Cover Story

The
A

s you pick up the milk sachet from your doorstep every morning, have you ever stopped to wonder what it took for the product to be delivered at your doorstep? .rom the dairy farm to the vending unit that pasteurises the milk, to packaging them into the quantityyou-want sachets, to transporting in those huge milk vans and distributing through your area depots, even if there is a slight delink in the chain of activities, you miss your refreshing morning cuppa. Chain of activities. That in fact is the supply chain - a network of inter-related entities which are involved in the procurement, conversion and distribution of goods. Managing this flow of items - and the integral information, cash and idea flows - is termed logistics. Logistics is that part of the supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption in order to meet customers requirements - according to the Council of Logistics Management. A well-designed logistics system

Logic of

cuts wastage reduces transit time and

SUPPLY CHAIN
Procurement

considerably cuts short inventory carrying cost.

Supplier
Inbound logistics

Logistics
Key Player in SCM
The logistics function would typically look at a given task of movement and storage of goods, while Supply Chain Management (SCM) spans the entire stream of activities from raw material to consumption. (.or example, going back to our milk sachets, imagine tracing the fodder that came to feed the cattle that supplied the milk that was distributed to the milk vending units). Today, logistics is an important handmaiden to SCM. Over the years, activities under the logistics umbrella have come to include freight transportation, warehousing, material handling, protective packaging, inventory control, order processing, marketing, forecasting and customer service. The demand today is for heightened service performance - shorter lead times, more frequent deliveries, no losses, delivery within specified time windows, as well as value-added services. So that the milk sachet awaits you (and not vice versa), dry and ready, and even wishes you in filigree writing: Have a nice day!
Flow of Information Flow of Finance

Transporter
Outsourcing and conversion

Manufacturer
Order processing, production, planning, scheduling & despatching Outbound logistics Customer service

Flow of Value (Goods and Services)

Flow of Information

Transporter

Distribution

Branch / CFA

Transporter
Stock and sell

Wholesaler / Retailer

Usage and consumption

Customer

Source: Logistics and Supply Chain Management: Cases and Concepts, 1999

OCT 2001 ASHLEY NEWS

Commercial Vehicles
ust as you wonder about the milk that was delivered at your doorstep, think about the huge network needed to support, say, the supply of food grains all over India from far flung farms. We are talking of an average 200 million tons per year. Who moves them? The total goods movement over the last decade has gone up by 291 billion ton kms - an increase of 52%. And the share of the road in goods movement has increased from 55% to 64%, over the same period of time, cornering a major share from the railways. It is therefore obvious that the estimated 1.8 million commercial vehicles that criss-cross the 165,000 kms of National and State Highways - and more (challenging) road stretches that connect the interiors - are the Moving .orce behind the huge logistics operations involved.

- the Moving .orce behind Logistics

commercial vehicles in the country. (See back cover for product range). Within this range come many variants suiting varied customer needs. Depending on the terrain, the cargo and the application, customers can choose from an

Centres, mobile service training vans and Driver Training Centres. The Namakkal driver training centre, providing comprehensive training to the ultimate user of the vehicle, is acknowledged as the best of its kind in the private sector. The Annual Maintenance Contract introduced by Ashok Leyland for Euro II vehicles covers preventive maintenance, besides breakdown any time during the contract period. AMC packages to suit various vehicle models and

Cover Story

CVs and Logistics: The Movement Zones

Type of Movement
Primary

Key .eatures

Raw material to factory Long distance, bulk movement .inished goods to Mechanised handling warehouses Operational economy Warehouse to wholesaler/retailer Convenient batches Safe transportation Timely distribution Optimum turnaround Door delivery Timely delivery City operations .requent start-stops High manoeuvrability operating conditions have been developed to meet the growing demand of good maintenance by fleet owners. The unit/aggregate exchange scheme, available at select outlets, ensures higher vehicle uptime and thereby higher operating levels. With a host of after-sales products in the offing, Ashok Leyland hopes to add value to the customer even as it expands its own boundaries of business.

