Our client is Atlanta Bonded Warehouse (ABW), a third-party logistics provider of transportation, integrated warehousing, and co-packaging solutions. ABW specializes in temperature-controlled management of consumer-packaged goods (CPG) for the food, beverage, pharmaceutical, plastics, and related CPG industries. ABW’s warehousing services include multi-client and contract warehousing, freight consolidation, and cross-docking. Their co-pack services include secondary product packaging and repackaging/reconfiguration. Secondary product packaging focuses on kitting, bundling, and sealing to ensure that the products are ready for retail. ABW’s goal is total customer satisfaction through continuous innovation in technology as well as best practices by focusing on teamwork, accountability and integrity, all in a safe working environment. We worked with one of their thirteen facilities in order to provide company-wide recommendations.
At the core of our project is the opportunity to reduce randomness within ABW’s warehouse. Many of their internal operations, including pallet storage, dock door assignment, and picker route selection, contain decisions that are uninfluenced by a systematic approach. As a result, each process results in excess travel time, which leads to a need for overtime. Inspired by the client’s wishes for a layer of standardization in regards to the tasks given to their warehouse employees, our team found the processes with the highest variability behind their task times through time studies. The tasks include pallet collection, case picking, and order staging.
To reduce variability and increase time savings for ABW, we created solutions for four different opportunity areas: (1) co-pack storage, (2) full pallet location assignments, (3) case pick pallet location assignments, and (4) dock door assignments. We created multiple solutions for each of these areas to insure that ABW was able to choose and implement the best solutions for their operations.
In order to complement the current warehouse management system and warehousing strategies, three files will be delivered to the client: (1) a product family reassignment list, (2) an affinity mix identifier, and (3) a dock door assignment tool. Each of these files will help ABW to incorporate our recommendations into each of their twelve facilities.
Value and Impact
Overall, through the combination of savings from each of our project components, we have a total savings of $81,435 per year for our primary facility. This amount is equivalent to $243,415 over five years using a 20% weight adjusted cost of capital rate. Employees work until all tasks are complete, which means that it is common for them to work 9 to 10 hours each night. These labor savings come from the elimination of the extra time that is necessary for each shift, valued at $0.50 per minute per employee. We can apply these concepts to ABW’s twelve other facilities.