Professional Documents
Culture Documents
Milan Sip
Milan Sip
ON
Submitted by
by
Milan Kanti Chanda
Affiliated to
Vidyasagar University
1
DECLARATION
(Milan Kanti
Date: Chanda)
ACKNOWLEDGEMENT
I express my sincere gratitude to the following people with whose help and
encouragement I have completed the project successfully.
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First of all I would like to express my deep gratitude to our beloved chairman Mr.
Vidur Kapoor for his kind encouragement and blessings.
I would also like to thank Mr. Himadri Deb (MLL Eastern Zone Trainer) , who has
always helped us whenever we approached them during the course of our project.
My sincere gratitude and thanks to our beloved and respected Mr. Deepak
Srivatsava (MBA) Head of the Department of Supply Chain Management studies for
his guidance and motivation throughout the internship.
I would like to thank the Entire Organization and Employees of Mahindra Logistics
Ltd Kolkata Devision, Specifically Mr. Sandeep Khandedwal [CLM] and Mr. Amit
Kumar [OM] and his team in Warehousing Department for their enthusiastic
involvement, invaluable guidance, constant supervision, suggestion and showing
immense importance to my Training.
I wish to thank other Teaching and Non-Teaching staff members’ friends for the
support and guidance. I would also like to thank our parents who stood by me,
satisfying all my needs towards the fine success of my project.
Abstract
Mahindra Logistics entered the booming logistics industry in 2000 as a captive entity servicing
the needs of our rapidly growing Automotive and Farm sectors. They branched out and moved
beyond a decade ago. Today, Mahindra Logistics is a stand-alone company that services over
200 large corporate customers by deploying 25,000 vehicles a month, and five million square
feet of warehouse space. They are today India's leading integrated third party logistics service
brand, with 13 offices, over 88 operating locations across the country, and revenues in excess of
INR 17500 million.
They manage close to 5 million sq. ft. of warehouse space at multiple locations across the
country. These include a mix of built-to-suit, dedicated and multi-user warehouses. They are
also adept in handing the existing warehouses of customers to generate optimal efficiencies in
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them. Their warehouse operations use latest and proprietary technologies for improving
productivity and increasing efficiency. Mahindra’s system runs on a structured process flow for
each sub operation and for tracking metrics. Technologies like Clean Sheet for process wise
manpower requirement, layout optimizer for optimizing layouts, Knap Sack for optimal storage
pattern analysis and Customized MHEs etc are used on a regular basis across the network
Warehouses are usually large plain buildings used for commercial purposes for storage of
goods and are commonly used by exporters, importers, wholesalers, manufacturers etc.
Warehouses are crucial components of most modern supply chains and are likely to be involved
in various stages of the sourcing, production and distribution of goods, from the handling of
raw materials and work-in-progress through to finished products. This study was done based
on the data provided by Mahindra Logistics Reporting team of an achievement they made on a
3rd party contracted warehouse in Hyderabad. Warehouse management is concerned with
ensuring that all the activities involved in warehousing are carried out efficiently and effectively
by seeking to eliminate waste from activities that add cost to the supply chain, while
maximizing those areas that add value. Mahindra Logistics has developed and implemented its
own management concepts in their Client’s Warehouse in order for it to run smoothly and
accomplish the vision, goals and objectives it has set forth by their client. The four functions or
types of activities of warehouse management are: planning, organizing, leading and controlling.
This study is designed to explore the overall picture of warehouse management practice at
Mahindra Logistics Limited warehouses and help identify the scope of improvement
Contents:
Contents Page No
Introduction to Logistics 7
Importance of the Study 10
Industry Overview 11
Company Profile- The Group 15
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Mahindra Logistics Limited 17
Objective of the Study 27
Scope of the Study 28
Vendor Management 29
Limitation of the Study 30
Research Methodology 31
Data Collection 32
Ware housing 33
Functions of Warehousing 37
Mahindra's Warehouse 42
Case Study 62
Conclusion 68
Reference 69
Flow Charts &Tables Page No
Logistics activities 9
Warehouse Categories 46
Manpower in Warehouse 59
Organizational Chart 59
Performance Analysis 63
Problems and Causes 64
Performance post 2012 67
Pictorial Representations Page No
Mahindra Group's Performance 15
2016 Revenue Figures 16
Top Client list 20
Transportation Facilities offered 25
Lords Freight Services Provided 26
Safety and Sustainability 28
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INTRODUCTION TO LOGISTICS
Logistics is a broad, far-reaching function which has a major impact on a
society’s standard of living. In a modern society, we have come to expect excellent
logistics services, and tend to notice logistics only when there is a problem.
The difficulty in shopping for food, clothing, and other items if logistics systems
do not conveniently bring all of those goods or items together in one place, such
as a single store or a mall.
The challenge in locating the proper size or style of an item if logistical systems
do not provide for a wide mix of products, colors, sizes, and styles through the
assortment process.
The frustration of going to store to purchase an advertised item, only to find out
the store’s shipment is late arriving.
There are only few of the issues for granted which illustrate how logistics
touches many facets of daily lives. Because of the magnitude of the impact of logistics
on society and individuals, a macro approach is taken to understand the logistics
management.
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Logistics is called by the many names, including the following:
Business logistics
Distribution
Logistical management
Supply chain management
Supply management
What these terms have in common is that they deal with the management of the
flow of goods or materials from one point of origin to point of consumption, and in
some cases even to the point of disposal.
