For a company to continue business, the role of the Spare Parts department is very important. Whether or not the part activities are properly controlled, can greatly influence the company’s success.
The system control among other things is vitally important to the Spare Business Unit (SBU) control, for effective operation of actual SBU.
For a company to continue business, the role of the Spare Parts department is very important. Whether or not the part activities are properly controlled, can greatly influence the company’s success.
The system control among other things is vitally important to the Spare Business Unit (SBU) control, for effective operation of actual SBU.
This Project presents a case study in inventory management of Mercedes Spare Parts of a service company. This project aimed to minimize the total costs of the inventory in the company through developing and optimizing various inventory management models of the company’s various spare parts.
For a company to continue business, the role of the Spare Parts department is very important. Whether or not the part activities are properly controlled, can greatly influence the company’s success.
The system control among other things is vitally important to the Spare Business Unit (SBU) control, for effective operation of actual SBU.
The Toyota Production System (TPS) is an integrated socio-technical system, developed by Toyota, that comprises its management philosophy and practices. The TPS organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. The system is a major precursor of the more generic "lean manufacturing". Taiichi Ohno and Eiji Toyoda, Japanese industrial engineers, developed the system between 1948 and 1975.
Originally called "just-in-time production", it builds on the approach created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno. The principles underlying the TPS are embodied in The Toyota Way.
For a company to continue business, the role of the Spare Parts department is very important. Whether or not the part activities are properly controlled, can greatly influence the company’s success.
The system control among other things is vitally important to the Spare Business Unit (SBU) control, for effective operation of actual SBU.
This Project presents a case study in inventory management of Mercedes Spare Parts of a service company. This project aimed to minimize the total costs of the inventory in the company through developing and optimizing various inventory management models of the company’s various spare parts.
For a company to continue business, the role of the Spare Parts department is very important. Whether or not the part activities are properly controlled, can greatly influence the company’s success.
The system control among other things is vitally important to the Spare Business Unit (SBU) control, for effective operation of actual SBU.
The Toyota Production System (TPS) is an integrated socio-technical system, developed by Toyota, that comprises its management philosophy and practices. The TPS organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. The system is a major precursor of the more generic "lean manufacturing". Taiichi Ohno and Eiji Toyoda, Japanese industrial engineers, developed the system between 1948 and 1975.
Originally called "just-in-time production", it builds on the approach created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno. The principles underlying the TPS are embodied in The Toyota Way.
Effective Spare Parts Management - 8 rulesLogio_official
The management of spare parts and other materials needed for realization of the maintenance process is one of the key
functions in physical asset management.
KEY TO PROFITABILITY: SPARE PART MANAGEMENTDr. V.N. Tikku
Many companies fail not because of more consumption but due to maintenance of huge spare inventory which remains underutilized ! The presentation looks in to reasons as well as remedial actions...
Supply Chain Management in the Motor Vehicle Industry, the Example of Mini.aguesdon
The powerpoint presentation based on my dissertation. It is much less complete than the dissertation itself, as the presentation must only last 3 minutes.
Please feel free to leave any comment or suggestion !
World class factory equipment spare parts programs_bhut
This deck gives an overall view and the elements of what a World class factory equipment spare parts program looks like. Was presented at the 2007 annual symposium of the Houston chapter of the Society of Maintenance and Reliability Professionals.
Is your warehouse as efficient as it could be? A well-designed facility needs the right conveyor belt, software and machinery. But even with the best equipment and digital technology, the backbone of warehouse efficiency is still old-fashioned organization.
Maintenance Planning and Scheduling are key elements that influence the true success of any organization. Many times we have a planner or planner/scheduler, but do not know how to use him or her effectively or efficiently.
Warehouse management system presentationNimish Arora
Case study on how automation can be used in warehouse mangement system with Grey orange as an example. Content based on the course Industrial Automation.
Bayesian approach for spare parts replenishment policies under uncertaintiesIJERD Editor
The legislative constraints, the need to optimize the dismantling process, the introduction of recycled
parts on the spare parts market are reinforced since the systems in end-of-life phase have become increasingly
profitable. There are few works that treat recycled spare parts integration problem in economic models of
inventory control. These works do not consider uncertainty. In order to manage more realistically the inventory
control of spare parts, we propose a probabilistic model formalized by a Bayesian network. The model is used to
identify the best purchase policy. More precisely, it allows choosing the best proportions between new spare
parts (NSP) and recycled spare parts (RSP) by taking into account the traditional criteria of inventory control
and the availability of the spare parts on the market. The proposed method provides a decision-making tool for
manufacturers who are interested both in reducing the costs of stocks and guaranteeing a minimal availability in
an uncertain environment.
Effective Spare Parts Management - 8 rulesLogio_official
The management of spare parts and other materials needed for realization of the maintenance process is one of the key
functions in physical asset management.
KEY TO PROFITABILITY: SPARE PART MANAGEMENTDr. V.N. Tikku
Many companies fail not because of more consumption but due to maintenance of huge spare inventory which remains underutilized ! The presentation looks in to reasons as well as remedial actions...
Supply Chain Management in the Motor Vehicle Industry, the Example of Mini.aguesdon
The powerpoint presentation based on my dissertation. It is much less complete than the dissertation itself, as the presentation must only last 3 minutes.
Please feel free to leave any comment or suggestion !
World class factory equipment spare parts programs_bhut
This deck gives an overall view and the elements of what a World class factory equipment spare parts program looks like. Was presented at the 2007 annual symposium of the Houston chapter of the Society of Maintenance and Reliability Professionals.
Is your warehouse as efficient as it could be? A well-designed facility needs the right conveyor belt, software and machinery. But even with the best equipment and digital technology, the backbone of warehouse efficiency is still old-fashioned organization.
Maintenance Planning and Scheduling are key elements that influence the true success of any organization. Many times we have a planner or planner/scheduler, but do not know how to use him or her effectively or efficiently.
Warehouse management system presentationNimish Arora
Case study on how automation can be used in warehouse mangement system with Grey orange as an example. Content based on the course Industrial Automation.
Bayesian approach for spare parts replenishment policies under uncertaintiesIJERD Editor
The legislative constraints, the need to optimize the dismantling process, the introduction of recycled
parts on the spare parts market are reinforced since the systems in end-of-life phase have become increasingly
profitable. There are few works that treat recycled spare parts integration problem in economic models of
inventory control. These works do not consider uncertainty. In order to manage more realistically the inventory
control of spare parts, we propose a probabilistic model formalized by a Bayesian network. The model is used to
identify the best purchase policy. More precisely, it allows choosing the best proportions between new spare
parts (NSP) and recycled spare parts (RSP) by taking into account the traditional criteria of inventory control
and the availability of the spare parts on the market. The proposed method provides a decision-making tool for
manufacturers who are interested both in reducing the costs of stocks and guaranteeing a minimal availability in
an uncertain environment.
