|
DB Schenker/Spirit AeroSystems ― A 4PL
Partnership
Wichita, Kansas
USA Site Visit
November 17, 2011
By
Richard Armstrong
Attendees:
Jeff Bise, Director Operations – DB Schenker
Steve Turkle, Director SCM – Spirit
Kevin Homan, Operations Manager – DB Schenker
Carey Cargile, Senior Manager – Warehousing –
Spirit
Spirit AeroSystems and DB Schenker (DBS) recently
signed a 10-year contract extending DBS’ role as fourth-party logistics (4PL)
manager for inbound logistics and manufacturing support. The two companies
continue to work closely to insure operational efficiencies and continuous
improvement. The contract relationship started in August 2006 following
Spirit’s spin-off from Boeing in late 2005.
About Spirit¹
Spirit is one of the world’s largest suppliers of
commercial airplane assemblies and components. It builds fuselage assemblies
and components, propulsion systems and wing components and structures. About
83% of its business is with Boeing but it has expanded to serve Airbus (11%),
Sikorsky Helicopter and others. In 2010, it produced fuselages for 3,500 Boeing
737s, 31 Boeing 787s and 23 Boeing 747-8s. For Airbus, it builds the center
widebody fuselage piece for
the A350 XWB at its new Kinston, North Carolina plant. Spirit also builds wing
components for the Airbus A320, A330, A340 and A380.
 
Spirit’s revenue grew from $3.2 billion in 2006 to
$4.2 billion in 2010. It has a $28.3 billion backlog of future business.
Spirit was purchased from Boeing by Onex Corporation in 2005. Onex still
controls the majority of voting stock.
When Spirit
became an independent company in
2005, Steve Turkle and his team led the effort to redesign and improve logistics
processes. The main location is and was Wichita. Today, about two-thirds of
company employees (10,000) are in Wichita in a complex two miles wide and one
mile long covering 600 acres.
Turkle and his team had
several major changes to make for the new company. Firstly, they needed to
consolidate warehouses and develop into a distribution center model. DBS
took the lead and rebuilt a little used manufacturing building at the north end
of the campus into a DC. The building makeover took six months and DBS was
ready to operate from it in
August 2006. Besides the building, DBS built IT capability around the
Infor/Exceed WMS (warehouse management system). Also needed were racking and
other assets. DBS provided the property and IT improvements. Charges were
amortized and paid off as agreed in the original DB Schenker contract.
Labor for the new DC was arranged by
DBS for Spirit using Logistics Resources, Inc. (LRI). The new LRI operation
grew to 230 employees quickly and remains
at that level today absorbing a greater than 30% growth in Spirit’s business.
Turkle also involved DBS in transportation
management. Inbound transportation costs were significantly reduced within a
year.
Overall, logistics unit costs have been lowered
systemically for Spirit and process improvements continue to keep them under
control on an ongoing basis.
The Spirit DC averaged 75,000 stock keeping units
(SKUs) with 1.5 million pieces of inventory in 2010. A significant part is now
consignment inventory.
DB Schenker Logistics’ Role
Working with Carey Cargile, senior warehousing
manager for Spirit, DBS Logistics designs and monitors the 250,000 square foot
distribution center. It controls the movement of parts from the DC to 600
production locations (work stations) on seven routes within the Spirit
manufacturing complex.
DBS Logistics as a 4PL has this –
Mission Statement
To continually provide Spirit AeroSystems the
logistics tools, technology, and leadership to enable “world class” solutions,
delivering important “values” of efficiency, quality, and operational
performance, while also providing “sound and significant” returns on investment.
DBS had its transportation management system
operational at Spirit’s Wichita location in January 2006. The Spirit
distribution center started operations in August 2006 with DBS as the 4PL
Manager. In January 2007, 36,000 737 SKUs were brought into inventory.
Twin-aisle SKUs (747, 767, 777) were added in September 2007. In May 2009, 787
SKUs were added.
