精益物流经典案例Human side of lean logistics

Human side of lean logistics: the Kivits Drunen caseAuthor: S.A.C. van der SmissenDate of completion: 12-08-2010Human side of lean logistics: the Kivits Drunen caseMaster thesis of the department of Organization & Strategy,Faculty of Economics and Business Administration,Tilburg UniversityAuthor: S.A.C. van der SmissenStudent number: 610961Program: Master Logistics and Operations ManagementDate of defense: 27-08-2010Company: Kivits Drunen BVCompany supervisors: Maya GeelenJohn MeestersUniversity supervisors: drs. Mark Overboomdr. Job de Haandr. Fons NausNumber of words:16511Management summaryLogistic Service Providers (LSPs), such as Kivits Drunen, might face two big problems. First, they are traditionally seen as cost centers, instead of value-adding entities. Moreover, it might be difficult to hire quality employees whose needs fit with their jobs. This research performed a baseline analysis, using four different analyses, aimed at employees, customers, process, and productivity. Moreover, this research uses the lean environment to solve the problems LSPs face.This has led to the following problem statement:Using a baseline analysis and lean principles, what improvement-agenda can be offered to Kivits Drunen?To answer the above question, a literature research was performed on logistics and the application of the lean philosophy to logistics. Lean principles and goals were discussed, together with the underlying lean practices, which were, in line with theory, combined into bundles.Moreover, literature research was started on the analyses used in this research. These are: person-work analysis, customer-process analysis, value stream mapping, and data envelopment analysis. These analyses were performed with the expectation that the leanness of Kivits Drunen affects the job characteristics and the process, although the leanness could not be measured.A case study at Kivits Drunen was performed to see the current position of the company with respect to the analyses used in a base analysis. Throughout the research, company records, questionnaires, direct observations, and the knowledge of the employees were used to obtain and verify information and observations.The observations showed that there is not much awareness of the lean philosophy within Kivits Drunen. Knowledge of the philosophy is essential before implementing other suggestions for improvement.The results of the analyses show that Kivits Drunen can improve the fits between the needs of employees and the potential of the job. The biggest improvement potential within the person-work analysis can be found in the autonomy fit for truck drivers. By improving the autonomy fit, satisfaction, and motivation is expected to increase, while employee turnover decreases. This is expected to be beneficial for productivity, and hence, the financial position of the company. On average, truck drivers want more autonomy, while some drivers want lessautonomy. For the truck drivers who wish more autonomy, boundaries can be set with respect to for instance waiting time at destinations within which the drivers can operate. Autonomy for truck drivers can also be increased by analyzing their skills set and by letting them train other people if their skill set is sufficient to do so. Moreover, autonomy can be increased by learning them to see waste and giving them the autonomy to remove this waste.From the value stream mapping analysis, it followed that efficiency improvements can be gained by finishing the loading list earlier on and/or by starting the picking and packing process later. This decreases the waiting time between the picking and packing process and the shipping process. Decoupling drivers from trucks saves labor hours, but is expected to lead to problems regarding employee satisfaction and motivation, and hence, to employee turnover intent. Moreover, it makes it hard to maintain the responsibility of the truck drivers for their own truck. Therefore, this is not a good solution for the problem. Focus should therefore lie on standardizing the time of finishing the loading list by obtaining information from customers more quickly.Moreover, travelling time within the picking and packing process can be reduced by adjusting the layout of the cell from which the products for customer F are picked.These measures are expected to lead to a lower utilization of the number of labor hours. The data envelopment analysis showed that Kivits Drunen uses too many labor hours compared to other decision making unit. Therefore, there is room for improvement regarding efficiency of labor.However, the adjustments made in processes should fit with the customer‟s needs.From the customer-process analysis, in