Hong Kong China order fullfillment reengineering warehousing distribution

1. Hong Kong Distribution Project
Final Recommendations Presentation
March 26, 2002

2. Project Objectives
Review current distribution processes, focusing on:
 Order taking
 Order processing
 Warehouse operations
Identify Opportunities to:
 Improve customer service (reduction in order cycle time)
 Improve distribution of Abbott products
 Incorporate technology into the processes

3. Processes Reviewed
Order taking with Sales Reps
Accounting Order Entry
Shatin warehouse repackaging
Shatin warehouse receiving, picking and
shipping operations
PRC product storage and shipping
Order delivery by Wilson

4. WRITTEN OFF
$600,000 / YR 1.2%
OF GROSS SALES
90%
27 - 33
DAYS
MONTHLY 60' / 40'
CONTAINERS
3 DAYS
ELAPSED
70 - 80%
AT EOM
1 - 2
DAYS
SALES
COORDINATOR
INVOICING TEAM
100%
(AI & ADD)
HPD
SALES
PRC
100% CUST. PICKUP/SHIP BY BOAT/AIR
HK
ADD
HK
350 + / DAY
PICK LIST
SORTED BY
TRUCK
2x / DAY 1:00 PM
3:30 PM
EMERGENCY: AS NOTIFIED
BATCHES
MIN 8
MAX 24
FIELD SALES
SPECIAL ORDER
FORMS
350 +
INVOICES
NOLA
ALOA
SINGAPORE
JAPAN
U.S.
ADD
HK
AIRPORT
10% RETURNED
TO RECEIVING
HK
PORT
SEAPORT
23 - 27
DAYS
SHATIN
RECEIVING
17th
FLOOR
HK + PRC
PRODUCTS
PUT
AWAY
11, 15-17th
FLOOR
~ 500
PRODUCTS
HK + PRC
RETURN
GOODS
PICK
INSPECT
ADD
& SETS
ONLY
REPACK
17th FLOOR
66%
WILSON
PRC
REPACK
17th FLOOR
33%
WILSON
PEOPLE'S REPUBLIC OF
CHINA
FREIGHT
FORWARDER
Dx
PRC
SPECIAL
PACKAGING
17th FLOOR
SHIPPING
 WILSON-6 AI
 TRUCKS - 3
- 2 AI
- 1 ADD
PRINT
INVOICE
& PICK
TICKET
(17th FL)
@ SHATIN
ORDER
ENTRY
&
VALIDATION
INTO
AST 4
AIA
DELIVERY TRUCK BRINGS BACK RETURNED GOODS
$660,000 YR
ABBOTT HONG KONG DISTRIBUTION
LOGISTICS FLOW
FEBRUARY 2002
ADD
6
PND
5
HPD
4
PPD
3
3
MND
2
TRADE
REP
1
BLANK ORDER
FORMS
ADD
SHATIN HOURS: 9:00 - 5:30 (6:30)
SPACE: 14,000 SQ FT / FLOOR (11, 15-17) 55,000 SQ FT TOTAL
- 14 ' CEILING
- 2 PALLETS HIGH
- SPACE UTILIZATION @ 75 - 80%
~~
~~
22 INVOICES / MONTHLY
6532
DR'S OFFICES
1
DRUG STORE
1
CHAIN STORE
 DISPENSARY
 SUPER MARKET
2
OLD AGE HOMES
2 3 64
HOSPITALS - HA
6432
HOSPITALS - PRIVATE
6
LABORATORIES
52
HOMES
TO
PRC
ADD
PRODUCT
ADD
AI

5. Strengths
Dedicated management at AIA and Shatin
Well run distribution, given complexity of
the operation (repackaging, PRC, ADD)
Knowledgeable warehouse manager
Efficient delivery partner in Wilson
Dedicated repackaging staff

