HONDA DEALER MANAGEMENT SOLUTION

PROCESS REENGINEERING

Prepared for
Prof. Mohan Kumar
Prof. Aparna Bhat

Prepared by
Group AC1
Section 5
ITB, MNCN-2
T. A. Pai Management Institute 576104

March 9, 2015

Letter of Transmittal

Group AC1
T. A. Pai Management Institute
Manipal, Karnataka-- 576104
9 March 2015
Mr. Siddharth Roy
Manager
SABLOK HONDA
Ahmednagar, Maharashtra-414001
Dear Mr Siddharth Roy
In response to your request to provide a solution to the problems faced by your existing dealer
management system (DMS), we have analysed the business processes of your service centre.
The existing dealer management system does not met the requirements of the dealers at the
regional level. The solution we have recommended would help you in reducing costs as well as
man power requirement.
Based on our analysis, we recommend that the dealer management system should be
customized at the local level. Our reasons are described in the report.
I would like to thank the managers at the SABLOK HONDA service centre for providing us with
all the required information about the DMS. If you require any further information, please contact
us at the address provided.
Yours sincerely
Divya Naik A.
Analyst
Group AC1
Encl: Report

ii
ACKNOWLEDGEMENTS
We hereby take this opportunity to express our sincere gratitude to all those people who
have helped us in the successful completion of this project. We would like to thank SABLOK
HONDA for entrusting us with the responsibility of providing a customized solution to their dealer
management system. We would like to thank Mr Siddharth Roy, manager of the Sablok Honda
service centre for providing us with all the required information as well as in helping us in better
understanding the Honda dealer management system.
We would also like to thank to Prof. Mohan Kumar and Prof. Aparna Bhat for their
constant support and guidance throughout the course of the project. It would have not have
been possible to complete the same without their valuable suggestions and advice. Lastly, I
would like to extend a special thanks to everyone who were directly or indirectly associated with
the project.

iii
EXECUTIVE SUMMARY

HONDA DEALER MANAGEMENT SOLUTION

PROCESS REENGINEERING

Group AC1
March 9, 2015

The purpose of our project is to understand the problems faced by the dealers while providing
routine and non-routine services to the customers. Honda, the Motorcycle and Scooter
manufacturer provides a dealer management solution software to all its dealers. This particular
software provides the dealer with all the basic sales and service requirements to enhance
customer service. But the software is not designed as per the requirements of each dealer and
hence it has several issues.
Dealers need to fill in multiple forms and enter the data for every service which makes it time
consuming and costly.
The project focuses on ways to improve the existing dealer management solution system for
two-wheeler automotive dealers. The data collection was based on documents, videos and
reports on the complete business process provided by Sablok Honda. The following data was
obtained:

Documents detailing the process for sales and service

Document stating the current problem faced by the company
Videos showing the related forms and service cards used in the process
Verbal information of the complete process

A customised software will help automate a lot of processes which are currently done manually,
which would help save costs and reduce the labour hours required per vehicle servicing. We
hence recommend the installation of a customized DMS system over the current system.

iv

CONTENTS

ACKNOWLEDGEMENTS

ii

EXECUTIVE SUMMARY

iii

INTRODUCTION
Background
Problem Statement
Motivation
Coverage and Scope
Limitations
Assumptions

1
1
3
3
3
3
4

METHODOLOGY
Objectives
Research Methodology

5
5
5

FINDINGS
AS-IS Process
Issues Faced

6
8

RECOMMENDATIONS
TO-BE Process
Key Performance Indicators (KPIs)

9
9
12

CONCLUSION

13

REFERENCES

14

LIST OF ILLUSTRATIONS
Tables There are no tables in this report
Figures
Figure 1
Figure 2
Figure 3
Figure 4
Figure 5
Figure 6
Figure 7
Figure 8
Figure 9
Figure 10
Figure 11
Figure 12

HONDA DMS
AS-IS Process
Customer
Customer Service Representative
Vehicle Servicing Team
VAT Calculation and Vehicle Delivery
TO-BE Process
Customer
Customer Service Representative
System Automated Processes
Automated VAT Calculation
Periodic Customer Review

