revamping of logistics
TRANSCRIPT
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PROJECT ON
REVAMPING OF LOGISTICS PATTERN OFAN FAST MOVING CONSUMER GOODS
IN PARTIAL FULFILMENT OF THE REQUIREMENT
FOR MASTERS OF MARKETING MANAGEMENT
(2009 2010)
CERTIFICATE FROM THE GUIDE
THIS IS TO CERTIFY that the project entitled Revamping of
Logistics Pattern of an Fast Moving Consumer Goods is successfully
done by during the third year of his course in partial fulfillment of the
Masters Degree in Marketing Management under the University of
Mumbai 400 051.
This project represents the work done under my guidance.
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Name of Guide
Project Guide Sign :
Date:
ACKNOWLEDGEMENT
The success of this final report is the outcome of Guidance and valuable
suggestions provided by all the concerned without whom the report could not
fide on the right back. I would like to express my sincere gratitude to our project
guide Director of C.I.M.R, Dr. M.V. Deshpande for giving me an opportunity to
do this project work.
I would like to take opportunity to personally thank and express my sincere
gratitude towards Prof. P. S. Rao who had helped me very much to make this
project a success and also to all of them who have contributed directly or
indirectly in my project work.
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Last but definitely not the least; I am thankful to my parents, family, friends,
colleagues and well wishers for their enthusiastic support in some way or the
other.
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CONTENTS
Topics Page No
Chapter I
Executive summary
Objectives of the project
Chapter II
Introduction to Supply Chain Management
Company profile & Current distribution network
Chapter III
Product Overview
Overview of Current Distribution System
Problem Identification
Chapter IV
Research Methodology
Data Analysis
Findings and Interpretation
Chapter V
Suggestion & Recommendation
Conclusion
Chapter VI
Bibliography
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Annexure / Questionnaire
EXECUTIVE SUMMARY
Logistics play a very important role in industries. Logistics enable the companies to
bridge the gap between the suppliers and the end consumers and efficiently delivery
the products at the right time at the right place at minimum cost.
Any increase in fuel cost indirectly increases the distribution cost of the company
thereby increasing the cost of raw material and finally the cost of the end product. If
we take any organization, the cost of procurement, cost of human resources, cost of
R&D, and cost of storage cannot be eliminated or compensated along withmarketing cost of the products.
As logistics play a very important role and thus the cost incurred for deliveries and
distribution have to be managed well to have a competitive pricing for products.
There are various means and methods in the supply chain management which helps
to achieve the objectives of the company in efficient supply chain management.
Nowadays companies are going ahead by tie ups with 3PL logistics suppliers to
minimize distribution costs and to be efficient and effective.
Hence looking at the future scenario, one way to look at reducing costs is to have a
better supply chain management structure to enable companies manage the
deliveries in least cost to make their products competitive.
This study has been done keeping in mind the future scenario of supply chain
management and to understand how companies manage their distribution network
to minimize costs and provide efficient and effective services to end consumers.
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OBJECTIVES OF THE PROJECT
The objective of this project is to study the current logistics pattern of the company
and to find out the gaps in the current distribution network and how the same can be
bridged to enable better services to the end consumer, identify the areas excellence,
areas needing improvements with the change in the distribution network.
This project aims at understanding the supply chain management by identifying the
areas of excellence, analyze their working, performance and highlight the areas of
excellence while providing suggestions and recommendations for improvements.
Thus it is very important to study and understand how the major players of FMCG
like Nestle, Cadburys etc, manage their distribution network to improve their brand
loyalty amongst their customers and what do customers perceive about the
companies.
This study is aimed at finding out the below mentioned details:
1. The present status of transportation cost between packing station
and child depot destination.
2. To find the transportation cost incase of direct supplies to child
depot.
3. To find whether there is saving on following grounds
First point transportation
Transit time
Depot Space
Better service level
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Better stocks control
INTRODUCTION TO SUPPLY CHAIN MANAGEMENT
If your company makes a product from parts purchased from suppliers, and thoseproducts are sold to customers, then you have a supply chain. Some supply chains
are simple, while others are rather complicated. The complexity of the supply chain
will vary with the size of the business and the intricacy and numbers of items that
are manufactured.
Elements of the Supply Chain
A simple supply chain is made up of several elements that are linked by the
movement of products along it. The supply chain starts and ends with the customer.