which this fit is discussed, it followed that Kivits Drunen is not aware of these needs. The estimation of these needs is based on experiences. It is wise to set up service level agreements to actually measure the customer‟s needs. These needs should then be translated into internal performance indicators, so that performance on the customer‟s needs, and, hence, customer satisfaction is actually measured. If performance indicators are measured, kaizen (or continuous improvement) can be applied and actually measured. Service level agreements do not only identify customers‟ needs, they might also offer you bargaining power when you have exceeded the customer‟s needs.To conclude by implementing (a number of) these suggestions, the fits investigated are expected to improve. This, in turn, is expected to lead to a higher level of efficiency and a better financial position of Kivits Drunen.ForewordThis thesis is written to complete the master “Logistics and Operations Management” at the Tilburg University. The empirical part of this research is based on an internship at Kivits Drunen BV, as a part of the …Human side of lean logistics‟ project at Tilburg University.I want to thank Rob van Opzeeland, who has given me the chance to do an internship at the company. Moreover, I am thankful to Maya Geelen and John Meesters, who were my company supervisors throughout my internship. I am also thankful to drs. Mark Overboom, who was my personal supervisor, and dr. Job de Haan, and dr. Fons Naus, who co-supervised the …Human side of lean logistics‟ p roject. I would also like to thank Mark van den Broek, a consultant involved in the project. All these people provided me with useful suggestions. Moreover, I would like to thank the eight other students involved in the project. During the project we have exchanged ideas and we have written the theoretical part together.This thesis provides an improvement agenda for Kivits Drunen to become more efficient by using the lean philosophy. Hopefully, these suggestions can be implemented successfully. The last five months have been a great experience for me. Although I only performed a research for Kivits Drunen and did not work for the company, I learnt a lot about the logistics business. The food industry in which Kivits Drunen is mainly operating requires a lot of flexibility. Being able to see how a business deals with this issue is very interesting.To conclude, I would like to thank all the employees of Kivits Drunen, since they were always willing to help and to answer questions for the research. Moreover, they have made my internship at Kivits Drunen very pleasant and valuable.Stef van der SmissenAugust 2010Table of ContentsManagement summary i Foreword iii 1. Introduction 11.1 Problem indication 11.2 Conceptual model 21.3 Problem statement 21.4 Research questions 31.5 Research design 31.6 Structure of the thesis 42. Lean logistics and lean principles 62.1 Logistics and logistics service providers 62.2 Relationships among TPL providers and members of supply chains 72.3 Lean philosophy 82.3.1 Lean service 92.4 Lean Bundles 122.4.1 Just-in-time 122.4.2 Total Quality Management 122.4.3 Total Preventive Maintenance 132.4.4 Human Resource Management 132.4.5 Customer Involvement 142.4.6 Supplier Communication Management 142.5 Lean Tools 142.5.1 5S 142.5.2 Just in Time Kanban Demand Signals 152.5.3 Value Stream Mapping 152.5.4 Kaizen 162.6 Summary 163. Analytical models 173.1 Introduction 173.2 Research model 173.3 Person-work analysis 183.3.1 Employees‟ needs and job characteristics193.3.2 Psychological states 193.3.3 Outcomes 203.4 Customer-process analysis 203.5 Value stream mapping 213.6 Data envelopment analysis 213.7 Summary 224. Research methodology 234.1 Introduction 234.2 Person-work analysis 234.3 Customer-process analysis 244.4 Value stream mapping 254.5 Data envelopment analysis 265. Results 285.1 Person-Work Analysis 285.1.1 Descriptive statistics 285.1.2 Needs and potentials 295.1.3 Correlations 305.1.4 Regression Analysis 305.2 Customer-process analysis 345.2.1 Pareto analysis 345.2.2 Choice of customer 345.2.3 Employees‟ daily reports 355.2.4 Services provided for customers 355.2.5 Customer-process analysis for customer F 365.3 Value stream mapping 385.4 Data envelopment analysis 405.4.1 Outputs/inputs 405.5 Conclusion 416. Discussion and conclusions 436.1 Discussion 436.2 Conclusion 456.3 Improvement agenda 466.4 Limitations 486.4.1 Reliability 486.4.2 Validity 496.5 Recommendations 49References viiAppendix 1: Elaboration on analyses xv1. Job Characteristics model xv1.1 Background xv1.2 Original model xvi1.3 The core job dimensions xvii1.4 The critical psychological states xviii1.5 Work outcomes xix1.6 Mediating effect