BEREA COLLEGECollege Store and SCOTS

Supply Chain Process Improvement

Mission

VisionTo provide every visitor an opportunity to experience and learn about Berea College, creating an emotional connection and a loyal friend for life.

To provide engagement opportunities for visitors through student interaction, craft demonstrations, tours, and in-store experiential learning. The Store provides merchandise that is designed to enhance the visitor experience by resonating with the consumer and ultimately providing revenue to the College.

Charter1. Mission - To provide engagement opportunities for visitors through

student interaction, craft demonstrations, tours, and in-store experiential learning. The Store provides merchandise that is designed to enhance the visitor experience by resonating with the consumer and ultimately providing revenue to the College.

2. Burning platform – Before the new bookstore is complete, we must implement a supply-chain management system that is consistent, timely, and documented.

3. Process Description – Ordering, receiving and accounting for all College Store and SCOTS merchandise.

4. Problem Statement – The current system is inconsistent, inefficient and allows for errors and waste.

5. Sponsor – Derrick Singleton

6. Process Owners – Susan Buckmaster/Steve Davis Rosenbaum

7. Team Lead – Theo Scripps

8. Facilitator – Theo Scripps

9. Team – Susan Buckmaster, Steve Davis Rosenbaum, Katrina Frailey, Leanne Solomon, Sara Caudill

SIPOCSuppliers Inputs Process Outputs Customers

• College

accounting

policies

(GAAP)

• Limited

Storage Space

• Vendor

Availability

• Market Forces

• Purchase

Orders

• Vouchers

• Merchandise

• Patrons

• Accounting

• Vendors

• Staff

• Merchandise

• Purchase

Order

Hi-Level Process Map

Accounting:

Product:

Recognize Need

Stock Product

Receive Product

Order Product

Verify Product Received

Input Order

Information

Strengths WeaknessesThreatsOpportunities

SWOT AnalysisIn

tern

alEx

tern

al

• Experienced Team

• Little Competition

• Buying Power / Cash Flow

• Location / Convenience

• No Standard Work Procedures

• Institutional Knowledge

• New Workstaff / Turnover

• Low Price Expectations

• Growth

• New Store

• Expanding Tourism / Customer

Base

• New Accounting Platform

• Losing Storage Space

• New Competition

Gap Analysis Opportunities and Priorities

• Constraints:

– Multiple PO confirmations and/or edits

– Multiple approvals needed

– Waiting for invoices from suppliers

– Price/quantity verifications

– Printing and tagging merchandise

– Inventory storage / discount racks

– Lack of consistent worker training and performance

Gap Analysis Opportunities and Priorities

• LPAB Focus is to remove or reduce:

– Inventory Waste (storing inventory before putting on shelves, ordering too much inventory)

– Motion Waste (multiple confirmation/edits of PO’s, moving inventory multiple times)

– Overprocessing Waste (putting tags or labels on inventory)

– Waiting Waste (waiting for invoices, confirmation, and/or approvals)

– Defects Waste (wrong orders, unavailable merchandise, different workers perform processes differently)

Seeing the ProcessCurrent State VSM:

Seeing the ProcessCurrent State VSM:

Seeing the ProcessCurrent State VSM:

Cycle Time: 1.1 – 7.2 hours Takt Time: 3.63 hours Throughput Yield: 49% (avg.)

# of Steps: 17 WIP: 7.2 – 35.0 ordersVA steps / NVA steps = 7/17 or 41% value add

Seeing the ProcessSpaghetti Diagram (Current State):

Seeing the ProcessFuture State VSM:

Seeing the ProcessFuture State VSM:

Cycle Time: 1.8 – 3.9 hrs Takt Time: 3.63 hours Throughput Yield: 79% (avg.)

# of Steps: 9 WIP: 7.1 – 12.1 ordersVA steps / NVA steps = 7/9 or 78% value added

Seeing the ProcessProcess Flow Diagram (Future State):

Root Cause Analysis• Brainstorming 8 Wastes

• Cause and Effect Diagram

• 5 Whys

Lean Countermeasures Used • Visual Management: Standard Work Procedures,

checklists, and WIP boards

• Error Proofing: improper shipments not accepted

• Shorter lead times = reduced inventory & WIP

• Pull system: orders signaled and placed based on customer need.

Action Plan• Write and display Mission/Vision Statements

• Create Charter, SIPOC, SWOT analysis

• Design an Improved Future State VSM with reduced steps and improved processes.

• Incorporate the improvements into the new building design (removed storage space, incorporated new process flow, etc.)

• Implement displayed SWP’s, checklists, and WIP board in the new space.

WasteWaste: The need for new products was identified manually (visual inspection, special order, or shortage).

Waste: Multiple documents, approval steps, and verbal confirmation with vendors caused errors and delays.

Waste / CountermeasureWaste: The need for new products was identified manually (visual inspection, special order, or shortage).