Periodic Review Model for Determining Inventory Policy for Aircraft Consumabl...Waqas Tariq
This research is conducted to develop inventory policy of aircraft consumable spare parts which are needed on aircraft maintenance activity . In this research, we used periodic review model to determine the optimal policy of aircraft spare parts inventory. By using the periodic review model, we find optimal period of inventory review and maximum level of inventory. The optimal decision is determined based on the minimum total cost. We have classified consumable spare parts using ABC method to categorize them based on their dollar contribution and demand frequency. Therefore in this research, we focus on managing the inventory level for spare parts on class C. The result from this study shows that the proposed periodic review policy result in lower total inventory cost compared the the company policy. The proposed policy gives an average saving 35.38 %.
Covers all aspects of retail mastery, from retail metrics to retail strategy, retail merchandise planning, retail formulas, retail fact based negotiation, retail store financial management
Joel Marusiak, Neovia Logistics presenatation at Spare Parts 2013Copperberg
"Global Inventory Management Strategy, Design & Execution:
Optimisation & Flexibility Amidst Constant Change" Joel Marusiak, IM Solutions Manager - EMEA, Neovia Logistics presenation at Spare Parts Business Platform 2014.
Find out more http://www.sparepartseurope.com/
Retail analytics - Improvising pricing strategy using markup/markdownSmitha Mysore Lokesh
In this project, retail data was cleaned in the ETL process using Microsoft SQL Server 2013 and the pricing strategies formulated were visualized on Tableau dashboards.
SAP FI module where it provide over all idea about FI module.
Welcome to the
presentation. This comprehensive overview will
provide a deep dive into the functionalities and benefits of SAP Finance. We will explore key features, processes, and best practices.
Financial accounting in SAP (Systems, Applications, and Products) is a comprehensive module designed to manage and record financial transactions within an organization.
SAP’s Financial Accounting (FI) module is a key component of the SAP ERP system, providing a robust solution for financial reporting and compliance.
Financial Accounting in SAP is a comprehensive solution that enables organizations to effectively manage their financial processes, ensuring accuracy, compliance, and real-time visibility into financial performance.
FOR MORE CLASSES VISIT
www.ops571genius.com
1. Which of the following is a measure of operations and supply management efficiency used by Wall Street? Dividend payout ratio Receivable turnover Current ratio Financial leverage Earnings per share growth
"You can download this product from SlideTeam.net"
Want to present your company’s supply chain management review report? Not finding suitable PPT templates for the same. No worries! We are here to help you out. Download our professionally designed supply chain management review PowerPoint presentation slides that will help you in explaining the various aspects of supply chain management. This supply chain analysis PPT presentation includes a slide on introduction, supply chain management process, SCM decision phases, strategic sourcing process, logistics & IT, planning & forecasting, inventory management, inventory management models, performance measures, a common problem with SCM, components of supply chain etc., which will help you leave an impact on your audience. Our research team has researched for the content and our graphics designers have converted it into an impressive presentation. This order fulfilment presentation PPT is suitable for topics like raw-material management, inventory management, supply chain logistics flow, material management, circular supply chain management, goods, and services flow etc. Download our supply chain management review PowerPoint presentation and accomplish your end goals. Want to present your company’s supply chain management review report? Not finding suitable PPT templates for the same. No worries! We are here to help you out. Download our professionally designed supply chain management review PowerPoint presentation slides that will help you in explaining the various aspects of supply chain management. This supply chain analysis PPT presentation includes a slide on introduction, supply chain management process, SCM decision phases, strategic sourcing process, logistics & IT, planning & forecasting, inventory management, inventory management models, performance measures, a common problem with SCM, components of supply chain etc., which will help you leave an impact on your audience. Our research team has researched for the content and our graphics designers have converted it into an impressive presentation. This order fulfilment presentation PPT is suitable for topics like raw-material management, inventory management, supply chain logistics flow, material management, circular supply chain management, goods, and services flow etc. Download our supply chain management review PowerPoint presentation and accomplish your end goals. Camaraderie comes alive due to our Supply Chain Management Review Powerpoint Presentation Slides. Friendly feelings get expressed. https://bit.ly/3gZ8iGi
hey friends, we know from earlier research that material control is the major component of cost. so, let us have a look at few tenchniques relating to material control
Inventory management, loading strategy and warehouse categorizationMihir Sangodkar
Inventory Management, Loading Strategy and Warehouse Categorization - Golchha Lubricants, Jamshedpur, a recognized distributor for Shell, Castrol, IOCL, BPCL and HPCL with a combined volume of more than 1700 KL a year
1) Developed an inventory management strategy to reduce loss of sale by 80% with respect to revenue
2) Developed an automated interface to provide safety stock and reorder point data along with the respective cost savings for a 99% service level across 90 SKUs among 3 brands
3) Developed a sustainable inventory management model to operate even with a 20% demand fluctuation
4) Developed a new docking strategy to reduce loading time by 50%
5) Got an extension of project scope to optimize delivery routes and identifying low performing SKUs
6) The live project is currently being implemented at Golcha lubricants
In this presentation, we have discussed a very important feature of BMW X5 cars… the Comfort Access. Things that can significantly limit its functionality. And things that you can try to restore the functionality of such a convenient feature of your vehicle.
𝘼𝙣𝙩𝙞𝙦𝙪𝙚 𝙋𝙡𝙖𝙨𝙩𝙞𝙘 𝙏𝙧𝙖𝙙𝙚𝙧𝙨 𝙞𝙨 𝙫𝙚𝙧𝙮 𝙛𝙖𝙢𝙤𝙪𝙨 𝙛𝙤𝙧 𝙢𝙖𝙣𝙪𝙛𝙖𝙘𝙩𝙪𝙧𝙞𝙣𝙜 𝙩𝙝𝙚𝙞𝙧 𝙥𝙧𝙤𝙙𝙪𝙘𝙩𝙨. 𝙒𝙚 𝙝𝙖𝙫𝙚 𝙖𝙡𝙡 𝙩𝙝𝙚 𝙥𝙡𝙖𝙨𝙩𝙞𝙘 𝙜𝙧𝙖𝙣𝙪𝙡𝙚𝙨 𝙪𝙨𝙚𝙙 𝙞𝙣 𝙖𝙪𝙩𝙤𝙢𝙤𝙩𝙞𝙫𝙚 𝙖𝙣𝙙 𝙖𝙪𝙩𝙤 𝙥𝙖𝙧𝙩𝙨 𝙖𝙣𝙙 𝙖𝙡𝙡 𝙩𝙝𝙚 𝙛𝙖𝙢𝙤𝙪𝙨 𝙘𝙤𝙢𝙥𝙖𝙣𝙞𝙚𝙨 𝙗𝙪𝙮 𝙩𝙝𝙚 𝙜𝙧𝙖𝙣𝙪𝙡𝙚𝙨 𝙛𝙧𝙤𝙢 𝙪𝙨.
