akzonobel gaurav kumar 65

“Reduce lead time to service customer order by reducing cycle

time of Order of Dispatch”

Undertaken at

Chattarpur Depot, New Delhi.

Under the Guidance of

Submitted for the partial fulfillment of Post Graduate Diploma in Industrial Management (PGDIM)

Submitted by:

Gaurav Kumar

Roll No. 65

PGDIM-20

National Institute of Industrial Engineering (NITIE), Vihar Lake, P.O. NITIE, Mumbai

NITIE, MUMBAI

Prof. Rakesh Raut

Assistant Professor

NITIE

Mumbai

Mr. Ujwal Ghimiray

Supply Planning Manager

Akzo Nobel India Limited

Gurgaon, Haryana.

Declaration

I hereby declare that the project work entitled “Reduce lead time to service customer

order by reducing cycle time of Order of Dispatch for Akzonobel India Pvt.

Limited” submitted to the National Institute of Industrial Engineering is a record of an

original work done by me under the guidance of Mr. Ujwal Ghimiray (Supply Planning

Manager Akzo Nobel India Limited Gurgaon, Haryana) & Prof. Rakesh Raut

(Assistant Professor,NITIE,Mumbai) and every part of the project report that I have

submitted is genuinely my own work.

(Gaurav Kumar)

Roll No-65

PGDIM 20

NITIE, Mumbai

NITIE, MUMBAI

Acknowledgement

First of all I thank NITIE, providing me with an opportunity to work with AkzoNobel

India Pvt. Limited because of which I was able to apply the concepts learned in the

curriculum to the actual business scenario.

I wish to extend my sincere and heartfelt gratitude to my guide Mr. Ujwal Ghimiray

Supply Planning Manager Akzo Nobel India Limited., who guided, supported and

encouraged me during the entire tenure of the project. I also thank Mr. Ashish Gupta,

Regional Logistic Manager , Akzo Nobel, for his co-operation and knowledge sharing

throughout the course of my project.

I take this opportunity to extend my sincere thanks to Mr. Chanderkant

Sharma,Warehouse Manager, Chattarpur Depot Akzo Nobel India Limited for his kind

support & guidance. I would like to thank the staff of Chattarpur Depot for sharing their

experience and helping me out whenever required.

I am thankful to Prof. Rakesh Raut of NITIE for his constant support, guidance and

suggestions.

Gaurav Kumar

Roll No-65

PGDIM 20

NITIE, Mumbai

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Executive Summary

AkzoNobel is the largest paint company in the world. The logistic department of the

company ensures that dealer gets delivery on time. Company has 66 parent

warehouses ( 21 in North ,19 in South ,16 in west and 10 in East) .This project was

about identifying the problems in providing service and improving the on-time

delivery performance of Chattarpur warehouse. Chattarpur warehouse serves various

dealers of South Delhi. The service time promise to dealers depends on distance from

Chattarpur warehouse. Dealers are divided into routes and accordingly they are given

service hour promise. On time performance of this warehouse was not satisfactory.

In today's competitive environment it is very important to provide satisfactory service

to customers. If the dealers are not getting on time service, company might lose

customer immediately. Good service might induce repeated purchase and help

improve market-share of the company.

The main bottleneck was identified with primary observation of time at all stages of

order delivery and the main problem is found to be inbound warehouse problems

include lack of discipline in dispatching the vehicle and extra time taken between

pick slip generation and dispatching of vehicle and miscellaneous avoidable delays

which happen between processes. So Time study was conducted and value stream

mapping was done so as to remove any non-value adding activity so that the total

cycle time can be reduced. After the project the cycle time was calculated as 57 min

which will help in increasing the OTIF level of the company.

Table of Contents

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Declaration...........................................................................................................................2

Acknowledgement...............................................................................................................3

Executive Summary.............................................................................................................4

1. Introduction...............................................................................................................8

1.1 Profile.........................................................................................................................8

1.2 Values..................................................................................................................11

1.3 Core principles.........................................................................................................11

1.4 Location...................................................................................................................12

1.5 Structure of Paint Industry.......................................................................................13

1.6 Paints Sector Analysis * :.........................................................................................14

2. Literature Review...................................................................................................15

3. Project Details.........................................................................................................18

3.1 Need and Significance of Project Work...................................................................18

3.2 Project Objective......................................................................................................18

3.3 Scope........................................................................................................................18

3.4 Project Deliverables.................................................................................................19

3.5 Limitations...............................................................................................................19

4. Methodology...........................................................................................................20

4.1 Reduction in the lead time to service customer order..............................................20

4.2 Manpower Planning.................................................................................................22

5. Data Collection, Data Analysis & Findings...........................................................23

5.1 Reduction in the lead time to service customer order..............................................23

5.2 Job Description:.......................................................................................................27

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5.3 Time Details:............................................................................................................39

5.4 Root Cause Analysis...............................................................................................40

5.5 Manpower Planning.................................................................................................43

6. Results and Recommendations...............................................................................46

6.1 Suggestions..............................................................................................................46

6.2 Results:.....................................................................................................................47

7. References...............................................................................................................50

Case Studies & White Paper :........................................................................................51

Websites:........................................................................................................................51

List of Illustration

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Figure 1: Akzo Nobel’s Values.........................................................................................11

Figure 2 : Location of AkzoNobel in India.......................................................................12

Figure 3 : Structure of Paint Industry................................................................................13

Figure 4 : Methodology for reduction in lead time............................................................20

Figure 5 : Standard time calculation..................................................................................21

Figure 6 : Methodology for Manpower Planning..............................................................22

Figure 7 : Process Map......................................................................................................23

Figure 8 : Order creation and Invoicing............................................................................24

Figure 9 : Amendment/cancellation of order.....................................................................25