HONDA DEALER MANAGEMENT SOLUTION

PROCESS REENGINEERING

INTRODUCTION
We are conducting this research to analyse the issues faced by Sablok Honda in Maharastra,
with the current dealer management solution.
Background
Honda is the worlds largest manufacturer of two Wheelers vehicles. in 1999, The Wings,
recognized world over as the symbol of Honda two wheelers , arrived in India as Honda
Motorcycle and Scooter India Pvt. Ltd. (HMSI ), a 100%subsidiary of Honda Motor Company
Ltd., Japan . Since its establishment in 1999 at Manesar, Haryana, Honda has lived up to its
reputation of offering the highest quality at the most reasonable price. Despite being one of the
youngest players in the Indian two-wheelers market, Honda has become the largest two
wheeler manufacturer as well as the second largest two-wheelers company in India.
Honda two wheelers sales and services
At Honda, reaching closer to the customers has always been their top priority and they have
been relentlessly following their ambitious targets for expansion in line with their product
portfolio expansion. Through diligent network expansion they wish to cover the vast Indian
landscape and thus, deliver world class products and services. With 3170 dealers already in
place across India, HMSI becomes the second largest two wheeler dealer network in the
country. With the expansion of sales capacity, Honda continued its spree of spreading wings in
India and reaching out to customers through expanded network in an aggressive manner.
Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) announced the opening of its 800th HEAD
viz. Honda Exclusive Authorized Dealer with the inauguration of its new 4S (Sales/ Service/
Spares/ Safety) facility in the state of Karnataka.
In the end of FY 2013-14, HMSI Sales & Service network stood at over 2730 outlets (includes
768 Dealers, 1000 Branches/Sub dealers, 962 service set-ups) across India. In current
FY2014-15, they are targeting to add a total of 1020 more outlets and provide service closer to
customer, with a network of 3750 sales and service outlets.

The dealer outlets offer key customer needs ranging from product sales, product servicing, and
Hondas genuine spares facility along with road safety promotion amongst other services.
Dealer Management Solution
The Dealer Management Solution (DMS) for the automotive industry is a comprehensive
solution that simplifies day-to-day operations and increases performance efficiency. It is a
centralized application that captures customer, vehicle and inventory information to facilitate
better inventory management and provide visibility on dealer operations across geographies.
A central server is needed for DMS installation which stores all data, permitting multiple users to
have the right of entry for as many as 50 or more client computers. Other DMS providers use an
application service provider or centrally-hosted model.

Key functionalities of the solution include:

Pre-sales

Vehicle Sales

Vehicle Parts and Spares

Vehicle Service

Customer Relationship Management

Basic Financial Accounting

Workflow Automation and Alerts

Figure 1 HONDA DMS

Problem Statement
In our project, we have tried to find ways to reduce the shortcomings of the current DMS and
tune it according to the requirements of the dealers at the regional level. The main objective of
the report is to reduce the time taken to service each vehicle, which thereby reduces costs. This
helps enhance the productivity of the employees and employee retention.
Motivation
Our project is related to the business process reengineering (BPR) that focuses on
reengineering the existing processes of the dealer management solution system at the HONDA
service centre. The motivation for taking up this project was eliminate the shortcomings faced by
the dealer at the regional level. Dealers faced several problems and hence were quite
dissatisfied with the present system. HONDA was also unable to customize its software
according to the requirements of its individual dealers. Hence, in our project, we have tried to
comprehend the existing system and analyse the issues. Based on our analysis, we have
provided recommendations for its improvement.

Coverage and Scope

The solution that the dealer desires from the system varies based on the specific requirements
of the customers and the regional transport office. Hence, the changes that apply to one
particular dealer cannot be applied to other dealers.

The project covers the service aspect of the dealer management solution system. The other
aspects such as sales, procurement and data management are not covered as it would increase
the complexity of the project. The solution can also be applied to other processes with minor
changes.

Limitations
We limited our project scope to the vehicles service management. We didnt not include the
purchase management and Insurance Renewal Management business processes as the
dealers were not able to provide us with the required information.
Under services management, there are three processes, namely free services, paid services
and accidental services. We have limited the project to free and paid services alone, as accident
services would increase the complexity of the project.

Assumptions
1. The current DMS system can be modified to incorporate this new system
2. The customer service representative at the service station can be trained to use the
modified IT system

METHODOLOGY
Objectives

Analyse the current DMS system and list out the issues faced by the dealers
Provide a customized solution to mitigate the issues faced and reduce the overall costs

Research Methodology
The research methodology used by us is mainly qualitative in nature. We conducted telephonic
interviews to gather data from the dealer. We also gathered information based on documents,
videos and reports on the complete business process provided by Sablok Honda. The following
data was obtained:

Documents detailing the process for sales and service

Document stating the current problem faced by the company
Videos showing the related forms and service cards used in the process
Verbal information of the complete process

Based on the above information, reengineered the current business process to provide the
dealer with a customised solution, mitigating the current issues faced by the dealer.

