Time is our most precious commodity, and wasting even the smallest amount can be detrimental to your business.
In a previous role, I worked in logistics, specifically with manufacturers in the northeastern United States. Every job we performed required specific arrival, processing, and departure times. Any extra downtime would increase costs both internally on labor and externally on driver detention (see Issue Type – Driver Detention). On one job in particular, we had a series of trucks arriving over four nights, three trucks at a time. Each truck had a specific arrival time of 5:00PM, 7:00PM, and 9:00PM. If we weren’t on time we typically saw costs of:
*These costs are estimated specific to this job and will vary for other industries/jobs
The clock starts with trucks being loaded, and then drivers leave the distribution center. They slept all day in order to drive all night, traveling the 500 miles to their destination. The finished product was going to a new Children’s Hospital; a four-story building set in a major city. Trucks were arriving on a schedule in the morning to coincide with a crane that would be on site. Punctuality was key here as one truck would be able to enter, be unloaded, and leave through the same entrance. In addition, ten crew members were on site ready to take the unloaded product and begin using it to build the facility.
Drivers are scheduled at least two days prior to arrival to ensure that the crane has constant use, and the truck must be off-site quickly to keep costs low (Costs compound as the system backs up. If a truck sits for an extra hour we’re looking at 10 workers x $50/hr + crane and operator at $500/hr + $400/hr overtime). Drivers were told to arrive 5 minutes early. This gave a buffer time to be led to the crane, be unloaded and leave before the next truck would arrive. If we missed our times for delivery, not only do laborers wait, but so would the crane, other drivers, our driver when he finally arrived, and the people paying to have this building constructed. Regaining traction after experiencing one of these issues is both costly and time consuming. One thing I consider is what’s my customer’s view of me and my mistake? How can I best handle this? What is my best possible outcome? Did I plan properly for this? You should consider how these costs affect everyone involved:
Being only associated with the logistics portion of this project, I only had to plan for so much. We did have a truck arrive an hour late which caused a plethora of problems. I had to determine where the extra costs were coming from, rebuild trust and relationships with my customer and their customer, all while maintaining focus on having the other trucks from the rest of the day cascade to fit the new schedule. I may have saved the situation, but I spent my whole day fixing one issue that I lost all other customer opportunities.
The most successful approach to avoid all of these scenarios is having a concrete plan, and as a Project Manager it’s important to understand the risk inherent in such a process. By relying on traditional scheduling tools you rely on averages, and hope everything works out. Simulation allows you to plan for uncertainty, avoid additional costs, and improve on time service levels.