Goodwill Industries

Paper Magic Re-packaging and Distribution 1 Goodwill Industries: Paper Magic Re-packaging and Distribution Zach Parsons Chris Packard Dave Stark Pacific Lutheran University May 18, 2007 Business 309-01 Professor Berniker Paper Magic Re-packaging and Distribution 2 Table of Contents: Acknowledgments………………………………………………………………...3 Executive Summary……………………………………………………………….4 Introduction to the business unit, functions, and purpose…………………………5 Current and suggested processes………………………………………………….7 Results of Processes……………………………………………………………….9 Problems, opportunities, and challenges…………………………………………..10 Paper Magic Re-packaging and Distribution 3 Acknowledgments We have a few people that we would like to acknowledge for giving us the chance to do this project and assisting us as we took on the task of learning about Goodwill Industries. We would first like to thank Scott Marshall, the Warehouse Facilities Manager. Scott is in charge of the warehouse we visited, and was very helpful in assisting us and answering any questions we had. He took time out of his day to show us around the plant one morning. He also was very quick to respond to any email questions that we sent his way, and we sent quite a few. Our second thanks go to the production supervisors, Karen and Misty. We came in one morning when Scott was unable to be there, and we had all our questions asked and were able to observe the process. It was helpful to hear from someone that is around this process all day and every day. We would like to thank Ken Lund for the opportunity to be able to study Goodwill. He took a chance by letting college students evaluate his companies’ operations and we are thankful that we had the opportunity to do so. Finally, we would like to thank our professor, Eli Berniker. He brought real world applications into the classroom, which does not happen as often as it should. He was also very helpful with regards to Process Model as it proved to be quite difficult at times. Paper Magic Re-packaging and Distribution 4 Executive Summary The business unit of Goodwill Industries was the re-packaging and distribution warehouse. The specific process that we analyzed was the re-packaging of Paper Magic greeting cards into Costco and Sam’s Club display pallets. After our first initial view of this process, we thought the best idea to make this process more efficient was to add another shrink wrap machine. However, after charting this process onto Process Model, we found results that suggested otherwise. These results showed that the two workers that prepare the display pallet to be put onto the shrink wrap machine were actually blocking the shrink wrap machines from receiving work. It is not because these workers were slow; it was because they had too many job duties to stay up to speed with the rest of the process. As a result, we came up with some possible solutions. Our first solution was to add another worker to the process. This worker would be solely responsible for taking the pallets off of the rolling conveyor, put the display pallet onto the shrink machine, and start up the machine. This would allow for the two workers that re-package to concentrate on that only. Our second solution would be to add more rolling conveyor so that another three pallets or so would fit. This would give space to alleviate any back-ups that occur on the rolling conveyor. We are not doing this project to try and tell you how to run your company, but rather to try and assist you in seeing the importance of perfecting the process. We hope that with this project you will take our ideas seriously and see if our suggestions will improve the process. We have done this project to help the Goodwill and to try and help make an already successful company even more successful. Paper Magic Re-packaging and Distribution 5 Introduction to the business unit, functions, and purposes: Goodwill Industries has many different business sectors. We chose to focus on packaging, distribution, and warehouse subcontracting. This warehouse serves many purposes, ranging from long term storage to mail sorting. We chose to focus on Paper Magic. Paper Magic is a greeting card company that supplies to Costco and or Sams Club. Because Paper Magic packages their cards in a different way compared to how Costco wants it, they use Goodwill as a middleman. The next part will explain the process. Paper Magic ships their product into the Port of Tacoma. A drayage company hauls the container up to Goodwill, where they drop it off. There are two employees who take the boxes out of the container and place them on pallets, which a forklift driver takes and stacks off to the side. It takes about two hours for these two employees to offload the container. A person then quality checks the boxes that the pallet driver stacked. When Costco decides they need the product, Costco tells Goodwill when the trucks will be arriving to pick up the finished pallet. We concentrated on the repackaging process of these greeting cards. The layout in this warehouse looks something like this: Paper