Advanced Additives®

Problem Background & Objectives

Company Profile
Advanced Additives ® is a manufacturer and distributor of liquid and powdered products. They ship to contractors, distributors and hardware stores. Due to the current growth in the construction industry, the company needs to increase its production capabilities. A planned addition of two production lines will cause the company to look at new methods of receiving and shipping, feeding and removing products from the lines and storing raw materials and finished product. The current building cannot be expanded or replaced. Advanced Additives ® currently operates its manufacturing and shipping staff on a two shift schedule. Receiving is performed on the first shift.
15

000 square feet. Currently. empty pallets must be stored outside. which block 6 of the receiving doors.400 square feet of mezzanine space is used to support production lines.000 square feet.000 square feet is used for receiving. An additional 5. Two doors are used to stage a trash container and a broken pallet trailer. inclusive of offices. There are 6 shipping dock doors and 16 receiving dock doors. The remaining 70. 16 . 101. raw material storage and production. Offices and maintenance account for approximately 12. with a clear height of 25 feet. Due to fire regulations. ft will be used for warehouse and distribution space.000 sq.Facility Description The facility is 183.

Facility Description (cont. Currently. shipping and employee parking occurs in the lot to the South. Propane which is used in Process 1 and in lift trucks is stored in the Southeast corner of the yard. All receiving. The space for Process 1 is unavailable for use by any other process or storage requirement. a river to the East and a road to the West. trailers queue along a public road waiting for doors.) The facility has some significant constraints inherent in its design and location. The yard has parking for approximately 85 cars and no trailer staging space. Column Spacing is 40’ (N – S) x 38’ (E – W) 17 . Expansion is not an option as the building is abutted by a freight rail line to the North.

Current Facility Space (file available separately) 18 .

The three trailers that are delivered each day are not expected to increase. During shift overlaps.Operational Details Yard – Employee parking and trailer operations share the same space. 19 . there are more cars than available spaces. Receiving – There are 3 positions for unloading bulk raw materials into silos from tanker trucks. It is common that more than 3 tankers arrive at the facility simultaneously. further exasperating the space issue. Frequent access to propane (stored in the yard) is necessary. It takes approximately 1. An “open top” trailer delivers dry goods for Process 1. 24 tankers are delivered daily. Empty pallets are stored outside. Typical trailers are 53’ and drivers are required to “jackknife” to back into the building. The number of tankers will increase by 15% to support the planned growth.5 hours to unload a tanker. This trailer requires 1 dedicated door. On average.

This is expected to increase by approximately 5% over the study period.) – In addition to the bulk trailers. pallet height 56 inches including pallet.800 pounds and the average height is 53”. They are stored in floor stacks of 6 high. 20 . It generates 3. Process 1 – This process is performed in the western one third of the building. The average weight of these pallets is 1. 90% of raw material is delivered in bulk by pipe and 10% on pallets. there are approximately 18-53’ trailers delivered each day. Also. The typical pallet found on the receiving dock is a standard US 48” x 40” pallet.Operational Details Receiving (cont.950 pallets per month. This product’s market is stable and is not expected to grow throughout the planning horizon. approximately 2 transfer trailers (trailers from other plants within the company) are received each day. Finished pallets are stretch wrapped and transported to the finished goods storage on the east end of the building.

The average weight of the pallets is 1.Operational Details Process 2 – The product from this process is in liquid form. . No growth is expected. The average weight of the pallets is 1.700 pounds. shrink-wrapped and stored 21 in rack to await picking and shipping. The pallets are transported to the finished goods warehouse. Water is delivered to a mezzanine via piping and is mixed with additional raw materials (lifted in dry form to the mezzanine) and the finished product is filled and palletized at ground level. No growth is expected. All raw material is delivered on pallets.200 pounds. 70% of the raw material is in bulk through pipes and 30% delivered on pallets. This area generates approximately 12. The height of these pallets is 48”. shrink-wrapped and stored in rack to await picking and shipping.The product from this process is also in liquid form. The pallets are transported to the finished goods warehouse. The height of these pallets is 48”. Plastic totes (48”x 48”x 38”) are delivered to a mezzanine mixed with additional raw materials (lifted in dry form to the mezzanine) and the finished product is filled and palletized at ground level.000 pallets/month.000 pallets/month. Process 3 . This area generates approximately 5.

