Vartak College - Presentation

8/8/2019 Vartak College - Presentation

1/76

1

JIT

&

Supply Chain Excellence

S. K. Jena

Mahindra & Mahindra Ltd


2/76

2

Nashik PPC

DEALERS

CENTRAL PPC OFFICE

Kandivali PPC Igatpuri PPC Haridwar PPC

Zaheerabad PPC

DCM


3/76

3

KANDIVALI PLANT

Manufacturing

Shop

Procurement

Cell

Suppliers


4/76

4

Production Planning

Marketing

Production

PPC

Procurement

CPPC


5/76

5

Marketing releases various dispatch plans onthe basis of forecasting, Area office inputs &

dealers projections viz..

Yearly Plan

Monthly plan ( 1mth firm, 2nd mth tentative)

Weekly feasibility

Input from Marketing


6/76

6

Plan

Source Make Deliver

Supplier

Plan

Customer Customers

Customer

Suppliers

Supplier

Make DeliverSource MakeSource DeliverMakeSourceDeliver SourceDeliver

(internal or external) (internal or external)

Your Company

Supply Chain

Flow of Material

Flow of information


7/76

Traditional View of Manufacturing

A key objective was to fully utilize production

capacity so that more products were produced.

This thinking led to large queues of in-processinventory waiting at work centers.

Large queues meant workers and machines never

had to wait for product to work on.

This resulted in products spending most of their time

in manufacturing just waiting, an arrangement that is

unacceptable in todays time-based competition.


8/76

Time-Based Competition

It is not enough for firms to be high-quality and

low-cost producers

Today, they must also be first in getting products

and services to the customer fast

To compete in this new environment, the order-

to-delivery cycle must be drastically reduced

JIT (Just in Time) is the weapon of choice todayto reduce the elapsed time of this cycle


9/76

Order-to-Delivery CycleOrder-to-Delivery Cycle

DistriDistri--

bution andbution and

CustomerCustomer

ServiceService

CustoCusto--

mermer

PlacesPlaces

OrderOrder

OrderOrder

EntryEntry

EngiEngi--neeringneering

DesignDesign

SchedSched--

ulinguling

ManufacturingManufacturing

Lead TimesLead Times

PurchasingPurchasing

Lead TimesLead Times

ManufacturingManufacturing

Cumulative Lead TimeCumulative Lead Time

OrderOrder--toto--Delivery CycleDelivery Cycle


10/76

Process

BProcess

A

Fin. Goods

Raw

MatlSupplier Customer

Part Flow

Process

C

PUSHSYSTEM

Information Flow

WIPWIP

Execution - Parts completed to schedule without any downstream considerations

Replenishment - Based on projected demand (forecasts)

Shop Floor Control - System, transactions, paperwork

Problems - Hidden

Reaction to changes and problems - Through system - rescheduling

Linkage - Operations are NOT physically linked


11/76

Process

B

Process

AFin. GoodsRaw

MatlSupplier Customer

Information Flow

Part Flow

Kanban

Locations

Process

C

PULL SYSTEM

Execution - Parts produced upstream as signaled from the downstream operation or customer

Replenishment - Based on consumption

Shop Floor Control - Automatic - visible

Problems - Exposed - creates urgency

Reaction to changes and problems - Immediate - on-line and visible

Linkage - Operations ARE physically linked


12/76

JIT: A Pull System

In a push system, we look at the schedule

to determine what to produce next

In a pull system, such as JIT, we look only

at the next stage of production and

determine what is needed there, and then

we produce only that


13/76

JIT Manufacturing Philosophy

The main objective of JIT manufacturing is to

reduce manufacturing lead times.

This is primarily achieved by drastic reductions

in work-in-process (WIP).

100% capacity utilization is not the predominant

objective.

The result is a smooth, uninterrupted flow ofsmall lots of products throughout production.


14/76

Successful JIT Applications

Most successful JIT applications have

been in repetitive manufacturing, where

batches of standard products are

produced at high speeds and in high

volumes.

Successful use of JIT is rare in large,

highly complex job shops whereproduction planning and control is

extremely complicated.


