A system study on Leroi Farm Store Corporation

Leroi Farm Store Corporation is a wholesale distributor of branded animal feeds, pet food, gamecock feeds and veterinary medicines. The company has two warehouses located in Bacoor and Imus, Cavite. Leroi\u27s warehouses store a variety of products which are later on distributed to its customers which are retailers and farms. There are 3 trucks which go about Cavite, Laguna and Metro Manila areas daily to deliver the customer\u27s\u27 goods. Each truck is allocated to deliver for each area which is covered by the company\u27s delivery route. Leroi is responsible in ensuring that 100% of the customer orders delivered are of quality and that 100% of the customer orders to be delivered on the scheduled delivery date. Upon conducting a WOT-SURG analysis, it was found that the most alarming concern is 5.72% of the customer deliveries were late as the delivery truck arrived past the customers\u27 operating hours. There is a 5.72% deviation from the 0% accepted tolerance of late deliveries. This results to an opportunity loss of P287,395.4l during the course of this study from June 2015 to May 2016. With an aim to solve this concern, an initial Why-Why analysis was used to expound on the many causes contributing to this problem. The causes presented in the initial diagram were further validated through interviews, time studies, work sampling and observations as well as historical data methods in order to verify that the root causes are the following: (I) trucks depart the warehouse after its scheduled departure time at 10AM, (2) breakdown of delivery trucks on its way to the customer. Upon evaluating several possible solutions through a Kepner-Tregoe Decision Analysis, r a combination of four alternatives was selected. These ae to use the trolley and ramp, give the r perfect attendance award, prepare the purchase order and follow a regular preventive maintenance for truck. The proposed system no follows a more efficient system in loading retrieving the goods from the warehouse to the truck, mitigate errors in information transfer when inputting the customers\u27 orders into the MYOB accounting system, Jessen absences of employees to ensure that individual tasks are accomplished, and lessen the number of truck breakdowns to be able to comply with the objectives of the company in delivering customer orders in full and on time. The cost benefit analysis of the system was done, and a Net Present Value of P114,140.34 was obtained. Moreover, with its implementation, the annual benefits when the proposed solution is implemented is P116,0 I 0.36 and the cost for the first year of implementation, considering the initial and annual costs is P75,632.00. The annual cash flow will be N0,378.36. Investment costs will be recovered in a payback period of 0.53 years or 6.87 months