1

AP CARGO: IMPROVEMENT OF FACILITY

LAYOUT

A Continuous Improvement Project

Presented to the Faculty

Of the Industrial Engineering Department

Eastern Visayas State University Tacloban City

In Partial Fulfillment
Of the Requirements for the Course
IE 302 (IE Industry Immersion)

By:

RHOEL BACULO YADAO

BSIE – 3A

August, 2022
 i

TABLE OF CONTENTS

Page
TITLE PAGE
TABLE OF CONTENTS ……………………………………………………………… i
LIST OF TABLES …………………………………………………………………….. ii
LIST OF FIGURES …………………………………………………………………… iii
PROJECT ABSTRACT ……………………………………………………………… 1
ABSTRACT …………………………………………………………………………… 2
BACKGROUND OF THE STUDY ………………………………………………….. 3
CONCEPTUAL FRAMEWORK …………………………………………………….. 4
PROBLEM REQUIREMENT ………………………………………………………… 5
WORK STUDY (CURRENT SYSTEM) …………………………………………….. 6
Flow Process Chart ………………………………………………………….. 6
Work Instruction ……………………………………………………………… 11
Time Study ……………………………………………………………………. 11
CI STUDY ……………………………………………………………………………… 15
Methodology ………………………………………………………………….. 15
Work Instruction ……………………………………………………………… 24
ECONOMIC STUDY ………………………………………………………………….. 25
CONCLUSION AND RECOMMENDATION ………………………………………. 27
BIBLIOGRAPHY
APENDICES
 ii

LIST OF TABLES

Page
TABLE 1. Flow Process Chart for the Inbound Process via Roro (Material Type).. 7
TABLE 2. Flow Process Chart for the Inbound Process via Roro (Man Type) …. 9
TABLE 3. Flow Process Chart for the Inbound Process via Roro ………………. 10
Table 4. Existing Actual Time ………………………………………………………… 11
Table 4.1 Existing Time Study Operation …………………………………………… 11
TABLE 5. Project Charter ……………………………………………………………... 16
TABLE 6. Work Instruction for the CI Project ……………………………………….. 24
TABLE 7. Cost Analysis ………………………………………………………………. 25
TABLE 8. Benefits Analysis …………………………………………………………… 26
 iii

LIST OF FIGURES

Page
FIGURE 1. Conceptual Framework (Journey Map) ………………………………… 4
FIGURE 1. Flow Process Chart for the Production (Material Type) ……………… 6
Figure 3. Flow Process Chart for the Production (Man Type) ……………………. 8
Figure 4. Existing Layout ……………………………………………………………… 14
Figure 5. Number of Cargoes Per Month …………………………………………… 19
Figure 6. Fish Bone Diagram for Causes of Poor Layout Which Resulted to
Delays of Operation ……………………………………………………………………. 20
Figure 7. Propose Layout ……………………………………………………………..
23
 1

PROJECT ABSTRACT

AP Cargo is a third-party logistic business known for shipping and distributing

services located in Marasbaras, Tacloban City. AP Cargo is experiencing delays in
operation on their warehouse. Through a series of visits and thorough observation in the
facility and on the operation, the proponent has found out that it was the delays on
unloading cargo from the roro truck and facility layout. In improving the facility by
optimizing the space in the warehouse can improve the quality of AP Cargo’s operation as
well as reducing the higher rate of delays in unloading cargo, the Six Sigma DMAIC tools
were applied. The proponent is proposing the project “AP Cargo: Improvement of Facility
Layout” in which it is concerned with improving the layout of the AP Cargo facility. The
proponent used Fishbone Analysis in finding the root cause of the problem. A new layout
of the facility is suggested to AP Cargo to have. It will lessen the delays of the unloading
procedure, segregation of cargoes, utilization of space and safety of the workers inside
the warehouse.
 2

ABSTRACT

VISION

➢ AP CARGO: The preferred express logistics company in the Philippines

MISSION

➢ Bridging people and businesses

CORE VALUE

➢ Flexibility
➢ Integrity
➢ Reliability
➢ Excellence
➢ Commitment

OBJECTIVES OF THE STUDY

The Proponents aim the following objectives:

1. To be able to interpret the current situation of AP Cargo clearly and accurately

including the causes and effects.
2. To be able to address the existing problem that AP Cargo have been and currently
facing throughout the years.
3. To provide feasible suggestions and recommendations to the existing problem.

