Sunland Logistics Solutions led a cross-functional continuous improvement team to optimize the processes and layout for the repackaging function of the distribution center operation supporting their customer’s 24/7 manufacturing plant. As a result, the project increased productivity and reduced costs for the manufacturer.
Repackaging Process & Layout Optimization to Reduce Costs for Manufacturing Plant
Customer Value Highlights:
- 85% Productivity Improvement
- Reduced overall costs by 2% (contributing to an overall 30% Cost Reduction across 3 years)
The Background
Sunland Logistics Solutions manages a complex 24 hr. 7 day / week just-in-time (JIT) warehouse operation providing inbound to assembly plant operation support to one of the largest U.S. manufacturers of residential and commercial products.
As a strategic third-party logistics provider, Sunland’s team is consistently focused on identifying and implementing continuous improvement projects to generate quantified value for its customer. Sunland maintains a CI project pipeline and reviews it with its customers during quarterly business reviews to ensure alignment on CI project prioritization, required resources, and timelines. After successfully transitioning as the manufacturer’s new 3PL partner, Sunland’s team presented a project to focus on optimizing the repackaging function of the operation.
The Problem
The warehouse operation receives component parts ranging across 2,000 SKUs in supplier packaging from approximately 100 suppliers. The component parts are then repacked in totes with dividers requiring various packaging types and orientations that are to be sent to the assembly line with no changes needing to be made.
The high complexity of the repack process and inefficiencies of what was the existing repack station layout were driving up the overall unit cost for the manufacturer. The repack station layout and design were also posing increased safety risks for team members from an ergonomics and forklift traffic standpoint.
The Solution
Sunland’s Continuous Improvement project team included a combination of solutions engineers, site managers, IT support, and the team members who perform the repackaging functions on the warehouse floor. Together the team used lean best practices to determine the root causes of the inefficiencies and conducted multiple kaizen events to develop an optimal solution for improving the repack processes, layout, and station design. Key elements of the solution included:
- Workstation redesign to improve ergonomics and implementation of one directional flow improving efficiency and safety by reducing pedestrian / forklift traffic
- Visual management enhancements including red / green andon lights to indicate when a team member needs help resolving an issue.
- Digital process transformation within the Warehouse Management System
The Results
The team used a Plan, Do, Check, Act (PDCA) approach to ensure the solutions implemented were effective in resolving the issues. With this CI project the Sunland team improved the 10 repack stations’ productivity by 85% and reduced overall costs to their manufacturing customer by 2%. This continuous improvement project helped contribute to the overall 30% cost reduction Sunland was able to provide the manufacturer over the course of three years.
