EXECUTIVE SUMMARY

The main objective behind this project is to understand the processes involved in
inbound logistics from arrival of raw material to its storage in logistics storage
facility. Also it helps to understand the role of milk-runner in internal logistics
processes. This projects also considers how E- Kanban system which is implemented
in Bosch Ltd helps them to manage their inventory and how production dept sent
trigger to the store keeper so that lead time reduction can be achieved.

Even it covers detail study of suppliers loop, the various functions needs to be
performed by various stakeholders within company and use of RFID based E- Kanban
system for greater functional efficiency and reduction of manual errors for gain of
total control.

1.0 INTRODUCTION

1
Logistics coordinates the movement and storage of resources such as goods,
equipment and inventory. For manufacturers, logistics starts with the incoming supply
of raw materials and carries through to the delivery of finished products to customers.
For example, a logistics department would receive supplies, give components to a
production line, move finished goods to a distribution center, manage inventory and
ship products to a customer.

Logistics teams are responsible for making sure each of these steps run smoothly,
including purchasing, accepting inbound delivery, storage, packaging, inventory
management, shipping, outbound transportation and delivery. Choreographing these
processes gets complicated when volume grows and there are multiple products to
manage. Companies that use several distribution channels and operate facilities in
different locations face another layer of complexity.

Role of Logistics
Logistics is the foundation of the supply chain and is vital to a company’s success.
Well- organized logistics can reduce expenses, save time, help meet customer
demands and enhance a brand’s reputation. Effective logistics is key to managing the
supply chain, the complex network of organizations, individuals, activities and
resources required to supply a service or product. In 2019, the average company spent
11% of revenue on logistics, with transportation and inventory accounting for about
72% of that spending.

LOGISTICS

INBOUND OUTBOUND
LOGISTICS LOGISTICS

2
 INBOUND LOGISTICS:

Inbound logistics is the way materials and other goods are brought into a company. This
process includes the steps to order, receive, store, transport and manage incoming supplies.
Inbound logistics focuses on the supply part of the supply-demand equation.

OUTBOUND LOGISTICS:
Outbound logistics focuses on the demand side of the supply-demand equation. The process
involves storing and moving goods to the customer or end user. The steps include order
fulfillment, packing, shipping, delivery and customer service related to delivery.

ATTRIBUTE INBOUND LOGISTICS OUTBOUND LOGISTICS

Direction Inward Outward

Focus Supply Demand

Role Receiving Delivery

Key Suppliers, vendors and their Distributors, wholesalers, retailers,

Relationships distributors end customers

Processes Sourcing, procurement, materials Inventory management, order

handling, putaway fulfillment, shipping

Activity Raw materials or goods coming in Finished products going out to

from suppliers customers

Strategic Obtaining goods or materials the Meeting customer demand,

Imperative company needs to make its supporting the sales process to
products generate revenue

3
As outlined, inbound logistics focuses on the transportation and storage of incoming
goods. It is important to understand who is liable to take the financial burden in these
transportation contracts when there is a voyage between a seller and buyer. Also, of
utmost importance is the cost of any damage which occurs in transit at various points.

Liability and cost are key when understanding the incoterms or shipping terms agreed
to. As an example, a carriage which is Free on Board (FOB) terms of shipping;
outlines that the buyer takes on the burden for the costs of shipping following the
point of shipment loading or another specified point.

Further information on Inbound Logistics

There is little reading material around inbound and outbound logistics as it is not a
specific topic. It covers any goods that are bought and sold; which can include:

 Tools for processing of goods

 Raw materials
 Finished goods
 Or underlying commodities being sold to an eventual purchaser

Conversely, outbound logistics is usually referred to when something is sold and so

when finished goods are transported from a company to an end buyer.

4
 1.2 NEED & SIGNIFICANCE

1. This study gives knowledge about about standard set of activities followed to
provide the physical movement and storage of goods and related information

 From the point of origin of the vendor or the supply services.

 Through company facilities

 To point of consumption

1. This study provides understanding about how theoretically learnt concepts like E-
kanban, works practically.

2. The new concepts like goods receipt note, put-away, Advance shipping notice and
their significance learnt during this study.