4. To help AP Cargo attain maximum profitability and eliminate financial losses.

 3

BACKGROUND OF THE STUDY

The service industry has grown dramatically regarding service time, cost, and
quality, to keep pace with technological advancement and customer shopping behaviors.
As a result, companies in the service industry actively look for new opportunity to save
time and money while delivering products to customers on time. Continuous improvements
focus on adopting activities which add value either to the product or process. One goal of
a continuous improvement project is to eliminate waste and additional costs for a
company. Through proper planning, designing of improvements and implementing
controls, companies can cut costs which are not adding value to the products being
produced.
AP cargo stands as the leading domestic shipping and logistics provider in the
Philippines. With roots that trace back to its foundation in 1971, then called MBS Trading,
it evolved quickly into a nationwide air-shipping pioneer in the years to come. AP Cargo,
as it is known today, remains steadfast in its devotion to delivering more possibilities
whether through land, air, sea. AP Cargo is the only logistics company that handles
partnership, packages, and people. AP Cargo is a third-party logistics company who give
shipping services and has many branches national and international, one of those
branches is located in Marabasras, Tacloban City.
The sole purpose of AP Cargo is to provide convenience and flexibility to their
clients while going above and beyond. Given how essential each package to you and your
recipient, every parcel, document, and freight consignment is handled and dispatched with
the utmost care. People are valued by AP Cargo, who sees them as the heart and soul of
the business.
The majority of customers or consumers of this services are large offices and
business owners that come to the company to help them distribute or move their cargoes.
This service introduced in two ways: poach and bulk, depending on the size or quantity of
cargo. So by all the means people tend to go to AP Cargo when moving or shipping Bulk
items to different destination.
We, the proponents, would want to examine all transactions and processes being
made within the business from the warehouse to distributing the cargoes on their
designated areas. With this, we can understand how the management handles the
business including problems such as complaints from the customers if there’s any.
 4

Conceptual Framework (Journey Map)

The Proponents developed the following conceptual framework that would serve as a guide throughout the study. Figure 1
shows the conceptual flow of the study.

Physical Letter Table Establishment Papers Papers Table Phone for Laptop or Student Shop School
Evidence documentation phone and Center
papers

Researcher’s Making First on-site Identified Initial Brainstorming Continue Input what Improve Print Going to
Work communication assessment problems in planning observe we revision submit
letter warehouse observed of the of output
paper

Establishment Owners' Interview of Ask

Owner’s permission the process permission
Action engineer again

Professor Consultation Revision of Consultation Approval

Action of paper Paper of paper

FIGURE 1. Conceptual Framework (Journey Map)

 5

PROBLEM REQUIREMENT

As per the observation and the interview that had been made with the Process
Supervisor of the AP Cargo, the proponents had found out that the current layout of the
warehouse is affecting the unloading process, increase the delays in operation and make
the safety of the workers and especially the condition of the cargoes in the warehouse at
risk. It is because the messy arrangement of cargo, equipment, machines and
unnecessary materials in the warehouse. Considering the unloading time, it will take time
to unload the cargoes to the warehouse because of the unnecessary steps in getting the
equipment and long workflow in the operation. According to the Process Engineer of AP
Cargo Marabasras, Tacloban Branch Engr. Maria Abegail Bianes, they estimated that
around 45mins-1hr is the average unloading process in their facility. And as I notice the
workers in the operation takes time in getting the equipment such as the manual lifter from
its position to the unloading area. Another problem inside the facility was the unnecessary
parking space of motorcycle inside the warehouse and the messy arrangement of
equipment such as the plastic pallet and other cargoes in the warehouse. Therefore, the
proponents want to address this problem and come up with a proposed solution for the
business that can lessen or even eliminate this waste in time and effort they are incurring.
 6

WORK STUDY (Current System)

Process Flowchart

A. Material Type

FIGURE 2 . Flow Process Chart for the Production (Material Type)

 7

TABLE 1. Flow Process Chart for the Inbound Process via Roro (Material Type)
EQUIPMENT
FLOW PROCESS CHART
TYPE
OPN Operation: Inbound Process
NO. Via Roro
SYMBOL
ELEMENT

1 Scan & unload cargoes from the

Roro truck
2 (Branch Cargo) Unload the cargo
from the Roro truck.
3 (Not a Branch Cargo) Do not
Unload the cargo.
4 Store in warehouse

5 Segregate cargoes per area for

Delivery/pick up
6 Deliver cargoes to designated
area
7 Cargo Tagging
 8

B. Man Type

Figure 3. Flow Process Chart for the Production (Man Type)

 9

TABLE 3: Area
TABLE of Focus
2. Flow Process Chart for the Inbound Process via Roro (Man Type)

FLOW PROCESS CHART EQUIPMENT

TYPE
OPN Operation: Inbound Process
NO. Via Roro SYMBOL
ELEMENT

1 Check the MTS strip form vs the

actual cargoes
2 Take a photo on the AP seal &
cargoes inside the truck
3 Go inside the Roro truck

4 Grab and inspect the cargo label

5 (Not a branch cargo) Do not

unload
6 (Cargo branch) Scan and unload
the cargoes from the Roro truck
7 (Not a large cargo) unload the
cargo manually
8 (Large cargo) Get manual lifter

9 Use the manual lifter to unload

the cargo
10 Store the cargoes at the
warehouse
11 Sign for the MTS trip report

12 Segregate cargoes per area for

delivery/pick up
13 Deliver cargoes to designated area

14 Cargo tagging
 10

AREA OF FOCUS: UNLOADING PROCESS

TABLE 3. Flow Process Chart for the Inbound Process via Roro
FLOW PROCESS CHART EQUIPMENT
TYPE
OPN Operation: Unloading Process
NO.
SYMBOL
ELEMENT

1 Go inside the Roro truck

2 Grab an inspect whether the

cargo is for the Branch
3 (Not a Branch Cargo) Do not
Unload the cargo.
4 (Cargo Branch) Unload the cargo
From the Roro truck
5 Not a large cargo) unload the
cargo manually
6 (Large cargo) Get manual lifter

7 Use the manual lifter to unload

the cargo
8 Store in warehouse

9 Segregate cargoes per area for

Delivery/pick up
10 Deliver cargoes to designated
area
11 Cargo Tagging
 11

WORK INSTRUCTION
AREA OF FOCUS: UNLOADING OPERATION
Elements:

1. Receive documents from Roro truck

2. Check the MTS trip form vs the actual cargoes
3. Take a photo on the AP seal & cargoes inside the truck
4. Go inside the truck
5. Grab and inspect the cargo label
6. Scan the cargo from Roro truck
7. Get the manual lifter
8. Use the manual lifter to unload the cargo
9. Put the cargo inside the warehouse
10. Sign on the MTS trip report
11. Segregate cargoes per area for delivery/pick up

Table 4. Existing Actual Time

Table 4.1 Existing Time Study Operation

TIME STUDY OBSERVATION
SHEET
Sheet: 1 of 1 Date: August 5, 2022
Operation: Inbound Operation Op. No.:
Part Name: Petilla, John Mel M. Part No.:
Machine Name: Manual lifter Mach. No.:
Operator’s Name & No.: Petilla, John Mel M. Gender:
Experience on Job: N/A Material:
Foreman: Dept. No. IE Dept EVSU
Sheet: Date:
 12

Begin: Finish: Elapsed: Units Finished: 3 Actual No. Of

00:09:00 00:09:45 00:02:02 Time/100: Machines
2:02 Operated:
1
Elements L R M 1 2 3 Selected Time

1. Receive documents T 0.02 1.235 2.1975

from Roro truck R 0.10 0.075 0.125 0.1

2. Check the MTS trip T 0.12 1.31 2.3225

form vs the actual R 0.10 0.075 0.125 0.1
cargoes

3. Take a photo on the T 0.22 1.385 2.4475

AP seal & cargoes inside R 0.05 0.0375 0.0625 0.15
the
truck

4. Go inside the truck T 0.27 1.4225 2.51

R 0.10 0.075 0.125 0.1
5. Grab and Inspect the T 0.37 1.4975 2.635
cargo label R 0.05 0.075 0.0625 0.0625

