Professional Documents
Culture Documents
6 Implementation of ObsolescencePolicy.............................................23
Policy on Slow Moving / Non Moving Stock............................................................................23
Slow Moving Stock (1 Yrs. Old Parts).................................................................................24
Very Slow Moving Stock (2 Yrs. Old Parts)...........................................................................24
Non Moving Parts (3 Yrs. Old Parts)....................................................................................24
Orders should be generated using the software. The order quantity of items depends on following
factors:
Current stock in hand: The actual stock in hand with the Distributor (AGNI) and the time
required to exhaust that stock.
Demand History: The demand for a particular item in last 12 months is taken into account for
order generation.
Lead Time: Time from the date of ordering to the date on which the spare parts consignment
actually reaches the distributor. Factors that affect total lead time are order processing time at
M&M and transit time from M&M to Distributor.
In addition to above mentioned factors, some more factors have to be taken into consideration.
-Seasonal changes, during the year and their effect on future demand should also be considered.
Some examples of the parts which have seasonal demand are:
Parts Season
Wiper Rainy
AC Summer
-Sudden Requirement of parts, Sometimes demand for a particular part increases due sudden failure
of that part & later on it comes down to normal level. This should also be taken into consideration while
preparing the orders.
Frequency of Order: There is no particular time for placing orders by the distributor. It is
recommended that the distributor should fix a particular day to place the orders .Frequent
orders results in lower inventory of parts at distributor end, better cash management (better
fund rotation),better ordering of parts.
Back Order: Distributor has to consider the items that have already been ordered but is
currently in back order with M&M.
Transportation Time: It is the time taken for the consignment to reach the Distributor after
dispatch from M&M.
Order processing at M&M, on the day the order is received from the distributor, payment
check is done, order is processed and parts allocated. The picking instruction is generated,
picking and packing of parts is done, the parts are invoiced and dispatched.
Material in Transit: Order generation through your system should take into account the
material in transit, i.e. the consignment that has been dispatched from M&M but has still not
reached distributor.
Note: After generation of order by the software, the distributor must review the parts and
quantity in the order and make necessary modification as per requirement.
1. INFORMATION TO BE MAINTAINED
Procurement
Demand vs. Supply from M&M to Agni
Service level of M&M to Agni
Order Ratio of Agni to M&M (REGULAR ORDER/VOR ORDER/URGENT ORDER)
Parts in Back order of Agni from M&M
Lead time calculation of parts coming from M&M to Agni
Rate deviation comes in PI vs. .Invoice
On order parts
On transit parts
Discrepancy Report (Damage/shortage/wrong supplied etc.) coming in each consignment
KPI - Order Ratio (Stock Vs. Rush & VOR)
Order Ratio of Agni to M&M (REGULAR ORDER/VOR ORDER/URGENT ORDER)
Order Ratio: This indicates the efficiency of stocking of parts the customer need.
Ideal ratio is
Stock ordering 90%
Rush & VOR orders 10%
Lower % on Stock orders indicate a poor Service level & hence potentially poor Customer
service
Lower Stock Ratio means lower gross profit on parts Sales.
Sales
Item wise, Posting group wise, location wise with M&M SUPPLY,M&M BY AIR & LOCAL
PARTS sales (Qty wise & Value wise) monthly
3s,2s.1s,Retail, Un Authorized Workshop (UAW),counter, internal service sale monthly with
Target vs. Achievement
Lost Sale data monthly
Demand vs. supply
Service level (Parts first fill rate) monthly (Distributor to Dealer & Parts Fill Rate to
workshop)
Parts in your back order monthly of 3s,2s.1s,Retail, Un Authorized Workshop
(UAW),counter, internal service
Inventory
Part no wise inventory (Qty & Value) monthly
Posting group wise, location wise with M&M SUPPLY,M&M BY AIR & LOCAL PARTS
INVENTORY (Qty wise & Value wise) monthly
Discrepancy Report (Damage/shortage/wrong supplied etc.) monthly from every location
during handling
No sale in 1/2/3 years parts
Dead Stock Amount
Space utilized / inventory
Importance of payments timely arranged payments by dealers is necessary for AGNI to process order
.In other will be processed after payments are secured by AGNI.
Delivery lead time is calculated once the payment is confirm. If the payment is not prepared within a
certain period, concerned orders can be cancelled without prior notice.
As all orders will be processed after payment timely and accurate is essential for good service to our
customer.
Validation (Checking of part no, order qty, Amount & order day)
NO BACK
IS STOCK ORDER
AVAILABLE
YES
NO
IS PAYMENT
AVAILABLE FOLLOW UP WITH DEALERS
YES
PARTS IS ISSUED
INVOICING IS DONE
NOTE:
1. Freight charge will be paid by dealers on by AIR MODE (VOR ORDER& EMERGENCY ORDER)
1) For all the filed supplies, the parts are sourced from the manufacturing plant.
