ERP

- Containing the ability to link customers & suppliers into a

complete supply chain
- An enterprise wide set of management tools that balances
demand & supply
- Employing proven business processes for decision making and
providing high degrees of cross functional integration among
sales, marketing, operations, logistics, purchasing, finance, new
product development, HR etc.
ERP

- Sales Forecasting
- Supplier rating & performance
- MPS & MRP
- Capacity
- Shop floor planning
- Customer order entry
- Inventory in & out
- Purchase order
- Accounts payable, receivable, G. Ledger, Cash Mgt etc.
- HR
MRP

- What are we going to make

MRP
- What does it take to make it
- What do we have
- What do we have to get
Materials Production
Planning Planning
Process waste
- Too many signature levels
- Unclear job descriptions
- Obsolete database
- Purchase orders not matching quotation
- Wrong data
- Poor office lay out
- Unnecessary e-mails
- Waiting for next process step
- Over production
- Defects & extra inventory
Kaizen

- Japanese term
- Kai means “continuous” & zen means “improvement”.
- Kai means “change” & zen means “good or for better”.
- Derived from Gai San
- Gai mean The action to correct
- San mean action that benefit the society
- “Just do it” by stakeholders (operators, owners, managers)
- Ongoing improvement involving everyone
Lean

- “A manufacturing philosophy that shortens the time line

between customer order and the shipment by eliminating waste
(non-value-adding activities).”
- Commitment to continuous improvement
- Systematic approach for Waste elimination from process
- Doing more with less
- Zero waiting time
- Less of materials, time, resources, people, money
 Lean / Continuous elimination of waste

Inactivity

Excessive stocks

Dirt and disorder Scrap and defects

 5 S or Cando

- Sort / Proper placing

- Straighten/Arranging
- Shine / Clean work area / Safety / e.g oil leakage
- Standardize/systemize / Consistency
- Sustain / To keep process going th. Training, communication etc.
Jidoka

- Stop & notify the problem / abnormality

- Rectify problem and then move
- This system gave faith to worker & allow the worker to stop
- This system gave liberty and authority to worker
- Separate man’s work
- Separate machine’s work
- Quality in production process
-
TPS (Toyota Production System)

- Taiichi Ohno visited USA in 1956 where customer choose exactly

what they wanted & in the quantities they wanted
- Customer satisfaction
- Just in time + Jidoka
- Employee satisfaction
- Mutual trust b/w employees & Mgt.
- Team work
- Delegate authority
- Search for opportunities of further improvement
-
Six Sigma

- Motorola engineer Bill Smith pioneered the concept

- A quantitative approach to measure quality & service
- A metric that demonstrates quality levels at 99.9997%
- Statistical approach to problem resolution & improvement
-
Who Uses Six Sigma?
Sigma Levels and Defects per Million (DPM)

σ Level PPM or DPM

2 308,537
3 66,807
4 6,210
5 233
6 3.4
Comparison

Six Sigma Traditional

Focus on Prevention
Low cost
Stable/Predictable Processes
Proactive
Low Failure Rates
Focus on Long Term
Efficient
Manage by Metrics and Analysis
Focus on Firefighting
High cost
Processes based on Random Probability
Reactive
High Failure Rates
Focus on Short Term
Wasteful
Manage in haphazard wayants”
Just in time

- Making only what is needed

- Purchase only when it is required
- It eliminates large inventories
- Continuous flow
Kanban

-The Japanese term means “signal”

- Printed card contains the information like name, quantity etc.
- Communication b/w workers / managers
ISO

- Write what you say

- Do What you write
- More focus on documentation
- DuPont, Toronto plastics, Sun Microsystems etc got benefits
Class A
- Behavior
- Process re-engineering
- Involvement & integration
- Trust & teamwork
- Performance measurement
- Root cause analysis
- Frozen demand philosophy
- Sales & operation planning
- Open & honest communication
- Internal customer agreements
-Data accuracy , Success stories, projects etc.
Total quality

