The combustion engines division of an $8B manufacturing company had assembly two plants with attached storage facilities. Growing demand, rising labor costs, increasing transportation costs and general economy of scale motivated a strategic plan to move all primary assembly and storage to a single facility. The client sought help to design the warehousing component of the merged site to optimize the material flow, assembly, storage and distribution.

Our team analyzed inbound component receiving volumes and frequency, on-hand storage volume for both components and finished goods and component sequence to assembly for all identified SKU groupings necessary to meet production demands. Our Plan For Every Part (PFEP) approach applied a custom decision support system to evaluate 100’s of scenarios including over 500 finished goods and 6,000 components with the goal of optimizing on-hand inventory and set replenishment requirements. Analysis detailed showed the inbound volumes, locations and sequential flow to assembly by SKU grouping, which provided inputs for product slotting and warehouse layout design, resulting in detailed AutoCad design for a 560,000 ft assembly and storage facility.

The PFEP approach optimized inventory levels, while warehousing slotting & layout work improved space utilization and efficiency. Inventories were consolidated with annual savings exceeded $1,000,000.

• 18% reduction in on hand component holding costs.
• 2.5 annual logistics savings
• 1.75 Reduced labor costs