Outlined below are the key activities required to facilitate the flow of a product from
point of origin to point of consumption. All of these activities, listed below, may be
considered part of the overall logistics process.
Customer service
Demand forecasting/planning
Inventory management
Logistics communication
Material handling
Order processing
Packaging
Plant and warehouse site selection
Procurement
Return goods handling
Traffic and transportation
Warehousing and storage
While all organization may not explicitly consider these activities to be part of logistics
activities, each activity affects the logistics process.
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Warehouse Management provides maximum profitability with the minimum
investment through ordering cost and carrying of materials.
INDUSTRY OVERVIEW
Logistics is regarded as the backbone of the economy, providing efficient and cost
effective flow of goods on which other commercial sectors depend. Logistic industry in
India is evolving rapidly, it is the interplay of infrastructure, technology and new types
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of service providers, which defines whether the logistic industry is able to help its
customers reduce their costs in logistic sector and provide effective services.
Despite of the weak economic sentiments, the logistics industry continues to witness
growth due to the growth in retail, e-commerce and manufacturing sectors. The Global
Logistics sector was expected to grow 10-15% in the period 2013-14. Logistics industry
is expected to reach over USD 2 billion by 2019. Rise of e-commerce logistics and
increased domestic consumption will lead the way for the industry in the coming years.
With a promise of growth and improvements, the service oriented logistics industry is
ready to expand beyond the horizons in the latter half of this decade.
Trained Manpower is essential both for the third party logistics sector as well as the
manufacturing and retailing sectors, which is very weak at a practical level, i.e., IT,
driving and warehouse as well as at a higher strategic level. The disorganized nature of
the logistics sector in India, its perception as a manpower-heavy industry and lack of
adequate training institutions has led to a shortfall in skilled management and client
service personnel. There is a lack of IT standard, equipment and poor systems
integration.
Poor facilities and management are the reason for high levels of loss, damage and
deterioration of stock, mainly in the perishables sector. Part of the problem is
insufficient specialist equipment, i.e. proper refrigerated storage and containers, but it is
also partly down to lack of training. The practitioners and the academicians are now
aware of the importance of logistics and supply chain; however the field is still under
penetrated as far as research is concerned. It is essential to prioritize research and
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development so that the weaknesses in the industry can be taken care of and improved.
Future prospects:
The logistics firms are moving from a traditional setup to the integration of IT and
technology to their operations to reduce the costs incurred as well as to meet the service
demands. The growth of the Indian logistics sector depends upon its soft infrastructure
like education, training and policy framework as much as the hard infrastructure.
To support India’s fast paced economy growth of logistics industry is very essential.
It is estimated that the Indian logistics industry will continue to show robust growth of
10-15% annually, leading the pace of growth of the economy at large.
With the implementation of GST, the logistics companies, which are currently forced
to set up many small warehouses across multiple cities can set up just a few, big
warehouses region wise and can follow the hub-and-spoke model for freight movement
from the warehouses to the different manufacturing plants, wholesale outlets, retail
outlets and the various POS. This growth is backed by the boom in the e-commerce
sector and expansionary policies of the FMCG firms.
This has increased the service geography of the logistics firms but they also have to
meet the demands of quick delivery and tight service level agreements. The industry
has moved from being just a service provider to the position which provides end to end
supply chain solutions to their customers. Thus, all this has paved the way for further
growth of Logistics and Warehousing industry in the coming years.
Few trends in India in 2017
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has an enormous potential to benefit from automation. With Amazon using its
Robotics division to help with picking orders, restocking and shelving, there’s a
lot of buzz about robots replacing employees. Our take on that is robotics, and
other forms of automation will emerge as a very attractive option. However, they
will collaborate with employees rather than replace them.
To achieve higher productivity and efficiencies businesses will need to
AUTOMATE some of their supply chain processes. Warehousing, for instance,
has an enormous potential to benefit from automation. With Amazon using its
Robotics division to help with picking orders, restocking and shelving, there’s a
lot of buzz about robots replacing employees. Our take on that is robotics, and
other forms of automation will emerge as a very attractive option. However, they
will collaborate with employees rather than replace them
E-COMMERCE has been changing the rules of logistics and transportation in the
past and will continue to steamroll in 2017, with Amazon leading the way, be it
with robotics-driven warehouse operations or setting up new shipping routes.
Traditional logistics providers will need to keep pace.
FREIGHT volumes in shipping will continue to be high, despite rates going up.
Global air freight tonnage is expected to show an upward trend, buoyed by the
growth showed in 2016. Truckload volumes are also expected to go up.
As promised by the Indian government last year, HIGHWAY construction has
received a boost and will remain a focus in 2017, strengthening road
infrastructure in the country
Businesses will prefer to engage INTEGRATED SERVICE PROVIDERS that can
manage end-to-end logistics and transport, and bring in better control, visibility
and efficiencies amid chaos in the business environment.
As consolidation happens, the global transport and logistics industry will be
about a few large providers and their success will depend on their
KNOWLEDGE of the local markets they operate in. This trend will extend well
beyond 2017.
SUPPLY CHAIN DEMANDS will be focused on ensuring on-time last-mile
deliveries to keep pace with the rise of disruptors and unconventional business
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models. Here’s where integrated logistics service providers with a sound
understanding of global and local markets will come in hand.
