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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

August 19, 2015

Logistics News: Searching For Solutions To Complex Logistics Challenges

Can DC Automation Provide a "Competitive Advantage"?

Holste Says:

Finding ways to optimize operations is paramount to increasing efficiency and productivity.
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Previous Columns by Cliff Holste

Sorting It Out: Shippers Looking To Increase System Capacity Are Surprised To Find It May Already Exist!

Sorting It Out: For Shippers - Benefits Of Real-Time Control In The DC Are Huge!

Sorting It Out: Shippers Looking to Improve Operations Choose Customer Centric Approach

Sorting It Out: Productivity is a Crucial Factor in Measuring Production Performance

Sorting It Out: Packaging Construction Impacts on Logistics Operations


Productivity and efficiency issues are critical to maintaining a profitable DC operation. Caught between escalating cost, aggressive competition and a constantly accelerating flow of new technology, today’s operations managers feel an unrelenting urge to act. Yet the very complexity of the problem argues hesitation realizing that there are no assurances that the decisions made will be the right ones, or that the targeted productivity and throughput goals will be realized.

Before moving ahead with more aggressive plans, it’s a good idea to review core functional areas such as: receiving, put-away, picking, value-added services, order consolidation and shipping. Also, take a close look at SKU slotting practices, current order batching and picking profiles, and pick path routing strategies. Take special notice of areas where material flow is oftentimes congested or in some way constricted. Finding ways to optimize operations is paramount to increasing efficiency and productivity.

If all appears to be in good shape, the next step would be to consider more advanced levels of order fulfillment such as picking, sorting, and palletizing systems all of which are mature technologies with a proven track record of success across a broad range of applications.

However, as it relates to automation, first time buyers need to be aware that automated systems can be difficult to reconfigure. Getting it right the first time is critical. If your business is in any way driven by popular demand or fashion orientated, then you know that product life cycles can be as short as just a few weeks. Changes to SKUs, customer order profiles, and value-added services are normal and to be expected. Therefore, system flexibility and adaptability are critical considerations - please review “When It Comes To DC Automation – The Questions Are: When, What, and How Much”.

The ebb and flow of work in most DCs varies daily and seasonally resulting in extreme highs & lows throughout the year. System operations (staffing and throughput) must be efficient and productive through all of the various business cycles. Automation that optimizes the labor component will consistently deliver the best overall system performance independent of frequently changing business activity levels. However, system ROI may be protracted if volume remains low for long periods.

Note: When considering any major operational changes or upgrades, especially if new order processing methods are involved, be sure to have a well thought-out backup plan or temporary workaround that will keep the operation running while faults are being corrected. This is especially important if experimental or prototype equipment is being deployed.

Final Thoughts

In spite of the associated business challenges, companies should embrace change. It forces company planners to expand their technology comfort zone in order to compete at a higher level. As such, it presents an opportunity to improve and grow the business.



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