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Customer: The customer starts the chain of events when they decide to purchase a
product that has been offered for sale by a company. The customer contacts the
sales department of the company, which enters the sales order for a specific
quantity to be delivered on a specific date. If the product has to be manufactured,
the sales order will include a requirement that needs to be fulfilled by the
production facility.
Planning: The requirement triggered by the customers sales order will be
combined with other orders. The planning department will create a production plan
to produce the products to fulfill the customers orders. To manufacture the
products the company will then have to purchase the raw materials needed.
Purchasing: The purchasing department receives a list of raw materials and
services required by the production department to complete the customers orders.
The purchasing department sends purchase orders to selected suppliers to deliver
the necessary raw materials to the manufacturing site on the required date.
Inventory: The raw materials are received from the suppliers, checked for qualityand accuracy and moved into the warehouse. The supplier will then send an invoice
to the company for the items they delivered. The raw materials are stored until they
are required by the production department.
Production: Based on a production plan, the raw materials are moved inventory to
the production area. The finished products ordered by the customer are
manufactured using the raw materials purchased from suppliers. After the items
have been completed and tested, they are stored back in the warehouse prior to
delivery to the customer.
Transportation: When the finished product arrives in the warehouse, the shipping
department determines the most efficient method to ship the products so that they
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are delivered on or before the date specified by the customer. When the goods are
received by the customer, the company will send an invoice for the delivered
products.
Supply Chain Management
To ensure that the supply chain is operating as efficient as possible and generating
the highest level of customer satisfaction at the lowest cost, companies have
adopted Supply Chain Management processes and associated technology. Supply
Chain Management has three levels of activities that different parts of the company
will focus on: strategic; tactical; and operational.
Strategic: At this level, company management will be looking to high level
strategic decisions concerning the whole organization, such as the size and location
of manufacturing sites, partnerships with suppliers, products to be manufactured
and sales markets.
Tactical: Tactical decisions focus on adopting measures that will produce cost
benefits such as using industry best practices, developing a purchasing strategy with
favored suppliers, working with logistics companies to develop cost effect
transportation and developing warehouse strategies to reduce the cost of storing
inventory.
Operational: Decisions at this level are made each day in businesses that affect
how the products move along the supply chain. Operational decisions involve
making schedule changes to production, purchasing agreements with suppliers,
taking orders from customers and moving products in the warehouse.
Supply Chain Management Technology
9
http://logistics.about.com/od/strategicsupplychain/a/strategic.htmhttp://logistics.about.com/od/tacticalsupplychain/a/tactical.htmhttp://logistics.about.com/od/operationalsupplychain/a/operational.htmhttp://logistics.about.com/od/strategicsupplychain/a/strategic.htmhttp://logistics.about.com/od/tacticalsupplychain/a/tactical.htmhttp://logistics.about.com/od/operationalsupplychain/a/operational.htm -
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If a company expects to achieve benefits from their supply chain management
process, they will require some level of investment in technology. The backbone for
many large companies has been the vastly expensive Enterprise Resource Planning
(ERP) suites, such as SAP and Oracle.
Since the wide adoption of Internet technologies, all businesses can take advantage
of Web-based software and Internet communications. Instant communication
between vendors and customers allows for timely updates of information, which is
key in management of the supply chain.
Further, the current distribution pattern of having a mother depot for the
distribution network of western region was started by the company from the year
1991. The major advantages of this concept are as stated below:
1. Reduce the incidences of excess floor stocks as well as stocks
out situation.
2. Lesser PKD related problems.
3. Saving in the first point transportation cost.
4. Better control over the stocks movements.
5. Lesser reverse IUTAs.
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COMPANY PROFILE & CURRENT DISTRIBUTION NETWORK
XYZ Consumer Healthcare India Pvt ltd. is located at Mumbai and having their
Head office at Gurgaon (Haryana). The company is one of the leading FMCG
companies in India and had completed 50 years of existence in India and is further
on a growth spree. Their present turnover is around Rs.2,200 crores and western
region contributes approx 10 % in terms of sales turnover.
Distributors are serviced by 5 depots in the region which are located in Pune,
Ahmedabad, Raipur, Indore and Goa. The present distribution pattern is the stocks
from the packing station are being sent to Pune Depot (Mother Depot) and then it
is being transferred to child depot in the regions as per the sales forecast.
