1. Iqra University
Gulshan Campus

2. Submitted to:
Ms. Ambar Raza
Dated: December 5, 2008
Submitted by:
Sheema Raza – 12936
Sheraz Hussain –
Sidra Moin – 2817
Mona Sakhawat –
Naima Maniar – 2462
Shehla Ejaz – 12247
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3. FOREWORD
The findings essentially highlight all management functions being practiced
at Hinopak with some recommendations in the end, as desired by you.
Moreover, this report also reflects the impact of the crude industry of the
commercial vehicles on the management decisions of Hinopak. The basis of
this report has been company promotional material, company website and
necessary inputs from few existing managers.
We are grateful to you (course facilitators Ms. Amber Raza) for providing us
insightful guidelines and essential concepts regarding major features of
management that really worked like a catalyst to materialize this report. We
may not also forget the courtesy, knowledge, guidance and great piece of co-
operation from management of Hinopak Motors Ltd. We are also much
obliged to Mr. Azher ul Ehsan, D.G.M Engineering & Development Division,
Mr. Syed zafar Ali, D.G.M Production Division, Mr. Mehmood Ahmed Khan,
Manager Technical & Product Compliance for being so instrumental in their
value added guidance, whenever needed, while shaping up this report.
Although we left no stone unturned to have an exhaustive study and prepare
a comprehensive report on the said topic. Nevertheless, we would be glad to
furnish any additional information or supporting documents to further clarify
your queries in the report.
Dear Madam, the report is strictly confidential and most of it should not be
copied or reproduced without prior permission of HinoPak Motor Company
Limited.
We hope that the report prepared is up to your expectations and look forward
to the same kind of support and valued guidance from you in future.
Sincerely,
Sheema Raza
Sheraz Hussain
Sidra Moin
Mona Sakhawat
Naima Maniar
Shehla Ejaz
Page 3 of 39

