Background

A leading pharmaceutical company, which we’ll call “MediCareCo,” approached NexStride Consulting to enhance the operational efficiency of their 62,000 sq. ft. temperature-controlled warehouse in Bethlehem, Pennsylvania. The facility supports critical supply chain activities, including storing raw materials like glass bottles and distributing anesthesia products globally. While the warehouse met current demands, inefficiencies in layout, inventory management, and space utilization hinted at missed opportunities for cost savings and scalability.

Assessment Process: A Strategic Approach

NexStride conducted an in-depth, two-day assessment, combining leadership interviews and on-site observations. Our goal was to identify immediate improvement opportunities while crafting a phased roadmap for long-term success.

Key Observations

Spatial Organization Challenges

• High-traffic areas were inefficiently located, leading to unnecessary operator movement and delays.

• The warehouse layout lacked optimization for storage capacity, particularly in subleased sections.

Inventory Management Limitations

• A lack of detailed inventory analysis restricted effective slotting and reorganization.

• Subleased storage areas relied on manual, spreadsheet-based inventory tracking, which hindered efficiency.

Missed Opportunities in Sustainability

• Lighting and temperature management systems were outdated, increasing energy costs.

• The facility showed potential for integrating energy-efficient solutions, such as LED lighting and air curtains.

The Roadmap: Tailored Solutions for MediCareCo

Recognizing the need for a phased, cost-conscious approach, NexStride outlined three distinct paths forward:

Path A: Efficiency and Utilization Focus

Investments:

• Implement SAP EWM for advanced inventory management.

• Reconfigure racking to align with optimized slotting.

• Upgrade forklifts to improve material handling.

Results:

• Up to 50% productivity improvement and 40% capacity gains.

• Payback within 18 months, due to streamlined workflows and increased throughput.

Path B: Cost Optimization Focus

Investments:

• Relocate slow-moving items and implement additional racking for subleased inventory ($20,000-$70,000).

• Introduce auto-light switches and striping for navigation clarity.

Results:

• Up to 20% capacity improvement and 15% traffic reduction.

• Payback within 12 months, driven by reduced energy costs and optimized space utilization.

Ideal Path: Long-Term Transformation

Investments:

• Advanced automation, including dock-to-stock processes and robotics for repetitive tasks.

• Sustainability upgrades like solar energy and high-density racking systems.

Results:

• Up to 200% capacity gains and a 50% reduction in energy costs.

• Payback within 4-5 years, supported by long-term operational savings and scalability.

Our Recommendations

NexStride’s assessment revealed that while MediCareCo didn’t need to implement all improvements immediately, a phased approach was crucial to achieving their goals. We advised starting with Path B for quick wins and cost-effective changes, followed by a gradual progression to Path A as business demands evolved.

By presenting comprehensive ROI calculations for each path, we ensured leadership could make informed decisions about capital allocation. For example, the additional racking for subleased items alone could cut storage costs by 50%, from $8.30 to $4.30 per pallet per month. Meanwhile, the proposed SAP EWM system promised to reduce high-traffic bottlenecks by 30% and improve picking and put-away times by 50%.

Results and Impact

By adopting NexStride’s recommendations, MediCareCo is set to achieve:

• Short-Term Wins: Improved space utilization and reduced operational costs through targeted racking and energy-saving solutions.

• Mid-Term Gains: Enhanced productivity and workflow efficiency via reconfigured layouts and upgraded systems.

• Long-Term Scalability: Future-proof operations with advanced automation and sustainability measures.

NexStride’s consultative approach ensures that businesses like MediCareCo don’t just address today’s challenges—they prepare for tomorrow’s opportunities. Whether you’re looking for quick wins or long-term transformation, NexStride delivers solutions grounded in real-world ROI and operational excellence.

Ready to optimize your operations? Schedule a consultation today.