aal-meritor operations case study for naissance 2012

7/30/2019 AAL-Meritor Operations Case Study for Naissance 2012

1/11

COMPLEX PROBLEMS

Aspire,Apply &LeadAspire,Apply &Lead

SIMPLE SOLUTIONS


2/11

Introduction

200 Mil USD


2.5 Billion

USD

4 Billion USD


3/11

Holding: Listed: ARM 35.5% |Holding: Listed: ARM 35.5% | KalyaniKalyani 35.5% | Public 29%35.5% | Public 29%Operation Start date: July 1984Operation Start date: July 1984

Responsibilities:Responsibilities: Value AdditionValue Addition Quality AssuranceQuality Assurance Material ProcurementMaterial Procurement DeliveryDelivery

Automotive Axle Limited

Introduction: Company Structure & Responsibilities


Holding: Non Listed: ARM 51% :Holding: Non Listed: ARM 51% : KalyaniKalyani 49%49%Operation Start date: April 1999Operation Start date: April 1999

Responsibilities:Responsibilities: Technology ManagementTechnology Management Customer InterfaceCustomer Interface Product SupportProduct Support

Meritor HVS (India) Limited

Design | Testing | Engineering | Marketing | Service | AfterMarket


4/11

Drive Axle

LCV Application

M & HCV Application

Defence Application

Specialty (Front Steer Axle):

Low Floor Bus Application

High End Coach Application

Introduction: MHVSIL-Products


Drive Heads:

LCV Application

Brakes

Drums - M & HCV application

Discs Coach & TruckApplication

Aftermarket:

Gears, Drive heads, Brakes


5/11

All commercial vehicles with a tonnage more than 7.5 tons are categorized asMedium and Heavy commercial vehicles (M&HCV)

In the Indian M&HCV industry the schedule for components released by OriginalEquipment Manufacturers (OEMs) to Tier-1 suppliers are heavily influenced bytwo important factors:

1. Off take of stock by dealers and2. Rate of supply or schedule adherence by the Tier-1 suppliers

The schedule released by OEMs to tier-1 suppliers will ask for quantities which aremore than their actual need. This is to ensure that, Tier-1 suppliers agree to meet

Medium and Heavy Commercial Vehicles industry

Aspire,Apply &LeadAspire,Apply &Lead5

m n mum comm men s. s soon as ey n a e supp y rom er- supp ers

is smooth and meeting the schedules, they will cut the requirement in thesubsequent revised schedule.

Also depending on the off take by dealers, OEMs will change their productionschedules

The effect is that Tier-1 suppliers end up receiving at least three to four revisionsof schedule from OEMs within a month


6/11

These two factors result in high schedule fluctuations for the Tier-1 suppliers

Automotive Axles Ltd. being a Tier-1 supplier ofAxle Assemblies to all the

Major M&HCV manufacturers, experience at least four to five schedule

changes from the OEM customers within a month

This disturbs the whole supply chain both internal and external

Scheduling in M&HCV industry


Typically the first revision of the schedule for a month is received by 20th

ofthe previous month, which is the basis for running MRP for the month for

Automotive axles

Based on the MRP, Supplier schedules to Automotive Axles Ltd. suppliers aresent and internal manufacturing orders are released


7/11

For the month of Dec11, Automotive Axles Ltd. received five revisions of demand

schedules which is shown below. The first revision was received on 21st Nov11, the 2nd

was on 23rd Nov11, 3rd on 29th Nov11, 4th on 7th Dec11 and the final on 21st Dec12

Automotive axles Ltd. sends its weekly commitment for the whole month to OEMs.

