Scotch is a beverage company that produces a series of health-focused beverages. Scotch doesn’t hold a large number of SKUs, but produces and stores a significant quantity of their products in warehouses. Due to Scotch’s business having a seasonality factor, with sales peaking around the new years, Scotch ends up having a large amount of finished goods stored away in warehouses awaiting for their peak demand months. To support this seasonality trend, Scotch previously rented 7 warehouses to reach the capacity required. This, in turn, slowed inventory location, convoluted warehouse management, and incurred high logistic costs.
Because of the inefficient warehouse management caused by the spread of inventory into 7 different rental warehouses, Scotch wanted to consolidate all their inventory into one big distribution center. In addition to solving the warehouse management problem, consolidation will allow Scotch to save on warehousing costs in the long run. Moreover, their products have a 15 day marination process during production before going through quality control, thus they needed an accurate system to manage their FIFO system to manage the shelf life requirements of their customers. Scotch also wanted a DC near their production plant, so they can lower transportation costs for transfer of WIP between production plant and storage, as well as outbound transportation costs.
We took a turnkey project from Scotch, partnering with a third party construction company for the construction of the distribution center. The building was constructed close to the production plant to allow the easy transfer of WIP between storage and production plant for marination purposes. The solution we offered Scotch was an automated storage and retrieval system equipped with 10 cranes, all 20 meters tall. The system held a max capacity of over 17,000 locations while having a throughput of 300+ pallets/hr, 150 IN/OUT. In addition to the storage system, the system was also equipped with a small picking station suited for picking individual products for outbound to smaller retail businesses. The picking system works by notifying the total order quantity for each day. If there are not enough products at the picking stations to suffice the order, the system automatically retrieves additional products from the storage to satisfy the order. With automated order management, Scotch was able to reduce paper usage within the warehouse. The system also features a transportation management system used to calculate the truck capacity in cubic size to optimize full truckloads when delivering to each customer.