supply chain transformation

Supply chain transformationMahindra South Africa case study:

Running with the big dogs, even if you’re small

InSync Solutions

Savino Del Bene – Fast facts

A multinational freight and logistics organization

Employing in excess of 3000 staff

Operating in 45 countries with owned offices

Savino Del Bene and InSync –An End to End Supply Chain Solution

A Strategic Alliance with

InSync – Fast facts

• InSync – from Integration and Synchronisation; two key principles for JIT logistics

• Founded: 2006• Majority shareholder: Resolve – an Imperial company• Logistics Solutions Provider: Design, implement and manage• > 900 Employees• 18 Grad Engineers , 6 Diplomats

• Operational activities at 6 sites:• PE – VW SA ,• East London – Mercedes SA, • Gauteng – SAB, SCJohnson, Mahindra, BMW SA

InSync Solutions

Business requirements

Why change?

InSync Solutions

Strategic objectives

• Improve CSI – brand value (service to dealers)

• Platform for sustainable future growth

• Flexible solution to support future growth

• Minimum effort to administrate

• Competitive costing

InSync Solutions

Improved

Competitiveness!

Beating the trend….

InSync Solutions

Co

stC

ost

SizeSize

• Inbound volume, # of lines

• Outbound volume, # of

lines

• Distribution density - # of

lines per distribution point


InSync Solutions

Co

stC

ost

ServiceService

• Accurate

• Reliable and

predictable

• Cost effective

• Minimum effort for

dealer network

• Visibility of important

information to all

parties

• …..


InSync Solutions

Co

stC

ost

Distribution frequencyDistribution frequency

Pop-corn factor 1:7

Partner of choice

• Single partner with end-to-end service offering

• Specialised skills, processes & systems

• Right size – take business serious

• Experience

• Flexible – adjust solution around Mahindra’s specific needs

• Innovation to “beat the trend”

InSync Solutions

Clarity of requirements

InSync Solutions

Mahindra

Dealer as

customerInSync

Solution requirements: Dealers

Dealer must be confident to promise service and deliver on it:

• Visibility of stock at warehouse

• Simple ordering process

• Accurate, reliable ETA for orders

• Correct part at right quality

• Quick turn-around for back orders

• Empowered through information available at all times

InSync Solutions

Solution requirements: Mahindra

Service excellence to dealer network:• 100% on time in full delivery against dealer orders• Accurate inventory records• Quality assurance throughout all elements of the supply chain• High levels of automation of business processes• Secure business process reflecting Mahindra business rules• Real time, on demand reporting• Simple, pleasant experience with system for dealer network when

placing orders• Information available to dealers to reduce basic queries• Industry best cost competitiveness• Automated workflow for return orders

InSync Solutions

Solution requirements: InSync

Ability to meet customer expectations effectively:

• Full integration with Principal system

• Clear, simple KPI’s agreed to reflect SLA, visible to all parties in real time

• Stability in business rules supported by work flow

• Flexibility to design & implement “best fit” solution based on our experience

InSync Solutions

Designing the solution

Some considerations

InSync Solutions

Focus…

“There is nothing so useless as doing efficiently that which should not be done at all.”

– Peter F. Drucker

VALUE:

Any activity or process that the

customer is willing to pay for.

InSync Solutions

Absolute clarity on customer requirements vital to understand VALUE.

Key focus: Waste elimination

• MURI – Design and plan to prevent waste

• MURA – Implementation of work design through system & equipment and elimination of fluctuation in work load

• MUDA – Further waste discovered after implementation and focus of continuous improvement

InSync Solutions

MURI – plan & design to prevent waste

InSync Solutions Innovation

SystemSystem

ProcessProcess

Customer requirements

Customer requirements

MURI – plan & design to prevent waste

InSync Solutions

Management Philosophy and

practices

Processes

Equipment, layout & facilities

System

Holistic

solution

Balance and integration more important than pockets of excellence

Creating value: Waste elimination

• Waste of transport – distribution

• Waste of space

• Waste of excess capacity to cover for order fluctuation

• Waste of motion

• Waste of complexity

InSync Solutions

Waste of transport

InSync Solutions

CostEffort

Impact on operations

FrequencyReduced inventoryFlexible inventory

Balance?Moderate expectations

Waste of transport

• 1 m3 flows in; 3-5 m3 flows out

• 1,1 m3 per delivery point

• Collection allowed at warehouse

Network solution• Single National Warehouse close to COG

• Single, daily delivery overnight to Gauteng and main centers

• Lead time as per network to outlying areas

• Vehicle off road orders for critical orders– Limited through rules and discount structures

