A leading FMCG company, let’s call it “Sam spice products” is a reputed player in the industry with well-established brands, manufacturing facilities, warehouse, and good sales network. As

the company was growing at a fast pace, management planned to

shift to a new warehouse with automation to expand operations and to cater to the increased demand forecast.

The current warehouse is being operated fully manually. Once

items are received in receiving dock, material handling operators manually picked the items and dropped them in respective bins.

For outbound movement, Operators picked the items from

respective bins and moved them to Outbound Dock storage areas. Once trucks came in, another set of operators loaded the trucks. A

total of 200 operators were employed per shift for material move-ment.

Company’s management was interested to bring in new

technologies, automation and material handling equipment to

improve safety, efficiencies and to scale up for future demands quickly.

The Warehouse manager Michael was in charge of identifying

vendors and evaluating the new warehouse designs. Michael was an expert in manual warehouse operation, very good at handling

people and solving day-to-day problems to meet the delivery goals, but he was completely new to the automated warehouse. He approached three companies for warehouse design and

implementation.

These 3 companies visited the current warehouse and studied the current operation. Each company submitted its designs and approaches for the new warehouse. Now Michael had three designs & plans, and each company explained their approach to

meet the future demand. As Michael was new to the automation

area, he faced a challenge in asking the right questions to the vendors.

The Client • Leading FMCG Player plan-

ning a new, bigger and auto-mated Warehouse.

• Current warehouse is in fully manual model with opera-tors moving the items from inbound to storage and to outbound manually.

• Desires to move from Manu-al to Automation for safety, efficiency and scalability.

The Challenge • Warehouse manager new to

automation. • Got quotes from 3 vendors

with different approaches, Material Handling Equip-ments & processes.

• Not clear on evaluating the different automation plans.

.

Overview

The Challenge

This was the time when Bestir business consulting team approached Sam spice product’s managers and introduced simulation and its benefits for decision-making. The managers

including Michael were pleasantly surprised, as this was exactly

what they needed. They understood that simulation would not only evaluate the designs, it would also help them understand the

internal operations and all the nuances. The warehousing team signed a contract with Bestir for evaluating whether the

warehouse designs would meet their goals. As Sam’s management

had already rejected two designs due to the timeline and budget, they wanted to validate the one design provided by the Smart

Engineering consulting company.

In Bestir’s experience

Bestir assigned its project Manager Shelly to the job and she

selected FlexSim simulation engineers from our pool of resources and started the project. The simulation team visited the warehouse and studied the operations. Bestir team brought Sam’s Warehouse,

Operations team, and the designers from Smart Engineering consulting together to discuss the needs and objectives of the

Client and to finalize the requirements, Process flow, Constraints,

Rules of the project.

After Analysis, Bestir understood that the main objective of the client was to maximize their per-day throughput. The company was handling 200 tons of Food products in a single 9 hour shift and wanted to handle around 300~350 tons going forward. The

company was also contemplating a change in their supply chain to

directly supply to retailers instead of dealers which will increase supply chain movement.

Simulation Solution • Bestir enters at the right time • Introduced simulation & Ex-

plained simulation benefits for evaluating process design, Resource optimization, Process optimization, etc.

• Signed up for Warehouse design validation

Finalize the Objectives • Requirement workshop

involving Warehouse team, operations team, and Ware-house consultants

• Maximize daily throughput is

the goal (Double current throughput)

• 40% growth forecast in 2 years, that design needs to handle.

Simulation approach for Warehouse Design validation

Objectives of the Warehouse design

“Simulation is a perfect fit for design validations of complex

processes that involve distributed source for inputs, different

types of resources, different processes, internal rules, and

constraints, etc. Other tools like XL cannot handle the

distributions, time factors, distance, speed factors, and the

inter-dependent constraints to give an accurate output”

Further, they are expecting 40% of growth in the next 2 years, so

per shift around 100 trucks will enter the warehouse for loading and unloading operations. Each truck will have approximately four

tons of capacity. They expect their new warehouse to be capable of handling the forecasted demand.

In the current warehouse, a fleet of 200 employees per shift

operate manually. Sam’s company expected the new warehouse to handle double the capacity but with a lot fewer manual resources

and more automation.