Since these parts are not required in the field on a continuous basis, a definite
Lead time is required to supply them. Through analysis, it has been identified
That the parts listed out below require a lead time minimum of 60 days to supply.
2) This will be applicable to all the order types (VOR, Rush order or Stock order).
Our commitment on the supply of the rest of the parts will continue to remain
The same.
3) The list of parts is given below:
1. CARGO PANELS
2. BODY SHELLS
3. ASSY FRONT END LESS DASH PANEL
4. KIT ASSY PANEL FRONT & ASSY GUSSET
5. ASSY WHEEL HOUSE FRONT
6. ASSY REAR WHEEL HOUSE FRONT
7. PANEL ROOF
8. ASSY EXTN HOOD
9. CHANNEL DRIP RAIL SIDE
10. PANEL ASSY HEADER REAR
11. CAP DRIP RAIL
12. PANEL ASSY HEADER FRONT
13. PILLAR A INNER UPPER
14. PANEL RING
15. CHANNEL DRIP RAIL PILLAR
The Prices of similar parts of competitor models should be studied for competitive pricing.
The profit margins of the fast moving parts should be flexible. It should be kept as such that it is
in comparison to similar competitor models.
Comparison with grey market should be avoided as there is no quality assurance.
Marketing
The information about the availability of spurious parts is useful to capture the untapped market.
Field representative for market study can help in the finding out the customer requirements.
The sales potential has to be calculated according to the vehicle park.
The potential market calculation will give a clear picture about the market share.
Sales promotion
Safety and cleanliness are the two most important points to maintain in a warehouse operation.
Efficiency is a third. To achieve these ends, we offer some daily and monthly warehouse operation
checkpoints.
a). FIFO:
Per Person/Hour
Number. of Lines Received ds
ji
Transportation Cost qa
vs. Sales
Manual B/Os
Number of Lines o
Ratio
ol
Claims
Number of Claims ml
Back Order kj
Number of Months gb
It is recommended that receiving be performed by two workers. One worker reads quantity and
location bin code from a receiving list based upon invoice information and/or packing lists.
Another worker counts the quantity received and writes the bin code on the parts. For bulky parts
in boxes, it is better to write the bin code on each box. To prevent writing or reading errors, it is
good practice to prepare beforehand a sticker with the part number, quantities and bin code to put
on the parts when they arrive.
Separate parts by zone and row number of bin code during the receiving process to make storage
quicker and easier.
If parts without a bin code assigned to them are discovered, immediately advise the person who is in
charge of assigning of bin codes.
When storing the parts on the shelf, the part number should be matched with the part number on
the shelf. To make it easier to read and pick the parts for shipment later, the parts should be placed
so that the part number label side faces the front. The principle of first-in first-out should be
followed, where the newest stock is placed near the back or bottom of the existing stock, so that
the older stock will be shipped first. This prevents parts and their packaging from deteriorating due
to overly long storage periods.
In case there is no space to store the parts, use a provisional space with the same bay number. If
there is not enough space even in the provisional space, advice the person who is in charge of
assigning bin code or warehouse in charge.
If the parts are wrongly received in part number or quantities, or are damaged, advise an
warehouse in charge, spare head , inventory auditor & account about invoice number, case number,
part number and quantities. Take a picture of mistaken items in order to file a claim with
MAHINDRA & MAHINDRA. Take a picture of damaged items and their packaging in order to
file a claim with the shipping company.
Discrepancy types which comes in our spare business unit (SBU) during
warehousing process:
Excess (overage): Quantity of supplied parts is larger than what was invoiced or physical stock
is greater than system stock in locations during physical verification.
Not Received (Shortage): Quantity of supplied parts is smaller than what was invoiced or
physical stock is lesser than system stock in locations during physical verification.
Wrong supply: When a part is different from its drawings (parts are different in shape , color
and size from a correct one).
Damage: Supplied part with external damage (Broken/dented/scratchedetc.)
It is not necessary to open the box to count quantities. Pick this qty.
50 PC for picking if the box in good shape (not broken).
Seal and ship out as many carton boxes as possible before end of each day and to minimize
picking, checking and packing jobs left in process and unfinished each day. This will boost
performance measures regarding number of lines shipped, and will prevent loss of items still in
process. To do this, put more manpower on checking and packing than on picking when close to
the end of the day. (At the beginning of the day, put more manpower on picking jobs.)
For a large-size warehouse, provide an empty truck all day long in order to load packed carton
cases immediately after they are sealed and ready to ship out. This will avoid the need for
valuable storage space for cartons that are packed.
Check for number of hours or days of delivery and delivery routes from warehouse to dealers
periodically.
A) Receiving
B a r C ode S ca n n er
CRT 1 2 11 0 -3 4 E 0 0 -0F 0
C ase D ata
Even with the best of Inventory Management tools, there will be some inventory which may not be
moving but lying in stock
Action plan:
Action Plan:
Segregate these parts & scrap them as one time cleaning process
Such parts should be taken out of Stock for reporting purpose