BLUEPRINT FOR AUTOMOTIVE PARTS LOGISTICS

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Jacob Matthews
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1 A BARRETT DISTRIBUTION CENTERS CASE STUDY Barrett operates two distribution centers for an aftermarket automotive parts distributor. Barrett s proprietary Blueprint methodology achieved measurable improvements, which have now been successfully duplicated at the retailer s 20+ facilities nationwide for significant overall supply chain performance improvement. A Barrett Distribution Centers Case Study 1

2 BACKGROUND Barrett had worked with the senior supply chain management team at a major US retailer for more than 11 years with positive results. When key leaders from that group took up leadership of this major automotive parts retailer, they turned to Barrett Distribution Centers to bring fresh ideas to existing processes and again craft a custom supply chain solution for the operation, which the new team could leverage to improve operations at the additional 20 locations run internally by the company, over time. We ve been able to leverage the solution and processes Barrett designed throughout our operation with measurable results and significant performance improvement. - Logistics Director, Major Automotive Parts Retailer Barrett s Blueprint process is a proprietary approach to designing, implementing and managing supply chain solutions which holistically deploy Barrett s people, process and technology resources, in collaboration with others as required. The Blueprint process methodology provides a professional framework for very deliberate consideration of all aspects required to create a tailored road map for each customer engagement. This case study is another in a long line of validations of the process as a value driver that establishes solution control and results that meet or exceed customer expectations. The sketch below charts key steps from initial analysis through design and manage to improvement: Analysis Design Build Implement Manage Improve The next few pages illustrate, step by step, how the Barrett team worked with this client to identify opportunities to improve operational efficiencies, design, build and implement a new solution, which significantly improved overall supply chain performance. A Barrett Distribution Centers Case Study 2

3 Barrett handles all shipments for Vibram, to the consumer direct and retail channel in the US, Canada, and Mexico. Barrett approached the overall supply chain solution using Barrett s proprietary Blueprint Process methodology, described below. Volume handled in SKUs and in lines picked and lines received are as follows: Approximately 55,000 SKUs in each location All SKUs are B items Approximately 400,000 lines picked per year at each location Following is a recap of results achieved in each of the steps, using the framework described below: Design Needs Analysis Process Definition Systems Definition Identify MHE Model Productivity and Staffing Build Retrofit Facility Fixture Facility Systems Infrastructure Installation Spec and procure equipment SOW documentation Implement Dedicated project lead and team Recruit, hire, train Systems testing Contingency planning Contingencies Manage Labor planning Client KPI definition Operating Metrics Quality Performance Management Improve Goal setting Collaborate Gain sharing Benchmark EVA & value positions Barrett Blueprint Process Methodology A Barrett Distribution Centers Case Study 3

Design DESIGN PHASE In the Design phase of our Blueprint Process, Barrett identified modifications to the facility layout (pictured below), and receiving process that resulted in a 15% improvement in

4 Design DESIGN PHASE In the Design phase of our Blueprint Process, Barrett identified modifications to the facility layout (pictured below), and receiving process that resulted in a 15% improvement in Receiving lines per hour. The Auto Parts Retailer has since used the Barrett engineered design and process in other facilities as they either move or retrofit them. Figure 1 Revised facility layout resulting in 15% improvement in receiving lines per hour. A Barrett Distribution Centers Case Study 4

Build BUILD PHASE In the Build phase, Barrett identified a more efficient layout for SKUs and pick patterns that resulted in a 9% improvement in pick productivity over the specified layout.

5 Build BUILD PHASE In the Build phase, Barrett identified a more efficient layout for SKUs and pick patterns that resulted in a 9% improvement in pick productivity over the specified layout. Figure 2 Proven, reliable process methodology ensures results. Implement IMPLEMENT PHASE As we moved to the Implement phase, Barrett produced a training video with an accompanying process map, to comprehensively illustrate each step in the process within an overall framework for clarity. Barrett provided this training video at no additional cost to the client, who has modified it for use in their internally managed facilities as well, and finds it to be a highly useful tool for the entire team. To view this video, please go to A Barrett Distribution Centers Case Study 5