Figure 10 : Dispatch of goods from depot.........................................................................26

Figure 11 : Process Capability of Telecaller......................................................................33

Figure 12 : Process Capability of DCO.............................................................................34

Figure 13 : Process Capability of Picking.........................................................................35

Figure 14 : Invoice Generation..........................................................................................36

Figure 15 : Process Capability of Loading........................................................................37

Figure 16 : As Is Process Map..........................................................................................38

Figure 17 : Fish Bone Diagram........................................................................................40

Figure 18 : Fish Bone Diagram For CRO..........................................................................41

Figure 19 : Fish Bone Diagram For DCO.........................................................................41

Figure 20 : Fish Bone Diagram For DO............................................................................42

Figure 21 : Fish Bone Diagram For Picker........................................................................42

Figure 22 : Average Number of Orders............................................................................43

Figure 23 : Manpower Planning (Monetary Term)...........................................................45

Figure 24 : Heijunka Board..............................................................................................47

Figure 25 : To-Be Process Map.........................................................................................48

Figure 26 : Manpower Graph............................................................................................49

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1. Introduction

1.1 Profile

AkzoNobel N.V. is headquartered in Amsterdam, the Netherlands, and is a Global

Fortune 500 company. AkzoNobel is consistently ranked as one of the leaders on the

Dow Jones Sustainability Indexes with operations in more than 80 countries, our 55,000

people around the world.It is one of the world’s leading industrial companies. It’s

businesses are active in Decorative Paints, Performance Coatings and Specialty

Chemicals.

Decorative Paints

It is the world leader in decorative coatings and home to some of the best-known brands

in the business. Every day, its products protect the buildings and infrastructure around the

globe and promote safety and good health. It bring color to the world, allow it to travel

and communicate, and furnish homes and offices. And, most importantly, it help to create

a more sustainable society.

Performance Coatings

AkzoNobel Performance Coatings is a leader in almost all its businesses. Working from

60 countries, around 30,000 employees produce proven solutions for its customers.

Performance Coatings is divided into the following businesses:

Automotive & Aerospace Coatings

Marine & Protective Coatings

Powder Coatings

Industrial Coatings

Specialty Chemicals

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https://www.akzonobel.com/aboutus/organization/specialty_chemicals/index.aspx

https://www.akzonobel.com/aboutus/organization/performance_coatings/industrial_coatings/index.aspx

https://www.akzonobel.com/aboutus/organization/performance_coatings/powder_coatings/index.aspx

https://www.akzonobel.com/aboutus/organization/performance_coatings/marine_and_protective_coatings/index.aspx

https://www.akzonobel.com/aboutus/organization/performance_coatings/automotive_and_aerospace_coatings/index.aspx

https://www.akzonobel.com/aboutus/organization/performance_coatings/index.aspx

https://www.akzonobel.com/aboutus/organization/decorative_paints/index.aspx

AkzoNobel’s chemicals are essential ingredients in everything from ice cream to asphalt,

soup to soap, and plastics to paper. It is the leader in several markets and sectors –

including pulp and paper, where bleaches are bestsellers. Specialty Chemicals is divided

into the following business:

Surface Chemistry

Functional Chemicals

Industrial Chemicals

Pulp & Performance Chemicals

Akzo Nobel India manufactures and markets a wide range of coatings and specialty

chemicals. It has been present in India for over 100 years and is a significant player in the

Paints industry. Over 1,700 people work at Akzo Nobel India in its five production

facilities, two state-of-the-art research laboratories and 75 warehouses. 8500 plus

retailers retail our products across India.

In the year 2012, three AkzoNobel Group companies in India, namely, Akzo Nobel Car

Refinishes India Private Limited, Akzo Nobel Chemicals (India) Limited and Akzo

Nobel Coatings India Private Limited merged with Akzo Nobel India Limited, thereby

expanding the Company’s presence in a wide range of coatings covering Decorative,

Powder, Marine and Protective, Automotive and Aerospace, Coil and Specialty

Plastics Chemicals.

Unification of Akzo Nobel India's specialty businesses under one umbrella now equips

the company to integrate and consolidate efficiencies while at the same time providing

the company with an enhanced addressable market segment. Akzo Nobel India now has

the capability to address 11 different business segments within the specialty chemicals,

coatings and paints industry. Akzo Nobel India’s Decorative paints business-line

manufactures the Dulux brand of paints for interior and exterior decoration and

protection as well as products for surface preparation and wood care. The emphasis is on

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https://www.akzonobel.com/aboutus/organization/specialty_chemicals/pulp_and_performance_chemicals/index.aspx

https://www.akzonobel.com/aboutus/organization/specialty_chemicals/industrial_chemicals/index.aspx

https://www.akzonobel.com/aboutus/organization/specialty_chemicals/functional_chemicals/index.aspx

https://www.akzonobel.com/aboutus/organization/specialty_chemicals/surface_chemistry/index.aspx

quality, aesthetics and high performance in terms of longevity, washability and stain

resistance, anti-colour fading, water proofing, quicker & easier applicability,faster drying

time, low VOC and odour, and so on. The paints are also free from any added lead,

mercury or chromium compounds, underlining the importance that AkzoNobel gives to

caring for the environment. We have been amongst the first in the Indian industry to

pioneer responsible manufacturing.

This has become a way of life at AkzoNobel –the latest initiative in the area being the

‘Life Saving Rules’ which all employees and Business partners are mandated and

encouraged to follow as Akzo Nobel India’s Performance Coatings business-line

provides some of the most advanced packaging coatings and inks in the market,

protecting everything from food and drinks cans to aerosols and metal closures.

Performance coatings have diverse functions andwe’ve divided them into four

businesses: Industrial Coatings, Powder Coatings, Automotive & Aerospace Coatings,

Marine & Protective Coatings.