4. CONTENTS
• EXECUTIVE SUMMARY
• COMPANY PROFILE
 COMPANY'S HISTORY
 HPML MARKET SHARES
 HPML SHARE HOLDING
 MARKET SHARE IN DIFFERENT CATEGORIES
• PRACTICE TO IMPROVE PROCESS EFFICIENCY
 To avoid 3Ms
 KAIZEN
 5S ACTIVITIES
 BCG GROWTH-SHARE MATRIX PORTFOLIO STRATEGY
APPROACH
• GOAL FORMULATION & PLANNING
 PLANNING PROGRAM
 MISSION
 VISION
 MILESTONE
 OBJECTIVES
 GOAL FORMULATION
 DEVELOPING STRATEGIES
∇ Increase of sales volume
∇ Smooth introduction of the new model series
∇ Cost reduction
∇ Profitability of Body Manufacturing Plant
∇ Enhancement of after sales service
∇ Enhancement of quality assurance
∇ Promotion of zero accident minds among all
fellows
∇ Safety hazard
• ORGANIZING
 ORGANIZATION STRUCTURE
 DECISION MAKING APPROACH & STYLE
 ORGANOGRAM
 TYPES OF DEPARTMENTALIZATION
 VERTICAL CO-ORDINATION
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5.  DEPARTMENTALIZING
 ORGANIZATIONAL FUNCTION
• FINANCIAL PROJECTIONS
 BUDGET PLAN
 OPERATING RESULTS
 SALES REVENUE
 GROSS PROFIT
 DISTRIBUTION AND ADMINISTRATIVE EXPENSES
 OTHER INCOME & EXPENSES
 CAPITAL EXPENDITURE
 CASH FLOW
 STATEMENT OF VALUE ADDITION
 DISTRIBUTION OF VALUE ADDITION
 SOME FINANCIAL HIGHLIGHTS
 OPERATING PROFIT
 TOTAL ASSETS
 SHARE PRICE CLOSING
 EARNING PER SHARE
 INVESTORS INFORMATION
• LEADING
 MOTIVATION
 COMMUNICATION
∇ Methods used for communications
∇ Meeting
∇ Importance of communication in organization
 DISCIPLINE
 GROUP DYNAMICS
∇ Situations in which groups are superior to
individuals
∇ Groups are performed better than individuals
• CONTROLLING
 FEEDBACK MECHANISM
 CONCURRENT SYSTEM
 CONTROL MECHANISM
 WORK PLACE PRIVACY AND WORKPLACE VIOLENCE
 TOTAL QUALITY MANAGEMENT
 INVENTORY CONTROL
 INTRODUCING ERP
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6.  ISO IMPLEMENTATION
 INTERNAL AUDITING
• CONCLUSIONS & RECOMMENDATIONS
• GLOSSARY
• OTHER REFERENCES
• APPENDIXES
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7. EXECUTIVE SUMMARY
Hinopak Motor Limited has been a market leader since 20 years. In 2007, with
the market share of 56% it became the most sought vehicle company in the
country. Hinopak's Market share stands at 76% in busses, 65% in heavy trucks
and 49% in light duty truck, which clearly shows that it out beats all other
companies in the country. Backed by Hino's expertise Hinopak has achieved
standard of quality and excellence that rival the best in the region. With over
39,000 vehicles on road, Hinopak has gained 65% market share making it the
largest manufacturer in medium and heavy-duty truck and bus industry in
Pakistan.
The gross profit increased to Rs. 1,388 million from last year's Rs. 835 million.
The distribution and administrative expenses increased to Rs. 409 million
from Rs. 308 million. The net increase in cash and cash equivalent was Rs. 300
million. The year thus closed with a positive cash balance of Rs.156 million.
The selling prices of vehicles are rising and "Deletion" because of falling value
of the rupee against dollar and yen.
Total Customer Satisfaction, is a set vision for the company. Total Quality
Management or TQM is a philosophy of management driven by continual
improvement and responding to customer needs and expectations.
Hinopak by utilizing its MIS system controls and keeps track of raw materials
inventory, work – in – process inventory and finished goods inventory. Just in
time (JIT) approach is preferred to eliminate all sources of waste, including
any activities that do not add value by focusing on having the right part at the
right place at exactly the right time.
Hinopak is the only automotive company in Pakistan and the first Hino
affiliate world wide to receive the ISO 9001 certificate.
Hinopak is Pakistan’s first automobile company to export its buses to
Middleast and African countries. The company is in the process of negotiation
with Hino Japan that Hinopak will be made the center of all Hino export to
Algeria, U.A.E. and other African countries by 2010.
In order to keep the checks and balances, to avoid errors and to detect frauds,
the company has an internal auditor, whose responsibility is to make sure
that the controls are implemented at all levels and there is proper segregation
of duties and no teeming or lading takes place.
Although Hino Pak is meeting the production targets, lack of support form
the government is creating problems in the efficiency of the company
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8. Hinopak backed by Hino Japan has designed a CNG bus suited the operating
conditions in Pakistan. But lack of support from government makes it difficult
to practice. Even though Hinopak Motors Ltd. is a well-managed organization
there is still some span for improvement. The company will have to make its
decision making and managerial practices more clear and transparent. A trace
of double standards during hiring, promotion and foreign trainings ought to
be faded out to truly motivate the employees and retain the potential
employees of the company. Moreover, structure of the company is to be lined
up in such a way that the work channel and communication channel should
not affect the pace of the work.
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9. COMPANY PROFILE
COMPANY'S
HISTORY
Hino Motors Japan and Toyota Tsusho Corporation in collaboration with Al-
Futtaim Group of UAE and PACO Pakistan formed Hinopak Motors Limited
in 1986.
In 1998, Hino Motors Ltd., and Toyota Tsusho Corporation obtained majority
shareholding in the company after disinvestments by the other two founding
sponsors. This decision to invest in Hinopak at a time when the country's
economy was passing through a depression and the sale of commercial
vehicles was at an all time low reflects the confidence our Principals have in
our company and their commitment to the Pakistani market. Hinopak is the
trusted market leader with over 65% share in the Pakistani Truck and Bus
industry. Hinopak a vital contributor in saving of foreign exchange is also
providing jobs and plays a pivotal role for the development of the local
industry through its progressive manufacturing.
By continuing to move forward and staying alert to the ever-changing market
& social needs, Hinopak will continue to be a successful and respected
corporate citizen of Pakistan, reflecting their commitment and belief in the
Hinopak corporate philosophy to "contribute to the development of a more
