Report On "supply Chain Initiative In Apr Limited"

CASE ANALYSIS

CASE NUMBER .4

SUPPLY CHAIN INITIATIVE AT

“APR LIMITED” Submitted To: Mr. N S Uppal

Submitted By: Supply Chain Initiative at APR Limited

Page 1

Atul Jain Kavita Deora Sahil GABA Sandeep Khowal

TABLE OF CONTENTS

S.NO.

TOPICS

PAGE NO.

METHODOLOGY

OBJECTIVE OF THE STUDY

CHAPTER. 1.

04

INTRODUCTION

1.1

BACKGROUND

05

1.2

BUSINESSES

05

1.3

REQUIRED WOOD

05

1.4

SUPPLIER

05

1.5

WOOD CONSUMPTION

1.6

FUTURE STRATEGIES

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06 06

Page 2

1.7

APR LIMITED SUPPLY CHAIN

CHAPTER. 2.

FINDINGS

PROBLEMS

CHAPTER. 3.

07

SIX DRIVERS OF SUPPLY CHAIN

3.1 FACILITIES

08

3.2 INVENTORY

09

3.3 TRANSPORTATION

10

3.4 INFORMATION

10

3.5 SOURCING 3.6 PRICING

CHAPTER. 4.

06

11 11

DISCUSSION QUESTIONS

QUESTION NUMBER .1.

13-18

QUESTION NUMBER .2.

19-26

QUESTION NUMBER .3.

27-29

Supply Chain Initiative at APR Limited

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CHAPTER. 5.

CONCLUSION

RESULT OF THE STUDY

30-31

BIBLIOGRAPHY

32-33

Supply Chain Initiative at APR Limited

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OBJECTIVE

•

To understand strategic role of supply chain.

•

To understand drivers of supply chain performance.

•

To develop capabilities for analytical analysis of supply chains.

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1. INTRODUCTION 1.1 Background APR Limited was a diversified Taper group company engaged in a number of businesses.

Our Unit is one of the best in South East-Asia for manufacturing

dissolving Grade pulp. Rayon grade pulp accounted for 70 percent of the company turnover. The pulp manufacturing plant was located in the remote area at Kamalapuram of Warangal District & is away by 120 km from Warangal in Andhra Pradesh. 1.2 Businesses APR Limited engaged in a number of Businesses like, –

Pulp

–

Packaging

–

Soya meal and

–

Leather footwear

1.3 Required Wood The company was currently using two types of wood - namely, 1. Eucalyptus 2. Casuarina 1.4 Supplier

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The company procured wood from a number of wood contractors who sourced wood from different places. Casuarina: It was sourced from various parts of Andhra Pradesh.

Eucalyptus: 60% of eucalyptus was sourced from Andhra Pradesh, 20% from Karnataka and the balance 20% from Uttar Pradesh. 1.5 Wood Consumption The Company was currently using two types of wood in the proportion of 60:40 for procuring one ton of pulp; the plant needed about 4.2 tons of wood. 1.6 Future Strategies In early 1995, the company decided to make substantial investment so as to double its capacity by 1997 end from 150 MT of rayon pulp to about 300 MT per day. The company had further plans to increase the capacity so as to reach to the level of 500 MT per day by 2002.

1.7 APR Limited Supply Chain

MONEY INFORMATIO

MATERIAL FLOW

1. FINDINGS

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1.

International pulp prices dropped by about 40 percent because in the beginning of 1997, the government slashed custom duty on rayon pulp from 25 to 10 percent.

2.

Holding Inventory of 6 Months of wood stock at its wood yard, during the first three months the moisture content would come down at the rate of 4 to 5 percent per month. Subsequently, with every month the moisture content would come down at the rate of 1 to 2 percent per month.

3.

As there was shortage of woods in Andhra Pradesh Region, the company had no choice but to accept the terms dictated by suppliers.

4.

Wood Contractors asked for increase in rates so as to compensate them for the increase in waiting time at the company, many trucks come during the night and wait outside the factory gate.

5.

Material Handling Cost is very high.

–

One point in time the company was paying about Rs. 10 million to the labour contractor for the material handling of wood.

–

If a truck unloaded at the wood yard and material was subsequently brought to the chipper, it would result in extra material handling costs of Rs. 100/ton.

–

The company employed contract labourers who were paid on the piece rate basis.

1.

Each Chipper only one truck could be unloaded at a time because truck unloading required special equipment.

