Supply chain transformation. Mahindra South Africa case study: Running with the big dogs, even if you’re small. Presented during the 37th Annual SAPICS conference and exhibition held at Sun City in South Africa from May 31 to June 2

1. Supply chain
transformation
Mahindra South Africa case study:
Running with the big dogs, even if you’re small
InSync Solutions

2. Savino Del Bene – Fast facts
A multinational freight and logistics organization
Employing in excess of 3000 staff
Operating in 45 countries with owned offices

3. Savino Del Bene and InSync –
An End to End Supply Chain Solution
A Strategic Alliance with

4. InSync – Fast facts
• InSync – from Integration and Synchronisation; two key principles
for JIT logistics
• Founded: 2006
• Majority shareholder: Resolve – an Imperial company
• Logistics Solutions Provider: Design, implement and manage
• > 900 Employees
• 18 Grad Engineers , 6 Diplomats
• Operational activities at 6 sites:
• PE – VW SA ,
• East London – Mercedes SA,
• Gauteng – SAB, SCJohnson, Mahindra, BMW SA
InSync Solutions

5. Business requirements
Why change?
InSync Solutions

6. Strategic objectives
• Improve CSI – brand value (service to
dealers)
• Platform for sustainable future growth
• Flexible solution to support future growth
• Minimum effort to administrate
• Competitive costing
InSync Solutions
Improved
Competitiveness!

7. Beating the trend….
InSync Solutions
CostCost
SizeSize
• Inbound volume, # of lines
• Outbound volume, # of
lines
• Distribution density - # of
lines per distribution point

8. Beating the trend….
InSync Solutions
CostCost
ServiceService
• Accurate
• Reliable and
predictable
• Cost effective
• Minimum effort for
dealer network
• Visibility of important
information to all
parties
• …..

9. Beating the trend….
InSync Solutions
CostCost
Distribution frequencyDistribution frequency
Pop-corn factor 1:7

10. Partner of choice
• Single partner with end-to-end service
offering
• Specialised skills, processes & systems
• Right size – take business serious
• Experience
• Flexible – adjust solution around Mahindra’s
specific needs
• Innovation to “beat the trend”
InSync Solutions

11. Clarity of requirements
InSync Solutions
Mahindra
Dealer as
customer
InSync

12. Solution requirements: Dealers
Dealer must be confident to promise service and
deliver on it:
• Visibility of stock at warehouse
• Simple ordering process
• Accurate, reliable ETA for orders
• Correct part at right quality
• Quick turn-around for back orders
• Empowered through information available at all
times
InSync Solutions

13. Solution requirements: Mahindra
Service excellence to dealer network:
• 100% on time in full delivery against dealer orders
• Accurate inventory records
• Quality assurance throughout all elements of the supply chain
• High levels of automation of business processes
• Secure business process reflecting Mahindra business rules
• Real time, on demand reporting
• Simple, pleasant experience with system for dealer network when
placing orders
• Information available to dealers to reduce basic queries
• Industry best cost competitiveness
• Automated workflow for return orders
InSync Solutions

14. Solution requirements: InSync
Ability to meet customer expectations
effectively:
• Full integration with Principal system
• Clear, simple KPI’s agreed to reflect SLA,
visible to all parties in real time
• Stability in business rules supported by work
flow
• Flexibility to design & implement “best fit”
solution based on our experience
InSync Solutions

15. Designing the solution
Some considerations
InSync Solutions

16. Focus…
“There is nothing so useless as doing
efficiently that which should not be done at
all.”
– Peter F. Drucker
VALUE:
Any activity or process that the
customer is willing to pay for.
InSync Solutions
Absolute clarity on customer requirements
vital to understand VALUE.

17. Key focus: Waste elimination
• MURI – Design and plan to prevent waste
• MURA – Implementation of work design
through system & equipment and
elimination of fluctuation in work load
• MUDA – Further waste discovered after
implementation and focus of continuous
improvement
InSync Solutions

18. MURI – plan & design to prevent
waste
InSync Solutions Innovation
SystemSystem
ProcessProcess
Customer
requirements
Customer
requirements

19. MURI – plan & design to prevent
waste
InSync Solutions
Management
Philosophy and
practices
Processes
Equipment,
layout & facilities
System
Holistic
solution
Balance and integration more important than pockets of excellence