6. Floor 17 - Repackaging

7. Wilson Delivery

8. Recommendations:
Reduce Cycle Time
Field Sales
 Use PDA/Other device to take and submit order
 Shift order taking hours to 7pm
Office Administration
 Stagger shifts to capture 100% of same day orders
Warehousing
 Stagger shifts to capture 100% of same day invoices
Wilson Delivery
 Stagger shifts to capture 100% of prior day shipments

9. Take Order
Submit
Order
Enter Order
Pick and
Check
Deliver
Return
Paperwork
to Abbott
Load TruckStage
Assign Pick
List by
Truck
Create
Batch Pick
List
Sort by
Route
Create
Invoice
Begin:
10:00AM
End: 6:00PM
Begin: 9:00AM
End: 6:00PM
Begin: 2:00PM
End: 6:00PM
Begin: 9:15AM
End: 1:00PM
Estimated
Queue:
Max: 23-24Hrs
Min: 15-16Hrs
Estimated Queue:
Max: 7-9Hrs
Min: 2-3Hrs
Estimated Queue:
Max: 26-27Hrs
Min: 22-23Hrs
Estimated Queue:
Max: 4-5Hrs
Min: 1Hr
Recommend.
Cycle = C
Other = X
C - PDA/Other
to take and
submit order
C - Extend
hours to 7PM
X - Minimize
travel to office
X - Improve
order form to
enable multiple
items &
multiple
discounts
X - Segment
customers who
want 1,2,3 day
(price diff.)
X - No need to
extend order
pricing for
reporting
Recommend:
Cycle = C
Other = X
C - Stagger shifts to capture 100% of prior day
shipments
Recommend:
Cycle = C
Other = X
C - Stagger shifts to capture 100% of same day invoices
X - Use package specific item coding to enhance locating, repackaging, scheduling,
etc.
X - Repackage based on ABC analysis to balance workload, minimize storage area,
and reduce picking effort
X - Relocate PRC order accumulation away from floor 17
X - Develop locator scheme
X - Create procedure manual and SOP's for repackage scheduling, batching, picking,
etc.
X - Relocate returns and obsoletes from floor 17
X - Possibly add customer segmentation criteria to batching process
X - Develop warehousing measurements and targets
X - Rush order queueing
X - Relocate pallets from floor 17, other than those necessary to support short term
operations
Recommend:
Cycle = C
Other = X
C - Stagger shifts to capture 100% of same day
orders
X - Use multiple item order to eliminate need to
consolidate same customer orders
X - Package specific item coding to enhance special
instructions and eliminate manual effort
DAY 1 DAY 2 DAY 3
DAY 1
DAY 2
Current
Proposed
Hong Kong Distribution
Field Sales Office Administration Warehousing Wilson
.

10. Orders
Picked &
Staged
Pick
Tickets
Printed at
Shatin
Orders Delivered
Trucks Loaded
Take Orders
Acctg
Enters
Orders
Staged Order Waits Overnite
Order Waits Overnite
OP
&S
Orders Picked
& Staged
Pick Tickets
Printed at Shatin
Orders Delivered
Trucks Loaded
Take Orders
Accounting
Enters Orders
Same
Day
Delv.
Order
Transmitted
Staged Order Waits Overnite
CURRENT
POTENTIAL
2 4 6 8 10 122 4 6 8 10 122 4 6 8 10 12 2 4 6 8 10 122 4 6 8 10 122 4 6 8 10 12
Day 1 Morning Day 1 Afternoon Day 2 Morning Day 2 Afternoon Day 3 Morning Day 3 Afternoon
2 4 6 8 10 122 4 6 8 10 122 4 6 8 10 12 2 4 6 8 10 122 4 6 8 10 122 4 6 8 10 12
Day 1 Morning Day 1 Afternoon Day 2 Morning Day 2 Afternoon Day 3 Morning Day 3 Afternoon
ORDER CYCLE TIME REDUCTION
Current Cycle
Time
Min: 40 Hours
Max: 57 Hours
Potential Cycle
Time
Min: 5 Hours
Max: 33 Hours
.
Transfer to
Order Sheet

