A rapidly growing distributor that ships supplies direct to medical practicioners’ offices expects to double its business within the next 5 years. The company has five DCs, ranging from 200K-400K sq. ft. There are 55,000 SKUs, tens of thousands of which are very small instruments. Some items are controlled drugs with FDA regulations for storage and processing, and some require refrigeration for storage and shipping in temperature controlled containers. In a recent year, the network shipped about 46,000 cartons to customers each day. All orders received during a day are shipped that day, and all DCs have a significant level of conveyorized automation.
Distribution Design’s assignment was to assess the current operations in all DCs and make recommendations for increasing storage capacity and processing throughput. The assessment produced 13 categories of opportunities and dozens of specific recommendations for improvement. In addition, Distribution Design made other strategic recommendations for maximizing the effective capacity and throughput of each of the DCs.
Following the recommendations will allow the client to handle all of its peak capacity and throughput needs for the next five years in four facilities. The client already knew it needed to expand the fifth DC, but feared having to expand three or four of the five. Distribution Design’s recommendations were instrumental in saving capital dollars and increasing throughput and capacity. The inventory analysis completed by Distribution Design also described a plan for saving $2.2 million in inventory carrying costs.