6 Manage MANAGE PHASE Facilities are managed to exacting standards, driven by the demanding requirements of automotive retail locations. Following is a high level summary of KPI standards achieved: Production Nr. Process KPI Target Rating 2011 Results from similar operations - Operated by Barrett/GRL 1 Goods-in To bin transfer <= 100% and >=99.9% excellent % <= 99.9% and >= 99.5% as required < 99.5% poor Shipping Nr. Process KPI Target Rating 2011 Results from similar operations - Operated by Barrett/GRL 2 Goods-out Pick & Pack <= 100% and >=99.95% excellent % <= 99.95% and >= 99.8% as required < 99.8% poor Quality Nr. Process KPI Target Rating 2011 Results from similar operations - Operated by Barrett/GRL 3 Quality of Error rate <= 0.05% excellent <= % Deliveries <= 0.08% and >= 0.05% good <= 0.10% and >=0.08% as required > 0.10% poor Stock Accuracy Nr. Process KPI Target Rating 2011 Results from similar operations - Operated by Barrett/GRL 4 Perpetual Stock accuracy > 99.9% excellent Inventory <= 99.9% and > 99.75% good *99.863% <= 99.75% and > 99.25% as required <= 99.25% poor *This is a measure of location/bin accuracy which includes physical quantity in location against the system, plus that the item is in the correct location. Our inventory accuracy as a measure of physical variance against system is ~99.99%. A Barrett Distribution Centers Case Study 6

Improve IMPROVE PHASE Finally, our Blueprint Process concludes with an Improve phase, which is really an ongoing effort of analysis, feedback and continuous improvement driven by learnings from the

7 Improve IMPROVE PHASE Finally, our Blueprint Process concludes with an Improve phase, which is really an ongoing effort of analysis, feedback and continuous improvement driven by learnings from the prior phases. Barrett identified process improvements in the handling of the exhaust/pipe product line that improved the safety and productivity on this segment of the business. Again, this process has been duplicated at other locations run by the retailer. Barrett noted an opportunity to manage the returns process more efficiently, impacting warehouse productivity and lowering overall cost: Figure 3 Returns process improvement plan A Barrett Distribution Centers Case Study 7

CONCLUSION CONCLUSION This automotive parts case study is only one example of how Barrett s Blueprint Process not only produces a more efficient supply chain, but improves a company s overall

Barrett s proven process methodology provides a reliable framework for systematic supply chain assessment, identification of areas for focus and improvement, and management to desired result.

8 CONCLUSION CONCLUSION This automotive parts case study is only one example of how Barrett s Blueprint Process not only produces a more efficient supply chain, but improves a company s overall business. Barrett s proven process methodology provides a reliable framework for systematic supply chain assessment, identification of areas for focus and improvement, and management to desired result. With the Blueprint Process framework, Barrett was able to create efficiencies in receiving, pick patterns, and training for this important customer: including a 15% improvement for lines per hour, picking productivity improvement of 9%, and reduction of error rates to.0062% as a result of the highly effective training program. These efficiencies reduced overall costs for the retailer and allowed them to focus more on the core business of selling automotive parts. Figure 4 Automotive parts. Objective: Fast to retail. Figure 5 Auto parts inventory in stock at Barrett Northeast distribution center. A Barrett Distribution Centers Case Study 8

ABOUT BARRETT DISTRIBUTION CENTERS ABOUT BARRETT DISTRIBUTION CENTERS Barrett Distribution Centers, headquartered in Franklin, Massachusetts, and founded in 1941 as a single warehouse operation, has

9 ABOUT BARRETT DISTRIBUTION CENTERS ABOUT BARRETT DISTRIBUTION CENTERS Barrett Distribution Centers, headquartered in Franklin, Massachusetts, and founded in 1941 as a single warehouse operation, has grown to serve a wide array of customers and industries with a network of 13 strategic distribution centers throughout the US. These facilities are designed to efficiently handle fast moving consumer goods for leaders and future leaders of the consumer electronics, chemical, food and beverage, and footwear and apparel sectors. Barrett provides both consumer direct fulfillment and retail channel delivery, with facilities and operations covering the East Coast, West Coast, Mid-Atlantic and Southeast. For more, please visit A Barrett Distribution Centers Case Study 9

BLUEPRINT FOR FOOD LOGISTICS

BLUEPRINT FOR FOOD LOGISTICS A BARRETT DISTRIBUTION CENTERS CASE STUDY For a major US food brand, Barrett began on a small introductory scale in 2008 and quickly proved to be an asset in terms flexibility,