Professional Documents
Culture Documents
HONDA Report PDF
HONDA Report PDF
2017-19
Submitted By:
Aakriti Gupta
2017001
Module on Procure to Pay Policy of Honda Cars” is my own work, to the best
written by another person nor material which to a substantial extent has been
accepted for the award of any other degree or diploma of any other institute,
2
CERTIFICATE
3
ACKNOWLEDGEMENT
Mukund Keshoraiya San (Industry guide) for making the resources at right time
project.
I express my gratitude to Mrs. Sweety Singh for arranging the summer training in
good schedule.
I also extend my gratitude to my Project Guide Dr. Anindita Sharma, who assisted
I would also like to thank all the faculty members of PGDM Department
advice and guidance without which this project would not have been possible.
Last but not the least I place a deep sense of gratitude to my family members and
my friends who have been constant source of inspiration during the preparation of
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EXECUTIVE SUMMARY
1.1 This report presents the findings of a study that was carried out to gain
INDIA LTD. The report also outlines the meaning of Procure To Pay Policy and
1.2 The concept of this policy starts from different step: The complete cycle of
1.3 The main objective of this study is to assess the effectiveness of this policy
implemented at HCIL. The analysis has been made on the basis of preparation of
E-Module on the P2P policy of HCIL. This module will help in the better
understanding of the policy and the 3 main powers ruling this policy.
1.4 All 3 powers lies in different authorities and approval by different authorities
according to the limit of expenses and work done. Further these steps involves
1.5 Vendor Selection „Yes‟, where multiple vendors are available for any activity
policy
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Only single vendor is available for the activity (Need to justify)
Vendor already approved for similar activity like AMC or earlier contract
is valid etc.
Annexure 2or in the format suggested by BMD and also add justification sheets
1.7 There is always 2 level check at every level of work done or payment made.
Several details on the NFA need to be filled by the user and approving authority
1.8 User will take NFA no. and submit the original copy to Admin deptt. User will
submit the fully filled payment request form (left side) to Planning/ Kanri team.
1.9 Planning/ Kanri will verify approvals as per mentioned Procure to pay process,
NFA, agreement etc. and will forward it to BMD for further processing.
payments will be paid according to the terms & conditions mentioned in the
1.11 In case of any clarification/ ambiguity, following stepwise contact points are:
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1.12 General Purchase will continue to follow their own procurement process. In
Director (GA).
This developing of e- module was much needed in the Honda because every
department was facing issues regarding the procedure of the policy and they had
The company allotted me the work to make the e- module on the policy which
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TABLE CONTENTS
1. Cover Page 1
2. Declaration 2
3. Certificate 3
4. Acknowledgement 4
7. Abbreviations 10
1.1 History 11
1.2 Logo 13
1.6 SWOT 20
8
2.2 Background of the Policy 29
3.1 Significance 54
5.1 Conclusion 63
5.2 Annexures 65
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ABBREVIATIONS
Ki - Financial year
Kanri - Planning
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CHAPTER-1
Honda Cars India Ltd (HCIL) is a subsidiary of Honda of Japan for the
Honda Siel Cars India Ltd, it began operations in 1995 as a joint venture between
August, 2012, Honda bought out Usha International's entire 3.16 percent stake
for 1.8 billion in the joint venture. The company officially changed its name to
Honda Cars India Ltd (HCIL) and became a 100% subsidiary of Honda.
HCIL's first manufacturing unit at Greater Noida began operations in 1997. Set up
at an initial investment of over 4.5 billion, the plant is spread over 150 acres
(0.61 km). The initial capacity of the plant was 30,000 cars per year, which was
thereafter increased to 50,000 cars on a two-shift basis. The capacity has further
increase in the covered area in the plant from 107,000 square meters
District of Rajasthan, spread over 450 acres (1.8 km) with an investment of 3526
crores. It operates under the ISO 9001 standard for quality management and ISO
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FOUNDER
Japanese tuning shop, Art Shokai, where he tuned cars and entered them in races.
