If bikes and mopeds are the engines, then IT is the fuel that powers growth in Kinetic Engineering. Srikanth R P says IT is at the very core of Kinetic’s strategy

P V Deshpande believes that IT is not just about technology—it is a strategic investment

Information technology has always been an area of focus for automotive manufacturers. In line with the global trend, in India too, we have numerous examples like Maruti, Mahindra & Mahindra and Hero Honda. But among other automotive sectors, the Indian two-wheeler segment has been the most exciting of the lot and is now experiencing rapid growth.

Today, India is the second largest two-wheeler market in the world and is expected to cross the 10-million volume mark in the next seven years from the current level of 3.5 million units. Though volumes are huge, competition too is intense and here IT plays a crucial part.

Like its peers, Kinetic Engineering has IT at the very core of its strategy. If its bikes and mopeds are the growth engines for the company, then IT is the fuel that powers this growth. Says P V Deshpande, general manager, ISD, Kinetic Engineering, “Today information technology is not just about technology—it is a strategic investment. Our group’s IT strategy attempts to use technology to achieve higher productivity and planning of the four Ms of enterprise resources—man, money, material and machines, to their best synergistic value.”

The way it started
IT was introduced in the Kinetic group more than two decades back for two simple reasons—better utilisation of resources and improved productivity. High cost of computer hardware forced Kinetic to use computing facilities on a rental basis initially. Over the years, as hardware costs dipped, the group started acquiring its own hardware. To start off, in 1987 Kinetic purchased Microvax-2 from Digital with DEC-10 operating system with 20 odd terminals installed at its head office in Pune.

Around the same time, as the size of data handled was becoming voluminous, Kinetic decided to use Oracle RDBMS. Simultaneously, application systems in functional areas such as materials, finance, payroll, share accounting were implemented in Oracle 5 and COBOL. In 1990, the company switched to Unix-based servers to cater to the increasing need for computing power. Also, with the advent of new technologies, Kinetic decided to migrate from a central computing model to a client-server environment.

Network
Kinetic manufactures a wide range of mopeds, scooters and motorcycles that have been hugely popular in the country. The company has four manufacturing plants with a capacity to manufacture more than four lakh vehicles per year. Besides catering to the domestic market, the company also exports vehicles to countries like the USA, Canada, Sweden and Latin America.

Kinetic currently, has operations spread across four plants, 12 depots, 400 dealers and around 500 vendors. At its plants and the head office, the company has installed database servers from Sun and IBM, networking components from Cisco and 3 COM. Each location has also got its own team of software engineers to develop and implement systems. This team has been responsible for creating integrated application systems in functional areas of manufacturing, materials, finance, sales and distribution, service, human resource management and share accounting.

There are also no bandwidth issues as the LAN has a fibre optic backbone established at each location. The WAN is supported by 64 Kbps leased lines. Internet access is provided on demand to users and analysis of e-mail and Internet usage is done to avoid unwanted traffic on the network. Kinetic also extensively uses solid modelling tools like IDEAS and 3D modelling tools for product design and development, which have cut significant time in developing new product prototypes.

Adds Deshpande, “As a common RDBMS, Oracle is used at all locations, there are no problems in incorporating data generated at one location at other.

Intranet applications provide a comprehensive view of data across the group companies to such functions. With a VPN in place, which ensures security, our database at the headquarters is automatically updated on the latest production status against plans. The result is that our sales team has information on dispatches, and buyers can query on critical material receipts and stocks.”

The MIS system in each of the functional areas helps the management in making, carrying out and controlling decisions. The MIS is management-oriented and it is based on appraisal of management needs and overall business objectives. With the help of this system, the management can actively direct system development efforts and ensure that it is integrated to give a comprehensive picture of the interlocking subsystems that operate within the group companies.

Kinetic also uses barcode systems to track vehicles during manufacturing and dispatch. The implementation of bar code systems in vehicle tracking has improved efficiency as well as data accuracy. Bar code stickers are printed and pasted on chassis and engine. These are then scanned and punched on the frame body and engine. Further, the same stickers are scanned during the process of vehicle roll down, QC clearance and dispatching. The automatic and accurate data capture has ensured an increase in efficiency.

Moreover, the company is into video conferencing tools extensively. Deshpande elaborates: “To cut down on precious travel and time costs, video conferencing systems from Polycom are used. By virtually shrinking multiple conference rooms at different locations into one, video conferencing tools have helped to take decisions in hours that earlier used to take weeks.”

Kinetic Online
Being one of the largest two-wheeler manufacturing companies in India, Kinetic found that the interaction between its huge sales network of dealers and depots by traditional means like telephone or fax was proving to be time-consuming and expensive. To solve this problem, the company launched ‘Kinetic Online’—an online system, which facilitates quick interaction between its production and sales departments.

Explains Deshpande, “Kinetic-Online is the Internet-based system for our sales and distributions operation. It helps dealers to place orders for vehicles and spare parts and remain updated on the status and dispatch details, view statement of accounts, status of sales promotion claims, finance company documents, register warranty cards, and to report secondary sales and stocks. For depot operations, Kinetic has developed an in-house package to load stock transfer data, generate invoices, update stocks and forward data to headquarters.”

Benefits
The Kinetic Online system has facilitated proper flow of information on stock status, spare parts availability, order, flow and status. In addition, dealers can simply log on to Kinetic Online and place fresh orders at the factory or depot as per customer requirements in terms of colour and model. The system also aids dealers in learning about the statement of accounts with the company, invoices raised by the company, status of vehicle requisition, status of hire purchase documents as well as information about weekly and monthly sales and stock. With the availability of the system, the company has seen improved availability of products and reduced inventory levels at the dealer level. Also, administration costs due to telephone and faxes have come down significantly.

The way forward
Three years back Kinetic Engineering acquired Kinetic Motor Company. Hence, though the systems are similar, there are cases where re-engineering of business processes are required. The company is in the process of completing these initiatives. Kinetic also plans to implement a supply chain management solution which can connect all its units and vendors. Also, Intranet applications which are currently only for marketing and sales departments are being developed for all other functions.