Over the 10 years, we have gained a strong foothold in the market due to our range's high quality, competitive prices, and time-lined delivery schedules.
What Does the Active Steering Malfunction Warning Mean for Your BMWTanner Motors
Discover the reasons why your BMW’s Active Steering malfunction warning might come on. From electrical glitches to mechanical failures and software anomalies, addressing these promptly with professional inspection and maintenance ensures continued safety and performance on the road, maintaining the integrity of your driving experience.
What Exactly Is The Common Rail Direct Injection System & How Does It WorkMotor Cars International
Learn about Common Rail Direct Injection (CRDi) - the revolutionary technology that has made diesel engines more efficient. Explore its workings, advantages like enhanced fuel efficiency and increased power output, along with drawbacks such as complexity and higher initial cost. Compare CRDi with traditional diesel engines and discover why it's the preferred choice for modern engines.
Symptoms like intermittent starting and key recognition errors signal potential problems with your Mercedes’ EIS. Use diagnostic steps like error code checks and spare key tests. Professional diagnosis and solutions like EIS replacement ensure safe driving. Consult a qualified technician for accurate diagnosis and repair.
5 Warning Signs Your BMW's Intelligent Battery Sensor Needs AttentionBertini's German Motors
IBS monitors and manages your BMW’s battery performance. If it malfunctions, you will have to deal with an array of electrical issues in your vehicle. Recognize warning signs like dimming headlights, frequent battery replacements, and electrical malfunctions to address potential IBS issues promptly.
Comprehensive program for Agricultural Finance, the Automotive Sector, and Empowerment . We will define the full scope and provide a detailed two-week plan for identifying strategic partners in each area within Limpopo, including target areas.:
1. Agricultural : Supporting Primary and Secondary Agriculture
• Scope: Provide support solutions to enhance agricultural productivity and sustainability.
• Target Areas: Polokwane, Tzaneen, Thohoyandou, Makhado, and Giyani.
2. Automotive Sector: Partnerships with Mechanics and Panel Beater Shops
• Scope: Develop collaborations with automotive service providers to improve service quality and business operations.
• Target Areas: Polokwane, Lephalale, Mokopane, Phalaborwa, and Bela-Bela.
3. Empowerment : Focusing on Women Empowerment
• Scope: Provide business support support and training to women-owned businesses, promoting economic inclusion.
• Target Areas: Polokwane, Thohoyandou, Musina, Burgersfort, and Louis Trichardt.
We will also prioritize Industrial Economic Zone areas and their priorities.
Sign up on https://profilesmes.online/welcome/
To be eligible:
1. You must have a registered business and operate in Limpopo
2. Generate revenue
3. Sectors : Agriculture ( primary and secondary) and Automative
Women and Youth are encouraged to apply even if you don't fall in those sectors.
Core technology of Hyundai Motor Group's EV platform 'E-GMP'Hyundai Motor Group
What’s the force behind Hyundai Motor Group's EV performance and quality?
Maximized driving performance and quick charging time through high-density battery pack and fast charging technology and applicable to various vehicle types!
Discover more about Hyundai Motor Group’s EV platform ‘E-GMP’!
Things to remember while upgrading the brakes of your carjennifermiller8137
Upgrading the brakes of your car? Keep these things in mind before doing so. Additionally, start using an OBD 2 GPS tracker so that you never miss a vehicle maintenance appointment. On top of this, a car GPS tracker will also let you master good driving habits that will let you increase the operational life of your car’s brakes.
Why Is Your BMW X3 Hood Not Responding To Release CommandsDart Auto
Experiencing difficulty opening your BMW X3's hood? This guide explores potential issues like mechanical obstruction, hood release mechanism failure, electrical problems, and emergency release malfunctions. Troubleshooting tips include basic checks, clearing obstructions, applying pressure, and using the emergency release.
What Does the PARKTRONIC Inoperative, See Owner's Manual Message Mean for You...Autohaus Service and Sales
Learn what "PARKTRONIC Inoperative, See Owner's Manual" means for your Mercedes-Benz. This message indicates a malfunction in the parking assistance system, potentially due to sensor issues or electrical faults. Prompt attention is crucial to ensure safety and functionality. Follow steps outlined for diagnosis and repair in the owner's manual.
"Trans Failsafe Prog" on your BMW X5 indicates potential transmission issues requiring immediate action. This safety feature activates in response to abnormalities like low fluid levels, leaks, faulty sensors, electrical or mechanical failures, and overheating.
1. 1 | P a g e M e d h a k u m a r Y a d a v
Spare Business Unit
(SBU)
Spare Parts Management
Medha Kumar Yadav
2. 2 | P a g e M e d h a k u m a r Y a d a v
PARTS MANAGEMENT
Click on the links given below
Parts Sales Analysis …………………………………4
Anticipate Demand & Order the parts ………………………………4
What is Inventory Management? ………………………………5
Principles of Inventory Management …………………………………6
Parts Manager Major Roles …………………………………6
Inventory Management Process …………………………………7
Inventory Cost ………………………………7
Indicator in Inventory Management …………………………………8
U.I.O …………………………………8
Key Inventory Terms …………………………………9
Role of Inventory ………………………10
Inventory Classification ………………………………10
ABC Analysis …………………………………10
FMS Analysis …………………………………11
RIS Analysis …………………………………11
HML Analysis …………………………………11
ABC FMS Analysis …………………………………12
Characteristics of Each Group on the basis of Consumption ……15
Strategy for Inventory Management ………………………………16
How to calculate Replenishment quantity? …………………………………16
Method 1. ORDER QUANTITY CALCULATION …………………………………16
Method 2. ORDER QUANTITY CALCULATION …………………………………16
Automated Ordering System …………………………………17
AOS Implementation Process …………………………………17
What is Demand Forecasting? …………………………………19
INPUTS & OUTPUT …………………………………19
Demand Forecasting Models …………………………………20
6 Months Medium ………………………………20
On the basis of RIS & FMS …………………………………20
On the basis of FMS & ABC …………………………………20
Optimization of Inventory …………………………………21
Service level – First Fill Rate (FFR calculation) …………………………………21
Key Performance Indicator – (KPI) …………………………………21
KPI - Order Ratio (Stock vs. Rush & VOR) …………………………………22
KPI – Inventory Turnover Ratio …………………………………22
KPI – Lost Sales …………………………………22
KPI – Return on Investment (ROI) …………………………………23
KPI - Improving Service level …………………………………23
3. 3 | P a g e M e d h a k u m a r Y a d a v
KPI – Obsolescence …………………………………23
Cow Parts …………………………………24
Parts Pricing …………………………………25
Benefits of Effective Stock Management …………………………………25
Guidelines for doing Perpetual …………………………………26
Manpower Development …………………………………29
Warehouse Standardization …………………………………30
Objective of Warehouse Standardization …………………………………30
Warehouse, Before Standardization …………………………………30
Essence of Warehouse Standardization …………………………………31
Initiatives for F /Y2017 …………………………………37
Proposed Spare Parts Mother Warehouse Operations …………………………………37
Mother Warehouse …………………………………38
Mother Warehouse Details …………………………………39
Best in Class Processes …………………………………39
Example of Poka Yoke for Binning …………………………………39
Example of Poka Yoke for Final Packing …………………………………41
4. 4 | P a g e M e d h a k u m a r Y a d a v
PARTS MANAGEMENT
Objective
“How to improve Customer Satisfaction & Increase the Parts Sales by using various
Management Tools & Control Procedures”
Parts Sales Analysis
Sales should be analyzed as per following type
1. Retail
2. Workshop
3. Body Shop
4. Trader
5. Internal
6. Warranty
7. Lost Sale
This analysis is required to understand the percentage of sale coming from each type so
accordingly inventory planning can be done.
Anticipate Demand & Order the parts
Demand planning process ensures the availability of “Right part in Right quantity” leading to higher
customer satisfaction.
5. 5 | P a g e M e d h a k u m a r Y a d a v
What is Inventory Management?
Low Stock High Stock
High Turnover Low Turnover
Definition
A series of actions to keep proper inventory levels by purchasing right parts at the right time along with
right quantities in order to meet certain service levels at lowest possible
costs.
Objectives
1. Improve customer service level by rapid supply of parts.
2. Earn more profits by minimizing stock holding costs, ordering costs
and avoiding sold-out stock.
3. To ensure smooth flow of stock.
4. To provide for required quality of materials.
5. To control investments in stock.
6. Protection against fluctuating demand.
7. Protection against fluctuations in output.
8. Minimization of risk and uncertainty.
9. Risk of obsolescence.
10. Minimization of material cost
Function
1. Prevent excess stock and sold-out stock.
2. Achieve highest service levels with the lowest possible stock.
GOOD INVENTORY
MANAGEMENT
OU
POOR INVENTORY
MANAGMENT
6. 6 | P a g e M e d h a k u m a r Y a d a v
Principles of Inventory Management
1. EFFICIENCY =Focus on Scientific Managements for Simple operations
2. ECONOMY =Focus on Economic Managements for Cost Reduction
3. EFFECTIVENESS=Focus Effective Management for Customer Satisfaction
Parts Manager Major Roles
“Right part at the Right Time at the Right Place & in Right quantity”
What to buy?
When to buy?
How much (many) to buy?
When not to buy?
The answer to these questions comes……
From the cumulative information in the inventory management system.
Inventory Management System
Demand
Management
System
Demand
Forecasting
System
Purchase
Order
System
RESULT
Part No’s
Quantities
Time of
Purchase
7. 7 | P a g e M e d h a k u m a r Y a d a v
Inventory Management Process
Inventory Policy
Analysis and Monitoring Operation and Process
Inventory Cost
Cost related with inventory management
Holding Cost
Arises with amount of holding stock
Varies with quantity of items being held
Result from parts handling, damage, etc.
Ordering Cost
Arises with frequency of purchase order
Does not change with the order quantity
Setting Policy & Objective
How much cost for inventory? (Warehouse Capacity? Employees?
What is the target service level?
Forecasting , Purchasing ,Sales System Operation
P/O Placement (Regular/Emergency/ Vor)
F/UP Inbound/Outbound Process
Indicator Management
F/Rate Trend
B/O Analysis
8. 8 | P a g e M e d h a k u m a r Y a d a v
Sold-out Stock Cost
Hard to estimate
Result in customer disappointment, lost sales, etc.
Indicator in Inventory Management
Indicator Description Formula
MOS
(Months of Supply)
Shows how many months can be operated without buying more
stock.
Total stock
Average monthly sales
Turnover Shows the how many times the inventory turns over in a year
-Higher turnover equals more profit
Annual sales
Average inventory
Fill Rate Shows customer satisfaction at the time of order
-Instantly allocated lines over requested lines
Allocated Lines
X
100%
Requested Lines
B/O LINE Shows how many lines are on Back Order.
-B/O Lines indicators are also measure of customer satisfaction
B/O Lines
Monthly Order Lines
U.I.O
Units in Operation
UNI is a number of vehicles operating on the roads in each country. It is one of the most important
factors to determine the size of A/S market. Available from government statistics agency & vehicle
registration office. A medium or long term parts operation can be based on the parts sales per UIO .It is
recommended that distributors, consider the parts sales per UIO in future inventory plan, warehouse
expansion plan ,etc.
Vehicles Scrap Rate as per Vehicle Age
Scrap rates show an upward trend according to the increase in vehicle age. Scrap rates vary country due
to differences in consumer’s behavior, road and weather conditions, national gross income, etc. The
concept of UIO is opposite to that of survival rate which is how many vehicles operate on the roads as
time elapses.
High Level of Stock
High Frequency of Purchase Order
Sold-out Stock
Cause HIGH COST
9. 9 | P a g e M e d h a k u m a r Y a d a v
Key Inventory Terms
Lead Time
Interval Between ordering and receiving order
Fill Rate
Percent of parts filled by the depot upon request via a stock order
Safety Stock
Inventory kept on the shelf as a ‘’Security blanket’’ in order to absorb erratic or unexpected sales
demand within a reasonable factor
Working Stock
Amount of inventory needed on the shelf to satisfy most immediate demands
On-Hand (Stock)
Number of pieces on the shelf
Back Order
An order which will be late in delivery because of temporary stock out
Obsolete Part
Parts which no longer in active production or use
VOR (Vehicle –off-the-road)
Terms applied to emergency purchase
AMD (Average Monthly Demand)
EOQ (Economic Order Quantity)
ROP (Reorder Point)
SOQ (Suggested Order Quantity)
MOS (Months of Supply)
IRL (Initial Recommendation Parts List)
SPL (Service Parts List)
10. 10 | P a g e M e d h a k u m a r Y a d a v
Role of Inventory
1. Inventory acts as buffer for
Sales
Procurement Fluctuations
2. Improves response to Customers
Immediate Fulfillment of Customer orders
Customer Loyalty
3. Impacts CSI
Inventory Classification
Classification Stands For Criteria
ABC High Value , Medium Value, Low Value Based On $Value
FMSN Fast, Moving, Slow moving and Non-
Moving
Based on Qty
RIS Regular , Irregular, Sporadic Based on Movement of
Parts
HML High Medium Low Based on Unit Value
ABC Analysis
1. ABC analysis is done on the basis of sales value of each part.
2. ABC analysis process
Take out the entire consumption, 6 month consumption or 1 Yrs. consumption report.
