Welcome to Session 136 Transform your Warehouse Without Sending your Customer to Disney World Presented by: Sponsored by: Chris Femia: Sr. Vice President TransTech Consulting Inc. John Leonard: Director Supply Chain Projects Roche Diagnostics 2012 Material Handling Industry. Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.
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Roche Diagnostics - Profile Along with Roche Pharmaceuticals, Roche Diagnostics is an important part of the foundation that modern healthcare builds upon. Our broad range of innovative diagnostic tests and systems play a pivotal role in the groundbreaking area of integrated healthcare solutions and cover the early detection, targeted screening, evaluation and monitoring of disease. Roche Diagnostics is active in all market segments, from scientific research and clinical laboratory systems to patient self-monitoring.
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2 Global Hubs: Manheim Germany (Europe / Africa / Far East) Indianapolis, IN (Americas) Indianapolis Operation 275 Employees, 3 shifts, 7 day/week operation 280,000 SF 15,000 pallets stored 13,000 SKU s 1.3million annual shipments to customers worldwide Overview
Overview Indianapolis Operation 11,000 customers 34 countries Ambient, cooler, and freezer operations
Original Layout: Indianapolis Buildings 1&2 Buildings 5&6 DIS TRIB UTION 1,2 00 AMP PANEL DISCONNECT
Buildings 1 & 2
Buildings 5 & 6
Ambient Picking & Consolidation
Disconnected receiving department Disconnected loose picking areas Crowded outbound processing area and dock The Problem Mismatched equipment and processes (i.e. carousels, pick-to-light) Physical consolidation of orders required Aging conveyor system, RF, and pick-to-light equipment Undersized cooler (storage and picking) Physical building impediments (i.e. block wall between process areas) 20 hours of daily activity in the effected areas Soon to be displaced warehouse management system (ewms on the horizon)
Efficient, ergonomic and economical processes Strategic plan for growth Maintain outstanding customer service Improve material handling and storage methods Provisions for flexibility in corporate growth and expansion The Objective Determine facility, equipment, systems and manpower requirements to support growth Determine projected savings and budget costs of the proposed improvements Eliminate unnecessary non-value added costs and processes
The Challenge Install changes within the existing operations footprint No disruptions to inbound or outbound operations Compliance with strict site-level safety guidelines at all times Use of little to no outside warehousing space as a safety valve Implement changes in multiple areas of the campus No additional staff to cover short-term inefficiencies Comply with global Roche Diagnostics green initiatives ZERO impact to the customer
The Process Roche Diagnostics engaged TransTech Consulting in April, 2009 Three step process Feasibility Final Design Implementation
Feasibility Reviewed all aspects of operations, product flow, and systems capabilities Collected and analyzed data Profiles for orders, SKU s, inventory & shipping Developed and refined objectives Designed conceptual alternatives Cost effective processes, systems and equipment Projected staff and resource requirements / budget Completed 5-year financials, including ROI and payback metrics
Discussed PRO s and CON s of each alternative Final Design Selected alternative that accomplished the greatest number of concurrent objectives Refined selected designs Sold selected alternative to senior management Discussed and designed in fulfillment best practices Wrote requests for proposal (RFP s) for all major equipment Began developing implementation / transition schedules
Implementation Distributed RFP s Facility Equipment Systems Analyzed bids Selected vendor partners Refined and added detail to project schedules Project management Equipment & System Testing Multiple Go-live(s)
Receiving Changes Goods received and shipped from the same building Inbound Quality split and housed in both major processing areas More ASN receiving = Faster receipt = Better product availability Putaway Changes Expanded cooler RF-directed putaway Location check-digit verification at putaway Wire guidance in bulk areas Goal: Improved validation upon putaway to improve accuracy of outbound picks The Solution
The Solution Replenishment Changes 2-Weeks Supply strategy (Limits top-off activities) Validation at putaway (Location / SKU / Lot) Picking Changes Ambient Mezzanine moved to improve flow Cooler Mezzanine expanded Carousels removed System cubing / carton assignment Pick to shipping carton (consolidation eliminated) Voice-directed bucket brigade picking (flexibility / efficiency / accuracy) Cross-aisle picking within pick modules Pick-n-Pass (linked pick modules) Continuous conveyor takeaway
The Solution Packing Changes Packing moved to empty mezzanine to clear floor space Dedicated pack lines based on packing needs (ambient, cold chain, hazmat, QC) Basic Functions Dunnage (most likely paper) Packing slips Ice (as needed for cold chain) Special labeling / paperwork (i.e. hazmat) Carton sealing (in-line tapers) Shipping label Pallet Build: No longer performed at a pack station, but instead at the dock
The Solution Shipping Changes Improved inbound and outbound flow through expanded dock Improved staging capabilities + room for growth New shipping sorter (flexible / intelligent) Dock spots facilitate improved order sortation, manifesting, and workload management Order complete signals Waves released as dock spots are cleared and shipped
