Operation. Jim Butler. Sponsored by: Presented by:

Transcription

1 Welcome to Session 237 Generating Savings in a Mature Operation Presented by: Sponsored by: Mark Pennybacker Jim Butler 2011 Material Handling Industry. Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.

2 PartyLite PartyLite is the world's largest direct seller of candles, candle holders and home accessories.

3 PartyLite PartyLite began operations in 1973 with 3 employees Today nearly 70, consultants worldwide

4 Overview 4 Distribution Center's support sales worldwide: Carol Stream, IL, Netherlands, Monterrey MX, and Sydney North American Distribution (Carol Stream) services the USA and Canada, with DC transfer support to the others DC has been operational since ,000Square Feet, 30 Clear Height 47,500 pallet positions 6,800 feet of conveyor 1,900 pick-to-light locations

5 Metrics Carol Stream, IL Distribution Center Metrics Single shift operation 138 total employees 1,500+ active SKU s 22,000,000 + units shipped per year Over 850,000 orders per year Over 8,500 during peak days Average 6,000+ cartons per day

6 Process Engaged TransTech Consulting in June, 2009 Review all aspects of operations, product flow, and systems capabilities Collect and analyze data Profiles for orders, SKU s, inventory & shipping i Develop and refine objectives Design conceptual alternatives Cost effective processes, systems and equipment Project staff and resource requirements Complete financials and payback numbers

7 Process PartyLite initiated a continuous improvement philosophy p Identified a number of opportunities throughout the operations Receiving Storage Replenishment Picking Material Handling Equipment Equipment

8 Receiving Direct to Stock with Wax coming from manufacturing Study details showed 60% of all goods received come PartyLite Manufacturing in Batavia Started Advance Shipping Notifications (ASN) process Pallet ID label affixed at manufacturing and used to locate WMS receives detailed pallet information Operators remove pallet from trailer, scan pallet ID label and locate direct to stock WMS optimizes putaway based on product characteristics Process reduced 38% of steps at receiving

9 Storage Modified Rack Locations All aisles of racking had 50 standard d pallet openings Wax product pallets from manufacturing did not fit 50" opening Receiving process required stripping layers from pallet Modified location openings to 70 in 40% of aisles Adjusting sizes eliminated repalletizing process Expedited receiving process Increased productivity

10 Process Change Eliminated the "Yellow Zone" area for Replenishment Yellow Zone was a secondary staging location Each SKU in forward area had a replenishment location New process replenishes fastest movers in pallet quantities direct from reserve area to forward pick Full pallet replenishment has gone from 1% to 25% Faster mover SKU s stored closest to pick area and in the repurposed yellow zone area Remainder replenished in cases from bulk 21% productivity improvement in warehouse

11 Process Change Yellow Zone

12 Process Change Eliminated the "Yellow Zone" area for Replenishment Vacated Area Allows for shrinking overall operational footprint by 34% 340,000 square feet down from 515,000 square feet

13 Replenishment Old Replenishment Process 17 Steps 2/7/2011 Whse to Yellow Zone Yellow Zone Replen Directive Generated. Warehouse to Pick Divert Pick Divert Replen Generated Pull Replen according to WMS Order Picker Place Bar Code onto 1 case for SKU pulled for Replen directive. Order Picker Stage Pallet in 89 P&D. Turret Pull Pallet From Whse Rack Location. Turret NO Is Pallet Full Stage Bar Code into YZOB Staging Area. Order Picker Shuttle Pallet from 89 P&D to Nwall Staging Area. Long John/ Dock Stocker Stage Pallet in 2T Staging area. Dock Stocker NO Scan Bar Code at the Nwall Staging Area. Pallet to 308 or Offline? Dock Stocker YES YES Move Pallet to YZOB Staging Area. Order Picker Shuttle Pallet to Pick To Light Staging Area. Long John Pallet Moved into Yellow Zone Rack Location. Turret Move pallet to 308 or Offline. Dock Stocker Move Pallet to directed Pick To Light Location. Rackfiller Scans a Bar Code on the Pallet. Rackfiller NO Stage Pallet in Pick To Light Staging Area. Long John End of Process Close Bar Codes into 308 or Offline location Dock Stocker Close Bar Code and Load cases into designated Pick To Light Location. Rackfiller Is Pallet Emtpy. YES End of Process

