21 Mistakes adding cost & killing productivity in your warehouse #17: Non-integrated systems

There is no doubt that Information, Communication and Technology (ICT) systems have been the key driver of productivity in every aspect of human endeavour for many decades now. Many different systems exist that have benefits for the warehouse and the supply chain in general.  Whenever a new system is introduced there is always a choice about whether to use it as a standalone separate system or to interface it to the rest of the business systems.  It is my opinion that except in the most low volume transaction environment it is usually a mistake not to integrate systems.

By integration I mean the transmitting of data between the two systems.  In the context of warehouses and supply chain this data will usually be related to transactions or system updates about the movement of goods: into, around and out of the warehouse. 

The ideal integration is automated real time transaction by transaction.  Stepping down from this is periodic updates (anywhere from 5 minutes to once daily).  Batch updates with manual intervention (downloading a file from one system, transforming it into a suitable format and uploading it to another).  The lowest level of integration is a manual interface where outputs of one system are keyed into another.  This is only acceptable for very low transaction volumes or during a trial learning phase or proof of concept.

There is of course nothing wrong with starting off the use of a system without integration or with manual integration as a valuable way to start getting benefits early and learn more about the new system.  This learning will often inform the development of the interface and how the systems best work together.

Here are a few examples integration between systems in a warehouse.

·        Purchase order information is sent from a customer to the host system.

·        Order information is sent to a WMS and order confirmations returned.

·        A WMS send order information to a Pick To Light subsystem and order confirmations are returned.

·        Despatch information is sent to a freight system and con-note numbers and costs are returned.

·        A transport management system sends manifest information to a fleet management systems and receives proof of delivery information in return.

·        A WMS sends information to a check weight system and receives a confirmation in return.

·        A WMS sends an Advance Shipping Notice to a customer’s system.

Lack of integration adds cost and introduces the potential for errors in re-keying information.  It creates data gaps where data required by an operator must be sourced from two or more different systems.  It makes reporting of business information more difficult and more costly, and as mentioned in previous posts data and the ability to analyse it is one of the most important assets a business now has.

I sometimes see businesses with a non-integrated system such as a WMS and whilst I can understand that the lack of integration got them up and running quickly, there is no roadmap to integrate the systems and the expected costs of integration are too high.  It is far better to determine the roadmap to integration with full understanding of the cost before you embark on a project.  Sometimes the integration costs can blow out the cost of a project and reduce the ROI to unacceptable levels.  In this context then it may be better to look for an alternative system that has already been integrated to your host system where the integration costs are low.

Only in the context of a commitment to full automated integration of all warehouse related systems can you keep the productivity and service of your warehouse at world class levels.  Let this be your starting point and aim whenever considering the implementation of a new system in your warehouse.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 Mistakes adding cost & killing productivity in your warehouse #16: Use of multiple freight systems

Most if not all carriers today will want you to give them your freight despatch information electronically.  Whilst there are still plenty of circumstances where a hand written consignment note is unavoidable, the processing of manual con-notes is more expensive.  To make this easier for you and for them they have developed computerised freight management systems.  Unfortunately these systems are designed to work with one carrier (i.e. the carrier providing the system).  This means that when you inevitably need to use the services of a different carrier that is either cheaper or provides services that you cannot get from your other carrier you end up with another freight system.  This can end in multiple carrier specific freight systems.  This is a mistake, it is better to have a single (paid for) freight system.  Why should I pay for something that I can get for free, you ask?  Well I’ll tell you.

Carriers don’t want you to use anyone else for your freight, a single carrier system tends to lock you into that carrier.  Once you break this barrier and have multiple systems you now have a training load to learn an additional system.  It may also take different sized labels and so you have an additional critical supply to manage.  You have just added more points of potential failure.

You have now also split your data into multiple systems.  The 21^st century more than any other is the age of data and you should regard your data as a gold mine to be guarded and protected from loss and fragmentation.  What use is my old freight data apart from looking up old consignment notes for Proof of Delivery requests, you ask?