20. Creating value: Waste elimination
• Waste of transport – distribution
• Waste of space
• Waste of excess capacity to cover for
order fluctuation
• Waste of motion
• Waste of complexity
InSync Solutions

21. Waste of transport
InSync Solutions
Cost
Effort
Impact on operations
Frequency
Reduced inventory
Flexible inventory
Balance?Moderate
expectations

22. Waste of transport
• 1 m3 flows in; 3-5 m3 flows out
• 1,1 m3 per delivery point
• Collection allowed at warehouse
Network solution
• Single National Warehouse close to COG
• Single, daily delivery overnight to Gauteng and main
centers
• Lead time as per network to outlying areas
• Vehicle off road orders for critical orders
– Limited through rules and discount structures
InSync Solutions

23. Waste of space
InSync Solutions
Data complexity
Warehouse
flexibilty
Storage types
Storage
density
Balance?
Layout optimisation
System innovation

24. Benchmark info
InSync Solutions -
500
1 000
1 500
2 000
2 500
3 000
3 500
Op1 Op2 Op3 Op4 Op5 Op6 Op7
Inventory held for one orderline out
Rinventory(ave)/Orderline(m)
-
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00
Op1 Op2 Op3 Op4 Op5 Op6 Op7
Sales generated per inventory unit
RAnnualSales/R(Ave)Inventory
-
2 000
4 000
6 000
8 000
10 000
12 000
Op1 Op2 Op3 Op4 Op5 Op6 Op7
Inventory density
Rinventory(ave)/SQM

25. Waste of space
• One part # per bin location required for
process assurance
• Accessibility by foot to be maximised
• Maximise storage density (m3 parts/m3 racks
and part # per sqm)
• Storage types matched to product attributes
and material handling requirements
InSync Solutions

26. Waste of space
InSync Solutions
Volumeperpart
BulkstorageBulkstorage
LargepalletLargepallet
SmallbinareaSmallbinarea
SmallpalletSmallpallet
LeanliftsLeanlifts
#ofunitsin
stock
Part #’s

27. Waste of space
InSync Solutions
Lean
Lifts
Small Bins
Cross
DockCrossDock
Lean lifts
362 bins/sqm
5427 bin locations
Small bin
area
14 bins/sqm

28. Waste of space
• 2 Lean lifts installed
• High security parts
• Small parts for medium and slow
movers
• Strategic items (extremely low
sales)

29. 27 bins per tray for bigger parts
54 bins per tray for smaller parts
75 trays per machine
5427 bin locations in 2 machines

30. • Standard light duty racking
used
• Boxes specially designed to
fit into racks
• Box size range determined
by part sizes
Waste of space

31. Waste of excess capacity
InSync Solutions
Operational complexity
Excess capacity
Unlimited
capacity
Multiple cut-offs
Order flexibility
Balance?• Business rules
• System
innovation

32. Waste of excess capacity:
Order intake patterns
InSync Solutions
Cut-off
1
Cut-off
2
Cut-off
3
Time of day
#oforderlinesperhr
Day of month
#oforderlinesper
day
Month-end
Waste
Waste

33. Waste of excess capacity:
Order intake patterns
InSync Solutions
Cut-off
1
Cut-off
2
Cut-off
3
Time of day
#oforderlinesperhr
Day of month
#oforderlinesper
day
Month-end
Excess
capacity
Customer waiting
or overtime
Customer waiting
or overtime
Excess
capacity

34. Waste of excess capacity
• Single daily cut-off (16h00)
• Daily order buckets limited to agreed
capacity
• Various order types with discount structure
and rules – different lead time promise
• Work pattern introduced
InSync Solutions

35. Waste of excess capacity:
Order intake patterns
InSync Solutions
Cut-off
1
Time of day
#oforderlinesperhr
Day of month
#oforderlinesper
day
Month-end
Fixed daily capacity
Work pattern
allows variation
in capacity
without
additional cost

36. Waste of motion
InSync Solutions
Minimise moving
distance
Minimise handling steps
Space
considerations
Racking limitations
Balance?• Layout
optimisation
• Bin Structure
optimisation
• System
innovation

37. Benchmark info
-
1,00
2,00
3,00
4,00
5,00
6,00
7,00
Op1 Op2 Op3 Op4 Op5 Op6 Op7
Throughput per SQM
Orderlines(m)/SQM
-
2,00
4,00
6,00
8,00
10,00
12,00
Op1 Op2 Op3 Op4 Op5 Op6 Op7
Frequency in vs out
LinesOut(m)/LinesIn(m)

