It is done. The new distribution system is in operation for a couple of weeks now. It passed the acceptance procedure and the supplier’s team has hit the road after a successful run-up. Was that all? What’s next?
Well, if you do it right, you can now start a phase in which you increase the profitability of the project far above your budget. We are talking about raising efficiency by 20 to 50%, compared to design specifications! By the way, these are not made-up numbers, but instead have been achieved in a variety of optimization projects with our customers.
A semi-automated distribution system has roughly 20 – 30 logistical parameters that you may adjust. This purposefully excludes the hundreds of technical adjustments, which are possible at the machines, even though they will indirectly influence the logistical functioning as well. This, by the way, is for an average, semi-automated installation, worth between 2 and 10 Million €. You could say this is still middle class, certainly not high-end, in terms of investment as well as in technical complexity.
And that’s not nearly all, because the logistical performance and efficiency of the distribution system is also significantly influenced by the organization of the business and the interaction with the ERP system and its associated processes.
Altogether, we are talking about a bunch of around 50 to 100 parameters that influence the profitability of your investment after the run-up of the system, and noteworthy so.
Now, how can you bring this treasure to the surface? The operating manager is already busy getting to know the new system, reducing the training deficit of his people and overcoming the typical disturbances a new facility tends to experience. The supplier’s experts have left and the maintenance mechanics are not seasoned logistics specialists.
With the experience from many successful optimization projects, we can give a crystal-clear recommendation here. What you need is an experienced logistics veteran who is deliberately not involved in the process organization. In the end, it doesn’t matter whether he or she comes from your own company, from the facility’s supplier or from a third party. A true expert with experience in logistics will leave no stone unturned when analyzing all the processes from goods-in to replenishments and order start all the way to personnel placement planning and the synchronization of functions, as well as control parameters of the installation. Particularly the analysis of error handling allows valuable insights about the process, the interfaces and the possible ways to optimize.
Such an overall optimization usually consists of a number of small adjustments and improvements. And now the good news: most of these steps require little or no additional investment. That’s because the lion share of the potential improvement can usually be realized from process or business organization.
Another finding from projects such as these is that it pays to involve the system supplier, especially when it was he who provided the material flow control or the warehouse management system as well. First, the supplier can give valuable data and detailed knowledge about the facility. Second, he will be needed when it comes to changing and adjusting parameters later. A good supplier will actively contribute to the success of this phase with his own constructive and pragmatic proposals.