Posted: April 9th, 2022

Case Study 3 – SRJ Logistics Services

SRJ Logistics Services
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SRJ Logistics
“The standard of our efficiency has improved considerably, however shops proceed to complain
about our deliveries,” mentioned John Smith, common supervisor of the Springfield Warehousing and
Distribution Heart (WDC) run by SRJ Logistics Services. Smith appeared on the buyer
satisfaction survey for the fourth quarter of the earlier yr. “At this level, it’s turning into
more and more tough for us to make additional enhancements. We’d like an in depth plan of motion
concerning what to do subsequent. Robin, I want to see an preliminary plan from you within the subsequent couple
of months. Why don’t you start by wanting on the receiving operate?” Robin Marsh, high quality
supervisor on the WDC, nodded her head.
Background
Based in 1989, SRJ Logistics Services (SRJLS) was an entirely owned subsidiary of SRJ and
Co., a big nationwide retail chain. Previous to 1989, SRJ dealt with its personal logistics features,
together with warehousing and transportation. In 1989, SRJLS was spun off as a separate firm
with the only real goal of offering logistics companies. Initially, all of SRJLS’s enterprise got here
from SRJ. At current, solely 85 p.c of SRJLS’s enterprise got here from the mother or father firm, and
SRJLS was actively in search of enterprise outdoors of SRJ. Though SRJLS had plans for progress, it
needed to remain within the enterprise of offering logistics companies to retail chains.
SRJ operated a community of seven warehousing and distribution facilities for SRJ and Co. Every
WDC was assigned a area through which it served all SRJ shops. Every WDC sometimes stocked all
objects wanted by shops within the area it served. Firm patrons at SRJ positioned orders for
merchandise with suppliers. These orders had been primarily based on forecasted demand at retail shops and
had been delivered to the WDCs the place they had been obtained and held in storage. When shops ran out
of a product, retailer managers positioned replenishment orders for merchandise on the WDC. If the
product was out there, the order was picked on the WDC and delivered to the shops. The shops
primarily cared about orders being delivered in the precise amount on the proper time.
The Springfield WDC
The Springfield WDC served a complete of 194 shops. The 194 shops had been divided into three
classes (A, B, and C) by reducing order of dimension. There have been 57 A shops, 75 B shops, and 62
C shops. A complete of 12,539 objects had been stocked at Springfield. The vast majority of this stuff had been
known as breakpack objects (9,944 in whole), with the remaining being full-case objects. For breakpack
objects, equivalent to answering machines or telephones, SRJLS obtained instances of a sure dimension from its
suppliers. Shops had been allowed to position orders for portions lower than a full case as a result of SRJLS
broke open the instances and shipped objects to the shops in smaller portions. Thus, it was not
uncommon to have partial case of breakpack objects in storage. For full-case objects, shops had been
required to order no less than a case. For this stuff, SRJLS solely wanted to deal with instances and didn’t
break them into smaller models.
The WDC at Springfield had a complete space of 1.1 million sq. ft and was divided into six
modules (see Exhibit 1). Breakpack objects had been saved in Module 1, whereas full-case objects had been
saved in Module 3. The opposite modules had been used for sorting and the staging space. On common,
Springfield had a listing price $46 million, which corresponded to a few one-month
demand from shops within the area.
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Smith was employed as the overall supervisor on the Springfield WDC in January of the earlier yr.
A portion of his bonus was primarily based on a quarterly survey of retailer managers taken by SRJLS
administration. The final survey previous to Smith’s arrival indicated that retailer managers had been very
dissatisfied with the efficiency of the Springfield WDC. Springfield was a poor performer and
ranked final inside the SRJLS community. Clients (retail retailer managers) complained that orders
had been late and never delivered in the precise amount.
Upon arriving, Smith centered his consideration on service high quality on the WDC. Smith shortly realized
that no efficiency knowledge was out there inside the Springfield WDC. In reality, not one of the course of
had been properly outlined. He needed to put a complete high quality program in place and appointed Robin Marsh
as High quality Supervisor. Marsh had spent appreciable time at Springfield and was educated
concerning the processes and issues. As a primary step, Marsh and Smith recognized receiving,
stock, storage, order filling, and transport because the 4 key processes at Springfield. Receiving
referred to the method of receiving deliveries from provider and placing them into storage on the
WDC. Stock storage referred to the method of storing merchandise on the WDC. Order filling
referred to the method of receiving a retailer order and, selecting required objects from storage, and
loading the supply truck. Transport referred to the method of transporting the shop order from
the WBC and delivering it to the shop. These 4 processes had been recognized as key as a result of any
error in these processes impacted Springfield’s skill to provide a retailer order on time and within the
proper amount. An error in receiving or stock storage might end in an improper amount of
a selected product exhibiting up within the stock system. Because of this, the WDC might promise
supply to a retailer from inventory, despite the fact that the merchandise was out of inventory. This error could be
detected when the WDC tried to fill the order and located they may not. This is able to trigger the
supply to the shop to be late. Smith’s goal was to handle the 4 processes within the
warehouse in such a means that retailer orders may very well be delivered in the precise amount on the proper
time.
