Group 9_CRM Project_Hero Honda vs TVS Motors

Comparison of CRM implementation in Hero

Honda (now Hero Motocorp) and TVS Motors

Group 9

Avnish Chawla (12P015) Amanpreet Singh (12P123)

J Abhinav (12P140) Vaibhav Gupta (12P172)

Varun Gopal (12P174)

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Table of Contents TVS Motors .............................................................................................................................................. 2

CRM Initiatives of TVS Motor Company ............................................................................................. 3

SAP Business Intelligence ................................................................................................................ 3

Dealer Management Systems ......................................................................................................... 4

Customer Loyalty Program – Smiles Forever .................................................................................. 7

Product Lifecycle Management ...................................................................................................... 8

Hero Honda (now Hero Motocorp) ......................................................................................................... 9

CRM practices at Hero Honda (now Hero Motocorp) ...................................................................... 10

ERP ................................................................................................................................................ 10

Supplier and Customer Relationship Management ...................................................................... 10

The Hero Honda passport programme ......................................................................................... 11

More Value added services ........................................................................................................... 11

Keeping in touch – all year through .............................................................................................. 11

Special privileges – All the way ..................................................................................................... 11

Special Invitations ......................................................................................................................... 12

Security for Customers and family ................................................................................................ 12

Rewards and Points Programme ................................................................................................... 12

Star Club and Treasured Rewards ................................................................................................. 12

Treasured Reward ......................................................................................................................... 13

SBI-Hero Honda Credit Card .......................................................................................................... 13

Implementation of my SAP CRM ................................................................................................... 13

References ............................................................................................................................................ 14

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TVS Motors

TVS Motor Company is the third largest two-wheeler manufacturer in India and

one among the top ten in the world, with annual turnover of more than USD 1

billion in 2008-2009, and is the flagship company of the USD 4 billion TVS

Group. The company has a production capacity of 2.5 million units a year. TVS

Motor's strength lies in design and development of new products - the latest

launch of 7 products on the same day seen as a first in automotive history. TVS

deliver total customer satisfaction by anticipating customer need and

presenting quality vehicles at the right time and at the right price. The

customer and his ever changing need is a continuous source of inspiration.

Over the years TVS Motor has grown to be the largest in the group, both in terms of size and turnover, with four state of the art manufacturing plants in Hosur, Mysore and Nalagarh in India and Karawang in Indonesia. TVS Motor is credited with many innovations in the Indian automobile industry, notable among them being the introduction of India's first two-seater moped, the TVS 50cc. The company became the leader in its category of sub 100 cc mopeds, having sold 7 million units. It also introduced the TVS Scooty, which is India's second largest brand in the scooterette segment. The TVS Jive launched in November 2009 became India's first clutch-free motorbike aimed at a stress-free rider experience while the unisex scooter TVS Wego is targeted at urban couples, featuring body-balance technology for easier handling. On 1 June 2012, TVS Motors reported a dip of 5% in its total sales for May 2012. In July 2012, TVS Motors and BMW Motorrad were reported to be in talks for technology sharing. 0n 8 April 2013, BMW Motorrad and TVS Motor Company signed a cooperation agreement with the aim to develop and produce motorcycles in the segment below 500cc.

In July 2013, TVS Motor announced plans to construct a motorcycle assembly plant in Uganda and to introduce two new models suited to the East African environment. The new plant is expected to become operational in 2014.

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CRM Initiatives of TVS Motor Company

SAP Business Intelligence

India’s third largest two-wheeler manufacturer, TVS Motor Company, was

finding it tough to make insightful decisions about manufacturing and sales

real time. The senior management at TVS wanted a single report on sales

performance, which could show the past, present, and the future growth

trends across its customers and vehicle models for any given period. However,

integrating data from its various enterprise applications to generate such a

report was time consuming, leading to clear business case for BI. With BI, TVS

Motor Company could generate accurate and reliable reports on inventory,

sales, billing, and orders placed on its dealers. BI was seen useful also in

analyzing customer-complaints to ensure quick response and thus improve

quality of service.

The solution implemented was of SAP Business Intelligence system. The

following departments could use the BI system at TVS Motors:

Top management

Information technology

Finance and accounts

Manufacturing and production

Marketing and sales

Quality assurance

Post-sales service

And it covered the following aspects:

Analytics

Dashboards

Querying and reporting

Benefits delivered

TVS Motor Company has achieved time savings eliminating the need to manually search for and collate information from various sources.

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Real time data provided to the field executives has helped the company to improve its monthly sales volumes.

With BI, TVS Motor Company is able to gauge individuals spends with greater clarity and thus prepare more accurate budget plans.

Sales service reports have helped its customer support teams to coordinate with the quality control department for improvement of

product quality andreduction of customer complaints.

