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Cliff Holste

Supply Chain Digest
Material Handling Editor

Logistics News - Sorting It Out

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.

October 25, 2017

Sorting It Out: Shippers Searching For More Flexible, Adaptable, Scalable & Cost Effective Solutions


For Those Considering Automation the Key concerns are – When, What, and How Much

 

Progressive shippers are always looking to improve and expand customer services while at the same time lowering operating cost. This is in an environment that is becoming more specialized and demand driven. Recently Supply Chain Digest published a blog article on choosing processing methods that yield best results – see (Blending Automated & Manual Operations for Maximum Benefit). Based on our readers interest in this topic we decided to provide additional insight on When, What, & How Much.

The most important factors peaking interest in automation is the need for more flexible, adaptable, scalable and cost effective material handling solutions. There are of course many other factors, such as:

Holste Says...

The most important factors peaking interest in automation is the need for more flexible, adaptable, scalable and cost effective material handling solutions.

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  • proliferation of slow moving SKUs
  • shorter lead times for processing orders
  • higher proportion of small orders
  • more severe and later seasonal spikes in volume
  • ever increasing demand for highly customized value added services (VAS)

The above factors are the result of continued global supply chain expansion and rapidly growing marketing strategies such as; ecommerce, multi-channel fulfillment, and same-day delivery. Most B2B and B2C market sectors are been impacted by these factors.

Shippers could use some help in determining; when to automate, what to automate, and how much to automate. To get your planning process started, we suggest the following:

A. When to Automate

The following are common clues that current processes are either maxed-out or are no longer optimized:

  • Outdated and antiquated 20th century processing methods
  • Satisfying daily shipping volumes requires excessive overtime
  • Frequent issues with order accuracy, charge-backs, and/or customer service
  • Declining productivity
  • Frequent system interruptions
  • Increasing employee turnover rate

When confronted with the above challenges it’s a good idea to make sure your existing operations are up-to-date and running as effectively as possible. This is important because perhaps automation is the way to go, however, comparing an automated solution to an existing sub-optimized operation may result in calculating an inflated ROI.

Start by focusing on basic operations such as slotting, replenishment, location and inventory tracking, vendor compliance, and pick/pack/ship productivity. Invest in technologies that can be later integrated into a more automated system solution. An example would be a Warehouse Management System (WMS) perhaps with RF and Voice directed capability.

B. What Types of Automated Solutions are Available

Labor intensive full case & item pick/pack operations offer great opportunities for automation. The need to quickly process a large number of small orders of less-than-full-case quantities is the ideal environment for product-to-picker solutions. When a large percentage of slow moving SKUs are involved, automated product-to-picker solutions like mini-load AS/RS may be the perfect fit. The increasing demand to build mixed case pallet loads is one of the key drivers for Robotic Palletizing in the DC. The benefits of building store specific loads include significant labor savings and improved operational efficiencies at the store level.

However, before evaluating automation options, business managers must define business and operational requirements without which the chances of finding the right automation solution or technology is slim.


C. How Much to Automate

DC automation does not have to be an all or nothing deal. The most labor-intensive operations can usually support some level of automation. For instance, in the typical B2C model, the areas of picking, packing and shipping can represent 70% or more of total DC labor. Therefore, updating and automating order fulfillment and shipping operations can yield huge benefits in terms of performance and productivity.

To actually determine the amount of automation that can be justified, you need to have current performance data to measure the impact of automation against. Unfortunately, most shippers do not have good measurable data or operating standards in place to use as the basis for evaluating alternatives. Knowing what data is required and how best to collect and analyze it requires the expertise of an experienced industry expert.

Final Thoughts

The path to selecting and deploying an effective automated solution can be challenging, but also well worth it. A great place to start your planning process is at industry trade shows such as Modex 2018 in Atlanta, GA. April 9 thru 12, 2018. You can quickly check it out and pre-register at www.Modexshow.com


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