A company was seeking a consolidation review to understand potential outcomes of an acquisition.
Company

A manufacturer and distributor of mobile audio/video products, mobile device accessories, installation and fabrication supplies, and OEM integration solutions that distributes its products worldwide.

Challenge

This company was considering an acquisition of a large designer and supplier of consumer vehicle security and remote start systems. It needed to understand the available cost savings, efficiencies and improvements in customer service that could be achieved by consolidating some facilities into existing or larger joint facilities.

Tompkins International's Role
  • Evaluate existing manufacturing and warehouse facilities to assess each facility on major operating parameters such as site layout, control systems, order picking, housekeeping and safety, space utilization, labor productivity, equipment, inventory accuracy, and building facilities.
  • Develop a model to compare the costs/savings of consolidation into 3PL versus an owned facility, as well as evaluate labor, space, and equipment costs.
  • Identify cost improvement opportunities and make recommendations on path forward for facility consolidation.
The Results
  • Recommended consolidating two west coast facilities. This included combining the light manufacturing areas, designing a new layout of the storage area to improve highbay utilization and achieve increased cube utilization, as well as reconfiguring office areas to gain production space.
  • Recommended a plan that involved the exit of a 3PL and consolidating into an owned facility to gain savings in facility and labor costs of more than14% per unit.
  • Developed new carton and pallet flow pick line to replace manual pick process.
About the Author
Tompkins International Staff
Tompkins International Staff