prosperous and comfortable society by providing the world with a new set of
values".
Hinopak Motors Limited assembles, manufactures and markets world
renowned Hino diesel trucks and buses in Pakistan. The Company has held
the top position in the domestic market for medium and heavy-duty vehicles
for 17 consecutive years and is highly acclaimed for quality and technological
excellence.
Backed by Hino's expertise Hinopak has achieved standard of quality and
excellence that rival the best in the region. With over 39,000 vehicles on road,
Hinopak has gained 65% market share making it the largest manufacturer in
medium and heavy-duty truck and bus industry in Pakistan.
Hinopak's product range has been designed and built in Hino's traditions of
automotive excellence to be the leader in its category and the main emphasis
has been given to passengers' safety & comfort.
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10. HPML MARKET SHARES
HPML SHARE HOLDING
Public
11%
Hino
76%
TTC
13%
MARKET SHARE IN DIFFERENT CATEGORIES
Bus
Dong
Dong Feng Feng
Master
0.0% Volvo
0.0% 1.6% Master
Nissan Volvo Nissan 8.9%
0.0%
8.8% 0.0% 23.2%
Isuzu
12.1%
Hino
45.6%
Isuzu
22.3%
Hino Truck
77.5%
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11. PRACTICE TO IMPROVE
PROCESS EFFICIENCY
To avoid 3Ms:
• Muda Waste
• Mura Unevenness / Waviness
• Muri Overburden / Impossibility
Wastage of Material,
Time, Energy,
Muda Equipment, Human
Potential etc.
Some time there is
(Waste)
more work and some
time its less then a
person or a machine
can handle.
Mura Muri
(Unevenness) (Overburden)
Pushing a Person or
a Machine beyond
Natural Limits
KAIZEN:
The Japanese term for Continuous Improvement is kaizen and is the process
of making incremental improvements, no matter how small, and achieving
the lean goal of eliminating all waste that adds cost without adding to value.
Kaizen teaches individuals skills for working effectively in small groups,
solving problems, documenting and improving processes, collecting and
analyzing data, and self-managing within a peer group. It pushes the decision
making (or proposal making) down to the workers and requires open
discussion and a group consensus before implementing any decisions. Kaizen
is a total philosophy that strives for perfection and sustains Toyota
Production System (TPS) on a daily basis.
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12. 5S ACTIVITIES:
"Implementation of 5S Activities to acquire a Neat & Clean environment
which gives Higher Productivity, Fewer Defects, and a safer execution"
BCG GROWTH-SHARE MATRIX
PORTFOLIO STRATEGY APPROACH
A corporate portfolio matrix, such as the BCG matrix can be a useful strategic
management tool. It provides a framework for understanding diverse
businesses and helps managers establish priorities for making resource
allocation decisions.
Below is the BCG portfolio categorization done on the basis of the knowledge
of current business situation pertaining to each product:
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13. GOAL FORMULATION & PLANNING
PLANNING PROGRAM
Company’s Mission & Vision have been set by the top management with
some inputs from the principals and senior managers. Company’s Vision and
Mission statements are:
MISSION
"The mission of Hinopak Motors Limited is to provide the society with safe,
economical, comfortable and environment friendly means of transportation
by manufacturing and supplying commercial vehicles and services".
VISION
“Total Customer Satisfaction, is a set vision for the company. In pursuit,
new concepts have been introduced such as a mobile workshops, 3S/2S
dealership facilities, and training and free service camps for the vehicle
owners and drivers”.
MILESTONE
“Hinopak is Pakistan’s first automobile company to export its buses to
Middleast and African countries”.
After successfully establishing itself as the market leader at home, Hinopak
proceeded to explore its product potential for the export market. This entry
into the export market was an important milestone for Hinopak and lead
Pakistan into an exciting new era for the automotive industry, fulfilling
Hinopak’s commitment towards the economic growth of Pakistan.
The company is in the process of negotiation with Hino Japan that Hinopak
will be made the center of all Hino export to Algeria, UAE, and other African
countries by 2010.
Other milestones are;
• To secure strong No. 1 position in Pakistan
• Defeating UD, Isuzu, Chinese and European
• To achieve Hino global standard quality
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14. • To reorganize 3S network and modernize sales
• To function as export base of bus and truck for Middle East,
Africa and Central Asia
• To diversify into new business
OBJECTIVES
GOAL FORMULATION
Goals provide the direction for all management decisions and actions and
form the criterion against which actual accomplishments are measured. Goal
setting approach in Hinopak is traditional type; however, in various
departments like Marketing, Finance and HR, senior managers also use the
MBO approach for setting annual goals to motivate the employees and make
them participative, productive and get the ideas out of them.
A Traditional Goal setting approach includes:
• Reviewing the organization’s mission
• Evaluating available resources
• Determining the goals individually or with input from others
• Writing down the goals and communicating them to all who need to
know
• Reviewing results and whether goals are being met
Strategi
c
5 Years Tactical
1~2
Years
MANAGEMENT SETTING
Operational
Less than 1
FUNCTION GOALS Year
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15. The Management by Objectives (MBO) approach used in various other
departments of the organization refers to a system which integrates key
managerial activity manner and is directed towards efficient and effective
achievement of organizational and personal goals. The MBO process consists
of five steps:
• Review organizational objectives
• Set worker objectives
• Monitor progress
• Evaluate performance
• Give rewards
DEVELOPING STRATEGIES
When it comes to developing strategies, we would recommend that the
company should now start focusing on something that is a mix of both long
term and short term strategies, reason behind the environment they are
currently competing is a very dynamic one and to back their long term
strategies / goals they need some intermediary heads that can assist them in
