Operations case: Meridian Parcel
Client: Meridian Parcel, which runs a sorting hub for next-day delivery.
Question: 18% of parcels miss the next-day cutoff against a 5% target. Why, and what should Meridian do?
What you have: parcels arriving by hour, sorting capacity, labor costs and the refund paid on each late parcel.
Done looks like: the bottleneck, the size of the fix, its cost against the refunds it saves, and a recommendation. All figures are fictional.
Operations cases are about flow: work arrives, gets processed, and leaves. Delays build where work arrives faster than it can be processed.
- Follow the process step by step to find the stage that's slowest at the busiest time: the bottleneck.
- Capacity = resources × rate (sorters × parcels per sorter per hour).
- Backlog grows by arrivals minus capacity each hour that arrivals exceed capacity.
- Fixes add capacity at the bottleneck, or move demand away from the peak.
Then weigh the cost of the fix against the cost of the problem. Here the problem has a price: refunds on late parcels.
Capacity: 50 sorters × 200 an hour = 10,000 parcels an hour
Arrivals: 8,000, 12,000, 14,000 in the three evening hours
Backlog: 0 + 2,000 + 4,000 = 6,000 parcels behind
Backlog only grows in hours when arrivals beat capacity.