India will soon see the emergence of WAREHOUSING HUBS as a result of the
implementation of GST in 2017. Some of the cities where these hubs are likely to
come up are Bhubaneshwar, Coimbatore, Goa, Guwahati, Jaipur, Nagpur,
Ranchi, Vijayawada and so forth
As the rest of the world goes mobile, the transport and logistics providers will
look at integrating MOBILE applications to their Transport or Warehousing
Management Systems to provide smarter solutions to their clients.
COMPANY PROFILE
The Group :
The Mahindra Group is an Indian multinational conglomerate holding company
headquartered at Mahindra Towers in Mumbai, India, with operations in over 100
countries around the globe. The group has a presence in aerospace, agribusiness,
aftermarket, automotive, components, construction equipment, defense, energy, farm
equipment, finance and insurance, industrial equipment, information technology,
leisure and hospitality, logistics, real estate, retail, and two wheelers. It is considered to
be one of the most reputable Indian industrial houses with market leadership in utility
vehicle as well as tractors in India.
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Mahindra & Mahindra is a part of the US$ 17.8 billion global Mahindra Group
headquartered in Mumbai, India, with a presence in over 100 countries and employing
over 2,00,000 people. The Group’s operations span 20 key industries across 10 sectors
The Mahindra Group has consistently created value for all stakeholders. The total
Market Capitalization of the Group has increased by 108 times in the last 21 years and
by 23 times in the last 11 years..
Their core values are aligned with sustainable growth that is in harmony with the
environment and society. They have built a green revenue portfolio of over US$ 393
million and have proactively been addressing issues pertaining to Sustainability. A
water positive group. Mahindra is also the first Indian Company to sign up to EP-100, a
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new initiative to double energy productivity by 2030 which is developed and
administered by The Climate Group. As per the last Annual report [2015-2016], they
will continue to invest in technologies that increase energy efficiency and enhance their
use of renewable energy. Mahindra Group also focus on increasing recycling, reducing
waste and restricting the use of hazardous substances in their manufacturing activities
Mahindra Logistics Ltd. provides logistic services. The Company offers services such as
freight transportation, warehousing and distribution, brokerage, supply chain
solutions, and industry sector solutions. Mahindra logistics belongs to the 17.8 billion
Dollars’ worth Mahindra Group with the vision of becoming a leading global 3PL
player.
A Company with strong parentage & brand Subsidiaries which has operations span in
19 industries and 100+ countries employing over 2,00,000 people and growing.
Mahindra logistics limited [MLL] was formed with a focus on Rural Transportation
needs. The Scope thereafter, was widened to transportation of goods, warehousing and
transport services for the corporate employees. The Organization was incorporated as
limited company and Rechristened as Mahindra logistics limited. This paradigm shift
was accompanied with and increased focus on building Supply chain Management
Capabilities in Automobile and other industries coupled with IT infrastructure
deployment.
The year 2008 marked the involvement of Mahindra Logistics Limited with a host of
customers within the Mahindra Group by meeting all the supply chain needs like
inbound and outbound logistics, inter-plant movement, warehousing, linefeed, Freight
forwarding and value added services among other solutions.
As per Mahindra logistics aggressive expansion they have partnered with two other
logistics to serve clients in all needs in Logistics. MLL’s Subsidiaries are
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2 x 2 logistics Pvt Ltd and Lords Freight [India] Pvt Ltd.
2x2 Logistics
Mahindra Logistics has partnered with Indian Vehicle Carriers Pvt. Ltd. (IVC) to form a
new company called ‘2x2 Logistics’ offering automotive outbound logistics solutions to
four-wheeler and two-wheeler industries.
This is the first time that MLL has added significant assets to its outbound business -
100 vehicle carriers to begin with and an intention to ramp up capacity shortly. MLL
has a majority stake in 2x2 Logistics. The new company will offer global standards of
service and technology with a special focus on innovative designs, highest degree of
visibility and quality control. This partnership will strengthen MLL’s existing pan India
network and freely allow assets to operate thereby bridging the gap between demand
and supply.
It will also allow Mahindra logistics limited to fulfil one of its core values of considering
every customer a partner, evolving to make every customer a coowner.
Mumbai based IVC is one of the leading vehicle carrier solution providers in India and
has over three decades of experience in catering to automobile manufacturers across
India.
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With this acquisition, MLL’s service portfolio will be considerably enhanced,” said MLL
Chief Executive Officer Pirojshaw Sarkari.
“This investment by MLL will allow the Logistics Division to pursue a strategy of
enhancing their capabilities and expanding our international presence, while
simultaneously leveraging MLL’s customer base and process methodologies.
What they do :
Mahindra Logistics Ltd. provides logistic services. The Company offers services such
as freight transportation, warehousing and distribution, brokerage, supply chain
solutions, and industry sector solutions. Mahindra logistics belongs to the 17.8 billion
Dollars’ worth Mahindra Group with the vision of becoming a leading global 3PL
player.
A Company with strong parentage & brand Subsidiaries which has operations span
in 19 industries and 100+ countries employing over 2,00,000 people and growing.
Very strong base and experience in Integrated Services like, Supply chain consulting,
Freight forwarding, Transportation, Cross-docks/Consolidation centers, In-plant stores
& line feed, Warehouse inventory & order management, Last mile delivery. Also
provides Value added Services like (Packing, labeling, kitting)
A Growing company with Strong pan India presence,
National transport Network with 13 offices, 90 operating locations, Over 25,000+
vehicles a month
Warehousing space Over 5 million square feet with over 2000+ Manpower.
