Case Study II - Warehouse Management ... Deck Bottleneck Issue

Background

A Canadian subsidiary of the world's renowned pharmaceutical companies successfully developed an infant vaccine that obtained approval from around the world regulatory agencies. The new vaccine was well received by the entire world due to its extremely low fatal rate and effective protection for the newborn and adolescent from many common fatal deceases. Because of the introduction of this new popular vaccine, the annual sales revenue increased 8 time. The annual vaccine volume throughput correspondently increased from 10 million doses to close to 100 million doses.

Owing to this sudden and rapid increase, the Canadian site needed huge investment to support with this rapid business/operation expansion. The HQs' priority, however, focused on manufacturing, R & D, regulatory Affairs, quality operations and packaging functions. Most of the funding were allocated to these functions.

Issue and Investigation

As usual, the logistics function was only allocated with very limited Capital funding to cope with this rapid and drastic expansion. Bottleneck was very quickly built up in the following warehouse operations - The warehouse Dock capacity was not capable to handle this 10 times throughput.

The company recruited a new VP, Supply Chain Management to resolve this logistics problem. The following were some of his findings after a series of studies and research.

1. Owing to lack of capital funding and space constraint, adding more docks were not a feasible solution.
2. There were only three High-bay docks for loading and unloading standard 40 - 53 ft trailers or ocean-going containers; and there are two low-bay docks for the small cube vans and light trucks.
3. On average these high-bay docks handle about 30 incoming and 35 outgoing trailers/containers per week. And the low-bay docks handle about 60 light trucks - the incoming and outgoing numbers are about the same. The incoming vehicles were the suppliers for ordered materials, While the going vehicles were outbound for both domestic and international product shipments.
4. Investigation also found out that the suppliers did not provide advance shipment notices and deliver on their own schedule.
5. There was no dock management system and operations were quite manual on an "First come first Serve" basis.
6. The outgoing activities were handled by the Shipping Section and the Incoming activities were handled by the Receiving Section. Their material handling equipment (such as forklifts, pallet trucks, pallets, etc.) were NOT shared.
7. In normal circumstances, the customers' orders started to arrive in the late morning and peak between 3 - 5 pm. Therefore, most of the out-going loading operations were in the afternoon.
8. Owing to the long lead time to the western provinces, those customers usually did not place order after Wednesday, thus overall outgoing shipments for Thursday and Friday usually drops by 25%.

Question

If you were the VP, Supply Chain Management, how would you resolve this Dock Bottleneck problem with only limited Capital budget.