Holste Says: Based on industry research and response to surveys and phone interviews conducted by SCDigest over the years, there appears to be persistent 'pinch-points' that can and usually do surface when DC operations are under the greatest stress. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

As the busy fall season approaches, aside from the generally dismissive view that “we can always do better” most shippers feel confident that their order fulfillment operations will be ready for “prime time”. That opinion may be based on statistical reports, meetings with DC staff, occasional interaction with associates, customer feedback, and general observations. However, the unvarnished truth may not be so rosy.

Based on industry research and response to surveys and phone interviews conducted by SCDigest over the years, there appears to be persistent “pinch-points” that can and usually do surface when DC operations are under the greatest stress. During normal operation these issues are often tolerated because they do not impact on order fulfillment and shipping schedules. The following is a list of persistent issues that left unchecked going into the peak shipping season may negatively impact operations:

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 – Operation planners 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) during periods of high stress 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 the time it takes to restock shelves with product without increasing in-store labor. This is forcing DCs to ship store/aisle-ready unit loads. Palletized loads must arrive at stores presorted and grouped by product family in aisle stocking sequence. Manual palletizing methods are not sufficient for this 3D puzzle building task.

Work Related Injuries – Distribution centers are busy and noisy workplace environments typically handling huge amounts of diverse products and volume. Injuries can be devastating to the health of workers, not to mention medical and absentee costs to the business.

Multi-Channel Retailing - Companies are operating numerous online virtual store formats in an effort to target consumer demographics. This requires fulfillment operations with greater flexibility to meet significantly different order profiles.

Focused Strategy

Many of the above issues can be resolved by adopting a focused strategy. Companies can identify particular opportunities like compliance labeling or product slotting, for example, that can provide immediate specific benefit without incurring the overhead cost of a total system solution. This type of selective or phased-in approach can spread out the cost of upgrading operations 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 company’s business model or marketing channels. Technologies most often deployed include:

Conveyors, Sorters, and Extendable Trailer Loaders

Warehouse Management Systems (WMS)

Warehouse Control Systems (WCS)

Automatic Print & Apply Systems

Automatic Case Weighting & Sealing

Goods-to-Person Systems

Each of these technologies can be implemented standalone and/or integrated into a total system solution.

Final Thoughts

Deploying material handling technology in the DC has long been recognized as a dependable strategy for processing customer orders. A strong case can also be made for its positive effect on employee relations.