Client Overview
TAFE is a US$750 million tractor major incorporated in 1960 at Chennai in India, in
collaboration with Massey Ferguson (now owned by AGCO corporation, USA). TAFE acquired the Eicher tractors business, its engine plant at Alwar and transmissions plant at Parwanoo through a wholly owned subsidiary “TAFE Motors and Tractors Limited. A member of the Amalgamations Group of Chennai, this company has four plants involved in tractor manufacturing at Mandidheep (Bhopal), Kallidaipatti (Madurai), Doddabalbur (Bangalore) and in Chennai.
SCM Initiative
TAFE implemented SAP solution in 1999 and then implemented a supplier portal in 2001. In order to overcome some of the SCM issues, it looked for vendors who can provide the solution. It evaluated SAP APO and Planvisage SCM solution. After a thorough analysis, it went ahead with Planvisage solution. The implementation started in October 2007 and completed by January 2008.
Pain Points
Some of the points points were
• SAP MRP is not able to consider vendor capacity, transport warehouse stock and alternate part numbers
• Buyers not sure which material should be expedited based on next week production
• Forward visibility is only one or two days. This gives a very short time to get the material from supplier with long lead time
Planvisage Solution
Planvisage material planning solution was used to take care some of the deficiency of SAP MRP. Here the solution was integrated with SAP to pull relevant data like BOM, Inventory, Supplier and Demand. Some of the data which is not availabe in SAP was maintained in Planvisage soluiton itself. This included transport warehouse stock, supplier capacity and supplier calendar.
Report Developed
Some of the reports developed were
Supplier Capacity
It highlights exception when schedules of a part for all plants put together exceed monthly capacity of a vendor.
Benefits
• Plan for capacity enhancement for existing resource
• Develop alternate source where required
• Optimize allocation of share of business based on the capacities
Parts without Approved Source
It highlights exceptions where there is no regular series scheduling agreement and share of business for plants and hence MRP cannot plan for the material
Benefits
• Initiate procurement of ADD parts as per planned production requirements
• Ensure transfer of parts to regular series procurement
• Eliminate discrepancies between BOM/PO/Usage
Inventory Guidance Value
It shows expected closing inventory value for any given day based on opening inventory, expected receipts and expected consumption
Benefits
• Maintain optimum inventory levels
• Improve inventory turns
• Avoid block up of funds in non-productive assets
Late Delivery
It highlights exceptions where the latest available date is greater than earliest required date for a part/vendor combination based on lead time
Benefits
• Check for in-transit / warehouse inventory
• If not available, source from vendor with less lead time
• Change to faster mode of transport
• Get stock from alternate plant if available in excess
ECM Items
It plans for alternate parts in place of deletion parts
Benefits
• Initiate procurement of ECM addition parts in a planned manner
• Reduce / slow down procurement of deletion parts
• Avoid / minimize obsolescence
Final Procurement
It shows net quantity to be procured after offsetting warehouse inventory as on planning day (total scheduled – warehouse stock = net scheduled quantity
Benefits
• Ensure liquidation of warehouse stock and avoid pile up
• Caution vendors against dumping
Warehouse Stock Clearance
It provides date-wise clearance plan of warehouse inventory on FIFO basis based on planned production
Benefits
• Facilitate warehouse clearance in a plannedmanner on FIFO basis
In-house Surplus Quantity
It shows the surplus in-house inventory over and above the expected consumption for planned production
Benefits
• Avoid further procurement till stock deplete
• Communicate to vendors to slow down supplies
• Block POs if stocks are very high covering few months (review such blocks periodically and remove block as and when necessary)
Liquidation of Stock
It shows surplus in-house inventory over and above the expected consumption for planned
production with details of requirement of same item in alternate plants as per their production
plan.
Benefits
• Liquidation surplus stocks
• Reduce in inventory
• Avoid premium freight if same is available in other plants
Zone Wise Exception
Provide alert regarding expected supply disruptions from a particular zone due to festivals, monsoon etc
Benefits
• Plan and procure in advance
• Caution the vendors in advance
Q Block Items
It highlights exceptions of Q Block items at planning stage itself
Benefits
• Plan for quality improvement of existing source add / or develop alternate source
• Arrive at a consensus between IPC/SQA/QCD whether to product as per production plan of affected models or cancel the plan
Custom Expiry for Exports
Provide details of custom expiring parts during planning itself
Benefits
• Ensure custom availability for month M, M+1 and M+2 procurement plans
Integration to SAP
Data from SAP is downloaded through ABAP scripts in flat files in a shared folder. This data is uploaded into Planvisage through the import utility tool. It accesses the flat files from the shared folder and updates in Planvisage database.
Testimonials
After conducting Planvisage planning run based on 1st April 2009, we see the following
• Inactive Inventory has been reduced by 56% in Madurai and 37% in Madurai Exports.
• Inhouse Surplus stocks (where available stocks cover next 45 days demand plus their safety stock demand) has been reduced by 45% in Madurai and 19% in Madurai Exports. These figures show excellent performance by Madurai operations in both above areas helping us to bring down our inventory levels. We are liquidating lot of fat stocks and controlling inactive parts too.
- Mr. Padmanaban, Senior Manager (Materials)