ACKNOWLEDGEMENT

I take this opportunity to extend my sincere thanks to Asian Paints Limited for offering a unique platform to gain exposure and garner understanding in the field of Operations Management.

I wish to extend my sincere and heartfelt gratitude to my guide Mr. Vasanth Devaraj, Senior Manager-Administration and Mr. Krishnan Vaidyanathan, Senior Manager-Plant Personnel who guided and encouraged me during the entire tenure of the project. I would like to thank Mr. Bharath Agarwal, Manager Materials, who supported me throughout the project. For their valuable suggestions and immense support, I would like to thank Mr.Harikrishnan, Mr. Sundarvadivelu, Mr. Ganesh Kumar and the officers of the Materials Department. I am able to say with conviction that I have immensely benefited from prestigious association as a summer intern with Asian Paints Ltd.

During this training period the support & direction were provided by my institute guide Prof. Manimay Ghosh, for which I am thankful for his guidance.

Last but not the least I would like to express my profound gratitude to each and every employee of the organization who contributed in their own way in successful completion of this project.

Unnikrishnan N IMT-Nagpur Roll no. 2009258

TABLE OF CONTENTS

1: 2: 3: 4: 5: 6: 7: 8:

Executive Summary Chapter 1: Overview of the plant Chapter 2: Objectives Chapter 3: Gap identification Chapter 4: Exploring options for space augmentation Chapter 5: Warehouse Management System Chapter 6: Key Learning Contents in CD:
1) Appendix.xls

3 4 8 9 11 15 26

Appendix 1: (Also in CD PFDs.xls) a) Layout of RMG-2 b) Layout of R003 c) Layout of R005 Appendix 2: a) IMC chart (Also in Hazard current.xls) Appendix 3: a) Cumulative Design Doc Data b) Storage capacity available c) Difference in RM mix stored in RMG-2 Appendix 4: proposed RM receipt process 2) PFDs.xls a) Issue area number of bins for RMG-2 b) Issue area number of bins and bin numbers in BG-paint c) Z replenish transaction d) PFD of replenishing issue racks and issue of materials in RMG-2 e) PFD of replenishing issue racks and issue of materials in BG-Paint f) Issue of materials in BG-Pol 3) On CD Hazard level current.xls a) Calculation of Risk in R003 (Trial worksheet) b) Bin algorithm proposed

EXECUTIVE SUMMARY:

The Sri Perambudur Plant of Asian Paints Ltd. in its efforts to maximize the utilization of the available capacity and in its journey to attain 150000KL capacity needs to relook at the Space available for storing Raw materials. While about 90 raw materials are handled in the 4 godowns in the plant, new raw materials are planned to be introduced in the course of next 12 months. The storage space available and utilization of this space was formally decided between the Purchase Department and the Materials department in the plant and put forth in the Design Document in 2006. Four years hence, there have been changes in the RM mix stored in each of the warehouse, the number of inventory days worth of material that is stored in the godowns, and the space available. One of the objectives of the project is to understand the Gaps between what exists and what was envisioned in the Design Document. It was agreed upon that there is a need to look at options for space augmentation. As storage space cannot be increased further because of bound; the only way to increase space is by improving the utilization of the existing space and by expanding within the space available. Space augmentation recommendations are primarily based on utilizing the existing space available and by installing new Racks where materials can be placed.

Raw materials handled in the plant are in the form of powder, or Liquid. Powders are stored in different SKU sizes which range from 25kg to 1000kg and Liquid raw materials either come in tankers, or in Barrels of different SKUs, and materials with higher viscosities come in IBCs. These materials are kept in 4 warehouses namely RMG-1 (Raw material godown-1), RMG-2, BG-Paint (Barrel godown- Paint) and BG-Polymer (Barrel godown-Polymer). The initiative to implement a warehouse management system was primarily for better visibility of the materials, for a better control over the material flow (FIFO adherence), and easier picking. The project also deals with phase-1 of the WMS implementation. It involves designing the process flow diagrams of the material inwarding and material issue, and understanding the WMS transactions involved, the limitations of such a system. Integrating Inter-material compatibility with the WMS system was proposed. The objectives were to minimize the risk of keeping two incompatible materials together and maximum utilization of available space. This involved in coming up with a standard measure of Risk which could be applied across the organisation for risk assessment. A consensus on the WMS process was established with a meeting of the stakeholders, where the infrastructure and manpower necessary for operational effectiveness of the system was also discussed and finalized. CHAPTER-1: OVERVIEW OF THE SRI PERMABUDUR PLANT

Asian Paints is India's largest paint company and ranked among the top ten Decorative Coatings Companies in the World with a turnover of INR 54.63 billion. Asian Paints along with its subsidiaries has operations in 18 countries across the world and 27 paint manufacturing facilities. Of these, 9 facilities in India are at Bhandup, Ankleshwar, Patancheru, Kasna, Sriperumbudur, Sarigam, Baddi, Taloja and Rohtak.

