Business

Analysis

Eddie Fonseca
SR LOGISTICS MANAGER
FIRST ANALYSIS

Short term:

From my point of view, the first 3 months

are to acquire 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

Business
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
 Cross-docking to
save time: Some
 Choosing a 3PL products are of
based on cheaper quick displacement,
one: Not always the therefore those
supplier with the products should
cheapest cost is the
have special areas
best choice to
Implementing an
manage the
ABC Analysis.
operation. Being a
start-up company,  Standard
Which capabilities you we must focus in the measurements: We
consider are service level offered, are to apply
“nice to have” and also the measures within
vs. capacity to increase and effective ERP
“must have” for the the operation directly tool, for the specific
correct DC operation? related with JOKR tasks that the team
growth avoiding over should be working
costs. on.

 Delegate 100% of  Use forecasting to

the operation to the plan resource
3PL: Although this is allocation:
the easiest way, Communication
JOKR should fully among internal
know and control the teams is important
operation from zero
to understand
in order to guarantee
volume, sales and
the operational
growth to the next
sourcing.
level, so that we can  Identify KPIS:
acquire expertise Clearly explain what
and also be tasks should be
confident on how to implemented,
solve problems and measured and
demand solutions to controlled.
the 3PL.
NICE TO HAVE  MUST HAVE

 Perform Cycle
Have a flat operation: Counts: Implement
monthly counts by
the 3PL to
Having a flat guarantee an
operation refusing to optimal operation.
analyze some  Avoid overstocking
changes on the
by audit and
processes we can
inventory
lose big opportunities
management: We
to improve the real
must get rid of
task, which is the
excess and
customer experience.
regularly re-slot
inventory we expect
to sale.
 Implement good
WMS: it is
necessary to have a
wide picture 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
t Sourcing 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 aware, 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
 Updated inventory into the WMS
improvement  Required time to process, program and
delivery of the different orders in a
OTIF, productivity and consolidated way to each 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 the 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.

SUMMARY: