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SUBMITTED BY
Swati Singh
(10-06-11)
PGDM-Executive, 2016-18
BY
Swati Singh
10-06-11
Declaration
I hereby declare, to the best of my knowledge and ability that my work on the Summer
Internship Project title JIT Implementation for Seoyon-E-Hwa is a genuine research work
undertaken by me. It has not been published anywhere earlier and is prepared after
completion of the Summer Internship Program with Daimler India Commercial Vehicles
Roll No.:10-06-11
SIMSR DICV
Certificate
Table of Contents
Declaration .............................................................................................................................................. 2
Certificate from summer project guide .................................................................................................. 3
Certificate................................................................................................................................................ 4
Acknowledgement .................................................................................................................................. 7
Preface .................................................................................................................................................... 8
Introduction to Daimler .......................................................................................................................... 9
Timeline................................................................................................................................................. 10
Company Profile of DICV ....................................................................................................................... 11
Executive Summary............................................................................................................................... 15
Milestones............................................................................................................................................. 16
Organization of Supply Chain Management ......................................................................................... 17
Role of MHE Team ................................................................................................................................ 18
End to End process flow........................................................................................................................ 20
Process and department wise work distribution .................................................................................. 24
Work Packages under JIT implementation for Seoyon-E-Hwa ............................................................. 25
BRS is the system requirement for JIT implementation of Seoyon-E-Hwa parts. Benefits arising out
of this development (including report) / enhancement / change: - ................................................. 42
CONCLUSION......................................................................................................................................... 47
Conclusion and Recommendations ...................................................................................................... 49
Acknowledgement
The internship opportunity I had with DICV was a great chance for learning and
professional development. Therefore, I consider myself as a very lucky individual as I was
provided with an opportunity to be a part of this company during my MBA. I am also grateful
for having a chance to meet so many wonderful people and professionals who led me though
this internship period and gave me a home away from home in Chennai.
I also wish to place on record my best regards, deepest sense of gratitude to other
members of the team for their careful and precious guidance which were extremely valuable
for my study both theoretically and practically.
Sincerely,
Swati Singh
Oragadam, 20th July, 2017
Preface
Summer internship is an important part of the MBA degree as it gives us a practical
knowledge of the industry. It gives us an insight of how an organization works. I got an
opportunity to complete my summer internship at Daimler India Commercial Vehicle Pvt.
Ltd, Chennai Plant in the Supply Chain Management domain in the department Management
Handling Engineering.
It was a great experience to work with the corporation which has made itself a brand
in the commercial vehicle sector on the national and international level. Daimler Trucks is the
worlds largest manufacturer of trucks and is consistently increasing its share in the Indian
market.
In addition to the JIT implementation, I also had the responsibility of line side
readiness of frame shop for TF titan.
Introduction to Daimler
Daimler AG is a German multinational automotive corporation. Daimler AG is
headquartered in Stuttgart, Baden-Wrttemberg, Germany. By unit sales, it is the thirteenth-
largest car manufacturer and largest truck manufacturer in the world. In addition to
automobiles, Daimler manufactures buses and provides financial services through its Daimler
Financial Services arm.
As of 2017, Daimler owns or has shares in a number of car, bus, truck and motorcycle
marquees including Mercedes-Benz, Mercedes-AMG, Smart Automobile, Freightliner,
Western Star, Thomas Built Buses, Setra, BharatBenz, Mitsubishi Fuso, MV Agusta as well
as shares in Denza, KAMAZ, Beijing Automotive Group, Tesla Motors, and Renault-Nissan
Alliance. The Maybach marquee was closed at the end of 2012, but was revived in November
2014 as "Mercedes-Maybach", an ultra-luxury edition of the Mercedes-Benz S-Class.
Timeline
1959
1896
Production 2007
2012
Worlds first of Pullman
truck with a van with 2 1981 Start of Global
1. Detroit
4 hp and 2 Heavy duty
controlled introduced as
cylinder 1923 axle
Acquisition Engine Platform
of new brand for
engine prodn. at
First Freightliner power portfolio
Detroit
operational 2001 2015
2. Start of
diesel
production
engine by 1969 Acquisition of Start of heavy
series 900 and
Benz US Engine duty
Start of medium duty in
manufacturer transmission
planetary India
Detroit -DDC production in
hub prodn. Detroit
In Rastatt
1908
Currently, Daimler is present in the Indian market with the Mercedes-Benz brand of
trucks. Beginning 2012, DICV initiated production of commercial vehicles under the
uniquely Indian brand BharatBenz. Towards this objective, DICV had invested Rs.4,400
crores in establishing a state-of-the-art manufacturing plant at Oragadam near Chennai,
including an extensive research & development arm.
Subsequent to the launch of an all new brand "BharatBenz", DICV set to take its
vision and mission into the market. After a successful Premiere of its trucks in March 2012,
DICV inaugurated its state-of-the art plant at Oragadam, near Chennai, in April 2012. Later,
in June 2012, it began production of the Heavy-duty trucks. This was followed by a slew of
dealerships that were inaugurated. On 26 September 2012, DICV launched its Heavy-duty
trucks after an intense period of testing. February 2013, witnessed the launch of the
Light/Medium duty range. DICV also launched the new FUSO range of trucks at its plant on
23 May 2013, as part of its well-coordinated Asia Business Model.
Daimler India Commercial Vehicles Pvt. Ltd (DICV), a 100% wholly owned subsidiary
of Daimler AG, on 10th July 2013, rolled out the 5000th truck from its plant at Oragadam,
near Chennai. DICV is stabilizing its production line of all its launched models. Currently,
DICV produces the 2523, 3123, 2528, 914, 1214, 4923, 4928, 3128, 1623 & 1217 (Heavy,
Medium/Light-duty rigid & tipper trucks) with several more variants.
Domestic Vehicles:
Thunderbolt
3143CM Used for heavy duty, off road, deep pit iron ore mining, coal mining, etc.
31T max. Vehicle weight with a usable load of 19T and a 12L 430HP BS4 engine.
4023T 4928T
Buses
Export Vehicles:
On MARCH 6TH 2014, Daimler laid the foundation stone for its new bus plant. The new
bus manufacturing plant is spread across an area of 27.91 acres within the existing premises
of DICV. The bus plant manufactures and assemble buses under the Mercedes-Benz and
BharatBenz brands and will be completed by the 2nd quarter 2015. The DICV plant in
Oragadam will thus be the only Daimler Truck plant worldwide, that manufactures three
brands of Trucks and Buses, as well as engines under one roof. Daimler India buses are
offered in 9t, 16t and above 16t categories in both front and rear engine configurations. An
investment of INR 425 Cr has been earmarked for the bus project in India for an installed
capacity of 1500 units in the initial phase. The capacity can be further expanded to 4000 units
subsequently. On 10th April 2014, Daimlers BharatBenz trucks rode on high gear and
crossed 10,000 units sale. In the end of 2016, Daimler achieved the following:
Executive Summary
The Supply Chain Management department is divided into various divisions namely
Power train, Vehicle, In Bound Logistics, Out Bound Logistics, In Plant Logistics,
Consolidation Centre and more. Each division is tasked with ensuring the supply and
availability of particular parts and aggregates to the production line. I was working in the
MHE department which is responsible for plan for every parts used in production line,
logistics Infrastructure necessary for material storage, handling and movement, packaging
concerns and resolution process, packaging design and development.
The Supply Chain and Logistics (SCML) department handles more than 6000
different parts from about 280 local suppliers across India. These suppliers are spread out
across various regions and cities like Chennai, Coimbatore, Pune, Pithampur, Rajkot and
Delhi. In addition, there are many parts that are imported and many parts that are under
development for localization and exports, which are also handled by the SCML department
through its Consolidation Centre. Finally, the finished vehicles are also transported by
SCML. During the course of the training, the working of different sub-departments was
studied and different parameters were evaluated based on the criticality and importance for
keeping the Heavy Duty Trucks, Medium Duty Trucks and Bus production lines running.
