Logistics News

By Cliff Holste

March 28, 2012

Is Your DC Fast Enough?

Obtaining a Truly Fast DC Involves Much More than the Physical Movement of Goods

By the mid 1990s, distribution centers equipped with conveyor and sorting systems that could transport and sort cartons at the rate of 120 per minute (2 per second) were considered to be high speed, high throughput operations.

At that time the focus at most DCs was on the physical movement of goods. Still, it could take a day or so to get through the order entry approve and acceptance process, then another day to verify and allocate inventory and for load planners to release the orders into the DC system. Finally, the customer order was able to be quickly picked, packed, sorted and shipped. Unless, of course, the carrier had not yet arrived or there was no dock space available, in which case shipping would be further delayed.

If the above sounds vaguely familiar, then you have been in the logistics business for awhile. However, if the above sounds normal, you’re in big trouble!

Holste Says: Physical speed (getting product out the door) is not the only qualification for being fast - there are other service related factors. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

Defining the “Fast” DC

Regardless of how a DC is equipped (manual or automated), if it can satisfy customers’ demand for same-day shipping it probably meets today’s criteria for being a fast DC. However, physical speed (getting product out the door) is not the only qualification for being fast – there are other service related factors.

For example, we know that order processing and fulfillment operations move swiftly and accurately in a DC controlled by a robust, up-to-date Warehouse Management System (WMS). We also know that in an integrated DC, equipped with a Warehouse Control System (WCS), computer directed product movement is fast and efficient. In DCs that have this level of sophistication, processing Value Added Services (VAS) is routine, and with few exceptions, does not interrupt the flow of orders through the operation.

Due to the Material Handling Industry’s commitment to on-going advances in design and manufacturing, equipment speeds throughout the industry are steadily increasing. Conveyor systems for example, are now capable of transporting and sorting cartons in the 200 to 250 per minute range. This is especially good news for DCs that experience seasonal peaks 2X or 3X the average. Also, good news for large retail chain store operations making it possible for them to consolidate smaller regional DCs into one high volume central operation.

Factoring In Transactional Speed

In today’s quick response environment, DC speed is dependent on more than just the physical movement of goods. B2B and B2C customers want to check the availability of inventory and the status of their orders on-line – avoiding the time it takes to get through to a customer service representative. This requires network transparency (visibility) and high speed integrated transactional capability.

In the cyberspace world, where a millisecond is like “forever”, DC speed includes being able to synchronize the activities of multiple warehouses, or multiple vendors in the supply chain, to provide a seamless real-time view of inventory and order status beyond the four walls of the DC. That means integrating internal DC systems with the logistics systems of external trading partners so that customer order status can be monitored and/or expedited in real-time.

It means updating IT systems with visibility tools that increase DC speed by allowing trading partners and customers across the supply chain to receive alerts and notifications when events occur, or don't occur, so that service providers can take proactive steps rather than just react – see “For Logistics Service Providers Updating IT Solutions is Key to New Growth Opportunities”.

Given that DC speed involves a blend of physical movement, and information flow, what are the governing factors?