1.

INTRODUCTION

1.1 OBJECTIVE OF THE PROJECT

 To Study the material procurement and its flow in TVSM.  To suggest the most feasible and optimized Logistics arrangement.  Improvement activities considered in stores.

1.2. SCOPE OF THE PROJECT The project dealt with the integration of all the elements inside the plant is critical for a manufacturing unit. TVS Logistics provides superior inplant logistics with warehouse infrastructure, highly skilled manpower, and advanced information systems for our customers complex production schedules. We focus on providing a complete logistics planning with lean management principles so that our customer can focus on their core operations. Solutions to be,     Storage and Line feeding Kitting and sequencing Sub-assembly activities Monitoring shortage through min-max stock level checks

1.3. THEORETICAL BACKGROUND

LOGISTICS MANAGEMENT

Logistics is the management of the flow of goods and services between the point of origin and the point of consumption in order to meet the requirements of customers. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and often security. Logistics is a channel of the supply chain which adds the value of time and place utility. Today the complexity of production logistics can be modelled, analyzed, visualized and optimized by plant simulation software. Logistics as a business concept evolved in the 1950s due to the increasing complexity of supplying businesses with materials and shipping out products in an increasingly globalized supply chain, leading to a call for experts called supply chain logisticians. Business logistics can be defined as "having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer", and is the science of process and incorporates all industry sectors. The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies. In business, logistics may have either internal focus (inbound logistics), or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption (see supply chain management). The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation and the organizing and planning of these activities. Logisticians combine a professional knowledge of each of these functions to coordinate resources in an organization. There are two fundamentally different forms of logistics: one optimizes a steady flow of material through a network of transport links and storage nodes; the other coordinates a sequence of resources to carry out some project. production logistics is used to describe logistic processes within an industry. The purpose of production logistics is to ensure that each machine and workstation is being fed with the right product in the right quantity and quality at the right time. The concern is not the transportation itself, but to streamline and control the flow through value-adding processes and eliminate nonvalue-adding ones. Production logistics can be applied to existing as well as new plants. Manufacturing in an existing plant is a constantly changing process.
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Machines are exchanged and new ones added, which gives the opportunity to improve the production logistics system accordingly. Production logistics provides the means to achieve customer response and capital efficiency. Production logistics is becoming more important with decreasing batch sizes. In many industries (e.g. mobile phones), a batch size of one is the short-term aim, allowing even a single customer's demand to be fulfilled efficiently. Track and tracing, which is an essential part of production logisticsdue to product safety and product reliability issuesis also gaining importance, especially in the automotive and medical industries. Third-party logistics (3PL) involves using external organizations to execute logistics activities that have traditionally been performed within an organization itself. According to this definition, third-party logistics includes any form of outsourcing of logistics activities previously performed in-house. If, for example, a company with its own warehousing facilities decides to employ external transportation, this would be an example of third-party logistics. Logistics is an emerging business area in many countries. 3PL CHARACTERISTICS A 3PL company is a private firm that provides logistics services under a contract to a primarymanufacturer, vendor, or user of a product or service. It is called third-party because the logistics provider does not own the products but participates in the supply chain at points between the manufacturer and the user of a given product. The 3PL can perform logistics functions of their customer either completely or only in part. Initially, the 3PL were carriers, storage companies or forwarding agents. Currently, they diversified by offering various services and by ensuring various activities. The principal 3PL have their own warehouses, transport fleets and their credits are often deployed throughout the world. Table 1 provides a list of possible activities of 3PL and their related logistics functions . Most 3PL have specialised their services through differentiation, with the scope of services encompassing a variety of options ranging from limited services to broad activities covering the supply chain.

1.4. COMPANY PROFILE

TVS Logistics is a fast growing 3rd party logistics provider across multiple verticals including automotive, distribution, electronics, and discrete component manufacturing. We are a flagship company of the highly respected TVS group. TVS Logistics was established in 2004 and provides integrated supply chain solutions across the world either directly or through our joint ventures and subsidiaries. With our extensive global footprint and strong expertise in supply chain logistics, we offer unparalleled levels of customer satisfaction. Culture, Value & Ethics We believe in our rich value system and for us, value creates money. We have always stood by our commitment to create integrated supply chains for our customers, with respect to our practices and procedures like:
y y y y

Maximum utilization of all fixed assets Continuous process improvement to reduce waste across the value chain Institutionalization of good practices Zero tolerance for unethical practices

Vision Statement To create integrated supply chain for our customers by providing a high quality and cost effective logistics services globally, which will be the best of its class in the industry with respect to practices and procedures. Quality Policy To excel in customer satisfaction by:
y y y y y

Developing and partnering with our service providers for enhancing quality service. Continuous updating of technology to provide world class service. Total employee involvement and development. Encouraging team building for improved efficiency. Using the best methods for problem solving and continuous improvement.

