At a Glance
- Logistics provider re-designs in-hub processes to improve workforce planning and efficiency
- Achieves 90% fulfillment rate and 94% on-time delivery with improved performance monitoring
- Updates management control system for better performance management and visibility
Background
The client is a market leader in logistics in Southeast Asia with over 1,200 branches nationwide and overseas. It offers various services to consumers and businesses including mail, parcel and cargo logistics, bill payments, remittances, warehousing, cross-docking and cash-on-delivery. The company’s desire to cement its position as a market leader through continuous improvement led them to partner with Renoir Consulting.
The Challenge
When the client first reached out, its first- and second-line supervisors were spending excessive time on administrative activities, instead of actively managing staff and ensuring their accountability and performance. As a result, productivity levels, compliance with procedures, and delivery performance remained low.
The Renoir team found the following key areas for improvement during their analysis:
Lack of Management Control System and Practices
We found that the client’s management control practices and performance management data in the form of KPIs and SLAs were inadequate. A better system was needed to plan and control performance at the point of execution and provide the client with better visibility and oversight of employee performance.
Limited Strategic Workforce Planning
At the beginning of the project, there was a lack of a systematic approach to manpower planning, which showed significant variations in employee performance. The standards for the number of deliveries per driver, for example, varied widely and clearer KPIs needed to be defined.
“Renoir have been instrumental in being able to transform our organization into being data-driven, through the implementation of management control systems, visibility and active supervision.”
– Chief Marketing Officer
Inconsistent and Overly Wide Span of Control
The client’s span of control (SOC) showed that there was a disparity in direct reports at various levels of the delivery department, and there was a need to reduce the number of subordinates per manager.
Lack of Root Cause Analysis
Deviations to the clients’ performance metrics or plans were not highlighted and Root Cause Analysis (RCA) was not systematically conducted to understand what was going wrong, how to prevent future occurrences, or how to make improvements.
Overall, the analysis demonstrated that there was a need for business process improvements and management control systems as the existing ones were inadequate, resulting in suboptimal staffing levels, low delivery performance and operational inefficiencies.
What We Did
To address these issues, a Process Excellence Team was set up, which comprised 6 full-time LBC taskforce members under the guidance of full-time Renoir support. The approach was to implement key initiatives, or New Ways of Working (NWOWs), in 2 delivery hubs to start with for pilot testing.
Once further experience and understanding were gained, similar NWOWs would be rolled out to another 16 hubs across Luzon Island. A steering committee was also set up, made up of the senior executives, delivery top managers and Renoir management, to review the progress of the project, performance of each delivery hub, make decisions and eliminate roadblocks.
Key Results
Streamlined in-hub processes & manpower planning for delivery zones
On-time delivery performance improved by 18%
With new daily fulfillment performance KPI, achieved 90% fulfillment rate
A robust Management Control System for all management levels
Project Approach
The main activities carried out during the implementation stage of the project were as follows:
Business Process Re-engineering
Redesigned in-hub processes to better allocate manpower and improve delivery performance. The whole delivery process was broken down into three stages, namely pre-delivery, delivery and post-delivery. Each stage was assigned its own manpower resources with clear roles and responsibilities.
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Optimized Workforce Planning
Improved zone planning per delivery person was prioritized to increase productivity and manage workload. With each established delivery zone, the capacity per driver could then be determined and used to plan manpower requirements and forecast volume.
Organisation Design
The existing organisation design and structure was redefined in order to reduce the span of control across regional managers, delivery managers and team leaders. This provided more consistency in the number of subordinates to manage workforces more easily.
Enhanced Monitoring Devices & Systems
Handheld devices were deployed across delivery teams with enhancements implemented along the way for easier tracking of drivers and their performance in meeting delivery KPIs. Meanwhile, checklists were developed and implemented to monitor the condition of motorcycles and vans, preventing unnecessary breakdowns.
Updated Management Control System
A robust management control system (MCS) was installed to ensure NWOWs were implemented at all levels. The MCS would then drive the implementation of the standardized management reports and KPIs, including regular performance reviews, locally and regionally. Root cause analysis was then used where appropriate to identify core issues with any business processes. Additionally, the MCS now also drives accountability at all management levels.
Results
The re-designed in-hub processes and newly set-up pre-delivery team fast-tracked the sorting of parcels and cargoes, resulting in more deliveries per day.
With clearer roles and responsibilities for all levels, a culture of accountability was created within the organization. Expectations were underpinned by installing clearly defined KPIs such as fulfilment rates, which allowed the timely management of performance. Each team now had daily targets with reporting on undelivered parcels and cargoes and a clear understanding of reasons for non-delivery.
As a result, the client achieved 94% on-time delivery against its initial base of 80% at the start of the project.
Are your business processes and workflows designed as well as they should be?
