Caring for our customers precious objects with Domino Discipline, we promise to stay Ahead in reach in service quality,

wide network, technology, automation and in being high calibre Gatiites and responsible business partners.

VALUE ENGINEERING IN LOGISTICS

K. Ramachandran
12 October, 2006

October 31, 2006

C o n f i d e n t i a l

C o n f i d e n t i a l

Value Engineering In Logistics

Value engineering is a systematic method to improve the "value" of goods and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost.
October 31, 2006

It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements. Value Engineering techniques can be applied to any product process procedure system or service in any kind of business or economic activity.
October 31, 2006

C o n f i d e n t i a l

C o n f i d e n t i a l

Value Engineering focuses on those value characteristics which are deemed most important from the customer point of view. Value Engineering is a powerful methodology for solving problems and/or reducing costs while maintaining or improving performance and quality requirements.
October 31, 2006

Value Engineering can achieve impressive savings, much greater than what is possible through conventional cost reduction exercise even when cost reduction is the objective of the task.

October 31, 2006

C o n f i d e n t i a l

C o n f i d e n t i a l

Benefits of Value Engineering

Improving quality management Improving resource efficiency Simplifying procedures Minimising paperwork Lowering staff costs Increasing procedural efficiency
October 31, 2006 7 C o n f i d e n t i a l 8 C o n f i d e n t i a l

Benefits of Value Engineering

Developing value attitudes in staff Competing more successfully in marketplace

October 31, 2006

VALUE MANAGEMENT/VALUE ADDITION

October 31, 2006

GATI Commitment Single Window Solution In-Country International Logistics Logistics Future GATI Assured DELIVERS Growth Delivery Technology Support
October 31, 2006

All India Reach Inventory Management

10

C o n f i d e n t i a l

C o n f i d e n t i a l

In Logistics You Can Term Value Engineering as

Value Addition By GATI Why Gati? Project Management approach for all warehousing project. Team of Engineers to design & build warehouse as per your requirement.
C o n f i d e n t i a l 11 12 C o n f i d e n t i a l

October 31, 2006

Creating State of Art Warehouse with APL Racking & MHE at all location across the country. Availability of additional warehouse space on shared basis as per need basis in all India location. Strong Financial strength to invest in capital infrastructure.
October 31, 2006

CASE STUDY Customer : IFTEX PETROCHEMICALS LTD. Product : FUEL ADDITIVES

C o n f i d e n t i a l 13 14 C o n f i d e n t i a l

Requirements : Instant warehousing distribution system Pan India warehousing and distribution
October 31, 2006

Sales tax registration in 21 states Delivery to BPCL petrol stations Delivery against cheque / draft Banking at local branches Monthly sales tax return submission On-line inventory visibility Single window solution Optimum cost
October 31, 2006

Solution Given

100 sft warehousing space (21 cities ) Dedicated manpower Shared system support Communication support Storage racks Web based WMS system Order processing Returns management All India co-ordinator at Mumbai Daily MIS reporting
October 31, 2006

15

Primary and secondary distribution Centralised billing facility Track and trace of all consignments Facility for sales staff seating at locations JIT delivery to OEM two wheeler factory

October 31, 2006

16

C o n f i d e n t i a l

C o n f i d e n t i a l

21 STATE WAREHOUSE S
IFTEX FACTORY ROHA (MAHARASTRA)

B P C

VAS Storage

O
Distribution Centre

U T

Cross Dock
Receivi ng Put away store Inventory Mngment pick VAS Consolid ate Ship

L E T S
Pick-pack Kitting Kiting Break-bulk Packaging

C U S T O M E R S

Product flow Information flow

October 31, 2006

17

Our Approach : Four Stages Diagnostic Carry out Supply Chain SWOT Identify areas that will provide customers with maximum value Through Questionnaire, Interviews and site visits

October 31, 2006

18

C o n f i d e n t i a l

C o n f i d e n t i a l

Proposed Supply Chain Model Process Mapping/ Detailed Audit New Model, Strategies and Technologies evolved Process changes required identified Logistics options explored Cost- benefit Analysis Done
October 31, 2006

19

Our Approach : Four Stages (contd.) Detailing Teams formed to detail the approved model Critical Process Mapping, Rootcauses and re-engineering of processes Comprehensive logistics and IT Plan
October 31, 2006

20

C o n f i d e n t i a l

C o n f i d e n t i a l

Our Approach : Four Stages (contd.) Implementation Plan, People Issues, Cost-Benefit Analysis Implementation Comprehensive Support Steering Committee Vendor Selection: Logistics and IT Tracking of MOPs: Costs and Benefits, Cycle Time Control Systems
October 31, 2006

21

Unlike Other Logistics Service Providers that simply focus on Cost Cutting and unwittingly end up in Value Destruction WE SHALL FIND WAYS TO TONE UP YOUR SUPPLY CHAIN Or If You have a Ready Solution, we shall implement it straightaway. The Next Step..
October 31, 2006

22

C o n f i d e n t i a l

C o n f i d e n t i a l

GATI Logistics Package Provides you with a ready-tomove distribution network; having storage locations and distribution channels: No big investment Standardised execution at all locations Locate your inventory closer to your customer
October 31, 2006

23

Available shelf space at 200 locations Seasonally in distribution requirements met

October 31, 2006

24

C o n f i d e n t i a l

Expand into new markets without a large capital investment

C o n f i d e n t i a l

MANTRA For Survival/Growth FUTURE INVENTION

C o n f i d e n t i a l 25 26 C o n f i d e n t i a l

(a)Ongoing Practice of anticipating : (i) Customer Needs & (ii) Competitor Moves (b)Examine Traditional Cycles & Supply Chains Business

(c)Eliminate Processes that do not add value to products or market position

October 31, 2006

To conclude

SCM moves from Back room To Board room Current Business Environment necessitate streamlining of processes, use of IT, ERP & SCM tools/solutions
October 31, 2006

Can we can help you to get your share of this big cake ?
October 31, 2006 27

Welcome to Ahead In Reach

THANK YOU
October 31, 2006 28

C o n f i d e n t i a l

C o n f i d e n t i a l

India Inc can save upto $ 5 bn. by 10% reduction in SC costs from the present $ 50 bn. (Rs. 2,35,000 crores) (13% of GDP, highest in the world)