The plant at Sri Perambudur was set up in 2005 with a vision to be the largest paint manufacturing plant in India. It started out with a modest capacity of 25000 KL in 2005 and steadily grew to 140000KL in 2009. In its efforts to achieve the maximum utilization of the available capacity and in its journey forward to attain 150000KL capacity, it needs to look at the Space available for storing Raw materials, as increased production would mean greater amount of RM held at the plant. Since, space cannot be increased further because of nonavailability of land; the only way to increase space is by improving the utilization of the existing space and by expanding within the space required.

Appendix 1 gives the layout of RMG-2, BG-Paint and BG-Polymer OVERVIEW OF WAREHOUSES IN THE PLANT:

About 90 different Raw materials are handled in the plant. These Raw materials are in powder, or Liquid form. Powders are stored in different SKU sizes which range from 25kg to 1000kg and Liquid raw materials come in tankers which are stored in Tanks, or in Barrels of different SKUs, and materials with higher viscosities come in IBCs. These materials are kept in 4 warehouses namely RMG-1 (Raw material godown-1), RMG-2, BG-Paint (Barrel godown- Paint) and BG-Polymer (Barrel godown-Polymer).

RAW MATERIAL GODOWN-1 (RMG-1): This Godown is also called R001 according to nomenclature of the inventory management module in SAP. Here Powder material is stored which are then charged into Silos, or through a charge hopper fed to the TSD (Twin Shaft Dispenserwhere the initial stage of paint processing is carried out). The materials arrive in trucks or containers. The SKUs differ in height and weight. The nomenclature used for different bags are: Sack tip bags of 25kg (these are fed into the charge hopper), and jumbo bags (413-550 Kg, 650 Kg, 750 Kg, 1000 Kg) all of which are stored in their respective Silos.
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There are 30 Silos of a combined capacity of 4073 tons. This tonnage calculation was arrived at based on the bulk-density of the material stored, and the volume of the Silo. Due to safety considerations, only 90% of this capacity is being utilized. The usable capacity of the Silos hence turns out to be 3699 Tons.

These bags are placed on a 1.3 mt by 1.3 mt wooden pallet which is then placed on racks by a fork lift. Jumbo bags are kept 1 per pallet, while for sack tip bags the quantity placed per pallet varies. The maximum weight placed on a pallet is 1000 kg. This is due to the Safe working load of the racks.

The racks in RMG-1 are having 4 levels: Ground G (L), G+1 (M), G+2 (P), and G+3 (Q). The G+3 (Q) level is at a height of 4.3 mt from the ground. The racks on G (L), G+1 (M), G+2 (P) can safely carry a load of 1000 kg, but the Q racks can withstand only 650-700kg weight. Each level is numbered and each number corresponds to a Bin number where a pallet can be placed.

A Warehouse management system was implemented in RMG-1 couple of months back. The bin numbers are generated through the WMS which checks for the availability of free bins and allocates the bins according to a pre-defined logic which is based on the ABC classification of materials. The above mentioned transactions are done by the Materials department.

The issue of material is also done through this system and based on the FIFO logic. The jumbo bags are transferred to the Silo location in the WMS and SAP systems. The sack tip materials are shifted to an issue location named R004 whence the material is charged into the charge hopper. The transactions pertaining to the issue of material is done by the Production department.

OVERVIEW OF RAW MATERIAL GODOWN-2 (RMG-2):

This is also known as R002 as per the nomenclature of the inventory module in SAP. Powder and Barrel materials which are manually added into the TSD or the Mixer (the second stage of the paint making process) are primarily held in this godown. This is situated inside the Manufacturing block and near to the TSDs. Here powder materials come in 25kg bags which are stacked on a 1.3 mt by 1.3 mt wooden pallet. The stacking norms differ from materials, but the maximum qty on a pallet is 1000kg. RMG-2 can be virtually divided into two zones: where the racks are of G+3 levels and racks where only G+2 levels are set-up. The G+3 level is used to keep pallets which weight 700 kg or lesser. This is due to the SWL of the stacker at the G+3 height.