to Toyota. The first drafts of his design were rejected, and Soichiro worked
painstakingly to perfect the design, even going back to school and pawning his
wife‟s jewelry for collateral. Eventually, he won a contract with Toyota and built
Due to a gasoline shortage during World War II, Honda was unable to use his car,
and his novel idea of attaching a small engine to his bicycle attracted much
Calling upon 18,000 bicycle shop owners across Japan to take part in revitalizing
a nation torn apart by war, Soichiro received enough capital to engineer his first
motorcycle, the Honda Cub. This marked the beginning of Honda Motor
Company, which would grow a short time later to be the worlds largest
Honda was the T360 mini pick-up truck, which went on sale in August 1963.
Powered by a small 356 cc straight-4 gasoline engine, it was classified under the
cheaper Kei car tax bracket. The first production car from Honda was the S500
sports car, which followed the T360 into production in October 1963. Its chain
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LOGO
The Honda logo depicts attractive and stylish letter ”H” inscribed in Roman style
which gives it a simple yet eye-catching look. Another feature that makes this
badge so popular in comparison with others is its bold font. Honda has various
logos for different departments. But all badges have one single basic which is
confined in letter “H”. For example, Honda motorcycles have the famous Honda
Wings badge while letter “A” can be found on the bodies of Acura autos. It
actually looks more like reversed letter “H”. Traditional badge is broader on top
and thinner at the bottom. The Honda symbol features liver-grey metallic tone that
adds inspiring and radiant look for the logo. At the same time it looks simple,
elegant and stylish. Such combination represents the philosophy of the brand
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The Three Joys (buying, selling and creating).
Honda believes that each person working in or coming in touch with our
Company, directly or through our products, should share a sense of joy through
that experience. This feeling is expressed in what they call "The Three Joys"
Management Policies
Respect sound theory, develop fresh ideas, and make the most effective use of
time.
Honda Cars India Limited (HCIL‟s) stated vision and goal is to become a
company that society wants to exist. In order to meet the expectation of the
stakeholders and the society, Honda Corporate Governance (HCG) System has
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been set up. As part of Corporate Governance system, the Business Ethics
Proposal Line (BEPL) – VIGIL MECHANISM Policy has been established, with
the aim to enable Directors, employees and Business partners to report any
GROUP OF COMPANIES
1. HONDA WORLDWIDE
Honda Motor Company, Japan with its headquarters in Tokyo, has manufacturing
satisfaction.
Apart from HMSI that manufactures 2-wheelers, the other business divisions in
India include Honda Cars India Limited (HCIL) and Honda Siel Power Products
Limited (HSPP)
Honda's latest passenger car models and technologies, to the Indian customers.
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The company's product range include Honda Brio, Honda Jazz, All new Honda
City, Honda Civic, Honda CR-V, Honda all new WR-V and Honda Accord hybrid
which are produced at the Greater Noida facility. Honda's models are strongly
associated with advanced design and technology, apart from the established
HCIL's first manufacturing unit was set up at Greater Noida, U.P in 1997. The
green field project is spread across 150 acres and has an annual production
Tapukara, Rajasthan. This facility is spread over 450 acres and currently has a
state-of the art Power train and Press shop. The first phase of this facility was
Honda Siel Power Products Ltd (HSPP) is a Joint venture between Honda Motor
Co., Japan and SielLtd.India. Currently Honda Motor Company, Japan has a 67%
India, like Portable Gensets, Portable Engines, Portable Water Pumping set and
Lawnmowers
Honda R & D ( India ) Pvt. Ltd., is a 100 % subsidiary of Honda R & D Co. Ltd.,
Japan, which is a group company of Honda Motors Co. Ltd., Japan. HRID is
Motorcycle & Power Products on the directions provided by Honda R & D Co.
