FACILITY PLANNING & DESIGNACME Shoe Facility Design

Team #1

Mayank Agarwal Japan Shah Ashraf Naveed Khan Mohammed Naseer

Index Problem Definition Project Scope Product Flow Equipment Selection Space Utilization Space Calculations Labor Estimation Cost Estimation

Problem DefinitionACME is a wholesale footwear distributor serving varying sizes of customers for athletic footwear.

Existing DC is at capacity with no room to expand and an expiring lease

Experiencing high annual unit growth

Seeking new, justified alternative operational processes, and a right sized facility to support future business

Current operation has little to no automation

Project Scope

Design philosophy

Product flow

Space utilization

Human resources

Equipment selection

Information technology

Product Flow

Receiving Put-Away Order Fulfillment Staging Shipping

Unload trailer/container300 CPH

Check ASN, Verify BOL, and scan RFID Tag

Sort as per SKU Velocity category

Palletize

Forward or Reserve

Put-away to reserve area

30 PPH

Put-away to forward area

60 CPH

Generate orders by customers

ReserveForward

Full pallet orders

Pick from reserve area

Pick from forward area

Orders Cases/Eaches

Staging

Load on to trailer

Dispatch

Is there enough

quantity?

Replenish from reserve areaNo

Yes

Crossdock receipt?

Label outbound details

No

Print Outbound Label

Cases/pallets

10 % Q/A 240 CPH

SKU Velocity Order from A, B

& C

Yes

No

CPH- Cases per hour

PPH- Pallet per Hour

ASN- Advance Shipment Notice

RFID- Radio Frequency Identification Device

BOL- Bill of Lading Q/A- Quality

Assurance

Yes

Equipment Selection

Classification Equipment Location Data Used

Containers & Unitizing Pallets Receiving

Projected growth in the next five years

Storage and Retrieval Pallet Jack Pick to Light System Single Selective Racks with

Wide Aisles (10’)

Forward Area Reserve Area

Material Transport Equipment

Automated Roller Conveyor Counterbalanced Lift Truck Order Picker Sortation Conveyor

Storage to Shipping Storage Storage cum Retrieval Shipping

Automatic Data Collection & Communication Equipment

Radio Frequency Data Terminal Voice Headsets

Entire Distribution Center

Alternative 1

Classification Equipment Location Data Used

Containers & Unitizing Pallets Palletizer

Receiving

Projected growth in the next five years

Storage and Retrieval Pick to Light System Single Selective Racks with

Wide Aisles (10’)

Forward Area Reserve Area

Material Transport Equipment

Expandable/Portable Conveyors

Automated Roller Conveyor Counterbalanced Lift Truck Order Picker Sortation Conveyor

Receiving and Shipping

Storage to Shipping Storage Storage cum Retrieval Shipping

Automatic Data Collection & Communication Equipment

Radio Frequency Data Terminal Voice Headsets

Entire Distribution Center

Alternative 2

Equipment Selection

Space Block Dimension in Ft Area in Sq ftDistribution Center 771.36 x 410.05 x 30 316,292Receiving 325.5 x 76.8 25,000Storage 611 x 320 195,520

FReceiving 378 x 320 120,960RShipping 233 x 320 74,560

Shipping 325.5 x 76.8 25,000Admin Office Space 37.2 x 25 930Receiving Office 12.25 x 12.5 150Shipping Office 12.25 x 12.5 150Cafeteria 111.9 x 40 4,476Locker Rooms 96 x 24 2,304Restroom 21 x 12 252Parking Space 360 x 400 144,000

Space Utilization

Space Utilization

Reserve Area Reserve area: 233’x320’; 74,560 sq-ft Pallet Specification: 4’x4’x5’ Single Deep Rack Specification: 13’x 4’x15’ Total pallets in each rack: 12 Total number of racks: 510 Aisle Specification: 10’ wide Total capacity of the reserved area: 1,037,142 eaches Total capacity to hold pallets: 6120 Total capacity of each pallet: 192 eaches

Forward Area Forward Area: 370’x320’; 120,960 sq-ft Gravity Rack Specification: 32’x8’x8’ Total number of gravity racks: 196 with 4 layers Capacity of each gravity rack: 4160 eaches Roller Conveyor : Width : 21 Inch Total Gravity rack : 2500 no’s

Space Utilization

Space Calculations - Approach The growth in annual units sold per year is 7%. Annual units in year 2021 is calculated by using 7% growth over the 5

years of planning horizon. From the data of daily volumes, the deviations in the units sold per year

and the maximum outbound units in 249 days is obtained. The unit quantities sold for the 1st, 2nd, 3rd std deviations and the

maximum are observed The annual units sold as per 2nd std deviations is equal to the annual

units sold in year 2021. Analysis and calculation for space requirements are based on the 2nd std

deviations quantity.

Space Calculations – Data Analysis

Space Calculations - Approach Contd. If we design our facility as per max volumes, it will be under utilized about

half of the year and if we design as per the average volume it will not have enough space for the max volume.

To have a possible solution for the above problem it is necessary to take the seasonality factor into consideration.

Hence we design our facility based on the monthly volumes obtained taking into account the volume for peak month.

In each month the above three variables have different values due to the seasonality effect.

As seen from the table in next slide we observe that the peak season for the sale of shoes is before Christmas through spring and early summers with the most units sold in December and June.

The next slide shows the monthly orders, quantities of units sold and on hand inventories.

Space Calculations – Data Analysis Contd.

Facility LayoutTools Used : Auto Cad & Visio• All the facility layout has been drawn by Auto Cad 2016• 2D layout has been drawn and presented • The whole layout is scaled with actual dimensions of the DC• All the representations and notations are meticulously

designed in detail

Facility Layout

Labor Estimations• All the labor calculations has been done based on the growth

and the actual requirement for the respective year• Each year labor requirement is calculated for both direct and

indirect labor• Since the facility is designed based on the maximum utilization

of its capacity, all the amenities has been designed with respect to it.

• With respect to Alternatives designed, respective analysis in cost, requirement has been done and presented

Labor EstimationBaseline Alternative 1 Alternative 2

Receiving 19 24 16Put-Away 15 27 27Order Fulfillment 182 332 332Staging & QA 17 32 32Shipping 9 13 13Total 242 428 420Cost per hour $22.50 $27 $27Cost per month $871,200 $1,848,960 $1,814,400

Cost Estimation• The one of the major criteria for selecting the an alternative is

cost.• All the cost, including Man power, cost of equipment, cost of

labor, cost of land, all direct and indirect expenses.• Based on the, analysis for the 5 consecutive years, its found

that MARR for alternative 1 has better returns

Cost EstimationAlternative 1

Alternative 2

Cost Estimation

Alternative 1 MARR = 15.098

Alternative 2 MARR = 14.82

Alternative 1 is selected

Conclusion• All the design is based on the given data by ACME shoe

facility• Hence by all the analysis Alternative 1 has been selected

Thank You