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| Client: | An S&P 500 index company that manufactures, markets, and sells primarily branded prescription pharmaceutical products. | |||||
| Problem: | Order volume increased by over 40% after an acquisition. The distribution center was expanded by 130,000 sq. ft. from the current 150,000 sq. ft. There was a need to design an optimal layout for the receiving, storage, picking, packing and shipping operations. Included in the design were the specific requirements for material storage, returns, samples and literature processing. Product types included: ambient, refrigerated and controlled products. | |||||
| Approach: | Analysis of current operations included an assessment of the areas used, space required, volume increases, travel distance and time, labor costs, pick-pack-ship processing times, and storage requirements. Several process improvements were identified and implemented. The new layout was designed to separate shipping and receiving, reduce travel distance and time, and to relocate some functions closer to receiving and shipping. Three different alternatives were proposed based on different budget considerations. | |||||
| Results: | The
selected layout resulted in: • Reduced order cycle time by 40% • Improved orders processed per labor hour by 41% • Improved receiving dock with more space for receiving material • Reduced non-value added activities by 1,800 labor-hours annually • Reduced picking errors and direct material handling by 60% • Improved operations and processes resulted in savings of 40% |
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