11. STEP RESP. DESCRIPTION Work Time Elapsed Time Work Time A Elapsed A Frequency Value-Add
1 SlsRep Sales reps travel to office 0 60 0 60 N
2 SlsRep Transcribe orders (approx. 25/day) 30 30 30 90 N
3 SlsRep Transfer to call report for trade
account manager
15 15 45 105 N
4 Mktg
Mgr
Order checked - QA 15-25/batch,
to invoicing 3x/day
3-5 min.
(12sec. each)
3-5 min. 489 609 N
5 SlsRep Sales briefing 20 20 65 125 Y
6 SlsRep Sales reps travel to zone 30 30 95 155 N
7 SlsRep Take orders (15 customers). Also
clean shelves, services expired,
damaged product or exchanges
(up to 20 min.) Time with
customer varies (up to 1 hour)
165 (6.5 hours
x 11 min. x 15
cust.)
165 260 320 Y
8 SlsRep Travel to next customer 225 225 (15 min x
15 cust.)
485 545 N
9 SlsRep Go home 0 60 485 605 N
TOTAL
: 489 609 489 609
10 Sales Reps Work Elapsed Work Elapsed
- Responsible for 3-4 zones 0 0 Work Elapsed
- Cover 1 zone per day 165 165 33.74 27.09 Value Add - C
20 20 4.09 3.28 Value Add - B
Sales Briefing 0 0 0.00 0.00 Preparation
- Training 4 4 0.82 0.66 Check/Inspect
- Corrective actions 255 375 52.15 61.58 Move/Transport
0 0 0.00 0.00 Queue/Wait
45 45 9.20 7.39 Redundant
185 185 37.83 30.38
304 424 62.17 69.62
Total Time 489 609 100 100
Preparation
Cumulative
Hong Kong Distribution
Workflow and Classification of Activities
Activity: Drugstore Sales (Eddie Ip)
% of Total
Total Value Add
Total Non-Value Add
Total Time
Check/Inspect
Move/Transport
Queue/Wait
Redundant
Value Add by Other
Value Added - Customer
Value Added - Business
Class Code
M
R
R
I
VB
M
VC
M
M

12. Recommendations:
Other Process Improvements
Field Sales
 Minimize travel to office
 Improve order form to enable multiple items &
multiple discounts
 Segment customers who want same day
delivery
 Eliminate non-value added
activities
 Price extending
 Sales reporting
0
10
20
30
40
50
60
70
Minutes
Value Add - C Value Add - B Preparation Check/Inspect Move/Transport Queue/Wait Redundant
Time as a Percent of Total Time for Drugstore Sales Process
Work Elapsed

13. A/C No.:
Customer:
Address 1: Date:
Address 2: Rep:
List No.: Quantity Size Product Unit Price Discount Specials
6620 10 4/7/11 oz Selsun Blue (reg) Book 69% buy 3/1 free
L759 15 7/11 oz Selsun Blue E. C. Book 73%
6606 9 7/11 oz Selsun Blue E.M. Book 85% Buy 1/1free Murine Plus
L220 6 7 oz Selsun Gold Book 63%
2660 3 4 oz Selsun Suspension Book 89%
G662 9 15 ml Murine Plus Book 95%
L951 6 300 gm/700 gm Formance Plus Book 78%
M361 22 kg/1.8kg Grow Book 82%
Delivery: Invoice No.:
Terms: Distribution:

14. Office Administration
 Use multiple item order form to eliminate need
to consolidate orders for same customer
 Package specific item coding to enhance special
instructions and eliminate manual effort.
Recommendations:
Other Process Improvements
0
10
20
30
40
50
60
70
80
Minutes
Value Add - C Value Add - B Preparation Check/Inspect Move/Transport Queue/Wait Redundant
Time as a Percent of Total Time for Accounting Process
Work Elapsed

