Food Distribution Centre image

Food Distribution Centre

Project: Lauras International was asked to coach the site team of a major manufacturer of bakery products to reduce post POD errors and deliver substantial efficiency and service improvements to the operation. 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 and a further £87,000 was saved as a result of the reduction in 'Overs'.

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Background

cakes-03-casestudy-distributionThis 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.

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Testimonials

This is the best I’ve seen this line run…I never thought we’d be able to get it up to this speed.

Operator – Bakery

Inspiring the people in our business to understand how they can improve and the business can therefore develop, is an important building block in our drive for improving efficiency within our business. Engaging everyone in the business to realise that we can be better and any little improvement drives down to the bottom line. This has been seen both in the way the staff have engaged and enjoyed the experience and the evidence of reduced costs has helped the business to become more efficient. This process never stops but it is the tools that have been developed by Lauras International that has allowed us to deliver this important work at both our potato pack houses.

Fraser Scott, Head of Farming Operations Arable/Potatoes