Freight will be one of your company’s largest costs and not being able to measure and report on its performance and costs as a whole package, is a significant deficiency in your reporting.  Freight cost reporting is significantly easier if you have all the data in one multi-carrier system.  A multi-carrier system lets you extract data from all of your services so that you can get it costed by alternative carriers when you perform a freight review; which you should do annually.  Call me if you have never done a carrier review, we do this quickly and cheaply for you, even if your data is fragmented.

In addition to managing your freight costs, if you tie back your freight data to your order management system you will now be able to do better Cost To Serve analysis of your customer base to determine relative profitability of different customer groups.  This is very useful to assess the underperforming areas of your business.

If you have a large number of shipments per day there is a significant productivity gain to be made from having your freight system integrated to your WMS or order management system to eliminate data entry.  Creating freight labels at order confirmation or before each order pick (see no.15 on speeding the packing process) is a huge productivity booster.  You only want to integrate one system not four or five so this means you need a multi-carrier system.  One of our clients integrated their freight system and saved one full FTE*.  At around $55,000 p.a. for a storeperson for a development cost of only $5000 this had a payback of less than a month!
*FTE=Full Time Equivalent, or the labour equivalent of one person working full time.

There are three major multi-carrier freight systems currently available:

1.    IFS Smart Freight

2.    Supply Master

3.    Moveitnet

All are good and capable of being integrated with a host system.  Their cost structures and functionality vary so look at all three and choose the best one for your circumstance.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #15

15.   Slow packing process

Do you have a business that requires you to pick and pack your small items into an outer carton for shipping?  These might be large B2B orders or small orders from an online B2C business.  Do you have separate picking and packing functions?  This is a common mistake as it is inefficient due to the double handling of each item.  It is handled once by the picker and then again by the packer who will usually also be responsible for performing a double check of each item as they pack it into a carton.  This is simply a waste of effort that adds no value.  According to the principles of Lean, re-packing is a waste of motion, and double checking is a waste of over-processing.

The solution is to pick to carton wherever possible so that each item is handled only once.  This is fine if your typical order size is large but will be slow if your orders are small and you have a large product range and a significant warehouse travel path to pick each small order.  To get around this problem you need to adopt multi-order picking so that you can pick many orders in each pass through the warehouse.  See mistake 14 on picking strategies for more information on how you can pick more efficiently.

Pick to carton will require you to know what size carton you need to contain the order.  A sophisticated WMS will give you this information based on the weights and measures for each item.  If you do not have this then you will need an experienced operator to assess the carton requirements or simply have a supply of different sized flat cartons on the picking trolley to select from once the operator can see the size of the items to be picked.  Another method is to pick to a plastic bag which can then be put into a suitable sized carton at the end of the pick.  Pick to bag is also useful if your items are really small and you want to pick a lot of small orders in one pass and put them into cartons later.  There is also no reason why you can’t pick directly to Post-packs or other freight bags.

The key is to be able to identify what order is in what plastic bag or carton so that at the end of the pick the order can be confirmed and shipped correctly.  This can be done by attaching the pick slip or a label with the order number to the carton or bag.  With a sophisticated WMS you would be able to know the correct carton size and print a shipping label for each carton so that at the end of the pick the order would be complete and ready for shipping, saving you even more time.

The assumption of this process is of course that the order has been picked accurately and no further checking is necessary.  If you have been picking on paper and packing separately for years then you will know that you have a certain percentage of picking errors.  However I will wager that your packers do not find all the errors and that you still have service failures as a result.  On a pragmatic level you can look at the relative costs of the excess labour in packing vs. the costs of service failures and make a decision, but a cheap process that damages your business through poor service is not really the answer either.  A better way is to make use of available technology to improve your productivity and build quality into your picking process.

A WMS with wireless terminals making use of barcode scanning or voice directed picking will usually have a payback of around six months depending on the size of your business.  This technology will allow you to provide improved service to your customers and reduce your costs at the same time.  I do want to stress however that in accordance with the principles of process design you design the process you need for your business first and pick the technology second.  So although a WMS is a highly desirable technology it is also possible to achieve the same result with a paper based system.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #14

14.   Incorrect picking methodology

Picking is the highest labour activity in the warehouse and consequently gets a lot of focus on optimising it by both the Warehouse system developers and the materials handling equipment manufacturers.  Failing to select the best picking methodologies for your particular business needs will see you missing out on what can be relatively easily won productivity gains.

