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ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
EXECUTIVE SUMMARY
The internship was carried out in MH Alshaya, a Middle east based retail
and franchising company. The project was allotted in the logistics
department, group freight division. The internship was carried out in 4
project areas.
1. Freight Conversion
2. Group Freight Dashboard
3. Shipping Guide
1. Freight conversion
The project was part of cost cutting initiatives promoted by the top
management as a counter measure against economic decline. The
logistics department wanted to use marine freight instead of air freight
for transporting consignments from different supplier countries like
United Kingdom, China, India, Pakistan, Bangladesh, Singapore, UAE,
Hong Kong, Brazil, United States etc. to different gulf countries like
UAE, Kuwait, KSA, Bahrain, Qatar, Egypt, Lebanon Morocco etc.
The freight consisted of finished consumer goods e.g. Apparel and
furniture, semi-finished products e.g. Food items and miscellaneous
products like shop fittings, non-stock items eg. Hanger, tags, pallets
etc. and documents e.g. Brochure
There were 4 major brands selected by the division to carry out the
project for
1. Mothercare
2. River Island
3. Next
4. Aurora
The scope of the projects:
1. Propose most cost effective and adaptable supply models using
marine freight
2. Evaluate proposed models in terms of cost benefit and lead time
increase
3. Identify challenges and supply chain implications for different
models
4. Develop roadmap for implementation
The current scenario was analysed and freight volumes were simulated
for proposed models to find out the cost savings.
Estimated savings from freight conversion were calculated around $ 3
Million for all 4 brands ie. Approximately 65% cost reduction.
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
The project involved dealing with 3PL, shipping teams, brand teams
and clearance agents. It was required to recommend changes in
inventory control measures and replenishment techniques that will suit
the lead time impact in proposed models
2. Reporting Dashboard.
Logistics department deals with multiple supply partners, these supply
partners need to be aligned with the planning of top management and
must perform with required standard.
The different supply partners under consideration are
1. Third party logistics
2. Custom clearance agents
3. Third party warehouses
4. Finance team
5. Shipping teams
It was required by top management to take decisions regarding these
partners and activities performed by them, to correctly assess their
performance KPIs were needed to be updated and presented in a
manner that compares them within different dimensions to provide a
thorough but precise picture of group freight activities and spending.
It was also required that the performance and freight spent to be
compared with industry averages to ease benchmarking and ensure
that best practices are being effective to enhance the efficiency of the
supply network
Objective
To design a dashboard that provides:
A. Top view of logistics activities
B. Freight spent
C. To increase the visibility of performance of different stakeholders of
logistics department
Scope:
A. To identify and understand the primary freight activities that have
direct impact on freight performance.
B. Understand the data available on such activities and design KPIs
C. Design freight spent metrices that separate out opportunities and
threat for freight department
D. Design a dynamic layout for representing all the KPIs , Metrics ,
charts to the executives
-The project was part of top management decision making strategy,
it was to be used as an aide for top management in following areas
A. Gauging performance of supply chain partners in the areas that
directlt impact the supply chain capability in terms of
responsiveness and cost effectiveness.
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
3. Shipping Guide
Group freight division have 550+ staff that carry out day to day
operations of shipping, the knowledge base of this staff is limited and
no formal training is available to ensure that they are educated
centrally and their working is aligned with each other as well as best
practices followed in Industry
Objective
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
COMPANY BACKGROUND
Overview
As one of the most dynamic and successful retailers in the region,
Alshaya Retail franchises some of the world's best known brands,
making them flourish in new markets, from the Middle East and North
Africa to Russia, Turkey and Europe.
Alshaya operates across a uniquely wide range of sectors, offering
consumers the latest and best recognised names in Fashion &
Footwear, Food, Health & Beauty, Pharmacy, Optics, Home Furnishings
and Leisure & Entertainment.
With brands such as Starbucks, H&M, Mothercare, Debenhams,
American Eagle Outfitters, P.F. Chang's, The Cheesecake Factory,
Victoria's Secret, Boots, Pottery Barn and KidZania, our multi-brand,
multi-market franchise portfolio brings leading retail concepts to local
malls and high streets and ensures the delivery of a truly international
shopping experience.
