John Deere Grovetown

RightChain™ Warehousing Warehouse Optimization as a Service™ powered by rightchain.ai The World’s Most Advanced Warehouse Optimization and Planning Platform and Process John Deere, Grovetown Operations Update August 16, 2023

Strategic and Tactical AI-based Warehouse Optimization and Analytics At Scale and Speed

RightChain.ai/warehousing

RightChain™ Incorporated

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Contents CONTENTS

Warehouse Activity Insights Storage Mode Optimization Warehouse Layout Analysis

Contents Warehouse Activity Insights

SKU ABCDs Transaction Profiles

A Day in the Life Weekday Profile Activity and Labor Forecastability Move Type Profile Inventory Opportunities

SKU ABCDs | SKU ACTIVITY PARETO There is a super majority of activity concentrated in a small minority of SKUs, specifically, 50% of all warehouse transactions are executed against on 202 SKUs (4.2%). Also, a majority of the SKUs, specifically 2,600, have almost no transactional activity against them (5%). The concentrations and dilutions of activity across the distinct A, B, C, and D SKUs suggest the creation of A, B, C, and D “warehouses within the warehouse”.

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TRANSACTION PROFILE | Lines and Eaches Warehouse transactions are almost completely comprised of a single SKU with quantities ranging from 10 (first quartile) to 25 (median) to 75 (3 rd quartile).

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A DAY IN THE LIFE | Lines and Cube Activity days can be roughly characterized as VERY HEAVY (more than 8,400 lines and 28,000 cubic inches), HEAVY (between 6,800 and 8,400 lines and between 20,000 and 28,000 cubic inches), MEDIUM (between 2,200 and 6,800 lines and between 6,400 and 20,000 cubic inches), and LIGHT (less than 2,200 lines and less than 6,400 cubic inches). Staffing should reflect these distinctions.

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WEEKDAY PROFILE | Lines and Cube In rank order the transactional activity and related cube takes place on Tuesdays, Wednesdays, Thursdays, Mondays, and Fridays. The peak day’s activity is 17% higher than the valley day’s activity, again suggesting that staffing should be adjusted accordingly; and/or order shaping should be employed to balance activity across the weekdays.

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ACTIVITY and LABOR FORECASTABILITY TO activity is readily forecastable utilizing the forecasting engine in RightChain Forecasting. As a result, more sophisticated and optimized labor planning can be implemented to reduce overall staffing requirements.

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MOVE TYPE PROFILE The large majority of warehousing transactions and cube are executed on 350 (?picks) and 101 (receipts) move types. A small minority of moves and cube are executed on 998, 312, 417, 999, and 250 move types. The remainder of move types are inconsequential.

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INVENTORY OPPORTUNITIES SKUs are classified based upon three inventory dimensions – days on hand, dollars on hand, and cube on hand. Those SKUs with high days, dollars, and cube on hand are candidates for inventory interventions.

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Contents Storage Mode Optimization

Small Parts Storage Mode Alternatives Small Parts Storage Mode Optimization

STORAGE MODE OPTIMIZATION | Small Parts RightChain.ai simulates the productivity, storage density, accuracy, picking labor cost, restocking labor cost, occupancy cost, equipment cost, and error cost in each small parts picking storage mode including bin shelving, storage drawers, flow rack, carousels, and automated storage and retrieval systems (e.g. OPEX Perfect Pick, AutoStore, and KARDEX VBM).

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STORAGE MODE OPTIMIZATION | Small Parts Considering from among bin shelving, storage drawers, carousels, lift modules, and ASRS machines (Perfect Pick, AutoStore, and Miniload); overall small parts picking costs are minimized by the OPEX Perfect Pick solution.