2.

There is no systematic pattern of Truck Arrival. Truck Arrival pattern would change drastically on a day-to-day basis.

3.

Production Personnel changed their chipping schedules frequently during the day and rarely followed the schedule that they would have given to the wood yard personnel at the beginning of a day.

4.

Lack of coordination with various departments personnel because of this problem they did not follow the schedule.

5.

No material accounting at the wood yard.

6.

Unloading of a truck required about 1.5 to 2 hours because they unloaded the trucks manually.

7.

There may not enough demand in the RG pulp market. 1. SIX DRIVERS OF SUPPLY CHAIN

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Drivers determine supply chain performance. For each driver, managers must make tradeoffs between efficiency (cost) and responsiveness. Six Drivers of Supply Chain are as follows 1.

Facilities

2.

Inventory

3.

Transportation

4.

Information

5.

Sourcing

6.

Pricing

Logistical Drivers of Supply Chain

Cross Functional Drivers of Supply Chain

3.1 FACILITIES Places within the supply chain where inventory is stored, assembled, or fabricated. Decisions on location, capacity, and flexibility of facilities have a significant impact on performance. APR Limited Facilities There are two type of woods were used in APR limited Eucalyptus & Casuarina in proportion of 60:40 These woods were coming from three states Andhra Pradesh, Karnataka and U.P There could be 6 trucks which unloaded at a time in wood yard. APR limited had a big wood yard having enough space and it had sufficient tractors. Problems

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Unloading of trucks at wood yard took huge time because they did it manually. At each chipper only one truck could be unloaded at a time. 3.2 INVENTORY All of the raw materials work in process (WIP), and finished goods within the supply chain. Inventory policies can dramatically alter a supply chain’s efficiency and responsiveness. APR Limited Inventory Raw Material

: Holding about 6 months of wood stock.

Work in Progress

: It would go according to the wood chipping schedule. Likely wood chipping schedule

CHIPPER 1 CHIPPER 2

SCHEDULE 8:00AM TO 1:00PM 7:00AM TO 1:30PM

TYPE OF WOOD Casuarina Eucalyptus

MT 125 230

CHIPPER 1 CHIPPER 2

4:00PM TO 7:30PM 4:30PM TO 9:30PM

Casuarina Eucalyptus

150 260

CHIPPER 1 CHIPPER 2

10:30PM TO 1:30AM 11:30PM TO 5:30AM

Casuarina Eucalyptus

105 185

Finished Goods

: 250 MT per day

Problems APR limited was holding Inventory of 6 Months of wood stock at its wood yard, during the first three months the moisture content would come down at the rate of 4 to 5 percent per month. More inventory in wood yard increased material handling cost.

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3.3 TRANSPORTATION Modes and routes for moving inventory throughout the supply chain. APR Limited Transportation ✔ In APR limited they are using truck for transport purpose. ✔ APR Limited was sourced Eucalyptus from Andhra Pradesh, Karnataka & Uttar Pradesh & Casuarina was sourced from various parts of Andhra Pradesh. Problems There is no systematic pattern of Truck Arrival. Below there is truck arrival pattern on a day. Truck arrival pattern would change drastically on a dayto-day basis. Expected truck arrival pattern on a typical day Eucalyptu 06:00 - 08:00 08:00 - 10:00 10:00 - 12:00 12:00 - 02:00 02:00 - 04:00 04:00 - 06:00 06:00 - 08:00

s 8 14 18 10 10 6 4

Casuarina 5 7 10 6 6 4 2

3.4 INFORMATION Data and analysis regarding inventory, transportation, facilities, and customers throughout the supply chain. It is potentially the biggest driver since it affects all the other drivers. Supply Chain Initiative at APR Limited

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APR Limited Information Wood procurement data was managed by procurement personnel, the wood yard was managed by stores personnel and the chipper was managed by production personnel. Maintenance personnel was managed to replace blunt knives with sharpened knives at the chipper. Problems Lack of coordination between the various departments personnel. 3.5 SOURCING Sourcing is the set of business processes required to purchase goods & services. Managers must first decide which tasks will be outsourced & those that will be performed within the firm. APR Limited Sourcing ✔ Truck to purchase the woods from different states. 3.6 PRICING Pricing is related with that how much a company will charge for Goods & services that it makes available in the supply chain. Actually pricing affects the behaviour of the buyer of the goods or services which can affect supply chain performance.