38. Waste of motion
• Maximise picks on minimum distance corridor
( 92% picks)
• Maximise picks by foot
InSync Solutions
Quaran
tine
Damag
es
Dealer
Return
s
Receiving
Bulk North
Racking
Lean
Lifts
Small Bins
Palletized Racking Palletized Racking
Dispatch
Dispatch
Cages
Packing
Stations
WH
Office
Bulk South
Racking
Green
Area
Collect
ions
Cross
Dock
Cross
Dock
Minimum distance corridorMinimum distance corridor
Fast moving, high volume partsFast moving, high volume parts

39. Waste of motion
InSync Solutions
Quaran
tine
Damag
es
Dealer
Return
s
Receiving
Bulk North
Racking
Lean
Lifts
Small Bins
Palletized Racking Palletized Racking
Dispatch
Dispatch
Cages
Packing
Stations
WH
Office
Bulk South
Racking
Green
Area
Collect
ions
Cross
Dock
Cross
Dock
Fast moving, high volume partsFast moving, high volume parts
Rapid fire
zone
O
u
t
Small Medium
Larg
e

40. Waste of motion
• Sequence picks to minimise movement
distance
• Ensure equipment layout, process and
system steps align
• Place parts at heights based on movement
InSync Solutions
D
A
B
C

41. Waste of motion
InSync Solutions
Safety
net
High volume, fats moving
parts (filters, etc)
replenished into pick face
on minimum distance
corridor – pick by foot

43. Waste of motion
• Sequence put away to minimise
movement distance
InSync Solutions
Split by area
Route by Bin
location
Route by Bin
location

44. Warehouse layout
InSync Solutions
Quarantin
e
Damages
Dealer
Returns
Receiving
Bulk North
Racking
Lean
Lifts
Small Bins
Palletized Racking Palletized Racking
Dispatch
Dispatch
Cages
Packing
Stations
WH
Office
Bulk South
Racking
Green
Area
Collection
s
Expansion
possible
Cross
DockCrossDock
Minimum distance corridor

45. Waste of complexity
InSync Solutions
Control
Automation
Efficiency
Complex system
Complex master
data
Complex process
Balance?• Interfaces
• Automated
workflow
• Simple processes
• System
innovation

46. Interfaces (key enabler)
• To and from Host system (SAP)
• Master/slave relationship observed to
maintain data in one place
• Real time for critical and daily for non-
critical
• Automated error handling, logging and
notification
InSync Solutions

47. Automated workflow
InSync Solutions
Dealer:
places
order
DespatchDespatch
Result
SAP
Courier
Order info
Invoice

48. Automated workflow
• Credit control
• Back-orders
• Supersessions
• Dealer returns (return logistics)
• Invoicing (goods and courier costs)
Information
• Brochures, Training Manuals
• Invoices
• Order status
• Warehouse performance reports
InSync Solutions

49. Simple processes
InSync Solutions
• I see, I do
• Simple menu steps in system
• System driven routing to reduce decision making
• Minimum process steps
• Build-in mistake proofing
– One piece flow
– Never separate data and material
– Scan where possible
• No planning for standard material flow – work flow based
• Reflect, support and enforce business rules

50. System innovation
InSync Solutions
• Portable printing to allow user to print at material
• Work leveling of dealer orders into demand buckets
• Dealer credit handling as part of ordering process
• Configurable order type based business rules
• Courier service levels interactive selection
• Automated backorder and supersession handling
• Rule based Return Order handling – work flow based
with build-in notifications
• Handling of multi client warehouse (Mahindra &
SSangyong)

51. The results
InSync Solutions

52. Results
InSync Solutions
• Improve CSI – brand value (service to
dealers)
• Platform for sustainable future growth
• Flexible solution to support future
growth
• Minimum effort to administrate
• Competitive costing

53. In summary
InSync Solutions
• Most important measure of success is impact on the targeted
business strategic initiative
• Subject all decisions to objective when compromises are
required (customer response & cost)
• Design warehouse layout for customer response (outbound
speed & efficiency)
• Design warehouse structure and processes for costs (storage
density, automated workflow)
• Optimise, optimise, optimise equipment, process and system
integration during design phase to prevent waste in operation
• Drive waste reduction as way of life after implementation
• Serve warehouse operator as customer to the best of your
ability during the project phase and warehouse operator will
serve final customer to the best of his ability during operations