15/76

Elements of JIT Manufacturing

Eliminating waste

Enforced problem solving and continuousimprovement

Total Quality Management (TQM) Parallel processing

Kanban production control

Reducing inventories


16/76

(1) Waste from overproduction

(2) Waste of waiting time

(3) Transportation waste

(4) Inventory waste

(5) Processing waste

(6) Waste of motion

(7) Waste from product defects

Waste--Operations


17/76

Changes Required for JIT

JIT requires certain changes to the factory

and the way it is managed:

S

tabilize production schedules Make the factories more focused

Increase work center capacities

Improve product quality

Cross-train workers

Reduce equipment breakdowns

Develop long-term supplier relations


18/76

Problem Solving and

Continuous Improvement JIT is a system of enforced problem

solving.

One approach is to lower inventorygradually to expose problems and force

their solution.

Continuous improvement - a practice the

Japanese call kaizen - is central to the

philosophy of JIT.


19/76

Uncovering Production

Problems

QualityQuality

ProblemsProblems

MaterialMaterial

ShortagesShortages

MachineMachine

BreakdownsBreakdowns

WorkloadWorkload

ImbalancesImbalances

WorkerWorker

AbsenteeismAbsenteeism

OutOut--ofof--SpecSpec

MaterialsMaterials

QualityQuality

ProblemsProblems

InIn--ProcessProcess

InventoryInventory

We must lower the water level!We must lower the water level! Visible ProductionVisible ProductionProblems are OnlyProblems are Only

5% of the Total!5% of the Total!


20/76

Kanban Production Control

At the core of JIT manufacturing at Toyota

is Kanban, an amazingly simple system of

planning and controlling production


21/76

Japanese word for card

Pronounced kahn-bahn (not can-ban)

Authorizes production from downstream

operations

Pulls material through plant

May be a card, flag, verbal signal etc.

Used often with fixed-size containers

Add or remove containers to change

production rate

Kanban


22/76


23/76

Sample Kanban Card


24/76

Determining Number of

Kanbans

wherewhere

NN = number of kanbans or containers= number of kanbans or containersdd = average demand over some time period= average demand over some time period

LL = lead time to replenish an order= lead time to replenish an order

SS = safety stock= safety stock

CC = container size= container size

No. of Kanbans =No. of Kanbans =average demand during lead time + safety stockaverage demand during lead time + safety stock

container sizecontainer size

NN ==dLdL ++ SS

CC


25/76

Determining the Number of

Kanbansdd = 150= 150 partsparts per hourper hour

LL = 30 minutes = 0.5 hours= 30 minutes = 0.5 hours

SS = 0.10(150 x 0.5) = 7.5= 0.10(150 x 0.5) = 7.5

CC = 25= 25 partsparts

Round up to 4 (to allow some slack) orRound up to 4 (to allow some slack) or

down to 3 (to force improvement)down to 3 (to force improvement)

NN = == =

= = 3.3 kanbans or containers= = 3.3 kanbans or containers

dLdL ++ SS

CC

(150 x 0.5) + 7.5(150 x 0.5) + 7.5

252575 + 7.575 + 7.5

2525


26/76

KanbanKanban SystemSystem

Each container must have a cardEach container must have a card

Assembly always withdraws fromAssembly always withdraws fromfabrication (pull system)fabrication (pull system)

Containers cannot be movedContainers cannot be movedwithout awithout a kanbankanban

Containers shouldcontain theContainers shouldcontain thesame number of partssame number of parts

Only goodparts are passedalongOnly goodparts are passedalong

Production shouldnot exceedProduction shouldnot exceedauthorizationauthorization


27/76

StorageStorage

areaarea

Empty containersEmpty containers

Full containersFull containers


Receiving postReceiving postKanban card forKanban card for

product 1product 1

Kanban card forKanban card for

product 2product 2

FabricationFabricationcellcell

OO11

OO22

OO33

OO22

Assembly line 1Assembly line 1



28/76

StorageStorage

areaarea





product 1product 1


product 2product 2


OO11

OO22

OO33

OO22




29/76

StorageStorage

areaarea





product 1product 1


product 2product 2


OO11

OO22

OO33

OO22




30/76

StorageStorage

areaarea





product 1product 1


product 2product 2


OO11

OO22

OO33

OO22




31/76

StorageStorage

areaarea





product 1product 1


product 2product 2


OO11

OO22

OO33

OO22




32/76

StorageStorage

areaarea





product 1product 1


product 2product 2


OO11

OO22

OO33

OO22




33/76

Operational BenefitsOperational Benefits

yy Reduce space requirementsReduce space requirements

yy Reduce inventory investmentReduce inventory investment

yy Reduce lead timesReduce lead times

yy Increase labor productivityIncrease labor productivityyy Increase equipment utilizationIncrease equipment utilization

