Supply Chain Management
REPORT ON
Supply Chain Management in Pak Suzuki Motor Pvt Ltd, Pakistan
Submitted By By:: Muhammad Waqar (FA!" M#"$$!%&
Ati' azir Syed Ashar
Submitted Submi tted To: Sir) Mo*ashar Azam
Table of Content Con tent Supply chain River and ladder………………………………… page 3 General Parts (GP)……………………………………………... page 4 Targets…………………………………………………………… Targets…………………………………………………………… page !n"#r$ati#n #" !PP %epart$ent…………………………… %epart$ent………………………………... …... page & 'learing and "#rarding agent………………………………… page *uncti#ns #" GP %epart$ent……………………………………page + ,end#r-s c#ns#lidati#n…………………………………………..page S/OT 0nalysis………………………………………………….. page12 !T O5ectives…………………………………………………… page 11 Pr#ducti#n Pr#duct i#n $#nit#ring………………………………………….. $#nit#ri ng………………………………………….. page 16 7aterial 8andling %epart$ent (78%)………………………... (78%)………………………... page13 !ssuance #" parts t# #ther depart$ents………………………. depart$ents………………………. page 14 7a5#r pr#le$ "aced y 78%…………………………………. page 1 Garage disp#sal……………………………………………….. page 1& G#vern$ent regulati#ns……………………………………….. page 1 Rec#$$endati#ns……………………………………………… page 1+ E9supply chain…………………………………………………... page 1 '#nclusi#n………………………………………………………..page 62
Supply Chain River and Ladder Sourcing Raw Material Pak Suzuki sour+ing ra material 'rom di''erent +ountries like -apan, .orea and /hailand *ut most o' the +omponents are sour+e 'rom -apan) Furthermore Pak Suzuki is importing +omponents 'rom -apan as C.0 that means (Completely kno+k don&) 1t is +omplete assem*ly imported 'rom -apan and .0 as *u''er) /here are three departments they involving 'or pro+uring +omponents 'rom vendor that are as 'ollos2 1) IPP ( Import parts purchasing) 2) LPP ( Local parts purchasing) 3) P ( eneral parts)
Process of Supply chain management 3peration Pur+hasing 0istri*ution 1ntegration
Vendors and Suppliers Network Pak Suzuki has played an impetus role in the engineering se+tor *y promoting and en+ouraging the donstream vendor industries in the private se+tor) Currently there are a*out 45 lo+al vendors 'or di''eren+e parts hereas there are more than $ 'oreign suppliers 'or some ma6or +omponents)
IPP
0eals in Pro+urement o' Components (C.0, .0, Spares&, C7 Cylinders, 8a Materials (Steel Sheet, Plasti+ 8esins, C90 Paint&, PM9s and their Spares 'rom 'oreign sour+es
LPP 0eals in Pro+urement o' lo+ally developed Components 'rom lo+al :endors
GP 0eals in Pro+urement o' Plant Consuma*les (Paint, 1ndustrial 7ases, Lu*ri+ants, et+)&, PM9s and their Spares, Administrative Pro+urement (Computers, Mo*ile Phone, Stationery, et+)& 'rom lo+al suppliers) 3*6e+tive o' 1PP department
To insure continuous supply of all imported inputs to the end user to keep running the production without any interruption, which ensures that? The right materials are aaila!le" #t the right place" #t the right time The right $uantity and $uality #nd the competitie cost
Sections% &unctions of IPP 'epartment Planning 3perations 9;ports
Regular% Periodic #ctiities 1nventory Planning 3rdering L
Planning Se+tion
'istri!ution Inentory control To maintain the inventories at the desired level
Improement in supply chain Lead time reduction Increase the no of shipments Consolidation of shipments Thailand; head lamps, plastic Resins Italy; CN Cylinders
(perations Sections 8egular
)ost down Custom duty Chemical % Consuma#le C&' Cargoes
1nsuran+e +ost (remium on all insurance policies (remium on container transit policy
Freight +ost To switch from C%) to )*+ and other than C&' Cargoes
System 1mprovement !hipment monitoring and control procedures !witch over from manual data#ase to system to -! .// !ystems
Customs Clearan+e Reduction of Custom Clearance Time from 0 days to 1 days To #uild good relationship with Custom *fficials for improvement in Custom related activities
(T*+R R+L#T+' IN&(RM#TI(N (& IPP '+P#RTM+NT M309 3F PA= M9/2 Letter of credit '( Contract T2T Remittance
M309 3F S>1PM9/2 +y sea +y -ir
P38/ 3F 01SC>A879 (ort 3asim &arachi (ort
MA-38 S>1PP17 L19S $aersk line N4&
CL9A817 A0 F38WA8017 A79/ 56press service -!hakoor +rothers
1LA0 /8ASP38/98 -l hammas freight liner
1S?8AC9 C3MPA= 5fu general insurance
+,port section 8egular
Main (!-ecties