The Specialty Chemicals business in India deals in more than 30 products grouped under

organic peroxides, metal alkyls and polymer additives to pharmaceutical companies,

polymer producers, composite and rubber industry.

Akzo Nobel India continues to use its innovation and R&D strength to reduce costs

through process improvements, import substitution, and improving operational

efficiency. Also,we actively participate in bringing ‘greener product technology’ and

introducing coatings application technology to improve the ease of painting.

Globally, it has nearly 4000 active scientists and technologists in AkzoNobel who

perform leading-edge research, product & process development and provide technical

support for our customers and manufacturing operations. The scientists are based in more

than 160 laboratories world-wide.

The India Analytical Centre in Bangalore is an initiative to leverage

AkzoNobel’s global and local resources to provide high quality analytical services to

fulfill the needs of all coatings businesses in India;be it decorative, Industrial, Protective

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or Automotive coatings.Akzo Nobel India has been ranked among the top 500 corporates

in India by India’s leading financial newspaper and magazines i.e. The Economic Times

and Fortune India.

1.3 Values

1. Customer focused – we build successful partnerships with our customers

2. Deliver on commitments – we do what we say we will do

3. Passion for excellence – we strive to be the best in everything we do, every day

4. Winning together – we develop, share and use our personal strengths to win as a

team

Figure 1: Akzo Nobel’s Values

1.3 Core principles

There are certain behaviors that are expect from employees under all circumstances. They

call these non-negotiable behaviors, or core principles. It has defined three – safety,

integrity and sustainability.

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1.4 Location

Figure 2 : Location of AkzoNobel in India.

Source : https://www.akzonobel.com/in/aboutus/locations/ https://www.akzonobel.com

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https://www.akzonobel.com/

https://www.akzonobel.com/in/aboutus/locations/

1.5 Structure of Paint Industry

Figure 3 : Structure of Paint Industry

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1.6 Paints Sector Analysis * :

The paint industry is expected to grow at 12-13% annually over the next five years from Rs 280 bn in FY13 to around Rs 500 bn by FY18. FY13 was a challenging year for the industry as a whole due to subdued demand across key sectors and rising inflation.

The unorganised sector controls around 35% of the paint market, with the organised sector accounting for the balance. In the unorganised segment, there are about 2,000 units having small and medium sized paint manufacturing plants. Top organised players include Asian Paints, Kansai Nerolac, Berger Paints and ICI.

Demand for paints comes from two broad categories:Decoratives: Major segments in decoratives include exterior wall paints, interior wall paints, wood finishes and enamel and ancillary products such as primers, putties etc. Decorative paints account for over 77% of the overall paint market in India. Asian Paints is the market leader in this segment. Demand for decorative paints arises from household painting, architectural and other display purposes. Demand in the festive season (September-December) is significant, as compared to other periods. This segment is price sensitive and is a higher margin business as compared to industrial segment.Industrial: Three main segments of the industrial sector include automotive coatings, powder coatings and protective coatings. Kansai Nerolac is the market leader in this segment. User industries for industrial paints include automobiles engineering and consumer durables. The industrial paints segment is far more technology intensive than the decorative segment.

The paints sector is raw material intensive, with over 300 raw materials (50% petro-based derivatives) involved in the manufacturing process. Since most of the raw materials are petroleum based, the industry benefits from softening crude prices.

* http://www.equitymaster.com/research-it/sector-info/paint/Paints-Sector-Analysis-Report.asp

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http://www.equitymaster.com/research-it/sector-info/paint/Paints-Sector-Analysis-Report.asp

2. Literature Review

Value Stream Mapping :

Value stream mapping is a lean management technique which is used for analyzing the

current state of the process and then incorporating any improvements and removing the

non-value adding activities so as to reach the desired to be process. It was developed by

Taiichi Ohno while working in Toyota in 1960’s and 70’s. VSM is used to identify any

wasteful activity and how it can be removed so that flow of the process is made more

fluid. VSM is a visualization tool which helps in pinpointing the seven wastes which

may occur in the process namely Defects, Overproduction, Transportation, Waiting,

Inventory, Motion, and Processing. By using VSM technique (Belokar et al. , 2012) in

automobile industry and mapping they took the inner wheel housing for the case study

and by modifying the layout and welding operation they were able to improve production

by 44%. (Dinesh and Prabhukarthi ,2013) utilized VSM in pump manufacturing industry

and were able to reduce production lead time from 1896 mins to 1838 mins.

There are five basic steps of VSM: First the product or process is identified for which the

improvement is to be made, then the current flow is observed and as is mapping of the

process is done which means noting down how the process currently takes place, then

confirmation of the process is done i.e by physically going to the warehouse or

production facility where the process is occurring as it is very important that the process

is noted down as accurately as possible , fourth the improvements and non-value adding

activities are identified and removed so that the “to-be” process map is made keeping in

mind that any avoidable delay or waste should be removed and finally the new future

state map is implemented.

In the words of Ohno (1988) -

“All we are doing is looking at the time line from the moment the customer gives us an

order to the point when we collect the cash. And we are reducing that time line by

removing the non-value-added wastes.”

Lead Time :

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Lead time is the delay between the time when the customer makes the request for a

particular product or service and by the time he receives it. Lead time reduction is one of

the major area of the Toyota production system. Cycle time is different from lead time ,

cycle time is the time from which the work on a particular process or product starts and

end when the product or process is delivered. (Sehgal et al. , 2006) noted that –“ In the

Indian Paint company, customer satisfaction is identified as a key performance indicator

(KPI). The company has defined customer satisfaction in terms of order fill rate with

accuracy. The company monitored its performance in Customer Satisfaction through two

process measures:

(1) OTIF: On Time In Full.

(2) OSR: Order Satisfaction Ratio.

