Case Study: Royal Enfield

CAREER EPISODE – 1

a) Introduction:

Royal Enfield is the oldest motorcycle company in the world still in production and Bullet is the longest production run model. It has a rich heritage of around 50 years in Indian motorcycle industry. RE has a fabulous growth since 2012 in terms of sales and even higher in terms of profits. Royal Enfield production in the year 2012 was 1, 15,626 Vehicles, subsequently in 2013 it was 1, 81,095 Vehicles, 2014 it was 3, 07,000 Vehicles and in 2015 it was 6, 05,516 Vehicles.

To cater this increasing volume, supply chain function has to forecast the vendor’s capacity and necessary steps to be taken to assure the smooth flow of production.

CE3.1
Project Name : New Vendor sourcing for Silencer Guard.
Duration :

1. Identifying potential supplier: Supplier selection is the most critical activity of strategic sourcing. Apart from PQCD, there are several other factors to decide on the supplier selection such as Certifications, Financial health, Reputation, collaboration, customer base, Location, flexibility, Social Responsibility etc. On analyzing the suppliers based on the mentioned factors a supplier is finalized.

2. Information requests to supplier: Request for Proposal was floated to the suppliers to understand the technical expertise, specialized capability etc. Based upon the proposal, a supplier is finalized.

3. Contract terms & Negotiation process: This is the most important activity in Strategic sourcing. Contract volumes, Payment terms, and cost of the product everything will be discussed and closed. 4. Supplier evaluation: Supplier evaluation is done to monitor the performance, cost reduction, and also to drive continuous improvement.

CE3.7 Technical details of the work:
Identifying potential

So a new vendor was finalized based on various factors, and then the development phase has begun with tooling development, commercials finalization, samples submission, followed by PPAP Audit and clearance for Start of Production.

CE3.13 Your view of the overall project:

New Vendor for the silencer guard was very critical for Royal Enfield’s future production. We had initiated the development at the right time, which helped us in delivering the part at the desired time. With the support of all related teams we had completed the projects in 12 weeks (estimated time). From the project I’ve learnt that the Raw material of the part will also play a major role in the tooling development, since Physical properties of the part tends to change when they are processed. Hence based on the RM, some operations are either added or removed to get the part as per drawing.

CE3.14 How the project fared in meeting the goals/requirements:

We had predicted that the Silencer guard will be a biggest challenge for our increasing volume, so we have started the development immediately.

Estimated time: 12 Weeks
Completion time: 12