Process flow to be followed like TATA NANO project.

[Former Member]

Hi All,

Out Client is following the Business Process like

Plant--> Warehouse (Customer warehouse) --> Customer. (Automotive)

Eg:-

Customer has placed the order for 10000 Units of material every month. As per the Production line every day we need to supply the goods to the customer accordingly. Our Plant is in A -Location & Customer is in B - Location. So we made a Warehouse (Customer warehouse) controlled by us. According to the Product line we deliver the goods to customer. Customer Place the order to the Plant in A -Location & the goods are being dispatched daily to Warehouse billed to Customer in (50 - 100) units. As the bill is made at Warehouse stage itself it's difficult for the client to track how much qty need to be delivered to the client & balance warehouse stock.

They are following the regular sales flow. As the No. of Material have gone high the find it difficult to maintain manually. As they are doing presently at plant its Billed to Customer so after that is out of sap. We need to have a record in SAP at Warehouse (Customer warehouse). How we can maintain for this will Consignment / JIT process work.

Consignment / JIT - Difference between this processes? Which will suite this requirement?

Note:- (In Newspaper i read this article)

The Business Process is being followed in Tata for NANO project with in the TATA plant Vendor have their warehouse & according to the product line plan everyday morning it will have the display according to that the goods are delivered for Production. This is the paid warehouse by the Vendor & will have full control of the Material.

If its Consignment Customer & will have full control of the Material. So what is the Process flow to be followed? Please explain in detail. To give a better result to the client.

Thanks in Advance,

sapuser

Edited by: sapuser on Mar 11, 2009 12:12 PM

[Former Member]

Closing it.

[Lakshmipathi]

To adopt consignment process, you should have a warehouse; whereas for JIT process, you can supply directly from manufacturing plant to end customer and warehouse concept is not necessary.

As you must be aware JIT is nothing but Just In Time the materials should be supplied to customer daily. In Automobile Industry, this plays a vital role in catering the needs of the customer.

Instead of having a separate warehouse, I feel, JIT process is straight and simple. This is due to the fact that for consignment process, you need to configure the process and also from end users point of view, this will increase their work load. But for JIT, normal sales process is enough.

Still if the process warrants to have a warehouse, then go for it where you can very well monitor the special stocks at any point of time.

thanks

G. Lakshmipathi

[Former Member]

Hi Lakshmipathi,

As Customer will take the goods according to the Product line it will not be the same everyday & customer is in A-City & Our Plant is in B-City. Then how will it work. Right now in sap we are not using WMS the warehouse i have mentioned across is out of sap. So how to go ahead for this process.

Please explain in detail.

Thanks in advance,

sapuser

[Lakshmipathi]

It is not necessary that both customer and the manufacturing plant should be in the same city for JIT process.

Being the customer is dealing in automotive, definitely, they will release firm schedule one month prior to the actual requirements. So you have to go for Make To Stock Process and keep buffer stock at the manufacturing plant.

Also either the manufacturing plant or the customer will have some tie up with some transporter who should carry the cargo on daily basis. So the delivering plant has to coordinate with the transporter and despatch based on JIT schedule.

Of course, there are advantages also in stocking the goods in a warehouse which is nearer to customer so that at any point of time, delivery can be made at short notice. Here instead of going for consignment process, what I would recommend is that better you treat the warehouse as a depot and stock transfer via MM route where major work load is reduced. From that warehouse, they can create a sale order, make delivery, PGI and invoice.

It is upto the Management to decide as to which process, they prefer.

thanks

G. Lakshmipathi

[Former Member]

Hi Lakshmipathi,

Thanks for the reply i have to consult with the Client for this & over they have implemented depot resently so i thing this should work. Else we need to go for other process.

Thanks,

sapuser