Quality Management Issues of Shipping and Receiving

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Quality Management Issues of Shipping and Receiving

GM588 Managing Quality, Michelle Gardner
October 16, 2011

Professional Flooring Supply (PFS) is a wholesale distributor of flooring installation supplies and sundries. PFS currently has 15 branches located in Texas, Louisiana, Arkansas, Oklahoma, Colorado, Utah and Idaho. Each of these locations serves as a distribution point for resale customers as well as a retail store front for flooring installers. PFS was founded in 1977 with a location in Houston and in Fort Worth Texas. The company remained fairly small until 2005 when they began expanding rapidly. PFS in the past has always used a hub and spoke model when it come to distribution of inventory. The majority of the inventory will be shipped into the Central Distribution Center (CDC) and once a week the other branches will drive their delivery trucks to CDC to swap inventory. This inventory is used for stock items as well as special orders for customers. This system worked quite well until PFS grew past the geographical limits to make this possible. This has led to a number of issues that are occurring in the shipping and receiving department. This area of the company is vital because it insures that our customers are getting the materials they need in a timely basis. This has to be the main focus of a supplies distribution company. Some of the areas where issues are occurring are: items not shipped to customers on time, inventory not received and located in a timely manner, incorrect inventory quantities resulting in lost sales. Problem

The first area of concern is when customers are not receiving there ordered purchases on time. Our customers have jobs they are trying to complete and base the completion of these jobs on when we can deliver materials to them. If there is a snag on our part in the delivery of those goods then this in turn causes our customers to look bad to their customers. These problems can occur in a number of different areas but two of the main areas of concern are with our back order filling and shipping of materials. Often customers will make order for materials that we do not currently have in stock. When this is done the system will place the quantity of items needed in to a back order status that is to be filled when the new inventory arrives. If the receiving department does not fill these backorders (via a manual process) then there is a chance that this allocated material could be sold to another customer. PFS also utilizes a number of LTL delivery services to deliver goods to our customers as well as our own delivery trucks. PFS will also ship inventory between branches to speed up the fulfillment of customer orders. In this process often times items are entered into the system but often are not included on the shipments. This mainly occurs because PFS does not have a hard set timeline of when orders for shipment must be entered. This lack of a cutoff has resulted in branches trying to squeeze one last order in to make a customer happy but then results in a missed item that makes the customer unhappy. Another major area of concern is items that are not received and located in a timely manner. Each of the branch locations are often minimally staffed to save on labor costs. Many branches will only have one warehouse worker that also serves as a driver. Many times inventory will be delivered to us by a supplier and then not promptly checked in once the inventory is physically received. If this occurs then a customer that walks into the front of the store to purchase an item may be turned away because the inside sales team may not know that we did in fact receive the needed inventory it just wasn’t entered into the system yet. Another problem in this area is when the items are received in time but they are not located properly. Again, the inside salesperson will see in the system that we should have the items available to sell but when they go to the area that shows to...
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