September 14, 2016

Logistics News : How to Avoid Losing 4 Months of Non-Productive Labor Per Year

Maintaining Order Picking Productivity with Goods-to-Person Solutions

Many shippers are operating DCs where stock putaway and order fulfillment tasks require lots of travel time. Some would say that these tasks are a natural part of the DC working environment. While that may be true, when 1/3 or more of a person’s time is spent walking from task to task, that adds-up to a sufficient amount of lost productivity. It’s like losing 4 months a year per person.

DCs that are less than 100,000 square feet are often equipped with little or no automation. As the number of SKUs and daily orders increase, maintaining an efficient operation becomes more challenging. The typical 20/80 curve where 20% of SKUs represents 80% of sales may gradually degrade to 20/65 or worse. This means that the concentration of high volume SKUs is reducing while mid to slow movers are expanding resulting in longer stock put-away and order picking paths. Assuming overall unit sales volume remains mostly unchanged, DC productivity takes a hit.

Holste Says... ...when 1/3 or more of a person's time is spent walking from task to task, that adds-up to a sufficient amount of lost productivity. It’s like losing 4 months a year per person. What do you say? Click here to send us your comments

For those companies the good news is that there are both practical and affordable solutions that can greatly reduce walking time, speed-up order fulfillment, and increase DC productivity.

While SKU proliferation has consequences for all DCs, there are many shippers who (because of consumer product regulatory codes) are forced to maintain a dedicated picking position for even the slowest of the slow movers, taking up valuable pick-face space that is poorly utilized. In either case, significant improvement can be found through the adoption of a new generation of Goods-to-Person (GTP) solutions.

Mini-load automated storage and retrieval systems (AS/RS) that handle individual cases, totes and trays, are good GTP solutions for managing medium to slow moving SKUs. In this scenario, when a slow-moving SKU is required, the crane-like multi-shuttle system retrieves that item from its high bay storage location and creates a temporary pick face for it. When order fulfillment is complete the AS/RS places that SKU back in storage. This eliminates the need for a pick face in the DC for each slow mover, freeing up valuable space as well as improving DC productivity.

A semi-automated version of the above utilizes dynamic slotting functionality, which is available in most Warehouse Management Systems (WMS). In this scenario when an order is released that includes a slow moving SKU without a dedicated pick face, a temporary pick slot is created by the WMS. That slot is then filled (manually) with product from reserve storage to meet that need.

In some cases companies are deploying horizontal carousels to handle slow movers. One large fragrance company found that while its 900 slowest moving SKUs amounted to only about 2 percent of total volume, they led to substantial bottlenecks in order processing. They deployed two 65 foot long, five-shelf, light-directed horizontal carousels, which led to much more effective picking operations and storage density for those slow movers.

It is noteworthy that carousels are used extensively in service parts distribution – an environment often characterized by huge numbers of mostly slow moving SKUs.

Obtaining these operational benefits becomes an even more urgent imperative as the issues associated with response times are further exaggerated by the launch of an ecommerce program, which requires shippers to process and manage increasingly differentiated products with erratic changes in volume, shorter life cycles, and ever shorter customer delivery times.

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