Implementations & Continuous Improvement of Global Supply ChainBy: Jonathan Scott

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INTRODUCTION

• Texas A&M University – Senior (Class of 2015)– Grad. Date: December 2015

Major– Industrial Distribution

Minor: Geology

• Fun Facts– Alpha Phi Alpha Fraternity, Inc. – Middle Name: Denzell (Denzell Washington) – Uncle (Melody)

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INTERNSHIP• Mark Mannix

Director of Implementations & Projects • Rene Grado

Implementation & Continuous Improvement Manager

• Jose MontalvoInbound Manager

• Bryan O'NealOutbound Manager

• Harvey Wright Inventory Control Manager

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PROJECTS• Learn the DNOW distribution process of the warehouse

– Inbound– Outbound– Inventory Control

• Discover potential operational improvements

• Financial Cost Analysis

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WAREHOUSE SCHEMATICS

• 9 Businesses consolidated under one roof• 4 Branches

- Inbound, Outbound, Inventory Control, Pipe Yard, Containment Room• Manufacturing, Valves (DVA, IVA, WVS), Electrical (LSI)

• Pallet Racking • 15,000 Pallet Provisions• 250,000 sqft

• 23 Docks all around the warehouse • Machinery

• Forklifts, Swing Reach, Item Pickers, Wrapping Machine, Weighing Machines

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INBOUND ACTIVITY• Unload/ Receive the material

• Divide the material based off Store Numbers

• 3-Way Verification• Part numbers, Heat numbers,

Quantity

• GR (Goods Receipt) the material in to the system

• Put away material in the racks

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OUTBOUND ACTIVITY • Pick the material

• Verify the material• Item #, Quantity

• Create a Shipping Tag

• Stage material on pallets

• Wrap pallets in preparation for shipping

• Load the material/Ship the material

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INVENTORY CONTROL (CYCLE COUNTING)

• Print out cycle count with random stock locations

• Count stock at printout locations• Blind Count-Count by hand• 2nd count if necessary • 40mins-1hr time frame

• Check for any discrepancies• Adding or taking away• Positive or Negative• Movement history

• Post / Finalize cycle count• Adjust the count

• Price range of item distinguishes who can adjust

Looking for Verification of Electronic stock on hand (System vs. Physical material on hand)

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FINANCIAL COST ANALYSIS

• Purpose: To find out the average cost to receive 1 carton in the firebrick facility• Overall cost• Cost per individual worker

• Equations (Calculated Monthly)• Inbound Cost = Labor + Material Handling Equipment• Overall Cost to Process = Inbound Cost / # of Cartons received• Cost per Individual = Overall Cost/# of Cartons received per

Individual

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FINANCIAL COST ANALYSIS

• Labor (Hourly)$14/hr + 35% Burden Rate = $18.90

• Material Handling Equipment (Monthly)$300 x 2 Fork Lifts = $600

• Labor Conversion $18.90 per hour = $3,276 Monthly Labor Cost for 1 person

$3276 x 6 people = $19,656 Monthly Labor Cost for 6 people

• Overall Cost to receive cartons$19,656 (Labor) + 600 (Equipment) = $20,256 (Overall Monthly Cost)

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FINANCIAL COST ANALYSIS

• Average Cost to Process 1 Carton• $20,256 / 1275 Total Ctns Received =$15.89 (Avg. Cost Per Carton)

• Benchmark Cost to receive 1 carton (SH)

• $3276 (Labor) + 100 (Equipment) / 434 (Cartons Received) =

$7.55 (Benchmark Cost Per Carton)

• Best in Class• $1.50 (Cost Per Carton)

Labor

Workforce(Individual)

# of Cartons Received

SH 434

GD 379

JP 264

JF 139

IG 41

TR 18

TOTAL 1275

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PROCESS IMPROVEMENTS

• Purchase software for Inventory Control overstock location storage

• Improve the outbound operation from an effective point of view

• Create a schedule for workers to consistently be present during truck deliveries

• Use the Measure & Manage concept to increase labor productivity

• Form Cross-Training sessions for warehouse workers

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ACCOMPLISHMENTS

• Networking

• Obtaining a higher sense of knowledge pertaining to the distribution field

• Providing contributions to the warehouse

• Attaining valuable work experience

• Presented financial cost analysis information to high school summer interns

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SKILLS LEARNED & DEVELOPED

• Learned• Conceptualize the

distribution process

• Observe distribution from various perspectives

• Financial Analysis

• Developed • Communicative

• Critical Thinking

• Professional

• Adaptive

• Problem Solving

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FUTURE• Areas of Interest going Forward• Oil & Gas Industry

• Supply Chain

• Learn a foreign language

• Study Abroad

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POST GRADUATION • Move back to Houston• Apt., Condo

• Start my career • Supply Chain, Oil & Gas

• Join Graduate Chapter • Alpha Phi Alpha Fraternity, Inc.

QUESTIONS & COMMENTS?

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Back Up

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ZCONS

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INBOUND ACTIVITY• Heat numbers

• a set of numbers that traces the part back to the manufacturer who created the material in case any issues come up

• Purchase & Sales Order Numbers• Crossover PO#

• Oracle to SAP • Splitting Orders • Forklifts are the key machinery used in Inbound

• Fuel source• Natural Gas vs. Gasoline

• Customers• Aramco, Cabinda, State Oil, H&P, Petroleum, Petroamazonas

• Freight Bills

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OUTBOUND ACTIVITY • Five or more boxes/Box over 50 lbs must be on its own individual pallet• North and East pallets are two different routes in which boxes are

shipped to the Houston area• Laredo also has its own pallet for boxes to be shipped to that destination• Problem Pallet

• Any boxes with internal issues goes onto this pallet• Sales people are responsible for correcting these problems in order for

the items to be shipped • Will Call

• When the customer has an urgent item that needs to be received immediately, they come to the warehouse and pick it up themselves

• Freight Forwarders• Pentagon, Crane, Morgan Systems

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INVENTORY CONTROL

• Rows 1-14 are stock and domestic items• 15-24 are International items

• Inventory control is the most critical component with in the entire distribution process

• Purchase order numbers begin with 252# for all stock in the warehouse

• Everyman has vital role with in the inventory control process

• Screen reachers & Item pickers are two of the most common machines used in this area

• IC is a very tedious operation

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MIGOS