Blog November 6, 2012

Five Distribution Center Functions in Five Short Stories

By Charles Fallon
November 6, 2012 | 4 min read


1. Receiving


The DC manager of a Texas wholesaler was walking me through the operation. He pointed to that morning’s receipts and said “our philosophy is to keep everything in the vendor’s pallet configuration.” He waved his hands from the receipts to the racking – “everything should fly right off the dock and into storage.”

It sounds reasonable. However, when we looked at the data we uncovered a couple of problems. One, 7% of the storage capacity could not be used because some vendor pallets wasted too much space in the rack openings. Two, the savings in picker travel to have smaller slots (and pallets) on medium moving product more than off-set the additional costs to re-palletize those SKUs upon receipt.

MORAL – Receiving sets up all other DC functions. Optimizing receiving productivity often comes at greater expense in outbound operations.


2. Putaway

On a visit to an Ohio foodservice distributor, I found at the back of a 400’ deep dry warehouse, bulk storage lanes stuffed with pallets of paper and foam tray products. The data told us that a handful of these SKUs generated 25% of the pallet moves in the warehouse. I asked “why is this high-volume product slotted in the least accessible corner of the DC?”

“The guys doing putaway like to use the bulk floor slots for paper and foam trays. It’s a lot easier for them” came the reply.

When we calculated how much travel pickers were doing because what should be a cob-webbed corner of the DC was the hottest zone on the pick line, we immediately put an end to the practice.

MORAL – If left to their own discretion, fork drivers – quite logically – will do the work in a way that benefits their productivity regardless of the consequences on picking. The WMS should direct putaways and, in almost all cases, fork drivers should comply.


3. Replenishment

A General Merchandise/Health and Beauty Care tower was notoriously difficult to keep stocked owing to the wild imbalances in picking volumes over the course of a shift. With more than 70% of the volume picked in the first 4 hours of the shift, stockers were unable to keep pick slots replenished. So, the DC instituted a program where pickers would replenish pick slots whenever they need that SKU to complete an order line.

When we studied the RF transactions in the operation, it uncovered a habit some pickers developed when performing these emergency replenishments: they would load just one case into the slot in order to satisfy their immediate demand. After all, they were being judged for picking productivity and these replenishments did not help their statistics.

As a result, the stockers eventually had to perform replenishments on those same items that pickers had replenished – creating two replenishment tasks instead of one; neither task performed optimally. Stocking productivity suffered and the DC continued to struggle. While the ultimate solution was to improve slotting and reduce the stock outs in the first 4 hours of picking, the pickers were sensitized as a temporary solution.

MORAL – Nothing affects replenishment productivity more than its frequency. Slotting, WMS configuration and training should place a high priority on eliminating excessive replenishment.


4. Picking

A food distributor in upstate New York had run out of pick line capacity. So he expanded his pick line by moving pickers to man-up trucks where they picked off the ground. He knew pickers would lose some productivity owing to the vertical travel now introduced in the pick line.

However, what he hadn’t counted on was the outbound pallet height. To ensure a stable picked pallet as pickers moved up and down on their cherry-pickers, the outbound pallet height had to be reduced. Every 12” of lost pallet height added 1 extra trip along the pick line or 20% more travel in total. Not only did pickers slow down, they had to travel further. Worse, the shorter pallets meant a small but painful reduction in stops per route.

MORAL – Materials handling systems have important consequences; if the planning is inadequate, those consequences ripple through the supply chain in unintended and unwelcome ways.


5. Loading

A foodservice and c-store distributor serving a rural swath of Canada asked me to visit. A new chain account boosted volumes and had significant impact on routing. As a result, they needed to re-work their delivery process in order to reduce stop time in an effort to add stops to each route.

We had the owner ride along a sample of delivery routes. Together, we determined that the method for loading trucks was causing unnecessary delays when a driver stopped to make a delivery. Soon after the first or second stop, the truck would begin to look like toy blocks after a toddler swipes the tower he just built to the ground. Drivers lost track of where they re-located product as they rooted through pallets searching for the product needed to make the delivery.

We instituted changes in the departments that were picked and loaded together on the pallet as well as in the batching routines that created pallet-sized pick assignments out of multiple stops. The changes reduced the number of pallets a driver had to touch in order to gather everything on a customer order. This meant less time in the back of the truck when making a delivery – allowing the distributor to add stops to each route and improved the customer’s delivery experience.

MORAL – The perfect order, in a customer’s eyes, includes a perfect delivery: on time and quick. Leaving the perfect delivery to the driver alone is a recipe for failure – it begins at the beginning, with receiving!

Reach out to the LIDD team to learn more about warehouse slotting and optimizing your warehouse operations.

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