of the critical psychological states xix1.7 Moderating effect of the growth need strength xx1.8 Motivation Potential Score xx2. Data envelopment analysis xx i2.1 The procedure xx i2.2 Efficiency improvement potential for inefficient DMUs xxii2.3 Efficiency improvement potential for efficient DMUs xxiii2.4 Ranking efficient units xxiii3 Linkages between the adapted job characteristics model and dataenvelopment analysis xxv3.1 Introduction xxv3.2 Linkages xxv3.2.1 Job redesign and productivity xxv3.2.2 Employee turnover (intent) and productivity xxvi Appendix 2: Method person-work analysis xxviii Appendix 3: Correlations in the person-work analysis xxxv Appendix 4: Method customer-process analysis xxxvi Appendix 5: Pareto analysis 2009 and 2010 xxxviii Appendix 6: 24 biggest customers revenue-wise of Kivits Drunen in 2009 and 2010 xxxix Appendix 7: Customer profiles for the eight biggest customers ofKivits Drunen xl Appendix 8: Description of services performed for the biggest customers xli Appendix 9: Service/processes performed for top eight customers xliii Appendix 10: Time spent in warehouse on customers-activities xliv Appendix 11: Global value streams of the warehouse processes for the eightbiggest customers of Kivits Drunen in 2010 xlv Appendix 12: Method Value stream mapping xlvi Appendix 13: Current value stream map at Kivits Drunen xlviii Appendix 14: Explanation of symbols used in the value stream map xlix Appendix 15: Loading list l Appendix 16: Method data envelopment analysis li1. IntroductionSection 1.1 discusses the problem indication for Kivits Drunen. In Section 1.2, the conceptual model of this research is introduced, followed by the problem statement (Section 1.3). Om Section 1.4, the research questions and the problem statement are presented. In Section 1.5, the research design is discussed, followed by an explanation of the structure of the thesis in Section 1.6.1.1 Problem indicationLogistic Service Providers (LSPs), such as Kivits Drunen, might face two big problems. First, they are traditionally seen as cost centers, while the value they add to their customers is neglected (De Haan, Overboom, & Naus, 2009). Second, it is difficult to hire quality employees whose needs fit with their tasks (Autry & Daugherty, 2003). This paper uses the lean environment to solve these problems, since the lean philosophy is aimed at increasing efficiency and at using the company‟s staff in a better way.The lean philosophy is aimed at reducing all types of waste (Sugimori, Kusunoki, Cho, & Uchikawa, 1977). According to Shah and Ward (2003), “work-in-process inventory and unnecessary delays in flow time” (p. 137) are the biggest forms of waste. These forms of waste can be identified by using Value Stream Mapping (Abdulmalek & Rajgopal, 2007), thereby providing the link between value stream mapping and the lean philosophy. A value stream map defines all non-value-adding (waste) and value-adding actions by a company from start until end, at its customer (Abdulmalek & Rajgopal, 2007).In a lean environment, the employee‟s task should fit with the processes. The focus in lean is on people. This research goes beyond that by also investigating the fit between these tasks and the employee‟s needs. This is done through an adapted version of the job characteristics model by Hackman and Oldham (1976). In a lean environment, autonomy and responsibility are typically important for employees (Lee & Peccei, 2008). These and other inputs lead to a specific psychological state, such as the experienced meaningfulness of the work (Rungtusanatham & Anderson, 1996), which lead to a specific outcome, such as staying at or leaving the company, thereby influencing the productivity level.Moreover, this research investigates the fit between the (lean) processes of Kivits Drunen and the customer‟s wishes. The customer‟s wishes are reflected by key performance indicators set in Service Level Agreements. (Not) meeting the requirements of the customer, leads tocustomer (dis)satisfaction (Bowersox, Closs, & Cooper, 2010), which in turn influences the level of productivity.All of these models lead to a certain level of productivity, which is benchmarked against the best practices possible for the pool of similar companies by using the Data Envelopment Analysis. Ki vits Drunen wants to adopt the lean approach through the project …Human Side of Lean Logistics‟ to enhance its productivity. Moreover, eight warehousing and/or logistical companies from the Netherlands and Belgium are involved in this project. Just like Kivits Drunen, these companies want to use lean to obtain an increase in productivity. Keeping all other things constant, an increase in business productivity leads to more profit.While