yy Reduce paperwork andsimplifyReduce paperwork andsimplify

planning systemsplanning systems

yy Validpriorities for schedulingValidpriorities for scheduling

yy Workforce participationWorkforce participation

yy Increase service/product qualityIncrease service/product quality


34/76

Reducing Inventories

through Setup Time Reduction

Smaller lot sizes result in more machine

setups

More machine setups, if they are lengthy,result in:

Increased production costs

Lost capacity (idle machines during setup)

The answer is: REDUCE MACHINE

SETUP TIMES


35/76

Benefits of JIT

Inventory levels are drastically reduced:

frees up working capital for other projects

less space is needed

customer responsiveness increases

Total product cycle time drops

Product quality is improved

Scrap and rework costs go down

Forces managers to fix problems and

eliminate waste .... or it wont work!


36/76

Parts operated on JIT at

Mahindra Chassis 21 types of chassis of Max, F/bed , S/cab,

BMT CL , CDR , CNG etc

Seats

24 types of seats of Max , S/cab , Powerstrg, BMT, CL, CDR , CNg etc.


37/76

JIT operating Procedure

Stock of these JIT parts is kept for 4 to 5

hours ( in case of chassis ) & 5 to 6 hours

( for seats )

3 days schedule is followed to release the

material requirement of JIT items.

Model wise , sequence is given to the

vendor for the supplies of the parts .

Daily monitoring is reqd. for these JIT

parts.


38/76

Direct-On-Line

Material Supply


39/76

Traditional Process

StoresVendorProduction

Shop

Vendor Supplies the material to Stores

Stores department then stores it and supplies it to production shop as

and when required

Inventory Inventory


40/76

Direct Online

Vendor delivered material Directly on shopfloor.

StoresVendorProduction

Shop

Body Shop Stores

Area : 16,751 Sq. Ft

Manpower : 53


41/76

Part no. ABC Qty /Veh Vendor Location Store Qty Perbin Shop qtymax AfterQTY

90382 A 1 Shear Bend Goregaon 36 36 40

0101BC0210N A 1 Shear Bend Goregaon 36 36 40

0101DC0100N C 2 Penetrical Kandivli 200 100 80

91185 C 2 NAB-IDBI Poly. Ambarnat 240 150 80

94636 C 1 Shear Bend Goregaon 200 50 4039325 C 1 Sushmi engg Dahisar 1000 150 500



87582 C 2 Ramkrishna Iron Shahapur 100 150 80

75344 C 2 Press N Fab Dahisar 600 150 80

91188 C 2 Press N Fab Dahisar 400 150 80

0101EC0190N C 2 Penetrical Kandivli 200 100 80



33258 C 2 KVL Press Shop AS-KND 300 150 80

11237 C 1 KVL Press Shop AS-KND 150 50 40

Data Collection


42/76

HML Analysis ofSingle Cab Welding

AreaValue in Rs. Vendor Press shop Total parts %

H (> 50) 26 25 51 38%

M ( 20-50 ) 25 1 26 19%

L (


43/76


44/76

Line Side DOL Racks


45/76

DOL Racks for Big Bins


46/76

Area :

CL / CDR Re-spot

No. of Parts : 16

No. of Vendors : 7

No. of Parts : 19

No. of Vendors : 9

Area :

Single Cab Cowl Stage


47/76

BeforeAfter ( Removed )


48/76

Benefits of DOL

Inventory carrying cost reduced

Inventory days reduced

Stores space saved and in process of

being utilizedfor in house cargo painting.

Double handling of parts eliminated

Possibility ofparts getting damaged due to

double handling reduced.

