The Power of Context- Broken Window Theory

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Pre-Study at Dep. X

In order for the authors to obtain a clearer view of the circumstances at Dep. X and the problem at hand, as well as for the reader to be informed about this, a comprehensive pre-study was conducted at Dep. X. The findings of that study are the context of this section.
After the authors had made the decision to do their research on Dep. X and the cost prob-lem there, they realized the need for broad inside information on the operations of the de-partment. This was to get a clearer view of the department and where the cost problem may lie and to see whether or not the original reflections the authors had made were cor-rect. The pre-study consisted of one interview with the logistics manager at Dep. X, and one interview with the group manager at Dep. X. Also, the researchers browsed the corpo-rate website to find more information about the company.

 Findings of the Pre-Study

The findings of the pre-study interviews are the tasks of the logistics department, the tasks of individual employees at Dep. X, and some important aspects in the operations of Dep.
Also, an elaboration on the cost issue at Dep. X is presented. The remaining part of sec-tion 2 presents these findings.

The Logistics Department

Since the thesis company operates worldwide and carries such a large product range, it has a large logistics branch, which is responsible for handling the distribution of products all the way from contractors to warehouses. Within each warehouse, there is also an internal logistics department, which is responsible for unloading and organizing the products as they arrive at the warehouse. The goods must flow from the trucks into the shelves of the warehouse, so customers can buy them. In between these stages of movement of goods, freight must be examined and supplemented, registered, sorted and separated, and sent to the right place in the warehouse; shop, customer shelf or storage area.
Every day, thousands of products are handled at the logistics department, and the em-ployees there must struggle to be as efficient as possible so that all products a customer may demand are available at all times. Goods are packaged in flat parcels, transported by train, ship and trucks to be as cost- effective as possible. To be able to handle the logistical work task well, the employees must know all the activities going on in the warehouse and the locations of all products. Having full control of the warehouse and finding solutions to the logistics problems that may appear is a huge duty.
It is the responsibility of all employees working at the logistics department to examine goods for damages, and to handle freight efficiently. But it is the explicit responsibility of the logistics managers to make sure routines and methods are in place for handling so that logistics costs are held low. The group manager and the logistics manager are the ones car-rying this joint responsibility.

Pre-Study- Interview with Logistics Manager and Group Manager

Below follows a selection of the questions and answers from the pre-study that the authors found to be relevant. The questions and answers can be found in their full length in appen-dices 1 and 2. The answers from the logistics manager are from an interview conducted 2008-09-25 and the answers from the group manager are from an interview conducted 2008-10-02.

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How does the introduction for new employees work?

“The introduction information is of higher quality when we do not have peak deliveries; when there is not too much work coming in” said the logistic manager. While the group manager´s answer was “It works well. We have a check list and introduction agenda for new employees”. Both agreed on that the new employees should ask questions more fre-quently.

How do you inform your employees?

Both respondents answered the question almost identically and mentioned the same infor-mation sources when informing the employees. “Through 5 min meetings, staff meetings, e- mail concerning departmental meetings, a notice board, and the department magazine” both said.
What kind of cost problems do you have at the logistics department? The logistics manager said: “Our main problem areas are DD and WD costs”.
The group manager mentions other logistics departments: “We have been compared to other logistics department in other warehouses, and we have larger damage costs on DDs and WDs than they have”. He continues:” Mainly, the latter one is a problem, since they are unsellable products. Even since we built the external warehouse, these numbers remain high.” The group manager also tells the researchers about a group called „Cost hunters‟, which works with detecting sources of these costs.

What are DD and WD?

The logistics manager explains DDs: “DDs stands for delivery damages; damaged freight in the deliveries. Those become a logistics cost when we miss to report them, but if we report them, no money is lost for the warehouse”. He carries on: “If we have received a damaged product and notice that it is broken, we have the possibility to take a picture of it and re-port it as a DD, if this is done before the pallet leaves the quay”. Explaining WDs, he says: “WDs stands for warehouse damages, and are damages that the employees cause in the transporting and filling up of products, and this is a big problem for the logistics depart-ment, since the warehouse carries the cost”. He also adds that this is a big problem in terms of money and a big problem in relation to the customers, because of the sight of the dam-aged products around the warehouse. He says: “this does not look good; it gives bad pub-licity for the brand”. What is more, he says that they have to become better in both areas.
The group manager does not agree with the last mentioned above: “Mostly, we are very good at spotting DDs” he says. He persists; “WDs are warehouse damages, caused by cus-tomers or by employees due to lack of space, and this a big problem for the logistics de-partment”.

