Supply Chain Solution For Agility
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Supply Chain Solution for Agility to feed US Army in Iraq Tarun Talwar Ravi Parmar Ravi Sinha
Background •
Around 1,50,000 US troops in Iraq.
•
100+ Dining facilities All across Iraq managed by another vendor.
•
Dining Facilities have 21 day menu and place order Online every Week using US Military systems.
•
Agility receives orders, reviews and finalizes the order with the customer.
•
Lead time given to Agility is 2 weeks and substitutes can be delivered if an item is not available but 98% of the time compliance must be met.
•
After finalizing, Agililty creates shipment orders for suppliers and the operations of Agility receives and assembles the shipments.
•
Agility delivers shipments every week on a particular day to the dining facilities.
•
The delivery is done through a convoy of trucks from Kuwait – Iraq border under US military protection.
•
The lead time for trucks to return to base in Kuwait is two weeks.
•
Many a times trucks go missing, are bombed or held by the military.
•
On receipt of delivery, the authorized person in dining facility matches and signs the delivery receipt.
Background Cont…. •
Agility raises invoices to US Military on the basis of the signed delivery receipt.
•
Agility can invoice at Cost (Material Cost) + 15%.
•
US Military compensates for lost shipments lost in Iraq due to bombing or abduction.
•
Two types of Items are delivered, perishable (10%) and Regular (90%) .
•
Fresh Fruits & Vegetables (FFV) to be LP (Locally Purchased).
•
All have expiry dates. If expiry of regular items is less than 3 months, it will not be accepted by US Military.
•
When buying from suppliers, the minimum expiry date should be at least 6 months further.
•
Approved list of 40 suppliers spread across US and they ship only in Full Palates or Full Containers.
•
Agility has the below technologies. •
Oracle ERP
•
WMS
•
Need to deal with EDI of US Military.
Issues in the business Supplier End
Lead time with suppliers is unreliable
Problems with expiry date
Damaged items
Documentation issues
No tracking of shipments
Lack of Coordination
Customer End
98% compliance must be met
On Special occasions like 4th of July 100% compliance must be met.
Unable to trace location of trucks in Iraq.
Delays in trucks returning back to base.
Strategic Fit for Agility in US Facilities : •
Higher Efficiency model.
•
Construction of centralized very big size warehouses at 3-different locations (East, West & South US) near ports.
•
Freezing and cooling facilities.
Transportation : •
Higher responsiveness model.
•
Use of company owned trailers and state owned railroads
•
Freezing and cooling facility.
Inventory : •
Higher efficiency model.
•
Low inventory concept with 15-day safety stock.
•
FIFO
•
Inventory based upon 80 / 20 Rule.
•
Demand forecasting to specify min and max demand for 3- month.
Strategic Fit for Agility in US Suppliers: •
Higher responsiveness model.
•
Contracts to be revisited regularly.
•
Regular supplier response meeting.
•
Performance based contracts. Contract Revoke provision in contracts.
•
Deputation of Agility trained employees at suppliers end (for avoiding defective products, documentation, item code verification etc..)
Pricing: •
Higher responsive model.
•
Re-negotiate prices with clause for quantity, quality and responsiveness.
Strategic Fit for Agility in Iraq Facilities : •
Higher Responsiveness model.
•
Construction of centralized very big size warehouses at 2-different locations (Jordan & Kuwait) near ports and a small size warehouse at Turkey-Iraq border.
•
Freezing and cooling facilities.
Transportation : •
Higher responsiveness model.
•
Use of company owned transport vehicles.
•
Freezing and cooling facility.
•
Outsourcing to third party for custom clearance.
•
Own Security arrangements for trucks.
Inventory : •
Higher responsive model.
•
21-day safety stock inventory concept.
•
FIFO
•
Inventory based upon 80 / 20 Rule.
Strategic Fit for Agility in Iraq Suppliers: •
Higher responsiveness model.
•
Local suppliers for perishable goods from Turkey, Kuwait , Jordan and Dubai.
•
Contracts to be revisited regularly.
•
Regular supplier response meeting.
•
Performance based contracts. Contract Revoke provision in contracts.
Pricing: •
Higher responsive model.
•
Re-negotiate prices with clause for quantity, quality and responsiveness.
Technologies Integrated Supply Chain Management System
Order & Procurement Management System
Electronic Data Interchange (EDI)
Exchange order information electronically.
Allows business transaction to occur in less time with fewer errors.
Reduction in inventory by closely tying supply with actual demand.
Increased efficiency and Cost savings.
Warehouse Management System (WMS)
Reduces inventory levels.
Increases labor productivity.
Improves shipping and inventory accuracy.
Boost perfect order rates.
Reduce direct operating costs and increase overall revenue.
Radio Frequency Identifier (RFID)
With uniform standards for international adaptability to complement the Warehousing & Transportation. Enables every member in SCM to have access to operational information in time for better productivity and reduction in error rate.
Technologies Cont…
Automated Vehicle Locator
Uses Global Positioning System (GPS).
Enhances Productivity- more trips, capital savings due to the ability to better utilize vehicles, maintenance costs reduced and thus general reduction of cost per vehicle.
Better adherence to schedule, accuracy in monitoring and coordination.
Improved ability to control operations and driver performance
Communications between drivers, supervisors, operators and other staff improves.
Enables faster location of vehicles and response to accidents.
