate % of respondents who felt that this was a major problem.

ke electricity, gas etc., are expensive and their supply is erratic Problem #1: Utilities like (100.0%). Solution: Move component suppliers into Motorcycle Parks or clusters and provide them electricity through gas powered generation plants.

Problem # 2: Land is expensive (95.0%) Solution: Move component manufacturers into Motorcycle Parks or clusters and provide them land at affordable prices.

Problem # 3: Non availability of skilled workers (64.0%) Solution: Upgrade vocational skill centres and setup training facilities in the Motorcycle Parks or vendor clusters.

Problem # 4: Cheap under invoiced imports are damaging the local vendor industry (95.0%) Solution: Formulate and implement mechanism for fair valuation of imported parts through a committee comprising representatives o of EDB, Customs, OEMs and PAPAAM. The local component industry is effectively out of the Replacement Parts market because of the availability of under invoiced parts. In addition there is no guarantee that the parts which are imported are of the required qu quality. The manufacturer or importer in most cases cannot be traced in case any part fails

Page 29 of 83

Problem # 5: Locally available raw material is expensive as compared to regional competitors (91.0%) Solution: Form vendor buying coops to reduce cost by buying in bulk

Problem # 6: Sales Tax and other government departments are victimizing the local vendor industry (77.0%). Solution: Increase s between component manufacturers and relevant departments, EDB can act as mediator.

Problem # 7: Engineering Development Board is not monitoring and upgrading the localized parts list. This list has not been updated since 2004 (59.0%). Solution: PAAPAM should get the list updated on a quarterly basis by working closely with EDB.

Page 30 of 83

DEPARTMENTS UNDER STUDY DURING INTERNSHIP 1. 2. 3. 4. 5.

Human uman Resource Department istration & I.R Spare Parts Institutional Sales Services

(3 Weeks) (1 Week) (3 Days) (1 Week) (3 Days)

Page 31 of 83

Human Resource Department Page 32 of 83

FUNCTIONS OF HUMAN RESOURCE DEPARTMENT 1.

Recruiting & Selection

This includes activities like giving ads on appropriate media so that potential candidates are attracted and after acquiring a pool deserving candidates are selected purely on merit basis.

2.

Training & Development

Selecting a good employee is not enough till he is trained to give his best for the organization. To make him more useful for the organization an induction process is done at AHL.

3.

Performance Appraisal

Now when an employee is trained and he has performed his job for a certain period then company has to identify if that person is doing his work according to job description so they conduct performance appraisal.

4.

Compensation

On the basis of performance appraisal employees are compensated according to their performance. High performing employees get encouragement certificates and cash rewards. All above functions are performed by H.R specialist team at Honda both collectively and individually. Now I will explain who performs what in Honda H.R department department.

Page 33 of 83

3.

RECRUITMENT & SELECTION PROCESS

Requisition Slip

Induction Plan

Data Entry

Approval

Medical

Probation Evalation

Advertisment

2nd Interview

Confirmation

Pool

1st Interview

Short Listing /Screening

Written Test

Page 34 of 83

3.1 STANDARD OPERATING PROCEDURES (SOPs) & RATIONAL FOR RECRUITING & SELECTION

Ad is prepared by Manager HR but the Final selection of staff of grade 11 and above is done by CEO while the final selection of staff of grade 12 or below is done by Director HR. CEO issues letters of appointment and salary documents with a copy to HR Department and another copy to Corporate Office. At very first step HR department receives a requisition slip from the department requiring a new employee this goes to HR manager. HR manager brings this in notice of GMHR who is the approving authority for the recruitment and selection process. Once it is approved by GMHR an ment is given in the pre decided mediums. As soon as public gets to know about the vacancy they send in their CVs the pool of these CVs is short listed and a letter for the written test is sent to the candidates. Candidates who the written test are then called for two interviews and after first interview candidates are eliminated eliminated.. Whoever es 2nd interview is subjected to a medical examination and success in that medical examination will make you on probation bation employee at AHL.

a. INDUCTION PLAN The induction program for ing employees is necessary as per new training policy approved by GEC. Separate induction program is prepared for new employees: 1.

Up to grade 11

2.

From grade 12 and above

Page 35 of 83

HR Department of every company will find out a mentor from each department who will organize the induction in his department. There will be an overall mentor who will keep liaison with new employee to make him comfortable during induction period so that h he can focus on the main objective of this program.

Program- 1 Up to grade 11: The incumbent’s job will be mostly clerical/repetitive nature so mostly concern with his job. Following will be the program for this level of employees. 1-

Group Video and brochu brochure.

2-

Organization charts of company and group.

3-

HR systems (MBO performance appraisal etc)

4-

Staff rules and his grade related entitlement.

5-

All necessary info regarding timings, uniform, canteen and transport etc.

6-

Introduction to his mana manager, ger, peers and colleagues.

7-

Visit of all the departments for 3 hours each in which specifically the related employees will brief about his respective departments in routine business.

8-

Job description of the incumbent.

Dept. Mgr

9-

Departmental objective and his expected specific role.

Dept. Mgr

Page 36 of 83

Duration of Induction HR

1 Day

Other departments

5 Days

His own department (depends on size and location)

1 ~ 7 Days

Total duration

7 ~ 14 Days

The company HR will issue his induction program. The incumbent will submit his induction experience to HR Manager. His report will be studied and if it is useful will be presented in Managers meeting after the approval of CEO. Half an hour presentation will be enough. The presentation should cover cultural, discipline and technical issues.

Program – 2 For grade 12 and above: The incumbent’s job will be at middle /senior management level and requires routine decision making so he should be equipped with good knowledge of his job and fair interaction with all his peers and department managers. He should have fair knowledge of group companies specially related to his job. 1.

Group video and brochure

2.

Organization charts of company and group

3.

