4. 4
Define
1. Introduction to Lowe’s Store #1064 Receiving Bay
Lowe’s store #1064 is located on Garners Ferry Rd. just south of downtown Columbia, South Carolina. The
store has been open since the early 2000s and has operated successfully in southeast Columbia. This store is
not the most profitable, nor the highest revenue store in Columbia. The Lowe’s store on Harbison Blvd. has
maintained dominance as the highest traffic and revenue Lowe’s store among the three in the Columbia area.
This is due to inefficiencies occurring throughout the store. Group member Brett Ward began working at
Lowe’s store #1064 in August 2014 in the receiving bay as part of the nightly truck unload team.
Brett recognized that the process had room for improvement.
The manager of the receiving bay expressed concern for the time to unload the nightly truck delivery and its
movement to the sales floor for disbursement. The manager is seeking help from our team to discern
potential solutions for the truck unload process.
2. Current Process Overview
2.1 Basic Overview
Lowe’s store #1064 receives truck shipments Sundays through Thursdays in the early afternoon. The unload
team consisting of four employees who arrive to work at 5:00 p.m. on Sundays and 6:00 p.m. on Mondays
through Thursdays. The unload team must stay until all items are unloaded from the truck and the items are
distributed to their respective departments on the sales floor. At the very latest, the unload team must leave
the store by midnight.
The unload process begins with opening the truck and setting up the belt to move products from the truck.
One employee moves boxes from inside the truck onto the belt and pushes them down to the end of the belt.
The other three employees move the products from the belt to a specific pallet based on its intended
department. There are some palletized items inside the truck that must be removed using the forklift and
placed in a storage area to be taken to the sales floor later. In addition, appliances are removed from the truck
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using the hand truck and kept as backup stock in the receiving bay (they are not taken to the sales floor).
Once a pallet is too full to add any more items, it is moved to its respective department on the sales floor
using either a hand-pulled pallet jack or the front loader, which requires one employee to operate and one
employee to act as the “spotter” for customers. Once the truck has been completely unloaded and all of the
pallets have been taken to the floor, the unload crew has completed their shift.
2.2 Resources
The unload team has very few resources necessary for this process. There is one forklift that is used to pull
pallets and heavier items from the truck and one front loader that is used to move pallets to their respective
departments on the sales floor. In addition, there are two hand-pulled pallet jacks that are also used to move
pallets from the receiving area to their respective departments. Finally, there is a belt that moves products
from inside the truck to the unload area.
There are four employees in this process making approximately $10-11 per hour. Each employee is available
a different amount of time ranging from the mid 80% to 95%. The employees arrive and can immediately
begin the truck unload process, but they require a manager to open the truck door. In addition, if the pallets
have not been laid out in the proper formation, the team must do so before beginning the unload process.
2.3 Process Overview
1. Trucks enter the loading bay in the early afternoon Sunday through Thursday, but the four unload
associates do not arrive to begin unloading until 5:00 P.M. on Sundays and 6:00 P.M. Monday
through Thursday.
a. The number of items that arrive on each truck varies day to day and includes individual boxes
rated at easy, medium, difficult, and team lifts based on their weight. There are also large
appliances and wrapped pallets that require a forklift to remove from the truck.
Table 1: Truck shipment sizes and breakdown
Truck size U(1117, 272)
Easy lift 25%
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Medium lift 42%
Difficult lift 29%
Team lift 4%
Appliances U(?,?)
2. The unload crew moves the product belt into the truck and one associate begins placing products on
the belt and pushes them down to the end for the other three associates to place them on pallets.
a. Products are labeled based on their designated department. Pallets are arranged in the unload
bay in a specific layout with each pallet pertaining to a given department.
b. There are wrapped pallets in the truck that require a forklift to be removed. The stats are found
in the table below.
Table 2: Forklift statistics
Resource
Set-Up Time
(s)
Up-Time
(s) Pallets/min Total Average Utilization
Forklift 30.2 2224.9 0.438 16.71%
3. Once a pallet is filled, one of the associates stops moving boxes from the belt and uses a pallet jack to
move the pallet to the sales floor in its designated department.
a. Note: The stocking crew arrives between 8:00 P.M. and 9:00 P.M. to begin placing the
products unloaded from the truck on the shelves. This means that some pallets must be taken
to the sales floor before this time to begin stocking the shelves.