6. Scan the cargo from T 0.42 1.5725 2.6975

Roro truck
R 0.15 0.1125 0.1875 0.15

7. Get the manual T 0.57 1.685 2.885

lifter R 0.20 0.15 0.25 0.2

8. Use the manual T 0.77 1.835 3.135

lifter to unload the R 0.20 0.15 0.25 0.2
cargo

T 0.97 1.985 3.385

9. Put the cargo inside R 0.10 0.075 0.125 0.1

the
warehouse

10. Sign on the T 1.07 2.06 3.51

MTS trip report R 0.15 0.1125 0.1875 0.15

T 1.22 2.1725 3.6975

 13

11.Segregate cargoes R 0.015 0.025 00.00 0.01

per area for
delivery/pick up

Selected Time: Rating: Normal Time: Total Standard

1.3225 100% 1.3225 Allowance: Time:
10% 1.42 mins
Workstation Layout: Instrument Used:
Stopwatch
Time Study Board

Timed by: JM Petilla

We observed certain delays in the operation as a result of the time study that
we conducted, and that is the Elements No. 7 which is the (Get the manual lifter). The
result is 1.42 mins.

LAYOUT

The proponents decided that the area of focus for this CI Project will be the
Unloading Process. Below is the layout for the current system of the unloading area.
 14

Layout of AP Cargo Logistics Tacloban

Existing Layout
10000
5000 5000

Figure 4. Existing Layout

WARDROBE
5000

Plastic Pallet Stack Area

C
Manual Lifter
V
Steel Rack 18ft
5000
25000
5000

Cargoes

Table

W2
5000

Cabinet

CR Cargoes
W1
Weighing
D3 Scale
D2

Office
5000

W1 Table

W1 W1

D1
 15

CI STUDY (Proposal for Improvement)

METHODOLOGY

In improving the quality of the AP Cargo unloading process and optimized the
workflow as well as reducing unnecessary operation, the Six Sigma DMAIC tools were
applied. In this section, the technique and results are demonstrated.

• Define
AP cargo stands as the leading domestic shipping and logistics provider in the
Philippines. With roots that trace back to its foundation in 1971, then called MBS Trading,
it evolved quickly into a nationwide air-shipping pioneer in the years to come. AP Cargo,
as it is known today, remains steadfast in its devotion to delivering more possibilities
whether through land, air, sea. AP Cargo is the only logistics company that handles
partnership, packages, and people. As a Third logistic company, shipping delay,
distribution of cargoes, damage cargoes, loss items and safety of the workers are the main
problem of this business. And having a delay and high loss rate of item will definitely have
a significant effect for their business which could be a reason for their business to close if
it continues to develop. Below is the project charter for the whole continuous improvement
project.
 16

TABLE 5. Project Charter

PROJECT NAME AP Cargo: Improvement PERSON Head Section

of Facility Layout RESPONSIBLE

PROJECT START September, 2021 TARGET October,

DATE COMPLETION DATE 2021

PROJECT The problems that had been identified are the shipping delay,

DESCRIPTION distribution of cargoes, damage cargoes, loss items and worker’s

safety. Therefore, this project is concerned with improving the
facility layout to optimized the space and time during operation.

BUSINESS CASE To reduce delays and optimized the workflow

PROJECT PURPOSE To utilized the space in the warehouse to prevent blockage,

delays, damaging the cargoes and reduce the chance of accident
in the facility.

PROJECT SCOPE This proposed improvement is limited to improving only the

facility layout,
Workflow and utilized space.

PROJECT RISKS 1. Can affect operation during implementation.

