If it’s true that regardless of size improving productivity is a common theme, then does size matter when it comes to the actions these companies need to take to succeed? The answer is yes, and the following are a few of the reasons why:

Small Size DC Operations

Smaller companies (under 10,000 case picks per day) who offer unique and/or high end products typically do a commendable job in shipping their product to customers with low order cycle times (fulfilling orders within two days or less of order placement), and in providing an array of customized boutique style packaging services. Unfortunately, oftentimes their distribution operations are labor intensive. IT infrastructures and WMS functionality may also lag behind in many of these companies as compared to larger more automated operations. At some point these companies hit the wall in productivity gains, and they can no longer squeeze more productivity out of their manually intensive systems. Still others fear that their customer centric methods will not scale up to support their operations as the economy improves and the company expands.

These operations would probably benefit from deploying low cost batch order picking and sorting techniques as described in the SCDigest article “Is Poor Man’s Sortation System A Smart Answer For Smaller Distribution Centers”). With this approach they can maintain their flexibility and uniqueness while improving productivity.

Midsize Companies

Midsize companies (under 40,000 case picks per day) offering a large spectrum of commodity type products which are typically shipped same day or next day, have a different set of challenges. To compete effectively against their larger counterparts, many midsize companies are seeking ways to make their operations more agile to capitalize on their customers’ increasing requirements for tailored order fulfillment, and value added services at competitive rates. Their ability to be more agile and responsive than larger competitors is the key to winning and keeping business.

Presumably, these companies have already deployed some level of material handling picking, sorting and WMS technology. For them the next step may be to invest in a Warehouse Control System (WCS). For more insight into how beneficial a WCS can be see - “Can a New Warehouse Control System Breathe Life into a Tired DC?”

Large Companies

Large companies (over 40,000 case picks per day) are continually searching for ways to do more with less while lowering their per piece handling. Consolidation of multiple sites, while cost effective from a square footage perspective, places more pressure on the material handling, controls, and software systems to handle multiple tasks in a high-volume environment. Filling orders placed through multiple channels (e.g., direct, Internet, catalog, distributors, retailers), recognizing the need for robust labor management, and addressing the on-going challenges of slow movers and ever increasing SKU counts and inventory volumes, keeps logistics executives seeking the most efficient order processing and throughput strategies.

For these high volume companies deploying the latest in material handling system technology is a must! They should give serious consideration to advances in Automated Case Picking (ACP) strategies such as those described in the Supply Chain Digest Report “Automated Case Picking 2009”. Particular attention should be paid to the potential benefits of “Product-to-Picker” (sometimes referred to as ‘Put System”) methodology. Additional information and system examples can be found in “Put Systems Provide A 3X Increase in Order Fulfillment”.

Final Thoughts

For many companies, improving warehouse and distribution center productivity remains a goal, not a reality. These companies appear to be taking a wait and see approach. While that is understandable given the current market uncertainties, over time it can lead to compliancy and even stagnation.

Still, industry reports show that a growing segment of companies are taking advantage of the “buyers market” to upgrade equipment and systems that enable them to improve order cycle times and throughput. These top performers are leveraging more technology, have better data visibility, and work harder at cross-training their staffs. Chances are good that they will be able to quickly respond as the market improves.

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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