EXERCISE NO 2 CASE STUDY: BUILDING AND CONSTRUCTION MATERIAL DISTRIBUTOR WAREHOUSE REDESIGNING A leading building and construction material distributor in North America was expanding so fast that its inventory went beyond the current capacity of its warehouse. There was a need to optimise the design of the warehouse in a practical and cost effective way, so that it may support its operations for the next couple of years. The warehouse was also needed to be optimised to increase its productivity and, hence, improve the functioning of the other 17 distribution centres of the organisation in the region. For achieving this objective, the organisation hired a third-party vendor. The vendor first analysed the current operational needs of the warehouse. Then, it collected the required data and coordinated with the project team of the organisation for determining the ideal inventory level and the plan for achieving it. with the use of pallet quantities. The vendor suggested to floor-stack the crates and pallets in the warehouse, which resulted in preventing significant investment required for pallet racks. In addition, it recommended setting up a forward pick area with the use of some selective pallet racks. The vendor made this recommendation after analysing the transaction and order log. As the floor-stacked pallets were suggested for improving warehouse productivity, the vendor designed a location scheme that utilised location labels and striped lanes. Considering the detailed quantitative analysis of the future inventory, a layout was created that positioned pallets into every location by pallet quantity and product family. The vendor also redesigned the shipping and receiving area with the recommendation to relocate the break room close to the facility's front offices. As a result of implementing the warehouse redesigning suggestions of the vendor, the building and construction material distributor achieved the projected Return on Investment (ROI) of 19 months. The order fulfilment productivity increased to 56% more than the forecast. Moreover, the pallet capacity increased to 33% more than what was forecasted. 1. Why was there a need to optimise the design of the warehouse? 2. What did the vendor plan and coordinate with the organisation's project team? 3. What did the vendor suggest to the project team? 4. What were the various results of warehouse redesigning