Case Study $-$ New Warehouse Design and Construction for Food

Manufacturer

The Scenario

Britain$$s biggest food manufacturer wanted a centre for warehousing best practice at one of their $60$ UK

sites. The site was set up as a benchmark within the company for the definition and delivery of the

highest possible standards of working practice. The client wished to consolidate its distribution and

warehousing network to cost effectively accommodate past and future acquisitions of competitors.

A building project had already been started without the necessary project management rigour and

controls and WBS were asked first to bring the actual building work under control and secondly to

implement a complete pallet racking and operational infrastructure.

In order to maximise operational efficiency and achieve compliance with current health and safety

regulations WBS were also tasked with a complete redesign and refurbishment of existing warehouses.

This included a drive for best practice and training of all staff working at the distribution centre.

As a consequence of the expansion and refurbishment stock needed to be transferred between several

internal and third party warehouses in order to achieve the most cost effective stock and customer mix.

The Programme

A series of specific projects were identified for the programme:

Build a new $20,000$ m$2$ warehouse

Design and build $16,500$ pallet locations to suit current and future product mix

Design and build office and staff amenities block inside the new warehouse

Design and install a pallet conveyor system

Refurbish $15$ existing warehouses for health and safety and space optimisation

Create operator and supervisor work instructions for the end$-$to$-$end operation

Train $180$ staff on all work instructions

Transfer product between client and third party warehouses

The Mechanism

Making changes that lead to sustainable improvements requires a consultative approach involving

everyone affected by the process, in every area of the organisation.

To achieve this deep level of effective change, WBS creates an implementation team made up of WBS

consultants, and representatives from the client$$s own people. In this instance the client provided two

permanent members to the project team to ensure operational requirements and expertise were always

kept in focus.

A schedule of weekly programme update meetings with all client stakeholders was rigorously adhered to ensuring the right levels of communication and decision

making.

Furthermore, a schedule of weekly contractors$$ meetings was also maintained in order to ensure that all trades were working together and that all issues could be

raised and resolved.

The permanent members of the programme team were each responsible for one or more projects and would draw on relevant people from the client$$s

organisation to participate in design workshops etc.

The Benefits

Service level improvement from $95\%$ to $98-99\%$ sustained during peak periods

Total cost saving $1\mathrm{.}7$M

Storage capacity increased by $16,500$ pallets from $26\mathrm{.}5$K to $43$K pallets

Warehouse network reduced by $3$ warehouses

Modern and safe office and staff facilities

Reduced handling by introducing a pallet conveyor system

Improved layout, flow and pick face design

Lux levels raised from $30$ to $250$

Brighter and cleaner working environment

$5/24/2019$ Case Study $-$ New Warehouse Design and Construction for Food Manufacturer

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$7$ operators trained as in$-$house trainers

Created $9$ operator and $8$ supervisor work instructions

Trained $180$ people on work instructions

The Next Steps

WBS were retained to programme manage the further extension of the distribution centre with another $20$K$+$ m$2$ warehouse including the refurbishment of the

remaining old warehouses on the site.

The new programme also included refurbishment of the yard and the introduction of yard management.

A cost saving of $2\mathrm{.}5$M by discontinuing a $3$rd party warehouse contract was achieved due to the fact that the building project was delivered $3$ weeks ahead of an

already extremely tight schedule.Questions for Case Assignment # $3$

New Warehouse Design and Construction

Q$1$: Considering this case, what are some of key mechanism adopted by WMS to ensure that Construction is in line with company expectations?

Q$2$: Identify $5$ key benefits achieved by WBS while taking care of this project?

Q$3$: What is one key item in this project that ensured successful implementation by WMS group?