With unparalleled regional expertise and marketing knowledge,
Alshaya's dynamic performance has been driven by continuous
investment in talent, infrastructure, operational excellence, and by our
ambition to be a world-leading retailer. Through a spirit of trust, cooperation and best practice, we continue to build long-lasting,
professional and mutually profitable business partnerships.
The breadth of portfolio, understanding of business and consumer
needs, and ability to deliver integrated development plans at pace key
competencies of the company.
History
Alshaya Retail is part of the wider group of businesses owned by the
Alshaya Group, a family-owned business which was founded in Kuwait
in 1890 and which has become a byword for trading and commerce,
both in the Middle East and internationally.
Between the 1960s and 1970s the group expanded substantially and
today owns a portfolio of businesses in real estate, construction,
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Management
Alshaya's retail division is organised to support the mutual needs of
our business and those of our brand partners. Our management
structure is based on internationally recognised models whilst
allowing for cultural adaptability and regional flexibility.
Under the guidance and leadership of our Executive Chairman, the
business is led by our Chief Executive Officer. Each of the brands
within Alshaya sits within one of seven business units: Fashion &
Footwear, Food, Health & Beauty, Pharmacy, Optics, Home
Furnishings and Leisure & Entertainment. Each brand is led by a Vice
President or Business Director. Ultimate brand responsibility and P&L
accountability sits with business unit Presidents who report directly
to the CEO.
Each brand has its own team, structured to the individual needs and
scale of that business but typically including Business Directors,
Brand Managers and Operations Managers. These teams are
responsible for delivering the business proposition in keeping with
the franchise partner framework, and in line with Alshaya's retail
strategy.
Regional Managing Directors, reporting to the Chief Operating
Officer, support our individual operating regions: the Middle East
and North Africa, Russia, Turkey and Europe. Local country teams in
our markets ensure that operations are appropriately managed in
line with local infrastructure.
Markets
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Infrastructure
Our 2,800 stores are the engine of our business. Timely supply and resupply keep our stores fresh and ensure customer satisfaction. This is
essential in a dynamic sector where buying habits, markets and trends
can change almost overnight.
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
4000
3000
2000
1000
0
Air
Marine
1 Shipment
5 Shipments
522
750
832
998
10
Shipments
1543
1290
323
534
678
231
189
193
27
15
13
1853
2568
3617
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
* All figures in USD
# data from
These two factors means that a very high cost savings can be
achieved if we use marine freight and consolidate material from different
brands, these two possibilities makes the project a major force for cost
saving plan of group freight division
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Problems:
3PL which is not performing well can be shown in green region if number
of shipments were lower in that month
The KPIs don not compare performance with respect to previous month,
previous year or YTD, thus do not allow us to track trends
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Brand teams
Shipping staff
3PLs
Custom clearance agent
Finance team
COO
3. Shipping Guide
Logistics division have 550+ staff that carries out ground level
activities. These activities are:
1. Packaging
2. Pallet loading
3. Container loading
4. LCL/FCL decision
5. Documentation
6. Warehouse storage and retrieval
These are the ground level activities that directly impact supply
chain performance, because of lack of centralized training these
activities are carried out inefficiently in a misaligned manner
A literature is required that can be used to educate staff about
best practices that will be followed throughout the supply
network.
Shipping guide aims at solving following:
A. The management is aware that the shipping team is not able to
use best practices of shipping because of lack of communication
and education among shipping staff. The guide will help the
shipping teams to carry out freight activities efficiently.
B. To align the activities by standardizing shipping activities
C. Various tools will be provided to shipping staff that will aide in
increasing efficiency of freight activities
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
LITERATURE REVIEW
1. Freight Conversion
The freight is transported through air, marine and land routes. The
marine routes are very economical and usually 80% cheaper than
air freight but have a massive impact on lead times. In fashion retail
lead times are pivotal, to reduce cost and minimize impact on lead
times, supply routes are studied in detail. The data is provided by
3PLs in their rate cards.
2. 3PL Third Party Logistics
The logistics activities are outsourced to Logistics Company eg. DHL,
Aramax, Allport, DB Schenkers, Agility etc. The 3PLs work under SLA
and charges according to Rate cards provided by them
3. Rate Card
The rate cards are provided by the 3PL during contract and charges
all freight activities according to the same. 3PL provide the records
of all charges corresponding to individual shipments in their
shipment trackers
4. Shipping Trackers
Data provided by 3PL that contain details of shipments e.g. date,
volume, weight, costs associated, delivery day etc.
