ARMY INSTITUTE OF BUSINESS ADMINISTRATION (AIBA, AN INSTITUTE OF BUP)

Knowledge is Power

Term Paper: Production & Operations Management of Nitol Motors (Service)

Couse Name & Code: Production & Operations Management (OMT 6301)

Submitted/Prepared By: Submitted To/Prepared For:

Md. Tanzimul Islam Murshida Rahman
ID: M8190C007 Lecturer
Semester: 5th, Batch: 8th Army IBA, Savar, Dhaka
Program: MBA

Date of Submission: December 4, 2020

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 Table of Contents

Executive Summary.....................................................................................................................3
Chapter-1: Introduction .............................................................................................................3
1.1 Background of the study: ........................................................................................................3
1.2 Objective of the study: ............................................................................................................4
1.3 Methodology of the study: ......................................................................................................4
1.4 Limitations of the Study...........................................................................................................4

Chapter-2: Operation & Management of Nitol Motors Ltd......................................………..5

2.1 History of Nitol Motors Ltd:....................................................................................................5
2.2 Introduction to Operation & Management of Nitol Motors Ltd:………..…………………...5

2.3 Competitiveness, Strategy, and Productivity………..…………………………………….....6

2.4 Forecasting …:………..……………………………………………………………………...7
2.5 Strategies Capacity and Location Planning for Service of Nitol Motors Ltd………………..7
2.6 Quality Management of (NML Service):…………………………………………………….8
2.7 Warehouse & Inventory Management: ……………………………………………………..10

Chapter-3: Findings and Challenges of NML................................................…………………12

3.1 NML Service Operation Practice…………………………………………………………......12
3.2 Findings and Challenges of NML Service Operation………………………………………...12

Chapter-4: Conclusion & Recommendations .........................................……………………...13

4.1 Conclusion.................................................................................................................................13
4.2 Recommendations.....................................................................................................................13

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Executive Summary:

This short term paper deals with the operation management of Nitol Motors Ltd. It is the flagship
company of the Nitol-Niloy Group, has been a Tata Motors’ partner since 1988. Today, it is the
largest distributor of Tata Motors in Bangladesh, and the most dominant player in the country’s
commercial vehicle market with over 70 percent market share. NML offers customers the largest
sales, service and spare parts network in the country. Over the years, the organization has expanded
its activities into different sectors on order ensure excellence in service to the customer. Because
of its continuous diversification the organization has shaped itself as a true conglomerate from its
original identity as transport based organization. The height achievement and organizational
growth has possible only for excellence management practices. In this term paper we are going to
cover NML service activities operation as well as management process. After vehicle sells service
team has to ensure customer satisfaction refer to the various process. Customer satisfaction playing
a major role to keep customer retention. Because a satisfy customer will bring another new
customer to the organization. As service organization here included various department
involvement. Likewise Accounting, Finance, Operation, Quality, spare parts & warehouse
management, service marketing, MIS and IT system as well as HRM. To achieve customer
satisfaction and smooth support supply & demand chain process working very well. Finance is
responsible for securing financial resources at favorable prices and allocating those resources
throughout the organization, as well as budgeting, analyzing investment proposals, and providing
funds for operations. And service marketing is responsible for assessing consumer wants and
needs, and selling and promoting the organization’s goods or services. In the similar way NML
service is responsible proper maintaining & managing in order to ensure customer satisfaction.
All together make customer happy. This paper will gives some insights about operation &
management process of automobile trading company. After scrutinizing service operation &
management process we will give some recommendation based on the findings.

Chapter-1
Introduction

1.1 Background of the study:

The purpose of this study is to determine ‘how to work operation & management process of
an organization’, which is more fruitful & effective to learning and enhancing knowledge. This
report is done as a partial requirement of the completion of fifth semester of MBA program.

This report will give some insights about finance & accounting process, supply & demand
process, operation & management process as well as quality management, service forecasting
including service marketing which will increase practical knowledge as well as field
experience..

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1.2 Objective of the study:

The primary objectives of the report are:

 To fulfill the partial requirement of the MBA fifth semester course.
 To know about the operation & management process.
 To know organizational operation process & procedure at grassroots level.

1.3 Methodology of the study:

The methodology of the study is to get overall idea about operation & management process of
service organization in the automobile industry. How an organization working & growing up
rapidly inside and outside of the country. This information of this report has been collected from
two sources; Primary and Secondary

Primary Source:
 Operation & management physical practice of Nitol Motors Ltd Service.
 Previous year annual report and training PPT.

Secondary Source:
 Website of Nitol Motors Ltd (Service)
 The prospectus, Catalogs and ppt made by Nitol Motors Ltd (Service)
 Article & newspaper

1.4 Limitations of the Study:

During the study I have faced some others limitation which is given below.

