AN APPLICATION OF VALUE STREAM MAPPING

IN INTERNATIONAL LOGISTICS SYSTEM

SEBASTIÁN PUENTES CÓRDOBA
CÓD: 2150621
 PROJECT TO IMPROVE THE
TRANPORTATION METHODOLOGY

Project created and focused to 2 walk:

1) The trucks that move finished goods to Europe and Charlotte have to be
fully loaded.

2) The trucks used to transport product to Canada and Asia may transport
partial carrier loads.
 TRANSPORTATION IN VSM

• The total transportation cost can be drastically reduced if the

frequencies of transportation are reduced or minimized.

• The transportation costs are volume dependant because of this, by

utilizing efficiently the trucks capacities, transportation costs are
minimized
 SCALE AND CURVE

• SCALE: substantial economies of scale result from the necessary

aggregate safety stock being reduced whenever decentralized
inventories are centralized into fewer points.

• CURVE: exchange curves are tools that provide an optimal range

for operation of the inventories.
 METHODOLOGY

SURVEY OF EXISTING OPERATIONS: it consist in identify problems,

resources utilization levels and current practices of doing businees.

When we want to usderstand this first step, we need identify the complexity
of the manucfacturing operations.

In the case, they identified 2 major problems:

1) Inventory levels.
2) Transportation problems.
ANALYSIS OF SHIPPING AND STORAGE CONSOLIDATION:
it consists in analyze the transportation and storage
consolidation.

• Manufacturing facilities share a raw materials warehouse.

• Trucks were not loaded at full capacity, and manufacturing

facilities were required of daily shipments of raw materials.
SIMULATION MODELING FOR WHAT-IF SCENARIO
ASSESSMENT:
it consists of simulating the purposes of the Company with a
useful instrument to effectively obtain the proposed consolidation
of schemes.

These simulations can be used as tools for transportation

planning and cost estimations since the number of orders, order
sizes and delivery dates can be input in the models.
VALIDATION USING SIMULATION OF THE OVERALL
TRANSPORTATION AND STORAGE CONSOLIDATION:
it consists of developing dynamic conditions for the
recommendations of transportation and storage consolidation.

• The simulation modeling tool provided an estimate of the

number of trucks needed as well as the transportation cost for
the consolidation of finished goods and raw materials.
ANALYSIS OF FUTURE TOTAL VALUE STREAMS:

it consists of the interpretation of data dropped by simulation.

• The most important improvement was in raw material inventory,

days in inventory were reduced from 4 days to 1 day. .

• Regarding the transportation problem, the number of days that

a truck waits to comply with the customers’ shipping
requirements was reduced from 3 days to only 1 due to the use
of consolidation of finished goods orders.
• The inventory time in storage was reduced from 30 days to only
1day.

• The finished goods inventory decreased from a range of 2 to 3

days to one day.

• the fact that the transportation issue was forcing to delay

finished goods shipments from the warehouse, was resolved
with the consolidation.

• All these improvements led to a decrease of the in facility time

from 44 days to only 14.
Table 1. Comparison between Current and Future Total Value Stream Maps with difference.
TOTAL VALUE STREAM MAPS
COMPANY FACILITY PERFORMANCE MEASURE DIFFERENCE
CURRENT (DAYS) FUTURE (DAYS)
RM Time in Storage 4 1 3
FG Time in Storage 1 1 0
FACILITY A
Waiting Time 3 1 2
In-Plant Time 13 9 4
RM Time in Storage 30 1 29
FG Time in Storage (2-3) 1 (1-2)
FACILITY B
Waiting Time 1 1 0
In-Plant Time 44 14 30
TOTAL (98-99) 29 (69-70)
PROJECT SUGGESTIONS FROM EMPLOYEES:

• By noticing the difference and change with the applied

methodologies, employees participate more in decisión making
and brainstorming.

• Also, graphic tolos were used for a better interpretation of the

results and visualization of the improvements.