Ch00fm-pgs-Martichenko/Goldsby

Case Study: GoldSMART Products, Inc.
259
Figure 24.2A.
The Order Process: Current State.
Figure 24.2B.
The Order Process: Current State.
Time
Order
Reviewed
Order
Received
Order
Reviewed
On-
Hand?
Order
Entered
B
Initiate
Invoicing
Back-
order
No
Yes
A
Customer
Service
Warehouse
Planning
Warehouse
Operations
Department/
Entity
Order
Generated
Time
Shipment
Staged
B
Item 1
Gathered
Item 2
Gathered
Item 3
Gathered
Yes
Yes
Yes
No
No
No
Inventory
Updated
Documents
Prepared
A
Customer
Service
Warehouse
Planning
Warehouse
Operations
Department/
Entity
Back-
order
Back-
order
Back-
order
Item 1
Available?
Item 2
Available?
Item 3
Available?

260
Lean Six Sigma Logistics
will make us the smart company that we must become.” With that, Bob sent
his staff home for the evening.
Seeing Daylight Again
Over the next few days, Bob and his staff built on the understanding established
in that first meeting. They were able to gather critical operational data (Table
24.1) and financial data (Table 24.2). These data provided Bob and his orga-
nization with a better sense of the current health of the logistics system and the
business in general. Breezing over the numbers, he could sense that both cost
reduction and service improvements could be found, but exactly where and how
would involve deeper investigation and understanding.
Using the principles of the Logistics Bridge Model, Bob and his organiza-
tion developed statements of key focus areas (Table 24.3) and several signifi-
cant questions for a high-level review for current condition analysis (Table
24.4). Bob examined the guiding principles along with remnants of the neces-
sary data and found some sense of satisfaction in knowing that everyone was
focused on the job at hand. What comfort he enjoyed was tempered, however,
by the realization that tough decisions and volumes of work were ahead. If the
company were to become the “smart company” that he envisioned, he would
have to know what information must still be gathered and how to turn that
information into knowledge that could guide the company out of crisis and into
prosperity.

Case Study: GoldSMART Products, Inc.
261
Table 24.1.
GoldSMART Operational Data.
GoldSMART Data Collection Results
Operations Data
% common customers each plant
35%
% common suppliers each plant
40%
# of suppliers paying transportation (prepaid)
65
% distribution centers being used for inbound
0%
# of carriers (trucking companies) used
82
% of spend with top 10 carriers
65%
# of truckload carriers
64
40% Transportation spend
# of less-than-truckload carriers
10
28% Transportation spend
# of couriers
2
2% Transportation spend
# of expedited carriers
6
10% Transportation spend
Private fleet trailer/tractor ratio
3.5:1
20% Transportation spend
Total outside warehousing space
375,000 sq. ft.
Total space used for finished goods
800,000 sq. ft.
Total space used for raw material storage
250,000 sq. ft.
Available cubic meters per trailer
70 m
3

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