1.

Introduction In todays world of globalization many apparel retailers are building strong supply chains to gain advantage over their competitors by offering the best value to their customers. The supply-chain management (SCM) has become very critical to manage risk, dynamism, and complexities of global sourcing. A totally integrated supply chain is required for the company to get gain the maximum benefits. The objectives of the supply chain and the performance measurements need to be understood in order to build the most effective supply chain. Performance measurements provide an approach to identify the success and potential of supply management strategies. One major aspect of the SCM is to select the right sources of supply in the business environment that can support corporate strategy. Contrary to the conventional adversarial relationships, effective SCM in the new competition suggests seeking close relationships in the long term with less number of partners. Considering the rapidly changing market conditions and customer seeking the best value, long-term relationships with the vendors became very critical in the apparel industry. Therefore the apparel retailers are looking for the vendors who can provide the best cost in the fastest way. Such a relationship is regarded as partnership since it includes activities such as information sharing, joint product design, or sharing storage spaces. The purpose of this paper is to emphasize the importance the vendorselection problem and its relation to the supply-chain strategy. It presents a model, based on the analytical hierarchy process (AHP), that an apparel company can use to select its suppliers, and create a strategy for supplier

relationship management (SRM). The framework of the performance measurement is based on quantitative and qualitative measurements. Company Profile Sri Bhagirath Textiles Limited offers an exclusive array of yarn that is produced through making use of the high quality cotton and viscose material. SBTL provide this range of yarns to their customers in different sizes, colors and thickness as well. These products which are offered to their clients are exceptionally shining and come in different shades. They have exceptionally talented and experienced professionals who have enormous knowledge about the varied dynamics of the industry. In tune with the sophistication of the industry, SBTL have brought about sophisticated technology in their manufacturing unit so as to produce quality products. Company having more than seven decades of experience in functioning in this field has emerged as one of the fastest growing company engaged in the manufacturing and supply of a rich assortment of yarns, such as Cotton yarn, Open end yarn, Ginned cotton yarn, 100% Polyester yarn, Poly viscose yarn and Viscose yarn. Product range finds extensive application in the textile, fabric and apparel making industry for the purpose of sewing, embroidery and embossing fabrics and garments. They are enabled to attain this apex level in this industry owing to the support of an efficient and diligent team of professionals and because of their manufacturing facility which is upgraded as per the latest trends in the market. Company have a base in the textile centre in Nagpur and this has helped them in having contact with several reputed garment industries to source their requirements of materials for their needs. The profound guidance of mentor, Mr. Praveen Rander has been of immense encouragement for company to successfully pursue initiatives in the manufacturing of yarns. His vast industry

knowledge and experience in this industry has been of greater use in maintaining a long standing link with clients and winning their goodwill. Commitment to quality, cost effectiveness and delivery as per the time schedule, have enabled the company to garner a wide clientele across the nation. Team efforts joined with a strong and modern infrastructure has helped company to cope with the aggressive competition in the market and register a distinguished mark amidst all such eventualities. SBTL have been able to establish a niche in this business because of their capability in recognizing the customer needs and providing them with high end range of yarns, suited to the tastes and preferences of their valued customers.

Business Type

Manufacturer Industrial, VaRi Well Spun India Private Limited, Mumbai Bombay Dying, Mumbai Yarn and Raw Ginned Cotton Sarvodaxa Cloth Market, Near Hotel Annapurna, Gandhibagh. Nagpur - 440 002, Maharashtra 1991

Key Customers

Industry

Registered Address

Ownership & Capital Year of Establishment Legal Status of Firm

Public Ltd. Co. Registered under Indian Companies Act 1956

Proprietor Name

Mr. Ramesh Rander

Team & Staff Total Number of Employees Statutory Profile Income Tax Registration No. Service Tax Registration No.

501 to 1000 People AAACB8691F AAACB8691F ST 001 AAACB8691F ST 001

Central Sales Tax No. Value Added Tax Registration No.

27520000244 27520000244VI

Import Export Code Excise Registration No.

0300025726 AAACB8691F XM 001

Legal History

From the year 1991 to 1996 company's name was Bhagirath Textile Limited State Bank of India

Banker

TAN No. Registration Authority

NGPB00507D Registrar of Companies, Maharashtra

Registration No.

