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Equipment Manufacturing Industry Case Study

Some organizations in equipment manufacturing space have been able to create a harmonious supply chain with near perfect parts availability at reduced inventory , while releasing capacity of sales for customer acquisition.

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Equipment Manufacturing Industry Case Study

  1. 1. Equipment Manufacturing Unresolved Conflicts
  2. 2. Copyright © 2015 Vector Consulting Group. All rights reserved. A typical company in the equipment manufacturing industry deals with following chronic conflicts
  3. 3. but very long lead time to deliver other equipment High FG inventory of equipment which are not immediately wanted despite having a separate team for supply chain management Most of the sales capacity in branches is used up in material follow up Copyright © 2015 Vector Consulting Group. All rights reserved. despite having high non-moving inventory of spare parts Frequent complains for delayed services
  4. 4. Copyright © 2015 Vector Consulting Group. All rights reserved. High parts inventory but the assembly never has all the parts required on the daily basis.
  5. 5. Copyright © 2015 Vector Consulting Group. All rights reserved. Some organizations in equipment manufacturing space have been able to create a harmonious supply chain with near perfect parts availability at reduced inventory , while releasing capacity of sales for customer acquisition.
  6. 6. Case Studies 1. KOEL 2. Godrej Securities 3. Godrej MHE
  7. 7. Copyright © 2015 Vector Consulting Group. All rights reserved. Kirloskar Oil Engines Ltd. (KOEL) KOEL is the flagship company of the Kirloskar Group. Have four state of art manufacturing units in India that offer world class service. KOEL is an acknowledged leader in the manufacturing of diesel engines, agricultural pumpsets and generating sets.
  8. 8. Copyright © 2015 Vector Consulting Group. All rights reserved. Results Kirloskar Oil Engines Ltd. Indicators Before (March 2013) After (March 2014) Remark Debtors (Receivables) ~ USD 12 Million ~ USD 4 Million Reduced by 67% Inventories ~ USD 14.6 Million ~ USD 12.5 Million Reduced by 15% Credit Days (G-OEMs) 21 Days 7 Days Reduced by 67% Cash to Cash Cycle [Payables - (Inventory + Receivables)] Cash Negative Cash Positive Cash Rich Availability of engines at G-OEMs ~ 78% on Daily Basis ~ 99% on Daily Basis Order to Dispatch (Ex-works) 35 - 45 Days ~ 7 Days Reduced by 80%
  9. 9. Copyright © 2015 Vector Consulting Group. All rights reserved. Godrej Security Solutions Godrej Security Solutions is a company in India that provides mechanical & electronic security systems for banks, offices, homes; CCTV cameras & more. Offers diverse security product solutions including technologically advanced sphere like cameras, substance detectors, X-ray baggage, scanners, biometrics & access control systems , burglary & fire resistant safes, road blockers, marine solutions etc. The plant in Mumbai is rated as one of the finest and largest factories in India.
  10. 10. Copyright © 2015 Vector Consulting Group. All rights reserved. Results Godrej Security SolutionsThe first 2 years, the profits increased by and has quadrupled in the 3rd year 3 times The sales has also doubled in 3 years The profitability has increased significantly, while ROCE has tripled
  11. 11. Copyright © 2015 Vector Consulting Group. All rights reserved. Results (Institution Business) Godrej Security Solutions Output in the plant almost tripled, and this has been achieved with significant reduction in overtime and with the least addition of manpower Lead time to customers reduced by 50%, while variability in lead time reduced seven times On time performance improved to more than 90%, while the production lead time reduced by over 50% Work -in-progress inventory reduced by more than 50% and finished goods stock reduced by 50% Rate of new product introduction increased by 200%
  12. 12. Copyright © 2015 Vector Consulting Group. All rights reserved. Results (Retail Business) Godrej Security Solutions Number of distributors have almost tripled, along with doubling of range at the distributor Availability of all items is in the range of 90%Number of retailers increased four times, along with doubling of range at the retailer
  13. 13. Copyright © 2015 Vector Consulting Group. All rights reserved. Results (Overall Business) Godrej Security Solutions Profitability has almost tripled
  14. 14. Copyright © 2015 Vector Consulting Group. All rights reserved. Godrej Material Handling Equipment Established in 1963 and part of Godrej & Boyce Group, GODREJ- Material Handling Equipment, is India’s largest lift truck Manufacturer. The Forklift range of the company includes electric, LPG and diesel counterbalanced forklifts up to 25 ton capacity, warehouse trucks and special trucks for specific applications
  15. 15. Copyright © 2015 Vector Consulting Group. All rights reserved. Results Godrej Material Handling Equipment Area Parameter Improvement Operations On-Time Performance Now 85% WIP in Days Reduced by 33% Output (Export Line) Increased by 54% Output (Domestic Line) Increased by 24% Manpower Productivity (Mandays per Truck) Increased by 10% FG (count) Reduced by 75% Purchase RM Availability Now 97% RM Inventory (Rs. Cr.) Reduced by 17% RM Inventory (in Days) Reduced by 44%

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