2. Can change the arrangement of the equipment and other

materials.
 17

• Can reduce the possibility of accident inside the

BUSINESS BENEFITS warehouse

• Can increase sales and improve business reputation

• Can reduce delays in operation

• Can reduce the possibility of damaging the cargoes

• Can reduce the rate of items loss

CUSTOMER • Faster service

BENEFITS • Quality assurance of their cargoes

ESTIMATED Approximately Php 1000 of labor in implementing the layout

PROJECT COST
 18

• Measure
For the material and equipment, the facility has 2 manual lifters, 1 digital weighing
scale and CMS1 Scanner that helps them to track the cargo’s location in the system. All
of this equipment is use during unloading process in via roro and all are inside the
warehouse including the Plastic Pallet and Steel racks. The unloading process takes
45mins-1hr to finish including the scanning and segregation of the cargoes.
For the location and layout of the warehouse, AP Cargo has 2 branches in
Tacloban City, one in Real and one in Brgy. 79, Marasbaras. The branch in Marasbaras
was the branch where we conduct our observation. The total floor area of the warehouse
is 551 sq. m. The facility is a two-door warehouse and divided into 2 sections for AP Cargo
logistics and Apex logistics. At the gate, table and chairs are prepared at the of the office
for the customers who avail the services. There cabinets and steel racks for the cargoes
that are entering the warehouse. Manual lifters are located at the back-part area of the
warehouse. Wardrobe for the workers and stack-pile area for the plastic-pallet and area
for large and specific cargoes are all inside the warehouse.
Based on the interview that had been made with the Process Engineer of AP Cargo
Logistic, it was stated that the cargo arrived in the warehouse every 2-3 days by Roro
truck and unload to the warehouse and segregate in different location for pick-up and
delivery. The number of cargoes in every trip varies depends on season or client orders,
the more cargo the time in unloading process increases also. Therefore, we decided to
calculate the total number of the cargoes that arrived in the warehouse per month. The
figure below shows the number of cargoes from June to August.
 19

Total Number of Cargoes

1180
1165
1160

1140
1125
1120

1100 1095

1080

1060
June July August

Figure 5. Number of Cargoes Per Month

• Analyze
From the information we collected regarding of the facility layout and unloading
process of the establishment based on our personal observation and brainstorming
together with the management and workers of AP Cargo Logistic Tacloban. We found out
that the most affecting why there are delays in the process in the warehouse is due to
improper management of equipment locations and messy workplace layout. We also
noticed that equipment and cargo placement can affect the operation in the warehouse
and can cause more blockage.
Therefore, we used a cause – and – effect diagram or fish bone diagram to identify,
sort, and display the possible causes of unorganized layout. The fishbone diagram helps
us to determine the root causes of our problem, and which is an easy – to – read format
and helps us to identifies areas for collecting data. Based on our brainstorming, there were
many possible causes of having a poor layout and they are described in a fishbone
diagram as shown below.
 20

Fish Bone Diagram

People Machine Measurement

Operating Condition
Qualifications Cargo Label
Machine type
Lack of trainings/
Number of Cargoes
seminars Lack of machines, equipment

Poor Facility
Layout
Workplace Old Methods
Delivery Schedule
Policies/ Guidelines
Warehouse Condition
Process for safety
Damage cargo
Temperature is not followed

Environment Methods Material

Figure 6. Fish Bone Diagram for Causes of Poor Layout Which Resulted to Delays of Operation
 21

After identifying what is the root cause of having a delay in operation in the facility,
which is because of the poor layout. The Proponents proposes a possible improvement
actions or process on how to eliminate delays and blockage in the warehouse. We believe
that a good layout facility will open a lot of operation opportunity and minimize the delays
in the operation.
So, we the Proponents come up with a solution with their problem of having a delay
in operation. Based on our brainstorming with the group together with the management of
AP Cargo Tacloban, and the possible causes described in the fish bone diagram, it is
being proposed to have a new facility layout design that follows the principles of a good
layout to management and utilized the space throughout the warehouse.

• Control
For the last phase for Six Sigma DIMAIC tool, we need to determine how our proposed
improvement be sustained by implementing guidelines. The aim of our proposed
improvement project is to minimize the delays of AP Cargo Tacloban’s operation inside
the warehouse. So, we proposed a new facility layout for the establishment. To accomplish
this, they will first need implement the layout in their operation. This procedure will have
an impact in their operation and will gain benefits in long-term situation.
The entire business gains from a well-designed layout in addition to individuals
involved in the operation. It leads to increased productivity, a shorter processing cycle,
lower costs, and ultimately higher customer satisfaction. A well-thought-out and developed
layout has the following benefits:

1. The cost of labor

• Greater productivity due to higher output per worker hour.
• Reduce the number of employees.
• Minimal movement between procedures

2. In production management
• Increased rate of output.
• supplying accessible and sufficient storage spaces.

3. In Supervision
• Little supervision is necessary.
 22

• Time spent on inspection is cut down.