By June, detailed course of circulate maps had been constructed for every of the 4 processes (See
Exhibit 2 for receiving) and key aims had been recognized for every course of. To establish the
aims, Marsh and Smith took under consideration retailer necessities by way of supply accuracy.
The method mapping and goal identification was completed in coordination with the personnel
concerned with every course of. The operators had been anticipated to comply with procedures as describe within the
course of circulate maps. The hope was that with extra clearly outlined processes, efficiency would
enhance. To additional inspire personnel, customized survey outcomes for all WDCs had been posted throughout
the warehouse. Smith hoped that staff could be motivated to keep away from being on the backside of
the checklist and inspired to comply with the method extra rigorously, leading to higher efficiency.
These actions bore fruit, and Springfield moved as much as third place by the fourth quarter.
Sadly, on an absolute scale, efficiency was nonetheless fairly unhealthy with a number of dissatisfied
retailer managers.
Smith wanted an strategy to take high quality to the subsequent stage. He had heard of Statistical Course of
Management (SPC) and needed to make use of the methodology to enhance course of efficiency at
Springfield. SPC had historically been utilized in manufacturing settings for measurable variables
such because the thickness of a plate. In a warehouse setting, it was exhausting to outline how flawed a
course of had been however straightforward to categorise the end result as being faulty or not. Due to this fact, Smith and
SRJ Logistics Services
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Marsh determined to measure whether or not the totally different levels of a course of had been faulty or not.
The preliminary focus was on the receiving course of.
The Receiving Course of
The receiving flowchart (see Exhibit 2) is an outline of all of the duties essential to obtain a
vendor cargo into the WDC. The members had been:
➢ A guard who started the receiving course of by checking trailer hundreds into the WDC yard
➢ A receiving officer who ready the receiving packet and keyed obtained portions into
the stock system
➢ A yard driver who positioned drop trailers within the correct dock door and eliminated launched
trailers to the provider pickup space
➢ An unloader who eliminated the trailer and palletized the product
➢ A slotter who carried out detailed receiving duties (to make sure correct PO, amount rely,
and many others.), assigned inbound pallets to stocking places, and in addition carried out vendor
compliance audits.
➢ A putaway driver who moved obtained palletized product from the receiving space to the
assigned stocking location.
Detailed Knowledge Assortment
The Springfield warehouse carried out about eight,000 transactions in receiving each day. To
put together SPC charts, Marsh determined to research 800 transactions each day for the subsequent 45 days. A
pattern dimension of 800 transactions was chosen to make sure that most days had no less than three or extra
transactions that had been faulty. It could be not possible to assemble SPC charts if most samples
had no faulty transaction.
After speaking to skilled individuals concerned within the receiving course of, Marsh used fishbone
diagrams to establish the next 5 sources of error that had been prone to happen:
➢ Slotter: Errors in any of the slotter features
➢ Keying: Errors in receiving officer keying portions into the stock system
➢ Letdown: Errors in any of the unloader features
➢ ITR ADJ: Errors in receiving packet ready by receiving officer
➢ Putaway: Errors in placing the pallet/stack within the flawed location
All errors that would not be assigned certainly one of these 5 classes had been group as “different.” Marsh
additionally determined to separate the efficiency knowledge for Modules 1 (breakpack) and 3 (full case).
After 45 days, Marsh had loads of knowledge to have a look at (See Reveals 3, four, and 5). She nonetheless was not
certain find out how to greatest arrange it and put together a plan for motion.
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Dialogue Questions
1) Help Marsh arrange the info by making ready a run chart.
2) Put together applicable course of management charts to see if the method is in management. Is the
receiving course of in or uncontrolled?
a. Course of management charts ought to mirror the management limits in addition to the spec limits.
b. Question Assignment 3 helps you establish the spec limits
3) Customer support necessities decide that receiving course of errors ought to by no means
exceed 2 p.c on any given day. What share of the times is prone to exceed 2
p.c error, given the present efficiency of receiving? Assume a complete of eight,000
transactions per day, four,000 in every module.
four) Prioritize the set of actions you’d take to make sure that greater than 99 p.c of the
days have lower than 2 p.c receiving course of error.
