Case History

Upgrading the logistics processes of a distribution company

Problem

The company distributes electrical supplies. It has been on the market for several years and has always focused on the quality of its products. The company processes a large number of orders daily. Orders vary widely in terms of product type, volume and value.
The company has a modern ERP system and a modern warehousing system. The efficiency of the logistics system needs improving to guarantee ever shorter delivery times for their customers.
Given the favorable market situation, the company has decided to review the entire supply chain and information system to improve the quality of customer service. This is considered a key to market success.

Contract Manager then sets out the necessary activities.

Objectives and action taken

A supply chain management project is put together to review logistics operations and to achieve the following objectives, as agreed with the owners:

  • to raise service levels (speed and precision), so that orders can be shipped on the day they are received;
  • to optimize warehouse operations through improvements to both layout and the software used;
  • to assess, measure and optimize the stock levels and values required to reach the objectives.

The temporary manager analyzed the workflow and identified all those activities that produced little or no real value.  These often derived from old, engrained habits.  The aim was to make the customer the focus of attention.

Performance was measured, especially the number of orders received and shipped the same day, together with the backlog.  The temporary manager interacted closely with the supervisors, gathering their opinions and proposals, sharing his plans and identifying together with them the resources to involve.

Results

Thanks to the intervention of Contract Manager, the company achieved the following results:

  • a significant improvement in service levels, raising the number of same-day shipments from 45% to over 80%;
  • an 80% reduction in backlog during the first week of each month (the peak time for order reception);
  • identification of the person to fill the role, in this case the warehouse supervisor, releasing him from unproductive tasks and so freeing up his managerial potential.

These changes, with the innovation and professionalism that accompanied them, brought about an improved company climate. Many of the organizational solutions were overdue, and the new continuous improvement approach and people involvement quickly bore fruit.

The Logistics Department keeps up the good work along the lines set out by Contract Manager and positive feedback from the sales network, from the salesforce and agents to customers, confirms the success of the assignment.