Some barrel and IBCs are kept in this godown because of high viscosity due to which these materials cannot be pumped from the Barrel Godown-paint. These materials are unloaded in BG-Paint and only 1 week worth of Quality approved inventory is stored in RMG-2.

The powder material arrives in Trucks or Containers. They come in multiple vendor batches and the inspection lot for quality is based on the vendor batches and not on the basis of tonnage.

OVERVIEW OF BARREL GODOWN-PAINT (BG-PAINT):

This is also called as R003.Here all barrel materials are unloaded. Barrels come in SKUs of 18 kg (carbouys) to 226 Kg barrel. On each pallet 4 barrels can be placed, while pails can be kept to the maximum limit of 1000kg in one pallet.

Here, the material once approved is moved when necessary by the Materials department to the issue racks which are near the pumps. The production workmen take the material from these issue racks and pump it into the Day tanks which feed the TSD. The barrels are pumped completely, but all the barrels in the pallet might not be necessary. In such cases the pallet is kept near the pump for consumption later.

The godown has racks which have mostly G+3 levels. The Q-level racks are at a height of 4.3 mt. The Material handling equipment available is a ST-15 Stacker whose safe working load at this height is only 600 kg for an eccentric load. Since there is a possibility that the barrels
6

tip during its placement on the Q rack, because of the jerking etc. these bins are not being utilized presently.

12 raw materials unloaded in this godown are used in the M-block. 1 week worth inventory of these materials are kept in RMG-2.

OVERVIEW OF BARREL GODOWN- POLYMER (BG-POL)

This is also known as R005. Materials that are used for the production of emulsion RMs for paint production is unloaded and stored here. R005 has an AC storage location apart from a Non-AC storage location.

Apart from barrels, powders are also kept here. These powders are manually added in the reactor which is on the 3rd floor of the Polymer block. Barrels are pumped into the Day tank location from the ground floor using diaphragm pumps.

Not all the racks here have a G+3 level, nevertheless it is being utilized albeit an unsafe practice since the SWL of the stacker used here is also 600 kg at the Q-rack level.

INTER MATERIAL COMPATIBILITY:

The raw materials used in Asian Paints Ltd have been classified into 21 categories based on the chemical properties. If they were to come in contact with each other, based on the reaction which would occur with the severity of the risk, the cost of the damages,etc the plant has already prepared a chart which is detailed in the IMC (inter material compatibility) schedule. This chart is a 21 by 21 matrix which gives the potential hazard of the reaction of two materials. The potential hazard has been broadly divided into three categories, Danger (which is marked Red), caution (Marked Yellow) and Compatible/ No Risk (Marked green). Appendix 2 given in the CD as Hazard level current.xls gives details of the RM compatibility chart.

CHAPTER 2: OBJECTIVES OF THE PROJECT The objectives of the project are three fold:

1. Gap identification of Space Committed in Design Doc @ 150KL viz-a-viz what is Existing

2. Exploring Opportunities for Storage Space Augmentation

3. To finalize PFDs for WMS implementation in RMG-2, BG-Paint and BG-Polymer.

CHAPTER 3: GAP IDENTIFICATION

The objective of this exercise is to understand if there are any changes that have crept in the years after the latest design document was written. The perspective is mainly regarding the storage space (RMG-1, RMG-2, BG-Paint and BG-Polymer) and its utilization. We look at the Space committed in the design doc for the plant when it reaches 150K capacity (Appendix 3a in CD as Cumulative data.xls), and look at the present Space available (Appendix 3b). The 3 major factors that would affect the need for space: the inventory days that should be maintained within the plant, the space available and the load which can be kept in this space which depends on the stacking norms and other constraints like SWL of stacker etc.

Some major differences observed were: 1) Changes in the Raw materials stored in the respective warehouses. New RMs have been added and some old RMs were either removed or replaced by different ones. 2) There have been changes in the Stacking norms, mostly increasing the qty stacked per pallet. This has improved space utilization. 3) Also, there have been changes in the RM mix stored mainly in the RMG-2. This is given in Appendix 3c. 4) The inventory days to be maintained in the plant have mostly increased. When calculations were done according to the data given by the purchase department it was found that there was a need for more space. Since, there were some discrepancies regarding the data for imported material, the stock for these materials are taken to be the max. Stock levels of the months of Jan, Feb and March of 2010. The average daily demand was found by taking the fortnightly average of the rolling fortnightly plan and multiplied with the inventory days worth thatll be stored within the plant. 1 weeks inventory of barrel materials in RMG-2 is also included in the calculation. LOCATION (pallets/silotons) R001-RMG-1 R002-RMG-2 R003 -BG PAINT R005-BG POLYMER R005-BG POLYMER (AC) ACTUAL ACTUAL REQ AVAIL 459 1684 363 350 445 390 155 136 16 18