From Pune depot, the stocks are distributed to distributors of Maharastra and
Mumbai, Ahmedabad depot caters to the distributors of Gujarat, Raipur depot
caters to the distributors of Chhattisgarh, Indore depot caters to the distributors of
Madhya Pradesh and Goa depot caters to the distributors of Goa.
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CURRENT DISTRIBUTION NETWORK
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PRODUCT OVERVIEW
The products of the company are broadly classified into two major groups:
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1. Nutritional Healthcare (NHC)
2. Over The Counter (OTC)
Nutritional Health Care range is as under:
1. Product 1 (HLX) is available in packs of 1 kg, 500 gms jar and refill and 200
gms jar
2. Product 2 (CHX) is available in 500 gms jar and refill and 200 gms jar
3. Product 3 (JHX) is available in packs of 500 gms, jar and refill and 200 gms
jar
4. Product 4 (BST) is available in packs of 1 kg pet, 500 gms jar and refill and
200 gms jarAll the above foods products have a shelf life of 12 months from the date of
manufacturing.
Over the counter product ranges are as under:
1. Product 5(CRN) is available in form of tablets, drops and syrups
2. Product 6(ENO) is available in forms of sachets, bottles and tablets
3. Product 7(IDX) is available in packs, bottle and tube
Expiry date of all the above products are of 2 years from the date of manufacturing
and the products are tracked with their batch no.
Any distributor/retailer and willing to trade in product 5 should posses a valid drug
license.
OVERVIEW OF THE CURRENT DISTRIBUTION SYSTEM
Figure below shows the current distribution system employed by the company:-
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The stocks from the packing station are received at the mother depot located at
Pune and then redistributed to the child depots as per the sales forecast. This system
was good till the time the packing station of the organization was in the southern
part of India. Advantages of this system were as under.
Better stocks management
Volume was less
Lesser reverse IUTA.
Transportation cost was less
PROBLEM IDENTIFICATION
Increase in transit time since the packing station got shifted from South India to
North India.
15
PR5-HYD
PR6-RJ PR7-BNG PR1/PR2-HYD
PR3/PR4-FD
GUJ
M.P. CHG GOA
CW-MP/BM
MOTHER DEPOT - PUNE
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Additional space at Pune due to increase in volume of sale.
Stocks management .( Stocks out situation, more PKd issues )
Service level can be improved.
Huge work load during the month of promotional SKUs.
More than 8-9 SKU are being shipped through one IUTA
No bifurcation of stocks between normal, transfer and canteen store department.
Additional requirement of stocks by child depot will be sent during the final
allocation dispatch only.
RESEARCH METHODOLOGY
For the purpose of this study, 3 sets of questionnaire were prepared. One
questionnaire was prepared to find out the relevant primary data pertaining to the
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current depot distribution structure of the company, second questionnaire was
prepared to find out the depot working from the operations personnels point of
view and third questionnaire to find out the depot working from sales personnels
point of view. This will enable us to find out the perception of sales and operations
personnel, what he feels about the depot working and areas of improvement.
The data was collected based on information provided by:
1. Management personnel stationed at the Depot & C&F agents of the company.
2. Sales personnel of the company.
3. Operations personnel of the company.
Besides the primary data, secondary data was also collected from the existing
software of the company, transporters and the internet.
Based on the relevant primary and secondary data a study has been done to
understand the current distribution pattern and areas of weakness and areas of
improvement.
Based on the facts of the study, recommendation and suggestion has been provided.
This project was conducted in year 2009 in Mumbai, India.
Survey Methodology
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A survey was conducted amongst the depot personnel, sales personnel and
operational personnel who were involved in the day to day logistics operations of
the company. This survey aimed to find out the viability of the current logistics
pattern as per the current distribution strategy employed by the company and also to
find the views of the employees to improve the services and reduce logistics costs.
The survey questionnaire was sent to the respondents selected and their feedback
was obtained to analyze and study.
The secondary data was obtained from the management of the company and
existing transporters agreements.
