Holste Says: |
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| Companies can identify particular opportunities like, compliance labeling, or product sequencing for example, that can provide immediate specific benefit without incurring the overhead cost of a total system solution. |
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What Do You Say?
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Understanding Leading Pinch-Points
The above scenario is not by any means an extreme example. Having once spent 9 months working in a newly automated DC as a trainer and facilitator, I have firsthand experience of how intense (and in some cases - lousy) the work can be. However, I also know that while there may be no easy quick-fixes, there are better methods available.
From that perspective, and based on response to surveys and phone interviews conducted by SCDigest and Distribution Digest, the following is a list (not in any particular order) of the leading "pinch points" for companies that are looking to improve DC operations:
• SKU Growth - As SKU proliferation increases, so does the space required to access (pick) them. Slow movers, which make up the majority of SKUs, are taking up more and more space, even requiring a separate pick face in some operations. Companies are running out of room while pickers are walking miles every day.
• Throughput and Accuracy – The trend towards smaller shipments and higher order frequency continues to plague DCs. Orders must be processed, picked and shipped with ever increasing speed. Accuracy in order fulfillment is vital. Picking errors lead to customer dissatisfaction and higher costs. The pressure to perform is intense and felt across the board by all who work in the DC.
• Compliance Issues – The growing demand, especially in retail distribution, for customer specific labeling and VAS, is causing some companies to process as much as 30% of their case volume outside of their current “automated” material handling systems. This increases order processing complexity and interruptions to the normal workflow pattern raising the stress level across the operation.
• Peak Periods - Seasonal increases in throughput rates require the addition of seasonal labor. Seasonal labor is increasingly more difficult to hire, train, motivate and manage. Integrating them into the fulltime workforce is problematical.
• Real-Time Control - Distribution center managers need to know exactly where every item is located in the DC as well as the ongoing status of the order fulfillment process. The technologies that make all this possible are not perfect (it requires human interaction) things that can go wrong usually do.
• Increase Productivity - There are constant demands to “do more with less” - provide more productivity in less space with fewer people. That means new DCs have to provide more throughput in a smaller building footprint. Existing DCs must deal with more SKUs at a greater velocity within the existing building footprint.
• Product Sequencing - Retailers have had to reduce in-store labor and the time it takes to restock shelves with product. This is forcing DCs to ship store/aisle-ready unit loads. Palletized loads and cartons must arrive at stores presorted and grouped by product family in aisle stocking sequence. Even with the benefits of sophisticated automation, the challenges are great to satisfy store replenishment orders.
• Work Related Injuries – Distribution centers are typically busy and noisy places typically handling huge amounts of diverse products and volume. DCs are notoriously physically challenging places to work. Injuries can be devastating to the health of workers, not to mention medical and absentee costs to the business.
• Multi-Format Retailing - Retailers are operating numerous virtual store formats (such as e-Commerce) in an effort to target consumer demographics. This requires fulfillment operations with greater flexibility to meet significantly different order profiles.
Focused Approach
As Sam Taylor, CEO of Oriental Trading Company is quoted as saying "It is important that management spend more time out in the DC, listen to employees, and showing more appreciation for what they do".
Many of the above so called pinch-points have standalone requirement that can be improved by adopting a more focused strategy. Companies can identify particular opportunities like, compliance labeling, or product sequencing for example, that can provide immediate specific benefit without incurring the overhead cost of a total system solution. This is referred to as a selective or phased-in approach and can spread out the cost of a total system solution over several phases and years. It also lowers risk by allowing for design refinements to be more easily incorporated into future phases to account for changes in the business model.
By adopting a focused approach, proven DC technology can be used in varying degrees to improve product flow and labor allocation, accommodate facility size and reduce operating costs. Technologies most often used in these applications include warehouse management systems (WMS), warehouse control systems (WCS), automatic print and apply systems, automated storage/retrieval systems (ASRS), automated case picking (ACP), automatic guided vehicles (AGV), package and pallet conveyors, robotics, sorters, and trailer loaders. Each of these technologies can be implemented standalone and/or integrated into a total system solution.
Today, there is an ever increasing choice for companies looking to deploy standalone solutions designed to alleviate specific operational pinch-points.
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