The size of the proposed Warehouse was 50K square feet, with 20 dock doors, 16 for outbound and 4 for inbound. Approximately, 700 unique SKUs are stored and moved into the warehouse

regularly. As per the nature of customer orders, each order has more line items with a moderate number of quantities. This

leads to more picks in the outbound operation.

The new WH design from the Vendor also introduced new process

changes to accommodate the change from manual to MHEs and for

increased throughput. For e.g., the current WH handled goods as they arrived in the trucks, but the new design palletized the goods

and used different material handling equipment to transport them inside the WH.

A few key parts of the new design are

• Three different storage areas will be available to store SKUs

based on ABC analysis. Fast-moving SKUs will reside in a

shuttle rack system, medium-moving SKUs in the pallet rack system, slow-moving SKUs in the mezzanine floors.

• A combination of material handling equipment such as Reach

truck, BOPT (Battery Operated Power Truck) vehicles and

Pallet shuttles will be used to transport the pallets within the warehouse. 3 reach trucks, 2 for the shuttle system zone and 1

for pallet racking and mezzanine zones, 6 BOBT vehicles, 4 for shuttle system zone and 2 for pallet racking and mezzanine zones and 4 shuttles are planned serve across all the racks un-

der the shuttle system are part of the new design.

Warehouse details • The current manual warehouse

uses 200 employees per shift • New warehouse expected to

handle double capacity with less manual resources

• Warehouse size 50K sq. ft. 20 dock doors – 16 for outbound, 4 for inbound. Approx 700 unique SKUs

• More picks due to the nature of the orders.

Vendor design

• Changes to accommodate

Manual to automation & throughput expectation

• Palletize Approach • 3 storage areas and storage

systems based on ABC velocity.

• MHEs like Reach truck, BOPT, Pallet shuttles planned

• 4000-5000 pallets at a time storage capacity.

• 40 Racks for the shuttle sys-tems with 6 levels and 16 bays.

• 20 racks for pallet racking system with 8 bays and 8 levels each.

• Usage of the telescopic conveyor to speed up the pro-cess.

Warehouse details

Vendor design

• Overall, the warehouse will store 4000 ~ 5000 pallets at a time,

40 racks will be allocated for the shuttle system and it would go up to 6 levels and will contain 16 bays. Similarly, the pallet

racking system will consist of 20 racks; each rack with 8 bays and 8 levels.

• Apart from the transport vehicles, the design proposed telescopic conveyors to bring down the items from truck to

staging area during inbound operations & to move the SKUs from the staging area to the trucks.

Proposed design: Storage for Velocity A SKUs on the right, Racks for Velocity B SKUs on the left back & Floor storage for C SKUs on the

left front

Shelly prepared a detailed plan with well-defined scope and

deliverables with deadlines. Once Michael approved the plan, the

team started building the model.

First, the simulation team collected current and forecasted

inbound and outbound truck schedules, demand data and other

data points and verified them with the warehouse team.

Simulation project execution Bestir team executed the project as follows • Built the 3d model on top of

the CAD Model • Drew the network path, • Setup parameters and rules

for MHE, operators • Inbound and outbound

operations

Simulation project execution

As part of the simulation project, Bestir team

• Imported the layout and built the 3d model, placing the objects

such as rack, MHE, Operators, docking stations

• Drew network path across the warehouse to define the MHE travel path

• Setup the right parameters to MHE & Operators to follow traffic

rules , safety rules and operational rules inside the warehouse

• Modeled the inbound and outbound operations based on the truck schedule and traffic rules.

• Modeled the shuttle pallet racking and made it operational

• Modeled the telescopic conveyor operation

• Wrote scripts to build analytical reports

• Prepared reports with analysis and recommendations (Along with metrics)

Prepared Videos for the complete warehouse operation in 3D.

In FlexSim there is no out-of-box object to build shuttle pallet racking and telescopic conveyor’s operations. Bestir team completely customized the existing object libraries and built those objects and their operations.

Shelly updated the model progress to Michael on a weekly basis until project wind-up. This was helpful to avoid any potential

concerns and Michael was very happy that he was kept informed.