DATA ANALYSIS
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Tabulation of Primary Data
Particulars DEPOTS
Pune Ahmedabad Mumbai Raipur Indore
Transit time - Pk Stns
HYD 4 6 5 7
BNG 4 6 5 7
RJ 4 6 5 7
FD 5 7 6 8
Transit time - Depot Pune 0 2 1 3
Current Depot Space Sq Ft. 17000 3500 0 3200 4
No. of trucks Nos 104 17 21 8
No. of distributorserviced Nos 89 60 20 15
Transportation Spend In Lacs 2.5 0.75 1.41 0.26 0
Value of Primary Billing In Lacs 353 155 198 65
Contribution to West in % 41% 20% 22% 7% 1
Dates of Dispatch
1stAllocation 1st to 3rd. 1st and 2nd 1st and 2nd 1st and 2nd 1st and 2
2ndAllocation
7th to10th 7th and 8th 7th and 8th 7th and 8th 7th and 8
3rdAllocation
14th to17th
14th and15th
14th and15th
14th and15th
14th and15th
Final21st to24th
21st and22nd
21st and22nd
21st and22nd
21st and22nd
Dispatch date of IUTA
1stAllocation 5th -NA- -NA- -NA- -NA-
2ndAllocation 12th -NA- -NA- -NA- -NA-
3rdAllocation 19th -NA- -NA- -NA- -NA-
Final 28th -NA- -NA- -NA- -NA-
The above data obtained is a result of collation of the primary data received from
respondents based on the survey results.
Tabulation of Secondary Data
Particulars DEPOTS
Pune Ahmedabad Mumbai Raipur Indore
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No. of cases receivedfrom Pk Station.
Product 1,2HYD/KOM
9177 1406 1783 500 999
Product 3,4 FD/GD 16898 2450 3060 1641 2034
Product 5 BNG 5403 493 1186 195 911
Product 6 RJ 7556 2109 1546 352 579
Product 7 BNG 5223 959 1264 519 749
No. Dispatched fromPune
From Pune 7417 8839 3207 5273
Transportationcharges in Rs./MT
HYD /BN 825 1200 1050 700 950
RJ 1200 1500 1250 800 1500
FD/GD 1550 825 1450 1600 775
Pune 850 533 1175 850
The above data obtained is a result of collation of the secondary data received
from the management and transporters.
Total no of Distributors serviced in the region
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No. Of Distributors
89
60
20
15
55
Maharashtra
Gujarat
Mumbai
Chhatisgarh
Madhya Pradesh
There are around 240 distributors servicing the entire western region. As per the
geographical status, Maharashtra Pune has a large distributor base; Madhaya
Pradesh is the second largest, Gujarat ranks third followed by Mumbai,
Chattisgarh and Goa.
Thus it can be observed that Maharashtra had the largest base of distributors and
has to be well taken care of.
Value of monthly sales contribution - territory wise
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Value of Primary Invoicing Per Month(Rs. In Lacs)
353
155
198
65
88
MaharashtraGujarat
Mumbai
Chhatisgarh
Madhya Pradesh
The above pie chart represents the sales contribution of different sales territories
to the region.
Value of Primary Invoicing % Contribution to Sales
41%
18%
23%
8%
10%
Maharashtra
Gujarat
Mumbai
Chhatisgarh
Madhya Pradesh
As observed is can be seen that Maharashtra contributes to 41% of the total sales
per month followed by Mumbai, Gujarat, Madhya Pradesh and Chattisgarh.
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No. of incoming trucks at the depot.
10417
21
812
Pune
Ahmedabad
Mumbai
Raipur
Indore
As observed is can be seen that Pune depot received max no of trucks as it is
acting as a mother depot. This shows there is a heavy work load at depot.
Current space at depots.
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Current Space(Sq Ft)
17000
3500
3200
4600
Pune
Ahmedabad
RaipurIndore
As observed is can be seen that Pune has the maximum depot space as it is
acting as a mother depot.
Transportation charges from packing station to depots.(In Rs/MT)
825
1200
1050
700
950
1200
1500
1250
800
15001550
825
1450
1600
775
0
200
400
600
800
1000
1200
1400
1600
1800
Pune Ahmedabad Mumbai Raipur Indore
HYD
RJ
FD
The transportation charges are quoted on Rs/MT by transporters. The average
capacity of the trucks is 9MT. The transportation costs are as shown in the bar
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chart and ranges from Rs 700 to Rs. 1600 per MT depending on the distance and
quantum. These can be negotiated figures. In case of Raipur the charges are on
higher side since, the quantum of load is small and other areas are well
connected.
Transit Time in days from packing station and Depots to Depots.
6 6 6
7
2
5 5 5
6
1
7 7 7
8
3
6 6 6
7
2
0
1
2
3
4
5
6
7
8
9
HYD BNG RJ FD Pune
Ahmedabad
Mumbai
Raipur
Indore
Figure above shows the transit time taken for receipts between packing stations
to various depots. The average transit time ranges from 5 7 days. According to
the transit time, the dispatches need to be planned by the packing stations so that
the stocks reach in time to the depots.