There are three basic picking methodologies and a nearly endless variety of variations depending on the technology, equipment and layout employed in your warehouse.  The three basic picking methods are:

1.    Discrete picking

a.    Picking one order in its entirety before moving onto the next order.  This is the standard picking method employed by all order processing systems.

b.    Most suited to intermediate to large sized orders comprising multiple pallets or cartons of stock (including large re-pack orders).

2.    Multi-order picking

a.    Picking several orders at once in one pass through the warehouse.  If you have ever grabbed pick slips for a dozen single line orders and sorted them into correct travel sequence then you have performed a multi-order pick.

b.    The key to multi-order picking is to create a batch of orders that can be picked by one person onto one trolley.  Each order is assigned a carton number.  The picks are sorted into travel path sequence regardless of the order number.  Each pick is taken from the shelf and placed into the carton number associated with each order.

c.    Multi-order picking functionality is normally only provided by a WMS, but provided you have a modern system with some flexibility in data access, it is quite possible to create a paper based multi-order pick. (Contact us for more details)

d.    Suited to small order sizes where the entire order will fit into one or two boxes.

3.    Batch pick and assembly (also called consolidated picking)

a.    Performing a single pick for the sum of the quantities required for each item in a batch of orders.  This allows a single pass through the warehouse to pick an entire wave of orders.  The stock is staged in an assembly area and needs a subsequent pick process to assemble the individual orders.

b.    Most suited to picking from slow to access areas where discrete picking would be very slow.  This can be used as an entire picking strategy but be wary of the fact that the assembly process is effectively double handling and the selection of items from a large batch pick can be slow.

c.    The slow assembly process can be facilitated by locating the items in the assembly area so that they can be found quickly.  This functionality is not common, but not difficult to code if required, and manual workarounds can also be devised to speed the selection process.

Some common variations and combinations are:

·        Discrete pick the fast zone batch pick the slow zone or bulk areas

o   In this method the majority of the order picks are done for a single order from the fast pick area and a second batch pick for the order wave collects the stock from the slow zone and stages it in an area of the fast pick zone. The order picker then collects what he needs from this staging area to complete the order and thus avoids the travel time through the slow zone.

·        Multi-order pick the fast zone and batch pick the slow zone

o   Similar to the above but more suited to small order picking.  As above but the picker completes multiple orders in one pass through the fast zone.

·        Zone picking (discrete or multi-order or batch)

o   For very large orders or where stock requires different storage conditions grouped into location zones (such as temperature control, security, dangerous goods, special racking).  The order is broken up into zones and picked separately in each zone (often by different operators).  The picks from each zone are usually then brought together on the dock for consolidation for shipping purposes.

Further adding to the options available are various technology and materials handling equipment assisted methods.  Here is a quick summary.

·        Goods to the man systems

o   These are a means to eliminate picker travel and speed up picking.  They can be used for discrete or multi-order picking depending on their level of sophistication.

o   Vertical or horizontal carousels keep the operator in position and move the shelves to present the goods required for picking.  These systems require their own control systems that interact with the WMS to manage the picking and put-away processes.

o   Kiva systems use mini AGVs that move shelves of product to present the goods to the picker.

·        Conveyor based zone picking

o   This methodology is the province of the large distribution centre.  A conveyor moves totes for orders through each zone of the warehouse so that a picker can be restricted to picking from a limited range of items into the tote.  The tote is directed to each zone where a pick is required and ends up at a despatch station for freight labelling and staging.

o   This method also works for carton picks but in this case the picker picks and labels cartons on to the conveyor which directs the cartons from each zone to sortation lanes where the cartons are palletised for each order.

o   Some of the picking may be automated picking systems such as the A Frame high speed picker or AS/RS systems picking pallets and delivering them directly to the dock with AGVs.