previous studies investigated the models mentioned above one by one, this research combines the models in a baseline analysis to show where logistical service providers add value and what kind of workers should be hired to increase the productivity and in turn the financial position of the company, thereby contributing to existing literature.1.2 Conceptual modelA conceptual model was designed to guide the research, which is depicted in Figure 1.1. The theoretical concept of “analytical models and lean principles” leads to the identification of the company‟s strengths and weaknesses. A baseline analysis is performed for the four analytical models in this thesis and the lean principles. This baseline analysis leads to an improvement agenda, which conceptually reflects the company‟s strengths and weaknesses.Figure 1.1: Conceptual model1.3 Problem statementUsing a baseline analysis and lean principles, what improvement-agenda can be offered to Kivits Drunen?1.4 Research questionsThe research questions provide a systematic way for addressing the problem statement and the conceptual model (see Figure 1.1).Research question 1: What is lean logistics and what are the lean principles?Research question 2: What analyses are used in the research model for the baseline analysis? Research question 3: How are the analyses applied and what strengths and weaknesses can be expected from the analyses?Research question 4: What are the results of the baseline analysis for Kivits Drunen? Research question 5: What improvement agenda can be offered to Kivits Drunen?1.5 Research designThis research focuses on the link between existing concepts to gain new insights within the sector of lean logistics and therefore has a descriptive nature. The goal of descriptive research is to portray an accurate profile of persons, events or situations (Saunders, Lewis & Thornhill, 2007). The research strategy that will be used can be characterized as a theory-driven case study. This research is part of the project …Human Side of Lean Logistics‟, which involves 8 other case studies within the logistics sector. A part of this research is based on the comparison between all companies participating in this project.Furthermore, the descriptive design is used to systematically think about aspects in a given situation and to offer ideas for further research (Sekaran, 2003). A baseline analysis will be performed to get a clear picture of the current situation and to systematically identify specific opportunities for improvement of performance.Literature on the topic of lean logistics will be reviewed first to get insight in how the lean philosophy can be applied in a logistics environment. Literature is a secondary source of information, as it already exists and does not have to be collected by the researcher (Sekaran, 2003). Academic search engines such as ABI/Inform, ScienceDirect and ProQuest will be used to access relevant articles and publications from top journals in the fields of Logistics and Operations Management. Most important keywords used to collect these secondary data are: “lean logistics”, “lean warehousing”, “lean philosophy”, “lean manufacturing”, “logistics service providers”, “wastes” and “lean tools”. As a sampling technique, snowballing is used to collect secondary data. This is proven to be a very effective sampling strategy (Streeton, Cooke & Campbell, 2004).Primary data collection will be the basis for the empirical part of the research. This empirical part consists of four different analyses that together form the baseline analysis. These four analyses are also coming from literature. Details about the analysis that will be applied and the data collection process for the empirical part will be further elaborated on in Chapter 3.1.6 Structure of the thesisFigure 1.2: Thesis structureThis research can be divided into four different parts; shown in Figure 1.2as A, B C and D. Part A consists of Chapters 2, 3 and 4, who together cover the theoretical foundation and research methodology of this thesis. This part is identical for every case study within the project …Human Side of Lean Logistics‟. Within part A, Chapter 2 focuses on the first research question, covering the literature on lean logistics and the lean principles. Chapter 3 focuses on the second research question, where the theoretical background of the research model is discussed. Appendix 1 forms a supplement on Chapter 3 and contains an in-depth review of two out of the four analyses discussed earlier. Moreover, Appendix 1 provides the linkage between two analyses. Chapter 4 focuses on the research methodology.The fourth research question is discussed in part B (Chapter 5), which represents the empirical results coming from