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From
Distribution Center to Supply Chain Center
A Case Study of Hualian Logistics Project
Implementation
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Project
Background |
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Shanghai Hualian Supermarket Co.,
Ltd. Logistics is one logistics company with independent
legal qualification. It was founded by Shanghai
Hualian Supermarket Co., Ltd in June, 2002 after
its system reform and reconstruction. Located
in the city-level logistics garden zone----
Taopu Northwest Logistics Garden Zone in Putuo
District, Shanghai Hualian Supermarket Co., Ltd.
Logistics owns a very superior geographic position
with rapid economic development and large amount
of business activities. Besides, for its prosperous
commercial network and transaction market, the
company has enormous potential, rich experience
and solid foundation in the distribution of chain
supermarket commodities and it can assume logistics
business of various kinds of customers.
Looking into the future, Hualian Supermarket Co.,
Ltd. Logistics makes every effort to improve its
core competitive capacity. For this reason, it
tries to set up a modern logistics center with
fluent operation, quick response, low cost and
low error rate in distribution. Leaders in the
company take the "Logistics Enhancement Project"
as a very important task in 2007. In May, 2007,
after the bidding competition with so many world-famous
companies, Shanghai HEADING Information Engineering
Co. Ltd won the bidding for its efficient standardized
business procedures, various exception process
solutions and customized business solutions, which
accords with Hualian development strategic objective.
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Project
Implementation |
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i.
Demand research and development of personalized
functions
Deep grasp the essence of the various business of
Hualian Supermarket. By investigating its logistics
center, commodity department, finance department,
franchising department, operation department and
its stores and by communicating with different kinds
of software suppliers, figure out the development
strategic objective and current business situation
of Hualian. HEADING's standardized business procedure
model provides solid foundation for the successful
conduction of such tasks. According to its strategic
development objective, our project group has designed
new management and business mode and it has also
designed the reform and implementation solutions
from current mode to target mode. HEADING logistics
system is a mature software, which has met the most
demand of Hualian logistics. As for the personalized
need part, the project group developed a detailed
system development design document in regard of
the discussion results. Then, the group communicated
with engineers of Hualian Information Department.
When they all agreed, the document was sent to technical
staff to develop.
ii.
Warehouse planning and design
After fixing the business mode, the project group
conducted the task from several directions at the
same time. Departments of Hualian made operational
adjustments and reported its progress regularly.
Development department of HEADING gathered a group
of staff to develop personalized needs and accelerate
the process, thus meeting the urgent time demand
of putting the system into practice of Hualian.
HEADING logistics consulting group went to logistics
center to conduct thorough, detailed warehouse planning
and design task. It also designed warehouse layout,
shelf adjustment solutions, picking mode, system
switching solutions and so on.
iii.
Preparation for system implementation
System training before it was put into practice.
According to business procedures, the training was
divided into several parts---ordering, receiving,
distributing, shipping and returning, thus strengthening
the pertinence of training. In the training process,
we not only explained system functions, but also
explained in detail the achievement of business
procedures in the system. As for the problems rising
in the process of training, our project staff solved
them in time. Before switching, enhance the training
of nodes staff. For instance, teach staff who received
the goods and who put goods onto shelves to use
RF and train picking staff to use RD card label
for picking goods. All this would make sure the
fluency of the whole procedures after switching
the system.
iv.
Preparation for system switching
Before switching, stipulate detailed stage implementation
scheme which divides the implementation into the
initial stage of trial operation, the mimic stage
of trial operation and the system switching stage.
The scheme also regulates the tasks of every stage,
such as data to be collected, materials to be checked,
operation procedures when switching to make sure
the successful switching of the system.
v.
Solutions to problems after implementation
Some problems rised, such as so many pallets that
are not on the shelf, large amount of cross-area
replenishment, slow speed of picking goods which
is caused by large quantity of new and old inventory
goods, low shipping efficiency and so on. All these
made a low store satisfaction. To solve those problems,
we analyzed the amount of shipment of goods after
the system was put into practice and reorganized
the categories and number of goods of different
goods districts. For instance, for the cargo in
whole-to-part space which has big amount of shipment
and is suitable for whole-container shipment, transfer
it to the full container receiving and shipping
space of the new warehouse; for the cargo in the
constant temperature space which has certain fixed
quantity of shipment and is suitable for moving
out, transfer it to the full container receiving
and shipping space of the new warehouse; for the
cargo in the full container space of the new warehouse
which has an extremely large amount of shipment,
transfer it to the old warehouse for receiving and
shipping. Under the unremitting efforts of HEADING
project group, constant temperature logistics system
was successfully put into service on August, 22,
2007. From that day on, people from the project
group worked very hard on the spot, helped customers
better know the business procedures, improve work
efficiency and save the cost. After six months,
a wholly new Hualian logistics center appeared,
where both the business procedure and the management
have an overall improvement. |
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Results
of Project Implementation |
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i.
Great encouragement of staff's work enthusiasm
Since piecework management is adopted, work amount
of every frontline employee is recorded in the system.
According to piecework standard, employees will
get the salary by their work amount. Therefore,
they all work so hard that management staff does
not need so much energy to make them work in good
order. Employees in the warehouse have reduced 32%,
which greatly save the manpower cost. Picking amount
of every employee per day exceeds 1000 boxes with
some employees 2000 boxes per day.
ii. Encouragement
of the real potential order quantity demand.
The ordering mode of stores is reformed, in which
the mode of ordering in regard of inventory is transferred
into the mode of ordering in regard of store needs.
Stores do not need to consider whether there is
inventory in the distribution center. Under the
new ordering mode, in the last ten days of October,
2007, that is 2 months after the system is put into
service, capital satisfaction rate arrived 92% on
average, exceeding 90% initially set by the project
group.
iii. Efficient
monitor and management against the shipping of suppliers
and the ordering of order planners
With the adoption of order management, suppliers
should ship goods in the morning and in the afternoon
respectively according to the delivery amount and
fixed date, thus the inventory has been efficiently
controlled and the storage space can be assured.
Therefore, order amount is controlled from the source
and the work in the warehouse is balanced. At the
same time, every order planners should monitor the
arrival of goods by the arrival rate statement provided
by the system, which makes the punishment items
in the business contract be found with evidence.
It effectively controls the shipment arrival rate
of suppliers. Apart from this, the system supplies
monitor statement about the order of order planners.
This can not only examine order planners but also
make them clearly realize their disadvantages in
work.
iv. The
balance of the operation of each work by real-time
monitor against each work
Monitor the progress of the receiving of goods;
find problems in the process of ordering and receiving
goods as well as in the process of placing goods
onto shelves; monitor the distribution of goods;
closely pay attention to the tempo of the whole
process; analyze the working time point of each
stage in detail; make sure goods will arrive the
stores on time.
v. Great
enhancement in the accuracy rate of receiving goods
The pre-check of receiving goods and the check of
receiving list are conducted at the same time; the
pre-check of receiving goods, the examination of
goods on spot and the final check about receiving
list are conducted at the same time; the receiving
list will be printed as the basis of settlement
only when the two sides have agreed that there is
no error in the process. Because of all these, the
accuracy rate has been greatly improved.
vi. Better
support for the variety of Hualian's business due
to the system's support for the quantity control
against various kinds of goods distribution
For example, control the quantity of goods distribution
in regard of types of store as well as in regard
of types of business, such as normal goods distribution,
wholesale goods distribution and sale goods distribution.
Besides, we use RD card to start label picking.
"The more you do, the more you earn" wins
everybody's attention. Furthermore, the system can
fix the one who picks the wrong goods, who put goods
in a wrong position and who breaks goods.
vii. Great improvement
of picking efficiency
4 months after the system has been put into practice,
20,000 to 30,000 shipments can be completed in 16:00
in comparison with 17:00 before the system is put
into service; 40,000 to 50,000 shipments can be
finished in 18:00 in comparison with 22:00 before
the system is put into service.
viii. The realization
of automation on the capital control of franchising
stores
In the process of goods distribution, capital control
is implemented automatically. Not only support "
Distribute the quantity of goods in consideration
of the money", but also support that every
store owns several capital accounts, such as cigarette
capital control, sale capital control, fresh food
capital control, specially-provided goods capital
control and so on. It can be added by the users
as they need. At the same time, the system also
supports automatic account transfer among several
accounts.
ix. The reform of goods
distribution style of franchising stores which helps
the inventory not locked by stores for a long time
Pre-contract to lock inventory one day ahead; make
the best use of inventory resources; Hualian logistics
pre- arrange inventory, picking staff, shipment
wharf and other resources; cars should distribute
goods on spot only when its driving license is provided.
All these solve the bottleneck problems due to limited
distribution space.
x. The relaxation of the
chaotic situation in the period of sale by adopting
sale distribution plan module
All the orders in sale will be recorded in the system
plan module. The system will automatically make
ordering plan on sale and picking plan on sale according
to the sale distribution plan. As for the order
information, the system will provide the rule of
preparation for goods three days ahead. More and
more, in consideration of the inventory and shipment
situation, the system can estimate quantity demand
of three days later and it will suggest the suitable
purchase quantity in order to help order planners
avoid blind purchase. On the sale of January, 2008,
shipment capital reached 80,000,000 but the work
on spot was still implemented in good order. Picking
staff were busy in picking; the whole picking process
was very fluent; ordering satisfaction rate was
raised; we received good response from franchising
stores.
I . Great reduction of
carrier arrangement time
As for all the shipping routes of distribution store
maintenance, the system provides automatic carrier-arrangement
function and it also allows artificial carrier arrangement.
The carrier arrangement will be completed in about
one hour every day. Carrier arrangement information
will be sent to stores by OA so that they can know
in time the amount and the time of shipment, the
information about vehicle license plate and the
drivers. The information about the setting-out and
going-back of drivers will be recorded by brushing
their cards, which provide efficient method for
the evaluation of drivers.
II. The support for various
kinds of returning management
It not only supports receive the returning goods
in the process of distribution, but also supports
the monthly fixed returning work and supports the
amount control in returning goods. |
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Significance |
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The new arrangement of procedures
and the reform of management bring a lot to Hualian
logistics, not only the reduction of cost and
the increase of benefits but most importantly
the enhancement of its competitive capacity and
good opportunity for further development. In the
following work, our company will greatly support
Hualian logistics group as always, work hard to
study HDWMS system function and dig out new ways
for business expansion. From this day on, Hualian
is no longer a distribution center but a supply
chain center responsible for store satisfaction
and a modern, professional, international logistics
center with high efficiency.
After HEADING set up surveyor's pole in Shanghai
Kedi Convenience Logistics Center, today, HEADING
warehouse management system set a successful surveyor's
pole in supermarket logistics center.
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Others |
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