Development of a targeted business process model

02_gazprom
Problem statement

The customer owns a warehouse and transport infrastructure (either let on lease or outsourced). The storage areas are equipped with rail, road and river access ways.

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  • Absence of typical process technologies
  • Excess of machinery and storage equipment; consequently, higher storage and handling costs for commodities and materials
  • Problematic arrangement and storage of commodities and materials
  • Excessive staff size, assignment of warehouse personnel to storage locations
  • Paper inventory records at warehouses; inability to ensure the due accuracy and promptness of warehousing operations
  • Low percentage of JIT deliveries of commodities and materials

  • Availability of undocumented rejects, unmarketable commodities and materials at warehouses

  • Low turnover of commodities and materials at warehouses
  • Manual drawing-up of reports in terms of various aspects, problematic online delivery of analysis reports
  • Lack of a staff motivation and control system

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Project objectives
  • Reengineering of business processes related to warehouse logistics
  • Calculation of the optimal staff size, machinery, warehouse equipment, layout of optimal storage areas

  • Standardization of storage handling technologies and the warehouse topology

  • Development of a commissioning strategy for new storage facilities
Stage 1: “AS IS” – review of current warehouse management processes on site (at the customer’s storage facilities)
  • Description of the current infrastructure capacities (breakdown by location, by types of facilities, by types of storage, by technical equipment, etc.)
  • Detection and description of bottlenecks in the infrastructure and technology of freight handling at storage areas
  • Review of commodity stock items (quantity of SKUs, groups, turnover)

  • Description of current logistics processes, detection and listing of inventory management bottlenecks (inventory capitalization and disposal, stock control, assignment of expiration dates, tracking unmarketable commodities and materials in stock)
  • Calculation of performance indicators based on current input data (ratio of storeroom utilization, ratio of unmarketable commodities to total inventory in stock, inventory ratio turnover, warehousing efficiency ratio in cash equivalent)
Stage 2: “TO BE” – development of the Warehouse Management business model
  • Classification of the storage areas and facilities, items, development of standards for warehousing operations, practical application of the classification
  • Guidelines for the use of warehouse storage technologies (bin location warehousing, shelf storage using different types of shelves, on-the-floor storage, mezzanines, identification of commodities and materials, ABC zoning, mixed batches of storage, standardization of packaging, etc.)
  • Use of recommended technologies in the context of warehouse processes “Receipt of commodities and materials”, “Arrangement and storage of commodities”, “Disposal of commodities and materials”, “Inventory procedure”, “Management of handling operations”
  • Recommendations for the use of information technologies and IT equipment
  • Recommendations for the use of storage technologies with respect to different types of commodities and materials (pipes, cable products, drummed products, scrap metal, valves, etc.)
  • Analysis and calculation of personnel and equipment parameters in accordance with the Customer’s strategic plans
  • Calculation of bin locations in accordance with the Customer’s strategic plans

Results

  • development of a targeted business model for warehouse management processes;
  • operational requirements for the warehouse management system (WMS) including the necessary WMS operations per each process type per each commodity group
  • successful development of a new warehouse start-up strategy

Implementation period: 6 months