Page 34 - Case Study Annual 2018
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LAA Gold Award
• The utilisation of a high proportion of • Via the UPD Academy, SETA training in
temporary labour also presented challenges in the Diploma in Inventory Management was
continuity and skills retention. delivered for all warehouse employees.
• Carrying the right level of inventory and Process focus
product mix across 16,000 SKUs to improve • UPD removed waste wherever it could.
availability whilst eff ectively managing working • The company implemented visual management
capital costs is a juggling act. tools.
• Considering the way UPD is set up, it was • Improved pack away and inventory
not easy to identify where to begin. Many management processes.
companies would have cut heads or invested Premises focus
in expensive systems and automation, but UPD • Created an additional 7,000 pallet spaces.
did not do that. • Implemented full line wholesaler capability.
• Whilst its competitors were consolidating • Implemented night-time deliveries.
operations to reduce costs, UPD wanted to Financial results
ensure it had a broad infrastructure carrying all • Savings for the last two fi nancial periods
the products to meet customer requirements exceeded R60m across the main areas of focus.
whenever and wherever they needed. • Growth in top line turnover of 9.4 percent year
over year (YOY).
The solution • Growth in net operating profi t (OP) (after
In order to solve these problems, UPD invested interest) of 11.6 percent YOY.
in people, not technology or automation. Using • Took on four new distribution clients worth over
simple Lean Tools and Thinking and six sigma R3.2bn.
techniques, it equipped its people to solve its Operational results
problems. Examples of some of the tools are: • Achieved ISO 9001 nationwide.
• Process mapping; • Achieved Transport Asset Protection
• Four-step simple problem solving; Association (TAPA) certifi cation for facilities.
• Bottleneck analysis; • Improved receiving capability from 24 percent
• Waste walks. (2016) to 87 percent (2018).
• Hours to receive improved from average 47 to
Other steps and results included: 10.
People focus • Availability improved from 84 percent to 95
• Over 350 people were trained in Lean Thinking percent.
and Tools. • Improved inventory accuracy; reduction in belt
• Eight green belts delivering projects with a credits from R34m to R4.4m.
return on investment (ROI) of over 12:1. • Reduction in shrinkage from R63m in 2016 to
• Over 25 yellow belts addressing everyday R13m in 2017/2018 fi nancial year (FY).
problem solving.
The way forward
The company will continue to engage and
educate via the UPD Academy. It has formalised
a process for individuals to present and propose
solutions to real business challenges and these
form the basis for the strategic projects chosen
and implemented within the business. UPD
will engage the workforce in developing novel
solutions to problems.
An outcome has been lean processes
and those that are best in class, which is an
ideal launch pad for its phase 2 solution. The
company’s IT system change and further
automation will continue to drive it forward in the
years to come. •
32 The Logistics News Case Study Annual 2018