Append gross sales value of each root part number over the period of one year or six month.
Make a list of parts that ranks the parts in descending order of their sales value
All the parts should be included in this list irrespective of their Sales Value
Category Stands For Classification
A High value Parts that contribute to top 75% of value sold
B Medium value Parts that contribute to top 20% of value sold
C Low value Parts that contribute to top 5% of value sold
11. 11 | P a g e M e d h a k u m a r Y a d a v
FMS Analysis
1. FMS analysis is done on the basis of sales Qty of each part.
2. FMS analysis process
Take out the entire consumption, 6 month consumption or 1 Yrs. consumption report.
Append gross sales Qty of each root part number over the period of one year or six month.
Make a list of parts that ranks the parts in descending order of their sales value
All the parts should be included in this list irrespective of their Sales Qty
Category Stands For Classification
F Fast Moving Parts that contribute to top 75% of Qty sold
M Medium Moving Parts that contribute to top 20% of Qty sold
S Slow Moving Parts that contribute to top 5% of Qty sold
N Non Moving No Sales
RIS Analysis
1. RIS analysis is done on the basis of movement of parts got transacted in the given period.
2. RIS analysis process
To judge the frequency of movement of parts, the previous six-months or 12-months of
demand history will be used.
All the parts should be included in this list irrespective of their Sales Qty
Category Stands For Classification
R Regular Parts Moved in Months (9 to 12)
I Irregular Parts Moved in Months (5 to 8)
S Sporadic Parts Moved in Months (1 to 4)
HML Analysis
(Based on Unit Value)
High – Value of the part more than $100
Medium - Value of the part from $10 TO $99
Low - Value of the part less than $10
12. 12 | P a g e M e d h a k u m a r Y a d a v
ABC & FMS Analysis
We have seen how the movement of particulars part no .can be tracked across different using
“Movement Code” Analysis (MC analysis).
But since workshop deals in different part nos. & set of part no’s follow a certain trend, study of these
trends can be done through another inventory tool – FMS (Fast, Medium, Slow Moving parts) analysis
Let us understand Fast Moving, Medium Moving and Slow moving category of parts:
Category Stands For Classification
F Fast Moving Parts that contribute to top 75% of Qty sold
M Medium Moving Parts that contribute to top 20% of Qty sold
S Slow Moving Parts that contribute to top 5% of Qty sold
N Non Moving No Sales
Category Stands For Classification
A High value Parts that contribute to top 75% of value sold
B Medium value Parts that contribute to top 20% of value sold
C Low value Parts that contribute to top 5% of value sold
Steps for doing FMS analysis:
Step 1: Take total part consumption list from the system for last 1 yrs
Step 2: Short the list in descending order of their sale qty
Note: All parts should be included in that list irrespective of their sale qty
FMS Analysis is always to be done at root part no. It means consumption of all family part nos.should be
added to and updated against Root Part no.
13. 13 | P a g e M e d h a k u m a r Y a d a v
FMS(N) (Fast Moving, Medium Moving, Slow Moving, Non Moving)
924.00
100.00%
Row Labels Sales Qty
(FMS)
Contribution
%
Cumulative FMS
AC00444 574 62.12% 62.12% F
AC00467 69 7.47% 69.59% F
AK00039NM 52 5.63% 75.22% M
ATU0043M 20 2.16% 77.38% M
AC00460 18 1.95% 79.33% M
AK00024 18 1.95% 81.28% M
AC00448 13 1.41% 82.68% M
AC00458 13 1.41% 84.09% M
AK00039 12 1.30% 85.39% M
AK00025 12 1.30% 86.69% M
ATU0043 12 1.30% 87.99% M
AC00428 12 1.30% 89.29% M
AC00447 10 1.08% 90.37% M
AK00034 9 0.97% 91.34% M
AC00424 8 0.87% 92.21% M
ATU0042 8 0.87% 93.07% M
AC00431 6 0.65% 93.72% M
AC00457 6 0.65% 94.37% M
AK00038 5 0.54% 94.91% M
AC00427 4 0.43% 95.35% S
AK00023 4 0.43% 95.78% S
AK00022 4 0.43% 96.21% S
AK00017 4 0.43% 96.65% S
AK00026 4 0.43% 97.08% S
AC00444M 4 0.43% 97.51% S
AK00021 3 0.32% 97.84% S
AC00426 3 0.32% 98.16% S
AK00043 3 0.32% 98.48% S
AK00053 2 0.22% 98.70% S
ATU0045 2 0.22% 98.92% S
AK00052 2 0.22% 99.13% S
ATU0018 2 0.22% 99.35% S
ATU0048 2 0.22% 99.57% S
AK00047 2 0.22% 99.78% S
AK00049 2 0.22% 100.00% S
14. 14 | P a g e M e d h a k u m a r Y a d a v
ABC (A = High Value, B = Medium Value, C = Low Value)
3,148,443.79 100.00%
Row Labels
Sum of Sales
($)
Contribution
% Cumulative ABC
AC00444 778604.4 24.73% 24.73% A
AK00039NM 622159.2 19.76% 44.49% A
ATU0043M 294238.8 9.35% 53.84% A
ATU0043 177077.55 5.62% 59.46% A
AK00039 143575.2 4.56% 64.02% A
AC00458 128256.16 4.07% 68.09% A
AK00034 118324.8 3.76% 71.85% A
AC00428 103981.62 3.30% 75.16% B
AK00024 87022.66 2.76% 77.92% B
AC00431 86723.54 2.75% 80.67% B
AC00467 86097.9 2.73% 83.41% B
AK00038 65736 2.09% 85.50% B
AK00017 63619.2 2.02% 87.52% C
AC00424 51922.08 1.65% 89.17% C
AK00026 50397.6 1.60% 90.77% C
AC00457 47136.15 1.50% 92.26% C
AC00460 46101.04 1.46% 93.73% C
AC00426 39327.78 1.25% 94.98% C
ATU0045 29928.6 0.95% 95.93% C
AC00448 20186.01 0.64% 96.57% C
AK00025 18000 0.57% 97.14% C
AC00447 15139.76 0.48% 97.62% C
AC00427 10773.34 0.34% 97.96% C
ATU0042 9900.8 0.31% 98.28% C
AK00021 9105 0.29% 98.57% C
AK00047 7368 0.23% 98.80% C
AC00444M 7252 0.23% 99.03% C
AK00022 6412.4 0.20% 99.24% C
AK00052 6177.6 0.20% 99.43% C
ATU0048 4104.8 0.13% 99.56% C
AK00043 3837.5 0.12% 99.68% C
AK00049 3347.75 0.11% 99.79% C
AK00023 2934.2 0.09% 99.88% C
ATU0018 2003.1 0.06% 99.95% C
AK00053 1671.25 0.05% 100.00% C
15. 15 | P a g e M e d h a k u m a r Y a d a v
Characteristics of Each Group on the basis of Consumption
ON THE BASIS OF SALES QTY & SALES VALUE (FMS & ABC ANALYSIS)
