3G Guiding Principles for Logistics Operation

  At the heart of service-oriented business is “customer satisfaction”, and so is the case for transportation business. What customers want three things from a freight service provider: “Right Time, Right Place, and Zero Damage”. Hence, a Service Level Agreement (SLA) is introduced between the service provider and the customer to ensure that the qualities of services are being improved on a regular basis. Satisfy the mutual arrangement, or risk customer dissatisfaction whenever SLA terms are breached. More so even, ensuing customer turnover, should the provider fail to identify the cause and get the problem under control.

     Hence, a Japanese-style 3G Principle has become the go-to rule of thumb for addressing all business related predicaments and operational glitches, for accurate diagnostics and qualitative problem solving. The 3G Principle consists of GENBA :: Real Place, GENBUTSU :: Real Thing, GENJITSU :: Truth (Real) Prevailing at the Time.

     SCG Logistics has applied such principles to the diagnosis and solution of problems pertaining to transportation service improvement and customer satisfaction maximization and will be participating in the educational seminar at the Institute of Asian Network for Quality (ANQ) in Taipei, Taiwan, September this year (2015), to share experience and knowledge on work quality improvement.

     SCG Logistics makes 5,000 trips per month transporting paper-rolls to over 400 destinations, averaging 100-150 km per trip using over 300 trucks of different types. Given the fragile nature of products that require special care and damage prevention, a Key Performance Indicator (KPI) was defined to ensure effective work processes at all transport stages. Problems were identified as customer satisfaction was evaluated by evaluating Claim & Complaint Case records from all feedback channels.  It was found that customer complaints rose by 4.7% in 2014 in comparison with 2013, with the largest complaint being late delivery, 95% of which were subsequent to truck quality and driver’s behavior.

     The 3G Principle was then employed to investigate root causes, by going through procedural and pertinent shipping equipment evaluations, from the point of origin to destination (GENBA and GENBUTSU) with stored time-stamped data at every stage (GENJITSU). It was found that, the process is divided into three stages; Inbound (transporting vehicle queue-reserving at point of origination), Loading (from the factory), and Outbound (out of the factory and transported to end customer). Problems surface in the Inbound stage where transport contractors operate with different procedures and carry out lengthy vehicle inspections of about 20 minutes per unit, thereby, exceeding specified KPI loading time requirements. This is a result of utilizing transporting trucks with 200kg double canvas covers and 2m tall safety slings to service 30km-radius territories with seven loading points between three factories, that forces the driver to constantly be on the run with a shortage of rest periods in order to make as many shipment trips as possible. Late deliveries take place at the Outbound stage as either the truck or the driver break down, and consequently, shipment is held back from transportation time restrictions according to land transport regulations.

     By applying such guiding investigative philosophies allowed SCG Logistics to pinpoint the source of the problem and develop accurate and effective solutions, by switching vehicle types to reduce loading turnaround time at distributing points, eliminating the heavy canvas covers truck drivers have to hassle with. Load-capacity per trip increased and issues with vehicles being out of service were alleviated. All contractors are impelled to strictly comply with new set standard operating procedures, reduced turnaround time specifications as well as random inspections for all related parties and stages. As a result, products are transported and delivered at the “Right Time, Right Place, and Zero Damage”, meeting SLA terms with high quality services, and ultimately, with less complaints as more customers were satisfied.

     The 3G Principle is without doubt an effective tool that enables service providers to resolve problematic operational quandaries. That is to say, when problems arise businesses can no longer presume what is happening but adamant, rather, to rush to the scene of investigation, or the Real Place (GEMBA), in addition to gathering information and reports from related parties which may be inaccurate. As the first principle is observed, the Real Thing (GEMBUTSU) is the next topic of analysis, to explore actual characteristics as the incident occurred. Finally, to identify and analyze the root cause of the problem and come up with a resolution guideline, the investigation must be based on Truth Prevailing At The Time (GENJITSU). The tool can be applied to any issue, any time, and all the time, if only the user realizes the benefit and value to be gained from committing the time and effort to actually doing it.

Compiled by BLOG.SCGLogistics

References: SCG Logistics Management Co., Ltd. Newsletter

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