Business

Analysis
Eddie Fonseca
SR LOGISTICS MANAGER
FIRST ANALYSIS

 Short term:
From my point of view, the first 3 months are to
acquirte knowledge and execute an evaluation, get to
know the business from a zero-base and understand
the way of getting things done. Analyze the risks,
opportunities already defined in the strategic plans. At
the same time, map the different ways of
communication, WOWs (ways of working) and 1:1.
That is why, knowing the necessities of the company is
fundamental in order to map a solid structure.

ANALYSIS

Supply Chain
Head

Sr Logistics
Mngr

Bunsiness
Mxco Mty Gdl
Intelligence /
Coordinator Coordinator Coordinator
Finance
 Long term:
During this stage, I would propose to the Senior management or
C-level my suggestions to improve some processes, presenting
plans, people involved, and a timeline to correctly execute from a
short-term all the way to a long-term stage. Taking into account a
mirror exercise with the actual priorities already defined in the
operational plan of the company.

Following a simple thinking method, we must consider that we

already have a first class 3PL, for which we should have to name
a specific team, to follow and execute the daily operation of the
company.
This team is required to be solid and follow structured processes,
they will asked to develop new strategies in order to adapt the
necessities to the current capability of the company.

Supply Chain
Head

Sr Logistics
Mngr

Business
Intelligence / Mex Supervisor Gdl Supervisor Mty Supervisor
Finance

Transport Quality Transport Quality Transport Quality

Coordinator Coordinator Coordinator Coordinator Coordinator Coordinator

Inventory Inventory Inventory

Coordinator Coordinator Coordinator
SECOND ANALYSIS

 SKUS: 2,000
 Consolidation: 80%
 Frozen/ refrigerated: 20%
 Day on hand: 15 days
 Average sale per SKU: 5 units per day

DIMENSION
Define the m2
required to manage
a full operation
with the following
information:

Taking as reference the following standard

measures per piece:
 
10cms (height) x 20 cms (width) and 30cm (length )
= 0.006m3
* 150,000 pieces in a 15 days stock
=900 m3.

Result: 900 x height = 9,000m2 for storage

In addition, we must consider extra space of aprox

10% for inbound, labeling, return, quality, pick and
pack, and outbound.
 NICE TO HAVE MUST HAVE

 Choosing a 3PL based

on cheaper one: Not  Cross-docking to save
always the supplier
time: Some products
with the cheapest cost
are of quick
is the best choice to
displacement,
manage the
therefore those
operation. Being a
products should have
start-up company, we
special areas
must focus in the
Which capabilities you Implementing an ABC
service level offered,
consider are Analysis.
and also the capacity
“nice to have”
to increase the  Standard
vs.
operation directly measurements: We
“must have” for the
correct DC operation? related with JOKR are to apply measures
growth avoiding over within and effective
costs. ERP tool, for the
specific tasks that the
team should be
 Delegate 100% of the working on.
operation to the 3PL:  Use forecasting to
Although this is the
plan resource
easiest way, JOKR
allocation:
should fully know and
Communication
control the operation
among internal teams
from zero in order to
is important to
guarantee the
understand volume,
operational growth to
sales and purchases.
the next level, so that
we can acquire  Identify KPIS: Clearly
expertise and also be explain what tasks
confident on how to should be
solve problems and implemented,
demand solutions to measured and
the 3PL. controlled.
NICE TO HAVE  MUST HAVE

 Perform Cycle Counts:

Implement monthly
counts by the 3PL to
guarantee an optimal
operation.
 Avoid overstocking by
Have a flat operation: audit and inventory
management: We
must get rid of excess
Having a flat operation and regularly re-slot
refusing to analyze inventory we expect
some changes on the to sale.
processes we can lose
big opportunities to  Implement good
improve the real task, WMS: it is necessary
which is the customer to have a wide picture
experience. of the process, this
includes an updated
inventory, a detailed
synthesis of the team
performance with
costs.
THIRD ANALYSIS

What SLAs would you stablish into the

relationship with the 3PL?
How would you monitor its accomplishment?
What would you do its not accomplished?

The SLA will be executed aligned with the KPIs and

contract conditions, it should guarantee a constant
growth of the company, where the necessities, costs and
goals of JOKR should be the priority to accomplish.

We should consider as the best option an OPEN-BOOK

contract, stablishing a specific period of time so that
both, JOKR and 3PL, consider necessities and
capabilities.
3PL
managemen My proposal is to work with a forecast that works
updated with the Demand planning team and Sourcing
t team in order to understand what products are monthly
required, quantity, with that information, we can focus
on a specific scheme of work with the 3PL.

The forecast will be helpful for the 3PL to indicate how

many sources will be needed to move the quantity of
products already asked. With this, we can get an
average operational cost per piece or boxes for the
current month and with that cost we can evaluate
directly the 3PL.
3PL metric: Goal: 99% of accuracy, minimum 98.5%,
less than 98.5% is Critical.

If the 3PL has 3 recurrent status as critical, we must

give an “early” contract termination.
Important: this kind of contract will help us know in
which part of the operation we have variations to
identify extra costs or leaks and so, we can manage to
find new strategies to save money.

We must be conscient, that JOKR is a startup, which

can bring continuously changes, but that, cannot
affect directly with additional costs.
FOURTH ANALYSIS

Which are your ideas to manage and control

these 3 indicators?

 OTIF: In order to give a good service to our internal

clients (HUBS) it is necessary to define a daily
scheduling order and delivery scheme so that this
goes directly linked to the following points:
KPIs
improvement  Updated inventory into the WMS
 Required time to process, program and delivery of
the different orders in a consolidated way to each
OTIF, productivity and HUB.
inventory accuracy
We will evaluate the first OTIF information to execute a
plan, which includes a minimum of 90% of
accomplishment so that with time and experience we
can achieve at least a 95%.
Productivity: Being a company which manages
products that expire, I recommend to focus on a
traceability of each product. With this, we can ensure a
constant flow. We will need to evaluate the following:

• Product availability time: we will know the

time required in order to have certain product
available in the WMS.
• Storage space utilization: I propose to use a
Drive-Through Scheme to use FIFO ( First In,
First Out) method..
• Dispatch: We will need a control of how many
dispatches have been done per day in an
efficient and effective time, honoring a logistic
route avoiding the lack of stock in certain hub
due to mis-planning.
• Financial: Every cost will be linked with the
productivity according with the SLA
stablished.
Inventory accuracy: One of the main axes in the
supply chain is the inventory record, this shows
a real time the available stock, avoiding
overstock and connect demand planning and
sourcing.
Our 3PL will be a main axe, controlling and evaluating
through the following:

• ILA (Inventory Location Accuracy) : We have

several hubs that are needed to be everyday
dispatched, it is important to improve time of order
process. This will be helpful to avoid delays into the
picking and delivery process, guaranteeing a good
OTIF performance.

• IRA (Inventory record accuracy) : This will ensure

that the inventory of the 3PL matches with the
Internal Inventory.
This metric will be precise, avoiding significant
inventory variations. This metric shouldn’t be less
than 99% pushing it to have 99.5% as a constant.
 
 
I  recommend applying cycle counts implementing
monthly counts by the 3PL to guarantee an optimal
operation avoiding big loses that may affect the whole
year.