GUJARAT ENGINEERING COMPANY LIMITED

Submitted by:Rajkamal Roy(15-50-133)Rakesh Singh(15-50-131)Ganggin kuki(15-50-138)Mohammed Hussain Nawaz(15-50-140)

Managing Outbound Logistics Challenges

Brief about the company

Engineering Company

ProductsElectrostatic precipitators Auxiliary Equipment's Pre heaters Industrial fans

Annual Revenue : 7.2 Bn Annual Profit : 1.8 Bn

Vadodara, Gujarat

Strategic location for supply to industrially developed states like Maharashtra and Gujarat. It also facilitates access to Gujarat port services for international exports

GECL Departments

Material Planning Department (MPD)Responsible for material requirement planning , purchasing and allocating

material to internal customers

Production Department

Outsourcing support Department (OSD)

Responsible for outsourcing the component manufacturing

Internal Factory

• Internal manufacturing• Value added components

OSD receives confirmation of product

for delivery

Commercial Department confirms dispatch

schedule

On confirmation from customer , GECL

commercial department informs transport

department

Delivery is managed through listed transport

owner / Local transporters

Items are delivered

GECL logistics operation structure

GECL Logistics pattern

GECLInbound logistics from suppliers Outbound logistics to customers

• 67 % done through Roadways including the Over dimensional Cargos

• 33 % is done through Railways

Outbound Logistics trends

• 73% vehicles used were 15 Tons trailers• 87% of 15 Ton trailers failed to deliver on time• Average capacity Utilization = 75% of all vehicles , 65% for 15 Tons trailers

Yard Problem• Limited Yard space due to rapid business growth• High turnaround time (Average 52 hours)

Questions Asked

• Ownership pattern of vehicles• Incremental pattern generation in market• Mismatch between the contractual terms and service provider• Payment to service providers• Less Average capacity utilization• Poor material segregation

Strategically Issues faced by GECL

Operation issues affecting the organic growth

• Outbound logistics inside the yard was affecting the delivery time• Poor adherence was leading to problems related to material identification and

tracking• Failure to deliver on time Outsourcing of Material handling work to transport

owners• Mismatch in the definition of Other Dimension Cargo (ODC) , as per contractual

terms

This resulted in • Increased cost of Logistics• Inability to supply the products to customer (Vehicle demand : 741 , vehicles placed : 371 (81% on time and 19% late delivery)• Poor MH productivity affecting dispatch problems

Alliance spectrum

Alliance with the service providers : The Transport agencies

• Regular truck operation with guaranteed mileage and volume assurance• Providing reasonable advances to the service providers when the trucks

are on the road• Better dispatch plan to increase the average utilization capacity (currently

75%)• Encourage on time delivery . On the basis of it , bonus payments can be

made.• Emphasis on reduction on turnaround time in the yard.

• Modification in commercial department and common information sharing platform. Base capacity should be fixed at 18 Tons (As transporters were moving towards higher capacity vehicles)

• Better dispatch plan• Explore scope of taking up additional temporary yards.• Categorization of Other Dimension Cargo(ODC) and subsequent payment for

it.• Logistics department should outsource the complete work to 3rd Party logistic

services (Handling both listed and local service providers) • Revising Transport Rates and encouraging on time deliveries.• Direct delivery from Sub contractors and vendors after quality check• Functioning of Enterprise resource Planning (ERP) should be restructured.

Suggestions