IMPROVING PRODUCTIVITY OF WAREHOUSE ACTIVITY AT AZKO NOBEL

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GROUP 12

HERSH |ATUL | ARNAB| SAURAV

3/20/13

Under the guidance of Dr. RUPESH KUMAR PATI

FUNCTIONS OF WAREHOUSING

3/20/13

WAREHOUSE LAYOUT & LOCATIONAKZONOBEL

Conveyor Receiving Point Krishna Plant 100 KL/DayGodavari Plant 90 KL/Day Conveyo r FLT Operations FLT Receiving Point Equipment Area

Aisle FP Warehouse 1000 KL W/H Manager Office

Click toComplex edit Master subtitle style Racks Factory

Racks (G+4) Pallet Bins Design Capacity Operational Capacity Loading Points Loading Bay Material Holding capacity 20 2200 1000 KL 850 KL 5 50 KL

Racks

Racks

Racks

Loading Dock 1-5

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CURRENT PROCESS FLOW PUT AWAY

YE S Empty bin available? Store pallet in the empty bin Allocated to this SKU ID NO Store pallet in the nearest empty bin Allocated to other SKU ID

Receive Material Pallet (~480 L)

Move inside warehouse & Check SKU ID

Move pallet to rack allocated to SKU

Grey Areas Current Put Away Process Click to edit Master subtitle style
No entry of material during stock transfer to W/H Not enough bins allocated per SKU ID Put Away in other bins not allocated to SKU ID

Difficult to trace material if in a nonallocated bin

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CURRENT PROCESS FLOW PUT AWAY

Grey Areas Current Picking Process
Material not put in the allocated bins during put away Searching of material not found in allocated bins & Division of SKUs amongst workmen team members increase picking time Chances of picking wrong SKUs due to poor visibility or older stock in nonallocated bins

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Increases truck turnaround truck Workmen reporting to W/H manager during picking leads to loss of productive time In case of deficit quantities because of material not found, planning team needs to add material to STO to ensure FTL

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CURRENT PROCESS FLOW PICKING

YE S NO Move pallet to rack allocated to SKU Check color code & pick oldest stock, transfer to assembling pallet/Assembling area Search for the SKU in the warehouse Update the Pick List

SKU in the allocated bin? Check the SKU ID & Move to the bin allocated to the SKU

Receive Stock Transfer Order (Pick list)

Inform planning SPOC NO

YE Click to edit Any Master deficit insubtitle style S the material picked?

Any addition to the STO? Debit picked stock

YE S NO

YE S Handover the checked pick list to the W/H manager Handover additional pick list to workmen

NO

All SKUs in the Pick list picked?

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Print the final transfer documents & handover to the workmen

Verify material, load truck, handover transfer documents &

BENEFITS OF WMS (BARCODEPALLET)

As SKULocations are mapped, searching W/H for SKUs not found is not required Workmen can pick orders by using a handheld- saves time in dividing pick list, less frequent reporting to W/H manager, Verification of picked SKUs not required All stock movement in and out of bins will be updated real time through EDI in the WMS

100% FMFO compliance possible & increase in the operational capacity of the warehouse through dynamic nature of bins

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Decreased due to faster and accurate picking Inventory need not be verified monthly during scheduled stock take As inventory is updated real time

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MATERIALS MANAGEMENT: MANUAL PROCESS

Put Away Dispatc h
Workman receives stock transfer order

Workman notes down SKUs and batch numbers on receipt of FGs Workman notes down bin numbers in which FGs are stored Document sent to Warehouse Manager

Workman picks SKUs from bins indicated on STO

Workman confirms quantities and batch number by putting a tick on STO Completed STOs sent to Warehouse Manager

SAP entries passed

Bin wise stocks recorded in system

SAP entries passed & stocks debited from system

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MANUAL PROCESS: ISSUES

1 Information capture away from the point of action. Person passing system entries different from person carrying out the physical operation
Information capture at source

Heavily person dependent process; accuracy of inventory records depends on discipline of Workmen

Lesser data entry work at Stores Office

Material Managemen t through bar coding

Reduced person dependency

Duplication of work due to capture of information away from the source

Reduced duplication of work

Quantum of data entry work carried out by Warehouse Manager is quite high leading to reduced time for supervision

