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Assess and Optimise Distribution Operations

Daily firefighting and exception handling in distribution centres can lead to a vicious cycle of poor performance and productivity. Learn how an optimised assessment can help you find throughput and capacity in your operations as well as uncover easily implemented improvements.

by Brad Anderson

Challenges for distribution and operations management continue to increase: growing customer expectations, demand for faster services at lower prices, as well as increasing global competition.

Dealing with day-to-day requirements for throughput and storage capacity can leave little time to focus on critical improvements. This can create a vicious cycle of daily firefighting and exception handling, which leads to poor distribution performance, a downturn in customer satisfaction, market share and revenue growth.

How to Break the Cycle?

Solving these challenges begins with a comprehensive Optimisation Assessment that can reveal the root cause of issues, whether it be in process design, facility layout, floor supervisory skills or employee incentives. FORTNA not only leverages proprietary intelligent software, but also a team of experts with deep operations management experience coupled with a fresh and objective perspective. This can lead to quickly implemented improvements as well as provide an improvement roadmap that has been scoped, vetted, and prioritised.

Start With the Improvement Roadmap

Part of the Optimisation Assessment process is being able to answer some key questions when it comes to distribution centre operations. Not only will the assessment process enable you to answer critical questions but answer them with confidence as responses will be backed up with justified business intelligence and data.

An Optimisation Assessment will provide answers to questions such as:

How can I reduce my operating costs?
How do I increase throughput?
Can I create more capacity in my current facility?
What is our best short- and long-term plan of attack?
What are my largest opportunities for improvement?
What are my “low-hanging fruit” opportunities for immediate improvement?

analysis-warehouse-optimization-assessment

Leverage Data to Drive Results

Data-driven approach – FORTNA uses a data-driven process that leads to operational insights which can accelerate the assessment process. Using proprietary analytic and modeling software, FORTNA can take business data and quickly interpret it to understand the current condition of the operations.
Gather and align business requirements – All stakeholders will need to understand the gaps in the distribution centre’s ability to support the company strategy, as well as what obstacles could hold them back from growth today and into the future.
Model customer and operational data – One year of historical order and inventory data is gathered including: order profiles, slotting, volumes, SKU velocity and design constraints. The data gets processed through the proprietary FORTNA DC modeler® software which provides analysis and insight into current operations.
Observe and review – While data can reveal many core issues and some hard truths about performance and productivity, an intense on-the-floor observation and review can identify areas of focus and opportunity. This also provides perspective on future requirements needed to support and sustain growth.
Develop, analyse, and prioritise – The assessment team gathers all the improvement opportunities, including the impact on labor, processes, systems and equipment, then prioritizes their importance as well as how quickly they can be implemented. FORTNA then delivers a summary of opportunities, ranking them to cost, savings and ease of implementation.
Developing the roadmap – A roadmap of initiatives along with a business justification analysis and supporting financial analysis will be delivered and presented. This typically includes initiatives like slotting, inventory improvements, labour planning, layout improvements, process modernisation, systems enhancements, performance metrics and benchmarking.

Typical Optimisation Assessment Results

While results from an Optimisation Assessment can and do vary from situation and industry, results from past assessments normally produce:

Identification of 50 to 100 opportunities for improvement.
About half of these opportunities are considered quick wins or “low-hanging fruit” projects that have a rapid return on investment (ROI).
Longer-term projects, many times, produce an ROI in less than a year.
Many clients use savings from early projects (quick wins) to fund additional improvements.

FORTNA Can Help

The FORTNA team understands the need for practical data-based solutions that provide a quick ROI. Our approach is data-driven and highly-collaborative, to help gain buy-in from key stakeholders who will need to make and sustain the changes. FORTNA can roadmap and implement improvements quickly so that you meet your goals for cost, throughput, productivity, accuracy and service, all while producing a quick ROI.

Contact FORTNA today to schedule your Optimization Assessment and learn more about other assessment opportunities and how they fit into the FORTNA Distribution Optimisation Framework™.

Click for more insights on:

Ten Optimisation Opportunities for Operations in 2023

FORTNA Solution Design Guiding Principles

About the Author

Brad Anderson

Vice President, Solutions Enablement

Brad Anderson is Vice President, Solutions Enablement for FORTNA and has been in the industry for 20+ years, serving in multiple industries including consulting and leadership roles. Brad has been recognised as a Pro to Know by Supply & Demand Chain Executive magazine.