EXIDE CASE

Logistics & Supply Chain

REPORT
Management

SUBMITTED BY:
Ayush Bohra (87/51)
Devashi Kesaria (122/51)
Puneet Aggarwal (280/51)
Sammyak Jain (315/51)
Shavir Bansal (337/51)
Vaibhav Kalani (385/51)
Mayank Verma (4021/21)

ANOMALIES IN DATA
The given data had some anomalies and required some cleaning. Following were the discrepencies
with the data:
a) Production, receipts and sales sheet had many repeat entries. We have considered only unique
entries in each of the sheets for the analysis.

b) Dispatch data anomalies:

Material
AA1
AA1
AA1
AA1
AA1
AA3
AA3
AB1
AB3
BA3
BA3
BA3
EA3
EA3
EB1
FA1

To
H406
H406
H406
H503
S429
H406
H406
W42
W42
H406
H406
H406
H406
S103
H407
H406

Location Quantity Date_new Week_No

H406
6 19-05-2012
3
H406
20 22-05-2012
3
H406
15 28-08-2012
4
H503
50 07-11-2012
1
S429
18 17-10-2012
2
H406
10 18-05-2012
3
H406
1 18-12-2012
3
W42
250 03-08-2012
1
W42
100 03-08-2012
1
H406
10 18-05-2012
3
H406
10 25-06-2012
4
H406
10 28-08-2012
4
H406
49 24-07-2012
3
S103
20 30-04-2012
4
H407
30 12-01-2013
2
H406
7 28-08-2012
4

The above data had the same from and to location. We have not considered these entries for
the analysis.

Q1. Identify the fast moving and slow moving batteries on the basis of sales data.
We have considered the weekly sales data for estimating the coefficient of variation of each of the
batteries. Weekly sales data takes into account the risk-pooling effect of the daily variation. The
analysis is summarized in the table below.
We have assumed the following:
a) Coefficient of variation > 0.75 : Slow Moving (S)
b) Coefficient of variation < 0.50 : Fast Moving (F)
c) Products with average sales greater than 1000 are considered for classification as fast or slow.
Product
BA3
EA2
AA4
BB1
AA3
EA3
BA2
EB2
FA1
AA1
AB2
BA1
AA2
AB3
DA2
DA1
EB1
EA1
AB1
CA1

Average
1321
16261
49
445
46
15399
297
6390
705
3865
26
235
52
2382
45
310
2563
45
2210
27

Std Dev
466
5899
22
207
23
8099
159
3517
414
2268
16
146
34
1545
30
220
1997
36
1894
34

Coeff. Of variation
0.35
0.36
0.45
0.47
0.51
0.53
0.53
0.55
0.59
0.59
0.60
0.62
0.64
0.65
0.68
0.71
0.78
0.81
0.86
1.24

Type
F
F

S
S
-

Therefore, fast moving products are BA3 and EA2 while slow moving products are EB1 and AB1

Q2. Analyse the weekly sales of the above batteries. Is the weekly sales uniform across
the month?
The following graph and table show weekly sales of batteries across the months:

Weekly Sales in units

300000
250000
200000
150000
100000
50000
0
Apr May

Jun

Jul

Week 1

Month
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Average
Std.
Deviation
COV

Aug

Sep

Week 2

Oct
Week 3

Nov

Dec

Jan

Feb

Mar

Week 4

Week 1
Week 2
Week 3
Week 4
10571
27581
39711
68257
28187
41950
36213
70460
33850
42649
41001
70639
37319
42685
38493
62754
30639
43838
43812
76583
27071
48645
40326
108661
44967
66049
27912
86249
47728
35233
55375
70808
47845
49408
52580
109561
40112
39344
51422
84783
18907
81300
36791
81089
36536
43436
46921
92544
33644.33 46843.17 42546.42 81865.67
11375.97 14166.19
0.34
0.30

7885.27 15327.14
0.19
0.19

The weekly sales data is not uniform across the month. 4th week average data is almost double of the
rest of the weeks average sales for almost every month. Possible reason is the month end pushing of
sales to achieve the monthly set targets.
Seasonal influence is also seen in sales as sales in winter season are significantly higher than the
summer months.

Coefficient of variation decreases over each week in a month implying that sales prediction gets better
towards end of the month. This is an area of concern for Exide as the prediction is not consistent across
all weeks.

