POS DRIVE Case study

JAYACHANDRAN S 074 SANTOSH DESHPANDE 07 SHAMBAHVI SINGH 078 SHARDA PRODDUTURI 08 SHIVANI ZUTSHI 082 SHUCHI BHARDWAJ - 084

Presented By: Group 4

Improvement Suggestions
Downstream Supply Chain Exploit long term relationship and steady demand from customers. Go for Rate contract with all customers for all existing parts It will eliminate all Order placement paperwork and transactions formalities, which will in turn save 15 days of order lead time for customers. For any new part/component or changes in specifications of existing parts, simply revise the current rate contract accordingly or go for a new rate contract altogether. It will lead to a win-win situation for both the firm and its customers.

Improvement Suggestions (Contd.)

Upstream Supply Chain Foreign Supplier

Select only few reliable suppliers from each of foreign country and form a long term strategic partnership with them. Reduce foreign supplier base to max. 10 from current level of 32. Form Rate contract with foreign suppliers. Reduce inventory stock of imported items from 90 to 45 (10+32+3) days

Domestic Supplier

Again select few reliable local suppliers located in the vicinity of the plants and form long-term strategic partnership with them. Reduce the local supplier base to a optimum level from the current level of 120. Go for JIT with local suppliers- reduce stock level from 30 to 5

Improvement Suggestions (Contd.)

XYZ Analysis for Inventory Management

Combine ABC and FSN analysis for Inventory. X category items would require a more stringent control including complete accurate records, regular and frequent review by higher Mgmt, Frequent review of demand forecast and close follow-up procedures. Y category items would require normal controls with good records, regular attention and normal processing. Z category items may require simplest possible control such as less frequent periodic reviews and simple check-ups.

Improvement Suggestions (Contd.)

Projected Savings:

Inventory of Foreign stock coming down to 45 from 90 days => Inventory value coming down to 1.5 Cr from apprx. 3 Cr. Inventory of Local stock coming down to 5 days from 30 days => Inventory will come down to apprx. 50 Lakhs from 3 Cr. Apart from this, firm can enjoy other benefits of JIT and Rate contract. TOTAL SAVING/BENEFITS = Apprx. Rs. 4 Cr. + Higher Customer Satisfaction + Higher

Learnings . . . . .

Importance of supply chain Collaboration of Upstream & Downstream supply chain Inventory management

THANK YOU