Case Study: Transforming Warehouse Operations at Leading Furniture Manufacturing Plant & Warehouse

Victoria Gasho | Senior Management Consultant | December 10, 2025

Executive Summary

In today’s competitive manufacturing and logistics landscape, operational efficiency is no longer optional – it is a strategic imperative. This case study details how a leading furniture manufacturer partnered with Establish Inc., a recognized authority in supply chain optimization, to transform its warehouse operations and build a future-ready logistics model.

Facing rising labor costs, space constraints, and mounting service-level risks, the client sought a comprehensive solution to modernize its high-volume, make-to-order facility. Establish deployed a data-driven, phased methodology grounded in Lean principles and global Logistics Best Practices, combining advanced analytics, AutoCAD-based layout modeling, and rigorous on-site assessments.

The engagement delivered:

• Immediate operational relief through layout optimization and improved storage strategies.

• Medium-term efficiency gains via zone picking, dynamic slotting, and continuous velocity analysis.

• Long-term transformation through automation, inbound sequencing, and labor model redesign.

Key outcomes included:

• 16% reduction in storage footprint without capacity loss.

• Up to 47% labor savings through receiving process improvements and dynamic slotting.

• A scalable roadmap for automation and resilience.

By aligning process design, technology, and workforce optimization, this initiative positioned the client to achieve its ambitious goal of reducing labor dependency by 50% while enhancing throughput, inventory accuracy, and service performance. This case study demonstrates how strategic collaboration and evidence-based decision-making can convert operational complexity into a sustainable competitive advantage.

Company Backgrounds

Establish Inc.

Establish is a leading supply chain management consulting firm, recognized for its deep expertise and commitment to operational excellence. Our team is comprised of highly experienced consultants with advanced proficiency in Lean methodologies and continuous improvement strategies. We take a disciplined, data-centric approach to solving complex client challenges – combining rigorous analysis with practical insights drawn from decades of industry experience. Every recommendation we deliver is grounded in objective findings, supported by robust data, and enriched by our judgment and proven Logistics Best Practices.

Our toolkit includes state-of-the-art tools and sophisticated modeling techniques, enabling us to design and implement solutions that drive measurable performance improvements. Establish has extensive experience optimizing production and distribution operations, as well as developing innovative designs for greenfield environments. We specialize in creating sustainable, scalable systems that enhance efficiency, reduce costs, and improve overall supply chain resilience.

Notably, Establish pioneered the concept of its Logistics Best Practices – a benchmark framework that has shaped industry standards. Originally developed in the mid-1980s during our collaboration with General Electric (GE), these guidelines were instrumental in evaluating logistics performance across GE’s 72 divisions. Since then, our Logistics Best Practices have evolved continuously, incorporating technological advancements and insights from thousands of successful engagements. Today, we leverage this framework to assess a company’s functional performance against global benchmarks, identify gaps, and define actionable strategies to achieve world-class standards.

Our design solutions are complemented by comprehensive operating descriptions that clearly document recommended procedures. These include intuitive process flowcharts and detailed step-by-step guidelines, ensuring seamless implementation and adoption. Beyond process documentation, our recommendations are reinforced by advanced data analytics – transforming raw data into actionable intelligence that drives strategic decision-making and operational excellence.

At Establish, we don’t just deliver solutions; we create enduring value by aligning processes, technology, and people to achieve actionable change.

Client Overview

The client is a recognized and innovative leader in the furniture industry. The company designs, manufactures, stores, and distributes high-quality furniture and cabinetry. With a diverse portfolio of trusted brands and an unwavering commitment to craftsmanship, the client serves a broad customer base that includes major national homebuilders and designers, independent dealers, and leading big-box retailers.

Today, the company operates an extensive network of manufacturing facilities across the United States, supporting a supply chain that is both complex and highly dynamic. Coordinating production, warehousing, and distribution at this scale requires meticulous planning, precise execution, and a continuous focus on process improvement to maintain service levels and cost efficiency.