3. This study involves E- Kanban systemis a japenese technique for inventory

management and we can use this e- Kanban cards at various points during this process
which would significantly reduces the time and can minimize the errors.

5
 1.3 ORGANISATION PROFILE

Industry Profile:
The Indian auto component industry is one of the few sectors in the economy that has
a distinct global competitive advantage in terms of cost and quality. The Indian auto
component industry is extensive and highly fragmented. Estimates by the Department
of Heavy Industries, Government of India, indicate there are over 400 large firms who
are part of the organized sector and another 10,000 firms exist in the unorganized
sector. The Indian auto component industry has been navigating through a period of
rapid changes driven by global competition and the recent shift in focus of Global
automobile manufacturers. The automotive industry designs, develops, manufactures,
markets, and sells the world's motor vehicles. In 2008, more than 70 million motor
vehicles, including cars and commercial vehicles were produced worldwide. In 2008,
with rapidly rising oil prices, industries such as the automotive industry are
experiencing a combination of pricing pressures from raw material costs and changes
in consumer buying habits. The industry is also facing increasing external competition
from the public transport sector, as consumers re-evaluate their private vehicle usage.
As per an Automotive Component Manufacturers Association of India (ACMA)
report, the turnover of the auto component industry was estimated at over US$ 18
billion in 2007- 08, an increase of 27.2 per cent since 2002. It is likely to touch US$
40 billion by 2015- 16.

The value in sourcing auto components from India includes low labour cost, raw
material availability, technically skilled manpower and quality assurance. An average
cost reduction of nearly 25-30% has attracted several global automobile
manufacturers to set base since 1991. India’s process engineering skills, applied to
redesigning of production processes, have enabled reduction in manufacturing costs of
components. Today, India has become the outsourcing hub for several global
automobile manufacturers.

It manufactures products to suit requirements of different class segments of

6
customers. Some Leading manufacturers of auto components in India include Bosch
Limited, Bharat Forge, Sundaram Fasteners, Wheels India, Amtek Auto, Motherson
Sumi, Rico
The auto parts industry has emerged as one of India's fastest growing manufacturing
sectors and a globally competitive one. The auto components Industry in India is
dominated by around 500 key players, which contribute more than 85 percent of
India's production. The industry has linkages with almost.
To encourage the smooth growth of the industry, the Government of India has allowed
automatic approval for foreign equity investment up to 100 percent of manufacture of
auto components. Further, the engineering export promotion council under the aegis
of Ministry of Commerce and Industry, Government of India, over the years has been
engaged in promoting exports of engineering goods including auto parts.

The auto component sector generated sales of about US$ 15 billion in fiscal year
2007- 08, including US$ 2.8 billion worth of exports. India is estimated to have the
potential to become one of the top five auto component economies by 2025. The
industry has been experiencing a high growth rate of 20 per cent over the period 2000-
05 and is expected to grow at a rate of 17 per cent over the period 2006-14. Similarly,
while growth rate of exports has been 25 per cent during 2000-05, the growth rate is
expected to grow by 34 per cent during 2006-14. This Growth in exports if sustained
for another five years will see India’s auto Components exports will touch US$ 5
billion by 2011 from the US$ 2 billion at present.

7
Company Profile:
About Bosch Group:
The BOSCH Group is a leading global supplier of technology and services, in the
areas of Automotive Technology, Industrial Technology, Consumer Goods and
Building Technology, with 81,000 associates generated sales of 45billion Euros in
fiscal 2008. The Bosch Group comprises of Robert Bosch and its more than 300
subsidiaries and regional companies in over 60 countries. Its sales and services
partners are included, and then Bosch is represented in roughly 150 countries. This
worldwide development, manufacturing and sales network is the foundation for
further growth. Each year, Bosch spends more than three billion Euros for research
and development and applies for over 3000 patents worldwide. With all its products
and services, Bosch enhances the quality of life by providing solutions which are both
innovative and beneficial.
The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942) as
‘Workshop for Precision Mechanics and Electrical Engineering’. The special
ownership structure of Robert Bosch guarantees the entrepreneurial freedom of the
Bosch Group, making it possible for the company to plan over the long term and to
undertake significant up-front investments in the safeguarding of its future. Ninety
two percent of the share capital of Robert Bosch is held by Robert Bosch Stiftung , a
charitable foundation. The majority of voting rights are held by Robert Bosch
Industrietreuhand KG an industrial trust. The entrepreneurial ownership functions are
carried out by the trust. The remaining shares are held by the Bosch family and by
Robert Bosch.