In October 2010, 6,000 aftermarket SKUs were
added. In spring 2011, fabricated parts SKUs were added. Managed inventory
parts SKUs totaled 80,000 in fall 2011.
SKUs
In June 2011, 25,000 square feet of new warehouse
space were added in Plant 1. In
November, Warehouse #2 with 125,000
square feet was opened. By year end of 2011, DBS Logistics will manage 400,000
square feet of space and 96% of the vendor production parts for the Wichita
campus.
Schenker Logistics has
also expanded to Kinston, North Carolina and Saint-Nazaire, France as a
third-party logistics provider to support Spirits/Airbus operations.
DBS processes an average of 2,600
orders/45,000 pieces daily between the DC and production sites. Seven routes to
600 locations are serviced by golf carts and tow motors pulling carts and wagons
loaded with Kan-bans and kits.
Order Ticket
A Small Parts Location
Small parts are kitted and several thousand
special kits have been made. The kits have foam interiors cut to size to
accommodate each part.
A Sample Kit
The kits are transported to specific sites where
they are usually off loaded to specific free standing rack locations.
Unload and take to
Address
Typical Delivery Address
Longer pieces are racked separately and are
warehoused using a bank of tubes. Long, straight pieces are stored by SKU,
tube by tube.
Stringer Storage
Parts are called to
assembly control locations as needed by Spirit warehouse employees using
an electronic handheld device which feeds information to the Infor/Exceed WMS –
matching to master schedule orders received by Spirit’s SAP.
Scanning
This Visual Lineside Management (VLM)
allows for parts to arrive on an as needed basis and shrinks unnecessary
inventory at each assembly control center. The implementation of VLM has
reduced backorders by 79% and work in process by 72%. Estimated yearly savings
are over $600,000.
Back in the warehouse every picking and kitting
location has its own scoreboard. These scoreboards alert employees and managers
to production levels.
Route 3 Production Levels
Spirit and DBS regularly cooperate on Kaizen
events to increase efficiency and reduce cost. An example is the Receiving
Consolidation/Re-Engineering Kaizen completed late in 2010. Carey Cargile
of Spirit and Kevin Homan of Schenker were key participants along with LRI
personnel and Spirit's receiving departments.
The goals of this Kaizen were:
-
CREATE space to
accommodate future or “new” processes coming to the Spirit DC.
-
CONSOLIDATE the
redundant receiving operations to reduce space and provide process/labor
flexibility.
-
ILLUSTRATE “Best in
Class” technology solutions as “Real Time” KPI (key performance indicator)
information is displayed at work stations for employees and supervisors to
monitor performance through “status at a glance”.
-
POTENTIALLY decrease
man-hours/day.
Results achieved were:
-
A redesign and simplification of
three receiving areas into one.
-
A freeing up of floor space by
moving China boxes outside.
-
Moving fixtures and data lines to
new locations.
-
Improve the ASN (advanced shipping
notice) on dock process to achieve better precision.
-
Receiving dashboards were installed
at four stations.
-
Cross-dock boards were relocated.
The Receiving Consolidation/Re-Engineering Kaizen
at the Wichita Spirit DC is illustrative of the ongoing cooperation and
partnership between DBS and Spirit. As Steve Turkle points out, “Logistics
brings the solution to the manufacturing floor."
With the kind of solutions and results DB Schenker
Logistics has brought to Spirit, it’s not surprising that it has a new 10-year
contract.
________________________
¹Spririt AeroSystems, Inc. Annual Report – 2010
...3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI, 3PL, logistics providers,
third-party logistics providers, fourth-party logistics providers, 3PLs, 4PLs,
lead logistics providers, DB Schenker, DB Schenker Logistics, Schenker
Logistics, db schenker logistics, schenker logistics, Spirit Aerosystems, spirit
aerosystems, Boeing, boeing, Sikorsky, sikorsky, Airbus, airbus, aerospace
logistics, Onex Corp, onex, Logistics Resources, LRI...
|
