Increasing inventory capacity by optimal warehouse design
Background and Challenges
- A biopharma facility had issues meeting storage capacity for its products, workflow constraints, and EHS compliance issues in its warehouse. Issues regarding safety have been noted, including the warehouse having scattered items across the footpaths. The width of the aisles also were not suitable for forklift operation (typically requiring at least 11ft compared to the 8.5ft that was present.)
- The client was also introducing new items into their product lines, and the addition of such products would require a higher storage capacity. So our future layout would need to take into account this increase in material goods.
- Finding the right type of pallet rack from a vendor who provides good, lasting pallet racks at a reasonable price. The current warehouse only used one specific type of racking system, and it did not meet the capacity needed for storage.
- Operational issues were present in the warehouse. The current loading dock was not wide enough to receive plasma containers, which typically come in a bigger size.
What has been done?
- Tefen conducted in depth interviews with upper and middle management, as well as warehouse operators. We also interviewed supply chain and production experts to allow for us to predict future demand, allowing us to design our layout accordingly. These face-to-face interviews helped us to understand the processes and determine the optimal layout based on the daily workflows.
- Tefen built the flexibility to update demand estimation in an Excel tool created for the client. This tool enables the client to update important inputs which effect demand (current inventory, consumption, lead times, safety stock, BOM annual usage) which then automatically forecasts the number of pallets needed for storage. By using this tool, Tefen was able to accurately forecast how many pallets are needed given these various inputs.
- Tefen developed a detailed 5S and workflow design plan that will improve warehouse operations. We incorporated Kanban principles along with visual management aids to ensure a safe and highly efficient work environment.
Outcomes and Results
- Tefen designed a warehouse layout that increased storage capacity to meet the demand needs of our client. This new design took into account EHS compliance rules and regulations, and is an improved layout that will provide operators with a more efficient workflow.
Results of the project include:
- An 11% increase in storage capacity with a decrease in footprint of 9%
- Improved workflow to reduce lead times for operators in the warehouse
- Cost assessment and evaluation of the pallet racks to be ordered
- A dynamic demand forecasting tool that will predict the optimal number of pallets needed for any future demand
- A detailed 5S implementation plan
Our 5S Design:
- Capacity: Increase storage capacity by 11% with 9% less area
- Space Utilization: Increase aisle width to 12 ft; introduce a shower and eye wash station; assign designated hazard material area; 8-12 inch clearance for pest control
- Operations: Expand loading doors, introduce small parts shelves
- 5S & Process Improvement: 6 work stations, controlled inventory, 6 more pallet locations in quarantine, use of signs for hazardous/flammable materials
- Reporting: Link visual map and inventory report to display latest information regarding the storage location of items