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Ltd. of Japan. HRID was initially set up in India in the year 1998 as liaison office
of Honda R&D Co Ltd., Japan. Later a domestic company was incorporated in the
year 2003 to carry out R & D operations in India. Since then HRID has been a part
Honda Motor India the wholly owned subsidiary of Honda Motor Co. Ltd
formally began its operations from its corporate office in Greater Noida,
The plan to set up HMI was first announced by Mr Takeo Fukui, President and
CEO, Honda Motor Co., Ltd, during his visit to New Delhi. Formation of HMI is
Motor Vikatan
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o MOST RELIABLE / ECO FRIENDLY
AVERTISING
JAZZ
AMAZE
ACCORD
AUTOPORTAL 2017
MILESTONES
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b) DEC 23, 2016
HONDA CARS INDIA LTD. Reached the 100 million unit milestone in
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SWOT ANALYSIS
STRENGHTS
1.Competence in engine
manufacturing - company‟s core
product WEAKNESS
2.Diversified product portfolio Low investments in research
3.Dominance in motorcycle and and development (R&D) leading
engine industries leading to a high to innovative products
brand awareness
4.Strong position in Asia‟s
motorcycle markets
OPPORTUNITIES
1.Increasing government
regulations THREATS
1.Increased competition
2.Timing and frequency of new 2.Rising Japanese Yen exchange
model releases rates
4.Low fuel prices are increasing 3.Natural disasters
the demand for pickup trucks and
SUVs
20
ORGANISATIONAL STRUCTURE
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CHAPTER-2
LITERATURE REVIEW
salespeople.
The challenge
PepsiCo has over 15,000 frontline salespeople spread out across Sub-
Sahara and Europe. Almost all of their salespeople use their own device
and are in regions with poor Wi-Fi and data access. 10,000 out of their
15,000 salespeople are in Turkey, Russia and South Africa – all places
technology to deliver their training was ambitious. But for PepsiCo and
their learners, it was the difference between something and nothing – and
had to forgo or wait months to deliver. Efforts involved, travel costs, and
was cascaded down in face-to-face sessions, from the head office to the
regional and local, and then finally to the frontline managers and
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salespeople. This meant learning could get muddled and lose effectiveness.
And though all talented at coaching and assessing, their frontline mangers
weren‟t always the best teacher, and so the quality of training wasn‟t
consistent.
platform or an app that worked offline, and the two had to integrate
seamlessly
scale quickly and be cost effective to localise the platform, app and courses
The solution
PepsiCo‟s focus for their solution was on providing the right support and
tools for their markets and learners so they could make the learning their
own. By starting smart and scaling, PepsiCo was able to adapt to these
needs, and as a result, it became evident the new solution could revitalise
learning in the field while being supported and assessed by their managers.
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platform, dominKnow‟s offline app, and Kineo‟s expertise to implement
their Totara Learn and build an integration between the two solutions. The
solutions were chosen because both were easy to localise and brand and
PepsiCo‟s markets have rolled out both platform and app to learners,
means that when a course is uploaded to Totara and pathways are designated, the
course is immediately viewable to the right demographic either via the platform or
app when connected online – and can be downloaded to the app to take offline. To
use dominKnow‟s app offline, learners download courses when connected to Wi-
Fi. Results sync back to Totara Learn whenever the learner is online again.
their local markets, and also developed a process to localise courses by training
bite-sized courses, kept costs down and made learning quicker to develop and
for their learners, but it also meant that PepsiCo could meet the needs of their on-
the-go learners by ensuring learning fit their schedules and could be put into
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The results
PepsiCo‟s goal was to start smart and scale quickly so that the solution met
learner demands. Their new solution is proof that even the smallest
for sales and induction training, PepsiCo has a new learning strategy which
their learners do the theory in their own time and the managers focus on
Reaction has been positive. Managers have reported they no longer need to
focus on teaching theory and learners reported feeling more prepared for
situations in their daily work. One learner praised that „…you can easily
survey said they revisited the material regularly to improve their skills and
confidence.