Countermeasure: New inventory system will send alerts / vendors will initiate contact for seasonal items.

Waste: Multiple documents, approval steps, and verbal confirmation with vendors caused errors and delays.

Countermeasure: All product information to be contained in a “packet” to be sent for approval. All confirmation through email.

Waste / Countermeasure / ResultWaste: The need for new products was identified manually (visual inspection, special order, or shortage).

Countermeasure: New inventory system will send alerts / vendors will initiate contact for seasonal items.

Results: Orders are “pulled” via customer need, resulting in reduced work in process and inventory overage.

Waste: Multiple documents, approval steps, and verbal confirmation with vendors caused errors and delays.

Countermeasure: All product information to be contained in a “packet” to be sent for approval. All confirmation through email.

Results: Improved order accuracy and reduced WIP

WasteWaste: Waiting for invoices, pricing info, and shipping variance resolution from the vendor caused storage delays and missed sales. Price tagging was done by students after receipt of goods.

Waste: Entire boxes received with damaged product set aside until resolved, resulting in undamaged goods being stored instead of put on shelves for sale.

Waste / CountermeasureWaste: Waiting for invoices, pricing info, and shipping variance resolution from the vendor caused storage delays and missed sales. Price tagging was done by students after receipt of goods. Countermeasure: A new purchasing procedure requires an invoice, pricing information, and price tags to be included in the shipment or the product will not be received.

Waste: Entire boxes received with damaged product set aside until resolved, resulting in undamaged goods being stored instead of put on shelves for sale.

Countermeasure: Vendor notified upon receipt, with undamaged goods moved to shelves and damaged product returned or disposed.

Waste / Countermeasure / ResultWaste: Waiting for invoices, pricing info, and shipping variance resolution from the vendor caused storage delays and missed sales. Price tagging was done by students after receipt of goods. Countermeasure: A new purchasing procedure requires an invoice, pricing information, and price tags to be included in the shipment or the product will not be received.

Results: A shorter supply chain can react more quickly to customer needs, reducing inventory overages and WIP.

Waste: Entire boxes received with damaged product set aside until resolved, resulting in undamaged goods being stored instead of put on shelves for sale.

Countermeasure: Vendor notified upon receipt, with undamaged damaged product returned or disposed.

Results: Less WIP and inventory reduces waste and damage.

WasteWaste: Student workers did not know mission or standard procedures.

Waste: There were duplicate ordering processes with different steps for SCOTS and College Store, resulting in errors and waste.

Waste / CountermeasureWaste: Student workers did not know mission or standard procedures.

Countermeasure: We included the students in the lean events and then posted the Mission and Vision Statements in the receiving area, along with the SWP’s.

Waste: There were duplicate ordering processes with different steps for SCOTS and College Store, resulting in errors and waste.

Countermeasure: Both processes were combined and unnecessary steps eliminated.

Waste / Countermeasure / ResultWaste: Student workers did not know mission or standard procedures.

Countermeasure: We included the students and then posted the Mission and Vision Statements in the receiving area, along with the SWP’s.

Results: Reduced variation, increased flow and flexibility. A baseline is established for ongoing continuous improvement.

Waste: There were duplicate ordering processes with different steps for SCOTS and College Store, resulting in errors and waste.

Countermeasure: Both processes were combined and unnecessary steps eliminated.

Results: Greater efficiency, less errors, and reduced process steps

ResultsCurrent State: hours per order = 7.2 hours (max), 2000 sf storage

Future State: hours per order = 3.9 hours (max), 150 sf storage

(based on 25 orders per month or 1.11 orders per day)

Soft savings of $18,315 in process time labor costs

Construction costs savings of $185,000 due to reduced storage

• Total Process Time reduced by 30% (avg.)

• # of steps reduced from 17 to 9

• 80% reduction in non value-added steps

• Accuracy increased from 49% (avg.) to 79%

• Storage space reduced 92% (est).

Next steps include 5S, posting order data, and further process improvements.

Before and After(old College Bookstore) (new Visitor Center & Shoppe)

Before and After(old College Bookstore) (new Visitor Center & Shoppe)

Before and After(old College Bookstore) (new Visitor Center & Shoppe)

Before and After(old College Bookstore) (new Visitor Center & Shoppe)

Before and After(old College Bookstore) (new Visitor Center & Shoppe)

Wrap-UpThe most challenging obstacle was the replacement of the store manager and the construction of the new Visitor Center & Shoppe during the Lean project. It was difficult to meet and review while the new manager got up to speed and the move to the new store was underway.

The antidotal moment of the project was when we diagrammed the existing process with both the VSM and the spaghetti diagram and could graphically see how much waste was present and what a great opportunity we had for improvement.

An unexpected result of the Lean process was the anticipated (and realized) reduction in required storage space, which allowed the architects to increase the retail floor area in the College Store and Crafts area, allowing for a more efficient use of resources and ROI.

Project Team