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Facilities are always looking for ways to expand their operations internally - making room for revenue generating activities (more manufacturing, additional quality checks, etc. ) by shrinking the warehouse. Capacity Management KPIs:
- Width of warehouse x depth of warehouse = Total Square Footprint
- Cost of Warehouse Space: warehouse footprint x cost per sq. ft. = Cost Of Warehouse Space
- Warehouse Cubic Feet Occupied/Warehouse Cubic Feet Capacity = Warehouse Usage
Capacity Benchmark Example: DC Dental
The DC Dental Neighborhood:
- Dental supply distribution
- 20, 000 Sq. Ft. Facility
- 20, 000 SKUs
- 2, 500 lines/day (ability to pick 3, 500 lines/day)
- 480 orders/day
Case Study: DC Dental
Throughput KPIs
Throughput measures how many (parts, lines, orders) are completed in a specific time frame (hour, day) or by number of people. Throughput is becoming a more important measurement as customer demand from B2C is bleeding into B2B. Years ago manufacturers and distributors had fewer criteria to meet to satisfy a customer.
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This means that on the go-live date, the system will be deployed across business functions—manufacturing, operations, sales, finance, marketing, etc. The big bang approach requires a lot of planning since the software is implemented, in most cases, on a pre-decided date. Also, the pressure to get things done right is high, as any error can potentially affect all business functions. Advantages
Disadvantages
It needs less time to deploy, as all changes are made in one go. Deployment risk is high, as changes are implemented across business functions
The overall cost of deployment is low. More time is needed for planning the implementation. Only one-time training is required. Changes are irreversible, so there's high pressure on the implementation team to get things right the first time. The phased approach
In this approach, implementation is planned sequentially, with each phase implementing the ERP system for one or more business processes. You can plan these phases by business department, location, manufacturing facility, and more.