-rranging components from vendors at competitive price, in right 8uantity and at right time *rder local components at competitive price
'epartmental functions Costing !cheduling (arts follow up
Targets !tock reduction !ending monthly schedules electronically 5nsuring all supplies in defined 'ata consolidation !tandardi9ation of packing :ero production loss In time supply
Improvement of pro#lematic vendors
&unctions of GP department (lanning *rdering )ollow 7p (rice Negotiation $arket !ourcing
Plant procurement (aint % -llied $aterials Consuma#les (ackaging $aterials ($5s !pares
#dministratie procurement Computer Peripherals Mo*ile Phones Stationery items -anitorial items Capital Pro+urement PM9s Computer, Printers, S+anners
Vendor )onsolidation .Target/ )ost )ontrol 5limination of +ad performing vendors $erger of sister concerns % uni " group companies under one name To efficiently manage endor9ed procurement through minimum in 8ty % #etter in performance vendors Creating chain of Tier"< vendors to make the procurement cycle efficient
#dantages of Single Source 3nly those vendors hose quality and servi+es are outstanding) 1n time deliveries $$@ PPM level 3pportunity 'or dis+ounts Loer 'reight +ost Con+ession on other produ+ts even quantity is no issue) 9asier to s+hedule deliveries) lot size, delivery date,pa+king,et+& 8edu+ing inventory sto+kless *uying) Less risk in +ase o' re6e+tion
#dantages of Multiple Sources Alays in *argaining position) Lot o' options resulting +ost saving) 7ood quality) Availa*ility ill not *e an issue)
A*normal volume requirement not an issue) Lot o' market in'o) /hrough multiple suppliers)
S0(T #nalysis with reference to supply chain Strengths Produ+tion +apa+ity Large vendor industry Market goodill
0eaknesses Warehousing Fore+ast Methods Buality
(pportunities 98P80 Computerization
Threats Competitors 1nnovations :aria*les
Push VS Pull Push System2 material is pushed into donstream orkstations regardless o' hether resour+es are availa*le)
Pull System2 Material is pulled to a orkstation 6ust as it is needed)
1IT (!-ecties 5liminate inventories !mall lot si9es !low setup time
Planning process through +RP LPP sent delivery order to vendors hi+h is monthly *asis and also knon as 'irm orders, delivery order +ontains order quantity, delivery dates, pa+king size, minimum lot size, and starting date) LPP issue delivery order and part tags to vender, delivery order shos all 01s slip detail and part tags to vender through e"mail and vender are lia*le to paste part tags and delivery instru+tion letter along ith supplier in order to generate 781S (goods re+eiva*le inspe+tion notes&)
#dantages of +RP #etter s+heduling and +ontrol) 9''e+tive delivery order through 01 Slip Part /ag) o mistake in required do+uments 'or making 718) 9''e+tive appli+ation o' F1F3) #etter +ontrol on supply over delivery order quantity)
&L(0 of manufacturing Process As long as elding shop enters 0PP into the system, version and +olor is allo+ated to ea+h +hassis num*er into the system, hi+h has to *e 'olloed *y the all +on+ern shops
Press shop" $anu"actures sheet $etal parts as per /PP Welding Shop" re+ords +ol"ok (+hassis num*er pun+hing
status& and W#"3. (trans'er o' *ody shells 'rom hite *ody line&into the system) A'ter that the *odies are trans'erred to paint shop)W#"3. is treated as produ+tion o' press and elding shop) Paint shop re+ords P#"3 (loading o' hite *ody shells 'rom elding shop& and P#"3. (trans'er o' painted *ody shells to :FA&into the system) P#"3. is treated as produ+tion o' paint shop
Production monitoring and reporting Loading sequen+e report Monthly standard takt time report Color ise version ise takt time report Color ise version"ise produ+tion 'ollos up Monthly reports Monthly a+tivity report C.0 sto+k position Produ+tion division manpoer status
Production Loss analysis report Planning se+tion take in'ormation 'rom A03 system to prepare and maintain the summarized produ+tion loss analysis report, hi+h des+ri*es the reasons o' produ+tion losses during the hole month)
Monthly attendance results Planning se+tion +olle+ts the daily attendan+e results 'rom all departments o' produ+tion division and +ompiled these results in daily plant attendan+e report)