Bosch Limited is the flagship of the Bosch Group subsidiaries in India. Founded in
1951, the company is India’s largest auto component manufacturer and also one of the
largest Indo – German company in India.
Bosch has been present in India for more than 80 years – first via a representative
office in Calcutta and then from 1951 via its subsidiary Bosch limited (then Motor
Industries Company Limited).

8
The company is headquartered in Bangalore having its manufacturing facilities at
Bangalore, Nashik, Naganathapura, Jaipur and Goa. These plants are TS 16949 and
ISO 14001 certified. Bosch limited has its presence across automotive technology,
industrial technology, consumer goods and building technology, with employee
strength of over 10,000. It manufactures and trades products as diverse as diesel and
gasoline fuel injection systems, auto electrical, special purpose machines, packaging
machines, electric power tools and security systems. The company recorded a
turnover of RS. 4,542 crores in the year 2008.
The company has developed excellent R&D and manufacturing capabilities and a
strong customer base. Its market leadership is testimony to the high quality and
technology of its products. It also has a strong presence in the Indian automotive
service sector. Bosch’s service network spans across 1,000 towns and cities with over
4,000 authorized representatives who ensure widespread availability of both products
and services.

Vision:
Our vision is our shared image of the future. It states where we want to go, and what
drives our actions. It points the way forward for a strong and meaningful development
of the Bosch Group.

Mission:
BeQIK stands for greater speed in everything that we do, and it stands for quality,
innovation, and customer orientation. Our objective is to continuously improve our
internal processes.

Values:
The Bosch values are the foundation upon which the successes of the past were built,
and upon which we will build our future. We guide our actions and tell us what is
important to us and we are committed to.

FUTURE AND RESULT FOCUS: -

In order to ensure dynamic development of our company and to guarantee long term
corporate success, we participate in shaping the changes in markets and technologies.
By doing so, we provide our customers with innovative solutions and our associates

9
 with attractive jobs. We act result focused in order to secure growth and financial
independence. With the dividends generated, the Robert Bosch Foundation supports
charitable activities.

Supply chain management

As globalization gathers pace, the suppliers are also faced with new challenges. In
2007, the purchasing volume amounted to 24 billion euros, with Europe accounting
for 69 percent of this sum. In 2015, they expect this proportion to be only around 55
percent. By this time, they are looking to make 25 percent of our purchases in Asia
Pacific and
20 percent in America. The presentation of the Bosch Supplier Award, which
recognizes the top suppliers, confirms this increasing internationalization. In 2007, 19
of the 47 award winners were located outside Germany.

Quality Policy:

1. Customer satisfaction:
The objectives in Purchasing and Logistics are geared towards satisfying customer
requirements and ensuring customer satisfaction. In implementing these objectives,
they work with all parties concerned, across business divisions and in partnerships, in
order to ensure the best combination of function, delivery and costs. The achievement
of quality targets is a prerequisite.

2. Responsibility for quality:

They are responsible for the quality of purchased production materials, consumable
and capital items, as well as services, and pursue a zero defect implementation
(strategy) of their targets. The quality of logistic services meets international
standards and is geared towards meeting the customer’s requirements. They use
transparent and standardized measurements of performance.

3. Supplier development:
For the procurement of goods and services they need strong innovative suppliers with
whom they can interact in an open, fair and long term working relationship. They

10
 actively support their suppliers in continuously improving their expertise and respect
them as independent businesses.

4. Process orientation and continuous improvement

Core processes and structures within the Supply Chain are orientated towards the
principles of the BOSCH Business Systems. They are committed to continuous
improvement. To this end they ensure short throughput times and strive for economy.
The capabilities of the purchasing and logistics processes are rendered transparent by
a standardized controlling system.

