Final Presentation Of Mosc1

MANAGING OPERATIONS AND SUPPLY STRUCTURES

Presented By: Rajesh Kumar 21043084 Donny Koei Jeegar Merchant Bilal Nawaz Khan

21041045 20446183 21036361

SELECTION OF INDUSTRY • CAR INDUSTRY • COMPANIES

1) SUZUKI MOTOR COMPANY LIMITED [COUNTRY - PAKISTAN] 2) BMW Group [COUNTRY - GERMANY]

AREAS EXPLAINED SUPPLY STRUCTURE MATERIALS MANAGEMENT

Pak. SUZUKI MOTOR COMPANY  Pak. Suzuki Motor Company Limited (PSMCL) was incorporated as a public

limited company in August 1983

 Joint Venture Agreement executed between Suzuki Motor Corporation of

Japan (SMC) and Pakistan Automobile Corporation (PACO)

 In September 1992 the company was privatized and placed directly under

the Japanese Management. At the time of privatization SMC increased its equity from 25% to 40% Subsequently it has increased its equity to 73.09% by December 31,2001.

 The Bin Qasim Plant’s production capacity is 50,000 vehicles per year

(1992). The production capacity was further enhanced to 80,000 vehicles per year (2005), 120,000 vehicles (2006) and 150,000 vehicles per year (2007). In June 2008, 740,828 vehicles production was achieved.

 It is the most modern automobile manufacturing plant in the country.  Pak. Suzuki always endeavours to the development of society by increasing

motorization industrialisation, creating job opportunities thus improving the people’s living standards with the combined efforts of all the dealers, vendors and Pak Suzuki employees.

BM W

Bayerische Flugzeugwerke (BFW) is founded on 7th March 1916 and incorporates Otto-Werke. BMW acquires the BFW plant in 1922, but Bayerische Motoren Werke continues to date its foundation from the founding of BFW. BMW (car) has sales total of 764,874 automobiles, in first half on 2008, which is the most successful sales in the history of BMW Group. BMW Manufacturing Corp. is a subsidiary of BMW Group in Munich, Germany

Pak. Suzuki Mission statement To provide automobile of international quality

at competitive prices. To improve skills of employees by imparting training and inculcating in them a sense of participation. To achieve maximum indigenization and promote the automobile vending industry. To contribute to Pakistani society through development of industry in general and automobile industry in particular.

BMW Mission statement "To be the most successful premium manufacturer in the industry.“ To provide servicing, Maintenance and diagnostic services exceeding our customers expectations and requirements in both quality and level of service. To specifically taylor our service to meet each customers needs and budget. To conduct our activities in an economically viable, safe and professional manner.

PRODUCTION COMMITTEE MEETING In production committee meeting the directors and the general managers decides how much to purchase materials from the importer analysing the market ,production capacity ,market for casting.

UPDATION OF THE SPS SHEET

SPS is the stock production sales sheet which

calculates how much of the material should be purchased from importers .This will be discussed in materials management .

PLACING OF TENTATIVE ORDER Tentative order is regarded as initial order

which is generated after production committee meeting just to check that is every department satisfied from the order

PLACING OF FIRM ORDER Firm order is regarded as final order which is

generated after the approval of the tentative order . This order is given to the supplier.

PROFORMA INVOICE

 Buyer request for PROFORMA INOVOICE from the supplier  PROFORMA INVOICE contains the details of the consignment

.The values are given in PROFORMA INVOICE  =NO OF PIECES X UNIT COST = COST  +  FREIGHT  = C&F

RECEIVE SHIPMENT SCHEDULE FROM SUPPLIER

Shipment schedule contains the information

about consignment`s expected date of departure and expected date of arrival.

MODE OF PAYMENT Mode of payment is done through letter of

credit in which the bank gives the guarantee.

NON NEGOTIABLE DOCUMENT Non negotiable documents are received from

the supplier via post which contains bill of lading ( issued by supplier's shipping company) , invoices ,containers list ,letter from the governments chambers of commerce. These documents are then given to the clearing agent for custom purposes in the port

NEGOTIABLE DOCUMENTS ANOTHER SET OF DOCUMENTS FROM THE

SUPPLIER`S BANK IS RECEIVED BY BUYERS BANK .THIS PROVES THAT THE PAYMENT IS DONE.