15. Shatin Warehouse
 Reorganize 17th
floor
 Relocate PRC order accumulation
 Relocate returns and obsoletes
 Relocate excess pallets
Recommendations:
Other Process Improvements

16. Floor 17 – Returned Goods
Floor 17 – Empty Pallets,
PRC, Returned Goods,
HK Repackaged Product

17. Floor 17 – Pick/Stage Area
Floor 16 – Storage Area

18. Floor 15- Storage Area
Some Racking in Back, PRC, ADD, Pallets, Non-Repacked Product

19. Shared Shipping Dock
3 Shared Elevators

20. Shatin warehouse (continued)
 Repackage based on ABC analysis to:
 Balance workload /Minimize setup / Optimize
production runs
 Minimize storage area
 Reduce picking effort
 Use package specific item coding to enhance
locating, repackaging, scheduling, etc.
 Develop product locator scheme
 Consider moving repackaging area and office
for more efficient use of storage space
Recommendations:
Other Process Improvements

21. Sample
Sales Volume
Forecast
Item
Number Item Name
Current
Location
Location
Storage
Capacity
(PU's)
Annual
Quantity
Sold
(PU's)*
Cumulative
Volume
Cumulative
% Volume
Item
Volume
ABC
Class
Volume by
Class
% Total
Volume
% Total
Items
71 A-FERIN KAPSšL AA1 200000 155923 155923 42.02% A
72 A-FERIN PED. SURUP AB5 50000 35792 191715 51.66% A
70 A-FERIN FORT TB AA3 40000 34772 226487 61.03% A
1867 %0,9 NACL 1000 CC(SETS˜Z) SERUM 30000 23482 249969 67.36% A
26 ACTIDEM zURUP DA5 30000 21593 271562 73.18% A
987 %5 DEX 500 CC(SETS˜Z) SERUM 30000 21444 293006 78.96% A 293006 79% 12%
1868 %0,9 NACL500 CC(SETS˜Z) SERUM 30000 20802 313808 84.56% B
986 %5 DEX 1000 CC(SETS˜Z) SERUM 20000 13773 327581 88.27% B
993 %5 DEX LAK.RINGER 1000CC(SETSZ SERUM 10000 6942 334523 90.14% B 41517 11% 6%
19 ACETYLCYSTEIN 600 X10 EF.TB DC3 10000 6328 340851 91.85% C
983 %10 DEX 500 CC(SETS˜Z) SERUM 5000 3982 344833 92.92% C
991 %5 DEX 0.45 NACL 500 CC(SETS˜Z SERUM 5000 3575 348408 93.89% C
24 ACNELYSE KREM AA1 5000 3354 351762 94.79% C
17 ACERILIN 5 MGTB BB2 5000 2597 354359 95.49% C
25 ACT-HIB BUZ 3000 2169 356528 96.07% C
