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Analysis of Gap Inc. Brampton Distribution Centre Inbound Operations
Annette Selvanayagam
A thesis is submitted in partial fulfillment of the requirements for the degree of
BACHELOR OF APPLIED SCIENCE
Supervisor: Professor D. Frances
Department of Mechanical and Industrial Engineering University of Toronto
March 22nd. 2007
i
Abstract The following thesis applies a combination of problem solving techniques such as simulation modeling, Business Process Reengineering (BPR) techniques and line balancing concepts to improve Inbound operations within Gap Inc. Brampton Distribution Centre. Prior to the thesis, the Inbound team was unable to meet its shipment stocking deadlines and experienced a drop in Team Receiving productivity which accounted for 80% of the labour hours. By utilizing simulation modeling and other BPR techniques, inefficiencies related to the Team Receiving process and the management of the shipment stocking deadline were identified. This document concludes with new strategies/processes to improve workload management and to ensure processes are aligned with business needs.
ii
Acknowledgements
I would like to thank Professor Daniel Frances for his support and guidance over the course of this thesis project. In addition, I would like to extend my gratitude to the Inbound Team at Gap Inc. Brampton Distribution Centre. Their information and assistance played a significant role in this project.
iii
i. Table of Contents
1.0 Introduction……………………………………………………………………….... 1.1 Purpose Statement………………………………………………………... 1.2 Company Background…………………………………………………….. 1.3 Motivation………………………………………………………………...… 1.4 Project Focus……………………………………………………………….
2.0 Literature Review………………………………………………………………….. 2.1 Business Process Reengineering……………………………………….. 2.2 Simulation………………………………………………………………….. 2.3 Line Balancing……………………………………………………………...
3.0 Methodology Overview……………………………………………………………. 4.0 Process Description Development ……………………………………………....
4.1 Development of Team Receiving ‘As-Is’ Model……….……………….. 4.1.1 Description of Current Team Receiving Process……………… 4.1.2 Description of Team Receiving ‘As-Is’ Model…………………..
4.2 Description of ‘On Time to Stock’ Metric Management Process……... 5.0 Problem Analysis………………………………………………………………….. 6.0 Process Redesign Development…………………………………………………
6.1 Redesigning Team Receiving Process…………………………………. 6.1.1 Simulation Testing Objectives and Procedures………………... 6.1.2 Results and Recommendation…………………………………...
6.2 Redesigning ‘On Time to Stock’ Metric Management process ………. 7.0 Conclusion…………………………………………………………………………. 8.0 References…………………………………………………………………………. 9.0 Appendices……………………………………………………………………...…. 10.0 Figures…………………………………………………………………………….. 11.0 Tables……………………………………………………………………………...
1 1 1 2 3 5 5 6 8 9 11 11 11 14 16 17 19 19 19 20 22 24 25 26 29 36
iv
List of Figures Figure 1: Team Receiving Process Map Figure 2: Team Receiving Simulation Model Figure 3: Probability Distribution of POs per Trailer Figure 4: Probability Distribution of SKUs per PO Figure 5: Sample Inbound Team Sheet Figure 6: Probability Distribution of Cartons per SKU Figure 7: Probability Breakdown of SRAT station sub-processes Figure 8: Current Team Receiving Productivity Figure 9: Three Man Team Test Results
v
List of Tables Table 1: Simulation Software Packages Table 2: Expected Cycle time of Team Receiving Workstations Table 3: Sample MOST Expectation Documentation Table 4: Sample Team Receiving Business Objects Report Table 5: Sample Labour Management System Report Table 6: ‘As-Is’ Simulation Model Results Table 7: Sample Three Man Team Simulation Test Results Table 8: Sample Inbound Trailer Log
Page 1 of 42
1.0 Introduction 1.1 Purpose Statement The purpose of this thesis project is to improve Gap Inc. Brampton Distribution
Center‟s (BDC) ability to meet its key performance metrics for its Inbound
operations. In order to achieve this objective, a combination of problem solving
techniques including simulation modeling will be applied.
1.2 Company Background
Gap Inc. is a specialty retail network consisting of four recognized apparel brands-
Gap, Banana Republic, Old Navy and Forth & Towne. It owns all aspects of its
supply chain business (i.e. Stores, Distribution Centers) aside from Manufacturing
and Transportation. Within Canada, currently there is only one Distribution Centre
(DC) – BDC that processes orders for stores across Canada.
As a part of the Logistics Sector, BDC management primarily aims to meet
performance metrics (i.e. productivity rates, cycle times, turnover rates, frequency of
accidents) set by the Gap‟s Logistics management while minimizing costs related to
labor and overhead. BDC must comply with performance metrics to receive
products within a specific deadline even if it requires overtime hours and the
products will remain stocked within the facility for over a month. In addition, store
needs are given higher priority over costs incurred by the DC to comply with the
needs. For example, if a store wants only one unit of multiple SKUs to replenish their
stocks, BDC must complete this order by unit picking the order even though it is
Page 2 of 42
more labor efficient for BDC to case-pick orders. Thus, operations are largely
dictated by requirements set by the Logistics management.
Within BDC operations, all job functions are either categorized under Inbound or
Outbound processes. The scope of this thesis will only cover Inbound Team
operations, which include Team Receiving, Multifunction, Vendor Audit, and Load
Put away of Pallets (Job functions will be explained in detail under Process
Description Development).
1.3 Motivation & Expectations
During my Professional Experience Year within Gap Inc., there were two DCs that
stored and processed orders for stores across Canada. Near the end of my term,
the two DCs were consolidated into one DC. Following this major change, the
Inbound team experienced challenges in meeting their key performance metrics. As
a result, I was presented with this problem as a thesis project.
One of the main changes in Inbound was the change in management. Some of the
new supervisors had limited experience in Inbound operations. Therefore, BDC
management team became interested in streamlining their operations by identifying
better ways to manage their employees and solutions to overcome current
bottlenecks in their Inbound processes.
