Track: Facilities Planning and Management

Abstract

Nowadays, the final customer requirements are more crucial and have taken a great relevance in suppliers, that relevance can be translate in quality, quantity and logistics efficiency. In this ambit, the logistics efficiency aims to load and send material to customer as soon as possible. So, the need to load and send material quickly have elevated in recent years. The deliver windows are getting shorter and the loading periods longer. We have identified an opportunity to reduce loading time of customize steel products such as profiles, sheets and coils.

Through our methodology inspired by the Deming cycle and lean logistics, we recognized different issues around the loading procedure. By applying lean logistics thinking, we were able to acknowledge and reduce time in every process that had waste in it. This paper proposes a step-by-step process of our intervention in the loading system and rearrangement of the warehouse. By reducing the waste of time, space and work force, we were able to reduce the loading time in 15% by preparing 10% of the future shipments. The occupancy of the warehouses were almost at full capacity. This resulted in the shutdowns of productive lines of 3.9 days per line per month because there were out of space. Another effect of the poor warehouse management was the shipments to external warehouses that resulted in extra costs.

By the standardization of the warehouse arrangement and process, we reduced the shutdowns of lines by 20% and the shipments to external warehouses by 15%.  With the previous improvements, we reduced canceled orders because of not on time delivery, an average of 4 per month, resulting in $315,790 dollars of extra profit annually. Finally, we achieved savings of $39,473 dollars annually of not sending material to external warehouses.