·        Wireless terminal assisted picking

o   Warehouse management systems provide the opportunity to manage the information normally presented on a paper pick slip with in any way you could possibly imagine.  An RF terminal can drive discrete, multi-order or batch picking and present the information to the picker via a screen or via voice and even vision based systems

o   Screen and barcode scanning is the most common.  All products and warehouse locations are barcoded to build accuracy into the pick process.  The RF terminal could be fixed to a trolley or forklift, or hand held.  There are also wearable units that allow the user constant use of both hands and eliminate the need to pick up and put down a scanner.

o   Voice directed picking has been implemented widely and is highly efficient because the picker does not have to stop to read a screen or scan a barcode.  Accuracy is built into the process with verbal confirmations of check digits and quantities picked.

·        Pick To Light systems (PTL)

o   Pick to light is a static racking based system usually built into carton live storage (roller racks) that uses a small electronic display at each pick face to indicate how many items to pick.  The operator presses a button to confirm the pick.  This is suited to high volume discrete picking (several hundred units per hour) of small items into repack cartons or totes.  PTL is often one of the zones in a large distribution centre but can also a be stand-alone installation.

What picking method should you use?  This is a very good question and it will depend on your business profile - what sort of inventory you carry and what your order size, quantity and frequency are.  Once this is known then it is a matter of costing the various options to find a suitable return on investment.  The important point to realise is that you may be missing out on increasing both your productivity, service level and accuracy by not taking advantage of what the best picking methods have to offer your business.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #13

13.    Products not slotted according to pick frequency

Traditionally, before computerised stock systems people stored products in warehouses in logical groups so that they were easy to find.  For example if you were a hardware wholesaler you would keep all the hand tools together with hammers, chisels, screwdrivers etc. all grouped together.  Lots of small warehouses still do this, even if they have a location system.  This strategy soon starts to fall apart when the business grows and becomes more dynamic.  

Changes in product stocking levels and turnover of products will require constant rearranging of stock to maintain the logical stock arrangements in the warehouse.  Because this is too much work, the system breaks down and stock gets stored wherever it fits and stock gets randomised and increasingly hard to find.  Does this describe your warehouse?

The simple antidote to this problem is to store products according to pick frequency.  Picking is the highest labour activity in the warehouse and as such is the process to be optimised beyond all others, which is why so much attention is focussed on it.

Product slotting is the calculation of the best place to store a product to minimise subsequent travel associated with moving of that product through the warehouse during put-away, replenishment and picking operations.

At its most basic this is the casual observation by the warehouse staff that it makes sense to keep a particular product down low because they pick it all the time.  The next level of sophistication is perform a Pareto* analysis of your order history to determine the fastest moving products in your business and apply this information to where you store your products and what goes in the fast zone or the slow zone of your warehouse.  Over time your business and product profile change so this must be periodically revised to keep your slotting current.

*Pareto analysis is the application of the 80/20 rule where 80% of the picking is from only 20% of the items in the warehouse.  Keep this 20% in the fast zone and you make a huge gain in productivity.

A basic Pareto analysis can be done on a spreadsheet with minimal effort.  We will be publishing a how to guide and spreadsheet template for members of the Warehouse Performance Initiative in the future.

Awareness of promotions and new products with a rapidly growing demand, and items that are dying or obsolete is also helpful to maintain the warehouse efficiency.  A product slotting review should be done at least twice per year if your business changes only slowly and monthly to quarterly if changes are more rapid and you want to keep your warehouse movements optimised.

The ultimate sophistication is to use product slotting software.  Optislot is the only standalone product in this market at the moment and is now available in Australia through Synermatic.  With typical improvements in replenishment and picking productivity of 10-15% this is a must have investment for large DCs running on thin margins.

According to the website: 

“OptiSlot DC addresses the complexities of slotting by utilizing advanced mathematical algorithms which consider a product's dimensions like weight and velocity, physical characteristics of your environment including slot configurations, pick path and material handling equipment, and operational goals like pallet building, seasonality requirements and retail groupings.”

It's probably worth noting that this is only possible when you have the data.  If you don't have a modern WMS with an accurate data set of your warehouse and product dimensions then this tool will not be any use to you.

Synermatic are also developing a subscription service for organisations that need more than a basic Pareto analysis, but do not wish to invest in purchasing the software, contact them for more details.

