TVS Logistics Services

Limited,
Chennai

R.Ramachandran
Head-National
Hubs

Part 1- Basics of Logistics

What is 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.

Business Excellence - Need of

the hour
Globalisation
Continuous cost reduction
Waste elimination
Concentrated on Logistics
Quality
Cost

Basics of Logistics Operation

MRP
Margin

Sales &
Administration

Observations
Logistics
Logistics is a necessary cost
Cost
It is a non-value added cost
since it is a part of the margin
customer is expecting for a value

Manufacturing
Cost

addition for the cost paid by him,

besides the best service quality.

Traditional Profit Model

COST Principle
Cost + Profit = Selling Price
Traditional Not-for-Profit (NFP)
[Costs = Budget]

Lean Profit Model

Market Principle
Selling Price - Cost** =
Profit
** To make a profit you have to keep costs below the price
you can sell

APPARENT

EFFICIENC
REAL
Y

-2%

10%
-.5%

Reduction
10%

In

Cut

Operating

Off

Expenses

1%

3%

The
Top

-.5%

BUDGET

-2%
-1%

Work Processes

5 Key Concepts from LEAN

Delivery of Value to the Customer
Efficiency as a Way of Running a Business
Elimination of Waste
Problem Solving
Building Performance Capability

The Purpose of a Work Process is to Deliver

Value to a Customer
In the PROMISED
QUALITY
QUANTITY
QUANTITY

- at the
COST
TIME

PLANNED BY AN
ORGANIZATION

as much as possible,
as continuously as possible and
with as much first time quality as
How to possible
Assure Delivery

Man
Machine
Material

Work
Method

Product/
Service

The focus of a Lean Enterprise is to increase

EFFECTIVENESS and EFFICIENCY
of work method and reduce costs while
maintaining delivery of customer value

Waste is:
Anything other than the minimum amount of
equipment, materials, parts, space, and worker
time and effort which are necessary to add
value to the product or service.
Things to Remember about Waste:
Waste is really a symptom of a problem in a
value stream rather than the real problem

Waste points to underlying problems within the

system (at both the process and system levels)

Toyotas 7 Types of Waste

Motion
Waiting
Rework
Inventory
Conveyance
Over-Processing
Over-Production

Why Shorten Lead Time

It reduces unnecessary use of resources
It reduces waits, delays and inventory build-up
It focuses attention on greater efficiency in

actual hands-on processing time

It forces attention to quality issues, their causes

and their cost.

It forces problems in the flow of the value stream

as a whole to the surface

A Typical Value Stream

Mapping

Problem SolvingAC PD
Good
thinking.

Good Products.

Executive

Manager

Supervisor
Team Leader
Staff

Team

AP
CD

by Level

AP
CD

Strategies
Business Objectives
Financial Performance

AP
CD

AP
CD

AP
CD

AP
CD

AP
CD

AP
CD

AP
CD

AP
CD

AP
CD

AP
CD

Goals
Ops/Project Plants
Budgets
AP
CD

Action Plans
Production Schedules
Targets

AP
AP
AP
AP
AP
AP
AP
CD
CD
CD
CD
CD CD CD
AP
AP
AP
AP
AP
AP
AP
AP
CD
CD
CD
CD
CD
CD CD
CD

Assignments
Rates/Due Dates
Standards

Out side
Container Yard

Imported
Parts

Local
Suppliers

Local
Vendor
Vehicle

Line Side Storage

Value stream Mapping Inhouse component Part Number -03021508 / 03021510

Blanking
1 day

Grinding

Forming

30 sec
0.5 day

50 sec

6.4 days

60 sec

Assembly

1 day

240 sec

2 days

1 day

Oil
spray

20 mts

Activity time 41 minutes

Waiting time 2.5 days

1 hour
2 hour

Receipt
Area

loading

Inspection

Changin
g from
Pallet to
Bin
30 mts

15 mts
2 hours

3 hours

Once assembly is over the parts will be

inspected, oil sprayed and directly put in to
IMCT delivery bins

Any Questions?

