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Case Studies

Strategic Warehouse Review 2

Client: Multi-National Packaging Manufacturer


Background

Noting recent changes to its manufacturing operations, our client commissioned a review to assess the opportunities and risks inherent in its warehousing operations.

Challenge

A key objective of this study was to identify short term solutions to improve the layout of its reel stores and identify longer term improvements to layout, process and productivity. To achieve this objective, a high-level assessment of layout, system and/or process related issues was required to determine their potential impact on warehouse performance, including:

  • Material Flows and product configuration
  • Operating methods and warehousing policies
  • Cubic and footprint Capacity utilisation
  • Current Material Handling Equipment and potential automation

Approach

A high-level and interview based assessment of the warehousing operation was conducted, including the following activities:

  • Targeted staff interviews focussing on issues related to People, Systems, Process and Infrastructure
    ‘Walked-through” warehouse operating processes
  • Reviewed WMS functionality at a high level to assess system viability and its effect on operating processes
  • Conducted high level analysis of product/location labelling standards and location management methods
  • Defined existing and target utilisation levels to help quantify existing building potential
  • High level review infrastructure and safety assessment to identify opportunities to improve capacity/space utilisation, storage and handling methods and ensure OH&S regulatory compliance

Outcome

Identified 14 point action plan with “quick win” improvement opportunities, focussing on areas such as operating processes, layout and safety. Action plan also targeted areas requiring detailed analysis for future consideration which would form the blueprint for the replanning of existing sites as well as the basis for new facilities.

Typical Benefits
  • increased service levels up to 99.9%
  • 20-40% inventory reduction
  • the ability to fund business initiatives from operating cash flow (OCF) improvements
  • improved return on capital employed (ROCE)
  • improved debt to equity ratios
  • 10-15% reduction in supply chain costs & improved operating efficiencies
  • a minimum 3:1 ROI for work undertaken (10:1 to 30:1 typical)