Development of performance control system for supply chain opperations; Dr. Reddy's Laboratories Ltd.

Abstract

The production and supply chain operations of the company are based on the Continuous Replenishment model using the S-DBR model. This model is in practice for the past two years. Prior to this the company followed the Make to Stock model which is a Push based approach. Hence the performance measures which were in use prior to this change became irrelevant after the change in the operations. The internship project was to analyze the operations and develop perlormance measures to check whether the processes are in line with the longer term objectives. The project also aimed at developing Early Warning signals that can help the planners to identify the deviations and take corrective and timely actions. Methodology: The project was executed in four phases. 1). Knowledge Transfer Phase: This phase involved understanding the operations of the Formulations plants from... the generation of orders to the replenishment. The Viable vision concepts and the continuous replenishment models were studied to get the conceptual understanding of the supply chain operations. 2). Interaction Phase: The next step involved interactions with the planners at both the delivery level and the plant level to understand their day to day operations. This phase also involved understanding the buffer management and the prioritization of the orders based on'their relative importance. The organization of the teams, reporting relations, responsibilities of each member of the team and the expectations from them was studied. 3). Analysis & Development Phase: The discussions with all the planners were compiled and the general problems tha~ results in delay or disruption in the expected processes were identified. These were used to develop Early Warning signals which are a set of measurements that will help the planners to predict the deviations and take corrective actions. Also a set of Performance Indicators were also developed that will help to measure the performance of the planning teams. 4). Evaluation & Selection Phase: This phase involved the evaluation of the identified indicators for its suitability and usefulness. This involved interactions with the team leads to check whether the indicators are relevant and useful to planning team. Redundant indicators and those that were not directly helpful to the planners were removed and a final set of indicators were suggested. The data sources for these 'indicators, measurement mechanism and reporting formats were also developed for the finalized indicators.