ABOUT BOSCH LIMITED NASHIK PLANT

Nashik Plant is one of the important establishments of Bosch in India since last 40
years. Nashik in Maharashtra, situated on the banks of the river Godavari and with a
dry climate, was chosen as the second manufacturing site. The in-depth
manufacturing experience gained at Bangalore helped to set up a pilot plant in 1969.
In August 1971, the government gave its approval and granted an industrial licence.
The construction of the main building was started the next year. The production of the
classical series of nozzles and nozzle holders began within two years. In the years to
come, the company played an important role in Nashik’s transformation from a
predominantly agricultural region into a modern industrial centre. With the constant
efforts for excellence in Quality and delivery commitments, the plant received good
acceptance by customers in Europe, USA and South East Asia. At present the export
business is about 25% of the plant output. The plant is committed to continue it's
efforts for total customer satisfaction in areas of Quality, Cost and Delivery. Bosch
Limited in Nashik is manufacturing nozzles and injectors for classical as well as Euro
series. The plant is spread on 400,000 sq m, having 4 manufacturing hangars. In
addition to TS 16949, plant is also certified for ISO 14000, the internationally
acknowledged certificate for Environment protection. Plant is well equipped with
latest in manufacturing, cleanliness and proving of product performance. This has a
strong back up of easily accessible BOSCH R&D for product and manufacturing
processes.

11
 Plant Commercial (PC) - Mr. Rashmi Ranjan

Plant Technician (PT) - Mr. Anantraman

Logistics Head (LOG) – Mr. Shiva Kumar

Assistant (LOG) – Mr. Baljeet Singh

Inbound Logistics Outbound Logistics

Mr. Sham Mahajan (Manager) Mr. Gurudatta Sanap (Manager)

Mr. Nishant Bhingude
Mr. Paras Bajaj Mr. Prabhakar Jagtap
( (Assistant Manager)
(Assistant (Assistant Manager)
Manager)

12
 2.0 REVIEW OF LITERATURE

1. In order to attain the maximum efficiency, it is very important to lower the fluctuations in the
order quantity (Monden 1983), and as a result of focusing on this matter, the Kanban system is
developing continuously. Other methods are being implemented which promotes a constant
consumption for all the products in the assembly line (S Kotani 1983, Monden 1983) To further
develop the Kanban system, the Toyota Production Company has introduced a new system called e-
Kanban system where “e” stands for electronic, which uses the communication network and computers
for maintaining a constant communication between the company and their suppliers. Generally the
Kanban cards are controlled manually (S Kotani 2007)

2. When a following workstation grabs what it needs from the previous one, a production signal is
sent to the latter, to indicate what must be produced to restore what was consumed (Ohno, 1988).
Nevertheless, this system has several drawbacks, such as loss, mishandling and misplacing of kanbans,
delays between information and material flows, limited tracking and monitoring, etc. (Kouri et al.,
2008; Maříková, 2008; Menanno et al., 2019; Ricky & Kadono, 2020; Sapry et al., 2020; Sly, 2018;
Wan & Chen, 2008; Wijaya et al., 2019; Yasin et al., 2016). Considering the above and due to ICT
evolution, a new type of system is being more sought out by industries, the e- Kanban system.

3. Using ICT, Menanno et al. (2019) upgraded the existent kanban to a web-based e- Kanban that
enabled the exchange of information between the company’s assembly lines and the supermarkets. The
results obtained in Menanno et al. (2019) showed a reduction of 30% to 40% in Work in Progress (WIP)
and a reduction in the supermarkets’ quantities.

4. Razafuad et al. (2018) and Svirčević et al. (2013) used an e-Kanban to manage the
replenishment process of inventory inside each company’s warehouse. In both papers, the number of
part shortages decreased after the application of the e-Kanban system. Maříková (2008) developed a
hybrid system for inventory management,

13
 using both a physical and an e-Kanban system between the company’s production
lines and warehouse. In the same way, Hawari and Aqlan (2012) and Jarupathirun et
al. (2011) implemented an e-Kanban/ERP hybrid system between the production lines
and the warehouse. In the first work, the authors used the WLAN and barcode/RFID
technology to trigger the kanbans movements and integrated them in the enterprise’s
ERP systems. This resulted in a 50% reduction of WIP and an 88% reduction in the
product lead time. In Jarupathirun et al. (2011), the system led to a reduction of 16%
in the production lead time.