As for costs and uptake, the total estimated cost per course run in 2017 is
$0.20 and 2017 has more than doubled 2016 figures for number of courses
run. Over 40,000 courses were run through the platform in the first eight
months of 2017 and another 40,000 through the app. When the UK only
had two modules live, they halved induction training from ten days to five,
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OBJECTIVE OF THE STUDY
The main objective of the study was to develop E- Module on the P2P policy for
In the big company like Honda, there occur many activities and for approval of
these activities there need to approve budget for easy completion of these
activities. These activities involve many steps from Budget approval to Payment
to the vendor. This all work is done by different authorities and users to avoid any
makes the process very technical as many annexure need to be attached and
company decided to make E-Module of this policy which will help the users for
following all steps. Honda hired a vendor who will make this E-Module, where
Intern made that vendor understand the whole policy and the requirement of the
policy.
Firstly Intern sent all the details regarding the policy and showed him some
presentations on the policy. Then, Intern made Table of Content finalized for the
policy which contains all the information required in the e- module, with the help
of her supervisor which Intern sent to the vendor for starting the storyboard.
Then, he sent the storyboard for finalizing, where Intern made some changes and
The final storyboard will be developed into an e – module which will be showed
on Honda website. The person whosoever wants to know about the detailed
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procedure involved in the policy can play the e-module from that website which
Approval company
Work requirement
Appointment
Work
including
accounting
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BACKGROUND OF THE POLICY
November 2, 2015. This policy governs all work/expenses of HCIL. There are 20
Since the time of launch of this policy in 2015, it has been observed that there
issues.
Furthermore, after rotating PDCA it has been found that some activities where
financial transaction is involved were not covered under the purview of this policy
Additionally, the current approval limits mentioned in the policy were finalized in
2009 and since then these were not revised resulting into increase in number of
proposals going to IBM. Moreover, certain activities / expenses which are regular
in nature and are required to ensure continuity of business, were covered in the
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category which mandates suitable approval (incl. IBM) and therefore was
proposed:
Scope:
Inclusion items :
Exclusion items :
separately evaluated
cars etc.
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ABOUT THE POLICY
Proposed Process:
A. Steps :
B. Basic Principle :
in
Governance.
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Minimum two level check/ verification at each step.
The detailed process, formats and mechanism of each step are explained below:
a) Process :
a) Format :
Annexure 2or in the format suggested by BMD and also add justification
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b) Procedure :
Budget review will be done at ORBT level and approved as per above
Budget Approvals, actual till date, projections for remaining period and
change points from previous event should be explained as per the above
Revision No : 02
Page No : 3 of10
Work/Expense.
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Details Category Category Category
Activity
Mandatory / Non-Mandatory /
(Extent of
Compliance Important / Regular Recurring at
need, Timing,
related varied intervals
Frequency)
Specification /
Fixed Fixed / Variable Variable
Policy
Fixed Variable
notification) Manpower)
Incomes / Earnings also need to be defined so that check & control can
be ensured.
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Operations
S.
Group Expense Type Cust.
No. Mfg BMD GA Pur Mktg. IT
Ser.
to Govt. authorities
3 Associate Travelling
4 Custom Duty
Electricity expenses to
Others 6 JVVNL /NPCL/ Electricity
Board, etc.
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Document No: HC/GA/P&S/01
Revision No : 02
Page No : 4 of10
Category ② - Work/ expenses which are regular in nature and which are
In case of Category②, since the expenses are regular in nature, Div. Director and
Category - All other work/ expenses which are not covered in Category ①or②.
earlier, but in case of projects, NFA will be valid till the completion of
project.
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In NFA, user will also select whether vendor selection is required or
Vendor Selection „Yes‟, where multiple vendors are available for any
activity
separate policy
Div. Director.
For initial approval for Work/ Expense NFA Sec. 1 to be filled by user and
amount.
SGA & Capex - Work/ Expense Approval limits (value on per annum per
activity basis)
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Un Budgeted < INR 2.0 Lakh > INR 2.0 Lakh
User will provide necessary approval for work/ expenses in Section 1 of NFA,
parameters (RFQ), probable/ existing/ past vendor details, PDCA of last year
activities, desired terms/ conditions and any other details that may be
necessary for the vendor selection co-ordinator. User may use extra sheets, if
required.