Every team of the supply chain management is interconnected with other teams, and a
common reporting standard was developed, so that key KPIs and aggregate supportability
numbers are easily available for all teams.
The main goal of the project need to connect all supply chain activities by inventory
and space reduction, efficient storage and handling , reduction of truck turnaround time and
by reduction of multiple handling. JIT implementation of Seoyon-E-Hwa will result in
savings of 3 lacs INR and 35 sq. m. of storage space.
Milestones
Ollows
HDT Engine
I. Material Trigger to supplier: First marketing and sales team will give the monthly
requirement as per market scenario. Then PPS team will validate the supportability and
schedule the posting on vendor portal. IBL team will give collection date to supplier.
Supplier will generate invoice copy and ASN (advanced ship notice) and will plan for
material delivery as per IBL team.
II. Reporting at Material Gate: Once supplier truck reaches at material gate, DICV
shipment related vehicles comes to parking area. After parking, driver walks to Material
Gate (MG) and hands over Original for Buyer (OFB), Duplicate for Transporter (DFT)
and Lorry Receipt (LR) to Security. Security verifies document and gives invoice to
Inward team.
III. Inwarding Activity: Inward team looks for ASN availability. If ASN not available then
truck will be parked at yard until ASN is raised or Deviation note is received. IF ASN is
available then invoice is processed for Inward Entry .GVN is printed and handed over to
Driver. Reporting of vehicle at concerned dock as mentioned in the Goods Verification
Note.
IV. Unloading Process: Unloading Team verifies Vehicle details as per GVN /Invoice copy,
and then unloads the material. Checking the no. of pallets/Packages unloaded and is
verified with GVN. Acknowledgement given on GVN 2nd copy and same is handed over
to driver.
V. Quantity matching activity: As per GVN, 100% Physical verification carried out only for
top 20 discrepancy supplier which will be circulated quarter wise and the same will be
displayed in all unloading docks. Sample check made in all other receipts. In case of
discrepancy /packaging damage then material is moved to hold area and discrepancy
report / ISPR report is generated.
VI. GRN preparation: Based on GVN acknowledgement GRN is prepared. GRN No written
on the GVN and GVN is forwarded for matching. Gate Exit is done based on
acknowledged copy. Driver will be given extra invoice with security stamp & Material
gate stamp as acknowledgement for material receipt.
VII. Invoice submission to Finance: GVN is matched with Invoice. GRN No written on
invoice. Extra copy of invoice & GVN filed for reference purpose. OFB & DFT is
submitted to Finance \based on Finance report, acknowledgement is taken for submission
and filed for reference.
VIII. Gate Pass Generation with Quality Flag at the Gate: Parts requiring Incoming quality
inspection are identified by Q-Flag in SAP System Gate Pass is generated with items and
Quality Check Indicator.
IX. Materials are unloaded at the designated dock: IPL -Unloading team will receive the
gate pass and unload the items. Items which are to be checked for quality are segregated
based on Q-Flag in the GVN/Gate Pass, All after sales receipt for 100% inspection:
Palletization of items which are to be moved to quality inspection area Sampling Plan
agreed between PQ&IPL to be used for segregation All after sales receipt will be 100%
offered to PQ for inspection irrespective of Q-flag.
X. Goods Receipt in system: System Transaction to receive goods in system is done and GR
Slip is generated; Items are blocked until quality inspection is completed Quality
Inspection team is notified.
XI. Movement to Quality Inspection Area: Items which are to be inspected for quality are
moved to quality inspection area sampling quantity is only moved to quality inspection
area.
XII. Quality Inspection is completed: Preventive Quality Team approves the usage of
material in the system by triggering a usage decision in system.
XIII. Communication of usage decision to In- Plant Logistics Team: In-Plant Logistics
receives email regarding put away Usage Decision triggers a put away slip in the printer.
XIV. Movement to designated storage location: Put away slips generated indicate the
designated location to which the approved items need to be put away.
For Seoyon-E-Hwa there is no quality check part. Finally from LC to line side movement of
parts internal Kanban is used.
Pick list is generated after scanning all the barcode of Kanban cards at production line side.