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APR Limited Pricing Company have no choice but to accept the terms dictated by suppliers in pricing fixed rate ton. Prices were ruling at about 35000 per MT dropped to a level of about 25000 per MT. Company is paying about 10 million to the labour contractor for the material handling of woods and extra material handling cost 100 per ton. Problems Very high material handling costs & extra handling cost. International Price dropped by about 40 percent.

Question No. 1 Supply Chain Initiative at APR Limited

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As Saloni Yashpal, what would you do to address the wood logistics problem? Where would you focus your attention and solution efforts? Solution As Saloni Yashpal various wood logistics problems that would come across our way are as: 1. BACKROUND Reduction of custom duty on rayon has led the company decide to make substantial investment so as to double its capacity from 150 MT to 300 MT per day. Further increase the production upto 500 MT per day. 2. WOOD LOGISTIC PROBLEM 2.1 PLANNING The company purchased wood in the form of logs, which were converted into wood chips before being fed into a digester. The company had two chippers and two separate silos for eucalyptus and casuarinas. The proportion of the wood instead of being fixed based on factors like availability of wood. Therefore as the ratio not being fixed led the company to vary it according to the availability of wood , as a result of which if the eucalyptus logs are forming a ratio of more than 60% then the chipper had to wait for a long time as the ratio is changed . As a result of such decisions trucks had to wait in long queues till early wee hours and at the same time contractors demanded more money which in turn led to the cost increment? Holding six months of inventory was a standard practice followed by the pulp and paper industry. Wood did get affected with time and the plant yield usually would be lower if wood was stored for a longer period of time. Hence there was no proper planning of inventory holding, lead time and the company didn’t follow a standard practice. Supply Chain Initiative at APR Limited

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2.2 PROCUREMENT The company usually had two kinds of contracts with the suppliers who supply the wood. In one kind the price of wood is based on its moisture content. The contract price would mention the price for having wood say, 10 percent moisture. The actual moisture content in the wood would vary from one truck to another. Based on the sample collected at the time of receipt, the quality control personnel would estimate the actual moisture content in the incoming wood and the supplier would be paid accordingly. Another kind of contract involved fixed prices per ton of wood irrespective of moisture content in the incoming wood. The company would like to get wood based on the first type of contract, but suppliers insisted on the latter type. As there was shortage of wood in the Andhra Pradesh region, the company had no choice but to accept the terms dictated by suppliers. Hence while not giving heed to the demand of suppliers the Company was hitting their own shoe as sourcing from far away regions like Karnataka and UP for almost all the wood logs would lead to cost increment. Moisture content had no specific quality problem. 2.3 TRANSPORTATION A steady stream of trucks would arrive at the gates of the company, each carrying about 10 MT of logs. Each truck was weighed at the weigh bridge and depending on the schedule and availability of chipping schedule logs would be unloaded. The company would prefer if the truck was unloaded directly at the chipper. Because if a truck unloaded directly at the Woodyard then it would lead to extra material handling costs of about 100 per ton . At each chipper only one truck could be unloaded at a time And the balance material was bought from the Woodyard using the tractor which could carry capacity of two tons of material. Unloading at the chipper can be done only when the chipper is operational. At the Woodyard they had capacity to unload a maximum of six trucks at a time. Unloading of a truck required about 1.5-2 hours. For all the material handling costs contract labourers were employed who

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were paid on piece rate basis. Labour contractor were paid Rs 10 million for the material handling of wood. Hence, handling of trucks carrying heavy logs of wood was one of the major areas of concern for the Company. This lead to a daily problem of trucks standing in long queues waiting till morning for their turn to come.

2.4 MAINTENANCE In the actual pressurized environment of day to day operations it was difficult to understand how decisions were taken by the various departments, how they interacted with each other .There was no material accounting at the Woodyard. Truck arrival pattern would change drastically on a day to day basis. Production personnel also changed their chipping schedules frequently on a day to day basis. Production personnel also changed their chipping schedules frequently during the day and rarely followed the schedule that they would have given to the Woodyard personnel. Thus there was no maintenance regarding the chipper schedule, truck arrival pattern, Woodyard material accounting problems and if the Company targeted increased production this would lead to the problems like mismanagement of all the activities as already when the production is 250 MT long queues of trucks keep waiting for their turn and in return they are demanding for more price of their wood. In addition there is no maintenance for High Inventory which in turn would lead to loss of production due to reduction in cellulose content .Hence maintenance of the logistics problem would keep a check on the various issues arising and would keep a quality control check on all the variations occurring due to deviations occurring. 3. ADDRESSING THE PROBLEM 3.1 UNDERSTANDING THE SITUATION Understanding the ongoing situation would be the first priority as it would help make a complete view of the system and it would help as –

Understanding the complete situation.