Q3. Analyse the weekly dispathces from the manufacturing plants. Are the weekly
dispatches uniform across the month?
The following graph & table show weekly dispatches across months:

Weekly Dispatches in units

800000
600000
400000
200000
0
Apr May Jun

Jul

Week 1

Aug Sep
Week 2

Oct Nov Dec

Week 3

Jan

Feb Mar

Week 4

Month
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar

Week 1
Week 2
Week 3
Week 4
97936
98803
115419
132265
108697
93995
117915
146566
110816
100386
122454
125600
132914
130582
108212
114637
101653
118840
126979
172993
103129
130863
130229
189816
168795
184696
108482
192217
163492
90347
135310
200662
179643
134401
139504
176056
174454
134594
106244
121942
76441
152461
83018
154155
119433
129439
137699
121109

Average
Std.
Deviation
COV

128116.92 124950.58 119288.75 154001.50

34888.22
0.27

27095.07
0.22

16335.12
0.14

31277.51
0.20

The weekly dispatch data is not uniform across the month. 4 th week average data is way higher than
the rest of the weeks average dispatches for many months. Possible reason is the month end pushing
of products to maintain inventory levels and sales to achieve the monthly set targets.

Seasonal influence is also seen in dispatches as sales in winter season are significantly higher than the
summer months.
Coefficient of variation is an area of concern for Exide as the coefficient varies significantly across
various weeks. It will be difficult to handle and improve since there is no set pattern emerging out of
the weekly dispatches data
It seems that nearly 2 months would be the lead time as there is higher correlation between dispatch
and sales data with a lag of 2 months.

Q4. Determine and analyse the inventory of the material at all the tiers.
Methodology:
1) Initially assumed zero starting inventory for each product at each location and calculated the
week-wise ending inventory for each product at each location.
2) For each product at each location, calculated the starting inventory that is required so that
there is no negative inventory in any of the 48 weeks.
The tables mentioned below give a consolidated view of the starting and ending inventory of each
of the products at each of the locations for the complete year:

Product
AA1
AA2
AA3
AA4
AB1
AB2
AB3
BA1
BA2
BA3
BB1
CA1
DA1
DA2
EA1

At Factory
Warehouse
Starting
End
Inventory Inventory
4234
4228
0
1738
234
161
118
289
6
37
23
50
0
680
0
87
160
0
90
11018
37
561
4
2109
80
160
45
223
0
11076

At Regional
Warehouse
Starting
End
Inventory Inventory
2165
4239
10
26
105
310
162
76
1146
548
27
158
1549
964
0
657
0
198
1056
2151
1203
883
144
409
0
728
12
185
1123
459

At Hubs
Starting
Inventory
944
46
60
105
1782
133
974
0
0
720
767
80
0
56
549

End
Inventory
23578
87
708
304
6223
242
6765
532
558
7876
1642
348
798
170
980

At Spokes
Starting
Inventory
39
0
373
0
0
1026
918
573
66
313
1586
6311
7223
675
74

End
Inventory
14689
479
45325
655
810
8045
10823
2366
205
5600
25157
13496
110300
10889
223

EA2
EA3
EB1
EB2
FA1

6467
29706
5824
6573
356

119465
29495
14351
6034
0

41835
1457
6935
300
105

19211
13007
2034
3077
253

18871
0
7693
269
164

70397
35106
9003
11507
2712

126
30
28
79
440

378
181
325
588
1160

The cells highlighted in green have huge increase in the aggregate starting inventory and ending
inventory. It shows that proper dispatch and sales levels are not forecasted and there is an issue with
the overall inventory management system.
If we consider average inventory as a percent of dispatch, few products are poorly managed as shown
in table below:
Stage

% Benchmark

Rationale for choosing these %ages

Products that are poorly managed

Factory
Warehouse
Hubs
Spokes

10%
10%
15%
20%

These percentages have been

chosen according to general practice
in the industry (mot mentioned in
case)

AA2, CA1, EA1

AB2, EA1
AA3, AB2, CA1, EA1
AA4, CA1, AB2, AA3, EA1

Q5. Determine and analyse the total lead times of all the material.
Methodology:
1) Total lead time = (Total time in Inventory) + (Total time in transport and assembly)
2) For calculating total time in inventory, we have calculated the inventory turn ratio for each product at
each location using the average inventory and dispatches/sales from those locations and then we have
used the weighted average of these inventory days (Analysis in the attached excel sheet). The table
below gives a summarized view of the inventory days.
3) For calculating total lead time in transportation, assumptions mentioned in the case have been used.
Also, we have taken a weighted average of all the transportation time for all the dispatches carried out
in one year. The table below summarizes the total transportation lead time of each of the products.