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Contents Warehouse Layout Analysis

Warehouse Activities and Flows Warehouse Footprint Analysis Current Warehouse Flow and Cost Assessment Warehouse Reconfiguration Scenario I Warehouse Reconfiguration Scenario II Warehouse Reconfiguration Scenario III

Waste & Trash

INVENTORY CONTROL

OUTBOUND (25,000 sf)

Repack

Repack

Down Stack

P F C T P I C K

Floor Bulk Storage 5K 85,000 sf

SMF Rack

Rack Storage (176,000 sf)

Floor Bulk Storage 4K 37,000 sf

JDSC

MHE CHARGING

SEQUENCING RELOADS

INBOUND (30,000 sf)

EXPIDITE

Contents Footprint Allocation

By far, the two largest footprint consumers are rack and floor storage. The rack storage footprint could be significantly reduced via very narrow storage, mobile storage rack, and/or automated storage and retrieval. The floor storage footprint may be significantly reduced via additional lane depth optimization, racking to improve the clear height utilization, and/or mezzanines installed above the floor storage where other mezzanine-able warehouse activities may be located.

Current Warehouse Assessment

Lease Cost per Vehicle per Year

Annual Occupancy Cost

Hourly Wage Rate

Total Annual Wages and Occupancy

Annual Labor, Occupancy, and MHE Cost

Footprint (Area)

Total Annual Wages

MHE Cost per Year

Activities

Rack Storage 10 5508972123222528250176,000 $ 10.00 1,760,000 $ 9 10 908752126222522250 85,000 $ 10.00 850,000 $ 9 5 10 08752126222522250 37,000 $ 10.00 370,000 $ Bulk Floor 5K Bulk Floor 4K Downstack Inbound Outbound SMF Racking NCM & Rework JDSC Kitting Office & Break Area Sequencing & Reloads Perfect Pick Repack GRC Area Expedited Receipt Waste & Trash Removal JDSC Pick and Ship MHE Charging Area Inventory Control Maintenance Unit Occupancy ($/sf-year)

Headcount 8$ 22.61 361,760 $ $ 2,121,760 8$ 22.61 361,760 $ $ 1,211,760

Vehicles 5 $ 8,238 $ 38,269 $ 2,160,029 5 $ 8,238 $ 38,269 $ 1,250,029

Rack Storage Bulk Floor 5K Bulk Floor 4K Downstack Inbound Outbound SMF Racking NCM & Rework

8$ 22.61 361,760 $ $

731,760

5 $ 8,238 $ 38,269 $

770,029

5 2 2 10 0000000000000000 34,000 $ 10.00 340,000 $ 15$ 22.61 678,300 $ $ 1,018,300

6 $ 8,238 $ 49,430 $ 1,067,730

9 2 2 2 10 053222877722220 30,000 $ 10.00 300,000 $ 27$ 22.61 1,220,940 $ $ 1,520,940 18 $ 8,238 148,291 $ $ 1,669,231

9 2 2 2 2 10 82226822226220 25,000 $ 10.00 250,000 $

7$ 22.61 316,540 $ $

566,540

4 $ 8,238 $ 33,485 $

600,025 732,640 402,072 160,000 90,000 177,412 356,320 362,797 123,458 67,000 67,000 292,100 68,238 775,464 100,220

5 2 2 2 2 2 10 2722882528250 19,000 $ 10.00 190,000 $ 12$ 22.61 542,640 $ $ 732,640

$ 8,238

$

-

$

2 2 2 2 2 2 2 10 422222222220 18,000 $ 10.00 180,000 $ 2 2 2 2 2 2 2 2 10 22222228220 16,000 $ 10.00 160,000 $ 2 2 2 2 2 2 2 2 2 10 2222222720 9,000 $ 10.00 $ 2222222222 10 222222220 9,100 $ 10.00 $ 22222282222 10 82228250 8,500 $ 10.00 $ 222222222222 10 2262220 7,500 $ 10.00 $ 2222222222222 10 222280 7,000 $ 10.00 $ 22222222222222 10 22220 6,700 $ 10.00 $ 67,000

4$ 22.61 180,880 $ $

360,880 160,000 90,000 136,220 356,320 346,320 115,220 67,000 67,000 292,100 60,000

5 $ 8,238 $ 41,192 $

JDSC Kitting

0$ 22.61

$ $

- -

$ $

$ 8,238 $ 8,238

$ $

- -

$ $

Office/Break Area Sequencing/Reloads

90,000 0$ 22.61 91,000 1$ 22.61 $

45,220 $

5 $ 8,238 $ 41,192 $

Perfect Pick

85,000 6$ 22.61 271,320 $ $ 75,000 6$ 22.61 271,320 $ $

$ 8,238

$

-

$

Repack

2 $ 8,238 $ 16,477 $

GRC Area

70,000 1$ 22.61 $

45,220 $

1 $ 8,238 $

8,238 $

Expedited Receipt

$ 22.61

$ $

- -

$ $

$ 8,238 $ 8,238 $ 8,238

$ $ $

-

$ $ $ $

Waste/Trash Removal 222222222222222 10 2 2 2 0 6,700 $ 10.00 $ 2222222282222222 10 2 2 0 6,600 $ 10.00 $ 22222222222222222 10 2 0 6,000 $ 10.00 $ 222222222222222222 10 0 6,000 $10.00 $ JDSC Pick and Ship MHE Charging Area Inventory Control

67,000 0$ 22.61

- -

66,000 5$ 22.61 226,100 $ $

60,000 0$ 22.61

$

-

$

1 $ 8,238 $

8,238

60,000 14$ 22.61 633,080 $ $

693,080 10 $ 8,238 $ 82,384 $

Maintenance

2222222222222222222 10

5,500 $10.00 $

55,000 1$ 22.61 $

45,220 $

100,220 -

$ 8,238

$

-

$

518,600

$ 5,186,000 123

$ 5,562,060 10,748,060 $

66

$ 543,732 11,291,792 $

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Warehouse Layout Scenario I Automate all small parts and medium parts storage and picking. Consolidate floor and bulk storage. Create A, B, and C popularity zones within each storage and picking area. “Dedicate” dock doors to receipt types – small parts inbound (SPIB), medium parts inbound (MPIB), and floor and bulk inbound. Locate supporting activities along the far side.

JDSC

?

OUTBOUND

Inv Contr

A’s

A’s

A’s

A’s

Medium Parts Automated

Small Parts Pick & Kit

Available Footprint

A Floor & Bulk Storage

B’s

B’s

MHE Chrg

Storage & Retrieval

C’s

C’s

C’s

C’s

?

?

Floor & Bulk Inbound

MPIB

SPIB

Available Footprint: 75,000 sf Construction CAPEX Avoidance: $11,250,000

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Warehouse Layout Scenario II Automate all small parts and medium parts storage and picking. Consolidate floor and bulk storage. Create A, B, and C popularity zones within each storage and picking area. Install mezzanine above floor/bulk storage. Locate “support” activities on mezzanine. “Dedicate” dock doors to receipt types – small parts inbound (SPIB), medium parts inbound (MPIB), and floor and bulk inbound. Locate supporting activities along the far side.

JDSC

OUTBOUND

A’s

A’s

A’s

A’s

Medium Parts Automated

Small Parts Pick & Kit

Available Footprint

A Floor & Bulk Storage

B’s

B’s

Storage & Retrieval

C’s

C’s

C’s

C’s

MPIB

Floor & Bulk Inbound

SPIB

Available Footprint: 100,000 sf Construction CAPEX Avoidance: $15,000,000

Mezzanine

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Warehouse Layout Scenario III Automate all small parts, medium parts, and floor bulk storage and picking. Consolidate floor and bulk storage. Create A, B, and C popularity zones within each storage and picking area. “Dedicate” dock doors to receipt types – small parts inbound (SPIB), medium parts inbound (MPIB), and floor and bulk inbound. Locate supporting activities along the far side.

JDSC

OUTBOUND

Inv Contr

A’s

A’s

A’s

A’s

Medium Parts Automated

Automated Floor & Bulk Storage

Small Parts Pick & Kit

Available Footprint

?

A

B’s

Storage & Retrieval

B’s

?

C’s

C’s

C’s

C’s

?

MPIB

Floor & Bulk Inbound

SPIB

Available Footprint: 160,000 sf Construction CAPEX Avoidance: $24,000,000

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Section 1 PriceSmart vs Domestic Warehouse Club Supply Chain Configurations RightChain™ Warehousing For more information... RightChain.com