The supply chain has been a hot topic for the past two years, to say the very least. Interruptions to standard supply chain logistics threw the whole world into an unprecedented moment of supply challenges as demand for certain items and components swelled.
Although the availability of these items and components has since improved, at least for the moment, supply chain specialists around the world are working to improve planning and processes in order to optimize supply chain operations for the present and the future.
Viraj P. Lele is currently an industrial engineer with DHL, specifically focusing on the company’s supply chain logistics at their Philadelphia location. During his time with DHL, Lele has implemented major improvements to various aspects of daily workflow that are saving the company both time and tens of thousands of dollars.
Lele has also published three research papers in the International Journal of Science and Research.
Our more techy readers will be delighted to hear that our interview with Lele provided an opportunity to discuss the specifics of several of his key initiatives with DHL.
We would like to hear about some of your improvement projects at DHL. Can you give us some examples?
Since my start with the company as an Industrial Engineer in January 2021, I’ve had the privilege of working with different teams across operations, inventory, and systems within the facility that handle liquor distribution for the entire Northeast region and central Pennsylvania.
Most of my projects have involved time studies of different processes. I have successfully implemented more than ten projects in the facility, which have all proved lucrative for site operations and maintenance.
My very first project was redesigning the layout of our charging stations. The existing size
of parking space in the charging area caused machines to be too closely parked, increasing the chances of operator injuries and machine or equipment damage. So there was a need to expand the current charging area.
I made use of Auto CAD software in the redesign. First, the entire charging area was marked for the issues we were facing.
The charging area was not efficiently utilized and had more open space with all the machines cramped together in one region. The goal was to spread out this area to improve the safety of operators and machines, and to mitigate numerous issues.
We decided to increase the parking spaces to six feet and five inches, which gave us more charging stations and increased the distance for riders to get on and off the machines, which addressed safety concerns.
The implementation of this new layout provided us with a total of seventy-six new parking spots in comparison to the 60 parking spots the company initially had.
That’s just one example, of course. I can touch on some others as we go along.
That would be great. But first I’d like to ask how you go about assessing the need to improve certain processes.
A good overview of the company is necessary for successfully carrying out different projects
within that company. In my case, assessing the need to improve a process is mostly based on two factors: the immediate need of the business/operation making it mandatory to initiate a change, and the analysis of existing processes to find better alternatives by doing floor studies.
Let me explain each one of the above points through another real-life example.
One of the most crucial projects I worked on was related to our replenishments. In the late months of 2021, the company acquired a business to provide its logistic services catering to regions in the Eastern and Central belts of Pennsylvania. We used to serve only the Northern and Central Philadelphia area, with an average picking of 20,000 cases/day. With the new region and an expanded area to cover, the average daily picking count was now 55,000 cases. One of the bottlenecks in the operations was performing the RCHs (the replenishment tasks that are created every day to replenish cases in Hand Stack (HS) and Case Flow (CF) locations) in time to have our picking start early to meet the daily count.
The purpose of HS & CF locations is for low-volume SKUs so that these low-volume SKUs do not acquire bigger locations which are meant for heavy-volume SKUs.
When we performed our velocity analysis, we observed a high number of heavy-volume SKUs
were directed toward CF & HS locations, causing the RCH count to rise every day. The repercussion of this was huge when we had higher volumes to pick with many SKUs taking up the CF & HS locations.
A high number of RCH counts caused our replenishments to happen until 10 AM in the morning on a regular day and until 12 noon on a high pick day. This affected our case picking and led to delays in loading trailers.
This problem had a huge impact, especially during peak season when replenishments happened until noon and increased overtime hours of associates along with delaying loads.
To mitigate this issue, I decided to study the picking pattern of each SKU to identify its velocity,i.e how often in a month it gets picked and which locations it occupies. The goal was to reduce the number going to CF & HS locations and thus reduce the RH count.
I collaborated with our systems team and we created a velocity master tool to identify the cases picked for each SKU over the previous year. This tool proved lucrative in identifying the high-moving SKUs which take up the CF & HS locations, thereby increasing our RCHs.
I slotted all these heavy SKUs in bigger locations and all the low-picked SKUs were kept dynamic to occupy a one-pallet-deep location, thereby reducing the RCH count.
The average RCH dropped from 842 in Dec’21 to 439 in Feb’22. Further, the RCH numbers dropped to an average of 215 in May 2022. From the SKU performance perspective for a case pick of 20,000, the facility generated 842 RCHs, whereas due to the improved slotting the RCHs generated were dropped down to 215 for a case pick of 55,000. This meant <0.5% of RCH accounted for the total cases picked in a day. There was a reduction in RCH by 74% since Dec ’21.
This helped our tasks complete around 5:30 AM instead of 12 noon, which saved a whopping 6.5 hours per day of operational time. As a result, case-picking tasks were completed on time and even the loading was done on time, removing all the previous operational issues with overtime and loading.
