Group 6 HMI Final

8/6/2019 Group 6 HMI Final

1/17

Term Project:

Honda Motors India

Group 6:

PGP/13/70: Yogi Agravat

PGP/13/101: Rahul Aggarwal

PGP/13/103: Ravindra Manvi

PGP/13/104: Rohit Kawatra

PGP/13/121: Shruti Urkude


2/17

Honda in India

Honda Motorcycle & Scooter

India (HMSI):

Manufacture and distribution

of motorcycles

Established :: 1999

Honda Motors India

Wholesale of service parts and accessories

for Honda products

Established:: 2006

Honda Siel Power Products Ltd.

Manufacture and distribution of

power products

Established:: 1985

Honda Siel Cars India (HSCI):

Manufacture and distribution of

automobiles

Established:: 1995


3/17


4/17

HMI CUSTOMER

DELIVERY

ORDER

Dealer

DELIVERY

DELIVERY

ORDER

APC-THAILAND

HB-JAPAN

LOCALSUPPLIERS

+

HSCI

FACTORY

IMPORTS

LOCAL

ORDER

SUPPLIER

Supply chain


5/17

Upstream

Supply chain

Japan

Purchase from the warehouse of Honda

Type of parts: High value, small critical parts,

No of parts: Around 25000+

Ordering Cycle:Weekly

APC Thailand

Purchase fromWare house

Type of parts: High value, Purchased by Honda from Thailand for global operations


Ordering Cycle:Weekly

Local Vendors

No of Suppliers: nearly 150 suppliers, mostly located in NCR

Type of parts: Heavy parts, developed with local vendors for new models


Ordering Cycle: Monthly


6/17

Supply chainUpstream :Logistics

Logistics Partner: keeps changing (annual contracts based on price)


7/17

Mapping of Sources andWarehouses

GRN: CentralWarehouse

MUM: 100% Procurement

CHE: Procurement + StockReplenishment

KOL: 100% Stock Replenishment

Logistics: Trucks (third party)

GRN

MUM

CHE

KOL

JPN

APC

LOC

JPN

APC

LOC

APC

LOCDownstream:

Majority demand-

Delhi,

Punjab,

Haryana,

UP,

Maharashtra

Supply chain

Internal


8/17

Distribution

Mode of Trnspt. Avg. Dist. Avg. Time

SURFACE 1-7

AIR 1-2

40-3100

D I S T A NC E 4 5-4 3 0(Kms)

LE A D TIM E 1 - 2

(D ays)

D I S T ANC E 4 00 -1 ,7 0 0

(Kms)LE A D TIM E 2 - 4

(D ays)

D I S TANC E450-1,800

(Kms)LE A D TIM E 3 - 6

(D ays)

D I S T ANC E 2 ,1 0 0 -

(Kms) 3,100

LE A D TIM E 4 - 6

(D ays)

WEST

NOR TH

E A S T

SOU TH


9/17

Inventory planning

ABC Method followed atHonda

A: 0 85%

B: 85 90%

C: 90 95%

D: 95 99%

E: 99 100% / Last 6months Non-moving

F: New Model Part

G: Last one year

Non-moving H: Last two year

Non-moving

Trigger Point Method

Stock: Safety Stock

Pipeline Stock

Economic Order

Quantity (EOQ)

Excess

Trigger Points

Safety Level (SL)

Re-Order Point (ROP)

Stock Max

Regular ordering


10/17

Inventory planning: Servigistics and manual(excel)

Inventory status: oracle

TA = OH + OO BO

Stock Max = SS + LT Stock + Q

Order Quantity = Stock Max TA Ship -> Mumbai -> Train -> Dadri(Near Noida) -> Truck -> GRN

Weekly for APC/JPN and Monthly for Local

Inventory management

Regular ordering: Operation mechanisms

Special ordering

Air Order for products with 15 days inventory or less

Back Orders

Very Slow moving

Daily monitoring of

BO/CBO

Very slow moving


11/17

Inventory norms followed pertaining to sales

At least 50% of inventoried parts should be sold withinthree months of their stocking

No more than 10 to 20% of inventoried

parts should remain unsold

after one year.

Inventory management

Parts Sold In % of Total

0 3 months 40% to 60%

4 6 months 15% to 25%

7 9 months 10% to 20%

10 12 months 5% to 10%

More than 12 months 10% to 20%


12/17

Inventory status: Oracle

Use of Bar Code at warehouse

Directly updated in Oracle

Servigistics implemented last year: Order Planning

Uses 8 methods of forecasting

Offers best-fit solution depending upon the data

Not configured for stock transfer

No longer used/No maintenance staff for Servigistics

Actual Order Planning: using Excel

Manually copy the daily status

Use of AMC instead of forecast

Back Order Tracking: Daily BO

Effective tool for monitoring Back Orders

Summary and auto-ordering enabled

Use of IT

Different tools, different databases


13/17

TA = OH + OO BO

not true picture (OO may refer to any number of days)

Components of On Order

Back Order at Vendor

Allocated not shipped by Vendor

In transit from Vendor to buyer

Arrived at buyer but O/H stock not updated

Maintenance of warehouse

Racks not labelled

Material not reported

Material not found when needed

Kept randomly

Cycle counting required

Deficiencies


14/17

Excessive Back Orders

Slow moving parts

Abrupt demand

Reporting errors

Supplier issues Difference between Date Receivedand Date Available

Unloading issues

Manual Bar code scanning: time consuming

Difference between Physical Inventory and System Inventory

Faulty Receiving Reporting Errors

Source Documents not controlled

Lack of Security

Inventory Appreciation or Depreciation not accounted for

Deficiencies (contd.)


15/17

Servigistics

Consult Vendor for configuring stock transfer

Else scrap it

Integrate database

Will enable accurate data for making decisions

Use the best-fit option

Monitoring lead time for each product and each supplier

MaintainingNiguri Planners (as used by Honda Motors Japan)

Recommendations

Niguri Planner


16/17

Use forecast instead of AMC

Eg. Linear Regression, Exponential smoothing,Winters MultiplicativeMethod (most applicable)

Warehouse

Increasing maintenance staff

Restructuring

Cycle Counting

Recommendations(ctd.)

AMC Forecast: Linear Regression


17/17

Thank You

Q & A