Title

Transforming spare parts division warehouse into a profit center - a case of warehouse at Atlas Honda limited

Author

Farhan Saleem

Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

Spring 2018

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Keywords

Warehouses--Management | Business logistics | Profit | Atlas Honda

Executive Summary

It is a well-established fact that the economy of Pakistan is getting better, slowly and gr Many micro and macro indicators can be analyzed to support the fact. Pakistan is the 6th populous country of the world, its GDP rate is growing, inflation and interest rates are stable, middle class is increasing and rising, infrastructure and road network is strengthening, while spending habits of consumers is changing from common products to brands. study was conducted to know more in depth about the SPD warehouse operations. First of all, the TOR's were finalized and it was decided that out of all sections, mainly warehouse shall be analyzed. Secondary research was conducted by collecting facts about Pakistani Economy from various resources along with literature review of warehouse related articles. Existing data of SPD regarding organization structure, operations and business distribution were also gathered and analyzed. In parallel, questionnaires were developed for all stakeholders (Warehouse workers, management, sales and operations team) to conduct the primary research. The intent was to collect the feedback for particular areas, like Operations, Planning, and Organization etc. Total 94 stakeholders filled these questionnaires across national level. The data were collected and Transforming Spare Parts Warehouse into Profit Center at Atlas Honda Limited analyzed, thoroughly. The analysis of Questionnaire from Warehouse Workers revealed that 80% of labor is temporary; mostly having shorter experiences (Less than a year). Also, 90% manpower is of junior position which has limited chance of training, no guidance from top and having low morale due to minimal salary structure. Analysis on Questionnaire from Warehouse Management highlighted a few troubled areas; Resource mismatch being the most severe one. It was found that 44% management looks after dispatch area where the work force is 5% of total worker strength while 11% management staff looks after Stacking Area, which is the core operational area. Secondly, the planning side is very weak with no long term business plan. The budget of warehouse comprises of Operational Expenses with lesser focus on future expansions. Warehouse management considers that Lay out is the root cause of slower operational efficiency along with lack of communication with stake holders. Since, sales team is the direct customer of warehouse, so the results obtained from their questionnaire are important and worthy. Sales team shares their work load by declaring that 30% territories comprise of more than 100 dealers in their network while 52% territories claim that the average number of complaints is more than 10 that touches to 40, often. In parallel, Missing of Parts is the main complaint along with Later Arrival being the second. Sales team feels that the operations of warehouse need to be re vamped along with addition of new warehouses as 72% territories share the warehouse locations. Lastly, the questionnaire from Operations team highlighted that the lack of communication and no common long term plans are the root causes of slow growth. Based on the above conclusions, a few recommendations are suggested. From Organizational point of view, the re-structuring is proposed along with establishment of KPI's for warehouse. Some mechanism should be introduced so that a particular percentage of temporary workers could be converted to permanent work force. Also, a common business s tan must be made comprising., of future expansion, new business needs and modalities of operational improvements. Lastly, from reach or lay out point of view, establishment of new warehouses should be linked with area wise potential along with continuous up gradation in line with modern techniques and best practices.

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