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–

Overview of actually what is happening.

–

Making note of all the areas of problems concern.

–

Having actual facts and figures collected.

All the above would help in making a note of real situation going around in the Company. 3.2 MEETING VARIOUS DEPARTMENTS PERSONNEL Managing effective logistics involved coordinating with various departments. Unless we got involve all of them, we would not be able to make any headway.

Woodyard personnel were managed by procurement personnel, the Woodyard was managed by stores personnel and the chip was managed by production personnel. We should involve maintenance personnel to replace blunt knives with sharpened knives at the chipper, which affected the daily chipper schedule. 3.3 SUPPLY CHAIN MANAGEMENT INITIATIVE Apart from the above two perspectives, the company also has to face pressures on the price front. With the opening of the economy the RG pulp market is quite vulnerable to changes and as the custom duty on rayon pulp has reduced, this has affected the price realization at the market place. So in future if the capacity would increase up to 500 MT it would pose focus on below points. 3.3.1 Managing logistics of incoming material With the increased capacity, the company has to procure more material and manage traffic of about, on average 150 trucks on a daily basis. 3.3.2 Managing multiple products and multiple grades Demand in the RG pulp market may decrease further so the Company will have to look at alternative markets like paper industries, pharmaceutical industry and textile industry.

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3.3.3 Managing logistics so as to reduce inventory and handling related costs and simultaneously improve customer service Since currently company is holding high amounts of inventory of 6 months so it is also incurring high handling costs above 10 million. 3.4 CONDUCTING WORKSHOPS FOR SENIOR & JUNIOR MANAGERS As there is no coordination among the various departments’ personnel therefore conducting workshops might be helpful for binding them in one group and shifting their focus towards the company’s problems and its targets. It would make them understand supply chain management, procurement, manufacturing, marketing, and corporate planning.

3.5FOCUS ON THE PRIMARY ACTIVITIES OF VALUE CHAIN Making all the departments understand the importance of various activities involved in value chain will give them insight as -

Planning for inbound logistics of wood

-

Raw material Mix

-

Inventory Planning

-

Coordinating inward movement of wood with chipping schedule

-

Planning for outbound logistics of finished goods

-

Supplying of pulp to various other industries like textile, paper and pharmaceutical.

-

Managing manufacturing and marketing interface

This would involve examining various ranges of issues involved in managing multiple products and grades from manufacturing and marketing angles. 3.6 SIMULATION EXERCISE It would manually simulate a day’s activity and would require participants which again will help them bind so that they coordinate among themselves.

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Simulation would help in calculating the various drawback areas like waiting of truck at all resources and calculating the costs of all the materials bought from Woodyard by tractors.

3.7 FOCUS AREAS While focusing on above aspects we would also like to focus on the some major aspects. As on validation of this data, expansion would be a much easier phenomenon –

Invest in one more weigh bridge

–

Invest in two more chipper

–

Increase silos capacity for chips

–

Invest in two more special equipments

–

Reduce the time required to replace blunt knives

–

Invest in integrated information system

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Question No. 2 What options exist? What would you recommend? Why? Solution In the beginning of the fiscal year 1997, the government slashed custom duty on rayon pulp from 25 to 10 per cent. Subsequently the international pulp prices dropped by about 40% putting the company under tremendous pressure. So the company not only had to gear up for doubling the production level, it also had to cut its costs substantially. To increase the Rayon production the first focus would be on the wood consumption i.e. Wood Logistics problem as the company was holding about 6 months of wood stock at its Woodyard. Various options which exist are: –

Maintaining fixed proportion of wood (60:40)

–

Fixing the contract with the Suppliers

–

Removing the Quality Check Personnel

–

Maintaining good relations with suppliers

–

Invest in one more weigh bridge

–

Invest in two more chippers

–

Invest in two more special equipments

–

Increase silos capacity for chips

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–

Use better quality of knives

–

Reducing the time required to replace blunt knives

–

Invest in integrated information system

–

Accounting of the material at the Woodyard

–

Source Casuarina wood from villages of Karnataka

–

Less variation in truck arrival pattern

–

Less variation in chipping schedule

–

Proper Interaction with the various departments’ personnel

–

Maintaining low inventory

–

Avoiding maintaining high inventory

–

Maintain proper lead time and Reorder cycle with the Suppliers

–

Reduce the material handling costs with the contract labourers

–

Reduce the truck waiting time at all the resources (Weigh Bridge, chipper and Woodyard)

–

Reducing the extra loading and unloading costs by tractors.

