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Project VSM: Analyze The Current Situation

The document describes a project to improve the performance of a delivery company by reducing waste and increasing efficiency. The main goals are to maximize the TOVE index and improve performance. Some proposed solutions include standardizing delivery routes, updating customer data, reorganizing packaging and assigning non-transport tasks. These changes are estimated to reduce non-transport time by 25%, excess distance by 16%, and increase fleet utilization and TOVE index by around 5%, helping the company operate more sustainably.

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David Businelli
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69 views4 pages

Project VSM: Analyze The Current Situation

The document describes a project to improve the performance of a delivery company by reducing waste and increasing efficiency. The main goals are to maximize the TOVE index and improve performance. Some proposed solutions include standardizing delivery routes, updating customer data, reorganizing packaging and assigning non-transport tasks. These changes are estimated to reduce non-transport time by 25%, excess distance by 16%, and increase fleet utilization and TOVE index by around 5%, helping the company operate more sustainably.

Uploaded by

David Businelli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PROJECT VSM

Businelli David & Sordelli Niccolò

Main goal: maximization of TOVE index and performance improvement


The steps
1. Analyze the current situation
2. Problem analysis
3. Problem solving using Lean manufacturing and Industry 4.0 knowledge.
4. How improvements affect TOVE
5. Formulation of the future state with improved performance

Analyze the current situation


After reading the case and analyze the as-is VSM, we found out that the company had some troubles with
performance efficiency.
There are two causes that generate the majority of wastes:
1. The fill loss waste (only the 49,5% of the trucks total capacity was used) a big problem in terms of
efficiency
2. The excess distance travelled equal to 28,4% of the distance. The consequence was: waste of time &
avoided to serve a higher number of clients.
Why there was such a huge waste?
 Each truck driver had to do the deliveries following the post codes. Because of this the routes made
by the trucks were overlapped.
 There were not standardized routes to follow so each driver did a different route by experience
 A truck could do multiple deliveries to the same customer in the same day
 Preferred customer received a daily delivery (without any type of scheduling) because the database
was not updated.

Problem analysis
 Improve the delivery’s routes (Standard routes)
 Update preferred customer’s status
 Organize packaging following the customer sequence
 Re-assign NIT activities to warehousing operators

Problem solving using Lean manufacturing and Industry 4.0 knowledge.


1. Re-assign NIT activities to warehousing operators
The first thing to do is to eliminate waste. Every operator needs a “standard work” according to the
area in which he is operating. So, all regarding the warehouse should be managed by warehouse
operators. That’s why we need to reassigning the NIT activities to the warehousing personnel.
The truck drivers will be interested only on the activities relative to delivery.
2. Update preferred customer’s status
The company should update the preferred customer and customer time windows database to avoid
visits to customer that did not have a steady demand. We need a more reliable information system
that gives us a more detailed plan. IIoT technology permits to track and control orders, making the
transport system clearer and easier to control
3. Organize packaging following the customer sequence
Each truck should have an integrated GPS that tracks the position of the vehicle and gives the
opportunity to the company to manage the following orders in a more efficient way
4. Improve the delivery’s routes
For improving the delivery routes there are several methods to apply
 Milk run system: thanks to this technique the company can elaborate a delivery route that
allows to deliver the packages in an optimal way. If each vehicle is used more efficiently, the
company will need fewer trucks (increasing truck’s availability) and the minimizing the trips per
day
 Standardization of the routes (5S of TPS): adopt a software to optimize the routes. For each
customer there is a fixed route to follow avoiding time wastes.
5. Green solutions
a. Hybrid vehicles for the distribution
b. Night shifts to avoid traffic jam

How improvements affect TOVE


In the sustainable value stream mapping we have to consider an important index called TOVE.
TOVE is indicates the quantity of CO2 produced by the transportation.

TOVE = (administrative availability x operating availability) x performance x quality


TOVE factors:
 Administrative availability:
o Vehicle no-scheduled time
o No-scheduled maintenance
o Driver breaks: Statutory breaks taken during a journey are considered a loss. If the statutory
break is taken at the end of a journey or when somebody else is loading/unloading then it is not
a loss.
o Excess load time: A standard time is allowed to load and unload a vehicle. When
loading/unloading exceeds the standard time, for reasons outside the control of the vehicle
driver, then excess load time occurs.
 Operating availability: excess customer service time, vehicle breakdowns and non-scheduled or
corrective maintenance, vehicle waiting time at distribution warehouse.
 performance:
o Excess distance traveled per route over the minimum required will be related to the
efficiency index of vehicle

o Fill loss: Ideally the vehicle will be full; either by weight or volume, whichever is the lower
constraint. Fill loss occurs when the vehicle is not fully loaded.
o Speed loss: The difference between maximum attainable speed and the average speed is the
speed loss
 Quality: Value losses considered important are:
o Product defects caused by handling and routing
o Percentage of customers not served by the route
o Percentage of demand on a route that is not met.
o Goods damaged in transit or poor/invalid paperwork would both be examples of quality issues
that impact adversely on the OVE measure.
The improvements proposed before can affect TOVE’s factors. Thanks to the optimization of the routes, a more
transparent data system and standardized operations the company could reduce the CO2 emissions, becoming
more sustainable.

NIT Fleet utilization Fill Excess Excess Deman Client TOVE


time (demand/capacity) loss distance serving d not served index
time satisfied outside
time
AS IS 3.2h 45% 60.5% 28.4% 49.6min 6.5% 36% 5.8%
TO 0.8h 43% 52.6 12.2% 30.3min 3.5% 26% 10.2%
BE %
∆ 25% 2% 8% 16% 40% 3.5% 10% 5%

Improvements table
(All the figures are qualitative assumptions, because we don’t have enough data to calculate the real result)

1. NIT time: with a reorganization of the activities the drivers can use their time fully for the deliveries
(reduction of waste time)
2. Fleet utilization: using the truck’s capacity more efficiently the company can gain a slight advantage in
fleet utilization
3. Fill loss: the new techniques the company can slightly increase the truck’s capacity
4. Excess distance: the utilization of a more sophisticated method optimize & standardized the length of
the route
5. Excess serving time: optimizing the routes thanks to the mill-run the company could reduce this figure
6. Demand not satisfied: the improvement of the performance of the deliveries allows an improved
customer service
7. Client served outside time: A system which is more transparent and more controlled, thanks to IIoT,
avoid delivery delays
8. TOVE index: the value of the TOVE could doubled because of the optimization of the routes which
allows to reduce the trips and produce less CO2.

The VSM basically remains with the same structure because we are not changing the architecture of the
system.

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