Table 3: Pallet to sales floor movement statistics (seconds)
LCL 90.3
UCL 427.5
RANGE 337.2
Mean 225.3
Note: large differences in times are a result of departments that are farther from the receiving bay and the use
of pallet jacks vs. front loader or forklift (after-hours only)
4. After all freight has been removed from the truck, any appliances are moved out with a handcart and
placed in the receiving bay (they are not taken to the sales floor).
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5. Remaining pallets in the receiving bay are moved to the sales floor to their respective department.
This is done with either a pallet jack or the front loader.
Table 4: Front loader statistics
Resource
Set-Up Time
(s)
Up-Time
(s) Pallets/min Total Average Utilization
Frontloader 20 6159.4 - 28.52%
A screenshot of the process model for the unload process can be found in Exhibit 1.2.
3. SIPOC Diagram
Below is a SIPOC diagram overviewing the entire process with consideration for suppliers, inputs, outputs, and
customers. This chart was used to help our team scope the project before beginning the measurement phase.
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Measure
1. Process
On the first visit to the Lowe’s store, we began process mapping in order to gain a better understanding of the
flow of products through the system. By creating a process map, we were able to determine the most effective
method to measure the efficiency of associates and the process as a whole. The most essential parts of the
process are the time products spend idle on the belt and the time taken to move products from the belt to their
respective pallets. We collected cycle time for each of these parts of the unload process in addition to the time
taken to move pallets to the sales floor. These measures (output variables) are essential in evaluating the overall
efficiencies in the unload process.
Through the data collection process and establishing a global view, we were able to identify a series of inputs
(X process variables) and resulting outputs (Y process variables) that encompass the scope of the entire process.
While all variables are critical and need to be identified in order to understand the process as a whole, the scope
of our project does not necessarily measure every variable.
Process Input Variables (X’s)
Human Resources (Employees)
Non-Human Resources (Loader and Pallets)
Total Inventory (On Truck at Start)
Inventory Waiting to Be Processed (Waiting on
Belt)
Process Output Variables (Y’s)
Inventory Loaded Off
Truck
Employee Utilization
Cycle Time of Pallet Distribution to Sales Floor
Cycle Time of Inventory from Belt to Pallet
Employee Time to Complete
Unloading
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Analyze
1. Bonefish Diagram
This bonefish diagram some of the potential causes and issues to look for improvement in our process. We
looked at six major areas that affect the process.
1.1 Management
There appears to be an overall lack of support from management. No one has true ownership over the process
and therefore no one correcting it. This leads to a lack of supervision so employees are not staying on task or
not performing the task most efficiently. Performance evaluations are non-existent, which means there is no
data and no real understanding of the time it actually takes to complete the process. Finally, combining all of
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this is a lack of forward thinking and disregard for the long-term effects that the inefficiencies in this process
can have.
1.2 Method
Generally there is a process but no standard operating procedure. This is not helped by other factors that are
lacking, and the variability in the inventory on the truck also plays a key role. Our focus is the unloading
process, which can lead to redundant work because items are picked up and placed somewhere, only to be
picked up and placed again. Inventory tracking is important and comes mainly from the distribution centers but
items are not always labeled properly leading to mistakes happening throughout our process. Finally there are
safety concerns that need to be taken into account and some that need to be readdressed.
1.3 Manpower
Connecting back to the management section, the employees are not held accountable for their mistakes or lack
of effort causing the process to take significantly longer than it should. They work to their own personal “takt”
time and are not very productive. There are scheduling issues where not everyone involved in the process is
present leaving more work for the rest. In addition to this there are only one or two employee who are licensed
to operate the forklift. This brings the process to a halt if that person is not around or is busy with another part
of the process.
1.4 Equipment
As mentioned in the manpower section staffing and scheduling are necessary to the process and have other
issues. The belt on which the goods are loaded onto have a kink in it which can make it difficult for the good to
line up properly or be set on the belt. Some of the equipment is old and needs constant repairs. There is a lack of
attention to these repairs and no standard operating procedure for them.
1.5 Materials
The first “material” that is dealt with in the process is the truck that needs to be unloaded. This truck comes
packed rather randomly making it difficult for sorting. Also by nature of the orders the truck constantly has
different inventory on it. Outbound logistics is something that may be able to be changed to help the process.
