Lean Process Improvements in Warehousing and Distribution Lean Process Improvements in Warehousing and

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  • Lean Process Improvements in Warehousing and Distribution

    Leigh Henderson, Lean Six Sigma Leader

    Scott Jagger, Operations Distribution Manager

    IDEXX Laboratories

  • About IDEXX

  • Lean at IDEXX

    Cost and Delivery are not knobs, they are results; Quality is the knob, Employee engagement is the means

    And the Customer is the reason.

  • Increase velocity and

    capacity

    Reduce Waste

    Lean at IDEXX

  • IDEXX Distribution Purpose Driven Excellence

    Perfect order fulfillment with next day delivery to support the well-being of

    people, pets, and livestock

  • Excellence Inside Story – Part 1

    Plan

    • All direct sales model for Companion Animal Group (CAG) business in the US with free overnight shipping

    • Eliminate third-party distributors

    • Strengthen relationships with veterinary practices

    Impact

    • Hired Sales Professionals – Sales Representatives

    – Field Support Representatives

    – Professional Service Veterinarians

    • Scaled Order Fulfillment – 2 Distribution Centers (DCs)

    to 5DCs

    – Parcel shipments doubled at initial 2 DCs

  • Excellence Inside Story Timeline

    July 2014: IDEXX Announces Go Direct Strategy

    August – December 2014: Three 3PLs launched and IDEXX DCs prepare for changes

    January 1, 2015: Go Direct

    Go Direct: Place order before 9:00pm EST and receive order next

    day

  • US DC and Carrier Network Map

    Reno, NV

    Ft. Worth, TX

    Memphis, TN

    Harrisburg, PA

    Westbrook, ME

    UPS 3PL UPS 3PL

    UPS 3PL

  • About the Memphis Distribution Center

    Memphis, TN

    Picking Methodology 90% Zone with Automatic Conveyance 10% High Bay

    Order Profile by Week Monday: 30% Tuesday: 22% Wednesday: 19% Thursday: 17% Friday: 12%

    Order Profile by Day 60% of Orders arrive after 2:00pm

    Order Cut – Off Time 9:00pm EST

  • About Memphis Customer Orders: Temperature Conditions

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    Frozen Only Cold Only Ambient and Frozen Cold and Frozen Ambient and Cold Ambient, Cold, and Frozen

  • Memphis Distribution Center Before and After Go-Direct

    Monthly Volume Before (2014) After (2015) % Change

    Packages 29,700 46,100 55%

    Lines 23,700 34,000 43%

    Deliveries 45,800 71,100 55%

    Ratios Before (2014) After (2015) % Change

    Lines per Package 1.5 1.5 0%

    Lines per Delivery 1.9 2.1 8%

    Packages per Deliveries 1.3 1.4 8%

  • Basic Direct Order Fulfillment Process

    Order Creation: Routed to DC/3PL based on location,

    inventory, and time of day

    Pick: Cooler, Freezer, or Ambient

    Pack: Pack contents according

    to storage and labeling conditions

    Ship: Parcel must arrive to customer

    next day

  • Business Case

    • Memphis pack process had highest cycle time and greatest variation

    • 10 out of 12 pack stations in use at pre-go direct volumes

  • Memphis Story

  • 3P Methodology Production Preparation Process

    Evaluate Against Team Developed Criteria

    Select Final Configuration

    Option 1

    Option 3

    Option 1

    Option 2

    Option 3

    Option 3

    Develop Alternatives

  • Forming the Cross Functional Rapid Improvement Process (RIP) Team

    Team Role IDEXX Role

    Champion Senior Director

    Leader Distribution Supervisor

    Lean Facilitator Lean Six Sigma Leader

    Area Experts 2 Packers 1 Pack Lead

    Outside Eye Quality Assurance Facilities

  • Improvement Process Timeline

    • Phase 1: “Plan” August 27 – 29

    • Phase 2: “Do” September 10 – 12

    • Phase 3: “Check, Act, Plan”

