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Contract Logistics:Electronics Case Study
Electronic Case Study
Operationally Rooted Customer Service Inefficiencies

Problem: A Pennsylvania utility company serving 2.0 million electrical and natural gas customers was experiencing a 72-hour window for receiving and distributing repair parts over a 2,500 square mile service area. Their work processes resulted in excessive inventory, multiple handlings, and delays in delivering service-sensitive materials.

Solution: ODWCS analyzed the work processes and cycle times and determined that through changes in inbound receiving, all needed material could be made available for picking the same day, and all orders could be filled with internal overnight delivery.

Benefits: Through the use of bar code scanning and directed putaway, ODWCS was able to make all materials available for picking upon receipt. The delivery process was also streamlined so that needed materials were shipped directly to the line crews, by-passing local stocking and storage functions, and saving additional handling and labor costs.

Inefficiencies in the Use of Resources

Problem: A leading producer of electronic equipment had run out of storage space in their national parts distribution center. This 400,000 sq. ft. facility was fully utilized, but the company wanted to increase SKU part numbers from 80,000 to 133,000 and increase the number of orders processed from 300 regional orders per day to 3,000 direct-ship technician orders per day.

Solution: ODWCS was one of four companies invited to analyze the situation and recommend a cost-effective solution. Each of the other three competitors recommended expanding the building. ODWCS management, however, looked at current work processes and found that the existing parts storage area was actually 50% larger than needed.

Benefits: Through the use of a random storage and velocity-based sizing design, ODWCS won the contract and implemented a solution that more than handled the increase in SKU and order volumes, and still reduced overall headcount and operating cost.
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