Cleansheet Analysis Framework for Warehouse Cost Optimization PPT

This PPT slide, part of the 23-slide Warehouse Costing: Cleansheet Analysis PowerPoint presentation, outlines the Cleansheet Analysis, a structured approach aimed at identifying cost efficiencies within warehouse operations. The primary objective is to ascertain the lowest possible costs associated with various elements of warehouse management and compare these with the actual costs incurred. This analysis serves as a diagnostic tool to highlight discrepancies and areas requiring attention.

The framework consists of 3 main steps. The first step, "Ascertain Critical Parameters," focuses on identifying volume drivers such as the number of SKUs, orders, and order lines, along with key assumptions related to packaging, handling times, and equipment. This foundational understanding is crucial for accurately assessing cost structures.

The second step, "Perform Bottom-up Calculations," involves creating a detailed model for each significant warehouse process, including receiving, storage, picking, packing, and shipping. This granular approach allows for a comprehensive breakdown of costs associated with each process, facilitating a clearer understanding of where inefficiencies may lie.

The final step, "Determine Ideal Throughput Metrics," emphasizes the establishment of benchmarks for optimal performance. This includes determining ideal operating costs, the number of full-time equivalents (FTEs), space requirements, and capital expenditures (CAPEX). By comparing these metrics against actual performance, organizations can identify gaps and implement targeted strategies for improvement.

Overall, the Cleansheet Analysis provides a systematic methodology for organizations to prioritize their cost management efforts, ultimately leading to enhanced operational efficiency and better resource allocation.

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