No of cases dispatched from packing station (In cases)
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To Pune
To Pune , BNG,
1279
To Pune , RJ,
1720
To Pune , FD,
5993
To Pune , HY,3124
BNG
RJ
FD
HY
To Ahmedabad
To Ahmedabad,
BNG, 329
To Ahmedabad,
RJ, 1406
To Ahmedabad,
FD, 1950
To Ahmedabad,
HY, 1131
BNG
RJ
FD
HY
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To Mumbai
To Mumbai,BNG, 786
To Mumbai, RJ,
1031
To Mumbai,
FD, 2480
To Mumbai,
HY, 1443
BNG
RJ
FD
HY
To Indore
To Indore,
BNG, 611
To Indore, RJ,
379
To Indore, FD,1634
To Indore, HY,
799
BNG
RJ
FD
HY
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To Raipur
To Raipur,
BNG, 232
To Raipur, RJ,
120
To Raipur, FD,
1331
To Raipur, HY,400
BNG
RJ
FD
HY
The above pie charts represent the no of cases received from the packing
stations to the depots on a monthly basis.
For clarity, separate pie charts have been made.
The abbreviations in legend in the pie chart is as below:
HY - Hyderabad
BNG - Bangalore
FD - Faridabad
RJ - Rajamundary
Currently the packing station at Hyderabad had been shifted to Baddi in Himachal
Pradesh.
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FINDINGS AND INTERPRETATION
There are around 240 distributors servicing the entire western region. As per the
geographical status, Pune in Maharashtra has a large distributor base followed by
Madhaya Pradesh, Gujarat, Mumbai, Chattisgarh and Goa. It implees that that the
company must properly focus on the core region which has maximum distributors
as servicing the large base of distributors is not an ordinary task. When there is a
large no of distributors, it is also noted that Pune has a large consumer base and
thus the company must plan its supply chain management very efficiently.
As per sales volume also compare to different sales territories to the region,Maharashtra contributes to 41% of the total sales per month followed by Mumbai,
Gujarat, Madhya Pradesh and Chattisgarh and Pune depot receives the max no of
trucks as it is acting as a mother depot. There is very heavy work activity going on
in the Pune mother depot.
The transportation charges are quoted on Rs/MT by the transporters. The average
capacity of the trucks is 9MT during each ferry. The transportation costs ranges
from Rs 700 to Rs. 1600 per MT on an average scale depending on the distance and
quantum of deliveries. The transportation rates can be negotiated with the
transporter depending on the quantum of deliveries and truck loads and also based
on tie upds for a specified period.
In case of Raipur the transportation charges are on higher side since, the quantum
of load delivered is small and the area lacks basic transportation facilities. As other
areas are well connected the average rates are less compared to Raipur.
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The transit time taken for receipts between packing stations to various depots
ranges from 5 7 days on an average. According to the transit time, the dispatches
need to be planned and scheduled by the packing stations so that the stocks reach in
time to the depots.
Basic other issues which were found on the basis of the research and its analysis:
Need to manage both IUTA and normal dispatch.
No bifurcation of stocks between normal, IUTA and canteen stores department.
Huge work load during the month of promotion as the volume will be 2 times
the normal target in these months.
Issue with management of stocks Additional space needs to be procured due to other activities/increased volumes.
Need to plan dispatch after the receipt of stocks from Pune.
More than 8-9 SKU comes in one truck efficient management required
Additional requirement of stocks is being sent to the depots during the final
dispatch
Freshness of PKD is an issue as it has to be maintained on FIFO basis
If any stock is out of stocks at Pune depot, it is mostly likely that other depot
also might not have the required stocks.
After the shifting of packing station from South India to North India the transit
time have increased.
SUGGESTION AND RECOMMENDATION
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Comparative Analysis of Current scenario V/s Direct supply
1. First Point Transportation Cost
a) First point transportation charges under current scenario:- ( Scenario 1)
SupplyLocation
Incoming sku's fmSupply location
Avg receipts(c/s)
Weight TotalMT
FreightRate Rs/MT
Amount (Rs) Avg per month
HYD Product 5 43226 648 825 534922
RJ Product 6 60445 907 1200 1088010
KOM Product 1 /2 89286 1786 825 1473219
FD Product 3 / 4 164412 3204 1550 4966045
Total 357369 6545 8062196 671850
Second point transportation costs (Borne by the region) 2670000 222500
Total Spend from packing station to child depots 10732196 894350
Total receipts from all the packing stations is approx. 3,57,369 cases per year
which comes to 29,780 cases per month.