Product
BA1
DA1
BA2
EB2
AB3
EA3
AB1
BB1
FA1
AA1
EA2
BA3
EB1
DA2
AA2
AA4
AB2
AA3
CA1
EA1

Starting
Inventory
0
80
160
7181
3441
31536
3960
2580
938
8929
74396
2541
26763
187
122
511
211
478
258
2112

Ending
Inventory
Inventory
Days
1755
47
2496
54
1411
55
35307
58
19232
63
122933
64
14853
66
5452
73
8565
81
57202
92
319373
104
31934
113
38884
120
801
129
2056
150
1047
160
775
227
1767
233
3047
323
13675
1336

Transportation
Lead time
(days)
1.90
1.67
1.64
1.88
1.89
1.84
1.89
1.89
1.94
1.42
1.84
1.61
1.83
1.82
1.97
1.77
1.97
1.90
1.36
1.85

Total Lead
Time (in days)
48.9
55.67
56.64
59.88
64.89
65.84
67.89
74.89
82.94
93.42
105.84
114.61
121.83
130.82
151.97
161.77
228.97
234.9
324.36
1337.85

Lead time for premium products should be less as quality is an important factor for such consumers
and large lead times can lead to battery self-discharge. For eg. lead time for BA3 should be reduced.

Q6. Map the material flow and check whether the flows are as per the network design.
1) Production:

Material
AA1
AA2
AA3
AA4
AB1
AB2
AB3
BA1
BA2
BA3
BB1
CA1
DA1
DA2
EA1
EA2
EA3
EB1
EB2
FA1
Grand
Total

F21

F22

48236

Location wise production

F31
F32
F41
35682

66079

F51

F52

85517
4334
3559
2886

740

116713
1804

1044

127308
6076

7297
11586

4658

70644

5596
24200

4092
8432
2775

48236

30090

42124

146891

13666
40782
276355
1346
99169
41663
576677

268221

F53

Grand
Total
235514
4334
3559
2886
117453
1804
128352
6076
7297
92484
24200
4092
8432
2775
13666
978362 1019144
563453
839808
132600
133946
193553
292722
41663
1867968 2980207

There is no production taking place from F32 which is resulting in unutilized capacity and off-setting
the material flow planning. It is having a direct effect on the production schedules of other factories.
Also, the warehouse in region 3 has to get the product from other factories/warehouses and thus
having a direct implication on transportation costs.

2) Dispatches from factory:

There are two issues which can be observed from the table shown below:
1) Products being sent to hubs which already have a factory and warehouse in their region
2) Products being sent from factory directly to spokes

As per the network plan hubs/spokes should preferably receive products from their respective
warehouses/hubs. This would lead to increase in transportation costs as the trucks engaged in these
cases would not be plying on the assigned routes.
Location

H101

H104

H206

H402

H403

H405

H406

H407

H408

H507

S329

S514

F21
F22

112

F31

90

F41

50

F51

1335

F52

935

F53

2860

297
295

395

750

750

1000
1061

340

1725

545

800

1015
490

1490

1200

1325
12354

145

4160

183

38119

F32

3) Dispatches from warehouse:

Material is being sent from warehouses to hubs which are outside their respective regions. Small
deviations can be possibly explained due to urgent requirements but the network plan should be able
to address these cases appropriately.
For the entries highlighted in red:
These hubs are being served by warehouses of different regions, which are not having factories of their
own. Hence, these warehouses are being served by factory warehouses of some other regions.
Routing products through multiple warehouses is not optimal.
Location H104 H209 H301 H302 H501 H502 H503 H504 H505 H506 H507
W11
110
13395
10497 14728
W12
44057
1500 5334 8937 12413
7769
W21
50
W22
12737
W31
22779 37162

4) Dispatches from hubs:

Material is being sent from hubs to warehouses which is in violation of the network plan. The possible
reasons for this can be 1. Returns due to damage/deterioration
2. Rerouting to address demand of some other hub/spoke
A significant issue is the transfer of materials from H301 to W31. The quantity transferred is large and
cannot be explained according to the network plan.