The team also had 2 demo sessions with Michael to present the

intermediate model and confirm the progress. Michael had some suggestions after understanding the system through the simulation

model.

• Shuttle pallet racking & operations

• Telescopic conveyor models & operations

• Analytical reports generation • Analysis and Recommenda-

tions • Video of Warehouse

operations • Customizations and Scripting

Simulation Results and Recommendations

• 3 shifts needed to process vol-ume assumed for 1 shift

• 70% racks are not being uti-lized

• Savings in racks and in ware-house space

• Designs changed to accommo-date the volume movement needed & also the reductions above

• Redesign of the New ware-house with confidence

FlexSim customization

Project progress report

Simulation result presentation

As the new warehouse operation was very different from that of

the current warehouse, and Michael was new to automation, the FlexSim simulation model helped Michael and Sam’s key personnel

to visualize the end-to-end operation and demonstrated the internal operational flow with utmost clarity in 3D animation

For e.g. Simulation showed that it will take 3 shifts to process the demand that the Client was expecting to process in 1 single shift. If

the client had constructed the Warehouse based on the given design, it would have increased the operational cost for 2

additional shifts and would have jeopardized his business.

As per the simulation reports out of the suggested racks, only 30% were being utilized. Reducing the racks would be helpful in reducing the budget allocated. Further, this will help increase safety stock maintained and will also free up space for other Warehouse needs. The projected reduction in rack budget was about 20%.

Bestir team shared all the observations from the simulation with

Sam’s Warehouse team and Michael. He arranged a meeting between the engineers from Bestir and Smart Engineering to

decide on the design changes needed to achieve their goals.

Mathew, the Project Manager from Smart Engineering consulting, who is also an expert in engineering design, gathered all the

outputs from simulation and asked for a report to visualize the cycle time in different areas across the warehouse. Shelly had already built this report as part of the project scope. She just

shared with them.

Based on the insights obtained from the simulation Smart Engineering consulting company was able to amend the design to

achieve the Sam Spice Product warehousing team objectives and goals. Simulation built a lot of confidence for the Design team as well as the Client.

Analysis report and recommendation

Once again, simulation proved its potential as a tool simplifying the complex processes and operational systems along with illustrating

the possible bottlenecks in such a way that even a person with no prior knowledge in simulation or construction would understand.

This is an example where simulation proved its ROI, as our client, Sam Spice Product Company achieved the following benefits:

• Saving 20% off rack cost

• Saving 10% of storage space in overall warehouse size

• Clarity of the operation flow, bottlenecks etc for every one in

the warehouse team so that all decisions and actions are in sync

• Information about maximum orders that can be handled by warehouse in a shift. As a result warehouse management team can come up with different options, when order volume

increases. This will avoid delay on customer delivery.

• Base mjodel can now be used for validating any changes and also for “What-if” analysis e.g. tovalidate future changes in schedule, resources, operational flow, etc…

Seeing these benefits, Sam’s Spice Product company also decided to uses Simulation as a Practise in the future for optimizing processes and resources.

Summary • Simulation - Simplifying the

complex • 20% savings off Rack cost • 10% saving in storage space • Explain the operations & bot-

tlenecks visually • Clarity on bottleneck areas,

maximizing throughput • Model for future changes and

what-if analysis

Summary

Quote from Sam spice product’s management team

Project Metrics

If you are a sophisticated, market facing company with a need for designing and implementing software solutions to solve real world business problems, or if you are a Software Service or Product Company in the US, looking for a reliable and committed long-term partner, you have come to right place. We are looking for clients whose annual software budget is in excess of USD 100,000.

ABOUT YOU

ABOUT US

Our vision is to become a 100 people company by 2020, operating from India, with an average revenue per employee of USD 100,000

We are a 40 member bou-tique software company. We design and implement software solutions to real world business problems.

Led by a team of 3 senior technocrats and 6 mid-level project managers we have the right mix of resources to take up projects in the range of 10 people months to 100 people months. Our current technical skills are in Salesforce, NetSuite, MEAN, Flexsim and Microsoft Tech-nologies. For skills other than these, we will outsource the coding part to our vendors in In-dia while taking complete responsibility for the project design and delivery.

info@bestirtech.com www.bestirtech.com