Case Study: Third Party Logistics & Layout

Instructions: Complete the blank tan boxes in the document, save it and submit it.

Kasi, Inc. is a third-party logistics provider that offers specialized logistics services with their customers including off-site warehousing, item kitting, order fulfillment, service parts management, and last mile delivery solutions for their customers. They are looking to improve efficiency at their current facility. The third-party logistics portion of their business in located in four bays of their warehouse as shown below.

Kasi supply chain professionals are interested in determining if this is the optimal arrangement of the four departments or if rearranging the order of the departments would reduce the distance traveled by material handlers each day. For simplicity, they are considering adjacent bays as 30 feet apart (as indicated with the distances in the layout above). They counted the number of trips made by the material handlers over a 24-hour period with the following results:

Interdepartmental Trips in a 24-hour period

Trips to > from v	Kitting	Parts	Fulfillment	Last Mile
Kitting	-	0	110	25
Parts	75	-	95	76
Fulfillment	0	0	-	35
Last Mile	0	0	0	-

Part 1: What is the total distance traveled with this layout? (Hint: It is the number of trips times the distance for each combination of departments.) Complete the distance table below. Then review the textbook example 12.2 under the Layout Strategies section in Chapter 12 which shows multiplying the interdepartmental trips by the distance.

Distance to > from v	Kitting in Bay 1	Parts in Bay 2	Fulfillment in Bay 3	Last Mile in Bay 4
Kitting in Bay 1	-
Parts in Bay 2		-
Fulfillment in Bay 3			-
Last Mile in Bay 4				-

Current Layout Total Distance Traveled:

Part 2: Suggest a new layout that reduces total distance traveled by moving the departments around in the bays. You can use the image below to show your revised layout by typing the department names in or above the bays.

Calculate the total distance traveled with this layout (Hint: The Interdepartmental Trips matrix does not change but the distances change between the departments based on your new layout. Update the Distance table to reflect these changes and then proceed to multiply the trips times distance as you did in Part 1.) Answer the additional question.

Distance to > from v	Kitting in Bay _	Parts in Bay _	Fulfillment in Bay _	Last Mile in Bay _
Kitting in Bay _	-
Parts in Bay _		-
Fulfillment in Bay _			-
Last Mile in Bay _				-

Proposed Layout Total Distance Traveled:

Did your proposed layout reduce the total distance traveled?

Part 3: What are other factors Kasi should keep in mind as the company is planning the new facility layout? How can the layout impact service response logistics?