    September 13 – October 20

    • Phase 4: “Do” October 21 – 24

    Plan

    DoCheck

    Act

  • Phase I –Assessing the Current State

  • Phase I –Assessing the Current State

  • Phase I –Assessing the Current State

  • Phase I –Assessing the Current State

  • Phase I –Assessing the Current State

  • Time Study Results

  • Phase I – Future State Planning

  • Phase I – Future State Planning

    • Each design evaluated by team developed criteria: – Available desktop work space – Available floor space – Ergonomically friendly – Minimal restocking – Low Cost – No need for additional/personal items – Expected positive impact on productivity – Flexibility to future changes – Ease of access to supplies

  • Phase II

    Plan

    DoCheck

    Act

  • Phase II – Implement Design on One Pack Station

  • Phase II – Implement Design on One Pack Station

  • Phase III

    Plan

    DoCheck

    Act

  • Phase III – Check, Act, Plan

    • Solicited feedback frequently from employees using the prototype station

    – Employees did not like the automatic tape dispenser

    – One additional box type moved to overhead storage

    – Large boxes relocated to be easier to reach and shelving utilized for spare paper and tape

  • Phase IV: Final Implementation

    Plan

    DoCheck

    Act

  • Phase IV: Final Implementation

    Before After

  • Phase IV: Final Implementation

    Before After

  • Phase IV: Final Implementation

    Before After

  • Summary of Major Improvements from 3P Methodology

    • Standardized pack stations based on employee feedback – Utilized space directly off of the conveyor to hold

    totes – Frequently used items store within closest reach – Labeled where items belong to promote 5S

    • Standardized oversized box and insulated box storage

    • Added a water spider to replenish supplies to the pack stations and minimize the number of times packers left their stations

  • Results from 3P Methodology

    • Packing cycle time reduced approximately 40%

    • Results have been sustained for 2 years

    – Packers have made additional improvements: • shopping list

    • flag for water spider attention

    • Strong sense of ownership by RIP participants

  • Excellence Inside Story – Part 2

    • How will we know if we are

    – Ahead?

    – Behind?

    – On Track?

  • Excellence Inside Story Same Day Shipment for Highly Seasonal Orders

    • Season: Time period over which pattern of demand is repeated

    • Season 1: Day of Week

    • Season 2: Time of Day

  • Season 1: Day of Week

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    35%

    Monday (+ Weekend) Tuesday Wednesday Thursday Friday

  • Season 2: Time of Day

    0%

    2%

    4%

    6%

    8%

    10%

    12%

    14%

    16%

    18%

    Pe rc

    en t

    o f

    Li n

    es

    Hour of Day (CST)

    Percent of Daily Lines Created by Hour

  • Model Li

    n e

    s

    Hour (CST)

    Actual versus Forecast

    Dropped by Hour Forecasted Volume by Hour

  • Model Li

    n e

    s

    Hour (CST)

    Actual versus Forecast

    Demand Cumulative Forecasted Cumulative Volume

  • Cumulative Flow Diagram C

    u m

    u la

    ti ve

    L in

    e s

    Time (CST)

    Actual Flow

    Demand Cumulative Picked Cumulative Packed Cumulative Shipped Cumulative

  • Workflow Visibility Progression

    Manual – Next Day Reporting

    • Pull and aggregate 4 reports

    • 30 minutes of work

    • How did we do yesterday?

    Automated – 4x/Day

    • Reports and analysis automated

    • How did we this morning? This afternoon? This evening?

    Automated – Real Time Data

    • No reports required

    • Data pulled directly

    • How are we doing right now?

  • During peak hours the run time is 4 hours

    Process for Reporting Data 4x/Day

  • Process for Real Time Reporting

    SAP HANA Modeling

  • Purpose Driven Excellence: Perfect order

    fulfillment with next day delivery to support the

    well-being of people, pets, and livestock

    • Reduced packing cycle time by 40% through 3P improvement methodology

    • Enabled workforce to be highly prepared, flexible, and reactive by understanding delivery arrival and fulfillment patterns in innate detail

  • Thank You!

    Your opinion is important to us! Please take a moment to complete the survey using the conference mobile app.

    Session: WP/27

    Lean Process Improvements in Wareh