At the JDA Focus 2011 conference, I saw a presentation by Matt Webb and Tony Poole of Kimberly-Clark that outlined an interesting application of Lean. Kimberly-Clark applied the Lean continuous improvement process to its JDA transportation management system (TMS). The company felt that it was paying transportation analysts a lot of money, but those analysts were spending too much time clicking through the application rather than doing value-added work.
Kimberly-Clark purchased its TMS three and a half years ago from i2 (acquired by JDA last year). The company does centralized planning for North America out of Knoxville, Tennessee, where it plans 2,500 outbound loads from 40 origin points. The loads flow from plants to distribution centers (DCs), plants to customers, and from DCs to customers. All 2,500 loads are touched multiple times.
Planners perform two global planning optimizations runs per day, one at 4-5 am and the other at 8 pm. Prior to the Lean project, planners would come in at 8 am, log in to the TMS and see that they had about 100 loads to review and plan for the next optimization run. About 70 of the loads were typically fine. Those would be accepted, which involved a whole series of clicks. The other 30 loads would require changes based on business rules in the planners’ heads, which were not fully modeled in the application. After those changes were made, the planners would set the loads to plan, which involved a click for each load. And for loads going to Kimberly-Clark destinations they would make calls to set up appointments and click through a series of tenders for those destinations.
On a perfect day, a planner would be done by 9 am. But there were few perfect days. A planner might have 15 emails describing problems from the previous day, phone calls from customer service representatives, and meetings to attend. On many days, loads would not get tendered for three or four hours. The non-value added work meant that planners had limited time to perform more strategic forms of analysis. Further, Kimberly-Clark has a history of making acquisitions. If more acquisitions were made, the company wanted to increase the number of loads it could manage without increasing the number of planners.
The transportation planning project team included people from the business and IT. They looked at the whole planning process and concluded that the biggest area of waste involved all the clicks associated with processing the 70 loads that were fine.
To automate the application, they needed to get inside the minds of their users and understand how planners decided what the exceptions were, and which loads were fine. That logic then needed to be implemented in the form of a table with a hierarchy of rules. As an example, a planner might decide that all loads shipping tomorrow or the next day that have just one pick-up location and one drop off are fine and don’t need to be reviewed. Another rule might be that all loads with 53 foot equipment and a cube that falls outside a certain range absolutely needs to be looked at. There are also carrier rules (e.g., if the destination is Santa Fe, exclude Carrier X from the tender list) and lane rules (e.g., for a particular lane, exclude all loads with 53 foot trailers because it might offer an opportunity for an intermodal move).
The JDA TMS solution came with an Agile Business Platform which Kimberly-Clark used to customize the TMS. The rules described above now enable the TMS to flow loads into two batches: one batch that requires review, one batch that can be processed automatically. If a load is kicked out because it violates a rule, the application shows the user which rule was violated. The project took 10 months in total (4 months of IT work) and was completed in March of 2011. Initially, the company thought 70 percent of the loads would flow through untouched, but the actual number is closer to 80 percent.
Kimberly Clark has freed up about 35 hours per day across its planning team. But the project has had other benefits as well. Planned loads drop to the DCs loading schedule earlier, enabling added efficiencies at the warehouse; carriers get tenders earlier, allowing Kimberly-Clark to lock down prime capacity before it disappears; and planners like it because they get to go home on time at the end of the day.