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Presented by:

C/VLM Working Group

Easy C/VLM Cost Justification:

Calculate the true cost and ROI of carousels and vertical lifts

Horizontal Carousel

Vertical Carousel

Vertical Lift Module

Easy C/VLM Cost Justification:

You know that using space and resources more efficiently will improve your operations and lower your costs.

An automated carousel or vertical lift module may be the ideal system for you.

C/VLM Equipment “Benefit Zone”

• Short term, dynamic storage.• Highly accurate item location.• Enhanced security.• Small to medium article sizes.• Individual lots.

Easy C/VLM Cost Justification:

How do you justify the cost of the capital equipment that will

allow you to achieve those goals ? 

Calculate R. O. I.(Return on Investment)

Gain from investment - Cost of investment

Cost of investment

Calculate R.O.I.

$110,000 - $75,000 $35,000

.466 X 100

Revenue +

Machine Cost ÷$75,000 $35,000Gain

= 47% R.O.I

Calculate R.O.I.

Gain from investment - Cost of Investment (AS HIGH AS POSSIBLE) - (AS LOW AS POSSIBLE)

Cost of Investment(AS LOW AS POSSIBLE)

Gain from Investment

Tier1: Financial Justifications•Reduce Costs•Avoid Costs •Increase Revenue

Gain from InvestmentTier 2: Benefits of C/VLM•Reduced workplace injuries•Boost productivity •Increase security/ reduce loss•Improved inventory accuracy•Add reporting and analysis •Integrate with vendors/customers

Gain from InvestmentTier 3: Additional Benefits• Competitive advantage• Reduced Environmental Impact• Employee retention and promotion•Enhanced image and reputation• Preparation for future growth• Image and prestige

Research Pull financial records Determine company procedures Know your hurdle rate

Research Get the inside track Know historical successes and

failures Know ALL of the approvers Get everyone affected on your team Present a united front

Research Use industry statistics Don't guess, estimate or over

inflate Get input internally and

externally Involve vendors who may be

affected Get 3rd party endorsements

C/VLM Equipment BenefitsHigh Density and Vertical Storage•Make room for more inventory•Make room for new profit centers•Avoid new construction•Eliminate storage and transportation fees•Reduce energy costs (lights, HVAC)•Reduce workload (cleaning, safety)

C/VLM Equipment BenefitsHigh Density and Vertical Storage

$3,000,000 Building Expansion vs

$600,000 Machine Investment$2,400,000 Saved

400% R.O.I.

C/VLM Equipment BenefitsEnclosed Storage Offers Protection•Avoid environmental damage •Avoid disaster damage •Increase shelf life

C/VLM Equipment BenefitsEnclosed Storage Offers Protection

$25,000 Machine InvestmentVs

Avoid $1.2 Million Inventory Loss

C/VLM Equipment BenefitsEnclosed Storage Enhances Security•Physical Locks •Passcode access to the machine•Passcode access to individual shelves•Passcode access to individual part numbers•RFID & Magnetic Card Reader security

C/VLM Equipment BenefitsIncreased Inventory Accuracy Avoids:

• Overstocking• Rush charges• Missed orders• Production delays and shutdowns• Expired inventory• Wasted time searching

C/VLM Equipment BenefitsBoost Productivity•Pick & Pull items faster•Batch jobs for speed•Pull the right part for the job•Combine processes together•Quick access to entire inventory

C/VLM Equipment BenefitsBoost Productivity

$160,000 Machine Investmentvs

$100,000 salary reduction$15,000 Overtime

$8,000 Rush ShippingAnnually

C/VLM Equipment BenefitsEnhance Security •Enclosed storage•Physical locks•Passcode access•RFID•Card swipe

C/VLM Equipment BenefitsImprove Ergonomics•Lift in the “Golden Zone”•Avoid climbing and stooping•Avoid slip & fall•Avoid collisions•Avoid lifting and carrying

Present your case1. Executive summary

• 2 Paragraphs• 3-4 sentences each.

2. Situational analysis• Proposed solution

3. Financial benefits• Return on Investment

4. (Steps to counteract risks)

Tractor and Utility Vehicle Manufacturer

Application•Pick And Pass Spare Parts Order FulfillmentSolution•Six Horizontal Carousels•Four VLMs •Pick To Light•SoftwareCost Justification•Doubled Productivity•Recovered 83% Floor Space

“We couldn’t throw any more bodies into the mezzanine zone

without people tripping over each other. We were able to

increase our picking productivity by over 90% and only need one worker to manage the carousel

zone.”

- Logistics Manager

Retail Pharmacy Distribution

Application•Order Fulfillment For Retail OperationsEquipment•Six Horizontal Carousels•Pick To Light•SoftwareCost Justification•90% Faster Picking•72% Labor Reduction

“We were picking as fast as staff, shelving and technology would

permit, but it wasn’t fast enough, the addition of the horizontal

carousels has allowed us to meet current order demand and

expand into a seasonal fulfillment program,”

-Operations Manager

Equipment Manufacturer

Application•Fulfilling Parts Orders For ManufacturingEquipment•Three VLMs •Pick To Light•SoftwareCost Justification•Picking 44% Faster•Reduced Labor

“Before installing the VLMs, we did a time study. Our average

picking time has been reduced from 4.72 to 2.64 minutes per

pick, a 44% increase in productivity.”

- Warehouse Supervisor

Textile DistributorApplication•Wholesaler & Distributor Of Decorative FabricsEquipment•Four VLMs With Pick to Light and SoftwareCost Justification•Recovered 67% Floor Space•Increased Capacity•Doubled Productivity

“Picking hardware was an inefficient and labor intensive

process. The VLMs allowed us to add more inventory while

maintaining our 3pm order cutoff time - growing our hardware

business.”

- Vice President

Medical Center“We had run out of space in our central sterile storage room, and were faced with a multi-million

dollar building expansion. Vertical carousels allowed us to

remain in our existing space, avoiding the cost and hassle of

construction. We even have room to grow in the future now.”

- CSP Director

Application•Central sterile storageEquipment•Eleven vertical carouselsCost Justification•Avoided $3 Million construction•Reduced overstocking •Reduced errors impacting surgical scheduling

CNC Equipment Supplier“We were staffed based on peak demand times, and even then were not able to ship all orders

same day. The VLMs allowed us to reduce staff and still guarantee our customers that all orders will

ship the same day. The VLMs saved us $180,000 the first year.

In labor and other costs.”

- National Parts Manager

Application•Distribution CenterEquipment•Nine vertical lift modulesCost Justification•More picks with reduced staff•Cross-check for accuracy•24hr. guaranteed shipping

Automobile Dealerships

Application•Parts and Service DepartmentEquipment•4 vertical lift modules•1 vertical carouselCost Justification•Larger parts inventory•Specialized tool storage•Added security and accuracy

“We included vertical storage as an integral part of each of our

dealerships. We freed up a lot of floor space, and greatly improved

the performance of the parts counter for our service departments and the appearance

of the service area for our customers.”

- CFO

Lawn & Garden Equipment Supplier“I can leave here at night

and I know that every order is gone, and I know that every order is gone

accurately.”

- President

Application•Distribution CenterEquipment•Four vertical lift modulesCost Justification•Eliminated overtime•128sq/ft footprint freed space•Accuracy increased to 99.9%

Questions?

For More Information:

www.mhi.org/as-rsTim Archer- allan.archer@kardexremstar.com

www.kardexremstar.com • Booth 9323

David Schneider - dschneider@hanel.uswww.hanel.us • Booth 8417