TV Gadgetry TV Gadgetry (TVG)-a distributor of inexpensive kitchen tools and small appliances that are promoted on late-night infomercials-is facing challenges in its DC operations Compared to the previous month, both the numbers of orders and customer complaints regarding service quality have increased dramatically in September. The company's manual picking systems and paper-based order management methods seem to be affecting perfor- mance, as is the heavy labor turnover occurring in the DC Dylan Larking, the company's vice president of logistics is determined to uncover the source of these complaints. He asks the new intern, Connor McDavis, to collect data and evaluate a variety of KPIs. McDavis jumps on the task and captures the information needed to evaluate order fill rate, fulfillment accuracy, invoice accuracy, and on-time dispatch. These metrics, McDavis believes, will help him identify the real problems so that changes can be made. His effort generates the following data: FULFILLMENT DATA SEPTEMBER AUGUST Customer Orders Processed 50,000 40,000 300,000 200,000 Units Ordered 192,507 Units Shipped 287,333 247,385 188,263 Correct Units Shipped 39,124 46,310 Correct Customer Invoices 49.188 38,791 Orders Ready by Deadline 1,500 2,000 Total Labor Hours Paid After thanking McDavis for the collecting the data, Larking asks the intern to do three things: (a) Cakculate relevant distribution KPIs; (b) Compare the results to the TVG fulfill- ment goals, and (c) Identify the major problem areas and potential solutions "Get busy with this," says Larking. "I want you to investigate the situation and report back to me on Monday CASE QUESTIONS 1. Help McDavis with the analysis by calculating KPIs for: (a) Unit fill rate; (b) Fulfillment accuracy; (c) Document accuracy; (d) On-time dispatch; and (e) Productivity 2. Compare your KPls to the following TVG goals and comment on the problem areas: GOAL KPI 95% Unit Fill Rate 98% Fulfillment Accuracy 99% Document Accuracy 95% On-Time Dispatch 135 units shipped per labor hour Productivity Distribution-Managing Fulfillment Operations 3. Based on your KPI calculations, what is the perfect order index for TVG? 4. What actions should TVG management take to address the problems that you identified? What benefits could TVG gain by adopting a warehouse management system? 5. September August 40,000 Customer Order Processed 50,000 Units Ordered 300,000 200,000 Units Shipped 192,507 287,333 Correct Units Shipped 247,385 188,263 Correct Customer Invoices 46,310 39,124 49,188 Orders Ready by Deadline Total Labor Hour (units/hr) 38,791 1,500 2,000 Metric September August Unit Fill Rate Fulfillment Accuracy Document Accuracy On-Time Dispatch Productivity Units/hr.) Metric Goal September August Comments Unit Fill Rate Fulfillment Accuracy Document Accurad On-Time Dispatch Month POI Comments August
