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1
JIT
&
Supply Chain Excellence
S. K. Jena
Mahindra & Mahindra Ltd
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2
Nashik PPC
DEALERS
CENTRAL PPC OFFICE
Kandivali PPC Igatpuri PPC Haridwar PPC
Zaheerabad PPC
DCM
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3
KANDIVALI PLANT
Manufacturing
Shop
Procurement
Cell
Suppliers
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4
Production Planning
Marketing
Production
PPC
Procurement
CPPC
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Marketing releases various dispatch plans onthe basis of forecasting, Area office inputs &
dealers projections viz..
Yearly Plan
Monthly plan ( 1mth firm, 2nd mth tentative)
Weekly feasibility
Input from Marketing
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Plan
Source Make Deliver
Supplier
Plan
Customer Customers
Customer
Suppliers
Supplier
Make DeliverSource MakeSource DeliverMakeSourceDeliver SourceDeliver
(internal or external) (internal or external)
Your Company
Supply Chain
Flow of Material
Flow of information
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Traditional View of Manufacturing
A key objective was to fully utilize production
capacity so that more products were produced.
This thinking led to large queues of in-processinventory waiting at work centers.
Large queues meant workers and machines never
had to wait for product to work on.
This resulted in products spending most of their time
in manufacturing just waiting, an arrangement that is
unacceptable in todays time-based competition.
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Time-Based Competition
It is not enough for firms to be high-quality and
low-cost producers
Today, they must also be first in getting products
and services to the customer fast
To compete in this new environment, the order-
to-delivery cycle must be drastically reduced
JIT (Just in Time) is the weapon of choice todayto reduce the elapsed time of this cycle
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Order-to-Delivery CycleOrder-to-Delivery Cycle
DistriDistri--
bution andbution and
CustomerCustomer
ServiceService
CustoCusto--
mermer
PlacesPlaces
OrderOrder
OrderOrder
EntryEntry
EngiEngi--neeringneering
DesignDesign
SchedSched--
ulinguling
ManufacturingManufacturing
Lead TimesLead Times
PurchasingPurchasing
Lead TimesLead Times
ManufacturingManufacturing
Cumulative Lead TimeCumulative Lead Time
OrderOrder--toto--Delivery CycleDelivery Cycle
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Process
BProcess
A
Fin. Goods
Raw
MatlSupplier Customer
Part Flow
Process
C
PUSHSYSTEM
Information Flow
WIPWIP
Execution - Parts completed to schedule without any downstream considerations
Replenishment - Based on projected demand (forecasts)
Shop Floor Control - System, transactions, paperwork
Problems - Hidden
Reaction to changes and problems - Through system - rescheduling
Linkage - Operations are NOT physically linked
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Process
B
Process
AFin. GoodsRaw
MatlSupplier Customer
Information Flow
Part Flow
Kanban
Locations
Process
C
PULL SYSTEM
Execution - Parts produced upstream as signaled from the downstream operation or customer
Replenishment - Based on consumption
Shop Floor Control - Automatic - visible
Problems - Exposed - creates urgency
Reaction to changes and problems - Immediate - on-line and visible
Linkage - Operations ARE physically linked
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JIT: A Pull System
In a push system, we look at the schedule
to determine what to produce next
In a pull system, such as JIT, we look only
at the next stage of production and
determine what is needed there, and then
we produce only that
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JIT Manufacturing Philosophy
The main objective of JIT manufacturing is to
reduce manufacturing lead times.
This is primarily achieved by drastic reductions
in work-in-process (WIP).
100% capacity utilization is not the predominant
objective.
The result is a smooth, uninterrupted flow ofsmall lots of products throughout production.
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Successful JIT Applications
Most successful JIT applications have
been in repetitive manufacturing, where
batches of standard products are
produced at high speeds and in high
volumes.
Successful use of JIT is rare in large,
highly complex job shops whereproduction planning and control is
extremely complicated.
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Elements of JIT Manufacturing
Eliminating waste
Enforced problem solving and continuousimprovement
Total Quality Management (TQM) Parallel processing
Kanban production control
Reducing inventories
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(1) Waste from overproduction
(2) Waste of waiting time
(3) Transportation waste
(4) Inventory waste
(5) Processing waste
(6) Waste of motion
(7) Waste from product defects
Waste--Operations
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Changes Required for JIT
JIT requires certain changes to the factory
and the way it is managed:
S
tabilize production schedules Make the factories more focused
Increase work center capacities
Improve product quality
Cross-train workers
Reduce equipment breakdowns
Develop long-term supplier relations
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Problem Solving and
Continuous Improvement JIT is a system of enforced problem
solving.