5. The first study was carried out for a parts supplier in the automotive industry which produces a
cockpit module for a Japanese automaker (Suprasith et al., 2011). The work processes were examined
before and after the implementation of E-Kanban system (Suprasith et al., 2011). After the imp
lementation of E-Kanban, the enterprise was able to eliminate steps of the traditional Kanban process
and reduce the imp lementation time, which generated a significant gain in storage costs. The second
study was carried out within Fork Truck at the level of assembly lines, the installation of E –Kanban
system made it possible to automatically update the Kanban informat ion, optimization of the space of
the assembly line, reduction of stocks of materials in process in the factory, resolution of quality
problems, and cost savings (Rong et al., 2012).

6. The concept of milk run logistics originates from the dairy industry. The notion covers a
transportation network where all input and output (I/O) material requirements of several stations are
covered by one vehicle that visits all these stations, and circulates according to a pre-defined schedule.
This transportation concept is economical when the I/O volume of each single station is essentially
smaller than a truckload. The milk run concept is frequently applied in internal plant logistics to
transport raw materials, finished goods, and waste between manufacturing and assembly Stations and
the warehouses of the plant (Baudin, M., “Lean Logistics: The Nuts and Bolts of Delivering Materials
and Goods”, productivity press, 2005).

14
7. To select possible e-Kanban suppliers, an ABC-analysis of archival data from the organisations’
production planning system (PPS) was conducted to categorise the suppliers with relation to the
purchasing value (Ramnath et al. 2009), Figure 4. For the analysis, the purchased volume per supplier
per year was multiplied by the price per unit, to calculate the value which was received by each supplier
in 2010. Arranging the results according to value, 80 per cent of the total purchasing value is reached
with the 36 most important suppliers (classed within ‘A’ type) and 54 per cent of all orders (5246 of
9698 orders) were accomplished by 6 per cent of the suppliers. This set of 36 suppliers is the target
group to introduce to a supplier e- Kanban. It was not worth introducing a supplier e-Kanban to “B” and
“C” vendors, owing to infrequent order patterns and small batch

15
 4.0 RESEARCH METHODOLOGY

A) Objectives of the Study

1. To understand the process followed during transfer of raw material from supplier to
inbound logistics store.
2. To understand the process involved in movement of material from store to
production facility.
3. To understand the use of electronic kanban in managing inventory.

4. To understand the put-away process.

A) Research Problem Statement:

This project concerns about how supplier’s loop and milk-runner’s loop works in
Bosch ltd. and how e-kanban system use in it.

B) Type of Research Design:

This qualitative research is descriptive in nature. I have studied the process followed
during raw material/component arrival until it is dispatched to the respective
production facility.

Data Sources and Data Collection:

The data sources are primary and secondary in nature. A primary source provides
direct or first-hand evidence of an event. The primary data sources used in this case
includes fieldwork, observations, interviews or face to face conversation. So that real
time data becomes possible to gather.
Secondary data means data collected by someone else i.e it is a existing data. The
project contains data which gathered from some websites, literature reviews, and the
company’s internal records/charts.

16
D) LIMITATIONS

1. Project is been conducted within less time duration.

2. Limited time of interaction with the company guides due to their busy
schedules.
3. Due to lack of time and other resources, it is not possible to conduct study at
very minute level

17
 4.0 DATA ANALYSIS AND DATA INTERPRETATION

Inbound Logistics:

Inbound logistics is the way materials and other goods are brought into a company. This
process includes the steps to order, receive, store, transport and manage incoming
supplies. Inbound logistics focuses on the supply part of the supply-demand equation.