Revision No : 02
Page No : 5 of 10
The agency / person responsible for vendor selection should be different from
and transparency.
a) Process :
After taking approval in NFA Sec.1, user will propose the vendor selection
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Work/ Expense value on per annum per activity
basis
Vendor Selection
Purchasing/ CFT/ Kanri Head
Option (Any one)
Authority to decide
option
Authority to decide
members in case of
CFT (Annexure – 5)
d) Procedure: Detailed process flow chart for vendor selection through CFT is
as follows:
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Document No: HC/GA/P&S/01
Revision No : 02
Page No : 6 of 10
Note:
work.
approved by CFT.
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4. Vendor selection coordinator will keep the records of communication /
5. Members of the CFT must not have any financial or personal relationship
(as per companies act definition) with the vendor. In case of any perceived
of CFT and should not accept any CFT assignment in case any conflict of
interest exists.
Head).
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In case where Kanri team doesn‟t exist, approval will be taken by the user
from the person(s) nominated by Operating Head to act as Kanri for that
particular activity.
First approval will be taken by the user from CFT Approving Committee /
Final approval for the activity along with the selected vendor& final cost
S Approval
Amount Approving Authority
No. Document
NFA/ IOM/
1 Up to INR 50 Thousand Operating Head (OH)
E-mail
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up to INR 45 Lakh Director (Finance), In case of
Revision No : 02
Page No : 7 of10
#
b) SGA and Capex - Un Budgeted
S Approval
Amount Approving Authority
No. Document
Note:
43
Approval to be taken for final negotiated price with the vendor, along
Revision:02
with the saving/increase in the final price from budgeted amount.
In operations where both, Operating Head & Joint Operating Head are
User will take NFA no. and submit the original copy to Adminstration
department.
with clarity about the approval authority will be defined under separate
guidelines.
h) Award of Work
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Purchase Order/ Work Order / Engagement Letter / Agreement &
Contract
After taking NFA no. user can proceed for the PO/WO/Engagement
Revision:02
Letter/Agreement &
Revision No : 02
Page No : 8 of 10
Note:
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and changes/ deviations is proposed/ suggested by vendor in the
for a longer duration (1 year or more) and/or there are chances that
execution.
will be signed as per guidelines dated January 21, 2014 (Annexure 6).
Agreement/Contract.
of the EL/ Agreement/contracts the User to upload the soft copy and
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within 7 days. Accordingly, BMD will refer these EL/
Once the work / Activity has been done, it is important to ascertain the
a) Process :
1. Invoice Submission : The vendor shall submit the invoice as per the terms
department. User department shall verify the fee charged as per the work
done (quantity and quality – specs etc.) as per the Agreement/ Contract
and have 2 levels of verification along with compliance of all its terms
and conditions.
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b) Format :
Payment Request Format: User must fill the Payment Request Format
Revision No : 02
Page No : 9 of 10
Category as
mentioned in Step 2
< INR 2.0 Lakh > INR 2.0 Lakh
(Request for Work/
Expense)
By Divisional Head/
Category ①
Operating Head *
Director
guidelines – Annexure 7)
User will submit the fully filled payment request form (left side) to
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In case of any postponement of expense / capex beyond INR 1 million
and if incurred after the month in which it was budgeted, user would be
Revision:02 required to mention the reason of postponement in the request form and
get the same also approved by signatories as per the payment approval
matrix (till 1 million by divisional director and for more than 1 million by
c) Approval :
process, NFA, agreement etc. and will forward it to BMD for further
processing.
a) Checking by BMD
BMD will again check the conformance of payment request with relevant
documents and fill Payment Request Format (Right side) (Annexure 7).
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b) Advance Payments
All advance payments will be paid according to the terms & conditions
follows:
Director (Finance)
More than INR 1
Divisional Director In case of Dir. (Finance)
Lakh
Dir. (GA)
Revision No : 02
Page No : 10 of 10
Payment to Vendor
2. In case of cheque, the same will be handed over to user only after entry in
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Notes:
are :
BMD.
