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Outbound Logistics Functionality
  165 Reduction of Turnaround Time for Outbound Logistics(Finished Goods only) in a Food Processing Industry Kushal Parwani (PGDM No.: 12085)Student, SDMIMD, Mysore R Jagadeesh Professor - Operations Management and Quantitative TechniquesSDMIMD, Mysore  166 Comments by the Faculty Logistics is that part of supply chain management that is responsible for the effective movementof the goods from the point of srcin to the point of consumption in the least possible timeincurring least cost and satisfying the customers€ requirement in terms of quantity, quality, andvariety. Without the support of logistics it would not be possible for the supply chains toensure safe and timely delivery of the materials and finished goods to the concerned customers.Hence every effective supply chain needs to focus on the logistics part to ensure production anddistribution without any interruption.A manufacturing company usually will have inbound logistics, which brings in all the rawmaterials, semi-finished goods, components, and packing items, and the outbound logisticsthat carry the finished products from the company to the dealers, distribution centers, andsometimes directly to the retail shops and customers. It is imperative that the outbound logisticssystem works efficiently to ensure that the finished goods are dispatched from the company€spremises as soon as the manufacture is over so that the goods reach the destination at theearliest possible time. This in turn ensures meeting the demand at the destination points andleads to increased sales and in the long run enables customers€ loyalty.The present project carried out at Nestle India limited at their Nanjanagud plant in Karnataka,India, primarily focused on minimizing the outbound logistics time so as to improve the overallefficiency. First the entire outbound logistics pattern that involved the movement of the carrierswhich are nothing but two types of trucks was studied by mapping the process. Then all thesteps involved in the logistics operation, namely documentation, record keeping, loading,weighing, and waiting times were systematically studied using a sample of 5 trucks on each dayfor a period of ten days. This data of 50 trucks helped in noting down the various issues thatwere responsible for the total time of operations along with the bottlenecks in the process. Byusing Pareto chart the two major contributors responsible for the delay were observed andthen appropriate modifications were carried out. After implementing the pilot plan the activitieswere again measured for their time of operation and a substantial reduction in time wasnoticed. It was indeed obvious that with the improvement in time of operations of the twomajor activities which constituted for almost 75% of the total time, the total time wassubstantially brought down. Thus the project was able to achieve objectives of improving theperformance of the outbound logistics operation. R Jagadeesh  167 Reduction of Turnaround Time for Outbound Logistics(Finished Goods only) in a Food Processing Industry Introduction Supply chain management  A supply chain involves facilities, functions, and activities for producing & delivering productor service from suppliers to customers. Supply chains usually include four functionalcomponents: (1) demand planning, (2) manufacturing-planning and scheduling, (3) supplyplanning, and (4) transportation planning. Supply chain management (SCM) spans all themovement and storage of raw materials, work-in-process inventory, and finished goods frompoint of srcin to point of consumption, (Chopra & Meindl, 2003). SCM draws heavily from theareas of operations management, logistics, procurement, information technology and strivesfor an integrated approach. The main objective of SCM is to minimize supply chain costs whilekeeping a reasonable service level leading to customer satisfaction/quality/on time delivery,etc., (Christopher, 2011). Logistics Logistics refers to the management of the flow of resources between the point of srcin and thepoint of consumption in order to meet some requirements, for example, demand from customersor corporations. The resources managed in logistics can include physical items, such as food,materials, equipment, liquids, and staff, as well as abstract items, such as time, information,particles, and energy. The logistics of physical items usually involves the integration of information flow, material handling, production, packaging, inventory, transportation,warehousing, and often security. The complexity of logistics can be modelled, analyzed,visualized, and optimized by dedicated simulation software. The minimization of the use of resources is a common motivation. (Mentzer, 2004). Outbound Logistics The movement of material associated with storing, transporting, and distributing goods to itscustomers or distribution centers. About the Company Nestlã is the world€s leading Nutrition, Health and Wellness Company that continues to delightconsumers and create economic value for society. Their mission of ƒGood Food, Good Life‚ is toprovide consumers with the best tasting, most nutritious choices in a wide range of food andbeverage categories and eating occasions, from morning to night.After nearly a century-old association with the country, today, Nestlã India has presence acrossIndia with seven manufacturing facilities and four branch offices spread across the region.Nestlã India€s first production facility, set up in 1961 at Moga (Punjab), was followed soon afterby its second plant, set up at Choladi (Tamil Nadu), in 1967. Consequently, Nestlã India set upfactories in Nanjangud (Karnataka), in 1989, and Samalkha (Haryana), in 1993. This wassucceeded by the commissioning of two more factories - at Ponda and Bicholim, Goa, in 1995  168 and 1997 respectively. The seventh factory was set up at Pantnagar, Uttarakhand, in 2006. The8th Factory was set up at Tahliwal, Himachal Pradesh, in 2012.The four branch offices in the country help facilitate the sales and marketing of its products.They are in Delhi, Mumbai, Chennai and Kolkata. The Nestlã India head office is located inGurgaon, Haryana. Problem/Objective of Study The research work was carried out in the Supply Chain Management department, of Nestle IndiaPvt Ltd., Nanjangud (Karnataka). The company has two warehouses to handle … € Maggi: The product is supplied mostly to regions in South, East and West of India € Coffee: The product is supplied all over India. It is the only plant in India for Coffeeproduction and supply across the country.The project was about the total turnaround time for outbound logistics (finished goods), inwhich the objective was to understand the entire process and suggest some steps to reduce itsignificantly. Turnaround Time Turnaround time is defined as the time taken by the transport vehicles to complete the wholeprocess of loading finished goods, starting from the point of entry to its exit from the factorypremises. In Nestle India, Nanjangud the break-up of the outbound logistics process (finishedgoods) is shown in Figure 1. Turnaround time is probably the most important key performanceindicator in any logistics operation, as stated in Bolstorff (2007). A short turnaround time iseconomically advantageous, making the most efficient use of time and materials. (Bowersox,Closs, & Cooper, 2002) Figure 1 : Outbound logistics process in the company  Arrival at thegateClearance atthe gateWaiting to beweighedWeighmentbefore loadingIdle time afterloadingLoadingIdle time beforeloadingReporting toSCM officeTarpaulindressingDocumentation& ProcessingWaiting to beweighedWeighment afterloadingCheck out atthe gate
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