Not long ago I had a conversation with a logistics executive who manages a 450K sq. ft. DC. He mentioned that he is somewhat frustrated that he has to wait until the end of the day for an operations summary report to learn how they performed. It’s all good information to have, he said, but by then it’s not relevant - its history and it’s too late to do anything about it.

He went on to said that recently while watching an evening news report on the gulf oil spill crises, suddenly they broke into the broadcast to show live video (taken from a news helicopter flying overhead) of a gas main explosion. This accident had occurred just a few minutes before, somewhere in Texas, killing 3 construction workers and injuring several others. He said that nowadays he is more current on local and national news than he is with what’s going on in his own operation.

No doubt we are living in a world of real-time information flow. There’s an accident on the highway and immediately the location is emailed and text messaged to drivers, or better yet, downloaded real-time into their GPS so they can avoid the congestion.

Managing Processes in Real-time

Going back a few years, DC mangers had to wait until the end of the day to find out if they hit their target numbers – too late to do anything about it. Now, with real-time performance displays, managers can see whether they are hitting the numbers incrementally throughout the day, and if not, what areas are falling behind. This then allows management to adjust operations by using the real-time information to balance demand for products with the resources and workload in the facility to quickly get back on track.

The primary function of the DC has always been receiving, putaway, picking, packing, and shipping. That’s not going to change. However, for many logistics companies real-time order processing is impacting the way those basic functions are executed.

Real-time information is the key that makes this “new normal” possible and cost effective as it directs materials handling operations.

For example – A worker performs a put-away or stock move. Using a mobile handheld computer, he scans the bar-code label on the product he is moving, and the system recommends the optimal location for the product to be placed. The worker can select that location, or override it and place it in another location at his discretion. He scans the bar-code of the destination location to ensure that he has placed the item in the correct location. The WMS is immediately updated as to the status of the goods in real-time, and even knows when goods are in-transit, being moved from one location to another.

The result or “business value” is improved warehouse slotting, warehouse and administrative labor savings, and improved inventory accuracy.

Automatic “Cruise” Control

The way real-time automation control works in a picking and sortation system for example – the system software “understands” the priority of the central merge picking lane release, controlling when and how cases are released from each lane to the sorter. Any interruption in flow is reported immediately.

Meanwhile, the software is monitoring the sortation lanes to determine where to send cartons before sorting them, i.e., they may need to go to the product sequencer buffer if building store ready pallet loads (look for more on product sequencing in upcoming articles).

In another example – if the real-time control system senses heavy throughput at a particular shipping lane, the control system can automatically dispatch additional operators (equipped with voice units or RF terminals) to that lane to head off congestion and delays. Or, in a multi-line palletizing system, if a palletizing machine goes down, the system can automatically direct product to another palletizing line.

This ability to reallocate work applies to filling unexpected and/or expedited orders as well – an imperative in today’s DCs. Every warehouse management system (WMS) allocates inventory and organizes picking waves at the beginning of the shift based on the orders that have been received into the system. But then, sometime well into the pick cycle, an order becomes a higher priority than was originally planned, or a new order, that must be shipped today, shows up. Sound familiar? No problem – with real-time order processing, the system can internally reprioritize the remaining orders to accommodate the new or expedited order without interrupting other operations.

In still another example – in DCs where the number of active products exceeds the number of available picking slots, real-time information can be used to manage a dynamic pick face strategy. In this example selected products are stored in a mini-load storage system to maximize cube storage space then delivered as needed to an open pick location. In this way, one picking location may be used for several products on an as needed basis.

Managing Labor in Real-time

Assuming that workers have been cross-trained, real-time information can be used to optimize the workforce in the DC. For instance when plans change, as they often do, the control system can look at requirements and the human resources assigned to each area, then reallocate based on the new demand. If volume in receiving is low, and there are more workers than required, they can be reassigned to another area where volume is high.

In this way labor management systems (LMS) and WMS work in tandem with voice and/or RF technologies to reallocate labor and tasks throughout the DC. With most of the technologies now available, managers get a workflow dashboard that provides a visual representation of everything going on in the DC at that time and can easily change a task or leave in place an ongoing task.

Real-time Control Extends Beyond the DC

Using real-time point-of-sale (POS) and store replenishment systems, store managers can see that they are about sold out of a specific SKU in one store, while there is a surplus in another store. Now instead of getting on the phone to manually arrange a transfer from one store to another, they can do it on-line. The surplus will be sent immediately back to the DC where it will be received and crossdocked to the next truck going to the store that needs it.

Likewise, with visibility into the contents of containers coming into port along with real-time inventory levels in DCs and stores, retailers can postpone the preallocation of inventory on a cargo ship until it arrives at the dock, then crossdock it to the store based on demand.

Final Thoughts

Increasingly, businesses operate in a demand-driven world. That in turn is driving the requirement to operate in real-time along with the development of processes that are enabled by real-time. Upgrading to real-time mode should be high on the priority list for every logistics company that wants/needs hands-on control of operations.

Agree or disagree with Holste's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the website. Upon request, comments will be posted with the respondent's name or company withheld.

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