 Officials deny disclosing some information for the reason of confidentiality.

 Difficult to collect the information from various personnel for their job constraint.
 Report writing besides official job is assumed to be extra task which needs time and
attention.

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 Chapter-2
Operation & Management of Nitol Motors Ltd.
2.1 History of Nitol Motors Ltd:

A dynamic young man Abdul Matlub Ahmed founded Nitol Motors Ltd in 1983. He has graduated
from Oxford University in 1972. After liberation war in Bangladesh He came back to reform the
country in spite of having offer from World Bank, IMF and other renowned organizations. Very
firstly he started distributing Trucks in Bangladesh. Beginning in the early 1980s, NML started
commercial ventures through the import of vehicles from England and Japan. In 1983, "Nitol
Motors (Pvt.) Ltd" has become an institutionalized form. In 1985, the company got the dealership
of India's leading automobile company "The Hindustan Motors Ltd". In the continuation of
development, in 1989, the institution received the sole distributorship in BD of TML. In 1991,
NML & TML Jointly opened a new dimension in the transport sector of BD. Currently it has 70%
market share in the automobile sector in Bangladesh. It has 75+ sales office, 70+ recovery office,
67+ service center and 600+ spare parts outlet shop to ensuring customer satisfaction by getting
any facilities.

2.2 Introduction to Operation & Management of Nitol Motors Ltd:

Operation management is a process in a business area which concern production of goods or

service and involves the various activities to ensure efficient business operation. Nitol motors
limited is sister concern of Nitol Niloy Group. This organization has some department which are
responsible for specific area. Likewise, accounting department are responsible for recording
financial transactions pertaining to a business. The accounting process includes summarizing,
analyzing and reporting these transactions to oversight agencies, regulators and tax collection
entities. Finance department responsible for securing financial resources at favorable prices and
allocating those resources throughout the organization, as well as budgeting, analyzing investment
proposals, and providing funds for operations. IT department responsible for the architecture,
hardware, software and networking of computers in this company. Quality assurance department
to ensure profit margins by reducing inefficiencies, operations errors and product defects. In
addition, the purpose also must include proactively improving capability and capacity of
operations through new methods, tools or skills. The HRM department is responsible for hiring
and firing employees, training workers, maintaining interoffice relationships and interpreting
employment laws. The warehouse & inventory management focuses only spare parts stock,
inanition warehouse management involves managing employees and supply chain management,
shipping or freight personnel operating in the warehouse environment. Warehouse processes cover
the internal movements and storage of spare parts within and outside warehouses. The Operations
management covers both strategic and tactical activities for smooth operation as well as achieve
organizational goal by continuous growth. For example, NML senior management take strategic
decisions and development as well as planning. Middle management and supervisory staff
concerned with tactical issues including service activities, equipment selection, manpower
utilization, customer awareness, meet & greet program & others which are related customer
services. At an operational level, focus on activities like Service scheduling, stock processes and
parts handling, quality control and maintenance policies etc.

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 Organogram of Nitol Motors Limited (Service)

Director Board

CEO

Accounts' Finance Admin & HR Technical Operation Warehouse Quality IT

Management Management Management Management Management Management Management Management Management Management Management Management Management Management
Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff

Worker Worker Worker Worker Worker Worker Worker Worker Worker Worker Worker Worker Worker Worker

2.3 Competitiveness, Strategy, and Productivity:

Competitiveness in an important factor of any organization. Its rivals in attracting customers and
defending against competitive forces. Nitol Motors ltd service Competitiveness advantage are
included here,

a. Brand Value
b. Competitive Price with Good Quality Vehicle
c. Low Maintenance cost of TATA Vehicle
d. High Performance
e. Availability of spare parts.
f. Nationwide Superior customer service
g. Skilled Manpower

Strategic Planning
Nitol Motors Limited management focus two type planning for organizational growth. Short term
strategies planning and long term planning. The short term planning is increase market share 70%
to 85% with customer satisfaction. The long time planning is keeping leading position around the
country by providing quality work to the valued customer. Because the organization believes that,
customer is everything, without them the organization is nothing. In order to this mission NML
always giving first priority to their customer to achieved satisfaction.

Productivity
Skilled manpower is an asset any organization. That is why NML management focus skills
development & training for every employee. It is compulsory to attend training program once in a
year for employee skills development and performance output. Because productivity playing
important role to achieve organization goal. It is an index which measure effective use of resources,
Usually expressed as the ratio of output to input. Although productivity is important for all
business organizations, it is particularly important for organizations that use a strategy of low cost,
because the higher the productivity, the lower the cost of the output. As service organization NML
focus on their labor productivity and machine productivity as well as multifactor productivity.

