From SCDigest's On-Target E-Magazine
Dec. 6, 2011
Logistics News: Integrating Manual with Automated Operations Reduces Headcount While Increasing System Throughput, Flexibility & Adaptability
Can Too Many Worker Bees Clog-up The Hive?
Cliff Holste, Materials Handling Editor
One of the key advantages often cited by proponents of manually operated DCs is the relative ease in which they can increase or decrease labor. At some point though, congestion becomes a factor and adding more labor does not yield more volume. When this happens productivity, as measured in units shipped per labor hour, drops. Worse yet, throughput takes a hit resulting in shipping delays at the most critical peak time. Unfortunately, it’s not always easy to determine where the volume verses incremental labor tipping point is.
In spite of labor and throughput issues, the manual order picking and shipping model is the most common order fulfillment strategy for a broad spectrum for both large and small consumer goods distributors.
SCDigest Says: |
|
By leveraging the capabilities of the WMS to including both primary and secondary sorting functions, the company can enjoy the benefits of automation and the flexibility of manual processing in a mutually exclusive, but still integrated, system configuration. |
|
What Do You Say?
|
|
|
|
Over 70 Percent of DCs Have Little or No Material Handling Automation
The surprising truth is that according to a Supply Chain Digest survey (see - “Automated Case Picking 2009”), less than 30% of order fulfillment distribution centers utilize automated picking and/or shipping methods. A total of 72% of the respondents reported using manual methods in lieu of automated picking and sorting systems: 37% of order picking is done using pallet jacks and 35% via order picker truck.
Interestingly, 76% of respondents admitted to having medium to high concerns about case picking costs, and another 60% reported having medium to high concerns relative to inventory and order picking accuracy issues.
SC Digest recently published an On-Target Newsletter entitled “Logistics Companies Challenge System Automation Providers For More Comprehensive “Plug & Play” Capability”. As stated in this article, the adoption of automated material handling system technology has been slow in the U.S. because many companies consider fixed path, bolt-to-the-floor automated systems too complex and inflexible to adapt to rapidly changing business requirements. Therefore, they fear that their investment in automation might become prematurely obsolete.
We subsequently conducted phone interviews with non-automated companies that ship at least 20,000 to 60,000 loose cases per day. They consistently cited SKU diversity, customer order profile volatility, and customer value added service requirements (VAS) as being the primary reasons in favor of manual operations.
These companies tend to rely principally on WMS, ADC, and voice directed technologies to drive down cost while trying to maximize throughput. Over the years, they have become so proficient and finely tuned with their manual operations that justification for material handling automation is considered to be beyond reach.
However, when you dig deeper, the above statistics reveal that companies who are “married” to their manual methods are nevertheless looking for relief from growth related incremental labor cost and order fulfillment accuracy issues. This is probably due to the need to increase headcount and/or working an excessive amount of OT hours just to keep up with normal growth – not to mention the ciaos that typically happens during peak periods. This is the consequence of managing an expanding labor force within the confines of a fixed space facility. In other words – too many worker bees clogging up the hive!
(Distribution/Materials Handling Story Continues Below
) |