the four analyses. Part C (Chapter 6) covers the final research question and focuses on the confrontation of the proposed theoretical framework with the empirical results from the analysis. Moreover, conclusions are drawn and recommendations are made in the improvement agenda for the company.Part D is constructed as a detailed empirical supplement of Chapter 5. Every analysis has its own appendices with detailed or extra information regarding the data collection or empirical results. This research focuses on the development of a baseline analysis which leads to an improvement agenda. In order to achieve consistency throughout the entire period of the project …Human Side of Lean Logistics‟, th ese appendices can be used as a guideline to perform the same analysis again.2. Lean logistics and lean principlesThis chapter provides the t heoretical foundation of the subject …lean logistics‟. Section 2.1 describes the concept of logistics and gives a definition of logistics service providers. Subsequently, in Section 2.2, the role of third party logistics providers within a supply chain is discussed. Section 2.3 deals with lean philosophy in the context of logistics and in Section 2.4 lean practices will be aggregated into six lean bundles. In Section 2.5, lean tools will be elaborated upon. The chapter ends with a summary.2.1 Logistics and logistics service providersThe improvement of logistics is an important source for companies to make new profits and maintain a competitive advantage.The Council of Supply Chain Management Professionals define logistics as “that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customer requirements” (n.d, para. 4). Rutner and Langley (2000) state that logistics adds value for customers when products are at the right place, at the right time, and in the right quantity. The factor “place” concerns delivering products from and towards the right location. Transportation and facility networks are two important related concepts. Transportation is responsible for geographically moving and positioning inventory. A facility network involves the number and location of facilities required to perform logistics work, as well as the inventory and how much inventory to store at each facility (Bowersox et al., 2010). Furthermore, delivering products at exactly the right moment is crucial. This is represented by the second factor …time‟. Late arrivals can result in shortage of stock, possibly leading to delays in customer delivery. Early arrivals can cause severe storage problems. In order to bridge time gaps between production and consumption, products are stored and inventory control is applied at warehouses (Bowersox et al., 2010). The third factor …quantity‟ represents the volume delivered to customers. This factor has a great impact on the internal processes of the customer; if quantities are too small, production may be put on hold. On the other hand, if quantities are too large, extra storage space might be required, which may not be available.Companies bridging these gaps are logistics service providers (LSP‟s) (De Haan et al., 2009). LSP‟s bring along benefits such as cost reduction, service improvement, strategic flexibility and an increased focus on core competencies (Van Laarhoven, Berglund, & Peters, 2000). Logistics service providers perform various activities for customers, functioning as an intermediary (Lai, 2004). These activities range from traditional logistics activities (such as storing and transport) to less conventional activities (such as tracking and tracing) (Chen,2007). Hertz and Alfredsson (2003) summarise a third party logistics provider as an external provider who manages, controls and delivers logistics activities on behalf of a shipper. According to Berglund, Van Laarhoven, Sharman and Wandel (1999), LSP‟s can add value in four ways namely; operational efficiency, integration of customer operations, vertical or horizontal integration and supply chain management and integration. The first two relate to the sharing and increased utilisation of resources. The third relates to a network of LSP‟s to outsource while the fourth relates to managing the supply chain for the customer. De Haan et al. (2009) summarise LSP‟s as carrying out shippers‟ primary processes at a high service level but at the lowest price possible, reflected in service level agreements. Both must be pursued simultaneously in order to satisfy and retain customers.2.2 Relationships among TPL providers and members of supply chainsBask (2001) states that third party logistics (TPL) providers can be seen as supportive supply chain members and should therefore support supply chain strategies. Supportive members can be defined as companies that simply provide