• Reduction in inspection costs.

4. Operation Cost
• Decreased energy use
• Deduction of scrap and defects to a minimum.
• Decreased handling results in improved quality.
• Decreased maintenance costs.
• Increased use of the materials.

5. Worker
• Decrease in the quantity of handling.
• Reduced strain, tension, and effort.
• Improved security and reduced risk of accidents.
• Enhanced production resulting in increased pay.
• Improved motivation and morale.
• Improved welfare and health.

The proposed layout with organized flow of process is shown below, where it
designed for efficient operation. The plastic pallets are stacked differently first, and then
the parking spot inside the facility is moved outside. The crew also moved the manual
lifter's position to improve productivity during operation and moved the cargo locations to
make the most of the warehouse's available space.
 23

Propose Layout

10000
5000 5000

WARDROBE
5000

Cargoes Plastic Pallet Stack Area

Figure 7. Propose Layout

Steel Rack 18ft

5000
25000
5000

Table
5000

W2
Cabinet

CR Cargoes
Weighing
W1 Scale

D3
D2
Manual
Lifter
5000

Office W1 Table

W1 W1

D1
 24

Principles of a good layout is the basis of the changes in the existing layout.
Principle of Overall integration and Principle of Satisfaction and Safety was applied on
changing the arrangement of plastic pallet to reduce the space when stacking and reduce
the risk of accident when getting. The principle of Minimum Distance was applied on the
positioning of the manual lifter. The Principle of Cubic Space Utilization, Principle of Flow
was applied on the repositioning of parking space and other cargoes in the warehouse to
achieve the optimum space, avoidance of blockage inside the warehouse. The proposed
layout was intended to work during normal days and seasonal events with lesser delays
in operation that indicates the appearance of the Principle of Flexibility

WORK INSTRUCTION

For the proposed improvement, the table below shows the work instructions
including the project description, objectives, actions and expected outcome from the
actions taken.

TABLE 6. Work Instruction for the CI Project

TITLE OF PROJECT AP Cargo: Improvement of Facility Layout

DIVISION/AREA FACILITY LAYOUT (Unloading Area)
PROJECT EFFECTIVITY DATE December, 2022
PERSON RESPONSIBLE Head Section
PROJECT APPROVED BY Process Engineer: Engr. Maria Abegail
Bianes
DESCRIPTION OF THE The problems that had been identified are the
PROJECT shipping delay, distribution of cargoes, damage
cargoes, loss items and worker’s safety.
Therefore, this project is concerned with
improving the facility layout to optimized the
space and time during operation.
OBJECTIVES • To provide instructions and guidelines to
maintain the work process flow.
• To provide good facility layout that will
maximize the space in the warehouse and
minimized the effort and workload of the
workers.
ACTION 1. The plastic pallets are stacked differently
first.
2. The parking spot inside the facility is moved
outside.
3. The manual lifter's position to improve
productivity during operation and moved
 25

the cargo locations to make the most of the

warehouse's available space.
SAFETY CONTROLS 1. Before starting the operation, inspect
the machine and equipment’s position
to reduce waste of time in gathering
them.
2. Clear the operation area to avoid
delays ang blockage.
3. Always check doors and door lock
during the unloading process
4. Check the steel racks before putting
cargoes in it.
5. Handle the cargo properly to avoid
damaging the cargo and avoid injuries.
WHAT TO COMPLETE • Lessen the delays in the operation
• Reduce labor cost
• To increase sales and improve
business reputation

ECONOMIC STUDY
COST BENEFITS ANALYSIS
Considering making an improvement or changes in business, this analysis will help
to showcase and analyze if the project will be beneficial to the business. The proponents
help to showcase and analyze if the project will be beneficial to the business. The
proponents proposed a new facility layout for the warehouse.

The implementation of this project “New Facility Layout” to AP Cargo Logistic

Tacloban is to be able to improve the operation and maximize the space of the facility.
This proposed project will be a big help in increasing revenue and decrease or eliminate
delays in operation which leads to loss. The table below shows the cost of implementing
the new layout.