5) Are you able to consider a steady enchancment framework that Marsh can use as an engine
to enhance efficiency within the receiving course of and different processes at Springfield?
SRJ Logistics Services
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Exhibit 1: Structure of Springfield WDC (1728’ x 576’)
Workplace
Space
Module
3
Module
1
Exhibit 2: Course of Flowchart: SJR Logistics Services, Receiving
Guard Receiving
Workplace Yard Driver Unloader Slotter Putaway
Truck arrives
at gate
Test in
trailer
Assign trailer
to receiving
location
Ship papers
to workplace
Put together receiving
packet
Enter accomplished
receipt to system
Enter slotting
reassignments to
system
File receiving
packet
Place trailer
to dock door
Unload
trailer
Type cartons
by merchandise
Construct Pallets
by merchandise
Stage pallets
in receiving
apron
Match objects
obtained to PO
Rely amount
obtained
Evaluate amount
to supply
manifest
Assign pallet to
stocking location
Put pallet/stack in
assigned location
Return unslotted
pallets to
supervisor
Transport Space
Receiving Space
Return empty
pallets to
unloading space
Dwell Load? Flooring Stack?
Y Y
N N
Full
receiving packet
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Exhibit 3: General Efficiency of Receiving course of
Date Slotter
Errors
Keying
Errors
Letdown
Errors
ITR ADJ
Errors
Putaway
Errors
Different
Errors
Complete
Errors
Complete Slots
Checked
6/1 four 1 1 1 zero 3 10 800
6/2 11 2 1 2 2 7 25 800
6/3 11 2 zero 2 four four 23 800
6/four 6 6 zero zero 2 11 25 800
6/5 6 zero zero 1 3 four 14 800
6/6 19 zero zero zero 1 5 25 800
6/7 11 zero zero zero 2 2 15 800
6/eight 3 1 2 zero 1 16 23 800
6/9 3 zero 3 zero 1 3 10 800
6/10 3 zero 3 zero zero 5 11 800
6/11 5 zero 3 zero zero 7 15 800
6/12 zero 1 1 zero 1 22 25 800
6/13 four 1 3 zero four 5 17 800
6/14 2 zero 2 zero zero 19 23 800
6/15 zero 2 2 zero zero 1 5 800
6/16 2 2 zero zero 1 zero 5 800
6/17 four zero 1 zero 2 zero 7 800
6/18 3 1 four 2 zero zero 10 800
6/19 four zero 3 zero 2 1 10 800
6/20 7 2 2 zero 3 3 17 800
6/21 13 zero 2 zero 1 9 25 800
6/22 7 zero 2 zero 2 5 16 800
6/23 four zero four zero 1 6 15 800
6/24 7 zero zero zero 2 7 16 800
6/25 2 zero 1 zero four 2 9 800
6/26 2 zero 1 zero four 1 eight 800
6/27 2 zero 2 zero zero eight 12 800
6/28 eight 1 1 zero zero 6 16 800
6/29 7 1 1 zero zero 7 16 800
6/30 1 1 1 zero 1 four eight 800
7/1 10 zero 2 zero 1 eight 21 800
7/2 7 zero 2 zero 2 four 15 800
7/3 four zero 1 zero 6 1 12 800
7/four 6 zero 2 zero 1 1 10 800
7/5 3 zero 1 zero zero 2 6 800
7/6 zero 2 2 zero zero 1 5 800
7/7 1 zero 5 zero zero 19 25 800
7/eight 5 zero 2 zero zero 3 10 800
7/9 5 2 2 zero 1 6 16 800
7/10 6 zero zero zero 1 2 9 800
7/11 9 zero 3 zero zero eight 20 800
7/12 9 zero 3 zero zero eight 20 800
7/13 four zero 2 zero 5 zero 11 800
7/14 zero zero 3 zero eight 1 12 800
7/15 zero zero 2 zero zero 5 7 800
Complete 230 28 78 eight 69 242 655 36000
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Exhibit four: Module 1 Efficiency
Date Slotter
Errors
Keying
Errors
Letdown
Errors
ITR ADJ
Errors
Putaway
Errors
Different
Errors
Complete
Errors
Complete Slots
Checked
6/1 1 zero 1 zero zero zero 2 400
6/2 10 2 1 2 1 1 17 400
6/3 9 1 zero 2 four 2 18 400
6/four 6 6 zero zero 2 7 21 400
6/5 3 zero zero 1 3 zero 7 400
6/6 1 zero zero zero zero 1 2 400
6/7 7 zero zero zero 1 2 10 400
