modex floor seminar
TRANSCRIPT
© 2014 MHI®Copyright claimed as to audiovisual works of seminar sessions and
sound recordings of seminar sessions. All rights reserved.
Sponsored by:
Presented by:
C/VLM Working Group
Easy C/VLM Cost Justification:
Calculate the true cost and ROI of carousels and vertical lifts
Horizontal Carousel
Vertical Carousel
Vertical Lift Module
Easy C/VLM Cost Justification:
You know that using space and resources more efficiently will improve your operations and lower your costs.
An automated carousel or vertical lift module may be the ideal system for you.
C/VLM Equipment “Benefit Zone”
• Short term, dynamic storage.• Highly accurate item location.• Enhanced security.• Small to medium article sizes.• Individual lots.
Easy C/VLM Cost Justification:
How do you justify the cost of the capital equipment that will
allow you to achieve those goals ?
Calculate R. O. I.(Return on Investment)
Gain from investment - Cost of investment
Cost of investment
Calculate R.O.I.
$110,000 - $75,000 $35,000
.466 X 100
Revenue +
Machine Cost ÷$75,000 $35,000Gain
= 47% R.O.I
Calculate R.O.I.
Gain from investment - Cost of Investment (AS HIGH AS POSSIBLE) - (AS LOW AS POSSIBLE)
Cost of Investment(AS LOW AS POSSIBLE)
Gain from Investment
Tier1: Financial Justifications•Reduce Costs•Avoid Costs •Increase Revenue
Gain from InvestmentTier 2: Benefits of C/VLM•Reduced workplace injuries•Boost productivity •Increase security/ reduce loss•Improved inventory accuracy•Add reporting and analysis •Integrate with vendors/customers
Gain from InvestmentTier 3: Additional Benefits• Competitive advantage• Reduced Environmental Impact• Employee retention and promotion•Enhanced image and reputation• Preparation for future growth• Image and prestige
Research Pull financial records Determine company procedures Know your hurdle rate
Research Get the inside track Know historical successes and
failures Know ALL of the approvers Get everyone affected on your team Present a united front
Research Use industry statistics Don't guess, estimate or over
inflate Get input internally and
externally Involve vendors who may be
affected Get 3rd party endorsements
C/VLM Equipment BenefitsHigh Density and Vertical Storage•Make room for more inventory•Make room for new profit centers•Avoid new construction•Eliminate storage and transportation fees•Reduce energy costs (lights, HVAC)•Reduce workload (cleaning, safety)
C/VLM Equipment BenefitsHigh Density and Vertical Storage
$3,000,000 Building Expansion vs
$600,000 Machine Investment$2,400,000 Saved
400% R.O.I.
C/VLM Equipment BenefitsEnclosed Storage Offers Protection•Avoid environmental damage •Avoid disaster damage •Increase shelf life
C/VLM Equipment BenefitsEnclosed Storage Offers Protection
$25,000 Machine InvestmentVs
Avoid $1.2 Million Inventory Loss
C/VLM Equipment BenefitsEnclosed Storage Enhances Security•Physical Locks •Passcode access to the machine•Passcode access to individual shelves•Passcode access to individual part numbers•RFID & Magnetic Card Reader security
C/VLM Equipment BenefitsIncreased Inventory Accuracy Avoids:
• Overstocking• Rush charges• Missed orders• Production delays and shutdowns• Expired inventory• Wasted time searching
C/VLM Equipment BenefitsBoost Productivity•Pick & Pull items faster•Batch jobs for speed•Pull the right part for the job•Combine processes together•Quick access to entire inventory
C/VLM Equipment BenefitsBoost Productivity
$160,000 Machine Investmentvs
$100,000 salary reduction$15,000 Overtime
$8,000 Rush ShippingAnnually
C/VLM Equipment BenefitsEnhance Security •Enclosed storage•Physical locks•Passcode access•RFID•Card swipe
C/VLM Equipment BenefitsImprove Ergonomics•Lift in the “Golden Zone”•Avoid climbing and stooping•Avoid slip & fall•Avoid collisions•Avoid lifting and carrying
Present your case1. Executive summary
• 2 Paragraphs• 3-4 sentences each.