5. Clearance Agent
To clear the customs in international freight, the custom clearance
activities are outsourced to other.
6. LTL/FTL
Less Than truckload The Company do not rent the whole truck but
only transports small quantity. The LTL shipment is charged
according to volume.
Full Truck Load - The Company hires the whole truck and 3PL
charges as a complete truck
7. LCL/FCL
Less than container load and full container load
8. Chargeable Weight
3PLs charges according to chargeable weight which is the greater
one of volumetric weight or actual weight.
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
9. Consolidation
Combining material from different location as one consignment to
ship more economically.
10.
Cross Docking
Quick pick up and dispatch of material without any storage in
warehouse.
11.
FOB
Logistics from supplier yard to origin port
12.
Group Freight Dashboard
KPI: Key Performance Indicators
Indicators that gives us one number to gauge the performance of
stakeholder in key areas that are critical to successful operations
Important KPIs in MH Alshaya logistics
1. Air KPI: Door to Yard Lead time
2. Marine KPI: Transit time port to port
3. Road KPI: Transit Time
4. PO closing performance
5. Invoice closing performance
6. D/O Handover time
Metrics
Important measures that are key to understand freight activities
1. Freight Cost per Unit
2. Freight cost as percentage of Costs of goods sold
3. Mode optimization
4. Route economy
13.
Shipping Guide
Container
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
M.H. ALSHAYA
NATIONAL INSTITUTE
OF INDUSTRIAL ENGINEERING
d(S) = min{d(a, c), a vertex of S, c vertex of container C}
For instance, if we have the maximal-space S1 = {(4, 4, 2), (6, 6, 10)} in a
(10,10,10) container, the corner of S1 nearest to a corner of the container is
(6,6,10) and the distance to that corner is d(S1) = (0, 4, 4). At each step we take
the maximal-space with the minimum distance to a corner of the container and
use the volume of the space as a tiebreaker.
If we have a second maximal-space S2 = {(1, 1, 2), (4, 4, 9)}, we have dist(S1) =
(0, 4, 4) and dist(S2) = (1, 1, 1). From among these spaces we would choose
space S1 to be filled with boxes. At each step, the chosen space will be denoted
by S. The corner of the maximal-space with the lowest distance to a corner of
the container will be the corner in which the boxes will be packed. The reason
behind that decision is to first fill the corners of the container, then its sides and
finally the inner space.
Step 2: Choosing the boxes to pack
Once a maximal-space S has been chosen, we consider the types of boxes i of
B fitting into S in order to choose which one to pack. If qi > 1, we consider the
possibility of packing a column or a layer, that is, packing several copies of the
box arranged in rows and columns, such that the number of boxes in the block
does not exceed qi. In Figures 3 and 4 we can see different possibilities for
packing a box type i with
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M.H. ALSHAYA
NATIONAL INSTITUTE
OF INDUSTRIAL ENGINEERING
qi = 12. Figure shows alternatives for packing a column of boxes, while in Figure
4 we consider different ways of packing a layer with this box type. If some
rotations of the pieces are allowed, the corresponding configurations will be
considered.
M.H. ALSHAYA
NATIONAL INSTITUTE
OF INDUSTRIAL ENGINEERING
again the lexicographical order. We can see an example in Figure 5, in which we
consider several alternatives for filling an empty space of (20, 20, 10). The
block (a) completely fills the space and its distance is (0,0,0); the block (b)
completely fills one side of the space and its distance is (0,0,9); for the block (c),
only its height matches the space height and its distance is (0,2,7); finally, none
of the dimensions of block (d) matches the space dimensions and its distance is
(2,2,3).
For both criteria, ties are broken by choosing the configuration with the minimum
number of boxes. In Section 4 we test both criteria and make a decision about
which one will be used in the final implementation. After choosing a block with ri
boxes, we update P with the type i and the number of boxes packed and set qi =
qi ri. If qi = 0, we remove piece i from the list B.
