The growth of the Group through the years has been influenced
by a number of factors:
The Hero Group through the Hero Cycles Division was the first
to introduce the concept of just-in-time inventory.
The Group boasts of superb operational efficiencies. Every assembly
line worker operates two machines simultaneously to save time
and improve productivity. The fact that most of the machines
are either developed or fabricated in-house, has resulted in
low inventory levels.
In Hero Cycles Limited, the just-in-time inventory principle
has been working since the beginning of production in the unit
and is functional even till date. The raw material vendors bring
in the goods get paid instantly and by the end of the day the
finished product is rolled out of the factory. This is the Japanese
style of production and in India, Hero is probably the only
company to have mastered the art of the just-in-time inventory
principle.
Ancillarisation:
An integral part of the Group strategy of doing business differently
was providing support to ancillary units. There are over 300
ancillary units today, whose production is dedicated to Hero's
requirements and also a large number of other vendors, which
include some of the better known companies in the automotive
segment.
The Munjals have gone much beyond the conventional definition
of ancillarisation, making it a point to extend technical and
managerial support to these ancillaries. These ancillary units
are manned by friends, relatives, ex-employees or close associates
of the Munjal family since the Group patriarch, Mr Brijmohan
Lall, "… never wanted to march alone."
Employee Policy:
Another Striking feature within the Hero Group is the commitment
and dedication of its workers. There is no organised labour union and family members
of employees find ready employment within Hero. The philosophy
with regard to labour management is "Hero is growing, grow
with Hero."
When it comes to workers' benefits, the Hero Group is known
for providing facilities, further ahead of the industry norms.
Long before other companies did so, Hero was giving its employees
a uniform allowance, as well as House Rent Alowance (HRA) and
Leave Travel Allowance (LTA). Extra benefits took the form of
medical check-ups, not just for workers, but also for the immediate
family members.
Dealer Network:
The relationship of the Munjals with their dealers is unique
in its closeness. The dealers are considered a part of the Hero
family. A nation-wide dealer network comprising of over 5,000
outlets, the Munjals have a formidable distribution
system in place.
Sales agents from Hero travels to all the corners of the country,
visiting dealers and send back daily postcards with information
on the stock position that day, turnover, fresh purchases, anticipated
demand and also competitor action in the region. The manufacturing
units have a separate department to handle dealer complaints
and problems and the first response is always given in 24 hours.
Financial Planning:
The Hero Group benefits from the Group Chairman's financial
acumen and his grasp on technology, manufacturing and marketing.
Group Company, Hero Cycles Limited has one of the highest labour
productivity rates in the world. In Hero Honda Motors Limited,
the focus is on financial and raw material management and a
low employee turnover.
Consolidated Family Business:
The Hero Group is a strong family run business - there is no
other Group that has so successfully managed to stay together
for nearly 50 years. The system is to bring in any new family
member, coming of age, within the fold of the existing business
or set him up in a new business. The third generation is
already actively involved in existing as well as the new initiatives
within the Group. The Group's future is being consolidated with
the same zeal by the second and the third generations of the
family, aided by workers who typify the hardy spirit of the
Punjab.
Diversification:
Throughout the years of mammoth growth, the Group Chairman,
Mr Lall has actively looked at diversification. A significant
level of backward integration in its manufacturing activities
has been substantial in the Group's growth and led to the establishment
of the Hero Cycles Cold Rolling Division, Munjal and Sunbeam
Castings, Munjal Auto Components and Munjal Showa Limited amongst
other component-manufacturing units.
Then there were the expansion into the automotive segment with
the setting up of Majestic Auto Limited, where the first indigenously
designed moped, Hero Majestic, went into commercial production
in 1978. Then came Hero Motors which introduced Hero Puch, in
collaboration with global technology leader Steyr Daimler Puch
of Austria. Hero Honda Motors was established in 1984 to manufacture
1000 cc motorcycles.
The Munjals also took a foray into other segments like exports,
financial services, information technology, which includes customer
response services and software development. Further expansion
is expected in the areas of Insurance and Telecommunication.
In Conclusion:
The Hero Group's phenomenal growth is the result of constant
innovations, a close watch on costs and the dynamic leadership
of the Group Chairman, characterized by an ethos of entrepreneurship,
of right attitudes and building stronger relationships with
investors, partners, vendors and dealers and customers.
