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Robust Production Management (RPM) Module 10: Small Warehouse Case Study

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This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go …

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/robust-production-management-rpm-module-10-small-warehouse-case-study-468


In this case study of a small warehouse operation, Robust Production Management (RPM) techniques, tools and concepts were applied to identify and quantify the spare capacity and operational savings opportunities present in the organization. If you've studied the previous RPM modules, you'll quickly recognize real-world examples of time studies, the performance framework, resource alignment matrix and unit cost analysis - including 'before and after' states for the organization. "Small Warehouse Case Study" is the tenth module in the Metrilogics Robust Production Management (RPM) training series - more on the way.

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  • 1. Copyright © 2005 Metrilogics, LLC. All rights reserved. Robust Production Management Metrilogics Front-line controls for bottom-line savings. TM SM Module 10: Small Warehouse Case Study By Lance Latham Senior Managing Partner
  • 2. Performance Management Structure and Concepts: Raw Performance Data by Individual Team Member v Paid Time Off (Indirect Hrs.): Non-Chargeable Down Time, Vacation, Holiday, Personal, Funeral/Disability v Lost Time (Indirect Hrs.): Meetings, Projects, Running Reports, Ticket Closing, Supervision, Training, Pallet Replenishment, Inventory Management, Inventory Consolidate, Other Exception Time v Completed direct task volumes: Receiving Putaways, Pick/Pack Lines, Logistics Replenishment Cartons, Logistics Cycle Count Locations, Shipping Cartons Packages v Establishing hourly capacity task rates Quality Work (Earned Credit Hrs.) v Quality Data: Tracked thru various methods for Receiving, Pick/Pack and Shipping; not always tracked to individual team members. Average across all data sources = approx. 99+% v Work Time (Direct Hrs.): Time spent completing task work* v Loaded Hourly Salary: Includes base compensation + benefits + ER taxes Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM 2 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-10-small-warehouse-case-study-468
  • 3. Establishing Direct Task Capacity Rates (cont.) In addition to the hands-on processing time incorporated into a given task’s hourly capacity rate, other business-related time is also included: v Task Preparation Time: Opening and reviewing relevant emails and reports; creating rows and fields in tracking databases; printing and retrieving all necessary paperwork; checking out equipment, retrieving necessary supplies (barcode labels, batteries, pens, skids, rolls of brown packing paper, etc.); identifying and confirming replenishment needs by customer and warehouse location. v Unavoidable Business-Related Interruption Time: Equipment glitches; working with delivery drivers re. receipt of damaged material; asking / answering questions involving Warehouse team members; supervisors and Client Services (verbally, via email or by phone); problem solving re. location issues and / or material versions being picked or shipped. v Work Station Clean-Up, Maintenance and Reporting Time: Disposing of excess shrink wrap / packaging / erroneous labels; recycling workstation supplies; re-stacking empty skids away from main floor area; keying data into systems (order info., time tracking, database fields, confirmation emails to supervisors and Client Services). Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM 5 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-10-small-warehouse-case-study-468
  • 4. Analysis (cont.): Warehouse Performance* for Base Period Spare Capacity = Primary Area of Opportunity Secondary Area of Opportunity Associated Opportunity *Analysis per Metrilogics ‘White Box’ system, based on Warehouse time, task volume and payroll data for the 10/1/09 – 9/30/10 base period. Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM 8 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-10-small-warehouse-case-study-468
  • 5. Analysis (cont.): Daily Receiving Putaway Units and Hours During Base Period U n i t s H o u r s Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM 11 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-10-small-warehouse-case-study-468
  • 6. Analysis (cont.): Daily Logistics Cycle Count Locations and Hours During Base Period U n i t s H o u r s Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM 14 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-10-small-warehouse-case-study-468
  • 7. 2.) Distribute base period work volume across fewer Warehouse team members. Recommendations: Increasing Production Agility to Close Costly Performance “Gaps” 3.) Ensure adequate level of skills training across key tasks to maximize flexibility and responsiveness of Warehouse team. 4.) Increase the level of management planning and coordination day by day and hour by hour, via focused short interval scheduling techniques. 1.) Communicate hourly capacity rates for the 5 primary Warehouse activities, and encourage Warehouse team members to achieve them. 5.) Provide weekly performance feedback to each Warehouse team member. 6.) Reward Warehouse team members for performance improvements and goal achievements by implementing / reinstating a performance-based incentive program. Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM 17 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-10-small-warehouse-case-study-468
  • 8. Recommendation #2: Distribute Work Volume Across Fewer Warehouse Team Members Before FTE = 17.41 After 16,579.45 (61.34%) 1,559.59 (5.77%) 764.05 (Fixed) 4,201.04 (Variable) 4,965.09 (18.37%) 3,923.81 (14.52%) 27,027.94 Annual hours by 10,569.53 (28.11%) FTE = 12.99 = a need for approx. 13 FTE’s Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM 20 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-10-small-warehouse-case-study-468
  • 9. Recommendation #5: Provide Weekly Performance Feedback to Warehouse Team Members Goal: Reinforce performance focus among Warehouse team members at the individual level. v Management to provide one-on-one feedback to individual team members on a weekly basis re.: o Quality / accuracy % for the week and year-to-date o Productivity % for the week and year-to-date o Cross-training skills changes for the week and year-to-date v Management and team members to discuss performance successes achieved - or issues encountered - for the most-recently concluded week. v Management and team members to jointly make action plans for the following week, aimed at improving quality/accuracy and productivity, as well as taking advantage of any cross-training opportunities.* v Implement a performance management system to facilitate ease of performance review and communication between Warehouse management and team members. * Subject to availability of anticipated work demand and Warehouse team attendance levels. Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM 23 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-10-small-warehouse-case-study-468
  • 10. Manager 1st Shift Supv. 2nd Shift Team Lead Pick/Pack Team Lead Shipping Team Lead 1 Logistics 1 Shipper 2 Receivers 4 Pickers Post Project Benefits (cont.): Proposed Warehouse Org. Chart Total proposed FTE complement = 13 4 from current 17 FTE level Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM 26 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-10-small-warehouse-case-study-468
  • 11. 1 Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com

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