One approach is to lower inventorygradually to expose problems and force
their solution.
Continuous improvement - a practice the
Japanese call kaizen - is central to the
philosophy of JIT.
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Uncovering Production
Problems
QualityQuality
ProblemsProblems
MaterialMaterial
ShortagesShortages
MachineMachine
BreakdownsBreakdowns
WorkloadWorkload
ImbalancesImbalances
WorkerWorker
AbsenteeismAbsenteeism
OutOut--ofof--SpecSpec
MaterialsMaterials
QualityQuality
ProblemsProblems
InIn--ProcessProcess
InventoryInventory
We must lower the water level!We must lower the water level! Visible ProductionVisible ProductionProblems are OnlyProblems are Only
5% of the Total!5% of the Total!
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Kanban Production Control
At the core of JIT manufacturing at Toyota
is Kanban, an amazingly simple system of
planning and controlling production
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Japanese word for card
Pronounced kahn-bahn (not can-ban)
Authorizes production from downstream
operations
Pulls material through plant
May be a card, flag, verbal signal etc.
Used often with fixed-size containers
Add or remove containers to change
production rate
Kanban
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Sample Kanban Card
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Determining Number of
Kanbans
wherewhere
NN = number of kanbans or containers= number of kanbans or containersdd = average demand over some time period= average demand over some time period
LL = lead time to replenish an order= lead time to replenish an order
SS = safety stock= safety stock
CC = container size= container size
No. of Kanbans =No. of Kanbans =average demand during lead time + safety stockaverage demand during lead time + safety stock
container sizecontainer size
NN ==dLdL ++ SS
CC
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Determining the Number of
Kanbansdd = 150= 150 partsparts per hourper hour
LL = 30 minutes = 0.5 hours= 30 minutes = 0.5 hours
SS = 0.10(150 x 0.5) = 7.5= 0.10(150 x 0.5) = 7.5
CC = 25= 25 partsparts
Round up to 4 (to allow some slack) orRound up to 4 (to allow some slack) or
down to 3 (to force improvement)down to 3 (to force improvement)
NN = == =
= = 3.3 kanbans or containers= = 3.3 kanbans or containers
dLdL ++ SS
CC
(150 x 0.5) + 7.5(150 x 0.5) + 7.5
252575 + 7.575 + 7.5
2525
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KanbanKanban SystemSystem
Each container must have a cardEach container must have a card
Assembly always withdraws fromAssembly always withdraws fromfabrication (pull system)fabrication (pull system)
Containers cannot be movedContainers cannot be movedwithout awithout a kanbankanban
Containers shouldcontain theContainers shouldcontain thesame number of partssame number of parts
Only goodparts are passedalongOnly goodparts are passedalong
Production shouldnot exceedProduction shouldnot exceedauthorizationauthorization
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StorageStorage
areaarea
Empty containersEmpty containers
Full containersFull containers
KanbanKanban SystemSystem
Receiving postReceiving postKanban card forKanban card for
product 1product 1
Kanban card forKanban card for
product 2product 2
FabricationFabricationcellcell
OO11
OO22
OO33
OO22
Assembly line 1Assembly line 1
Assembly line 2Assembly line 2
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StorageStorage
areaarea
Empty containersEmpty containers
Full containersFull containers
KanbanKanban SystemSystem
Receiving postReceiving postKanban card forKanban card for
product 1product 1
Kanban card forKanban card for
product 2product 2
FabricationFabricationcellcell
OO11
OO22
OO33
OO22
Assembly line 1Assembly line 1
Assembly line 2Assembly line 2
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StorageStorage
areaarea
Empty containersEmpty containers
Full containersFull containers
KanbanKanban SystemSystem
Receiving postReceiving postKanban card forKanban card for
product 1product 1
Kanban card forKanban card for
product 2product 2
FabricationFabricationcellcell
OO11
OO22
OO33
OO22
Assembly line 1Assembly line 1
Assembly line 2Assembly line 2
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StorageStorage
areaarea
Empty containersEmpty containers
Full containersFull containers
KanbanKanban SystemSystem
Receiving postReceiving postKanban card forKanban card for
product 1product 1
Kanban card forKanban card for
product 2product 2
FabricationFabricationcellcell
OO11
OO22
OO33
OO22
Assembly line 1Assembly line 1
Assembly line 2Assembly line 2
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StorageStorage
areaarea
Empty containersEmpty containers
Full containersFull containers
KanbanKanban SystemSystem