OTIF measures the performance of the business against fulfilling a complete customer

order (In Full) on the desired date (On Time). OSR measures customer order satisfaction

at the stock keeping unit (SKU) level .

For the paint industry it becomes very important to decrease its lead time as much as

possible so that the dealers remain loyal to them and they can increase their profit margin

and market share.

(Treville a et al. , 2004) suggested that managers in many companies believe that reducing

lead times is difficult and expensive, and that information systems will make lead time

reduction easier [4]. Lead time measures the time it take from arrival of order to the time

when the goods are delivered whereas cycle time measures the time which start from the

instant the production of the product start to the time it is delivered to the customer.

Time Study:

(Kanawaty, 1992) define time study as: Time study is a work measurement technique for

recording the times of performing a certain specific job or its elements carried

out under specified conditions, and for analysing the data so as toobtain the time

necessary for an operator to carry it out at a defined rate of performance.

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http://www.sciencedirect.com/science/article/pii/S0272696303000792#AFF1

http://www.sciencedirect.com/science/article/pii/S0272696303000792

Stop watch time study is the basic tool for calculating the standard time for a particular

process or activity. Three basic equipment’s required for the time study are Stop watch,

study board, and time study forms. Care must be taken that the worker is informed

beforehand about the time study so that he perform at his normal pace.

(Kanawaty, 1992) explains the steps involved in time study:

(1) Obtaining and recording all the information available about the job, the operative and

the surrounding conditions, which is likely to affect the carrying out of the work.

(2) Recording a complete description of the method, breaking down the operation into

"elements".

(3) Examining the detailed breakdown to ensure that the most effective method and

motions are being used, and determining the sample size.

(4) Measuring with a timing device (usually a stop-watch) and recording the time taken

by the operative to perform each "element" of the operation.

(5) At the same time, assessing the effective speed of working of the operative relative to

the observer's concept of the rate corresponding to standard rating.

(6) Extending the observed times to "basic times".

(7) Determining the allowances to be made over and above the basic time for the

operation.

(8) Determining the "standard time" for the operation.

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3. Project Details

3.1 Need and Significance of Project Work

1. Reduction in the lead time to service customer order: Currently the order placement to delivery time is of 4 hours (Local shipments) but current

DOT level is 89% which suggest that dealers are not getting their shipments on time

which is causing dissatisfaction among them and forcing them to change suppliers and

hampering the market share of AkzoNobel India Pvt Ltd.Mapping and elimination of

Non-Value Adding activities so that overall DOT level is improved.

2. Manpower Planning:

Currently the standard time and cycle time for the process are not calculated which makes

it very difficult to optimize the manpower requirement and result in short staffing and

over staffing. As company has to hire contractual workers on peaking days and those

days with high demand and orders so it become very important to have time standards for

the process.

3.2 Project Objective

The Objectives of the Project were:1. As is mapping of Order dispatch process which happens in the warehouse and then

suggesting the “To-Be” process by carefully examining each and every activity and

eliminating any non-value adding activity which result in increasing the total cycle time.

2. To calculate the optimal number of workers required by calculating the standard time

of the picking activity and then planning the hiring of contractual workers keeping in

mind the order pattern.

3.3 Scope

1. Value stream mapping of the Order to Dispatch process.

Value stream mapping was done by first mapping the as is process by carefully

examining the activities happening in the Chattarpur Depot.Non Value Adding activities

were identified and possible reasons were examined. Any avoidable delay in the process

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was also noted down.After carefully examining the process the optimal To Be process

was suggested keeping in mind any constraints and unavoidable delays .

2. Manpower Planning.

Stopwatch time study was conducted for each and every process which contributes from

order to dispatch to identify bottleneck & to calculate cycle time. After that allowances

were added to the observed time so as to calculate the standard time. Order pattern of

previous four months were studied and consequently optimal number of pickers required

were calculated for the warehouse.

3.4 Project Deliverables

1. Standard time and Cycle time to be calculated for the process taking into account the

allowances and variability.

2. “As is” mapping of processes, suggesting the improvements in the processes and

clearly defining the “To Be Process”.

3. Identifying and removing any special causes which increase the total cycle time of the

process.

3.5 Limitations

Calculated cycle time is subjected to change. If there will be improvement in the

layout or method of doing the existing process then cycle will change.

The order pattern depends upon the previous four months and its accuracy is

limited.

Any change in policy of company can change lunch/break time, which will

change calculated utilization.

Increasing the permanent worker or contractual worker will change the standard

time of the process.

If the change in SAP system are implemented then the standard time will change.

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4. Methodology

4.1 Reduction in the lead time to service customer order

Figure 4 : Methodology for reduction in lead time.

First the standard process and job responsibilities were studied from the company’s

standard manual for depot operations then the actual operation was studied by visiting

Chattarpur depot and noting down how exactly the process was happening and if there

were any ambiguities from the standard procedure. Time study was conducted by noting

the time of each activity namely telecalling , punching the order, picking of the

material ,invoice generation, loading and dispatch. Workers were informed beforehand

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that their time will be noted and they should work at the normal pace so that standard

time is as accurate as possible. Process capability for each process was calculated using

Minitab which helped in finding special causes of error which may make the process out

of control. After collecting the data root cause analysis was done so as to pinpoint the

causes of delays and wastages. After that Future state map was constructed keeping in

mind and unavoidable delay which may occur. Standard time for the activities were

calculated keeping in view the different allowance.

Figure 5 : Standard time calculation.

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4.2 Manpower Planning

Figure 6 : Methodology for Manpower Planning.

Order data of previous 4 months was collected and average number of order per day was

calculated. Standard time for picking activity was calculated previously and it was used

to calculate the total number of pickers required, an excel template was made for the

same. Salary of the permanent labour and contractual labour was used to calculate the

optimal number of pickers which would keep the total spent to the minimum.

