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Evaluation of Facility Re-Design

A family-owned carbonated soft drink distributor to perform a warehouse re-design focused on increasing storage capacity and pick locations.

Beverage Warehouse Redesign

The Challenge

The distributor was recently awarded distribution rights to a large-volume brand. As a result of the increased volume and associated inventory, the distributor’s current warehouse was at risk of being over capacity with the current layout and storage plan.

As part of the warehouse re-design process, KPI focused on exploring options to re-purpose existing warehouse space to avoid use of overflow storage or warehouse relocation.

The Solution

KPI Solutions utilized its proven warehouse design methodology consisting of detailed analytics and on-site operational reviews. By evaluating 11 alternative layouts and storage plans, the team realized adequate space was available if the distributor was willing to apply new racking methods, execute minor facility modifications, and re-purpose warehouse sections.

KPI Solutions developed a solution that included

  1. Removal of an interior wall to provide flexibility,
  2. Application of push-back rack and selective rack to increase storage density and selectivity,
  3. Utilization of walk-back pick locations under the push-back rack,
  4. Increased use of case flow rack, and
  5. Changed product staging process/location. Following the completion of the facility re-design, the project team worked together to define the optimal product slotting based on increasing SKU counts and new package types.

The Value

  • The client invested ~$450K in rack resulting in a 17.5% IRR
  • Avoiding use of an external overflow facility or warehouse relocation
  • Successful brand acquisition within the current facility

Detailed warehouse design approach focused on re-purposing existing space

Achieved a 17.5% IRR via avoidance of overflow storage or warehouse relocation