Page 3 of 42
1.4 Project Focus
As mentioned in section 1.1, the primary objective of this thesis is to improve BDC
Inbound team‟s ability to meet key performance metrics. Following discussions with
the Inbound manager and the supervisors, it was understood that the primary
requirements for this project was to overcome the following set of challenges:
Poor productivity within Team Receiving job function, which accounts for 80%
of labor hours in Inbound. Following consolidation, Team Receiving
productivity rate for the first two months was 57 Cartons per Direct Hour
(CPDH), which was more than a 20% drop from last year‟s performance of 69
CPDH. As the new Inbound management team and employees became
more accustomed to their responsibilities, productivity significantly improved.
However, they were still unable to meet or exceed last year‟s performance
level. Since this job function accounts for such a large portion of the labor
hours, all other job functions (i.e. Vendor Audit, Multifunction and Load
Putaway) were considered to be outside the scope of this project due to
limited time constraints.
Inability to meet performance „On Time to Stock‟ (OTS) metric. This metric
requires 90% of the shipments to be processed through Team Receiving
before their stocking deadline. The stocking deadline for each shipment is
usually three days following its arrival or two days following its arrival if it is an
airfreight trailer. Unfortunately, the Inbound management team missed the
Page 4 of 42
deadline for 30% of the shipments following consolidation. This is a significant
drop from last year‟s performance when only 5% of the shipments missed the
OTS metric requirements.
Following discussions with the Engineering Department Manager, it was also
understood that the project would focus on how simulation modeling could be
applied in other areas of the DC or Logistics and to identify the software most
appropriate to handle related complexities.
Page 5 of 42
2.0 Literature Review
Given the problem and challenges faced by the Inbound team stated in section 1.4,
this section provides existing research and applications related to various problem
solving techniques.
2.1 Business Process Reengineering
In an article written by Bush [1] regarding productivity improvement through
Business Process Reengineering (BPR), he explains that various changes such
innovative technology and unique customer demands are increasing the need to
challenge existing processes in order to achieve dramatic positive results. In order
to execute with this vision, the author also provides a series of guidelines to follow.
First, it is important to build direction by identifying business/team objectives and
critical success factors from a management perspective. Given the understanding of
project goals, the next step requires narrowing the scope by building an „As-Is‟
Model and conducting interviews/research in order to identify „quick hits‟ or
bottlenecks that require further analysis and evaluation. Following these steps, the
author suggests to begin redesigning the process by taking a clean-slate approach
and challenging any process constraints that do not align with the business direction.
The same approach must be applied when forming linkages between the
organization and its external counterparts. This step aims to ensure that proper
resources (i.e. people, policies, etc.) are available to support new processes. Finally,
Page 6 of 42
implementation steps occur during various stages of the BPR, starting with the
implementation of quick hits proceeding to training for the new processes.
2.2 Simulation
According to Simulation Modeling with Simul8 [2], the authors of the book describe
simulation as “the use of a computer program to model a real world system” that
enables the user to try different ways of operating the system. The Simul8 software
and other similar simulation software packages takes into account many important
factors such as productivity rates, probability distributions, travel distance, rate of
traveling, conveyor speeds, etc. Thus, this tool will play an important role within the
BPR approach.
As stated in 2.1, building an „As-Is‟ model of business processes will help identify
current bottlenecks and narrow the scope of processes that require redesign. In
addition, it will validate the new processes created during the design stage without
experimenting within the real system. However, simulation modeling does not
provide optimal solutions easily. According to Kempfer [3], optimizing operational
and business rules require running multiple tests and comparing outputs. This can
be a highly inefficient process.
In terms of simulation software options, there are various available for Distribution
Centre facilities/ Logistics related issues. According to Gaming Reality [4] - a
Page 7 of 42
simulation survey conducted by James Swain and other simulation articles, the
software packages detailed in Table 1 are utilized within the industry.
Table 1: Simulation Software Packages
Software Name
Applications Price Industry Usage
Arena Routing/dispatching strategy
Facility Design/Configuration scheduling
Workflow improvements
Decision support tool for capital improvements
$795 High
AutoMod Decision support tool for statistical and graphical analysis of material handling equipment in logistics
$2000 High
Extend Suite
High volume production line modeling
Building supply chain network [5]
$4000 Low
Flexism Managing Flexible Manufacturing Systems [6]
$12,500- $19,500 Low
ShowFlow 2 Facility Layout Design
Workflow improvements
Decision support tool for capital improvements
$1500 Low
Simul8 Facility Layout Design
Workflow improvements
Decision support tool for capital improvements
$5,000 High
Though all these software packages are fairly similar in terms of graphical model
construction, distribution fitting, output presentation, animation and real time viewing,
Arena is the most affordable software. In fact, it seems as though it is also the most
widely mentioned simulation software in many of the industry journals for
DC/Logistic related problems. For example, it was detailed in the following articles:
Simulation application for logistics strategy planning in the Baltic IT market
[7]: Arena is used to build a simulation model of the IT distribution system to
determine its logistic strategy planning
Page 8 of 42
Warehouse simulation creates a new model for change [8]: Simulation
software such as Arena allows companies to try different ways of designing or
redesigning the warehouse layout prior to installation.
Integrating simulation modeling and equipment condition diagnostics for
predictive maintenance strategies-a case study [9]: By utilizing Arena, a
simulation model was built to test various predictive maintenance strategies in
order to reduce system downtime and work in process inventory.
Given its affordable pricing and applicability to various DC/Logistics related
problems, the Arena simulation package would be the most appropriate option for
the Engineering teams within Gap Inc. However, for the purpose of this thesis,
Simul8 will be applied since the Thesis supervisor has provided access to the free
student version.
2.3 Line Balancing
Line balancing is a method of identifying optimal solutions through mathematical
calculations. It aims to efficiently distribute workload among a series of workstations
by taking into account various factors such precedence constraints, production rates
and objectives (i.e. minimize number of work stations or maximize productivity).
Line balancing problems of flow oriented operations such as BDC‟s Team Receiving
process is fairly difficult to solve. According to Driscoll and Thilakawardana [10], the
simplest form of an assembly line problem involves conveyor speed, cycle time at
each workstation, and series of sequential workstations. Complexities such as
probability distributions will further increase the difficulty of the problem. Though it
Page 9 of 42
will be difficult to determine a solution through such calculations, the concept of line
balancing can be applied through simulation testing to ensure workload is equally
distributed within a single receiving line.