In-plant stores and line feeding at 28 manufacturing locations, Managing
workforce of over 4,000
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Mahindra logistics has grown significantly over last 3 years and serves market
leaders in every sector. We see that they stand true to the Mahindra brand with focus on
customer centricity through transparency, quality and customized solutions
Clients :
Below listed are few prestigious Client catered by Mahindra Logistics.
Mahindra India is a proven facilitator of trade, across the globe. Their strength lies in
our global network and the know-how of our people. Backed by strategic alliances with
world-class partners and the innovative use of technology, they strive to continuously
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improve the quality of the service. Their services range from fast, responsive and cost
effective express deliveries to-ecommerce fulfillment and intelligent logistics solutions.
Mahindra core services consist of door-to-door air express delivery of documents and
parcels of all sizes, both into and out of the country.
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100 monthly trips on one of the major routes In-plant management & Inter-unit
transfer of engines, castings and aggregates.
18,000 parts supplied in a month; part loads converted to full truck loads
(FTL), leading to on-time delivery- In-bound to axle/engine manufacturing
units and fully integrated plants.
50% shipment consolidated at cross docks; 25-30 Cr. annual savings Raw
Materials imported, Milk-runs in supplier locations & consolidation at cross-
docks
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0.5%, High delivery reliability at 97%.
Express surface
Express Air
Full Truck Load
Part Truck Load
Rail
Dedicated
Transportation :
Transportation is the most visible of all functions of logistics and high contributor to
logistics cost. We can see trucks, containers and wagonloads of material being moved
from place to place as an activity directly associated with trade and business. We should
also appreciate that this is an activity that adds highest amount of cost to the activity of
making inputs and outputs available to consumers. Transportation function moves the
products to meet customer expectations at minimum cost. Transportation is one of the
most visible elements of logistics operations. Transportation provides 2 major functions:
product movement and product storage
MLL has 8 strategically located cross docks near manufacturing hubs Pan India.
Active Cross docks are currently at Gurgaon, Jaipur, Nashik, Chakan, Hyderabad,
Bangalore, and Chennai. 2 other docks coming at Haridwar & Zaheerabad.
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Freight forwarding solutions:
Mahindra Limited also provides cargo handling facilities through it partner, Lords
freight India Pvt Ltd. Below find the services, Sectors and clients Serviced.
LORDS provides air and ocean freight movement across key geographies
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Lords has executed project cargo of explosive goods for the ministry of defense
through a flight charter
Optimized route plan to avoid all no fly zones yet arrive in time
NOC and Landing permit obtained before arrival in India
NOC’s from all overflying and refueling countries managed in-house
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All legs of the movements - Planning, execution and final delivery – managed
as per expectations
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Objective of the Study
PRIMARY OBJECTIVE
To have a thorough understanding of how logistics Operations and Warehouse
management works inMahindra logistics.
To learn the effectiveness of warehouse operationsin Mahindra Logisticsand to
understand the standards and benchmark the organization with respect to
theindustry.
SECONDARY OBJECTIVE
To know about Logistics Industries
To understand the Divisions, Departments process of warehousing departments
To know whether the internal and external customers are satisfied with the
existingrangeofserviceprovided.
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Inside the walls of the warehouse, the utilization of every component “space, people,
inventory and equipment” will impact the bottom line in profound ways over time.
Warehouse Management enables to analyze these components continually, so we can
conserve effort, fill orders faster and more accurately, save space and reduce inventory
and save money.
Mahindra Logistics Limited (MLL) is a leading third-party logistics (3PL) solutions provider in
India. Vendor management in MLL involves the systematic and strategic approach to managing
and optimizing the performance and relationships with its suppliers and service providers. Here
are some key aspects of vendor management in Mahindra Logistics Limited:
Criteria: MLL selects vendors based on various criteria including quality, cost-
effectiveness, reliability, and compliance with industry standards.
Evaluation Process: Potential vendors undergo a rigorous evaluation process
involving background checks, capability assessments, and financial stability
evaluations.
2. Contract Management
Agreements: Detailed contracts outline the terms and conditions, service level
agreements (SLAs), and key performance indicators (KPIs).
Renewals and Terminations: Contracts are reviewed periodically for renewals,
renegotiations, or terminations based on vendor performance.
KPIs: Vendors are monitored based on specific KPIs such as delivery time,
quality of service, compliance, and cost efficiency.
Regular Reviews: Performance reviews are conducted regularly, and feedback is
provided to vendors for continuous improvement.
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4. Risk Management
5. Relationship Management
Ethical Practices: Ensuring vendors adhere to ethical practices and comply with
legal and environmental regulations.
Sustainability Initiatives: Promoting sustainability in the supply chain by
encouraging vendors to adopt eco-friendly practices.
8. Continuous Improvement
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Limitations of the Study
The necessary information about the study was given by the company.
Some of the study was based on observation from my short stint of Internship in
the Warehouse and Chennai Branch Office.
Research Methodology
Companies could gain cost advantage using their logistics area of the business.
Warehouse management is a possible source of cost improvements a logistics that
companies could use during this economic crisis. The goal of this study is to expose a
few best practices used in Mahindra Logistics limited warehouse performance
measurement which lead to performance improvements.
The research represents a case study on a loss making warehouse which was
contracted by Mahindra logistics. The study demonstrates the intricacies of warehouse
management practices earlier used and how it was improved by Mahindra Warehouse
team. This is to understand possible barriers which influence the overall performance
of warehouse operation. Warehouse performance measurement refers to the
measurement of: optimal use of storage space, customer relations, activity, quality level,
assets usage and costs.
