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Improving CHEP Inventory Management

Learn how Bolthouse Farms enhanced inventory management by reducing variance and minimizing financial impact with technology integration and control measures.

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Improving CHEP Inventory Management

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  1. Improving CHEP Inventory Management at Bolthouse Farms Amanda Cebell Ruby Juarez Will Altmiller Asif Sohail

  2. Bolthouse Farms(History) 1915 1972 1990 2003 2007 Bakersfield Baby Carrots Premium Beverages Michigan Salad Dressing Source: www.bolthousefarms.com

  3. Bolthouse Farms Mission: We are a market driven, fully integrated farming company. We are innovative in agricultural and packaging technology. Within the parameters of our Corporate Philosophy, our focus is to offer quality products at the lowest possible cost through a “state of the art” plant, quality raw material and the maintenance of trust and credibility with our customers, growers and employees. Products: Premium Beverages Yogurt and Vinegar Based Dressings Fresh Carrots

  4. Pallets • Commonwealth Handling Equipment Pooling • consumer goods, produce, meat, home • improvement, beverage, raw materials, • petro-chemical and automotive industries. • Containers and pallets are not for sale. • Rental price for pallets varies depending on contract • agreement.

  5. Step 1 of DMAIC - Define • Pallet Tracking Issue: • Over or Under-stated Inventory Levels • No inventory maintained in the System • Vendor (CHEP) Complaints • Continuous Manual Adjustment • Potential loss of pallets not reported

  6. CHEPs Flow at Bolthouse

  7. Step 2 of DMAIC - Measure Measurements and Goals for Improvement • The variance b/w In and Out • Currently 2000 (approx) pallets per week • 500 pallets + or – per week is the goal • Audit of Transfer/Customer Orders • Less than 1% discrepancy b/w physically on rail car and what the transfer order shows • Physical count • Less than 0.5% variance b/w physical count and inventory level in the system.

  8. Step 3 of DMAIC - Analyze

  9. Step 3 of DMAIC – Analyze (cont….)

  10. Step 3 of DMAIC – Analyze (cont….) WeeklyPercentage Variance

  11. Step 4 of DMAIC – Improve • I. Goals for Improvement • 1. Reduce Current Average Variance from 10% to 3% • 2. Minimize the Financial Impact . • II. Alternatives: • New Software system implemented • Con: too costly current system is already implemented. • RFID tag all pallets– too costly • Efficient Accountability (See Following Fish Bone Diagram) • Process Auditing • Using the Existing ERP System • Physicality Measures • Regular Reconciliation

  12. Step 4 of DMAIC – Improve (cont….)

  13. Step 5 of DMAIC – Control • Continued Process Improvement: • Monthly Reconciliation with CHEP • Develop and Implement SOP: • Staff Training • Timeliness/ Inventorying Accountability Practices • Annual SOP review and updating • Control Charting

  14. Conclusion • Define: The tracking of CHEP Pallets at Bolthouse Farms • Measure: • The Variance between in/out • Audit of Transfers/Customer Orders • Physical Count • Analyze: Data & Process Flow of Inventory Management • Improve: • Reduce Variance • Minimize Financial Impact-Utilize Technology • Control: • Monthly reconciliation of CHEP • Staff Training • Accountability

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