3.0 Methodology Overview
Given the benefits and challenges associated with BPR, Simulation and Line
Balancing, this project entailed a combination of these techniques. The following set
of methods which are in compliance with the BPR approach, were applied over the
course of this project in order to evaluate and improve the Inbound area:
1. Build the Project Direction:
Conducted interviews with the Inbound manager and supervisors to
understand project expectations and critical success factors. Appendix A
details sample questions used during the interview;
2. Understand the Problem Scope
Observed and documented the current processes;
Collected data by reviewing documents or databases containing related
information;
Interviewed the supervisors to understand their current methods to meet
key performance metrics for Team Receiving and the OTS metric; and
Built an „As-Is‟ Simulation Model of Team Receiving, which takes into
account distributions related to workload variability, quantity of change
over and strategies applied by employees to reduce idle time;
3. Target the Problem
Page 10 of 42
Discussed potential root causes of problems related to Team Receiving
and the inability to meet the OTS metric among employees and
supervisors.
4. Design the Process
Identified potential new processes or strategies to overcome current
problems;
Tested and validated new approach to improve productivity for Team
Receiving by modifying the simulation model to take into account a new
line balancing strategy. The results were compared against the „As-Is‟
Model results; and
Presented a new process to overcome current problem of meeting OTS
metric to Inbound management and discussed the infrastructure alignment
necessary to support the change.
The scope of this project did not extend beyond these four sections of Business
Process Re-engineering. The BDC management team is responsible for planning
the implementation and actual implementation of the re-engineered processes into
the BDC operation.
Page 11 of 42
4.0 Process Description Development
This section details the current processes that were selected to be redesigned. An
understanding of these processes was necessary in order to identify root causes
during the problem analysis stage. In addition, the Team Receiving information was
employed to build an „As-Is‟ Simulation Model
4.1 Development of Team Receiving „As-Is‟ Simulation Model
The Team Receiving process is primarily required for sorting received cartons onto
pallets according to the style id after its product information had been uploaded into
the Warehouse Management System (WMS). Following palletization, the pallet is
slotted within a specific bulk storage location or unit pick modules prior to any
Outbound job function. Thus all cartons within the DC must be processed through
Team Receiving.
Through documentation and data collection, the necessary information related to the
Team Receiving sub-processes and workload variability was gathered to build a
sufficiently accurate „As-Is‟ simulation model for the purpose of this project.
4.1.1 Description of Current Team Receiving Sub-Processes
Page 12 of 42
BDC consists of four team receiving lines, where teams of four employees process
cartons from one trailer at a time. As shown in [Figure 1] and [Table 2], the process
consists of the following series of sub processes/ workstations:
1. Offload cartons: After opening the dock door and extending the moveable
conveyor near the edge of the door, an employee begins placing cartons on the
conveyor. In order to maintain efficiency throughout the line, he/she try their
best to group together cartons of the same purchase order (PO) and SKU.
2. SuperRAT (SRAT) station: At this workstation, carton information is uploaded
into WMS. Depending on the type of label and/or carton, this workstation
process and cycle time can vary in three different ways:
a. Manual Printing Process: Cartons from suppliers that do not comply with
Gap Inc‟s. labeling structure are relabeled with Veli Labels after data related
carton weight, style, size and quantity is entered into WMS for each carton.
b. Veli Scan Process: Non Full-Case1 cartons with Veli labels only require
scanning and its information is automatically uploaded into WMS.
c. One Step Process: Full-Case2 cartons with Veli labels only require the first
cartons to be scanned for each new SKU.
If it is the first carton of any SKU, employees are required to conduct a First
Carton Seen Screen. This sub process requires opening the first carton of the
new SKU, verifying its contents and entering data related to PO, size, weight,
style, and quantity.
1 Non Full-Case cartons consist of units with multiple sizes of the same product. These cartons are not
processed through Unit Picking where cartons are opened and one or two units are sent in an order to the store. 2 Full Case cartons consist of units with the same product and size. They are sent directly to the store as a whole
entity when they stock their shelves with new products. They are not opened within the DC.
Page 13 of 42
If there are any discrepancies with the contents, three cartons are sent to
Vendor Auditing. In addition, if the PO is from a supplier that is on the Vendor
Audit list, three cartons are also sent to the Vendor Auditing.
3. Palletize cartons: At this workstation, cartons are palletized with respect to style
id. Once a pallet reached its maximum height, the set of cartons are updated in
the system as either: pure (one style), side by side (2 styles) or mixed (more
than 2 styles) pallet.
Prior to processing a shipment, a member of the team picks up a sheet from the
Inbound office which details dock door number, number of cartons, number of POs
and number of SKUs. This information can provide an idea of the workload level for
each trailer.
As the number of SKUs increase in a single trailer, the amount of First Carton Seen
Screen increases and thus the workload increases to process the trailer. However,
the information does not give a complete picture of the workload. Each trailer can
consist of multiple POs where each PO will require one of the three SRAT station
sub-processes to upload carton information into WMS. Unfortunately, teams do not
have visibility of the percentage breakdown of Manual Printing, Veli Scan and One
Step for each trailer. However, over the course of a week or month, the percentage
breakdown is fairly consistent where Manual Printing (i.e. the most time consuming
upload process) does not exceed 12%.
Page 14 of 42
Therefore, the team usually assigns one employee to each sub-process/workstation
except for the SRAT station. An additional employee is positioned at the 2nd SRAT
station since a significant proportion of its variable workload has a higher cycle time
(i.e First Carton Seen Screens) than the other workstations. However, if the
additional employee notices a large queue (on average more than 65 cartons)
forming on the conveyor line leading to the palletization area, he/she walks over to
the end of the line to assist the Palletizer.
