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Fujitsu America
Milk Run in FMCG Industry- Abhai Tripathi
Fujitsu America 2
Agenda
■ What is milk run planning■ Challenges faced■ Oracle functional design■ Business benefits■ Lessons learned■ Q&A
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 factoryA Maquiladora or maquila is a factory in MexicoA 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
Fujitsu America
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
Fujitsu America
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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Oracle functional design
Fujitsu America
➢ 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
Fujitsu America
➢ 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
Fujitsu America
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
Fujitsu America
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
Fujitsu America
Lessons learned
➢ Accurate lead times are as important to planning as correct air
pressure in car tires
➢ Use planning category and planner codes intelligently. They
help in segregating different planning scenarios
➢ Lesser the order modifiers, better the plan
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Questions and Answers
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