The calculations for

Space is

given in excel sheet Cumulative data.xls. The worksheet Sheet 1 presents the space required which is calculated according to the inventory days calculation. In worksheet Table
9

coloumns O, P, Q, R,S, T, U have data from which calculations for the rest of the columns are done. O has the data pertaining to the safety stock days which is taken from worksheet SS,QA which was given by the purchase department. Safety stock of those materials which are imported are put under 1900, 1950 site ids have not been considered because of discrepancies in data. For these materials average stock levels data for Jan, Feb and March 2010 was taken. The average demand (Avg DD) is calculated according to the fortnightly consumption data (24 fortnights in a year) got from the planned consumption these data is put in Fortnight average worksheet.

CHAPTER 4: EXPLORING OPTIONS FOR SPACE AUGMENTATION

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It was suggested that prior to the implementation of WMS in the godowns, and in order to support any increase in space requirement that options for space augmentation in all of the warehouses in the plant be explored.

RMG-1 (R001) The number of pallets that were committed in RMG-1 according to the design document is 604 pallets, but, as of now 1804 pallets exists, 120 of which are used for sack tip issue (R004) and empty bags put away bins. Details are given in Appendix 3b

The company had taken initiatives such as installation of new Q-bins, and increasing the load capacity of each of the M and P level bins to accommodate 1000Kg loads. These initiatives have ensured the maximum utilization of existing space.

RMG-2 (R002) The existing space available is 350 pallets. New racks were installed as a part of the 100KL expansion. The following options are suggested to augment space within the confines. The details are given in Appendix 3b.

1) Shifting materials to another godown to free up space: Pumping AM1512 Defoamer from the Barrel Godown would not necessitate 1 weeks worth inventory to be kept in RMG-2. This would free up at least 12 bins worth of space.

2) Exploring feasibility of installing additional racks: Additional rack verticals (L, M, P, Q) can be placed adjacent, left side, to the 111, 311, 411 and 511 verticals. This would add 20 bins to the existing bins. Shifting racks of the first row from 111 to 122 0.5 mt nearer to the wall would allow for new racks to be installed right behind these racks. This would allow 32 new bins additionally (L, M, P, Q bins)

11

There are no existing Q bins because of the rack heights (1.75 mt between L, andM, & M and P levels), which would put the Q level beyond the reach of the stacker. This height was given to accommodate HEC, MHR and Nipacide DFX RMs. HEC and MHR RMs are stacked 40 bags on top of two pallets, which makes the stack 1.5 mt in height, and Nipacide DFX is 1.45 mt long.

Additional Q bins may be installed since Stackers are available which are able to pick and place materials at Q level. Additional Q bins would add 47 bins. Including option 1 this would come to a total of 98 new bins. In order to add new Q bins, the existing height between the levels wouldve to be reduced to 1.45 mt which would require that the HEC and MHR stacks be de-stacked to 30 Bags per pallet. Nipacide DFX height cannot be changed and hence would require bins which can accommodate the stock of Nipacide DFX. 24 Bins ( 311-314, and 411-414) are given for this purpose.

Since, MHR and HEC come already stacked as 40 bags, there is an additional activity to de-stack these bags to 30 bags per pallet. RMG-2 is on the 2nd floor, the materials are brought up using a Lift. The operators are meanwhile idle for about 5 minutes. The destacking of the bags to 30 bags can be done by the labourers while waiting for the lift.

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With the increase in space it is possible that we can store all the barrel materials which are used in the M-block in RMG-2 itself. This would decrease a major NVA of moving materials from BG-Paint to M-block. The number of pallets necessary to keep all the stock of powder and barrels would be about 440 pallets.

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BG-PAINT (R003): The existing space available in BG-paint is 312 Pallets excluding 79 Q level bins. The Q level bins are not utilized because of problems while stacking barrels using the existing MHEs.

1) Presently, shifting Nipacide DFX to RMG-2 where it is being consumed would free up the bins in BG-Paint. This would also mean that the verticals from 201 to 207 and from 301 to 315 which are so structured that the L, M and P bins are 1.75 mt, can be changed to 1.45 mt to accommodate Q bins.

2) 8 new bin positions can be added adjacent to 701 vertical and 715 verticals.

