Facility Layout and Operational Design for a Third-Party Procurement and Manufacturing Provider
Client
The client provides integrated supply chain solutions supporting in-store merchandising. Its activities encompass display design, purchasing, distribution, kitting and light manufacturing functions.
Executive Summary
The client sought to reduce operating and inventory costs for a major customer. This was the second of a multi-phase project designed to identify cost reduction initiatives to meet this goal. As a result of this effort, The Revere Group provided the client with the following:
- A comprehensive facility assessment.
- Material handling, product flow and storage profiles.
- An implementation plan to execute the recommendations
The operational layout supported a 20% inventory reduction, coupled with internal operational and material handling efficiencies that drove labor productivity up 22%.
Business Challenge
The client manages the distribution of Point of Sale (POS) display materials with a global leader in manufacturing of consumer packaged goods. In Phase 1 of this engagement, The Revere Group developed a complete inventory profile and followed a Value Stream Mapping methodology to detail the value and non-value added processes with the distribution and manufacturing facility. In this phase, the client needed specific warehouse layout and operational processes developed to help capitalize on the opportunities identified in the first phase.
Solution
The Revere Group conducted a complete layout and storage review using detailed sales and inventory data compiled during the assessment phase. The analysis employed slotting and visual modeling techniques to create optimal inventory and replenishment locations. Revere recommended that the warehouse facility be reconfigured in order to reduce space requirements and improve order filling productivity. Improved space utilization resulted from the following actions:
- Consolidating like inventory items into common storage locations
- Eliminating inactive inventory
- Improving control and location of manufacturing materials inventory
- Creating a more streamlined and productive kitting and production area
Results
The project delivered material handling efficiencies through improved traffic flow and basic task interleaving. Production efficiencies also accrued from reducing manufacturing materials handling. Ultimately, the new designs and processes throughout the facility supported a 20% inventory reduction. The internal operational and material handling efficiencies also pushed productivity up, reducing labor needs by 22%.