Relevant Issues Minimum change in current mode of operations Constraints: space, safety, IT Cost-Benefit Analysis

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MATERIALS MANAGEMENT via BARCODING

Concept Working Challenges

Material Management through bins at pallet level

Unique barcode number will be generated on SAP entry from shop floor to warehouse Bar code will contain SKU code, batch number mapped to it

Workman needs to ensure that label for partial pallets stuck on correct pallets

Fixed number of static bins in SAP

Flexibility to accommodate cases of two batch numbers on one pallet During stock taking each bin will have to be scanned to confirm count

Unique barcodes for each pallet for finished goods received at warehouse

Debit made during dispatch will be deducted from pallet stock & warehouse stock

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NEW PROCESS
Put Away Workman receives FGs and
from shop floor

Dispatc h

Workman receives STO & can access it through HHT

Workman scans bar code on pallet, enters SKU code and quantity Workman puts away pallet in free bins and enters bin in HHT by scanning bar code on bin

Workman picks the pallets from bins indicated on HHT

Workman scans the barcode on pallet and debits the picked quantity

Bin wise stocks of FGs updated in SAP

Bin wise and pallet wise stocks of FGs updated in SAP

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COSTING

Hand Held Terminals

Servers & Cabling

Wireless Access Points

Bar Code printers

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COSTING
Issued to Number of Type of HHTs HHTs Put Away 2 Team (2) Dispatch Team (7) Spare HHTs Total 5 1 8 Normal

Hand Held Terminals

Item Server(1) Cabling

Other infrastructure
Cost Rs. 120000 Rs. 100000

Bar Code Printer (1) Rs. 40000 Bar code labels Rs. 10000 Rs. 30000 Rs. 300000

Normal Normal Normal Rs. 79348 Rs. 634784

Wireless Access Points (2) Total Cost

Operational costs
Item Cost Annual Maintenance Rs. 3700 Cost (Normal HHT) Total Maintenance Cost Rs. 37000

Cost of normal HHT Total Cost

Replacement of 20% Rs. 2500 labels Total Operational Cost Rs. 39500

Total Fixed Investment = Rs. 9,34,784 Incremental Operational Expense = Rs. 39500 3/20/13

BENEFITS OF WMS (BARCODEPALLET)

Average STO Picking Time Average Picking Team Size With WMS Picking Team Size Time Saved/ STO Average no. of STOs in dispatch plan (Current) Average volume/STO Time to pick & dispatch all STOs (Current) Overtime Overtime Cost/Year Time to pick & dispatch all STOs (With WMS) Overtime Additional Dispatch Opportunity Additional Dispatch Volume possible Margin/Ltr paint (At the least level) Additional income (Margins 3/20/13 only)/ Day 60 2.5 22 5 40 19 12 KL Mins Workmen Mins Workmen

Picking & Dispatch

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2090 None 1.1 13.2 5 66000 STOs/FTLs KL Rs Rs Productive Time/Workmen/Day Total Time/Day Monthly Salary 440Mins 2200 11480 Picking Workmen 5

2850 650 179088

Mins Mins Rs

PAYBACK PERIOD
Pessimistic Payback Potential Payback
Percentage Total of potential savings sales achieved 1 2 3 4 Payback period (yrs)

Fixed Cost

Rs. 935000 Rs. 40000 Rs. 180000 Rs. 140000 6.7 years

Operational Cost Confirmed Savings Benefit Payback period

Rs. 338000 3 Rs. 536000 2 Rs. 734000 1.3 Rs. 932000 1 Rs. 11300000.8

Challenges: Resistance from labor force 5 Training of labor force Deviation Management Maintenance of wireless infrastructure 3/20/13

LEARNINGS FROM PROJECTS

Exposure to various aspects of supply chain like planning, materials management etc.

Exposure to batch mode of operation and various challenges faced especially in conventional plants

Analysis problem independent from the solution leading to consideration of a range of solutions rather than trying to fit in one solution to solve the problem Exposure to IT aspect of operations and realization of its significance

Developing solution that minimizes the current mode of carrying out operations to minimize resistance to acceptance Factoring constraints from different areas and all deviations and scenarios handled by current system while developing solution

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THANK YOU

3/20/13