Investors Our investors include Goldman Sachs and TVS Capital Funds Limited. The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and
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maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world. TVS Capital Funds Limited is a venture capital arm of the TVS Group. It specializes in growth to later-stage investments. The firm seeks to invest in private companies and in midcap, family-owned businesses. TVS Capital Funds Limited was formed in September 2007 and is based in Chennai, India with an additional office in Mumbai, India. ADVANTAGES OF LSL Service Innovation Logistics, off late has started to be recognized as an industry in itself. Our focus has continued to be around service innovation in the field of logistics. We design innovative logistics solutions for all our business partners, which fall in line with their processes. This has made us become the path breakers to new business practices in the industry. We use our proprietary Service Innovation in Logistics (SIL) model to answer the central question that stakeholders ask"WIIIFM What is in it for me?" Hence, we follow a multidimensional approach, which satisfies our valuable stakeholders. We practice service innovation in: Strategy: Creating a logistics model that optimizes our customers operations. Manpower: Highly-skilled manpower with the prowess to execute complex processes IT: Technology as a backbone of our strategy planning and execution Engineering: Our dexterity in orchestrating advanced processes that concurs with our customers operations Cost: Our acuity and proficiency in the field of logistics, which results in optimizing costs for our client. Corporate Governance Corporate Governance, in TVS Logistics decodes to corporate citizenship that is responsible for delivering quality and maximizing value for all the stakeholders of the organization. A good corporate governance framework creates and drives value in all the business processes. Our critical governance areas are: Workplace Management: Creating a workplace environment that enables career planning, development, and succession. Marketplace Responsibility: Delivering quality services to our customers and continuously upgrading on the service level standards. Environmental Stewardship: Commitment to reduce environmental impact and strive for preserving a green supply chain.
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Community Engagement: Creating a platform that helps the firm to engage in community welfare activities. Sustained Financial Performance: Efficient performance management systems in place to constantly monitor the firms financial goals in the long run. Some of our corporate level programs and events are:
y y y

PIP, Matsya, and COLO that focus on developing our organizational culture and inducing a learning-oriented atmosphere Upakara, our corporate social responsibility program Prakriti, to expand our intellectual capital and instill team spirit at the workplace.

1.5 SOLUTIONS Supply chain management

Transportation and Integrated Logistics We manage solution planning for inbound and outbound logistics from the supplier end to the client end. We also provide transportation solutions in the form of milk run, line haul and redelivery activities. Our solutions provide the complete array of services from collection to storage and delivery. We customize our services to the size of our customer's project and the complexity of their processes. Global Integration TVS Logistics provides end to end supply chain management solutions to firms wishing to export/import from/to India. TVSLSL with the help of its service providers and joint ventures exports to US, Europe, Asia and Australia. We manage the entire logistics functions for our customers, which includes inland haulage, customs clearance from ports, freight forwarding, transporting materials to our customer's warehouses in US, Europe, Asia, and Australia. Our services are competitively priced due to our constant innovation in supply chain functions. We also operate though service providers for customs clearance, transport, storage, and value added services. Our global integration solutions include:
y y y y

VMI services and JIT deliveries with warehousing at destinations Sea import and Export Air import and Export Value added services like: o Quality inspection at destination o Effective container cube utilization
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Robust packaging

Warehousing solutions
Inplant Solutions Integration of all the elements inside the plant is critical for a manufacturing unit. TVS Logistics provides superior inplant logistics with warehouse infrastructure, highly skilled manpower, and advanced information systems for our customers complex production schedules. We focus on providing a complete logistics planning with lean management principles so that our customer can focus on their core operations. Our inplant warehousing solutions include:
y y y y

Storage and Line feeding Kitting and sequencing Sub-assembly activities Monitoring shortage through min-max stock level checks

After Market Services At TVS Logistics, we provide end to end aftermarket warehousing solutions that cover our customers complex logistics processes. We effectively address volatile demand chains, vast geographical diversity, and focusing on our clients lead times. We customize our solutions to meet our customers business needs and optimize their inventory and assets. Our aftermarket capabilities include:
y y y y y

Inventory receipt, pre-packing, labeling and packaging Inventory control and variance reduction Putaway and secure storage Quality control POD managment

Asset based services

Material Handling Solutions TVS Logistics has more than a decade of experience in material handling solutions for our clients. We train our manpower on material handling equipments like scissor lift, floor crane and pallet truck from a certified training facility. We have advanced material handling equipments and the expertise to deal with complex processes. At present, our clients include large scale and medium scale engineering industries, automobile manufacturers and the FMCG sector. Our material handling services include owning and operating the material handling equipments for our clients by:

y y y y

Competitive priced solutions Superior quality machines Trained manpower Regular Maintenance

Commutation Solutions TVS Commutation Solutions Limited is a joint venture of TVS Logistics. We offer executive transportation services to organizations. We operate through a large fleet of vehicles with a presence in all the metros. We also offer passenger shuttle services known as Aeroexpress Services in Hyderabad and Delhi airport on a daily basis. Aeroexpress is a joint venture of TVS Logistics with the Hyderabad and Delhi airport.