resources, knowledge, utilities or assets for the primary members of the supply chain (Pagh and Cooper, 1998, in Bask, 2001). In Figure 2.1 the three relationships which exist in a supply chain with regard to a TPL provider are displayed:1.The relationship between seller and TPL provider.2.The relationship between buyer and TPL provider.3.The relationship between seller and buyer in the supply chain.Figure 2.1: Three dyadic relationship among seller, buyer and third-party logistics providerHowever, third party logistics does not only refer to a situation where two parties are served by the logistics service provider (LSP); a LSP with solely a relation with the seller or the buyer can also be qualified as a TPL provider.In Figure 2.1 the TPL provider is depicted above the seller and buyer, which might seem strange when defining the TPL provider as a supportive member of the supply chain. Therefore, depicting the TPL provider in a smaller circle beneath the seller and buyer might be more appropriate. This is in accordance with the definition of Shapiro and Heskett (1985, in Bask, 2001) who see the TPL provider as “the agent middleman in the logistics channel who enters into a temporary or longer term relationship with some other entity in the logistics channel”.2.3 Lean philosophyLean is viewed as a philosophy, a way of life, rather than just a management tool. Bortolotti and Romano (2010) indicate that lean production provides several benefits: cost reduction, productivity increase, quality improvement, lead time reduction, supplies reduction, flexibility and customer satisfaction improvement. According to De Haan et al. (2009), lean companies need to balance flexibility with uninterrupted flows, implicating a trade-off between continuous flow of goods and flexibility to accommodate variety. Womack and Jones (1996) propose five guiding principles to achieve benefits of lean processes:1.Define value from the standpoint of the end customer, broken down by product family.2.Identify all steps in the “value stream” for each product. This step is undertaken by thevalue stream map. The value stream includes all actions, those that create value and those that do not, which are required to bring a product from concept to launch and from order to delivery.3.Make value-creating steps occur in tight sequence so the product will flow smoothlytowards the customer.4.As …flow‟ is introduced, let customers pull value from the next upstream activity andensure that those responsible for each process phase act only to add value to the preceding phase. There should be a continuous flow throughout the process.5.Begin the process again, defining value, identifying steps in the value stream,removing unnecessary steps, introducing flow and pull. Continue until perfect value is created and no waste activities are left. In other words, this is a search for continuous improvement to manage perfection.De Haan et al. (2009) summarize lean management in three principles: creating value, reducing waste and improving continuously. In order to create customer value production should only take place when needed. When reducing waste the processes need 100 % processcontrol. Continuous improvement should be implemented step by step to enhance performance towards the customer. Cuatrecasas (2004) describes lean management as making use of lean for management control systems or steering the business.2.3.1 Lean serviceThe lean philosophy originated in production environments. Figure 2.2 gives an overview of the most important elements in lean production. Although the philosophy finds its origin in manufacturing, it is transferrable to service environments as well. Swank (2003) defines lean service as applying lean principles in service industries, whereas Bowen and Youngdahl (1998) define lean service as the application of state-of-the-art manufacturing thinking to service design and delivery. The first definition will be used in this research as this definition most explicitly refers to lean. However, problems arise as services tend to be heterogeneous in nature (Holm & Ahlström, 2010). Within service environments, direct contact exists with customers exhibiting different needs whereas in production environments a stable flow can be established. Dal Pont (2010) emphasizes the role of employees and strong utilisation of IT as important variables in lean service implementations. Lean exists on two levels according to Hines, Holweg and Rich (2004): a strategic level which encompasses the whole organisation to understand customer value and an operational level which relates to lean tools and techniques to create value and eliminate waste.Figure 2.2: Elements of lean production (Karlsson & Ahlstrom, 1996)。