Among its network, the focused facility stands out as one of the client’s most critical sites. This integrated operation combines manufacturing, warehousing, and shipping functions, primarily focused on make-to-order products – a cornerstone of the company’s customer-centric supply chain strategy. However, as market demand changed, product variety expanded, and manual processes persisted, the warehouse began to experience mounting operational challenges. These included inefficiencies in material handling, limited inventory visibility, and suboptimal labor utilization, all of which threatened throughput and service performance.

Project Background: The Need for Warehouse Transformation

The client’s leadership team quickly identified the focused facility as a strategic priority for operational improvement. As one of the company’s most complex sites, this plant was experiencing mounting challenges that threatened efficiency and service performance. Key issues included:

• High labor dependency across core activities such as receiving, stocking, picking, and kitting

• Limited storage capacity and inefficient utilization of available floor space

• Frequent material shortages disrupting workflow and increasing handling costs

• Congestion in staging areas and aisles, creating bottlenecks and slowing throughput

• Lack of real-time visibility for inbound materials, hindering proactive decision-making

These operational constraints were not only driving up costs but also impacting production flow and outbound service levels – critical factors for meeting customer expectations. Recognizing the urgency, the client set an ambitious goal: to reduce labor dependency by 50% across its facilities, beginning with the focused site, while simultaneously improving productivity, inventory accuracy, and overall warehouse performance.

Project Objectives and Methodology

To achieve this transformation, the client partnered with Establish. The engagement was structured as a phased, hands-on approach – starting with a comprehensive assessment of current operations and culminating in a strategic roadmap for long-term modernization.

Objectives

The primary objectives of this engagement were to:

1. Conduct a comprehensive assessment of current operations, including receiving, put-away, storage, picking, shipping, and overall material flow.

2. Identify gaps and inefficiencies impacting productivity, inventory accuracy, and service levels.

3. Develop process maps and Best Practice benchmarks to guide operational improvements.

4. Perform material flow analysis and capacity planning to support future growth.

5. Provide data-driven recommendations for layout optimization, system enhancements, and automation opportunities.

6. Deliver conceptual layouts and a detailed final report, outlining actionable steps for implementation and long-term modernization.

These objectives were structured into two distinct phases:

• Phase 1 Evaluation: Evaluate the current state, document existing processes, and identify improvement opportunities through our Logistics Best Practice audit, data profiling, and material flow analysis.

• Phase 2 Design: Design optimized layouts and workflows, incorporating automation strategies, storage specifications, and material handling equipment recommendations, supported by cost-benefit analysis.

Methodology

Establish employed a phased, hands-on approach grounded in engineering principles and Lean methodologies. Our methodology combined rigorous data analysis with on-site observations and stakeholder engagement to ensure practical, actionable improvements. Key components included:

1. Data Collection and On-Site Presence: The project began with a multi-day on-site kickoff to observe operations, conduct interviews, and map current processes. Simultaneously, a detailed data request was issued to gather inventory profiles, order history, and throughput metrics, enabling robust analytical analysis to support the improvement recommendations.

2. Current State Assessment: Using our proprietary Logistics Best Practices audit, we benchmarked the operation against global standards. This included evaluating layout efficiency, labor allocation, inbound and outbound processes, storage principles and utilization, and material flow. Findings were documented through process maps and flowcharts for clarity and alignment.

3. Gap Analysis and Opportunity Identification: We performed a gap analysis to highlight areas of inefficiency and quantify potential improvements. This analysis introduced targeted recommendations for layout redesign, process optimization, and technology improvements. These recommendations were prioritized based on forecasted impact and effort of implementation.

4. Material Flow and Capacity Planning: Leveraging data profiling, we developed strategies for inventory segmentation and flow optimization. These insights provided the foundation for conceptual layouts that maximize capacity, space utilization and throughput.

5. Conceptual Design Development: Multiple layout alternatives were created, each addressing functional requirements, storage configurations, and material handling strategies. Recommendations included specifications for racking systems, aisle spacing, and automation technologies, supported by estimated costs and ROI projections.

6. Stakeholder Collaboration and Validation: Weekly status meetings and milestone reviews ensured transparency and alignment throughout the engagement. Assumptions were communicated proactively, and recommendations were refined based on client feedback.

7. Implementation Roadmap: A comprehensive roadmap detailing prioritized initiatives, timelines, and resource requirements for execution. This roadmap provided actionable steps to achieve the client’s strategic objectives while laying the groundwork for scalable improvements.

