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DELIVERY PROBLEMS AT
ANKUR BHARDWAJ (10P068)JAYANT BAHEL (10P081)
LOKESH HARNAL (10P086)MANIKA VERMA (10P087)
MOHIT AHUJA (10P090)SAMBHAV AHUJA (10P107)
ARROW’S HISTORY
Started as a local distributor in NYC in the 30s
Went public in early 60s, became 11th largest by 1968
Became 2nd largest by 1980 with nationwide presence
Centralized purchasing and distribution (37 warehouses to 4 PDCs)
Focus on growth through acquisitions 1992 – acquired Scheweber to became no.
1
ARROW’S ORDERING PROCESS
TYPE OF ORDERS
• Order contains one part number • Placed one at a time• Only two to three day’s notice, i.e
require same day shipping
One off order with short lead time
• Customer orders several times a week
• Lead time of two to three week before delivery was required
One off order with long lead
time
• Order contains many part numbers • Placed once a month• Products need to be delivered
weekly over a two to three month period
Multiple item orders with
varying delivery time
ANALYSIS OF ORDERS
Type 1 (One off order with short lead time) need to be shipped the same day
Type 2 and type 3, do they need to be shipped the same day?
Therefore, does it mean that type 1 orders comprised of 94% total orders before Schweber acquisition?
Premium freight paid for late orders
SCHWEBER ACQUISITION
Arrow acquired
Schweber in late 1991 for $ 150
mn to become the
no.1 distributor
Integrated their DOE system called
scratch pad
Schweber warehouse consolidatio
n completed in June 92
Order surge since
January 1992
Same-Day order
shipment slipped
from 93.1% in April 1992 to 78.7% in
May 1992; remained in the 70s and
80s ever after
CHANGES AFTER ACQUISITION
Average orders
94% efficiency
78% efficiency
July 91-Dec 91 86858 81646
Jan 92- Dec 92 1633811 127981 106197 Inference – Schweber may have more of
type 1 orders
PROCESSES AT PDC
Packing, weighing and shipping
Picking and placing on the conveyor for shipping area and confirming location in hand held terminals
Storing and entering storage location in hand held terminals
Receiving, unloading and entering information in Arrows computer system
PROCESS
PROBLEMS
Due to surge in orders, workers were taking procedural short cuts to speed up the process
ConsequencesSense of confusion, destroyed orderly flowDelayed parts already on the conveyor Increased chances of quality errors
Rush during evening hours i.e 3-7 pm Overtime for initial processes
POSSIBLE SOLUTIONS
Increasing
staff
• Pros – would be able to meet the evening rush and reduce overtime
• Cons – increase idle time and add onto operational cost
Tweaking UPS
system
• Pushing back the pickup time to 8:30 pm• Sending delivery van to UPS rather than waiting
Hire part time staff
• Pros – Hiring college interns to work during peak hours would ease up the delivery process and help in removing the current bottleneck
• Negative – Interns would require training and no guarantee of them staying for long
RECOMMENDATIONS• During ordering, categorize the
types of orders and assign daily delivery only to type 1 orders
• Use part time interns for a few months
• Push back the pickup time of UPS as it has a provision of picking up till 8:30
Immediate implementatio
n
• Determining the relevance of 94% delivery efficiency
• Automation of PDC processes to remove redundancy
• Integrating with ordering process using ERP technologies
Long term
ADVANTAGES OF RFIDSelectively apply the technology to improve
specific processes that are labor intensive or prone to creating delays or inaccuracies
Mobile readers are often advantageous to fixed-position models because they can be used for multiple applications
As applications grow, so does inventory visibility, which ultimately leads to lower inventory levels and more efficient supply chain operations
RFID IMPLEMENTATION
RFID IMPACT Receiving
Labor SavingsPallets automatically identifiedData read and transferred to Warehouse
Management SystemCross docking for immediate transportStorage and picking personnel (40% of
workforce) can then be deployed in receiving and packing & shipping
RFID IMPACT Putaway
Automatically associate stored goods with actual putaway location
Security/Documentation Unattended location monitoring
Picking Error-proofing the picking process
Shipping Can validate pallet loads and improve shipping
accuracy Asset Tracking
Track the shipping container with RFID, if the container is a returnable or reusable asset
Improve planning, reduce buffers and increase utilization
THANK YOU