Page 387 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

Design and Improvement of Service Processes—Process Management 347

may be short, such as a few feet, or extremely long, as in moving items from
one continent to another. The goals of logistics processes typically are to
minimize damage and loss of items, to reduce costs involved, and to increase
the response time for moving items around.

Typically there are different modes for the transportation aspects of logistics;
certain items may be moved by air, sea, or over land by truck or rail.
Depending on the items being transported, these methods each have different
attributes regarding cost, speed, and damage potential. Process management
can be very useful in improving the performance of these processes.
For example, in France, the Minitel system, which resulted from a process
management study, has reduced logistics and shipping costs through better
coordination between the different trucking companies. The Minitel system
helps pair up shipments and trucks so that trucks returning to their original
point of origin, which may have returned empty, are now being subcon-
tracted to carry other items, thereby avoiding the need for extra round-trips.

Examples of Logistics and Distribution Processes

Mail and package delivery, food delivery, flower delivery, and moving
services

Logistics and Distribution Processes Performance Metrics

Shipment Damage or Loss
Loss or damage of shipped items is clearly a key failure for a logistics and
distribution process. Loss of items may be caused by poor handling, failure
in a shipment tracking system, or failure in a sorting process or of equipment.
Damaged items are mostly due to poor handling or packaging. Clearly, it is
desirable to reduce shipment damage and loss to a minimum.

Delivery Delays
Delivery delay means that the items arrive in a customer’s hands later than
promised. It clearly makes customers unhappy and damages the shipper’s
credibility. Delivery delay may be caused by poor handling, poor shipment
tracking, inadequate shipping capacity, bottleneck resources, and poor
scheduling.

Logistic Cost
Logistic and distribution costs depend on many factors. The important
factors include scheduling and routing, location and capacity of distribution