4.1.2 Description of „As-Is‟ Model
Given the data sources [Appendix B] and the information detailed in 4.1.1, an „As-Is‟
simulation model [Figure 2] was created using Simul8. The following set of
parameters or assumptions were built into the model:
1. Conveyor speed of 25 feet per minute;
2. Conveyor length of 50 feet leading to the SRAT station from the dock door
and conveyor length of 135 feet leading to the Palletization from the SRAT
station;
3. Carton/Work type dimensions of 24” x 24” for all cartons except Full Case
cartons. Full case cartons are 12” x 24”;
4. The time to perform the three main activities under Team Receiving based on
Maynard Operation Sequence Technique (MOST)/ Expectation values [Table
2]: Offloading, SRAT and Palletization. However, palletization is peformed
twice as fast for Full Case cartons since they are palletized two at a time;
Page 15 of 42
5. There is a continuous flow of cartons and therefore there is no account for
downtime related to opening/closing dock doors or any other initial set up
activities. The time spent performing these activities are recorded under
indirect hours and thus outside the scope of improving Team Receiving
productivity metric;
6. The time to perform 1st Carton Seen Screens based on MOST/Expectation
values every time the SKU changes
7. The Offloader places all cartons with the same PO and SKU on the conveyor
before changing to a new SKU or PO;
8. One resource is assigned to each work station (Offloader, SRAT Stations and
Palletizer workstations). The fourth resource floats between the SRAT Station
2 and Palletizer 2 depending on the number of cartons waiting to be
palletized. If the conveyor (leading to Palletization) carton quantity exceeds
65, the fourth resource walks over to the area to palletize. Once the conveyor
carton quantity drops below 30, it walks back to the second SRAT station to
resume work there;
9. Travel time between SRAT Station 2 and Palletizer 2 is 2 minutes. This travel
time also includes computer sign-in time;
10. Every PO is processed as either Manual Printing, Veli Scan or One Step at
the SRAT station;
11. Probability distributions related to POs per Trailer [Figure 3] and SKUs per
PO [Figure 4] which was derived from information gathered on Inbound team
sheets [Figure 5];
Page 16 of 42
12. Probability distribution related to Cartons per SKU [Figure 6] which was
derived from Team Receiving Business Objects report [Table 4];
13. Percentage breakdown of Manual Printing cartons, Veli Scan cartons and
One Step cartons as shown in Figure 7 which was derived from data provided
by Labor Management System [Table 5].
According the model after six runs [Table 6], the current average productivity rate is
73 CPDH which is fairly close last year‟s performance of 69 CPDH. Since the model
does not take into account the impact of training new employees and infrequent
downtimes related to vendor audit problems, the outputted productivity rate is
reasonable and validates the accuracy of the model.
4.2 Description of OTS Metric Management
In terms of attempting to meet the OTS metric, the Inbound team simply tries to work
through as many shipments as possible within a given day in a First–In-First-Out
(FIFO) manner. Given the supervisor‟s time constraints of managing a large team,
the task of assigning each shipment to a team‟s dock door is managed by Inbound
clericals who check-in the shipments as they enter the yard.
Airfreight shipments usually arrive on Friday afternoons. Since BDC does not run on
Saturdays and these shipments need to be stocked within two days instead of three
days, it is processed as soon as it arrives. Thus, these shipments do not usually
miss the stocking deadline.
Page 17 of 42
5.0 Problem Analysis
Overall, Inbound has two major problems:
Easier workloads decrease Team Receiving efficiency
Within Team Receiving, there is a large variation in workload from shipment to
shipment. The largest impact on workload level is the quantity of First Carton Seen
Screens (i.e. changeover). Though productivity is expected to increase
proportionally to the quantity of changeover, this was not evident from observations
of the actual process or the results outputted by the „As-Is‟ model.
Figure 8: Current Team Receiving Productivity
Team Receiving Productivity
60.00
62.00
64.00
66.00
68.00
70.00
72.00
74.00
76.00
78.00
80.00
1 3 5 7 9 11
Cartons to First Carton Seen Screens
CP
DH
Four Man Team
As shown in [Figure 8], as the ratio of Cartons to First Carton Seen Screens
increases, productivity increases; however, it begins to plateau as the ratio becomes
Page 18 of 42
greater than 7. Through observations, it is now understood that as the workload
decreases, employees at the SRAT station either slow down due to a conveyor
blockage or continuously walk between the SRAT station and Palletization area in
order to balance issues related to conveyor blockage or waiting time of the
Palletizer. Therefore with easier workloads, Team Receiving lines are poorly line
balanced.
Lack of information related to stocking deadlines
Following consolidation, the supervisors assumed that Inbound‟s inability to meet the
OTS metric was due to poor Team Receiving productivity. However, despite a
significant improvement in productivity and shipment throughput per shift in the
months following consolidation, Inbound was still unable to meet its OTS metric for
20% of its shipments.
As a result, a meeting was held with the Inbound manager, supervisors and WMS
coordinator to re-evaluate the current FIFO strategy. Through the discussion, it was
acknowledged that some of the shipments could possibly be arriving late and
therefore shortening the time available to meet the stocking deadline set
automatically by one of Gap‟s Logistics Management systems. Although some of
supervisors realized the need to prioritize shipments with respect to stocking
deadlines, they did not pursue the idea since they did not have information related to
stocking deadlines readily available to them. In order to gain visibility of these
Page 19 of 42
deadlines, large amounts of data mining was required. However, the team did not
have the resources necessary to take on such a time consuming task each day.
6.0 Process Redesign Development
This section details the new processes/strategies designed to overcome the
problems specified in section 5.0 and how they were developed.
6.1 Redesigning Team Receiving Process
Since teams of four employees (i.e. Four Man Teams) generates inefficiencies for
easier workloads (i.e. low quantity of Cartons to First Seen Screens), the application
of Three Man Teams (i.e. teams of three employees) was initiated to process such
shipments.
6.1.1 Simulation Testing Objectives and Procedures
The purpose of the simulation testing was to determine the feasible conditions to
utilize Three Man teams instead of Four Man teams to increase the level of
productivity. Since the percentage of First Carton Seen Screens significantly affects
the workload for each shipment, this testing aimed to determine the threshold ratio of
Cartons to 1st Carton Seen Screens at which the Inbound Team could feasibly utilize
Three Man Teams. This information could then be applied easily by the Inbound
clericals who will use the threshold ratio to route „easy‟ shipments to preset Three
Man Teams and the other shipments to preset Four Man Teams.
Page 20 of 42
In order to achieve this objective, the „As-Is‟ simulation model was modified to
calculate the ratio of Cartons to 1st Carton Seen Screens for every trailer arrival. If
the ratio was greater than the ratio value being tested (i.e. 1, 2, 3, 4, etc), three
employees are used to process the trailer instead of the usual four employees.