Receiving postReceiving postKanban card forKanban card for
product 1product 1
Kanban card forKanban card for
product 2product 2
FabricationFabricationcellcell
OO11
OO22
OO33
OO22
Assembly line 1Assembly line 1
Assembly line 2Assembly line 2
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StorageStorage
areaarea
Empty containersEmpty containers
Full containersFull containers
KanbanKanban SystemSystem
Receiving postReceiving postKanban card forKanban card for
product 1product 1
Kanban card forKanban card for
product 2product 2
FabricationFabricationcellcell
OO11
OO22
OO33
OO22
Assembly line 1Assembly line 1
Assembly line 2Assembly line 2
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Operational BenefitsOperational Benefits
yy Reduce space requirementsReduce space requirements
yy Reduce inventory investmentReduce inventory investment
yy Reduce lead timesReduce lead times
yy Increase labor productivityIncrease labor productivityyy Increase equipment utilizationIncrease equipment utilization
yy Reduce paperwork andsimplifyReduce paperwork andsimplify
planning systemsplanning systems
yy Validpriorities for schedulingValidpriorities for scheduling
yy Workforce participationWorkforce participation
yy Increase service/product qualityIncrease service/product quality
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Reducing Inventories
through Setup Time Reduction
Smaller lot sizes result in more machine
setups
More machine setups, if they are lengthy,result in:
Increased production costs
Lost capacity (idle machines during setup)
The answer is: REDUCE MACHINE
SETUP TIMES
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Benefits of JIT
Inventory levels are drastically reduced:
frees up working capital for other projects
less space is needed
customer responsiveness increases
Total product cycle time drops
Product quality is improved
Scrap and rework costs go down
Forces managers to fix problems and
eliminate waste .... or it wont work!
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Parts operated on JIT at
Mahindra Chassis 21 types of chassis of Max, F/bed , S/cab,
BMT CL , CDR , CNG etc
Seats
24 types of seats of Max , S/cab , Powerstrg, BMT, CL, CDR , CNg etc.
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JIT operating Procedure
Stock of these JIT parts is kept for 4 to 5
hours ( in case of chassis ) & 5 to 6 hours
( for seats )
3 days schedule is followed to release the
material requirement of JIT items.
Model wise , sequence is given to the
vendor for the supplies of the parts .
Daily monitoring is reqd. for these JIT
parts.
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Direct-On-Line
Material Supply
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Traditional Process
StoresVendorProduction
Shop
Vendor Supplies the material to Stores
Stores department then stores it and supplies it to production shop as
and when required
Inventory Inventory
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Direct Online
Vendor delivered material Directly on shopfloor.
StoresVendorProduction
Shop
Body Shop Stores
Area : 16,751 Sq. Ft
Manpower : 53
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Part no. ABC Qty /Veh Vendor Location Store Qty Perbin Shop qtymax AfterQTY
90382 A 1 Shear Bend Goregaon 36 36 40
0101BC0210N A 1 Shear Bend Goregaon 36 36 40
0101DC0100N C 2 Penetrical Kandivli 200 100 80
91185 C 2 NAB-IDBI Poly. Ambarnat 240 150 80
94636 C 1 Shear Bend Goregaon 200 50 4039325 C 1 Sushmi engg Dahisar 1000 150 500
0101DC0080N C 1 Penetrical Kandivli 200 150 40
0101DC0070N C 1 Penetrical Kandivli 200 50 40
87582 C 2 Ramkrishna Iron Shahapur 100 150 80
75344 C 2 Press N Fab Dahisar 600 150 80
91188 C 2 Press N Fab Dahisar 400 150 80
0101EC0190N C 2 Penetrical Kandivli 200 100 80
0101EC0210N C 1 Penetrical Kandivli 100 50 40
0101EC0200N C 1 Penetrical Kandivli 100 50 40
33258 C 2 KVL Press Shop AS-KND 300 150 80
11237 C 1 KVL Press Shop AS-KND 150 50 40
Data Collection
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HML Analysis ofSingle Cab Welding
AreaValue in Rs. Vendor Press shop Total parts %
H (> 50) 26 25 51 38%
M ( 20-50 ) 25 1 26 19%
L (
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Line Side DOL Racks
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DOL Racks for Big Bins
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Area :
CL / CDR Re-spot
No. of Parts : 16
No. of Vendors : 7
No. of Parts : 19
No. of Vendors : 9
Area :
Single Cab Cowl Stage
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BeforeAfter ( Removed )
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Benefits of DOL
Inventory carrying cost reduced
Inventory days reduced
Stores space saved and in process of
being utilizedfor in house cargo painting.
Double handling of parts eliminated
Possibility ofparts getting damaged due to
double handling reduced.
Supply module strength reduced
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Logistics
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INBOUND
Customer
Other Units
OUTBOUND
Supplier
SCRAP
OEM
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Logistics Cost Reduction
The Classification
Appropriate Vehicle Selection
Optimum Utilization of Vehicles
Pallet / Fixture and Packaging Modification
Vendor Base Related Initiatives
Milk Run Implementation
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Appropriate Vehicle Selection
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Appropriate Vehicle Selection: The Concept
BODY P.U. FENDER MOVEMENT , DOOR MOVEMENT
CARGO MOVEMENT , BODY SHELL MOVEMENT
TRANSMISSION P U NGT 520 GEARBOX
TRAILER
TRUCK
1 2 3 4 5 6
1 2 3 4 5 6 7 8
INCREASE IN NUMBER OF FENDERS TRANSPORTED PER UNIT COST BY
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INCREASEINNUMBER OF FENDERS TRANSPORTED PER UNIT COSTBY
USINGTRAILERS FOR FENDER MOVEMENT
Fenders per Truck: 48
Freight Incurred (Rs.): 5466
Freight per Fender (Rs.): 114
Freight Saving per Fender (Rs.): 39 (35%)
Fenders per Trailer: 96Freight Incurred (Rs.): 7200
Freight per Fender (Rs.): 75
Annualised Cost Saving for the Initiative (Rs.): 11 Lacs
BEFORE AFTER
Implementation: February, 2007
INCREASE IN NUMBER OF GEAR BOXES TRANSPORTED PER UNIT COST
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INCREASEINNUMBER OFGEAR BOXES TRANSPORTED PER UNIT COST
BYUSINGTRAILERS FOR GEAR BOXMOVEMENT
BEFORE AFTER
Gear Boxes per Truck: 84
Freight Incurred (Rs.): 5466
Freight per Gear Box (Rs.): 65
Freight Saving per Gear Box (Rs.): 8 (13 %)
Gear Boxes per Trailer: 126
Freight Incurred (Rs.): 7200
Freight per Gear Box (Rs.): 57
Annualised Cost Saving for theInitiative (Rs.): 3
Lacs
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OptimumUtilization of Vehicles: The Concept
2 LAYER LOADING
3RD LAYER ADDED
SCORPIO AXLES TRANSPORTATIONFROM TWO LAYERS TO THREE
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SCORPIOAXLES TRANSPORTATIONFROMTWO LAYERS TO THREE
LAYERS
Axles per Truck: 24
Freight Incurred (Rs.): 5466
Freight per Axle (Rs.): 228
Freight Saving per Axle (Rs.): 62 (27%)
Axles per Truck: 36
Freight Incurred (Rs.): 5466
Freight per Axle (Rs.): 166
Annualised Cost Saving for theInitiative (Rs.): 38
Lacs
BEFORE AFTER
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TRANSPORTATIONOF 25 MAXITRUCK CARGOESINSTEAD OF 15
Cargoes per Truck: 15
Freight Incurred (Rs.): 7615
Freight per Cargo (Rs.): 508
Freight Saving per Cargo (Rs.): 186 (36%)
Cargoes per Truck: 25
Freight Incurred (Rs.): 8059
Freight per Cargo (Rs.): 322
Annualised Cost Saving for theInitiative (Rs.): 28
Lacs
BEFORE AFTER
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CHANGEINPACKAGINGFOR TRANSAXLE TRANSPORTATIONTO HARIDWAR
Trans Axle per Truck: 144
Freight Incurred (Rs.): 48000
Freight per Trans Axle (Rs.): 333
Freight Saving per Trans Axle (Rs.): 253 (75%)
Trans Axle per Truck: 300
Freight Incurred (Rs.): 24000
Freight per Trans Axle (Rs.): 80
Annualised Cost Saving for the Initiative (Rs.): 40 Lacs
BEFORE AFTER
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BACK HAULINGOF RAWMATERIAL IN VENDORS VEHICLE
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BACK HAULINGOF RAWMATERIALINVENDORS VEHICLE
MAHINDRA & MAHINDRA,
KANDIVLI
A. R. INDS, FARIDABAD EATA PLAST, MULUND
Net Logistic CostSaving: 2.00 Lacs
Implementation: May, 2006
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Logistics Activities
Cost Reduction through negotiations with transporter Sourcing of Alternate transporter
Better fleet utilization by loading material during return
trip
Optimum utilization of vehicle both in terms of volume
& weight
Co-ordination with 3PL (Third party logistics) operators
& TSG (Transport Solution Group) for smooth flow of
materials
Design & Implementation of Milk runs
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Implementation
ofMilk Runs
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Milk Run:The Concept
POINT OF
CONSUMPTION
V1V2
V3
V4
Considerable
Distance
A & B Category Parts
Sequential Movement of Vehicle
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Why Milk Run
Inventory Control forHigh Value Parts
Smooth flow of Material to eliminate
procurement uncertainties and hassles
Logistics Cost Reduction through optimum
utilization of vehicles
Eliminate obsolescence creation
Z Sh t li t d
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Zones Short-listed
CHENNAI
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Milk Run: Implementation Method
Candidate suppliers for each location were identified Free delivery / Ex-works suppliers were segregated.
Part list and lot sizes for each of the candidate
suppliers were determined.
Candidate suppliers forpilot milk run from each zone
were identified
Identified Suppliers were communicated regarding
the new system and the nominated transporter.
Appropriate vehicles for the movement from each
zone were decided upon depending upon approximate
tonnage
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Pune Milk Run: Scope
Distance From Mumbai: 200 Km No. of Vendors: 24
No of Parts Covered: 160
Inventory on Dec 31, 2006: 8.89 Days Frequency of Milk run: Daily
Transporter: Onkar Roadways
Vehicle Used: 1 or 2 Pic Ups (As Needed) Transportation Lead Time: 6 Hrs
P Milk R V d B
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Pune Milk Run: Vendor Base
Vendor Location No. of Parts Frequency
SKF Chakan 42 Daily
PremierSeals Chinchwad 5 Alternate
Mega Fibre Chinchwad 3 Daily
Timeken Bearing Wadi 1 Daily
Mohan Plastics Pimpri 3 Once in 3 Days
Lumax Industries Chakan 11 Once in 3 Days
Tata Ficosa Hinjewadi 1 Daily
Shreyas Auto Tahthawade 2 Weekly
Fitwell gasket Bhosari 13 Weekly
TOTAL 84
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The Pune Milk Run
No. of Vendors: 9
Frequency of Milk run: Daily
Average Tonnage: 3.5 T
Consolidation Time: 2200 Hrs 2300 Hrs
Delivery time: 0800 Hrs
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Daily Schedule for Pune
Vendor Pick Up time
Tata Ficosa 1100 Hrs
Mega Fibre 1300 Hrs
Timken Bearing 1500 HrsSahyog Engineering 1600 hrs
SKF India Ltd 1700 Hrs
Mohan Plastic 1800 HrsLumax industries 1830 Hrs
Shreyas Auto 2000 Hrs
PremierSeals 2100 Hrs
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Mumbai Milk Run: Scope
No. of Zones: 5 No. of Vendors: 110
No of Parts Covered: 1027
Inventory on Dec 31, 2006: 9.07 Days Frequency of Milk run: Daily
Transporter: Abhishek Transports
Vehicle Used: Pick Up
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Mumbai (Zone I) Milk Run: Vendor Base
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Mumbai (Zone I) Milk Run: Vendor Base
Vendor Location No. of Parts Frequency
Rainbow Industries Goregaon (E) 32 Once in 3 days
PMP Goregaon (E) 2 Once in week
Accurate Springs Goregaon (E) 23 Once in 3 days
Siddhivinayak Kandivli(E) 3 Once in 3 days
Pariwar Kandivli(E) 4 Once in 3 days
Panetrical Kandivli(E) 31 Once in 3 Days
Lalit Goregaon (E) 5 Once in 3 days
Prospect Goregaon (E) 7 Once in 3 days
Friends Malad (E) 7 Once in 3 days
TOTAL 114
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Benefits of a Milk Run
Smaller lot sizes resulting in considerable
reduction in inventory
Smooth regular flow of material ensuring
hassle free procurement
Reduction in chances of obsolescence
creation
Reduction in Transportation Cost
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Thank you