CONSIGNMENT AT PLANT After receiving the clearance from the

government with respect to the custom then the transport company pick`s the consignment from the port and bring it to the plant

BMW Supply Structure Operation Plan

P1 Plan Supply Structure

Source S1 Source Stocked Products

S2 Source MTO Products

S3 Source ETO Products

P3 Plan Make

P4 Plan Deliver

Make M1 Make-to-Stock

M2 Make-to-Order

M3 Engineer-to-Order

P5 Plan Returns

Deliver D1 Deliver Stocked Products

D2 Deliver MTO Products

D3 Deliver ETO Products

Return Deliver

Return Source

Enable

Customers

Suppliers

P2 Plan Source

SUZUKI (Pak.) MATERIAL MANAGEMENT  PURCHASING THE RIGHT PRODUCT FROM THE RELIABLE

SOURCE AT REASONABLE PRICE OF ACCEPTABLE QUALITY AT RIGHT TIME CONSIDERING THE OPTIMUM INVENTORY LEVEL.  MATERIAL NEED ANALYSIS > SOURCE TRACKING> ORDERING > RECEIVING>PAYMENT>STORAGE>ISSUANCE

MATERIALS MANAGEMENT CALCULATION PARTS

SMC

JAN.08

FEB.08

MAR.08

Production

192

240

480

Shipment

192

192

480

-

48

48

144

96

384

20

116

130

-

19

114

172

152

406

-

-

-

20

117

133

192

269

539

PARTS Inventory Level

1.48

1.16

1.17

CARS Inventory Level

1.05

1.03

0.84

Stock In-transit Received Production Sales PARTS

PSMC

Stocks

CBU Total :

BMW MATERIAL MANAGEMENT BMW uses SAP applications for logistics, financials, and

human resources. It also uses mySAP Automotive to monitor production status in real time. SAPTM Automotive receives custom-configured manufacturing orders from BMW's planning system and generates delivery schedules matching BMW's assembly-line planning and sequencing directives, which are sent to suppliers. Larger suppliers receive the information via electronic data interchange (EDI). Other suppliers access the mySAP Automotive Supplier Portal Through an Internet browser, suppliers can view this information in real time, When shipping parts, suppliers send BMW an advance shipping notifications (ASNs) with information on parts

BMW MATERIAL MANAGEMENT Parts arriving at the BMW dock are then received and

transferred directly to the line. mySAP Automotive registers production confirmation and parts consumption information every three minutes. Parts consumed during assembly are removed from the inventory count, and costs are posted to calculate the value of work in process. mySAP Automotive gives BMW a standardized, scalable platform that can be flexibly expanded and modified to embrace new functionality or changes in business processes. mySAP Automotive provides the best-in-class Internet functionality and the most frequently used business processes – from production planning and procurement

BMW MATERIAL MANAGEMENT mySAP Automotive provides the best-in-class Internet

functionality and the most frequently used business processes – from production planning and procurement to sales and distribution. The seamless collaboration between business partners across the supply chain supports the engineering and high-volume production of highly customized products. Advantages of mySAP: BMW business processes are integrated with mySAP Automotive so information can be easily accessed, including forecast requirements on a component level, sales orders, and vehicle bills of material.

BMW MATERIALS MANAGEMENT The company has also developed Internet applications

for supplier quote creation and analysis for production parts, which have been added to the mySAP Automotive Supplier Portal, “Workplace”. Hans Nowak, program manager for BMW Manufacturing Company in Spartanburg, says “mySAP Automotive helps us reduce order-to delivery time, strengthens our supply chain activities in the areas of demand planning and tracking and tracing of material deliveries and improves inventory accuracy across our Spartanburg plant – enabling us to significantly reduce time-to customer”.

COMPARISON SUZUKI VS BMW • Suzuki (Pak.) uses MS Excel for their database,

ordering, material management calculations, while BMW uses latest software SAP which makes the whole procedure time efficient. • While BMW traces their shipment ETD and ETA online in real time, Suzuki (Pak.) corresponds their shipment details by fax and other traditional methods. • This decision to do so depends greatly on the size and scale of the operation. • BMW also offers its customers the option to customize their car on the website (degrees of customization).

Thank You! Any Questions?