FA FAST MOVING HIGH VALUE SALES
FREE FLOW
FB FAST MOVING MEDIUM VALU SALES
FC FAST MOVING LOW VOLUME SALES
MA
MEDIUM
MOVING HIGH VALUE SALES
MB
MEDIUM
MOVING MEDIUM VALU SALES
MODERATE FLOW
MC
MEDIUM
MOVING LOW VOLUME SALES
SC SLOW MOVING LOW VOLUME SALES
SA SLOW MOVING HIGH VALUE SALES
RESTRICATED FLOW
SB SLOW MOVING MEDIUM VALU SALES
16. 16 | P a g e M e d h a k u m a r Y a d a v
Strategy for Inventory Management
1. How to maintain the inventory?
2. When to order?
3. How much to order?
4. At what frequency?
Strategy No of Parts Value
Replenishment
Demand Forecasting
Total
How to calculate Replenishment quantity?
1. ORDER QUANTITY CALCULATION
Projected
Available
Balance
Inventory + Qty. on purchase order + Transfer Ord. Receipt(qty) +Qty
in Transit - Qty on sales order -Qty on Service Order (EDMS)-Transfer
ord. shipment(qty)
Safety Stock Avg. Sales * 1.5 (FREE FLOW PARTS) or Avg. sales * 0.75
(MODERATE FLOW PARTS) or Check (RESTRICATED FLOW
PARTS) NOT REQ. (NN)
Min. Qty Avg. Sales + Safety Stock
Lead. Time Avg. Sales*1.5 (45 DAYS)
Max. Qty Avg. Sales + Safety Stock + Lead Time
Re-order
point
Maximum. Qty – Minimum Qty
ORDER PAB Greater then Min qty Order =(NO)/PAB Lesser then Min qty
order=(Yes)
Suggested
Order Qty
(SOQ)
If order = (NO) then SOQ= 0 / If order = (Yes) then SOQ = Max QTY -
PAB
2. ORDER QUANTITY CALCULATION
SOQ = EMD *(LT+T) + S/S – (OH + O/O) + B/O
SOQ: Suggested Order Quantity T: Order Period O/O: On Order EMD: Estimated Monthly
Demand
S/S: Safety Stock B/O: Back Order LT: Lead Time O/H: On Hand
LT-DEMAND T-DEMAND
LT+T SAFETY STOCK
B/O
ON HAND
ON ORDER
17. 17 | P a g e M e d h a k u m a r Y a d a v
Automated Ordering System
AOS (Automated Ordering System) is a tool to assist the Ordering Person for Inventory
Optimization
o Follows the consumption pattern of a part & use Statistical Methods to dynamically set inventory
norms
o Inventory norms are based on
o Distance from M&M warehouse
o Number of ordering days per week
o Two types of orders
o Non Editable Order
o For regular moving items
o Low demand fluctuation
o Parts with streamlined demand history
o Editable Order
o Slow Moving items
o Abnormal Demand items
o Seasonal Demand items
o High Value items
AOS Implementation Process
Ensure no stock mismatch and no damaged/un-used
parts
Proper Part Flagging
To check Initial SOQ (i-SOQ). In case of any changes in
Part Category, correct it.
To Provide AOS roll out confirmation
Download SOQ & Study non-editable parts. Escalate it
to M&M in case of any discrepancy.
19. 19 | P a g e M e d h a k u m a r Y a d a v
What is Demand Forecasting?
Definition
Calculating the future demand in advance by using scientific and statistical method based on demand
history data.
Characteristics
1. Forecasting methods assume that the causal relations in the past continue to exist in the future.
2. There are always errors in forecasting.
3. Group basis forecast is more accurate than individual forecast.
4. Accuracy of forecast lowers as forecasting term increases.
5. There is no forecasting method that predicts exact random variation.
Variation Factor of Forecast
1. Trend
2. Shows a consistent incline or decline over time.
3. Seasonality
4. Repeat a large demand in a specific season annually
5. Cyclical Variation
6. Shows a repetitive demand pattern at a certain period.
7. Random Variation (Unpredictable)
8. Caused by unknown or random factor (no fixed form)
INPUTS & OUTPUT
Demand History . Monthly
Average
Technology Information Demand forecast system . EMD
Before / After Part .Safety Stock
-ITC
ITC forecasts system peaks using the following
Method:
— A sales forecast is derived.
—A system load factor is modeled to reflect usage
Patterns.
—The following relationship is used to extract the
System peak:
Peak Demand = Average Demand/Load Factor
20. 20 | P a g e M e d h a k u m a r Y a d a v
Demand Forecasting Models
6 Months Medium
-Simplest Model
-Suitable for short term forecasting for stable demand
EXAMPLE
Month Jan Feb Mar Apr May Jun
Demand 5 4 7 3 6 5
EMD OF JUL = (5+4+7+3+6+5) / 6 =5
ON THE BASIS OF RIS & FMS
Category
PART
S
Range Category Parts Range
Regular
384 9 to 12
Months Fast Moving
51 Parts that contribute to top 75% of value
sold
Irregular
589 5 to 8
months
Medium
Moving
549 Parts that contribute to top 20% of value
sold
Sporadic
2795 1 to 4
months Slow Moving
3168
Parts that contribute to top 5% of value
sold
Total
3768
Total parts for Rolling Forecast = Regular + Fast
Moving + Slow Moving
984
ON THE BASIS OF FMS & ABC
CATEGORY
Demand
Forecasting
FA FAST MOVING HIGH VALUE SALES
FREE FLOW
PARTS
AVERAGE SALES
FB FAST MOVING MEDIUM VALU SALES
FC FAST MOVING LOW VOLUME SALES
MA MEDIUM MOVING HIGH VALUE SALES
MB MEDIUM MOVING MEDIUM VALU SALES
MODERATE
FLOW PARTS
MC MEDIUM MOVING LOW VOLUME SALES
SC SLOW MOVING LOW VOLUME SALES
21. 21 | P a g e M e d h a k u m a r Y a d a v
Optimization of Inventory
Ordering by maintaining Safety, Max Stock & Reorder point
This method helps in optimizing the current stocking level & avoid stock out situation.
