Revamping of Logistics

8/8/2019 Revamping of Logistics

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PROJECT ON

REVAMPING OF LOGISTICS PATTERN OFAN FAST MOVING CONSUMER GOODS

IN PARTIAL FULFILMENT OF THE REQUIREMENT

FOR MASTERS OF MARKETING MANAGEMENT

(2009 2010)

CERTIFICATE FROM THE GUIDE

THIS IS TO CERTIFY that the project entitled Revamping of

Logistics Pattern of an Fast Moving Consumer Goods is successfully

done by during the third year of his course in partial fulfillment of the

Masters Degree in Marketing Management under the University of

Mumbai 400 051.

This project represents the work done under my guidance.

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Name of Guide

Project Guide Sign :

Date:

ACKNOWLEDGEMENT

The success of this final report is the outcome of Guidance and valuable

suggestions provided by all the concerned without whom the report could not

fide on the right back. I would like to express my sincere gratitude to our project

guide Director of C.I.M.R, Dr. M.V. Deshpande for giving me an opportunity to

do this project work.

I would like to take opportunity to personally thank and express my sincere

gratitude towards Prof. P. S. Rao who had helped me very much to make this

project a success and also to all of them who have contributed directly or

indirectly in my project work.

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Last but definitely not the least; I am thankful to my parents, family, friends,

colleagues and well wishers for their enthusiastic support in some way or the

other.

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CONTENTS

Topics Page No

Chapter I

Executive summary

Objectives of the project

Chapter II

Introduction to Supply Chain Management

Company profile & Current distribution network

Chapter III

Product Overview

Overview of Current Distribution System

Problem Identification

Chapter IV

Research Methodology

Data Analysis

Findings and Interpretation

Chapter V

Suggestion & Recommendation

Conclusion

Chapter VI

Bibliography

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Annexure / Questionnaire

EXECUTIVE SUMMARY

Logistics play a very important role in industries. Logistics enable the companies to

bridge the gap between the suppliers and the end consumers and efficiently delivery

the products at the right time at the right place at minimum cost.

Any increase in fuel cost indirectly increases the distribution cost of the company

thereby increasing the cost of raw material and finally the cost of the end product. If

we take any organization, the cost of procurement, cost of human resources, cost of

R&D, and cost of storage cannot be eliminated or compensated along withmarketing cost of the products.

As logistics play a very important role and thus the cost incurred for deliveries and

distribution have to be managed well to have a competitive pricing for products.

There are various means and methods in the supply chain management which helps

to achieve the objectives of the company in efficient supply chain management.

Nowadays companies are going ahead by tie ups with 3PL logistics suppliers to

minimize distribution costs and to be efficient and effective.

Hence looking at the future scenario, one way to look at reducing costs is to have a

better supply chain management structure to enable companies manage the

deliveries in least cost to make their products competitive.

This study has been done keeping in mind the future scenario of supply chain

management and to understand how companies manage their distribution network

to minimize costs and provide efficient and effective services to end consumers.

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OBJECTIVES OF THE PROJECT

The objective of this project is to study the current logistics pattern of the company

and to find out the gaps in the current distribution network and how the same can be

bridged to enable better services to the end consumer, identify the areas excellence,

areas needing improvements with the change in the distribution network.

This project aims at understanding the supply chain management by identifying the

areas of excellence, analyze their working, performance and highlight the areas of

excellence while providing suggestions and recommendations for improvements.

Thus it is very important to study and understand how the major players of FMCG

like Nestle, Cadburys etc, manage their distribution network to improve their brand

loyalty amongst their customers and what do customers perceive about the

companies.

This study is aimed at finding out the below mentioned details:

1. The present status of transportation cost between packing station

and child depot destination.

2. To find the transportation cost incase of direct supplies to child

depot.

3. To find whether there is saving on following grounds

First point transportation

Transit time

Depot Space

Better service level

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Better stocks control

INTRODUCTION TO SUPPLY CHAIN MANAGEMENT

If your company makes a product from parts purchased from suppliers, and thoseproducts are sold to customers, then you have a supply chain. Some supply chains

are simple, while others are rather complicated. The complexity of the supply chain

will vary with the size of the business and the intricacy and numbers of items that

are manufactured.

Elements of the Supply Chain

A simple supply chain is made up of several elements that are linked by the

movement of products along it. The supply chain starts and ends with the customer.