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This study is based on data provided by Mahindra Logistics Reports team form their
repository. From the data we understand opportunities to improve warehouse
performances in terms of planning, design and operation in General.
Based on the data provided, we are suppose are to understand how Mahindra
Logistics Uses warehouse performance indicators?
How are they calculated by Mahindra Logistics and how are they interpreted the
issues, suggested solutions for the crisis.
How can a manager use them in order to improve the warehouse performance?
This study will answer all these questions and will also present the way in which
using performance indicators in awarehouse belonging Mahindra Logistics Limited
Data Collection:
To understandand to reach the said objectives, the study intends to use qualitative
research model which was mainly based on primary data and some secondary sources
were also used.
Primary data:
o One to One discussion with the Warehouse management Team. Key
Informant Interviews [KII]
The study found the Effective management by Mahindra Logistics team improved the
performance of a Loss making Warehouse.
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Warehousing:
A warehouse is a commercial building for storage of goods. Warehouses are used by
manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc.
They are usually large plain buildings in industrial parts of towns. They come equipped
with loading docks to load and unload trucks; or sometimes are loaded directly from
railways, airports, or seaports. They also often have cranes and forklifts for moving
goods, which are usually placed on ISO standard pallets.
Introduction to Warehouse:
Warehouse can play a key role in the integrated logistics strategy and its building
and maintaining good relationships between supply chain partners. Warehousing
affects customer service stock-out rates and firm’s sales and marketing success. A
warehouse smoothens out market supply and demand fluctuations. When supply
exceeds demand, a demand warehouse stores products in anticipation of customers’
requirements when Demand exceeds supply the warehouse can speed product
movement to the customer by performing additional services like marking prices,
packaging products or final assembling etc.
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chain. Warehouse management helps in optimizing warehouse operations. It enables to
pinpoint big potential cost-savings and gives us a “hands-on” control of the movement
of goods not only in warehouse, but also throughout the entire logistics chain.
Labor: Make people more efficient by managing their tasks and improving
their processes. Plan and balance workload and monitor activities with
integration to Labor Management.
Physical Space: Cross-docking and flow-through capabilities, plus integration
with Yard Management, reduce the need for warehouse space.
Time: Automate picking, packing and shipping, and minimize the number of
moves per order
Types of Warehouse:
Private Warehousing:
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A firm producing or owning the goods owns private warehouses. The goods are stored
until they are delivered to a retail outlet or sold. Potential advantage of using a private
warehouse is the ability to maintain physical control over the facility, which allows
mangers to address loss, damage, and theft. When not in use they can rent it out.
The construction and maintenance of private warehousing can be extremely costly. All
the expenses have to be carefully analyzed and evaluated. These are:
o Fixed expenses and building and land acquisition costs which are high; o
Expenses incurred on ensuring that warehouses are properly equipped with
material-handling equipment like conveyors, fork lifts, hand trucks, racks and
bins, and dock levelers;
o The costs of salaries of staff required for peak activity periods which can be very
high since retrenchment during slack periods may not be possible;
o Extra payment to be made for work on Saturday and Sundays and holidays; o
Generator and other services charges are required to be taken into account.
o The office and record-keeping equipment necessary for successful warehousing
operations has to be budgeted for;
o To this must be added the cost of such item as fuel, air-conditioning, power and
light.
o The cost of maintaining insurance records and of the premiums paid for fire,
theft, and also for workmen’s compensation.
Advantages
The advantages and disadvantages of private warehousing as against those of public
warehousing are:
Private warehousing offers better control over the movement and storage of
products as required by the management from time to time.
There is less likelihood of error in the case of private warehousing since the
company’s products are handled by its own employees who are able to identify
the products of their own company better.
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If there is sufficient volume of goods to be warehoused, the costs of private
warehousing compares favorably with that of public warehousing. But private
warehouse may not be expected to be packed up to the brim all the while.
Therefore the costs of private warehousing per unit may actually be higher.
Public Warehousing
A public warehouse rents space to individuals or firm needing storage, some provide
wide array of services including packaging, labeling, testing, inventory, maintenance,
local delivery, data processing and pricing.
All the foregoing cost factors operate in public warehousing as well. But in public
warehousing, the expenses are distributed over several other consignments of other
clients. In most instances therefore can render better service with greater flexibility for
the user. A company running a private warehouse will have to compare costs incurred
with the total figure for the complete service through public warehousing.
Advantages
It is generally less expensive and more efficient.
Public warehouses are usually strategically located and immediately available.
Public warehousing is sufficiently flexible to meet most space requirements, for
several plans are available for the requirement of different users.
Fixed costs of a warehouse are distributed among many users. Therefore the
overall cost of warehousing per unit works out to a lower figure.
Public warehousing facilities can be given up as soon as necessary without any
additional liability on the part of the user.
The costs of public warehousing can be easily and exactly ascertained, and the
user pays only for the space and services he use.
Contract Warehousing
Contract warehousing is a specialized form of public warehousing. In addition to
warehousing activities such warehousing provides a combination of integrated logistics
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services. Thus allowing the leasing firm to concentrate on its specialty. They provide
customized services, eg. Value Added Services.
Co-Operative Warehousing
These warehouses are owned, managed and controlled by Co-operative societies. They
provide warehousing facilities at the most economical rates to the members of their
society.
