DISADVANTAGE OF 3PL:Loss of control this is the single biggest disadvantage of using a 3PL where there may be a certain comfort level to servicing your customer when logistics is in house, that feeling is gone when you outsource to a 3PL.Higher exit barriers- it is very difficult to reverse the decision to outsource once your organization has signed up with a 3PL provider. Contracts are usually 2-5 years in length with penalty clauses for early termination.Unexpected fees- unless explicitly stead in the contract, extra usage fees may apply. This is dependent on the type of contract that is used, open-book or closed book. In open book, all costs are visible to both parties and a management fee is applied or is applied for the 3 PL service. In closed-book a cost per piece is charged, so as the volume handled increases, the cost increases.Major part of logistics at ashok Leyland encore plant is taken care of TVS logistics. TVS logistics provide services like inbound logistics and warehousing. TVS logistics takes care of the milkrun process and the inter unit process. Mahindra logistics take care of the logistics at the bhandara and alwar plant. Materials are also transported from the suppliers to ashok Leyland through other approved logistics services. The supply of materials follow a schedule called as the rolling plan r production plan. Now let us see and detail about the production plan.PRODUCTION PLAN OR ROLLING PLAN:The production plan or the rolling plan is a schedule given by a specified group for the supply of materials as per he production requirement and the market demand. The production plan is devised during the first week of every month at the production planning meeting (PPM) the production planning meeting (PPM) is conducted during the mid of every month for revisions if any. Ashok Leyland follows a production plan which is scheduled for a period of 12 weeks of which 6 weeks material requirement is firm and the reset is tentative. At frits, a monthly requirement is scheduled for the 3 months, and then monthly requirements are converted into weekly requirements. The supplier and the logistics serive providers (for milkrun and inter unit) are given the schedule. The supplier supplies the material in accordance with this schedule. The logistics service province is also instructed to collect the material in accordance with this schedule. RECOMMENDATIONS: The collection schedule should match with the material planning schedule with necessary updating wherever necessary. Supplier wise allocation for the collection of the material should be based on the output of the supplier.

MODELS OF SUPPLY: To enable a smooth flow of materials from the suppliers and between its units, ashok Leyland followed various models of supply. They are listed below: Milkrun process Direct inbound logistics form suppliers Inter unit logistics

MILKRUN PROCESS:Milkrun process, is a logistics technique for the collection and transportation od goods from suppliers by the logistics servicer with a defiled delivery route, in which various stops are planned and executed in terms of quantities and timings, rather than awaiting the delivery from the suppliers. In the milkrun process the suppliers and the logistics service provider are given the material collection schedule. At ashok Leyland, TVS logistics takes care f the milkrun process at Chennai, Coimbatore, pune, hosur and Bangalore. In the milkrun process are Chennai, TVS logistics collects material from 85 suppliers every day in various areas like gummidipoondi (two routes), ambattur (four routes), guindly, perungudi, MM nagar and point collection (two routes). All the collected material is consolidated at the hub store wise and the material is loaded in truck the day material is collected. The manifest is created at the hub for all the items in the truck. The next day, material is dispatched from the hub to ashok Leyland. At ashok Leyland the material is inwarded at the gate, goods receipt note (GRN) processed, quality control processed (for non-self-certified items) stores processed and then the material reaches the assembly line. Before in awarding the material at gate the manifest is verified at the TVS logistics office at ashok Leyland and cleared for errors if any.Supplier milkrun model Milkrun operationSupplier hub

Delivery of the material at ashok Leyland Logistics service providers to collect material from suppliersFinished productReceipt of material, inspection &assemblyDelivery of the material at hubMillkurn modelProduction planning (PPM)12 Weeks Rolling PlanSchedule given to suppliers and logistics service providers

PROCESS FLOW DIAGRAM FOR SUPPLY OF MATERIALS FOR MILKRUN MODEL: Direct inbound logistics from suppliers:Direct inbound logistics, is a logistics technique for transporting the goods from suppliers, in which the supplier is responsible for transporting the goods. The logistics carrier may be owned by the supplier or the good will be sent by other approved logistics service provider. For these logistics service provider the amount will be paid by ashok Leyland or the amount may be billed in the invoice. In this model od supply the schedule is given to the suppliers only. The supplier takes care of sending the material. At ashok Leyland the material is inwarded at the gate, goods receipt note (GRM) processed, quality control processed (for non-self-certified items) stores processed and then the material reaches the assemble line. Before inwarding the material at gate, the manifest is verified for errors if any. If there are any errors. The errors are cleared and then inwarded at the gate.

