BLUEPRINT FOR AUTOMOTIVE PARTS LOGISTICS

1/1/2012 A Barrett Distribution Centers Case Study

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Barrett operates two distribution centers for an aftermarket

automotive parts distributor. Barrett’s proprietary ‘Blueprint’

methodology achieved measurable improvements, which have now

been successfully duplicated at the retailer’s 20+ facilities nationwide

for significant overall supply chain performance improvement.

Blueprint for Automotive Parts Logistics

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Blueprint for Automotive Parts Logistics A B A R R E T T D I S T R I B U T I O N C E N T E R S C A S E S T U D Y

BACKGROUND Barrett had worked with the senior supply chain management team at a major US retailer for more than 11 years with positive results. When key leaders from that group took up leadership of this major automotive parts retailer, they turned to Barrett Distribution Centers to bring fresh ideas to existing processes and again craft a custom supply chain solution for the operation, which the new team could leverage to improve operations at the additional 20 locations run internally by the company, over time.

Barrett Blueprint® Methodology

Barrett’s Blueprint® process is a proprietary approach to designing, implementing and managing supply chain solutions which holistically deploy Barrett’s people, process and technology resources, in collaboration with others as required. The Blueprint process methodology provides a professional framework for very deliberate consideration of all aspects required to create a tailored road map for each customer engagement. This case study is another in a long line of validations of the process as a value driver that establishes solution control and results that meet or exceed customer expectations.

The sketch below charts key steps from initial analysis through design and manage to improvement:

The next few pages illustrate, step by step, how the Barrett team worked with this client to identify opportunities to improve operational efficiencies, design, build and implement a new solution, which significantly improved overall supply chain performance.

We’ve been able to leverage the solution and processes Barrett designed throughout our operation with measurable results and significant performance improvement.

Logistics Director, Major Automotive Parts Retailer

Blueprint for Automotive Parts Logistics

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SCOPE OF OPERATION Barrett operates two distribution centers for this leading after-market auto-parts retailer, in a manner consistent with industry best-of-breed for such operations, in terms of process, Key Performance Indicators (KPIs), order cut-off and order availability requirements, and other key aspects of operations.

Volume handled in SKUs and in lines picked and lines received are as follows:

• Approximately 55,000 SKUs in each location • All SKUs are “B” items • Approximately 400,000 lines picked per year at each location

Following is a recap of results achieved in each of the steps, using the framework described below:

FIGURE 1: BARRETT BLUEPRINT PROCESS METHODOLOGY

Blueprint for Automotive Parts Logistics

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Design Phase

In the Design phase of our Blueprint Process, Barrett identified modifications to the facility layout (pictured below), and receiving process that resulted in a 15% improvement in Receiving lines per hour. The Auto Parts Retailer has since used the Barrett engineered design and process in other facilities as they either

move or retrofit them.

FIGURE 2: REVISED FACILITY LAYOUT RESULTING IN 15% IMPROVEOMENT IN RECEIVING LINES PER HOUR

Build Phase

In the Build phase, Barrett identified a more efficient layout for SKUs and pick patterns that resulted in a 9% improvement in pick productivity over the specified layout.

FIGURE 3: PROVEN, RELIABLE PROCESS METHODOLOGY ENSURES RESULTS

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Blueprint for Automotive Parts Logistics

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Implement Phase

As we moved to the Implement phase, Barrett produced a training video with an accompanying process map, to comprehensively illustrate each step in the process within an overall framework for clarity.

Barrett provided this training video at no additional cost to the client, who has modified it for use in their internally managed facilities as well, and finds it to be a highly useful tool for the entire team.

To view this video, please go to http://www.barrettdistribution.com/.

Manage Phase

Facilities are managed to exacting standards, driven by the demanding requirements of automotive retail locations. Following is a high level summary of KPI standards achieved:

Blueprint for Automotive Parts Logistics

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Improve Phase

Finally, our Blueprint Process ‘concludes’ with an ‘Improve’ phase, which is really an ongoing effort of analysis, feedback and continuous improvement driven by learnings from the prior phases. Barrett identified process improvements in the handling of the exhaust/pipe product line that

improved the safety and productivity on this segment of the business. Again, this process has been duplicated at other locations run by the retailer.

Blueprint for Automotive Parts Logistics

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Barrett noted an opportunity to manage the returns process more efficiently, impacting warehouse productivity and lowering overall cost (as sketched below):

FIGURE 4: RETURNS PROCESS IMPROVEMENT PLAN

Blueprint for Automotive Parts Logistics

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CONCLUSION This automotive parts case study is only one example of how Barrett’s Blueprint Process not only produces a more efficient supply chain, but improves a company’s overall business. Barrett’s proven process methodology provides a reliable framework for systematic supply chain assessment, identification of areas for focus and improvement, and management to desired result. With the Blueprint Process framework, Barrett was able to create efficiencies in receiving, pick patterns, and training for this important customer: including a 15% improvement for lines per hour, picking productivity improvement of9%, and reduction of error rates to .0062% as a result of the highly effective training program. These efficiencies reduced overall costs for the retailer and allowed them to focus more on the core business of selling automotive parts.

FIGURE 6: AUTO PARTS INVENTORY IN STOCK AT BARRETT NORTHEAST DISTRIBUTION CENTER

FIGURE 5: AUTOMOTIVE PARTS: OBJECTIVE: FAST TO RETAIL

Blueprint for Automotive Parts Logistics

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ABOUT BARRETT DISTRIBUTION CENTERS Barrett Distribution Centers, headquartered in Franklin, Massachusetts, and founded in 1941 as a single warehouse operation, has grown to serve a wide array of customers and industries with a network of 12 strategic distribution centers throughout the US. These facilities are designed to efficiently handle fast moving consumer goods for leaders and future leaders of the consumer electronics, chemical, food and beverage, and footwear and apparel sectors. Barrett provides both consumer direct fulfillment and retail channel delivery, with facilities and operations covering the East Coast, West Coast, Mid-Atlantic and Southeast. For more, please visit www.barrettdistribution.com.