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GUJARAT ENGINEERING COMPANY LIMITED
Submitted by:Rajkamal Roy(15-50-133)Rakesh Singh(15-50-131)Ganggin kuki(15-50-138)Mohammed Hussain Nawaz(15-50-140)
Managing Outbound Logistics Challenges
Brief about the company
Engineering Company
ProductsElectrostatic precipitators Auxiliary Equipment's Pre heaters Industrial fans
Annual Revenue : 7.2 Bn Annual Profit : 1.8 Bn
Vadodara, Gujarat
Strategic location for supply to industrially developed states like Maharashtra and Gujarat. It also facilitates access to Gujarat port services for international exports
GECL Departments
Material Planning Department (MPD)Responsible for material requirement planning , purchasing and allocating
material to internal customers
Production Department
Outsourcing support Department (OSD)
Responsible for outsourcing the component manufacturing
Internal Factory
• Internal manufacturing• Value added components
OSD receives confirmation of product
for delivery
Commercial Department confirms dispatch
schedule
On confirmation from customer , GECL
commercial department informs transport
department
Delivery is managed through listed transport
owner / Local transporters
Items are delivered
GECL logistics operation structure
GECL Logistics pattern
GECLInbound logistics from suppliers Outbound logistics to customers
• 67 % done through Roadways including the Over dimensional Cargos
• 33 % is done through Railways
Outbound Logistics trends
• 73% vehicles used were 15 Tons trailers• 87% of 15 Ton trailers failed to deliver on time• Average capacity Utilization = 75% of all vehicles , 65% for 15 Tons trailers
Yard Problem• Limited Yard space due to rapid business growth• High turnaround time (Average 52 hours)
Questions Asked
• Ownership pattern of vehicles• Incremental pattern generation in market• Mismatch between the contractual terms and service provider• Payment to service providers• Less Average capacity utilization• Poor material segregation
Strategically Issues faced by GECL
Operation issues affecting the organic growth
• Outbound logistics inside the yard was affecting the delivery time• Poor adherence was leading to problems related to material identification and
tracking• Failure to deliver on time Outsourcing of Material handling work to transport
owners• Mismatch in the definition of Other Dimension Cargo (ODC) , as per contractual
terms
This resulted in • Increased cost of Logistics• Inability to supply the products to customer (Vehicle demand : 741 , vehicles placed : 371 (81% on time and 19% late delivery)• Poor MH productivity affecting dispatch problems
Alliance spectrum
Alliance with the service providers : The Transport agencies
• Regular truck operation with guaranteed mileage and volume assurance• Providing reasonable advances to the service providers when the trucks
are on the road• Better dispatch plan to increase the average utilization capacity (currently
75%)• Encourage on time delivery . On the basis of it , bonus payments can be
made.• Emphasis on reduction on turnaround time in the yard.
• Modification in commercial department and common information sharing platform. Base capacity should be fixed at 18 Tons (As transporters were moving towards higher capacity vehicles)
• Better dispatch plan• Explore scope of taking up additional temporary yards.• Categorization of Other Dimension Cargo(ODC) and subsequent payment for
it.• Logistics department should outsource the complete work to 3rd Party logistic
services (Handling both listed and local service providers) • Revising Transport Rates and encouraging on time deliveries.• Direct delivery from Sub contractors and vendors after quality check• Functioning of Enterprise resource Planning (ERP) should be restructured.
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