DISTRIBUTION CENTER DESIGN: AUTOMOTIVE
- 34% Overall Cost Reduction
- 20% Material Handling Equipment
- 3-Year Payback: Racking/Pick
A leading forklift manufacturer had launched its new series of pantograph reach trucks. Dealers were particularly excited about the tilted mast feature on these reach trucks which gave the client a competitive advantage in the market. However, when parts for this new reach truck were initially sourced during the pre-production stage, there was not enough thought given to the packaging and transportation of these parts to the client. Due to lack of packaging standards, the supplier was shipping most of the painted parts on pallets (one part, one pallet) to avoid having the parts rub against each other and damage the paint and/or the part while in transit. However, this quickly increased the inbound transportation cost by 75% as the client could only load 24 parts per trailer. Additional storage problems were caused due to lack of pallet stack ability.
Collaboratively source capacity and
facilitate planned continuous moves
through Transplace Lanehub
The ultimate goal was to decrease inbound transportation cost by consolidating more parts in a trailer while still maintaining 100% quality. Transplace was able to leverage the use of its Lean, Plan-Do-Check-Act (PDCA) tools to build a cross functional team comprised of key stakeholders from each area of the supply chain including but not limited to receiving, warehouse, assembly and supplier personnel to document and validate the current state. After a brainstorming session, the team was able to identify 20% of the parts that caused 80% of the problem for better packaging review. Transplace was able to design and implement returnable bins with custom packaging that could enable the supplier to ship 10 parts in one bin instead of one part per pallet while still maintaining a 100% quality. These returnable bins could also be efficiently stacked two-high inside a trailer thereby improving trailer cube utilization.
Additionally, they significantly reduced inbound transportation cost. As a result of improved consolidation, Transplace was able to pick up parts from other suppliers in the same region. This improved routing and lowered the total inbound freight cost. It also enabled the customer to avoid leasing another warehouse to store these new parts.
Transplace Network Services (TNS) provides access into the vast resources within Transplace’s more than $11 billion freight network, helping customers to lower transportation costs, expand fleet capacity, enhance supply chain efficiencies, and reduce their carbon footprint.
15% increased capacity and
supply chain efficiency
Transplace Network Services provides access into the vast resources within Transplace’s more than $11 billion freight network, helping customers to lower transportation costs, expand fleet capacity, enhance supply chain efficiencies, and reduce their carbon footprint.
Transplace, an Uber Freight company, powers one of the largest managed transportation and logistics networks in the world. Our tech-enabled services and solutions platform are backed by the unrivaled combination of innovative technology and a dedicated team of domain experts, engineers and data scientists. We are committed to thrilling our customers by consistently improving supply chain performance and providing greater visibility and control of their logistics networks. Companies of all sizes rely on Transplace to deliver trusted outcomes through best-in-class logistics management, strategic capacity and cross-border services.
Learn more about Transplace Consulting Solutions
BG Products (BG), an automotive maintenance products manufacturer, had a 50,000- sqft distribution center (DC) that couldn’t accommodate the company’s future growth projections.
Amid these capacity constraints:
- Finished-goods kitting functions were performed off-site due to lack of
space and capacity in the current facility.
- The DC’s racking didn’t support SKU profiles.
- Manual activities and multiple touch-points slowed processes.
- The facility’s design wasn’t aligned with a picking strategy for optimal
- Poor traffic flow inhibited pallet-building.
The Transplace Consulting team assessed several key distribution processes including: manufacturing transfer, receiving, inspection, put away, storage, inventory control, order processing, packing, staging, and shipping functions.
After mapping the current state, the Transplace team recommended that BG convert to a 120,000-sqft square foot facility that would enable productivity improvements and support an effective inventory management system. This would also enable the kitting function to be moved back into the distribution center.
Transplace consultants designed BG’s new distribution center based on
best-in-class operating principles:
- Quality at the Source
- Material Flow
- Teamwork Collaboration
- Continuous Improvement
They also considered all of the related material handling equipment to accommodate processes and movement of finished goods inventory from manufacturing through the kitting and distribution processes.
With some simple equipment changes, BG would see a 20%
reduction in costs.
Additionally, adjusting the picking strategy to select racking would yield a payback period of three years on racking material costs. Kitting of finished goods could now be performed at the distribution center. Overall, BG would see a 30% cost reduction by implementing these solutions.
As a result of this successful project, BG extended the partnership to include RFP development and an evaluation process for procuring pick modules and selective racking.
Implement Solutions and Realize Results