Fujitsu COE Milk Run

Fujitsu America

Milk Run in FMCG Industry- Abhai Tripathi

[email protected]

Fujitsu America

Agenda

What is milk run planning Challenges faced ASCP Fundamentals Oracle functional design Business benefits Lessons learned Q&A

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Fujitsu America

What is milk run planning?

US PlantMexico Plant

Inte

rnat

iona

l Bor

der

US VendorsMexican Vendors

Maquiladora Accounting

A Maquiladora or maquila is a factory in Mexico that imports materials and equipment on a duty-free and tariff-free basis for assembly or manufacturing and then re-exports the assembled product, usually back to the originating country.

BOL

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What is milk run planning?

It’s a pull based system

Virtual Kanban but specific to a FG model

No inventory build up in advance at the destination plant

(Mexico in this case)

Each trailer will carry a kit for a specific FG model and fixed lot

size

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What is milk run planning?

Truck will start from US plant with make parts (Sub assemblies)

En-route it will pick purchased parts from vendors

Milk run parts will be shipped only a day in advance of their

due date, sometimes a shift before

If any of the parts is not filled for that day, the milk run will be

cancelled and FG schedule will be modified as per availability

of next kit

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Challenges faced

Very less floor space in MX plant for storing parts

Milk run parts will be shipped only a day in advance of their

due date, sometimes a shift before

Frequent FG schedule changes often due to demand schedule

changes

Prompt vendor communication for any schedule changes

Legacy MRP not responsive enough to changes (lead times,

finite scheduling, etc.)

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Challenges faced

Manual and laborious process for generating Milk run parts list

Often milk runs were missed because of disconnected

subassembly and FG planning

Excel based Shop floor scheduling mostly based on the tribal

knowledge of the scheduler, very time taking

Since milk run parts are model specific, any excess inventory

increases the risk of obsolescence

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ASCP Fundamentals - Planning Flow

Manufacturing Plant

Oracle Master / Txn Data

Vendor 1

Ship Receive Goods

Vendor 2

Demand Forecast

Plan Run

Supply Agreements ASLs

Approved Reqs / RelsSchedulers WB

Schedule Options

Build, Confirm and Send Schedules

Vendor Ships

Data Collection

Data CollectionASCP

Sourcing Rules

DockShip

Vendor ShipsDock

Dock

iSupplier Portal

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ASCP Fundamentals - Oracle Setups required – Order Modifiers

Fixed Days Supply The planning process suggests planned order quantities that cover

net requirements for the period defined by this value.Fixed Order Quantity The planning process suggests planned order with an order quantity

that is equal to the fixed order quantity.Fixed Lot Multiplier The planning process suggests planned order with an order quantity

that is a multiple of the fixed lot size multiplier quantity.Minimum order Quantity The planning process suggests planned order with an order quantity

that is at least equal to or greater than minimum order quantity.Maximum Order Quantity The planning process suggests planned order with an order quantity

that is at the most equal to or less than maximum order quantity.

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ASCP Fundamentals – Time Fences

Time Fences

Planning Time Fence: A planning time fence of x days freezes planned orders in the interval [plan start date, plan start date + x]. This eliminates near-term disruptions to the manufacturing schedule. If plan start date is non-working day, it takes the next working day. The planning engine does not create planned orders earlier than Planning Time Fence date. It schedules planned orders as follows depending on supply type:Make supplies: Start Date of the first operation’s first resource on or after Planning Time Fence

Date.Purchased supplies: Dock Date on or after Planning Time Fence DateTransfer supplies: Start Date at the receiving organization on or after Planning Time Fence Date.

Demand Time Fence: Select an option to determine a point in time inside which the planning process ignores forecast demand and considers only sales order demand when calculating gross requirements. This reduces the risk of carrying excess inventory

Release Time Fence: A release time fence of x days automatically firms and releases to the execution system planned orders in the time interval [plan start date, plan start date + x]. Subsequent planning runs then treat these planned orders as scheduled receipts, not subject to manipulation via order modifiers. This reduces planning nervousness. If plan start date is non-working day, it takes the next working day.

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ASCP Fundamentals - Lead Times

Lead Times

Preprocessing: The time required to place a purchase order or create a discrete job or schedule. This is also known as the paperwork or planning time

Processing: The time required for a supplier or your transfer from facility to deliver an item to your receiving dock or for you to manufacture an item. For make items, this is also known as manufacturing lead time. For buy and transfer items, it includes in-transit time to your facility.

Post processing: The time required to receive a buy or transfer item from the receiving dock to inventory.

Fixed: The time required to complete the tasks to make an assembly that are independent of order quantity, for example, setup, fixed run time, or teardown times.