Bonded Warehousing:
These warehouses are owned, managed and controlled by government as well as
private agencies. Private bonded warehouses have to obtain licenses from the
government. Bonded warehouse are used to store imported goods for which import
duty is yet to be paid. In case of imported goods the importers are not allowed to take
away the goods from the parts till such duty is paid. These warehouse are generally
owned by dock authorize and found near the ports.
FUNCTIONS OF WAREHOUSES:
Warehouses are basically intermediate storage points in the logistics system where raw
material, work in process, finished goods and good in transit are held for varying
duration of times for a variety of purposes. The warehousing functionality today is
much more than the traditional function of storage. The following are main function
that warehousing serves today:
Consolidation:
This helps to provide for the customer requirement of a combination of products from
different supply or manufacturing sources. Instead of transporting the products as
small shipments from different sources, it would be more economical to have a
consolidation warehouse. This warehouse will receive these products from various
sources and consolidate these into shipments, which are economical for transportation
or as required by the customers.
Break Bulk:
As the name suggests, the warehouse in this case serves the purpose of receiving bulk
shipments through economical long distance transportation and breaking of these into
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small shipments for local delivery. This enables small shipments in place of long
distance small shipments.
Cross Docking:
This type of facility enables receipt of full shipments from a number of suppliers,
generally manufacturers, and direct distribution to different customers without storage.
As soon as the shipments are received, these are allocated to the respective customers
and are moved across to the vehicle for the onwards shipments to the respective
customers at these facilities. Smaller shipments accompanying these full shipments are
moved to the temporary storage in these facilities awaiting shipments to the respective
customers along with other full shipments.
Product Mixing:
Products of different types are received from different manufacturing plant or sources
in full shipment sizes. These products are mixed at these warehouses into right
combination for the relevant customers as per their warehouses and continuously
provided for the product mixture shipments requiring these.
Stock Piling:
This function of warehousing is related to seasonal manufacturing or demand. In the
case of seasonal manufacturing, certain raw materials are available during short periods
of the year. Hence, manufacturing is possible only during these periods of availability,
while the demand is full year around. This requires stockpiling of the products
manufactured from these raw materials. An example is mango pulp processing. On the
other hand, certain products like woolens are required seasonally, but are produced
throughout the year, and thus need to be stockpiled as such.
Postponement:
This Functionality of warehousing enables postponement of commitment of products to
customer until orders are received from them. This is utilized by manufacturers or
distributors for storing products ready up to packaging stage. These products are
packaged and labeled for the particular only on receipt of the order.
Positioning:
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This permits positioning products or materials at strategic warehouses near to the
customers. These items are stored at the warehouse until ordered by the customers
when these can be provided to the customers in the shortest lead-time. This function of
warehousing is utilized for higher service levels to customers for critical items and
during increased marketing activists and promotions.
Assortment:
Assortment warehouse store a variety of products for satisfying the variety
requirements of customers. For example, retailers may demand different brands of the
same product in small quantities rather than larger quantities of the single brand.
Decoupling:
During manufacturing, operation lead-times may differ in order to enable production
economies. Thus, the batch size and the lead-time of production may differ in
consecutive operations. This decoupling of operations requires intermediate storage of
materials required for the subsequent operation.
Safety Stocking:
In order to cater to contingencies like stock outs, transportation delays, receipt of
defective or damaged goods, and strikes, safety stocks have to be maintained. This
ensures that, on the inbound site production stoppages do not occur, and, on the
outbound side customers are fulfilled on time.
Advantages of Warehousing
Mahindra’s Warehouses offers many advantages to the business community. Whether it
is industry or trade, it provides a number of benefits which are listed below.
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transferred to the buyer by transferring the warehouse keeper’s warrant.
Availability of finance- Loans can be easily raised from banks and other financial
institutions against the security of the warehouse-keeper’s warrant. In some
cases warehouses also provide advance to the depositors of goods on keeping
the goods as security.
Reduces risk of loss - Goods in warehouses are well guarded and preserved. The
warehouses can economically employ security staff to avoid theft, use
insecticides for preservation and provide cold storage facility for perishable
items. They can install fire-fighting equipment to avoid fire. The goods stored
can also be insured for compensation in case of loss.
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complexes will include both multi-user and built to suite units with the very best /
latest design, engineering, layout, material handling systems, automation and
warehouse management systems. Mahindra's warehouse and stores and line feed
service offerings:
For People:
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Processes:
Value to customer
Operational excellence:
utilization
From their research they found transportation costs initially decreases with increasing
number of warehouses. This is due to the transportation economics obtained by having
large-volume long-range transportation from consolidation warehouses and shortrange
small-volume transportation from break-bulk warehouses. However, as the number of
warehouses increases beyond a certain value, the transportation costs starts increasing
due to large number of transportation trips in – between the larger numbers of
warehouses. Inventory costs continuously increases with the increasing number of
warehouses beyond the increased space available needs to be utilized and firms
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increase the commitment of inventory at these warehouses beyond those actually
needed. Transit inventory costs continuously decrease with the increased number of
warehouses due to the shorter transportation times between the larger numbers of
warehouses. The warehousing costs increase with more warehouses due to the
maintenance and facility costs associated with each warehouse. For the same space, a
single warehouse incurs less warehousing cost than two warehouses.
Manufacturing-Positioned Warehouses.
