Velocity Based Storage for Owens Corning

Owens Corning is the world’s largest manufacturer of fiberglass and insulation products.

Project Objectives/Challenges

Owens Corning engaged Sedlak on three separate efforts toward improving its overall distribution network:

In Delmar, New York, the company needed additional warehousing space near its manufacturing plant. It leased a facility to be run by a 3PL, but needed to make sure the new distribution center would be run optimally.

For its Newark/Hebron, Ohio operations, Owens Corning sought a network analysis for its regional customer base to determine an optimal distribution location.

At facilities in Newark, Ohio, and Waxahachie, Texas, the company was reviewing in-house distribution practices, 3PL contracts, and facility leases.

What Sedlak Did

Sedlak performed an ABC analysis on the Owens Corning product line manufactured in the Delmar region.

We conducted a location analysis for the Newark/Hebron operations using key model assumptions, centroid of demand analysis, and a transportation cost equation.

Our team conducted an evaluation of the Newark and Waxahachie facilities’ production and shipping volumes, shuttle costs, 3PL costs, lease agreements and in-house distribution costs.

We also developed improved layouts for both facilities and determined the best strategy for use of 3PL and in-house operations.

Velocity-based slotting and storage enhancements in Delmar reduced the number of touches associated with the fastest moving product, resulting in an overall projected 25% labor reduction.

An optimal location for the Newark/Hebron operations was determined to be near the Owens Corning manufacturing plant in Newark.

Optimal layouts for the Newark and Waxahachie facilities were developed, and the best strategy for use of 3PLs versus in-house operations, and owned versus leased facilities were decided. Both operations reduced total cost of operations through diminished labor, rent and transportation costs.