Midsize DCs:

Midsize DC operations (250,000 sq. ft. and under with less than 40,000 cases pick/shipped per day) who typically offer a large range of general consumer goods, including a broad mix of unique product lines, all of which are available for next day shipment, have a different set of challenges.

To compete effectively against their larger counterparts, many midsize DCs are seeking ways to make their operations more flexible and agile in order to satisfy their customers’ demand for more customized order fulfillment services, including ecommerce and a host of specialized value added services. In addition, many are being required to provide promotional, rainbow, mixed case, and even store-ready and aisle specific palletized loads.

Typically, companies in this midsize range are invested in some level of material handling picking, sorting and WMS technology. For them the next step may be to deploy 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?”

Another major challenge for DCs in this midsize range is returns processing, also referred to as reverse logistics. How they handle returns can have a direct affect on customer satisfaction and bottom line performance. For this reason, many of these DCs, especially those with high-end and/or specialty products, outsource returns to companies who specialize in reverse logistics processes, see - “Technology Services Company Eases Reverse Logistics Woes of Large Manufacturers”. However, most take on the challenges associated with returns internally, usually at the risk of increasing operational complexity.

Large DCs: (over 40,000 case picks per day) are continually searching for ways to do more with less while lowering their per piece handling. DCs in this range are generally the result of consolidation of two or more smaller DCs.

Consolidation of multiple DCs, while cost effective from a management and facility utilization perspective, places more pressure on material handling equipment, controls, and software systems to handle multiple tasks in a high-volume environment. Filling orders placed through multiple sales channels (e.g., direct, Internet, catalog, distributors, retailers) keeps logistics executives seeking the most efficient order processing and throughput strategies.

For these high volume operations deploying the latest in material handling system technology is essential. They must 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”. Where item picking is required, particular attention should be paid to the potential benefits of “Product-to-Picker” or “Put” systems. Additional information and system examples can be found in “Put Systems Provide A 3X Increase in Order Fulfillment”.

Final Thoughts

For far too many companies improving warehousing and distribution center processes remains a goal, not a reality. These companies appear to be sitting on the sidelines. While that is understandable given the current market uncertainties, over time it can lead to compliancy and even stagnation.

Still, the interest in material handling automation, even among small DCs, is strong and growing. Companies that are still operating with “1970s push cart methods” understand that the time has come to upgrade. This is especially true for those companies who recognize the importance of ecommerce on their business, as they also recognize the role DC automation plays in their ability to provide the required quick response systems.