achieving the overall objective.
This can only be possible if the top management commitment and concern is
there and they enforce the same to the bottom. In case the market dynamics
start effecting the long term strategies the top management should be well
equipped and should be in a condition to take remedial measures / steps to
overcome these challenges at a very fast pace.
In addition to the above middle and low level employees are there to
implement the dreams & visions of the top management into execution.
They need to inculcate a culture of a learning organization before they step
forth with any future plans as this is the most basic ingredient in the success
of any company and an ingredient that is very much missing from the current
practices.
They targets set should not be virtual but should be both achievable and
acceptable by all and from top to bottom everyone should be inline with the
same objectives and work in liaison to achieve the same.
They also need to set proper performance benchmarking standards so as to
reward the ones who perform and identify the weak links out. What this will
do is that it will promote an environment of continuous learning and
competition within the team, due to which everyone will try to the optimum
level to achieve the best for both themselves and the company.
(Ref. Annexure-A, Corporate Objective 2008)
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16. Increase of sales volume:
• Promotion of direct sales
• Enhancement of demand generating/proposal type business
• UTS business (top sales) : 150 units/year
• Promotion of export bus business: Bangladesh, UAE etc.
• Tender business - government, UN, armed forces
• Revision of dealer policy
• Sales expansion by strengthening 3S
• Preparation for export of bus and truck
Smooth introduction of the new model series
• Increase of variety of models (Junior Dutro, high powered Dutro and
others)
• Development of HMPL version models (modified PM and others)
• Local parts procurement to satisfy ISDP standard
• Enhancement of purchasing to comply with multi-sourcing
Cost reduction
• Reduction of losses by leveling of production schedule
• Reduction of direct manpower cost by TPS
• Enhanced MIS - introduction of corporate wide LAN and various
software to support operations.
• Introduction of total cost control by model
• Reduction of total stock (CKD kit total stock 4 months, synchronization
of local parts with CKD kit etc.)
Profitability of Body Manufacturing Plant
• Improvement of body finish quality
• Production planning aiming at leveling
• Total revision of product quality and inspection procedures
Enhancement of after sales service
• Establishment of new 3S and 2S dealers
• Revision of parts sales policy
• Technical training prior to every new model introduction
• Procurement of spare parts for new model
• End User service facility through free service camps
• Dealer/user training utilizing new training facilities
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17. Enhancement of quality assurance
• Improvement of quality (local parts, body and completed vehicle)
• Establishment and spiral-up of ISO14000 EMS activities
• Continuation of ISO9001 EMS activities
Promotion of zero accident minds among all fellows
Safety hazards
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18. ORGANIZING
“It is the process of creating framework for developing task,
obtaining and allocating resources and co-coordinating work
activities to achieve goals. “
ORGANIZATION STRUCTURE
• Chairman
• Managing Directing
• Deputy Managing Director
• Functional Directors
• Senior General Managers / General Managers
• Departmental Heads
• Executives / assistants / coordinators
• Section In-charges
DECISION MAKING APPROACH & STYLE
Most of the times decisions taken by the management of Hinopak are result of
a blend of rationality and intuition. Managers use the historical trend they
learned from their experience in the past to cope with the problems, culture of
the Hinopak and their skills and understandings.
At top level, it’s analytical, as they take their time carefully weighing
alternatives and consider riskier options while at middle level it’s more of
behavioral and directive while at lower level its purely directive.
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19. ORGANOGRAM
Chairman
MD & CEO
DMD
Director
Director Director
Design & Sales & Finance 34 Material
82 83 146
Development Marketing & MIS Operations
Assembly Product Personnel
311 61 27
Operations Support & Admin
Plant
Body
Operations 801
Plant
Total Strength of HPML 1559
Quality 14
Assurance
TYPES OF DEPARTMENTALIZATION
• Production Department
Organization has two main operation plants for vehicles manufacturing
which are separately located. Divisions of plant are based on assembling
and manufacturing.
 Assembly Operation Plant
Assembly operation plant is operation division for the Chassis
assembling and sub-assemblies only.
 Body Operation Plant
Body operation plant is operation division for the manufacturing
of bus, truck bodies’ and related parts which re required during
assembly of chassis and its sub-assemblies.
 Engineering & Development
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20. Engineering and development department is separate division for
introducing & developing the new model of vehicles with new
technologies & facilities.
• Quality Assurance Department
Quality Assurance Department is for assuring the all activities during
operation and assemblies
• Marketing Department
Marketing Department is the searching engine for the firm which put orders
form customers also is for the sales of product in market
• Finance Department
Finance Department for accountability of overall performance of
production, as well as sales and profitability of the Organization
• Material Operations
Material operation department is for providing all required material at time
of operation to the production department also complete monitoring and
controlling of material management
• Personnel & Administration
Personnel & Administration is for monitoring over all productivity of plant
with work man force and facilitate the manpower
VERTICAL CO-ORDINATION
• Span of management
• Decentralization
• The Delegation Process
 Preparing
 Planning
 Discussing
 Appreciating
• E-Managerial Business Communication
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21. DEPARTMENTALIZING
Page 21 of 39

