Background
This major manufacturer of bakery products distributes its products to all UK supermarkets from a distribution centre fed by all its bakeries. The short life of the delicate product and additional seasonal variations mean that there is a fine line between getting it right and getting it wrong, with high waste and poor customer service (and fines) as a result. Lauras International was asked to coach the food distribution site team to deliver substantial efficiency and service improvements to this operation.
Issue/Problem
Although relatively small, the food distribution centre handled over 400 deliveries per week to multiple customers and multiple sites. Customer service is a key KPI for the site which was running at a stable level, with a recognition that it needed to improve. With most orders arriving on the morning of the delivery, the site had worked hard on the forecasting and stockholding to reduce the amount of shortages. However, Post POD Errors (errors found by the customer when checking against the Proof of Delivery note) had increased during the previous year, with over 150,000 cases affected.
Solution
A small team was formed from key areas of the process, including the Customer Service Manager, a Warehouse Shift Manager and a Supervisor from the Goods Out area.
The team used PCS over 4 days to break down the problem to find the root causes. Complex problems such as this have more than one root cause – the team found that there were 18 root causes! These included Service Team issues (e.g. keying in errors, order accuracy), Warehouse issues (e.g. picking accuracy, pallets being loaded onto the wrong trailer) and even some customer issues (e.g. the wrong case count (pieces/case) set in their system, wrong booking in time given). At the end of the 4 days the team agreed and completed an action plan to finish actions which they could not get done within the workshop.
Benefits
- The POD Error rate was reduced by 60%. From a total opportunity of £1.6m RSV an additional £960,000 of product was delivered right first time on time.
- In addition to the service improvement, a further £87,000 was saved as a result of the reduction in ‘Overs’ (where excess product was either not returned or returned with too little remaining shelf life) and from non-reordered shortages.