Location W11 W12 W21 W22 W31 W32 W33 W41 W42
H103
402
H104
100
H201
1348
H204
60
H206
10
H207
220
H208
240
H209
125
H301
5390
H302
125
H303
24
H305
90
H306
205
H308
23
H309
2
H311
1411
H401
20 300
H404
2838
H407
39
H501
50
H503
40
H504
175
H507
25

5) Dispatches from spokes:

Material is being sent from spokes to hubs which is in violation of the network plan. The
possible reasons for this can be 1. Returns due to damage/deterioration
2. Rerouting to address demand of some other hub/spoke
A significant issue is the transfer of materials from S502 to H506. The quantity transferred is
large and cannot be explained according to the network plan.
Location H501 H502 H503 H504 H505 H506 H507
S501
78
1
S502
524
15 6030
S503
110
63
878
S504
555
11

S505
S506
S507
S508
S510
S511
S512
S513
S514
S515
S516
S517
S519
S520
S521
S522
S523
S524
S525
S526
S527
S528

185
172

249
3
59
190
41

10

10
235
64
369
44
21
1142
21
114
660

60
33
11
12
75

5
187
287
84
417
466
73
23

Major Areas of Concern

1) Coefficient of variation across 4 weeks for sales and dispatch data shows huge mismatch
2) Production planning of product AA1, AB2, BA3, EA1 and EA2 are not aligned to the demand
shown by Sales data (Benchmark: Sales as the % of Production greater than 80%)
Produc
t

Starting
Inv

End
Inv

Inv
Days

Coeff. Of
variation

AA1

8929

57202

92

0.59

EA2

74396

104

0.36

BA3

2541

31937
3
31934

113

0.35

EB1

26763

38884

120

0.78

DA2
AA2

187
122

801
2056

129
150

0.68
0.64

Sales
18553
3
78053
8
63427
12303
7
2156
2356

Productio
n

Sales as % of
production

235514

79%

1019144

77%

92484

69%

133946

92%

2775
4334

78%
54%

AA4
AB2
AA3
CA1
EA1

511
211
478
258
2112

1047
775
1767
3047
13675

160
227
233
323
1336

0.45
0.60
0.51
1.24
0.81

2346
1268
2204
1311
2100

2886
1804
3559
4092
13666

81%
70%
62%
32%
15%

3) Average Inventory as % of Dispatch should be less than following values for respective stages
Stage

% Benchmark

Rationale for choosing these %ages

Products that are poorly managed

Factory
Warehouse
Hubs
Spokes

10%
10%
15%
20%

These percentages have been

chosen according to general practice
in the industry (mot mentioned in
case)

AA2, CA1, EA1

AB2, EA1
AA3, AB2, CA1, EA1
AA4, CA1, AB2, AA3, EA1

Supply Chain Strategies

1) For premium products, we should have best service levels in the industry
2) Reduce the loss in battery performance due to increase in lead time. This will give Exide the
competitive advantage, since the quality will not be compromised
Eg. Product EB1 has a lead time of 122 days, which reduces the quality of the product
significantly
3) Improve the correlation of Dispatch and Sales, which leads to improved forecasting, better
inventory management at each stage of supply chain, thus improving the bottom line leading to
higher profit margins

Supply Chain Changes

1) 52% of the products are being dispatched from H206 and H207. So as to minimize this cost our
warehouse W22 should be closer to H206 and H207 as compared to other hubs.

Warehouse Distance Hub

w22
400 H205
w22
500 H206
w22
300 H207
w22
10 H208
w22
350 H209

Dispatch
12135
26656
36994
33344
12327

% of total
Sales dispatch+Sales
121456
10%
121456
22%
121456
30%
121456
27%
121456
10%

Similarly, 50% of the products are being dispatched from H405 and H406. So as to minimize this
cost our warehouse W42 should be closer to H405 and H406 as compared to other hubs.
Warehouse Distance Hub
w42
10 H404
w42
500 H405
w42
600 H406
w42
450 H407
w42
450 H408

Dispatch
85997
39642
125233
44975
37575

% of total
Sales dispatch+Sales
333422
26%
333422
12%
333422
38%
333422
13%
333422
11%

2) Hub H501 caters to a large proportion of the requirements of other hubs in its region and it also
caters to the hubs present in other regions. Due to large dispatches through this hub we
recommend that a warehouse should be setup in that region to better balance the flow of
material.

Optimal Transportation plan

For converting the existing the existing supply chain plan into an optimal plan, we need to do the
following:
a) There are many irregularities in the current material flow as discussed in Ques 6. Theses
irregularities have to be addressed.
b) There are supply chain changes that have been suggested by us in the report. If we are able to
make those changes along with addressing the areas of concerns, we can achieve an optimal
transportation plan.
c) We have trucks of capacity 9 tonnes and 16 tonnes which are able to meet the current
transportation requirements but we would want to check the capacity utlization of each of the
truck at each route and would try to optimise the truck capacity accordingly.