U17100MH 1991PLC060542

2. Supply Chain Management (SCM) A supply chain is characterized by the flow of goods, services, money, and information both within and among business entities including suppliers, manufacturers, and customers. It also includes all types of organizations engaged in transportation, warehousing, information processing, and materials handling. Sourcing, procurement, production scheduling, manufacturing, order processing, inventory management, warehousing, and, finally, customer service are the functions performed throughout the supply chain. The ultimate goal of SCM is to meet customers demand more efficiently by providing the right product, in the right quantity, at the right location, on the right time, and in the right condition. As Figure 1 shows, SCM aims four major goals: 1) waste reduction: 2) time compression; 3) flexible response; and 4) unit cost reduction. These goals have been articulated in several contexts associated with SCM, emphasizing the importance of both intra- and inter-firm coordination.

Figure1. Supply Chain Management Framework Firms practicing SCM seek to reduce waste throughout the supply chain by minimizing duplication, harmonizing operations and systems, and enhancing quality. When production and logistics processes are accomplished in less time, all entities in the supply chain are able to operate more efficiently, and primary result is the reduced inventories throughout the system. Flexible response is in order handling, including how orders are handled, product variety, order configuration, order size, and several other dimensions means that a customers unique requirements can be met in a cost-effective manner. Overall, all of these goals help keeping the costs at the minimum for a given value for the customer.

3. Performance Measurement in the Apparel Industry SCM The aim of supply chain management is to gain an advantage in terms of customer service and cost over competitors. Traditionally, performance measurement is defined as the process of quantifying the effectiveness and efficiency of action. It plays a critical role in monitoring performance, enhancing motivation and communication, and diagnosing problems. Furthermore, performance measurement helps identifying the success and potential of management strategies, and facilitating the understanding of the situation.

Traditionally, performance measurement is defined as the process of quantifying the effectiveness and efficiency of action. From the management perspective, performance provides the necessary information for feed back to decision makers and process managers. It plays a critical role in monitoring performance, enhancing motivation, facilitating communication, and diagnosing problems. Performance measures are categorized into two groups; qualitative and quantitative. These measures involve customer satisfaction and responsiveness, flexibility, supplier performance, and costs. There are three types of measures: resources, output, and flexibility. A framework for measuring the strategic, tactical and operational level of performance in a supply chain, which deals mainly with supplier, delivery, customer service, and inventory, and logistics costs, exists. Customer satisfaction is level is an indication of the required standard of service level of a particular company, which is closely related to the whole performance of its supply chain. For different industries, customers look at different measures, such as delivery service, where time is no doubt their major concern; whereas for parts manufacturing, the accuracy of specification may be the most importance consideration. Thus, the weighting of each performance measurement can be different for each industry. It is common practice for apparel retailers to deal with manufacturers, with centralized buying and considerable negotiation on prices, quality and delivery schedules. However, in many chains there is an intermediary, often an import or export agency, acting as a significant figure within the chain. The addition of the intermediary has come about as a result of increasing globalization within the industry. Globalization of the textile and clothing supply chain is currently intensifying, with many companies either sourcing

components from overseas, or moving manufacturing to countries with lower labour costs. In addition, the textile industry is characterized by a number of factors, namely a short lifecycle, high volatility, low predictability, and high impulse purchase. In the textile industry, sourcing strategies must reflect the performance capabilities of the supply base. In most cases there are a variety of possible vendors that differ in cost, lead times and flexibility of production. Vendors with lowest cost generally offer virtually no flexibility booking capacity and shipment times of several weeks and often require that the total production be allocated relatively evenly throughout the year. More responsive vendors may have shorter lead times and allow greater flexibility vis-a-vis production commitments. Additionally, different vendors may be willing to store limited amounts of finished product prior to delivery for a fee.

Retailers tend to leverage a portfolio of two types of vendors: Type 1 vendors are characterized by long lead times, lower unit costs and less flexibility whereas Type 2 vendors offer short lead times, high unit costs and more flexibility. This enables such strategies as exploiting lower cost production for the most predictable segment of demand, while sourcing the more speculative segment via the more flexible, but more costly, vendors. Operationalizing this in multi-product, multi-vendor setting is nontrivial and is further complicated by many production and logistical constraints.