992 %5 DEX 0.2 NACL 500 CC(SETS˜Z) SERUM 3000 2099 358627 96.64% C
994 %5 DEX LAK.RINGER 500CC(SETS˜Z SERUM 3000 2042 360669 97.19% C
15 ACERILIN 10 MGTB CB4 3000 1324 361993 97.55% C
984 %20 DEX 500 CC(SETS˜Z) SERUM 3000 1163 363156 97.86% C
12 ACCOLATE 20 MG28 TAB. AA1 3000 1128 364284 98.16% C
16 ACERILIN 20 MGTB AA1 1000 980 365264 98.43% C
1869 1/3 IZODEKS 500 CC(SETS˜Z) 86997 1000 737 366001 98.63% C
1866 %0,9 NACL 500 CC PLASTIK SISE SERUM 1000 660 366661 98.80% C
1478 %5 FRUKTOZ 500 CC SETSIZ SERU 1000 602 367263 98.97% C
985 %30 DEX 500 CC(SETS˜Z) SERUM 1000 468 367731 99.09% C
988 %50 DEX 500 CC(SETS˜Z) SERUM 1000 458 368189 99.22% C
1865 %0,9 NACL 1000 CC PLASTIK SISE SERUM 1000 432 368621 99.33% C
1477 %5 FRUKTOZ 1000 CC SETSIZ SERUM 1000 418 369039 99.44% C
990 %5 DEX %0,9 NACL 500 CC(SETS˜Z SERUM 1000 413 369452 99.56% C
989 %5 DEX %0.9 NACL 1000CC(SETS˜Z SERUM 1000 356 369808 99.65% C
6440 %5 DEX 500 CC B˜OSEL(SETSIZ) 200 188 369996 99.70% C
7 A-NOX FORT 10 TB DE1 200 154 370150 99.74% C
6448 %10 DEX 500 CC B˜OSEL(SETSIZ) SERUM 200 105 370255 99.77% C
387 A.BALIK YAGI 500 ML AA1 200 103 370358 99.80% C
400 A.BALIK YAGI PORTAKAL200 ML DD 5 200 96 370454 99.83% C
386 A.BALIK YA¦I 1000 ML AC5 200 93 370547 99.85% C
13 ACCOLATE 20 MG56 TAB. CC2 200 78 370625 99.87% C
10 ACAROSAN NEMLI TOZ BC-1 200 73 370698 99.89% C
385 A.BALIK YA¦I SADE 200 ML BC-5 200 70 370768 99.91% C
393 A.BALIK YAGI LIMON 200 ML BB5 100 55 370823 99.93% C
391 A.BALIK YA¦I KIRAZ 200 ML CA5 100 51 370874 99.94% C
395 A.BALIK YAGI MUZ 200 ML BB5 100 49 370923 99.95% C
11 ACAROSAN SPREY BC5 100 42 370965 99.96% C
8 A-NOX FORT 20 TB CC1 100 36 371001 99.97% C
9 ACAROSAN KOPUK SPREYI AD4 100 28 371029 99.98% C
392 A.BALIK YA¦I KIRAZ 250 ML AA-5 100 26 371055 99.99% C
397 A.BALIK YA¦I AHUDUDU 200 ML BC5 100 21 371076 99.99% C
6399 A.BALIK YA¦I AHUDUDU 250 ML AD5 50 14 371090 100.00% C
6400 A.BALIK YA¦I NANE250 ML AC5 50 5 371095 100.00% C
18 ACEROLA PLUS TB DD4 50 5 371100 100.00% C 36,577 10% 82%
*Note: PU = Production Planning Unit