Systems (MBO, performance appraisal etc)

4.

Staff rules and his grade related entitlement. Page 37 of 83

5.

All necessary info regarding timings, uniform, canteen and transport etc

6.

Visit of all the departments for 3 hours each in which specifically the related employees will brief about his respective departments in routine business.

7.

Job description of the incumbent.

8.

Departmental objective and his expected specific role.

9.

Visit to other group companies located in same area

Specifically he should meet his peers in group companies to department understand the nature of interaction which will take place between them manager in routine business will arrange.

Duration of Induction: HR

1 Day ay

Other departments

5 Days ays

His own department (depends on size and

1 ~ Day D

location) Group Companies

3 Days ays

Total duration

10 ~ 11 Days

The Company HR will issue his induction program. The incumbent will submit his/her induction experience to GMHR of his company. His report will be studied and if it is useful will be presented in Managers meeting after the approval of CEO. Half an hour ppresentation will be enough. Page 38 of 83

4. TRAINING & DEVELOPMENT

AHL is determined to take employee training and development as a continuous process that eventually will result in performing the employees best at the jobs entrusted to them.

4.1 Training Objectives The broad objectives of the training should be to: •

Match the training with specific job assignments.

•

Enable the successful trainees to acquire and apply the training lessons in their work;

•

Specify the criteria for acceptable performance;

•

Elicit cit target behavior (acceptable performance) from the trainees.

•

Promote continuous employee performance improvement.

•

Encourage career-long long learning.

•

Provide an environment that fosters learning and encourages employee participation.

•

Provide learning exp experiences eriences that facilitate the improvement of employee reasoning, confidence, judgment, and self self-esteem.

•

Cultivate a work culture that provides a balance between organizational goals and personal development.

4.2

Employee Training and Development Strategies

In an effort to serve employees better and to develop them for the roles at AHL, we work to:

Page 39 of 83

•

Assess employee training and development needs regularly, in an effort to improve employee performance.

•

Provide employees with a reasonable number of eq equitable uitable and consistent training and development opportunities.

The objective to assist supervisors and managers lies in the following area To assist managers and supervisors to: •

Participate in performance management processes that are collaborative with your employees, and result in "no surprises" for either of you.

•

Develop and manage a performance management process that includes annual performance

planning,

employee

development development,

on-going going



and

performance evaluation. •

Set clear employee performance goals that align with AHL vision, mission and goals.

•

Provide

on-going going

performance



with

adequate

documentation

throughout the performance management cycle. Understand and deal effectively with performance management related special circumstances, as they occur.

4.3

Training Policy

a. Objective To help each individual, in the interest of the Company and himself, to do his present job more effectively and to help him equip himself for higher responsibility to reach his optimum potential. b. Policy Training is a line responsibility. Each manager is fully responsible for providing adequate development opportunity to promote maximum growth in each of his Page 40 of 83

subordinates. A Manager’s contribution in this respect is an important consideration in his own appraisal by his superior. Each General Manager mus mustt personally actively participate in fulfilling the training needs of his subordinates with particular attention to; • Systematically determining training needs for each subordinate. • Setting his training objectives and plans to achieve them • Monitoring the implementation of these plans • Evaluating the effects and usefulness of the training being given with a view to, if necessary modify the training plans. • Motivating subordinates to improve performance and to make full use to training. • Following ing above, each CEO is responsible for effective training in his unit. i. Formal training courses, both inside and out side the company, should only be a part of a Manager’s over all plan for the development of his subordinates. Informal day to day on the jo job b coaching must be regarded as the most important part of a Manager’s responsibility in training. ii.

Corporate HR department has an advisory role in providing Line Managers whatever advice / assistance they may require. In particular, opportunities wil will be provided to line Managers for improving their Training Skills.

iii.

Formal training should be in the form of in in-company company courses /seminars as far as possible.

c. Implementation This policy shall be implemented by the following four main activities. 1. Each Manager shall review the development needs of his subordinates constantly but more specifically at the time of annual appraisals when the development plans of a subordinate should be agreed with him. The CEO concerned shall be actively involved in the process. The Line Manager shall motivate his subordinates to make full use of the training being provided. 2. Each Manager shall constantly monitor the effectiveness of training being given and shall provide to Corporate HR Department. Page 41 of 83

3. If at any stage the Line Manager wishes to change the training plan he may do so after agreement with his CEO and if necessary advice from Corporate HR Department. 4. Once a year all CEOs shall individually, formally review all aspects of development activity in their units.

Page 42 of 83

4.4 TRAINING PROCESS

Performance Gap Identified

Report by Immediate Supervisor

Training Need Assessme Assessment

Cost Benefit Analysis

GM's Approval

Training Institute Selection

Training Report

Post Training Performance

Analysis of Pre and Post Training Performance

Page 43 of 83

4.5 STANDARD OPERATING PROCEDURES (SOPs) & RATIONAL FOR TRAINING & DEVELOPMENT

Any new employee is never familiar with the culture and working conditions of a new company, to make him feel at home socialization and training is important. At AHL socialization is done during the induction stage while some part of training for new employees is done also. What if an employee is been working for some time and if he starts performing bad, there should be some measure for that and it is covered under training and development. Boss of every employee keeps a check on his performance and when he sees a continuous decline in his subordinate’s performance he can always identify a gap. At the identification of that gap he extends a report to the Manager HR, who identifies TNA. He also conducts a cost benefit analysis to determine the importance of skills lacked by the employee. He then takes this working to the GM who is the training approving authority. After training raining has been approved by GM it is now the responsibility of Executive HR to select the institution of training. After employee is done with the training that ranges from 2 weeks to a month he is supposed to submit a report describing his training experience and how training has helped him overcome his shortcomings. Now he is allowed to perform again normal working conditions and after a certain period his performance is checked again. Pre training and post training data is then matched to see if the training has improved his skills or not.

