Easy C/VLM Cost Justification: Calculate the true cost and ROI of carousels and vertical lifts

Transcription

1 Easy C/VLM Cost Justification: Calculate the true cost and ROI of carousels and vertical lifts Presented by: Sponsored by: C/VLM Working Group 2014 MHI Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.

2 Horizontal Carousel

3 Vertical Carousel

4 Vertical Lift Module

5 Easy C/VLM Cost Justification: You know that using space and resources more efficiently will improve your operations and lower your costs. An automated carousel or vertical lift module may be the ideal system for you.

6 C/VLM Equipment Benefit Zone Short term, dynamic storage. Highly accurate item location. Enhanced security. Small to medium article sizes. Individual lots.

7 Easy C/VLM Cost Justification: How do you justify the cost of the capital equipment that will allow you to achieve those goals?

8 Calculate R. O. I. (Return on Investment) Gain from investment - Cost of investment Cost of investment

9 Calculate R.O.I. Revenue + $110,000 $35,000 - $75,000 Machine Cost $75,000 Gain $35, X 100 = 47% R.O.I

10 Calculate R.O.I. Gain from investment - Cost of Investment (AS HIGH AS POSSIBLE) - (AS LOW AS POSSIBLE) Cost of Investment (AS LOW AS POSSIBLE)

11 Gain from Investment Tier1: Financial Justifications Reduce Costs Avoid Costs Increase Revenue

12 Gain from Investment Tier 2: Benefits of C/VLM Reduced workplace injuries Boost productivity Increase security/ reduce loss Improved inventory accuracy Add reporting and analysis Integrate with vendors/customers

13 Gain from Investment Tier 3: Additional Benefits Competitive advantage Reduced Environmental Impact Employee retention and promotion Enhanced image and reputation Preparation for future growth Image and prestige

14 Research Pull financial records Determine company procedures Know your hurdle rate

15 Research Get the inside track Know historical successes and failures Know ALL of the approvers Get everyone affected on your team Present a united front

16 Research Use industry statistics Don't guess, estimate or over inflate Get input internally and externally Involve vendors who may be affected Get 3rd party endorsements

17 C/VLM Equipment Benefits High Density and Vertical Storage Make room for more inventory Make room for new profit centers Avoid new construction Eliminate storage and transportation fees Reduce energy costs (lights, HVAC) Reduce workload (cleaning, safety)

18 C/VLM Equipment Benefits High Density and Vertical Storage $3,000,000 Building Expansion vs $600,000 Machine Investment $2,400,000 Saved 400% R.O.I.

19 C/VLM Equipment Benefits Enclosed Storage Offers Protection Avoid environmental damage Avoid disaster damage Increase shelf life

20 C/VLM Equipment Benefits Enclosed Storage Offers Protection $25,000 Machine Investment Vs Avoid $1.2 Million Inventory Loss

21 C/VLM Equipment Benefits Enclosed Storage Enhances Security Physical Locks Passcode access to the machine Passcode access to individual shelves Passcode access to individual part numbers RFID & Magnetic Card Reader security

22 C/VLM Equipment Benefits Increased Inventory Accuracy Avoids: Overstocking Rush charges Missed orders Production delays and shutdowns Expired inventory Wasted time searching

23 C/VLM Equipment Benefits Boost Productivity Pick & Pull items faster Batch jobs for speed Pull the right part for the job Combine processes together Quick access to entire inventory

24 C/VLM Equipment Benefits Boost Productivity $160,000 Machine Investment vs $100,000 salary reduction $15,000 Overtime $8,000 Rush Shipping Annually

25 C/VLM Equipment Benefits Enhance Security Enclosed storage Physical locks Passcode access RFID Card swipe

26 C/VLM Equipment Benefits Improve Ergonomics Lift in the Golden Zone Avoid climbing and stooping Avoid slip & fall Avoid collisions Avoid lifting and carrying

27 Present your case 1. Executive summary 2 Paragraphs 3-4 sentences each. 2. Situational analysis Proposed solution 3. Financial benefits Return on Investment 4. (Steps to counteract risks)

28 Tractor and Utility Vehicle Manufacturer Application Pick And Pass Spare Parts Order Fulfillment Solution Six Horizontal Carousels Four VLMs Pick To Light Software We couldn t throw any more bodies into the mezzanine zone without people tripping over each other. We were able to increase our picking productivity by over 90% and only need one worker to manage the carousel zone. - Logistics Manager Cost Justification Doubled Productivity Recovered 83% Floor Space

29 Retail Pharmacy Distribution Application Order Fulfillment For Retail Operations Equipment Six Horizontal Carousels Pick To Light Software We were picking as fast as staff, shelving and technology would permit, but it wasn t fast enough, the addition of the horizontal carousels has allowed us to meet current order demand and expand into a seasonal fulfillment program, -Operations Manager Cost Justification 90% Faster Picking 72% Labor Reduction

30 Equipment Manufacturer Application Fulfilling Parts Orders For Manufacturing Equipment Three VLMs Pick To Light Software Before installing the VLMs, we did a time study. Our average picking time has been reduced from 4.72 to 2.64 minutes per pick, a 44% increase in productivity. - Warehouse Supervisor Cost Justification Picking 44% Faster Reduced Labor

31 Textile Distributor Application Wholesaler & Distributor Of Decorative Fabrics Equipment Four VLMs With Pick to Light and Software Picking hardware was an inefficient and labor intensive process. The VLMs allowed us to add more inventory while maintaining our 3pm order cutoff time - growing our hardware business. - Vice President Cost Justification Recovered 67% Floor Space Increased Capacity Doubled Productivity

32 Medical Center Application Central sterile storage Equipment Eleven vertical carousels Cost Justification Avoided $3 Million construction Reduced overstocking Reduced errors impacting surgical scheduling We had run out of space in our central sterile storage room, and were faced with a multi-million dollar building expansion. Vertical carousels allowed us to remain in our existing space, avoiding the cost and hassle of construction. We even have room to grow in the future now. - CSP Director

33 CNC Equipment Supplier Application Distribution Center Equipment Nine vertical lift modules Cost Justification More picks with reduced staff Cross-check for accuracy 24hr. guaranteed shipping We were staffed based on peak demand times, and even then were not able to ship all orders same day. The VLMs allowed us to reduce staff and still guarantee our customers that all orders will ship the same day. The VLMs saved us $180,000 the first year. In labor and other costs. - National Parts Manager

34 Automobile Dealerships Application Parts and Service Department Equipment 4 vertical lift modules 1 vertical carousel We included vertical storage as an integral part of each of our dealerships. We freed up a lot of floor space, and greatly improved the performance of the parts counter for our service departments and the appearance of the service area for our customers. - CFO Cost Justification Larger parts inventory Specialized tool storage Added security and accuracy

35 Lawn & Garden Equipment Supplier Application Distribution Center Equipment Four vertical lift modules Cost Justification Eliminated overtime 128sq/ft footprint freed space Accuracy increased to 99.9% I can leave here at night and I know that every order is gone, and I know that every order is gone accurately. - President

36 Questions?

37 For More Information: Gary Forger, AS/RS Managing Executive, MHI Website: