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    Milk Run Logistics Implementation

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    250 views6 pages

    Implementation of Milk Run Logistics

    Uploaded by

    Kun Harjiyanto
    Milk Run Logistics Implementation

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 6
    Implementation of Milk Run Logistics System in an Auto Component Manufacturing Plant Padmanabha Raju N.', Ajitkumar B.S.’, Sunil Dhake’, 1-MSe (Engg) Student, 2- Professor, Center for Engineering Management, M.S. Ramaiah School of Advanced Studies, Bangalore. : 53- Deputy Manager, Delphi Automotive Syatoms Pv Led {In today's competitive business environment, automobile companies worldwide are shifting their attention towards understanding and implementing extensive supply chain management principles that integrate the product, process and information flow within and ‘across organizational Boundaries. Managing supply chain risks have increased dramatically as companies operate in ong-reach systems ‘crass international Boundaries whilst simultaneously seeking to reduce cots. Inrecent years supply chains have mainly focused on the ‘outbound operations, being the customer-oriented part ofthe business whereas the control ofthe inbound operations was generally lefto the suppliers But now having the outbound operations seamlined and extracting addinional benefits has become more dificult. Taking ‘greater control of inbound logistics s becoming a top priority for many manufacturers today. Tuning atention to inbound logistics wl ot only reduce cases, but also generate more collaborative relationship with internal organizaions, suppliers and logistic providers, ‘which wll ultimately result ina more effective business process from which al parties will benefit. Inthe current work, Issues inthe inventory management ofa frst-tier automotive manufacturing plant were studied. Using value _aream mapping, the current supplier lead times order cles buffer and safer stocks for various supply cheln players were studied. An ‘appropriate milk run logistics system was designed and implemented inthe inbound operations area to reduce the high inventories and optimize transportation cost. Certain standard operating procedures were designed fo make the system successfuin the longru. ‘Results from this implementation of milk run system showed 4 significant improvement in inventory reduction, reduced transportation cost and other intangible benefits. Benefits proved tobe on win-win basis for supplies andthe manufacturer Based on the Abbreviations PCRL Production Control & Logistics OEM Original Equipment Manufacturer IDS Intermediate Drive Sha? GRN Goods Received Note NRGP Non Retumable Gate Pass SOP Standard Operating Procedure ERP Enterprise Resource Planning 1. Introduction ‘Supply chain managements a broadened focus tht considers, the combined effort of all the companies involved in the ‘manufacturing of goods and services, from suppliers to ‘manufacturers to wholesaler to retailers o final consumers and ‘disposal and recycling, It encompasses everything red to satisfy customers and includes determining Which hey will buy, how to prodice them, and how to deliver ‘The supply chain philosophy ensures that customers the right products a the right time at an acceptable price atthedesired location. ‘The primary purpose in establishing supply chains is to the flow of raw materials and finished products at ‘point i the pipeline inorder to improve prodictiity and ‘cost savings. Companies today must be fast and ively to reaet quickly to changes in customer demand and doit itl inventory. Too much inventory isa certain indicator of serious and costly business process and systems problems ‘ean be rooted very deeply across the organization. These include poor forecasting, inadequate order/product fications, ineffective production scheduling, poor quality, long cycle times and Production process problem, ‘The objective of this paper isto reduce inventories inthe operations of first-tier auto component manufacturing 'byadoptng milk run system. )BLEM BACKGROUND work reported inthis paper was based on a ease study ‘out at Delphi Automotive Systems Pvt Ltd (Plant 81), which isa wholly owned first-tier subsidiary plant of Sepinaw Steering Systems besed in USA. Delphi's major are hal-shafts, columns, intermediate drive shafs and TecH results obtained, few recommendations have made o improve other areas where there isan ample scope for improvement ‘Key Words: Supply chtin management, Milk ran logistics, Inventory reduction steering pumps. It supplies these products to all the major OEM companies i Inia and few other OEMs abroad. thas huge supplier base which includes the local suppliers (Bangalore based, Chennai based and north based) in India and ‘many other suppliers abroad. All the suppliers are quality certified and technically competent. Today the plant produces 2600 halfshafts and 1400 columns a day in two shifts: PC & L epartment controls the planning of raw material, production planning, packaging and customer support. PCALL department ‘has one ofthe important functions of Delphi in meeting customer demands. The responsibilities of PCL are planning and ordering of raw materials, production planning, stores, receiving, co-ordination with logistics, packaging, dispatch and customer suppor. From the past few months PC&L personnel were facing problems with excess inventory inthe super markets ‘hich is consuming lot of storage space as shown in Figure. ‘Theissuesin the inbound operations are «+ Excessinventory ‘High transporationcost ‘© muchoftrafieat dispatch area ‘= No contol over supplier arrival times Figure 1 Exees Inorder to over come al the above mentioned isues, the PCL

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