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5. Data Collection, Data Analysis & Findings

5.1 Reduction in the lead time to service customer order

First the process was understood by reading the Standard Operating Manual for Depot

Operations, different job descriptions and their roles and responsibilities were also

understood respectively.

Figure 7 : Process Map

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Requirement of products from dealers/

Sales OfficerMarket

demand of products

StartIs sales order placed

directly by dealer or by TSI/SO ?

Place telephonic order to Customer Relation Officer at depot

Dealer

Sequentially fills a serialized customer order form for the

dealer¶s order and forward to Depot Computer Operator

Customer relation officer

Obtain a physical or a telephonic order from dealer and intimate to

Customer Relation OfficerSave and generate sales order

number in Saturn

Dealer

TSI/SO

Sales Officer Depot Computer Operator

A

Sales order is booked in saturn with reference to mandatory

customer order number

Depot Computer Operator

Does sales order pass the blocking

criteria ?No

Stop

Sales order is blocked in saturn

Unblocking of blocked sales

order

System

A

Yes

Create delivery order in saturn

Depot computer operator

Generate pick slip and take its print out for confirmation of

availability of goods by dispatch officer


Are goods mentioned in pick list available ?

Delivery order quantity manually adjusted to the quantity

available

Pick slip is confirmed for the physical availability of all goods

and movement of goods to loading bay

Dispatch Officer

Dispatch Officer

No

Yes

Finished goods inventory are reduced by posting ³goods

issue´ in saturn


Print three copies of invoices and forward to dispatch officer


Figure 8 : Order creation and Invoicing.

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Order creation and Invoicing

Request from dealer for amendment of

sales order

Open sales order in saturn

Start

Request for amendment/ cancellation of sales order

is received or mistake/ error in order is identified

Customer Relation Officer

Is it an amendment of the sales order ?

Cross check changes with dealer, subsequently approve amendments to be made in

order

CFA Manager

YesMake required amendments

to the ordered quantity in saturn as per approval


Old sales order is cancelled and a new sales order is raised as

per the new criteria

No


Reason for cancellation of sales order is mentioned at the

time of cancellation of sales order in saturn


On a pre-defined periodicity, an MIS is prepared for all

cancelled sales orders stating therein the reasons for

cancellation

Regional Logistics Manager

New sales order in saturn

MIS for cancelled sales order

Amended sales order

Stop

Mistakes/Errors in sales order

Figure 9 : Amendment/cancellation of order

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Amendment/cancellation of order

Dispatch of goods from depot

Three copies of

invoices

StartTinting of goods are done as per

the dealer¶s order and invoice goods

Dispatch Officer

Entry of vehicle is done in gate register

Security Gaurd

Goods are loaded manually in the presence of Security Guard and

Dispatch Officer

Dispatch Officer

Lorry receipts and local way bill

Transporter prepares the lorry receipt and submits all documents to dispatch officer and security guard

Lorry receipt and other documents are to be handed over to the

person who delivered goods at transporter¶s warehouse

Two copies of invoice along with way bill are handed over to vehicle

driver

Vehicle move out from the gate and an out time and date are entered in

out register

Files the acknowledged copy of invoice as a proof of delivery of

material

Transporter

Transporter

Security Gaurd Dispatch Officer

Dispatch Officer

Vehicle driver submits the acknowledged copy of invoice to

dispatch officer

Transporter

Stop

One copy of lorry receipt kept as proof of

dispatchUpdated gate registerAcknowledged copy of invoice

Is sales local or upcountry ? Upcountry

Acknowledgement of tempo driver to be taken on invoice copy and

local way bill

Dispatch Officer

Local

Is dispatch direct from depot or from the transporter¶s

warehouse ?Direct

Transporter¶s warehouse

Figure 10 : Dispatch of goods from depot

5.2 Job Description:

Warehouse Manager

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Reporting to : Regional Logistics Manager –ANI Akzonobel India Limited

Overall Job responsibility (Purpose of the job ) :

To ensure operations related to customer service, stock management, slobs management

are carried out efficient manner. Depot manager is also responsible for ensuring

compliance to all HSE&S and statutory requirement in depot.

Details of Job Responsibilities :

1. To run the day to day operations at the Warehouse as defined in the SOP and as

per the service charter.

2. To be responsible for the revenues and expenses in the Warehouse.

3. Providing of timely MIS to Regional office / HO in the predetermined formats.

4. To maintain good housekeeping standards.

5. Responsible for the safety of the goods and personnel in the Warehouse.

6. To get necessary approvals from respective authorities whenever needed as

mentioned in SOP.

7. To check e-mails on a daily basis and to do necessary correspondences.

8. To ensure 100% stock accuracy level in the Warehouse .

9. Maintain all quality records in the Warehouse .

10. To interact with the Customer to enhance cordial relations and understand the

operational gaps if any; in the service deliverables..

11. Regularly inspecting the dispatch supervisor and casual labours adhering to

HSE&S norms and policy.

12. To plan out cluster mapping of dealers and ensuring vehicle adherence as per

service charter.

13. Optimise vehicle utilization during month end and scheme closing days.

14. To identify training needs and provide the required training to all warehouse

staff.

15. Keep a track of service charter adherence and conducting regular feedback from

the Top 15 dealers.

NITIE, MUMBAI

16. Maintaining Log Book and redressal register of all service related issues.

Telecaller

Overall Job Responsibility ( Purpose of the job ) : Perform outbound calls in a

scheduled manner to A & B Class customers and fetch orders placed by them. Respond

appropriately to inbound calls ,minimize call drops and timely closure of open queries

from Customer (internal and external)

Details of Job Responsibilities:

1. To call up A & B-Category dealers as per the schedule given by Area head.

2. To collect/receive orders from dealers/Sales team and fill Delivery Order form.

3. To maintain the Calls Register and regularly updating the same to Area head and

Regional office.

