Construction & Mining Equipment Manufacturer Case Study

Construction & Mining Equipment Manufacturer

The world's leading manufacturer of construction and mining equipment, off-highway diesel, natural gas engines, industrial gas turbines and diesel-electric locomotive.
They do business on every continent, principally operating through three primary segments - Construction Industries, Resource Industries and Energy & transportation - and providing financing and related services through their Financial Products segment.

Industry

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Client was using conventional SPR racks since the beginning of their facility in 1970s.
Client did not have sufficient space in their warehouse to accommodate the growing material volumes. With conventional SPR racks, the volumetric utilization of warehouse facility was very low.
Picking efficiency was very poor as client was storing even smaller SKUs in pallets and they were retrieving entire pallet every time for picking even a small single qty of tiny SKU.
Since it is a working plant, they were forced to use maximum vacant land for building new assembly lines and retain the existing storage facilities and look out for improvements in storage methods.

We have studied their internal handling processes such as material receipt, LE qty segregation, binning, put-away, picking, line segregation, kitting and dispatch operations (Part number-wise) in detail.
Upon detailed study of part-wise SKUs, we understood client was underutilizing storage height & cubic space within each pallet resulting in overall loss of storage volume & performing multiple picks.
As FIFO & selectivity was mandatory, client was unable to convert conventional pallet racking system since many years.
To overcome above, we have segregated less than 8Kg unit weight part items based on their overall storage volume and proposed V-store for these part numbers (goods to man, instead of man to goods), thereby substantially reducing no. of pallets picked/handled.
For part numbers with more than 8Kg unit weight and LE quantities ranging more than 1 pallet volume was allocated in Pallet racks.
MPR was proposed to optimize the Cubic space utilization, while ensuring selectivity.
Picking efficiency improvements, WMS integration, Rack loading pattern, location allocation, Aisle light integration were proposed for overall operational efficiency of the warehouse

Increase in cubic space utilization of warehouse by using MPR & V-store
Reduction in operational costs, handling time, number of pallets handled reduced drastically due as smaller SKUs stored in V-store (goods to man, earlier it was man to goods for picking even small SKU)
Part numbers handled as pallets reduced drastically and this improved their location allocation in WMS
V-store & MPR as a combined solution resulted in better cubic space utilization for storage, optimized handling method for respective part numbers, maximum utilization of storage locations.