Case Study:- Spare Parts Procurement Planning at KM Trans

Logistics
BACKGROUND AND PROFILE
 Founded in 1988 by two brothers, Kamal Kumar Chandwar and Prabhachand Chandwar.
 Function- Logistic provider for flatbed steels and finished automobiles(Passenger cars, cargo vehicles), freight
forwarding as well as providing warehousing and logistic services.
 Two workshop- Gidani workshop, Gurgaon workshop.
 Company having fleet of 850 vehicles, 500 finished car trailers and 100 flatbed trailers.
 Authorized capital – Rs. 400 lakhs and Paid-up capital- Rs. 315 lakhs and paid-up capital %- 78.85%
 Serving 90% of car makers.
 USP- Large Fleet, Safety is the priority, Monitoring System, Process Automation.
PROBLEM STATEMENT

Company had started to making losses due to instability in ordering spare parts and bad inventory
management techniques.
NETWORK
SUPPLY CHAIN MANAGEMENT TECHNIQUES

 Loading/Unloading points- Most of their loading points located in northern and western India where they

enjoyed locational benefits and their unloading could be located at every 50-100kms on the map of India.

 Transportation of selected items- It choose to transport only such goods like flatbed steel, cars and trucks.

 In-house repair system- Their workshop was self-sufficient as far as repaired and maintenance concerned

 Repair of minor issues- If minor issue require less than 30 minutes time for repair then it was repaired outside the

gate before entering the workshop\

 Not engaging in repair work of other parties
SUPPLY CHAIN MANAGEMENT TECHNIQUES

 Outsourcing- 1) Allow to use bring mobile vans to the workshop for repair.

2) Wheel balancing technology

 Control of senior executives
 2-leg transportation scheme
KEY ISSUES RELATED TO SUPPLY CHAIN MANAGEMENT
 Inefficient inventory management- 1) Procuring spare parts in ad hoc manner

2) Excess order of spare parts

3) Insufficient ordering of spare parts

 Lack of planning- Order quantity and procurement scheduled in the second leg depend on store manager.

 Lack of proper software solution named MIST-MIS for transporters was incapable of estimating the values
of inventory control input parameters.
CUTTING-EDGE TECHNOLOGY TOOL

 MIST-MIS Transportation Technology- Features are alarms, notification, automatic invoicing and
inventory control and MRP- Materials Requirement Planning system helps to determine the right

quantity and timing of spare part procurement.

 Electric- Mechanical Extraction System- It uses high pressure and heat to squeeze the oils out.
System pumps out required amount of oil. Prevented oil contamination or back-flow.
INVENTORY CONTROL TECHNIQUES

 Self- sufficient workshop- All repairs were carried in-house or outside the premises.

 Two leg inventory scheme- It prevented shocks in inventory either in low demand or high demand.

 Demand forecasting
INVENTORY CONTROL TECHNIQUES

 Just in Time- To save inventory storage cost. It is feasible to order a part on time or in this situation company's
employees used to carry that part on their own vehicle.

 Vital Essential and Desirable analysis(VED)- In this company used 50 spare parts which are either the most
expensive or the most fast moving and hence in the main store room they kept almost 5 to 10 units of each
component for easy availability.
INVENTORY CONTROL TECHNIQUES

 Bulk shipment
SOLUTIONS
 Inventory management and ABC analysis- In this spare parts can be divided into 3 categories according to their
importance and value.
 Upgrade in software- Company can upgrade their traditional software system or buy a new system that is more
robust and capable of estimating the values of inventory.
 Train the store manager- Need for clear procurement policies.
 Regular Audit
 Just in Time and Mobile Application- It can reduce inventory holding expense and mobile application is a cheap
solution.
Thank You