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Customer: The customer starts the chain of events when they decide to purchase a

product that has been offered for sale by a company. The customer contacts the

sales department of the company, which enters the sales order for a specific

quantity to be delivered on a specific date. If the product has to be manufactured,

the sales order will include a requirement that needs to be fulfilled by the

production facility.

Planning: The requirement triggered by the customers sales order will be

combined with other orders. The planning department will create a production plan

to produce the products to fulfill the customers orders. To manufacture the

products the company will then have to purchase the raw materials needed.

Purchasing: The purchasing department receives a list of raw materials and

services required by the production department to complete the customers orders.

The purchasing department sends purchase orders to selected suppliers to deliver

the necessary raw materials to the manufacturing site on the required date.

Inventory: The raw materials are received from the suppliers, checked for qualityand accuracy and moved into the warehouse. The supplier will then send an invoice

to the company for the items they delivered. The raw materials are stored until they

are required by the production department.

Production: Based on a production plan, the raw materials are moved inventory to

the production area. The finished products ordered by the customer are

manufactured using the raw materials purchased from suppliers. After the items

have been completed and tested, they are stored back in the warehouse prior to

delivery to the customer.

Transportation: When the finished product arrives in the warehouse, the shipping

department determines the most efficient method to ship the products so that they

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are delivered on or before the date specified by the customer. When the goods are

received by the customer, the company will send an invoice for the delivered

products.

Supply Chain Management

To ensure that the supply chain is operating as efficient as possible and generating

the highest level of customer satisfaction at the lowest cost, companies have

adopted Supply Chain Management processes and associated technology. Supply

Chain Management has three levels of activities that different parts of the company

will focus on: strategic; tactical; and operational.

Strategic: At this level, company management will be looking to high level

strategic decisions concerning the whole organization, such as the size and location

of manufacturing sites, partnerships with suppliers, products to be manufactured

and sales markets.

Tactical: Tactical decisions focus on adopting measures that will produce cost

benefits such as using industry best practices, developing a purchasing strategy with

favored suppliers, working with logistics companies to develop cost effect

transportation and developing warehouse strategies to reduce the cost of storing

inventory.

Operational: Decisions at this level are made each day in businesses that affect

how the products move along the supply chain. Operational decisions involve

making schedule changes to production, purchasing agreements with suppliers,

taking orders from customers and moving products in the warehouse.

Supply Chain Management Technology

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http://logistics.about.com/od/strategicsupplychain/a/strategic.htmhttp://logistics.about.com/od/tacticalsupplychain/a/tactical.htmhttp://logistics.about.com/od/operationalsupplychain/a/operational.htmhttp://logistics.about.com/od/strategicsupplychain/a/strategic.htmhttp://logistics.about.com/od/tacticalsupplychain/a/tactical.htmhttp://logistics.about.com/od/operationalsupplychain/a/operational.htm


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If a company expects to achieve benefits from their supply chain management

process, they will require some level of investment in technology. The backbone for

many large companies has been the vastly expensive Enterprise Resource Planning

(ERP) suites, such as SAP and Oracle.

Since the wide adoption of Internet technologies, all businesses can take advantage

of Web-based software and Internet communications. Instant communication

between vendors and customers allows for timely updates of information, which is

key in management of the supply chain.

Further, the current distribution pattern of having a mother depot for the

distribution network of western region was started by the company from the year

1991. The major advantages of this concept are as stated below:

1. Reduce the incidences of excess floor stocks as well as stocks

out situation.

2. Lesser PKD related problems.

3. Saving in the first point transportation cost.

4. Better control over the stocks movements.

5. Lesser reverse IUTAs.

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COMPANY PROFILE & CURRENT DISTRIBUTION NETWORK

XYZ Consumer Healthcare India Pvt ltd. is located at Mumbai and having their

Head office at Gurgaon (Haryana). The company is one of the leading FMCG

companies in India and had completed 50 years of existence in India and is further

on a growth spree. Their present turnover is around Rs.2,200 crores and western

region contributes approx 10 % in terms of sales turnover.

Distributors are serviced by 5 depots in the region which are located in Pune,

Ahmedabad, Raipur, Indore and Goa. The present distribution pattern is the stocks

from the packing station are being sent to Pune Depot (Mother Depot) and then it

is being transferred to child depot in the regions as per the sales forecast.

