Redesign study Value Added Services
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.
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.
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.
- 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.
50 years of experience
Consulting firm with over 50 years of experience.
Availability of a European logistics database with benchmark figures on transportation and warehouse costs.
Full scope expertise on network design, as well as warehouse design (conceptual layout, logistics - and storage equipment) and logistics building design (engineering and investment calculations).
Ability to support implementation of new logistics concepts (70% of Groenewout revenue is with existing customers in follow-up/implementation projects.
Extensive operational knowledge, hands-on, pragmatic and bottom-up approach.