Process improvement, through waste reduction in processing pre-allocated items of Golden ABC, Inc at its distribution center at Edsa Balintawak, Quezon City

Date

10-2011

Degree

Bachelor of Science in Industrial Engineering

College

College of Engineering and Agro-Industrial Technology (CEAT)

Adviser/Committee Chair

Romark O. Cayube

Committee Member

Haerold Dean Z. Layaoen, Lizbeth A. Mariano

Abstract

Golden ABC, Inc, (GABC) is a local fashion retail company. GABC's Distribution Center (DC) is in charge of assuring that the products of GABC will reach the stores fast. Due to its nature as a cross docking type of warehouse, DC has pre-allocated items, which are pre-sorted and pre-labeled items that are rerouted immediately to the GABC's stores. Processing pre-allocated items at DC is per Vendor Allocation Document (VAD),which makes processing by batch. This items account for 80 percent of the total GABC products produced. In processing pre-allocated items, DC experiences high occurrences of non value adding activities. These non value adding activities are attributed to waiting frequent transportation, not fully utilizing the personal talent, and a non value adding activity re-inspection. The process was evaluated and a value stream map is generated. The non value adding activities account for 9606 seconds while the value adding activities has just 114 seconds. Non value adding activities could be classified into value enhancing activities which are transportation and re-inspection, with a time 0f 5101 seconds per package and the real non value adding which of packages due to batch processing with time of 4508 seconds per package. Value enhancing activities are non value adding but are necessary to the process while real non value adding activities are the obvious wastes of the system. As a result of these non value adding activities are the obvious wastes of the system. As a result of these non value adding activities overtimes are implemented incurring PHP165,511 annually. Eliminating the real non value adding activities and reducing the time of value enhancing activities to 4500 seconds per package will reduce the cycle time of the process.CNX was conducted and the noise, controllable and experimental factors were identified. The controllable factors were the sealers do not have protection against the fumes and the supplier personnel are not trained in DC processes. While the experimental factors were: poor job assignment, no standard time established on processes, per VAD batch processing, and Quality control re-inspection at DC. Alternatives were proposed to reduce the high non value adding activities. The solution for the controllable factors is to buy half mask for the sealers, and to minimize the involvement of supplier personnel in processing the items. The solution for the experimental factors is to set a standard time for the processes, and use this standard time to propose a new process and new layout. From 22 workers, the new process will just require 10 workers. Instead of termination, DC could wait until the contracts of the workers expire. The new layout will just use 93.16 meter square from 289.51 meter square. The new process will reduce the non value adding time of 9609 seconds to 4493 seconds which is composed of value enhancing activity. And reduce the cycle time from 9723 to 4607 seconds per package. the recommendations will incur set-up cost of PHP 1,184 and an annual cost of PHP 3000 for the half mask. These will give a possible savings of PHP1,175, 513.76 when implemented. In addition, it will give a net present value of PHP6,623,780.25 inten years assuming 12% interest and an annual worth of PHP1,172, 513.76.

Language

English

Call Number

LG 993.5 2011 E66 A83

Document Type

Thesis

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