22. ORGANIZATIONAL FUNCTION
Page 22 of 39

23. FINANCIAL PROJECTIONS
BUDGET PLAN
OPERATING RESULTS
SALES REVENUE
The sales revenue in the year increased by 22% to Rs.7,827 million from Rs.
6,392 million in 2006.
Most of it, around 76%, came from the sale of chassis.
GROSS PROFIT
The gross profit increased to Rs. 1,388 million from last year's Rs. 835 million.
The increase in chassis gross profit is in line with the increase in sales volume.
The steady value of the Japanese yen in the first three quarters of the year
helped gross profit from bus and truck chassis to rise. Larger production
reduced the cost per unit and higher value-added specialized vehicles were
produced than in any previous year.
DISTRIBUTION AND
ADMINISTRATIVE EXPENSES
The distribution and administrative expenses increased to Rs. 409 million
from Rs. 308 million due to:
• Investments made in 3S dealership network
• Publicity launched to promote new models
• General inflation and normal increments in salaries and wages.
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24. OTHER INCOME & EXPENSES
Income from short term investments decreased by Rs.16 million due to lower
liquidity. A net exchange loss of Rs. 31 million was recorded in fair value
adjustment on forward exchange contracts made to hedge the exchange risk.
CAPITAL EXPENDITURE
The Company is continuously making investments to improve the capacity,
technology and safety of its plants especially the Body Fabrication Plant. The
expense incurred on this account during the year was Rs. 117 million.
CASH FLOW
The cash income from the operating activities was Rs. 542 million of which Rs.
117 million were invested in capital goods and Rs.130 million paid in
dividend to shareholders. The net increase in cash and cash equivalent was
Rs. 300 million. The year thus closed with a positive cash balance of Rs.156
million.
STATEMENT OF VALUE ADDITION
Page 24 of 39

25. DISTRIBUTION OF VALUE ADDITION
SOME FINANCIAL HIGHLIGHTS
Page 25 of 39

26. Page 26 of 39

27. Page 27 of 39

28. (Ref. Annexure-C, Capital Budget Expense of E&D Department 2008)
(Ref. Annexure-D, Manufacturing Budget Expense of E&D Department 2008)
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29. LEADING
“ The process of using influence to motivate others towards
accomplishment of goals. “
MOTIVATION
There are several factors for motivations of employees
• Medical policy
• Traveling policy
• Retirement policy
• Promotion policy
• Safety & health policy
• Employment welfare and benefit policy
• To enhance or encourage highly effort performance
• Performance appraisals
• Trainings & developments (Employees , community,
customers/vendors )
• Performance & Statutory Bonus/Cash awards
• Special Salary adjustment
• Late sitting allowance
• Leaves encashment
• Recreational activities
COMMUNICATION
Communication is the process of sharing our ideas, thoughts, and feelings
with other people and having those ideas, thoughts and feelings understood
by the people we are talking with. Communication is a process, by which
information is exchanged between individuals through a common system of
symbols, signs or data.
Structure of the company is to be lined up in such a way that the work
channel and communication channel should not affect the pace of the work.
Page 29 of 39