- Perfection
- Consistency
- Eliminating waste
- Speed of delivery
- Compliance with policies
- Doing it right the first time
- Delighting customers
- Total customer service & satisfaction
- Hyundai, P&G
Logistics / Transportation
- The frustration of going to a store to purchase an advertised item,
only to find out that store’s shipment is arriving late.
- The difficulty in shopping for food, clothing & other items if
logistical system is on strike
- Military Logistics
- Largest area in logistics cost
Logistics / Transportation

Responsible for the physical movement of materials / products

Tangible products need transportation
Less transportation cost may make trade more attractive
Factors are fuel, Vehicles, taxes & Drivers
Companies introduced regional warehousing rather national
Transport is one of the most expensive part in supply chain
Logistics / Transportation

Retailers
Suppliers

Logistics service 
providers

Consumers
Electronic d ata i nterchange Electronic data i nterchange

Consumers
Manufacturer

Suppliers
 Retailers
Mode of Transport
- Air
- Rail
- Road (Trallers, Bus, Trucks, Vans, Dumpers, Trucking
- Water (Cargo, Bulk Carriers, Tankers, Container ships, Ferries RORO
- Pipeline
Players

- Shippers (Include producers, couriers, brokers, agents, drivers)

- Carriers (Shipping companies, lines, railway, trucking etc.
Factors

- Per unit & Total cost

- Protection of theft, weather
- Direct Shipping vs Trans shipment
- Time, Volume & Value
- Distance
- Packaging / Size & length/ temperature
- Handling for loading and unloading
Intermodal Transport

Divide the journey into stages and use the best mode for each
stage
Stages involved from trucking to rail to ship to truck to rail
Trans shipment / part shipment
Consolidation logistics

- Gather / combine shipments

- Find partner/partners to distribute freight
- Control cost and save time
Clearing & Forwarding agents

- Work on commission basis

- Liaison b/w bank, company, shipping company & customs
Bill of lading / Airway bill

- Non negotiable vs orignal

- Issued by shipping company
- Description, ship name & origin
- Weight / Volume
- Time of the shipment
- Tentative / Original
- Port of shipment
- Shipper & Consignee
- Destination
Demurrage / Penalty

- Varies from country to country

- Maximum 5 days
Expediting & Tracing shipments

- Through shipping company websites

- Through suppliers / indenters / local shipping agent
- Can claim if shipment is unloaded with out any prior information
- Direct shipment vs trans shipment
- Through airline websites
Insurance

- Local Policy
- CIF, C&F, FOB
Logistics Communication

- Coordination b/w distribution warehouse & customers

- Inventory records
- Agents / intermediaries
Reverse Logistics

- Removal & disposal of waste

- Reuse, reprocessing or recycling
Outsourcing for Transportation

99.9% of transportation activities are Outsourced

Trucking importance

- Food, medicines,
- Furniture
- Cement
- Sugar cane / Sugar
- Wheat & rice
- Chemicals
- Cloths
- Grocery
- Others
Cost of lost sale & ABC costing
- Current sale but future sale as well due to word of mouth negative
publicity
- Disclosure of bad performance
- Extremely difficult to measure actual cost
- Activity based costing can give accurate & meaning full basis
Technology

- EDI
- Bar coding
- Satellite search

Virtual Private Network

 Mgt. of all parties in the supply chain in
5 PL
E-Business
conjunction with e:business
Supply chain co-ordination and
4 PL management by an entity that does not
Supply Chain Mgt supply (operate) underlying logistical
services
A specialized entity that operates
3 PL and provides logistical services, and
Forwarding/Contract Logistics may also co-ordinate/integrate the
services of others

2 PL Traditional asset based

Asset-based Logistics transport & warehouse
management

1 PL
Operation of logistics
Producer/Manufacturer by the owner
Competitive advantage/ Weapon

- May be the best source

- Long term successful relations can bring distinction
- Speed, safety, reliability & availability can bring change