From Pune depot, the stocks are distributed to distributors of Maharastra and

Mumbai, Ahmedabad depot caters to the distributors of Gujarat, Raipur depot

caters to the distributors of Chhattisgarh, Indore depot caters to the distributors of

Madhya Pradesh and Goa depot caters to the distributors of Goa.

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CURRENT DISTRIBUTION NETWORK

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PRODUCT OVERVIEW

The products of the company are broadly classified into two major groups:

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1. Nutritional Healthcare (NHC)

2. Over The Counter (OTC)

Nutritional Health Care range is as under:

1. Product 1 (HLX) is available in packs of 1 kg, 500 gms jar and refill and 200

gms jar

2. Product 2 (CHX) is available in 500 gms jar and refill and 200 gms jar

3. Product 3 (JHX) is available in packs of 500 gms, jar and refill and 200 gms

jar

4. Product 4 (BST) is available in packs of 1 kg pet, 500 gms jar and refill and

200 gms jarAll the above foods products have a shelf life of 12 months from the date of

manufacturing.

Over the counter product ranges are as under:

1. Product 5(CRN) is available in form of tablets, drops and syrups

2. Product 6(ENO) is available in forms of sachets, bottles and tablets

3. Product 7(IDX) is available in packs, bottle and tube

Expiry date of all the above products are of 2 years from the date of manufacturing

and the products are tracked with their batch no.

Any distributor/retailer and willing to trade in product 5 should posses a valid drug

license.

OVERVIEW OF THE CURRENT DISTRIBUTION SYSTEM

Figure below shows the current distribution system employed by the company:-

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The stocks from the packing station are received at the mother depot located at

Pune and then redistributed to the child depots as per the sales forecast. This system

was good till the time the packing station of the organization was in the southern

part of India. Advantages of this system were as under.

Better stocks management

Volume was less

Lesser reverse IUTA.

Transportation cost was less

PROBLEM IDENTIFICATION

Increase in transit time since the packing station got shifted from South India to

North India.

15

PR5-HYD

PR6-RJ PR7-BNG PR1/PR2-HYD

PR3/PR4-FD

GUJ

M.P. CHG GOA

CW-MP/BM

MOTHER DEPOT - PUNE


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Additional space at Pune due to increase in volume of sale.

Stocks management .( Stocks out situation, more PKd issues )

Service level can be improved.

Huge work load during the month of promotional SKUs.

More than 8-9 SKU are being shipped through one IUTA

No bifurcation of stocks between normal, transfer and canteen store department.

Additional requirement of stocks by child depot will be sent during the final

allocation dispatch only.

RESEARCH METHODOLOGY

For the purpose of this study, 3 sets of questionnaire were prepared. One

questionnaire was prepared to find out the relevant primary data pertaining to the

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current depot distribution structure of the company, second questionnaire was

prepared to find out the depot working from the operations personnels point of

view and third questionnaire to find out the depot working from sales personnels

point of view. This will enable us to find out the perception of sales and operations

personnel, what he feels about the depot working and areas of improvement.

The data was collected based on information provided by:

1. Management personnel stationed at the Depot & C&F agents of the company.

2. Sales personnel of the company.

3. Operations personnel of the company.

Besides the primary data, secondary data was also collected from the existing

software of the company, transporters and the internet.

Based on the relevant primary and secondary data a study has been done to

understand the current distribution pattern and areas of weakness and areas of

improvement.

Based on the facts of the study, recommendation and suggestion has been provided.

This project was conducted in year 2009 in Mumbai, India.

Survey Methodology

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A survey was conducted amongst the depot personnel, sales personnel and

operational personnel who were involved in the day to day logistics operations of

the company. This survey aimed to find out the viability of the current logistics

pattern as per the current distribution strategy employed by the company and also to

find the views of the employees to improve the services and reduce logistics costs.

The survey questionnaire was sent to the respondents selected and their feedback

was obtained to analyze and study.

The secondary data was obtained from the management of the company and

existing transporters agreements.

