A legendary bike that lost its way is back on the road to success, says Venkatachari Jagannathan.

Talk of iconic or cult motorcycles in India, and only the Enfield Bullet rides into one''s mind. The country''s first four stroke bike — the 350cc Enfield Bullet — is more than 50 years old today. But great things have been happening to it. Royal Enfield, the motorcycles division of Eicher Motors, which rolls out this legendary bike, has developed a Euro 3 compliant engine for the overseas market and launches a bike breeching the Rs1 lakh price point.

At the shop floor, it is back to basics. Royal Enfield is consciously setting right quality glitches, to make this classic bike a winner not just on the road, but in the showroom too. At the Thiruvottiyur plant near Chennai, the mood is upbeat. The 650 strong workers, who were used to a laid-back attitude during the first quarter for years, are now working overtime to meet delivery schedules. The entire shopfloor is humming with activity, to exceed the previous quarter''s production figures. Everything is geared to overtake the year''s target of 40,000 units.

"Not long ago," says a plant supervisor, "targets like that used to be just wishful thinking." It''s a remarkable turnaround, thanks to one person — the 56-year-old CEO R L Ravichandran — himself a marketing icon in the motorbike industry. Originally incorporated as Enfield India Ltd, the company was acquired by the Eicher group and renamed Royal Enfield Motors Ltd. Later it became the Royal Enfield division of Eicher Motors.

A question of quality
Everybody knows the fate of bikes that fails on quality; they stop selling. "Irritants like oil leaks, or electrical failure are sure signs of death for a two wheeler today," Ravichandran says candidly. Royal Enfield itself has examples of various models - Fury, Silver Plus and Explorer - that rode into oblivion.

Like the brand, the problems in the bike too are legendary. Still, the Bullet survived as there was no competition in its class. It became an aspirational bike mainly because of its majestic looks, riding comfort and distinct engine sound. Everybody appreciated a Bullet. But when asked if they would like to own one, they would back out because of excessive ''maintenance''," says Ravichandran.

It wouldn''t be wrong to say the company had been taking its customers for a ride for too long. On an average the owner of a new Bullet had to take his bike to the garage - not counting the free service - before the odometer reached 400 km. Two years ago, when he first assumed charge, Ravichandran was wondering whether the division could stand on its own feet (wheels?) without the parent company''s financial assistance. But, given that the brand had a space in the minds of motorcycle owners, he took on the challenge.

He decided to do two simple things:

• Roll out defect-free bikes
• Test the market capability

In other words, he wanted to broaden the customer base, not just cater to Bullet enthusiasts. Transforming companies is not new to Ravichandran. That''s what he did earlier, at both TVS and Bajaj Auto.

He was in the thick of things when TVS Motor stopped losing money and became profitable, launching successful models like Samurai, Shogun and Scooty. And he was with Bajaj Auto when it transformed itself from a scooter maker to a motorcycle maker. He was schooled in quality concepts like Total Quality Management (TQM) and Total Productive Maintenance (TPM) there.

Market mantras
"At both these companies I learnt that a company can''t dictate to the market unless it understands why the market drops your product and picks up another," he explains. The stint at Bajaj Auto also taught him that consistently good quality is the only thing that can make the prospective customer go for at a new product over the market leader. The challenge before him at Royal Enfield was to inculcate cost and quality consciousness among the employees.

The first aim is to give the customer a defect-free bike. For that, the division had look at its manufacturing processes and quality control systems afresh, which meant looking at the entire production chain. Fortunately, Ravichandran got a new team. The entire top team — finance, marketing, production, quality control, human resources and sales — consisted of new faces from diverse backgrounds. It was not a purge by the new CEO; a booming job market coupled with the earlier company''s uncertain future seemed to have made the old hands quit.

Cross-functional teams were formed and customer complaints were grouped under different heads. The teams identified 122 problems — mainly oil leakage, electrical failure, clutch cable snapping, fork change, rusting, chain sprocket and others — and the initial target was to resolve the top 100 issues.