2) The utilization of Q bins would help tap unutilized space. Options to utilize these bins are following: -- Pallet modification that would help arrest the movement of the barrels while they are placed in the Q bins. -- A plastic stretch wrap, a belt with holes so that tightening is easy, etc are some suggestions which can be looked into for easy handling of barrels being kept in the Q bins. -- Every shipment has at least two or three odd barrels which wouldve to be kept on different pallets. Such pallets could be kept in the Q racks so that the L, M, P bins are available for pallets with 4 barrels.

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BG-POLYMER (R005):

Here the existing space available in Non ac is 118 pallets, while in AC is 18 pallets. Initiatives taken already installed Q bins by changing the height between the levels. It is noted that the initiatives taken have ensured the maximum utilization of space. Details of space available in BG-Pol is given in Appendix 3b

CHAPTER 5: WAREHOUSE MANAGEMENT SYSTEM

Since, a WMS system is already in place in RMG-1, BG (Paint and Polymer) and RMG-2 are within the scope of this project.

The need for a Warehouse management system: Easier Data Accessibility, and Visibility Better control over the flow of material FIFO adherence Variance control: this is to keep check of how much material is actually used and how much goes as waste. Ensures accountability at each stage of flow. Integrating IMC into WMS would help in assessing and reducing the Risk

The implementation of the Warehouse management system can be seen as a step towards a complete integration with the existing ERP and automation system for mistake proofing, greater visibility and control over the material flow.

The implementation of the WMS would be carried out in 3 Phases:

Phase 1: this consists of designing the WMS, and getting consensus on the design of the Process flow diagrams from the stakeholders. Design of a WMS must achieve the following objectives: Designing a system which is easy to maintain. Provides visibility, and is a reflection of the physical process Minimize transactions Infrastructure needed for the ease of operations

15

Also, getting consensus on the infrastructure necessary for the successful implementation of the WMS would be a part of this phase. Phase-2: Integration of IMC with the WMS: Inter material compatibility would primarily decide the logic for Bin placement and retrieval.

This would involve in coming up with a risk measure which could be applied across the organisation.

Phase-3: The installation of the necessary infrastructure like Hand held terminals, etc, and the integration of such a system with the automation system (PCS-7 system) would help in mistake proofing (Poka-Yoke) etc.

Phase-1: Designing the WMS: The following is the proposed structure of the WMS in the plant. All the warehouses are brought under a single warehouse SRM. RMG-2 is given a new inventory module name R007, while the issue area is given as R002 this is to not change the recipe in

16

RECEIPT PROCESS: The existing Receipt process is detailed in the process flow diagram below:

17

The proposed RM Receipt process with WMS transactions included is given in Appendix 4. It can be seen that the introduction of WMS injects a few activities which are required for visibility in the system. Since, the WMS system creates bin numbers based on the inspection lot numbers generated which is based on the Vendor batches that have arrived in the consignment, this would necessiate that during unloading the laborers seggregate it based on the vendor batches.

Also, for the sake of mistake proofing it is necessary that the officers place a sticker with the Bin number written on it on any one of the SKU on a pallet. The bin numbers from which sampled SKU are taken is noted so as to input in the WMSthis is to bring in visibility in the system of the bin number in which a sampled SKU, which is necessary during reassessment, or resampling.

For operational efficiency it is suggested that hand held terminals, much like PDAs which would be able to scan bar codes placed on the pallet would help in these transactions.

RM issue process: The process flow diagrams of issue process and RM replenishment in issue racks are given in The PFDs and materials flows are given in the excel sheet PFDs.xls in the CD. Transfer postings necessary are also given in the excel sheet.

RMG-2: This has two areas, the area where material is stored and where bin numbers are given, and the issue area from where the material is taken for consumption, the issue area does not have bin numbers and is not WMS activated. The issue rack space is provided according to the average daily demand of the powder materials. The issue racks would also need to accomodate the 1 weeks inventory of Barrel RMs.

The material flow is as follows:

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The transfer postings that need to be done for the issue process are as follows: Since the issue racks need to be maintained efficiently and hygiene must be maintained a variance of the issue rack must be taken twice in a week, and the replenishment of the issue area is done once in a day. Here Z-replenish transaction would help in know which material needs to be replenished and in what quantities. The re-order level for the materials is done in multiples of pallet and replenishment is also done in multiples of pallets.

The transfer posting in WMS consists of Transfer order Generatation (TO generation) and TO confirmation. It is proposed that Materials department handles replenishment of issue racks in both RMG-2 and BG-Paint. The TO confirmation of consumption of powder material would be done when the reverse flow is done from PCS-7 to SAP from R002 location.

While the TO generation and confirmation of barrel materials needs to be done by the production when it is pumped into the Day/tank or when it is consumed.

