Challenges-Part 1

Inbound Process Challenge

One of the main KPIs in the field of warehouse inbound is the TTS (Time To Shelf), which is means of the average time of entry of goods into the warehouse inbound gate until the goods are placed on storage locations.

During the past year of the biggest challenges that we have struggled with, was improving inbound process and decrease TTS KPI to speed of the inbound process and increase inbound capacity with the same resources.

In the past, this KPI was about 1,260 minutes, so at the beginning of my work we wanted to significantly reduce this value, so we started to do several studies and started diagnostic phase to improve this process and increase the capacity of inbound capacity. This would have made the inbound process more mature, as well as preparing for further progress. The aim was not only to increase the efficiency and capacity of the inbound, but also to prepare the process for future plans, which would lead to more positive changes in the process of the inbound.

Study Result

• After studying and researching on best practices such as SAP and similar businesses, we came to the conclusion that one of the biggest problems in this process was the one-to-one relationship between the purchase order document and the goods receipt, and this meant that every purchase order that was created must be Process it all at once by a goods receipt and a financial document. And this issue was strongly affected when one of the items in the purchase order encountered a problem and needed to be determined by the commercial or financial unit, so all the items in this purchase order were blocked and waiting to be determined and it was a biggest issue that we have found at that time regarding TTS KPI.
• Another problem observed during the analysis of this process was that, there was a concept in the system that according to the concept of all labeled items that was ready to be located in the storage locations, a package should be prepared and each of these packages should be assigned to one person (locator). The problem was that when the package includes a large number of items and the working hours were about 1-2 hours at the end of the shift, no one would accept larger packages because if the package was accepted, they would have to be in the warehouse until the package was fully stowed. So that, large packages waited in the corner of the depot warehouse for 1 or 2 hours before the end of the shift and waited for the next shift, which this wasted times increased the TTS KPI.
• The next issue was the time of activation of the product on the website and being salable. At the beginning of the study, it was observed that inventory increases when the process of labeling on the product is done and the steps of package construction and placement must be done, and due to the time consuming nature of these processes, we realized that part of the sales is lost and this is the main problem with not finding items when the picker wants to pick the specific item. Not to mention that not having a quarantine warehouse was another problem. According to process, we decided to make the product available when the package finalized and is ready to be stowed, and the stowing process began for it.

Actions

After reviewing and summarizing the observations, it was decided to raise this issue in a meeting with the teams of operations, finance and commercial, and to finalize and implement the desired solution. My suggested solution was to create a platform for changing the one-to-one relationship of the purchase order and goods receipt to one-to-many. It means, the rest of the goods that were unproblematic and could place in storage locations should be sent to the warehouse, but the entire purchase order should not be closed and only a part of the goods should be finalized. It was the decision that we have come to the conclusion from studies conducted in best practices such as SAP. After about four months of deliberations and discussions on various issues, the Financial, Commercial and Operations Unit finally approved the issue and decided to implement the process.

Breaking down the project

Due to the issues that were observed, the volume of changes was so large that it was not possible to do them in one phase and it caused increase the failure risk of whole the project, so it was decided to turn the project into 3 smaller phases and each of them will be implemented over a period of time and whole the project will be closed in 4 months.

Result

A few months after the implementation of the project, the result was extraordinary. The 1,260 minutes, which was calculated to be 21 hours per product at the beginning of the project, was reduced to 450 minutes almost 7.5 hours at the end of the third phase, which means approximately 62 percent improvement in inbound processes and increased productivity. Although we faced many problems during the implementation of the project, the desire to achieve a specific goal that improved the process to reduced the work of a large number of people in this sector and increased the entry capacity for the future, caused all these problems to be ignored, hence that led us to take a firm steps on this risky path.