Challenge
A multi-billion company, growing year over year by more than 10%, decided to enhance its warehouse network by building out a cross-dock distribution center (DC) in Central Europe. The objective was to increase weekly capacity from 5.5 million to 9 million units.
The main project constraints included:
- Designing the solution within the existing building layout of 85,000 sqm.
- Limited workforce availability in the region.
Actions
To address these challenges, the company launched an ambitious project to rebuild and optimize the existing DC at its current location. Our consulting team supported the client in three main areas:
- Strategic planning – We conducted a comprehensive analysis of expected product flows, order profiles, service level targets, and existing processes. This ensured that the new DC design would meet capacity requirements while fitting into the available building layout.
- Equipment selection – The facility was equipped with material-handling equipment (MHE) tailored to process needs and aligned with the project budget. The equipment scope included automatic sorting machines, palletizing robots, and an extended conveyor system linking sorting and shipping areas.
- Project management – Our experts managed the rebuild on-site, ensuring timely execution while also supporting team building and training. Stakeholder management was conducted across Supply Chain, Operations, and Commercial functions to align project goals and delivery.
Results
The project was delivered on time and within budget. Key outcomes included:
- Increased weekly building capacity to 9.5 million units.
- Launch of a second night shift and hiring of 700 additional associates within 6 months.
- Successful transfer of inbound deliveries from customer-facing fulfillment centers, increasing their capacity by ~6% during peak periods.
- Achieved Overall Equipment Efficiency (OEE) of 94% in the first year.
- Maintained a zero-accident record during implementation and first year of operation.
Additionally, a new fulfillment center (FC) was opened in November, with a capacity of 1.2 million orders weekly under a 22/7 schedule. Ahead of the Christmas peak season:
- 800 employees were hired and trained, with the flexibility to onboard another 140 if needed.
- Delivery time to customers was reduced by 1.2 days compared to previous network capabilities.
- The FC successfully handled its first peak season without missing a single day of operations, despite working with non-standard equipment and newly onboarded staff, all while maintaining a zero-accident record in the first 60 days.
Summary
A leading European e-commerce retailer expanded and optimized its warehouse network by upgrading a cross-dock distribution center and launching a new fulfillment center. Through strategic planning, tailored equipment selection, and effective project management, the client:
- Increased weekly capacity from 5.5 to 9.5 million units.
- Enhanced fulfillment capacity by 6% during peak.
- Reduced customer delivery time by 1.2 days.
- Achieved these results within budget and with zero accidents.