• Estimated CAPEX savings of $500.000

  • OPEX saving of $150.000 per year

The market for consumer goods is growing in the Philippines and our client’s activities have expanded to meet the increased demand. New distribution centres have been added to the site, one adjacent to the plant and one across a road. Now that a new phase of expansion is planned, our client wanted to identify the best logistics and warehousing solution in the long term. We were asked to develop a predictive simulation study to analyse, quantify and evaluate the options.

Multiple future scenarios are modelled

Our logistics simulation model included production and inbound flows, warehousing, docking and shuttling operations. With these models and using our knowledge on material handling equipment and warehousing, we were able to evaluate multiple future scenarios. For example, we explored whether the distribution centres could handle future volume growth, evaluated a proposed pallet conveyor between plant and warehouse, analysed bottlenecks, tracked utilisation rates of equipment including forklift trucks, and more.

Later in the year, the data and knowledge from the simulation model, combined with our engineering master planning expertise was used during an evaluation and iteration of the truck routes and dock design alternatives. The proposed solution was not yet under-consideration by the client team and improved site efficiency while allowing trucks safe docking all locations in the site expansion.

Domain knowledge comes together with digital tools for increased insight

Each option was evaluated using dynamic simulation and compared against the base case of existing function across key performance indicators. One of the benefits of our solutions is that, as an engineering company, we combine considerable domain knowledge with our digital tools to provide increased insight. In this case our knowledge of logistic flows, transportation and vehicle handling enabled us to quickly discard one scenario based on issues connected with safety, location and the environment. Also relevant was the question of how our client wanted to operate the site in the future, a consideration not covered in a purely statistical analysis.

The predictive simulation provided advanced understanding for our client, with two options standing out as the most beneficial on the balance of pros and cons. The detailed information guided our client’s investment decision for a future-proof facility. For instance, the study validated that one conveyor is sufficient for the required capacity. This resulted in estimated CAPEX savings of $500.000 and OPEX saving of $150.000 per year.

Our client’s responsible project manager: "Overall we are very positive about the project. From initial engagement to end result, we experienced strong technical expertise and understanding of our business challenges. The results were presented visually and translated well to our stakeholders."

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Project facts

  • Client
    Top-tier FMCG company
  • Location
  • Challenge
    To organise and design the interface between two distribution centres, that are needed to facilitate growth.
  • Solution
    Simulation model including production and inbound flows, warehousing operations, docking and shuttling operations.