The timing of the truck’s arrival and how often one is delivered could be improved to help our process. Finally,
when the truck arrives the inventory is labeled but the labels are difficult to read causing difficulty for the
employees.
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1.6 Environment
The space in which the truck is unloaded is very small making it difficult to move around and place the
inventory. This small space has lead to complicated layout that may need to be looked at. This leads into the
placement of the pallets where the inventory is sorted. Now employees have to walk around the belt and have a
lot of movement while sorting the inventory from the truck.
2. Truck Size vs. Unloading Time
The chart above shows the recorded completion times for various sized trucks in comparison to the suggested
completion time set by the Lowe’s corporate headquarters. The corporate headquarters states that unloading the
truck should take between 2.5 and 3.5 hours with no adjustments made based on the size of the truck. The
current process is out of control since unload times for the largest trucks is closer to 7 hours. This means that if
unload associates arrive at 5:00 p.m., all incoming products have not reached the sales floor until 11:30 p.m.
This has resulted in the shelf-stocking crew waiting (idle) until we bring more products. To analyze this issue
we asked 5 whys.
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3. Five Why” analysis
Problem: The truck unload process is taking too long
Why?
Products are not moving from the belt to the pallets fast enough.
Why?
The workers must constantly walk back and forth from belt to pallet.
Why?
The pallets are organized by department.
Why?
So that each department has a specific pallet location
Why?
There is no reason for the current organization of the pallets.
After completing the “5 whys” we found that there is no functional explanation to the organization of pallets in
the receiving bay. We see this as a potential opportunity to reorganize in order to eliminate repetitive
movements.
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3. Entity Time to Pallet
The chart above shows the amount of time taken to move an item from the belt to its respective pallet. There is
clearly variation, as certain departments take longer. Appliances take a significantly longer amount of time
because they move directly from the inside of the truck to the receiving bay, and associates must use a handcart
to move them. These items also require extreme care when handling, due to their high value. We do not see any
area to improve the removal of appliances because the equipment is functioning properly and extreme care must
be taken in handling these items.
The concern arising from this data is when you compare the time to pallet for specific departments and their
respective locations. The pallet for paint is directly next to the pallet for regular plumbing, but the average time
taken to move items from the belt to the paint pallet is more than 2x greater. It is difficult to discern the cause
of this variation because the difficulty of lifting a given box varies greatly for both departments. Based on
observations of the process, the typical product size for regular plumbing was much smaller and many had
handholds making it easy to carry more than one at a time. Some of the boxes for the paint section tended to be
flimsy or require two hands to maneuver.
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4. Worker Utilization and Downtime
The above chart shows arrival times, average utilization, and average downtime for each of the four associates
that work on the unload team. We found some of the associates arrived much later than others. The days that we
observed, one worker showed up more than 2 hours later than the others. This is mainly a result of poor
communication and a complete lack of supervision. The manager of the unload team never clearly stated when
the associates were to arrive to begin the unload process. In addition, the manager typically does not arrive until
around 8:30 p.m. In addition, some associates took frequent bathroom breaks and actually took longer routes
(less direct) around the sales floor when moving pallets to their department. There is no standardization
procedure to monitor or record the amount of time taken on breaks and to move pallets to the sales floor.
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5. Entity Averages by Department
The chart above shows the comparison between the amount of time that a product sits on the belt in comparison
to the amount of time taken to move it to a pallet. The times vary so greatly because there is no FIFO process in
action, the products are arranged on the truck in no specific order and are placed on the belt as such (there is no
groupings by department). The departments that spent the least amount of time on the belt are actually closest to
the belt/opening of the truck. The associates often looked for products that required less movement to pallets
farther away.
This data may be slightly skewed as the times were taken over the course of two hours. After only 15 to 20
minutes of moving products from the truck to the belt, the belt would be full and the individual inside the truck
would have to wait for space to open up on the belt. There is no coordination of the amount of products placed
on the belt in comparison to the amount of boxes being removed. This causes long NVA times spent on the belt
in addition to long, cummulative downtimes for the associate inside of the truck.
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Improve
We have concluded there are four modifications that can be implemented in order to improve the current
process.
