CASE STUDY

Case Study Information Systems

Case Study Information Systems

1. Introduction

Bloemenveiling Aalsmeer (VBA), the second largest flower auction in the world, auctions about 19 million flowers per day between 6 am and 11 am, which equals 60,000 daily transactions on average (2003). VBA employs about 1,800 people, but under its roof, also many of its customers have their own Distribution Centers (DC). About 10,000 people work in the entire 1 million m2 building. The number of daily transactions has been growing with about 3% annually for the last five years. The total flower distribution process consists of two parts: distribution (by tow-truck drivers) of transactions from auctioned trolleys to customer trolleys and transport of complete customer trolleys to the customer's DC. The first part of the distribution process (distributing transactions from grower trolleys over customer trolleys) becomes more and more congested, leading to exceeding of the agreed customer lead time and makespan, which subsequently influences the handling process of flowers in the customers' DCs. In order to make the process effective, VBA has strict service level agreements with wholesalers on time fences: 95% of the transactions should arrive in the customer's area within 2 hours after the purchase. The 98% total makespan should be within about 7 hours after the auction start. Unfortunately, with the increasing number of transactions, these targets can no longer be achieved with the current organization. So far, the growth has been accommodated by bringing in more workers. This solution is no longer sufficient, as the labor market is tight in this region and motivated workers are increasingly difficult to find. Also, more workers lead to more congestion in the distribution area. As a consequence, the worker productivity has been decreasing gradually over the past years, from 38 transactions per distributor per hour in 1995 to 28.7 at the start of our study.

In section 2 we describe VBA's current process. We introduce teamwork and the implementation of teamwork, using zones at VBA in section 3 and section 4. In section 5, we describe different methods for the customer-to-aisle assignment. This assignment is important as it determines the workload imbalance between zones and thereby the performance. In section 6 the simulation model is presented, followed by results in section 7. Finally, in section 8 we discuss VBA's implementation of a work split.

2. VBA's current distribution process

Distributing flowers is an extremely time-critical process. Every night and early morning, flowers from the growers arrive at VBA, to be auctioned and distributed to wholesalers the same morning. Wholesalers add value to the flowers, by packaging, labeling, making bouquets and sell and ship them world-wide the very same day. A challenging process, as flowers and bouquets are often sold in certain quantities against a certain price, before they actually have been purchased at the auction. Although many flowers are nowadays bought via the internet, the underlying process is still based on (electronic) auctioning..

Customers can buy not only a whole trolley of flowers, but also (parts of) individual vases or boxes of ...