Step 3: Updating the list L
Unless the block fits into space S exactly, packing the block produces
Cross-docking
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Cross Docking
FCL/LCL Decision
Factors to consider when sending marine shipment
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Use the facts and ask "So what?" to determine all the
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
great
strategy
to
adopt
is Kaizen
or
continuous
improvement. This is the idea that continual small changes create better
systems overall. Kaizen also emphasizes that the people closest to a
process should identify places for improvement. Again, with Kaizen alive
and well in your company, the root causes of problems can be identified
and resolved quickly and effectively.
Key Points
Root Cause Analysis is a useful process for understanding and solving a
problem.
Figure out what negative events are occurring. Then, look at the complex
systems around those problems, and identify key points of failure. Finally,
determine solutions to address those key points, or root causes.
You can use many tools to support your RCA process. Cause and Effect
Diagrams
and 5 Whys
are integral to the process itself,
while FMEA
and Kaizen
future.
As an analytical tool, RCA is an essential way to perform a comprehensive,
system-wide review of significant problems as well as the events and
factors leading to them.
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
METHODOLOGY
1. Freight Conversion
Project requirement:
To design supply networks for multiple brands according to the
requirements specified by individual brand or director, Logistics
The process followed to design supply network was as follow
U n d erstan d
su p p ly
n e tw o rk to
u n d erstan d
rou tes
Prop o se
A lte rn a te
m od e ls
S im ulate
M od e ls
Fin d co st
sa vin gs,
im p lica tio
ns.
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
27 | P a g e
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Freigh
t
Costs
Stora
ge
cost
Clear
ance
cost
Freight
Costs
Desti
natio
n cost
Demu
rrage
cost
Origin
cost
20 Pallet
standard
shipment
Brand 2: Next
Units
1924
CBM
1,199,
019
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Vol/we
ek
37 CBM
Freight FCPU
cost
2,110,274 1.76
Consolid
ated
1539
Seperat
e
385
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Sh i
pm ent
U
A E
Kuwait
KSA
Q
a
V
olum e
tar
B ahra
in
L
eba
non
Possible Supply
routes
Rate
Cost
Cards
understanding
3PL
Route feasibility
Intervie
Possible challenges
w
Consoliation feasibility
Shipme
nt
Market wise
breakdown
tracker
20 ft Standard container
40 ft standard Container
40 Ft high cube container
LCL shipments
FTL Shipment
LTL Shipments
Scheduled according to
shipment data from tracker.
Freight cost calculated from
rate cards
Shipment schedule in
proposed model
Step
5:
Recommendation
Brand 3: Aurora
29 | P a g e
Cost savings
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
2. RCA: Performed root cause analysis to find out what the root cause
to track.
3. Derive KPIs & Metrics: Understand trends of the root causes to make
sensible KPIs out of them
The KPIs Metrics and representing charts were framed in a
dashboard of two pages that contains what management should
know to make decisions
Step 1: Identify critical activities
Interview top
management for
understanding key
problems
Output:
1. the process flow of key activities that directly impact the supply chain
and are a matter of concern
2. Ground level challenges in performing key activities
3. Understanding of key sub-activities
Step 2: Root cause analysis
1.
2.
3.
4.
5.
Rating
scheme
Modelling to
identify root
cause
3. Shipping guide
Identify shipping
activities that
effect supply chain
31 | P a g e
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Efficient packaging
Cost reduction through packaging
TRACKER
MODEL 1
MODEL
32 | P a IMPACT
g1
e
MODEL
2
MODEL
3
MODEL
MODEL
32
IMPACT
IMPACT
ACTUAL
SIMULATE
COSTS &
D COSTS
LT
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Marine shipments
Consolidation
Freight costs and break down
Market wise costs
Mode wise costs
Model 1
Model 2
Model 3
Frt.