Some Warehouse Management Systems also have a product slotting package available.  Most notably Manhattan which was designed by the same person who developed Optislot.

The big hurdle with slotting your warehouse is not getting the information; it is acting on it.  What do you do when you find out that 75% of your stock is in the wrong place?  This is a huge and seemingly wasteful task if all you do is move it from bin to bin.  The answer is to:

• Understand that the effort required to move the product to the right place will pay you back in productivity gains (reduced labour)
• Let natural turnover drive the process over time.
• Change the home bin or pick location or put-away zone etc. (depending on what systems you have available) so that as new products come in, they are put-away where they should be and the wrongly located items are picked out.
• After a month or two bite the bullet and move out anything left behind.
• If natural turnover hasn’t moved it then it is a slow item that may take too long or never pick out.  You do not want slow moving items in fast moving areas!!!!!  I cannot emphasize this enough.
• Perform a more regular slotting review so that you do not get yourself in such a mess in future.

Finally, some personal experience of what having a jumbled warehouse is like.  When I was Logistics Manager at Clifford Hallam I had to re-layout my warehouse to install a lot of new racking (more than doubling the storage by using the height of the building).  I did this whilst continuing to operate the business.  

This process took several months and the entire stock got jumbled due to all of the relocations required during the installation.  My overtime costs for normal operations went through the roof!  I finally sorted it out by re-slotting and working even more overtime (that went down well with my boss, as you can imagine!) to move product around to where it needed to be.  My excess labour fell back to even better than before the re-design and everyone was happy in the end.  So if your warehouse has never been slotted properly then imagine what productivity treasures are waiting to be revealed!

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #12

12.    Cluttered and badly organised operations benches

Quite frankly many operations benches that I see are a mess, cluttered and covered in stuck orders, returns, old paperwork, out of date work instructions and broken staplers and tapeguns.  There is no point having a highly efficient warehouse if you lose your hard won productivity gains with slow administration in receiving and order confirmation/packing freight. 

Here are my tips for best practice in operations workbench organisation

• The first aim of an operations bench should be to have nothing on it apart from work in progress.  Computers, printers, labels, pens, cartons, pending paperwork should be stored off the surface of the bench itself.  Either above or below.  This way nothing will get lost or mislaid.  Everything is easily to hand and never in the way.
• Custom make your workbench to suit your process.  Make sure everything is in arms reach from the operator.  This can be as simple as installing some shelves and Dexion bins to give everything a place.  If you work space is limited you can install monitor and keyboard stands to get the computers off the work top.  Printers can be installed under the bench or on a separate stand.
• Lay a padded anti-fatigue mat in front of the bench.
• The areas around the bench must be kept clear also with a standardised workflow of products and paperwork in and out.
• Sometimes the best bench is mobile.  Breaking down a mixed pallet of small items can be done on the dock with a multi-level trolley/bench that allows you to sort, check off, book in a delivery and then roll the trolley to the rack for put-away.
• Similarly on the outbound process, orders picked to a carton on a picking trolley can be checked, labelled and closed on the trolley and then rolled to the dock for staging ready for pick-up.
• Take advantage of wireless mobile terminals, and printers or even a laptop to allow transactions to be completed on the spot without the need for constant travel to/from a bench.  Installing a wireless network in your warehouse (even a cheap one) will free you up to perform warehouse transactions at the point of activity.  This is a key driver of efficiency and accuracy and is a good interim step if you have not yet invested in a WMS.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #11

11.    Not separating fast pick areas and bulk storage

At the heart of all warehouse productivity improvement is the target of eliminating the waste of motion.  Simply moving something from one place to another in the warehouse does not add any value.  One of the most common mistakes we see in warehouses is the failure to optimise the placement of the most commonly picked items to reduce travel path when picking and replenishing.

What do you do when you have lots of stock of those fast moving products?  If you keep all your stock together it will take up so much space in your fast moving rack zone that your fast moving products will not be near each other.  

The solution to this problem is to create a pick location with just enough of each fast moving product to allow you to keep a lot of products in a restricted amount of space and keep the bulk quantities of the stock somewhere else in your warehouse.  This means you will need to periodically replenish the stock of each item in the fast from the bulk zone.  This process is known as pick area replenishment.