Page 44 of 83

HUMAN UMAN RESOURCE HIERARCHY AT AHL

G.M Human Resource / istration

N.M Human Resource

Manager Human Resource

Executive Human Resource

Executive Human Resource

Executive Human Resource

Page 45 of 83

Following are the staff work working ing at AHL in Human Resource Department Department. Their name and designation is described with their job descriptions.

Miss Asma Manager Human Resource Responsibilities: 1. Personal Loans These are the kinds of loan extended to the employees by the AHL. These loans are given against Provident Fund and are payable in installments.

2. Recruitment She monitors all recruiting activities like:

i)

Budget for recruitment

ii)

Ad preparation

iii)

Selection of Medium

3. Reports She prepares the reports for Management Committee, Group Executive Committee. Whenever a meeting is commenced she takes notes of that and prepares a report later to be circulated among the concerning authorities.

4. H.R Information System This system includes all work functions regarding H.R and her responsibili responsibility is to supervise all functions and to make a report for the National Manager.

Page 46 of 83

SOPs & RATIONAL FOLLOWED BY MISS ASMA Being Manager HR she is answerable to NM and GM GM. While dealing in personal loans she has to make sure of many documents because it involves monetary issues. When an employee comes with a request to take loan against his provident fund following documents are important: 1. Employees Employment Record 2. Provident ent Fund Documents

She consults the matter with NM and with the approval by NM loan is awarded to the employee. Deg of recruitment ad and budget determination is also her responsibility. After preparing ad within the budget limit the ad is shown to NM and GM and if both agree with that then the recruitment ad is given through desired medium. She maintains the record of management committee reports it is her responsibility to attend the meetings and make a report within a week and then she sends the ccopies of that report to the CEO and the officials who have attended the meeting.

Page 47 of 83

Mr. Omer Akram Executive Human Resource: Responsibilities: 1. Insurance Employees at AHL are insured in three dimensions: i)

Life Insurance

ii)

Health Insurance

iii)

Accidental Insurance

Insurance are covered by two different insurance companies

i)

New Jubilee Life Insurance Company (covers Life & Health Insurance)

ii)

Atlas Insurance (covers Accidental Insurance)

2. Job Descriptions: He also maintains a data bank of all Job Descriptions of all the employees which is updated as per the requirement of the jobs. istration and H.R managers ar are responsible for updating J.Ds J.Ds.

3. Training Need Assessment: Immediate boss reports the performance of his subordinates at the ttime of performance appraisal. A list of employees needing any kind of training is generated with the suggestion from the immediate boss of a particular employee. Now this list is handed over to General Manager and Mangers to identify what kind of training should be given to which employee. They decide on this Training Need Assessment in the meeting presided by General Manager Human Resource, istration & IR.

Page 48 of 83

SOPs & RATIONAL FOLLOWED BY M Mr. r. OMER AKRAM He works closely with the insurance companies to make sure every employee at AHL is covered under the promised policy. It is a part of his daily routine to make insurance company aware of addition and deletion of employees. This process is same for Life & Health Insurance. While under accidental insuranc insurance e only test riders are covered so the family of that rider are not covered. Addition is done when: 1. A new employee comes in 2. Employee gets married 3. Birth of daughter or son to any employee In above case Mr. Omer sends following documents to the insur insurance ance company: 1. Proof of above three happenings 2. Employees Insurance Number (if any because in case of new employee there will be no number) 3. Copy of Insurance Plan All these documents and a letter by National Manager are sent to the insurance company through courier. In response to this insurance company sends an e e-mail mail of acknowledgement as soon as they receive the documents documents. They send the confirmation documents in next 2 days while the insurance card is sent within next 2 weeks. Second scenario is of deletion so a deletion is done when: 1. Employee Leaves All above addition process will be repeated to cover this deletion.

Atlas Honda follows the concept of MBO management by object; this concept emphasizes the importance of worker in setting the target. So whenever job description or new year targets are updated then every employee above grade 11 has to meet Manager istration to discuss it on mutual basis. When all job descriptions are updated this record comes to Mr. O Omer mer Akram. Now it is the responsibility of him to determine whether every employee is following his J.D in the right direction. Page 49 of 83

Mr. Syed Zeeshan Haider Executive Human Resource Responsibilities: 1. Data retrieval from all six attendance machines installed at plant 2. Updating Daily Automated Attendance 3. Generating attendance report of previous day (3 shifts) and presented to General Manager Human Resource, istration & IR 4. Twice a month an *“Inconvenience Allowance Report” is generated which is to be submitted to the finance department. 5. Salary Processing

*Inconvenience Allowance Report: It includes the list of Grade 16 or above who have worked on an off day or four hours more then the official working hours.

SOPs & RATIONAL FOLLOWED BY M Mr. r. ZEESHAN HAIDER He is mostly responsible for all the attendance issues. Everyday first part of his job is to retrieve the attendance data from automated machines and then he prepares a report consisting of the data of all the machines and of all the shifts. GM dem demands a report of previous day three shifts. Workers who go out of the plant have to submit an attendance slip for that at the gate. Very next day these slips will be on the table of Mr. Zeeshan who has to make sure that the record of half day leave or full day leave is maintained. All his activities help to determine that which employee deserves reward for his regularity.

Page 50 of 83

Mr. Abdul Haq Executive Human Resource Responsibility: 1. Vehicle Insurance Vehicle insurance is covered by Atlas Insurance. These vehicles are the one owned by the employees only.

2. Purchase of Motorcycles by Employees This purchase is made in two different categories: i)

Installment

ii)

Policy

Under installment agreement only motorcycles are given to the employees on installment basis while ile under Policy both cars and motorcycles are given to the employees. But there is a certain criterion for the employees who can get the car on installment. Grades determine the level on which an employee is eligible to have a car.