Costs
X1
Y1
Z1
LT
Savings
X2
Y2
Z2
X3
Y3
Z3
Consolidat
ion
X4
Y4
Z4
Schedule
X5
Y5
Z5
Compari
son
X6
Y6
Z6
The analysis was carried out for multiple brands, the top rated three
initiatives are illustrated
Potential Savings
Potential savings are calculated by merging forecast for this year adjusted
according to deviation in quarter 1 forecast and actual value
Forecast model
Forecast for Month i = Fi
Actual shipping volumes for Month i = VolAi (i=1-4)
Adjusted forecasts for Month i = Vol i (i=5-12)
33 | P a g e
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Volumes - 2015
100
80
60
40
20
0
Volumes
10
7
5.5
Consolidati
on
10
17
23.5
Consolida
ted
0
0
0
7.35
4.9
5.6
12.3
10.1
2.4
4.9
10.5
22.8
0
2.4
Date
Ch WT
CBM
01-01-2015
02-01-2015
03-01-2015
1670
1169
918.5
1227.4
5
818.3
935.2
2054.1
1686.7
400.8
04-01-2015
05-01-2015
06-01-2015
07-01-2015
08-01-2015
09-01-2015
na
na
na
Freight
cost
0
0
0
Origin
cost
0
0
0
30.65
545
332
0
0
0
32.9
0
na
na
na
A
na
0
0
0
545
0
0
0
0
332
0
Class
Formula
Consolidation: =IF(E57<25,D57+E56,0)
Simulating shipment: =IF(F57=0,"na",IF(F57>33,"B","A"))
Cost calculation: vlookup
34 | P a g e
Descripti
on
Origin Cost
per
wt
per
shipment
Freight cost
per
wt
per
shipment
Destination
Costs
per
per
wt
shipment
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
A
FCL 40
0
FCL 40
B
0
HC
C
FCL 20
0
D
LCL
5.6
E
FTL 20
0
F
FTL 40
0
FTL 40
G
0
HC
H
AIR
17.3
NATIONAL INSTITUTE
160
560
1.2
122
160
560
1.2
122
120
35
120
160
0
40
0
0
480
0
350
390
1.2
1.2
1.2
1.2
98
90
98
122
160
390
1.2
122
267
213
1.2
98
Market
Origin
Cost
Current Model
Air
Freight
Clearance
Cost
cost
UAE
KSA
Kuwait
Qatar
Egypt
Bahrain
Lebanon
Morocco
Turkey
35 | P a g e
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Proposed Model
Market
UAE
KSA
Kuwait
Qatar
Egypt
Bahrain
Lebanon
Morocco
Turkey
Air
Freight
Cost
ya
Yb
Yc
Yd
Ye
Yf
Yg
Yh
yi
Origin
Cost
Xa
Xb
Xc
Xd
Xe
Xf
Xg
Xh
xi
Clearance
cost
za
Zb
Zc
Zd
Ze
Zf
Zg
Zh
zi
Origin
Cost
Xa
Xb
Xc
Xd
Xe
Xf
Xg
Xh
Xi
Road
Freight
Cost
ya
Yb
Yc
Yd
Ye
Yf
Yg
Yh
Yi
Comparison table
Comparison
Market
UAE
KSA
Kuwait
Qatar
Egypt
Bahrain
Lebanon
Morocco
Turkey
Absolute
CSa
CSb
CSc
CSd
CSe
CSf
CSg
CSh
CSi
FCPU
CSa;
CSb;
CSc;
CSd;
CSe;
CSf;
CSg;
CSh;
CSi;
CSa
CSb
CSc
CSd
CSe
CSf
CSg
CSh
CSi
CSa;
CSb;
CSc;
CSd;
CSe;
CSf;
CSg;
CSh;
CSi;
36 | P a g e
Mothercar
e
Current
Proposed
2017
Potential
Freight
Cost
$160000
$80000
$56000
FCPU
$1.1
$0.55
$0.62
Clearance
cost
Za
Zb
Zc
Zd
Ze
Zf
Zg
Zh
Zi
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Using road freight translated into 50% cost savings over air freight in
single route network.
NEXT cost savings table
Current
Proposed
2017 Potential
Freight Cost
$2 mn
$0.6 mn
$1.4 mn
FCPU
$1.76
$0.32
$1.44
The total cost savings are around 70% for supply network with ocan
freight and road freight combinations.
Aurora cost savings table
Current
Proposed
2017 Potential
Freight Cost
$1.2 Million
$0.93 Million
$0.82 Million
FCPU
$0.92
$0.72
$0.2
Aurora brand was reworked with air freight and road freight combination
The multi brand consolidation at origin and milk run pickup model also
derived cost savings of 7-10%
Total cost savings cumulated to 22%.
