A client of Establish's was running into some warehouse process problems: the warehouse was not as efficient as it could have been and, with a labor shortage of quality workers, needed to become as efficient as possible. As such, they called Establish and enlisted our help.
The current situation was a warehouse that acts as the hub for our client's business: it receives all of the sourced product and distributes to end customers, retailers and its network of satellite warehouses. As such, it was critical that this operation be as efficient as possible.
The operation consisted of all magnitudes of order picking: full pallet, case and unit/inner pack. Initially, the picks were done in varying areas: inner and unit picks were done from full cases, pallets and from case flow rack. Cases were pulled from the case flow rack, a hot-case area and the full pallet area.
Additionally, capacity was a constraint. The warehouse was nearly out of space.
Once Establish came in, we started with our standard, 8-step methodology. We had a project kick-off to discuss the parameters of improvement and toured the site for the first time. In the meantime, we collected all the data we could from our client's ERP system: receipt history, monthly inventory data, sales history and more. We then observed all functional fulfillment processes and created a current state baseline of where the operation was, and recommended some quick fixes to help productivity.
We then created several conceptual warehouse designs that met the design criteria established from the kick-off meeting and all of the data analysis. The winning concept, as determined by our client, was a standardized case flow rack picking system. All SKUs were to be re-packed into a standard tray from their carton to speed up order picking and allow for a more dense and uniform picking area. Additionally, it was recommended to pick directly into a shipper. It was estimated that the additional replenishment time would require an additional 0.5 FTE, but the labor savings in picking direct to a shipper with reduced travel distance would dwarf the additional replenishment labor.
Additionally, the overall 150,000 square foot operation was re-designed to utilize more bulk floor storage for pallets to increase the warehouse capacity nearly 40%. Our final deliverable was a detailed layout with all of the specifications that our client would need to manage equipment acquisition and installation of the new design.