4. To inform all the dealers about the scheme and updating the latest information to

them as per the instructions of respective Area head.

5. To provide all the information related to blank Cheques and receipting of the same to

dealer and respective Sales representative.

6. To flushback the unserviced skus to dealer/Sales representative immediately upon the

confirmation of receipt from computer operator/dispatch supervisor.

7. To collect information related to dispatch of stocks/gifts of any previous sales order

from dispatch register and informing the concerned dealers on request.

8. Delivery confirmation of all the upcountry dealers every day/ weekend and updating

the same in Stock out (invoice) register.

9. To update the dealer about the Credit Invoice/notes regularly.

10. To receive all the queries relating to service levels from dealer/Sales representative

and handing over to Depot Mgr for redressal.

11. Providing cheque bouncing information to Dealer and respective Sales representative.

Floor supervisor

NITIE, MUMBAI

Overall Job Responsibility : To supervise the operation in the Warehouse like receipts,

storing and dispatches, coordination with depot Manager for arranging vehicles for local

and upcountry deliveries and ensuring the updation and retention of all quality

documents.


1. Maintenance of Bin Cards.

2. Maintenance of Green card and Red card at the warehouse.

3. Proper stacking, storing and aisle space inside the warehouse as per layout.

4. To ensure safety & security of goods & personnel at warehouse.

5. Updation and maintenance of all quality records as per the retention norms.

6. To supervise the packing & dispatch activity after the picking operation.

7. To pick material from warehouse mentioned in the pick list as per FMFO.

8. Flushback the information related to unserviced skus to teleoperator and computer

operator before invoice finalization.

9. To regularly inspect the SND stocks and segregate the same if found in slob

conditions.

10. Ensuring the stocks are lying at the specified storage location and within the aisle

area.

11. Proper marking of invoice reference no. on the cans/cartons/drums meant for delivery

to dealers.

Computer Operator

Overall Job Responsibility: To input customer orders received in the ERP software

(SAP)


1. To collect customer order from Tele sales operator

2. To punch the order in the system

NITIE, MUMBAI

3. To take print out of Pick Slip & after checking hand over the pick slip document to

dispatch officer

4. To release final invoice after confirmation of picking by Dispatch officer & check the

printout with order

5. To hand over the final invoice to Dispatch officer

6. To collect the written cheque from Accounts officer.

7. To punch the cheque details (Cheque date, cheque no, amount, bank name, invoice

no, credit note no)

8. To print “Pay-in-slip” (6 copies) {5 copies to Bank, 1 copy at depot as acceptance

copy. Next day acknowledgement copy is received}

9. To hand over “Pay-in-slip” and cheque to Accounts officer

10. To punch in the debit note details incase if the Cheque bounces

11. To handover the debit note to Documentation officer for couriering to respective

customer

12. To handover the bounced cheque to Accounts officer To segregrate and dispatch

Debit notes, Credit notes to respective dealer.

13. To collect Local ,Upcountry and STI acknowledge invoices and file serially and

month wise.

14. To inform the pending acknowledgements to Transport officer for doing follow ups.

15. To send daily Performance Matrix report to all concerned without fail.

Data Entry Operator - (Receipts)

Overall Job Responsibility : To input material receipt in the ERP software (SAP)


1. To collect STI / Invoice from receipt supervisor after unloading.

2. To punch in the receipts in the system.

3. To print OTR (Out Turn Report).

4. To update OTR register

NITIE, MUMBAI

5. To prepare damage & discrepancy report

6. To collect the transfer orders from ANI -Regional Logistics Executive

7. To punch in the orders in the SAP system

8. To print Stock Transfer order pick slip

9. To print final STI basis confirmation from dispatch officer

10. To hand over the final STI for shipment to required depot

Receipt Supervisor

Overall Job Responsibility : To carry out the receipts & stock transfer in the warehouse


1. To collect the inward documents from the security.

2. To arrange the vehicle at unloading bay.

3. To unload the material at Staging area , incase if the materials are not binned directly

to locations.

4. To check the physical quantity of the material with document quantity

5. To coordinate with floor supervisor for stacking and binning in locations

6. To pass on the document to data entry operator for OTR generation.

Pickers:

Overall Job Responsibility :To carry out picking & packing activities in the warehouse


1. To receive pick slip from P & D supervisor

2. To check the FMFO location of the material

3. To pick the material as per the sample invoice & mark on invoice wherever the

materials are not available.

4. To place materials at the staging area -I and a copy of the sample invoice to be kept

on the particular lot. Also proper marking to be done to distinguish the invoice

material

NITIE, MUMBAI

5. To update quantity, invoice no, location in the respective

6. To mark “Picking Confirmed” on the pick slip & handover the same to local P & D

supervisor after keeping the material in staging area.

Security Guard

Overall Job Responsibility :To carry out security checks & visitor access control in the

depot to prevent loss of stock/assets


1. To check the visitor credentials.

2. To have the visitor go thru the access checkpoint board

3. To get visitors acknowledgement in the entry register along with In & Out time

4. Issue ID & Visitor slip to the visitor

5. Check for Mobile /Matchbox /Cigarette deposit with security.

6. Advise Alarm bell & Assembly point to the visitor

7. Direct office visitors to office directly

8. Maintain Generator log book

9. Maintain Stock outward register

10. Do a Pre-loading check for the vehicles reporting at the depot

11. Vigil of the Depot area

12. Courier documents handling

13. Head count maintenance for the visitors & during emergency evacuation.

After that data for each and every process was collected by time study.