Apparel retailers deal with both fashion goods and basic goods to offer product variety to their customers. Basic and fashion goods can be classified based on the volume of production, degree of style variation, and frequency of style changes. For example, fashion goods are hard to forecast the demand; have high fashion level and seasonality, and have varied style change. Basic goods are relatively easy to forecast the demand, have low fashion level and limited seasonality, and have a basic garment style that remains constant. Therefore, the retailer will place the fashion goods with the Type 2 vendor and the basic goods with the Type 1 vendor. Textile is a sector where quality is one of the key competitive factors, and current competition does not only concern the individual firm but, rather, involves the entire supply chain. Indeed, the quality of the final product that reaches the customer is clearly the result of a chain of successive, inter-linked phases: spinning, weaving, apparel and distribution. In this new competitive environment, quality, but must be a feature of all market segmentsbasic and fashionto meet the specific requirements and tastes of all types of customers. Furthermore, quality cannot be restricted to the area of the intrinsic quality of the goods themselves, but must also take even more operational aspects into account in. The fashion industry is beset by problems of volatility, making it difficult to predict fashion trends and consumer demands. Despite recent improvements, traditional forecasting techniques cannot deliver the accuracy required for managing logistics in the fashion market. Hence, forecasting risks could be reduced by being less dependent on forecasts. This can be achieved by shortening lead times, since this allows better response to consumer demand. Speed-to-market has become a fundamentally important way to cope with the increasing demand for fashion variety.

4. An Analytic Hierarchy Process Model for Vendor Selection Supplier selection decisions are taken following the creation of a supplier shortlist during the pre-qualification phase of the supplier relationship framework shown in Figure 2. They are complicated decisions since various criteria must be considered in the process. A significant number of quantitative and qualitative supplier attributes should be examined. Assessments should be made using objective and subjective criteria, and tradeoffs should be established. A strategic approach towards purchasing may further emphasize the need to consider multiple criteria. The evaluation of vendors is a complicated decision problem. The complexity comes from: 1) the relative difficulty to conceptualize and structure the numerous components of the evaluation problem into an analytical framework; 2) The nature of the components in this process; some are quantitative whereas others are subjective. 3) The large number of alternatives as the competition in the marketplace increases. AHP is a decision making tool that decomposes a complex problem into a multi-level hierarchical structure of objectives, criteria, subcriteria and alternatives. Applications of AHP have been reported in numerous fields such as conflict resolution, project selection, budget allocation, transportation, health care and manufacturing The AHP provides a framework to cope with multiple criteria situations involving tangible and intangible, quantitative and qualitative aspects (Saaty, 2000, 2001). It consists of three steps: 1. Decomposing the complex problems into a hierarchy of different levels of elements.

2. Using a measurement methodology to establish priorities among the elements. 3. Synthesizing the priorities of elements to establish the final decision.

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. 1) 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. 2) Planning: The requirement triggered by the customer's sales order will be combined with other orders. The planning department will create a production plan to produce the products to fulfill the customer s orders. To manufacture the products the company will then have to purchase the raw material s needed. 3) Purchasing: The purchasing department receives a list of raw materials and services required by the production department to complete the customer's orders. The purchasing department sends purchase orders to selected suppliers to deliver the necessary raw materials to the manufacturing site on the required date. 4) Inventory: The raw materials are received from the suppliers. Checked

for quality and 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. 5. 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. 6. Logistics/Transportation: When the finished product arrives in the warehouse, the shipping department determines the most efficient meth od to ship the products so that they 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.

Levels in 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; an d 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 Decisions There are four major decision areas in supply chain management: 1. Location Decisions.

2. Production Decisions. 3. I nventory Decisions. 4. Transportation (distribution) Decisions. Location Decisions The geographic placement of production facilities, stocking points, and sourcing points is the natural first step in creating a supply chain. The location of facilities involves a commitment of resources to a long-term plan. Once the size, number, and location of these are determined, so are the possible paths by which the product flows through to the final customer. These decisions are of great significance to a firm since they represent the basic strategy for accessing customer markets, and will have a considerable impact on revenue, cost, and level of service. These decisions should be determined by an optimization routine that considers production costs, taxes, duties and duty drawback, tariffs, local content, distribution costs, production limitations, etc. Although location decisions are primarily strategic, they also have implications on an operational level.