30. The key element is “understanding”. Hinopak is using chain of command
is from top to bottom.
Methods used for communications
• Electronic mail
• Voice messaging
• Faxing
• Teleconference and video conference
• Inter departmental memorandum
Meeting
• Before the meeting:
 Plan the meeting: time, people, items to be discussed
 Prepare materials.
• During the meeting
 Start on time.
 Cover most important topic first.
 Promote a professional atmosphere.
 Collect idea of everyone.
 Must have final decision.
 End on time.
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31. • After the meeting:
 Distribute copies of minutes.
 Follow up on decisions made
Importance of communication in organization
• Everything a manager does involve communication.
• The success of an organization is built upon effective communication.
DISCIPLINE
Discipline, rules and regulations are most important for any organization.
Hinopak is strictly following the discipline and for the awareness of this it is
conducting trainings programs also.
• High quality worker performance form is used to evaluate the
worker performance which is based on plan verses actual.
• Accountability on Rules & Regulations standards breaking
• Workers behaviors are accountability at time of start their work with
all safety measures and using all stuff throughout the day and kept at
their defined places at the time of leaving their places with cleaning
of machines.
• Late arrival of workers as well as managerial staff.
GROUP DYNAMICS
Groups are more useful for organization as for good for people. It can
improve creativity, can make better decisions, can increase commitments to
action, can help control their members, and can help offset large
organization size.
Situations in which groups are superior to individuals
• When there is no clear expert in a particular problem or task.
• When problem solving can be handled by a division of labor and
the sharing of information.
• When creativity and innovation are needed.
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32. Groups are performed better than individuals
Hinopak is comprises of some groups to get better performance, opinion
from people (employees, vendors, and suppliers). There is some group are
performing for different causes which are;
• CSR Committee
• Task Committee
• Health and Safety Committee
• Day to Day Operation Committee
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33. CONTROLLING
“Process of monitoring and regulating the organizational
activities”
Determine Establish Measure Compare Standards
areas to Standards Performance Performance Met or
Control against Standards Exceed
Standards not
Met
Take Corrective Recognize
action as Performance
Necessary
Adjust Standards and Measures as Necessary
FEEDBACK MECHANISM
Both middle and top management agree upon innovative feedback,
procedures and services provided to the customers. Different tests and
Page 33 of 39

34. approaches are implemented in this regard like customer evaluation forms,
customer feed back, marketing and promotional activities, periodic changing
in products and product range to ensure best quality product is available in
the market.
CONCURRENT SYSTEM
Hinopak controlling system is dominated by feedback controlling system.
However one may find a touch of concurrent control system as well. Product
support department collects the inputs of the customers’ complaints through
a PIR (Product Improvement Request) and QPR (Quality Problem Request)
system.
(Ref. Annexure-E, QPR-Quality Problem Report)
CONTROL
MECHANISM
WORK PLACE PRIVACY AND WORKPLACE VIOLENCE
To avoid any negative activities through email system, MIS department keeps
track of the emails being sent across and websites being visited (especially on
Saturdays). Few video cameras are also installed in some critical production
areas and security areas.
TOTAL QUALITY MANAGEMENT
Total Quality Management or TQM is a philosophy of management driven by
continual improvement and responding to customer needs and expectations.
Through TQM, Hinopak is not only focused on the final product but also
concerned about how the company handles deliveries, how rapidly it
responds to complaints, how politely the phones are answered and the like.
Hinopak utilizes statistical techniques to measure every critical variable in the
organization’s operations. These are compared against standards or
benchmarks to identify problems, trace them to their roots and eliminate their
causes. Statistical process control uses periodic random samples taken during
actual production to determine whether acceptable quality levels are being
met or production should be stopped for remedial action.
INVENTORY CONTROL
Hinopak by utilizing its MIS system controls and keeps track of raw materials
inventory, work – in – process inventory and finished goods inventory. Just in
Page 34 of 39