Appendix C details the code utilized to achieve this approach. Since the number of
cartons per SKU follows the Geometric probability distribution (parameter = 0.25),
the ratio rarely exceeded 17 and thus the model was run only 17 times.
For each ratio value, the model was run for more than four or five runs where each
run replicated the arrival of more than 500 shipment arrivals for a single receiving
lane. This was done to ensure that the ratio was tested against a wide range of
trailer arrival scenarios.
Following each run, the program returned data related to the number of units
processed through Three Man Teams and the time spent to process its units in
addition to the number of units processed through Four Man Teams and the time
spent to process its units (sample information outputted by the model is detailed in
Table 7).
6.1.2 Results & Recommendations
According to the simulation testing results [Figure 9], it is feasible to utilize Three
Man teams if the ratio of Cartons to 1st Carton Seen Screens is greater than 5. The
application of this threshold ratio will increase productivity up to 42% for each
shipment.
Page 21 of 42
Figure 9: Summary of Three Man Team Test Results
Three Man Teams vs. Four Man Teams
55.00
60.00
65.00
70.00
75.00
80.00
85.00
90.00
95.00
100.00
105.00
1 3 5 7 9 11 13 15 17
Cartons to First Carton Seen Screens
CP
DH
Current ( without
Three Man
Team Scheme)
Three Man
Team
There will be a significant jump in productivity following the application of Three Man
teams mainly because the productivity rate of a single SRAT station will become
fairly equivalent to the productivity rate of a single Palletizer as the ratio increases.
Under such circumstances of a well balanced receiving line, the overall productivity
will improve due to the elimination of inefficiencies related to waiting for cartons or
conveyor overload.
Although the application of the Three Man Team scheme will improve productivity
under its optimal conditions, the total cycle time (CPDH x number of associates on a
team) to complete each shipment increases by up to 25% (drop from 292 CPH to
219 CPH). If the OTS metric is being well managed, it should not be a major
problem to the other key performance indicators. However, if a shipment is at risk of
If Ratio >5, Three Man Team will improve productivity
Page 22 of 42
meeting its „On Time to Stock‟ metric, it is recommended not to utilize a Three Man
team to receive it.
6.2 Redesigning OTS metric management process
Following discussions with external engineers in other DCs within North America, it
was understood that the best way to increase visibility of stocking deadlines given
resource constraints was to increase communication between the Inbound team and
the local Transportation team. The Transportation team who were responsible for
the management of trailers across Canada, kept daily records of information related
to incoming and outgoing BDC shipments. Since both teams had different
management systems, this information was not readily available to the Inbound
team.
In order to achieve the goal of meeting the OTS metric, a meeting was held with the
Transportation manager and Inbound manager to discuss a new process to break
down current infrastructure restrictions. Fortunately, the Transportation manager
agreed to support the Inbound team since his team already data mines such
information for performance measurement needs. Furthermore, it would be a
duplication of work if the Inbound team took on this task as well. Thus, the new
process required that one of the Transportation team members send an Excel sheet
[Table 8] containing important information related to trailers in the yard on a daily
basis. Once the supervisors receive this sheet, they are required to prioritize trailers
with respect to their deadlines.
Page 23 of 42
This process has been in place since December 2006. For the month of February,
only 5% of the shipments missed the stocking deadlines and thus the „OTS‟ metric is
on target.
Page 24 of 42
7.0 Conclusion
Overall, this thesis project was able improve BDC Inbound team‟s ability to meet key
performance metrics related to OTS metric management and Team Receiving
productivity. Through the application of BPR techniques, core challenges and
infrastructure restrictions related to the OTS metric were easily identified and
resolved by increasing communication between segregated teams. In addition,
through simulation modeling and an understanding of line balancing, a new strategy
to improve Team Receiving productivity by up to 40% per shipment was created and
tested.
Page 25 of 42
7.0 References
[1] Bush, B. 2001. Productivity Improvement Through Business Process Reengineering. Handbook of Industrial Engineering, Maynard‟s Industrial Engineering Handbook, pp. 2.11-2.27.
[2] K.Concannon, M. Elder, K. Hunter, J. Tremble, S. 2004. Tse. Introduction to
Simulation. Simulation Modeling with Simul8. pp. 15-31 [3] J. Driscoll, D. Thilakawardana. 2001. The definition of assembly line balancing
difficulty and evaluation of balance solution quality. Robotics and Computer-Integrated Manufacturing, 17, 81-86.
[4] Swain, J. 2005. Gaming Reality. OR/MS Today, pp. 1-6. [5] R.Phelps, D. Parsons, A. Siprelle. 2001. SDI Supply Chain Builder: Simulation
from atoms to enterprise. Winter Simulation Conference Proceedings, 1, 246-249.
[6] E. Gelenbe, H. Guennouni. 1991. Flexism: A flexible manufacturing system
simulator. European Journal of Operational Research, 53, 149- 165. [7] J. Kemers, Y. Merkayer. 1991. Simulation application of logistics strategy
planning in the Baltic IT market. European Simulation Symposium, 11, 2004- 208.
[8] Forcino, H. 2000. Warehouse Simulation creates a new model for change.
Managing Automation, 15, 61-62. [9] L. Contreras, C. Modi, A. Pennathur. 2005. Integrating simulation modeling
and equipment condition diagnostics for predictive maintenance strategies- case study. Proceedings of the 2002 Winter Simulation Conference, 2, 1289-1296.
[10] Kempfer, Lisa M. 2005. Top 5 Reasons to Use Warehouse Simulation
Software. Material Handling Management, 60, 5:33-34.
Page 26 of 42
8.0 Appendices Appendix A: Sample Interview Questions
During an initial group meeting with supervisors, the following set of questions was
discussed:
1. What are the key performance metrics for the Inbound team?
2. What challenges do you face in meeting this performance metrics?
3. What strategies do you apply in meeting each of these key
performance metrics?
4. How do you manage your employees and assign them duties?
5. What are the possible root causes of the productivity drop?
Page 27 of 42
Appendix B: Data Sources for Team Receiving „As-Is‟ Model
The following are the main data sources that were used in building the As- Is
Simulation Model:
1. [Table 3] Maynard Operations Sequencing Technique (MOST) standards: MOST
is a method of determining the elemental time necessary to complete each task
in an activity. These documents provided expected cycle time for each
workstation/sub-process.