The configuration of your fast pick zone will depend upon your products and their physical size and order profile.  Ideally you want at least a day’s worth of stock in a pick face and more is better.  If the stock is batch controlled or expiry dated then you will want to have two pick faces to allow for different batches/dates.  You should avoid mixing batches/dates of product in the same location if batch control and traceability is important to your business (it may not be).

Replenishment of the pick face can be done on demand or to a schedule.  On demand means that you do not do any replenishment until you absolutely have to.  When you release a wave of orders the replenishment moves needed to fulfill them will also be generated.  The disadvantage of this is that it can slow down your order fulfillment as you cannot complete those orders waiting of the pick face to be replenished.

Scheduled replenishment means that you can use slower times of warehouse activity to perform replenishment so that your high activity times during order processing can be devoted to processing orders in the shortest possible time.  The best solution will depend on your particular cycles of activity for your business.

If you have a basic business system that only allows one location per item (there are still too many of these around) then how do you find the bulk stock if you have set the pick face to be the only location for the item?  There are two solutions to this problem:

1.    Keep the bulk stock nearby.  Usually on a level above or below that is not located on the system.

2.    In a manually recorded location with a paper trail to the pick face.  Keep a card in the pick face with a list of locations where the balance of the stock is held.  Cross off the locations when you empty each location during replenishment and write on new locations when you receive and put-away new stock.  Also note the quantity held by the pick face so that you can use these cards to drive the replenishment process when pick faces are empty.

Further productivity gains can also be made by making sure you store your bulk stock to minimise the travel required during replenishment.  Keep the bulk stock of the fastest moving products in the fastest to access bulk areas.  This is another example of product slotting technique which we will cover in more detail in #13.

This is post is taken from an ebook that will soon be available as a sign up bonus to members of the Warehouse Performance Initiative (WPI*).  Keep an eye on the home page or send an email to admin@logisticshelp.com.au if you would like to be join the WPI and get a copy of the report as soon as it is available.

In the meantime you can subscribe to this blog by email and get all of our valuable insights delivered to direct your inbox.

*WPI is our global initiative to raise world productivity by helping small to medium businesses develop amazingly brilliant warehouses. The WPI is essentially a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals  (coming soon!).

21 mistakes adding cost and killing productivity in your warehouse - #10

10.    Lack of appropriate materials handling equipment

Your choice of materials handling equipment (or lack thereof) will set the level of productivity available to you in the same way as your warehouse layout and racking.  One of my key observations in any warehouse is how well equipment been deployed and how much it eases the physical task.  This will be indicated by how much motion is required to complete a task.  Following the Lean Methodology, motion is a non-value adding waste that should be eliminated where possible.

The classic mistake many warehouse managers make is to think that materials handling equipment is expensive and should be used sparingly.  Regardless of the cost, appropriate materials handling equipment will:

1. increase safety (reducing the cost of safety related incidents),
2. reduce labour (operating expense) and
3. increase capacity,

so that it is soon paid for and generating additional profit through reduced costs and increased output.  

A materials handling system is composed of three elements:

1.    a container,

2.    a mechanical means of moving that container,

3.    a storage system for the container.

Containerisation of goods is the foundation all materials handling.  Basic packaging is packed into or onto a container to standardise the means of materials handling.  For example, a pallet makes a forklift possible.  Although pallet standards vary they are similar enough in concept to allow a forklift to be built that is able to handle the wide variety of pallets available.  Pallet racking provides a place to store pallets of goods with volumetric efficiency.

The containerisation concept is widely applied in many types of materials handling system to increase productivity.  There are a huge variety of materials handling systems available to suit most common applications.  Custom containers and handling systems can also be built for non-standard products and materials.

The most efficient warehouse will make the best use of appropriate equipment.  Here is a quick round up of the different types of materials handling systems:

1.    Trolleys and tote bins

a.    If you have a lot of small order picking and processing then a trolley and tote/carton system is essential.  Multi–order picking to a multi-level pick trolley will allow you to pick several orders in one pass through the warehouse and is very efficient.