This has also helped the company to make its processes speedy and efficient as

the right decisions are taken on time.

Dealer Management Systems

The Dealer Management System (DMS) at TVS Motors was an ERP for the

dealers that help provide a standardized way of working at dealerships and

also valuable customer information. Since the dealers are the touch-points

with the customers, they have to make customer experience standard across

the country. The objective of the DMS was to help understand the profile of

the customers and also get relevant retail data that can be used to take certain

strategic initiatives.

The company had been using a SAP ERP system since two years. However,

some mechanism was needed at the dealers end to monitor and meet

customer needs. So TVS Motors stepped in to ease its dealers’ burden by

employing a DMS system. Each dealer contributed around a lakh and a half

towards the project, which included the charges for the hardware

infrastructure, software, and the support.

The DMS had finance management, inventory management, service, and

customer analysis modules. It was not just the dealers, but the parent

company also stood to benefit in the long run. Issues like selection of vendors,

hardware, and maintaining network availability for the dealers were typical

challenges faced during the implementation.

An automobile dealership deals with the Vehicle Sales, Spares Sales and

Servicing of Vehicles. Primary objective is to help the management by

providing the information about the business at various levels and to pass the

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required data to the manufacturer to enable data analysis on a daily basis.

The business information shall be drilled down from a macro / consolidated

level in to any micro / transaction level. Secondary objective is to help the

operators through easy transactions as it happening in front of the customers.

The architecture of the system (DMS) is designed in such a way that, the

business flow and the technology merged together to achieve the ultimate

goal of customer satisfaction.

Wallcliffs Systems was appointed as the Implementation Partner for TVS

Motors for their Dealership Management System Project to Implement DMS in

all their Dealers & Sub-Dealers in India. It successfully Implemented DMS in

1200+ Dealerships across India and still the count goes on.

Area of Coverage

Vehicle Sales

Vehicle Ordering to the Manufacturer

PDI Process

Inventory Management (with multiple storage locations)

Vehicle Allotments to Bulk / Individual Customers

Project Management System (PMS)

Customer Relation Management

Enquiry Handling & Follow-up

Vehicle Booking

Customer Invoicing

Accessory Invoicing

Registration & Insurance Processes

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Spares Sales

Spares Purchase Ordering to the Manufacturer

GRN

Inventory Management (with multiple storage locations)

Counter Sales

Bulk Sales

Service Counter Issues

Service

Service Reminders & Follow-up

Jobcard Handling

Parts Issue to Jobcard

On MRP

On Manufacturer Warranty

On Goodwill Warranty

Labour Entries

Outside Labour Entries

Service Invoices

Integrated Reporting

Customer Traffic Analysis - Sales

Customer Traffic Analysis – Service

Mean time between Failure – Analysis

Mean time between replacement – Analysis

Integrated Dash Board

Before the implementation, getting secondary sales numbers and information

about products was a herculean task. The sales staff used to call dealers and

get the sales numbers, which was then sent to the headquarters for compiling.

A huge amount of time and effort was spent in getting the sales numbers.

Today, this solution with modules for sales, service, spares and accounting is

used by the dealer for running the day-to-day business.

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At the end of the day, all relevant data gets replicated at the headquarters. This enables TVS Motors to get information on dealership performance in addition to information related to secondary sales and service.

The logistics team also has the visibility of the dealer stock, which enables it to plan their dispatches based on requirements. This has helped in improving the working capital management of the dealer.

Information related to sales and service is now available to all sales and service staff at their fingertips. As a result, the sales team spends more time with customers and less in collating data for reporting.

Keeping in mind the fact that the dealership network is spread across India

with varying connectivity needs, the firm decided to design a solution that

could work in an offline mode and then synchronize the relevant information

to a centralized database.

This has enabled the dealers to operate independently. This has also helped in

de-risking the dealer from connectivity related challenges. The data transfer

between the dealer location and the central database is seamless and does not

require any additional effort on both sides.

A replenishment system between the dealer and TVS Motors reduced the

average inventory from 15 days of stock to seven days of stock. The ROI for the

dealer management system has exceeded expectations. The annual saving per

dealer amounts to Rs 1.3 lakh; if one calculates the total for 600 dealers, the

annual savings come to approximately Rs 7.8 crore.

There also been a marked improvement in quality of service. Post deployment

of the system, the customer satisfaction index has improved from 740 to 780.

It has also been able to improve service level for after-sales spares parts from

78 percent to 90 percent. Apart from this, the firm has been able to reduce the

number of repeat jobs from 8 percent to 3 percent.

Customer Loyalty Program – Smiles Forever

Smiles forever includes data analytics, warehousing, despatch, customer call

centre and Direct Marketing programs. It is a complex customer lifecycle

management program that has more than 1 million member base. Smiles

forever has been upgraded and revamped. The current customer base of the

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CRM programme is over 4.3 lakh members.

