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Redesign study Value Added Services

November 06, 2018 1740 Views

 

Description

Forever Direct is the European Distribution Center for AVA (Aloe Vera of America). AVA exclusively manufactures products for Forever Living in Texas (USA). Forever Living Products (FLP) is US-company founded in 1978. Its corporate HQ is based in Arizona (USA). FLP is today the world’s largest grower, manufacturer and distributor of aloe vera, bee and nutritional products. FLP is a multi-billion dollar company with 8.5 million distributors worldwide over 125 countries.

Opportunities

Due to country specific regulations, some countries asked for  (re)labeling the base products that were shipped from US.
The so called postponement manufacturing or Value Added Services (VAS) was a totally new service and the volumes were initially very low, thus limited focus. But this had to change.

Forever Direct  had to improve the VAS processes & layout in order to deal with the very high forecasted volume growth. Therefore, Groenewout was asked to redesign the VAS process and corresponding layout.

Solution

Step 1: Groenewout started to create transparency into both existing processes (labeling & kitting) and related activities. Corresponding volumes and goods flows were analyzed too. Then, the future state in terms of volumes and needed capacities (machine, labour & m²) were determined (Base Case scenario).

Step 2:  Processes, activities and layout were optimized by introducing line-balancing principle. New workflows per item group were created and implemented (as a pilot) to measure the line improvements. Finally, each item was connected to one of the line configurations.

Step 3: Several operating scenarios (in-house vs outsourcing) were evaluated and assessed based on financial business case, flexibility and scalability options.

Benefits

  • FTE saving of ca. 43%.
  • Substantial capacity increase of the labeling machines.
    As a consequence less machines were needed.
  • Pay-back < 1,5 yrs
  • Improved process and layout design which was able to cope with future business volumes.
  • Flexible & scalable solution.
  • Strong buy-in and commitment by the users and supervisors due to an early involvement approach.
  • Configuration book for each item.