Value added services

Network Design & Consultancy Services As global societies start to connect in an intense and aspirational manner, firms need to manage increasingly complex supply chains. These complexities span multiple stakeholders (separated by geography, tradition, and culture) besides having to fulfill regulatory concerns. And these challenge(s) involve managing and understanding an incessant flow of data. We help our customers in creating a blueprint of their supply chain, while keeping it focused on meeting their core objectives. A companys supply chain network needs to adapt to worstcase/best-case scenarios, or macro-economic fluctuations for a dynamic performance in the long run. Our blueprint helps creating a unique competitive advantage by: 1. Creating control on your supply chain functions by providing you an overall transactional visibility 2. Facilitating rapid decision making by enabling you to feel the pulse of the supply chain 3. Imparting analytics & reporting to facilitate meaningful inferences for your managers TVS Logistics has created a base of proprietary tools for network design that develop a clear and unambiguous bottoms-up picture of your supply chain. These ruggedized tools are used to model multiple causes including non-linear events and probabilistic scenarios. Our heuristics algorithms assist in short- and long-term planning and these models are directly integrated into metrics on our award-winning IT platforms. These metrics are rolled up to a network level provide a full view of major processes and exception driven proactive monitoring.

2. REVIEW OF LITERATURE

Outsourcing, third party logistics services (3PL) and contract logistics generally mean the same thing (Lieb, Millen and Wassenhove, 1993). It involves the use of external companies to perform logistics functions, which have traditionally been performed within an organization. The functions performed by third party logistics service providers can encompass the entire logistics process or select activities within that process. A key rationale for outsourcing of logistics functions is the intensified globalization of businesses. During the last two decades, globalization has emerged as a major force of shaping business strategies, leading firms to develop products designed for a global market and to source components globally (Cooper, 1993). This has led to more complex supply chains requiring larger involvement of managers in logistics functions. Lack of specific knowledge of customs, tax regulations and infrastructure of destination countries has forced firms to acquire expertise of third party logistics service providers. As a result firms are concentrating their energies on core activities and leaving the rest to specialist firms (Byrne, 1993; Foster and Muller, 1990; Trunick, 1989). An equally important development that is impacting the logistics industry is the increased emphasis on supply chain management as a source of competitive advantage. In the last two decades, the quest for time based competence led initially to a rapid adoption of new manufacturing methods like just-in-time, flexible manufacturing systems, computer aided manufacturing and so on by organizations. These methods have brought about significant improvements in supply chain performance through their focus on compressed manufacturing lead times and improved quality. However, further enhancements in supply chain performance will necessitate speeding the flow of information on orders to upstream supply chain partners, and expediting logistics activities like storage and delivery of materials or products through the entire supply chain (Bhatnagar, Sohal and Millen, 1999). A recent research carried out on supply chain management practices in India highlights that the opening of Indian economy and globalization of businesses has been a key factor for the Indian industry to align supply chain strategy with business strategy, streamline processes for supply chain integration and form partnerships for minimizing inventories. Indian organizations are increasingly deploying supply chain strategies for logistics improvements to increase sales revenue, enhance profits, reduce order to delivery cycle time and minimize inventories. (Sahay and Mohan, 2003). Logistics is therefore emerging
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as a key frontier of competition in the future. Good logistics performance requires a tradeoff between the need to reduce overall supply chain inventory and lead times, while simultaneously capturing economies of scale and improving customer service for enhanced business performance. Versatility of third party logistics service providers enables them to maintain this trade-off by turning fixed costs into variable costs for companies using their services (Trunick, 1989). The use of third party logistics service providers has gained prominence in this context. Empirical studies have tested the following factors in defining the extent of usage (Lieb, 1992; Dapiran, Lieb, Millen and Sohal, 1996; Bhatnagar, Sohal and Millen, 1999): Length of experience with third party logistics firms Level of commitment to the usage of third party logistics services Percentage of the total logistics budget allocated to third party logistics service providers Specific logistics services outsourced (warehouse management, shipment consolidation, fleet management, order fulfillment, product returns, carrier selection, logistics information systems, rate negotiation, product assembly, order processing, inventory replenishment, order picking, inbound transportation, outbound transportation, labeling and packaging, distribution, custom clearance and forwarding, import export management, customer service/support). At the same time, studies indicate that firms outsource logistics functions for a variety of reasons. Watson and Pitt (1989), Sheffi (1990), Foster and Muller (1990), and Bardi and Tracey (1991) have suggested the following reasons for the growth of logistics outsourcing in America: need to focus on core activities, better transportation solutions (e.g., consolidation), cost savings, customized services, reducing inventory, penetrating markets, becoming more active in international shipping, gaining the use of sophisticated technology, need for more professional and better-equipped logistics services. Gooley (1992) added flexibility as another reason for outsourcing based on his experience with European firms. By understanding the reasons for outsourcing of logistics services, 3PL service providers can gain insight into the benefits sought and provide focused services. A third party logistics service provider with experience, focus and expertise is regarded as more competent, compared to those service providers who profess to be "all things to any consumer" (Sink et al., 1996). The research on supply chain management practices in India has identified that outsourcing of logistics activities is growing in popularity for Indian organizations and there has been an increase in the number of third party logistics providers over the last couple of years (Sahay and Mohan, 2003). The major reasons cited for usage of 3PL services include cost reduction (27 percent), strategic reasons (26 percent), process
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effectiveness (24 percent), and lack of internal capability (11 percent). Usage of third party logistics services is a strategic decision and hence it is necessary to perceive and quantify the impact it has on business performance. The purpose of engaging in third party relations is seldom cost reduction alone, but a combination of service improvements and efficient operations (Larsen, 2000). Studies based on user firms indicate that the decision is worthwhile if it has an impact on one or more factors depicted in Table 1.