6/eight 1 1 2 zero 1 16 21 400
6/9 3 zero 3 zero 1 1 eight 400
6/10 3 zero 3 zero zero 3 9 400
6/11 5 zero 3 zero zero 3 11 400
6/12 zero 1 1 zero 1 21 24 400
6/13 four 1 3 zero 3 5 16 400
6/14 2 zero 2 zero zero zero four 400
6/15 zero 2 2 zero zero 1 5 400
6/16 2 2 zero zero zero zero four 400
6/17 1 zero 1 zero 1 zero 3 400
6/18 3 1 four 2 zero zero 10 400
6/19 3 zero 3 zero 2 1 9 400
6/20 7 2 2 zero 2 2 15 400
6/21 13 zero 2 zero zero eight 23 400
6/22 7 zero 2 zero 2 1 12 400
6/23 four zero four zero 1 four 13 400
6/24 5 zero zero zero 1 5 11 400
6/25 2 zero 1 zero four 2 9 400
6/26 1 zero 1 zero 3 1 6 400
6/27 2 zero 2 zero zero 5 9 400
6/28 6 zero 1 zero zero four 11 400
6/29 5 zero 1 zero zero 5 11 400
6/30 1 zero 1 zero zero four 6 400
7/1 eight zero 2 zero 1 7 18 400
7/2 7 zero 2 zero 2 four 15 400
7/3 2 zero 1 zero 6 1 10 400
7/four four zero 2 zero 1 1 eight 400
7/5 2 zero 1 zero zero 1 four 400
7/6 zero 2 2 zero zero zero four 400
7/7 zero zero 5 zero zero 15 20 400
7/eight 2 zero 2 zero zero 3 7 400
7/9 3 2 1 zero zero 2 eight 400
7/10 3 zero zero zero 1 2 6 400
7/11 7 zero 3 zero zero eight 18 400
7/12 7 zero 3 zero zero eight 18 400
7/13 2 zero 2 zero 5 zero 9 400
7/14 zero zero 3 zero eight zero 11 400
7/15 zero zero 2 zero zero 1 3 400
Complete 164 23 77 7 57 158 486 18000
SRJ Logistics Services
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Exhibit 5: Module 3 Efficiency
Date Slotter
Errors
Keying
Errors
Letdown
Errors
ITR ADJ
Errors
Putaway
Errors
Different
Errors
Complete
Errors
Complete Slots
Checked
6/1 3 1 zero 1 zero 3 eight 400
6/2 1 zero zero zero 1 6 eight 400
6/3 2 1 zero zero zero 2 5 400
6/four zero zero zero zero zero four four 400
6/5 3 zero zero zero zero four 7 400
6/6 18 zero zero zero 1 four 23 400
6/7 four zero zero zero 1 zero 5 400
6/eight 2 zero zero zero zero zero 2 400
6/9 zero zero zero zero zero 2 2 400
6/10 zero zero zero zero zero 2 2 400
6/11 zero zero zero zero zero four four 400
6/12 zero zero zero zero zero 1 1 400
6/13 zero zero zero zero 1 zero 1 400
6/14 zero zero zero zero zero 19 19 400
6/15 zero zero zero zero zero zero zero 400
6/16 zero zero zero zero 1 zero 1 400
6/17 3 zero zero zero 1 zero four 400
6/18 zero zero zero zero zero zero zero 400
6/19 1 zero zero zero zero zero 1 400
6/20 zero zero zero zero 1 1 2 400
6/21 zero zero zero zero 1 1 2 400
6/22 zero zero zero zero zero four four 400
6/23 zero zero zero zero zero 2 2 400
6/24 2 zero zero zero 1 2 5 400
6/25 zero zero zero zero zero zero zero 400
6/26 1 zero zero zero 1 zero 2 400
6/27 zero zero zero zero zero 3 3 400
6/28 2 1 zero zero zero 2 5 400
6/29 2 1 zero zero zero 2 5 400
6/30 zero 1 zero zero 1 zero 2 400
7/1 2 zero zero zero zero 1 3 400
7/2 zero zero zero zero zero zero zero 400
7/3 2 zero zero zero zero zero 2 400
7/four 2 zero zero zero zero zero 2 400
7/5 1 zero zero zero zero 1 2 400
7/6 zero zero zero zero zero 1 1 400
7/7 1 zero zero zero zero four 5 400
7/eight 3 zero zero zero zero zero 3 400
7/9 2 zero 1 zero 1 four eight 400
7/10 3 zero zero zero zero zero 3 400
7/11 2 zero zero zero zero zero 2 400
7/12 2 zero zero zero zero zero 2 400
7/13 2 zero zero zero zero zero 2 400
7/14 zero zero zero zero zero 1 1 400
7/15 zero zero zero zero zero four four 400
Complete 66 5 1 1 12 84 169 18000
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