FINDINGS
AS-IS Process
In the AS-IS process, the service station representative is forced to work with the standardized
DMS system provided to him. Hence, most of the tasks have to be done manually.

Figure 2 AS-IS Process

Initially, the customer checks the user manual provided to him and brings his vehicle for
servicing, based on the dates mentioned

Figure 3 - Customer

The customer service representative at the service station inspects the vehicle. He then
enters the details into the DMS system and informs the customer on the approximate
delivery time and service charges (if it is a paid service). He then makes a servicing plan
based on the details.

Figure 4 Customer Service Representative

Next, the vehile is servied by the servicing team at the station

Figure 5 Vehicle Servicing Team

Once the vehicle is serviced, the representative updates the inventory records based on
the supplies consumed. He then manually calculates and prepares the bill, based on the
value added tax (VAT) applicable for the spare parts used and supplies consumed. The
customer is then informed about the service completion and he/she collects the vehicle
after settling the bill.

Figure 6 VAT Calculation and Vehicle Delivery

Issues Faced
Lack of dealer level customization
Since the dealer is provided with a DMS standardized across the country, he/she is unable
to customise it according to his/her requirements. It therefore reduces the efficiency of the
system
Too many manual process
With there being a lack of an option to customise the system, the representative is forced to
perform a lot of manual tasks, which otherwise could have been automated.
High turnaround time
The manual tasks only add to the overall time required to deliver the vehicle to the customer.
Also, since the initial calculations are being done manually, the delivery time and costs
would have a larger error component when compared to an automated process.
Increased costs
With the turnaround time being high, there is an increase in the labour hours required per
vehicle, and this would increase the overall servicing cost.

RECOMMENDATIONS
TO-BE Process
In the TO-BE process, the DMS software provided is customized according to the needs to the
service station representative. Hence a lot of the tasks, which were previously done manually,
have now been automated.

Figure 7 TO-BE Process

The customer receives a SMS notification from the service centre, reminding him/her
about the free/paid service due. The customer then brings the vehicle to the service
centre.

Figure 8 - Customer

The customer service representative at the service station, as before, inspects the
vehicle. He then enters the details into the DMS system and informs the customer on the
approximate delivery time and service charges (if it is a paid service). This is generated
by the system.

Figure 9 Customer Service Representative

Now, based on the details entered, the system generates a list of spare parts and
supplies that would be used. It also generates a servicing plan based on the details
entered. Once approved by the representative, the inventory system is auto updated and
the vehicle is sent for servicing.

Figure 10 System Automated Processes

Once the servicing is completed, the status is updated in the DMS system. The system
then calculates the VAT based on the different tax slabs and prepares an invoice. A
notification is then sent to the customer to collect the vehicle.

Figure 11 Automated VAT calculation

The system then sends periodic reminders to the customer, asking him/her to bring the
vehicle to the service station once the servicing is due.

Figure 12 Periodic Customer Review

Key Performance Indicators (KPIs)

1. Labour hours per vehicle serviced
Here, we can see that through the automation process, the customer service representative
is required to spend lesser time with each service request. This thereby enhances his
productivity.
Also, since the system generates a standardized servicing plan, the standard operating
procedures are well defined and the vehicle servicing can be done faster by the servicing
team.
2. Improved stock visibility and inventory management
Since we now have our DMS system integrated with the existing inventory management
system, we are able to better manage our inventory and reduce the inventory holding costs.
We do not hold excess supplies in our warehouse and place orders only when our inventory
levels go below a certain point.
Also, since we now have the customer servicing schedule with us, we are better able to
forecast demand and hence will be able to maintain our inventory levels accordingly.
3. Customer Retention
With a lower turnaround time and enhanced customer service, the number of repeat
customers would increase as more people would choose to get their vehicle serviced
through a Honda service center, than go to a local mechanic.

CONCLUSION
The customized DMS system has been designed to mitigate the existing issues faced by the
dealers at Sablok Honda in Maharastra. It also brings in enhancements to the processes,
leading to long term benefits. The DMS system can be customized through local IT outsourcing,
which, according to the dealer, would cost around INR 25,000 to 30,000. This cost can be
recovered by the dealer in the long run.

REFERENCES
http://www.honda2wheelersindia.com/
http://yes.honda.co.in/honda-motorcycle-scooter.aspx
http://www.motoroids.com/news/honda-two-wheelers-india-celebrates-800th-dealernetwork/