Industrial logistics facility implements alternative operating plan

Case Studies

Challenge

OIA’s industrial logistics customer always operated on the weekends, despite the accompanying inefficiency. Full weekend operations were originally designed to maximize the direct-to-consumer supply chain, ensuring that orders were processed on the same day while also minimizing volume accumulation on Mondays. Unfortunately, the weekend shift became unproductive over time, so the business needed to completely reevaluate its operations plan. Furthermore, the inefficient structure was utilized across the entire distribution network, creating an illusion of success in order fulfillment.

 

  • Without weekend parcel pickups, orders were picked/packed but were not shipped until Monday afternoon, which did alleviate volume surges on Monday, but at a greater cost than if throughput was simply increased on Mondays.
  • Weekend shifts had turnover rates near 50%.
  • Poor on-time performance due to inexperienced staff
  • Frequent miscommunication during shift changes
  • Severe staffing complications during shift overlap

Solution

OIA engaged in open dialogue with the customer to better understand their unique business needs and preexisting customer commitments. After extensive discussions, both sides concluded that weekend operations existed because “that’s the way it’s always been.” They were a preexisting tradition with minimal strategic value.

  • OIA conceived new business models and alternative operating plans, allowing the customer to decide which options fit their operations best.
  • After a brief pilot program, the weekend shift was eliminated and eligible staff were re-allocated to weekday shifts, filling many vacant positions in the process.
  • OIA implemented consistent training standards which elicited better adherence to standardized work processes.

Benefits

OIA developed industrial logistics solutions that ultimately reduced the customer’s fulfillment costs and staff turnover without impacting overall service levels. OIA’s customer achieved a 99.5% on-time fulfillment KPI after increasing management’s tenure and oversight, reducing reliance on support staff, and eliminating preexisting operational issues. These changes simplified day-to-day business activities and eliminated unnecessary weekend communication.

 

  • Employees achieved better work/life balance as they no longer had to remain available during traditional “off hours.”
  • Reduced turnover rates
  • Better on-time fulfillment metrics
  • Improved cost per unit
  • Eliminated vacant positions on the first shift without sacrificing service levels for the end customer.

Final project implementation elicited $944K in savings, reduced turnover rates by 25% ,and improved on-time fulfillment by more than 10%. The company also saved an estimated $33,348 more per year due to improved workflows and training processes.

Stuck in the past?

OIA can design and implement alternative operating plans to increase productivity.

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