SOPs & RATIONAL FOLLOW FOLLOWED BY Mr. r. ABDUL HAQ He deals in vehicle insurance and purchase of vehicles. Like Mr. Omar Akram he also stays in with insurance company to make sure each and every vehicle of employees is insured. If an employee wants to purchase a motor cycle or car from the company he has to go to Mr. Abdul Haq and he will make sure about the presence of following documents. 1. Grade of the employee 2. Signed Agreement 3. Approval Letter from GM

Page 51 of 83

Human Resource Project During my time in Human Resource Department I was advised by National Manager to prepare a report on “Is there ere any room for improvement in the current Insurance Policy”?

I came up with the following points regarding the above statement:

Current Policy 1: As per Insurance Clause: Insurance Company is not liable if the insured person is dead in any terrorism act.

My Suggestion: There should be flexibility in the terrorism clause. At present terrorism is claiming most of the lives so what will be the use of a life policy if you are not covered against a very common and unfortunate cause of death. Insurance Company should pay at least 50% of insured amount. State, Companies and insurance companies should compensate the family of dead against any ki kind of act of terrorism. Though it’s not a binding by the law but still it’s an ethical duty of concerning institutions.

Current Policy 2: As per Insurance Clause: Insurance Company will not cover the parents of employees but their wife or children.

My Suggestion: Insurance Company should cover the parents of non non-married employees till they are married.

Page 52 of 83

Current Policy 3: As per Insurance Clause: Under Health Insurance there will be no coverage for the treatment of Hepatitis.

My suggestion: Hepatitis is a dangerous disease and suffering due to this is quite usual these days. Moreover its treatment is not quite affordable that why it should be covered to some extent to facilitate the insured employees.

Page 53 of 83

STRATION & INDUSTRI INDUSTRIAL AL RELATIONS (I.R) HIERARCHY AT AHL

G.M Human Resource / istration Manager istration

A.M istration

Executive istration

Executive istration

Executive istration

Page 54 of 83

STRATION & INDUSTRIAL NDUSTRIAL RELATIONS (I.R) DEPARTMENT D at AHL: This department runs with the co co-ordination ordination of Human Resource Department, both departments occupy the same office. It performs the following functions like:

1. 2. 3. 4. 5.

Canteen Uniform Traveling Apprenticeship Job Contract

6. 7. 8. 9.

Union Industrial Relations Security & Safety Transportation

All these functions are performed by . & I.R specialist team at AHL both collectively and individually. Now I will explain who performs what in Honda . & I.R Department. Following are the staff working at AHL in Human Resource Department. Their name and designation is described with their job descriptions.

Page 55 of 83

Mr. Rizwan Rasool Executive istration & I.R Responsibilities: 1. Canteen AHL spends around 1.8 million rupees on subsidized food each month. They have a promise to provide good quality, mouth watering and cheap food to their employees. For the food they charge Rs. 50/ month from all employees. Canteen is very spacious with ventilators around. Macro & some other suppliers supply all the kitchen items to the AHL.

2. Visits At AHL there are two kinds of visits:

i) ii)

Japanese & Higher Management Visits Study Visits

3. Stationery Stationery shop at AHL meets the needs of daily stationery. It is opened for two hours everyday from 8:30 am to 10:30. Personals from different department come with the Stationary Requisition Book to collect the required items.

4. Uniform When you enter AHL Sheikhupura plant it is almo almost st impossible to recognize some someone by his grade or rank due to uniform. Concept of equality prevails over AHL with all the employees dressed in white uniform. This equality is a symbol of AHL and it surely boosts the culture at AHL.

Page 56 of 83

Every employee gets three white uniforms including shirt and tros plus a single pair of shoes (since it can be of any color) per year. If they need more than three uniforms then they have to purchase their own from any anywhere. Laundry facility is also available at AHL; employees can get their clothes washed in as low as Rs. 1/wash.

SOPs & RATIONAL FOLLOWED BY M Mr. r. RIZWAN RASOOL A monthly canteen budget is given to the . & I.R Department by Finance Department and menu is strictly decided considering that budget limit. Monthly menu is decided by four member committee on 24th or 25th each month. This committee includes:

i) ii) iii) iv)

Executive . & I.R Executive . & I.R (Union) Production Personal Cost Personal (Finance Department)

Once a menu is prepared it is forwarded to Manager and Assistant Manger . & I.R. These both gentlemen decide whether to make some changes in the monthly menu. Any complaints regarding food are fo forwarded rwarded to Mr. Rizwan Rasool and he discusses them with Manager & Assistant Manager . & I.R. Visits by Japanese and Higher Management are quite frequent and due to the security concerns now a days there has to be some security plan for these guests. O Once the date of arrival of any guest is confirmed either by Fax or E E-mail mail or Phone, the istration and Security Department works closely to ensure security protection. They prepare a visit plan most commonly includes; meeting, lunch session and photo session. Study visits are also a very frequent issue; AHL receives many Institutional Visit Requests daily. Now let us see that how this process takes place. Institution has to send a formal request of Study Visit in the name of General Manager Human Resource, ce, istration & I.R. Once signed by G.M it comes back to Mr. Rizwan and he sends an acceptance e e-mail, mail, letter or phone. He also makes a schedule Page 57 of 83

for the visit and makes institution aware of it as well. AHL tries to schedule the visits on the days when plant is open and working because it makes the educational trip more meaningful.