DATA ANALYSIS

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Tabulation of Primary Data

Particulars DEPOTS

Pune Ahmedabad Mumbai Raipur Indore

Transit time - Pk Stns

HYD 4 6 5 7

BNG 4 6 5 7

RJ 4 6 5 7

FD 5 7 6 8

Transit time - Depot Pune 0 2 1 3

Current Depot Space Sq Ft. 17000 3500 0 3200 4

No. of trucks Nos 104 17 21 8

No. of distributorserviced Nos 89 60 20 15

Transportation Spend In Lacs 2.5 0.75 1.41 0.26 0

Value of Primary Billing In Lacs 353 155 198 65

Contribution to West in % 41% 20% 22% 7% 1

Dates of Dispatch

1stAllocation 1st to 3rd. 1st and 2nd 1st and 2nd 1st and 2nd 1st and 2

2ndAllocation

7th to10th 7th and 8th 7th and 8th 7th and 8th 7th and 8

3rdAllocation

14th to17th

14th and15th

14th and15th

14th and15th

14th and15th

Final21st to24th

21st and22nd

21st and22nd

21st and22nd

21st and22nd

Dispatch date of IUTA

1stAllocation 5th -NA- -NA- -NA- -NA-

2ndAllocation 12th -NA- -NA- -NA- -NA-

3rdAllocation 19th -NA- -NA- -NA- -NA-

Final 28th -NA- -NA- -NA- -NA-

The above data obtained is a result of collation of the primary data received from

respondents based on the survey results.

Tabulation of Secondary Data

Particulars DEPOTS


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No. of cases receivedfrom Pk Station.

Product 1,2HYD/KOM

9177 1406 1783 500 999

Product 3,4 FD/GD 16898 2450 3060 1641 2034

Product 5 BNG 5403 493 1186 195 911

Product 6 RJ 7556 2109 1546 352 579

Product 7 BNG 5223 959 1264 519 749

No. Dispatched fromPune

From Pune 7417 8839 3207 5273

Transportationcharges in Rs./MT

HYD /BN 825 1200 1050 700 950

RJ 1200 1500 1250 800 1500

FD/GD 1550 825 1450 1600 775

Pune 850 533 1175 850

The above data obtained is a result of collation of the secondary data received

from the management and transporters.

Total no of Distributors serviced in the region

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No. Of Distributors

89

60

20

15

55

Maharashtra

Gujarat

Mumbai

Chhatisgarh

Madhya Pradesh

There are around 240 distributors servicing the entire western region. As per the

geographical status, Maharashtra Pune has a large distributor base; Madhaya

Pradesh is the second largest, Gujarat ranks third followed by Mumbai,

Chattisgarh and Goa.

Thus it can be observed that Maharashtra had the largest base of distributors and

has to be well taken care of.

Value of monthly sales contribution - territory wise

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Value of Primary Invoicing Per Month(Rs. In Lacs)

353

155

198

65

88

MaharashtraGujarat

Mumbai

Chhatisgarh

Madhya Pradesh

The above pie chart represents the sales contribution of different sales territories

to the region.

Value of Primary Invoicing % Contribution to Sales

41%

18%

23%

8%

10%

Maharashtra

Gujarat

Mumbai

Chhatisgarh

Madhya Pradesh

As observed is can be seen that Maharashtra contributes to 41% of the total sales

per month followed by Mumbai, Gujarat, Madhya Pradesh and Chattisgarh.

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No. of incoming trucks at the depot.

10417

21

812

Pune

Ahmedabad

Mumbai

Raipur

Indore

As observed is can be seen that Pune depot received max no of trucks as it is

acting as a mother depot. This shows there is a heavy work load at depot.

Current space at depots.

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Current Space(Sq Ft)

17000

3500

3200

4600

Pune

Ahmedabad

RaipurIndore

As observed is can be seen that Pune has the maximum depot space as it is

acting as a mother depot.

Transportation charges from packing station to depots.(In Rs/MT)

825

1200

1050

700

950

1200

1500

1250

800

15001550

825

1450

1600

775

0

200

400

600

800

1000

1200

1400

1600

1800


HYD

RJ

FD

The transportation charges are quoted on Rs/MT by transporters. The average

capacity of the trucks is 9MT. The transportation costs are as shown in the bar

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chart and ranges from Rs 700 to Rs. 1600 per MT depending on the distance and

quantum. These can be negotiated figures. In case of Raipur the charges are on

higher side since, the quantum of load is small and other areas are well

connected.

Transit Time in days from packing station and Depots to Depots.

6 6 6

7

2

5 5 5

6

1

7 7 7

8

3

6 6 6

7

2

0

1

2

3

4

5

6

7

8

9

HYD BNG RJ FD Pune

Ahmedabad

Mumbai

Raipur

Indore

Figure above shows the transit time taken for receipts between packing stations

to various depots. The average transit time ranges from 5 7 days. According to

the transit time, the dispatches need to be planned by the packing stations so that

the stocks reach in time to the depots.