Product Lifecycle Management

During the year 2007-08, the Company has implemented Product Lifecycle

Management system to digitize the new product development process. This

solution will help in faster introduction of new products into the market. It

integrates different processes within the Company and enables electronic

collaboration with product development vendors.

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Hero Honda (now Hero Motocorp)

The company, established in 1985 as a joint venture between Hero Group of

India and Honda of Japan, holds a 50% market share in India. In the next six

years Hero Honda’s sales volume grew by 400%. It’s no wonder that Hero

Honda has won accolades in the New Delhi business press. In fact, in 2001

Hero Honda’s chairman Brijmohan Lal Munjal received the “Ernst & Young

Entrepreneur of the Year” award for India, and in 2005 he was presented with

the “Padma Bhushan,” a prestigious award from the Indian government. Hero

Honda now supplied motorcycles through more than 500 dealers and 700

service points, institutions, and overseas customers. The challenge for Hero

Honda: cut time and waste out of its supply chain and add more flexibility in

meeting the fast-changing dynamics of the modern market in India. Hero

Honda claims to be the world’s largest two wheeler company in its advertising.

To reach the heights that it has, Hero Honda has successfully leveraged the IT

advantage.

During the 1980s, the company introduced motorcycles that were popular in

India for their fuel economy and low cost. A popular advertising campaign

based on the slogan 'Fill it – Shut it – Forget it' that emphasised the

motorcycle's fuel efficiency helped the company grow at a double-digit pace

since inception. The technology in the bikes of Hero Honda for almost 26 years

(1984–2010) has come from the Japanese counterpart Honda.

Hero Honda has three manufacturing facilities based at Dharuhera, Gurgaon in

Haryana and at Haridwar in Uttarakhand. These plants together are capable of

churning out 3 million bikes per year. Hero Honda has a large sales and service

network with over 3,000 dealerships and service points across India. Hero

Honda has a customer loyalty program since 2000, called the Hero Honda

Passport Program.

The company has a stated aim of achieving revenues of $10 billion and

volumes of 10 million two-wheelers by 2016–17. This is in conjunction with

new countries where they can now market their two-wheelers following the

disengagement from Honda. Hero Honda hopes to achieve 10 % of their

revenues from international markets, and they expected to launch sales

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in Nigeria by end-2011 or early-2012. In addition, to cope with the new

demand over the coming half decade, the company is coming up with their

fourth factory in Neemrana, Rajasthan while their fifth factory is planned to be

set up in Gujara

CRM practices at Hero Honda (now Hero Motocorp)

Hero Honda Motors launched a Customer Relationship Program in the year 2001. The program was completely managed manually and was difficult to manage and there were always challenges in ensuring authenticity of the data. With the introduction of a software and online process (right from online form filling to redemption of gifts) there is complete authenticity of information captured and retrieved. The use of technology has increased management efficiency of the CRM program by providing real time information of the customers. Authenticity of information is no more questionable, the processing time has reduced from approximately three months to five days. Status of points and gifts redemption is visible to dealers as well as customers. Dealers' overhead costs have reduced because of a completely paper-less process also dealers now have access to lot more analytics to help them do target marketing.

ERP

As the management knew that the implementation of ERP would take some

time, they wanted to use that time to introduce an IT culture in the company.

The move was to implement ERP in order to integrate various functions and

control its operations. The company went live with SAP R3 on February 1,

2001. It uses modules like production, materials, finance, marketing, assets,

quality sales and distribution. The ERP implementation presented a high level

of data integration. “ERP has helped the company immensely. Today nobody

asks any other department for information. One can log in and see reports

online,” says Mukesh Malhotra, DGM, Hero Honda Motors. Because of this the

company also became ready for future SCM and CRM implementations.

Supplier and Customer Relationship Management

Hero Honda had already been using the my SAP™ ERP solution for its core

applications but until January of 2004, the company continued to enter its

customer orders manually .For example, they might have ordered 100 units

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but the supplier delivered 110. In February 2004, Hero Honda began a pilot

test, bringing in mySAP Supplier Relationship Management (my SAP SRM) as

well as mySAP Customer Relationship Management (my SAP CRM), both

solutions in the mySAP Business Suite family of business solutions. For

example, to confirm that they can handle a certain variation and to confirm

that they’ll meet the delivery schedule.

The Hero Honda passport programme

The Hero Honda passport programme is one of the first of its kind in India. The

company has secured over 1 million members in the last three years with the

Passport Programme, which involves offering members a small card/booklet

that looks like the Indian passport, complete with ''visa'' stamps for points,

similar to those offered by credit card companies and airlines. The only

difference in this programme is that the member need not always spend

money to obtain points. With the passport programme, each time a Hero

Honda customer visits a service centre, he gets points and depending on the

profile submitted by the customer, he gets benefits like free passes to a cricket

match sponsored by the company.