Lieb et al. (1993), Dapiran et al. (1996), and Bhatnagar et al. (1999) have observed that the future usage of third party logistics services is a function of the current level of satisfaction of the firm with the logistics services provider. The authors have also explored the changes in the level and the nature of outsourcing of logistics services by the user firms. All the above studies indicate high levels of satisfaction with third party logistics services providers, which will translate in increased outsourcing in the future. Typically, firms start with the outsourcing of few logistics services, moving over to activities which have maximum impact on logistics performance and then increase scope of usage of logistics services with perceived and quantifiable impact on overall business performance. The above studies provide a robust framework for the research methodology for analyzing the third party logistics practices in India. The input variables to the research framework depict the organization-specific characteristics, such as the extent of usage of third party logistics services, the reasons for outsourcing and the impact of the usage of third party logistics services. The output function of future usage of third party logistics services is influenced by the three input variables.

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CRITERIA AND METHODS OF 3PL SELECTION The most recent studies conducted on the 3PL use are generally results of many exploratory surveys. They are mainly interested in the following topics: - Reasons, benefits and risks of outsourcing decision - Modelling, planning and evaluation of the integrated logistics network for 3PL - Analysis of relationships between 3PL and supply chain members - 3PL selection and evaluation.

EVALUATION METHODS
 Linear weighting models  Artificial intelligence

 Statistical/probabilistic approaches, and  Mathematical programming models ADVANTAGES AND DISADVANTAGES OF 3PL SELECTION METHODS

Table2

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3. SUPPLY CHAIN MANAGEMENT IN TVSM

Fig 1 Supply chain of Tvsm CHALLENGES IN SUPPLY CHAIN y y y y y y y Varying customer demand Buyers market Flexibility to produce variety(colour model mix) Increasing transportation cost Need to reduce inventory Need for cheaper, safer and environmental friendly material handling methods Quicker communication.

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INBOUND LOGISTICS OF SUPPLIER PARTS Thrust areas Supply frequency optimisation Inventory management Scm Systems Milk run Kanban/2-Bin & direct delivery to usage Point. Material handling Communication Recylable containers Web based & ERP based information flow

PROBLEMS FACED IN MRP SCHEDULE BASED MATERIAL PROCUREMENT y y y y y y Line stoppers due to non-availability of parts High Inventory Follow-up by buyers Large storage space due to multiple location Non-value added activities in procuring, storing and delivering FIFO system not in place

STRATEGY TOWARDS JIT SUPPLIES

Fig 2 Strategy towards JIT supplies

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ADVANTAGES OF PULL SYSTEM (2 BIN KANBAN) y y y y y y y Fixed quantity replenishment Based on physical availability No surprise shortages No follow-up required Controlled Inventory Less space Standardised containers

CRITERIA FOR SELECTING 2-BIN PARTS y y y y y Low value and high volume(C class parts) Supply in Containers/Standard packing qty Under Skip inspection Short transit lead time - Local / Overnight supplies Single source supply or 50:50 Share of business for two Sources.