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BG-Paint: The material flow out of the storage area in BG-Paint is depicted below:

The transfer postings into the issue area would be done by the Materials department, while postings into the day tank location wouldve to be done by the production department.

BG POLYMER: The material flow in BG Polymer is as follows:

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Here there is no issue rack. We would need to create a new storage location which would phsyically be in the 3rd floor of polymer block as shop floor location. The transfer postings are as follows:

Here it is important that when the whole pallet is not consumed, it is returned to the same bin number.

INFRASTRUCTURE NECESSARY: Infrastructure necessary for successful operational efficiency. The need for infrastructure is because of the following reasons:
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Complexity of process would increase the work load with the introduction of a WMS. Infrastructure like HHTs would not only support a Palletwise visibility but also help in error proofing when integrated with PCS. Important in Polymer processes.

Additional Manpower would be necessary so that the existing resources not be diverted.

The infrastructure needed would be: 3 HHT with 3 additional back up batteries. Printer for Bar codes 3 workmen for 1st, 2nd and general shift. He would be performing the following functions Inwarding TO generation and confirmation Issue TO generation and confirmation into Day Tank in BG-Paint

INTEGRATION OF IMC WITH WMS: Role of Inter Material Compatibility (IMC) in WMS The Bin allocation and Issue of Bins Bin allocation will be done based on the compatibility of materials near to the Bin. Issue will be done on the basis of FIFO and Risk of the bin

There are two major objectives of integrating IMC with the WMS: Minimize Risk Minimize the likelihood of keeping incompatible materials together.

Maximum Utilization of Space

The major steps involved in this process are: Step 1: To define and quantify Risk. To define the Threshold Risk measure Step 2: Calculate Risk for all the Free Bins available. Step 3: Bins with least risk will be thrown. When there is no bin availability, then Bins above the threshold measure will be thrown, but with a warning.

STEP:1 CALCULATION OF RISK:

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The value of risk is proportional to the Hazard level of keeping two materials together, and inversely proportional to the distance between the materials being stored. The Hazard level is derived from the compatibility matrix designed by the Technology and QA Department at the plant. The matrix looks at the compatibility of the property of the materials. According to the matrix there are three levels of Risk
Danger Caution No Risk

The levels of Risk are subdivided into different categories based on the form of reaction that could each of these categories can also be treated differently for a precise calculation of Risk. The proposed measure considers only the broad categories of Risk (Red, Yellow and Green). Following Risk Measures are associated with each Hazard level. Red Bin has a Risk Points of 240 (this value is different from the Kroners model) Yellow Bin has a risk of 10 points. This would imply that if all of the 23 bins in the vicinity were yellow, the risk would only go up to 230. This scaling has been provided for greater discrimination between the Yellow and Red Risk and hence for better space utilisation.
Danger Caution No Risk 240 10 0

The value of risk is inversely proportional to the distance between materials kept. This measure is termed as Distance Factor. The distance factor is 1 if the materials are placed adjacent to each other, 0 if kept one pallet away or are isolated from each other in any other manner (wall, aisle) For example: Q 201 P 201 M 201 L 201 Q 101 P 101 M101 L 101 Q 202 P 202 M 202 L 202 Q 102 P 102 M102 L 102 Q 203 P 203 M 203 L 203 Q 103 P 103 M103 L 103 Q 204 P 204 M 204 L 204 Q 104 P 104 M104 L 104

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101 and 201 are in adjacent rows which are not separated from each other. All bins starting with 1 are in the 1st Row and those starting with 2 are in the 2nd row. L, M, P, Q are levels in the same vertical.

Materials in the bins 101, 201, 102, 202, 103 and 203 are a potential threat to material in M 102. Distance factor for all these Bins is 1. Distance factor for those beyond 204 (included) is 0. Risk of placing a material in M102 is calculated by summing the product of the Hazard level posed from material kept in the other bins and the distance factor. i.e.: Risk (M102)= (Risk M102 & X); where X= L101, M101, P101, Q101, L201...etc.

