Warehousing
Challenge:
A dedicated warehouse operation of 2,000m2 was costing client $3.4M annually, covering operational cost for rent, maintenance and utilities.
Objectives:
To reduce overall running costs.
Solution:
Challenged with reducing this cost, we first looked at areas of the building that were not operational and could effectively be switched “OFF” and be utilized by the land lord potentially saving 14%. However, the client had another 10,000 pallet space warehouse also operational 24/7. Tasked with creating space within this new warehouse areas were identified that could be streamlined in current operation and more effectively utilized. The existing operations and a team of 55 was reduced by 20% and relocated into existing offices within new warehouse, with zero effect on operational performance and customer service. Within 3 months the warehouse was returned back to landlord saving $3.4M. The entire operation reduced into 200m2 foot print a 90% reduction in floor space. Additional savings and synergies were produced due to eliminating need to deliver between the two warehouses.
Result:
The cost reduction project brought about USD 3M savings, with an intelligent deployment of space, streamlined operations and staff allocation. Transport was reduced maximizing efficiencies.
Challenge:
The ratio of overtime man-hours to regular hours for a large warehousing and logistics company stood at an average of 15%. The utilization of staff during regular hours was low resulting in high over time further translating into high cost of operations.
Objectives:
Objective of the project was to reduce over time by at least 20%.
Solution:
Analysis on volume peaks and lows was done and FTEs were deployed based on volumes inflow and outflow. Shift pattern was changed to match the volume peaks and lows. Cross utilization of MHEs were done to reduce waiting time during peak hours. Based on past performance process level targets were set for core activities like receiving and picking.
Identified wastes like waiting and over processing in inbound and outbound process and the same was eliminated by designing checklists and creating better transparency in the process
Result:
Outcome was a 30% reduction in overtime resulting in annualized savings of QAR 0.5 million