6 Sigma Project - 2014

1. RATIONALIZATION OF TRUCKING
FLEET TO OPTIMIZE FREIGHTS &
HAVE DEPENDABLE TRUCKING AVAILS

2. OVERVIEW
Problem Statement:
Over the last couple of years, it has been realized that there have been certain external factors that
impact trucking arranged from general market over a prolonged period such as, floods in 2010, wheat
exports in 2011, TCP Urea imports in 2011-12, limited backloads, trucker cartelization & unionization of
truckers in 2012. As a result, this negatively impacts our trucking and consequently freights are
affected. With additional production avails after Plant 2, the overall impact has further
increased.
Goal Statement:
To develop alternate & reliable sources of trucking through which continuous and reliable
trucking avails could be ensured while reducing reliance on trucks from general market and
hence have a better control on freights & shipments. At least, 10% of trucking from alternate
source means in the first year.
Business Case:
Due to external factors, there have been massive freight increases to the tune of Rs. 50 Mn on
FY basis and more dumping in 2012 of almost 9 KT which not only resulted in reclamation cost
of ~ 2Mn but also threatened plant shutdown.

3. CNX / FISHBONE ANALYSIS

4. SOLUTION
 After detailed deliberations, brainstorming sessions, and cross-industry
analysis, the concept of dedicated fleet was explored.
 Other major modes of trucking evaluated:
 Increasing number of trucking contractors
 Inducting truckers who own a trucking fleet
 Committed Trucking on regular freights

5. As depicted from the Ease Impact Matrix, dedicated trucking is the most suitable option that
could rationalize trucking and have an impact with least effort involved.
EASE IMPACT MATRIX

6. ADVANTAGES OF THE DEDICATED FLEET
 Provide reliable trucking avails
 Ship out volume to non-lucrative destinations for regular truckers,
especially at the short hauls (Larkana, Shikarpur, Khairpur, etc).
 Make priority shipments as per Sales requirement, mainly at short hauls
 Savings vis-à-vis Regular trucking by maximizing round trips
 Improving dealer order aging
 Better tracking of the shipments
 Deterrence to regular trucking swings
 Freights control is better and is not subject to freight swings due to
market forces

7. MAJOR CONCEPTS COVERED IN THE
DEDICATED FLEET ARRANGEMENT
 Trucks to be shipped at any destination at our discretion
 Round the clock and continuous operations
 Trucks to be loaded and unloaded on priority
 Fixed monthly cost and Variable cost
 Variable costs to vary with HSD and Inflation and Fixed Cost after fixed periods
 Travel Time calculations based on travel loops
 For out of order trucks or unnecessary delays, deductions to be made on the double the
pro-rated fixed costs
 Variable cost to be paid on round trip basis
 Number of trucks with loading capacities [currently 14 Trucks (10 from Faisal Movers + 4
from PSN) with 50 Tons Loading capacity each]

8. MODUS OPERANDI AND SOP
 Destination for shipments to be selected each day based on order avails and feasibility
 Track status of each truck at least twice per day
 Make arrangements for priority loading
 Travel time and trip details sheet (attached)
 Round trip time analysis (attached)
 Trip register with each truck
 Advance communication to concerned ZDO / AMM for timely unloading
 Make shipments to destinations where the existing truck loads are minimal by reserving
detailing for dedicated trucks separately
 Follow up with concerned ZDO / AMM for prompt unloading in case of delays
 SOP for Handling of Dedicated Shipments
 Destination Selection Module

9. OCTOBER AND NOVEMBER OPERATIONS AND KPIS
Description OCT 2012 NOV 2012
Volume Shipped 5600 Tons 8850 Tons
% of Total Shipments 7% 9%
Number of Trucks 12 14
Total Savings Realized Rs. 0.33 Mn Rs. 0.57 Mn
Total KMs travelled 26,744 Km 50,981 Km
Avg. round trips per truck 13 13
Average KMs travelled 239 275
Area Oct-12 Nov-12 Total % Placement
Bahawalnagar 300 1,500 1,800 12%
Bahawalpur 500 1,650 2,150 15%
Daharki 650 450 1,100 8%
Dera Ghazi Khan 200 350 550 4%
Jhang 200 100 300 2%
Khairpur 200 1,850 2,050 14%
Khanewal 550 50 600 4%
Larkana 950 650 1,600 11%
Lodhran 400 100 500 3%
Multan 100 350 450 3%
Rahimyar Khan 1,050 350 1,400 10%
Shikarpur 500 1,450 1,950 13%
Total 5,600 8,850 14,450

10. SUMMARY OF TOOLS USED
 Historical shipment analysis for targeted Areas
 FMEA
 Brainstorming
 CNX Analysis
 Time and Motion Study
 Ease Impact Matrix

11. ISSUES
 Delays in unloading at destinations
 Detention by Motorway Police and Weighbridges resulting in
increased operational costs for the trucks
 Shipment Plan limitations for most lucrative destinations
 Lesser mileage being achieved by the trucks for Sindh due to
dilapidated road conditions

12. WAY FORWARD
 Increase fleet to at least 20 trucks
 Work out ways to maximize volumes shipped and trips

13. THANK YOU

14. ANNEXURE 1

15. FREIGHT ANALYSIS
Area
Projected
Saving
(Rs / Ton)
Projected Saving
/ Truck / Month
(Rs)
5 Years
Historical
Volume / Month
(Tons)
Assuming max.
50% Vol. to be
through dedicated
trucking/ Month
(Tons)
# of Trucks
Required
for shipping
desired vol.
Total Saving /
Month (Rs)
Bahawalpur 20 23,233 2,527 1,263 1 25,521
Daharki 151 249,368 2,148 1,074 1 162,294
Khairpur 23 27,838 3,390 1,695 1 39,321
Larkana 61 70,174 2,946 1,473 1 89,886
R.Y Khan 11 16,156 6,299 3,149 2 33,921
Shikarpur 153 191,279 3,163 1,581 1 241,997
Grand Total
Total Volume per Annum to be
shipped by dedicated Fleet
20,472 10,236 8 592,942
122,832 Total Saving per Annum 7,115,302
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