Due to space constraints warehouses are spread out across many different places making supply chain management complex and creating a bottleneck in quality testing of raw materials
Tools & Methodologies:
Interviewed operational staff to understand estimated times for hands-on work and machinery and understand production lead-time
Built capacity model to understand utilization rates for people and machinery
Designed current and future value stream maps to identify waste and bottlenecks and streamline value flows
Conducted financial analysis and built financial model to understand profitability of project under different staffing and demand scenarios
Created current state and future state supply chain flow diagrams to demonstrate efficiency improvements
Outcomes/Results:
Relocation is financially feasible and will produce operational savings
Facility is equipped to satisfy increased demand and production lines with regards to equipment and people
Selection of new facility will be critical to improving process efficiencies
Relocation costs estimated at $4M-$4.2M
Based on potential real-estate difference of selling vs. Buying of $3.5M an investment of $0.5M-$0.7M is required
Annual operational savings of $750K are expected as a result of the move
ROI of 150%-$480
NPV of $1.7M-$4M
Current machinery capacity is less than 60%, facing few capacity constraints
Current staff capacity is 10-60%, also facing few capacity constraints
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