2. Labor Management System Database: This database keeps an accumulated
track of all important units of measure for a particular job function such as
number of Cartons, SKUs, First Carton Seen Screens, Manual Printing Cartons,
Veli Scan Cartons, etc. This set of information helped to build probability
distributions related to workload variability.
3. Team Receiving Business Objects Report: The Business Objects software is
linked with the Warehouse Management System and thus its report provides a
time stamp of every carton processed through SRAT station with information
related to employee id, receiving line, SKU number and etc.
4. Inbound Team Sheets [Figure 5]: Prior to processing a shipment, a member of the
team picks up a sheet from the Inbound office which details dock door number,
number of cartons, number of POs and number of SKUs.
Page 28 of 42
Appendix C: Three Man Testing Visual Logic Code
VL SECTION: Blocker Route In Before Logic
Begin IF int_SKU count = 0 Begin IF int_PO count = 0 Begin IF int_CTNcount = 0 Begin IF int_CALCTNcount/int_CALSKU count > 6 Begin SET SRATor Palletizer Associate.Max Available = 0 SET TeamQty = 3 End ELSE Begin SET SRATor Palletizer Associate.Max Available = 1 SET TeamQty = 4 End End End End End
VL SECTION: PO Batch Route In After Logic
Begin IF TeamQty = 4 Begin SET Total4Units = Total4Units+int_CALCTNcount SET TotalLaborUnits = TotalLaborUnits+int_CALCTNcount SET TimetoComplete = EndTime-StartTime SET Fourman Minutes = TimetoComplete*4 SET Total4Minutes = Total4Minutes+Fourman Minutes SET TotalLaborMinutes = TotalLaborMinutes+Fourman Minutes End IF TeamQty = 3 Begin SET Total3Units = int_CALCTNcount+Total3Units SET TotalLaborUnits = TotalLaborUnits+int_CALCTNcount SET TimetoComplete = EndTime-StartTime SET Threeman Minutes = TimetoComplete*3 SET Total3Minutes = Total3Minutes+Threeman Minutes SET TotalLaborMinutes = TotalLaborMinutes+Threeman Minutes End SET int_PO count = 0 SET int_SKU count = 0 SET int_CALSKU count = 0 SET int_CTNcount = 0 SET int_CALCTNcount = 0 SET StartTime = Simulation Time Set Route In Discipline Blocker , Passive End
Page 29 of 42
9.0 Figures
Figure 1: Team Receiving High Level Process Map
Offload Cartons
SuperRAT station
Palletize Cartons
Veli Scan Process
Manual Printing Process
One Step Process
First Carton Seen Screen Process
New SKU?
No
Page 30 of 42
Figure 2: Team Receiving Simulation Model
Dummy Workstations
Page 31 of 42
Figure 3: Probability Distribution of POs per Trailer
Comparison of Input Distribution and Geomet(0.11)
Values in 10^1
0.0
0.2
0.4
0.1 2.6 5.1 7.5 10.0 12.5
Input
Geomet
Page 32 of 42
Figure 4: Probability Distribution of SKUs per PO
Comparison of Input Distribution and NegBin(3.00,0.35)
Values in 10^1
0.0
0.1
0.2
0.1 0.7 1.3 1.9 2.5 3.1
Input
NegBin
Page 33 of 42
Figure 5: Sample Inbound Team Sheet
Page 34 of 42
Figure 6: Probability Distribution of Cartons per SKU
Comparison of Input Distribution and Geomet(0.25)
Values in 10^1
0.0
0.2
0.5
0.1 1.8 3.5 5.3 7.0 8.7
Input
Geomet
Page 35 of 42
Figure 7: Probability Breakdown of SRAT station sub-processes
Page 36 of 42
10.0 Tables Table 2: Expected Cycle Time of Team Receiving Workstations
Workstation Workstation sub process
Cycle Time (s) *
Unit of Measure Cycle Time Accounts for:
Offloading 8.05 Carton
Time for Unloading each carton. Also accounts time necessary to open trailer door, extending mobile conveyor into trailer, etc
SRAT
Manual Printing 23.38 Carton Time for printing new labels and scanning each cartons
Veli Cases 8.99 Carton Time spent scanning each carton
First Carton Seen Screens 77.55 Carton
Time for completing a First Carton Seen Screen
Palletization
Palletize 15.11 Carton Time for palletizing each cartons
Build Pallet 52.88 Pallet Time for creating a new pallet and updating the WMS system
* Cycle time is based on Maynard Sequence Operation Technique (MOST), which is used to determine the expected time to complete a series of steps.