Production Decisions The strategic decisions include what products to produce, and which plants to produce them in. allocation of suppliers to plants, plants to DC's .. and DC's to customer markets. As before, these decisions have a big imp act on the revenues, costs and customer service levels of the firm. These decisions assume the existence of the facilities, but determine the exact path(s) through which a product flows to and from these facilities. Another critical issue is the capacity

of the manufacturing facilities--and this largely depends the degree of vertical integration within the firm. Operational decisions focus on detailed production scheduling. These decisions include the construction of the master production schedules, scheduling production on machines, and equipment maintenance. Other considerations include workload balancing, and quality control measures at a production facility. Inventory Decisions These refer to means by which inventories are managed. Inventories exist at every stage of the supply chain as either raw material, semi-finished or finished goods. They can also be in-process between locations. Their primary purpose to buffer against any uncertainty that might exist in the supply chain. Since holding of inventories can cost anywhere between 20 to 40 percent of their value, their efficient management is critical in supply chain operations. It is strategic in the sense that top management sets goals. However, most researchers have approached the management of inventory from an operational perspective. These include deployment strategies (push versu s pull), control policies --- the determination of the optimal levels of order quantities and reorder points, and setting safety stock levels, at each stocking location. These levels are critical. since they are primary determinants of customer service levels. Transportation Decisions The mode choice aspect of these decisions is the more strategic ones. Th ese are closely linked to the inventory decisions; since the best choice of mode is often found by trading-off the cost of using the particular mode of transport with the indirect cost of inventory associated with that mode. While air shipments may be fast, reliable, and warrant lesser safety stocks; they are expensive. Meanwhile shipping by sea or rail may be much cheaper, but they

necessitate holding relatively large amounts of inventory to buffer against the inherent uncertainty associated with them. Therefore customer service levels and geographic location play vital roles in such decisions. Since transportation is more than 30 percent of the logistics costs, operating efficiently makes good economic sense. Shipment sizes (consolidated bulk shipments versus Lot-forLot), routing and scheduling of equipment are keys in effective management of the firm's transport strategy. Objective 1 Internal logistic: raw material transfer from RM stores to production line. As shown in below mentioned process flow, raw material (RM) bought by SBTL, has been stored in godown according to the lot no assign to it. Daily RM has been issued from various lot according to the requirement of the R & D, as given in the issue slips against the particular lot no. RM has been issued from various lot to make product more homogeneous, which happen during the mixing stage in the production line.

The process for RM store is as follows

Types of Raw Material Basically three types of raw material has been transferred as follows 1. Cotton: this is the basic element of yarn producing any unit. Various types of cotton have been transferred like Shanakar 6, MCU5, GEZA, Organic cotton etc. 2. Polyester: 3. Viscose :

Mode Of transfer: Raw material has been transferred with the help of tractor and open trolley.

Generally, trolleys can transferred18 bales per round. Loading on the trolleys done manually. SWOT- Internal Logistics Strength : 1. Excellent RM management system with independent lot no for every lot, segregated storage as per no., different godowns for each unit etc. 2. Good issuing process. 3. Physical V/s system inventory management system. 4. Trained managers and manpower with excellent knowledge of inventory handling and management.

Weakness: 1. Poor godown conditions. 2. Roads in very bad conditions leading to high raw material transfer cost. 3. Exposure of RM to the external condition like rain, dust, sunrays etc. Leads to wastage. 4. Stacking system is not good. 5. Transferring system not so sufficient and good.

Opportunities: 1. RM inventory level going to increase in the coming years due to companies target of 500cr. By 2015 to 15% PAT. 2. Material handling and storage system have to be modernised to reduce the transfer as well as carrying cost there by increasing the gross profit. 3. Closed godown has to be built with inclosed proximity to each unit.

Threats: 1. Tough working conditions as manpower has to work in open areas. 2. If not done, handling inventory in the future will become a threat.