Post picking data after scanning all Kanban cards in a route, pick list is generated in LC. Parts
from LC are collected as per pick list and kept at staging area. Tugger operator will get the
parts from staging to feed the line side location. Stock will transfer from PP-10 to WP-10.
Sample Sheets (used during material Inwarding & Out warding)
Invoice Copy
(GVN)
GRN
Pick List
Kanban Card
Monthly
Marketing Requirement
Validate 6 week rolling Upload in Plan moves Agg. Level MRP Run Schedule
PPS supportability plan APO to D2S requirement Short and posting on
generation long term vendor portal
Give
IBL collection
date to
supplier
Generate Generate
Supplier invoice and invoice and
ASN ASN
Y
Generate Prepare GVN
Material invoice and Verify
Gate ASN
N
SM will
SM correct ASN
Rising of
claim to SM
Scanning Moving of
N of TO for material to
Y N Material supp. no. desired
GRN
Unloading of Verify Q flag moved to to move location
IPL material
preparation and
put away and
as per parts par to
label printing
GVN desired closing of
location TO
Stock moves in
SAP Y
Parts moved to
PQ PQ
It is an attempt to identify and define project work (goals and objectives) and to establish an
efficient decision making process for managing further planning and development of the
project.
For JIT project different department stakeholders alignment is must where appropriate
project participants are working within acceptable tolerances to develop and meet a uniformly
defined and understood set of project objectives. Aligning the project team involves
developing clearly understood objectives for all team members and gaining the commitment
to work toward those goals. Different project team involved in JIT is MHE, IBL, SCQM,
PPS, and IPL.
Tactical Implementation Plan is derived from a common understanding of the project need to
change or improve, and is the common tool that is used to make it clear to all, the actions
required to achieve the JIT goals and targets. A Tactical implementation plan incorporates the
resultant actions from the gap analysis phase which enables the move from current to future
state. To plan and execute actions effectively requires the use of a standard and structured
scheduling tool. The T.I.P. is constructed to show the tasks that are required to be completed
in a specific timescale, and make visible the progress against each task to be able to review it
on a regular basis. Missed milestones need highlighting when known, and then the standard
escalation process needs to be followed.
This calendar specifies the duration different stakeholders must give for the project.
This includes the activities related to holding parts and the processes of counting and
transacting the parts as it moved out of LC.
Kickoff meeting is the first meeting with the project team and the client of the project. This
meeting would follow definition of the base elements for the project and other project
planning activities. This meeting introduces the members of the project team and the client
and provides the opportunity to discuss the role of team member. Other base elements in the
project that involve the client may also be discussed at this meeting (schedule, status
reporting, etc.).
PFEP is a database that is maintained to record information of each part, part number, pack
quantity, variant list, part description, point of consumption, packaging dimensions, loop
quantity, stock at DICV etc.
TAKT time is the available production time divided by the units a customer demands. For
HDT line takt time is 8.4min (540/64) and for MDT line 13.5min (540/40).
Present inventory level data is collected from SAP. Inventory level in the plant (in days) =
Lead time for replenishment (in days) + Safety stock (in days). Safety stock depends on
factors such as; unplanned production peaks, quality rejection of supplier parts, Truck
breakdown etc. Based on previous record of production fluctuation and supplier part rejection
rate safety stock can be defined between 1.5 to 2 truck load of inventory
Space occupied by each part is measured with IPL team to cross check space saving after JIT
implementation.
Verify PFEP at LC
Plan for every part is check with IPL team in LC. This step includes cross checking the part
number against part pack quantity, packaging dimensions, storage location, actual pallets
present at LC, maximum pallets for the parts, area occupied by the individual parts.
Current state mapping is a lean-management method for analyzing the current state and
designing a future state for the series of events that take parts from its beginning through to
the DICV.
