Logistics News: Distribution Center Improvement Wish List for 2009

As budget approval time draws near, Logistics and Distribution Managers struggle to get their share of the shrinking capital expenditure pie.  It is, therefore, critical that their “wish list” include funding for projects that deliver the biggest bang for the buck.

By focusing on improving core warehousing and distribution functions, companies can ensure that their capital dollars will be wisely invested.

While every Warehousing and Distribution Center operation is different and unique, the core functions of Receiving and Putaway, Storage and Retrieval, Picking and Shipping, are common to all.  It is therefore of the utmost importance that these core functions be performed flawlessly if the business is to be vibrant and competitive.  Those companies looking to ramp up performance in these key areas need to undertake an end-to-end assessment of their current DC technology and process infrastructure.

The following is a list of recommendations that should be on every DC manager’s wish list for improvement:

• Increase inventory accuracy
• Increase inventory turns
• Improve order fulfillment accuracy
• Improve throughput speed
• Improve ability to meet customer-specific requirements

Below are some ideas on how to get there.

Steps to Success

• Relook at your numbers. Doing SKU and activity profiling annually can often show important changes to the business, and support improvements in layout, slotting, software configuration, and other processes.
• If you are still using a spreadsheet-based warehouse inventory monitoring system, look hard at a plan to migrate to a Warehouse Management System (WMS) supported by bar code scanning, or even RFID.  Deploying a WMS will provide measurable gains across all of the core functions.
• Invest in formal training to allow for a more agile operation.  By cross-training your employees in multiple disciplines, you will be better able to respond to throughput issues immediately.
• Make customer order on-time rates a top priority.  Best in class performers fulfill their customer orders typically in less than one day.
• Focus on enhancing visibility to support better communications up and down the supply chain.  Provide a company-wide view of real-time order status, labor status, and active inventory.  This can be accomplished by deploying a Warehouse Control System (WCS) that can be accessed via the internet.
• Upgrade your current WMS if older than 4 years.  Companies operating an older WMS often do not know what functionality they are missing out on that could drive improved throughput and productivity or enable more efficient support for seasonal fluctuations or customer demands for tailored fulfillment services.
• Evaluate emerging best practices for automation.  Material handling providers are constantly introducing new technology, equipment, and system designs that enhance order processing, cross docking, labor management, slotting, etc.  You can learn about the new advancements by attending ProMat 2009 and other industry related shows and conferences throughout the year.

DC managers looking to enhance operations should analyze which areas of their operation demand the most attention and focus on those initially.  It’s likely that a combination of core improvements will prove more beneficial than an investment in a single productivity improvement application.

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