Page 37 of 42
Table 3: Sample MOST Expectation Document 1501 INBOUND - OFFLOAD TRAILER (TR HUM) (DLX)
Task UOM TMU FREQ TOTAL
2 OPEN DOCK DOOR, ATTACH MANUAL DOCK LEVELER * * * *
3
WALK 11 - 15 STEPS TO EXTENSION CONVEYOR STORAGE - 2 PERSON TRAILER 240 2 480
4
PUSH EXTENSION CONVEYOR 10-13 STEPS TOTRAILER - 2 PERSON TRAILER 240 2 480
5 ATTACH CONVEYOR - 2 PERSON TRAILER 460 2 920
6 *FREQ* GET KNIFE TRAILER 20 0.77 15.4
7 *FREQ* CUT STRETCH WRAP FROM PALLET TRAILER 210 0.77 161.7
8 WALK 1-2 STEPS TO CARTON CARTON 30 1 30 9 READ P.O NUMBER (7 DIGITS) CARTON 100 1 100
10 GET BULKY CARTON W/O REACH AND PLACEMENT CARTON 30 0.5 15
11
BEND 50%, GAIN CONTROL OF BULKY OBJECT W/O REACH AND PLACEMENT CARTON 60 0.5 30
12 WALK 1-2 STEPS TO END OF CONVEYOR CARTON 30 1 30
13 PLACE CARTON ONTO CONVEYOR W/ ADJUSTMENT CARTON 30 1 30
14 ADJUST EXTENSION CONVEYOR - PERSON TRAILER 90 15 1350
15 CLOSE DOCK DOOR, DETACH MANUAL DOCK LEVELER * * * *
16 --- END OF WORK --- * * * *
Page 38 of 42
Table 4: Sample Team Receiving Business Objects Report
OPID DATE_WMS TO_LOC TO_LOAD_ID TO_QTY SUBSTR CASE_ID WSKUSKU PK Factor
100140 2007010213152580 R10-01-1-M 30501700 0 R10 4200150085934640 97478760000 8
100140 2007010513302110 R10-01-1-M 30588469 0 R10 4200150086227740 1114404240002 100
100140 2007010809292870 R10-01-1-M 30612015 0 R10 4200150086314050 2649391540000 360
100140 2007010510175480 R08-01-1-1 30585772 0 R08 4200150086221160 3544060143532 18
100140 2007010915521720 R10-01-1-M 30648356 0 R10 4200150086466940 4491470040000 10
100140 2007010915522630 R10-01-1-M 30648364 0 R10 4200150086466960 4491470040000 10
100140 2007010915523700 R10-01-1-M 30648369 0 R10 4200150086466970 4491470040000 10
100140 2007010915524900 R10-01-1-M 30648378 0 R10 4200150086466980 4491470040000 10
100140 2007010915525940 R10-01-1-M 30648392 0 R10 4200150086467000 4491470040000 10
100140 2007010915530490 R10-01-1-M 30648397 0 R10 4200150086467010 4491470040000 10
100140 2007010915531170 R10-01-1-M 30648408 0 R10 4200150086467030 4491470040000 10
100140 2007010915532030 R10-01-1-M 30648421 0 R10 4200150086467040 4491470040000 10
100140 2007010915532630 R10-01-1-M 30648427 0 R10 4200150086467050 4491470040000 10
100140 2007010915533190 R10-01-1-M 30648433 0 R10 4200150086467060 4491470040000 10
100140 2007010915534720 R10-01-1-M 30648447 0 R10 4200150086467080 4491470040000 10
100140 2007010915541410 R10-01-1-M 30648453 0 R10 4200150086467100 4491470040000 10
100140 2007010915542110 R10-01-1-M 30648457 0 R10 4200150086467120 4491470040000 10
100140 2007010915543090 R10-01-1-M 30648461 0 R10 4200150086467130 4491470040000 10
100140 2007010916185530 R10-01-1-M 30648963 0 R10 4200150086467480 4491470040000 10
100140 2007010916190430 R10-01-1-M 30648970 0 R10 4200150086467490 4491470040000 10
100140 2007010916191870 R10-01-1-M 30648985 0 R10 4200150086467510 4491470040000 10
100140 2007010916192450 R10-01-1-M 30648992 0 R10 4200150086467530 4491470040000 10
100140 2007010916192980 R10-01-1-M 30649000 0 R10 4200150086467540 4491470040000 10
100140 2007010916193600 R10-01-1-M 30649006 0 R10 4200150086467560 4491470040000 10
100140 2007010916194380 R10-01-1-M 30649013 0 R10 4200150086467570 4491470040000 10
100140 2007010916195050 R10-01-1-M 30649014 0 R10 4200150086467580 4491470040000 10
100140 2007010916195470 R10-01-1-M 30649018 0 R10 4200150086467600 4491470040000 10
100140 2007010916200070 R10-01-1-M 30649021 0 R10 4200150086467610 4491470040000 10
100140 2007010916200620 R10-01-1-M 30649026 0 R10 4200150086467640 4491470040000 10
100140 2007010916201280 R10-01-1-M 30649029 0 R10 4200150086467650 4491470040000 10
100140 2007010916202150 R10-01-1-M 30649030 0 R10 4200150086467660 4491470040000 10
100140 2007010916202710 R10-01-1-M 30649034 0 R10 4200150086467670 4491470040000 10
100140 2007010916441540 R10-01-1-M 30649589 0 R10 4200150086468020 4491470040000 10
100140 2007010916442430 R10-01-1-M 30649595 0 R10 4200150086468040 4491470040000 10
100140 2007010916442990 R10-01-1-M 30649598 0 R10 4200150086468050 4491470040000 10
100140 2007010917085570 R10-01-1-M 30649934 0 R10 4200150086468400 4491470040000 10
100140 2007010918074260 R10-01-1-M 30650706 0 R10 4200150086469620 4491470040000 10
100140 2007010918075090 R10-01-1-M 30650709 0 R10 4200150086469640 4491470040000 10
Page 39 of 42
Table 5: Sample Team Receiving Labour Management System report
Production KVI Data
12/16/2006 1/11/2007
Job Code Perf % Goal Direct KVI 03 KVI 04 KVI 05 KVI 06 KVI 07 KVI 08 KVI 09
1501 64 2,996 4,670 277103 0 22,168 289731 91443 15998
KVI 10 KVI 11 KVI 13 KVI 14 KVI 15
174349 22168 163490
KVI Description
KVI 3 Cartons Palletized
KVI 4 Sku
KVI 6 SuperRat Cases
KVI 7 Exploded Units
KVI 8 1-Step Cartons
KVI 9 Pallets
KVI 10 Case Weight
KVI 11 First Case Seen
KVI 15 1-Step Cases
Page 40 of 42