2.    Motorised trolleys and stock-pickers

a.    A pedestrian picker is limited to the speed they can walk and how high they can reach.  Using a motorised trolley such as a Crown WAVE or a with a built in ladder or step to allow the picker to reach higher levels, will allow a dramatic increase in the range of stock accessible to a pedestrian picker.

3.    Forklifts

a.    Pallet jack

                                       i.    The most basic manual hydraulic lifting device for moving a pallet.  They only move pallets at floor level.  Motorised units are available to ease the physical effort.

b.    Pallet mover/low level stock-picker

                                       i.    These are large ride on pallet movers that are designed to facilitate carton picking from the first level of pallet racking and can also be used to load semi-trailers.  Some units can carry two or more pallets on extended tines.  Crown now has a unit that is remote controlled so that the picker does not need to get on and off to drive to the next pick bay.

c.    Walkie stacker

                                       i.    A walkie stacker is a most basic type of forklift for moving pallets into the higher levels of pallet racking.  There are a wide variety available and really suit small warehouses with low a volume of pallet movements.  They can work in aisles as narrow as 2.4m to get the best use out of small warehouse spaces.

d.    Counter balanced forklift

                                       i.    These are the traditional looking forklifts with a seat and fork tines out in front of the wheels and a heavy weight (counterbalance) at the rear.  They are now relegated to truck loading and yard work rather than use within pallet racking where a reach truck is more efficient.

e.    Reach truck

                                       i.    The reach truck is so named because it has a mechanism to move the pallet into or out of the racking from the body of the forklift.  
There are two types:       

1.    The moving mast type moves the entire mast back and forth.

2.    The cantilever type uses an X-type extending cantilever to move the pallet back and forth.

These forklifts work in much narrower aisles than the counterbalanced forklift of around 3.0m or less.  They can also now reach to very high levels of over 12m with the use of automatic level selection and video camera assisted positioning.

f.     Stock-picker

                                       i.    The stock picker is designed to carry a person to high levels in storage racking so that they can pick cartons.  This eliminates the need to reach up and pull down and then replace a pallet just to pick off a few cartons.  They are a productivity gold mine in the right circumstance.

g.    Turret truck

                                       i.    A turret truck is designed to work in very narrow aisles of 2.0m or less.  The turret refers to the mechanism that allows the fork tines to swivel from side to side as the turret trucks tines are moveable from side to side.  Most turret trucks also carry the operator to high levels to ease operation and allow for carton picking.  Turret trucks can reach up to 18m in height.

h.    High level cranes

                                       i.    A high level crane does the same thing as a turret truck, but it is built into the structure of the building and located on rails top and bottom so that it can reach even higher levels.

4.    Conveyors

a.    Conveyors are a substitute for moving stock by forklift or other device.  They are very fast and efficient but also very specific and not easily (or cheaply) altered.   Conveyors best suit mature businesses with high order volumes.  They are mostly used in very large and high volume warehouses where the investment is warranted by the high transaction and stock volume they handle. 

b.    Smaller scale applications of conveyors are used but can also introduce inefficiencies when the business needs change and the fixed conveyor no longer suits the new operation but is not updated.  Also when your conveyor system is down it can simply stop you shipping orders.  An efficient but more manual system is more scalable and has the flexibility to cope with changing business needs.

5.    Automated Storage & Retrieval Systems (AS/RS)

a.    AS/RS is a very broad term that can apply to anything from a carousel to a huge warehouse with conveyors and cranes moving pallets in and out of a very high level automated warehouse.  The technology removes human activity and brings the goods to the man for order processing.

6.    Automatic Guided Vehicles (AGVs)

a.    Forklift AGVs are available and well suited to high volume pallet movements often associated with manufacturing plants.  They can be configured as a turret truck and can even load semi-trailers.  Like most automation they are suited to high volume operations and will provide the highest return when operated in a 24/7 environment.

b.    Kiva Systems make a mini AGV that is so good at what it does that Amazon bought the company.  The Kiva system uses many small AGVs to move storage shelves around the warehouse to picking stations allowing the picker to stay put and perform a multi-order pick to carton without having to walk around the warehouse.