–

Conducting workshops for managers

–

Form in charge of various different departments and give them incentives

–

Planning for inbound logistics of wood

–

Planning for outbound logistics of wood

–

Managing manufacturing and marketing interface

Above all are the various options which exist for the increase in the production level. RECOMMENDATIONS Various Recommendations that exist are: Maintaining fixed proportion of wood (60:40) The proportion varied from month to month on the basis of factors like availability of wood. In the last four years the proportion of Eucalyptus had never gone below 50% but at the same time there was a month when the company operated with a high proportion of eucalyptus as 70%. Supply Chain Initiative at APR Limited

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Fixing the contract with the Suppliers As the suppliers want to be paid on the basis of fixed prices per ton of wood irrespective of the moisture content in the incoming wood. This would help as follows: –

Reducing the cost by removing the Quality Check Personnel

–

Help maintain good relations with suppliers

–

Avoiding the cost of getting wood from far off places

Managing multiple grades and products As the company would like to expand its RG pulp manufacturing, the demand of the product may get reduced hence the company should look at other alternatives like paper pharmaceutical and textile industries. Holding low inventory (not more than 3 months) As the cellulose content in the wood did get affected with time and the plant yield usually would be lower if the wood was stored for a longer period of time. Hence high holding inventory will lead to –

High carrying costs

–

High order costs

As in the first 3 months the moisture content would reduce at rate of 4-5%.So inventory must not be kept for more than three months. Conduct Workshops Since there is no coordination among the various departments’ personnel so conducting workshops would be helpful to understand the concept of –

Supply chain management

–

Procurement

–

Manufacturing

–

Marketing

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–

Corporate Planning

Moreover it will bind all the members together and help them focus on company goals and targets. Invest in Integrated Information System Such a system would ensure that each and every entity in the system would have knowledge on real-time basis about the status of the system. This will help all departments to make optimal decisions on a real-time basis.

Invest in one more weigh bridge, two chippers and special equipments As a result of the Data Sheets for Simulation Exercise following problems occurred ○ Truck waiting at Weigh Bridge, chipper and wood yard ○ Extra loading and unloading costs ○ Increase in production would be an impossible task Hence investing in two chippers will help as ○ No more waiting queues for trucks ○ Will reduce extra material costs of contract labourers ○ Will reduce the cost of 100 per ton ○ More quantity of wood can be cut easier Following is the Scheduling of two chippers of Eucalyptus and Casuarina SCHEDULE EUCALYPTUS SCHEDULE Chipper No. 1 7:00 AM to 1:30 PM

1:30 PM to 4:30 PM

4:30 PM to 9:30 PM

Supply Chain Initiative at APR Limited

9:30 PM to 11:30 PM

11:30 PM to 5:30 AM

5:30 AM to 7:00 AM Page 23

Chipper 1 Eucalypt us

Operatio n

Close

Operation

Close

Operation

Close

6.5 Hour

3 Hour

5 Hour

2 Hour

6 Hour

1.5 Hour

7:30 PM to 9:30 PM

9:30 PM to 3:30 AM

3:30 AM to 5:00 AM

EUCALYPTUS SCHEDULE Chipper No. 2 5:00 AM to 11:30 AM Chipper 2 Eucalypt us

11:30 AM to 2:30 PM

2:30 PM to 7:30 PM

Operation

Close

Operatio n

Close

Operation

Close

6.5 Hour

3 Hour

5 Hour

2 Hour

6 Hour

1.5 Hour

7:30 PM to 10:30 PM

10:30 PM to 1:30 AM

1:30 AM to 8:00 AM

CASUARINA SCHEDULE Chipper No. 1 8:00 AM to 1:00 PM Chipper 1 Casuarin a

1:00 PM to 4:00 PM

4:00 PM to 7:30 PM

Operation

Close

Operatio n

Close

Operation

Close

5 Hour

3 Hour

3.5 Hour

3 Hour

3 Hour

6.5 Hour

CASUARINA SCHEDULE Chipper No. 2 11:00 AM to 4:00 PM

4:00 PM to 7:00 PM

7:00 PM to 10:30 PM

Supply Chain Initiative at APR Limited

10:30 PM to 1:30 AM

1:30 AM to 4:30 AM

4:30 AM TO 11:00 AM

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Chipper 2 Casuarin a

Operation

Close

Operatio n

Close

Operation

Close

5 Hour

3 Hour

3.5 Hour

3 Hour

3 Hour

6.5 Hour

Investing in one Weigh Bridge will help as –

Constant arrival pattern of trucks and outgoing can be maintained

Investing in special equipments will help as –

More chippers require more special equipment to unload the truck at the chipper.

