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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

October 9, 2013



A Detailed Plan Is Key To Having A Successful Materials Handling Project

Converting a Vision into a Successful Project Requires Attention to Details


Holste Says:

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By touching on all of the critical planning bases you will have a better understanding of the details involved in implementing the project along with having a good handle on what the real benefits are going to be, thereby improving your changes for project approval.
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Previous Columns by Cliff Holste

Logistics News : Is Your DC Order Fulfillment System Out-of-Date?

Logistics News : High Frequency of Internet Orders Drives DC Automation

Logistics News : Three Key Factors for Implementing a Profitable Returns Capability

Logistics News : Shippers Looking To Automate Should Simulate Recommended Solutions Prior To Committing

Logistics News : When Looking To Improve Operations, Shipper Can Tap Into a Variety Of Expert Resources

More

When considering any project it is always a good idea to have a vision of what success looks like. This vision must then be translated into goals and objectives by which project success can be measured. Of course there is a huge amount of operational data that must be collected and analyzed. In addition, most companies try to forecast and plan for 3 to 5 years out. The project plan needs to take both current and future data into consideration.

To get the ball rolling, begin by considering how the project can be accomplished without major disruptions to critical processes like receiving, picking, and shipping. Most DC operations can tolerate limited pre-planned interruptions. By breaking the overall project into smaller more manageable parts, that can be completed between peak shipping periods, and by planning for a few clever workarounds - flow and order processing interruptions can be avoided.

The key to having a successful project is to develop a detailed implementation plan. The following is a list of tasks (that can be done concurrently by the planning team) and once completed will provide critical planning framework data:

 

  • Create a Current Facility Arrangement Layout

Start by measuring every physical aspect of the building, including the yard around the building, the dock doors, building columns and grid, offices and employee facilities, material handling equipment and system layout, rack systems, mezzanines and anything else that takes up floor space, noting clearance heights and fixed-in-place obstructions (e.g., power panels, battery charging area, fans, ceiling heating and air conditioner units, drain downspouts, lighting, piping, emergency exits, etc.).

This information is then used to create a computerized AutoCAD drawing of the current facility arrangement. Don’t be surprised if you find (as in some extreme cases) that as little as 25% of building cube is being used for product and the rest is aisles, dock space and otherwise unused air space.

  • Assess Your Customers’ Needs

Another good approach is to step back and look at the building as if it were empty. Then consider what’s best for your customers. For example, think about how product should be sequenced and loaded onto the trucks to facilitate unloading, staged to make that loading scheme possible, packed to facilitate that staging, picked and staged for packing the order, and so on? In other words, go step by step back through the process to conceptualize the optimal flow based on your high value customer’s order and service requirements.

  • Evaluate Vendor Packaging

The idea here is to determine how well the product(s) that are received into the DC from suppliers (external and/or internal) fit into their individual carton. There is often an excessive amount of air in vendor cartons. Logistics companies can gain considerable storage space savings in total footprint of their facility by requesting or specifying more conservative carton sizes and/or configurations. Don’t assume that you have no influence over this important aspect of the supply chain.

Also, look at the pallets and cartons to assess how well the cartons fit on the pallets and the pallets fit in the racking. While in the racking system - check for honeycombing, and the amount of partial pallets stored in full pallet locations. Little improvements here can produce big overall storage gains.

  • Digging Deeper

Some distributors look at product movement in term of dollars, instead of how often each item is accessed. Movement data should include sales of units, pieces, cases and pallets in order to identify the volume and item peaks and valleys. In this way you expose the true physical nature of the order fulfillment operation (time time verses picking). This analysis shows what kind of repetitive process the operation experiences during the study period.

In addition to order history, customer order profiles should be analyzed to determine whether orders typically comprise one line item, 100 line items or 1000 line items. Most DCs are a hybrid of two order types – large and small. This is often where you have the greatest opportunity for bottlenecks and pick/pack slowdowns. Therefore, it is one of the most important areas to optimize in an upgrade project. By re-slotting your inventory – locating stock items to reduce travel time and increase velocity – distributors can go a long way towards improving facility efficiency. If you compare an efficiently slotted DC with an inefficient one, most experts agree that you could see a 25% to 30% improvement in labor productivity.

  • Crunch the Data

The output of all this data is the basis for the project plan. This plan should run the gamut from re-slotting the facility all the way to re-designing the flow, tearing out existing equipment, systems, outdated controls (hardware & software), and installing new systems where required, or perhaps adding a mezzanine in the free space over the receiving/shipping dock, and so on. It’s not uncommon for a company to consider several upgrade plans at once, and evaluate what makes the most sense economically and operationally, as well as short term and long term benefits.

 

  • Develop a Phased Implementation Plan

By breaking the project into smaller and smaller tasks, you will be able to think through where the domino effect of changes can be executed so that events and people can be scheduled without oversight. When you do this you come up with a step-by-step phased implementation plan. Using appropriate project management programs, you can create a detailed project plan, assigning resources to each step, and determining the linkages and interdependencies between steps. Depending on the scope and complexity of the project, a full-time dedicated and experienced Project Manager may be beneficial.

Consider the development of a “Project Planning Book” as a central record for all project stakeholders.

See “Material Handling Automation Projects – By the Book”


Final Thoughts

By touching on all of the critical planning bases you will have a better understanding of the details involved in implementing the project along with having a good handle on what the real benefits are going to be, thereby improving your changes for project approval.

However, no matter how well you plan, problems invariably arise. Be sure to let your key customers know upfront what you are planning and what the expected benefits are. That way they can plan for potential hiccups and there will be fewer unpleasant surprises.

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