No of cases dispatched from packing station (In cases)

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To Pune

To Pune , BNG,

1279

To Pune , RJ,

1720

To Pune , FD,

5993

To Pune , HY,3124

BNG

RJ

FD

HY

To Ahmedabad

To Ahmedabad,

BNG, 329

To Ahmedabad,

RJ, 1406

To Ahmedabad,

FD, 1950

To Ahmedabad,

HY, 1131

BNG

RJ

FD

HY

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To Mumbai

To Mumbai,BNG, 786

To Mumbai, RJ,

1031

To Mumbai,

FD, 2480

To Mumbai,

HY, 1443

BNG

RJ

FD

HY

To Indore

To Indore,

BNG, 611

To Indore, RJ,

379

To Indore, FD,1634

To Indore, HY,

799

BNG

RJ

FD

HY

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To Raipur

To Raipur,

BNG, 232

To Raipur, RJ,

120

To Raipur, FD,

1331

To Raipur, HY,400

BNG

RJ

FD

HY

The above pie charts represent the no of cases received from the packing

stations to the depots on a monthly basis.

For clarity, separate pie charts have been made.

The abbreviations in legend in the pie chart is as below:

HY - Hyderabad

BNG - Bangalore

FD - Faridabad

RJ - Rajamundary

Currently the packing station at Hyderabad had been shifted to Baddi in Himachal

Pradesh.

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FINDINGS AND INTERPRETATION

There are around 240 distributors servicing the entire western region. As per the

geographical status, Pune in Maharashtra has a large distributor base followed by

Madhaya Pradesh, Gujarat, Mumbai, Chattisgarh and Goa. It implees that that the

company must properly focus on the core region which has maximum distributors

as servicing the large base of distributors is not an ordinary task. When there is a

large no of distributors, it is also noted that Pune has a large consumer base and

thus the company must plan its supply chain management very efficiently.

As per sales volume also compare to different sales territories to the region,Maharashtra contributes to 41% of the total sales per month followed by Mumbai,

Gujarat, Madhya Pradesh and Chattisgarh and Pune depot receives the max no of

trucks as it is acting as a mother depot. There is very heavy work activity going on

in the Pune mother depot.

The transportation charges are quoted on Rs/MT by the transporters. The average

capacity of the trucks is 9MT during each ferry. The transportation costs ranges

from Rs 700 to Rs. 1600 per MT on an average scale depending on the distance and

quantum of deliveries. The transportation rates can be negotiated with the

transporter depending on the quantum of deliveries and truck loads and also based

on tie upds for a specified period.

In case of Raipur the transportation charges are on higher side since, the quantum

of load delivered is small and the area lacks basic transportation facilities. As other

areas are well connected the average rates are less compared to Raipur.

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The transit time taken for receipts between packing stations to various depots

ranges from 5 7 days on an average. According to the transit time, the dispatches

need to be planned and scheduled by the packing stations so that the stocks reach in

time to the depots.

Basic other issues which were found on the basis of the research and its analysis:

Need to manage both IUTA and normal dispatch.

No bifurcation of stocks between normal, IUTA and canteen stores department.

Huge work load during the month of promotion as the volume will be 2 times

the normal target in these months.

Issue with management of stocks Additional space needs to be procured due to other activities/increased volumes.

Need to plan dispatch after the receipt of stocks from Pune.

More than 8-9 SKU comes in one truck efficient management required

Additional requirement of stocks is being sent to the depots during the final

dispatch

Freshness of PKD is an issue as it has to be maintained on FIFO basis

If any stock is out of stocks at Pune depot, it is mostly likely that other depot

also might not have the required stocks.

After the shifting of packing station from South India to North India the transit

time have increased.

SUGGESTION AND RECOMMENDATION

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Comparative Analysis of Current scenario V/s Direct supply

1. First Point Transportation Cost

a) First point transportation charges under current scenario:- ( Scenario 1)

SupplyLocation

Incoming sku's fmSupply location

Avg receipts(c/s)

Weight TotalMT

FreightRate Rs/MT

Amount (Rs) Avg per month

HYD Product 5 43226 648 825 534922

RJ Product 6 60445 907 1200 1088010

KOM Product 1 /2 89286 1786 825 1473219

FD Product 3 / 4 164412 3204 1550 4966045

Total 357369 6545 8062196 671850

Second point transportation costs (Borne by the region) 2670000 222500

Total Spend from packing station to child depots 10732196 894350

Total receipts from all the packing stations is approx. 3,57,369 cases per year

which comes to 29,780 cases per month.