14 Replenishment New Replenishment Process 10 steps 2/7/2011 Warehouse to Pick Divert Pick Divert Replen Generated Pull Replen according to WMS Order Picker Place Bar Code onto 1 case for SKU pulled for Replen directive. Order Picker NO Is Pallet Full Stage Bar Code into YZOB Staging g Area. Order Picker YES Move Pallet to YZOB Staging Area. Order Picker Shuttle Pallet to Pick To Light Staging Area. Long John Move Pallet to directed Pick To Light Location. Rackfiller Scans a Bar Code on the Pallet. Rackfiller Stage Pallet in Pick To Light Staging Area. Long John NO Close Bar Code and Load cases into designated Pick To Light Location. Rackfiller Is Pallet Emtpy. YES End of Process

15 Operations Two Sisters Gourmet process moved from off-line Prepping / kitting product to locate to stock Kitted product now located across all areas Located throughout the pick areas by velocity Improved throughput and productivity Overall pieces picked per labor minute increased Substantial savings in shipping TSG was supported off-line and shipped in own carton Now integrated with remainder of order saving $1.2MM annually

16 Sub-assembly changes Operations Product now being located into poly bags or corrugate boxes as needed Dry goods are polybag; Glass items into boxes In-house solutions were implemented at $.33 per unit versus average vendor cost of $.75 per unit Reduced damages Virtually eliminated all damages (down from 1.5% to 2%) of all shipments TSG damages had been #1 customer complaint

17 Equipment Change Remove "Mirror" in PTL B area Two sides of one module had been mirrored with duplicate SKU's and processes Slower moving SKU s were located there Required excessive carton handling to complete picks Opened up 200 locations for additional SKU's Supported SKU expansion from kitting project

18 Conveyor Conveyor Redesign and Rerouting Project Required largest capital investment to implement Allows flexibility for leveling the workload Any carton can be directed to any pick zone Offers slotting flexibility Controlling picks by zone Larger and fastest moving items have been slotted into the first zone % + of all cartons now begin with picks in 309 Even greater % of total lines picked Eliminated handling and repacking through pick process Damages have become non-existent Easiest replenishment zone

19 Continuous Improvement Lean Initiative Continuous Improvement Culture Partnered with University it of Illinoisi 56 hours of training for leadership team on Lean Culture and tools to implement Hired a full-time Continuous Improvement Engineer Created a cross-functional team 11 managers, 8 supervisors and 10 hourly Established the culture Physical & mental Visual work place

20 Continuous Improvement Lean Initiative Continuous Improvement 4 Kaizen Events, 6 Kaizen Blitz, created Red Tag Area 250 hours of practical experience in 6 sigma, Flow and Visual Workplace

21 Continuous Improvement Lean Initiative Continuous Improvement Doctrine: Continuous efforts to achieve stable and predictable process results are of vital importance to business success Manufacturing and business processes have characteristics that can be measured, analyzed, improved and controlled Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management

22 Continuous Improvement Lean Initiative Continuous Improvement Key Features: A clear focus on achieving measurable and quantifiable financial returns from any project An increased emphasis on strong and passionate management leadership and support A clear commitment to making decisions on the basis of verifiable data, rather than assumptions and guesswork

23 Results INITIATIVE SAVINGS Direct to stock with wax $ 45,000 Pallet density $ 68,000 Eliminate i Yellow Zone (replenishment) $ 580, Two Sisters packaging redesign $ 1,200,000 Conveyor Redesign (indirect labor reduction) $ 75,000 Overall warehouse productivity improvements $ 125,000 $ 2,093,000 7% overall savings to operating and shipping costs

24 Summary TransTech study opened PartyLite's eyes to opportunities Not all have been considered / implemented Changed the attitude of the PartyLite team What once was thought of as too big can be achieved Break down any issue into smaller bites / initiatives Introduced the power of compounded thinking One idea builds on another if everyone is aligned Created a mindset of creativity and appropriate risk taking $200,000 savings from lean initiatives budgeted 2011

25 For More Information: Mark Pennybacker com Jim Butler Visit ProMat 2011 Booth Material Handling Industry. Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.