Case on Delivery Performance Improvement

1 Introduction

The objective of this case study is to improve lead time delivery of spare parts from Distributor Center (DC) to TTT Sdn. Bhd. (TTT) warehouse which is located at Kemaman, Terengganu before deliver to end user within Kemaman area.

2 Case Study

TTT is a service provider company specializing in providing manpower services and spare parts for diesel engines maintenance. Its core business focus on oil & gas industry and cover for both onshore and offshore industrial applications such as diesel engine generator, pump and compressor packages. TTT is consist of 30 service technicians, 6 service engineers and 3 office supervisor to handle administration, finance and service parts.

TTT establishment in Kemaman as immediate support to local oil & gas industries as other branches for TTT Sdn. Bhd. is located at Miri, Labuan and Brunei. Its headquarters is located at Puchong, Selangor while DC for South East Asia region is located in Singapore.

Before TTT service team begin process of performing maintenance on client’s diesel engine, they must ensure that all related spare parts for maintenance purpose is arrived, inspected and packed as client’s requirement before deliver to work site. Normal order process started when Service Parts Supervisor key-in order through dealership system. From the system the supervisor able to get confirmation on parts availability either at Singapore or other location. ¬In normal scenario majority of the spare parts are available at Singapore and once order process is completed, spare part are ready to be delivered.

One of limitation TTT’s operation is duration for spare parts to arrive from DC to TTT warehouse will take up to 1-2 weeks even though Singapore is just a neighbor country. Author found out their current practice is bad for business as they will lose potential and existing client due to delay in spare parts delivery. Most of TTT competitors are able to source out the same product within one week. One critical weakness to TTT’s operation due to not implement keeping stock for common spare parts at their warehouse. Even if the clients need common spare parts such as lubricants, filters or gaskets, they need to wait for almost 2 weeks to receive the required parts.

The delivery to TTT warehouse is scheduled for twice a week which is on Tuesday and Thursday by truck or trailer, depending on the capacity of orders. Since TTT Kemaman branch is not working on Friday, most of the parts delivered on Thursday are only be processed on the following week. The schedule for truck arrival is irregular but frequently will arrive at TTT warehouse around 6-7 pm. Store-men need to standby to receive spare parts, manage handling to warehouse and complete necessary documentations. From author’s point of view this is additional cost to TTT operation due to unnecessary cost incurred for staff’s overtime on Tuesday and Thursday. If there is urgency that require store-man to process the received spare parts, they are needed to work during weekend too.

Another comment from author is Service Parts Supervisor is handling the critical task alone without assistance or support system. If the supervisor is on leave or absent due to medical issue, the ordering process is put on hold. For the time being there is no plan for TTT to hire support staff to assist Service Parts Supervisor.

According to Operation Manager of the company this process flow has been as it is since the company establishment at Kemaman. From author’s observation there is room for improvement should be implemented in their business work flow. However this will involve a lot of approval process at higher management level considering annual company’s budget on capital expenditure and operational expenditure.

Teaching Notes:

Case on Delivery Performance Improvement

Tengku Hasanul Firdaus, Shahryar Sorooshian*

Faculty of Industrial Management

Universiti Malaysia Pahang

MALAYSIA

*sorooshian@gmail.com

This case study is suitable for Service Operation Management subject for (Management) diploma students. Learning outcome throughout this case will cover both comprehension and application of Bloom’s taxonomy.

Lecturer may ask students to form in group of 2 or 3 person to read and discuss among themselves in 20 minutes. Then lecturer may ask their opinions, comments and share their findings among other groups. At the end of sharing session lecturer may conclude the answers and relate to below solutions of the case study.

Problem Solution

1. Supply Chain Management – Logistic Management.

As mentioned in the case study, delivery operation is limited by transportation arranged