This structured methodology ensured that immediate operational pain points were addressed while creating a sustainable foundation for long-term efficiency gains. By combining our Logistics Best Practice benchmarking, advanced analytics, and collaborative design, Establish delivered a roadmap that positioned the client for significant productivity improvements and reduced labor dependency.

Comprehensive Data Analysis

The project began with a rigorous data collection and analysis phase, including analyses of the following information:

1. Inbound Purchase Order Data

2. Outbound Picking Data

3. Labor Headcounts and Stocking Rates

4. AutoCAD-Based Layout

5. Time Studies

To ensure a targeted and effective optimization strategy, the project commenced with an in-depth data collection and analysis phase. This foundational step enabled the team to uncover inefficiencies, validate assumptions, and tailor solutions to the client’s unique operational environment and volumes.

1. Inbound Purchase Order Data

Historical purchase order data was analyzed to identify patterns in inbound order volume, SKU velocity, and put-away travel paths. This helped pinpoint staging requirements, associate high-frequency zones and congestion points within the warehouse pertaining to inbound flows.

2. Outbound Picking Data

Historical order data and picking records were analyzed to identify patterns in order volume, SKU velocity, and picker travel paths. This helped pinpoint high-frequency picking areas and congestion points within the warehouse pertaining to the pick paths.

3. Labor Headcounts and Stocking Rates

Staffing levels and replenishment rates were reviewed to assess labor utilization and identify bottlenecks in stocking processes. This analysis informed recommendations for labor balancing and shift optimization.

4. AutoCAD-Based Layout

The existing warehouse layout was digitized using AutoCAD, allowing for precise measurement of travel distances between storage locations, packing stations, and receiving areas. This spatial analysis was critical in evaluating layout efficiency and proposing reconfigurations.

5. Time Studies

Benchmark data from similar warehouse environments was leveraged to compare task durations and validate projected improvements. These time studies provided a reliable baseline for estimating ROI and labor savings.

On-Site Observations and Process Mapping

Establish conducted a structured, engineering-based assessment during the on-site visit at the facility. The purpose was to capture the current operational reality and validate data-driven findings through direct observation. The approach included:

1. Material Flow Analysis

2. Labor Allocation Review

3. Process Bottleneck Identification

4. Validation and Insight Generation

5. Additional Evaluations

1. Material Flow Analysis

Observed the end-to-end movement of materials from receiving through put-away, storage, picking, and shipping. Documented flow paths, travel distances, and staging points to identify inefficiencies such as excessive handling or redundant moves. Quantified material flow volumes to support capacity planning for future layout designs.

2. Labor Allocation Review

Assessed how labor resources were distributed across functional areas (receiving, picking, shipping). Evaluated task sequencing and time utilization to identify idle time, overstaffing, or underutilization. Compared observed practices against Lean principles and Best Practice benchmarks to highlight improvement opportunities.

3. Process Bottleneck Identification

Mapped workflows for all major processes, including:

• Receiving and stocking of inbound product

• Outbound picking strategies

• Assembly line flow

• Staging organization for outbound shipments

Identified constraints in staging areas, congestion points, and delays caused by layout limitations or process design.

4. Validation and Insight Generation

Cross-referenced observations with data profiling results (inventory characteristics, order profiles) to confirm root causes of inefficiencies. Developed process maps and flow charts illustrating current state and proposed improvements. Created an actionable gap analysis comparing existing practices to Establish’s Logistics Best Practices.

5. Additional Evaluations

Assessed automation opportunities and material handling equipment usage for potential productivity gains. Evaluated space utilization and layout effectiveness, noting areas for reconfiguration to improve throughput and storage density.

Key Findings

By leveraging detailed operational data, conducting comprehensive on-site observations, and applying Establish’s Logistics Best Practices framework, we developed a clear picture of the facility’s current state. This integrated approach allowed us to validate data insights with real-world conditions, uncover root causes of inefficiencies, and identify opportunities for transformational improvement. The following key findings highlight critical gaps in material flow, labor utilization, process design, and layout configuration, as well as areas where automation can deliver significant productivity gains.

