Distribution Center Design & Implementation
By Charles Fallon
July 2019 | 3 min read
The leading manufacturer of bedding products in the United States serves all major US retailers through a global supply chain with primary manufacturing in Asia and Central America as well as manufacturing and distribution facilities across North America. Having launched several successful new product lines, the company’s distribution network struggled with capacity issues as sales increased significantly
The Mandate
The company asked LIDD to accomplish three goals:
- Review its current network and determine the optimal location for a new distribution center
- Design the new distribution center
- Lead the project team to implement the new distribution center
Executing the Mandate
LIDD analyzed the inbound and outbound flows of the supply chain and assessed the capacity of existing distribution facilities.
LIDD evaluated a series of scenarios including:
- Maintain the current facilities and expand those that could not meet the capacity within their market
- Establish a new distribution center in a new market and relieve the existing facilities currently serving that market
- Replace a distribution center and re-locate it to reduce the network-wide transportation costs
LIDD recommended the third option as it would provide the necessary capacity, reduce transportation costs and avoid the additional fixed costs of adding a new facility.
LIDD designed a 400,000 sq.ft. facility in the southeastern United States. The facility is 40’ clear in height and consists of pick towers fed by high-density storage racking. Pickers pick master cases as well as retail units to support a variety of distribution channels. A high-volume yet simple shoe-sorter style sortation system directs orders to the correct palletizing station based on the outbound transportation carrier.
While LIDD designed the facility, the client secured the site and contracted a design-build firm to perform the necessary civil engineering and construction. The construction project was launched in January 2017.
LIDD led the implementation team through:
- Facility construction
- Materials handling system procurement
- Materials handling installation & testing
- Modifications to the warehouse management system & integration with the conveyor controls-system
- HR structure, job descriptions and training manuals
- Pick line design & product slotting
- “Go-live” planning and post-launch stabilization
Results
The client shipped its first orders from the new facility in November 2017. LIDD completed the project on schedule and under budget. Network-wide transportation costs fell as the client was able to shift volumes from other facilities. The client had increased capacity to continue growing and began plans to launch new product lines.