The classification of Risk is as follows. The ratings are based on the Kroners rating used for Risk assessment at Asian Paints. 10< Total Risk < 110 Risk Rating is 35 or Trivial Risk If, 110 < Total Risk < 230 Risk Rating is 45 or Medium Risk If 240 < Total Risk < 480 Risk Rating is 70 or High Risk Total Risk is > 480 Risk rating is Unacceptable. Bins will not be allocated The rating helps in gauging which bin be allocated and which bin not be allocated. The Risk measure would be helpful in a greater discrimination between available bins. For the material allocation matrix in BG-Paint on 29th May (appendix 8) risk was calculated and it was found that: Risk No. of Bins Type of Risk Kroners Rating

Risk > 480 240 < Risk < 480 110 < Risk < 230 10 < Risk < 110 Risk= 0

29 26 2 123 77

Unacceptable High Risk Medium Risk Trivial Risk No Risk

>70 70 45 35 0

Bin algorithm proposed according to the IMC bin logic is given in the Hazard level current.xls in Bin algorithm in worksheet. The isolation factor takes into consideration

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whether a rack is isolated from other racks such as if there is an aisle or a wall in between this is given as C in the algorithm. The excel sheet Hazard level current.xls has these calculations in the worksheet Trial. By typing in the bin numbers in E5 and F5, and the material code in G5 we get the risk in H5. If we wish to change the materials which are already present in the warehouse, please change the data in worksheet R003 mat-bins. The bin numbers must get automatically updated in the worksheet Trial.

PROPOSED BIN ALGORITHM:

Objective: To incorporate Inter-material compatibility into the WMS. Requirements for the algorithm: (Please Refer to the Excel Sheet Hazard level current.xls) Material compatibility matrix which is a 21 x 21 matrix (Excel Sheet: RM Compatibility Sheet) based on properties of materials and gives the Hazard level when two materials of different properties react. Each property is given a code number as given below. (This code is represented as P.) To check compatibility of Acid and Biocide, we need to check the cell where row 1 and column 3 intersects. (or row 3 and column 1 intersects)
Property Acid Antifoaming Biocide Base colloid Emulsifier Monomer Functional monomer Plasticizer

P 1 2 3 4 5 6 7 8 9

The racks layout in the godown. The bins are numbered like L101, L105, L310 etc... L 310 means 3 row 10th bin in the L rack. LMPQ racks in the same vertical will have the same number 310. List of Blocked bins. (Blocked Bins are those which either cannot be used due to damage or because they are used as issue racks presently, or do not exist in reality because theres a separation between two pallets. Separations can be in the form of a beam inside the rack, or an aisle.) List of Free bins, i = 101, 310, etc... m free bins, property of material to be put in free bin is P(i) Blocked bins must not be considered. List of Occupied bins; material code linked to their property; j= 102, 312 etc... n occ. Bins. Property of Materials in occ. Bin is referred to as Pj. Blocked bins must not be considered.

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List of Material codes and properties. (RM (i) is represented as the Mat code and Property is represented as P (i) and P (j) ) Free bins Property of RM (Pi) Pi (only one RM is done so only one Pi) P (i) Occupied bins Property of RM (P j) P (j)1 P (j)2

Level (i) L 101 N 315

Level (j) L 102 N 312

Algorithm: Note: The formulas are the same I have used in excel. Please refer to Excel Sheet: Trial. The sheet Main list of materials needs to be updated for new Raw Materials Free Bin List in I & J columns. Occ. Bin list in A & B columns. C columns has material codes D Key in Input Mat code in cell B2, cell C2 gives the property of material automatically. The Row Numbers will change if we are going to use a single warehouse location.

Risk = Hazard x Isolation Factor x Distance factor =HxCxD

(H) Hazard. There is a colour coding in the RM compatibility matrix. (Excel Sheet: Hazard) --No Risk (Grey Colour) = 0 --Yellow =10 --Red = 240 (C) Layout Factor: This is a factor that is related to the Layout of the warehouse. Sometimes rows can be numbered as adjacent like 3 and 4 as is in the case of Barrel Godown Paint (R003), but they are isolated either by wall (in the case of R003) or are separated by an aisle (in the case of R002). This would mean that a material kept in either 3 or 4 would not affect a material kept in 2 or 3 respectively even if they are numbered as adjacent. C= 0, If j is isolated from i C=1, if j is in the same row as i In barrel godown R=3, 4 and 7, and Bins in verticals 207 and 208,

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C=

IF(ROUNDDOWN(i/100,0)=R, IF(ROUNDDOWN(j/100,0)=R, 1, 0), 1) * IF(ROUNDDOWN(j/100,0)=R, IF(ROUNDDOWN(i/100,0)=R, 1, 0), 1) * IF(i=207, If(j=208,0,1),if (i=2008, if(j=207,0,1),1))