From DICV supply manager send daily schedule of parts requirement to supplier through
mail and supplier gets the monthly forecast at beginning of every month through SAP.As per
daily requirement supplier keeps the FG ready in DICV pallet at dispatch area. TVS logistics
is the logistics partner for DICV. For plant#2 total trips is 2 per day and for plant#3 is 1 per
day. Plant#2 is 3kms from DICV and plant#3 is 30kms.Empty pallets loaded trucks reaches
supplier plant and unloaded .Total time of travelling for plant#2 is 15mins and plant#3 is
45mins and unloading time for plant#2 is 20mins and for plant#3 is 35mins. FG pallets are
loaded back in trucks and time for loading at plant#2 is 26mins and for plant#3 is 75mins.
Trucks after loading return to DICV fence gate and the time from plant#2 is 7mins and from
plant#3 is 30mins. After reaching to DICV Inwarding procedure starts which takes 15mins
for plant#2 parts and 60mins for plant#3 parts. After FG unloading trucks goes to side
loading area of DICV for empty loading and time recorded for plant#2 is 28 mins and for
plant#3 is 20mins. By considering all the above mention time and including waiting time
total trip time for Plant#2 is 4hrs 45mins and for plant#3 is 23hrs.
Part Matrix for Seoyon-E-Hwa contains all the details of the parts. There are total 72 parts pf
Seoyon-E-Hwa out of which 26 is from Plant#2 and 46 from plant#3.Sample copy of part
matrix is shown below.
Truck load capacity calculation for plant#2 is shown in the following excel sheet. The
efficiency of truck for plant#2 is 98% and the weight required is 52%.This data is received
from IBL team.
Truck load capacity calculation for plant#3 is shown in the following excel sheet. The
efficiency of truck for plant#3 is 94% and the weight required is 64%.
1 2 3 4 5 6
Inventory Inventory @ Inventory @ Storage space Area Area
Level @ plant 2 plant 3 measurement calculation @ Calculation @
supplier end plant 2 Plant 3
9 8 7
System Packaging Past 3
Requirement Verificati month line
on at LC stoppage
data
Inventory at supplier end is calculated and cross verify with the forecast volume of Daimler
requirement for both the plants. How much of inventory in the form of finished goods must
be present at supplier side to cater to Daimler daily peak volume. Excel sheet for both the
plant inventory is given below.
Inventory at Plant#2:
Inventory at Plant#3:
Dispatch area and finished goods area layout of Seoyon-E-Hwa end is measured. After JIT
additional space requirement is calculated and implemented after discussion with the
supplier. Layout and area calculation for both the plant is given as follows:
No Location Size
Raw Material 50
1
Area 1 Sqm
1 3 Raw Material 40
2
Area 2 Sqm
50
4 FG Area
Sqm
This step involves understanding supplier end process. Plant#2 and plant#3 visit done to
know how they storing, loading and unloading DICV stock. How much area space is for
DICV, how much inventory is maintained, which vehicle is used for inventory movement.
How much time is required for parts loading, unloading, waiting time for gate in, dock in,
dock out, gate out.
1 2 3 4 5 6
Last 3 month Average Next 3 month Demand Delivery Vs Rework Data
production demand forecast plan fluctuation Plan Data (% rejection)
volume
9 8 7
Forecast 3 months data is taken. Highest consumption for particular months among the 3 is
considered and is divided by 24 days (no. of working days) which in return is divided by the
usage per vehicle to get the average volume.
Collect the data from PPS for next 3 months forecast/Plan and Calculate the
average demand based on forecast volume
PPS team looks into the production planning and scheduling after getting details from
marketing and sales team about market demand. On basis of market demand they prepare the
forecast value for each and every part. This will give the average daily consumption volume.
Based on which operation stock and safety stock at DICV is calculated. This further will
define the truck trip and volume.
Collect the past 3 month line stoppage data due to Supplier parts
This line stoppage data is from IPL team and there is no line stoppage due to Seoyon-E-Hwa
parts.
i) Repackaging / standard packaging Out of 72 parts 5 parts repacking is done and
rest 67 parts are kept in containers received from supplier end.
ii) Container loop For 72 parts 341 containers is in the loop.
iii) Container classification - Out of total 72 parts 38 parts are kept in GLT whereas
34 parts are kept in KLT.