Observed Operational Gaps:

1. Material Flow Inefficiencies

• Excessive travel distances between receiving, put-away, and picking areas due to current layout design.

• Redundant handling steps observed in inbound and outbound processes, increasing cycle time.

• Lack of defined flow paths caused congestion and inconsistent movement of goods.

2. Labor Allocation Issues

• Labor resources were unevenly distributed across functional areas, leading to idle time in some zones and overburden in others.

• Manual processes dominate critical tasks such as picking, limiting scalability and productivity.

• No clear labor standardization or cross-training, reducing flexibility during peak demand.

3. Process Bottlenecks

• Staging constraints in outbound areas created delays in order consolidation and shipping.

• Single-slot storage strategy caused frequent replenishment and increased touches.

• Receiving and stocking delays due to limited space and inefficient sequencing of tasks.

4. Layout Constraints

• Current warehouse layout did not support optimal material flow or high-volume throughput.

• Aisle spacing and slotting practices restricted efficient use of material handling equipment.

• Limited bulk storage positions for high-volume SKUs, led to fragmented inventory locations.

5. Automation Opportunities

High reliance on manual handling presented opportunities for:

• Updated systematic picking methodology to streamline movement between zones.

• Automated storage solutions for high-density storage and retrieval.

• Automated transportation vehicles to reduce operator travel for picking activities.

Solutions Overview

Establish’s recommendations were structured across three time horizons to ensure both immediate relief and long-term transformation.

Short-Term Solutions: The Immediate Relief

These focus on quick wins to alleviate current bottlenecks and improve space utilization.

1. Optimize Fronts Storage

• What it does: Adds vertical storage levels, places slow-moving items higher, and receives single-SKU pallets for fast movers instead of mixed SKU pallet for all SKUs.

• Impact:

  • Optimizes floor storage space and increases the vertical storage space.

  • Reduces congestion near staging.

  • Speeds up picking for high-demand SKUs by minimizing handling time.

2. Increase Flat Stock Storage

• What it does: Relocate inventory and add shelf levels and overstock pallets to increase capacity.

• Impact:

  • Expands storage without major layout changes.

  • Reduces stockouts and improves inventory availability.

  • Supports higher throughput during peak demand.

3. Carrier ETA Accountability

• What it does: Tracks and improves on-time delivery (OTD) for inbound carriers.

• Impact:

  • Improves planning and labor scheduling.

  • Reduces idle time and unexpected delays.

  • Enhances reliability of inbound flow, preventing bottlenecks.

Medium-Term Solutions: Efficiency Gains

These aim to streamline operations and reduce wasted movement.

4. Layout Updates

• What it does: Adds rack rows, narrows aisles, and increases days-on-hand storage.

• Impact:

  • Increases storage density.

  • Reduces travel distance for operators.

  • Supports higher inventory levels without expanding the building footprint.

5. Zone Picking

• What it does: Assigns operators to specific zones to minimize travel and congestion.

• Impact:

  • Improves picking speed and accuracy.

  • Reduces labor fatigue and inefficiency.

  • Enhances throughput during peak periods.

6. Continuous Velocity Analysis

• What it does: Regularly reviews SKU movement to inform slotting and storage decisions.

• Impact:

  • Keeps fast movers accessible and slow movers out of prime space.

  • Maintains optimal layout as demand patterns shift.

  • Prevents inefficiencies caused by outdated slotting.

Long-Term Solutions: Transformation

These create a scalable, automated, and future-ready operation

7. Sequencing Inbound Trailers

• What it does: Loads inbound trailers by outbound order priority so stocking and picking are streamlined.

• Impact:

  • Reduces double-handling.

  • Improves overall dock efficiency.

8. Dynamic Slotting

• What it does: Moves from fixed to system-directed, dynamic storage locations.

• Impact:

  • Maximizes space utilization dynamically.

  • Reduces manual decision-making and errors.

9. Utilize Carts for Inbound Items

• What it does: Switches from pallets to carts for mixed SKUs.

• Impact:

  • Cuts handling time and packaging waste.

  • Improves flexibility for mixed orders.

  • Enhances ergonomics for operators.

10. Automation

• What it does: Introduces vertical lift modules and AMRs.