Secondary

Tertiary

Wholesaler/ retailer to consumer

Ashok Leyland in Logistics: Vehicles and Beyond

With a market share of 38.3% (2000-01) in the Indian CV industry, Ashok Leyland plays an integral part in this logistics network. .rom 7.5T GVW to 125T GTW for goods transport, and from 19 seaters to 80 seaters for passenger transport, Ashok Leyland offers the largest range of

exhaustive menu of vehicle models tailor-made to specific preferences of wheelbase, loading span, engine, axles, gearbox, body and cowl. With 145 dealer outlets, 72 Authorised Service Centres and 186 Highway Repair Centres, Ashok Leyland provides a strong service backbone covering the entire sub-continent. Training is offered at various levels through Service Training

ASHLEY NEWS OCT 2001

Cover Story

Ashok Leyland and Logistics: Presence in Key Zones

Segments LPG Primary Movers LPG Bullets Taurus 2516 (6x4) 3516 Articulated Car/scooter carriers Comet 2614 Articulated Viking 222WB Secondary Movers Cylinders Comet CO1611/CG 1613 Cargo 1512/909 Comet 2614 Viking 222WB Cargo 909 and Stag Container Comet 2614 -Articulated 3516 -Articulated Tusker 2214 (6x2) Beverages CO 1611/CG 1613 Tusker 2214 (6x2) Perishables Comet 2614 -Articulated 3516 -Articulated Tusker 2214 (6x2) CO 1611/CG 1613 Cargo 909/759 CO 1611/CG1613 Cargo 909/ 100.12 Cargo 759/909 Tertiary Movers

Chicken/Poultry

Cargo 909/100.12

Cargo 759

Logistics within Ashok Leyland

The Inbound Chain
Materials worth Rs 15 billion (2000-01) from over 1,100 suppliers reach the six manufacturing locations of Ashok Leyland, according to the centrally negotiated plans at the Corporate Strategic Sourcing cell. The Unitspecific portfolio of products creates a loop among the Units, facilitating supply of parts/ aggregates according to a predetermined schedule. Once the products are value-added and assembled, the sales network takes over, acting as the external loop to reach the customers. Again, take note here that the very supply of material is dependant on the demand forecast by Marketing. Plans Suppliers Procurement Manufacturing Distribution Logistics management within Ashok Leyland aims to achieve cost effective service and balance material requirement with production schedules and distribution plans.

Just-in-Time
The JIT logistic strategy, acknowledged the world over as the best for auto companies, is the vehicle for providing high-value customer ser vice. At Ashok Leyland, JIT is employed both as a guiding philosophy and as a strategy. Across the supply chain, the JIT philosophy is aimed at elimination of waste. This translates to making what the customer needs when he needs it and acts as a pull system oriented towards

OCT 2001 ASHLEY NEWS

the end customer. Moving away from the conventional monthly bucket of scheduling for material, the funnelbased weekly scheduling provides stable and reliable schedules for on-time-delivery by vendors. In the 12-week rolling schedule, the first two weeks plan is frozen, the second two weeks semi-frozen, the third tentative and an outlook for the next six weeks is also given. Within the scope of JIT, the highvalue, high volume items yield the maximum benefit and result in huge savings in inventory carrying costs and working capital. The other benefits implementing JIT: of

buying and enables speedy corrective action Procurement is matched to make-specific requirements Uniformity in stocks without fluctuations and reduction in inventory Improved housekeeping and ease of handling Uniform cash outflow .or the low-value, high-volume items, the low cost logistics approach gives early warning of shortages, ensures availability of safety stock, rationalises the inventory, increases accountability and prevents finished goods from waiting for low value components.

The outbound supply chain addresses the mammoth task of reaching the finished products when and where the customer wants them. Units supply the products to the five sales yards based on week-wise/model-wise production plans. This enables Marketing not only position products at the required location at the required time but also ensures regular communication on the status of supplies in the chain: Plants Marketing HO Regional Offices Area Offices Dealers Customers. The Outbound Supply Chain Management has helped Ashok Leyland achieve better finished goods inventory management and even more importantly, higher level of customer satisfaction, as evident from the growth in market share in different segments.

Cover Story

Early warning of wrong or missed deliveries avoids panic

The Outbound Chain

Logistics in Parts Operations

Ashok Leyland was the first automobile company in India to decentralise parts operations way back in 1983. Currently, 1,200 tons of spare parts are transported between the 16 warehouses and from there to the customers every month. .or transportation of material, Corporate Warehouse Coordination Cell finalises Annual Transport Contracts with transporters. The warehouses receive material from suppliers/ other warehouses, preser ve, cartonise, store, pick, pack and despatch to the customers/other warehouses. Operations are ITenabled. Outsourcing the warehouse operations started three years back and as on date, three warehouses - Nagpur, Hosur, Delhi - are being operated by reputed logistics experts like Sembcorp and TVS Logistics.

ASHLEY NEWS OCT 2001