Our client is a leading technical apparel company with a global turnover exceeding €300 million. Their operations include a spacious 20,000 square meter warehouse, employing a unique hybrid operating model that seamlessly integrates internal personnel with cooperative efforts.
Business Challenge
Our client aims to improve warehousing productivity and cost optimization across both internal and external (3PL) warehouse operations. Managing approximately 20,000-25,000 SKUs, including both current and past collections. These items are distributed among various storage locations, including 16,000 pallet positions, 550 drive-in locations, and 44,000 bin box slots integrated into a multi-shuttle automated system, alongside 6,000 carton slots dedicated to manual picking.
Approach
1. Process Mapping and KPI Definition:
Conducted a preliminary assessment of process mapping and define key performance indicators (KPIs) and their development.
2. Personnel Right-Sizing Method:
Introduced a 'productivity-volume' approach to optimize personnel allocation for key direct operations, including container inbound, picking, and outbound.
3. Improvement Activities:
Implemented improvement activities across internal and external warehouses’ operations, focusing on:
- Picking with double capacity of manual picking, routing optimization and stock allocation
- Flexible storage system dedicated to single-piece management of low runners (C class, 7-9.000 SKUs)
- Optimal allocation between internal and external 3PL workload and inbound (containers’ unloading) and outbound (picking)
- Packaging size review to improve box fulfilment and minimize transportation costs
Results
Cost Savings:
Achieved €1 million in annual savings, representing a reduction of 22% in direct personnel costs and 37% in external warehousing expenses, all accomplished within a 4-month project timeframe.
Performance Dashboard:
Developed a comprehensive performance dashboard to enable real-time monitoring of productivity and workload across various warehouse areas, including inbound, forklift operations, picking, and outbound processes.
Warehouse Optimization Procedures:
Reviewed warehouse optimization procedures for replenishment and stock reallocation activities to enhance operational efficiency.
