01 Sep Logistics: Late Deliveries
A large logistics firm was sporadically missing deliveries to a large customer. In addition to hundreds of thousands of dollars in penalties, the firm was concerned that the contract would not be renewed based on the delivery failure rate.
eMRI trained and coached a Lean Six Sigma Belt through the project from start to completion. Simple data analysis showed that 80% of delivery issues were coming from a single pick line. Further analysis showed root causes were uneven replenishment and an unbalanced workload among pickers.
Revamping the replenishment process and balancing the workload among pickers resulted in the elimination of late deliveries for the past 4 months. Long-term process assessment is currently being undertaken.
Savings of over $275,000 in annual contractual penalties, plus improved probability of customer retention.