Productivity Award winner: IKEA thinks global acts local
A new DC employs a global warehouse design and best practices to serve a growing regional market.
By Staff -- Modern Materials Handling, 1/1/2009
IKEA is Modern's 2009 Productivity Achievement Award winner for Warehousing/Distribution. Read the full story.
Think globally, act locally. That's how IKEA Wholesale approached its new 750,000 square foot distribution center in Port Wentworth, Ga., located near the port of Savannah.
In fact, three principles came into play in the facility design, according to Jim Leddy, IKEA's expansion manager for North America and Ed Morris, manager of the Georgia DC.
First: Recognition that IKEA is a global company. “We incorporated a design based on a model used by similar DCs around the globe,” explains Morris.
Second: Location. While the DC design is global, the facility's location allows it to quickly deliver fast-moving products to IKEA stores in local markets in the southeastern United States including North Carolina, Florida and Texas. That proximity not only improves service times, it reduces transportation costs.
Third: Automation. While IKEA operates highly automated facilities in other countries, this is the first in North America. The DC was designed around a 13-crane automated storage and retrieval system (AS/RS) (viastore, 616-656-8876, www.viastore.com) featuring a 100 foot-tall high-bay in-house rack system. At full operation, the system can process 600 pallets an hour, or nearly one pallet per minute from each crane.
The combination of those factors has reduced the turnaround on orders to the stores from 72 hours to 24 hours while taking nearly 700 miles out of the distance from the DC to the stores and from the port to the DC.
“As we increase the number of stores and the volume being handled in that facility, our ROI will improve because of the increased throughput in the system,” says Morris. “We have reduced our lead time to the stores and reduced our transportation costs. As we take on more volume this year, we expect this to be our highest-performing DC in North America.”
IKEA thinks global and acts local
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