Volition Consulting Services is the largest independent supply chain consulting services company operating primarily within the automotive and FMCG industries. Its core business is centred on supply chain integration, which is supported by technology enablement and business process management services. The central parts distribution centre (PDC) provides centralized warehousing and distribution for parts and accessories for BMW lifestyle products, motorcars and motorcycles. The turnover of the PDC is some R600-m per annum and employs around 50 people.
The objective of identifying improvement opportunities was to alleviate the pressures faced by warehouse management and staff thereby enabling increased levels of effectiveness and efficiency. The major contributor to operational pressures within the PDC was the below par supply rate (an availability measure). Increasing airfreight volumes placed growing pressure on various processes within the PDC as the airfreighted goods must be processed as a matter of priority.
Unacceptable levels of pressure faced by warehouse management and staff in the central parts distribution centre of BMW SA's Parts and Accessories division motivated the commissioning of Volition Consulting Services to develop a process optimization programme.
* Improved communication between the PDC staff and other departments within the broader parts and accessories department, encouraging proactive management by warehouse staff.
* A benefits tracking model that monitors and measures all benefits accruing through the implementation of these initiatives, as well as those being implemented internally within the department.
The results included:
* Improved communication and collaboration between P&A functions.
* Increase in supply rate from 93 to 95 percent.
* Decrease in pressure on binning and picking as on average 200 lines/day are processed through the fast track.
* Significant reduction in backorder throughput - from 54 hours to less than nine hours.
* Improved collection service to dealerships - and ultimately to BMW customers.
* Reduced disruptions to PDC and reduced hold-ups for dealers (from 50 to 60 calls per day to an average of two calls to the PDC).
* Advanced notification from suppliers has improved planning in receiving and eased bottlenecks in receiving.
* Visible reduction of supplier congestion.
* Back-order analysis identified two problem classes resulting from erratic dealer ordering and delayed replenishment reaction times - report now generated for change in reorder quantities. Benefit that has accrued from these initiatives will be monitored and measured on an ongoing basis to ensure that the change is entrenched within the business and that it is sustainable.
Based on the initial investigation conducted by Volition, a number of initiatives were identified for implementation to enhance the effectiveness and efficiency of the PDC operations. A number of improvement opportunities were implemented:
* A fast-track process, based on the principles of cross docking, for inspection, receiving and despatch of high priority back orders received by airfreight.
* Implementation of an improved collections process for the dealers at the PDC.
* The development and implementation of a time-slot scheduling process for all inbound inventory into the warehouse.
BRONZE
Improved communication and smoother operating conditions have led to benefits to BMW and its dealers.
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