ITM346
Supply
Chain Management
(For CNM
Cases)
Assignment - II
Assignment Code: 2016ITM346A2 Last Date
of Submission: 30th April 2016
Maximum
Marks: 100
Attempt all the questions.
All the questions are compulsory and carry equal marks.
Section-A
1 Discuss some information
technology based approaches that are well suited for the enhancement of supply chain
management.
2 What is the role of safety
inventory in the supply chain? Explain how a reduction in lead time can help a supply chain reduce safety
inventory without hurting product availability. Show the same mathematically.
3 Discuss the different metrics
that are used to measure Supply Chain Performance.
4 Discuss the different criteria
that are used to select and evaluate a vendor.
Section-B
Case Study on Warehouse
Efficiency
Personal
Care Limited (PCL) is a large and premier FMCG company In India with a turnover
of about Rs 2000 crore. It has 85 productions plants spread over the whole
country, producing about 1200 products ranging from personal care to household
goods.
The
company has four of its own mother warehouses situated in the four zones of
north, south, east and west that receive products from almost all the plants on
a regular and consignment basis in containers by road. These warehouses are
responsible for taking care of stocks,
order placement for next arrivals, loading and unloading, protective storage,
stock recording, apart from order processing and trans-shipment of goods to
C&F agents of respective zones, who number around 150 per warehouse.
After
receiving goods from various plants, these are first entered into the computer
for inventory recording purposes. Suitable storage location spaces are then
assigned after taking into consideration the quantity to be stored, the physical dimensions characteristics of items,
frequency of flow and availability of
space, which is quite variable and flexible. For storage of goods, flexible
raking system is used so that the size of a rack’s space can be changed as per
the size of the product’s package. Furthermore, racking is back-to-back in
pallet blocks which are 5 storeyed and
in one block, there are about 400 back-to-back racks.
In
certain areas, for selected heavy weight and bulky items, 50 selectors drive
forklift trucks and in the remaining areas, as many as 350 selectors pick the
goods manually and use hand trolley. Selectors are normally less educated but
highly experienced, and have well-defined areas of selection.
With
this existing system, there have been a lot of practical problems, such as
under-utilization of space; traffic congestion in aisles between the racks as
one selector, blocks another’s progress while he is picking items from a
location, wrong assortment, difficult to track goods, difficult to fill one single order as it contains a variety of items, etc.
Furthermore, a trucker is required to collect items from different places of
the warehouse complex to make up the order. Frequently, they have to wait for a
full load. Then , the driver has to collect challan and other required papers.
Normally, this whole process takes seven to ten days, subject to ready
availability of the goods in the stock. In the case of stock-out items, it may
go anywhere in between 15 to 30 days.
That is why, replenishment cycle time for nearby C&F agents is about 15
days and for others, it comes around 3 weeks. Due to a gradual increase in the
quantum of competition and increasing customer expectations, along with
increasing awareness about the
overwhelming contribution of L&SCM in cost reduction and service
improvement, the top management of PCL have appointed highly qualified and
experienced professionals at al four warehouses with the following objective:
·
To improve the efficiency of the warehouses;
·
To reduce the replenishment cycle time by 25
per cent;
·
To reduce the total logistical costs by 10
per cent;
·
To have transparency in dispatch of premium
products.
Mr.
A.K. Sinha, who joined the north zone warehouse as chief warehouse manager, has
had a very successful career of 25 years. He wants to redefine the whole
operating system.
Case Questions:
1.
How Should Mr.Sinha approach this
problem?
2.
Develop a strategy to overcome the
problem and fulfill the redefined objectives of the firm?
3.
What changes would be recommended for
the implementation of the new strategy?
4.
Suggest measures for evaluation of
performance of the warehouses.
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