A multi-billion-dollar machinery manufacturer was facing significant space constraints during peak business periods. The main distribution center’s limitations were negatively impacting on-time delivery, inventory accuracy, and overall profitability of the organization.
The manufacturer needed help with employing improvements that would improve efficiency. These improvements are required to efficiently handle all portions of the business cycle, with the ability to add inventory from other business units potentially.
The manufacturer called upon MetaExpert David to meet the challenge. David began by analyzing the flow of materials through the facility. He immediately identified an opportunity for an improved layout that would increase velocity.
David identified further opportunities for better space utilization by using product dimensions to create the right opening sizes for groups of items. This step would inevitably help the manufacturing company increase its storage capacity and optimization.
MetaExpert David built a plan and managed the RFP process to determine the capital and expense investment needed to accomplish the project. He presented that plan to management and gained approval for the $2 million initiative to optimize its layout.
- Storage capacity of the facility was improved by 30% to handle peak volumes.
- Throughput time was decreased by 10% to assist in achieving record revenues.
- Inventory accuracy was increased by 2% and allowed a reduction in cycle count activities.
- Safety and housekeeping were dramatically improved due to space utilization improvements.
- A carrier consolidation effort delivered a 7% cost savings on a $70 million transportation spend.
- The re-writing and training of distribution center processes reduced the error rate on shipments by 15% in 9 months.
MetaExpert David helped achieve the ROI for the project in less than 12 months. The development of a Category Management approach to procurement spending drove $1 million of savings in the first 6 months of implementation.