Dep. X at the Company

It is not in the scope of this thesis to be concerned neither with the entire furniture com-pany, nor its logistics departments in general. The focus of the problem discussion will be logistics Dep. X in one of its warehouses. Also, a benchmarking study will be performed, contrasting Dep. X with the comparable logistics Dep. Y in another warehouse.
Dep. X operates actively every morning between 5 am and 10 am, unloading and filling up products before customers arrive. About 10- 14 employees carry out these tasks each morn-ing. The manpower varies depending on the workload, illness and other unpredictable fac-tors. Some employees operate forklifts [FL], while others use pallet jacks [PJ] to the areas the forklifts cannot access, to move goods. The fork lift operators are not only to unload trucks, but also finish off task lists they receive each morning. The task lists contain orders about which products that are out, and thus need to be refilled to where, and from what place they should be picked up.
While some employees unload trucks and label freight, others fill up shelves and unpack goods. It is however the assignment of all employees to check freight for damages and re-port them, as well as removing damaged products from shelves and keeping the warehouse neat. There are also employees starting work at 9 am, who work at the customer shelves [CS] department during opening hours. These employees also hold a responsibility in re-porting damages. Moreover, the pickers [P] also hold a responsibility in removing damaged goods.

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How Dep. X Should Operate

For the logistics department to work efficiently, some important aspects that are vital to its operations will be discussed in the following section.

‘Introduction Agenda’

The company has a formal „Introduction Agenda‟ for all new employees at its logistics de-partments. It consists of a 4-day program covering all security issues, garbage sorting, and rules and routines for all tasks at the department. This introduction program is translated into English and presented in figure 3 below.

‘Checklist for New Employees’

Also, one of the things on the introduction program is a run through of the „Checklist for New Employees‟ translated into English and presented in figure 4 below. The introduction program contains a work description, handing out of clothes and materials, authorization matters and local security affairs. Also, this checklist contains an item saying that new em-ployees are to be informed about delivery damages and warehouse damages.

1 Introduction
1.1 A Mini Case of the Situation at Dep. X
1.2 Background
1.3 Research Approach: Case Study
1.4 Disposition
2 Pre-Study at Dep. X 
2.1 Findings of the Pre-Study
2.2 Cost Issue at Dep. X = Damaged Goods
2.3 Target Levels for WDs
2.4 Conclusion of Pre-study
3 Problem
3.1 Hypotheses
3.2 Research Questions
3.3 Normative Purpose
3.4 Limitations
4 Methodological Aspects 
4.1 Scientific Approach, Method and Data
4.2 Abductive Research Strategy
4.3 Validity, Reliability and Objectivity- Critics
4.4 Ethical Considerations
4.5 Proceeding of the Research
4.6 Shortcomings of and Reflections on the Research
5 Theoretical Framework 
5.1 Logistics
5.2 The Power of Context- Broken Window Theory
5.3 Communication Theory
5.4 Communication Within Organizations
5.5 Motivation Theories
6 Empirical Findings of the Research 
6.1 Interviews with Logistics Manager, Group Manager and Employees
6.2 Survey
6.3 Investigation of 5 Minute Meeting at 5 a.m.
6.4 Investigation of Damage Levels
6.5 DD Reporting- Comparison of Dep. X and Dep. Y.
7 Analysis; Reflection on Identified Problems 
7.1 Analysis of Pre- Study Findings
7.2 Comparison of Dep. X and Dep. Y; Interviews with Logistics Manager, Group Manager and  Employees
7.3 Comparison of Dep. X and Dep. Y; Survey
7.4 Investigation of 5 Minute Meeting at 5 a.m
7.5 Investigation of Damage Levels
7.6 DD Reporting- Comparison of Dep. X and Dep. Y
7.7 Summary of Analysis
8 Conclusion
8.1 Conclusion of the Problem Areas
8.2 Suggestions for Improvements
8.3 Generalizations of Findings
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