This customer eliminated supply chain inefficiencies to the tune of USD 300,000 per annum.
Our customer’s global supply chain involves the farms of 11,600 farmer shareholders in New Zealand, with distribution to their customers and consumers in 140 countries. With a collection of over 14 billion litres of milk a year, it manufactures and markets over 2 million tonnes of dairy products annually, making it the world leader in large-scale milk procurement, processing and management. This Kiwi dairy exporter employs over 16,400 people across 5 continents and has a turnover exceeding USD 10 billion.
When our customer realised they weren’t using their 130 warehouses in New Zealand optimally, together with their project team, they came to us with a task -increasing throughput in their 45,000 cubic metre Crawford Street facility in Hamilton, 100 km south of the main port of Auckland. Their key interest was in Maersk’s CLASS modelling capabilities, which we put to use by creating an ‘As-Is’ model and three scenarios to increase throughput. Easy to implement, our recommendations brought them more than USD 200,000 in supply chain benefits, in the first nine months.
- A lack of capacity at the Crawford Street facility meant cargo was often diverted to more expensive facilities.
- Too many slow-moving Stock Keeping Units were left idle in the Crawford Street facility, which was originally designed as a high throughput export container packing facility
To evaluate throughput improvement options, we simulated the Crawford Street operations using CLASS warehouse simulation software.
The study included:
- Physical layout modelling
- Product flow modelling (including time-of-day analysis)
- Detailed process mapping
- Productivity definitions per process
- Material handling equipment definitions
Based on the scenario models, our customer’s warehouse management team added a weekend shift and increased its cross-docking volume (not stored).
Following these changes, the facility exported over 3,000 TEU per month for at least 5 months, which was on average 1,000 TEU more per month compared to the same period the previous year.
The CLASS model gave the world’s largest exporter of dairy products the confidence to build a long-term operations solution within a very short time. And the results were impressive:
- Estimated cost benefits for the first nine months of the year following the implementation of our solution were more than USD 200,000.
- The same year, overall packing capacity issues in the region were alleviated due to seven-days-a-week operations at Crawford Street and full year volumes at Crawford Street were estimated to be 35,000 TEU. Actual volumes for the two previous years were 23,900 TEU and 18,000 TEU respectively.
- Greater capacity and flexibility improved DIFOT (Delivery In-Full On-Time) performance and trucking operations.
- Additional volume from their production and packing facility was transitioned to Crawford Street to increase throughput from the original forecast.