OMGT2196.
WAREHOUSE & DISTRIBUTION CHANNELS
ASSIGNMENT 2. KPI IMPROVEMENT PLAN
Student’s Name: Che Minh Trang
Student’s ID: s3619106
"I declare that in submitting all work for this assessment I have
read, understood and agree to the content and expectations of the
Assessment Declaration."
TABLE OF CONTENTS
1. Executive Summary 1
2. Situation Analysis 1
3. Method & Application 2
4. Action Plan 3
5. Budget Estimation 5
6. Risk Management 6
7. Evaluation 8
8. Conclusion 8
9. References 9
10. Appendix 10
Executive Summary
This report aims to provide a detailed analysis of Vinatalks warehouse recent
problems then indicates feasible solutions with a practical improvement plan. To be more
specific, Vinatalks corporate is now facing the lack of integration in warehouse information
system. This led to the loss of data and the deficiency of storing process. Warehouse
Management System (WMS), thus, will be elaborated as a recommended approach to solve
the urgent concern due to its high functioning benefits. Additionally, the report also covers
other essential areas for an efficient KPIs development plan including working strategy, tools
selection, adaptability examination, action plan, budget and risk control. Lastly, there will be
an evaluation suggestion of implementation success.
Situation Analysis
Vinatalks Corporation is a large size business considering its warehouse acreage
occupies 30,000 square meters and the inhouse workforce comes up to 500 full-time
employees. Given the fact that Vinatalk’s production focuses on cellular electronic devices,
warehouse procedures will require specialized handling and preserving conditions.
Furthermore, since the input number is expected to be high, three critical KPIs
including inventory control, order fulfillment and warehouse performance shall be taken into
account when conducting an improvement plan. Despite Vinatalks’ long operation life span
(14 years), there are several noticeable deficiencies in warehouse operations management
leading to low performance of certain sectors.
As can be seen, the ineffective figures (red-colored) in Figure 1 (Appendix) are the
result of the low-speed function as well as poor data management, explaining by employees’
manual practice. To elaborate, staffs have to put great effort into dealing with the heavy
workload from paper recording; thus, it would be more difficult to avoid mistakes. Physical
damage is also another major concern since serious consequences may follow data loss. In
addition, picking and packing large amount of goods without any machinery assistance
certainly, demand longer duration; however, the accuracy stays modest. Undoubtedly,
warehouse performance KPIs such as orders and items per hour are unimpressive. Not only
does storage manual product arrangement fails to optimize the capacity (60%) but it also
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causes unnecessary damage to inventories (3,75%). Hence, some predictable cases which
could be mentioned are waste cost and time for long sitting goods, data correctness and
restructure or re-organizing.
From Figure 2 (Appendix) , the dense traffic movement should be issued. Employees
have to travel several times to complete their picking or putting away process, assuming that
information storing is done by excel files and handwritten documents. This dangerous
tradition will likely to generate errors in goods allocation, which then urges wrong items or
items amount at the assembling area. If not detected in time, customers may have higher
chances of receiving shipments that do not meet their expectations. In the very scenario,
excess budget for reverse logistics and decrease of the firm’s credibility are inevitable.
Method & Application
● Method
WMS provides the utmost real-time visibility of every function in the warehouse. By
utilizing the advantages that brought back by the system, warehouse staff could fully improve
their workflow and performance. For instance, as data will be organized and stored with
enormous capacity in software platforms, employees could access updated information in a
timely manner to produce critical solutions for stock management, warehouse picking/
packing flow redesign or even keep track of product movement and order frequency (CPSi,
2012). Significantly, WMS could integrate with other technologies like mobile devices, RFID
and barcodes to optimize the business supply chain. Overall, the system not only eliminates
all paperwork faults but it also reduces human workload and saves more space. As a result, it
encourages warehouse effectiveness by increasing agility and lowering the lead time.
● Application
When it comes to selecting a software vendor, there are some criteria that a warehouse
manager should clarify including cloud-based operation, reasonable license fee, the
appropriate level of functionality, simple user manual and training provision policy.
LOGIWA is a highly suggested software that could well respond to the above terms.
LOGIWA facilitates warehouse in all stages, from picking, packing to shipment while
at the same time, synchronizes with the whole supply chain sale channels to control goods
flow. The other highlight features are cross-docking and backorder handling. Moreover, it
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enables integration with RFID, barcode and automated MHS to generate better outcomes.