Total weight of all the cases is 6,545 MT which comes to 545 MT per month.

The transportation charges from Packing station to Pune depot as calculated above

is Rs.6,71,850.00 per month. The transportation charges from Pune depot to other

depots in the region as calculated above is Rs. 2,22,500.00 per month.

Hence the total first point transportation charges incurred by the company is

Rs.8,94,350.00 per month.

b) First point transportation charges under direct supply: (Scenario 2)

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Packingstations

Ahmedabad RaipurIndore

(Ind1+2)

Pune(Mh1+Mh2+CSD)

+Goa

Bombay(Bm1+Bm2)

Total

Cases Value Cases Value Cases Value Cases Value Cases Value Cases Value

OTC

HYD( CRN

) 3948 71064 2785 29243 7337 104552 15348 189932 9430 148523 38848 54331RJY ( Eno) 16873 379643 1434 17208 4550 102375 20639 371502 12367 231881 55863 110260

TotalOTC 20821 450707 4219 46451 11887 206927 35987 561434 21797 380404 94711 164592

NHC

FBD 23399 386084 15973 511136 19613 304002 71913 2229303 29759 863011 160657 429353

HYD 13572 325728 4801 67214 9592 182248 37486 618519 17320 363720 82771 155742

36971 711812 20774 578350 29205 486250 109399 2847822 47079 1226731 243428 585096

Total 57792 1162518 24993 624801 41092 693177 145386 3409256 68876 1607135 338139 749688

IUTA Cost fro transfer to Goa depot 17760

Total Cost

Average 63954

Total receipts from all the packing stations is approx. 3,38,139 cases per year

which comes to 28,178 cases per month.

The transportation charges from packing station to all depots except Goa as

calculated above is Rs.6,24,750.00 per month and the transportation charges from

Pune depot to Goa depot is Rs.14,800.00 per month.

Hence the total first point transportation charges incurred by the company are

Rs.6,39,540.00 per month.

First point transportation Cost Analysis in both scenarios (A & B): (All Fig in lacs)

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Transportation cost under present scenario 1 : 107.32

Transportation cost under scenario 2 : 76.74

Expected IUTA due to change in forecast : 2.40

Saving in transportation is : 28.10

As observed from the above calculations, the company can save approximately

Rs.28.10 Lacs per annum if the company decides to go for the direct dispatches of

stocks from packing station to other depots in the region.

2. Transit time

Supply from Mother depot

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AreasSales in

Cases(2003)Floor stks+

CSDTotal

Arearequired(Sq.ft)

Areaavailable

(Sq.ft)

Extra areaneeded(Sq.ft)

Expectedcost(Rs)

Bombay II 638 638 0 800 0 0

Ahmedabad 7288 3231 10519 5500 3500 2000 8000

Indore I + II 4617 2332 6949 5000 4600 400 1760

Raipur 2890 1000 3890 3700 3200 500 2000

Goa 1432 0 1432 0 1250 0 0

West (Excl Pune) 16865 6563 23428 14200 13350 2900 11760

Pune 24731 17130 41861 14000 17000 -3000 -18000

Total 41596 23693 65289 28200 30350 -100 -6240

Assuming that mother depot is not in place, some of the depot will need

additional space for maintaining floor stocks and above calculation shows a

nominal saving of Rs.6000.00 per month. The same space requirement is

represented graphically below.

Direct Supply Area in Sq. ft.

14000

5500

3700

5000

Pune

Ahmedabad

Raipur

Indore

Diagrammatic representation of REVAMPED LOGISTICS MODEL

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Advantages of this system:-

1. Reduction in transit time

2. Better service to the market

3. Better stocks management.

4. Balance work load

5. Incase of forecast variation the concern area get the penalty.

RECOMMENDATION

All stocks from FD / HY/ BG / RJ packing station to be supplied directly to

all depot of west.

36

PR1/2-BD

CW-MP/BM

PUNEMUMBAICHGM.P.GUJ

PR3/4-FD PR5-HYD PR6-RJ PR7-BNG

GOA


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IUTA cost from Pune to other depot and vice versa due to change in forecast

would be 2.4 lacs p.a. approximately

The net saving expected would be around Rs.28 lacs due to direct supply.