The Solution Insuring Quality Improved inbound verification leads to fewer errors during outbound fulfillment receipt putaway replenishment putaway In-line weigh-in-motion verification Dedicated quality assurance lanes Address physical issues (i.e. no-reads / misreads) as well as errors (short picks, mispicks, master data issues) Flexible QC initiatives New employees Key customers New products High value orders
The Schedule Master Schedule 1,100 lines when combined Facilities Conveyor Operations Systems (i.e. current and future WMS) Schedules / task lists by functional area Managed in workable chunks MS Project? not necessarily Clear ownership at the task level Review update distribute REPEAT Supporting Actions / Issues List - Due date driven
Buildings 1 & 2 Carousel and concrete pad removal Wall removal between Bldgs. 1 & 2 Changes to Operations office areas Product relocation (coolers / ambient areas) Cooler upgrade and expansion Roof repairs Conveyor removal and installation Pick module installation(s) Location labeling Product load The Schedule
Buildings 5 & 6 Relocate diabetes customer care business Product relocation (coolers / ambient areas) Storage reconfiguration Cooler reconfiguration Conveyor removal and installation Location labeling Product Load The Schedule
Carousel Removal
Safety First
Wall Removal
Wall Removal
First Brick in the Wall
Cooler Evacuation
Cooler Remodel
The Transition Multiple alternatives reviewed by the leadership team: Each alternative included Description of the alternative Transition timeframe Transition elements included for each alternative Short-term and long-term effects on staffing - Current - Interim - Future Dependencies Risks Advantages Disadvantages Detailed visual walkthrough
N N N M M N M N N M M M N M Bldg. 1 & 2 Conveyor Transition 6 12-3 & 12-6 7 11-19 1 4 3 11-29 & 11-30 2 11-22 12-7 11-23 thru 11-24 5 12-1 & 12-2
Bldg. 5 & 6 Transition Current Layout Receiving / Putaway RAS International Ventana Production Support Non Conforming ACC
Box 1 Box 2 Box 3 Box 4 Ice Ice Ice Ice Ice Ice Ice Ice Ice Boxes Boxes Boxes Boxes Boxes Box 1 Box 2 Box 4 Box 3 Box 5 Box 6 Box 1 Box 2 Box 3 Box 4 Box 5 Box 6 Bldg. 5 & 6 Transition Future Layout Receiving / Putaway RAS Diabetes Care International Ventana Production Support Packing Shipping
Bldg. 5 & 6 Transition Step #1 Illustrated Establish Location for Nonconforming and move Move W6 supplies to W5 Move remaining inventory in South-East pallet area to available locs in W6 Move RAS ambient stock to new area in South-East pallet area
Bldg. 5 & 6 Transition Step #2 Illustrated Remove Rack on south side of W6 to create new RAS pack area Move RAS Pack Stations Move Ventana packaging supplies to W5 Move Ventana primary pick locations
Bldg. 5 & 6 Transition Step #3 Illustrated Remove racks on East wall (4 rows) and Install and start using future DC / Ventana Packing Lines Remove old Ventana packing lines Install new CFR for Ventana and DC loose pick. Move product
Bldg. 5 & 6 Transition Step #4 Illustrated Install new CFR for Ventana and DC loose pick. Move product Install Conveyor Move packaging and some Ventana overstock back to W6
Bldg. 5 & 6 Transition Step #5 Illustrated Open space in W5 Cooler to move Ventana Loose Pick Shift current rack to designated future location Create new CFR Create new Pallet Flow Create new RAS Start Station Install Conveyor Move RAS loose pick and install shelving under racks Current Future
Ice Ice Ice Ice Ice Ice Ice Ice Ice Ice Ice Understanding Package Flow Box 1 Box 2 Box 3 Box 4 Boxes Boxes Boxes Boxes Boxes
The Secret Complete understanding and buy-in from all teams and levels of the organization (senior mgt., operations, IT, facilities) Clear roles and responsibilities Education processes, approach, transition Detailed design reviews Product flow Day-in-the-Life Staffing up to fight burnout (headcount not hours) Flexible vendors (schedules, installation practices) Local vendor presence Creative scheduling around operational needs Detailed implementation schedules
Weekly / daily meetings as required to keep on track Fallback plan(s) Delegate delegate delegate Master project management Team leads for all major sub-projects - Facilities - Operations - Systems - Conveyor Readiness - Site, team, operations The Secret
30% improvement in packing efficiencies 75% reduction in overtime Total FTE reductions of 20% 25% (through attrition & reductions in temporary labor only) Dramatic increase in floor space for expanded business opportunities, product staging, and flow Improved cooler picking space by 70% Improved cooler storage space by 40% Improved ambient picking space by 40% Improved ambient storage space by 50% Balanced workload between buildings The Results
Introduced a number of best practices 2-week supply approach to replenishment Cross-aisle picking Bucket brigade picking Voice picking (replaced classic RF and pick-to-light in broken case areas) Cubing to final the shipping container Weigh-in-motion for QC Use of dynamic shipping lanes for freight sortation The Results First warehouse in the US to implement CO 2 based cooling
The Results
The Results
The Results
The Results
For More Information: Chris Femia: cfemia@transtechconsulting.com www.transtechconsulting.com John Leonard: john.leonard@roche.com Visit MODEX 2012 Booth 820 2012 Material Handling Industry. Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.