Other Benefits: 1. Greater level of motivation as well as satisfaction level, 2. Extra man hour can be utilised for other purposes.

Other recommendation: 1. Roads leading to godown should be properly maintain to avoid any damage to the transportation system. 2. Godown conditions must be improved as lot of wastage happens due to increase in the dust levels, change in moisture content level etc.

3. Shelf stacking system can be used to avoid the load of top bales on the bales at the bottom. 4. All the bales should be covered properly to avoid the contamination due to rain, dust etc. 5. Better mode of transportation should be implemented.

8. objective 2

SBTL Logistic: Finished good transferred from SBTL, Mohali (Kalmeshwar) to SBTL Mumbai & Ichalkaranji.

SBTL Shares in the total dispatch:

Scheduling contract: Yarn has been dispatched from all units, in mohali to SBTL Mumbai & Ichalkaranji against the scheduling contract. Scheduling contract is agreement to supply a particular amount of quantity of yarn during the particular time period. Dispatch plan either weekly or daily been given to marketing by the purchase department of SBTL, Mohali (Kalmeshwar) PO has been raised against that dispatch plan and budget is been linked to that PO and finally physical transfer of finished goods happen. Mode of Transfer Physical finished goods have been transferred with the help of closed trolley and closed body trucks. Finished goods has been packed in pallet and stage film packing with following specification: 1. Bag Packing with a 16 cones and 2 layers of cones. 2. Generally 1 bag weighs around 32 Kg. 3. However it varies for open end and double yarn.

One trolley as well as truck generally has carrying capacity of 6-6.5 tonnes.

Cost incurred

Detailed dispatch flow chart

Figure: Detail Dispatch flow chart

SWOT-SBTL Strength: 1. Group companies which lead to better negotiation level for

improvements. 2. Smaller lead time. 3. Lower packing and transportation cost.

4. Almost constant level of dispatch thereby helps in smooth planning. 5. Easy availability of vehicles even possibility of JIT. Weakness 1. Non availability of computer system in FG Stores leads to time consumed in checking stocks somewhere and also non-availability of data in soft format for analysis. 2. High waiting time at SBTL yarn as well as SBTL gate 3. Unclear roles and responsibillitites definition at SBTL, Mohali. 4. Bag packing crashes during the transportation. 5. Unsafe unloading practices at SBTL, Mumbai & Ichalkaranji 6. Infrastructure problem at SBTL Mumbai like availability of hand trolley for unloading, unloading rap etc. 7. Wrong entry of reporting time which leads to wrong data available for analysis.

Opportunities 1. With increase in the business at SBTL, Demand for yarn will be increasing in the coming years. 2. New trolleys can be added to the kitty thereby decreasing the transportation cost. 3. Negotiation can be done at better level which can lead to increased overall groups profit.

4. Decreasing the turnaround time can increase the no. Of round per trolley per day thereby reducing the transportation cost. Threats 1. Transporter may not be interested in adding more trolleys due to high initial investment. 2. Negotiation on various issues, if not done properfly can lead to bitter relationship within the groupcompany which should be avoided as long as possible. 3. Involvement of both sides needed to resolve the issues.

Data Analysis Following data was gathered from the ERP and analysis was done.

T1, T2, T3, T4 & T5 represent the trolleys whereas others represent the all other vehicle except trolleys.

Vehicle type

Total net Total round weight (in kg)

FG Transfer Per FG Transfer % of round (tonne) per day (tonne) Total

Other T1 T2

1315480.00 926480.00 905510.00

203.00 148.00 144.00

6.48 6.26 6.29

10.12 7.13 6.97

22.94 16.16 15.97

T3

878490.00

139.00

6.32

6.76

15.32

T4

837330.00

136.00

6.16

6.44

14.60

T5

870900.00

141.00

6.18

6.70

15.19

Grand Total 5734190.00

911.00

6.29

44.11

100.00

Interpretation: Following conclusions can be drawn from the above data: Dispatch per round is almost constant for all the vehicles i.e. 6-6.5 ton per round. Daily dispatch is around 45 ton, which is close to the actually observation. Number of rounds by trolleys per day is around 5-6 per day. Almost two more rounds of trolley are required to save around Rs.700 per day. Future Strategies With the company vision of 15000 Cr. By 2015 with 15% PAT, Total turnover of the NIT will also be increases thereby increasing the requirement of yarn over the years. Thus finding the cost effective solutions has become the need of the hour.

Thus in long term approach, this small changes can make a huge difference to the efficiency of supply chain thereby leading to company's high overall. Recommendations: 1. Add one more layer of cones to the existing pallet. 2. Adding 1 more trolleys to the kitty. 3. Getting bigger truck at lower cost. 4. Increasing Turn Around Time (TAT) at AY, Sanghera as well as at AHT, Dhau la. Evaluations Of each recommendation Option 1 Getting bigger truck at lower cost. Negotiation has been done with some transporter to supply bigger truck with double capacity as that of smaller truck but at higher overall cost ofRs.1800 perround. Although total cost per round will be more but cost per kg of yarn will be much less.

Benefit: Material will be sent with much safety as compared to current scenario. Cost saving of around Rs.400 per day or Rs.146000 per year is possible. Constraints: Negotiation has to be done with truck operator union to eith er provide trucks at Rs.1800 or to goout of contract tohire truck from other transporters.

Option 2 Adding one more layer of cone: Additional layer of cone can be added at the top of the pallet which means 13 layers instead of 12 layers thereby increasing the total number of cones to 260 cones from 240 cones per pallet.

Benefits: It can increase the FG transportation by S/6th pallet per round which means around 5 more pallets per day (Assuming 6 rounds per day) It will save the packing cost for every 13th pallet. Transportation cost saving will be Rs.17S per day or Rs.63875 per year. Packing cost saving will be around Rs300 per 13 pallets or Rs.54228 per year.

Constraints: Negotiation has to be done with AHT. Ohaula as they were very reluctant to adding any additional layer. Packing machines' capacity to pack at that height has to be confirmed. This addition is possible in case of cones only as cheese doesn't properly got locked in the other cheese which is not the case in cone win ding.

Option 3 Adding one more trolley

One more trolley can be added to the kitty thereby transporting total dispatch toAHT, Dhaula thru' trolley only.

Benefits:

Cost saving is the main benefit in this case as calculated below: Total Initial investment: Rs.150000 (For new trolley) Annual maintenance charges: Rs.l0000 Assuming trolley life: 10 years NPV (Discounted@10%):Rs.577373

Year

10

Inflow

127783

127750

127750

127750

127750

127750

127750

127750

127750

127750

Outflow

150000

10000

10000

10000

10000

10000

10000

10000

10000

10000

Net flow

-150000

117750

117750

117750

117750

117750

117750

117750

117750

117750

127750

Table 6: NPV Calculation for New Trolley

Constraints:

Due to high initial investment and longer payback period, transporter is not ready to invest in trolleys.

Option 4 Decreasing the Turn Around Time (TAT) Other option is to increase the number of rounds per trolley This can be achieved by decreasing the total turnaround time of each round. Decreasing TAT atAY, $anghera TAT consists of following times:

Time between:Check-in and 1" weigh: - 00:15:10 hr. 1" and 2"' weigh. : - 01:05:27 hr. 2" weigh and billing. : - 00:27:54 hr. Billing and check-out. : - 00:30:38 hr. (Data Source: SAP, Jan' l2-Jun' 12) Scope of Improvements Scope of decreasing time is between: 21 LD weighment and Biling. Billing and check-out.

Reasons for delay Main reason observed for the time lag between above mentioned times are: 1. Unavailability of Test Report: Test report is generally sent after asking for the same which delay the vehicle at the gate. 2. Distinguished Roles and Responsibility Definition: Administration has all the roles after the billing whereas SCM is accountable for the delay happened after the billing 3. Unavailability of authorized signatory: Authorized signatory is not available and without the signatures vehicle can't move out of company's premises. Recommendations: 1. Dispatch plan has to be sent to the concemed deptt. in advance. 2. All test reports of the material has to ready before the loading completes. 3. Check can be implemented at packing stage only. Material should be shifted to FG Godown on Iy after the availability of test report. 4. TAT Demurrage should be responsibility of Administration department after billing. 5. A person should be always available at gate for signing the invoices as authorized signatory. Decreasing TAT at AHT, Dhaula.