1. Improvements
1.1 Modification 1 – Cross-training:
There are only two workers trained to operate the forklift at the moment. Our first proposed modification is
to cross-train all workers so that anyone will have the ability to work the forklift when necessary. All
workers having the ability to use the forklift will allow for individual employees to use it at their discretion
when needed for unloading, instead of having to ask/find the forklift-trained worker to use the forklift,
potentially causing a greater slowing of the unloading process by taking them away from the belt or pallets.
We noted there is a problem with employees not arriving to work in timely fashion or continuously calling
in sick, and currently there are only two forklift-trained workers so if they call out sick the unloading
process will be drastically slowed or possible have to come to a halt. Cross-training will eliminate this
possibility. (Exhibit 1.6)
1.2 Modification 2 – Pallet Line up:
Comparing the data of time on belt and time from belt to pallet by size had no statistical relevance for
improvement purposes, as we quickly observed how arbitrary the process is in terms of how and which
objects are unloaded in what order. However, when comparing the data from time on belt and time from
belt to pallet by department there was one factor which could significantly improve the overall loading time.
An order list with the number of items per truck load is included with each shipment (sent to management
before the truck actually arrives), and the inventory is organized by department on that order list. Using the
information provided, the pallets should be lined up based on the amount of inventory each department has
per shipment; most to least, with departments containing less inventory located further from the belt than
ones with more inventory. This will reduce the overall steps the workers will take, and thereby speed up the
process.
1.3 Modification 3 – FIFO (First in First out):
While observing the spaghetti chart of worker movement, we learned that some workers chose to grab
packages by which side of the belt the item’s pallet was located. This meant workers were taking extra time
to look at packages’ labeling, and if the package did not belong to the pallets on “their side” they would skip
17. 17
over it and look to the next package, wasting time. There were also workers who grabbed packages based on
size or how closely its pallet was located to their current position. Because there was no established method
of unloading packages from the belt, some packages waited on the belt for significant periods of time. To
combat this, we propose that in addition to implementing the new pallet line up depending on the shipment
(modification 2) that they add a FIFO-based unloading pattern which will allow workers to be more
organized and should help with filling up more department pallets quicker, instead of choosing at random.
1.4 Modification 4 – Frontloader:
Another issue is when the frontloader is used to remove a full department pallet and take it to the sales floor.
When that happens, there is no longer a pallet in that place for that department, and can potentially halt
another employee’s unloading efforts if they have to stop to go locate a replacement pallet so that they can
resume unloading inventory. We propose that instead a stack of empty pallets be left beside the
frontloader’s non-use location, and when an employee gets it to go unload a department pallet they also take
a new pallet with them and replace it with the one they are removing before taking the full pallet to the sales
floor. This would only add a few more seconds of time to that worker’s period away from unloading the
belt, but potentially save minutes from another employee having to stop his efforts and track down a new
pallet which could be located anywhere.
1.5 Modification 5 – Wage and Mandated Arrival Time:
Lastly, after looking over the data we noted that some employees’ utilization levels are very low. We
obtained information from a worker that for some of the employees this job is the primary or only source of
income. Due to how important it is for them to receive as much money as possible per paycheck, and that
they were paid by the hour, it made sense that the employees would have little motivation to complete the
work quickly or efficiently, if taking their time and doing the work slowly resulted in them being paid more
for putting in less effort. Many employees did not arrive until hours after the truck arrived at the shipping
bay. When there was a low inventory level shipment that could be finished in an hour, it could be stretched
into several hours. At first, we considered having the wage determined by the size of the shipment in the
truck, but this would affect the workers’ morale (depending on how large or small) and could cause more
concerns about their pay. Therefore, the optimal solution would be for wages to be determined by using a
baseline of simply unloading the truck in its entirety and mandating all workers to arrive at the same time.