The commitment sent as of 1st week of Dec11 is as below

The Table below shows the schedule for eight varieties of AxlesAs the monthly schedule is revised by OEMs, the weekly commitments to OEMs have

to be revised

This in turn leads to changing the schedule for all suppliers and for internal

Scheduling in M&HCV industry contd


3 days 6 days 6 days 6 days 6 days

Axle part no. Customer

Dec'11

Reqmt For

MRP Dt

21.11.11

Dec'11

Reqmt

O/B 121

Dt

Dec'11

Reqmt

Rev:01 Dt

29.11.11

Dec'11

Reqmt

O/B # 123

07.12.11

Dec'11

Reqmt

Rev:03 Dt

21.12.11

wk-1 (1-3)wk-2 (5-

10)

wk-3 (12-

17)

up to wk-3

commit

wk-4 (19-

24)

wk-5 (26-

31)

CTTP160 Largest customer 220 220 60 0 0 20 40 60 0

R1495 STD 2nd Largest customer 150 150 350 600 600 40 180 70 290 150 160R1495-01 Small volume customer 900 900 500 250 250 0 0 0 0

R1495-02 Small volume customer 0 100 0 100 0 0 0 24 24 36 36

R1495 L 2nd Largest customer 18 36 80 80 80 18 18 36 22

Stallion Largest customer 50 60 60 24 100 0 0 60 40

R145 Largest customer 200 200 380 350 350 30 70 90 190 80 80

R1497 Largest customer 180 180 110 200 200 60 80 140 60

Commitment as on 2nd of Dec'11

3 days 6 days 6 days 6 days 6 days

Axle part no. Customer

Dec'11

Reqmt For

MRP Dt

21.11.11

Dec'11

Reqmt

O/B 121

Dt

Dec'11

Reqmt

Rev:01 Dt

29.11.11

Dec'11

Reqmt

O/B # 123

07.12.11

Dec'11

Reqmt

Rev:03 Dt

21.12.11

wk-1 (1-3)wk-2 (5-

10)

wk-3 (12-

17)

up to wk-3

commit

wk-4 (19-

24)

wk-5 (26-

31)

CTTP160 Largest customer 220 220 60 0 0 20 40 60 0

R1495 STD 2nd Largest customer 150 150 350 600 600 40 180 70 290 150 160R1495-01 Small volume customer 900 900 500 250 250 0 0 0 0

R1495-02 Small volume customer 0 100 0 100 0 0 0 24 24 36 36

R1495 L 2nd Largest customer 18 36 80 80 80 18 18 36 22

Stallion Largest customer 50 60 60 24 100 0 0 60 40

R145 Largest customer 200 200 380 350 350 30 70 90 190 80 80

R1497 Largest customer 180 180 110 200 200 60 80 140 60

Commitment as on 2nd of Dec'11


8/11

The BOM of each Axle assembly consists of the following major components:Housings2 Nos. Housing halves

Drive gearDrive gear hard

Drive Gear soft

Drive pinion

Drive pinion hardDrive pinion soft

Axle Shafts

Bearings

Companion Flange

Axle assembly BOM


The Quantity per Axle is as below

SKU Unit per Axle

Housing Half (HH) 2 2HH = 1 Housing

Drive Gear 1

Drive Pinion 1

Axle Shafts 2

Bearings 5Companion flange 1

SKU Unit per Axle

Housing Half (HH) 2 2HH = 1 Housing

Drive Gear 1

Drive Pinion 1

Axle Shafts 2

Bearings 5Companion flange 1


9/11

SKU Opening Balance

Part No. for SKUs

Axle Part No. Housing Half Drive Gear Drive Pinion Axle Shafts Bearings Companion flange

CTTP160 HH1 DG1 DP1 AS1 BG1 CF1

R1495 STD HH2 DG2 DP2 AS2 BG2 CF2

R1495-01 HH3 DG3 DP3 AS3 BG3 CF3


R1495 L HH5 DG5 DP5 AS5 BG5 CF5Stallion HH6 DG6 DP6 AS6 BG6 CF6

R145 HH7 DG7 DP7 AS7 BG7 CF7


SKUs Part Nos.

Axle Part No. Housing Half Drive Gear Drive Pinion Axle Shafts Bearings Companion flange

CTTP160 HH1 DG1 DP1 AS1 BG1 CF1

R1495 STD HH2 DG2 DP2 AS2 BG2 CF2



R1495 L HH5 DG5 DP5 AS5 BG5 CF5Stallion HH6 DG6 DP6 AS6 BG6 CF6



SKUs Part Nos.


