BPMG3133 WAREHOUSING MANAGEMENT

GROUP A
SESSION 2022-2023 (A221)

INDIVIDUAL ASSIGNMENT 2
KENCO LOGISTIC

THIS ASSIGNMENT PREPARED FOR:

DR FARIZA BINTI AHMAD MAHYADIN

THIS ASSIGNMENT PREPARED BY:

RAFA MUHAMMAD LUTHFI ZEINUR
(281655)
TABLE OF CONTENT

1.0 BACKGROUND OF THE COMPANY............................................................................................3

2.0 SWOT ANALYSIS........................................................................................................................4

3.0 6 KEY QUALITY INDICATORS.....................................................................................................6

1. SHIPMENT ACCURACY..........................................................................................................6

2. INVENTORY ACCURACY........................................................................................................6

3. ORDER FILL RATE..................................................................................................................7

4. PACKING ACCURACY............................................................................................................8

5. PUTAWAY ACCURACY..........................................................................................................9

6. PRODUCTIVITY RATIO........................................................................................................10

REFRENCES....................................................................................................................................11
1.0 BACKGROUND OF THE COMPANY

Kenco is the premier third-party logistics company (3PL) in the United States. We provide
integrated logistics solutions including distribution and e-commerce fulfillment, comprehensive
transportation management services, material handling equipment services, engineering and
innovation consulting, and information technology. They are all designed for operational
excellence.

For over 70 years, we have built decades-long customer relationships. We take corporate
responsibility seriously by committing to ethical, honest and sustainable business practices. Our
agile, customer-focused, data-driven approach ensures we deliver real solutions and real results
to our clients. Our story began in 1950 with a single warehouse in Chattanooga, Tennessee,
with just two employees.
Jim Kennedy Jr. and Sam Smart. Our company's history is steeped in ever-evolving innovation,
but it wasn't until Kenco co-founder Jim Kennedy Jr. drafted the industry's first management
fee contract and DuPont warehouse contract in 1969. Our biggest early achievement. Even
more impressive is the fact that DuPont remains a Kenco customer to this day.

Since its first contract in 1969, Kenco has grown into a fully integrated logistics provider,
managing 116 logistics facilities covering 40 million square feet. Kenco currently serves over
350 customers with a variety of logistics needs in various industries.

Kenco is a private company with an estimated 1,735 employees. In the US, the company has a
notable market share in at least one industry: Public Storage & Warehousing, where they
account for an estimated 3.7% of total industry revenue and are considered a Golden Goose
because they display medium to strong market share and strong profit, but slower revenue
growth than some of their peers.

2.0 SWOT ANALYSIS

Kenco is a private company with employs around 1,735 people. In the United States, the
company has a significant market share in at least one industry: Public Storage & Warehousing,
where they account for an estimated 3.7% of total industry revenue and are regarded as a
Golden Goose due to their medium to strong market share and profit, but slower revenue
growth than some of their peers.
Applications for Trademarks
Kenco Group's trademark applications depict the items and services that it is producing and
marketing. Kenco Group has no recent trademark filings, indicating that the company is
concentrating on its present operations rather than growing into new goods and markets.
Brand names, product names, logos, and slogans are all examples of trademarks.
KENCO Logistics management in material handling, transportation, and warehousing. Logistics-
related business consulting services; Product distribution consulting services, operations
management services, logistics, reverse logistics, supply chain, and production systems and
distribution solutions; Consultation on business management in the realm of logistics;
Management of logistics, reverse logistics, supply chain services, supply chain visibility and
synchronisation, supply and demand forecasting, and product distribution procedures for
others are examples of business management services. Business management services, such as
supply chain logistics, reverse logistics, and the liquidation of others' goods; Freight logistics
management; Transportation logistics services, such as arranging the transportation of goods
for others; Transportation logistics services, such as planning and scheduling shipments for
transportation service users.
Risk of Recession
Determine if Kenco Group expanded or contracted during the last recession. This is important
in determining the company's financial strength and credit risk. Consider how recession-proof
Kenco Group is in comparison to the industry as a whole. While a new recession may hit a
specific industry, measuring the industry's and company's resilience during the previous
recession estimates its ability to weather future recessions.
Kenco Group's Major Competitors' Market Share
A competitive study reveals that these organisations, while not competing head-to-head, are in
the same broad field as Kenco Group. These are the most profitable corporations. However, if
they have expanded into other business lines, they may not have the biggest market share in
this industry. The "Competition" part of a business plan or investment memorandum would
begin with researching these firms. Better pricing or superior products/services provide a
competitive edge.
Future Competitors: Kenco Group's Fastest Growing Competitors
These businesses are in the same industry as Kenco Group and are quickly developing.
Companies can expand either organically or through acquisition. In certain circumstances,
seemingly large growth rates may be the result of data that was unavailable in earlier years.
Modern TECHNOLOGIES
Because of quickly changing customer purchasing patterns and expectations, new and
developing business models, and a shifting competitive environment, supply chain complexity is
rapidly expanding. To obtain a competitive edge, our customers are increasingly focusing on
modernising their supply chains. The introduction of big data, developments in information
technology, and developing analytical approaches have created a once-in-a-lifetime
opportunity for companies to use sophisticated data analytics-based decision support in their
supply chain transformation initiatives.

