Infrastructure and Utilities
Improving Logistics for a Hydraulics Company
Improving Logistics for a Hydraulics Company
Develop Consulting supported a Birmingham based hydraulics manufacturing facility who were experiencing significant space constraints, which were impacting the availability of materials for production and hampering their ability to meet sales orders.
Results
- Reduced on hold inventory (without movement) by £3.3m
- £285k (22%) reduction in missing inventory
- 79% reduction in off-site pallet storage within 5 months
- 14,821 kg CO2 saving in off-site logistics
- £25k p.a savings from improved logistics
- 18% improvement in pedestrian pick productivity
- Achieved a client agreed ROI of 4:1
Observations
On arrival, the facility was 30% overstocked with pallets and materials located outside of prime storage locations. Initially we organised materials by receipt date and identified parts with immediate demand to maintain the required WIP for production.
Objectives
Stabilise: Creating flow from the Inbound process area to the required storage areas, the layout was changed to aid the supply of full pallet receipts to production and KPIs established to monitor throughput, inspire improvement and visualise trends. Materials were consolidated within storage locations to create improved storage fill and the capacity tracked of all storage zones.
Improve: Engaging the teams to improve off-site processes to initially move slower moving materials off-site to increase required on-site space. We also reviewed the off-site logistics costs and arranged consolidated return based on the forward plan in production which had the affect of reducing costs and creating further space, storing materials on temporary trailer space in the yard.
Actions
Initially, Develop Consulting worked closely with the company’s first line leaders to effectively address concerns surrounding 800 displaced pallets, resulting in a significant enhancement of workplace organisation and the streamlined flow of materials to the production line. Our efforts extended to the optimisation of the Goods In receiving layout, achieving a more efficient prioritisation of daily tasks, and the segregation of full and mixed pallets, enabling faster put-away of full pallets.
One key achievement was the implementation of a receipt-to-bin Key Performance Indicator that spotlighted materials received but not yet put away within three days of arrival. This strategic focus improved accountability and adherence to timely storage practices.
Within the storage zones, daily audits were conducted on aisles exhibiting the highest stock discrepancies, culminating in a strategic consolidation of materials for improved space utilisation. This served to maximise available storage area while minimising clutter.
To tackle off-site logistics costs, a revolutionary approach was employed by devising consolidated returns in alignment with Production’s forward plans. Additionally, the elimination of premium time movements – weekend and Bank Holidays working – provided significant cost savings.
We championed operational integrity by emphasising the value of utilising Handheld Terminals (HHTs) to complete transactions. This shift markedly reduced the time otherwise spent on locating misplaced materials, thereby boosting overall operational efficiency.
An important aspect of our engagement involved fostering integrity through proactive communication. By establishing a dedicated stock team, we empowered the maintenance of stock accuracy and orchestrated a seamless alignment of stock planning with space requisites.
Develop Consulting’s’ partnership with the commpany exemplified a comprehensive overhaul that not only resolved immediate challenges but also laid a robust foundation for sustained operational excellence. Our strategies intertwined efficiency with precision, engendering a transformational impact across the company’s operational landscape.
