Corporate Strategy Consulting
Major Original Equipment Manufacturer (OEM)
Next-Gen Logistics
Preparing for a New Era of Product Mix Changes
In the dynamic landscape of vehicle manufacturing, adaptation is key to staying competitive. For one major Original Equipment Manufacturer (OEM), a strategic shift in production towards a more complex, customizable vehicle posed both opportunities and challenges. To navigate this transition smoothly, the OEM embarked on a journey of logistics optimization with the expertise of Ingenics, specializing in process optimization.
Solutions realized through initial project and follow-up projects
- Revised kitting strategies
- Optimized warehousing concepts
- Implemented 5S practices in kitting cells
- Reconfigured warehouse layouts, liberating 5,000 square feet for future production expansions
- Reduced logistics operational costs by 10% through refined picking and kitting strategies
- Improved efficiency and productivity by streamlining processes, reducing kitted picks per vehicle, and optimizing material flows
Understanding the Challenge
The OEM faced a twofold challenge: evaluating the existing logistics setup and anticipating potential bottlenecks associated with the impending change in product mix. With the aim of enhancing storage, replenishment, picking, and kitting processes, the OEM sought the assistance of Ingenics
The Collaborative Approach
Over a six-week period, two consultants from Ingenics worked closely with the OEM's logistics teams to assess and optimize various aspects of their operations. The project unfolded in a structured manner:
Week 1: Data Collection and Actual State Review
The journey began with comprehensive data collection and a thorough review of the current state of logistics operations. This phase involved gathering information on inbound logistics, warehouse storage concepts, material flow, and plant layout.
Weeks 2-3: “As-Is” Analysis of Data and Logistics Areas
With data in hand, Ingenics consultants dove into the analysis phase. They meticulously examined existing logistics processes, identifying inefficiencies, bottlenecks, and areas for improvement.
Weeks 4-5: “Ideal-State” Analysis of Data and Logistics Areas
Building upon the insights gleaned from the analysis phase, the focus shifted towards envisioning the ideal logistics setup. Ingenics collaborated with the OEM to develop a target picture that would optimize material flow and storage, laying the groundwork for enhanced flexibility and efficiency.
Week 6: Focus on “Quick Wins” with Project Handover
As the project neared its conclusion, attention turned towards implementing quick wins. These were actionable steps aimed at delivering immediate improvements in logistics operations, ensuring a smooth transition as the OEM prepared for the upcoming product mix change.
The Impact of Optimization
The collaboration between the OEM and Ingenics yielded significant benefits, driving tangible improvements across multiple facets of logistics operations: Immediate Action Items Implemented
One of the key outcomes of the project was the identification of immediate action items. These included revising kitting strategies, optimizing warehousing concepts, and implementing 5S practices in kitting cells, among others.
Tangible Benefits Achieved
The optimization initiatives undertaken yielded tangible benefits for the OEM. Firstly, through the reconfiguration of warehouse layouts and the consolidation of structures, the company successfully liberated 5,000 square feet of space. This reclaimed area was strategically reallocated for potential future production expansions, thereby optimizing resource utilization. Secondly, the implementation of refined picking and kitting strategies contributed to a notable 10% reduction in logistics operational costs. This enhancement in cost-effectiveness underscored the efficacy of the optimization efforts. Furthermore, by streamlining processes such as reducing kitted picks per vehicle and optimizing material flows, the OEM witnessed marked improvements in efficiency and productivity within its logistics operations. These outcomes collectively underscored the success and tangible benefits derived from the optimization endeavors.
Risk and Impact Assessment
In addition to the benefits realized, the project also involved a comprehensive assessment of potential risks and impacts. This included evaluating the timeline implications, analyzing the utilization of third-party logistics (3PL) support, and assessing the costs associated with warehouse automation modifications.
Navigating Change with Agility
In a rapidly evolving manufacturing landscape, the ability to adapt and optimize is paramount. For the OEM, the partnership with Ingenics proved instrumental in preparing for the upcoming product mix change. By addressing inefficiencies and implementing strategic optimizations, the OEM is now better positioned to navigate the transition with agility and efficiency. As the industry continues to evolve, the lessons learned from this collaborative endeavor serve as a testament to the power of proactive logistics optimization in driving success amidst change.