Redesign study Value Added Services

November 6, 2018 648

 

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.
Twitter
  • Rob Besten en Tim van Lohuizen supply chain adviseurs bij Groenewout https://t.co/C8vaaWiEov via  @Consultancy_nl  4 months ago
  • Welkom nieuwe collega's: Tim van Lohuizen en Rob Besten. Specialisaties: modelleren, operations research en logisti… https://t.co/y3nzTaydQB 5 months ago
  • Per 1 april '19 neemt Alain de rol van Managing Director over van Mari van Kuijk, die sinds 2007 deze rol vervulde.… https://t.co/eAbdd6fAMq 5 months ago
50 years of experience

Consulting firm with over 50 years of experience.


European database

Availability of a European logistics database with benchmark figures on transportation and warehouse costs.


Network design

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).


Implementation support

Ability to support implementation of new logistics concepts (70% of Groenewout revenue is with existing customers in follow-up/implementation projects.


Extensive knowledge

Extensive operational knowledge, hands-on, pragmatic and bottom-up approach.


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