Total weight of all the cases is 6,545 MT which comes to 545 MT per month.
The transportation charges from Packing station to Pune depot as calculated above
is Rs.6,71,850.00 per month. The transportation charges from Pune depot to other
depots in the region as calculated above is Rs. 2,22,500.00 per month.
Hence the total first point transportation charges incurred by the company is
Rs.8,94,350.00 per month.
b) First point transportation charges under direct supply: (Scenario 2)
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Packingstations
Ahmedabad RaipurIndore
(Ind1+2)
Pune(Mh1+Mh2+CSD)
+Goa
Bombay(Bm1+Bm2)
Total
Cases Value Cases Value Cases Value Cases Value Cases Value Cases Value
OTC
HYD( CRN
) 3948 71064 2785 29243 7337 104552 15348 189932 9430 148523 38848 54331RJY ( Eno) 16873 379643 1434 17208 4550 102375 20639 371502 12367 231881 55863 110260
TotalOTC 20821 450707 4219 46451 11887 206927 35987 561434 21797 380404 94711 164592
NHC
FBD 23399 386084 15973 511136 19613 304002 71913 2229303 29759 863011 160657 429353
HYD 13572 325728 4801 67214 9592 182248 37486 618519 17320 363720 82771 155742
36971 711812 20774 578350 29205 486250 109399 2847822 47079 1226731 243428 585096
Total 57792 1162518 24993 624801 41092 693177 145386 3409256 68876 1607135 338139 749688
IUTA Cost fro transfer to Goa depot 17760
Total Cost
Average 63954
Total receipts from all the packing stations is approx. 3,38,139 cases per year
which comes to 28,178 cases per month.
The transportation charges from packing station to all depots except Goa as
calculated above is Rs.6,24,750.00 per month and the transportation charges from
Pune depot to Goa depot is Rs.14,800.00 per month.
Hence the total first point transportation charges incurred by the company are
Rs.6,39,540.00 per month.
First point transportation Cost Analysis in both scenarios (A & B): (All Fig in lacs)
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Transportation cost under present scenario 1 : 107.32
Transportation cost under scenario 2 : 76.74
Expected IUTA due to change in forecast : 2.40
Saving in transportation is : 28.10
As observed from the above calculations, the company can save approximately
Rs.28.10 Lacs per annum if the company decides to go for the direct dispatches of
stocks from packing station to other depots in the region.
2. Transit time
Supply from Mother depot
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AreasSales in
Cases(2003)Floor stks+
CSDTotal
Arearequired(Sq.ft)
Areaavailable
(Sq.ft)
Extra areaneeded(Sq.ft)
Expectedcost(Rs)
Bombay II 638 638 0 800 0 0
Ahmedabad 7288 3231 10519 5500 3500 2000 8000
Indore I + II 4617 2332 6949 5000 4600 400 1760
Raipur 2890 1000 3890 3700 3200 500 2000
Goa 1432 0 1432 0 1250 0 0
West (Excl Pune) 16865 6563 23428 14200 13350 2900 11760
Pune 24731 17130 41861 14000 17000 -3000 -18000
Total 41596 23693 65289 28200 30350 -100 -6240
Assuming that mother depot is not in place, some of the depot will need
additional space for maintaining floor stocks and above calculation shows a
nominal saving of Rs.6000.00 per month. The same space requirement is
represented graphically below.
Direct Supply Area in Sq. ft.
14000
5500
3700
5000
Pune
Ahmedabad
Raipur
Indore
Diagrammatic representation of REVAMPED LOGISTICS MODEL
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Advantages of this system:-
1. Reduction in transit time
2. Better service to the market
3. Better stocks management.
4. Balance work load
5. Incase of forecast variation the concern area get the penalty.
RECOMMENDATION
All stocks from FD / HY/ BG / RJ packing station to be supplied directly to
all depot of west.
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CW-MP/BM
PUNEMUMBAICHGM.P.GUJ
PR3/4-FD PR5-HYD PR6-RJ PR7-BNG
GOA
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IUTA cost from Pune to other depot and vice versa due to change in forecast
would be 2.4 lacs p.a. approximately
The net saving expected would be around Rs.28 lacs due to direct supply.