Although the system possesses many value-added functions, its user-friendliness and
customer support are highly appreciated (Softwareadvice 2018). LOGIWA’s operating cost is
also economical considering Vinatalk’s business size and model.
RFID or PDA (Portable Data Assistant Scanner) could also be put into use to enhance
warehouse productivity. PDA is a mobile device built to assist the order fulfillment process
by prioritizing different product categories based on the requested time and delivery
destination. It is connected to the inventory management system with real-time visibility and
interaction. According to GHN Express 2018, PDA promises to accelerate productivity
10-15% after one year of implementation.
Action Plan
● Project team
Duration: The required time to install WMS is estimated from 6-12 months, mostly
depending on the warehouse staff skillset and learning speed. Since Vinatalks has not applied
any technology method in history, it is essential for employees to be trained thoroughly
before handling any involving task.
● Structure & Roles
Team’s position Role
Warehouse manager Project leader Creates, proceeds and supervises the
training plan
Warehouse employees, IT Internal Input warehouse data
staffs Participate in training sessions and
real-life practice
LOGIWA consultants and External Provide training and immediate
coaches support when needed
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The team could also workspace platforms such as Confluence in order to share information
and keep track of the project progress through meeting records and communication tools.
● Training
To achieve a successful training program, the warehouse manager should pay attention to
keeping the harmony between technology implementation and the company’s culture.
It is important that their subordinates understand the reason for adopting the new system and
how it benefits the workforce.
Regarding training knowledge, employees should focus on comprehending how to work with
the software rather than studying too much about technical issues. Competency will be built
through practicing and understanding of reality circumstances (Wright, 2010). Last, for future
improvements, all feedback needs to be gathered.
The training plan is divided into 2 phases: Surface training and In-depth training,
following a pyramid model. The project team with 20 members are the first ones who receive
instruction lectures from LOGIWA. After that, each of them will hold the responsibility of
training for 20 inferiors and so on. This will continue when human resource increases.
Training sessions are going to be held by the warehouse manager to minimize
possible risks. Also, individuals with good performance will be selected to form a team to
answer concerns from employees.
Surface training 2 hours per day 3 days per week 1 month
In-depth training 3 hours per day 3 days per week 3 months
● Pre-implementation
Prior to the real practice of LOGIWA technology, managers and staff must ensure
these following preparations are taken care:
a) The new system should have received all databases from the old one.
b) Hardware responds well to LOGIWA software platforms.
c) Users have a clear mindset of the software operating.
d) The combined tools show positive signs of integration.
e) Testing trials are done correctly and adequately.
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f) Feedback and reports have to be frequently updated and revised.
● Post-implementation
At the end of everyday use, employees are required to conduct an efficiency checklist.
Maintenance and upgrades should be often reviewed for sustainability.
Budget Estimation
All estimations are based on Vinatalks corporation size and model.
Type Description Estimation
License Fully-licensed: users have full 10 users = $18,000/ year
access to every feature, unlimited + $130 for each extra user
time use during payment
Data migration Cost for migrating data from the old $8,000
system to the new system, the larger
gap between the two systems the
higher fee
Customization Cost for IT designed adjustments to $7,500
adapt with Vinatalks current
warehouse system
Training program Educating sessions expenditure $16,000 per year (traveling
cost included)
Maintenance Occasional check-ups to evaluate $600 per year ($150
LOGIWA performance quarterly)
Upgrade Depending on the software version $300 once averagely
Synchronization Depending on the complexity of the RFID: $200/ once
integrated devices function PDA: $100/ once
Barcode: $100/ once
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TOTAL COST $50,800
Risk Management
Risk management is a crucial task that any operation will need to avoid unexpected
collapses. Kottler’s leading change model, in this case, will be proposed as the approach for
issues control. The model’s eight steps are listed below
- The making of urgency sense
- The coalition of guidance
- Vision and strategy development
- Communication
- Broad action
- Short-term achievements
- Cultivate the change momentum
- Anchor the change
The following table will indicate some predicted risks that Vinatalks may encounter
when applying LOGIWA and practical recommendations
Category Possible problems Consequences Recommendations
Human - Shortage of HR - Increasing workload Kottler’s model
Resource → higher overhead
cost
- Staff readiness is - Productivity
low decreases
- Difficulties in - Unlikely to
technology learning collaborate
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- Delay in project’s
timeline → slow
progress
Budget - Lack of revenue for - Project is delayed or - A detailed budget plan
reinvestment shut down should be carefully
forecasted and
- Excess costs monitored throughout
the whole process
Training course - Training lessons are - Staff unable to work - Ensure that the vendor
not effective with LOGIWA and provides sufficient
solve any related training and further
- Difficulties in issues explanation
catching up with new
knowledge and - Waste time and - Ensure staff
technical issues money anticipation in learning
and sharing knowledge
Management - Low collaboration - Low-quality - Stimulate teamwork
among departments information → by assigning more
unqualified outcome mutual tasks (e.g.
