Aurora ELP Processing System Improvement Project
- 1. Theme: Achieve continuous-flow ELP processing from customer order to final delivery. •Consistently fulfill our commitments to Weyerhaeuser customers •Improve workload balance for both sales and operations departments •Add capacity by reducing waste in the processing system AURORA ELP IMPROVEMENT PROJECT Current Condition: Operations •This project supports Weyerhaeuser’s Project Alpha initiative •Orders “leap-frogged” during the order-to-delivery cycle, causing systematic errors. •12 to 15 + two temporaries used in yard activities. •25% overtime •28,000# truckloads •Transaction timing and sequencing creates delays in the OTD process. •Printing early •Un-timely inputting of sales orders and inputting of completed work orders Function Typical Time Phone call/fax to order input 408 min. (call/fax avg.) Order entry to Printed work order 1211 Minutes Printed work order to loaded truck 1628 minutes Loaded truck to shipped 585 minutes Transit Time to Customer 300 minutes Total Order-To-Delivery Time 4132 min. (2.9 days) Current Condition: Sales •Sales team structure is horizontal and not conducive to good sales/processing communication. •Processing Volumes not well dispersed hour by hour and day by day, resulting in uneven use of capacity: •Significant dwell times exist resulting in slow response to customer requests Previous Image Implemented Image 1. Ops. manager prints all work orders for following day at 5:00pm. 2. Work orders sorted by product type and given to yard “specialists”. 3. Specialists pick and cut inventory based on individual work orders. 4. Specialists transfer inventory to staging area and sort by product type. 5. Loaders pull work orders by truck and sort and load inventory by order/truckload. A truck load may have more than one product type. 1. Ops. Manager prints 1 truck’s worth of work orders at a time starting at 12:00 noon and distributes to team (2-4 people per truckload). 2. Workers pick, cut and load 1 truck at a time. 3. Loader helps load trucks. 3 Days 2 Days OSROSR OSR OSR OSR OSR OSR ISR ISR ISRISR ISR ISRISR CSR •Sales process not driven by quantitative goals. •Operations capacity not visible to sales operation. Previous Sales Structure OSROSR OSR OSR OSR OSR OSR ISR ISR ISRISR ISRISR CSRCSR CSR Team 1 Team 2 Team 3 Implemented Sales Structure: •Vertically oriented by product group •Proactive selling •Visual control Order Taking Order GENERATING Countermeasures: •Organize ELP processing methods with outbound truck loading •Establish continuous “small batch” processing methods among yard operators •Reconfigure shift start times to eliminate dwell time of customer orders •Create visual “load control” board for sales operation to plan available capacity •Re-organize sales team to utilize skills and product characteristics Benefits: Total savings of $615,000 in ’14. Expected margin increase of two (2) points. •Removed one full day of lead time (2.9 days to 1.9 days) •Load control board resulted in improved load density by 25% (28,000 lbs to 35,000 lbs, approx. $240,000 annual savings) •$210,000 annual labor savings (reduced from 12-15 +2 temps to 9 + 1 temp.) •$165,000 annual overtime reduction from >25% to <10%. ($15k/person annually vs $6k/person annually, 15 people vs. 10 people) •Inventory accuracy has improved (less time spent searching for product) •Processing accuracy improved (less time spent fixing bad orders) •Vertically integrated product teams will create extra capacity of approx. 30%+ for increased future sales (measurement due Summer ’05, expected benefit to exceed two (2) margin points) Next Steps: •Continue development of sales team •Implement “small batch” processing in the Naperville warehouse •Establish “Office of Continuous Improvement” to leverage knowledge and skills of Aurora personnel •Consider consolidated inventory management strategy amongst Great Lakes Region Timeline: ID 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Sales Team Facilitation Develop metrics Improve Capacity Coordinate with warehouse Small Batch Processing (Naperville Whse.) Evaluate Plan Implement Office of Continuous Improvement Select Team Train the trainer Begin projects Centralized Inventory Management Strategy Study Plan Implement 1/16 1/23 1/30 2/6 2/13 2/20 2/27 3/6 3/13 3/20 3/27 4/3 4/10 4/17 4/24 5/1 5/8 5/15 5/22 5/29 January February March April May 0 20 40 60 80 100 120 140 160 180 Mon Tue Wed Thur Fri # of work orders 0 1 2 3 4 5 6 7 8 Hour 1 Hour 3 Hour 5 Hour 7 Hour 9 Hour 11 # of work orders David Sheehan
- 2. Sales Customers Faxes distributed E-mail Queue Orders Inquiries Quotes Entered Order Odyssey Queue EDI Sales Support Release Order Manually or auto send confirmation Phone/fax/e-mail Sales Process Order Printed Staged in bins Handed to cutters Order processed Staging Order recorded Loads created ShippedLoaded ELP Process Phones Arrival 408 Minutes 1211 Min. 1628 Minutes 585 Min. 4132 Minutes, or 2.9 days 300 Min. Current Image