2. Situational analysis• Proposed solution
3. Financial benefits• Return on Investment
4. (Steps to counteract risks)
Tractor and Utility Vehicle Manufacturer
Application•Pick And Pass Spare Parts Order FulfillmentSolution•Six Horizontal Carousels•Four VLMs •Pick To Light•SoftwareCost Justification•Doubled Productivity•Recovered 83% Floor Space
“We couldn’t throw any more bodies into the mezzanine zone
without people tripping over each other. We were able to
increase our picking productivity by over 90% and only need one worker to manage the carousel
zone.”
- Logistics Manager
Retail Pharmacy Distribution
Application•Order Fulfillment For Retail OperationsEquipment•Six Horizontal Carousels•Pick To Light•SoftwareCost Justification•90% Faster Picking•72% Labor Reduction
“We were picking as fast as staff, shelving and technology would
permit, but it wasn’t fast enough, the addition of the horizontal
carousels has allowed us to meet current order demand and
expand into a seasonal fulfillment program,”
-Operations Manager
Equipment Manufacturer
Application•Fulfilling Parts Orders For ManufacturingEquipment•Three VLMs •Pick To Light•SoftwareCost Justification•Picking 44% Faster•Reduced Labor
“Before installing the VLMs, we did a time study. Our average
picking time has been reduced from 4.72 to 2.64 minutes per
pick, a 44% increase in productivity.”
- Warehouse Supervisor
Textile DistributorApplication•Wholesaler & Distributor Of Decorative FabricsEquipment•Four VLMs With Pick to Light and SoftwareCost Justification•Recovered 67% Floor Space•Increased Capacity•Doubled Productivity
“Picking hardware was an inefficient and labor intensive
process. The VLMs allowed us to add more inventory while
maintaining our 3pm order cutoff time - growing our hardware
business.”
- Vice President
Medical Center“We had run out of space in our central sterile storage room, and were faced with a multi-million
dollar building expansion. Vertical carousels allowed us to
remain in our existing space, avoiding the cost and hassle of
construction. We even have room to grow in the future now.”
- CSP Director
Application•Central sterile storageEquipment•Eleven vertical carouselsCost Justification•Avoided $3 Million construction•Reduced overstocking •Reduced errors impacting surgical scheduling
CNC Equipment Supplier“We were staffed based on peak demand times, and even then were not able to ship all orders
same day. The VLMs allowed us to reduce staff and still guarantee our customers that all orders will
ship the same day. The VLMs saved us $180,000 the first year.
In labor and other costs.”
- National Parts Manager
Application•Distribution CenterEquipment•Nine vertical lift modulesCost Justification•More picks with reduced staff•Cross-check for accuracy•24hr. guaranteed shipping
Automobile Dealerships
Application•Parts and Service DepartmentEquipment•4 vertical lift modules•1 vertical carouselCost Justification•Larger parts inventory•Specialized tool storage•Added security and accuracy
“We included vertical storage as an integral part of each of our
dealerships. We freed up a lot of floor space, and greatly improved
the performance of the parts counter for our service departments and the appearance
of the service area for our customers.”
- CFO
Lawn & Garden Equipment Supplier“I can leave here at night
and I know that every order is gone, and I know that every order is gone
accurately.”
- President
Application•Distribution CenterEquipment•Four vertical lift modulesCost Justification•Eliminated overtime•128sq/ft footprint freed space•Accuracy increased to 99.9%
Questions?
For More Information:
www.mhi.org/as-rsTim Archer- [email protected]
www.kardexremstar.com • Booth 9323
David Schneider - [email protected] • Booth 8417