The Long & Short of Enabling Growth

A pharmacy chain was expecting explosive growth – a ten-fold increase over the next seven years. But inaccurate orders, low labor productivity and slow inventory turns were hampering that growth. They asked Fortna to help them develop a plan to meet their aggressive growth strategy and fulfill their promise of daily delivery to each of their pharmacies. Fortna recommended a state-of-the-art distribution center that could handle their current and expected growth. But when opportunities for international expansion put that project on hold, an alternative approach had to be quickly defined. Using parts of the design for the new DC, changes are being made to their existing distribution process to meet their current growth plans. The improved operation, with a 20% increase in productivity and faster and more accurate order processing, is giving them time to finalize their international expansion plans.

Improving Delivery, Reducing Cost

A healthcare services company and pharmaceutical distributor responsible for delivering to 40,000 pharmacies daily approached Fortna to design and implement a national re-distribution center to replace their two smaller DCs. They wanted to improve fulfillment time and reduce costs in the new DC that would house over $2 billion in inventory and ship more than a million items a day. Fortna designed and implemented a highly-automated 600,000 square-feet DC to include the largest and most secure storage and processing areas for the high value drugs and those requiring refrigeration. The 500 fastest-moving items, which account for 70% of the volume in the DC, are managed through a Goods to Person solution that uses automated guided vehicles (AGV) to retrieve pallets and deliver them to the picker. The new facility improved throughput by 220%, reduced operating costs by 25% and now allows the client to keep its promise to help deliver better care to patients.

Making Distribution a Competitive Advantage

A large pharmaceutical manufacturer and regional distributor needed to increase distribution capabilities due to acquisition and organic growth. They asked Fortna to help make improvements to their distribution operations to drive a competitive advantage not only for their own brands, but also for global brands they distribute. Fortna recommended changes to their existing distribution facility that would give it the additional capacity needed for growth, without extending the facility footprint. The updated distribution center has enabled increased throughput, improved productivity, and increased accuracy and offers better security resulting in reduced shrinkage.

Enabling Exponential Growth

A leading industrial distributor was experiencing exponential growth, but that growth brought with it increased costs and inefficiency as they struggled to expand their existing facility and lease additional facilities to keep up. They decided that the best way to eliminate risk, service customers efficiently and bring costs under control would be to bring all of their operations under one roof. Fortna helped redesign the company’s order fulfillment operation to improve and optimize flow, reduce variable costs and better manage inventory. As a result, they are able to reduce risk, reduce operating costs and enable 131% growth over 5 years.

Speed to Market Improves Customer Service Levels

A wholesale distributor planned to double its revenue and expand into new geographic markets. But they were struggling with long order cycle times, unable to respond quickly to customer needs and their current volume already exceeded capacity. Fortna helped them build a business case for investment, design and implement a second DC. Analysis of their systems, picking, sorting and storage operations was done to ensure that the new facility mapped to both the current and future growth and business continuity needs. As a result, the client increased productivity by 20%, created additional capacity for further growth, and can now shift volume from one DC to the other as needed, minimizing risk. And as delivery order cycle times decreased, service levels improved, so their customers can get next day delivery and manage their inventory better.

Building the Business Case for Automation

A major distributor of pharmaceuticals was experiencing capacity constraints that limited their ability to grow. As SKU counts increased, they turned to Fortna to help design and build a multi-temp facility that would allow them to combine two existing facilities and more than double their capacity. But first we had to help them build a solid business case for change and justify the expense to investors. Fortna helped the client build a regional DC that could handle current volume in excess of 144,000 cartons and 1.4 million lines per week with room to grow by 2.5 times those figures. In this new facility more than 70% of their volume (representing only 5% of their 10,000 SKUs) is handled entirely by robots. The design not only helped them meet their growth goals but also reduced their operating costs by 25%, all within a facility that is only 50% larger than their previous DCs.

Maintaining High Availability on a Large Number of SKUs

A leading industrial parts distributor promised its customers next-day delivery on any of its 600,000 SKUs. But the company was faced with high transportation costs, outdated software that drove inefficient processes, and low customer service levels. Fortna helped redesign the company’s order fulfillment operation, provided an updated software solution that integrated all of their systems and yet was easy to maintain, reengineered their facility layout for better flow and implement changes to their picking processes. As a result, they were able to cut order cycle time from three hours to less than one and improve productivity by 62%. The changes also helped to reduce their labor costs, increase their operating capacity and improve customer service. For more, read the full case study.

Integrating Complex and Disparate Networks

When a large auto parts distributor acquired a significant competitor, they needed to quickly integrate the two companies in order to show value to shareholders and the market. But each company had a very different business model (daily vs weekly replenishment, piece vs bulk picking). Fortna helped them develop a comprehensive plan to combine inventory, real estate, distribution assets, labor, and transportation across both networks. The plan called for consolidating, retrofitting, relocating and building 9 facilities to maintain inventory consisting of over 120,000 SKUs and to provide daily delivery to over 3,600 stores. Fortna was there to help at every step along the way. As a result, they have restructured their distribution network to seamlessly integrate assets from both companies, improve customer service levels and position themselves for future growth.