Supply module strength reduced


49/76

49

Logistics


50/76

50

INBOUND

Customer

Other Units

OUTBOUND

Supplier

SCRAP

OEM


51/76

51

Logistics Cost Reduction

The Classification

Appropriate Vehicle Selection

Optimum Utilization of Vehicles

Pallet / Fixture and Packaging Modification

Vendor Base Related Initiatives

Milk Run Implementation


52/76

52

Appropriate Vehicle Selection


53/76

53

Appropriate Vehicle Selection: The Concept

BODY P.U. FENDER MOVEMENT , DOOR MOVEMENT

CARGO MOVEMENT , BODY SHELL MOVEMENT

TRANSMISSION P U NGT 520 GEARBOX

TRAILER

TRUCK

1 2 3 4 5 6

1 2 3 4 5 6 7 8

INCREASE IN NUMBER OF FENDERS TRANSPORTED PER UNIT COST BY


54/76

54

INCREASEINNUMBER OF FENDERS TRANSPORTED PER UNIT COSTBY

USINGTRAILERS FOR FENDER MOVEMENT

Fenders per Truck: 48

Freight Incurred (Rs.): 5466

Freight per Fender (Rs.): 114

Freight Saving per Fender (Rs.): 39 (35%)

Fenders per Trailer: 96Freight Incurred (Rs.): 7200

Freight per Fender (Rs.): 75

Annualised Cost Saving for the Initiative (Rs.): 11 Lacs

BEFORE AFTER

Implementation: February, 2007

INCREASE IN NUMBER OF GEAR BOXES TRANSPORTED PER UNIT COST


55/76

55

INCREASEINNUMBER OFGEAR BOXES TRANSPORTED PER UNIT COST

BYUSINGTRAILERS FOR GEAR BOXMOVEMENT

BEFORE AFTER

Gear Boxes per Truck: 84


Freight per Gear Box (Rs.): 65

Freight Saving per Gear Box (Rs.): 8 (13 %)

Gear Boxes per Trailer: 126


Freight per Gear Box (Rs.): 57

Annualised Cost Saving for theInitiative (Rs.): 3

Lacs


56/76

56

OptimumUtilization of Vehicles: The Concept

2 LAYER LOADING

3RD LAYER ADDED

SCORPIO AXLES TRANSPORTATIONFROM TWO LAYERS TO THREE


57/76

57

SCORPIOAXLES TRANSPORTATIONFROMTWO LAYERS TO THREE

LAYERS

Axles per Truck: 24


Freight per Axle (Rs.): 228

Freight Saving per Axle (Rs.): 62 (27%)

Axles per Truck: 36


Freight per Axle (Rs.): 166


Lacs

BEFORE AFTER


58/76

58

TRANSPORTATIONOF 25 MAXITRUCK CARGOESINSTEAD OF 15

Cargoes per Truck: 15


Freight per Cargo (Rs.): 508

Freight Saving per Cargo (Rs.): 186 (36%)

Cargoes per Truck: 25


Freight per Cargo (Rs.): 322


Lacs

BEFORE AFTER


59/76

59

CHANGEINPACKAGINGFOR TRANSAXLE TRANSPORTATIONTO HARIDWAR

Trans Axle per Truck: 144


Freight per Trans Axle (Rs.): 333

Freight Saving per Trans Axle (Rs.): 253 (75%)

Trans Axle per Truck: 300


Freight per Trans Axle (Rs.): 80

Annualised Cost Saving for the Initiative (Rs.): 40 Lacs

BEFORE AFTER


60/76

BACK HAULINGOF RAWMATERIAL IN VENDORS VEHICLE


61/76

61

BACK HAULINGOF RAWMATERIALINVENDORS VEHICLE

MAHINDRA & MAHINDRA,

KANDIVLI

A. R. INDS, FARIDABAD EATA PLAST, MULUND

Net Logistic CostSaving: 2.00 Lacs

Implementation: May, 2006


62/76

62

Logistics Activities

Cost Reduction through negotiations with transporter Sourcing of Alternate transporter