It is mixed and processed on a mezzanine and filled and palletized on the ground floor.900 pounds. and 30% in bulk through pipes. all from the same travel aisle.) This process uses significant numbers of pallets of raw materials and generates a significant amount of trash. The average weight of the pallets is 1. There are 4 automated filling/palletizing lines and 3 manual lines. 22 .) The growth is to be supported by the addition of two additional processing lines in another location within the building (location not determined. by pallet.400 pallets per month.Operational Details Process 4 – The product created in this process is dry. The raw materials are lifted to the mezzanine. The typical pallet is 32”x 31”x 44”high. The pallets are transported to the finished goods warehouse. 70% of raw material is delivered on pallets. the trash is lowered from the mezzanine and the finished goods are removed. It is this process that is expected have significant growth (16%. This area currently generates 8. shrink-wrapped and stored either in rack or on the floor (3 high stack) to await picking and shipping.

Lift trucks used for all material handling are propane sit-down counter-balanced. Pallet wrapping is accomplished by a pallet conveyor-fed automatic wrapper. Unused product is re-warehoused. are delivered via lift truck.Operational Details Material handling Raw materials are pulled by the pallet and transported to the appropriate line. except water. 23 . All raw materials. Picking is accomplished by using the sit-down trucks and pallet jacks. The wrapper is capable of wrapping 50 pallets/hour.

standard US 40” x 31” pallets. Pallet flow – up to 13 pallets deep. pallet height 60 inches including pallet Palletized. standard US 48” x 40” pallets. pallet height 56 inches including pallet Palletized. See drawing Pallet rack – 110” x 36” deep single deep racks ( 4 levels) are currently used. Aisles are 13’4” and flue space is 8”. pallet height 56 inches including pallet 24 . standard US 32” x 31” pallets. 5 levels Floor storage – High inventory bulk items • • • Decked rack – Low inventory items Palletized.Operational Details Finished Goods Storage – Storage is accomplished by various modules.

Picked pallets – usually picked with a pallet jack from dedicated locations throughout the finished goods warehouse. causing congestion in the yard and surrounding roadway 25 . Significant floor space is required for this process. Picking and loading are done simultaneously when trailer is staged on a shipping door.Operational Details Order Picking Full pallet picks – counterbalance truck usually out of pallet flow and floor storage locations. Orders are picked and staged on the floor for loading up to 1 week in advance. Shipping Orders are shipped via trailers via freight and LTL Trailers are live loaded with counter-balance trucks Trailers often arrive simultaneously.

Operational Details • Workforce Description Receiving Process 1 Process 2 Process 3 Process 4 Material Handling Picking Shipping Total Head count Wage rate 12 $14.22 $17.17 $3.50 2nd shift differential = $0.69 $3.50 18 $15.41 $18.50 2nd shift differential = $0.92 $16.83 Weighted averages Notes One Shift 2nd shift differential = $0.30 $3.50 2nd shift differential = $0.50 22 $15.30 $3.25 22 $14.75 2nd shift differential = $0.50 26 .17 $2.19 $17.25 14 $13.30 $18.30 $18.91 $3.50 2nd shift differential = $0.22 $2.08 $3.00 26 $15.08 $17.75 16 $13.47 $19.92 $16.00 140 $14.61 Benefits (22%) Avg Labor cost $3.50 2nd shift differential = $0.00 10 $15.

etc. inventory turns will remain the same. Advanced Additives® is looking for you to help them develop the best material handling. The company has provided all the current production.) will continue at current levels. It is assumed that order characteristics (lines per order. units per line. The company anticipates an overall growth of approximately 8%. storage and product flow for this facility including the manufacturing space. In addition. inventory and sales data for this facility. 27 .Project Description Advanced Additives® has hired your team to improve the layout design of their facility. Their desire is to remain in this facility for an additional 5 years.

or updates required for existing lines (assume the cost of the new production lines to be approved and thus not a part of the justification) • Storage system layout (raw materials and finished goods) to accommodate increased production • Storage and handling equipment to be purchased • Production and warehouse control for improved product flow • Receiving and shipping recommendations for improved yard operations and operational control 28 . As such.Project Description The project team’s resulting design must be submitted to upper management of Advanced Additives® for budget approval. including but not limited to the following: • The placement of new manufacturing lines required. all significant financial decisions need to be justified.

