Global Healthcare 3PL Provider*

 

Client said: There’s got to be more we can do to increase efficiency at one of our warehouses. Can you evaluate our operations there and help us find new ways to save time and money?

The engineers at Scott Sheldon said: We can do that.

Project background:

We performed a supply chain tune up for the 3rd party logistics division of one of our major customers. The company is the nation’s leading distributor of medical and surgical supplies to the acute-care market and also serves as a provider of healthcare supply chain management solutions.

Because we’ve worked together on a variety of supply chain improvement efforts, the company invited the Scott Sheldon team to join them onsite at their Louisville warehouse for 3 weeks to conduct a comprehensive review of the operations there.

The “Ah Ha” moment:

The project reached an important milestone when the team realized that their warehouse was completely full. There was simply no more room for inventory. Without the ability to pick and pack, move, maneuver and stage product, you’re at a standstill.

The Action:

We implemented our proven supply chain tune up methodology by working with the customer’s team to review three major components of their operations:

• The configuration of the warehouse, its racking structure, strategic fit of the location and ability to serve customers going forward.
• The business processes employed at the facility and the use of Red Prairie as their WMS
• The business financials, including rent and labor costs

One of the keys to the success of this tune up was the level of detail of the financial analysis. We explained how their methods of measuring productivity could be improved and showed them new metrics with which they could better manage costs.

To remove the bottleneck from the at-capacity warehouse, we suggested they find “relief space” elsewhere in their system. By moving inventory that wasn’t needed in Louisville to a remote location for customer processing, they could free up the space needed to operate that center profitably.

The tune up also revealed options for significant savings in labor reductions. Along with staff adjustments, we found ways to save by streamlining business processes that drive better inventory management and replenishment, and improve the use of their WMS.

Result:

The results of this healthcare supply chain tune-up were practical, creating opportunities for total savings of $1.5 million.

We get it.

*Due to confidentiality, we do not disclose the names of healthcare companies

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