DELIVERY PROBLEMS AT

ANKUR BHARDWAJ (10P068)JAYANT BAHEL (10P081)

LOKESH HARNAL (10P086)MANIKA VERMA (10P087)

MOHIT AHUJA (10P090)SAMBHAV AHUJA (10P107)

ARROW’S HISTORY

Started as a local distributor in NYC in the 30s

Went public in early 60s, became 11th largest by 1968

Became 2nd largest by 1980 with nationwide presence

Centralized purchasing and distribution (37 warehouses to 4 PDCs)

Focus on growth through acquisitions 1992 – acquired Scheweber to became no.

1

ARROW’S ORDERING PROCESS

TYPE OF ORDERS

• Order contains one part number • Placed one at a time• Only two to three day’s notice, i.e

require same day shipping

One off order with short lead time

• Customer orders several times a week

• Lead time of two to three week before delivery was required

One off order with long lead

time

• Order contains many part numbers • Placed once a month• Products need to be delivered

weekly over a two to three month period

Multiple item orders with

varying delivery time

ANALYSIS OF ORDERS

Type 1 (One off order with short lead time) need to be shipped the same day

Type 2 and type 3, do they need to be shipped the same day?

Therefore, does it mean that type 1 orders comprised of 94% total orders before Schweber acquisition?

Premium freight paid for late orders

SCHWEBER ACQUISITION

Arrow acquired

Schweber in late 1991 for $ 150

mn to become the

no.1 distributor

Integrated their DOE system called

scratch pad

Schweber warehouse consolidatio

n completed in June 92

Order surge since

January 1992

Same-Day order

shipment slipped

from 93.1% in April 1992 to 78.7% in

May 1992; remained in the 70s and

80s ever after

CHANGES AFTER ACQUISITION

Average orders

94% efficiency

78% efficiency

July 91-Dec 91 86858 81646

Jan 92- Dec 92 1633811 127981 106197 Inference – Schweber may have more of

type 1 orders

PROCESSES AT PDC

Packing, weighing and shipping

Picking and placing on the conveyor for shipping area and confirming location in hand held terminals

Storing and entering storage location in hand held terminals

Receiving, unloading and entering information in Arrows computer system

PROCESS

PROBLEMS

Due to surge in orders, workers were taking procedural short cuts to speed up the process

ConsequencesSense of confusion, destroyed orderly flowDelayed parts already on the conveyor Increased chances of quality errors

Rush during evening hours i.e 3-7 pm Overtime for initial processes

POSSIBLE SOLUTIONS

Increasing

staff

• Pros – would be able to meet the evening rush and reduce overtime

• Cons – increase idle time and add onto operational cost

Tweaking UPS

system

• Pushing back the pickup time to 8:30 pm• Sending delivery van to UPS rather than waiting

Hire part time staff

• Pros – Hiring college interns to work during peak hours would ease up the delivery process and help in removing the current bottleneck

• Negative – Interns would require training and no guarantee of them staying for long

RECOMMENDATIONS• During ordering, categorize the

types of orders and assign daily delivery only to type 1 orders

• Use part time interns for a few months

• Push back the pickup time of UPS as it has a provision of picking up till 8:30

Immediate implementatio

n

• Determining the relevance of 94% delivery efficiency

• Automation of PDC processes to remove redundancy

• Integrating with ordering process using ERP technologies

Long term

ADVANTAGES OF RFIDSelectively apply the technology to improve

specific processes that are labor intensive or prone to creating delays or inaccuracies

Mobile readers are often advantageous to fixed-position models because they can be used for multiple applications

As applications grow, so does inventory visibility, which ultimately leads to lower inventory levels and more efficient supply chain operations

RFID IMPLEMENTATION

RFID IMPACT Receiving

Labor SavingsPallets automatically identifiedData read and transferred to Warehouse

Management SystemCross docking for immediate transportStorage and picking personnel (40% of

workforce) can then be deployed in receiving and packing & shipping

RFID IMPACT Putaway

Automatically associate stored goods with actual putaway location

Security/Documentation Unattended location monitoring

Picking Error-proofing the picking process

Shipping Can validate pallet loads and improve shipping

accuracy Asset Tracking

Track the shipping container with RFID, if the container is a returnable or reusable asset

Improve planning, reduce buffers and increase utilization

THANK YOU