Customer
One of the largest Auto OEMs in India with presence in commercial and passenger vehicles
Problem
High inventory levels were maintained to ensure smooth running of the lines, which eventually resulted in increased working capital and inventory management costs
Cause
Modern ordering system allowed vendors to view the daily required quantities for assembly on six lines. But vendors could not cope with the staggered daily delivery model, which necessitated higher inventory levels.
KGC’s Approach
Integration
- KGC collaborated with the customer to set up a Just-in-Time (JIT) sequencing and delivery system involving 62 direct component vendors located within a 200-kilometer radius of the manufacturing facility
- Delivery schedules of all the 62 vendors were integrated on KGC’s digital platform to create a single login and dashboard
Cluster Formation
Clusters (groups) of vendors were formed on the basis of geographical location, part volume, quantity and component type
Milk-Run Collection
Collection timings were assigned to each vendor, and components were collected from 62 vendors on a daily basis
Specialized Equipment & Personnel
Specialised collection trucks and teams were assigned to each cluster who reported on next day before the start of production
Returnable Bins
Returnable bins were introduced to save on packaging costs and empty bins were returned back to vendors (no extra cost)
Outcome
- KGC designed and implemented the first JIT model in the Auto OEM’s long history
- The project achieved remarkable success and the customer decided to establish it as a template, replicating it across all other manufacturing facilities throughout India