Service level – First Fill Rate (FFR calculation)
This is the proportion of demand we can supply from stock as a % of total demand.
Service Level = Line Items supplied x 100%
Line Items demanded
“This measurement is of Service level from stock”.
Overall achieving 100% service level is practically impossible but a figure in 90% FFR is reasonable
Key Performance Indicator – (KPI)
Spare Parts Manager must monitor
1. Order Ratio
2. Inventory Turns
3. Lost Sale
4. ROI – Return on Investment
5. Improving Service Level
6. Obsolescence
22. 22 | P a g e M e d h a k u m a r Y a d a v
KPI - Order Ratio (Stock vs. Rush & VOR)
Order Ratio: This indicates the efficiency of stocking of parts the customer
need.
Ideal ratio is
Stock ordering – 90%
Rush & VOR orders – 10%
Lower % on Stock orders indicate a poor Service level & hence
potentially poor Customer service
Lower Stock Ratio means lower gross profit on parts Sales.
KPI – Inventory Turnover Ratio
This ratio indicates how many time inventory is rotated in a year. This is the operational indicator of
ROI in spares.
Inventory Turn Ratio = Annual Sales @ Cost price .
Average Inventory @ Cost price
Bench Mark – 2.5 to 4 Turns
Higher contribution can be achieved through same
Amount of inventory by maintaining higher inventory turns.
KPI – Lost Sales
As time progresses, range of parts need to be stocked in Warehouse increases due variety of reasons as
detailed below
1. Vehicles get older hence need an additional range of parts
2. Vehicles usage may change over time
3. New vehicles are added to the Range sold
4. Parts are modified
5. Parts are replaced
It is not possible to achieve 100% parts availability overall hence it
is must to have system to keep records of Lost of Sales &
regularly analyzing the lost demand
23. 23 | P a g e M e d h a k u m a r Y a d a v
KPI – Return on Investment (ROI)
Return on Investment = Parts Profit
Parts Capital Employed
Parts Profit can be defined as
(Net Sales - Cost of Sales ) = Gross Profit
(Gross Profit - Parts Expenses ) = Parts Department Profit
Note - Parts Department Expenses include Employee Salary + Other overheads in parts dept.
Parts Capital Employed
Parts Stock +Parts Equipment + Cost of Space Occupied +Parts debtors - Parts
Creditors
KPI - Improving Service level
Reassess current stock to improve Inventory DEPTH
Work closely with Service to anticipate their changing demands & requirement of parts
Identify any vehicle applications may affect parts demand, for e.g. deep mining
Keep in touch with Fleet Workshops to protect your sales from competition
KPI – Obsolescence
Ideally we should only have Working Stock but in reality it is not possible - efforts required in
preventing Excess stock becoming Obsolete Stock
Budget every year for Obsolescence Write Off
How to identify obsolete part?
Should do investigation like Checking Catalogue, Alternate part no, Car park in the market, No
movement in last 3 yrs.
How should these be written off?
50% value at the end of 1st yrs.
25% value at the end of 2nd Year
25% at the end of 3rd Year
- Parts which have no movement for one year should be identified separately & Special discount
should be given for liquidation. This process should be continued on regular basis
- Markets should check respective country specific regulations of supplying parts for 7years to 10
years before marking part as Obsolete
Parts which have no consumption in last 3 years should be considered for
Obsolescence as they occupy space and carries Inventory holding cost
Schemes should be floated with Traders / Retailers to liquidate such parts
1. Policy on Slow Moving / Non Moving stock
Even with the best of Inventory Management tools, there will be some inventory which may not be
moving but lying in stock
Such parts can be classified into 3
categories :Part group age
Description Category
I year Old Parts Parts not moved for more
than 1 year
‘Slow Moving
Stock’
2year Old Parts Parts not moved for more
than 2 year
‘Very Slow
Moving’
3 year Old Parts Parts not moved for more
than 3years
‘Non Moving
Stock’
24. 24 | P a g e M e d h a k u m a r Y a d a v
2. Slow Moving Stock (1 year old parts)
Parts not moved for more than 1 year
Probability of movement of such parts exists
Action plan:
Such parts should be kept in the live locations of the warehouse but at the rear end
3. Very Slow Moving Stock (2 year old parts)
Parts not issued for more than 2 years
Low probability of sale of such parts
Action plan:
Take out from the live locations
Pack in Carton Boxes
List of the parts with quantity should be kept inside the box
Paste the list on the outside of the box
Keep the list with the Spare Parts Manager
Plan schemes for liquidation of these parts
4. Non Moving Parts (3 year old parts)
Negligible probability of sale of these parts
Action Plan:
Segregate these parts & scrap them as one time cleaning process
Such parts should be taken out of Stock for reporting purpose
Obsolescence policy is to be implemented for such parts every year
COW PARTS
Competitive COW Parts pricing plays very important role when Customer decide to buy the
vehicle
Customer always compare COW parts prices with competition
Always point of discussion in Auto Magazines & News Papers - Competitive parts prices helps
improve Car Sales
25. 25 | P a g e M e d h a k u m a r Y a d a v
PARTS PRICING
The Prices of similar parts of competitor models should be studied for competitive pricing.
The profit margins of the fast moving parts should be flexible. It should be kept as such that it is
in comparison to similar competitor models.
Comparison with grey market should be avoided as there is no quality assurance.
