Business: FedEx SmartPost

Team 16: Alex JohnsonAshwin Nair

Phuc Van NguyenZiran Zhu

2

Background: FedEx SmartPost delivery model

Statement of Need: Limited staging capacity during Peak season

Project Objective: Evaluate the feasibility for vertical staging

(racking systems) as a solution to increase staging space.

Introduction

3

Project Outline

==>

Decision Matrix

Sensitivity Analysis

+Understand the

Problem and Process Model for Racking

Systems

Operating Cost estimations

Research on Costs

Model for Transport Time

Recommendation

Research on Racking Systems

Research on Operations

Evaluate Alternatives

Operating Cost

Flexibility

7 alternatives

Implementation Cost

Density Level

Transport Time

Identify Alternatives

4

Density Level Calculation

5

Transport Time Calculation

6

Project Outline

==>

Decision Matrix

Sensitivity Analysis

+Understand the

Problem and Process Model for Racking

Systems

Operating Cost estimations

Research on Costs

Model for Transport Time

Recommendation

Research on Racking Systems

Research on Operations

Evaluate Alternatives

Operating Cost

Flexibility

7 alternatives

Implementation Cost

Density Level

Transport Time

Identify Alternatives

7

Floor Staging

8

SelectiveRacking

9

Pushback

10

Gravity Flow

11

Drive-In (eliminated)

12

Mezzanine (eliminated)

13

Horizontal Pallet

Transfer System

14

Result (Evaluation of Alternatives)

Alternative Density Level1 Implementation Cost2 Transport Time3 Minimum Forklift

Trucks Transport Time3 Minimum Forklift Trucks

Yearly Operating Cost

Selective - Horizontal 7.4 $105,000 17.2 4 19.6 9 $183,000Selective - Vertical 7.4 $105,000 16 4 18.2 8 $178,000Pushback - Horizontal 12.5 $337,000 15.7 4 17.3 8 $169,000Pushback - Vertical 13.3 $337,000 14.4 4 15.5 7 $161,000Gravity Flow 12.8 $412,500 12.7 3 14.1 6 $153,000Floor Staging 3.6 $0 16.4 4 N/A N/A $169,000

Units:

3Transport Time (minutes per 12 pallets)

Off-peak - 756 p/day Peak season - 1500 p/day

Note: Yearly operating cost is rounded to the nearest thousand dollars.1Density level (pallets per 100 square feet)2Implementation Cost (1,500 pallet positions)

15

Decision Matrix

Alternatives Density Level Transport Time FlexibilityImplementation cost per

palletOperating Cost Total

Weight 7 5 5 5 7Selective Racking 2 2 5 5 2 88

Pushback 4 3 3 2 3 89Gravity Flow 5 5 1 1 4 98Do Nothing 1 3 1 5 3 73

Drive-In 5 N/A 1 4 N/A N/AMezzanine 2 N/A 1 N/A N/A N/A

Automatic Storage and Retrieval (Horizontal pallet

transfer system)5 5 1 N/A 4 N/A

16

Selective RackingBenefits:- Minimizes implementation cost and improved flexibilitySetbacks:- Slowest to remove pallets from the racks and may require

additional labor. Gravity FlowBenefit:- Significantly higher pallet staging capacity.Setback:- Relatively more expensive compared to Selective Racking.

Conclusions and Recommendations

17

Pushback- Middle ground solution- Pushback is best where having a cheaper

implementation cost and more flexibility while also maintaining a high density level is important.

Conclusions and Recommendations

18

Additional Operational improvements recommended: Changes in inspection process Route organization

Considerations for future work: Identify priorities for each hub’s needs Refine time and cost estimates Improve operational processing capacity

Operational Improvements and Future Work

Project Management (Gantt Chart)

Week 1 2 3 4 Project Proposal 6 7 Status Report 1WBS Task Name Jan 13 Jan 20 Jan 27 Feb 3 Feb 10 Feb 17 Feb 24 Mar 3

0 Find Project0.1 Create Teams x0.2 Research Projects x x0.3 Express interest in Projects x0.4 Assigned Project x

1 Define Problem1.1 Identify Objectives x1.2 Conference Call with Project Partner x1.3 Ask Questions x1.4 Create Team Charter x

2 Understand Problem2.1 Read Background Material x2.2 Plant trip x2.3 Conference Call with Project Partner x

3 Project Proposal3.1 Research Potential Approaches x x3.2 Collect Main Parts of Proposal x x3.3 Develop Presentation x

4 Research Solutions4.1 Understand Operational Process x x4.2 Research Specific Solutions for Each Approach x x x

5 Status Report 15.1 Create Status Report x

Gantt Chart (continued)

9Spring Break 11

Status report 2 13 14 15 Final Report

Mar 10 Mar 17 Mar 24 Mar 31 Apr 7 Apr 14 Apr 21 Apr 286 Evaluation of solutions

6.1 Determine if Solution is Implementable x x x x6.2 Determine if Solution is Operationally Viable x x x x6.3 Calculate the Cost/Benefit of Solution x x x6.4 Determine Scalability of Solution x x x x

7 Status Report 27.1 Create Status Report x

8 Final Report8.1 Recommendations for Action x x8.2 Develop Main Components x8.3 Create Graphs and Tables x8.4 1st Draft of Report x8.5 Final Draft of Report x x8.6 1st Draft of Presentation x8.7 Final Draft of Presentation x x

21

Budget

Week of

1/27

Week of 2/3

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2/10

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2/17

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2/24

Week of 3/3

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3/10

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3/17

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3/24

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3/31

Week of 4/7

Week of

4/14

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4/21

Week of

4/28

$0

$5,000

$10,000

$15,000

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$50,000

Cummulative Cost

ActualBudget

22

IE 332: Computing in IE◦AutoCAD

IE 335: Operations Research – Optimization◦Sensitivity Analysis

IE 343: Engineering Economics◦Payback period

IE 484: Integrated Production Systems 2◦Material Handling

IE 590: Project Management◦Project Management tools

IE courses relevant to this project