Professional Documents
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• Placing logistics division and the link between manufacturing and marketing;
• Continuous flow of information for reducing delays and ensuring 100 per cent
reliability;
• Availability of right product and the right place at the right time and quantity;
CEAT designed a measurement system (for dealers and depots) according to which
if 100 units were sold in a month, the minimum stock to be held would be 4 units a
day. If, at any time in any of the selling locations, the stock falls below 4 units a day,
it would be captured as a sale lost. To begin with, the organization had a 22 per
cent ‘sales lost’ percentage due to stock outs. The present aim is to reach 5 per
cent of ‘sales lost’. Days of finished goods inventory, originally at 52 days are being
brought down to a desired level of 25 days.
In each of the cases, a very simple measurement tool- CLIP (committed line item
production)- was introduced. A monitoring system also has the advantage of making
the transporter more accountable, particularly at the time of negotiating a yearly
contract. All information regarding transporter’s performance is shared with him at
CEAT.
The final learning were, use technology for speed in information processing and
dissemination, make your operations flexible and reliable, channel your resources
for maximum leverage serve the end user, attack the inventories as Non
Performing Assets (NPAs) and apply tactical solutions to changing situations.
REVIEW QUESTIONS
1. What measures were initiated by the CEAT to overcome the supply chain
problems?
2. Why logistics was the major focus for redesigning the CEAT supply chain?
NOTE: