Ander Errasti

Lean thinking with improvement teams in retail distribution: a case study

Sectors associated with the distribution of products and goods have become more and more important in recent years. Globalisation and changing market demands are increasing competitiveness in these sectors, and as a result many companies have adopted new improvement methods to assure their survival. The adoption of improvement philosophies and a lean culture offer new opportunities to improve the quality and service of distribution networks and activities related with transport and warehousing. The application of these philosophies, widely used in industrial companies, has been little documented in distribution centres. However, these methods are difficult to implement in companies from the distribution sector due to the volatility of customer demand, the high degree of human participation and the demanding mechanical and repetitive activities in retail and storage activities. This paper presents a methodology for change management to adopt lean practices in distribution centres. The presented case study has been used to develop, test and refine the methodology. Results show that the methodology was suitable for establishing a lean culture in the company and it resulted in good outcomes in terms of productivity, employee attitudes and participation.

Evaluating order picking performance trade-offs by configuring main operating strategies in a retail distributor: A Design of Experiments approach

Warehouse design has become important due to its impact on service to customers and total logistics costs. Order picking is the key activity of a warehouse and an appropriate design will directly affect its overall performance. The increasing complexity of warehouses means that the main operating strategies such as storage location assignment, batching and routing need to be considered simultaneously. A Design of Experiment approach aided by Discrete Event Simulation could help to meet these new picking design process requirements, especially when various performance measures need to be compared. Some of the trade-offs that managers must keep in mind when designing order picking systems are shown, describing a single-case study carried out at a retail distributor.

Managing international operations: configuration of production network for SMEs

Internationalisation of manufacturing and logistics networks is a phenomenon that has gained momentum over the last decade as a consequence of the evolution of the competitive environment. Many manufacturing companies, in fact, have increased their international presence to remain competitive. The internationalisation of operations can take different forms and includes the development of new configurations such as international distribution systems, networks of global suppliers, and multisite and/or fragmented manufacturing networks. The need to take more effective decisions is more crucial for Small and Medium Enterprises, because their economic resources and the possibility to acquire capabilities to accomplish these new challenges are limited. Unlike multinational enterprises, SMEs are less familiar with the need to coordinate and integrate activities fragmented in different part of the world. Thus, the development of an international production network, for Small and Medium Enterprises, needs a careful (re)design of the operations functions in order for the company to achieve the expected benefits of this new paradigm. In a more and more dynamic and volatile market environment, production networks need to evolve over time and local approaches have to be integrated and coordinated with global infrastructures. This Special Issue called ‘Managing international operations: configuration of production networks for SMEs’ will discuss the different paths that companies can undertake in order to face the challenge of internationalisation. It will address the main barriers, enablers and trends of internationalisation for design, procurement, manufacturing and logistics operations. This Special Issue is composed of four papers:

Value Chain based framework for assessing the Ferdows' strategic plant role: an empirical study

In the current global economy, with an increased international presence of all type of organisations, the design and management of global operations networks (GON) plays a vital role in organisational competitiveness. Whilst all type of organisations are facing significant challenges for managing increasingly complex global operation, current literature on global operation networks is still limited in its scope. The aim of this paper is to discuss the development and evaluation of a construct for assessing the strategic plant role and developing of an improvement roadmap in GONs. This research makes a contribution to current knowledge on global operations by extending the model proposed by Ferdows and operationalizing it to enable its application for the design and optimisation of global operations networks.

Adapting Zaras Pronto Moda to a value brand retailer

The clothing sector is currently characterised by frequent assortment rotation in stores, a quick response product development and a focus on minimising end-of-campaign stock levels. This paper is based on a case study carried out at a value brand retailer, with a purpose to show how the company increased competitiveness in a market requiring more responsiveness. The case presented shows that the establishment of an adequate supply strategy for differentiated product segments, the introduction of mini-collections, the redesign of business processes (especially the new product development and the order fulfilment processes) and the redesign of the supply chain, lead to a sales increase and purchasing savings. Moreover, the study treats how a value brand retailer, facing different supply chain challenges compared with the leading brands, balance global and local production, lean and agile manufacturing and how it is possible to abandon the traditional two-campaign paradigm in favour of more rapid replenishment.

Framework for assessing the strategic plant role and deploying an improvement roadmap in global operations networks: an empirical study

In the current global economy, with an increased international presence of all types of organisations, the design and management of global operations networks (GON) plays a vital role in organisational competitiveness. Whilst all types of organisations are facing significant challenges for managing increasingly complex global operations, current literature on GONs is still limited in its scope. The aim of this paper is to discuss the development and evaluation of a construct for assessing the strategic plant role and developing of an improvement roadmap in GONs. This research makes a contribution to current knowledge on global operations by extending the model proposed by Ferdows in ‘Making the Most of Foreign Factories’ (HBR, 1997) and operationalising it to enable its application for the design and optimisation of GONs.

A World Class Order Picking Methodology: An Empirical Validation

Order picking is the process of retrieving products from storage in response to a specific customer order. Although this process’ design has significant impact on warehouse global performance, a practical-oriented design procedure is still lacking in literature. This paper presents a novel order picking system design methodology based on Design for Six Sigma approach, that aims to assist designers making decisions by suggesting the most effective operational and organizational policies and the equipment needed in order to fulfill customer’s orders. A case research in a home appliances manufacturer is presented in order to demonstrate the effectiveness of this approach.

An Expert System for Inventory Replenishment Optimization

Companies survive in saturated markets trying to be more productive and more efficient. In this context, to manage more accurately the finished goods inventories becomes critical for make to stock production systems companies. In this paper an inventory replenishment expert system with the objectives of improving quality service and reducing holding costs is proposed. The Inventory Replenishment Expert System (IRES) is based on a periodic review inventory control and time series forecasting techniques. IRES propose the most effective replenishment strategy for each supply classed derived of an ABC-XYZ Analysis.

Integrated System for Combining Decisional Problems in a Distribution Centre

The efficiency in distribution centres is conditioned by the management in the storage and picking process. To achieve this efficiency different coupled decisions have to be made for problems like storage, picking, truck-dock assignment and task assignment. The information of the activities, inside the facility and in the supply chain, is a key point to adapt the status of the process to the conditions of a changing environment. This paper describes a system to integrate information and decisions dynamically and validates it with a detailed simulation model. We show the results of the application in two case studies in actual facilities.

Teaching Theory of Constraints in 10 hours using open-source simulator

In this paper, the use of a graphical simulator called TOCNUN is presented. It helps users to understand plant operations conducted under the philosophy of Theory of Constraints (TOC) developed by Goldratt. TOCNUN is an alternative tool developed to support the teaching of TOC in just six or seven steps, which correspond to six or seven, 90-min learning sessions, including theory. This paper illustrates the structure for practical sessions that should be carried out with the simulator. Finally, validation input from undergraduate students and company managers is presented.