Telecaller

NITIE, MUMBAI

37332925211713951

30

15

0

Samp

le M

ean

__X=16

UCL=31.34

LCL=0.66

37332925211713951

20

10

0

Samp

le Ra

nge

_R=8.16

UCL=26.65

LCL=0

3530252015

40

25

10

Sample

Value

s

6050403020100

LSL 0USL 60

Specifications

LSL USLOverallWithin

40200

StDev 8.148Z.Bench 1.96Cpk 0.65PPM 24787.70

WithinStDev 8.003Z.Bench 2.00Ppk 0.67Cpm *PPM 22795.15

OverallOverall

Within

Specs

Process Capability Sixpack Report for MeanXbar Chart

R Chart

Last 25 Subgroups

Capability Histogram

Normal Prob PlotAD: 3.375, P: < 0.005

Capability Plot

Figure 11 : Process Capability of Telecaller

NITIE, MUMBAI


37332925211713951

50

25

0

Sam

ple

Mea

n

__X=28.09

UCL=58.13

LCL=-1.95

37332925211713951

40

20

0

Sam

ple

Rang

e

_R=15.97

UCL=52.19

LCL=0

3530252015

50

30

10

Sample

Valu

es

120100806040200

LSL 0USL 120

Specifications


9060300



OverallOverall

Within

Specs


R Chart

Last 25 Subgroups



Capability Plot

Figure 12 : Process Capability of DCO

Picking

NITIE, MUMBAI

181161141121101816141211

100

50

0

Sam

ple

Mea

n

__X=31.8

UCL=53.1

LCL=10.5

181161141121101816141211

100

50

0

Sam

ple

Rang

e

_R=11.3

UCL=37.0

LCL=0

200195190185180

35

25

15

Sample

Val

ues

1059075604530150

LSL 0USL 90

Specifications


12080400



OverallOverall

Within

Specs

1

11

1

1

11

111111

1


R Chart

Last 25 Subgroups



Capability Plot

Figure 13 : Process Capability of Picking

NITIE, MUMBAI

Invoice Generation

121110987654321

2000

1000

0Tim

e (s

ec)

__X=640

UCL=1881

LCL=-601

121110987654321

4000

2000

0

Tim

e (s

ec)

_R=660

UCL=2156

LCL=0

12108642

4000

2000

0

Observations

Tim

e (s

ec)

40003000200010000

LSL 20USL 1000

SpecificationsLSL USL

10000100010010

Location 5.895Scale 0.4443Z.Bench 1.31Ppk 0.10PPM 94329.53

Overall Overall

Specs

Process Capability Report for Invoice GenerationXbar Chart

R Chart

Last 12 Subgroups


Loglogistic Prob PlotAD: 0.911, P: 0.009

Capability Plot

Figure 14 : Invoice Generation

Loading

NITIE, MUMBAI

121110987654321

2000

1000

0

Tim

e (s

ec)

__X=888

UCL=1612

LCL=163

121110987654321

3000

1500

0

Tim

e (s

ec)

_R=385

UCL=1258

LCL=0

12108642

4000

2000

0

Observations

Tim

e (s

ec)

3000200010000

LSL 200USL 1500

Specifications


400020000



OverallOverall

Within

Specs

1

1

Process Capability Report for LoadingXbar Chart

R Chart

Last 12 Subgroups



Capability Plot

Figure 15 : Process Capability of Loading

NITIE, MUMBAI

Figure 16 : As Is Process Map

NITIE, MUMBAI

5.3 Time Details:

Time details were noted for each activity and standard time was calculated for the picking

activity.

CRO DCO

Picker

NITIE, MUMBAI

Mid Month 14.86End of Month 18.19

Average Call time per SKU (Sec)Mid Month 31.34End of Month 21.85

Average Call time per SKU (Sec)

Contract 00:00:38Permanent 00:00:31Overall 00:00:32

Average Picking time per Unit (Sec)

Mid Month 00:00:33End of Month 00:00:28

Average Picking time per Unit (Sec)Manual 00:00:37Equipment 00:00:29

Average Picking time per Unit (Sec)

5.4 Root Cause Analysis

Root Cause Analysis was done so as to remove any avoidable delay and any Non-Value

adding activity.

Figure 17 : Fish Bone Diagram

NITIE, MUMBAI

Figure 18 : Fish Bone Diagram For CRO

Figure 19 : Fish Bone Diagram For DCO

NITIE, MUMBAI

Figure 20 : Fish Bone Diagram For DO

Figure 21 : Fish Bone Diagram For Picker

NITIE, MUMBAI

5.5 Manpower Planning

Average number of order per day were calculated taking into account previous 4 month

data. After that optimal number of permanent pickers were calculated taking into

consideration both the monetary factor and Time standards.

Figure 22 : Average Number of Orders

Standard Time was calculated for the picking activity and then personal , fatigue and

delay allowances were added to it. Assuming each order to be of 200 litres the total

number of daily order was calculated and number of order each picker can pick in a day

was calculated. Given the monthly order volume of Chattarpur depot as 220 KL the

required number of picker was found to be 4.

NITIE, MUMBAI

Calculation:

Average Number of Orders Daily = (220*1000)/(200*26) = 43

Average Number of hours for unloading = 3

Number of SKU in one order = 6

Total Available time (Two 15 min break ) = 4.5 Hours

Time required to pick one sku = 31 sec

Personal Allowance = 5 %

Fatigue Allowance = 10 %

Delay Allowance = 5 %

Standard Time To pick One Order =3 min 43 sec.

Unavoidable delay between orders = 1200 min

Total number of orders one picker can pick daily = 11.43

Number of pickers required = 43/11.43 = 4

After talking to Warehouse manager it was learnt that the pay of the permanent labour

was Rs. 8500 per month and the contractual labour was available for Rs. 400 per day. So

taking into account these two costs and the average daily order pattern least spent was

calculated.

