LOGISTICS BUSINESS PROCESS IMPROVEMENT IN A SPORT GEAR COMPANY

Abstract

A small sports gear company, specialising in boxing and muaythai, is receiving complaints from customers due to incorrect shipments. The consequences of incorrect shipments are: customer dissatisfaction, higher costs due to returns and reshipments, and waste of time and resources. As a result, the objective of this thesis is to reduce incorrect shipments improving the internal logistics processes using framework of SCOR model and information technology management. Having investigated the record of each incorrect shipment, a working group of employees was formed to analyse and determine possible causes using quality improving tools such as fishbone diagram and why-why analysis. Each cause is given different priority using Risk Priority Number (RPN) and is discussed in detail for possible solutions. Advantages and disadvantages were evaluated before presenting the root causes and solutions to executive management for the final approval. This leads to four inter-dependent solutions, particularly a new coding system of all products, information system for inbound logistics process, on-site training, and regular meetings. After six months of implementation, there was no incorrect shipment. As a part of solutions, the weekly meetings and regular reports also promoted inter-organisation communication and allowed the management to identify issues promptly. As a result of improvement implementation time to response to customer order and time to prepare order from stock decreased, monthly sales from stock and total sales increased. Possible intangible benefits of the implementation include higher inventory accuracy and lower inventory level.