To accommodate the above change we need to take additional warehouse
space in other depots and surrender space in Pune depot which will help save
another Rs.6000.00 per month.
Better stock management (Better floor stock maintained at depots) and
increase in service levels of the depots due to lesser stock out situation.
It there is any variation in forecast, then the concerned depots will only suffer
without affecting other depots.
Work load in the operational level gets distributed for better management.
CONCLUSION
On analyzing the above data with respect to transportation cost, depot space, transit
time and the administrative problems. I would recommend the company to go for
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the direct dispatch of stocks from packing station to depots because of the
following advantages:
Savings in transportation cost
Reduction in transit time
Saving in cost of depot space.
Better stocks management ( Stocks out situation / Lesser PKD issues)
Lesser IUTA
Efficient operations management in logistics
BIBLIOGRAPHY
Magazines, others:
Business Line
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Business today
Reference reports from company
Transportation agreement
Web sites:
www.eyefortransport.com
www.logisticsworld.com.com
www.supplychainmanagement.in
www.bindallogistics.com
www.google.com
Annexure / Questionnaires
Depot Person
1. What is the current depot size? ______________
2. What are the transit time details from the following packing stations and depot?
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1. Hyderabad. _________
2. Bangalore : _________3. Rajamundry :_________
4. Faridhabad : __________
5. Pune : __________
3. No. of cases received from packing station / depots
1. Hyderabad.: _________2. Banglore : _________
3. Rajamundry :_________
4. Faridhabad : __________5. Pune : __________
4. No. Of trucks received in the month?________
5. Transporter charges from the following depots.
1. Hyderabad./ Banglore : _________2. Rajamundry :_________
3. Faridhabad : __________
4. Pune : __________
6. No. of distributors services? _____________
7. Value of Primary billing per month?__________
8. Contribution in terms of percentage to Regional Billing?____________
9. Dispatch dates of stocks to distributors.
10. Dispatch dates of stocks to Other depot ( Applicable only for Pune )
11. Other Issues faced.
12 Name of the depot you handle: ______________________
13 Name of the person: ___________________
Operation Person
1. How many person handle the operation of stocks?a) One b)Two c) Three d) More than 3
2. How many iuta are planned for the following depot in a month ?
1. Ahmedabad : _________
2. Indore :__________
3. Raipur :__________
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3. How many trucks of stocks are removed .
1. Ahmedabad : _________ Trucks
2. Indore :__________ Trucks
3. Raipur :__________ Trucks
4. Whether the stocks bifurcated between normal despatch and IUTA.- Physically
a)Yes or b) No
5. Whether the stocks bifurcated between normal despatch and IUTA.- System
a)Yes or b) No
6. How the iuta are planned.
7. Whether the depot is able to handle the current market requirement
a)Yes or b) No
8. Whether the service of the depot is good
a)Yes or b) No
9. What are the problems faced by them
1. Additional requirement of stocks .
2. Freshness of PKD.
3. Need to wait till the stocks is received from Pune
4. Lesser amount of floor stocks maintained.
10. Rates of Full and half truck load.
Area Full Truck Load Half Truck Load.
1. Ahmedabad
2. Raipur
3. Indore
11. What is the stocks level maintained at distributor point.1. NHC -_________Days
2. OTC - _________Days
12. What is the stocks level maintained at depots.1. NHC -_________Days
2. OTC - _________Days
13. Cost of transportation incurred ?
1. Mumbai -
2. Pune -
3. Raipur -
4. Indore -
5. Gujarat -
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14. Names of the depots you are handling? _________________
15. Name of the Person: ____________________
Sales Executives / Area Sales Managers
1. Which area you are handling?_________________
2. Which are the main selling sku in your area?
Product 1 / 2- __________
Product 3 / 4 -__________Product 5 - __________
Product 6 - __________
Product 7 - __________
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3. How is the service level from you depot ?
a) Excellent b) Good c) Poor d) Very poor.
4. Whether you have been informed about the status of orders after the allocation ?
a) Yes b) NO.
5. Whether you have been updated with the details of stock out ?
a) Yes b) NO.
6. Whether the distributors are happy with the service of the depot?
a) Excellent b) Good c) Poor d) Very poor.
7. What are the other issues faced with respect to depot handing?