Variable: The time required to complete the tasks to make an assembly that depend on order quantity, for example, run time. Oracle Bills of Material concurrent processes calculate this time.

Lead Time Lot Size: The typical quantity of the item that you buy, make or transfer. The default value is item attribute Standard Lot Size (set by Oracle Cost Management). Oracle Bills of Material concurrent process Calculate Manufacturing Lead Time uses this value to compute Processing.

Cumulative Manufacturing: For make items, the time required to make the item if you have all of the buy items in inventory and have to make all subassemblies and the item itself.

Cumulative Total: For make items, the time required to make the item if you have to purchase all of the buy items, make all subassemblies, and make the item itself.

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ASCP Fundamentals - Lead Times

(Suggested) due date Due date for Supply = Dock date + Post Processing lead time

(Suggested) Dock date Dock date = Ship date + In transit Lead time

(Suggested) Ship date Date on which shipment leaves the Shipping Org = Start date + Processing Lead time

(Suggested) Start date Start of manufacturing activities in manufacturing Org

(Suggested) Order date Order date = Start date – Pre Processing Lead time Calculated based on Receiving Org calendar

Need By date For purchase orders, the need by date from the purchase order line. If the purchase order is rescheduled, the

same as if the supply is a planned order. For planned orders and open make orders, the date the supply is due, the Sugg Due Date of end item demand.

Old Due date Only applies to rescheduled supplies. Sugg Due Date of the supply before the reschedule.

Old Dock date Only applies to buy items with rescheduled supplies. Sugg Dock Date of the supply before the reschedule.

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ASCP Fundamentals - Lead Times

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ASCP Fundamentals - Planning Constraints

Constrained Enforce Demand Due Dates Enforce Capacity Constraints Buckets Resource Constrained Material

Scheduling Minutes Hours Daily

Planned Resources All Resources Bottleneck Resource Group

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Oracle functional design

GL/Foreman

Trailer Tracker (10 Day Schedule

Report Detail)

1

GL/Foreman

Milk Run Kit Pick List

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Milk Run Loader

Scan KIT LPN’s to

Trailer LPN

3

Manually fillLoad Sheet

Manual Load Sheet

Validate Contents in Triler Using System and Physical agains

the Load Sheet

Truck departs US Plant

GL/Foreman

3a

Run Maquiladora

Extract

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Manual Update of System Generated

Maquiladora extract

(if Needed)

Kit Parts - Intransit Ship

express receipt into MX Plant

GL/Foreman

5 6

Maquiladora extract sent to FTP directory

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CAM Process

Customs Invoice

Document

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GL/Foreman

9Prepare BOL

(Manual)

Packing List (Maquiladora

Extract)

10 11 12Update Truck

Departed status on the Shipment

(Optional)

US Parts PickUp

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MX Parts PickUp

13

Cross Border

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Supplier Parts – PO Receipts

Gl/Foreman

4Ship Confirm

Trailer -InterOrg Intransit

Shipment

Customization

Legacy System

Standard Oracle

Manual

Milk Run Flow

Unloader/Fork Lift Dirvier

GL/Foreman

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Oracle modules considered for mapping milk run process are: ASCP Manufacturing Scheduling Inventory WMS WIP i-Supplier and Supplier Scheduling

Fixed order quantity on FG models

Shipment network and inter-org lead times

Separate planner code for grouping milk run items

Each trailer given a fixed LPN and trailer mapped as container

items

Oracle functional design

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Flattened FG BOM

Milk run parts list generated from the component requirement

of FG jobs

Pick list customization for milk run parts (make and buy) to

print the LPN barcode and group them by individual FG job and

sorted in the order they will be picked

Customization for generating Maquiladora accounting feed

from Oracle shipment number

Oracle functional design

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Business benefits

Better utilization of floor space in MX plant for inventory

movement

Just in time shipment of milk run parts, not more than a day in

advance

Long term visibility of the material and resource requirements

Increased responsiveness to Frequent FG schedule changes

Improved vendor communication for any schedule changes

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Business benefits

Faster and accurate generation of Milk run parts shipment list

Efficient Shop floor scheduling based on finite model

Decreased obsolescence of parts

Increased visibility of inventory and empty trailers

Improved ageing analysis resulting in savings of duties and

taxes in Mexico

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Lessons learned

Simpler the solution, better it is

Too many constraints increases the nervousness of the system

Inventory traceability is the key to day to day operation,

especially when the BOM is large for end assembly

I wish we live in ideal world, we don’t! Have a little safety stock

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Lessons learned

Accurate lead times are as important to planning as accurate

driving directions

Use planning category and planner codes intelligently. They

help in segmenting the plan output

Lesser the order modifiers, better the plan performance

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Questions and Answers

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