To accommodate the above change we need to take additional warehouse

space in other depots and surrender space in Pune depot which will help save

another Rs.6000.00 per month.

Better stock management (Better floor stock maintained at depots) and

increase in service levels of the depots due to lesser stock out situation.

It there is any variation in forecast, then the concerned depots will only suffer

without affecting other depots.

Work load in the operational level gets distributed for better management.

CONCLUSION

On analyzing the above data with respect to transportation cost, depot space, transit

time and the administrative problems. I would recommend the company to go for

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the direct dispatch of stocks from packing station to depots because of the

following advantages:

Savings in transportation cost

Reduction in transit time

Saving in cost of depot space.

Better stocks management ( Stocks out situation / Lesser PKD issues)

Lesser IUTA

Efficient operations management in logistics

BIBLIOGRAPHY

Magazines, others:

Business Line

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Business today

Reference reports from company

Transportation agreement

Web sites:

www.eyefortransport.com

www.logisticsworld.com.com

www.supplychainmanagement.in

www.bindallogistics.com

www.google.com

Annexure / Questionnaires

Depot Person

1. What is the current depot size? ______________

2. What are the transit time details from the following packing stations and depot?

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1. Hyderabad. _________

2. Bangalore : _________3. Rajamundry :_________

4. Faridhabad : __________

5. Pune : __________

3. No. of cases received from packing station / depots

1. Hyderabad.: _________2. Banglore : _________

3. Rajamundry :_________

4. Faridhabad : __________5. Pune : __________

4. No. Of trucks received in the month?________

5. Transporter charges from the following depots.

1. Hyderabad./ Banglore : _________2. Rajamundry :_________

3. Faridhabad : __________

4. Pune : __________

6. No. of distributors services? _____________

7. Value of Primary billing per month?__________

8. Contribution in terms of percentage to Regional Billing?____________

9. Dispatch dates of stocks to distributors.

10. Dispatch dates of stocks to Other depot ( Applicable only for Pune )

11. Other Issues faced.

12 Name of the depot you handle: ______________________

13 Name of the person: ___________________

Operation Person

1. How many person handle the operation of stocks?a) One b)Two c) Three d) More than 3

2. How many iuta are planned for the following depot in a month ?

1. Ahmedabad : _________

2. Indore :__________

3. Raipur :__________

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3. How many trucks of stocks are removed .

1. Ahmedabad : _________ Trucks

2. Indore :__________ Trucks

3. Raipur :__________ Trucks

4. Whether the stocks bifurcated between normal despatch and IUTA.- Physically

a)Yes or b) No

5. Whether the stocks bifurcated between normal despatch and IUTA.- System

a)Yes or b) No

6. How the iuta are planned.

7. Whether the depot is able to handle the current market requirement

a)Yes or b) No

8. Whether the service of the depot is good

a)Yes or b) No

9. What are the problems faced by them

1. Additional requirement of stocks .

2. Freshness of PKD.

3. Need to wait till the stocks is received from Pune

4. Lesser amount of floor stocks maintained.

10. Rates of Full and half truck load.

Area Full Truck Load Half Truck Load.

1. Ahmedabad

2. Raipur

3. Indore

11. What is the stocks level maintained at distributor point.1. NHC -_________Days

2. OTC - _________Days

12. What is the stocks level maintained at depots.1. NHC -_________Days

2. OTC - _________Days

13. Cost of transportation incurred ?

1. Mumbai -

2. Pune -

3. Raipur -

4. Indore -

5. Gujarat -

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14. Names of the depots you are handling? _________________

15. Name of the Person: ____________________

Sales Executives / Area Sales Managers

1. Which area you are handling?_________________

2. Which are the main selling sku in your area?

Product 1 / 2- __________

Product 3 / 4 -__________Product 5 - __________

Product 6 - __________

Product 7 - __________

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3. How is the service level from you depot ?

a) Excellent b) Good c) Poor d) Very poor.

4. Whether you have been informed about the status of orders after the allocation ?

a) Yes b) NO.

5. Whether you have been updated with the details of stock out ?

a) Yes b) NO.

6. Whether the distributors are happy with the service of the depot?

a) Excellent b) Good c) Poor d) Very poor.

7. What are the other issues faced with respect to depot handing?

Revamping of Logistics

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