Supplier direct inbound model Ashok Leyland

Delivery of the material at Ashok LeylandProduction planning meeting (PPM)

12 weeks Rolling Plan

Schedule given to Suppliers

Supplier to transport the material by other approved logistics service provider

Finished product Receipt of material ,inspection & assembly

PROCESS FLOW DIAGRAM FOR SUPPLY OF MATERIALS FOR DIRECT INBOUND MODEL:Inter unit logistics:Inter unit logistics, is a logistics technique for transporting the goods between various units of ashok Leyland. TVS logistics and Mahindra logistics takes care of the inter unit process. TVS logistics takes care of the inter unit process at Chennai, hosur and alwar unit. Mahindra logistics take care of the logistics at bhandara and alwar unit. A manufacturing schedule is devised and given to the production department. The production department at the entire unit support each other for the requirement of material. The logistics. The logistics service provider is advised to collect the material from the unit by the production and deliver at ashok Leyland. At ashok Leyland the material is inwarded at the gate, goods receipt not (GRN) processed, stores processed and then the material reaches the assembly line. Before inwarding at the gate, the material is validate and cleared for errors if any.

INTERUNIT MODEL

ASHOK LEYLAND, ASHOK LEYLAND, ENNORE

Finished product Receipt of material ,inspection & assemblyDelivery of the material at Ashok Leyland Logistics service providers to collect material from various unitsSupport to other units with logistics service providers (TVSL & Mahindra) Production Manufacturing scheduleProduction planning meeting (PPM)

PROCESS FLOW DIAGRAM FOR SUPPLY OF MATERIALS FOR INTERUNIT LOGISITICS MODEL:VENDOR MANAGED INVENTORY : CHAPTER-6A means of optimizing supply chain performance in which the manufacturer is responsible for maintaining the distributors inventory levels. The manufacturer has access to the distributors inventory data and is responsible for generating purchase orders.

Under the typical business model:When a distributor needs product, they place an order against a manufacture. The distributor is in total control of the timing and size of the order being placed. The distributor maintains the inventory planVendor managed inventory model:The manufacture receives electronic data (usually via EDI or the internet) that tells him the distributors sales and stock levels. The manufacturer can view every item that he distributor carriers as well as true point of sale data. The manufacturer is responsible for creating and maintaining the inventory plan. Under VMI, the manufactures generates the order, not the distributor.The goal of vendor managed inventory is t provide a mutually beneficial relationship where both sides will be able to more smoothly and accurately control the avaibility and flow of goods.In VMI a manufacture or distributor assumes the role of inventory planning for the customer extensive information sharing is required so that the manufacture distributor can maintain a high degree of visibility of its goods at the customers location. Instead of the customer reordering when its supply has been exhausted, the supplier is responsible for replenishing and stocking the customer at appropriate levels. Wal-Mart has mastered VMI and is the company against which many other organizations benchmark themselves.Customer benefits:When the supplier can see that its customer is about to exhaust its inventory, the supplier can better prepare to replenish the customer because the supplier can then better schedule its own production distribution. Customers will reduce eliminate stock outs because they will not have to reorder goods at the last minute without knowing whether the supplier has the ability to restock without interrupting the customers operation. Therefore, part of VMIs goal is to reduce uncertainty that arises when the supplier is blind to the customers inventory status.Supplier benefits:As long as the supplier carries out its task of maintaining predetermined inventory and avoiding stock outs, it will be able to lock in a VMI- supported customer for the long term with or without a contract. This will produce a steady and predictable flow of income for the supplier and reduce the risk that customer will switch supplier (switching would be too costly for the customer). A VMI arrangement will allow the supplier to schedule its operations more productively because it is now monitoring its customers inventory on a regular basis. Furthermore, reductions in inventory will be achieved once the supplier develops a better understanding of how the customer uses its goods over the course of a year VENDOR MANAGED INVENTORY AT ASHOK LEYLAND:The vendor managed inventory in encore plant of ashok Leyland is managed by Mahindra logistics (3pl). The role Mahindra logistics is maintaining the logistics of part numbers between the vendor (supplier) to customer (ashok Leyland).Their duty is for the management of delivery of right part number to right a store at right time so that the part number to the assembly do not delay. One more responsibility of unloading of part numbers from vendor end to the VMI area and storing them at respective stores is other activity.

Demand forecasting

Material requirement planningMaster production schedule

From store to assemblyVehicle to saleCustomersMaterials for production is divide with respective these verticalsSheet metalNon-metallicMetallicSAPAfter sales Advance shipment notice

plant upload bill of material child partnumBracket ways

each individualsupplier Transfer to stores

zzzzzproduction planning and control

supplierLocal supplierVMIAdvance shipment noticeGoods receipt notice

Casual laborData processing operatorExecutiveOfficer

CAUSENUMBER OF INDENTPERCENTAGE

ASN not available44.6

material not recovered44.6

waiting for store confirmation6979

part number mismatch11.1

ASN quality mismatch22.3

later dispatch44.6

future data issue11.1

ASN wrong11.1