22. Total Materials Volume Turnover Plan
% Total
Volume
Forecast
Volume
(PU's)
% Total
Items Class
Current
Turnover
Current
Inventory
Levels
(PU's)
Current
Turn
Index
Target
Turnover
NewTurn
Index
Target
Inventory
Levels (PU's)
Space
Reduction/
Increase
79 293006 12 A 12 24417 144 24 288 12209 -50%
11 41517 6 B 12 3460 72 18 108 2307 -33%
10 36577 82 C 12 3048 984 6 492 6096 100%
100 371100 100 12 30925 1200 16 888 23194 -25%

23. Bulk Storage
Location
Staging
Bulk Storage
Location
Bulk Storage
Location
up
down
up
down
Office
Washroom
Female
Washroom
Male
Wilson
Store
Drugs
Repackaging Area
up
down
R.G.
Lift Lift Lift Lift Lift M
Shatin Warehouse
Current Storage Layout for 17th Floor
FlowRacking
Samples
Not to Architectural Scale

24. Staging
A
B
A
B
A
B C
C
A C
up
down
up
down
Office
Washroom
Female
Washroom
Male
Wilson
Store
Drugs
Repackaging Area
up
down
R.G.
Lift Lift Lift Lift Lift M
Shatin Warehouse
Potential Storage Layout with Current Configuration - 17th Floor
FlowRacking
Samples
Legend
Pallet Positions
(assumes 2 levels)
"A" Items
"B" Items
"C" Items
Flow Racking*
Sampling
Total:
168
60
64
32
16
340
* Capacity for up to 160
storage positions
Drug cage needs to be
relocated. Look at storeroom
off of repackaging area, or
R.G. room in lower left corner.
Not to Architectural Scale

25. B
A
Staging
Repackaging
A
A
A A
up
down
up
down
Washroom
Female
Washroom
Male
up
down
Lift Lift Lift Lift Lift M
Shatin Warehouse
Potential Storage Layout with Revised Configuration - 17th Floor
Office
Drugs
Legend
Sample Pallet
Positions
(assumes 2 levels)
"A" Items
"B" Items
"C" Items
Flow Racking*
Sampling
Total:
204
84
36
32
8
372
C
C
Flow
Rack
Samples
A
B
Not to Architectural Scale
NOTE:
May also want to
consider moving
Repackaging and
Office to a different
floor

26. up
down
up
down
Washroom
Female
Washroom
Male
up
down
Lift Lift Lift Lift Lift M
Shatin Warehouse
11th Floor
up
down
up
down
Washroom
Female
Washroom
Male
up
down
Lift Lift Lift Lift Lift M
Shatin Warehouse
15 - 16th Floor
Empty Floor Layouts for Planning Storage Locations

27. Shatin warehouse (continued)
 Formalize rush order queuing process
 Possibly add customer segmentation criteria to
batching process
 Create procedure manual and standard
operating procedures (SOP’s) for repackaging,
scheduling, batching, picking, etc.
Recommendations:
Other Process Improvements

28. Other Information (continued)
 Safety
 Physical Inventory
 Training Programs and
Records
 Receiving
 Product Picking
 Shipping
 Product Breakage Loss
and Expiration
 Sanitation
 Products Requiring
Temperature Control
 Pesticide and
Rodenticide Control
Standard Operating Procedures Examples

29. Standard Operating Procedure
SUBJECT: Logistics NUMBER:
POLICY: Physical Inventory DEPARTMENT: Warehouse
EFFECTIVE DATE: 01/2001 REVISED DATE: Page 1 of 2
Approved By: Title: Warehouse Manager Date:
Approved By: Title: Director of Strategic Programs Date:
Purpose
The Purpose of this policy is to provide principles and guidelines that will establish the basis for adherence to the
standardized procedures of inventory management. Standard procedures are utilized for all major processes in
Materials Management activities.
SCOPE
This policy applies to all storage and warehousing facilities.
PROVISIONS
1.0 All locations with inventory assets owned and managed must perform physical inventories at year-end. Warehouse
Management can also assist other entities in advice and guidelines for performing physical inventories.
2.0 A Physical Inventory Checklist will be used on all year-end physical inventories. The checklist will be provided by the
Warehouse Manager and will be filed with documentation of the inventory. (See Attachment) The Manager will appoint an
Inventory Coordinator to oversee the Inventory.
3.0 Teams of two persons, a counter and a recorder will perform the actual counts. Each team will be responsible for
counting at least 20 items. The count sheets will include the item number, lot number, unit of measure, location, blank
spaces for count quantities and a pricing column. Upon completion, the counter

30. Shatin warehouse (continued)
 Develop warehousing measurements and
targets
Recommendations:
Other Process Improvements

31. Other Information (continued)
 Customer
 Order Turnaround Time
 Order Fill Rate
 Order Pick Accuracy
 Employee Appearance
 Financial
 Overtime Limit
 Inventory Turns
 Obsolete Inventory
 Budget Management
 Internal Business Process
 MDC Inventory Value
Mgmt.
 Inventory Accuracy Mgmt.
 Receiving & Putaway
Efficiency
 Order Pick Efficiency
 Learning and Growth
 Elapsed Time for Training
 Orientation
 Education
KPI / Warehousing Balanced Scorecard

