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FACILITY PLANNING & DESIGNACME Shoe Facility Design
Team #1
Mayank Agarwal Japan Shah Ashraf Naveed Khan Mohammed Naseer
Index Problem Definition Project Scope Executive Summary Product Flow Equipment Selection Space Utilization Space Calculations Labor Estimation Cost Estimation
Executive Summary The present ACME Distribution Center was having constraint with future throughput capacity
with respect to the forecasted growth.
Growth was expected to be 7% in unit capacity, 2% in orders for every consecutive year, for a five year design period.
ACME’s Distribution Center is re-designed with the growth data and brain stormed with different alternatives.
Analysis and design has been done with respect to space utilization, labor, material handling, and cost expenditure.
Comparison was done between the alternatives and the alternative with the highest MARR (Minimum Acceptable Rate of Return ) was selected.
Problem DefinitionACME is a wholesale footwear distributor serving varying sizes of customers for athletic footwear.
Existing DC is at capacity with no room to expand and an expiring lease
Experiencing high annual unit growth
Seeking new, justified alternative operational processes, and a right sized facility to support future business
Current operation has little to no automation
Project Scope
Design philosophy
Product flow
Space utilization
Human resources
Equipment selection
Information technology
Product Flow
Receiving Put-Away Order Fulfillment Staging Shipping
Unload trailer/container300 CPH
Check ASN, Verify BOL, and scan RFID Tag
Sort as per SKU Velocity category
Palletize
Forward or Reserve
Put-away to reserve area
30 PPH
Put-away to forward area
60 CPH
Generate orders by customers
ReserveForward
Full pallet orders
Pick from reserve area
Pick from forward area
Orders Cases/Eaches
Staging
Load on to trailer
Dispatch
Is there enough
quantity?
Replenish from reserve areaNo
Yes
Crossdock receipt?
Label outbound details
No
Print Outbound Label
Cases/pallets
10 % Q/A 240 CPH
SKU Velocity Order from A, B
& C
Yes
No
CPH- Cases per hour
PPH- Pallet per Hour
ASN- Advance Shipment Notice
RFID- Radio Frequency Identification Device
BOL- Bill of Lading Q/A- Quality
Assurance
Yes
Equipment Selection
Classification Equipment Location Data Used
Containers & Unitizing Pallets Receiving
Projected growth in the next five years
Storage and Retrieval Pallet Jack Pick to Light System Single Selective Racks with
Wide Aisles (10’)
Forward Area Reserve Area
Material Transport Equipment
Automated Roller Conveyor Counterbalanced Lift Truck Order Picker Sortation Conveyor
Storage to Shipping Storage Storage cum Retrieval Shipping
Automatic Data Collection & Communication Equipment
Radio Frequency Data Terminal Voice Headsets
Entire Distribution Center
Alternative 1
Classification Equipment Location Data Used
Containers & Unitizing Pallets Palletizer
Receiving
Projected growth in the next five years
Storage and Retrieval Pick to Light System Single Selective Racks with
Wide Aisles (10’)
Forward Area Reserve Area
Material Transport Equipment
Expandable/Portable Conveyors
Automated Roller Conveyor Counterbalanced Lift Truck Order Picker Sortation Conveyor
Receiving and Shipping
Storage to Shipping Storage Storage cum Retrieval Shipping
Automatic Data Collection & Communication Equipment
Radio Frequency Data Terminal Voice Headsets
Entire Distribution Center
Alternative 2
Equipment Selection
Space Block Dimension in Ft Area in Sq ftDistribution Center 771.36 x 410.05 x 30 316,292Receiving 325.5 x 76.8 25,000Storage 611 x 320 195,520
FReceiving 378 x 320 120,960RShipping 233 x 320 74,560
Shipping 325.5 x 76.8 25,000Admin Office Space 37.2 x 25 930Receiving Office 12.25 x 12.5 150Shipping Office 12.25 x 12.5 150Cafeteria 111.9 x 40 4,476Locker Rooms 96 x 24 2,304Restroom 21 x 12 252Parking Space 360 x 400 144,000
Space Utilization
Space Utilization
Reserve Area Reserve area: 233’x320’; 74,560 sq-ft Pallet Specification: 4’x4’x5’ Single Deep Rack Specification: 13’x 4’x15’ Total pallets in each rack: 12 Total number of racks: 510 Aisle Specification: 10’ wide Total capacity of the reserved area: 1,037,142 eaches Total capacity to hold pallets: 6120 Total capacity of each pallet: 192 eaches
Forward Area Forward Area: 370’x320’; 120,960 sq-ft Gravity Rack Specification: 32’x8’x8’ Total number of gravity racks: 196 with 4 layers Capacity of each gravity rack: 4160 eaches Roller Conveyor : Width : 21 Inch Total Gravity Racks : 2500
Space Utilization
Space Calculations - Approach The growth in annual units sold per year is 7%. Annual units in year 2021 is calculated by using 7% growth over the 5
years of planning horizon. From the data of daily volumes, the deviations in the units sold per year
and the maximum outbound units in 249 days is obtained. The unit quantities sold for the 1st, 2nd, 3rd std deviations and the
maximum are observed. The annual units sold as per 2nd std deviations is equal to the annual
units sold in year 2021. Analysis and calculation for space requirements are based on the 2nd std
deviations quantity.
Space Calculations – Data Analysis
Space Calculations - Approach Contd. If we design our facility as per max volumes, it will be under utilized about
half of the year and if we design as per the average volume it will not have enough space for the max volume.
To have a possible solution for the above problem it is necessary to take the seasonality factor into consideration.
Hence we design our facility based on the monthly volumes obtained taking into account the volume for peak month.
In each month the above three variables have different values due to the seasonality effect.
As seen from the table in next slide we observe that the peak season for the sale of shoes is before Christmas through spring and early summers with the most units sold in December and June.
The next slide shows the monthly orders, quantities of units sold and on hand inventories.
Space Calculations – Data Analysis Contd.
Facility LayoutTools Used : Auto CAD & Microsoft Viso• All the facility layout has been drawn by Auto CAD 2016• 2D layout has been drawn and presented • The whole layout is scaled with actual dimensions of the DC• All the representations and notations are meticulously
designed in detail
Facility Layout
Labor Estimations All the labor calculations has been done based on the growth
and the actual requirement for the respective year. Each year labor requirement is calculated for both direct and
indirect labor. Since the facility is designed based on the maximum
utilization of its capacity, all the amenities has been designed with respect to it.
With respect to Alternatives designed, respective analysis in cost, requirement has been done and presented.
Labor EstimationBaseline Alternative 1 Alternative 2
Receiving 19 24 16Put-Away 15 27 27Order Fulfillment 182 332 332Staging & QA 17 32 32Shipping 9 13 13Total 242 428 420Cost per hour $22.50 $27 $27Cost per month $871,200 $1,848,960 $1,814,400
Cost EstimationThe one of the major criteria for selecting the an alternative is
cost.All the cost, including Man power, cost of equipment, cost of
labor, cost of land, all direct and indirect expenses.Based on the, analysis for the 5 consecutive years, its found
that MARR for alternative 1 has better returns.
Cost EstimationAlternative 1
Alternative 2
Cost Estimation
Alternative 1 MARR = 15.098
Alternative 2 MARR = 14.82
Alternative 1 is selected
ConclusionAll the design is based on the given data by ACME shoe
facility.Hence by all the analysis Alternative 1 has been selected.
Thank You
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