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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

February 13, 2013

Restoring Aging Material Handling Equipment & Systems Will Improve DC Performance

It Costs Less to Update Equipment & Systems than Replace Them

Holste Says:

If the problem is frequent equipment breakdowns resulting in the loss of productivity, industry experts generally agree that with very little capital expenditure you can increase the performance of older conveyor transportation and sorting systems by 10 to 20%.
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Overtime with changes in a company's business model, customer order profiles, and SKU mix, material handling equipment and system controls can become outdated. Given the high replacement cost of new equipment, along with untimely disruptions to on-going operations, it's smart to first consider less evasive alternatives.

If the problem is frequent equipment breakdowns resulting in the loss of productivity, industry experts generally agree that with very little capital expenditure you can increase the performance of older conveyor transportation and sorting systems by 10 to 20%.

The following table shows the typical benefits:



Typical Benefit

Lower DC operating and maintenance costs

Increase system efficiency

Compare current performance against industry averages and original design assumptions

Develop corrective procedures

5% to 10%

Increase system throughput capacity

Improve system reliability

Adjust and update equipment, controls, and operations

Evaluate and upgrade software systems

Institute preventative maintenance practices

10% to 25%

By taking the following steps, companies can keep their existing equipment and systems running at peak performance:

  Performance Audit: An effective way of keeping a material handling system operation up to date is by doing a performance audit every few years. A performance audit can help you zero in on productivity drains, evaluating such areas as picking, conveying, and sorting rates. Whether you utilize internal resources or hire an industry expert, a comprehensive audit will analyze systems from both an operational and functional standpoint, including a final report detailing recommended adjustments. Thus, you will be able to pinpoint and fix inefficiencies, realizing cost savings from improved productivity rates and system performance.

Preventative Maintenance:
A comprehensive PM program is an effective way to keep your system’s performance “fresh”, reduce breakdowns, and extend equipment service life. In particular, it can reveal if your equipment is functioning properly or if it requires a tune-up. Regularly scheduled preventative maintenance can help you determine when components will fail so you can do corrective work on them before they breakdown. Thus, you can keep systems running at peak efficiency and avoid the high cost of malfunctioning equipment, including downtime for emergency fixes and hefty replacement expenses for components beyond repair. Another benefit is that a properly tuned and maintained system consumes less energy.

Retrofitting: Retrofitting can boost efficiency by 15-20% or more. By retrofitting the equipment, your system will be able to function beyond its initial capacity limits and be in better condition to satisfy increased production demands. This can involve upgrading components, increasing speed/capacity, or incorporating new technologies.

An example that is relevant in today’s economy where package sizes are becoming smaller is to change the spacing of conveyor load carrying rollers from the typical 3 inches to 2 inch spacing. Most conveyor side frames are pre-punched in the factory for 2 inch roller spacing. Other minor equipment modification may be necessary in order to convey a larger array of small light weight packages such as replacing mechanical sensors with electronic sensors.

By reusing equipment instead of replacing it, a company can enjoy considerable savings. For one thing, the cost of retrofitting is often less than 60% of new equipment cost. Moreover, by retrofitting and modernizing your equipment, you boost its reliability, renew its service life, while cutting maintenance and operating expenses. Furthermore, by updating companies can ensure compliance with current federal and state safety regulations, thereby helping reduce work-related injuries and insurance premiums, including workers' compensation.

At the same time, companies seeking to upgrade their material handling system controls and software should consider adding a Warehouse Control System (WCS) to enhance flexibility, performance, and broaden access to real-time operational data. To learn more, follow this link: When Automating a DC, be Sure to Stay on Top of the WMS-WCS Discussions


Final Thoughts

While companies should understand that the above strategies can't push back new capital expenditures indefinitely, they do however represent effective ways to get the best performance and value out of existing equipment and systems.


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