INAUGURAL ISSUE

Autologistics India

Vol.1.No.1 December 7, 2011

Milk Run: a primer!

Ramesh Kumar, Publisher & Editor-at-Large EARLY this week, a friend forwarded an advertisement from D B Schenker of Thailand. They are looking for Assistant Manager to handle milk run. Not that I want to be a career milk runner, but he knew my interest in the subject. He recalled the fun he had at my expense when I was wet behind my ears not in the too distant past when Vibhu Prakash of Panalpina India stumped me with this terminology. His article that he had sent for Logistics Times which I had co-founded with some colleagues had several references to milk run and I was clueless. What has milk run got to do with supply chain and logistics? I wondered. Images of healthy fat cows strolling around Swiss Alps munching green grass on boundless valleys danced in my mindscreen. I would have been embarrassed to reveal my ignorance to Vibhu and hence took the easy way out and caught hold of another friend the man now in Singapore who had forwarded the D B Schenker advertisement - from the logistics industry who had tutored me. Subsequently I wrote to Vibhu explaining my stupidity after he left Bangalore to Toronto be with his family and continue to serve Panalpina from the northern America. He had a hearty and sportive laugh! Few months later, I landed up at Rudrapur for a factory visit to Bajaj Auto plant. Pramod Dindhodkar, General Manager of the plant, was the most talked person in Indias second largest two-wheeler manufacturer and he was more than glad to show me round the plant. What really drew me to him was the industry talk that his inventory levels of finished vehicles are just 30 minutes! By the way, he was also known to have no inventory of stocks to make bikes from his assembly line. Wah, wah! I had tweeted when
Address for communication: KRK Associates, Deep Apartments, 52 Ward No 1, Mehrauli, New Delhi 110030/INDIA Twitter: @konsultramesh * Blog: http://onlogisticsmatters.blogspot.com * Email: ramesh@konsultramesh.com

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someone spoke of his spectacular calibre. How is that possible? I demanded. Efficient milk run, pat came the reply. Once again, THAT WORD! A bit of flashback. Before proceeding for a rendezvous with Dindhodkar, I buttonholed Jasjit Sethi, CEO of TCI Supply Chain Solutions, to gain a little more about this milk run business which has simply got nothing to do with cows, buffaloes or goats at all! By sheer coincidence TCI Supply Chain Solutions was managing Bajaj Auto Rudrapur plants milk run. What more one may ask for? Manna from Heaven, indeed. Over an hour long interaction, the professorial-looking Sethi walked me through the process and the challenges. (I still possess those audio recordings containing his pearls of wisdom.) Dindhodkar was lucky enough to have someone like Sethi and his team to help him achieve his 30 minute inventory or is not no inventory? - magic. Eighteen component suppliers situated just behind the main assembly plant keep sending their stuff to TCI Supply Chain Solutions consolidation base nestled amongst them for kitting bin-wise which then reaches Bajaj Auto assembly line like a well oiled machine. An early 20ish consolidation base logistics manager, overseeing a bunch of equally young workforce, explained the entire gamut of milk run patiently. I saw the workforce diligently doing the same chore again and again. Dont they get bored performing this exercise mechanically? No, he responded and explained that the long forgotten Adam Smiths division of labour concept and its advantages in his own simply way. Memories of first year undergraduate economic classroom of 1972-6 returned to haunt for a while. Like disciplined worker bees or ants, Sethi men managed trucks that kept running clock-like precision picking up items from component producers gates at the pre-fixed window timings and unloading and kitting most efficiently. Well, that was about inbound logistics or lean logistics. And once the finished two-wheelers trundled out at the well laid out Bajaj Auto assembly line, those vehicles quickly had undergone various tests before parked in the delivery bay from where TCI Supply Chain Solutions team quietly loaded them onto their delivery vehicles - again in less than 30 minutes! Quite a revolution, no doubt. That was milk run practical class for me. Mid November last year, I was sitting outside Tata Motors Chinchwad plant, watching the loading of Tata trucks onto Mercurio Pallia Logistics finished vehicle logistics trucks (a first of its kind: truck on trucks! in India). In between, I keep noticing the unending flow of national-permit-coloured trucks keep entering the Tata Motors premise ferrying various components for the assembly of a slew of Tata Motors offerings from the component manufacturers in the near vicinity. Just in Time in action! Again, a few months later I sit at Om Logistics Manesar state-of-the-art warehouse on the National Highway 8 that services Maruti Suzuki Manesar plant. It is not a warehouse, but whereagain witness young workers unpacking Saint Gobain glass items (windows etc) and repackaging or kitting unitwise. Incidentally, these items had travelled all the way from Chennai to Gurgaon on Om Logistics trucks and now getting ready to reach countrys numero uno passenger car makers assembly line. Well, what exactly auto OEMs do? Dont they manufacturer cars? They dont. It is a fact. Auto OEMs dont manufacture. Period. Then what the hell they do? Hold on They assemble components supplied by vendors (tier 1), handpicked and santised by them. Not only auto OEMs. Most industries. I heard Dell does not produce what you and I proudly own. Someone does everything and Dell just does brand promotion exercise. Even your handphones! Even there milk run is in place. Core competence. Auto OEMs want to focus on making cars. They dont want to manufacture components. Even they dont want to manage the transportation of these components from wherever to their assembly points. Thats where logistics service providers step in and begin offering milk runs. It is a tough business.

Address for communication: KRK Associates, Deep Apartments, 52 Ward No 1, Mehrauli, New Delhi 110030/INDIA Twitter: @konsultramesh * Blog: http://onlogisticsmatters.blogspot.com * Email: ramesh@konsultramesh.com