I’m pleased to announce that the peer-reviewed journal, The International Journal of Operations Research and Information Systems, published an article by two of my colleagues. The article introduces a new approach to distribution center (DC) delivery scheduling, a novel inbound logistics concept we call Master Purchasing Receipt Scheduling (MPRS). The article details how an iconic American quick-service restaurant (QSR, aka fast food) chain uses MPRS to reduce DC bottlenecks, increase receiving efficiency, and eliminate hundreds of hours of planning time.
While described here for a QSR chain, MPRS can improve inbound freight management for any business that runs high-velocity DCs, particularly wholesale distributors and retailers. With MPRS, you can break away from ineffective, business-as-usual practices and discover a potent competitive advantage through reduced bottlenecks, smarter labor utilization, and a stronger bottom line.
Why MPRS Is So Important for Inbound Freight Management
As I detailed in a previous article, according to a study from the American Transportation Research Institute (ATRI), half of all warehouse visits involve driver delays of over 2 hours. Even more alarming, drivers experience delays of 4 to 6 hours 14% of the time, and over 6 hours 9% of the time. For transportation providers, all of this waiting around means increased labor costs, lower truck utilization, challenges meeting hours of service regulations, and delays with downstream pick-ups and drop-offs. For the receiving companies, bottlenecks lead to rushed receiving, skipped steps, injuries, and detention fees for excessive delay times. And the flipside of bottlenecks is excess capacity at other times. This results in low labor utilization and high costs.
So why are these delays so pervasive when there are more supply chain planning technologies than ever? Because constraints on warehouse receiving capacity have been a blind spot for most companies and their technology vendors. That has to change, given the growing prevalence of high-velocity distribution centers. MPRS is the solution.
Typical purchase order (PO) generation logic doesn’t consider DC receiving capacity. Delivery dates are planned for when products are needed, on a just-in-time basis, without considering receiving constraints. MPRS takes a different approach. Just as Master Production Scheduling creates production schedules that account for manufacturing capacity, MPRS schedules the delivery of orders taking into account receiving capacity. (Note that MPRS is not the same as dock scheduling, which plans hourly delivery time slots shortly before a driver departs their point of origin and does not consider whether there are too many or not enough deliveries planned on a given day.)
MPRS Has Already Solved a Costly Planning Problem for a Leading U.S. QSR Chain.
The QSR chain came to New Horizon for help with its ongoing challenges with delivery scheduling. When their buyers ordered supplies, they initially scheduled deliveries based on just-in-time requirements, without considering the physical receiving capacity on a given day. What if the warehouse already had 100 deliveries scheduled, leaving no open time slots? To account for warehouse receiving constraints, they had a senior planner spend a quarter of their time manually re-planning deliveries, especially around the holidays.
With the MPRS approach, deliveries are automatically scheduled at the time of PO creation. Delivery dates are optimized to smooth the flow of goods across days of the week, avoiding frustrating bottlenecks and inefficient downtime. In addition, the planning team has saved about 500 hours a year previously spent on manual planning.
MPRS provides a delivery scheduling framework that’s missing in today’s supply chain systems. This extra layer of inbound logistics optimization can complement your existing systems while positioning your supply chain for streamlined operations, reduced planning time, increased resource utilization, and lower costs.
Here’s How MPRS Works
MPRS is an advanced planning process to determine which deliveries should be made on which dates. MPRS replaces manual processes with a scheduling algorithm that plans deliveries at the time of order creation. Once deliveries are planned for the optimal day, dock scheduling can proceed as it’s done today, closer to the time of delivery.
MPRS starts by calculating weekly vendor shipments in terms of pallets, weight, and cube. Next, MPRS converts these figures into the number of trucks required each week for each vendor. It then categorizes the vendors as large, medium, or small, based on the number of trucks. Lastly, MPRS calculates possible DC receiving days based on each vendor’s availability, transit time, and DC workdays.
MPRS offsets and balances the distribution center’s workload—spreading out deliveries, starting with large vendors before identifying time slots for medium and smaller vendor deliveries within the constraints of daily receiving capacities. Through iterative refinements, MPRS reduces intake variance to promote the most efficient receiving schedule possible.
In developing the MPRS algorithm, we established three criteria for an effective planning system: consistency, accuracy, and adaptability. The algorithm is now in production and has proven itself with respect to these criteria. MPRS consistently follows the same logic and optimizes each week separately so the results are the same every time.MPRS provides receiving schedules that account for variability in truck deliveries without significantly impacting the leveling of DC workdays. Finally, MPRS uses several inputs to easily adapt and create new schedules for different scenarios on the fly.
Conclusion
DC receiving is plagued by long delay times and inefficiencies, but it doesn’t have to be this way. It’s time to start taking receiving capacity into account when scheduling deliveries. With Master Purchasing Receipt Scheduling, businesses can save time, resources, and money while keeping operations running smoothly every step of the way. With an already complex, ever-evolving, and chaotic supply chain landscape, streamlining and automating receiving shipments isn’t just a smart idea, it’s a necessity.
Ready for a Smarter Approach to Inbound Logistics Optimization?
At New Horizon, we’re proud of the business gains we’ve helped our clients achieve with MPRS. We’re ready to help your organization break free from outdated and ineffective planning. With Master Purchasing Receipt Scheduling you can rest assured that your vendor delivery schedules are automated and aligned with your DC receiving capacity so you can receive shipments on time every time.
For information on our Buyers Workbench application, which includes MPRS functionality, click on the button below.