Background

In 2015 an international water solutions manufacturer was struggling to manage their U.S. inventory of pumps and parts efficiently across their U.S. network. The primary causes of the manufacturer’s supply chain challenges were a result of SKU complexity and trying to operate multiple distribution centers with disparate systems while shipping products to approximately 5,000 different locations that included jobsites, manufacturing facilities, and municipalities. To help improve their inventory visibility and service to their customers, they decided to consolidate their distribution centers to one location near their plant and selected Sunland Logistics Solutions as their new third-party logistics partner. The partnership was established with mutually agreed upon Key Performance Indicators (KPIs) & a mutual culture of continuous improvement with the expectation of implementing lean principles to advance the manufacturer’s supply chain.

Problem

Over the course of the initial five years, Sunland helped the manufacturer improve and maintain high customer service levels while establishing a strong partnership built on transparency and continuous improvement. During that time the manufacturer’s business grew along with its increasing SKU count and labor costs. Although Sunland’s team was hitting all of their target KPI’s, it was apparent that their ability to continue implementing impactful improvements within the operation was constrained by the limitations of the existing Warehouse Management System (WMS). As one of the remaining accounts on a system being phased out of Sunland’s network, the manufacturer recognized the importance of transitioning to Sunland’s Tier 1 WMS solution, Infor SCE, to advance its technology and innovation capabilities. However, understandably, there was some initial reluctance because systems transition projects, similar to construction, are notorious in the industry for escalating budgets, grossly extended timelines, and risk causing significant disruptions to customers.

Solution

To develop and implement a successful system transition project, Sunland assembled a cross-functional team composed of members from its Operations, IT, and Quality departments, all of whom had been trained in Lean and many of whom had experience working with this specific account and were familiar with its nuances.

In addition to detailing the future cost savings opportunities that would be dependent using the Infor WMS, the system transition project plan presented to the customer included process flows, block diagrams, and a detailed project timeline. It was thorough enough to quell concerns of the Plant Manager and the project was greenlighted.

For the migration, several key components were put in place that helped ensure a seamless transition to the new Infor WMS system, including:

  • Migrating the existing inventory from the previous WMS with current LPNs and Location records maintained.
  • Incorporating the current cycle count velocity
  • Maintaining order allocation controls and dashboards
  • Training operations team on all functions both in a group setting and individually to ensure everyone was prepared for go live.

During this transition, one of the most critical elements to success was transparent, consistent communication with the customer on timeline benchmark updates. Using the Lean methodology, Plan, Do, Check, Act (PDCA) allowed Sunland’s team to feel comfortable communicating with the customer that extending the Go-Live date by a week to accommodate the additional testing they felt was necessary to ensure a seamless launch.

Results

Using lean methodologies in their project management approach, Sunland led a successful WMS transition, within budget, on time, and without service disruptions to the manufacturer or their customers.

With the new Infor WMS the operation gained a more secure web-based platform, an easier communication channel, real-time inventory visibility, improved order allocation accuracy, and more advanced quality control tools.

Because this operation was now on the same platform as the other accounts, Sunland was able to provide greater labor flexibility and peak-volume support with crossed trained team members.

From a cost-savings perspective, between 10-15 hours of labor is estimated to be saved per day which would result in an annual cost savings of approximately $45,000 for the manufacturer with labor efficiency and inventory accuracy improvements.