Johnson Stephens Consulting assisted our client, a leading, customer-centric packaging solutions provider of custom designed plastic packaging, with an outbound flow & capacity optimization and network optimization effort.
The flow & capacity optimization project was initiated to resolve the existing outbound constraints in a California manufacturing facility, which also anticipated a volume increase of 33%. The facility was operating with limitations in staging, loading, and yard capacity that supported the outbound manufacturing flow. JSC was tasked with building a capacity plan that clearly defined current capacity constraints and formulating a resolution plan to accommodate the anticipated growth. In addition, JSC was asked to identify and resolve process flow opportunities to create a more productive future state.
The network optimization effort was initiated to facilitate the optimization and incorporation of a new company acquisition into the broader client network. The current network configuration was configured with minimal historic strategic planning and needed to leverage the existing Altium network where possible.
JSC recommended an outbound improvement plan to satisfy projected growth. This included the expansion of dock doors, rebalancing of outbound staging and doors to effectively align with production line volume, and the quantification of yard space required to support the projected growth. In addition, JSC was able to recommend outbound process improvements that allowed for $150-200K in annual labor savings opportunity. This included reduction in wait times by balancing production output to labor ratios, realignment of production staging to reduce travel.
The network optimization effort resulted in a strategic roadmap that provided $7M in operating expense savings in the near-term and $13.5M savings in the long-term. This was achieved through the reconciliation of transportation inefficiencies, the realignment of the network to leverage low cost distribution points, and a partial merge into the Atrium distribution network. These savings opportunities were achieved while maintaining customer service levels.
How We Did It
Generating process and value stream maps, along with a customized capacity model, allowed the JSC team to recommend a change roadmap supporting the outbound growth plan in the California facility. Time studies were collected, and data was analyzed to provide an analytically and mathematically supported improvement roadmap.
The network optimization was executed through a comprehensive modeling effort that include 8 different future state network configurations, along with detailed assessment of transportation spend.