Sip report Avijit Halder
- 1. TRANSPORTATION & LOGISTICS MANAGEMENT 1 COMPANY OVERVIEW Established in the year 1937 by Dr. Prabhat Chandra Chakroboty at 34 alipore road . The firm after granted drug license was named “Mendie Pharmaceuticals works “ after Mendine the first product of the firm. Gradually firm evolved into into a partnership compny having four partners , in 1975 company was converted into Private Limited company and renamed as “ Mendine Pharmaceuticals Pvt.Ltd ” The company was granted the license of a Bonded manufactory and was engaged in manufacture of pharmacopoeia tinctures , spirits and proprietary reparations. Today , company has branches at Varanasi, Patna, Jamshedpur, Cuttack , Guwahati and Agartala.
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- 9. TRANSPORTATION & LOGISTICS MANAGEMENT 9 INTRODUCTION The myopic view of supply chain design “ people designed supply chain as simple linear processes of goods and information swiftly passing through an efficient logistics and IT pipelines and concentrate on only that part of the pipe directly controlled by them or at best that of their customers and suppliers “ Dominant players in a supply chain network : 1. Suppliers 2. Logistics Players : B2B & B2C 3. Contract Manufactures 4. Distributors 5. Retailers There are two types of logistics activity in a supply chain Movement of raw materials from source of supply to the beginning of production line is called Inbound Logistics . Movement of finished goods from end of the production line to the consumers is called Outbound Logistics. Movement of used or damaged goods from consumers to manufacturer is called Reverse Logistics.
- 10. TRANSPORTATION & LOGISTICS MANAGEMENT 10 PROBLEM STATEMENT Warehouse and Transshipment or cross docking hubs are play a crucial role in a supply chain because of the fact that there is always a mismatch between rate of production and rate of consumption. Strategic location selection is not only the solution of this problem , organized and rational operation of each activity pertaining to the distribution of product from the warehouse are equally important to improve the responsiveness of supply chain keeping the cost low. Hence a strategic decision has been planned to restructure the existing Midnapur distribution route from the Midnapur depot by keeping the total travel distance as minimum as possible. Adequate inventory level in a warehouse ensures streamlined flow of material across the supply chain, Maintaining rational inventory level improve responsiveness of supply chain while keeping the ordering and holding cost low. The reorder level is the level of inventory which triggers an action to replenish that particular inventory stock. It is an minimum amount of an SKU which a firm holds in stock. Hence a detail study has been executed based on the previous demand pattern of each sKU to specify the ROL of each depot.
- 11. TRANSPORTATION & LOGISTICS MANAGEMENT 11 OBJECTIVE OF THE STUDY : Objective of this project is to obtain feasible route coverage plan which will be used to cater the East Midnapur, South 24 Parganas and Howrah distribution channel. Another objective of this study is to establish ROL level for the existing product line that ensure continuous flow of outbound laden ( Finished Goods ).
- 12. TRANSPORTATION & LOGISTICS MANAGEMENT 12 REVIEW OF LITERATURE Forty five years ago, an academic and practitioner from the north of England published a method of tackling the vehicle routing problem (VRP) in an American journal. Little could they have realized how the method they devised would still be a significant part of the research agenda nearly half a century later. Adaptations of their method are significant components in the analysis of the many different extensions to the problem that have been investigated. This paper provides the historical background to the development of the savings method and subsequent proposed variations to the basic savings formula and other improvements, and then charts the role the savings method has played in the investigation of VRPs with additional constraints. Some interesting examples of practical applications of the savings method are reported. Finally, comments are made on the use of the savings method in commercial routing packages. The vehicle routing problem (VRP) can be stated very simply: a set of customers with known location and demand are to be supplied from a depot by delivery vehicles of known capacity subject to all customer demand being met, vehicle capacity not being exceeded and total trip length not exceeding some specified level. If times of delivery at customers’ locations are also specified then it is often described as the “vehicle scheduling” problem. Fletcher Clark & Wright savings criterion is the basic mathematical model for solving a classified vehicle routing problem. Usefulness of this technique is further enhanced by the availability of several user friendly software such as MATLAB, MICROSOFT EXCEL, etc. Descriptive statistics analysis and Gaussian normal distribution are used to define the ROL level. The Gaussian normal distribution is taken as reference from the book “Communication Engineering - Singh & Sapre “
- 13. TRANSPORTATION & LOGISTICS MANAGEMENT 13 METHODOLOGY : To obtain a feasible route coverage plan , I took the help of Microsoft Excel and Google Map based geocoding technique. Thereafter a optimum depot location is found to cater the East Midnapur market and this analysis is based on the Gravity model. Where the center of gravity of a cluster or market is concentrated at the depot and the location of this depot can easily be found out with the help of Microsoft excel and solver add ins. In the second part of this project, I exploit the usefulness of Gaussian normal distribution to find the most probable monthly sales figure of a depot for a particular product , because demand is nothing but a random variable. This stochastic analysis will help me to define the ROL.