• Impact:

  • Reduces labor dependency.

  • Improves accuracy and speed.

  • Future-proofs operations for growth and labor shortages.

Labor Model Development and Utilization

To ensure that our solutions were not only operationally sound but also financially justified, Establish developed a comprehensive labor model designed to measure the impact of the proposed changes on workforce productivity and cost efficiency. This model served as a critical decision-support tool for the project.

Purpose

The labor model was created to:

• Establish a baseline of current labor performance across main warehouse functions.

• Quantify the effect of process improvements and layout changes on labor hours and productivity.

• Provide objective ROI calculations for each recommendation, supporting executive decision-making.

Data Inputs and Assumptions

The model integrated multiple data sources and assumptions:

• Historical labor data: Hours worked per department, overtime patterns, and staffing levels.

• Order and SKU profiles: Velocity of product groups, order frequency and profiles, cube size, and product handling complexity.

• Observed process times: Captured for specific tasks related to receiving, put-away, picking, kitting, and shipping.

• Projected volume growth: Incorporated to simulate future-state labor requirements under increased throughput.

Model Architecture

• Activity-Based Costing: Each warehouse function was broken down into discrete tasks:

  • Travel

  • Pick

  • Pack

  • Stage

  • Load

• Time Standards: Applied industry benchmarks and validated them against observed cycle times.

• Variable Scenarios: Modeled multiple configurations, including:

• Current state (baseline)

• Recommended layout and slotting improvements

• Automation integration scenarios

• Sensitivity Analysis: Tested assumptions under different demand and labor cost conditions.

How It Was Used

• Baseline Measurement: Quantified current labor hours, cost per order, and parts-per-hour (PPH).

• Impact Simulation: Calculated expected reductions in labor hours and improvements in PPH for each proposed change.

• Cost-Benefit Analysis: Converted labor savings into annualized cost reductions, enabling ROI projections.

• Capacity Planning: Forecasted labor requirements for peak seasons and future growth scenarios.

Outcomes and Insights

• Identified high-impact areas where process redesign and layout optimization would yield the greatest labor savings.

• Demonstrated that automation investments could reduce labor dependency significantly, aligning with the client’s 50% labor reduction goal.

• Provided a clear roadmap for workforce optimization, including cross-training strategies and labor reallocation.

This labor model was not just a calculation tool – it was a strategic enabler, ensuring that every recommendation was backed by measurable financial and operational benefits.

The Measurable Impact

Expected Short-Term Results

• Layout Enhancements: Reduced storage footprint for fronts by 16% without negatively impacting total storage capacity which in return increased flat stock storage by 36 bays (135 pallets) without rack moves.

• Capacity Gains: Storage capacity utilization decreased from 99.7% to 85.1%.

• Improved Processes: Put-away labor reduced by 6% (20 hours/day); picking labor reduced by 2% (6 hours/day).

Expected Medium-Term Results

• Layout Redesign: Layout redesign of back-to-back racking additions and reduced aisle widths doubled the pallet storage per bay, increased inventory days-on-hand to 3 days, and reduced inbound labor by 18%.

• Inventory Management: Improved visibility and more efficient cycle counting

• Optimized Zone Picking: Reduced operator travel distance by 5% and picking labor by 3% (11 hours/day).

Expected Long-Term Results

• Dynamic Slotting: Enabled a 24% reduction in put-away labor (75 hours/day) by allowing system-directed storage and direct put-away of single SKU pallets.

• Cart-Based Receiving & Storage: Paired with dynamic slotting, cart-based receiving reduced put-away labor by up to 47% (149 hours/day).

• Automation: Implementation of vertical lift modules and AMRs further reduced operator travel and improved ergonomics, safety, and pick accuracy.

Closing Remarks

This project underscores the value of combining rigorous analysis with practical, site-specific insights to achieve measurable operational improvements. By aligning process design, labor optimization, and technology enhancement, the client now has a clear roadmap for transforming its warehouse operations into a scalable, high-performance environment. The solutions proposed not only address today’s challenges but also position the organization to adapt confidently to future growth and evolving customer demands. Ultimately, this engagement demonstrates how strategic collaboration and data-driven decision-making can convert operational complexity into a sustainable competitive advantage.