624.184 1.508 1.Design Year Inventory Requirements Type Container Finished Good Formula Raw Material Total Future Inventory SKUs Weight 400 435.593 Pallets 1.081.888 4.567 442 601 7.253 103 1.106 8.086.648 13 21.622 9.498 29 .

635 718 30 .504 3.639 352 479 5.972 Total 1.973 1.066 267 50-99 86 494 139 Pallets in Inventory 20-49 10-19 218 109 497 592 68 56 109 839 810 0-9 790 990 16 175 1.Current Year Inventory Profile SKUs Containers Finished Goods Formula Raw Materials Total >100 2 6 1 SKUs with Pallets in Inventory 50-99 20-49 10-19 1 7 8 7 17 42 2 2 2 8 10 28 58 0-9 382 1034 10 91 1517 Total 400 1106 13 103 1622 9 SKUs Containers Finished Goods Formula Raw Materials Total >100 302 1.

31 .848 258.263 % of Units Weight Shipped Shipped 62% 22.281 1.432 4% 1.600 0% 131.Current Unit Movement by SKU Units Shipped by SKU Total Units Shipped >10.652 0% 2.700.985 100% 40.904 29% 14.887 3.601 0% 343.000 1.985 4% 1. of SKUS 20 97 52 130 50 167 228 74 818 % of SKUs 2% 12% 6% 16% 6% 20% 28% 9% 100% Units Shipped 556.289 % of Weight Shipped 56% 36% 3% 4% 0% 1% 0% 0% 100% Summary: 14% of SKUs accounted for 91% of unit sales and 92% of weight shipped.000 to 10.436.171.000 500 to 999 100 to 499 50 to 99 10 to 49 2 to 9 1 Totals: No. Just 2% of SKUs accounted for 62% of unit sales.091 74 891.511 36.387 3.426.130 0% 18.620.184 31.

5 to 0. Hits Hits per Week >100 4 8 18 20 12 50 to 99 10 to 49 1 5 1 17 5 11 3 43 1 to 9 2 8 9 61 36 57 253 426 <1 No.99 0. 32 .99 1 to 4.99 0. of SKUs 4 11 31 34 127 51 128 428 >200 pallets 50 to 199.99 10 to 49.1 Total SKUs Pallets Shipped per Week 4 30 4 2 7 6 58 172 243 62 40 Note: Hits are the number of times an SKU is picked during the time period.99 5 to 9.1 to 0.49 <0.Order Profile Shipments vs.

937.973 5.037 100% 40.2 13.Order Profile Lines per Order Table % of Orders 0% 4% 21% 12% 14% 3% 9% 37% 100% Shipped Quantity 5.215 34% 16.973 64.221 Lines per Order >100 50 to 100 20 to 49 10 to 20 5 to 9 3 to 4 2 1 Totals: Orders 4 191 1.982 5.563.512 35.033.822 125.603 171.962 73.180 6% 2.103 57.449 12.6 % of Lines 1% 18% 55% 12% 9% 1% 1% 3% 100% Average Lines per Order: Average Units per Line: Average Units per Order: 33 .875 82.333 7.350 8% 3.700 627 906 1.918 305.004 14% 6.175.428.383.844.611 891.286 Lines 416 11.8 168.200.369 68.587 9% 4.691 8% 2.109 608 765 183 453 1.263 % of Units Shipped Shipped Weight 1% 291.157 19% 4.

999 1.346 0% 100% 40. 100% Average Weight per Order: Average Weight per Line: 34 .449 7.193 4.221 lbs.105.327 705 635 935 1.515.751 5.300 9% 55% 29.358 1% 3% 44.648 627 % of Lines Weight % of Weight 4% 3.281 14. 10.000 to 9.999 100 to 999 <100 Totals: Orders 55 1.000 lbs.Order Profile Weight per Order Table % of Orders 1% 25% 13% 12% 18% 31% 100% Weight per Order >50.000 to 4.880 72% 22% 5.514.869 35. lbs.000 to 50.000 5.069 4% 9% 499.629 5.517 1.428.838 64.749.268 14% 7% 1.286 Lines 2.

427 Weight Shipped 1.387 9.194 1.874 3.317. No.436 35 . of Orders 198 409 138 166 166 68 Avg.602.968 1.880 Avg.Order Profile Shipping Days: Daily Shipment Summary 27 Units Shipped 33.010 102.290.432 19.169.772 28.270 5. of Lines 2.640 436.136 934.453 1.535.844 508 Avg.987 1. No.634 Average Peak Orders 196 687 Lines 2.313 Day of Week Sunday Monday Tuesday Wednesday Thursday Friday Avg. Weight Shipped 1.066 23.497. Units Shipped 29.663 66.361 26.859 5.282 1.

99 0.1 Totals: No.1 to 0. of SKUS 4 11 31 34 127 51 128 428 814 % of SKUs 0% 1% 4% 4% 16% 6% 16% 53% 100% Pallets Shipped % of Pallets 1.239 32% 637 16% 236 6% 315 8% 38 1% 34 1% 9 0% 3.5 to 0.99 0.414 36% 1.922 100% Summary: 10% of SKUs accounted for 90% of pallets shipped 36 .99 5 to 9.) >200 pallets 50 to 199.99 1 to 4.Current Pallet Movement Pallets Shipped per Week by SKU Weekly Pallets Shipped (Avg.49 <0.99 10 to 49.

49 <0. Days Inventory 2.1 4.414 1.5 21.0 40.99 1 to 4.99 10 to 49.1 to 0. Inventory (in Pallets) Pallet Inventory >50 2 1 1 1 821 5 10 to 49 1 13 18 19 1 1 3 994 56 1 to 9 1 7 14 13 79 29 65 32 913 240 0.5 to 0.5 to 0.99 0.99 5 to 9.99 0.3 0.5 1 6 6 15 320 38 348 0 1 1 3 15 14 29 42 105 Pallets Shipped 1.99 2 2 7 1 18 30 43 60 <0.1 Pallets in Inventory Total SKUs Pallets Shipped per Week 37 .3 10.0 >200 pallets 50 to 199.Current Pallet Movement Shipments vs.0 17.239 637 236 315 38 34 9 Avg.0 840.

Jacks Case Flow Rack. Dock equipment Conveyor – Powered and Gravity Computers – WMS.Equipment • Students may use any material handling/storage equipment including but not limited to: – – – – – – – – – Pallet Rack – Single or Double Deep Pushback Rack. Turret. Carousels Pallet Flow Systems Dock levelers. RF technology Mezzanines 38 . scanners. Reach. Drive-In Rack Lift Truck – Counterbalanced. Shelving.

Include an overview of the problem and operations.Concise description of problem(s) that are addressed by this project. data sources. Justify your approach. main findings and recommendations. Approach and Methodology . Table of Contents . Introduction .One page or less.With page numbers. approach. What is wrong? Who is being affected? Etc. Describe how you approached the problem . Executive Summary .This can have sub-sections. Brief description of problem(s).With project title and team members. assumptions. Problem Statement .Report Format Suggestions Cover Page . analysis techniques used.methods and procedures. Briefly discuss the project thrust. Why did you choose your approach? Teams are expected to make and justify their own assumptions in areas where information provided is unclear or insufficient. with pertinent references cited from your reference section. What other approaches were available to you? This section should contain a literature review. 5 .

Detailed printouts or calculations should be put in an appendix. Discuss benefits for implementing your recommendations. The reader should only need to refer to the appendices to get more detailed information.Provide a summary of numeric and qualitative results. as well as any limitations. Recommendations and Implementation . 6 .Report Format Suggestions Results . all pertinent information must appear within the body of the report. Conclusions and Acknowledgments. Some graphs and charts would be good in this section. Discussion of results and their sensitivity to changes in assumptions. Follow this with an implementation plan.Describe a clear list and discussion of your short-term and long-term recommendations. Note.

listed as “Personal Communication”.(Including oral conversations. citations should be made throughout your report where appropriate. The reader should not have to read the appendices unless he/she wishes to obtain more detailed information.Report Format Suggestions References .) 7 . These 15 pages should stand alone.. must not exceed 30 pages. all critical information should appear within the 15 pages.Conclusions and Acknowledgment section should not exceed 15 pages.e. Note . The entire report.The Introduction section through the . You should follow the style of writing used in technical reports. including appendices and executive summary.) Note. i. (Concise and in third person.

Sign up to vote on this title
UsefulNot useful