- 14. TRANSPORTATION & LOGISTICS MANAGEMENT 14 DATA COLLECTION
- 15. TRANSPORTATION & LOGISTICS MANAGEMENT 15 Supply Chain network of Mendine Pharmaceuticals DEPOTS CLUSTER DUMDUM MIDNAPUR MALDA BURDWAN NEW ALIPORE CUTTACK GUWAHAT I AGRATALA PATNA VARANASI JAMSHEDPUR SUPPLIERS FACTORY DAKGHAR , KOLKATA CENTRAL WAREHOUSE BEHALA
- 16. TRANSPORTATION & LOGISTICS MANAGEMENT 16 CUSTOMERS SPACE Inbound Transportation : Suppliers Factory RM, BOP, PM Outbound Transportation : Factory Customers Space Finished Goods DEPOT CLUSTER MSR HQs
- 17. TRANSPORTATION & LOGISTICS MANAGEMENT 17 MSR - HQ Moyna Tamluk:1 Tamluk:2 Sutahata Chaitanyapur Kolaghat Demari Khirpai Panskura Sonamui Amarshi Bhagawanpur Khejuri Nandigram Mothchandipur Balisai Contai:1 Contai:2 Egra Nachinda FACTORY DAKGHAR CENTRAL W/H BEHALA MIDNAPUR DEPOT RETAILERS/STOCKIST LAST MILE
- 18. TRANSPORTATION & LOGISTICS MANAGEMENT 18 EXISTING DISTRIBUTION MODEL OF EAST MIDNAPUR The entire east midnapur distribution model is divided in four routes , namely 1. Tamluk :1 2. Tamluk : 2 3. Contai : 1 4. Contai : 2 Tamluk 1 291 km Tamluk 2 230 km Caontai 1 372 km Contai 2 297+30 km Chaitanyapur kolaghat Amarshi Balisai Mahishadal Demari Bhagbanpur Contai_1 Radhamani Khirpai Bhupatinagar Contai_2 Sutahata Panskura Khejuri Egra Tamluk :1 Sonamuni Nandigram Ghatal Tamluk :2 Nachinda Moyna
- 19. TRANSPORTATION & LOGISTICS MANAGEMENT 19 DATA ANALYSIS
- 20. TRANSPORTATION & LOGISTICS MANAGEMENT 20 ROUTE OPTIMIZATION MODEL: 1 Total distance covered by this by this route optimization model is 283 km.
- 21. TRANSPORTATION & LOGISTICS MANAGEMENT 21 Vehicle sourcing point PANKURA Loading MIDNAPUR DEPOT MSR HQ MOYNA MSR HQ MAHISHADAL MSR HQ CHAITANYAUR MSR HQ SUTAHATA MSR HQ TAMLUK MSR HQ DEMARI MSR HQ KOLAGHAT MSR HQ SONAMUI MSR HQ GHATAL MSR HQ KHIRPAI End point & MSR HQ PANSKURA TOTAL DISTANCE 283 km
- 22. TRANSPORTATION & LOGISTICS MANAGEMENT 22 ROUTE OPTIMIZATION MODEL: 2 Total distance covered by this route optimization model is 327 km .
- 23. TRANSPORTATION & LOGISTICS MANAGEMENT 23 Vehicle sourcing point Belda Loading @ depot Midnapoore MSR HQ Bhogobanpur MSR HQ Chandipur MSR HQ Nandigram MSR HQ Khejuri MSR HQ Nachinda MSR HQ Contai MSR HQ Bhupatinagar MSR HQ Balisai MSR HQ Egra End point & MSR HQ Belda Total Distance 327 km
- 24. TRANSPORTATION & LOGISTICS MANAGEMENT 24 OPTIMUM LOCATION OF MIDNAPUR DEPOT There are many analytical method available for deciding upon warehouse / depot location, with the objective of minimizing cost. This cost depends upon the distance between the warehouse and customers as also on the frequency or number of loads carried to the customers. This model can be termed as Gravity model which is used for identifying suitable geographic location for a warehouse / depot that will minimize the cost by keeping total route distance as small as possible. This model can be developed with the help of Microsoft Excel
- 25. TRANSPORTATION & LOGISTICS MANAGEMENT 25 Location of depot in 2D ( Cartesian Plane ) = X = 96.44 Y = 121.43
- 26. TRANSPORTATION & LOGISTICS MANAGEMENT 26 UNDERSTANDING THE WAREHOUSE LOCATION IN 2D PLANE : Bhogobanpur and Chandipur both are very close to coordinate ( 96,121 ), so we can consider Bhoganpur or chandipur as depot for catering entire East Midnapur.
