Indonesia study tour: our visit to Astra Honda Motors PT
10/05/2017
![AHM Headquarters in Karawang](https://blogs.cranfield.ac.uk/wp-content/uploads/2017/05/AHM1-1.jpg)
Another long and traffic filled journey on our second day in Jakarta saw us heading to West Javea past numerous rice field plantations, specifically heading for the Karawang Plant of Astra Honda Motors PT.
Astra International was founded by William Soeryadjaya and became one of Honda’s many dealers in the region. Established in the market and well respected by Honda for being ahead of the curve, Astra International became the sole agent for Honda’s motorcycle distribution in the 1970s. By the 1980s, they were the largest and most advanced motorcycle operation in South East Asia, and to this day this remains true, with Yamaha keeping them on their toes.
It appears that Astra Honda are achieving their vision to “take a lead in the Indonesian motorcycle market band as a global player, by making dreams come true”, with a mission to “create mobility in society with the best products and services”. This is reinforced by values of putting the customer first, truly innovating, promoting teamwork, respecting others and having integrity. With an organisation of 302,000 employees, instilling these values, along with gaining buy-in to the vision and mission is a daunting task. However, having spent time with a number of employees, at both management and team member level, we saw first-hand in the manufacturing plant how they are totally aligned to the vision, mission and values of Astra Honda.
From a supply chain perspective, AHM needs to deal with very a significant complexity. The five different manufacturing sites, holding a total capacity worth around 5.3M units/year (=18,000+/day), are indeed replenished by over 160 suppliers which provide the over 2,000 parts required per single vehicle, and serve 29 dealers in the country. Besides the dealers, several outlets (e.g. spare parts outlets) are scattered throughout Indonesia, so as to serve a potential market of ~125M customers dominated for over 75%, setting AHM 54.2% market share apart from their nearest competitor (Yamaha).
Given the network complexity, and considering the constant economy fluctuations, strict sales and operations planning is paramount, along with the rigorous logistics discipline imposed to the 40+ logistics companies in place to cope with the daily Just-In-Time deliveries from the AHM plants, so as to distribute products with different lead time requirements in relation to their buffer stock, which could range between 4 hours and 40 days depending on sales turnover.
From a marketing perspective, considering the national per capita income of around 4,000 USD dollars/year and the average selling price for scooters (which contribute to 82.6% of the total sales, complemented by the other two product lines, i.e. cub and sport) of around 1,000 USD, AHM complements their products with financial services (amongst others) as a strategic asset to sustain a purchase set to last 5-7 years for their customers.
We would like to warmly thank the AHM staff for their fantastic hospitality and the incredibly insightful visit at their state-of-the-heart operations… Terima Kasih!
Categories & Tags:
Leave a comment on this post:
You might also like…
Creating Impact: Women in STEM Scholars discuss their journey and aspirations
We recently had the opportunity to catch up with some of your Women in STEM scholars to discuss what receiving the scholarship means to them, their experiences studying and living in the UK, their ...
Getting involved in outreach activities improved me as a Cranfield PhD Researcher
I spent an amazing three years as a PhD student with the Plant Science Laboratory, researching the metabolic and physiological changes in mango ripening. As a Cranfield PhD student I had many opportunities outside ...
Academic spotlight interview: Hannah Allen
From Crime Scenes to Classrooms: Hannah Allen’s Unique Path in Forensic Science “Forensics is about finding justice for victims, ensuring the guilty are prosecuted, and protecting the innocent.” Forensic Investigation MSc Course Director, Hannah ...
Automotive Engineering MSc alumnus Ghazi Raad on the impact of Cranfield on his career
Ghazi Raad is a Senior Innovation Engineer at AQA. He graduated from Cranfield University with an MSc in Automotive Engineering in 2023, after also completing a Pre-master’s in engineering in 2022. ...
Running a peer analysis in Fame
If you need to compare a UK company’s financial performance against that of other companies, Fame is a great place to start. This database contains the financial accounts of over 8.5 million public and private ...
From medical robotics to space exploration: My journey at Cranfield University
My name is Praveen Elavazhagan, and I’m from India. I recently completed my MSc in Robotics at Cranfield University, graduating in 2024. My journey to Cranfield, and now into a PhD, ...