Part 2- Warehouse Selection

New Warehouse Proposal Form

Warehouse Particulars
1Address

2Details of the owners

Represented by:
3Present contact address

4Description of Land
5Original Owners
6

Description of Building

a)Age of the building

No. of Years:

b)Building dimensions

Area

i)

Total Area

ii)

Warehouse area

iii)

Office area

iv)

Open area

Length

c) Height from the Ground level

d)

Fencing

7Type of roof
Load
bearing
capacity:

8Type of Flooring
9Warehouse Layout

Enclosed

Width

Height

Specific details

10
a)

Power:(KVA)

i)

Capacity

ii)

No. of phases

11

Lighting points & Fittings

a)

Lighting points

b)

Fittings

i)

Warehouse area

ii)

Office area

Tube Lights Fans

12Generator facility
13Water source
a)Storage capacity
14Toilets
15Drinage ( Open / Closed )
16A/C Provision
17Telephone connections
18Approach road width
Distance from Customer
19 point / hub
Waste disposal area ( in
20 sq.ft. )
Kms. From the nearest bus
21 stop

Place:

Distance:

22Kms. From the bus station

Place:

Distance:

Kms. From the Railway

23 station

Place:

Distance:

24Nearest Airport

Place:

Distance:

25Nearest Police Station

Place:

Distance:

25Ramp - Loading facility

LAN

B. Check list
Sl. No Documents / Details to be checked
1

Copy obtained

Deed dated Enclosure

Remarks

Status

Remarks

Original sale deed

a)Title of the lessor
b)Provision for sub-letting
c)Conditional clauses (if any)

Previous tenent

Payment status
a)Electricity payments

Cleared / Pending

b)Water cess

Cleared / Pending

c)Property tax

Cleared / Pending

d)Corporation / Panchayat tax

Cleared / Pending

e)Telephone dues

Cleared / Pending

Upto Date

ESI -Notified area

YES / NO

Shop Act Notified Area

YES / NO

Octroi Limits

YES / NO

Describe which limit:

Catering facility

YES / NO

Distance from the warehouse :

C. Physical Verification:
Verification report

Checked

1Power connection

Yes / No

2Functioning of Fittings

Yes / No

3Telephone

Yes / No

4Water line & Pipes

Yes / No

5Motor

Yes / No

6Toilets

Yes / No

7Floor damages

Yes / No

8Walls damages

Yes / No

9Painting

Yes / No

10Doors & Windows

11
12
13
14
15

Yes / No

Remarks

D.Financial Deals / Negotiations

S No

1Rentals Proposed by the owner

Date

Rate / sq. ft

Done by /
Remarks

No of
months

Amount

Remarks

a)Warehouse Area
b)Office Area
c)Open Area
d)Amenities
e)Fixed Rentals
f)Total
f)Advance / security deposit
Particulars
2

Final Negotiation
Done by /
Remarks

a)Warehouse Area
b)Office Area
c)Open Area
d)Amenities
e)Fixed Rentals
f)Total
f)Advance / security deposit

No of months Amount

Remarks

Responsibility Due on

Remarks

Particulars
a)Brokerage (if any)
Name of the broker

3Contract period
4Seperation clause
5Date of possession
6Agreement
Agreement Processing

Types of Warehouses
In plant Warehouse
Spare Part Warehouse
Vehicle Stockyard
Transit Warehouse (Hub)

Various SCM
Models

Any Questions?

Part 3
Modern
Warehousing with
Automation

Why Automation ?
Flexible manufacturing and reduced costs
Improved product quality
Extreme volatile market with newer products
Increasing trend in globally dispersed manufacturing
processes.
Design and deliver better and cost effective Solution
faster
Improve process and system scalability
Eliminate all internal , routine and operational tasks
Shift focus and harness energies of employees.