Monthly Production results Planning se+tion prepares the monthly produ+tion results report 'or revie o' 0M0) /his report in+ludes produ+tion results o' A#"3. FC"3., reasons o'
Material handling department . M*'/ &unctions Receiving !torage !upply to the (roduction Line
Responsibilities *ead of 'epartment >ead o' department is responsi*le 'or monitoring < supervising overall operations o' Material >andling 0epartment)
Section Incharge Se+tion 1n"+harges o' department are responsi*le 'or +ondu+ting smooth produ+tion operation) >e is responsi*le 'or +arrying out all a+tivities in respe+t o' sa'ety, quality, produ+tivity and resolve administrative a''air)
Shift Incharge Shi't 1n"+harge is responsi*le 'or shi't produ+tion and to resolve a*normalities related toprodu+tion)
IMS )oordinator 1MS Coordinator o' department is responsi*le 'or +ondu+ting all +on+erned departmentala+tivities a++ording to 1MS
2uality )oordinator Buality +oordinator assures and +o"ordinate the produ+tion o' desired quality pro+ess)
Safety )oordinator Sa'ety Coordinator is responsi*le 'or +ondu+ting all departmental a+tivities and operationin sa'e and healthy orking environment
3ai4en )oordinator .aizen +oordinator o' department is responsi*le 'or a+hieving kaizen targets o' shop and motivate orker 'or it)
Issuance of parts to other departments ) /he M>0 re+eives requisition +alled /: (/rans'er :ou+her& 'rom the demanding 0epartment) /hen a'ter +he+king o' sto+k level it approves to deliver the parts) D) /he same /: goes to the C.0 re+eiving se+tion 'or ad6ustment o' sto+ks) 5) All delivered parts +ompiled in the end o' the month to pla+e the order 'or replenishment o' sto+k
Issuance of parts to production line ) Material >andling department ensure F1F3 ('irst in 'irst out& o' the parts )D) /he shop ise sta'' have deployed 'or the supply o' parts )5) Material >andling 0epartment has the separate sta'' 'or the supply o' Lo+al parts and the C.0 parts 'or ea+h shop) 4) Parts ise distri*ution has done amongst the orkers so that every*ody knos hi+h vehi+le and line part he has to supply) !) /here are spe+i'ied and general trolleys have *een designed in order to +arry more parts in less time) E) Parts 'illed in trolleys *in at un"*o;ing area and then push it to the desired pla+e) ) #ins system also introdu+es *y M>0 'or small parts either it is lo+al or C.0) G) Waste generated during un"*o;ing properly disposed o' in trolleys *y orkers o' M> department)
Storage areas /he storage areas are properly de'ined to allo orderly and sa'ely storage 'or various +ategories o' parts su+h as C.0, .0 and Lo+al parts) /he storage areas o' all the respe+ted shops have *een de'ined) /he C.0 and Lo+al parts have their separate designation areas) /he parts in'ormation tags have displayed a++ording to the parts setting on the storage areas) 9a+h part has its separate lo+ation as ell) All parts in these areas are +learly
identi'ied and arrange in groups a++ording to their type) /he storage areas need proper +leaning and maintenan+e in order to prevent damages and deterioration o' stored items)
Major problems faced by MHD Line re-ection 1t +auses *y the mishandling o' orker (unskilled&, or the manu'a+turing 'ault should *e one +ase
'efected and short supply Parts issued to the other departments *e+ause o' some unavoida*le situations)
Material handling documentation :arious re+ords generated in the M> 0epartment during the normal a+tivities) /hedetails are do+umented on the Master 0o+ument List)
Retention eriod Material *andling costumers :FA (:ehi+le Final Assem*ly Area&) Welding Shop) 9ngine Shop) Paint Shop) Plasti+ Molding Shop) Marketing 0epartment (0elivery =ard&
Material *andling facilities Fork Li'ters /o /ru+k (Sta+ker&) Spe+i'ied /rolleys 7eneral /rolleys) 7ravity #ase 8oller Conveyor
!arbage Disposal Safety Safety manuals #olts /in #o;es Cartons Polythene Sheets Polythene #ags /hermo pole Papers Wooden #o;es Wooden Ply ails 8u**er #oots Cotton 7loves Card #oard 0amaged #ins 0amaged /rolleys 0amaged 8a+ks
Shut do"n activities Sto+k /aking (Audit& Maintenan+e Spe+ial Assignments Pro6e+ts