TRAINING AND COMMUNICATION Training to Suppliers y 2-bin operation & importance y Role of suppliers in 2-bin y Gemba visit Training to In-house operating team y Need for 2-Bin y Roles & Responsibilities of operating team

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2- BIN MATERIAL FLOW NVA REDUCTION

Fig 3 Bin Material flow

KANBAN VS 2-BIN SYSTEM 2-BIN SYSTEM Low value parts 2-Bin quantity Replenishment lead time KANBAN SYSTEM High value Parts Kanban quantity Replenishment lead time - A & B1 class - day to 1 day - 2 hours to 1 day - B2 & C class - 3 days to 6 days - 48 hrs

NEED FOR ALIGNING IN-BOUND LOGISTICS TO INTERNAL LOGISTICS y y Improve supply reliability of outstation parts Increase frequency of supplies at reduced cost

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MILK RUN SYSTEM

Fig 4 Milk run system BENEFITS IN MATERIAL HANDLING DUE TO CONTAINERISATION

Fig 5 Benefits in material handling

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ADVANCE SHIPPING NOTIFIATION Availability of in transit stock details for users Improves MRP scheduling process for long distance suppliers Eliminates duplication of data entry Eliminates data entry error while material in warding Faster GRN creation

OUTBOUND LOGISTICS Thrust Areas Material handling Scm Systems packaging improvements concurrent logistics Transportation cost Reverse auction collaborative logistics Reverse logistics Inventory management Communication Direct delivery to dealer Mixed model loading Track and trace system-GPSOnline schedule for Transporters vehicle management system

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4. STORE MANAGEMENT

Stores plays a vital role in the operations of a company. It is in direct touch with the users department in its day-to-day activities. The most important purpose served by he stores is to provide unintterupted service to the manufacturing divisions. The functions of stores can be classified as follows: y y y y y y y To receive raw materials, components, tools, equipments and other items. To provide adequate and proper storage and preservation to the various items. To meet the demand of consuming departments by proper issues and account for the consumption To minimise the obsolescence, surplus, and scrap through proper codification and handling. To highlight stock accumulation, discrepancies, and abnormal consumption. To ensure good house keeping so that material handling, material preservation, stocking, receipt and issue can be done adequately. To assist in veification and provide supporting information for effective purchase action.

LOCATION AND LAYOUT The normal practice is to locate the stores near the consuming departments. This minimises handling and ensuring timely despatch. In stores layout, the governing criteria are easy movement of materials, good housekeeping, sufficient space for men and material handling, optimum utilisation of storage space, such as shelves, racks, pallets and proper preservation from rain,light and other such elements. Since stores have to be nearest to the user, large organisations usually have stores attached to each consuming department, whereas receiving is done centrally. Items of common usage are stocked in the central stores so that inventory is kept at optimum level. These factors are considered at the planning level of layout. STORE SYSTEM AND PROCEDURES RECEIPT SYSTEM: This can divided into receipt from outside suppliers and receipts from internal divisions. Systems for receipt start even before the time when the material actually reaches the plant. When a purchase order is placed, a copy is sent to the stores, indicating quantity and delivery date. These should be arranged in a chronological sequence so that the stores manager can at any time estimate the volume of receipt. This also help in planning labour contracts when unloading activities exceed a particular limit. This is the first step in the stores system. Secondly, suppliers, once they despatch the goods, normally send an advance note to the stores. This provides information on the date of despatch, carrier details, description of consignment and value. This is sent in advance so that quick and easy clearancemay be done. The third stage is document prepared by the document carrier.

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A professionally managed Stores has a process and a space within, to receive the incoming materials (Receiving Bay), keep them for as long as they are not required for use (Custody) and then to move them out of stores for use (Issue). In a manufacturing firm this process forms a cycle to maintain and run the activities of Stores. The basic responsibilities of stores are to act as custodian and controlling agent for parts, supplies, and materials, and to provide service to users of those goods. Typically and at times essentially, a Stores has the following activities that are managed through use of various resources and are thus called Stores Management : Receiving of incoming consignments (goods) Safe keeping of goods (Custody) Disposal of undesirable goods Inventory Management House keeping and record maintenance It all starts with a suitable Lay out design of stores. Depending upon the nature of items used for processing by the organisation the lay out and type of stores are selected. For example , a process that requires use of raw materials , not costly enough, an open and nearby stores with truck / rail inside movement possibility can be adequate. Similarly, for storing costly material, a closed and restricted type of stores shall be needed. However, irrespective of the type and lay out , any Stores would have , as its starting activity , receiving and accounting of the incoming goods. This part of Stores is known as Receiving Bay. Once the material has been received and cleared through inspection and accepted for use, it needs safe custody till it's actually used. It calls for a separate physical storage space , open or closed, as per need. It maintains all documents that are able to trace an item , show all its details and preserve it up to its shelf life in the manner prescribed or till it is issued for use.

