0 Replies Latest reply on Feb 19, 2010 5:01 AM by dcurran1

    Supply Chain Chaos Story

    dcurran1 Newbie

      I joined the UK’s leading mobile phone / cell retailer a few years ago.  This was in November in the run up to the key holiday trading period.  I was their first ever supply chain / logistics professional.


      Within days of my arrival the seasonal stock started to be delivered from the phone manufacturers following huge orders from the Purchasing team.  This was completely uncoordinated resulting in many supplier deliveries arriving at the same time.  Despite the size of the retailer it had a very small warehouse with one loading bay for both goods in and out.  Articulated trucks had to be reversed in requiring someone to hold up the traffic on a 3-lane road while it manoeuvred and reversed in!


      The result of this was a warehouse that was now full with more stock arriving.  At this point the basic wms stopped working as did the only fork lift truck.  Every aisle was double stacked with pallets.  Pickers were now climbing the racking 2 or 3 rows high to get stock for stores.  Stock could not only not get in but pretty much couldn’t get out.


      The warehouse manager was calmly trying to pick store orders alongside his team.  Like them, he rolled in at 8:30 and left at 18:00 having claimed overtime payments for the last hour, apparently oblivious to the storm brewing around him.


      The ensuing chaos was entertaining (at least in hindsight) to watch.  The business was completely incapable of dealing with either the size it had grown to or the impact of a seasonal sales peak.  All of the intellectual resource had gone into customer service and technical training for frontline staff.  There was no basic retailing ability to manage stock to shelf.  What was amazing was how quickly a very successful company managed to go from normal operations to literal total logistical gridlock within the space of a few days.


      Fortunately, some of the solutions were quite easy to identify and remedy.  We immediately closed the returns warehouse and repair workshop (remember this was a time when phones were much less reliable and it was economically possible to repair them).  This created a logistics workforce of twice the size.  A 7-day / 2-shift operation replaced the exiting 5-day / 1-shift structure.  The forklift truck was repaired and a second one hired.  Suppliers were contacted and a goods-in booking system was introduced so that deliveries could be planned and didn’t turn up unannounced.


      The result of all of this was their best sales ever and a only a few days where sales were really impacted.  The longer term result was a warehouse 8 times larger with a professional management team!