Dealer costumer net"or# /he dealers o' Pak Suzuki are situated a+ross the +ountry to +ater all the important areas) /hese provide sales, servi+e and genuine Suzuki spare parts) At present there are E% dealers o' Pak Suzuki stret+hed in all ma6or +ities o' Pakistan) /hese dealerships make up the +ountryHs largest vehi+le a'ter sales servi+e and genuine spare part netork)
!overnment regulations Monetary poli+y o' the government e''e+t the automo*ile market *e+ause o' the money supply and the e;+hange rate dire+tly e''e+ts to the leasing and 'inan+ingse+tor)Without any prior noti+e or dis+ussion ith the automo*ile assem*lers government has +hanged the duty stru+ture that ill alter the +ost o' the produ+t) 7overnmentHs /a; poli+ies are not +onsistent hi+h +auses un+ertainty in market) /his results in tur*ulen+e in a+tual demands levels)
La" and order regulations La and order situation is not good as +ompared to the previous years) /he in+ident Dth 0e+em*er +ompelled us to think a*out the +hange in planning tokeep *u''er in the parts order that also in+rease in +arrying +ost) /ransportation o' the parts suppliers and distri*utors has pro*lems) /o distri*utors have lo+ated at Front road in .orangi 1ndustrial area totally *urnout *y the mis+reants)
Recommendations Lo**ying ith Poli+y Makers2 Should 'o+us on important government o''i+ials and poli+y makers to a+hieve 'olloing goals)))I .no up+oming poli+yI Mold poli+ies in on 'avor
SCM rocess definitions Pak Suzuki should adopt the +on+ept o' suppliers, supplier to +ustomers and this ill *e possi*le hen +ompany e;pand their S3P 'or more parts o' Supply +hain pro+esses)
MR System Pak Suzuki is pra+ti+ing M8P (Material 8esour+es Planning& system and theyare maintaining their material planning on e;+el) 1n our opinion Pak Suzuki should +onsider more advan+e so'tare 'or their 'a+ility and it is *eing in'ormed us that they are a*out to introdu+e 98P (9nterprise resour+e planning hi+h ill *e *ased on AS"4$$)
$lternative vendor%s pole Sometimes +ompany 'a+e shortage o' supply due to non"availa*ility o' materials) Several times single sour+e vendor +reate this pro*lem to in+rease +ost o' materials there'ore PA.S?J?.1 try to minimize vendorHs monopoly *y introdu+ing ne vendor 'or same parts)
Develop vendor%s society 1n the +onsideration o' the la and order situation espe+ially in .ara+hi Pak Suzuki is also emphasizing to develop a vendorHs so+iety 'or the purpose they are lending land to their vendors (importantly +riti+al parts vendors&) Pak Suzuki o''er land on the *asis o' lease)
Mar#et Intelligence Pak Suzuki not having the Market 1ntelligen+e department hi+h provides the in'ormation a*out the market +hanges, +ompetitors a+tivities and 7overnment poli+ies hi+h also e''e+t the entire planning o' the organization)
The &'supply chain >igh speed, lo +ost, +ommuni+ation and +olla*oration ith your +ustomers and suppliers are +riti+al su++ess 'a+tors to more e''e+tively manage your supply +hain) /hen, the e"Supply Chain is very likely in your 'uture) /he very essen+e o' Supply Chain Management is e''e+tive in'ormation and material 'lo throughout a etork o' +ustomers and suppliers) I 7ood supply +hain pra+titioners kno that in'ormation should *e passed on only to those ho need to kno it, in the 'orm they need to have it 0emand in'ormation, inventory positions, order"'ul'illment, supply management and a hole host o' other in'ormation e;+hange a+tivities ill +hange ho e sell produ+ts, supply produ+ts and make and re+eive payments 'or goods and servi+es)
Conclusion SCM is no a days one o' the greatest emerging te+hnologi+al impli+ation) Supply +hain management (SCM& is a +on+ept that has 'lourished in manu'a+turing, originating 'rom -ust"1n" /ime (-1/& produ+tion and logisti+s) /oday, SCM represents an autonomous managerial +on+ept, although still largely dominated *y logisti+s) SCM endeavors to o*serve the entire s+ope o' the supply +hain) All issues are vieed and resolved in a supply +hain perspe+tive, taking into a++ount the interdependen+y in the supply +hain
References http())"""*ravimaga+ine*com)analysis'of'pa#istani' automobile'industry'a'report) http())"""*industry"ee#*com)supply'chain)supply' chain'constraints'present'three'part'challenge' automotive'suppliers http())"""*slideshare*net)$a,ib-asim)eop'auto' industry'of'pa#istan