This part of Stores is called Custody. Thus the role of Custody is to receive and preserve the material and then to issue it to the user, as and when needed. A stage comes when the material is needed for use. Stores thus releases the material from its custody to the user department and the process is called 'issue of goods. It might also happen that after partial use , some materials having useable value in future are returned to the stores and thus they also become part of the custody again.
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In the long drawn process of preserving the materials till its use ,some materials might get obsolete and unserviceable and may require removal from stores , in order to clear space for other incoming goods. This activity is known as Disposal of goods for which auction etc is done.

Since the material has a cost , the organisation would definitely like to incur optimum cost on this account and thus there is a need to manage the materials within a stores such that the total cost of maintaining materials remains optimum. The materials , lying unused but have future economic value are said to form inventory which needs professional handling. Inventory control / management thus is a vitally important aspect of any stores function. One of the basic functions of stores is to account for every material received in Stores by maintaining proper records of all the incoming, stored and outgoing materials so that proper accounting and audit trail is maintained. Hence , record keeping is a vital function of stores . Of course , it also goes along the various activities and with development in the information technology domain, the record keeping in stores too is through electronic medium making the whole process smooth and efficient. Any Stores as such is a physical entity which deals with material receipt , preservation and issue. Material handling therefore is another vital function. Just as Lay out of a Stores is designed considering the nature of material Stores has to handle, material movement equipment and implements also are important.

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5. ANALYSIS OF MATERIAL PROCUREMENT AND ITS PROCESS IN LINE PRODUCTION ( INBOUND LOGISTICS)

Analysis of material procurement and its process to be considered as material procurement group and its flow in line production through logistics department by the way of handling and monitoring its activities. Material procurement and its flow for TVS WEGO and XL HD line production. In this project the process dealt with handling and monitoring the activities of material through certain stores viz. 1. GI (GOODS INWARD) 2. VEHICLE UNIT STORE 3. BUFFER LOCATION 4. ENGINE STORE 5. CASTING STORE 6. SAFE ROOM 7. REJECTION STORE 8. CHINA STORE 9. MYSORE STORE 10. HP 11. FABRICATION STORE

Main suppliers for Tvs Motors to be SACL( Sundaram Auto Components Limited), KPEPL, OSWAL, RAJSRIYA, HI TECH, MECHATRONICS, MULTILINK.
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GI (GOODS INWARD) Goods inward to be initial stage of production process i.e. receiving of raw materials. In GI department LD will receive the materials based on order created by buyer, materials will be received and entering the material description in the GI Record, where it consists material name, number, invoice no, vehicle no, vehicle timing ( Reported, unloaded started, unloaded completed), Quantity(Advised, received), GRN No. After this process quantity to be checked based on the order created by buyer, if received quantity is less than or greater than advised quantity it will be recorded in ODC ( Open Delivery Certificate) where the quantity may be excess or less to be recorded in ODC, then it will be considered as non standard quantity. In GI , they will receive the three copies of receipt, where one for account process, another one for logistics record, final copy of receipt for supplier. After this process GRN to be created for the material for the Accounting process. Here GRN to be created through software application viz. SAP (System Application Product) , Every system in plant to be interlinked with sap, Login details SAP LOGON 7.1, & SAP LOGON 6.4 USER NAME: MM_______ (MM- MASTER MATERIAL) While unloading the material automatically the material to checked by quality department, all this process will be considered as interlink . By this process GRN will be created in GI Department, GRN will be created based on four types, 1. MRP Type 2. ASN 3. JIT 4. NO EXCISE.

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y y

MRP type to be created without Kanban, ASN. JIT- Just In Time / KANBAN Here GRN No. Will be noted in extra copy, it will be help for store members for further process. Part 2 Serial no will be noted in duplicate copy for further process in finance department regarding the payment to supplier. CREATE GRN this option to be selected while creating GRN because for the purpose of labour charge i.e. assembly process CREATE GRN EXCISE- this option to selected while creating GRN (not based on assembly process).

y y

ASN Shipping notification no. NO EXCISE Reason to create MRP in No excise because VAT will be differed between the places so for this purpose MRP is created through no excise. The document no. Will be created and it to be noted for the Accounting department process.

After unloading of the materials , will be moved to respective stores through proper man power. Here material handling activities to be considered.

VEHICLE UNIT STORE

In vehicle unit store more than 200 materials will be located. According to my project the production process is for TVS WEGO, XL HD. According to the need of materials for vehicle assembly will be moved from the VUS to vehicle assembly through proper man power. Important part to be the line stoppage should not be in vehicle assembly in chance of LD.

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VUS consists of three kitting zone. y y 1st and 2nd kitting will be moved to conveyor line 1. 3rd kitting will be moved to conveyor line 2.

Nearly 15 materials to consisted in every kitting Zone.

OUTPUT TIME (SEC) TVS WEGO XL HD 60 90

NO. OF VEHICLE 1 2

VUS consists of XL HD and Wego ( N15) materials. Man power will be allotted separately for moving the trolley and bin items to the vehicle assembly. One man power will be allotted for the sub assembly, here we are the service providers for the TVS MOTOR company, So here the essential point to be line stoppage should not be occurred. If any critical materials occurred such type of materials to be intimated to the buyer before 24 hours.