Packaging verification at LC
Physical verification of each and every parts of Seoyon-E-Hwa is done at LC. Which include
counting the number of pallets, bins/container dimension, pack quantity and internal Kanban
cards and area occupied by parts.
System Requirement
BRS is the system requirement for JIT implementation of Seoyon-E-Hwa parts. Benefits
arising out of this development (including report) / enhancement / change: -
Implementation of E-Kanban by sending automatic trigger to supplier for parts
dispatch based on the consumption of parts at line-side.
Automated trigger to the supplier for Just-in-time parts delivery.
Real time transparency on physical stock through intranet portal.
Portal should send the mail regarding consumption information to the supplier at
regular defined interval.
Fields Description
Vendor Code JIT supplier
Plant 6365
Part Number All parts from the selected vendor based on the vendor code
Opening stock Stock immediately after the trigger time
Received stock Stock when GRN is made
Consumed Stock transfer from PP10 to WP10 ( Consider open posting for calculations)
stock
Safety Stock Reflect the existing safety stock (in Nos.) from SAP
Rejection Consider the RJ10 value
Available stock Opening stock + GRN - Consumed stock
After implementation of JIT total inventory for Seoyon-E-Hwa parts reduces from 24773 to
9618. As a result of inventory reduction inventory cost reduces from 2695110.57 to
2385207.04 resulting in saving of 11.5%.
After JIT implementation inventory storage space reduces from 248.86m2 to 213.24m2.Total
area saving of 35.62m2 is done. This results in cost saving of 14 lacs almost 14.31%.
2 trips per day for plant#2 and loading pattern is shown below
For plant#3 1 trips per day is shown below with pallet loading pattern is shown below
4C proposal
1. Container
2. Container presentation
3. Consumption
4. Container delivery internal logistics
Kanban calculation
Kanban calculation is done keeping 3 days of loop quantity for plant#2 and 4 days of loop
quantity for plant#3.Although we have tried to send e-trigger rather than physical Kanban
cards to avoid the loop holes in the system after fixing the part quantities with IPL team
(based on consumption stock on daily basis).
Key performance indicators (KPI) are a set of quantifiable measures that a company uses to
gauge its performance over time. These metrics are used to determine a company's progress
in achieving its strategic and operational goals, and also to compare a company's finances and
performance against other businesses within its industry.
In this project inventory cost saving of 3lacs is calculated and space saving of 35m2 is
calculated which brings cost saving of 14lacs.
Strengths Weakness
Opportunities Threats
CONCLUSION
The JIT production process means inventory levels are kept to a minimum. A low inventory
figure on the balance sheet means a higher inventory turnover ratio, making the company
look more efficient. A company with little to no inventory has a much higher ratio than a
company with equivalent COGS expenses that utilizes a more anticipatory production
strategy. High inventory turnover ratios are considered a good sign of operational efficiency,
effective purchasing management, and productive use of advertising and promotional
campaigns aimed at generating sales.
References :
http://wiki-int.e.corpintra.net/display/artikel/Kanban-Simulation+-
1
+Introduction+to+Pull+Systems
2 http://wiki-int.e.corpintra.net/display/artikel/Pull-+Produktion
3 http://wiki-int.e.corpintra.net/pages/viewpage.action?pageId=35728639
4 http://wiki-int.e.corpintra.net/display/artikel/Signal-Kanban
5 http://wiki-int.e.corpintra.net/display/glossar/Pull+Prinzip
6 http://wiki-int.e.corpintra.net/display/glossar/JIS
7 http://wiki-int.e.corpintra.net/display/artikel/Methode+Milkrun
8 http://wiki-int.e.corpintra.net/display/artikel/LOG- Standards+Idealband+Halle+9+W67
9 https://team.sp.wp.corpintra.net/sites/00116/tos/TOSplus%20Dokumentenbibliothek/TOS+
%20Comic%20Simple%20Show%20englisch.wmv
10 http://www.investopedia.com/terms/e/end-to-end.asp
11 https://en.wikipedia.org/wiki/Just-in-time_manufacturing
12 http://www.toyota- global.com/company/vision_philosophy/toyota_production_system/