Pride in Performance Year 9

Category: Sustainability

Date of Submission: February 08, 2019

Individual / Group / Business Unit Nominated: LOGISTICS DEPARTMENT / JGSPC

Title of Initiative: DESIDERATUM: DECREASE IN DAMAGED GOODS RATE

Executive Summary

I. Nature and Objective of the Initiative

It is a suppose understatement that not a single venture can fully thrive without experiencing any drawback.
Likely, these instances can be cumbersome and may effect unwieldy returns. And for us who facilitates the
warehouse operations of JG Summit Petrochemical Corporation, one of our major shortcoming is the
occurrence of damaged goods during material receipt and handling.

As we continuously perform at best in dispatch volume and quality deliveries, the recurrence of damaged
goods is certainly inevitable. And because eradication is deemed hard to do so, and is yet to be proven
achievable, our objective is to always keep the damaged goods to a minimum rate.

For the past quadrennium, our damaged goods rate was at a steady phase of 0.15% versus the annual
production output; and was even at a highest peak of 0.2% during 2016. This is roughly equivalent to an
average of 4,000 bags or 100MT per month; corresponding to the loss of an estimated Php21, 000,000.00 per
annum.

In a layman’s perspective, we can literally fill-up five Olympic sized swimming pools from the vast volume of
damaged goods we had. It was also enough to load a hundred and twenty-three forty foot trailer trucks. And
if laid down to the ground, it may even be able to have three circumferential trips within the plant’s 350Ha
vicinity.

Although damaged goods are reclaimed and recycled, these will only be sold out as downgraded wide-specs
and is discounted at a hefty 30%.

II. Key Activities / Programs

During the first quarter of 2018, the Logistics Department conceived a team of FG-Warehouse Assistants; led
by the FG-Warehouse Supervisor and composed mostly of Industrial Engineers.

Root Cause Analysis (RCA) methods were undertaken to analyze the causality of damaged goods, while an
array of IE methodologies were employed for them to devise innovative ideas and breakthrough solutions.

Each engineer was assigned to look out for the factors contributing to the high damaged goods count. Initially,
they were tasked to work in solitude and were provided with the necessary provisions and support they
needed. After fact-finding and early data were gathered, they were brought back all together to merge their
variable insights and conclusions.

In this way, the department was provided diversified understandings from each individuals’ point of view, to
which also made it easier for them to execute activities based on consolidated recommendations.

III. Team Performance

After gathering and analyzing data, the team came up with the following initiatives:

FINDINGS RECOMMENDATIONS

Deployment of foremen forklift operators

Forklift Operator Error
Damaged Pallets
Collapsed Pile from Poor Embossing
Remedial trainings and scheduled re-orientations
Stricter supervision
Sorting and segregation of all pallets
Repair and replacement of damaged pallets
Acquisition of new pallets
Quality Plan for Packaging and Finished Goods Department
Tighter control and parameters
Quality inspection before material receipt

(1) Format: 500-1,000 words, Verdana 9pt, long bond paper (8.5” x 13”)
(2) Initiatives should have been implemented during the recently concluded fiscal / calendar year depending on what the business unit follows.
(3) Submit entries to Corporate HR on or before February 15, 2019.
Pride in Performance Year 9
Category: Sustainability

Immediate discontinuance of practice

Loading Procedure: Pallet Pushing
Revision of WIP concerning Loading Procedure
Improved overhead LED lighting from 25 lux to 100 lux
Poor Warehouse Lighting Condition
Continuous warehouse lighting improvement plans

IV. Outputs and Key Results

Breakthrough was achieved in July 2018 with the implementation of corrective measures which significantly
reduced the damaged goods rate by more than half (from 0.15% in 2017 down to 0.07% in 2018). It roughly
translated to savings of up to Php700, 000.00 per month, or Php8, 400,000.00 per year.

In parallel, inventory accuracy also noteworthy improved from 54.5% in 2017, way up to 99.82% in 2018.
Performance-wise all FG-Warehousemen were in a consistent streak in damaged goods observance and
control with the marginal average damaged goods rate at par with the total annual receipt and total annual
deliveries.

Overall, Logistics Department already proved something remarkable – that profound planning and teamwork
will always work out beyond any adversity. And with this achievement we unknowingly contribute to the
welfare of the local community by greatly reducing our wasted materials to which, at some extent, affects and
pollutes the nearby marine eco-system.

And if this isn’t sustainability, we seriously do not know what is. 

Submitted by: Endorsed by: Approved by:

Renato M. Casas Cesar T. Fernando Patrick Henry C. Go

(1) Format: 500-1,000 words, Verdana 9pt, long bond paper (8.5” x 13”)
(2) Initiatives should have been implemented during the recently concluded fiscal / calendar year depending on what the business unit follows.
(3) Submit entries to Corporate HR on or before February 15, 2019.