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2.4 Forecasting
Forecast is a statement about the future value of a variable of interest. It is a basic input to make
future decision. The operation management cannot overlook forecast planning. Its gives insights
in future business trend based on the previous & current date. In order to decision making and
organizational growth NML every department has working forecasting in their individual areas.
Forecasts affect decisions and activities throughout an organization, in accounting, finance, human
resources, marketing, and management information systems (MIS), as well as in operations and
other parts of an organization. Here are some examples of uses of forecasts in business
organizations:

Accounting Forecasting. Cost estimates, profit projections, cash management

Finance. Equipment replacement or new purchases needs, timing and amount of funding arranging
purpose making forecast.

Technical Operations. NML management has schedules work, capacity planning, work
assignments and workloads, inventory planning, make-or-buy decisions, outsourcing, project
management purpose making forecasting.

In the similar way, HR, marketing and MIS department making their own forecasting to ensure
continuous growth of NML organization.

NML technical management basically used 3 approach for forecasting.

a. Naïve approaches
b. Moving average approach
c. Exponential weighted moving average approaches
Others department making forecasting in different approaches based on their nature of work.

2.5 Strategies Capacity and Location Planning for Service of Nitol Motors Ltd.

Currently NML has 70% market share around the country in Bangladesh. As per the customer
demand NML expand their brunches to fulfill customer demand in order to customer satisfaction.
67+ service point, 70+ sales office, 75+ Recover office and 600+ parts retail shops. NML has
service network expansion which team analysis area wise, market share, vehicles sales volume and
then forecast up to next five years sales volume considering the external factors, then make
feasibility study. If the feasibility study give positive outcome then NML organization open a
brunch office. Otherwise for customer satisfaction purpose NML has 4 mobile service workshop
van, 50+ ATM Service Van and 100 motor cycle mechanic they are always ready to serve customer
prompt support.

In mathematical term NML analyze their existing workshop capacity efficiency & utilization.

Efficiency = (Actual vehicle attend / Effective vehicle attend capacity) X 100%

Utilization = (Actual vehicle attend / Design vehicle attend capacity) X 100%

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2.6 Quality Management of (NML Service):

Quality management is a process which determine quality policy, create & implementing quality
planning, improvement to meet customer expectation. In the same way NML service team has
quality policies, process and implementing method to assure customer expectation.

NML Quality Policy

Nitol Motors Ltd. (Service) will strive to achieve excellent in maintenance and repair of TATA
Commercial vehicles through Quality Management System in compliance with applicable
statutory and regulatory requirements. Company is committed to adhere and continually improve
the effectiveness of quality management system and apply the same to improve customer
satisfaction level.

Quality Objectives:
a. To Achieve Customer Satisfaction Index from 70 to 85 in 2020.
b. To reduce average customer complaint resolution time 10 days to 3 days in 2020
c. To Achieve Vehicle Attendance of 2.3 per bay per day from 2.25 in 2020

Currently NML organization maintain two standardization for quality management.

a. ISO 9001:2015 quality management system
b. BSTI quality management system

The following tools and techniques are used for improvement of productivity and quality
management.
a. Kaizen 5S

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b. PDCA Cycles

c. Cause-and-Effect Diagram

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 d. Quality Check Sheets

e. Quality Circles.
f. Flowcharts.
g. Pareto Analysis

2.7 Warehouse & Inventory Management:

NML has largest warehouse in Bangladesh in the automobile industry. Warehouse team always
update inventory system once in a month. As well as make parts order to TML considering the
safety stock. Total inventory system done by online software which is given below.

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 Warehouse Management maintain their safety stock by EOQ analysis.

In addition, Warehouse Management maintain deferent type of analysis, Likewise ABC & VED
Matrix Analysis, FMS Analysis.
A-items are goods which annual consumption value is the highest. The top 70-80% of the annual
consumption value of the company typically accounts for only 10-20% of total inventory items.

C-items are, on the contrary, items with the lowest consumption value. The lower 5% of the annual
consumption value typically accounts for 50% of total inventory items.

B-items are the interclass items, with a medium consumption value. Those 15-25% of annual
consumption value typically accounts for 30% of total inventory items.

ABS Analysis on # Item Qty

Matrix V E D ABC & VED Matrix Analysis
A 5 8 5
B 8 2 6 Matrix V E D
C 16 159 149 A AV AE AD
B BV BE BD
ABS Analysis on # Item Value C CV CE CD
Matrix V E D
A 44% 17% 16% Group 1 AV+BV+CV+AE+AD
B 8% 2% 3% Group 2 BE+CE+BD
C 1% 6% 6% Group 3 CD

ABC & FNS Analysis format which are used to NML management.

