Agenda. Company BackgroundCustomer InformationProduct DescriptionFacility Layout/DiagramCurrent Picking/Shipping process for this customerIssues with current processOpportunities to Improve. Company Background. Acme Automotive 30 years in business, privately held40 employeesSales of $14M/yearBusiness: Aftermarket Lug nutsReplacements for regular carsWheel locks for expensive wheelsStd shipment is next day for small orders, 2 days for larger orders.
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1. 2008 West Coast Case StudyAcme Automotive April 11, 2008 This is a real company with a real problem. They want to see what you come up with! They may use your ideas. But names have been changed.This is a real company with a real problem. They want to see what you come up with! They may use your ideas. But names have been changed.
2. Agenda Company Background
Current Picking/Shipping process for this customer
Issues with current process
Opportunities to Improve
3. Company Background Acme Automotive
30+ years in business, privately held
Sales of $14M/year
Business: Aftermarket Lug nuts
Replacements for regular cars
Wheel locks for expensive wheels
Std shipment is next day for small orders, 2 days for larger orders
4. Customer Info 400 different customers
Customer DTB is 37% of total business
600 Ship-to Locations
Centralized purchasing with shipment to individual stores
No partial shipments for any line item
5. Customer Wants Save money on freight by consolidating shipments to multiple stores by geographical area
No delay in shipments but asking for special labeling & handling of consolidated orders
Consolidated orders will only contain the same most used 70 items (max)
6. Product Description Company sells over 1000 individual products
2 major product families
Installation Kits (63% of sales to DTB)
Bulk Inventory (loose lugs) (28% of sales to DTB)
All products purchased from Taiwan – long leadtimes
Some installation kits can be made in-house from bulk inventory Data will be provided on the last 9 consolidated orders received and on a representative item from each product familyData will be provided on the last 9 consolidated orders received and on a representative item from each product family
7. This is the current warehouse layout.This is the current warehouse layout.
8. Current Value Stream Map Current Picking/Shipping process for these large consolidated orders (see VSM)Current Picking/Shipping process for these large consolidated orders (see VSM)
9. Steps in Current State Consolidated order faxed by customer
Copies made for owner (forecasting), shipping & Inventory control
Inventory control – identifies shortages and opportunities to build in-house while stockroom physically picks all parts to clarify shortages
Shipping/Inventory compare backorders to provide true list back to Customer
10. Steps Continued Individual store orders received (adjusted by back orders removed)
4 orders pulled to one pallet on other side of aisle while Customer Service makes labels for all orders (same PO, plus store ID).
Orders checked for correct # cartons and labels applied to each carton
When pallet is full, pallet is re-arranged for balance and stability
Shrink-wrap, weigh, and load pallet onto trailer
11. Issues with current process Installation kits are shipped master pack of 6 from Taiwan, but customer orders in 5’s.
Floor space limited to pulling 1 consolidated order at a time
Customer doesn’t provide store breakdown until backorders id’d (can’t generate labels until you know qty for each store)
Too much inventory handling when pulling consolidated orders
Pull all quanties to one side of aisle on separate pallets
Pull indiv. orders (4/pallet) on other side of aisle
12. Opportunities to Improve ˜25% of order qty is backordered because of shortages (lost business)
Need better way to keep these 80 items in stock
Data on last 9 orders has been provided to show qty ordered/qty shipped. Assume difference were because of shortages.
What methods should be used to ensure our sample products (1 of each type) are kept in stock and available?
13. Opportunities to Improve Current process takes 2 days and fills one aisle (everything on the floor)
Process is inefficient – requires multiple picks of same item
What changes would you suggest to improve/change entire picking/shipping flow?
14. Opportunities to Improve New layout of warehouse – company moving in a few months to newer building
You can design your own layout to improve receiving/QA, storing, picking, shipping flow
What would new warehouse look like?
How to minimize downtime when doing the move?
What issues should be considered?
15. Summary Inventory shortages
Inefficient process flow
New warehouse with unlimited opportunities
You can tackle all or part of the issues – but justify why
16. Quote by Mark Twain “I can write 30 pages in 2 days, but it will take me 30 days to write 2 pages.”
You have 15 hours, 3 pages and 6 minutes.
17. Questions? Good Luck to all!