Automation equipment missteps can be costly.
When a global consumer products manufacturer was planning how to accommodate for a new product introduction, their estimates led them to a $3 million ASRS installation. With that much capital on the line they turned to Haskell for a second opinion. We took a more scientific approach to line optimization rather than a conservative, widely accepted approach. The reward was more accurate data that complied with our client’s above average, stringent customer service expectations.
We analyzed production levels beyond standard practice.
Rather than estimate peak inventory levels ten years from now, the standard practice, we defined our client’s actual ASRS requirements based on minimum production levels and predicted production quantities ten years into the future. Industrial engineering theory accounted for changes in demand. The exercise allowed us to estimate costs based on differing levels of service. But in a market where the goal is 85-95 percent service levels, our client’s expectation was 99.9 percent satisfied customers, an important factor that determined the safety stock level.
The optimized solution saved resources and gave new confidence.
The results from the planning were significant for our client’s bottom line. Based on our calculations, the company was able to make an informed decision and halved the estimated costs of their ASRS installation — effectively saving $1.5 million in capital expenditure. More significant was that we gave our client the confidence that future demand would safely be met and at the expected above-average level of service to customers.