Inbound Logistics Activities:

 Sourcing and procurement: Identifying and evaluating potential suppliers, obtaining

price quotes, negotiating with and managing suppliers.
 Ordering/purchasing: Buying the goods and materials the company needs so the
right quantity arrives at the right time.
 Transportation: Deciding whether to use a truck, airplane, train or another method to
move goods. This activity also involves selecting delivery speed for incoming supplies,
contracting with third-party carriers and working with vendors on price and route.
 Receiving: Handling the arrival of new materials, unloading trucks and ensuring they
match the order.
 Material handling: Moving the received goods short distances within the facility and
staging them for later use.
 Put-away: Moving goods from the receiving dock to storage. Staff puts everything
away in assigned locations.
 Storing and warehousing: Managing the materials before they go to manufacturing
or customer fulfillment. This department is responsible for making sure items are placed in
logical locations for fulfillment and the right storage conditions are met.
 Inventory management: Deciding the type and amount of raw materials/items you
should store and where to locate them. Read the inventory management
guide to learn more.

18
  Expediting: Managing the progress of and schedule for materials as they make their
way to your facility.
 Distribution: Sending supplies to their destination inside the business.
 Tracking: Checking on details about incoming orders, such as their location and
documents like receipts.

Steps Followed in Supplier’s Loop at Bosch:

E- Kanban:

E-Kanban is the connection between the supplier and the customer. When there is
requirement of raw material the customer, in this case the store-keeper (Viskan) of
inbound logistics, scanned the electronic kanban card available in the store the TR is
generated and trigger goes to the supplier. So that supplier comes to know about the
replenishment of required material.

Arrival of EMR:

After getting Transfer Order the supplier send the required material to the company in
defined time window using external milk-runner (EMR). Prior to the departure of the
material, supplier send the ASN i.e. Advance Shipping Note through Electronic Data
Interchange (EDI) from the Supplier’s facility.

Document Verification:

After the arrival of the EMR at the Unloading Bay, the respective store-person accept the
required documents. Receiving store person verifies the documents and gives the signal
for unloading the vehicle. Unloaded material now placed at Just Received Area in the
store. If material is as per the given specifications the store person puts his/her sign on the
POD i.e. Proof of Delivery document as it is required for the proper payment. It includes
the time of delivery, full delivery address and the name and signature of the person who
accepted the shipment.

19
GRN Tag:

When material kept in Just Received Area the store person put hand written green
coloured GRN tag i.e Good Received Note on it which consist of details i.e supplier,
invoice no./date, part no., quantity, receipt date etc. After completion of quantity
verification and GRN booking in SAP the printed white coloured GRN Tag pasted onto
the Green GRN Tag. For Dolly Supermarket one tag is been used for each Dolly.

Quality Checking:

After pasting white GRN tag, the PQA (Purchase and Quality Assurance) department
take some samples from the Dolly for quality inspection and after quality check put that
samples in respective box/ pallet.

Put-Away:

The GRN tagged and quality checked material is then placed in their assigned location
from just received area, this process is called as Put-away. This simplifies the process of
storing items, reduces the risk of misplacing or losing the items, and keeps your
warehouse clean and organized. Initially, store person i.e. Viskaan goes with the Mathadi
to the location where the material needs to be place. Then the Viskaan scan the barcode
which is present on the GRN tag to fill the material details in SAP and afterwards scan
the QR Code to get the location details using ALPE Scanning Device.

20
Flow Chart for Supplier’s Loop:

Trigger to the supplier from store

PO Generated by Planning Dept

PO generated by Planning Department

Supplier send Advance Shipping Notice

Supplier sends Advance Shipping Note

EMR arrival at Definite Time Window

EMR Arrival at defined Time Window

Unloading of Material at Unloading Bay

Unloading of Material at Unloading Bay

Document verification Hold the vehicle

Sign and stamp of POD

Sign and stamp on POD

Quantity Checking
Follow short quantity
receiving process

Put temporary Green GRN Tag

Put temporary green GRN tag

Quality Checking Follow return process or

scrapping process

21
Printing and pasting permanent white
GRN, Put-away by ALPE Scanner
Steps Followed in Milk-runner’s Loop at Bosch:

T-Kanban:

When raw material required the RFID based T- kanban card scanned using RFID Scanner
at the production facility. It acts as the connection between Production Facility and Store
Department. It generates TR i.e. Transfer Receipt signal in SAP and trigger in the form of
mail goes to the store keeper (Viskaan).

Milk-runner’s Role:

According to the time window given the milk-runner carry that scanned T-kanban card
with him and placed it in the kanban board which is present in the store. After that store
keeper allows milk-runner to take the required material with him from Dolly Supermarket
and while returning the milk-runner scan the T-kanban card using RFID scanner placed
in store so stock automatically gets deducted from the store.