According to management, Lowe’s expected unload time should be between 2.5 and 3.5 hours. The average
wage for employees who unload the truck is approximately $11 an hour. Our proposal is that instead of
paying truck-unloading employees by hour that they are instead paid by truck, regardless of the size of the
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shipment. Each truck would be valued at $40 (at the old wage rate is slightly over 3.5 hours, the high end of
manager expectations – this is due to outliers of truckloads that take well over five hours to finish with a full
crew). By implementing this, the new system will change the workers’ mindset; instead of working with the
intention of taking as much time as possible, it now serves their best interest to complete the work as
quickly as possible—and with the entire team present. Workers will be paid the flat $40 rate whether they
finish in 30 minutes or 12 hours. This will ensure the employees arrive at the same time and get out faster,
allow the sales floor crew to begin stocking sooner, and save Lowe’s money by eliminating situations where
workers take longer in order to be paid more. (Exhibit 1.6)
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Control
Management at Lowe’s can control the proposed process improvements and ensuing modifications with
techniques listed below.
1. Modifications
1.1 Modification 1 – Cross Training:
The main control from cross-training all the workers to operate the forklift is to ensure that all employees
stay up to date on that training, and make it a requirement for any new hires to complete that training before
being allowed to aid with the unloading efforts. This will streamline the on boarding process for new hires
and make sure that they can fully contribute as soon as they start working.
1.2 Modification 2 – Pallet Line Up:
As this particular modification must continuously change in order to be effective, the control is effectively
built in. By taking the daily inventory order list and controlling the shifting location of unload pallets (based
on inventory size) management will save significant time each unloading day by reducing worker steps, as
long they continue to control pallet location. It would also be effective for them to continuously measure the
overall unload time as it improves from before the new modification to ensure that improvements are being
made. As a safety precaution, management should also note the average inventory size for each shipment
(by department), so that in the rare case of a missing order list, the pallets can be organized so that the
statistically most likely departments be arranged closest to the belt instead of randomly.
1.3 Modification 3 – FIFO:
Through implementation of a FIFO unloading method, it is important that management be aware as to
whether or not the employees are actually selecting the first items on the line. They will have to remain
vigilant and focused on keeping the employees from straying from this pattern, intentionally or
unintentionally. The only control issue is ensuring that the employees follow the procedure, which will be
more likely to occur if there is an active managerial presence around.
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1.4 Modification 4 – Frontloader:
Management will need to ensure that there are ample free pallets available for stacking beside the loader’s
no-use location, which may cause the need for the purchase/procurement of more. They will need to analyze
the current pallet usage and determine how many are needed on a typical basis. The potential cost of
acquiring more pallets (one-time cost) will rapidly be offset by the employee resource time saved by
implementing this new, more effective method of pallet replacement.
1.5 Modification 5 – Wage and Mandated Arrival Time:
This improvement has the greatest active opportunity for control. At our proposed per-truck rate of $40 per
employee, this would normally equate to about 3.5 hours worth of work with all employees arriving at the
same time, the high end of management’s expected time range. Management will want to actively monitor
when workers arrive and how long it takes the workers to finish the unloading after being informed that they
are paid by truck and not by hour. This should incentivize them to complete the work as quickly as possible,
which will give management a true indicator of how long the unloading process should take. After that,
management has two options. Assuming that the actual average time to unload is significantly less than 3.5
hours, they can choose to either: A) decrease the overall per-truck payment to each employee, saving the
company wage money to be put to use elsewhere, such as potentially hire another employee, or B) fire an
employee so that even with one less employee the crew still completes the task in the 2.5-3.5 hour range, still
saving the company wage money to be put elsewhere.
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Conclusion
Throughout this project we have been able to identify, measure, and provide plans to strengthen Lowe’s process
of unloading a truck. The first identified changed would be to implement a new standard operating procedure
for the process so that it reduces the repetitiveness and waste in the process. The second major aspect, which
will help with the new process, is to change the layout and setup of the receiving bay to be more efficient.
Finally, developing a standard time for taking the pallets to the sales floor will help eliminate waste and
employees taking longer than they should. All of this can be controlled by management having a greater hand in
the process. Continuous monitoring of the total unloading time and nightly evaluations of the employees will
help keep these changes in check.
A major benefit to these changes will be a waterfall effect with labor costs because of the reduced time. The
process will not take as long so items will get to the sales floor faster and will reduce downtime of the nightly
receiving crew. Overall a reduction in variability will allow management to better evaluate the process and the
individual employees. One possible improvement we did not get to work on was the inclusion of the shelf
stocking process. By uniting both the truck unload and the nightly stocking we would better understand how
much downtime the stocking crew is experiencing as a result of inefficiencies in the truck unload.
