BG Products (BG), an automotive maintenance products manufacturer, had a 50,000- sqft distribution center (DC) couldn’t accommodate the company’s future growth projections.
Amid these capacity constraints:
- Finished good kitting functions were performed offsite 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 productivity.
- 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 warehouse 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.
Implement Solutions and Realize Results
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.