Purpose of Automation
Productivity
- Increase in Production
- Modernization of existing system
- New line set up
- Line flexibility to handle various sizes
Quality
- Final inspection on 100% products
- Stage inspection (Poke Yoke)
Safety
- Handling of Hot products
- Handling of Hazardous products
- Continuous handling of heavy objects
Warehousing
- Airports/ Ports
- Raw material/ Finished goods store
- Third party warehouse
- Transshipment Godowns

Products : Overview
D

F
I

Inventory Computer System

Storage Rack

Stacker Crane

Intelligent Vehicles (AGV, RGV, LGV)

Conveyor System

Sorter

DPS

H APS
I

Gantry

Robot Palletizer

Logistic & Warehouse

Third party Dynamic Warehousing.
Airports/ Ports/ Cold storage
Raw material/ WIP (including inventory control).
FIFO and LIFO management.
Finished goods warehouse.
Transshipment warehouse.
SCM (Supply chain Management)
Solutions

Warehouse Handling

Advantages of AS/RS
(Automated Higher
storage
&capacity
Retrieval
system)
stock keeping
within limited space
Advantages

Protection of storage goods from theft and damage

Automation of dangerous and hard work of storage and retrieval process
Prevention of safety accident
Real-time & Easy inventory control with computer system
Simple expansion of warehouse
Faster and more reliable operation of warehouse
Comfort and convenient work environment
Easy and faster maintenance through modular and standard design
Economy in investment and operation

Applications

Finished product storage

Raw material storage
Partly manufactured goods
Storage for distribution

Products : STACKER
CRANE

A stacker crane is the automatic machine installed

inside rack to serve storage and retrieval operation.
It critically influences AS/RS performance developed
from SMC with know how achieving low-price,
high speed, light- weight & stabilization.

Advantages

Stability of load handing through smooth acceleration &

deceleration controls by S-Curve

Increased load weight by super high-speed type

Stabilized structure design featured by low noise & low vibration

Easy maintenance through checking error code history &

Trouble shooting by monitor

Precision controlling driving & lift location through distance

measurement by Laser sensor and flexible correspond to lean of
rack
Slim Fork development in European Load area

(Thickness 65mm) Minimalization of Fork Thickness

Products : SORTER
This system sorts individual materials to a designated
place according to its own information specified by the
bar-code or RFID attached to them by automatically
distributing and collecting with the conveyor and sorter.
Advantages:
High performance on product assortment by

requirements
(customer, area, size, etc)
Stability of sorting (Reduction of errors)

Products : DPS
Picking systems
perform
complexsystem)
order assignments
(Digital
Picking
in a fully automatic, reliable way and in shortest time.
Fast order handling at the highest quality level
guarantees maximum productivity in your warehouse.

Advantages :

High productivity at peak times

Reduction of time consumption for picking relying on

manual bills

Less personnel for picking thanks to location

management
and minimized working route

Efficient use of space thanks to high product density

Products : APS
Picking systems perform complex order assignments

(Automatic Picking system)

in a fully automatic, reliable way and in shortest time.

Fast order handling at the highest quality level
guarantees maximum productivity in your warehouse.
Advantages :

High productivity at peak times

High profitability thanks to elimination of time consuming

manual picking

Constant high quality and reliability even during peak times

Efficient use of space thanks to high product density

Products : GANTRY
Gantry is to provide greater volume coverage,
limitless layout options and flexible work envelopes.
Gantry also supports diverse pick-up and delivery points,
variety of end effectors available.

Advantages:

Adaptation to different crate and case sizes and types

Error-free picking

Stock in order and Flexible operations

Easy maneuvering

Low system noise level

Easy cleaning of the equipment and floor

ROBOT PALLETIZER
Robotic palletizing systems allow for more flexibility
to run products for longer periods of time.
Robot Palletizer can be integrated towards any project.
With current advancements in end of arm tooling,
robot palletizes have been introduced to many factories
and they have benefited from this robot palletizing
systems.
Advantages :

Can be Operated within a small area

Multiple end effector applications for bags, boxes,

cases, etc.

Innovative, user-friendly Control

Saves time and increases reliability

Automatic diagnostics instantly identify errors

Increases uptime & operating efficiency

Flexible layout capabilities

increase efficiency and profitability

Car Engine (Warehousing)

Beer (Warehousing)
DPS(Digital Picking System)

Tyre (Warehousing)

