This project was part our course work - Facilities Planning and Design. The project data was given by the National Material Handling organization. In this project, our aim was not only to design the facility but to plan the facilities in such a way that it should remove the nonvalue activities, able to handle seasonal and future sales, and allocate the resources efficiently.

3.  The present ACME Distribution Center was having constraint with future throughput capacity
with respect to the forecasted growth.
 Growth was expected to be 7% in unit capacity, 2% in orders for every consecutive year, for a
five year design period.
 ACME’s Distribution Center is re-designed with the growth data and brain stormed with
different alternatives.
 Analysis and design has been done with respect to space utilization, labor, material handling,
and cost expenditure.
 Comparison was done between the alternatives and the alternative with the highest MARR
(Minimum Acceptable Rate of Return ) was selected.

4. 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

5. Design philosophy
Product flow
Space utilization
Human resources
Equipment selection
Information technology

6. Product Flow
Receiving Put-Away Order Fulfillment Staging Shipping
Unload trailer/
container
300 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 area
No
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

7. 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

8. 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

9. Space Block Dimension in Ft Area in Sq ft
Distribution Center 771.36 x 410.05 x 30 316,292
Receiving 325.5 x 76.8 25,000
Storage 611 x 320 195,520
FReceiving 378 x 320 120,960
RShipping 233 x 320 74,560
Shipping 325.5 x 76.8 25,000
Admin Office Space 37.2 x 25 930
Receiving Office 12.25 x 12.5 150
Shipping Office 12.25 x 12.5 150
Cafeteria 111.9 x 40 4,476
Locker Rooms 96 x 24 2,304
Restroom 21 x 12 252
Parking Space 360 x 400 144,000
Space Utilization

13. 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.

15. 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.

16. Space Calculations – Data Analysis Contd.

18. Facility
Layout

19.  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.

20. Baseline Alternative 1 Alternative 2
Receiving 19 24 16
Put-Away 15 27 27
Order Fulfillment 182 332 332
Staging & QA 17 32 32
Shipping 9 13 13
Total 242 428 420
Cost per hour $22.50 $27 $27
Cost per month $871,200 $1,848,960 $1,814,400

22. Alternative 1

23. Alternative 2

24. Alternative 1
MARR = 15.098
Alternative 2
MARR = 14.82
Alternative 1
is selected