The client for this project with CJ Gemadept is one of the leading global animal feed manufacturers, with 50 factories and production facilities in 30 countries. Preparing for its growth strategy in Vietnam, particularly in the Mekong Delta region, our client sought a reliable logistics service provider with extensive experience in warehouse operations. CJ Gemadept is honored to have been selected and trusted, establishing a long-term, win-win partnership. This milestone also marks the presence of the agricultural logistics sector among CJ Gemadept’s diverse clientele, as well as CJ Logistics in general - an area with significant potential and opportunities for 3PLs (third-party logistics companies) to explore.

Pain Point Before the Project Implementation

1. 100% Manual Operations and Insufficient Inventory for Sales:

   The client operated the entire logistics process manually, causing numerous issues. Manual handling in data entry, inventory counting, and storage management was time-consuming and prone to errors. These errors made internal operation control difficult and could directly impact product quality and order fulfillment at the sales points. Manual processes caused delays in inventory management, preventing real-time tracking of produced and available products for sale. This affected sales operations, making it unclear whether there was enough stock to fulfill orders.

2. Product Loss Issues:

   Aquatic feed products, often in powder or bran form, are prone to quantity losses. Losses could arise from QC activities (puncturing bags for testing) during receiving, natural losses during storage, or human errors during operations. Without a WMS (Warehouse Management System), identifying the causes of product losses was difficult, if not impossible. Excessive product losses without identified reasons led to asset loss and unexpected costs for the client.

3. Sub-optimal Resource Utilization Leading to High Operational Costs:

   Inefficient labor resource utilization was a significant issue. Ineffective use of manpower and unreasonable job assignments resulted in high labor costs and low productivity. Employees lacked proper training and the necessary skills for modern logistics processes, reducing work efficiency and increasing error risks. Additionally, since the client’s core operations were production and sales, the scalability of logistics resources was low, limiting the ability to meet warehouse demands during peak seasons.

4. Unstandardized Operational Processes and Layouts:

   Inefficiently designed operational processes and warehouse layouts caused significant storage space wastage and low operational productivity. Ineffective layouts led to low stacking efficiency per square meter. Products were not categorized using ABC Analysis, making it difficult to control Lot/Batch, causing confusion during picking and daily inventory counts. Unoptimized processes and layouts increased the number of internal movements, extended order fulfillment times, and reduced productivity.

CJ Gemadept's Solution

1. Implementing WMS to Ensure Sufficient Stock for Sales:

   Products were managed in real-time on the WMS from receiving to internal warehouse movements and dispatching, using barcode scanning with RF scanners. This minimized manual handling, reduced paperwork, increased accuracy, and minimized human errors. Real-time inventory updates significantly supported sales operations. Orders entered into the ERP system were immediately checked for actual stock availability, providing quick feedback on whether there was enough stock to fulfill the orders, and eliminating situations where distributors placed orders but did not receive the full quantity.

2. Integrating Smart Electronic Scales:

   Agricultural products are often bagged during receiving, and QC frequently punctures bags for sampling, causing quantity losses. Inconsistent bagging by suppliers led to non-uniform product weights per bag. Visual inspections and bag counts were not absolutely accurate and could not eliminate all risks of product loss. To address this, CJ Gemadept used electronic scales (with low error margins) to weigh each pallet during receiving, reducing the need for bag counts and accurately determining the quantity and weight of products (powder, bran) on each pallet, eliminating all loss factors before storage. After weighing, employees performed simple operations on RF scanners, combining barcode scanning of the weigh tickets to update real-time product data into the system. Each pallet was detailed with actual product quantity, lot/batch, production date, expiration date, bag type, receiving time, operator, order number, vehicle number, and supplier name. Any losses during storage and dispatch could be traced through the system to identify the causes.

3. Optimizing Resource Utilization:

   To address suboptimal resource utilization, CJ Gemadept re-evaluated and restructured labor allocation. The workforce was trained with essential skills for modern logistics processes, and tasks were assigned reasonably, ensuring each employee worked according to their abilities and expertise while strictly adhering to operational procedures. This increased labor productivity and reduced labor costs. The WMS recorded all receiving and dispatch operations in real-time, allowing detailed, logical, and fair assessment of each employee’s productivity. System data was used to implement motivational reward and penalty measures, boosting employee morale. With an extensive logistics network in Southern Vietnam, including the Mekong Delta, CJ Gemadept had ample resources for transferring and supplementing manpower during peak days, saving fixed labor costs and minimizing operational disruptions.

4. Improving Layout and Operational Processes:

   CJ Gemadept addressed layout and operational process issues simultaneously during project preparation. Layouts were redesigned using ABC Analysis, placing fast-moving items closer to convenient receiving and dispatch areas, reducing movement distances, and increasing productivity. All warehouse positions were fully identified both physically and within the WMS. Pallets were assigned ID numbers, labeled, and stored in real-time. Smart operational strategies were applied to streamline processes. Products were automatically allocated to optimal storage positions, and orders for raw materials or sales were categorized and picked using flexible strategies for maximum operational efficiency.

Positive Outcomes in the First Month of Go-live!

 Source : TEBS Department