Opening BalanceAxle Part No. Housing Half Drive Gear Drive Pinion Axle Shafts Bearings Companion flange

CTTP160 176 88 88 176 440 88

R1495 STD 120 60 60 120 300 60

R1495-01 720 360 360 720 1800 360

R1495-02 0 0 0 0 0 0

R1495 L 14 7 7 14 36 7

Stallion 40 20 20 40 100 20

R145 160 80 80 160 400 80

R1497 144 72 72 144 360 72

SKUs Part Nos.Opening BalanceAxle Part No. Housing Half Drive Gear Drive Pinion Axle Shafts Bearings Companion flange

CTTP160 176 88 88 176 440 88

R1495 STD 120 60 60 120 300 60

R1495-01 720 360 360 720 1800 360

R1495-02 0 0 0 0 0 0

R1495 L 14 7 7 14 36 7

Stallion 40 20 20 40 100 20

R145 160 80 80 160 400 80

R1497 144 72 72 144 360 72

SKUs Part Nos.


10/11

Gear Steel

SupplierGear Forging Inward Store Gear Blanking Gear Soft Heat Treatment Gear Hard

Capacity: NA Capacity: 200 Capacity: NA Capacity: 200 Capacity: 75 Capacity: 80 Capacity: 75

Leadtime: 45 Leadtime: 7 Leadtime: 1 Leadtime: 1 Leadtime: 0.08 Leadtime: 1.5 Leadtime: 0.08

Batch size: 200 Batch size: 100 Batch size: NA Batch size: 100 Batch size: 50 Batch size: 50 Batch size: 50

Setup time: NA Setup time: NA Setup time: NA Setup time: NA Setup time: 2 Setup time: NA Setup time: 2

Drive Head

Assembly

NX Assembly

Capacity: 80

HH Steel Supplier HH Supplier Housing line

Capacity: NA Capacity: 400 Capacity: 66

Leadtime: 45 Leadtime: 15 Leadtime: 0.33

Batch size: 200 Batch size: 200 Batch size: 30

Setup time: NA Setup time: NA Setup time: 2

Pinion Steel

SupplierPinion Forging Inward Store Pinion Blanking Pinion Soft Heat Treatment Pinion Hard

Routingwith Capacity, Lead time, Batch size and Setup time

Capacity per dayLead time in days

Batch size in Nos.

Setup time in hours

1 month = 25 days

Legend:


apac ty:

Leadtime: 0.02

Batch size: NA

Setup time: NA

Leadtime: 0.02

Batch size: NASetup time: NA

Capacity: NA Capacity: 200 Capacity: NA Capacity: 200 Capacity: 75 Capacity: 80 Capacity: 75

Leadtime: 45 Leadtime: 7 Leadtime: 1 Leadtime: 1 Leadtime: 0.08 Leadtime: 1.5 Leadtime: 0.08

Batch size: 200 Batch size: 100 Batch size: NA Batch size: 100 Batch size: 50 Batch size: 50 Batch size: 50

Setup time: NA Setup time: NA Setup time: NA Setup time: NA Setup time: 2 Setup time: NA Setup time: 2

Axle Shaft

Supplier

Capacity: 110

Leadtime: 7

Batch size: 200

Setup time: NA

Bearings Supplier

Capacity: NA

Leadtime: 90

Batch size: NA

Setup time: NA

Bearings Supplier

Capacity: NA

Leadtime: 90

Batch size: NA

Setup time: NA

Companion

Flange SupplierHydraulic press

Capacity: 80 Capacity: 100

Leadtime: 5 Leadtime: NA

Batch size: 100 Batch size: 50

Setup time: NA Setup time: 0.5

10

ExternalSupplier orOutsourced

Legend:

NA = Not Applicable


11/11

Expectations

How to handle the variation in schedule?How to arrive at the revised weekly commitments ?

What is the frame work for scheduling to take care of all the

variations?How much qty. of each of the SKUs should be held and at

which level/locations to facilitate schedule achievement and

reduce lead time?


Arrive at the schedules for the whole supply chain (internal as

well as external) Explain the logic

Is there any debottlenecking required?

Concepts will be appreciated more than numerical calculations

aal-meritor operations case study for naissance 2012

Documents