Table 6: „As-Is‟ Simulation Model Results Simulation Object
Performance Measure Run 1 2 3 4 5 Average
Offloader Waiting % 0.03278 0.15161 0.03128 0.1577 0.09997 0.094668
Working % 86.69753 86.87443 86.99494 87.1632 86.88206 86.92243
Blocked % 13.26969 12.97396 12.97378 12.6791 13.01797 12.9829
SRAT Station Waiting % 16.32414 16.36898 16.87816 17.25602 16.13413 16.59229
Working % 24.3416 24.09381 23.44368 23.35673 23.94651 23.83647
Blocked % 4.85288 4.97331 4.8537 4.89923 4.94607 4.905038
Change Over % 54.48138 54.5639 54.82445 54.48802 54.97329 54.66621
SRAT Station 2 Waiting % 50.83412 51.42654 51.85353 52.00864 50.64957 51.35448
Working % 46.64142 46.17153 45.57976 45.47755 46.86788 46.14763
Blocked % 2.52446 2.40193 2.56671 2.51381 2.48255 2.497892
Change Over % 0 0 0 0 0 0
Palletizer 2 Waiting % 71.53782 70.98647 71.70417 71.52087 71.02238 71.35434
Working % 28.46218 29.01353 28.29583 28.47913 28.97762 28.64566
Blocked % 0 0 0 0 0 0
Palletizer Waiting % 25.0557 24.98515 24.96942 24.91864 24.89988 24.96576
Working % 74.9443 75.01485 75.03058 75.08136 75.10012 75.03424
Blocked % 0 0 0 0 0 0
Total3Minutes Value 0 0 0 0 0
Total3Units Value 0 0 0 0 0
Total4Minutes Value 115013.2 114709.2 115041.1 114722 114964 574449.5
Total4Units Value 139381 139567 139841 140113 139776 698678
72.71 73.00 72.93 73.28 72.95 72.98
TotalLaborMinutes Value 115013.2 114709.2 115041.1 114722 114964
TotalLaborUnits Value 139381 139567 139841 140113 139776
MP Items Entered 15670 14760 14598 14354 15107
0.11 0.11 0.10 0.10 0.11
Veli Final Items Entered 46319 48269 46518 46875 47834
One Step Final Items Entered 77460 76694 78789 78952 76794
Final Queue
Number Completed Jobs 139449 139723 139905 140181 139735
SRATor Palletizer Associate Traveling % 0.28873 0.28958 0.29063 0.29224 0.29125
Four Man CPDH 72.98
Three Man CPDH 0
Page 41 of 42
Table 7: Sample Three Man Team Simulation Test Results
Simulation Object Performance Measure Run 1 2 3 4 5
Offloader Waiting % 0.02317 0.00994 0.07886 0.08344 0.0729
Working % 58.01301 59.30255 59.83296 57.49318 59.249
Blocked % 41.96382 40.6875 40.08818 42.42338 40.6781
SRAT Station Waiting % 2.63255 2.74635 2.97012 2.52893 2.46324
Working % 34.68204 33.95568 33.93986 35.38457 33.93522
Blocked % 5.97616 6.19826 6.26414 5.86598 6.23882
Change Over % 56.70926 57.09971 56.82588 56.22052 57.36272
SRAT Station 2 Waiting % 97.30526 96.97084 96.60571 97.04351 96.78882
Working % 2.62834 2.95312 3.31882 2.89083 3.1341
Blocked % 0.06639 0.07604 0.07547 0.06566 0.07708
Change Over % 0 0 0 0 0
Palletizer 2 Waiting % 99.25966 99.19672 98.99663 99.2177 98.99796
Working % 0.74034 0.80328 1.00337 0.7823 1.00204
Blocked % 0 0 0 0 0
Palletizer Waiting % 40.84449 39.87945 39.53474 41.06712 39.95701
Working % 59.15551 60.12055 60.46526 58.93288 60.04299
Blocked % 0 0 0 0 0
Total3Minutes Value 83116.78 82449.01 82225.77 82640.47 82078.66
Total3Units Value 88238 89453 89918 86967 88951
63.70 65.10 65.61 63.14 65.02
Total4Minutes Value 4240.534 4823.061 5271.56 4595.519 5076.184
Total4Units Value 5072 5691 6244 5401 5965
71.76 70.80 71.07 70.52 70.51
TotalLaborMinutes Value 87357.32 87272.07 87497.33 87235.99 87154.84
TotalLaborUnits Value 93310 95144 96162 92368 94916
MP Items Entered 9883 9550 9592 10402 9529
0.11 0.10 0.10 0.11 0.10
Veli Final Items Entered 31247 31688 31791 31184 31789
One Step Final Items Entered 52174 54144 54804 50852 53975
Final Queue
Number Completed Jobs 93304 95382 96187 92438 95293
SRATor Palletizer Associate Traveling % 0.28824 0.27305 0.3177 0.25538 0.3159
Four Man CPDH 70.91
Three Man CPDH 64.51
Page 42 of 42
Table 8: Sample Inbound Trailer Log
BDC Inbound Trailer Log
Wednesday, January 10, 2007
Total Cartons On Site: 10,374
Carrier Trailer # Status Dock Door
DATE Ctns Mode PO's
Earliest Plan INDC date
Time if AIR
Planned Stocked + 3 days
Air <2days
Priority
PAUL'S NYKU604928 FULL 14 9-Jan 476 OCEAN 2 8-Jan 1/11
MTR 51248 IP 15 9-Jan 1131 OCEAN 23
8-Jan 1/11
PAUL'S NYKU605314 FULL 16 9-Jan 934 OCEAN 30 9-Jan 1/12
PAUL'S APHU450471 IP 17 8-Jan 820 OCEAN 9 7-Jan 1/10
BTT CMBU236585 IP 18 9-Jan 279 OCEAN 2
7-Jan 1/10
PAUL'S APLU464550 FULL 19 8-Jan 968 OCEAN 5
7-Jan 1/10
PAUL'S APLU462427 IP 20 8-Jan 733 OCEAN 4
9-Jan 1/12
MTR 51217 IP 21 9-Jan 906 OCEAN 19
9-Jan 1/12
BLUE LINE 7285 FULL YARD 10-Jan 943 MOTOR 9
9-Jan 1/12
PAUL'S NYKU602900 FULL YARD 10-Jan 916 OCEAN 11
13-Jan 1/16
BTT TTNU219555 FULL YARD 9-Jan 207 OCEAN 3 12-Jan 1/15
PAUL'S TRLU413320 FULL YARD 9-Jan 682 OCEAN 13 10-Jan 1/13
PAUL'S TEXU464275 FULL YARD 10-Jan 656 OCEAN 1
11-Jan 1/14
BTT TTNU219555 FULL YARD 9-Jan 207 OCEAN 3 10-Jan 1/13
PAUL'S APZU402007 FULL YARD 10-Jan 262 OCEAN 4
13-Jan 1/16
PAUL'S APHU450471 FULL YARD 10-Jan 254 OCEAN 31 11-Jan 1/14
SMURFIT 20395 FULL YARD 4-Jan
SMURFIT 20219 FULL YARD 5-Jan
? 138 YARD 4-Jan PALLETS