35. time (JIT) approach is preferred to eliminate all sources of waste, including
any activities that do not add value by focusing on having the right part at the
right place at exactly the right time.
INTRODUCING ERP
Hinopak has recently practicing ERP on ORACLE. Oracle offers advanced
analytic capabilities for automotive providing business intelligence, decision
support, global compliance management and feedback from customers.
ISO IMPLEMENTATION
Hinopak is the only automotive company in Pakistan and the first Hino
affiliate world wide to receive the ISO 9001 certificate. This certificate has
been given to Hinopak for implementing and maintaining a company wide
quality system in:
• The Assembly and Progressive Manufacturing of Commercial
Vehicles
• Management
• Project Engineering
• Design
• Development
• Purchasing
• Production
• Marketing
• Quality Management
To the uninitiated, ISO 9001 certification may be considered a vital marketing
tool exclusively for promoting exports. In fact, the ISO 9001 requirement is as
valid for the domestic customer as it is for the overseas clientele. What is
important for each customer is the assurance that the products and services
being offered are in accordance with predetermined quality standards
INTERNAL AUDITING
In order to ensure compliance with the company policies by all departments /
staff, the company has a full-time internal auditor. The internal auditor
responsible for carrying out surprise and routine audits anywhere in the
Page 35 of 39

36. company and inform top management about the state of policies &
procedures compliance. The company has a very strict financial controlling
system. Each department is answerable for its Profit/Loss account which is
compiled every quarter. Inter-departmental transactions are also Debited /
Credited to ensure efficiency and accountability.
Employees’ bonuses, incentives and perks are also hedged with Company’s
performance. This also ensures that all employees work towards Company’s
profitability with all sincerity. This also helps in maintaining Goal congruence
and avoiding dysfunctional behavio
CONCLUSIONS & RECOMMENDATIONS
Although Hino Pak is meeting the production targets, lack of support form
the government is creating problems in the efficiency of the company. Hino
Pak has already produced CNG busses, but government is still not willing
to accept the idea.
The government should aim to increase the local production, by making the
local auto industry more competitive, creating capacity for local design and
innovation, domestic competition, human resource development and auto-
cluster development. whereas the government is still focusing on imports
from other neighboring countries.
If existing automobile business are not adapted to the requirements of the
future they would soon be history. If the future is inevitable it is imperative to
prepare for it in time.
Even though Hinopak Motors Ltd. is a well-managed organization there is
still some room for improvement. The company will have to make its decision
making and managerial practices more clear and transparent. A trace of
double standards during hiring, promotion and foreign trainings ought to be
faded out to truly motivate the employees and retain the potential employees
of the company. Moreover, structure of the company is to be lined up in such
a way that the work channel and communication channel should not affect
the pace of the work.
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37. GLOSSARY
CKD Complete-Knock-Down, when vehicle parts (especially the parts of)
chassis come in the separate pieces and assembled in the country
where it is assembled to curtail the custom duty factor.
CBU Complete Built-up Unit
6x4 First digit shows the total no. of wheels directly attached to the axles of
the vehicle and last letter shows the wheels that are directly driven by
engine.
PIR Product Improvement Request
QPR Quality Problem Report
E&D Engineering & Development Department.
AOP Assembly operating plant, manufacturing plant where Chassis of the
vehicles are assembled.
BOP Body operating plant, manufacturing plant where body of the vehicles
are fabricated.
MIS Management Information System
CBA Collective Bargaining Agent
UTS Urban Transport Service
3S Available Sales, Services, and Spare Parts facilities
2S Available Services and Spare Parts facilities
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38. OTHER REFERENCES
REPORT
• Hinopak Motors Limited for the year 2007
• Hinopak Newsline
BOOK
WEBSITES
• http://www.hino.com
• http://www.hinopak.com
• http://www.pama.org.pk
• http://www.hino-global.com
• http://www.japanese-trucks.com
Page 38 of 39

39. APPENDIXES
• Annexure-A
Corporate Objective 2008
• Annexure-B
Planning/objectives of Production Division
• Annexure-C
Capital Budget Expense 2008 of Production Division
• Annexure-D
Manufacturing Budget Expense 2008 Production Department
• Annexure-E
QPR-Quality Problem Report
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