Parts should be grouped together as Maintenance Parts, Wear & Tear parts, Body parts &
Other parts
Differential Margin should be applied for respective groups considering prevailing practices in
the markets & the findings of competitors benchmarking study
For example:-
Part Group Parts
Distributor
Margin
Dealer
Margin
Maintenance
Parts
Oil Filter, Air Filter, Fuel Filter & other
maintenance parts
Max 20% Max 20%
Wear & Tear
Parts
Brake pads, Disc, Wiper Blades, Bearings 20 to 25% 20 to 30%
Body Parts Body Parts - Fenders & Doors 40 to 50% 45 to 60%
Other Parts Excluding above Categories & Body Parts 25 to 40% 30 to 45%
Benefits of Effective Stock Management
Improved customer Satisfaction
Improved profitability through higher revenue
Improved space utilization
Reduce the risk of obsolescence
Improved vehicle sales
Support proactive parts marketing policies
26. 26 | P a g e M e d h a k u m a r Y a d a v
GUIDELINES FOR DOING PERPETUAL INVENTORY
Perpetual Inventory (PI) is required to be done on daily basis for sample parts
(constituting F,M & S categories of parts) in the warehouse
Frequency of part counting=Daily
How to decide what categories of parts to be counted at what
frequency?
Divide Parts using F,M,S & N ANALYSIS WITH THE PERIOD AS LAST Financial Year
Number of times a particular part which will be counted in a year is based on part
Category ( F: Fast moving ; M: Medium moving; S: Slow moving; N:No sale)
F Category: 3 times
M Category: 2 times
S Category: once
Find number of parts to be counted in day.
For ex: An average no of parts being stocked : 4000~5000.Considering 5000 parts,
we have to calculated no. of parts to be counted on daily basis
Part Category No of parts in Warehouse
No of times to count in a
year
Total items
F 500 3 1500
M 1000 2 2000
S 1500 1 1500
N 2000 0 0
TOTAL 5000
27. 27 | P a g e M e d h a k u m a r Y a d a v
Number of working Days in a year = 300
No of parts to be counted per day =5000/300 ~ 17
This 17 parts to be divided in the same ratio of 3F:2M:1S
Append the counting day for all the parts
Take the list of items with opening stock of the day
Do physical counting of parts before start of operations or after close of
operation
Find the items where there is discrepancy.
Do a root cause analysis for the same using Fish bone Diagram
Eli mate the root cause
Take management approval and update in the system
Sample Fish bone diagram for nailing the root cause
28. 28 | P a g e M e d h a k u m a r Y a d a v
Sr.
no
Part no Description
Computer
stock qty
(E)
Physical
Stock qty (F)
Diff qty
(E-F)
Counter
measure
taken
Remarks
1 0603AB0040N
VENTILATED
DISC ANGULAR
VANES 9 7 -2
2 0801CA0341N
CLUTCH COVER
ASSY 3 1 -2
3 9420000618
CLUTCH PLATE
BA 10 29 40 11
4 0088631
REAR VIEW
MIRROR RT 131 131 0
50 pc damage
…so
on
29. 29 | P a g e M e d h a k u m a r Y a d a v
Manpower Development
Manpower is the building block of an organization. Sustainability of an organization depends on having:
Right manpower with the right skill for the role.
Optimum number of Manpower
Happy & motivated manpower
Regular training to your staff, topics to be covered
1. System
2. Sales promotion
3. Operations
Business Processes in Dealer Spare Parts Operations:
Transactional
Operational
Managerial
Regular training to your channel partners, topics to be covered
1. Selling techniques
2. Skill up-gradation
3. Awareness about genuine parts
TRAINING FOR CHANNEL PARTNERS TRAINING FOR INTERNAL STAFF
30. 30 | P a g e M e d h a k u m a r Y a d a v
Warehouse Standardization
Objective of Warehouse Standardization
Effective utilization of Space
Maintain parts quality
Efficient Operations
Faster response to Workshop
Safe handling procedure
Increase profitability
Warehouse, Before Standardization
31. 31 | P a g e M e d h a k u m a r Y a d a v
BEFORE AFTER
Essence of Warehouse Standardization
1. Product specific racks
For odd shape parts such as Muffler,
brake lines, fuel pipes, cables etc.
2. Special Racks
Rack for temporary storage of Receipt items.
Rack for Storage of pre pulled items.
Rack for Packed storage of Non Moving item.
3. Easy to maintain FIFO
4. Maintain one – part one location
32. 32 | P a g e M e d h a k u m a r Y a d a v
Product Dimension Specific Racks
SM1 SM2
Muffler Rack
33. 33 | P a g e M e d h a k u m a r Y a d a v
Product Specific/Special Racks
34. 34 | P a g e M e d h a k u m a r Y a d a v
Small Parts Rack Small Parts Rack
35. 35 | P a g e M e d h a k u m a r Y a d a v
Pre Pulled Rack Cantilever Rack
Cantilever Rack Cantilever Rack
36. 36 | P a g e M e d h a k u m a r Y a d a v
Body Parts –Rack
37. 37 | P a g e M e d h a k u m a r Y a d a v
Initiatives for F /Y2017
1. New Mother Warehouse implementation
2. To improve FFR & Quicker Back order execution
3. To minimize Wrong supply, Short supply & Damages in shipment
Proposed Spare Parts Mother Warehouse Operations
38. 38 | P a g e M e d h a k u m a r Y a d a v
Mother Warehouse
39. 39 | P a g e M e d h a k u m a r Y a d a v
Mother Warehouse Details
Parts Stocking -10,000 Stock Keeping Unit (SKU)
Total Area allocated is @20,000 sq-ft
Introduction of Single delivery flow concept for final packing
Trolley as a medium to assimilate all picked material for given customer delivery
Flexibility to choose next available packer
Best in Class Processes
To reduce Wrong supply, Short supply & Damages in shipment
New packing system with built in mistake proofing and reduced Turn Around Time
(TAT)
Scan & pack –Zero error for end customer
Work balancing with visual control on Warehouse movement
Single delivery proofing
Poka Yoke – Mistake Proofing
Packaging improvements
Example of Poka Yoke for Binning
Problem Faced
Operators not following SOP of scanning the bin to confirm
Root Cause & Impact
System permits entry by keyboard. So operator can enter data without visiting
bin and allow Casual operator to bin material.
Wrong location binning leading to material not available to customer
Action taken
Secret digit incorporated in BAR code on the bin.
Operators cannot confirm Transfer Order by simply entering Location
40. 40 | P a g e M e d h a k u m a r Y a d a v
Example of Poka Yoke for Binning
Code -
• Transfer order can be confirmed only by scanning the bin
Example of Poka Yoke for Final Packing
Picking
Deliver to
Packing table
Identification
By scanning
Wrong Material/
Excess material
Yes/ No
System prevents
packing
System allows
Packing
Scan – Pack Method
No Yes
Code
with
Secret
Digits
41. 41 | P a g e M e d h a k u m a r Y a d a v
Example of Poka Yoke for Final Packing
System does not allow
Packing of excess
Quantity
Packing Station (HUPAST)
System rejects excess quantity