Supply chain Improvement

7/28/2019 Supply chain Improvement

1/21

VARDHMAN SPECIAL STEELS

IDENTIFICATION OF KEY AREAS FOR CUSTOMER LEVEL IMPRO

IN A COMPLEX SUPPLY CHAIN

UNDER THE GUIDANCE OF

Mr. Rakesh Arora( HOD PPC)


2/21

Industries in 1980s

During 1980s quality improvement became important with imprsales and profit performance.


3/21

Current Situation

Now a days industries have been showing great commitmencustomers.

Manufacturing skills are no longer key asset, customer servihas been recognized as strategic value.

Keep customer happy.


4/21

Key area of Service level improvem

Performance of supply chain is measured through two key peindicators when it comes to customer deliveries.

FFCOFR(First fully confirmed order fulfilment rate): Related ability. It measure whether industry can promise customer torder will be fulfilled given his requirement.

OTIF( On time in full): Measures how reliable industry is in dthe customer the given quantity on time.


5/21

What is OTIF?

"Getting the right stuff to the right place at the right time, in the right location on the jobsite, in t

condition with the right invoiceall day, every day."


6/21

OTIF measures the whole company and the performance at e

This isn't simply an operations report card;

OTIF is a roll-up measure.

To perform well on OTIF, everything that goes into it has to be

The take-off and order entries have to be correct;

Purchasing has to maintain appropriate inventory levels;

Material has to be handled correctly, pulled correctly,


7/21

ON TIME:

On-time is defined as delivering the order to the customer wpromised.

The measurement is the commitment the organization madnecessarily the time the customer requested


8/21

IN FULL:

In-full measures order accuracy. It counts as in-full when eveordered is delivered with no errors, backorders, or substitut


9/21

Why OTIF?The greatest value in measuring OTIF is that it allows you to sglance how the company is doing.

Companies that measure and manage OTIF are unanimous inof doing so. That value includes

Reduced time lost to mistakes

Time spent trying to locate materials

Elimination of missing directions for drivers Increased accuracy, and so much more.


10/21

Calculation of OTIF:

Requirements for the OTIF measurement are:

Have a delivery date (even hour for some organizations) on customer order.

Measure the date or the hour of delivery and archive it in th

Maintain record of the reasons why an order was not OTIF.


11/21

Generally OTIF is calculated by taking into account the numbedeliveries:

OTIF ( % ) = number of deliveries OTIF total number of delive

But he can also, according to organizations, be calculated accothe number of orders or the number of the order lines.


12/21

Reasons for OTIF failure:

As OTIF performance is measured, failures and the reasons foare tracked. Generally these fall into four categories: vendor icustomer issues, internal issues, or other.

Vendor: includes late shipments, partial shipments, or wrong sent.

Customer: includes wrong delivery information provided by tcustomer, last-minute changes/ add-ons.

Internal: includes sales order entry mistakes, inadequate timefor special orders, inventory out-of-stocks, manufacturing errdelivery error.


13/21

Other: weather issues or transportation strikes and the like.


14/21

March OTIF:Late cases NO.s %

More than 60 days 80 12

31-60 119 18

16-30 138 21

8-15 70 11

1-7 91 14

On time 147 23


15/21

Reasons of failure:

Wrong TDD.

Revised TDD updating in ERP not being done.

Over booking than plant capacity.

Dispatch against wrong COPS.

Sales budget should be in line with the booking if needed sh

revised and informed to PPC.


16/21

Root Causes:

URGENCY and URGENCY

Last moment addition of order disturbs the whole cycle.

Moreover addition of smaller diameter order as urgency resumuch delay of other order.

More time to roll small diameter bars.

Setup time: time lost in changing of rollers


17/21

Other reasons:

Internal Overbooking: customers are committed for the orders whic

never be made.

No proper communication between marketing department department.

Revised dates are not entered into ERP.


18/21

Hidden cause:

Steel Stacking: A problem in inventory management in the ste

A key logistics problem between the continuous casting stage and the hothe steel industry.

Continuous

Caster (CC)

Slab

Slab Yard

Reheat

Furnace

Hot Rolling Area

Hot Rolling

H

Mill


19/21


20/21

Solutions: Before committing any special small order, marketing depart

should inform PPC and ask if it is feasible.

Proper calculation for time loss to be made if we are makingspecial order. This time must include setup time lost due to cof rollers.

Some time customer keep on extending the date of delivery led to rise of inventory level on warehouses. So keep remind

customer to take off their order and pay the remaining amou


21/21

Work to do.

Material requirement planning.

To calculate how much raw material to order and at what potime it should be ordered.

Study of MPS.

Study of BOM for different grades.

Lot sizing policy for all parts.

Safety stock requirement.

Supply chain Improvement

Documents

Transcript of Supply chain Improvement