Mahindra’s positioned it’s warehouse are located near to their own manufacturing
facilities in order to support manufacturing on the inbound side and to facilitate
assortment-creation and shipping on the outbound side. This improves the support to
manufacturing division
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o Availability of services o Land cost and soil strength and
lay off land for drainage.
o Availability of transport linkages for example, to a rail
siding o Availability of utilities of water and power o
Taxes and insurance cost
o Expansion space availabilityBelow listed is the InPlant
Warehouses and External Warehouse Map.
Ware Housing
Model Customized warehousing Multi-user warehousing
Built-to-suit warehouses
catering to varied needs and Allotting space to multiple users
Description product types
Operations depend on the location Addressing different types of
and demand. Ensuring optimum
type of warehouse required utilization of resources
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Mahindra Logistics’ Innovation led implementation delivering value for a leading e-
commerce player.
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Achieved 4x efficiency in volumes, using the same resources i.e. drivers and
trucks
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WAREHOUSE LAYOUT AND DESINGN
Mahindra’s warehouse layout is designed in such a way that it can increase output,
improve product flow, reduce cost, improve service to customers and provide better
employee working condition.Their optimal warehouse layout and design for a firm will
vary by the type of product being stored, the company financial resources, competitive
environment and needs of customer. The warehouse manager considers the cost of
trade between labor, equipment, space and other vital information.
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In designing warehousing systems it is desirable to maximize.
• Space utilization;
• Equipment utilization;
• Labor utilization;
Storing goods in adequate space with the proper equipment by well trained personnel
in a properly planned layout results in maximum protection of items.
Their warehouses have 20-30 foot ceiling. Through the use of racking or other hardware
it is possible to store product up to the building ceiling. Warehouse design also allow
for straight product flow through the facility whether items are stored or not. In general
this means that product can be received at one end of the building, stored in the middle
and then shipped from other end.
From their design we can understand that a Good warehouse layout and design often
involve the use of automated equipment, such as a conveyor system to handle large
number of products packaged in a carton. The entire area of facilities development that
is size and number of warehouses, location analysis, warehouse layout and design is an
important factor yet complex, part of warehouse management. In recent years,
computers have played a more significant role as logistics executives attempt to
optimize warehouse operation. Thus a warehouse plays a multi-faceted role in the
integrated logistic system.
Warehouse Equipment’s:
In the present business world, all the warehouses are striving to attain an ideal
warehouse in which every equipment is automated and integrated with the computer
systems which minimize the effort put on to perform the operation and cuts down the
cost for the operation. This will at the same time reduce the man power required to
perform various operations in a warehouse.
Enhance responsiveness
o Increase the throughput of the facility, e.g.,
• Increasing the SKU density
• Establishing a more ergonomic environment/arrangement for the warehouse
operators
• Facilitating the parallelization of order picking
• By parallelizing the tasks of order-picking and replenishment
Equipment Classification
Containers & Unitizing Equipment
Storage and Retrieval Equipment o Unit Load o Small Load
Conveyors
Warehouse docks and dock-related equipment
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Automatic Identification and Communication Equipment
Pallet Storage Modes
Block Stacking
Rack Storage o Single-Deep o Double-Deep o
Drive-In/Through o Pallet Flow o Unit Load
AS/RS ….etc.
An efficient storage mode when there are multiple pallets per SKU; inventory is turned
in large increments, I.e., several loads of the same SKU are received or withdrawn at
one time. Main problem with this method is : Loss of space due to “honeycombing” not
effective utilization of the vertical dimension of the facility
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o
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• Easier supervision
• Better item security and protection o Disadvantages of STO:
• More expensive
• More maintenance
• More difficult to reconfigure
Conveyors
o (Flat) Belt o
Roller o
Telescoping
Belt
o Chute o
Sorting
• Deflector
• Push Diverter
• Pop-up Skewed Wheels
• Pop-up Roller
• Tilt tray
Remarks: Conveyors change the economics of travel. They can partition physically the
warehouse into zones
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• Truck levelers
• Scissors-type lifting docks o Bumper pads: absorb the shock from the
impact of the shipping trailer with the dock walls (laminated rubber
cushions)40,000 lb load traveling 4 mph =>
150,000 lb force o Dock shelter: a flexible shield that when engaged to the carrier
provides a closedenvironment interface between it and the inner area of the
warehouseenergy savings, increased safety, product protection, etc.
o Smart card
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o Hard hat
o Eye protection
o Hearing protection
o Dusk mask
o Work gloves
o Safety shoes
o Cold weather gear
Emergency Equipment
o Sprinklers
o Fire extinguishers
o Evacuation routes
o Electrical panels
o First-aid supplies
o Alarms and phones
o Walkie Talkie
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Manpower in Chennai Warehouse Division
Manpower set-up in Chennai Warehouse
Manager- Warehouse 1 1
Security Supervisor 1 1
Keeping records and reporting to the authority is the last and important part of the
warehouse management where the quantity of materials received and distributed at the
reporting period is mentioned. It provides the materials management personnel the
exact picture of the materials consumption and surplus or shortage situation. Reporting
team ensure whether the central warehouses are maintaining store tickets and ledgers
properly in issuing, returning, etc. of the materials. It ensures maintaining of all sorts of
files related to receiving,issuing, returning; and supporting papers of the same, voiding
ticket etc. as per Mahindra Central Compliance team guideline.
Coding and Classification of Materials:
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sequence gives a complete and unique reference which cannot be confused with
another and can be recorded, retrieved and recognized throughout the enterprise.
Based on the data shared by the team, below find the case study.
