Lean Process Improvements in Warehousing and Distribution

Transcription

1 Lean Process Improvements in Warehousing and Distribution Leigh Henderson, Lean Six Sigma Leader Scott Jagger, Operations Distribution Manager IDEXX Laboratories

2 About IDEXX

3 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.

4 Lean at IDEXX Increase velocity and capacity Reduce Waste

5 IDEXX Distribution Purpose Driven Excellence Perfect order fulfillment with next day delivery to support the well-being of people, pets, and livestock

6 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

7 Excellence Inside Story Timeline Go Direct: Place order before 9:00pm EST and receive order next day July 2014: IDEXX Announces Go Direct Strategy August December 2014: Three 3PLs launched and IDEXX DCs prepare for changes January 1, 2015: Go Direct

8 US DC and Carrier Network Map Westbrook, ME Reno, NV UPS 3PL Harrisburg, PA UPS 3PL Memphis, TN Ft. Worth, TX UPS 3PL

9 About the Memphis Distribution Picking Methodology Center Memphis, TN Order Profile by Week Monday: 30% Tuesday: 22% Wednesday: 19% Thursday: 17% Friday: 12% Order Profile by Day Order Cut Off Time 90% Zone with Automatic Conveyance 10% High Bay 60% of Orders arrive after 2:00pm 9:00pm EST

10 About Memphis Customer Orders: Temperature Conditions 30% 25% 20% 15% 10% 5% 0% Frozen Only Cold Only Ambient and Frozen Cold and Frozen Ambient and Cold Ambient, Cold, and Frozen

11 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 % Lines per Delivery % Packages per Deliveries %

12 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

13 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

14 Memphis Story

15 3P Methodology Production Preparation Process Option 1 Option 3 Option 2 Option 1 Option 3 Option 3 Develop Alternatives Evaluate Against Team Developed Criteria Select Final Configuration

16 Forming the Cross Functional Rapid Improvement Process (RIP) Team Team Role Champion Leader Lean Facilitator Area Experts Outside Eye IDEXX Role Senior Director Distribution Supervisor Lean Six Sigma Leader 2 Packers 1 Pack Lead Quality Assurance Facilities

17 Improvement Process Timeline Phase 1: Plan August Phase 2: Do September Phase 3: Check, Act, Plan September 13 October 20 Phase 4: Do October Act Check Plan Do

18 Phase I Assessing the Current State

19 Phase I Assessing the Current State

20 Phase I Assessing the Current State

21 Phase I Assessing the Current State

22 Phase I Assessing the Current State

23 Time Study Results

24 Phase I Future State Planning

25 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

26 Phase II Act Plan Check Do

27 Phase II Implement Design on One Pack Station

28 Phase II Implement Design on One Pack Station

29 Phase III Act Plan Check Do

30 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

31 Phase IV: Final Implementation Act Check Plan Do

32 Phase IV: Final Implementation Before After

33 Phase IV: Final Implementation Before After

34 Phase IV: Final Implementation Before After

35 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

36 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

37 Excellence Inside Story Part 2 How will we know if we are Ahead? Behind? On Track?

38 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

39 Season 1: Day of Week 35% 30% 25% 20% 15% 10% 5% 0% Monday (+ Weekend) Tuesday Wednesday Thursday Friday

40 Percent of Lines Season 2: Time of Day 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Percent of Daily Lines Created by Hour Hour of Day (CST)

41 Lines Model Actual versus Forecast Hour (CST) Dropped by Hour Forecasted Volume by Hour

42 Lines Model Actual versus Forecast Hour (CST) Demand Cumulative Forecasted Cumulative Volume

43 Cumulative Lines Cumulative Flow Diagram Actual Flow Time (CST) Demand Cumulative Picked Cumulative Packed Cumulative Shipped Cumulative

44 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?

45 Process for Reporting Data 4x/Day During peak hours the run time is 4 hours

46 Process for Real Time Reporting SAP HANA Modeling

47 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

48 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 Warehousing and Distribution Leigh Henderson & Scott Jagger IDEXX Laboratories Leigh-Henderson@idexx.com, Scott-Jagger@idexx.com