32. Warehousing Balanced
Scorecard
Timing/
Frequency
(When/How Often)
Construction/
Implementation
(Who/Method/Data Sources)
Notes
Customer
Order Turnaround
Time
Pick & Pack target = 4
hours 80%, 24 Hours,
100%
Monthly Summary Operations Manager performs random audits one
time each week (at least 10 of each order type). If
audit shows that target was met for an individual
order, a 1 is accrued to the tally. A zero is assigned
if turnaround is too long. Results are summed up
once each month (by order type) and the total of
‘1’s’ is divided by the number of orders in the
sample and multiplied by 100 to express as a
percentage.
Order Fill Rate
97% line fill rate
Monthly/
Report timing
depends on ESI
As currently measured and reported by ESI
Order Pick Accuracy
97% line pick
accuracy
Monthly 30+ orders are sampled by Operations Manager or
designee each month. If order line is accurately
picked, then a ‘1’ is accrued to the tally. If not, a
zero is assigned. Also, each customer call for the
month is either investigated or not investigated.
Calls investigated are assigned a ‘1’ and accrue a
zero if not. All ‘1’s are summed in the tally and the
result is divided by the total number of order lines
audited and customer calls received.

33. All areas:
 Reduce non-value added activities
Recommendations:
Other Process Improvements

34. 0
10
20
30
40
50
60
Minutes
Value Add - C Value Add - B Preparation Check/Inspect Move/Transport Queue/Wait Redundant
Time as a Percent of Total Time for Load Truck & Deliver
Process
Work Elapsed
0
10
20
30
40
50
60
70
80
90
Minutes
Value Add - C Value Add - B Preparation Check/Inspect Move/Transport Queue/Wait Redundant
Time as a Percent of Total Time for Pick & Stage Process
Work Elapsed
0
10
20
30
40
50
60
70
Minutes
Value Add - C Value Add - B Preparation Check/Inspect Move/Transport Queue/Wait Redundant
Time as a Percent of Total Time for Drugstore Sales Process
Work Elapsed
0
10
20
30
40
50
60
70
80
Minutes
Value Add - C Value Add - B Preparation Check/Inspect Move/Transport Queue/Wait Redundant
Time as a Percent of Total Time for Accounting Process
Work Elapsed
0
10
20
30
40
50
60
70
80
90
100
Minutes
Value Add - C Value Add - B Preparation Check/Inspect Move/Transport Queue/Wait Redundant
Time as a Percent of Total Time for Receiving & Putaway
Process
Work Elapsed
Value vs
Non-Value
by Process
0
10
20
30
40
50
60
70
80
90
100
Minutes
Value Add - C Value Add - B Preparation Check/Inspect Move/Transport Queue/Wait Redundant
Time as a Percent of Total Time for Repacking & Putaway
Process
Work Elapsed
Percent
PercentPercent
PercentPercentPercent

35. 0
5
10
15
20
25
30
35
40
Minutes
Value Add - C Value Add - B Preparation Check/Inspect Move/Transport Queue/Wait Redundant
Summary of Time as a Percent of All Processes
Work Elapsed
Percent

36. Other Information
Change Management Presentation
 Manage Communication and Maintain Momentum
 Secure Commitment to Change/Culture Shift
 Build Teams and Transfer Skills

37. Awareness
Self-concern
Mental tryout
Hands-on
Acceptance
Time
Stakeholder
Resistance
Transition to
Acceptance
begins
Point of no
return
CHANGE ACCEPTANCE
Change Acceptance Cycle

38. Summary
Cycle time reduction recommendations should net
90% of benefit
Other recommendations will enable Shatin to meet
challenges of sales growth
 Physical improvements
 Operational improvements
Recommendations do not appear to adversely
impact culture.
Providing enhancements (process and technology)
that will leverage current strengths