Warehouse Consolidation and Design of a Multisite Logistics Network

Project

Context:

Our client in the powersports industry aimed to introduce a new range of modular products and double its production. To meet this increased volume, our client decided to change its production strategy by moving from a single-site model to a multisite approach.

Problem:

The company had three small, inefficient, and over-capacity warehouses located near the production sites. With the increase in production, this strategy became untenable as it would require a further increase in the number of warehouses.

Need:

To remedy the situation, our customer asked Merkur to develop an optimized multi-site logistics strategy.

Client

Confidential

Industry

Manufacturing

Expertise used

Logistics

Supply Chain

" Our customer, a long-standing partner, undertook a rapid strategic expansion requiring an accelerated transformation of its production and logistics. The objective was to optimize costs while ensuring high operational efficiency. "

Mohamad Kabbara

Merkur Operational Excellence Consultant

Key results

Growth

Increased logistics capacity enables production to be doubled

Performance

Just-in-time delivery with optimized costs

Visibility

Implementation of an ERP process for inventory management and logistics flows

Project highlights

Increase production capacity a solution that optimizes cost and performance

DETERMINE THE REQUIRED WAREHOUSE AREA TO CENTRALIZE COMPONENT STORAGE AND OPTIMIZE SPACE UTILIZATION.
DEFINE AN INTER-SITE LOGISTICS STRATEGY TO DELIVER COMPONENTS TO THE MAIN FACTORY FROM THE WAREHOUSE AND THE SECOND PRODUCTION SITE.
DEFINE THE ERP REQUIREMENTS :
- Inventory status and location for the master scheduler
- Master scheduler planning windows (firm, frozen, slushy)
- Inventory status and stock in transit between multiple sites in real time, including raw materials and sub-assemblies
- Define and identify the logistics master data required for the ERP (locations, material groups, and storage capacities)

Analysis of the current situation and development of the logistics strategy.

CURRENT SITUATION:
- Determine current issues and waste in warehouses and the logistics network.
FUTURE SITUATION:
- Define the product families sold in the future and the associated volumes.
- Define the multisite warehouse strategy.
- Estimate the required storage area as well as the areas of the various warehouse zones (receiving, quarantine, storage, picking/kitting, finished goods storage, shipping).
- Define the multisite transportation strategy and inter-site material flows including variable delivery frequencies (hourly, daily, weekly) for each product category to level the flow at the production sites while minimizing the handling and transportation costs.

Logistics strategy based on the LEAN philosophy.

- Lean Manufacturing
- Warehouse Design
- High-Frequency replenishment
- KANBAN
- Business process mappings
- ERP requirements

Merkur evaluated the optimal warehouse area and required processes in record time, to allow the client to meet demand by rapidly increasing production capacity.

- Minimize total storage costs.
- Significantly reduced non-value-added activities in their logistics network and warehouse management.
- Define information system needs to create visibility of logistics flows.