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
Problem
Source
R
C
A
Source 1
Root
Causes
Source 2
R
C
KPIs
D
A
T
A
Metrics
Dashboard
Source 3
Generation of
costs
No. of activities
15
Associated
activities
Documentati
on
Generation
of costs in
time
Activities
rating
10
Data entry
Re-Routing
Causes
D/O handover
Invoice
generation
Original
documents
handover
Data input
Data correction
Re-routing
Decision
Re-routing
Cause
rating
5
Total
Rating
50
50
40
4
5
12
15
38 | P a g e
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
KPIs Identified
NA
Asia
Euro
3PL
Aramax
DGF
DB Schenkers
Evergreen
Allport
Aramax
DGF
DB Schenkers
Evergreen
Allport
Aramax
DGF
DB Schenkers
Evergreen
Allport
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NATIONAL INSTITUTE
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
FUTURE SCOPE
1. Marine Freight Conversion
A. Cost savings power house with minimum 60 % cost saving
When shipping teams opt for marine freight it usually results in
cost savings of around 80%. Around 80% of the inventory in
fashion footwear division is continuity stock which do not require
low lead times, and can be served by inventory holding model.
If the 80% of continuity stock is identified correctly it can be
transported through economic marine routes instead of
unnecessary air freight
Seasonal stock can be kept on current model, with 20% volumes
and 80% of revenue
Thus multiple models in parallel working can drive high cost
saving with zero impact of higher lead time
B. More efficient replenishment system for Local Distribution Centre
With 80% continuity stock in inventory holding model, the
replenishment of continuity stock in stores will take very low time
as each LDC will hold inventoy according to the order cycle
C. Proposed inventory classification that may be beneficial to save
cost savings in other parallel projects
D. Brands have multiple models available that can be used
simultaneously according to need to always have most suitable
and economical mode of transporting.
2. Group Freight Dashboard
A. Overview of whole freight spent at managers fingertips
B. Ease in communicating relevant figures to other stakeholders
C. Observing early signs of failure
D. Finding improvement opportunities
E. Tracking improvement initiatives
F. Validating figures propagated by stakeholders
3. Shipping Guide
A. Educating shipping staff about best practices
B. More tools like freight calculators are proposed that will help in
following best practices
C. Interactive videos based on findings of the project can be
produced
D. The process followed in identifying best practices can be
replicated to find other solutions
LIMITATIONS
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
SLA
Avg. LT
Aramax
DGF
Allport
DB
Schenkers
5
5
5
5
4.9
3.2
5.1
7.9
Completio
n
100%
87%
0%
30%
No.
shipments
1
125
1
145
of
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
ACADEMIC CONTRIBUTION
During the course of internship as part of my project I was able to
experience and implement theory in practice in following areas:
1. Consolidation
To benefit from economy of scale it was required to consolidate
volumes from different suppliers as well as different delivery
schedule dates.
2. Cross-docking
Huge volumes if shipments arrived from around 1900 suppliers from
190 locations, the volumes were shipped to 10 different markets. All
the shipments were cross docked at Jabel Ali, UAE
3. Truckload Optimization
Optimizing container and truckload to derive maximum cost savings
4. Scheduling
Short Term: Scheduling various types of order and various
suppliers to make economically fit consolidating
5. Inventory Classification
Classifying seasonal and continuity inventory to plan different
supply networks if possible as different inventory require different
lead times
6. Replenishment cycle management
Complexity of replenishment depends upon different classes of
inventory,
planning
replenishment
schedule
according
to
requirement can be a power house of cost savings without lowering
service standards.
7. Inventory Control and management
Change in Lead times resulted in changed order cycle, order
quantities and safety stock
8. Designing Supply network
Multiple parallel supply networks with different modes and routes
are designed that have different costs and lead times
9. Milk run in picking up
Picking up material from different suppliers in most economical way,
Milk run model was proposed that lead to decent cost savings
without any impact on on-going operations
10.
Managing suppliers
3PLs, suppliers, clearance agents and bonded warehouses are rated
according to their performances to find the best fit of supply route,
mode, supplier, 3PL etc.
42 | P a g e
M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
NATIONAL INSTITUTE
BIBLIOGRAPHY
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