- 27. TRANSPORTATION & LOGISTICS MANAGEMENT 27 ROUTE DISTRIBUTION MODEL ( CONSIDERING CHANDIPUR AS EAST MIDNAPUR DEPOT ) Total distance covered under this optimization model = ( 159+135+205+146) = 645 km In this model existing vehicle capacity will not be acting as a constraint as per as feasibility of this model is considered.
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- 29. TRANSPORTATION & LOGISTICS MANAGEMENT 29 ROUTE COVERAGE PLAN : HOWRAH DISTRIBUTION CHANNEL Total distance covered = 200 Km. BEHALA ANDUL PACHLA ULBERIA GARHCHUMAK AMTA UDAYNARAYANPUR JAGATBALLAVPUR DOMJUR RAMRAJATALA DASNAGAR SALKIA SHIBPUR
- 30. TRANSPORTATION & LOGISTICS MANAGEMENT 30 ROUTE COVERAGE PLAN : SOUTH 24 PARGANAS : BEHALA AMTALA DIAMOND HARBOUR KULPI KASHINAGAR JAYNAGAR
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- 32. TRANSPORTATION & LOGISTICS MANAGEMENT 32 SPECIFYING ROL LEVEL OF DIFFERENT SKUS BASED ON STATISTICAL ANALYSIS OF PREVIOUS DEMAND PATTERN
- 33. TRANSPORTATION & LOGISTICS MANAGEMENT 33 ROL LEVEL OF CARMOZYME CARMOZYME 100 ml at Varanasi Depot ( Sales data 2013- 2016 ) PRODUCT NAME YEAR APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH CARMOZYME 100 ml 2013 1,270 1,426 1,495 1,421 828 1,035 1,219 299 897 372 1,311 782 2014 1,131 1,386 1,242 662 1,416 1,084 482 292 634 382 1,008 461 2015 1,722 1,262 826 630 966 1,680 562 720 506 568 410 657 2016 1,252 1,732 866 1,406 416 - - - - - - 416 Normal Distribution of sales data From normal distribution curve we can conclude that probability of monthly sales of Carmozyme 100 ml at Varanasi is Highest at 100O. Analyzing the normal distribution curve and and sales figure of Varanasi depot we can fix up the ROL level at 1000 for the months April, june, July, august, September & February. For the months October, November, December,January and March the ROL level can be reckoned as the average value of monthly sales ( 566, 328, 509, 531, 579) and the dispersion may keep into account.
- 34. TRANSPORTATION & LOGISTICS MANAGEMENT 34 CARMOZYME 200 ml @Varanasi Depot : Year April May June July August September October November January February March CARMOZYME 200 ml 2013 479 615 867 555 540 510 870 540 330 2014 658 720 730 570 645 600 660 210 750 465 750 780 2015 728 980 420 450 525 780 465 660 300 435 600 408 2016 390 640 660 540 450 840 600 510 252 330 420 270 2017 90 390 255 AVERAGE SALES MONTH WISE 563.75 738.75 669.25 528.75 540 682.5 648.75 480 408 330 540 428.25 DISPERSION 135.307 7511 144.5845341 162.0237251 46.68712349 69.552138 72 133.1117951 145.96125 34 165.6804153 199.40411 23 147.351620 3 145.430395 7 211.6581855 Normal Distribution Curve : ROL = 500 By analyzing Normal Distribution curve we can fix ROL level at 500 .
- 35. TRANSPORTATION & LOGISTICS MANAGEMENT 35 CARMOZYME 450 ml @ Varanasi depot : CARMOZYME 450 ml 2013 180 220 220 260 140 125 280 95 280 2014 280 380 300 160 140 200 180 160 140 140 220 200 2015 220 200 260 140 160 160 210 220 40 80 200 132 2016 60 200 80 200 140 320 60 80 60 100 120 260 2017 120 100 210 MONTHLY AVERAGE SALES 185 250 215 190 145 201.25 182.5 138.75 130 110 160 200.5 DISPERSION 80.4673847 75.498344 35 82.91561976 45.8257569 5 8.660254038 73.51657976 79.49056548 55.71972272 94.33981132 22.36067977 50.99019514 45.61523868 Normal Distribution Curve : ROL level can be fixed at 175 units according to Normal Distribution curve.
- 36. TRANSPORTATION & LOGISTICS MANAGEMENT 36 CARMOZYME 100 ML @ Midnapur Depot : Sku april may June July August September October November December January February March 2015 24077 16946 22196 16544 18546 17703 14349 18500 11839 2016 20624 15780 25955 23635 18062 28775 9398 18981 5947 14719 22511 18819 2017 30433 7739 10389 Normal Distribution of Demand ROL can be fixed as 12500 units .