7.    Robots

a.    The Baxter Robot may not yet be a viable storeperson replacement yet, but watch this space. These devices will only get better and in 20 years or less will likely start to make inroads into all kinds of repetitive manual labour.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #9

1.    Poor layout and product flow (in and out)

A poor warehouse layout locks in poor productivity and what’s worse is that it becomes invisible.  Because businesses change over time, a once perfectly suitable layout and racking arrangement can become a drain on productivity.  Perhaps the layout was never planned in the first place but racking was simply put wherever it fitted at the time the installer showed up.

The principles of process design dictate that the design of the supporting systems and infrastructure must support the business process.  So in order to get the layout correct you must first design the process that you want it to support - with full knowledge of what is possible.  This is the approach we take to all our warehouse designs – first the process then the layout and systems to support it. 

Many people make the mistake of starting with the current system and the existing infrastructure and then designing a process around that.  Unfortunately when you do it this way, you are accepting your current limitations without question and missing the opportunity to unleash greater overall productivity in your business.  What often starts as a need for some new racking, or an observation that you are running out of space in your warehouse can be an opportunity for a major reform and productivity gain if you open your eyes to what is possible.

The basic principles of efficient warehouse layout are as follows

1.    Keep fast moving product in the fastest to access areas.  The corollary also applies, put slow moving items in the slowest to access storage areas.

a.    If you have a bad building with pillars and walls in all the wrong places then this idea is what will bring back the productivity into your operations.  Many businesses simply do not apply this principle to their warehouses or do not apply it rigorously enough to get the full benefit.

2.    Use fixed pick locations near to the despatch dock with a periodic replenishment cycle.  This keeps fast moving products close together to reduce travel path.

a.    This requirement must be balanced by the need to allow sufficient access to the pick face so that all of the orders for fast moving product may be picked.  Too close together and you can create crowding as too many pickers need to access the same product at the same time.

3.    Store the balance of fast moving stock in randomly located bulk storage racks.

a.    As per point 1: in bulk storage racks, keep the faster moving products in the fastest to access locations, which, in pallet racking, will be low and nearest to the despatch dock.

These first three points are related to the idea that is commonly called product slotting.  They are important to layout because they will impact what type of racking you put in your fast zone.  We will talk more about slotting in mistake number 15.

4.    Build travel shortcut aisles into long runs of racking or shelving so pickers can cut across aisles to reduce travel path.

a.    Pallet racking should be continuous with beams removed in one rack bay to a sufficient height to let your forklifts travel underneath the higher levels.

5.    Maximise the use of the building volume with high level pallet racking, multi-level shelving modules and mezzanine levels.

a.    Generally you can stack stock to up to 45cm below the level of your sprinkler heads but check with your fire system maintenance provider for the clearance required for your particular installation.

6.    Eliminate air – your stock does not need to breathe!

a.    When I walk into a warehouse, one of the first things I look for is storage density as indicated by the amount of free space (air) around products in the storage racking.  Lots of air means lots of wasted space which means higher storage cost per unit, longer travel path for put-away and picking and poor productivity.

b.    Once you realise that an investment in the most appropriate racking and storage systems for your products is an offset of both rent and operating expense you will not quibble over the cost anymore.  Good racking and storage systems make you money, last indefinitely and are never superseded.  Is any other investment this good? (Maybe real estate!)

7.    Build optimised workstations for receiving, packing and despatching orders near the inbound and outbound docks.

a.    Too much focus just on the pick process and neglecting the whole of the warehouse operations will see you missing out on valuable productivity gains.  However your stock comes in or goes out, you need space and efficient process to get it into or out of the warehouse.

b.    This means a well laid out operations bench which is kept clear of junk and has everything you need to hand such as labels, packing materials, paperwork, computer workstation (if required) & printers.

8.    Allow sufficient staging space for inbound and outbound order staging and processing.

a.    Around the workstations and at each dock you need clearance for staging of product in and out.  Nothing kills productivity and throughput rates faster than the double handling caused by inadequate staging space.

9.    Principles of good warehouse layout must be applied as part of the overall operational process design. This includes the warehouse management system, data collection technology (mobile terminals with barcode scanners, voice directed task technology), racking systems and materials handling equipment.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.