Better operational decisions towards detours due to sudden developments like bad weather and accidents.
THANK YOU
Background •
Around 1,50,000 US troops in Iraq.
•
100+ Dining facilities All across Iraq managed by another vendor.
•
Dining Facilities have 21 day menu and place order Online every Week using US Military systems.
•
Agility receives orders, reviews and finalizes the order with the customer.
•
Lead time given to Agility is 2 weeks and substitutes can be delivered if an item is not available but 98% of the time compliance must be met.
•
After finalizing, Agililty creates shipment orders for suppliers and the operations of Agility receives and assembles the shipments.
•
Agility delivers shipments every week on a particular day to the dining facilities.
•
The delivery is done through a convoy of trucks from Kuwait – Iraq border under US military protection.
•
The lead time for trucks to return to base in Kuwait is two weeks.
•
Many a times trucks go missing, are bombed or held by the military.
•
On receipt of delivery, the authorized person in dining facility matches and signs the delivery receipt.
Background Cont…. •
Agility raises invoices to US Military on the basis of the signed delivery receipt.
•
Agility can invoice at Cost (Material Cost) + 15%.
•
US Military compensates for lost shipments lost in Iraq due to bombing or abduction.
•
Two types of Items are delivered, perishable (10%) and Regular (90%) .
•
Fresh Fruits & Vegetables (FFV) to be LP (Locally Purchased).
•
All have expiry dates. If expiry of regular items is less than 3 months, it will not be accepted by US Military.
•
When buying from suppliers, the minimum expiry date should be at least 6 months further.
•
Approved list of 40 suppliers spread across US and they ship only in Full Palates or Full Containers.
•
Agility has the below technologies. •
Oracle ERP
•
WMS
•
Need to deal with EDI of US Military.
Issues in the business Supplier End
Lead time with suppliers is unreliable
Problems with expiry date
Damaged items
Documentation issues
No tracking of shipments
Lack of Coordination
Customer End
98% compliance must be met
On Special occasions like 4th of July 100% compliance must be met.
Unable to trace location of trucks in Iraq.
Delays in trucks returning back to base.
Strategic Fit for Agility in US Facilities : •
Higher Efficiency model.
•
Construction of centralized very big size warehouses at 3-different locations (East, West & South US) near ports.
•
Freezing and cooling facilities.
Transportation : •
Higher responsiveness model.
•
Use of company owned trailers and state owned railroads
•
Freezing and cooling facility.
Inventory : •
Higher efficiency model.
•
Low inventory concept with 15-day safety stock.
•
FIFO
•
Inventory based upon 80 / 20 Rule.
•
Demand forecasting to specify min and max demand for 3- month.
Strategic Fit for Agility in US Suppliers: •
Higher responsiveness model.
•
Contracts to be revisited regularly.
•
Regular supplier response meeting.
•
Performance based contracts. Contract Revoke provision in contracts.
•
Deputation of Agility trained employees at suppliers end (for avoiding defective products, documentation, item code verification etc..)
Pricing: •
Higher responsive model.
•
Re-negotiate prices with clause for quantity, quality and responsiveness.
Strategic Fit for Agility in Iraq Facilities : •
Higher Responsiveness model.
•
Construction of centralized very big size warehouses at 2-different locations (Jordan & Kuwait) near ports and a small size warehouse at Turkey-Iraq border.
•
Freezing and cooling facilities.
Transportation : •
Higher responsiveness model.
•
Use of company owned transport vehicles.
•
Freezing and cooling facility.
•
Outsourcing to third party for custom clearance.
•
Own Security arrangements for trucks.
Inventory : •
Higher responsive model.
•
21-day safety stock inventory concept.
•
FIFO
•
Inventory based upon 80 / 20 Rule.
Strategic Fit for Agility in Iraq Suppliers: •
Higher responsiveness model.
•
Local suppliers for perishable goods from Turkey, Kuwait , Jordan and Dubai.
•
Contracts to be revisited regularly.
•
Regular supplier response meeting.
•
Performance based contracts. Contract Revoke provision in contracts.
Pricing: •
Higher responsive model.
•
Re-negotiate prices with clause for quantity, quality and responsiveness.
Technologies Integrated Supply Chain Management System
Order & Procurement Management System
Electronic Data Interchange (EDI)
Exchange order information electronically.
Allows business transaction to occur in less time with fewer errors.
Reduction in inventory by closely tying supply with actual demand.
Increased efficiency and Cost savings.
Warehouse Management System (WMS)
Reduces inventory levels.
Increases labor productivity.
Improves shipping and inventory accuracy.
Boost perfect order rates.
Reduce direct operating costs and increase overall revenue.
Radio Frequency Identifier (RFID)
With uniform standards for international adaptability to complement the Warehousing & Transportation. Enables every member in SCM to have access to operational information in time for better productivity and reduction in error rate.
Technologies Cont…
Automated Vehicle Locator
Uses Global Positioning System (GPS).
Enhances Productivity- more trips, capital savings due to the ability to better utilize vehicles, maintenance costs reduced and thus general reduction of cost per vehicle.
Better adherence to schedule, accuracy in monitoring and coordination.
Improved ability to control operations and driver performance
Communications between drivers, supervisors, operators and other staff improves.
Enables faster location of vehicles and response to accidents.
Better operational decisions towards detours due to sudden developments like bad weather and accidents.
THANK YOU
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