TAT can be reduced at AHT, Dhaula by working on the following:1. Waiting time at main gate.

2. Waiting time at unloading ramp. 3. Condition of unloading ramp.

Study 1 Waiting time at main gate, AHT Dhaula Observations: Reporting time was not prop erly entered into the system which leads to wrong an alysis of the waiting time at Gate. Generally, reporting time was being put when all the documents got cleared and Vehicle can move inside. In practise, it should be the time at which vehicle reports at the gate. Reasons for the delay 1. PO not Raised: PO for that particular order has not been raised which in practise, they raise after seeing the billing due to the variability in the weight of yam. 2. Wrong PO raised: PO raised but with wrong quantity which means PO needs to be updated but it usually took long time. 3. Budget not Un ked: This is the main area of concern. Budget, most of th e time, remain ed pending for the approval which takes time and caused the delay at the main gate. Recommendation 1. PO has to be raised as soon as the duplicate copy of the invoice generates at the AHT, Dhaula counter. After the billing, vehide took around 45-50

min. to reach AHT's main gate. This provides the enough time for doing all the PO realated activities. 2. Budget has to be approved before placing the order and if approved, it has to be kept separately and should not be consumed for any other purchase 3. Still if Consumed, then budget has to app roved as the first work in the morning. Study 2 Waiting Time at Unloading ramp: Unloading is also one of the main times consuming activity at AHT. Dhaula. Thus it needs to study carefully. Observed and then recommendations should be made. Reasons for Delay at Unloading ramp: 1. Waiting problem at gate got multiplied when all the trolleys got clearance at the same time and proceed forthe unloading, 2. Last trolley has to wait for 3 hr, considering 30min unloading time, as all trolleys has to be unloaded. 3. Hand Trolley, used to unload pallets, are usually being borrowed from other department which cause the delay in the unloading process 4. Already vehicles are standing at the unloading ramp. Recommendations: 1. Priority should be given to the trolleys from AV, Sanghera.

2. All the hand trolleys should be in working conditions, which is not the scenario as per the sources. 3. Solving gates problem can solve this problem automatically.

Study 3 Condition of Unloading ramp Infrastructure is very important in the smooth functioning of any process. Same way loading ramp should be in good condition to unload the pallets easily and safely.

Conditions at SBTL:

Figure 17: Unloading Ramp Condition at SBTL

Problems at SBTL Unloading ramp 1. Base of the trolley is almost a feet above the base of loading ramp. A steel plate, with wooden baton under its bottom, has been used to unload the pallets. 2. This practice makes it very unsafe for the un loading man power. 3. This is the main hindrance to the addition of one more layer of cone at the top of the paliet. Recommendation

1. Reporting time should be entered correctly so that correct data should be available for the analysis. 2. Reason for the delay should be entered into the SAP in the remark column to reach the root cause. 3. Hydraulic unloading ramp should be installed to make the unloading process more smooth, easy and safe.

Objective 3

Domestic Logistic other than AHT: Dispatch to domestic customers other than AHT, Dhaula.

Figure 18: Category Wise Dispatch Distribution

As shown in the above figure, domestic dispatch constitutes the highest share amongst the all other. Around 41% of the total dispatch has been done to domestic customers, other than AHT, Dhaula. Major Transporter Main transporters used are: 1. Truck Operator Union, Bamala 2. J.S. Transport 3. BLR Transport 4. GOEL Transport 5. TATA 407 owner welfare society.

All the transporters signed a legal contract with ABIL for the services, they are supposed to provide. The legal contract contains the freight to be charged for different destinations, Lead time for each destination, lead time for providing the vehicle, penalty to be charged under different circumstances etc.

SWOT - Domestic Dispatch Strength: 1. Well streamlined process. 2. Contract with various Transports. 3. Well structured logistics and distribution team having excellent knowledge and management skills. 4. Finish goods storage facilities are well managed. 5. Excellent coordination within the loading team at various units to provide timely help like manpower requirement etc. Weakness: 1. Contracts lead to monopoly of some transports. 2. Lack of coordination between marketing and production thereby leads to unavailability of FG for loading or availability in wrong packing. 3. Dissatisfaction amongst the loading manpower. 4. Difference of roles and responsibilities. 5. High time lag between 2nd weighment and gate out.