Magic Re-packaging and Distribution 6 Inventory inventory inventory inventory SHRINK MACHINE Worktable (2 workers) Worktable(2 workers) Repackager Worker 1 Rolling Conveyor Display pallet Display pallet Display pallet Display pallet To storage Repackager Worker 2 Worktable(2 workers) Worktable(2 workers) SHRINK MACHINE inventory inventory inventory inventory Looking at this plan of the process, we see that the rolling conveyor is the center of this process. An empty, high quality pallet is set onto this conveyor. On either side of this conveyor there are tables, with two workers assigned to each table. Behind these tables there are pallets of Paper Magic that were put there by the forklift driver, who got them from the stack where he offloaded them earlier. We were told that the slower people were put in the first tables, so that they would set the pace. Each of the four tables have the same purpose, which is to take the Paper Magic boxes out of the cardboard boxes they were shipped in, and to arrange the Paper Magic boxes to how Costco wants them stacked and put them onto the pallet that is on the conveyor. So one person puts the Paper Magic boxes onto the table, and the other employee sets them onto the pallet. Each table is responsible for one row of the finished pallet. This pallet moves down the conveyor until it reaches the next section. There are two people who are responsible for completing the display pallet. They put on the finished pallet the corners, the lid, and the pallet tag, so that the display pallet Paper Magic Re-packaging and Distribution 7 can be put onto a shrink machine, either by a hand truck or a fork truck. The shrink machine is then started up by one of these two men. Once the machine completes shrink wrapping the pallet, which takes about one minute, a different fork lift driver takes the pallet and puts it into storage. It takes around 4-5 minutes for this pallet to move from the first table and into storage. Once the truck arrives, the forklift driver will load this display pallet into the truck, which drives to the final destination. This business unit takes advantage of companies that need random yet simple tasks to be completed. It needs to be done, and it gives jobs to people that are not skilled yet need to work. In this case, Costco needed Goodwill because every pallet that goes into their store needs to adhere to certain restrictions, given the shelf space in their stores. So Goodwill was contracted to take the greeting card boxes that came from Paper Magic and to rearrange them onto a pallet that would fit Costco’s standards and shelves. Goodwill also took advantage of the fact that in this order, the price stickers were located in the wrong spot, so Goodwill was paid extra to have a new sticker put onto each Paper Magic box. Our job was to understand the basic process and to try and improve the process so that Goodwill can maximize their profits. Current and Suggested Processes: We as a team did two Process Model simulations. The first simulation is the original process that Goodwill is using to re-package the Paper Magic greeting cards, and the second process which is our recommendation. This first simulation is pictured below: Paper Magic Re-packaging and Distribution 8 Greeting Cards box display pallet Storage Fork truck Pallet Stackers Worker1 Shrink Wrap Machine 2 Finished Goods Breakdown Load Pallets Package Pallet Put into Finished Goods Load assembly Line Shrink Wrap Machine Forktruck 2 Worker2 Unpackaging The picture above is how we created the process onto Process Model. Basically we said the greeting cards get pulled from storage by the fork truck driver and then get loaded onto the assembly line. Next the “un-packaging” workers unpack the greeting cards from there original box and breakdown the box. Then the “pallet stackers” stack the greeting cards onto the display pallets and get them the right way for the company that they are sending the product to. Then “worker 1” and “worker 2” package the pallet up and put it on the shrink wrap machine for the fork truck driver to take off when the display pallet is complete and put the finished product either on the truck or back into finished storage. Our second simulation is our recommendation to Goodwill Industries. It is very similar with the exception of adding one more worker. The second simulation is pictured below: Paper Magic Re-packaging and Distribution 9 Greeting Cards Box Display Pallet Finished Goods Storage Pallet Stackers Worker1 Shrink Wrap Machine 2 Load assembly Line Breakdown Load Pallets Package Pallet Shrink man Put into Finished Goods Shrink Wrap Machine Unpackaging Fork truck Worker2 Fork Truck 2 We added one more worker to the assembly line. This extra worker is responsible for taking the display pallet off of the conveyor, putting onto the shrink machine, and starting up the shrink machine. We suggest this because where we were finding a bottleneck was at the re-package pallet part of the process. We also added room for 3 extra pallets on the roller conveyer to alleviate any backup near