Page 58 of 83

Miss Humaira Executive istration & I.R

Responsibilities:

1. Traveling Related Services 2. Apprenticeship Recruitment & Selection

SOPs & RATIONAL FOLLOWED BY MISS ISS HUMAIRA Traveling services include air tickets, hotel rooms and traveling. Higher Management and Japanese Official move through the airplanes so her first responsibility is to see who wants to travel and where. For that she s the ttravel ravel agencies to book the tickets and hotels as well for the stay purpose. This traveling privilege is not for every one, only Assistant Mangers and above can enjoy this luxury. These officials travel in business class and stay in five star hotels. For la last st year or so due to bad economic conditions the AHL officials started using economy class which costs almost half of business class. In case the cancellation of the ticket is required she makes sure right amount is deducted with right refund.

ship lies under 1962 ordinance which makes it compulsory for the firms to Apprenticeship offer candidates the apprenticeship. It can also be called an agreement b/w the company and candidate. AHL each year takes 25 students for apprenticeship and gives them in house training ning for 3 years. During that time they attend institutes for six months to complete two batches of study. Apprenticeship candidates are paid half of the basic salary of permanent employees. A gradual increase is awarded as: 1st Year

50% of Basic Salary o of Permanent Employees Page 59 of 83

2nd Year rd

3 Year

60% of Basic Salary of Permanent Employees 70% of Basic Salary of Permanent Employees

When the apprentice agreement takes place, three copies are generated;

i)

Copy For Company

ii)

Copy For Candidate

iii)

Copy For *Apprenticeship renticeship Directorate

*It is the apprenticeship governing body of the government

Page 60 of 83

Mr. Shahzad Sarwar Executive istration & I.R

Responsibilities:

1. Industrial Relations 2. Union 3. Job Contract

SOPs & RATIONAL FOLLOWED BY M Mr. r. SHAHZAD SARWAR Industrial relation is very vast in its definition but precisely it’s about the relations within the industry and employees. Difference of opinion or any dispute can take you to the court straight away so you got to have some one to take a look at that. Thus it defines the basic purpose of I.R.

Following are the AHL legal consultants;

Naeem Bukhari, Islamabad (Supreme Court Matters) Bukhari Aziz & Kareem, Lahore

When ever the court calls AHL to the court then a “Power of Attorney” is given to the Manager istration & I.R by the General Manager. Some years ago Plant Manager used to enjoy “Power of Attorney”. This power means that the AMIR will act on the behalf of the company.

If an employee takes a plea in court against the company then comp company has to justify its decision over that matter. They can not straight away terminate some one but they have to show the procedure they have followed in doing so. At internship I just came across a Page 61 of 83

case of “Absent without permission”. An employee was term terminated inated because of absents without any permission or intimation. He went to the court against AHL now court ordered AHL to show that how his termination was done. This procedure follows as:

Union: Union is made to protect the employee right and it falls u under nder the Industrial Relations Act 2008. Union leader negotiates on the behalf of employees. Union leader is elected by the elections and union is supposed to be in the power for the period of two years.

Security & Safety: At AHL five Japanese rules are followed when it comes to the security & safety. These can be called 5’s.

1. Seiri is the sorting out and discarding of unnecessary items in the work place. 2. Seiton is the arrangement of necessary items into good order so that they can be easily selected for use. 3. Seiso is cleaning up ones work place completely so that there is no dust on floors, machines and equipment. 4. Seiketsu is maintaining ones work place so that it is productive and comfortable by repeating Seiri Seiri-Seiton-Seiso. 5. Shitsuke is training people to follow good work habits and strict observation of work place rules.

It is not necessary to follow them only in case of security and safety but they can be followed at the work place at any time.

Page 62 of 83

Security: Theft at AHL plant and DCC store was once an issue but with the age of time they have improved to such a level where there is almost zero theft possibility. It has become possible sheer because of effective “Security Guard Patrolling” and very impressive “RFID Reader”. Now let us go into the deta details ils of this “Security Guard Patrolling” system that how it works.

Total Number of Guards = 38 Guards Patrolling at Plant = 26 Guards Patrolling at DCC Store = 12 Guards at Plant are divided in 3 shifts (8 hours each) as: Shift A: 7 Guards Shift B: 9 Guards Shift C: 10 Guards

To rotate these guards in effective manner a “Monthly Duty Chart” is prepared which shows the duties of all guards for all shifts. In case a guard has to be absent on a particular day, security officer will make sure next shift guard will be available on current shift as well. In this case a guard will be doing a double duty so he will be compensated accordingly. Night time at plant is a challenge for security and that is when they use this device RFID reader. Patrolling guards keep tthis his device with them during their duty at plant. They go around the plant on a mapped track and on their way they use this RFID device on electric booths which notes the time. At morning RFID device is scanned to get the night data recorded by guards. It iis s then feed into the computer and a generated report is sent to the Manager istration & I.R.

Page 63 of 83

Safety: AHL has generated its own “Manual for Safety & Environment” that explains every thing in case of some emergency.

“Pakistan Institute of Quality Control” is the safety training institute for AHL. This institute conducts fire training sessions at AHL plant to make employees aware of the dangers not visible. During training sessions they:

Define all Terminologies Chemistry of Fire (i.e. Oxygen, Fuel Fuel, Heat) How It Expands? Prevention Methods

FASTAC (Fire & Security Training Center) offers First Aid Training Course which was attended by the relevant employees of AHL.

Recently “Rescue 1122” were invited to AHL Sheikhupura Plant to give some know how about bout First Aid to all the employees.

Not only AHL arrange such activities but also they have also ensured safety measures to get ISO certification.

Transportation: AHL plant is at 26/27 km Lahore – Sheikhupura road so it is very hard for the employees to o reach there at time. For the convenience of their employees they run 80 vans on 121 different routs covering Lahore, Sheikhupura, Sanglahill, Ferozabad. AHL charges Rs. 125/month for the transportation.

Page 64 of 83

They make sure that the employees reach at plant a around round 7:30 am so that they can start working at 7:45 am for this reason they prefer drivers who live near the starting point of the route.

