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Medical Distribution Center Redesign Delivers 62% More Storage Capacity

62%
Increase in Storage Capacity
100%
Increase in Throughput Capacity

Context

A proactive growth strategy jeopardized by a critical capacity shortfall.

A leading medical equipment company, with a target of 25% growth, found its Distribution Center (DC) operating at full capacity following a strategic increase in inventory prompted by tariffs. The existing warehouse layout was struggling to accommodate this expanded stock, creating a clear need for warehouse optimization to improve capacity and support future growth.

What We Discovered

A combination of process bottlenecks, spatial inefficiencies, and system gaps were constraining the DC’s potential.

Through a comprehensive assessment involving stakeholder interviews, DC tours, and detailed data analysis, we uncovered and categorized 20 distinct pain points. These issues revealed that the capacity constraints were not just a matter of square footage, but were rooted in warehouse inefficiencies across layout, processes, and technology. Sixty-five percent of the identified pain points were related to layout and space management alone.

  • Inefficient Space Utilization: The facility had significant unused vertical cubic space. Critical operational zones like picking, packing, and staging were suboptimal, driving frequent congestion. Oversized, single-sided packing stations consumed an excessive footprint, while slow-moving stock, some dating back to 2018, occupied prime storage locations. 
  • Critical Process Bottlenecks: The packing process was the primary bottleneck, unable to keep pace with the volume of orders from picking. A ratio of four to five pickers feeding only two packing stations created significant downstream delays, causing the conveyor system to frequently back up, forcing operators to stage picked orders on the floor. 
  • System & Data Deficiencies: Key warehouse functions relied heavily on manual operator decisions rather than system-directed workflows. A lack of system functionality in the Warehouse Management System (WMS) resulted in inefficient pick paths and reactive replenishment triggers.  
  • Costly Inventory Mismanagement: Our analysis identified 1,392 SKUs with no recorded shipments in the current fiscal year. This dead stock accounted for 8,331 boxes, or 14% of the total inventory on hand, consuming valuable space that could be used for higher-moving goods. 

Our Approach

We developed a multi-scenario roadmap to systematically unlock capacity and future-proof operations.

Our inventory management consultants developed and evaluated six distinct scenarios, modeling various combinations of warehouse layout modifications, equipment upgrades, and new technology. This approach provided a clear, data-driven comparison of costs, storage gains, and throughput improvements for our client. The final recommendation was an integrated warehouse optimization strategy designed not only to address immediate capacity constraints but also to create a scalable foundation for long-term growth within the existing distribution center.

  • Holistic Space Maximization: We proposed a multi-pronged strategy to reclaim and optimize every available area. This included converting to narrow aisles, installing new racking in previously unused space and above dock doors, and integrating high-density SpeedCell storage systems to condense small-parts picking.
  • Unlocking Vertical Potential: To address the vast unused overhead space, we recommended deploying Bravi Sprint mobile lifting platforms. This equipment empowers operators to safely and efficiently pick products from higher rack levels, effectively converting dormant vertical space into active, value-adding picking locations.
  • Targeted Throughput Optimization: We designed compact, ergonomically optimized packing stations projected to double throughput capacity. By reducing the packing area’s footprint, the redesign also frees up an additional 270–400 sq. ft. (a 60–90% increase) for the heavily congested inbound staging area.
  • Phased, Low-Risk Implementation: We outlined a detailed implementation strategy to execute the facility redesign in managed sections. This plan leverages off-hours work and temporary on-site storage to install new racking and systems, ensuring minimal disruption to ongoing daily operations 

Value Created

A clear path to averting risk and enabling sustained growth within the existing footprint.

Our client is now equipped with a detailed, actionable roadmap that directly addresses their warehouse capacity constraints and establishes an efficient operation for the future. The recommended strategy is designed to future-proof the distribution center, allowing it to support a 25% growth plan without physical expansion.

  • Projected 62% Increase in Storage Capacity: The recommended investment is expected to deliver the maximum possible increase in pallet locations, fully accommodating the company’s new strategic inventory requirements. 
  • Projected 100% Increase in Throughput Capacity: The redesigned packing stations and optimized workflows are projected to eliminate the primary operational bottleneck, effectively doubling the facility’s order fulfillment capability and preparing it for future volume growth. 
  • Mitigation of $319.6M in Revenue at Risk: By enabling the DC to meet the demands of the company’s growth plan, the recommended solution is expected to avert a cumulative $319.6M in potential revenue loss over the next 15 years. 
  • Immediate Efficiency Gains: We identified several “Quick Wins,” including the implementation of 5S principles and the removal of dead stock, which can provide immediate space relief and operational improvements even before the primary capital project begins.

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The Poirier Group | Medical Distribution Center Redesign Delivers 62% More Storage Capacity

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