Evaluation of outbound operations improvement projects for distribution centers

Abstract

Improving the operations within a distribution center by reducing waste can result in significant cost savings. One area with a large potential for improvement is outbound order packaging. With a limited number of box sizes stocked and available in the distribution center to package orders, some orders will inevitably be shipped in boxes that are larger than needed, thus creating huge waste on the shipping cost. Three potential solutions are proposed to reduce the empty physical volume within shipping packages and thus reduce freight cost and waste. The three solutions are: introducing new packaging options such as envelopes and paks, creating an optimal box selection strategy, and adopting a custom box-making system to the current process flow. For each option a systematic evaluation method is established, containing the analysis on financial returns, implementation difficulty and resources requirements, and the sustainability impacts. The method is utilized to evaluate three solutions proposed for Waters Global Distribution Center specifically as a sample case study. Finally, recommendations are made to Waters Corporation based on the evaluation results.