 As
part of an organization-wide operational transformation project for
a $16B California utility company, PRTM asked Bobby Jordan to lead
the receiving process improvement efforts at the utility’s primary
distribution center serving northern California.
The distribution center employed a legacy warehouse management
system (WMS) that was extremely limited in its ability to generate
useful reports for managing the receiving process, though valuable
raw data could be extracted. Bobby developed a daily process of
importing extracted data into Excel from WMS, using the V-lookup
function to segment the data into different major groups of receipt
categories, and summarizing the data in a pivot table. The pivot
table was then used to track daily cycle time averages, standard
deviations, and volumes for the different major receipt categories.
This enabled visual charting to track the team’s progress and
provide daily feedback for guiding decisions regarding the
improvement effort.
At the end of 12 weeks, by using the pivot table manipulated data
for guidance in implementing “lean” methods, the team managed to
reduce weekly average receiving cycle time from 62.77 hours to 36.63
hours, improve receipts per labor-hour by 24%, and deliver the work
stream to the client six-weeks ahead of the project schedule. This
landed Bobby the following praise from the Director leading the
transformation project:
"Bob, you've done a great job getting your team to today's decision.
I could not imagine a summer associate accomplishing more than you
have this summer."
Director
PRTM
Where Innovation Operates
The statistical significance of the reduction in average cycle time
was tested using an unpaired t-test implemented in Excel. The test
resulted in a calculated T-stat of 7.01 and a P-value less than
0.00, indicating that it is safe to reject the null hypothesis that
the two means are equal.
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