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 Chapter-3
Findings and Challenges of NML

3.1 NML Service Operation Practice

Services are intangible in nature and intangibility of services is derived from the fact that we cannot
see or touch a service. There is no precise standardization method for services. Nitol Motors Ltd
tries to provide best level of value added services through modern technology, onsite support,
campaigns. Nitol Motors Ltd is taking many initiatives for the customer satisfaction like quick
service, post-delivery feedback, and on-site services. Customers aren’t getting same and quality
service at all remote areas. Spare parts price is higher compared to local parts. Modern equipment
and tools are not available all service centers like two post lift, hydraulic crane, battery charger
etc. Delivery is an important issue to the customers but sometimes vehicles cannot deliver within
committed time due to unavailability of spare parts and work extensions. Sometimes mechanics
are not use personal protective equipment such

as helmets, gloves, eye protection that indicates the risks at workplace as well as unhealthy work
environment. Employees are not sufficient knowledgeable and skillful with modern technology on
(Bharat stage) BS-III & BS-IV vehicles such as ABS system, Common rail, retarder etc. Drivers
are sleeping in vehicle cabin who are coming from rural areas. Most of the vehicles are Bharat
stage (BS-II) norms which are not environment- friendly. Also it is found the survey report is that
the customer satisfaction level is high as Nitol Motors Ltd has sufficient service centers. On the
other hand customers also complain that the service facility at remote areas are very poor.

3.2 Findings and Challenges of NML Service Practice:

As service intangible, It is observed some factors are difficult to measure likewise how much
customer satisfy, there is not any numeric values, Customer always want more & more. When
customer will not get anything then he will get demotivated. However NML aim is to fulfill
customer demand as much as possible. Some other issues that stand as challenges are mentioned
below:

 Dissatisfied customer handling is not same for every employee

 Taken accountability at decision making management.
 New challenges acceptance like this upgraded & modern technological vehicle
 Increase communication and misinterpret the information.
 Lack of knowledge, training and equipment’s for upgraded & modern technological
vehicle
 Wrong selection of team leader as well as motivator.
 Increase communication and misinterpret the information.
 Documentation practice at grassroots level.

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 Chapter-4
Conclusion & Recommendations
4.1 Conclusion:

This paper covers almost all the major types of after sales activities, satisfaction level of customers
and highlighted some major weaknesses of Nitol Motors Ltd. Large service, sales and spare parts
retails network make the Nitols Motors as a market leader of automobile industry in Bangladesh.
After sales service activities is one of the most imports tools to keep touch with customers and
sustain in today’s markets. The company wants to establish itself as a benchmark company in
Bangladesh by after sales service activities. The Company is trying to provide best service to their
customers and constantly working to improve its service quality through competitive study and
customer feedback in order to maintain competitive edge. To gain this reputation, the company
needs to focus more value added service and communication initiatives to their customers that the
company is undertaking.

The study shows that customers are moreover satisfied in the quality and value added service of
NML. But they are showed their dissatisfaction level on remote areas service facilities. In this
study also identified some major weaknesses of Nitol Motors and some mentionable weaknesses
are costly per hour labor rate, unavailability of spare parts etc. Also trying to give some
recommendations to improve the service quality of Nitol Motors Ltd. It becomes quite clear that
there is no other alternative or short cut to the improvement of service quality and to overcome the
weaknesses. If the company has to meet the challenges of technology. Technical skill, special tools
for updating the after sales service quality then the customers must enjoy these types of services
and it would be trustworthy to the customers. As it is recognize fact that we can’t survive in
tomorrow with yesterday’s method; hence the continuous improvement of service facilities is the
prime requirement for this organization. It have to be realized that if the after sales service of any
organization is up to the mark and able to gain the customer reliance upon their company, than it
will surely help to boost up the sales of that product.

4.2 Recommendations:
The following recommendations are should be develop to ensure higher customer satisfaction:

 Give importance on the commitment.

 Communication with customer
 Labor cost decrease for customer service vehicle
 Spare parts availability in remote area
 Trained and skilled based manpower development for new technological vehicle
 Drivers facilities increase for their motivation

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References:
1. http://www.nitolmotors.com/
2. https://www.tatamotors.com.bd/about-us/
3. http://www.nmlservice.com.bd/index.html
4. https://www.slideshare.net/fbafahad/nitol-niloy-group
5. https://www.slideshare.net/MdRafiqulIslam20/final-presentation-for-successful-story
6. https://www.slideshare.net/imranhossain31/super-brand-66628843

End

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