–

Trucks can be sent directly to the chipper if the other chipper is on rest.

REVISED SIMULATION EXERCISE Truck Monitoring Sheet Truck Monitori ng Sheet Eucalyp tus Trucke d E1 E2 E3 E4

Casuar ina art dept time time 06:00 06:34 06:15 06:49 06:30 07:04 06:45 07:19

Supply Chain Initiative at APR Limited

trucke d

art time

dept time

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E5 E6 E7 E8

07:00 07:15 07:30 07:45

07:34 07:49 08:04 08:19 C1 C2

08:00 08:15

08:34 08:49

Weighbridge Monitoring Sheet

weighbridge monitoring sheet weighbridge operations-1 weighbridge operations-2 truc truck Start of End of k Start of End of truck statu operati operati truck stat operati operati ed s ons ons ed us ons ons E1 L 06:00 06:10 E1 UL 06:30 06:34 E2 L 06:15 06:25 E2 UL 06:45 06:49 E3 L 06:30 06:40 E3 UL 07:00 07:04 E4 L 06:45 06:55 E4 UL 07:15 07:19 E5 L 07:00 07:10 E5 UL 07:30 07:34 E6 L 07:15 07:25 E6 UL 07:45 07:49 E7 L 07:30 07:40 E7 UL 08:00 08:04 E8 L 07:45 07:55 E8 UL 08:15 08:19 C1 L 08:00 08:10 C1 UL 08:30 08:34 C2 L 08:15 08:25 C2 UL 08:45 08:49

Chipper Operation Sheet

For Eucalyptus chipper operations sheet Chipper Queue time time of of truck joinin leavi ed g ng

Eucalyptus Chipper 1 Operation trucke d

Supply Chain Initiative at APR Limited

Start of operation s

End of operatio ns

Eucalyptus Chipper 2 Operation truck ed

Start of operati ons

End of operatio ns

Page 26

E1 E2 E3 E4 E6 E8

06:10 06:25 06:40 06:55 07:25 07:55

06:30 06:45 07:00 07:15 E5

07:10

07:30

E7

07:40

08:00

07:45 08:15

For Casuarina

Casuarina Chipper 1 Operation

Trucked

Casuarina Chipper 2 Operation

Start of operation s

End of operation s

08:10 08:25

08:30 08:45

C1 C2

trucked

Start of operations

End of operation s

Chipper Wood Management Sheet Chipp er 1

chipper wood management sheet Chipp er 2

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Time Slot

Wood receiv ed Direct ly

Wood receive d from Woody ard

Time Slot

Wood receiv ed Direct ly

Wood receive d from Woody ard

Wood yard Management Sheet – I Woodya rd queue

Unload-1 Operation s Truck id E1

Unload-2 Operatio ns Star t of End of Op. Op. 06:1 0

Truck id

Start of Op.

End of Op.

Wood yard Management Sheet – II Unloa d-3 Opera te

Truck id

Unloa d-4 Operat e Start of Op.

End of Op.

Truck id

Unloa d-5 Opera te Star t of Op.

End of Op.

Truck id

Unloa d-6 Opera te Sta rt of Op.

End of Op.

Truck id

Sta rt of Op.

End of Op.

