Improving warehouse efficiency

A case study of the Indoorway solution based on an implementation at the plant of cosmetics manufacturer L'Oreal near Warsaw.

LEAN TRANSFORMATION -
thanks to Indoorway data, the client has obtained:
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+12%
increase in productivity
+€157 thous.
savings generated annually

About the customer

L'Oréal is a leading cosmetics manufacturer that has been present on the market since 1992. Its mission is to provide consumers around the world with innovative cosmetic products that are tested for quality, efficacy and safety.

„The data obtained from Indoorway enables us to make accurate decisions faster, minimizing the risk of mistakes. They are a reliable source of information and the only way to get a real picture of the situation in the factory. Moreover, data make it easier to find bottlenecks and allow us to define appropriate actions. An important value for me from the Indoorway solution was also the ability to involve employees in actions, that is, based on data, to make changes and set common standards that everyone can sign up to."

Łukasz Chochel, Warehouse Manager at L'Oréal Warsaw Plant

Description of the problem

Due to the doubling of the plant's capacity, a significant expansion of the manufactured product range, and L'Oréal's initiatives to improve operational efficiency, L'Oréal Warsaw Plant management set a goal to optimize costs and introduce automation. The project team decided to take a data-driven approach, starting with a good understanding of its current processes.

The optimization at L'Oréal Warsaw Plant was designed according to the Lean approach and consisted of the following steps:
  • Automation analysis
  • Data collection and analysis
  • Simplification
  • Lean Transformation
  • Investments
  • Automation
The first approach to data collection, including Value Stream Mapping, was done manually and involved 43 internal and external specialists for 73 days. However, the data they collected proved insufficient to draw appropriate conclusions based on it, mainlydue to the high complexity of the flow processes and the size of the analyzed area. That's when L'Oréal approached Indoorway to provide the necessary data to conduct the analysis.

Indoorway system implementation

Indoorway installed the system in a 20,000 m². warehouse. The measurements included 24 forklifts whose location and movement were measured with 1-meter accuracy for 4.000 hours, translating into as many as 14.6 million unit location points. Based on the measurements, Indoorway also provided accurate analytics showing the potential for improving process efficiency (e.g., packaging), including:
  • the actual load on individual zones - such data signals either bottlenecks or potential threats to employee safety;
  • Resource activity over time - large fluctuations in activity over the course of the day show problems with the planning of resource work, their inefficient use;
  • actual time of individual operations/cycles - such data accurately show deviations from standards, signal the source of many problems.

Implemented solutions and effects

  • Analyzing the flow of existing processes accurately showed not only existing inefficiencies, but helped decide what (and how) to improve first , and calculate which initiatives would not provide the expected return on investment (ROI). For example, through the analysis of warehouse processes, it turned out that the ROI from the wrapper relocation previously recommended based on the manual VSM analysis would be as high as 5 years. The customer also reorganized the process of retrieving tools and components from the warehouse, eliminating unnecessary employee movement.
  • With data on actual forklift activity and visualizations of their movement in heat map format, the L'Oréal Warsaw Plant team was able to diagnose the areas where bottlenecks were most likely to form. Based on this data, and knowing the exact scale of the problems and their frequency of occurrence, the team conducted additional workshops with operators, during which they were able to pinpoint the exact sources of the problems and prioritize them. As a first step, the placement of labels in the racks was rearranged. The team also implemented the 5S approach in the ramp area and redesigned some flows (Process Flows), which helped reduce waste (Muda) of unnecessary movement. It turned out that it was caused by pallets along the travel route, which theoretically should have been elsewhere, but were left there at the convenience of the operators and for much longer than the process indicated.
  • The heat map analysis also identified areas of excessive forklift traffic in employee areas. The resulting reorganization of Process Flows has reduced the risk of accidents involving forklifts and workers.
  • The analysis of forklift traffic data also helped the client revise its assumptions for the planned transfer of the wrapping machine, which had been recommended earlier by external consultants based on their observations and experience at other plants. Indoorway data showed that the benefit of this operation would be much lower than assumed, generating a return on investment only after 5 years. In addition, the transfer operation itself would have disrupted production continuity.

Effects

Check out what such a project might look like for your company
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