Paper reel handling

AGV (Automated Guided Vehicle

Car Parking Solution

Robot Parking

(note)
TD : stands for Traslo Device.
Traslo is Italian which means 'transfer

TD

Cage with trolley

Part 4 - Matrices

Data Updation Systems

THE VARIOUS SYSTEMS PRESENTLY USED
ARE:
SAP
ERP
WMS
RFID
BAR CODING etc

Matrices Transportation
Performance
Measure
Formula
Unit
On-Time Delivery

On-Time Delivery
Total Delivery

Days

Damage

Shipment Damage
Total Shipment

Value

Demurrage

Demurrage cost
Total transportation
cost

Value

Freight Bill Accuracy

Bill Error
Total transportation
cost

% Value

Freight cost per unit

shipped

Total Freight Cost

No. of units shipped

Outbound freight
costs as % of net
sales

Outbound freight cost

Net sales

Matrices Transportation
Performance-(Contd)
Measure

Formula

Transit Time
accuracy

Actual transit time

Standard transit time agreed

% of truckload
capacity utilized

Total volume/weight shipped

Maximum Load capacity

Truck Turnaround
Time

Measure between arrival of the

truck & its departure

No. of carriers per

mode

Total number of carriers used in

a given period, by mode

Shipment
visibility/traceability
%

Total No. of shipments via

carriers with order tracking
system
Total No. of shipments sent
during a period

On-Time pickups

No. of Pickups on time

Total No.of shipments

Unit

Matrices Full Fillment Performance

Measure

Formula

On Time Delivery

Orders on Time
Total Orders shipped

Order Fill Rate

Orders filled
complete
Total Orders shipped

Order Accuracy

Error Free Orders

Total Orders Shipped

Line Accuracy

Error Free Lines

Total Lines Shipped

Order Cycle Time

Actual ship dateCustomer order date

Line Count Fill Rate

No. of order lines

shipped
Total No. of lines
ordered

SKU Fill rate

No. of SKUs shipped

in the initial shipment

Unit

Matrices Inventory Performance

Measure

Formula

Inventory Accuracy

Actual Qty. per SKU

System reported Qty

Damaged Inventory

Total damaged value

Total inventory value

Inventory Turns
(Inventory Turnover)

Annual cost of Sales

Average Inventory
Level

Inventory Months of
Supply

Inventory on hand
Average monthly
usage

Unit

Matrices Warehouse Performance

Measure

Formula

Orders per hour

Orders picked/packed per

hour
Total WH labour hours

Lines per hour

Lines picked/packed per

hour
Total WH labour hours

Order Accuracy

Error Free Orders

Total Orders shipped

Line Accuracy

Error Free Lines

Total Lines Shipped

Order Cycle Time

Actual ship dateCustomer order date

Perfect Order
Completion

Perfect Deliveries
Total Orders Shipped

Unit

Various Warehouse Tools

Kanban System
Perpetual Inventory
Bin Audit
Dock Audit
Shut Down Inventory
5 S Concepts of House Keeping
G8D Root Cause Analysis

KANBAN SYSTEM INTRODUCTION

Kanban Benefits:

Production

5.5

Pull System

MaxIN

Reduces Inventory
Improves Material Flow
Simplifies Operations

INVENTORY

4.5

MinIN

3.5

2.5

Allows Visibility into the schedule

Reduces or eliminates unexpected
Visual tracking and Control
Schedule changes

Re-order Level
trigger to
production

Safety Stock

SUPPLIERS

RECEIVING STORES
Card

Card

Card

Card

Card

Card

Card

Card

Card

Card

Card

Card

Card

Card

Card

Transport
CardCard
Card

CARD DROP
BOX & TRIGGER

ASSEMBLY

Fix KANBAN CARD On Carton Box

Step 1 : Place the Kanban Card on

the Side Face of the Carton

Step 3 : Kanban Card on the

Carton fixed properly

Step 2 : Fix Kanban Card on

the Carton using Transparent
adhesive tape

G8D Guidelines & Process

Objectives

G8D Process
Problem solving process
A standard that commits to solving problems at root

cause level and preventing the problem from

happening again
A reporting format that describes the team's progress at
each step
Rational approach - Promotes use of facts and figures
"If you can't prove it, you should not say"
People oriented approach
Use the experience of those who do the work
Creative approach
Dismantle the status quo
Brainstorming

G8D Process
Symptom complexity exceeds the ability of one person

to resolve the problem

To prevent customer from adverse effects of the
problem
Supplementary tools
Benchmarking
Cause and effect diagram
Critical path method
Pareto chart
Brainstorming
Action plan

Objectives
D0 Symptom
As per symptom, provide Emergency Response Action to
protect the customer
Initiate the G8D process

D1 Team
Small group
Product/process knowledge
Team leader
Team synergy

D2 Describe the problem

" What is wrong with what"
Describe the problem in quantifiable terms
Use only one G8D per problem

Objectives

cntd...