KITTING 1-TABLE3

S.NO. 1 2 3 4 5 6 7 8 9 10

PART NO

PART DESCRIPTION Shock Absorber Center stand Fan cover Deflector Toggle link Fan Mud guard rear Lock set Axle Brake shoe
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11 12 13 14

Housing fan Air filter Sai air injection Bolt

KITTING 2 TABLE4

S.NO. 1 2 3 4 5 6 7 8 9 10 11

PART NO

PART DESCRIPTION Fender rear Prop stand Throttle switch Muffler guard Flasher IG Coil TCI Seat lock Wiring harness Horn Regulator

KITTING 3- TABLE 5 S.NO. 1 2 3 4 5 6 7 8 9

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PART NO.

PART DESCRIPTION Foot rest FT Cap Bracket Assy Cover bottom floor Pillion Handle Holder pillion foot rest Tail lamp Battery Starter relay

10 11 12 13 14 15 16

Throttle Upper and lower Number plate Grip Battery belt Fuel tank cover Handle pillion Tail cover center

Sub Assembly parts to be consists of 36 materials will be moved to production line through proper man power, the main suggestion is the line should not be stopped through LD. BUFFER LOCATION The location which to be used for the purpose of advance usage of material near to the store, feed to the line production.The materials which to be presented in the buffer location to be involved in kitting area. Most items involved in the buffer location to be trolley items. ENGINE STORE In engine store the materials concerned with kitting area to be y y y y y y y y y y y y y y CVT driven assy Magneto assy Face movable drive Plate movable drive Cam chain Bendix drive Shud Guide Face comp fixed drive Oil pump V belt Cover oil pump Starter motor Cover breather
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y y y y

Gear starter lever Housing Planch Circling

These are the materials involved in kitting area which to be moved to the engine assembly, where nearly 76 materials to be directly moved to the engine assembly through sub assembly process. CASTING STORE In Casting store the materials consists to be y y y y y y Crank case Cover variator Cylinder head Wheel hub front Wheel hub rear Cover cylinder head

Those materials will be received from different suppliers where those materials should be sent to machining line for cleaning process and to create the holes in the materials then the materials will be sent to paint shop which to be located in the plant 2. These process to be noted in log book regard how much materials moved to painted shop, then how much materials are waiting to receive, those details to be considered. Then directly those materials will be moved to engine assembly.

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SAFE ROOM

Safe room consists of A class materials namely y y y y y y y y y y y y y y y y Ball bearing Bearing 6201 Spark plug Needle roller bearing Ring piston Expander ring Piston Reed valve assy Carburreter assy Needle cage piston pin Tapset fuel tank Tvs logo LH & RH Tvs logo cover frame Magneto assy Clutch assy Screw

Those items to be presented in safe room where LD should take incharge regarding to take stock on daily basis and need to intimate to Buyer.

REJECTION STORE Rejection store consists of materials regard non standard quality which to be sent from the quality department, where LD should take responsible regarding to sent the materials to supplier. MSN- Maker Scrap Note GRN MRA- Good receipt note material rejection advice

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From quality department the MSN will be sent to the rejection store , regard the material non standard quality through such papers the supplier address to be noted and the material will sent to suppliers. From Rework tag , after the rework process of materials trough the lot system if its not ok the material rejection advice will be sent to rejection store, then the material will be sent to the supplier. CHINA STORE The materials which to be received from the china to be stored.viz. y y y y y y y y y y y y y Arm valve rocker Bendix drive Cam shaft Cam chain Control lever assy LH & RH Crank case Cylinder block Relay starter motor Sec air injection valve Shaft intermediate Gear intermediate Shaft clutch Valve exhaust and intake

Those materials to be stored in the china store based on availability for engine assembly and VUS the materials to be moved from the china store. MYSORE STORE Mysore store consists of the materials related to VUS. Then in mysore store the materials transhipment process also to be take place. XL materials will packed and the trolley items also to be move to mysore, so in that place its consists of loading and unloading point.

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HP HP kitting consists the materials concerned to the TVS XL HD will be sent to himachal Pradesh where it consists one loading point. y y y y y y y y y y y y y y y y y y Engine assy Wheel front Wheel rear Brake panel rear Brake panel front Swingram assy Licence plate Muffler assy Carrier comp Stand comp Bar comp foot rest Handle bar Tsl front Rear fender unpainted Cover frame Tank comp Frame comp unpainted Foot rest LH&RH

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FABRICATION STORE Fabrication stores materials consists to be the welded materials which to be stored , where welding process to be considered. So the material will be moved to the painting shop and it will be moved to the vehicle assembly line.

6. IMPROVEMENT ACTIVITIES IN VUS

y y y y Arrangement of supplier bin items in the chute through prior card. Arrangement of chute in line manner. SR materials should be properly handled and moved to the QD. Clearing the misused supplier bins.

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7. FINDINGS
y y y y y y y Basic 1s and 2s need to be improved in plant1 based stores. Misusing of supplier bin in plant 1 and in its stores. Line stoppers due to non-availability of parts High Inventory Follow-up by buyers Large storage space due to multiple location Non-value added activities in procuring, storing and delivering y y FIFO system not in place Operation with other logistical providers should be given more preference to achieve cost effectiveness. y Decision making is excellent for organization with respect to other organization in the industry. y y Rearrangement of employees may be a better solution. The organization client handling, ease of service and customer service is having remarkable difference from the industry standards. The main focus need to be on the ease of website and employee efficiency. From the data we can infer that areas which need to be improved are Website and employee efficiency. Employee efficiency can be improved with a proper Human Resource department y Tactical decisions are mostly followed by organizations followed by operational and a few strategical. y Commenting on ease of service, website and employee efficiency, the organization needs to further improve.

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8. RECOMMENDATIONS

Organization can further strenghten the employee strength in the documentation department. This can lead to further rapidity for operations.

 Organization can initiate Human Resource Department to further enhance employee

motivation. This will have favourable impact for the operational as well as total strenghtening of organization  Bar coding implementation y y y y y y Reduction in Cycle time of GRN creation from 2min to 1.5min per part(Approx) Reduces GRN creation time with more number of parts per invoice/DC Eliminates data entry error while material in warding Eliminates duplication of data entry

 Usage of company blue bin for storage process in vehicle assembly and also in machining line to reduce misuse of supplier bin.  To continue the line production without stoppage should follow up the buyers.  Use value added activities in the procurement and storing process.  Complete transparency amongst all the channel partners  A sense of mutual trust and risk sharing mechanism.  A project specific control mechanism  Selection of feasible and practical approach  Areas of Responsibility

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9. CONCLUSION
Logistics is one the most important and integral part of any organisations strategy and function. When the logistical process is carried out accurately then not only the company reduces the production cost but also improves the efficiency and customer satisfaction. Overall logistics management is very important for todays highly competitive and cut- throat corporate world. TVS Logistics is a fast growing 3rd party logistics provider across multiple verticals including automotive, distribution, electronics, and discrete component manufacturing. Over the past decades it had turned delivering materials into TVSM line production. TVS Logistics services limited has come a long way from being just a service provider. The organization now has the value of being an ultimate service provider for MNC Companies like Toyota and Value Adding as per customer needs. The present scenario and the future of the organization with regard to the management are satisfactory. The organization can increase the market share by improving with more state of art technology. The organization can diversify into related other business areas like Warehouses for lease to other organizations, state of art technology providers for other organizations. More importance is to be given for HR development by having a separate department for it. With the development of such a department, several favourable impacts such as increase in out put per employee, increased loyalty, team spirit etc can be generated. As far as TVSLSL is concerned it can be stated that through its excellent service and aggressive logistics service, organization has shown a noticeable increase in the market share. However, there are some areas where the company is not at the top-most position but it can certainly gear up in the near future and is committed to acquire that spot. On implementation of the above recommendations, the management can lead TVSLSL to the top most position when bench marked in the coming years.

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10. BIBLIOGRAPHY
BOOKS y Bardi, E.J. and Tracey, M. (1991), Transportation outsourcing: a survey of US practices, International Journal of Physical Distribution and Logistics Management, Vol. 21 No. 3, pp. 15- 21. y Bhatnagar, R., Sohal, A.S. and Millen, R. (1999), Third party logistics services: a Singapore perspective, International Journal of Physical Distribution and Logistics Management, Vol. 29 No. 9, pp. 569-587. y Bloomen, D.R.V. and Petrov, I.P. (1994), Logistics in Bulgaria: Concepts for New market Expansion, International Journal of Physical Distribution and Logistics Management, Vol. 24 No. 2, pp. 30-36. y Dapiran, P., Lieb, R., Millen, R. and Sohal, A. (1996), Third party logistics services usage by large Australian firms, International Journal of Physical Distribution and Logistics Management, Vol. 26 No. 10, pp. 36-45. y Razzaque, M.A. and Sheng, C.C., 1998, Outsourcing of logistics functions: a literature survey, International Journal of Physical Distribution & Logistics Management, 26, 2, 89-107. y Marasco, A., 2007, Third-party logistics: A literature review, International Journal of Production Economics, In Press, Accepted Manuscript.

INTERNET

y y

http://www.tvslogisticsservices.com http://www.inventorysolutions.org/def_mtl_flow.htm

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