optimum utilization of capacity. It also has to deal with high rates of product obsolescence and evolving customer needs. The GSCP maintains a record of all inventories, but according to Mr. Kaul, “one always tries to decrease inventory turn at warehouses”. He adds, “Days of inventory outstanding or DIO for finished goods is 27 days (including in transit), while monthly warehouse shelf inventory turn is 4 days. We try to ensure that goods move out of the Distribution Center in less than 30 days. Our focus this year is on reducing DIO, because of shortened product life cycles. That’s why our forecasting has to be incisive.” LGEIL takes care of the life-cycle of products, especially end-of-life (EOL) products, through a carefully controlled production plan. It sells EOL products through schemes, and some find its way into smaller and rural towns. In urban areas, this appears difficult as few or no dealers want to be saddled with old and outdated models. The GSCP tool, while
keeping track of EOL products, also throws up data of where these products could be deployed and sold. LGEIL follows the hub-andspoke model. So the final goods are moved from its various factories to the central DC at Noida and Ranjangaon, from where it moves to its 53 warehouses. A staunch subscriber to the outsourcing theory, Mr. Kaul believes that outsourcing non-value added activities to third-party can help create focus from operational activity to strategic value add operations. This is the reason why LGEIL has outsourced most activities such as transportation and warehouses.
... are you the best Supply Chain Manager?
Choosing the right Partners Towards the end of each year, LGEIL conducts a ‘global bidding’ to choose five shipping lines for its imports and to ship its products across the country. Most major shipping lines participate and send in their quote for a year’s business with their service conditions. It requires five shipping lines to import its containers numbering approximately 24,000
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INDIA Excellence A wards 2011 Frewin Francis Director and Publisher Logistics Week India
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