In RMG-2, R=3, 5 and 510||511; 410||411;310||311; 210||211; 110||111; AND 203||204; 206||207; AND 114||115;214||215;314||315; 414||415 (Not for 5th Row) C=
IF(ROUNDDOWN(i/100,0)=R,IF(ROUNDDOWN(j/100,0)=R-1,0,1),1)* IF(ROUNDDOWN(j/100,0)=R, If(ROUNDDOWN (i/100)=R-1, 0,1),1)* IF (MOD(i,100)=10, If(Mod(j,100)=11,0,1),IF(MOD(i,100)=11,If(MOD(j,100)=10,0,1),1))* IF(i=203, IF(j=204,0,1),IF(j=203,IF(i=204,0,1),1))* IF(i=206, IF(j=207,0,1),IF(j=206,IF(i=207,0,1),1))*

IF(ROUNDDOWN (i/100,0)=5,1, IF (MOD(i,100)=14, If(Mod(j,100)=15,0,1),IF(MOD(i,100)=15,If(MOD(j,100)=14,0,1),1))

In BG Pol: every row is isolated from each other. C = IF ((ROUNDDOWN(i/100,0)-ROUNDDOWN(j/100,0)=0,1,0) D) Distance factor: Risk is inversely proportional to the distance. The distance factor from the occupied materials if they are not isolated from each other is given as: (Excel Sheet Trial Cell M2, M3, M4)

1 (if they are adjacent), (LMPQ bins of the same vertical is considered as adjacent) 0 (if they are alternate pallets, i.e 1 pallet distance between them) 0 (if they are 2 or more pallet distance away from each other) Or Risk of any material that is not adjacent can be given as 0. Change must be done accordingly to M3, M4.

--Are they in adjacent rows? If they are not in adjacent rows, D=0 IF(ABS(ROUNDDOWN (j/100,0)--ROUNDDOWN(i/100,0))>1,0,1) -- If they are in adjacent rows then; D=1; IF ( j= i,1,0) --If Adjacent pallets, ABS(Mod(j,100)-mod(i,100))=1; D=1; --if 1 pallet distance: ABS(Mod(j,100)-mod(i,100))== 2; D=0; --if more than 1 pallet distance D= 0 Total Risk involved in placing material in location i is the summation of risk due to materials from all occupied bins. The risk of all free locations are seen and the least risky locations for the req number of pallets are given.

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It shouldnt block a location because of high-risk. It should show the risk involved in placing a material at that location. The BIN ALGORITHM is given in Hazard level current.xls in Bin algorithm worksheet.

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CHAPTER 6: KEY LEARNING Most theories of decision making, or of Management styles, make the assumption that the context in which the manager will be working has a certain amount of order to it: That either there are known knowns, or known unknowns. The case studies try to simulate an ordered environment, wherein we can, through analysis of the cause and effect, and analysis of the cost & benefit, come to a logical decision with reasonable assumptions. While an operations case might call for implementation of a robust IT system to support the process, an OB case would discuss the Human side of the process of execution. Here, I have had the opportunity of being in both the classes at the same time. But, the case studies do not discuss an environment that is hostile, unordered, where there are unknown unknowns or when there is a need for rapid or instantaneous decision making. When faced with such a situation, I have been told, the decision making is on an ad hoc basis. I was interested in observing such Ad hoc decisions. Complexity is introduced because of unpredictability in the system. Since, fickleness is the nature of things, while searching for facts in situations where in the cause-effect relationship is not discernable and there are unknown unknowns, one cannot be sure of the validity of past data (since the context has changed dramatically or one cannot define the context properly). So, as I understand it, one must look for the evolution of the right answer through discussion: There are competing ideas none of which can be a sure shot way out of the situation. Here, I believe, there is a need for being creative, for finding analogies where people faced with unknown unknowns were able to move forward. Also, eliminating false assumptions while coming to conclusions is an important part of making a good decision. There is a need that the managers not hold on to archaic ideas which are not applicable to the situation or have an inflexible way of managing things. Patience, encouraging interaction and allowing others to challenge your view point is very important for the evolution of an idea and of coming to a decision on the right way of doing things. At times we are faced with situations that demand rapid response, wherein there is not time for gathering data or discussing alternatives. Here, the courage of taking a decision and the burden of responsibility as the leader, clear communication of what is to be done, is what makes the difference. The experience has been an edifying. My major learning, to summarize, has been the following. Dynamics of interaction between links (Materials and Purchase) within a supply chain The chemistry between departments Production, Materials, QA etc. Parameters involved in designing a WMS system Parameters involved in successful implementation and sustenance of the design. DECISION MAKING:

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Initiating change Leadership styles Decision making under uncertainty Listening as an important tool to convince Departmental Silos and how we break those boundaries: Initiating Transparency between departments

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