Opportunities 1. Other transporter's share shou ld be increases to decrease the exploitation during the emergency timing. 2. Roles and responsibilities should be logically defined to make the working person responsible for the things happened. 3. With increase in the company's turnover, more options will be needed to cater this segment which insists for having relation with different transporters. 4. TAT can be reduced which results in improved efficiency of the whole system. Threats 1. Any issue with TOU can lead to problem in availability of vehicle for certain places. 2. Leading dissatisfaction can affect the whole process which is due to small-small issues like variable pay etc.

Region Wise Dispatch

The major chunk of dispatch went to north and west region. This constitutes around 99.5% of total dispatch.

Figure 20: Destination Wise Dispatch Distribution As shown in the chart, major dispatch receiving destinations are: Ahmedabad, Delhi, Fandabad, Fatehpur, Ludhiana, Panipat, Yavatmal

Figure 21: Destination Wise Transporter Used As clear from the chart, Truck Operator Union has monopoly for Ahmedabad logistics. This can be a problem in the future soalternate source of transport has to be developed for the same.

Transporter Wise Distribution

Figure 22: Transporter Wise Distribution

Truck Operator Union and J.S. Tranport have the around 91% share (combined) of the complete dispatch. Share of GOEl and BLR transport has to be increased to avoid the exploitation of company, in case of any emergency.

Time Analysis

Time analysis is being done on the data available for the domestic data. Following conclusion can be drawn from the chart shown below:

1.

Time after the billing is very high and happened very frequently as median is almost equals to average time lag at that point.

2.

Loading time is also very high but this includes loading at various units, putting tarp on it, waiting at weighing scale etc.

3.

Mainly focus was on Non-Value added activities like waiting time after Billing, waiting time before 1st weigh etc.

Figure 23: Time Analysis for Domestic Dispatch (Source SAP, jan'12-jun12)

Recommendations to Decrease the TAT

1. 2. 3. 4.

Marketing should coordinate with production before giving the dispatch plan. All the delivery orders should be available with dispatch plan. TAT Demurrage should be responsibility of Administration department after billing. A person should be always available at gate for signing the invoices as authorized signatory.

Area of Concern

Area 1 Unavailability of 8 ton LP Trucks: LP trucks are very difficult to hire due to below mentioned reasons. Reason: Due to obligation for Insurance that truck should not be older than 12 years. Most of the people buy bigger trolly due to high profit margin in it. This leads to dearth of LP Truck in the market. Recommendation: 1. 20' container should be used instead of LP truck for the following destinations:Arnbernath, Anjar, Darren, rchalkrarul, Khapoli, Malegaon, Mumbai, Silvasa, Tarapur, and vapi. For these destinations, freight per kg is less as compared to LP truck.

2. Marketing should try to get order near to capacity of trolly or Club the orders in the same city or on the same route and state Area 2 Monopoly of Truck Operator Union for Ahmadabad. Reason ABIL is in contract with Truck operator union that A81L can request vehicle from other transporter, only if it is not available with union.

Recommendation: Alternate sources like BLR or GOEL transport has to be used for the same route thereby eliminating the TOU's monopoly and hence the future troubles.

Area 3 Synchronization problem: Lack of synchronization between marketing and production like either material not ready or material in wrong packing. Reason: 1. DO raised against WIP. 2. DO raised for the right material but material available in wrong packing. Recommendations:

1. Coordination amongst the marketing and production should be very impeccable regarding the availability of FG at a point of time. 2. Do should be raised against the finished goods only 3. Do should be raised with proper packing specification.

Area 4 Manpower: Manpower allocation is the main difficulty du e to absenteeism and attrition.
Marketing Order Priority Matrix
Study was carried out on the contract done with various Transporter and analysis done for the cost per kg for the various destinations and various quantities. Following matrix came out as a result and it should be worked in coordination with SCM and

Marketing. For ego For Ahmedabad, order should be of quantity of trolla and that trolla should be hired from BLR only and so on.