the re-package pallet part of the process, which allows for the re-package workers to keep working . Results of Processes: Below are two bar graphs showing where we found the backup and how our recommendations corrected that backup and made the product level increase. Paper Magic Re-packaging and Distribution 10 The highlighted yellow name at the top of the chart is where package pallet is for the original simulation. As you can see the package pallet station is being blocked about 15% of the time, which is the purple line. You also see the two yellow lines at the bottom, which represent the shrink wrap machines waiting for work close to 40 % of the time. So, by using our new simulation you get the following statistics: As you can see in the highlighted yellow package pallet section there is no purple, which represented blockage. There is now even a little bit of idle time, which means the problem has been solved. You can also see that the yellow is gone in the bottom two lines, which means the shrink wrap machines aren’t waiting on the re-package station to deliver the display pallet. Problems, opportunities, and challenges: The biggest problem that we faced was being able to portray the process of repackaging through the use of Process Model. Once we figured out a way to show the Paper Magic Re-packaging and Distribution 11 process, we then ran into the challenge of having the process model give us the exact numbers that we were looking for. The numbers gave us difficulty and some of the numbers may still not be exactly what they should be in Process Model. The main reason some of the numbers are off is due to the fact of us not being able to figure out specifically how to get all the workers to work at the same time at some stations. This gave us a lot of troubles and we have the feeling that this situation is one of the major causes of our troubles. But we did manage to get the data that we found important into process model, which showed us that the bottleneck could quite possibly be the repackage station. One more problem was the fact that we could not study the process extensively. Soon after we started studying the process, the order was completed and the warehouse moved on to completing other orders of varying types. So we had to take what knowledge and experiences with the process we had and run with it. Process Model has presented us with the opportunity of being able to see the repackaging process and critique it with ways in which we might find helpful and beneficial to the company. When we went to the repackaging and distribution warehouse and watched the process, we found the process to be efficient and very productive, but we did see a potential for a bottleneck around the area that included repackaging and shrink wrapping. The assembly line moved very smoothly, but when the product came to the repackaging there seemed to be a good possibility that it was a bottleneck. We were even told that sometimes they had to pull a display pallet off to the side so that the line did not get backed up. This gave us the opportunity to make changes on Process Model to see if we could develop ways to solve the potential bottleneck. Paper Magic Re-packaging and Distribution 12 There were two workers who would deal with re-boxing the pallet and they would also be responsible for running the shrink-wrap machines. We feel like this might be giving these specific workers too many responsibilities and the process might be a little more productive if it were simplified. Therefore, our first suggestion of improvement is for Goodwill to add a worker whose only responsibility is to pull the display pallet off the conveyor, put it onto the shrink wrap machine, and operate the shrink-wrap machines. This will then allow for the two workers to stay focused on re-boxing the pallets, which is a two person team job, and the product will then be able to consistently move quicker down the line. The other suggestion that we have for Goodwill is for them to extend their assembly line conveyer by about two or three pallets length. This will allow for the assembly line to hold more products and by doing this it ensures that those at the beginning of the line consistently have work, even if there is a backup. Our suggestion will help to keep the process going with as little down time as possible, which will allow for Goodwill to produce more and to ultimately be more profitable. In conclusion, we studied the process that Goodwill uses to re-package Paper Magic greeting cards. We developed the process onto Process Model, and used what data we could as input. We then analyzed the results, and thought about potential solutions to the problems we discovered. We feel that our results and recommendations are interesting and are worth considering looker deeper into. However, we do not make the business decisions nor are we trying to convince Goodwill that they need to do it our way. We simply are challenging Goodwill to investigate their current processes and look for ways to improve them to maximize their efficiency and effectiveness.