D3 Interim Containment Action (ICA)

Implement ICA to isolate the effects of problem until PCA
Formal temporary Fix
Validate effectiveness
Optional step
"Buy Time" to solve the root cause of the problem
Contain the problem from a cost, quality, timing perspective
Works against the problem, not the root cause
Increases costs while the ICA is used.

Objectives

cntd...

D4 Root cause/escape point

Identify the root cause
Cause and effect diagram
Potential root cause list
The single verified reason that accounts for the problem
Escape point
The earliest location in the process, where the problem
should have been detected, but was not
Problem solving step

Objectives

cntd...

D5 Chosen Permanent Corrective Action

Making the best decision, based on benefits and risks
Verify that the choice will work
Not rushing into implementation
More than one PCA may be required to resolve 100% of the
problem

D6 Implement Permanent Corrective Action (PCA)

Remove ICA
Implement decision made at D5
Cross functional participation
Update all the documents, procedures etc
Train the workforce
Seek feedback from the customer

Objectives
D7 Prevent recurrence
Modify necessary systems (Practices/Procedures) to prevent
recurrence of
this problem or a similar problem
The goal is to change the system that allowed the problem to
occur in the first place
Enables lessons learned can be shared
Conserves resources by saving rework on other problems

D8 Recognize Team
Complete the team experience
Sincerely recognize both team and individual contributions
Encourage a repeat of the behavior

G8D Report-Illustration

Title
Date Opened
Last Updated
Multi model part shipment.
12-10-2001
15-10-2001
Product/Process Information
Organization Information
Receiving Process
TVSLL-KDPP
Multi model part was shipped as Sea
D Symptom(s)
% Effective
Date Implemented
D Emergency Response Action(s)
1. Intimated SCM
100%
12-10-2001
2. Reversal of SEA shipment.
D1 Team (Name, Profs, Dept., Phone)
D2 Problem Description
Champion: Prasad, M P&L
Multi-model part no XS61-18K579-DC 180 nos shipped in Sea
container instead of multi-model shipment
Team Leader: Arunachalam
Team Members:
Sampath - MP&L analyst
Hemanth - Receiving Analyst
Parthasarathy - Receiving Checker
D3 Interim Containment Action(s)
Followed up with SCM and diverted material
from Main Plant.

% Effective
100%

D4 Root Cause(s)
Lack of Process control measure affected receiving checker's ability to concentrate
D5 Chosen Permanent Corrective Action(s)
1.
Different receiving color tags for multi model shipment parts.
2.
Receiving Flag will be raised in CMMS3 by MP&L analyst

MP&L analyst will track the multi model parts

3.
D6 Implemented Permanent Corrective Action(s)
1.
Different receiving color tags for multi model shipment parts.
2.
Receiving Flag will be raised in CMMS3 by MP&L analyst
MP&L analyst will track the multi model parts
3.
D7 Prevent Recurrence
1. Regular awareness training.
2.
Multi model shipment information to consolidators.
D7 Systemic Prevent recommendations
Multi model shipment part labels to be color coded by supplier
D8 Team and Individual Recognition
Date Closed
Personally thanked all the team members
15-10-2001

Date Implemented
12-10-2001
% Contribution
100%
% Effective
100%
Date Implemented

15-10-2001
Date Implemented
15-10-2001
Responsibility

MH&PE
Reported By
A.Arunachalam

5S CONCEPT OF
HOUSE KEEPING

Work place becomes popular, clean & better organised

Shop floor and office operations become easier and safer
Results are visible to everyone - insiders and outsiders
Visible results enhance generations of more new ideas
People are automatically disciplined
People become proud of a clean and organised work place
Resultant good company image generates more business
etc.,

Happier employees with high morale

Greater people involvement
Low employee turnover
Increased number of suggestions
Better use of floor space
Less work-in-progress and inventories

Better flow of work

Low machine break down rates
Low accident rates
High yield of materials
High product quality

SEIRI
SEITON
SEISO
SEIKETSU
SHITSUKE

Sort out
unnecessary items
in the workplace
and discard them

FIVE QUESTIONS ABOUT SEIRI

1) Do you find items scattered in your work
2)
3)
4)
5)

place?
Are there boxes, paper and other items
left in a disorganised manner?
Are there equipment and tools placed on
the floor?
Are all items sorted out and placed in
designated spots?
Are tools and stationery properly sorted
and stored?