Question No. 3

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In what way the simulation exercise suggested by Saloni Yashpal would help APR in attacking the wood logistics problem? Solution The Simulation Exercise suggested by Salnoi Yashpal is:

Truck Monitoring Sheet Encalyptus Truck Data Casuarina Truck Data Truck Arrival Departure Truck Arrival Departure ID Time Time ID Time Time ID E1 06:00 07:48 ID E2 06:10 07:51 ID C1 06:25 08:40 ID C2 06:40 07:45 ID E3 07:00 07:45 ID E4 07:20 09:37 ID E5 07:30 08:02 ID E6 07:40 08:19 ID C3 07:55 08:36 ID C4 08:10 10:05

Weighbridge Monitoring Sheet Weigh Bridge Queue Truck ID

Truck Status

ID E1

UNLOAD ED

Time of Joining

07:38

Weigh Bridge Operation Time of Leavin g

Truck ID ID E1

07:45 ID E1 ID E2 ID E2 ID C1 ID C1 ID C2

ID C2

UNLOAD ED

08:35

08:36 ID C2 ID E3

Supply Chain Initiative at APR Limited

Truck Status LOADED UNLOADE D LOADED UNLOADE D LOADED UNLOADE D LOADED UNLOADE D LOADED

Start of End of Operatio Operatio ns ns 06:00 06:08 07:45 06:10

07:48 06:18

07:48 00:00

07:51 06:35

08:20 00:00

08:24 06:50

08:36 07:00

08:40 07:12 Page 29

ID E3

ID E5 ID E5 ID E6 ID E6 ID C3

ID C4

UNLOAD ED

LOADED UNLOAD ED LOADED UNLOAD ED LOADED

LOADED

07:37

07:40 ID E3 ID E4

07:30

ID E4 07:32 ID E5

07:55 07:40

07:59 ID E5 07:51 ID E6

08:14 07:55

08:16 ID E6 08:02 ID C3

08:10

ID C3 08:12 ID C4 ID C4

UNLOADE D LOADED UNLOADE D LOADED UNLOADE D LOADED UNLOADE D LOADED UNLOADE D LOADED UNLOADE D

07:40 07:20

07:45 07:32

09:32 07:32

09:37 07:40

07:59 07:51

08:02 07:59

08:16 08:02

08:19 08:12

08:32 08:12

08:36 08:16

10:01

10:05

Chipper Operation Sheet Chipper Queue Time Time of Truc of Leavi k ID Joining ng

Chipper 1 Operation Start of Truc Operati k ID on

ID C3

08:12

End of Operati on

Chipper 2 Operation Start of End of Truc Operati Operati k ID on on ID E3 07:12 07:37 ID E5 07:40 07:55 ID E6 07:59 08:14

08:32

Chipper Wood Management Sheet Chipper 1

Time Slot 08:0009:00

Chipper 2 Wood Received from Woodyard

Wood Received Directly 10

Time Slot 07:0008:00

Wood Received from Woodyard

Wood Received Directly 30

Wood yard Management Sheet – I

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Woodyard Queue

Unload 1 Operation End Truc Start of k ID of Op. Op. ID E1 06:08 07:38

Unload 2 Operation Start End Truc of of k ID Op. Op. ID 06:1 E2 8 07:48

Wood yard Management Sheet – II Unload 3 Operation Start End Truc of of k ID Op. Op. ID 08:2 C1 06:35 0

Unload 4 Operation Start End Truc of of k ID Op. Op. ID 06:5 C2 0 08:35

Unload 5 Operation Start End Truc of of k ID Op. Op. ID 07:3 E4 2 09:32

Unload 6 Operation Start End Truc of of k ID Op. Op. ID 08:1 10:0 C4 6 1

EXPLANATION OF SIMULATION EXERCISE

After filling all the sheets of the simulation exercise we come up with certain points which are as follows:

•

As per the table -2 (truck arrival pattern on a typical day) 13 trucks should be there in between 6:00 AM to 8:00 AM, but this simulation exercise tells us that only 9 trucks can go inside the premises which show that work is not going according to the standard.

•

Because we are not able to match the actual arrival pattern with standard arrival pattern, which creates a problem of waiting (queue) the truck outside the factory which also increases our Handling & Extra Material Handling Cost.

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•

In Weigh Bridge Monitoring Sheet we can see that most of the trucks stand in queue. And because trucks have to wait in queue the supplier is asking, to increase the cost.

•

In Chipper Wood Management Sheet we can see that there is only one truck of casuarina on slot of 8:00 AM to 9:00 AM. So, it will incur the Extra Material Handling Cost because we have to supply the material by the help of tractor and a single tractor carries only 2 Tons of wood and the extra material handling cost will be 200 Rupees.

This simulation exercise helps APR in attacking the wood logistic problem by describing the loop holes in the company.

5. RESULT OF THE STUDY

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By following the above value chain the company will be able to focus at each and every perspective from the incoming of raw materials to marketing and services. Inbound Logistics can be maintained by sourcing the material from AP, UP, Karnataka. Operations maintenance can be done by good coordination among various departments’ personnel so that any delay or early arrival can be handling accordingly. Outbound logistics can be maintained by supplying the material to textile industries, paper and pharmaceutical industries. Marketing interface would help managing multiple products and grades and accordingly they can be selling to different customers. Service can be maintained by supplying Rayon Grade Pulp with short lead time as it would help in incurring fewer costs. On time delivery will help making customers satisfied and will out step the competitors.

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Procurement will help if suppliers are contracted at fixed prices per ton of wood and maintain good relations with them as there is shortage of wood in AP. By developing our technology like chipper, weigh bridge, special equipment will help in fastening the chipping schedule which in turn would help in quick manufacturing and meeting the demands of customers investing in Integrated Information System will give complete real time basis which would help make optimal decisions. H R Management will be helpful if all the heads of departments are motivated continuously and there is good coordination among them.

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BIBLOGRAPHY

➢ “AAI paper recycling unit takes off”, The Times of India, New Delhi (3 October

2009) [email protected] ➢ “The Drivers of Supply Chain Management Competitive Advantage” Puff file

Presented by ‘Dr. John (Tom) Meltzer, presented at the CHA 2006 (30 January 2006) ➢ David Fogarty and Sunland Creech. “Paper Giant Promises Green Curbs On

Expansion”, Planet Ark, Australia (11 September 2009) ➢ Handan Kumar Das. “Drivers of Supply Chain Management” Puff file, (07

November 2008. ➢ “Big mills turn to waste paper” Business Line, New Delhi (03 July 2009). ➢

A. K. Sharma & Et Al, M. E. Khan, Sunita Chatham.”Cost-effective production of handmade paper through recycling of shredded currency waste of Reserve Bank of India” IPPTA Vole: 21 Issue: 3 pp: 111-117 (July 2009).

➢ P. Marimuthu. “Clean Development Mechanism: Opportunities in pulp and paper

business in India”, IPPTA Vole: 21 Issue: 3 pp: 101-105 (July 2009). ➢ “Ballarpur Industries”, Puff file (29 March 2008). ➢ “Audited consolidated financial results”, Acanthi Group Company, Puff file, (21

September 2009). ➢ Master Thesis. “Cutting logistic costs with a centralized distribution Model” puff

file, (December 2005). ➢ Case Study of Unisom Business Solution (http://www.unisoma.com.br/en/casos-

celulose-1.php) ➢ Supply Chain Management Overview & objective from Janet Shah.

➢ Wood Biodegradation Division ➢ (http://www.icfre.org/UserFiles/File/iwst/divisions/wbd/ wad .him)

➢ Eucalyptus Tree Book from Google Book. ➢ Karnataka Forest Division from Google Book. ➢ Uttar Pradesh Forest Division from Google Book. ➢ Case Analysis of ABB of logistics problem. ➢ Article related to Logistic Problems from Hindu Times. Supply Chain Initiative at APR Limited

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➢ Casuarina Tree Book from Google Book. ➢ S.G,deshmukh,” supply chain management ➢ B. P. Thapliyal, K Singh, R. M. Mathur.

“Challenges confronting Indian paper

industry in changing scenario” IPPTA Vole: 21 Issue: 3 pp: 95-99. (July 2009). ➢ K. C. Choudhury, P Sridhar, Vinay Dwivedi. “Carbon trading: Present scenario &

future prospects of Indian paper industries” IPPTA Vole: 21 Issue: 3 pp: 89-94 (July 2009). ➢ Adam and JR. Ebert. “Production and Operations Management” Unit IV. ➢ Charry. “Production and Operations Management”. ➢ Qiu Rongzu. “College of Material Engineering” Fujian Agriculture and Forestry University”, P.R. China. (05 July 2007). ➢ Esko Mikkonen. “Dept of Forest Resources Management, University of Helsenki, Fin-00014, Finland. (24 August 2004). ➢ John T Mentez,”supply chain management”pdf file ➢ Terry P Harrison,”The Practice of supply chail management,”Hau lung Lee

➢ Daniel L Gardner. ”Supply Chain Vector.” ➢ R.P. Mohan. ”Supply Chain Management”.

➢ S.G, deshmukh. ”Supply Chain Management”. ➢ Chem...J,”Theory of supply chain management”pdf ➢ A.teung,managing quality, “Effective in supply chain,”pdf

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