InSync Solutions

Waste of space

InSync Solutions

Data complexityWarehouse

flexibilty

Storage typesStorage density

Balance?Layout optimisation

System innovation

Benchmark info

InSync Solutions -

500

1 000

1 500

2 000

2 500

3 000

3 500

Op1 Op2 Op3 Op4 Op5 Op6 Op7

Inventory held for one orderline out

Rinventory(ave)/Orderline(m)

-

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

9,00


Sales generated per inventory unit

RAnnualSales/R(Ave)Inventory

-

2 000

4 000

6 000

8 000

10 000

12 000


Inventory density

Rinventory(ave)/SQM

Waste of space

• One part # per bin location required for

process assurance

• Accessibility by foot to be maximised

• Maximise storage density (m3 parts/m3 racks

and part # per sqm)

• Storage types matched to product attributes

and material handling requirements

InSync Solutions

Waste of space

InSync Solutions

Vo

lum

e p

er

part

Bulk

sto

rage

Bulk

sto

rage

Larg

e p

alle

tLarg

e p

alle

t

Sm

all

bin

are

aS

mall

bin

are

a

Sm

all

palle

tS

mall

palle

t

Lean lifts

Lean lifts

# o

f u

nit

s in

sto

ck

Part #’s

Waste of space

InSync Solutions

Lean Lifts

Small Bins

Cro

ss

Do

ck

Cro

ss D

ock

Lean lifts362 bins/sqm

5427 bin locations

Small bin area

14 bins/sqm

Waste of space• 2 Lean lifts installed• High security parts• Small parts for medium and slow

movers• Strategic items (extremely low

sales)

27 bins per tray for bigger parts

54 bins per tray for smaller parts

75 trays per machine

5427 bin locations in 2 machines

• Standard light duty racking used

• Boxes specially designed to fit into racks

• Box size range determined by part sizes

Waste of space

Waste of excess capacity

InSync Solutions

Operational complexityExcess capacity

Unlimited capacity

Multiple cut-offsOrder flexibility

Balance?• Business rules• System

innovation

Waste of excess capacity:Order intake patterns

InSync Solutions

Cut-

off

1 Cut-

off

2 Cut-

off

3

Time of day

# o

f ord

er

lines p

er

hr

Day of month

# o

f ord

er

lines p

er

day

Month

-end

Waste

Waste


InSync Solutions

Cut-

off

1 Cut-

off

2 Cut-

off

3

Time of day

# o

f ord

er

lines p

er

hr

Day of month

# o

f ord

er

lines p

er

day

Month

-end

Excess

capacity

Customer waiting

or overtime

Customer waiting

or overtime

Excess

capacity

Waste of excess capacity

• Single daily cut-off (16h00)

• Daily order buckets limited to agreed capacity

• Various order types with discount structure and rules – different lead time promise

• Work pattern introduced

InSync Solutions


InSync Solutions

Cut-

off

1

Time of day

# o

f ord

er

lines p

er

hr

Day of month

# o

f ord

er

lines p

er

day

Month

-end

Fixed daily capacity

Work pattern

allows variation

in capacity

without

additional cost

Waste of motion

InSync Solutions

Minimise moving distance

Minimise handling steps

Space considerations

Racking limitations

Balance?• Layout

optimisation

• Bin Structure

optimisation

• System

innovation

Benchmark info

-

1,00

2,00

3,00

4,00

5,00

6,00

7,00


Throughput per SQM

Orderlines(m)/SQM

-

2,00

4,00

6,00

8,00

10,00

12,00


Frequency in vs out

LinesOut(m)/LinesIn(m)

Waste of motion

• Maximise picks on minimum distance corridor

( 92% picks)

• Maximise picks by foot

InSync Solutions

Quara

n

tine

Dam

ag

es

Deale

r

Retu

rn

s

Receiving

Bulk North

Racking

Lean Lifts

Small Bins

Palletized Racking Palletized Racking

Dispatch

Dispatch

Cages

Packing

Stations

WH Office

Bulk South

Racking

Green Area

Co

llect

ion

s

Cro

ss

Do

ck

Cro

ss

Dock

Minimum distance corridorMinimum distance corridor

Fast moving, high volume parts Fast moving, high volume parts

Waste of motion

InSync Solutions

Quara

n

tine

Dam

ag

es

Deale

r

Retu

rn

s

Receiving

Bulk North

Racking

Lean Lifts

Small Bins


Dispatch

Dispatch

Cages

Packing

Stations

WH Office

Bulk South

Racking

Green Area

Co

llect

ion

s

Cro

ss

Do

ck

Cro

ss

Dock

Fast moving, high volume parts Fast moving, high volume parts

Rapid fire zone

O

u

t

Small MediumLarg

e

Waste of motion

• Sequence picks to minimise movement distance

• Ensure equipment layout, process and system steps align

• Place parts at heights based on movement

InSync Solutions

D

A

B

C

Waste of motion

InSync Solutions

Safety

net

High volume, fats moving

parts (filters, etc)

replenished into pick face

on minimum distance

corridor – pick by foot

Waste of motion

• Sequence put away to minimisemovement distance

InSync Solutions

Split by area

Route by Bin

location

Route by Bin

location

Warehouse layout

InSync Solutions

Quara

ntin

e

Dam

ages

Deale

r

Retu

rns

Receiving

Bulk North

Racking

Lean Lifts

Small Bins


Dispatch

Dispatch

Cages

Packing

Stations

WH Office

Bulk South

Racking

Green Area

Co

llectio

ns

Expansion

possible

Cro

ss

Do

ck

Cro

ss D

ock

Minimum distance corridor

Waste of complexity

InSync Solutions

ControlAutomationEfficiency

Complex systemComplex master

dataComplex process

Balance?• Interfaces

• Automated

workflow

• Simple processes

• System

innovation

Interfaces (key enabler)

• To and from Host system (SAP)

• Master/slave relationship observed to maintain data in one place

• Real time for critical and daily for non-critical

• Automated error handling, logging and notification

InSync Solutions

Automated workflow

InSync Solutions

Dealer: places order

DespatchDespatch

Result

SAP

Courier

Order info

Invoice

Automated workflow

• Credit control

• Back-orders

• Supersessions

• Dealer returns (return logistics)

• Invoicing (goods and courier costs)

Information

• Brochures, Training Manuals

• Invoices

• Order status

• Warehouse performance reports

InSync Solutions

Simple processes

InSync Solutions

• I see, I do

• Simple menu steps in system

• System driven routing to reduce decision making

• Minimum process steps

• Build-in mistake proofing– One piece flow– Never separate data and material– Scan where possible

• No planning for standard material flow – work flow based

• Reflect, support and enforce business rules

System innovation

InSync Solutions

• Portable printing to allow user to print at material

• Work leveling of dealer orders into demand buckets

• Dealer credit handling as part of ordering process

• Configurable order type based business rules

• Courier service levels interactive selection

• Automated backorder and supersession handling

• Rule based Return Order handling – work flow based with build-in notifications

• Handling of multi client warehouse (Mahindra & SSangyong)

The results

InSync Solutions

Results

InSync Solutions

• Improve CSI – brand value (service to dealers)

• Platform for sustainable future growth

• Flexible solution to support future growth

• Minimum effort to administrate

• Competitive costing

In summary

InSync Solutions

• Most important measure of success is impact on the targeted business strategic initiative

• Subject all decisions to objective when compromises are required (customer response & cost)

• Design warehouse layout for customer response (outbound speed & efficiency)

• Design warehouse structure and processes for costs (storage density, automated workflow)

• Optimise, optimise, optimise equipment, process and system integration during design phase to prevent waste in operation

• Drive waste reduction as way of life after implementation

• Serve warehouse operator as customer to the best of your ability during the project phase and warehouse operator will serve final customer to the best of his ability during operations