They not only make sure that employees reach the destination but also that they reach safely and they have made a co code de of conduct for the travelers and drivers;

i)

A particular driver can not drive more than a shift

ii)

Driver can not go above 80 km/h

iii)

In case of rainy weather it’s not necessary for the driver to abide by the time. Late arrival will be no issue since the weath weather er was dangerous.

iv)

At morning pick up driver can not leave some one before the committed time and he would not wait even a minute after that time.

v)

Monthly check up is ensured to keep the vans in good condition.

vi)

Smoking, eating and using abusive language is strictly prohibited in the vans.

Now the question arises how they make sure that no violation is going on, for that they nominate a traveling employee to be the monitor. Monitor makes sure that driver and travelers are following code of conduct.

Page 65 of 83

5. INSTITUTIONAL SALES Mr. Zaheer Minhas National Manager Institutional Sales

This includes four types of sales:

1. CSD (canteen sales department) 2. Government Institutions 3. Private Businesses 4. Exports

5.1

SALES & SPARE PARTS HIERARCHY

Vice President Marketing

National Manager PARTS

Regional Manager Karachi Region

Regional Manager Multan Region

National Manager SALES

National Manager Dealers Dev.

National Manager Institutional Sales.

Regional Manager Lahore Region

Regional Manager Rawalpi ndi Region

Page 66 of 83

5.2

INSTITUTIONAL SALES PROCESS

Personal Inquiry

Quotation

Purchase Order

Delivery

Booking

Pay Order

5.3 SOPs & RATIONAL FOLLOWED IN INSTITUTIONAL STITUTIONAL SALES

At first step purchasing institute inquires about the prices and product and most probably he asks for the quotation. This quotation is prepared and signed by Manger Institutional Sales which shows all the and conditions. Once the customer is ready to purchase he send in a p pay order along with a document of specifications he requires. On receipt of pay order motorcycles are booked for that institution and delivery is made within stated time or two weeks.

Page 67 of 83

6. SPARE PARTS Mr. Hassan Cheema Regional Manager Parts Responsibilities: Meeting the demand of the spare parts in the market and to make new dealers by exploring new markets.

Functions of Spare Parts Department: Sales department works with dealers who are at the same time working as the distributor and the retailer also. Dealers from respective areas send their orders in quantity that contain delivery period with advance payment with marketing department. Payment is sent to s department or dealer’s respective s. When payment becomes clear then demand is sent to marketing department to ensure delivery to dealers. If dealer has sent some extra amount then it is separately shown as a pending payment in his . This is adjusted after next delivery.

Spare Parts Sources: AHL gets these spare parts from three sources:

1. In House 2. Vendors 3. Import Vendors occupy the market because there are thousands of different vendors providing industry with required components. Vendors lead the market share with a big lead. Page 68 of 83

6.1 SOPs & RATIONAL FOLLOWED IN SPARE PARTS 5s DEALERS: AHL’s dealers deal in five categories:

In the past Honda allowed the dealership even for 1s but now they want to strengthen their dealership network so they now only form 5s dealerships as:

1s

Sales

2s

Service

3s

Spare parts

4s

Special sales (installments or leasing)

5s

Exchange facility

These 5s dealers deal in all the above categories and the reason for that is customer can get all the facilities regarding Honda motorcycles under one roof.

a. HUMS STRATEGY 5s – Exchange Facility: ility: It is relatively a new concept in automobile industry it works under a concept known as HUMS Dealers.

Developing “HUMS” Dealers (Honda Used Motorcycles Sales):

Page 69 of 83

CONCEPT

A lot of customers want to purchase new motorcycle, in exchange of old Motorcycle and they want to pay balance payment in of Cash or Installments. These kinds of customers mostly go to used motorcycle market for exchange purpose. We want to create ‘Best 2nd hand Sellers’ as our representatives of 5 5-s Dealers in the 2nd hand market, who bring these kinds of Customers to 5-ss Dealers and provide new motorcycle on mutual understanding. The HUMS will get the commission from the 5 5-ss Dealers and also from Customers and further get the profit after selling of old motorcycle.

BENEFITS TO AHL Phase-I At present, the contribution of exchange in sales is 4%, and by introducing HUMS, it will raise to 6%. We are linking 20 HUMS with 5 5-ss Dealers in 15 cities during 2008 2008-09

Phase-II We will increase HUMS in further 10 towns in 2009-10 300 to 325 Sales Dealers 36 to 50 SSP 145 to 155 Warranty Dealers

Page 70 of 83

b. CRITERIA FOR DEALER MAKING The criterion is very clear and that is the expa expansion nsion of business so before any anything else we have to find the answers to these questions:

WHY, WHERE, WHEN, WHO WHY? There can be countless reason ns to this Why but at most of the time it’s about capturing the market. Success comes when we keep a track of our competitor so any move from competitor can also bring an answer to this Why.

WHERE? This will include some research work because we have to inspect and analyze the data of potential markets we are intended to intrude. A survey of market potential, competitor analysis and the need of customer will help us in a big way. It will also include the location of our dealership as demographics plays an important part in sales activities.

WHEN? There is always a specific perfect time of doing something or most commonly we say there is a right time for right thing. This aspect spreads from our social live lives to the business activities. In the case of dealership our dealer is most concerned about it but at the end of day we are worried since the dealer carries our name.

WHO? Now the dealer comes into the equation, we have to find what kind of potential deale dealer should have to be our part.

His past experience business wise? What is his personality attributes? What is his background? What is his potential in the market? Page 71 of 83

Dealer Facilities: AHL is always ready to facilitate its Dealers to expand their business for this purpose they have launched a new facility for its dealers in co co-operation operation with Allied Bank Limited. Bank will provide them the facilities like:

1.