- 37. TRANSPORTATION & LOGISTICS MANAGEMENT 37 CARMOZYME 200ML @ Midnapur Depot : Sku april may June July August September October November December January February March 200 ml 2015 35107 23930 34531 32124 33455 34211 19091 35704 17132 2016 29269 23085 37890 35427 45359 19612 21335 38322 49279 25918 30055 25338 2017 10869 17052 73995 Normal Distribution curve of demand ROL = 30000 units
- 38. TRANSPORTATION & LOGISTICS MANAGEMENT 38 CARMOZYME 450ML @ Midnapur Depot : Sku april may June July August September October November December January February March 200 ml 2015 18170 18047 26608 22556 26525 29765 33530 16345 9236 2016 7613 10833 26533 38138 19133 19110 53778 9887 8637 18349 21776 50526 2017 16282 53647 14471 Normal Distribution curve of demand ROL can be reckoned as 22000 units (approx) according to Normal Distribution curve.
- 39. TRANSPORTATION & LOGISTICS MANAGEMENT 39 CARMOZYME Drops @ Varanasi Depot : ROL LEVEL ( VARANASI DEPOT ) : CARMOZYME DROPS SKU YEAR APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH 15 ml 2013 330 270 300 60 195 233 150 275 375 2014 225 435 435 120 345 270 255 210 165 225 435 540 2015 195 255 360 170 330 330 60 380 285 360 10 2016 530 650 370 750 495 695 370 345 45 165 165 330 2017 330 400 165 MONTHLY AVERAGE SALES 320 402.5 366.25 275 341.25 382 208.75 302.5 195 251.25 340 261.25 DISPERSION 131.1964176 159.3933813 47.87679501 276.9927797 106.2647049 183.9959239 115.8865286 65.43126164 136.381817 62.18671482 104.4629121 196.7350693 Normal Distribution curve of demand Rol level can set at 320 units
- 40. TRANSPORTATION & LOGISTICS MANAGEMENT 40 RECOMMENDATIONS TO OPTIMIZE ROUTE COVERAGE PLAN According to existing route coverage plan of East midnapur distribution the total distance travel by all the vehicles to cater all MSR-HQs is 1220 Km and number of vehicles are four. If we follow the suggested route optimization model which is described above , the total distance can be reduced to 610 km and number of required vehicles becoming only two . so there is a significant savings in distance that will reduce the outbound transportation cost of Midnapur depot. As the number of vehicles get reduced , simultaneously the vehicle capacity need to be enhanced that acts as a constraint for feasibility of this plan . To overcome this , TATA or MAHINDRA pick up van can be sourced to replace existing TATA 207 . We can also consider Chandipur as the depot which will only serve East Midnapur . According to my analysis, if we consider Chandipur as the depot for East Midnapur distribution , the total travel distance to cater all the MSR HQs only 645 km with four routes and four TATA 207 vehicles. The detail Route coverage plan considering Chandipur as depot is described above. Route coverage plans for South 24 parganas and Howrah are described above , these plans will ensure streamlined and fast transit of outbound laden. As carmozyme is a fast moving product , maintaining proper ROL level is very crucial that will ensure the product availability in the customer space. In this project ROL is defined in a way which is slightly different from the present day practice.
- 41. TRANSPORTATION & LOGISTICS MANAGEMENT 41 CONCLUSIONS Increasing the penetration and responsiveness in customer space by keeping the overall cost low is the main aim of any supply chain. As we know Transportation accounts up to 50% of total logistics cost in a supply chain. So there is need of smart route optimization plan that will ensure the rational supply chain . To make a supply chain more lean ,we need to locate depot/ warehouse/ plant more strategically , we should employ mathematical approach in route selection model. In this project report I tried to employ different mathematical theory in real life situation and I found impressive outcomes. The meaning of inventory is nothing but the asset in the form of raw materials , WIP, or finished goods to a business house with the sole purpose being sold to customers. If inventory is too low , its obvious that holding is also low but product availability is adversely affected. For large inventory holding cost becoming high with the improvement in product availability. A adequate inventory is required in a supply chain which will not affect the holding cost and product availability. So ROL level of each product line should be defined in a proper manner in all depots.
- 42. TRANSPORTATION & LOGISTICS MANAGEMENT 42 REFERENCES Supply Chain Management ( Fifth Edition ) , Authors : Sunil Chopra , Peter Meindi, D.V kalra Operations Management , Author : Norman Gaither Production and operation management , Author : S.N Chary Communication Systems , Author : R.P singh and S.D sapre.