E-kanban:

Simultaneously, store keeper scan the RFID based E-kanban card to send the Transfer
Receipt (TR) signal to the supplier to fulfill the demand generated in the store and the
process goes on.

22
Flowchart of Milk-Runner’s Loop:

Scanning T-kanban card

at Production Facility

Trigger goes to the store person

Milk-runner arrives in store with T-

kanban

T-kanban placed in kanban board

placed at store

Inform to the store person and take

Dolly with him

While returning scan kanban card at

store

Automatic stock-out from SAP

23
 5.0 THEOROTICAL BACKGROUND OF STUDY

1. Advance Shipping Notice (ASN) in Logistics

A message used for supply chain execution and logistics, the advance ship
notice or advance shipping notice (ASN) is an alert or notification of pending

24
 deliveries, with similar in information provided by the packing list and/or bill of
lading. The advance shipping notice is sent in electronic format and is a common EDI
document with various different names.

The advance shipping notice is similar to a bill of lading but serves the purpose of
notifying the consignee that merchandise is in transit and specifics as to what exactly is in
the individual boxes (Items, quantities, etc.), and evolved as technology has automated
logistics functions. In general terms, the bill of lading travels with the shipment’s delivery
as it progresses to the consignee. The ASN is usually delivered well ahead of the actual
shipment delivery, to optimize receiving, payment and tracking. Advance shipping notices
are generally automatically generated at the time the order is released for shipment. This
gives the consignee time between shipment release and delivery to anticipate and prepare
for the specific shipment.

2. Goods Receipt Note (GRN) in Logistics

Goods received note is a document that acknowledges the delivery of goods to a
customer by a supplier. A GRN consists of a record of goods that the buyer has
received. This record helps the customer compare the goods delivered against the
goods ordered. When the buyer receives the goods, the store’s department will
inspect them against the purchase order and examine their physical condition.
Once they ascertain that all goods are received in perfect physical condition, the
department issues the GRN.

25
 Record for the future: A record of goods received can be used as a reference
for future cases such as resolving disputes or audit trails.
 Examining goods received: GRN helps validate the quantity and quality
of goods received by the buyer. It helps to inform the supplier that the goods are of an
acceptable standard.
 Inventory management: GRN assists in keeping track of inventory levels and
thereby helps maintain accurate inventory levels.
 Assist in accounting: With the help of GRN, accountants can confirm inventory
balances and update the stock ledger against purchase entries. This also helps in managing
accounts payable. Items not received as per GRN can be subtracted, and the suppliers may
pay the balance.

A GRN must consist of the following features to depict complete information of the
delivery:

 Name of supplier
 Time and date of the delivery
 Details of products received include name, quantity, type, etc.
 Signature of stores manager
 Signature of supplier/representative of the supplier

The goods received note is concrete proof of receipt of goods. It helps maintain
inventory records that come in and ensures the right quantity of goods are always
available. GRN helps mitigate disputes that could arise due to faulty goods received.
It serves as a means to reconcile supplier invoices with the goods received to make
accurate payments. It is also documentary

evidence that accountants can rely on to maintain error-free account balances.

26
3. Put-away in Logistics

Put away is the process of removing materials from the dock (or other location of
receipt), transporting those materials to a storage area, and then moving them to a
specific location within that storage area. This last step often involves recording the
27
 movement and identification of the location where the material has been placed.

Put away is an important part of many logistics operations:

 It helps to ensure that materials are properly stored and tracked once
they have been received.
 Put away can also help to improve inventory accuracy and prevent stock
outs.

While put away is often completed manually, there are some automated put away
systems available that can help to speed up the process. These systems typically use
barcodes or RFID tags to track materials as they are moved to their final storage
location.

In a warehouse, put-away refers to all the processes that happen between receiving
goods from vendors and having them all put away into their assigned places. Having a
put-away system simplifies the process of storing items, reduces the risk of
misplacing or losing items, and keeps your warehouse clean and organized. Any put-
away system helps, but an efficient one is a lot better for your business. In this guide,
we will be talking about what you should do to optimize your put-away process and
get even better results.