Running Finance Mark up will be charged on the money used

2. Limit to Loan

1 million to 50 million Amount can be 30% of last year’s sale

3. Purpose of Loan

To buy the motorcycles or stock from AHL

4. Security

a. Stock through hypothecation b. Mortgage c. Personal Guarantee

5. Mark Up Rate

14%

6. Payment

Payment on quarterly basis

7. Basis Qualification

a. Dealing relationship with company should be more than 5 years b. No bank default history c. Value of Mortgage Property should be 25% more than the loan amount d. Firm or Company’s s

Page 72 of 83

7. SERVICES 7.1 SERVICES HIERARCHY

ational manager Service

Regional Manager Lahore

4 Territory Inch.

Regional Manager Rawalpindi

4 Territory Inch.

Regional Manager Multan

4 Territory Inch..

Regional Manager Karachi.

4 Territory Inch.

7.2 CUSTOMER CARE CENTRE A proactive approach to enhance customer satisfaction and add value to AHL brand

How will the centre work work?

•

Will supplement and coordinate the present departments and systems rather than replace them

•

The centre will be as effective as the it gets from the allied departments

•

Will depend on the data base of customers generated by dealership and sales team

Page 73 of 83

ow will the centre achieve its goals? How

•

To reach each & every new customer creating a trust between him and the company provide information and solution to his problems

•

Introducing services and products

•

Adding to the MIS system to improve marketing effort efforts

Why hy is a proactive approach required?

•

To reach out to those who are – orr have the potential to be dissatisfied customers

•

To give customers confidence that AHL cares

•

Too oo nurture loyalty through grievance management

•

To improve company – customer relationship and to use it to improve sales in all areas.

Page 74 of 83

Page 75 of 83

SWOT Analysis: Strengths: Backed by a big and financially strong group Atlas Honda Limited Enjoying 55 to 60% market share at present Exporting to some countries in Asia CD 70 is a symbol of success which is already enjoying a big market share Honda Japan and Atlas Group are working together in a close connection Weaknesses: Cost cutting is becoming a serious problem in presence of Chinese Manufacturers Opportunities: Japanese technology is considered a bench mark in relation to quality. So this his Japanese quality fame is still attracting customers. At the introduction stage of Chinese Motorcycles customers were interested in low price but with the age of time they realized the quality difference. That’s why there is so much opportunity for a quality conscious companies like Atlas Honda Limited. Only company producing 4 stroke 100 CC bike. CD 100 has good economy as compared to the competitors. Threats: Political instability, Govt. Taxes and Chinese companies are a threat but these are usua usual threats for any business.

Page 76 of 83

RECOMMENDATIONS & CONCLUSION 1. Glasses always appear suspicious with regard to cleanliness. 2. Canteen should be paints in more cheerful colors. 3. Intrusion from outside can be best stopped by electric fences. 4. Too many contractors are like too many cooks spoil the broth. 5. Personally I fear CNG cylinders in company like ICI they avoid using CNG cylinders in their vans. 6. Instead of so many vans and routes we can have coasters or other buses. It will give two benefits: spacious, AC will not be required. 7. If we just stick with these vans then we should make them stand under a shed or its becoming like a “journey to the hell” instead of home. 8. Vans are overcrowded which makes this long journey to home very uncomfortable. 9. Smoking should not be allowed in canteen area or other premises. There should be a specific smoking place, room or area for smokers. 10. There should be more variety in the menus means freedom of choice. 11. Safety board and plant map is in the security office while it should be appea appearing near the main gate so that even the visitors can know the place well. 12. Office computers are a bit problematic and soft wares are not up date. 13. LCD’s should be there to protect the eyes. People spend most of the time on their computers so it is necessary to protect their eyes that will also help to lessen the stress. 14. Conservation of energy is near to nil, when it comes to turning off monitors, everybody can use monitor auto power off option for that.

15. Stationary should be given to each shop or department once in the month till some emergency requirements. There should be a chart of expected demand of each department.

Page 77 of 83

16. On Friday there is a break from 1:00 pm to 2:00 pm for lunch and to offer the prayer. Time is sufficient but in such a large group like Atl Atlas as Group, there will be a mosque inside the factory factory.

College 17. We should ensure different suitable types of Recruitment i.e. Col Recruitment evelop Liaison with Intellectuals and Higher 18. For this purpose need to develop Authorities i.e. directors. Head of departments etc through Exchange of E E-Mails, Cards, Letters, Phone calls, Visits etc 19. Have Seminars in different universities 20. Offer visits to different universities 21. Offer internships to different universities 22. Ensure our participation in different Exhibitions and Functions encomes industrial sector in different universities and Associations. 23. Job ment on Website 24. For this purpose need to up upgrade grade our website with an addition of career tag on our ur website to Convey career path and growth at EDMF to our Applicants 25. Inform current opportunities for job, internships, apprenticeships etc 26. For online Resume submission time to time to have excellent application pool not only at the time of Job postin posting even before it. 27. Give detail for every ment of job opportunities along with detail about job description and career path, status of d job opportunities along with compensation packages to manifest potential candidates because this all detail is not possible through newspaper ment and we have competitive edge of offering excellent compensation package to Mgt. Trainees so we should get benefit of this strength. 28. Applicant's ratio should be of (4:1) in short listing. Test, 1st interview in and (3:1) in final interview to have purely potential candidate by following successful Recruitment Pyramid 29. Need to improve our newspaper ment format and style.