cross-department
reports)
Evaluation
The sustainability of businesses relies upon the working process improvement.
Therefore, to attain the set goals, Vinatalks should constantly evaluate the performance of
this project during and after implementation. OECD 2009 states that by practicing these 5 key
metrics, warehouse managers shall have a better-tailored plan.
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- Relevance: is the team following the right direction which leads to the first
objectives while still maintaining local and national regulations?
- Effectiveness: by making comparisons and contrast between the result and the
objectives, manager can answer how effective the project is.
- Efficiency: the warehouse manager should be able to justify if the input
resources are utilized with an appropriate expense.
- Impact: does the project development contribute to the overall increasing
performance (staff productivity)?
- Sustainability: to test if the positive effects are long-lasting or permanent and
learn how to maintain good practice.
- Employee's participation ratio and responsibility also help to adjust the project
outcome.
Conclusion
Warehouse management is undeniable to play as one of the key roles in the business
supply chain due to its value of creating competitive advantages regarding agility and
effective inventory control, especially in Vinatalks case which requires special treatment for
cellular electronic products. WMS, on the other hand, is one fundamental step that assists
employees in building a strong foundation system as it provides real-time visibility and
flexible integration options. This together with successful change leading as well as
communication will be the supporting tools that enable warehouse manager to give in time
judicious decision and achieve the goal of improving overall KPIs.
References
Anastasia 2017, “Essential Steps to a Successful Strategy Implementation Process”,
Cleverism, viewed 10 January,
<https://www.cleverism.com/strategy-implementation-process/>
Atlassian n.d, “Confluence”, Software, Atlassian, viewed 10 January,
<https://www.atlassian.com/software/confluence>
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Austrian Evaluation Unit 2009, “Guidelines for project and programme evaluations”,
Austrian Development Agency, oecd.org, viewed 30 August,
<https://www.oecd.org/development/evaluation/dcdndep/47069197.pdf>
CBSi Corporation 2012, “Warehouse management system overview”, Microsoft
official training materials for Microsoft Dynamics, cbsi-corp.com, viewed 30 August,
<https://www.cbsi-corp.com/wp-content/uploads/2012/02/NA2009_01_Whse_Mgmt_
Overview.pdf>
Linky 2016, “How to Structure and Build a Project Team”, Virtual Project
Management Consulting, virtualprojectconsulting.com, viewed 30 August,
<http://www.virtualprojectconsulting.com/how-to-structure-and-build-a-project-team/
#sthash.27yqJEFm.dpbs>
Tanner, R., 2018, “Summary of Kotter’s eight-step leading change model”,
Management is a Journey®, managementisajourney.com, viewed 30 August,
<https://managementisajourney.com/summary-of-kotters-eight-step-leading-change-
model/>
Scmconcept.com.br. 2014, “WMS: Advantages and Risks in Implementing - SCM
Concept”, scmconcept.com.br, viewed 30 August,
<http://www.scmconcept.com.br/site/en/wms-vantagens-e-riscos-na-implementacao/>
Shacklett, M., 2016, “The six most important criteria when evaluating WMS
software”. SearchERP, searcherp.techtarget.com, viewed 30 August,
<https://searcherp.techtarget.com/feature/The-six-most-important-criteria-when-evalu
ating-WMS-software>
Software Advice 2018, “LOGIWA WMS software profile”, softwareadvice.com,
viewed 30 August, <https://www.softwareadvice.com/scm/la-wms-profile/>
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Wright, T., 2010, “Ensuring successful system implementation”, Learning and
development, BCS - The Chartered Institute for, Bcs.org, viewed 30 August,
<https://www.bcs.org/content/conWebDoc/37377>
Appendix
Figure 1
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Figure 2
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