Logistics News

By Cliff Holste

February 8, 2012

Walking -- Good Exercise For Personal Fitness, Bad For Distribution Center Productivity

In the DC, Time Lost while Walking from One Location to Another Cannot Be Recouped

The challenge for DCs, especially those with little or no automation, is maintaining an efficient operation given a fragmented narrow-cast market that drives SKU proliferation and increased inventory levels. As a consequence, the typical 20/80 curve (where 20% of SKUs represents 80% of sales) may be gradually degrading to 20/65, or worse. This means that the concentration of high volume SKUs is reducing while mid to slow movers are expanding resulting in longer put-away and pick paths. Assuming overall unit sales volume remains mostly unchanged, DC productivity takes a hit.

Holste Says: The good news is that there are both practical and affordable solutions that can greatly reduce walking time, speed-up order fulfillment, and increase DC productivity. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

Unfortunately, many companies are still operating DCs where stock putaway and order fulfillment tasks require lots of travel time spent afoot. Some would say that walking is a natural part of the DC working environment – a requirement to “getting the job done”. While that may be true, when 1/3 or more of a workers time is spent walking from task to task, that adds-up to a sufficient amount of loss productivity. It’s like losing 4 months a year per person.

For those companies the good news is that there are both practical and affordable solutions that can greatly reduce walking time, speed-up order fulfillment, and increase DC productivity.

New Methods for Managing DC Efficiency & Productivity

While SKU proliferation has consequences for all DCs, there are many distributors who (because of consumer product regulatory codes) are forced to maintain a dedicated picking position for even the slowest of the slow movers, taking up valuable pick-face space that is poorly utilized. In either case, significant improvement can be found through the adoption of a new generation of Product-to-Picker technologies.

Mini-load automated storage and retrieval systems (AS/RS) that handle individual cases, totes and trays, are good product-to-picker solutions for managing medium to slow moving SKUs. In this scenario, when a slow-moving SKU is required, the crane-like multi-shuttle system retrieves that item from its high bay storage location and creates a temporary pick face for it. When order fulfillment is complete the AS/RS places that SKU back in storage. This eliminates the need for a pick face in the DC for each slow mover, freeing up valuable space as well as improving DC productivity.

A semi-automated version of the above utilizes dynamic slotting functionality, which is available in most Warehouse Management Systems (WMS). In this scenario when an order is released that includes a slow moving SKU without a dedicated pick face, a temporary pick slot is created by the WMS. That slot is then filled (manually) with product from reserve storage to meet that need.

In some cases companies are deploying horizontal carousels to handle slow movers. For example - Coty Inc., the world’s largest fragrance company, found that while its 900 slowest moving SKUs amounted to only about 2 percent of total volume, they led to substantial bottlenecks in order processing. Coty implemented two 65 foot long, five-shelf, light-directed horizontal carousels, which led to much more effective picking operations and storage density for those slow movers.

It is noteworthy that carousels are used extensively in service parts distribution – an environment often characterized by huge numbers of mostly slow moving SKUs.

For some businesses, especially those with an ever growing array of slow movers, moving from a “pick” operation to a “put” operation may provide a more efficient solution - see (Put System Provides A 3X Increase in Order Fulfillment)