Analysis and solutions proposals regarding the capacity problem of the finished products stock at Brunswick Marine in EMEA

Details

Supervisors

Chevalier, Philippe

Faculty

Louvain School of Management

Degree label

Master [120] en ingénieur de gestion

Abstract

This paper presents the development and resolution of the project tackling the capacity problem of the finished products stock at Brunswick Marine in EMEA with the DMAIC method. After the analysis, it is found out that the core of the capacity problem is that the combination of the layout and the warehouse management system instructions is not adapted to the high diversity of the stock keeping units and restricts the possible utilization of the available capacity. The predominant rationale is: the flexibility of the stock is linked with the number of free locations, which stands at a too low level because there are not enough locations, the number of used locations is uselessly multiplied and these locations are on average too long for the on-hand quantities. The first explored solution aims at maximizing of the utilization rate inside the current warehouse. It consists in a redesign of the layout based on an agile dedicated policy and a rework of the automated storing and picking rules. To add even more flexibility, the concept of a dynamic stock reorganization is proposed. The main downside of the solution is that the first in first out requirement would not be ensured by the storing and picking processes. The outcome of the in-house solution is a system that would minimize the volume waste and maximize the number of free locations, by minimizing the number of used locations for one SKU and maximizing the utilization rate per location containing the SKU. A certain gain in maximum occupied volume is obtained. We then explore the solution of getting extra storage volume outside the current warehouse. The first option is the storage via an external warehouse managed by a third-party logistics company. The second option is the building of a warehouse on the site of BME. This option would fulfill the same role as the external storage; being a secondary warehouse that accommodates slow moving, obsoletes and overstock and replenishes the primary warehouse when the quantity for an SKUs goes under the safety stock kept in the existing warehouse. The outcome of this solution would be the same for both options regarding the gain in capacity. Given the advantages of the on-site new warehouse option such as a better control on the inventory and its probable better cost-efficiency over the external storage, it is recommended. By combining both mentioned solutions (in and out of the current warehouse), the ultimate output of the project would be an estimated increase of 36.6% in the volume that could be accepted and stored on time at BME.