More Value added services

In tune with effective customer relationship management, HHML has come up

with the fresh idea of mobile service workshops: a complete workshop

incorporated into trucks that travel predetermined routes, visiting small towns

and villages where existing customers reside. Customers are informed that a

workshop will be coming, so that they don’t have to travel hundreds of

kilometres to an authorized workshop for servicing or repairs. These mobile

workshops also double as sales outlets and spare-part distributors.

Keeping in touch – all year through

An effort to be in constant touch with the customers through quarterly

newsletter, "Suhana Safar". The newsletter gives an insider's view to the

company, Hero Honda Motors Ltd. along with the latest happenings in the

Hero Honda Group companies.

Special privileges – All the way

Special discounts on spares and free services for Hero Honda motorcycle along

with attractive gifts at various milestones. This is companies way of making

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sure that every time customer come to showroom for servicing the

motorcycle, they take away more than just the benefit of world class servicing

in their automated workshops.

Special Invitations

For active members of the Hero Honda Passport Program the chance of being

invited to special events like Musical nights, Movie screenings, Award shows,

etc.

Security for Customers and family

The moment customers apply for Hero Honda Passport they are automatically

covered for a free Rs.100, 000 Personal Accident Insurance policies for one

year or for three years, as applicable.

Rewards and Points Programme

All these amazing rewards and benefits come to the customer as they earn

points in the Different CRM Programme. Once become a member, they earn

points for a host of regular transactions that they conduct at their local Hero

Honda authorized Dealership or Service Centres. These include:

Purchase of Hero Honda genuine spares

Purchase of accessories

Servicing of motorcycle

Bonus points on:

Free Service

Paid service

Referrals

Star Club and Treasured Rewards

This unique club has been introduced for those members who get their bikes

serviced regularly from authorized Hero Honda Service Centres. The Star Club

membership not only identifies the member as special for the HHPP family, but

also brings in some added benefits like:

30% discount on labour

7.5% discount on spares, till the validity of the Passport

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Treasured Reward

For Passport Programme members who have crossed the 1 lakh point mark in

the Hero Honda Passport Programme. The HHPP Treasured Rewards available

at 8 prescribed milestones beginning from 1.25 lakh points and ending at 3

lakh points, with each milestone at a gap of 25,000 points. In other words, the

milestones are placed at 1.25 lakhs, 1.5 lakhs and so on till 3 lakhs. Each time a

member reaches a milestone a Motorcycle Privilege Voucher of Rs. 1250/- will

be given to him. This voucher may be used to avail a discount on the purchase

of a new Hero Honda motorcycle. This voucher is transferable and can be given

to friends or relatives who may be planning to buy a new Hero Honda

motorcycle.

SBI-Hero Honda Credit Card

Another customer service initiative launched jointly by Hero Honda and State

Bank of India is a co-branded credit card. This time SBI Cards & Payment

Services (SBI Card) has teamed up with Hero Honda Motors to offer the Hero

Honda SBI Card, the first card for the two-wheeler industry in India. SBI card is

said to be India's No 1 Visa card-issuer with over 11lakh cards issued. The co-

branded card is designed to strengthen Hero Honda's Passport Programme.

Implementation of my SAP CRM

In India’s highly competitive motorcycle manufacturing sector, streamlined

operations and effective business relations are essential. To improve

information exchange with its many partners, Hero Honda decided to

introduce leading-edge supplier and customer relationship management

capabilities. We wanted to enable our dealers and suppliers to perform online

transactions, explains S.R.Bala subramanian (Bala), vice president of

information systems at Hero Honda, and this was something that our legacy

solution could not support. Hero Honda opted for the powerful self-service

features of my SAP Supplier Relationship Management (my SAP SRM), plus the

e-commerce capabilities of my SAP Customer Relationship Management (my

SAP CRM).

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References

http://www.informationweek.in/informationweek/case-study/174643/tvs-motors-takes-dealer-

relationship-level

http://www.cxotoday.com/story/tvs-motors-implements-dealer-management-system/

http://www.dynamiccio.com/2012/03/tvs-motors-dealer-management-system-heads-for-the-

cloud.php

http://www.wallcliffssystems.com/dealer_management_systems.aspx

http://searchbusinessintelligence.techtarget.in/survey/TVS-Motor-Company-speeds-up-

operations-with-BI

http://en.wikipedia.org/wiki/Hero_MotoCorp

http://en.wikipedia.org/wiki/TVS_Motor

http://www.business-standard.com/article/companies/two-wheeler-makers-ride-high-in-may-

110060200091_1.html

http://www.hindustantimes.com/business-news/CorporateNews/Higher-royalty-for-Honda-in-

split-from-Hero/Article1-638869.aspx