Dispatch – This distribution centre was handling a large volume of orders from across Europe, ranging from small parcels to pallet-size shipments (11,000 daily shipments). The kaizen delivered $360,000 of cost savings (by reducing freight costs, free-of-charge goods and 5 temporary employees). It also delivered an improvement to a key performance metric – On-time shipment (up from 95% to 99.8%) and a reduction of sorting errors from 17% to 0% of total volume. These results were achieved while the daily volume was growing by 10% and were sustained for well over a year.
Goods In – This department was handling 6 weekly plane loads as well as returned goods and packaging materials. Several pallets were not booked in on time resulting in stock outs for the order-picking areas. The kaizen delivered a 91% improvement to the daily number of customers who were impacted by stock outs (i.e. did not get their complete orders on time) from a daily average of 300 to less than 30. This kaizen received an award by the global parent company!
Returns – This department was handling returned goods from 14 different markets in Europe. It was struggling with a long standing backlog of 56 days. This resulted in daily complaints from customers refusing to pay their accounts and from customer services reps who had to handle customer complaints. A series of Kaizen and quick improvement activities resulted in a reduction of the backlog to a level of 0-3 days. This level was sustained. In addition, savings of $190,000 were achieved.
Re-packaging – This area was repacking certain product types for one key account. The team was struggling with a long standing backlog of 50,000 units (=67 work days) which was eliminated. The outcomes of the kaizen were praised by the key account logistics representatives and by the sales team.