Hero MotoCorp senior officials, including Pawan Munjal, the MD and CEO took the media for a tour of their newest factory in Neemrana, Rajasthan a day before the official inauguration of the factory. Hero is already working on more plants in Gujarat and Andhra Pradesh.
The Neemrana facility is in two parts. The smaller investment is roughly Rs 300 crore in the Global Parts Centre. The GPC, as HMC officials refer to it, is to be the hub from where Hero MotoCorp supplies its dealers and service stations, the world over, with original spares. Hero says it expects the GPC to enable Hero to double its parts business to Rs 3,000 crore annually in the next two to three years.
Our tour of the GPC shows that Hero has thought long and hard about the nature and role of the facility. What it is, in effect, is a building where Hero procures and then stores parts sent to it by all of its component suppliers. Then these goods are packaged, routed and then shipped to the places from where there is demand for some or many parts to be delivered for sale to the actual Hero motorcycle and scooter users. What Hero has done is created a highly automated setup where bar-codes, bar-code readers, robots and very few humans accomplish a complicated logistics task with great speed and precision.
The Automated Storage and Retrieval System has a massive three-storey high hall, full of stacked spares. Between the rows of shelves are robots with the fork of a forklift. They move up and down the aisles putting away incoming boxes of spares and take away outgoing boxes of spares for shipping. Hero says eliminating human intervention from the process makes it error-free. More importantly, the system appears to have some amount of artificial intelligence built in so it can study trends in the orders and adapt its methods to get more efficient as time passes. Hero also has a small assembly line within the GPC which allows the few workers the GPC has to pre-pack certain components to make them more friendly for sale or shipping.
The other Rs 700-odd crore spent in Neemrana is on the manufacturing plant. This is a massive plant that has already started work. The initial capacity is 7,50,000 units per annum and Hero has already started making the HF Dawn and HF Deluxe at Neemrana. Scooters, said Munjal, will be added to the Neemrana facility soon but the long term plan is to have the premium and high-displacement motorcycles rolling out of this plant.
The plant at Neemrana is less robotised than the GPC but we did spot the odd robot forklift swishing down the corridors of the hall. The plant, which took a year to complete is being called the Garden Factory by HMC because of the amount of effort Hero has put in to make the environmental impact as little as possible. To wit, the whole roof is crammed full of 5.5 megawatts worth of solar panels that reduce Hero’s dependence on the grid. In between the panels are sheds for vegetable cultivation at an industrial scale which will be used to feed the workers in the factory canteens. Hero also says it’s likely to have a surplus of vegetables which it intends to offer to the local community as a CSR activity.
Further, the factory has lots of skylights and windows to allow as much natural light as possible and again, reduce dependence on electricity and artificial lighting. Air-conditioning, similarly, uses an efficient system that positively pressurises the factory (for less dust and contaminants) and maintains a steady 24 degree celsius. Temperature and pressure sensors ensure power consumption is maintained at an efficient level. The solar panels, in fact, power this air-conditioning system. Hero also has in place rainwater harvesting as well as a treatment plant through which Hero will recycle all the water it uses.
Speaking to the media after the tour, Munjal clarified that while the current production at Neemrana is small motorcycles and soon, scooters, the plan is to make high-end motorcycles from this plant. The first product, of course, is to be the HX250R which will be Hero’s first all-indigenous premium product.
Hero is now set to now start work on its plant at Halol in Gujarat and its sixth Indian factory, in Andhra Pradesh will go into construction next year. Hero intends to have 12 million units in installed capacity by 2020. Hero will also invest in Argentina and Brazil soon.