Are you aware of the changes, if any, are needed for your distribution center? Are current activities at-capacity or over-capacity, which indicates that something needs to change? Has senior management pondered whether to retrofit or expand current facilities? What about moving to a new location? How feasible is that based on your company’s current financial situation?
These and many more questions linger in the minds of people who are in charge of running a distribution center. Unfortunately, a crystal ball that gives you a clear view of future needs does not exist. Instead, you must rely on past trends and current industry activities to secure a plan that optimizes operations.
Predicting future growth requires more ingenuity and foresight. While having more business than you can handle is a good problem, have a plan that addresses this problem sooner rather than later. Handling current and future growth is often determined through a comprehensive supply chain process.
When you take a comprehensive look at supply chain facilities as an essential element of the process, look for common capacity problems. More often than not, these are revealing triggers that it is time to seek a better solution.
Developing the best solutions to optimizing your distribution center facility involves having a thorough understanding of the current situation. In addition, plans for future growth should be included in strategic solutions. Setting these parameters helps your team work towards an ideal distribution center. These are some of the common problems to consider during the initial assessment.
The problem for many centers is a heavy reliance on paper tickets to pick orders. Not only is this decreasing the number of trees on the planet, but a printed paper process ignores the number of steps workers take to find pick locations. From one order to the next, productivity – and in some cases – order accuracy suffers. Paper tickets require a manual audit for quality control to avoid mistakes.
The solution? Implement a device and software driven process for order picking. There are many technologies available that you can incorporate to optimize operations. RF scanners, accuracy, pick-to-belt, order picking time and the number of workers needed to perform these tasks improve. For most centers, this could translate into a 30 to 70 percent jump in picking efficiency. Who knew removing paper from the process could make that much difference?
Another system to consider during the assessment is automatic dispensing, which work well with smaller goods. By dispensing products such as CDs or DVDs to a conveyor on demand, goods are automatically sorted and transported to a packing area. Labor and time is removed from the process of retrieving the items. Handling a high volume of such activity is a typical indicator that this solution could work in your distribution center.
Typically, most distribution centers are married to manual quality control processes when inspecting orders. These are time and labor intensive that offer very little in return. Alternative solutions are a process change away that addresses order validation issues.
First, having a check weigh system that automatically scans, weighs and compares actual weight against expected weight does wonders. By using data tables, this process can automatically reject high value orders.
A second possible solution is for distribution center operations where there are static or batch items per container. In these situations, a vision system can inspect containers or cartons for inconsistencies. Generally, these systems have color sensors or cameras that look for patterns and will flag the system when an error is found. Most vision systems are simple but can make a difference in complex applications that have multiple types of profiles.
One of the biggest areas that creates excessive touch labor in a distribution center is shipping and manifest. Workers perform quality control, packing, weighing and labeling tasks to prepare merchandise for shipment. These are followed by data entry to report on the completion of the tasks.
A better solution is to have a system that fully automates the end of line and manifest process. An alternative to this solution is having one person responsible for each task. To further the process, you could install shipping lanes for palletizing or consider options for carrier sortation. This could eliminate the need to have a manual all-hands-on-deck process to determine where packages need to go.
Typically, integrating a different end of line system removes two to four touch labor workers. This number fluctuates based on the volume of shipping your center handles.
Software and controls in this system can interface with shipper or host systems to expedite shipping. Equipment for this type of system usually includes a: • Controller • Zoned conveyor • Scanner – for order information • Checkweigher – for recording shipping weight and validating order contents • Label printer applicator • Validation scanner – verify label information • Sorting equipment is optional
Now, let’s take a look at the planning phase that can help frame the ideal solution for your distribution center operations. Hopefully, you will gain some insight on what can yield the most efficient distribution center today. This should also help you plan for a flexible operation for the future.
Making improvements to optimize your distribution center facility begins with establishing key performance indicators. These are essential metrics in the planning phase that will form benchmarks for measuring design solutions. Included in this initial step: estimating productivity by function area, requirements for storage space capacity for equipment and labor cost estimation.
Keep in mind that measurement of these KPIs is tied directly to the overall supply chain goals of your company. This is necessary to attain an ideal optimized network facility.
Next, you are ready to develop short-term and long-term solutions by analyzing operations data. This is important because you want to determine the optimal flow of moving SKUs through the center. Examine each functional area based on product and order characteristics, which help with future distribution projections. Look at everything concerning SKUs including: item numbers, descriptions, how information is grouped, special handling requirements and all pallet load details.
Additionally, you want to examine functional areas and processes to determine where changes are needed. Perhaps you need to change the way pre-labeling or advanced shipping notifications are handled. Changes to either area can improve efficiency for more accuracy with throughput functions.
Other areas to evaluate include: • Receiving • Put away • Reserve storage • Replenishment • Picking • Any value-added services
Once all your data is collected, you now have a basis for establishing capacity requirements for short-term planning. In addition, you can use the same data to determine what is needed for each functional area if you want to build a new facility.
Analyzing each functional area independent of others can help in the design of an optimal distribution center. Outline several approaches to handing merchandise in each area. Consider the impact that design, efficiency and costs could have on future expansion projects.
The following strategies were adopted from proven distribution center solutions. Incorporating one or all into your operations can align business strategy with distribution center logistics. Look forward to optimizing operations by eliminating activities that do not add value to overall goals. Address the most important business drivers to give your distribution center a competitive edge in the market sector your business serves.
Strategy #1 – Reduce wasted time traveling from one area to another. A significant amount of an order picker’s time is spent traveling between picks when you have a large operation. Deploy a system to reduce this time. Your order picker can work smarter with solutions such as optimized flow paths or dynamic slotting.
Strategy #2 – Zone orders. Consider using methods that expedite the flow of materials if you have an order assembly operation. Send order containers to zones designated for picking activity. Pick carts or conveyor networks are potential solutions.
Strategy #3 – Batch and sort orders. Group concurrent SKUs for multiple orders for more productive work. Pick carts and sorting systems work best to implement this strategy.
Strategy #4 – Split case selection and replenishment strategy to eliminate travel. Consider installing systems that will bring inventory to pickers, rather than having them waste valuable time going into the warehouse. They can remain in one location with a goods-to-person pick station supported by an automated staging system.
Strategy #5 – Full case selection and replenishment strategy to eliminate travel. Similarly, there are systems that will bring an entire case to the order picker. An automated case buffer system releases cases into sequences to build pallets.
Strategy #6 – Buffering and sequencing. An automated staging system is a potential solution to consolidating customer orders. A buffering and sequencing storage system helps to organize contents to optimize the process.
Strategy #7 – Free Picking. Negative pick software enables you to get more out of this process. For instance, you can create an order by transferring five cases at a time from one pallet.
Strategy #8 – Layer picking. Optimizing picking activity is a sure way to optimize your distribution center operations. Do this by deploying an automated system that removes whole layers from pallets. Consider layer picking robots if you want to increase assembly labor with less effort.
Strategy #9 – Palletizing mixed cases. Review your current assembly process for mixed case palletizing. Efficiency can improve with a case pick and sort that streamline manual functions into automated or semi-automated systems.
Strategy #10 – Change to real-time operational status. Get rid of paper processes and implement real-time systems. Your operations will gain visibility, real-time operational statuses and improve monitoring standards for labor productivity. A vast number of warehouse control system software selections are on the market.