Improving In-plant Logistics by Process Reengineering: Case Study

Abstract

This paper documents the experience of redesigning in-plant logistics operations of a large petrochemical complex in India. The complex under reference is expected to have a traffic volume of one truck per one minute by 2005.

The existing systems and procedures to receive and inspect a truck, load material, and complete commercial formalities are designed with a target truck turnaround time of 82 minutes. However, in reality the actual truck turnaround time is significantly higher than the target turnaround time.

The plant is located in a growing industrial area. Inordinate delay in truck turnaround time is a major demotivating factor for the truck companies to place their trucks with this complex. Consequently, there is a significant variation between the planned and actual dispatch of finished goods.

This investigation systematically analyzes the reasons for significant departure in the truck turnaround time. A truck driver survey is used to identify and prioritize areas of delay.

As a consequence of this analysis, it is argued that deployment of additional resources, optimizing the activity processing time, sub-contracting some of the activities and extensive automation of the process would only marginally improve the performance of the turnaround time.

In order to improve the turnaround time substantially, there is a need to redefine work, and fundamentally change the underlying process. Accordingly, several initiatives are identified to ensure dramatic reduction in the truck turnaround time.