Utilizing Business Process Re-Engineering for Optimization Of A Third Party Logistics Company

Purpose: Third Party logistics(3PLs) have become a critical component in the supply chains. Thus; for a 3PL to function in a dynamic and competitive environment, it needs to have business processes that cater to such an environment. As per the theory of business process reengineering, any process is a viable candidate for reengineering. This master’s thesis is aimed at identifying the business processes that need reengineering for Blue-Grace logistics a third party logistics firm located in Chicago. Design/Methodologies/Approach: To carry out any form of reengineering, it is imperative to first find out the present state of the business processes in a facility. To achieve this, a swim lane process map has been utilized. This is the very first step towards identifying the various processes and the people involved with it. The next step is to find what are the processes that are ‘most’ broken. To achieve this, a survey was administered to the workers to get their opinions on what they think needs immediate attention. Having identified a potential process, the next step is to get metrics used by the firm to measure their processes or the data collection phase. These metrics can then be used to recreate a dynamic model of the process. In this case, two models were developed at two stages. The first case utilized the principles of process mining to recreate the process from a strategic level. Thereafter, a discrete event simulation was used to further drill down to an operational level. Additionally, a task analysis was used to examine how the current environment seemed to affect the productivity levels of employees. Findings: After application of the above-mentioned methodology, the process that required the most attention was the process of booking carriers for loads. The need for approving loads by a carrier manager was found to be necessary for change. Carrier representatives needed more autonomy when it came to approving loads. A mechanism was then created based upon data of the firm to help them achieve this. Additionally, the survey revealed that the inhouse I.T. system was found to lag often. Employees reported of disturbance due to their immediate vicinity and the absence of ergonomically friendly furniture to affect their productivity at work. The efficacy of the solutions proposed were quantified by using a cost-benefit calculator related to human productivity measurement, developed at Washington State University.