4.

Milk-runner:

Milk run logistics is a goods delivery method used to transport stock from different
suppliers to a single final destination. Instead of each supplier sending goods
separately, transportation is planned with fixed supply routes in order for a vehicle to
pick up different loads and deposit them at a warehouse, production facility, or
distribution centre.
This logistics term got its name from the milk delivery process employed at the
beginning of the 20th century to save on travel costs: milkmen would drive along a
preset route, delivering milk to homes and collecting empty bottles. The number of
28
bottles would indicate to the seller the milk demand for the following day. Similarly, one
vehicle or train would collect milk from several dairy farms and then deliver the loads to a
processing facility. Milk run logistics is a method for delivering goods whereby a vehicle
picks up loads from several suppliers to group and transport them in a single shipment.
This procedure entails the implementation of a transportation network in which
movements of stock are carried out by the same vehicle, which makes multiple stops to
load or unload products at the different facilities it visits.

The milk run method is based on the premise that only material that has been
consumed should be replenished. Therefore, it’s common to implement this type of
strategy in warehouses or production centres that use stock management techniques
such as just-in-time, which only replenishes only the amount of goods necessary at the
right time.

 Transportation cost reduction. This supply method eliminates partial

truckloads: picking up raw materials from the different suppliers minimizes both
time and travel.
 Agile operations. Milk run logistics ensures uninterrupted inventory
replenishment when it comes to the supply of raw materials and semi-finished
products to production lines.
 Limited environmental impact. This distribution technique reduces
vehicle travel in the transportation of goods, between different logistics
facilities as well as between different areas in the warehouse or production
centre. This reduced travel makes for cleaner, more sustainable logistics.
 Efficient production strategy: adopting milk run logistics fosters more
accurate just-in-time goods deliveries. This distribution strategy avoids
bottlenecks in the storage buffers (which temporarily store goods to be sent to
the adjacent production lines) b y sending only items that will be required.

29
 6.0 CONCLUSION

1. The study gives us the detailed information about the processes followed in upstream
supply chain and also about the material movement.

2. This study provides us the standard procedure that are followed in Bosch Ltd. for raw
materials procurement, putting away in defined storage location and when required supplied it
to the production facility.
3. This study provides the knowledge about the use of RFID based e-Kanban cards in
inventory management.

30
 7.0 SUGGESTIONS

 It happens frequently that supplier shipped more material than ordered

quantity and company unable to send it back. Due to that inventory management
becomes more critical, company firstly can give strict warning to supplier about it and
after doing it again company can penalties for surplus material.

 Put-away becomes an issue when there is a mismatch between location

showing in SAP software and actual location of material, by using extended
warehouse management system company can remove this error and can use RFID
based E-kanban system.

31
 8.0 BIBLOGRAPHY

 https://www.netsuite.com/portal/resource/articles/inventorymanagement/
inbound-outbound-logistics.shtml
 www.in.bosch.com.
 Implementation of E-Kanban System Design in Inventory Management,
Mayilsamy.T, Pawan Kumar.E, International Journal of Scientific and Research
Publications, Volume 4, Issue 9, September 2014 2 ISSN 2250-3153

 Supply Chain Efficiencies Through E-Kanban: A Case Study, Suprasith

Jarupathirun, Andrew P. Ciganek, Thaloengsak Chotiwankaewmanee, Chayanun
Kerdpitak, International Conference on IT to Celebrate S. Charmonman's 72nd
Birthday, March 2009, Thailand

 https://www.mhlnews.com/technology-automation/article/22047801/the-
kanban-evolution

 https://www.interlakemecalux.com/blog/kanban-system

 A Review of Kanban-based Manufacturing Systems, Shobha N S, Dr.

Subramanya K N; International Journal of Research and Scientific Innovation (IJRSI)
| Volume V, Issue IV, April 2018 | ISSN 2321–2705

 Optimization of Inbound Logistics by Implementing E-Kanban System in an

Automobile Accessories Manufacturing Unit A Case Study; Koteshwara Rao G.1,
Lidwin Kenneth Michael2, Sriram K.V. Vol. 20, No. 170/ June 2019

32