Shopfloor showdown
Problem resolution involved a change in the production process as well as in vendors. On the shop floor, TPM got underway and steps were taken to simplify the workflow. The Japanese system of Poka Yoké (mistake proofing to make zero-defect products) was put into operation; one of the efforts even won an industry award. Computer-controlled CNC machines were bought to improve the machining process.

Weighing in on vendors
Instead of individual components, the company started sourcing sub-assemblies. This greatly increased quality and efficiency, as the onus to supply quality sub-assemblies shifted to the vendors. Royal Enfield now sources frames, the clutch assembly, the fork assembly and the wheel assembly. "We just do the machining, plating, painting and assembling at the shop floor," says Ravichandran.

Rationalisation of the vendors resulted in some getting increased volumes and economies of scale, though not in a very big way given Royal Enfield''s small capacity. Floor managers say the emphasis is on use of common parts across models. The move now is towards pressure die casting, abandoning the old gravity die casting process. Ravichandran admits that most of the changes are still basic in today''s context. "But it takes some time to change legacy systems that are more than five decades old," he smiles.

Processes that involved additional labour and hidden costs have been eliminated. But there are some operations that still follow the old system. Most manufacturers use stickers for graphics, but Royal Enfield still uses hand painting to draw the distinctive golden lines on the Bullet fuel tank. Besides, the fuel tank itself is handmade, though the division has decided to move to machine-made tanks. Leading by looks
The top team''s focus is now on vehicle styling, designing new models, branding, and retailing through setting up of brand stores, apart from logistics, distribution of spare parts and increased exports. Ravichandran says that Indian bike buyers fall into two categories - the power lovers and the fuel efficiency types.

But nobody buys a Bullet either for power or for fuel efficiency. It is bought because of its build, its classic looks, comfortable ride and legendary exhaust note. Since it was bought and not sold, there was no pressure on the company to upgrade its processes and in time, the unit sank into the red, though it did make some efforts, like moving the gear shifter to the left from the right.

As Royal Enfield bikes are bought, Ravichandran first put a freeze on mass media advertising. Instead, he encouraged activities that enhanced sales. Slowly, the results have started showing. Quality checks have resulted in reducing component rejections at the factory level to less than one per cent, but the reduction in warranty claims will be measurable only next year.

Hard work pays
But results are showing. Says N Venugopal, manager, Southern Motors, a leading Royal Enfield dealer, "Customer complaints have gone down drastically in the last two years, while sales have picked up." At times, he says, there is a waitlist. While the traditional Bullet contributed the lion''s share to the total sales, newer models like the Thunderbird are attracting young software professionals. Naturally, at Royal Enfield, the mood and morale are upbeat. Last year, the unit posted a profit of Rs1.2 crore against a loss of Rs5.6 crore in FY06.

Going forward, the unit is looking at ways to reduce the metal content without altering the bike''s basic looks. "It is very difficult to reduce the vehicle weight in a major way, but we are looking at alternate materials," Ravichandran remarks. The development of an integrated engine is expected to be the first significant step in that direction.

What next?
Ravichandran''s immediate goal is to increase sales by 20 per cent. To allow this, the division will have to spend some money on balancing equipment, to increase production. The basic idea is to tweak and sweat the current assets, bringing in good manufacturing systems and practices, and roll out 50,000 bikes per annum, by FY09. After that, based on the market, Royal Enfield will look at setting up a new plant. "Next year we will decide on a technology partner and future expansion plans," reveals Ravichandran, who has ideas about launching a bike with two engine options.

The division is on the verge of launching two new engines - a 500 cc integrated aluminium Euro 3 complaint engine for the UK market and a 350 cc twin spark aluminium engine for its sporty new bike, the Thunderbird. It is also working on a new vehicle that will be lighter than the current models. (See: Royal Enfield to launch India''s first Euro 3 engine in the UK)

About the emerging competition, Ravichandran says, "Foreign companies cannot offer lifestyle bikes at our prices. Certainly we will not fade away." He feels that the brand is owned by the customers and only if Royal Enfield adopts wrong policies, can it screw up the unit''s future. Till then Bullet will continue to move forward… thud by reverberating thud.