Analysing the impact of size, complexity and cut-off time on waste time for outbound processes in a 3PL company - Designing a calculation tool to support labour scheduling

Abstract

An outcome of increased competition among businesses operating within logistic services is a trend towards allowing shorter cut-off time in order to achieve competitiveness. Reduced cut-off times result in greater fluctuations in labour demand for logistic companies. Fluctuations in demand limit the ability to operate efficient, which is essential for logistics services, as it is a low margin business. Three variables, size, complexity and cut-off time will be analysed regarding their impact on waste time, in order to increase efficiency. Findings indicated that low volume of transactions, in the number of order and order lines, correlate with increased waste time. A correlation between reduced cut-off time and increased waste time was also established. Furthermore, analysis indicated a weak correlation between increased complexity and waste time. The findings concluded that both volume and cut-off time are important factors and should be taken into consideration when designing an inventory solution. A calculation tool was developed in order to support estimating of labour demand for new customers and assessments. Leveling smoothens the demand and allows accurate labour schedules. This method can be used for inventory processes by merging several customers’ inventory processes in order to create larger and more stable demand. A merged inventory can be established by an automated inventory solution, which is in line with the trends toward automated environments. The market’s knowledge regarding automated inventory solutions is considered as being very basic which creates barriers for implementing the solution. Increased knowledge regarding the possibilities with a merged automated inventory solution will allow a future implementation.