Improving the Logistical Process Around Cross-Docking of Products from Packaging Lines: A Case Study at the Zoeterwoude Brewery of HEINEKEN Nederland Supply

Improving the Logistical Process Around Cross-Docking of Products from Packaging Lines: A Case Study at the Zoeterwoude Brewery of HEINEKEN Nederland Supply

IJfs, S.R.

Verbraeck, A. (mentor)
Duinkerken, M.B. (mentor)
Lukosch, H.K. (mentor)
Hoondert, P. (mentor)

Technology, Policy and Management

Transport, Infrastructure and Logistics

Transport, Infrastructure and Logistics

2015-10-05

HEINEKEN Nederland Supply continuously strives to improve its logistical processes in order to be able to serve its customer better, but at the same time to reduce costs. Within the Zoeterwoude Brewery, the Customer Service & Logistics department is responsible for the supply of the materials to the packaging lines, but also for the loading process of the pallets arriving at the warehouse. Increasing output from the packaging lines have caused regular spill-back of finished goods towards packaging line 2, 4 and 7. This spill-back causes standstill of the filling machine and therefore a drop in the performance of the packaging lines. HEINEKEN Nederland Supply has a large number of open sales orders and is already producing in over-time. This means that every lost production hour leads to sales losses for the company and the potential loss of valuable customers. The objective is to improve the loading process such that the capacities and planning are better aligned with the supply of the packaging lines. This leads to the following research question: How can the loading process at the Zoeterwoude Brewery of Heineken Nederland Supply be improved such that the capacities within the process and the corresponding planning are better aligned with the supply of packaging line 2, 4 and 7? This research is framed within the DMAIC methodology (and performed by following on the Theory of Constraints). This research starts by analysing the current loading process and influencing factors. It is found that the amount of pallets that is being processed by CS&L is growing at a fast rate. Especially the loose-loaded pallets are leading to an increase in pallets. The share of these pallets grew in total from 6% in 2012 to 12% (even 43% for packaging lines 2, 4 and 7) in 2014 and is expected to grow even further. The process is found to be a complex socio-technological part of the brewery and is influenced by many factors, both controlled internally and externally. The next step in this research was to collect data related to this process and to obtain valuable information from different viewpoints. From the analyses the root-causes of the problem are found. From the bottleneck analysis it is found that the transfer car between the cross-docks and the loading stations is not able to handle certain product combinations entering the warehouse. The capacity of the loading operators is sufficient, although requiring two skilled operators. Unexpected disturbances lead to buffers (cross-docks) being occupied, after which the process is not able to restore itself because of a lack of over-capacity of the transfer car. From the remaining analysis it was found that the unexpected disturbances to the process are problems with the availability of containers, human errors, lack of communication, lack of skilled operators and the lack of warehouse capacity. The loading process can be improved by reducing the input to the cross-docks. This can be done by limiting the flow from line 41 and 42 by removing the pallets locally. Another solution is to introduce an alternative for the current transfer car that provides a capacity of 263 pallets per hour, such that full advantage of the downstream capacities can be taken in when clearing the cross-docks. Also by connecting the cross-docks with each other, the buffer capacity can be better utilised. The main disturbances can be reduced / eliminated by introducing strict rules and penalties regarding the delivery of containers. Also communication between the planning, packaging and CS&L department shall be more frequently with an end-to-end focus. Besides extra training and increased maintenance on critical machines, more responsibilities for the warehouse coordinator decreases the number of errors made by the operators. It is expected that 80% of the OPI losses can be eliminated by the implementation of a new transfer car and by better alignment of the downstream processes. This adds up to a yearly non-cash saving of € 41.700 for the packaging lines under study. Based on the fact that currently customer orders are being denied due to capacity shortages, these savings may increase. For packaging line 7 only (up to July 2015), a total sales loss of € 40.000 was encountered. The increased capacity reduces to time to clear the cross-docks (100% occupation of cross-dock 21, 22 and 7) from almost 7 hours to a little more than 2 hours.

cross-docking
Heineken
logistics
packaging lines
spill-back
cross-docks
production

http://resolver.tudelft.nl/uuid:06e6286f-8f3a-4d76-a4e9-fc4f6e267844

Student theses

master thesis

(c) 2015 IJfs, S.R.