3. No separate approval (Budget/ NFA) for taxes incl. GST / TDS are
5. New Model evaluation having the quorum equivalent to IBM will not be
6. HGID & EGID will follow this policy for all expenses, excluding part
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7. Monthly Selling Expenses/Activity approvals taken in Seihan meeting
be incurred post approval from any two Directors, but must be ratified in
10. All expense limits are for one year. Amount cannot be broken in monthly /
11. Approvals to be taken for annual menseki amount, not for the rates.
Revision: 02
12. In case of „Out of Pocket‟ expenses, user should mention the Amount /
The above guidelines will come in effect from January 22, 2018.
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CHAPTER-3
LIMITATIONS
Intern faced lot of hurdles while working for this e- module although it is a very
The main and major problem is the time issue as everyone is occupied
with so much work and daily meetings pressure that intern gets rare time
delay of work because in a big company like Honda, once the policy is
The time of internship for this project was 2 months, which was the
biggest time constraint, because this policy minimum needs 6 months from
The other major problem was that the vendor who is making the e- module
takes lots of time for doing the work and still missed out any point which
In Honda there is the trend of making many and different versions of same
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SIGNIFICANCE
Before this e- module every department if have any query regarding P2P
policy need to come to GA for solving there queries. But after the e-
This e- module shows the reasons of making the e- module, and what can
be the issues that other operations faced. This e- module also contains
There is step wise explaination of all the information and the approving
This e- module did not make the viewer bored because there is a regular
The vital need of maker – checker is also ensured in the policy in regard to
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CHAPTER-4
METHODOLOGY
This is a descriptive form of study because there is all the conceptual information
Intern started the work from reading the past P2P policies and need of the policy.
Intern made herself clear the whole concept and why revisions are made in the
policy.
After that Intern made the Table of Content (TOC) which was required by the
vendor for making the e- module. Many versions of TOC were made to ensure
that it contains the information from beginning of the policy till the end. When the
last version of TOC was approved by all the higher authorities in Honda , it was
called final TOC and was sent to the vendor for sign off to begin its work.
Once the vendor starting working on the TOC he asked many queries about the
policy.
55
Intern tried her best to give all the answers to his queries if not she asked her
After this he sent the first storyboard, from which intern figure out many mistakes
and changes about the colours used in storyboard and many confidential errors.
I st STORYBOARD
This storyboard was made after the approval of Final TOC , to make it interesting
and not monotonous , team introduced several FAQ‟s. After the completion of the
whole e- module, there will be result marksheet showing total scores scored by the
56
viewer. If the viewer has any doubts regarding any step or process , he/ she can
57
MAJOR CONCERN AREAS
Why is a 2-level verification required in this process? Why Kanri has to verify the
invoice?
The first level of verification is done by the user. The second level of
Points to be remembered:
Head/GA/BMD/Kanri team
policy
Vendor already approved for similar activity like AMC or earlier contract
is valid etc.
58
For genpo / inter-genpo payments.
project.
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OTHER WORKS
Intern learnt a lot about the work culture in Honda and even authorized
making best use of technology by making less paper work and more
now all the NFA‟s from April‟18 have been made online and online record
is maintained.
quotes are done which Intern learnt that how to make comparisons. Some
activities are not based on all factors of QCDMS but some factors like here
the cost matters while comparing the transport quotes of specific location:
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61
CHAPTER-5
LEARNINGS
Before working for any activity, make a demo plan for that activity.
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CONCLUSION
Intern have come to the end of this course. Let‟s look at the key learning
points now:
incomes
Three powers –
activity execution
BMD - responsible for verifying the work done and approving payment to
vendor
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Intern did the work upto the Alpha version of Storyboard as there needed more
time to complete the work . Many modifications and changes will be done from
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ANNEXURES
ANNEXURE-1
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ANNEXURE-2
66
ANNEXURE-3
67
ANNEXURE-4
68
I-MANAGE SOFTWARE OF HONDA
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THANK YOU
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