NITIE, MUMBAI

Number of

Permanent

Workers

0 1 2 3 4 5 6 7

Total

Spent

57600 55700 53800 51900 51200 53700 57800 63900

Figure 23 : Manpower Planning (Monetary Term)

NITIE, MUMBAI

6. Results and Recommendations

6.1 Suggestions

After carefully examining the Root Cause relationship diagram following suggestions

were made so that the avoidable delay can be eliminated and the whole process can be made more streamlined and can be completed in a lesser time so that the OTIF level is increased.

Designation Cause Suggestion

CRONo SAP access

Provide view access to certain modules of

SAP so that he can tell the material

availability, and order movement to

dealers.

No Integrated

information system

DCO

Actual Vs Book

Inventory VarianceSAP record should be updated regularly

and accurately.

Invoice / Pickslip both being

prepared in the same office

Relocation of One DCO in the Dispatch

section.

No set time for FWR

FWR should be made during 10-11 and 5-

6 only (as number of orders are less during

that period) and dealers should be notified

during that period only.

Responsibility of some

task is not defined. Segregating Duties of two DCO’s

DO

Pick Slip return

time is not entered

WM should make it sure that it is followed

and during audit it should be checked.

Negligence (Sending wrong

product)

Product Batch Number should be checked

during loading

NITIE, MUMBAI

No training given to

Contractual labour Needs to make arrangement for training.

Picker

Lack of training

(Contractual)

Needs to make arrangement for training.Not enough knowledge

about the

products

There is no

Plant layout Chart

Placing a Warehouse Layout Diagram in

the loading bay area.

No Product Signs are placed

in warehouse

Placing signboards inside the warehouse

with product codes

Absenteeism

WM needs to need to make contingency

plans incase of absent labours

General Shortage

of labour

Process

Waiting time between

processes which is a major

NVA

Buzzer/ Alarm System to be implemented

Heijunka box can be implemented for

streamlining the whole process and WM

needs to make sure that process

smoothening is achieved

NITIE, MUMBAI

Figure 24 : Heijunka Board.

6.2 Results:

1. Currently the average time for the process is 2 hours 23 min and the standard time for

the process calculated is 57 min keeping in view the unavoidable delays and

allowances so a reduction of around 60 % is achieved.

NITIE, MUMBAI

Figure 25 : To-Be Process Map

2. The standard time for picking the order is 3 min 43 sec. Permanent worker took 22%

less time than contractual worker in picking an order. While using equipment for the

picking picker took 22% less time.

3. The To-be process is defined and relevant suggestions are suggested to make the

process more streamlined and quick so that the increased OTIF level is achieved and

customer satisfaction is increased.

4. The Optimal number of permanent worker calculated is 4 considering both the time

standards and monetary terms which will result in saving 4800 man hours annually.

NITIE, MUMBAI

Figure 26 : Manpower Graph.

NITIE, MUMBAI

7. References

1. Belokar, R.M, Kharb, S.S.,Kumar,V., An Application of Value Stream Mapping

In Automobile Industry: A Case Study, International Journal of Innovative

Technology and Exploring Engineering 1 (2012), 231-235.

2. Dinesh, J., Prabhukarthi, A., Reduction of Lead time using value stream mapping

in pump manufacturing industry , National Conference on Manufacturing

Innovation Strategies & Appealing Advancements, (2013) 1-6.

3. Sehgal, Sanjay, Sahay B.S., Goyal, S.K., “Reengineering the supply chain in a

paint company”, International Journal of Productivity and Performance

Management 55 (2006), 655-670.

4. Treville a , S., Shapiro b , D. R., Hameri a , P. A., From supply chain to demand

chain: the role of lead time reduction in improving demand chain performance,

Journal of Operations Management 21 (2004), 613-627.

5. White, M., García, J.L., Hernández, J., and Meza J., Cycle Time Improvement

by a Six Sigma Project for the Increase of New Business Accounts, International

Journal of Industrial Engineering, 16(3),(2009) 191-205.

6. Kanawaty, G., Introduction to work study, International labour organization 4,

Geneva, (1992) 236-337,489-498

7. Mohanty, R.P. and Deshmukh, S.G. Reengineering of a supply chain management

system: a case study, Production Planning & Control 11,(2000), 90-104.

8. Rizzi, A., Zamboni, R., “Efficiency improvement in manual warehouses through

ERP systems implementation and redesign of the logistics processes”, Logistics

Information Management 12 (1999), 367-377.

9. Petersen, C., Siu, Charles, Heiser D.R., “Improving order picking performance

utilizing slotting and golden zone storage”, International Journal of Operations &

Production Management 25 (2005), 997-1012.

NITIE, MUMBAI

Case Studies & White Paper :

Asian Paints Gaining a 360-Degree View of the Customer.

Top 10 Losing Warehouse Strategies And How To Avoid Them- Motorola.

Optimizing Warehouse ROI – Accellos.

IARW Guide to Effective Warehouse Operations.

Websites:

1.https://www.akzonobel.com/in/aboutus/locations/

2. https://www.akzonobel.com

3.http://www.equitymaster.com/research-it/sector-info/paint/Paints-Sector-Analysis-

Report.asp

4.http://nptel.ac.in/courses/Webcourse-contents/IIT-ROORKEE/INDUSTRIAL-

ENGINERRING/

NITIE, MUMBAI







http://nptel.ac.in/courses/Webcourse-contents/IIT-ROORKEE/INDUSTRIAL-ENGINERRING/

http://nptel.ac.in/courses/Webcourse-contents/IIT-ROORKEE/INDUSTRIAL-ENGINERRING/

https://www.akzonobel.com/

https://www.akzonobel.com/in/aboutus/locations/

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