Arrange necessary items in

good order so that they can
be easily picked for use
A place for every thing and
every thing in its place

5 QUESTIONS ABOUT SEITON

1) Are passage ways and storage places
2)
3)
4)
5)

clearly indicated?
Are commonly used tools and stationery
separated from those seldom used?
Are containers and boxes stacked up
properly?
Are fire extinguishers and hydrants
readily accessible?
Are there grooves, cracks or bumps on
the floor which hinder work or safety?

Clean your work place

thoroughly so that there
is no dust on floors,
machines and other
equipments

5 QUESTIONS ABOUT SEISO

1)

Are the floor surfaces dirty?

2)

Are machines and equipment dirty?

3)

Are wires and pipes dirty or stained?

4)

Are machine nozzles dirtied by lubricants and

ink?

5)

Are shades, light bulbs and light reflectors dirty?

Maintain high
standards of house
keeping at work
place at all time.

5 QUESTIONS ABOUT SEIKETSU

1)

Is anyones uniform dirty or untidy?

2)

Are there sufficient lights?

3)

Is the noise or heat at your workplace

causing discomfort?

4)

Is the roof leaking?

5)

Do people eat at designated places only?

Train people to follow

good house keeping
disciplines
automatically

5 QUESTIONS ABOUT SHITSUKE

1)

Are regular 5s checks conducted?

2)

Do people clean up without reminders?

3)

Do people follow rules and instructions?

4)

Do people wear their uniforms and safety

wear properly?

5)

Do people assemble on time?

Employees will be disciplined to be more aware of

untidy workplaces and motivated to improve the
level of cleanliness.
Greater team spirit and cooperation can be built up
through involvement of all within an organisation.
Employees will be disciplined to follow safer and
better ways of work, resulting in lesser risks to
accidents.
Employees would be more conscious of improvement
which leads to greater efficiency and effectiveness.

Machine troubles can be detected at an

earlier stage to prevent a major breakdown
when machines are cleaned daily by people
operating them.
Daily cleaning of measuring instruments
will ensure accuracy and reliability.
Life of machines and tools can be extended
significantly when they are handled with
care and placed in the designated locations.

Flow of materials and work-in-progress will

become smoother.
Floor space will become organised and
possible areas for improvement can be
identified by quick observation.
Inventory of materials and work-in-progress
will become clearly visible and easily
handled.
Material yield ratios can be improved.
Reduced material handling will result.

Clean workplace will ensure that

final products will be free from
dust.
Sales people will be eager to
show customers the plant as a
marketing tool.

MONITORING
A daily Activity
Step by Step Approach
Displays and Disseminations
Involvement of Management & CEO
Consistency in Audit
PDCA
Rewards

General Warehouse
Practices & Visual
Display

Proper Stacking

Empty Clearance

Empty Box Movement

Check inside
before
Shifting

Make Sure the

Box is
Empty

Empty

Safety Corner

Dust Bins
Hazardous/Non
Hazardous

Stacking
Wrong X

No Support - Safety issue

Correct

Ladder Support

Aisle Discipline
Wrong X

Keep the aisle free for

Fork lift movement

Correct

Aisle Discipline
Wrong

Trolley & Scrap

Kept in Aisle

Correct

Keep the Aisle Free

FIFO Not maintained

Stage 1

FIFO
sticker

Stage -2

FIFO sticker kept

On wrong side

Stage -3

FIFO sticker not

Visible.

Stacking & Retrieving

Retrieve and Replenish always

from Left to Right

Wrong Way of Stacking

Box kept wrong way

Safety issue

Wrong Way of Stacking

Kept next to
Rails

Stacking
height

Fallen in the
Canal