TABLE 7. Cost Analysis

CATEGORY DETAILS COST

• Implementing the Labor (consist of 3 people) Php 885
layout.
TOTAL Php885
 26

TABLE 8. Benefits Analysis

CATEGORY DETAILES BENEFITS WITHIN 6

MONTHS
• Increase Revenue 10% - 20% increase in Php2,750,000 – 3,000,000
revenue
• Machine Maintenance Lessen frequent Php10,000
maintenance of machines
• Minimized damage and 90% decreased in damage Php350
loss cargo and loss
TOTAL Php3,010,350

Using the data above we calculate the payback time:

𝐶𝑜𝑠𝑡
= 𝑝𝑎𝑦𝑏𝑎𝑐𝑘 𝑡𝑖𝑚𝑒
𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠

885
= 0.0003
3,010,350

The cost for the implementation of the new layout is expected to be paid off within
0.0003 year. This means that after 0.0003 year, in calculation of revenue, the cost in
implementing the new layout isn’t included anymore.

To calculate for the Cost Benefits Ratio, we first divide the total cost by the payback
time to get the new cost for 0.0003 year.

885
= 2,950,000
0.0003

Using the data, we calculate the Cost Benefit Ratio:

𝑏𝑒𝑛𝑒𝑓𝑖𝑡
𝐶𝑜𝑠𝑡 𝐵𝑒𝑛𝑒𝑓𝑖𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝑐𝑜𝑠𝑡
3,010,350
𝐶𝑜𝑠𝑡 𝐵𝑒𝑛𝑒𝑓𝑖𝑡 𝑅𝑎𝑡𝑖𝑜 =
2,950,000

Cost benefit Ratio = 1.02

The ratio is greater than 1, it means that the project will give the company a positive
net benefit.
 27

To calculate the Net Benefit:

Net Benefit = Benefit – Cost

Net Benefit = 3,010,350 – 2,950,000

Net Benefit = Php60,350

The net benefit in 6 months is Php60,350, it is positive value which means that the
proposed project will have impact to the company.

CONCLUSION AND RECOMMENDATION

CONCLUSION

The purpose of this study was to emphasize and showcase the effectiveness of
new facility layout to AP Cargo Logistic Tacloban especially in their performance and
operation which helps to maximize space, minimize cost and reduce waste of effort to
increase productivity of the workers.

In AP Cargo Marasbaras Branch facility, the proponents found out that the poor
facility layout in the warehouse is one of the reasons in having loss, as for the operation
flow shows delays and causing some cargoes to be lost or damage during the process.
With this the proponents come up with this CI Project to be able to avoid or decreased
loss in AP Cargo Tacloban and one way or another increase their productivity and
customers satisfaction.

With the help of proposed facility layout their operation flow runs smoothly and
widen the gaps in the warehouse to eliminate blockage. Which will help them increased
revenue and decreased loss, which also could be great opportunity to widen their scope
of delivering cargoes without further delays in the long run. This also one way or another
help to level up their market opportunities not just locally but internationally.

RECOMMENDATION

Based on the Cost – Benefit Analysis data conveyed; this paper makes a
recommendation to the management of AP Cargo Tacloban:

To maintain the safe and continuous workflow in the facility especially in unloading
process to improve the performance of the workers.
 28

By implementing this kind of strategy, the operation in the facility could assure the
increased in revenue and opportunity, and also decreased or eliminates loss in their
business. Moreover, having this improvement won’t only benefit the business but also the
safety of the customers and satisfaction.
 29

BIBLIOGRAPHY

Derpich, I. (2022, May). Warehouse Optimization: Energy Efficient Layout and Design.
ResearchGate. Retrieved September 1, 2022
Sunol, H. (2021, March 3). The Principles of a Warehouse Layout Design. Cyzerg
Warehouse Technology. Retrieved September 1, 2022
Systems, N. (2016, July 26). Top Five Warehouse Management Problems and How to
Fix Them. Newcastle. Retrieved September 1, 2022
Pedraza, C. (2021, March 5). What is warehousing? Importance of Warehouses in 202
and beyond! Pedraza Custom House Brokers, Inc
Thakur M. and Vaidya D. (n,d) Cost-Benefit Analtysis Formula Wallstreetmojo
Retrieved September 1, 2022
 30

Appendices
31
32
33
34
35