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As a manufacturer of custom closets and storage for homes, this company provides its products through its franchising business systems, as well as corporate owned business units.
The client had enjoyed strong and steady growth for more than 3 consecutive years having expanded their geography, customer base, and product offerings. The back-end of the business had not been scaled appropriately to match this spike in incoming demand for product, and coupled with volatility with vendors, created bottlenecks in inbound and outbound warehousing.
The team worked closely with the client to determine their growth ambitions as well as understand what their current day-to-day challenges were. Utilizing information gained from on-site experience in addition to data uncovered from their ERP system and industry benchmarks, the evaluation phase uncovered several performance improvement opportunities geared towards level-loading the business in the short term and creating sustainable scalability in the long-term:
Optimize warehousing capacity and shorten walking paths by redesigning warehousing facilities
Reduce inventory carrying costs by standardizing and automating the shipping & receiving process
Increase team’s productivity by implementing a visual management system and key performance indicators
To capitalize on these opportunities, we tested, piloted, and implemented these solutions at 9 distribution centers across the US.
As result of this initiative, this client enjoyed both immediate and long-term financial and strategic benefits:
Annual incremental revenue increase of $58M enabled by capacity to store additional materials
Cost avoidance of leasing new facilities estimated $3M per annum
Receiving lead time was reduced by 75%, from 4.8 to 1.2 days as result of process automation and standardization, unlocking early payment terms with several key vendors