Kenco identified the potential early on and has taken the lead in assisting clients on their road
to supply chain transformation by building a world-class Advanced Data Analytics and Business
Intelligence capabilities.
3.0 6 KEY QUALITY INDICATORS
1. SHIPMENT ACCURACY
a) Definition
The consistency between a customer's order and what is delivered is referred to as
shipping accuracy. It essentially implies that an order's precise amount and SKU must
match a customer invoice and that it is delivered to the correct destination on time.

Accurate fulfilment guarantees that the consumer receives the exact product they
bought – the correct make, model, and colour — at the correct time and location.
b) Formula
Order accuracy rate = (Total orders fulfilled accurately / Total orders fulfilled) * 100
c) Question, calculation, and answer
Let’s walk through a quick example. If you fulfilled 100 orders, and 2 of them had
mistakes, then your order accuracy rate is 98%. See the calculation below:

Order accuracy rate = (98 / 100) * 100

Order accuracy rate = 98%

d) Explanation
Order accuracy is a critical metric that should be continuously monitored and improved
upon. To calculate it, find the number of accurate orders you’ve fulfilled, divide it by the
number of total orders fulfilled, and multiply that number by 100.

2. INVENTORY ACCURACY
a) Definiton
The discrepancy between recorded stock and actual inventory is measured as inventory
accuracy. If you have 100 pieces in your stockroom but only 80 in your inventory
management system, your inventory accuracy is 80%.
 Inventory accuracy aids in the retention of consumers. They will not order things that
are out of stock, which is extremely beneficial to them. Furthermore, you'll have a
better notion of which goods are selling, allowing you to push them further and make
the whole client experience more pleasant. As a result, your company will flourish and
consumer loyalty will improve.
b) Formula
inventory accuracy = [counted items / items on record] * 100
c) Question, calculation, and answer
your company sells phone cases, and you count 1,000 cases at your warehouse.
According to your records, you should have 1,020 cases in stock.

In this scenario, you'd divide 1,000 by 1,020, then multiply by 100. When rounded, this
gets you an answer of 98. This means your phone cases have a 98% inventory accuracy
rate.
d) Explanation
Start by counting how many units you have in stock of a specific SKU. Then, divide that
number by the recorded stock count of that same SKU, and multiply by 100.
When calculating your brand's inventory accuracy rate, keep in mind that the formula
only works if you have a reliable stock count. You can either use a physical inventory
count or opt for inventory valuation to inform your calculations.

3. ORDER FILL RATE

a) Definition
The order fill rate is simply the proportion of client orders that are instantly fulfilled by
available stock. It is sometimes referred to as the demand satisfaction rate since
customer satisfaction is strongly related to the number of orders that can be satisfied by
stock on hand. A happy customer will have all or most of their purchases completed and
dispatched right away. Stockouts and stock replenishment delays will occur if a
consumer is dissatisfied. Your connection with a dissatisfied consumer will deteriorate.
 Any ratio or figure, like other fulfilment indicators, should not be interpreted in
isolation. To determine how well your firm is performing, you must examine it as one of
a larger set of inventory management criteria. A high order fill rate may conceal
additional inefficiencies in your company. Furthermore, a low fill rate may not be
indicative of your seasonal sales.
b) Formula
Fill Rate = (Total Orders Shipped / Total Orders Placed) x 100
c) Question, calculation, and answer
you received 60 orders but were only able to ship out 45, your fill rate will be as follows:

Fill Rate = (45/60) x 100 = 75%

d) Explanation
calculate fill rate by counting the number of orders that you were able to fulfill at one
time. Then divide the number by the total number of orders you received and multiply
the sum by 100.

