Creating Flow in the yard for Foodstuff Inc. Logistics Operation

1. Creating Flow in the yard for Foodstuff Inc. Logistics Operation A global producer of both liquid and solid fresh produce and home to some of the UK’s leading brands, Foodstuff Inc. are a multi billion euro turnover company with over 4000 employees and 25% of the foodstuff market share. They make 4000 deliveries made to retailer regional distribution centres (RDCs) and stores each year. There was a noticeable bottleneck in the logistics operation at peak return time every day that resulted in long queues of trailers in the yard. The challenge was to eliminate this particular problem to improve efficiency and effectiveness of the logistics operation and to reduce their variable operating costs. • We carried out detailed diagnostics to understand the issues • We carried out thorough “go – look – understand” investigations of the operation • Reduction in overtime costs of £75k • 4% increase in delivery capacity per shift • Elimination of 2 trailers resulting in annual savings of £54k • Tighter control of existing working procedures • Improved measurement system to drive effective performance • Cross Functional working between operations and logistics • Real time problem solving ‘Our teams are working together far better than they were before. It’s made a huge difference.’ Supervisor, Foodstuff Inc. • We resolved bottleneck issues at root cause • We aligned activity between operations and logistics to create capacity • We challenged and created a case for changing the KPIs and measurements of the operation Fig.1 Numbers and time taken for trailers waiting before and after intervention

2. Detailing the intervention at Foodstuff. Inc • We started by checking the current measures being used to monitor and drive performance. We found the way in which some measures were calculated hid a multitude of issues and inappropriate measures were being used at different levels of the organisation • We focused on availability as our driving measure to ensure the entire network is flowing effectively to maximise the use of the trailer and driver. • We collated a simple daily diary of key data points from a sample of drivers; focusing on times spent driving vs. activities when not driving. It showed that on average only 60% of their time was spent driving or on statutory breaks. 25% was waiting at customer sites and the remaining 15% was spent waiting in the company yard for a number of reasons. • We found after carrying out a “go – look – understand” exercise, much of the yard waiting was on return to site to refuel and drop off tetras. We found only 2 out of the 4 petrol pumps were working and two of the tetra off-load bays were always blocked with a fork-lift and a waste bin, left there when the operator went on his lunch break! • We carried out the following pieces of work to resolve the issues; 1) Process improvement work in the tetra unloading bay to ensure that trailer turnaround was fully efficient and effective, and fully resourced at the right times of dayand fix of the petrol pump issue 2) The introduction of more effective debriefing whereby the driver had an opportunity to feedback where issues were occurring on his route that stopped him adhering to his schedule 3) Visual management at the key drop points on site that alerted drivers to call a number when certain conditions had been met (ie queues too long) in order that a task team could identify the issues the moment they occurred and fix them Problems that had been building up and worsening over several months were found to be rooted in a causes that were easy and inexpensive to fix. This discovery led to an appreciation of the power of a 'go, look, understand' approach for both drivers and planners. The measurement system was reviewed and changed as a result of the challenges we provided. This allowed teams to have much better understanding and control of performance enhancements. The implementation of a Telematix system followed the project to measure elements of the process critical to improvement that could not be done with current systems Within a month of activity we had cured the incoming logistics operation of their bottlenecks and got the operations to a point of stability understood by all • The intervention focused on the Tools and Techniques section of the Lean Business Model, using problem solving and simple visual management toolsto make improvements Mar 2009 April 2009