The operational cost significance of this project saved us nearly a million dollars per year by eliminating overtime and providing on-time delivery of our goods to stores.
What has it been like to get an inside view of how DHL operates? Was it at all different than you expected?
Coming from an Industrial engineering background, DHL surpassed all my expectations. I had worked on supply chain and manufacturing projects in the past, but getting hands-on in a fast-paced facility is a different experience.
My experiences with DHL have allowed me to explore different aspects of the supply chain. The company also treats its employees like valuable assets and focuses on their growth.
From my first day, I was given a good overview of how wide-reaching the company is and the various pillars it supports.
As a global supply chain provider, the company provides supply chain solutions to big brands such as Johnson and Johnson, Bayer, GSK, Sanofi, Nike, Primark, Lego, Carhartt, e-commerce sites such as ASOS, BooHoo, Wayfair, liquor sites, and this is only what they handle in North America.
This is my first experience with such a vast organization, and it’s been a highly rewarding and informative experience.
Do you feel like your current work frequently benefits from your prior work and research experience?
Yes, most certainly. The background of research, root cause analysis, and time studies is helping me in my daily tasks at DHL. From a professional view, I think every individual’s prior work experience will have some lessons that will be implemented in their next role, and that’s certainly been the case for me.
It reminds me of the saying, “No experience ever goes to waste. All the experiences come in handy at different stages in life.”
How frequently should companies like DHL be looking for opportunities for optimization?
There’s a famous saying, “Change is the only Constant”. This applies not only to people but also to industries, especially in today’s world where the market is fickle. Big names such as DHL are thriving today in the current scenario because of their ability to adapt and change.
With changing customer needs and markets, companies need to adapt to new opportunities for optimization to retain their customers. I would like to provide an example of one of my projects in supporting this argument as to how changes in the business and customer requirements changed the dynamics of our site, which needed Industrial engineers like me to test and implement a new workflow to support our operations.
With the onboarding of the new business mentioned earlier, our picking rate increased from 20,000 cases to an average of 55,000 cases. This required us to change our labor plan and hire more associates. With new associates coming in, we had to revise our entire training module to train people in less time.
I started with my time studies on the amount of time it takes for the runner to move the pallets from audit to wrappers and the stager from the wrapper to staging lanes in order to determine what should be the optimal number of people at each station. Further, the wrapping time was also incorporated. I calculated all the times without any waste (ideal scenario) from the observations made on the floor. I used a technique called Line Balancing to determine task times to find out how many stations would be needed, and how many associates to assign to each station.
The results from Line Balancing analysis suggested removing the labeler and assigning him as a stager, since there was an overlap in the staging process when the pallets were being wrapped.
This eliminated redundancy and increased the number of Stagers as the time travel for stagers was more than for Runners. The Stagers were asked to label their pallets, thus removing the need for a labeler. This whole setup consisted of 2 runners and 4 stagers who were also performing labeling as well. The flow of this setup was so streamlined that the bottleneck was completely eliminated along with the elimination of the idling labeler.
This project was implemented within two weeks and provided us with a savings of 360 minutes per day, which amounted to $80,000 in operational cost savings.
To prove my point in simple words and to answer the question, companies like DHL should be looking for opportunities for optimization on a daily basis.
Do you have plans to publish additional research papers in the near future? Are there any specific topics you’re considering?
As opportunities come, yes, I would like to perform research and publish my work on the newer projects I will be working on. As the field of supply chain and manufacturing progresses with cutting-edge technology, there is a huge scope for Research & Development.
With respect to my work, I’m currently working on improving the training modules within our facility and coaching supervisors on these new models. These include the preparation of training videos highlighting the intricacies of different job functions at the site along with preparing their Job Instruction Sheets (JIS). These models are a part of my new project in training the trainers and supervisors so that we impart the best possible learning cases to the new associates we hire.
I’m also working with our case pickers on productivity improvement methods with my time studies, which may lead to some future papers.
Have you observed any major supply chain-related improvements at other companies or industries recently?
I have been actively reading the news and following certain companies to learn about their advancements. Companies have been improving their inventory strategies, providing 3PL services, as well as increasing their presence by covering various locations in a particular geography which increases their reach to the audience in each region.
Many other industry giants are bringing automation to their pick-pack and delivery, with some even delivering products with drones. Bed Bath & Beyond improved its freight by opening up distribution facilities providing two-day shipping to the majority of its stores. They also improved their inventory models by sourcing items from manufacturers directly and shipping more volume through a strong network of suppliers.
Footlocker implemented a feature where associates in-store help customers locate specific items in other nearby stores and ship those items to the customer’s home or arrange for pickup in another store.
One of the prominent developments is Amazon’s delivery drones. It is almost in its completion phase and customers in Lockeford, CA will be among the first ones to benefit from the program.
Amazon Prime Air has been working on drone delivery for over a decade. They have been developing not just one but four different designs based on the safe delivery of packages to customers’ backyards.
So there are many exciting advancements, and I look forward to seeing even more innovations in the future.