Page 78 of 83

ours of our organization's organization' 30. A 15 minutes pre- screening phone call can save hours time. 31. Define efine the behavioral characteristics of the person you feel is your ideal candidate. Finally, list your five - ten key responsibilities and characteristics you will use to screen out your Applicants initially because some time in 1st interview we e find applicant is good but we are bound to reject them on the basis of Age limit, Expected salary salary, Cultural misfittiness etc 32. Some ome time even in final interview no candidate is selected. 33. There is need to have well defined standard of Written Test and n need to have very sincere and pure attentions and contribution of relevant department managers to develop an excellent test which later on evaluated by Manager HR as per test standards then recommended to proceed or modify it. 34. Induction plan/Orientation process demands a lot of improvement as suggested below. 35. There is need of separate place or Room along with equipments, which is purely reserved for newly hired applicant's Selection, Orientation procedure and preexisting existing employees training 36. There should ld be complete pre pre-defined defined program along with orientation module and contents supposed to be highlighted and discussed by every department. 37. HR department require to develop Orientation program and specific course contents for every department along with co-ordination ordination of every relevant department managers, discussed and highlighted during orientation training and upgraded with the age of time as for as changes takes place. And should be handover to every department and its one copy will remain to HR de department in orientation program file 38. Every department Manager or Asst. Manager will deliver lecture in training room by keeping in regard course contents given to their department and then followed by their department visit to ensure complete practical e exposure xposure about their department role and practices.

Page 79 of 83

39. Every department's representative will give assignments to new hires followed by lectures and visits of that department and in response they will make sure submission of assignments next day which depict depictss their understanding after visits. 40. There should be very accurate time division of orientation process as per requirement of every department. 41. First two days of orientation should be based on lectures only given by T Training Manager and MHR based on detail tail introduction and history of AHL, cultural aspects. Organizational strategic vision, mission, policies and procedures, workplace environment. Employee compensation, motivation, career path, promotional policies, and behavioral aspects. Etc 42. Rest of the e days should be divided as per requirement of departments. 43. Head of every department makes sure exact implementation of orientation program concerning their department by taking in the form of report. 44. New hires are supposed to give a comprehensive exam at the end of orientation process arrange and co ordinate by HR department to know about their understanding and their abilities, performance for any future objectives. 45. According to us our job description is very clear but our all empl employees are not doing work purely within their job description, JD is not enough for any employee to keep them motivated. Because Job description provide an opportunity to clearly communicate direction and where the employees fits inside of the big picture Job description set clear statement for what you expect from your people Whether you are recruiting new employees or posting job for internal applicants, job description tells the candidate exactly that what you want your selected person Well-written written job de description scription help organization employees, who must work with the person hired, understand the boundaries of person's responsibilities. 46. Job description becomes dated as soon as you write them in a fast fast-paced, changing customer-driven driven work environment. 47. Poorly orly written job description can work as evidence of wrongdoing or wrong telling. 48. For effectiveness you must regularly look and use job description as part of your day-to-day work. Page 80 of 83

office, are waste 49. Job description that is unused in a drawer, or worst filed in HR offi of time, they must be integral in your hiring process. 50. So if we want to say our employee is suppose to be familiar all work of his department this is fact we enforce him/her to do work beyond his/her job description so there is solution fo forr that Make certain job description has enough flexibility so individual "can work outside the box". 51. Make different job description for one employee encomes all areas of his/her department but for work he or she can do and let him/her to do work by following ollowing one job description for one time or specific period of time, until unless he/she becomes proficient in his/her work and then replace his/her job description with another one you have developed already for him/her, in this way he/she will be familiar ar with work of whole department and there will be no burden of additional work as well which may create de de-motivation motivation for him/her. 52. Performance Appraisal programs should be revised by following changing trend and employee’s behavioral elements etc. 53. There re is gap in training of employees especially for worker level of employee, there is need to ensure behavioral and technical training of workers by following performance appraisal after every six months. 54. On Friday there is a break from 1:00 pm to 2:00 pm for lunch and to offer the prayer. Time is sufficient but in such a large group like Atlas Group, there will be a mosque inside the factory. 55. Although AHL gives leadership strategies in the market as 5s but there is need to improve dealers perception, ttowards owards customer, need is to educate dealer accordingly and adopt some type of motivation tools to boost up his morale and loyalty level to company. In this situation dealership given criteria must be so strict to qualify to generate good dealer network whi which ch are the back bone of AHL or sales pillars 56. As there is not a beaurocratic culture in AHL management is flexible then one drawback is cross rides one cross his immediate boss and report of upper level boss which create disturbance so in this management style should be

Page 81 of 83

vertical but communication in AHL should be horizontal and one should be answerable to his superior only 57. In AHL environment use of computer is pre requisite but we must try maximizing to develop paperless environment with in an organization and the people link to AHL like vendors, or dealers to generate computer generated reports. 58. AHL is a leader in motor bike industry in Pakistan but it should not be proud enough but to be used on the continuous improvement theory in all its p policies 59. System, procedure even it should about after period modification to make them stylish and according to the trends of the market. 60. AHL must create economies of scale in order to develop good quality and standardized products and to need is to enh enhance ance its production level as per demand 61. On plant there is need to make AHL environment more attractive and landscaping is to be made to make it dream organization 62. In AHL there should be separate research and development department R and D for the continuous improvement in all aspects of the business of AHL 63. Employee rotation from one department to th the e other department for handling multiple tasks and to train them for emerging situations 64. Technological upgrading within. Short span of time so that plant must to be a strategic advantage or competitive edge not only in Pakistan but in Asia 65. Instead of all AHL is performing its best in Pakistan. AHL under pin the economic system and provide it with the required strength and vigor. AHL has shown strong commitment and response, great confidence in Pakistan. The operations of the bank are carried on latest computers network, which has increased the efficiency of the AHL manifold. On the whole the services pr provided by the AHL are fantastic fantastic, as I have worked d in AHL it seems that the customers are happy from the services provided by the AHL and they are satisfied. There is need for reduction in expenditure for the maximizing of profit. The savings should be invested in the growth of the AHL. Although AHL is p performing erforming well it should invest in other to become the leader in Pakistan economy.

Page 82 of 83

REFRENCES

PAMA – Pakistan Automotive Manufacturing Association (official website)

Research Paper: US Aid Agency & Ministry of Finance

Hand Book: Human Resource Department at AHL

Printed Material: Broachers & Literature at AHL

Page 83 of 83