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the Bosch group, in view of its rapidly growing automotive market and availability of
manpower with high degree of engineering and technology skills
Bosch is also a leading supplier of technology and services in the areas of Mobility
Solutions, Industrial Technology, Consumer Goods, and Energy and Building
Technology. Additionally, Bosch has in India the largest development center outside
Germany, for end to end engineering and technology solutions.
The Bosch Group operates in India through nine companies, viz, Bosch Limited,
Bosch Chassis Systems India Limited, Bosch Rexroth India Limited, Bosch Engineering
and Business Solutions Private Limited, Bosch Automotive Electronics India Private
Limited, Bosch Electrical Drives India Private Limited, BSH Home Appliances Private
Limited, ETAS Automotive India Private Ltd. and Robert Bosch Automotive Steering
India Pvt. Ltd. In India, Bosch set-up its manufacturing operation in 1951, which has
grown over the years to include 15 manufacturing sites, and seven development and
application centers. Bosch Group in India employs over 30,000 associates and generated
consolidated revenue of about ₨.17,022 crores in 2015 of which ₨. 12,100 crores from
third party. The Group in India has close to 14,000 research and development
associates.
Bosch’s Warehouse:
The warehouse owned by the company is located in Hyderabad and was acquired in
2009. The location of the warehouse was chosen for the following reasons:
The building has 15000 square Feet; it has few big rooms for storing the products (on
shelves or on pallets), and offices for the whole firm. Even though they had strong
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Check points and performance measurementsindices, they could not Control the KPI's
like Inventory Management, Order fulfillment & Warehouse performance.
We shall use for performance improvement as the performance indicators. The purpose
was to identify the poor performance inside the warehouse. As we mentioned above,
they have used John M. Hill’s indicators to assess the performance of the warehouse,
grouped into three categories like “Inventory Management”, “Warehouse
Performance” and “Order Fulfilment” The values written in green indicate that the
operation is going smoothly and red means that there are problems.
Taking into account the red values from performance indicators and also the warehouse
process map, we have identified several problems regarding warehousing, related to
space usage, inventory management, warehouse performance and order fulfilment
(performance indicators), that are presented below. Below find the Table with the
Problem Area and its causes.
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Solutions suggested:
Space:
The main problem of the warehouse is the poor utilization of space. It can be solved by
breaking some walls so that to have only a room for storing the merchandise. One of
the archives, the two halls and one of the toilets should be eliminated. The offices of the
firm should be moved on one side of the warehouse, so that access to goods be direct.
The current Office of the Director should be divided in two halves: one used by the
director and the other by the accountant and moved on the left side of the warehouse.
These modifications would result in a gain of 55.83 sq.m. There should be two main
docks in the warehouse: one for receiving the products and one for delivering them.
They should be situated on opposite sides of the warehouse. In this way, there will be a
better access to all the products. Before making these modifications, the opinion of a
construction engineer should be taken into account. Another solution is related to the
fact that there are multiple flows which intersect each other. One solution whichwould
improve space utilization is a new design of flows inside the warehouse – it looks like
possible to establish one different entry and one different exit for each stored product
category.
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Inventory Management:
“Dock to Stock Time” can be reduced by introducing portable barcode readers and a
barcode software. The time for entering the products or for preparing them for delivery
will be shortened also by solving the problem related to space. “Days on Hand”
indicator will have a lower value if contracts with suppliers are renegotiated and if are
kept only the ones who are able to deliver products fast. The firm should also use an
ABC analysis in order to know what products to place near the exit dock.
Warehouse Performance:
The problems related to warehouse performance can be solved by improving the space
utilization and by introducing portable barcode readers. We recommend a performance
indicators continuous monitoring, in order to observe the improvements while they
appear.
Order Fulfilment:
Delivery problems can be solved by collaborating with suppliers that have the
possibility to deliver merchandise fast or by investing in cars, and all that results from
this investment (hiring a driver). These solutions could be implemented, in our opinion,
in about 3 months, and this is because the whole architecture of the building has to be
changed.
Key achievements post taking over the warehouse from Bosch ltd.
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ISO certification (MLL VW)
Achieved ‘0 downtime’ on first day
99.99% inventory accuracy
Below find the snap shot about this case study in their Annual report of the year 2014.
Comparison before and After taking over the Warehouse from Bosch
0%
HUs not found 2%
RCM
100 % %
fullfillment 10 0 %
kaizen/quarter 0% 55
Value added
100 %
service 100 %
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100 %
Inventory accuracy99 %
60
50
40
30
20
10
0
Axis Title
Conclusion:
In order to solve the problems, we have used a very simple methodology: identify the
causes of the problems and then try to diminish their impact or just eliminate the
causes. It is a cause-effect approach, easy to be applied by any manager.
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indicators to a small company, but they can be calculated also for large firms. Even on a
small scale, they helped us discover a lot of problems, out of which the poor utilization
of space was the essential one.
Learnings:
Reference:
http://www.iamwire.com/2017/04/indian-logistics-industry-scenario/151331
http://economictimes.indiatimes.com/news/economy/policy/gst-to-
boostwarehousing-logistics-jll/articleshow/58186906.cms
file:///C:/Users/sakaruna/Downloads/Mahindra%20Annual%20Review
%202016.pdf
http://ivcpl.in/achievements.html
http://www.thehindubusinessline.com/companies/mahindra-logistics-acquiresstake-
in-lords-freight/article6331897.ece
http://www.mahindra.com/news-room/press-release/1342761056
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Thank you
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