4. PACKING ACCURACY
a) Definition
means the guarantee provided by the manufacturer of the Goods from time to time as
of the date of acceptance of the Statement of Work; The Personal Property Securities
Act is abbreviated as "PPSA." "Price" refers to the sum indicated in each Statement of
Work (subject to any Variation) or as otherwise defined by the Company to the
Customer as the cost of the Works. "Related Work" refers to any extra construction,
carpentry, painting, plastering, plumbing, or other work or trades required by the
Customer that are not to be performed by the Company. "Services" refers to the
services supplied by the Company to the Customer as part of the Works, which may
include, but is not limited to, Goods installation. The term "Services Delay Charge" refers
to the service delay charge.
b) Formula
 (Number of Accurate Orders Picked / Total Number of Orders Picked) x 100
c) Question, calculation, and answer
You picked 1,000 orders in the month of December
Out of these, 900 orders were picked accurately and 100 orders were picked
incorrectly
Based on this data, your order picking accuracy in the month of December =
900/1000 = 0.9
Order picking accuracy (OPA) (%) for the month of December = 90%
d) Explanation
you want to know how accurate you or the 3PL you partner with is amidst the busyness
of day-to-day picking and packing. Making sure the correct number of items are going
out in any given shipment and that the correct items are being picked for each order
isn’t necessarily that difficult. But when an influx of orders comes in and deadlines must
be met, speed can sometimes have a detrimental impact on precision.

5. PUTAWAY ACCURACY
a) Definition
When the goods arrive in the warehouse, the putaway process begins by placing each
item/piece in a predefined location chosen for the most convenient retrieval. We have
various put-away processes such as direct put-away, directed put-away, batched and
sequenced put-away, and interleaving.
Putaway accuracy: Percentage of the number of items put away accurately at the
designated location.
b) Formula
(Inventory Put Away Correctly) / (Total Inventory Put Away) = Accuracy Rate
c) Question, calculation, and answer
To calculate order picking accuracy, you will need to have checking steps built into your
picking process to catch errors before picked orders end up on the back of trucks. As
 part of the process, your checkers will need to record the number of inaccurate orders
they catch (and, of course, they will need to ensure the errors are corrected).
d) Explanation
effective and efficient put away process is one of the most critical components of good
warehouse management because it has downstream effects on fill rates, which can lead
to congestion in staging areas. Accuracy rate refers to the percentage of items put away
correctly the first time; the higher your warehouse’s accuracy rate, the more efficient
your put away process, with the ultimate goal of a 100% put away rate.

6. PRODUCTIVITY RATIO
a) Definition
The labour productivity ratio is a measure that expresses the number of work units
generated per hour of work. Productivity ratios effectively measure output/input, with
time spent as input and work units as output.
As long as a valid work unit can be recognised, the ratio may be used to assess
productivity for most forms of work. Labor productivity is easy to determine for an
industrial worker. If a worker makes 1000 widgets in a week, the productivity ratio may
be 1000/40. For a writer, the situation is less clear, but a work unit could be the number
of words or pieces of content produced per day or week.
b) Formula
The formula is output / input = productivity.
c) Question, calculation, and answer
a company earns $500,000 per month selling plush toys, 10 employees responsible for
creating the toys work 1600 accumulative hours in the month, then $500,000 would
represent the output and 1600 would represent the input?

$500,000 / 1600 = $312.50

d) Explanation
 Units are the number of products that a company develops, produces or sells.
Calculating and tracking productivity is likely to positively impact revenue and help you
reach target markets. If a company earns $500,000 per month selling plush toys, they
can use a productivity ratio to calculate the revenue generated by each employee per
hour. If the 10 employees responsible for creating the toys work 1600 accumulative
hours in the month, then $500,000 would represent the output and 1600 would
represent the input.
This means that the company earns $312.50 for each hour that a person works.

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