Better fleet utilization by loading material during return

trip

Optimum utilization of vehicle both in terms of volume

& weight

Co-ordination with 3PL (Third party logistics) operators

& TSG (Transport Solution Group) for smooth flow of

materials

Design & Implementation of Milk runs


63/76

63

Implementation

ofMilk Runs


64/76

64

Milk Run:The Concept

POINT OF

CONSUMPTION

V1V2

V3

V4

Considerable

Distance

A & B Category Parts

Sequential Movement of Vehicle


65/76

65

Why Milk Run

Inventory Control forHigh Value Parts

Smooth flow of Material to eliminate

procurement uncertainties and hassles

Logistics Cost Reduction through optimum

utilization of vehicles

Eliminate obsolescence creation

Z Sh t li t d


66/76

66

Zones Short-listed

CHENNAI


67/76

67

Milk Run: Implementation Method

Candidate suppliers for each location were identified Free delivery / Ex-works suppliers were segregated.

Part list and lot sizes for each of the candidate

suppliers were determined.

Candidate suppliers forpilot milk run from each zone

were identified

Identified Suppliers were communicated regarding

the new system and the nominated transporter.

Appropriate vehicles for the movement from each

zone were decided upon depending upon approximate

tonnage


68/76

68

Pune Milk Run: Scope

Distance From Mumbai: 200 Km No. of Vendors: 24

No of Parts Covered: 160

Inventory on Dec 31, 2006: 8.89 Days Frequency of Milk run: Daily

Transporter: Onkar Roadways

Vehicle Used: 1 or 2 Pic Ups (As Needed) Transportation Lead Time: 6 Hrs

P Milk R V d B


69/76

69

Pune Milk Run: Vendor Base

Vendor Location No. of Parts Frequency

SKF Chakan 42 Daily

PremierSeals Chinchwad 5 Alternate

Mega Fibre Chinchwad 3 Daily

Timeken Bearing Wadi 1 Daily

Mohan Plastics Pimpri 3 Once in 3 Days

Lumax Industries Chakan 11 Once in 3 Days

Tata Ficosa Hinjewadi 1 Daily

Shreyas Auto Tahthawade 2 Weekly

Fitwell gasket Bhosari 13 Weekly

TOTAL 84


70/76

70

The Pune Milk Run

No. of Vendors: 9

Frequency of Milk run: Daily

Average Tonnage: 3.5 T

Consolidation Time: 2200 Hrs 2300 Hrs

Delivery time: 0800 Hrs


71/76

71

Daily Schedule for Pune

Vendor Pick Up time

Tata Ficosa 1100 Hrs

Mega Fibre 1300 Hrs

Timken Bearing 1500 HrsSahyog Engineering 1600 hrs

SKF India Ltd 1700 Hrs

Mohan Plastic 1800 HrsLumax industries 1830 Hrs

Shreyas Auto 2000 Hrs

PremierSeals 2100 Hrs


72/76

72

Mumbai Milk Run: Scope

No. of Zones: 5 No. of Vendors: 110

No of Parts Covered: 1027

Inventory on Dec 31, 2006: 9.07 Days Frequency of Milk run: Daily

Transporter: Abhishek Transports

Vehicle Used: Pick Up


73/76

Mumbai (Zone I) Milk Run: Vendor Base


74/76

74

Mumbai (Zone I) Milk Run: Vendor Base

Vendor Location No. of Parts Frequency

Rainbow Industries Goregaon (E) 32 Once in 3 days

PMP Goregaon (E) 2 Once in week

Accurate Springs Goregaon (E) 23 Once in 3 days

Siddhivinayak Kandivli(E) 3 Once in 3 days

Pariwar Kandivli(E) 4 Once in 3 days

Panetrical Kandivli(E) 31 Once in 3 Days

Lalit Goregaon (E) 5 Once in 3 days

Prospect Goregaon (E) 7 Once in 3 days

Friends Malad (E) 7 Once in 3 days

TOTAL 114


75/76

75

Benefits of a Milk Run

Smaller lot sizes resulting in considerable

reduction in inventory

Smooth regular flow of material ensuring

hassle free procurement

Reduction in chances of obsolescence

creation

Reduction in Transportation Cost


76/76

76

Thank you

Vartak College - Presentation

Documents

Transcript of Vartak College - Presentation