Working Smarter With What You Have

In today's credit-strapped economy, squeezing greater performance out of existing infrastructure and equipment is a key distribution management strategy. By optimizing the efficiency and utility of existing buildings, equipment and systems, companies can realize bottom line-enhancing productivity gains without major capital expenditures.

Repurposing existing technology can also enable efficiency gains and increases in capacity that allow older distribution centers (DCs) to accommodate SKU growth and increases in store count or adapt to changes in order profile without major expansions or greenfield construction. Efficiency improvements also make companies more nimble, giving them the flexibility they need to rapidly adapt to ongoing market and business changes.

Handling More Throughput

The traditional response to dealing with the demands of growth has been to apply additional labor. Although this tactic can provide immediate incremental increases in a DC's capacity, there is a limit to how effective it can be in the long term. Eventually, other constraints, such as insufficient sorter speed, or too few pick faces or loading doors, will make additional increases to the labor force an inadequate solution.

At this point, the traditional Plan B is to purchase additional equipment, expand square footage or both. However, the current state of the global economy is causing the usual paradigm to change. Today, when labor increases are no longer the answer, and large capital expenditures are out of the question, it is time to examine the DC's operation and identify opportunities for reconfiguring material handling systems, adopting new software and/or altering processes to increase efficiency and overall productivity.

Two-Stage Crossdock

Productivity is a function of efficiency and utilization. The most efficient way to get product from one side of the DC to the other is to crossdock. The process of unloading goods at receiving and moving them across the building and directly onto another trailer is 100% efficient. But, efficiency is only one part of the productivity equation. Even though it is the most efficient process you can perform, if you crossdock only 5% of the time, it is only 5% productive (100% efficiency x 5% utilization = 5% productivity).

The goal of 100% productivity via crossdocking can be achieved only in a true store-per-door environment, in which there is a 1:1 ratio of stores serviced by the DC to live shipping doors with constant availability (100% efficiency x 100% utilization = 100% productivity). In the real world, few companies have the resources to implement such a system, but using the principles of crossdocking in all other operations will increase productivity.

It is important to note that these principles can be applied to order fulfillment, manufacturing and shipping to achieve higher productivity and lower costs. While 100% productivity remains the goal, the first step toward this ideal practice is a hybrid solution known as the two-stage crossdock.

It is possible to boost a DC's order fulfillment productivity by implementing a two-stage crossdock process that capitalizes on the efficiency of the crossdock, significantly increasing utilization without large capital expense. The two-stage crossdock leverages existing assets to increase order fulfillment efficiency. When allocated products — those that are already part of an existing order to be filled — arrive without a corresponding outbound trailer waiting at a shipping door, additional outbound positions are necessary. These are created by combining products into waves as they are received. Waves are then staged in a buffer consisting of a floor position, pallet position, AS/RS or trailer.

When a shipping door becomes available, the waves that comprise the order are pulled from the staging area and loaded onto the appropriate outbound trailer. This process can also be used for other operations; for example, allocated full cases destined for a split-case order fulfillment system can be staged by wave and introduced into the tilt-tray, cross-belt or put-to-light system when the wave becomes active. This effectively eliminates putaway and discrete picking of cartons by wave.

The two-stage crossdock can reduce re-picking labor by more than 50%. Although more labor intensive than a single-stage crossdock, it is an attainable solution that requires fewer shipping doors and uses significantly less labor than the typical material handling process. The two-stage cross-dock example illustrated in Figure 1 (p.36) reduces rolling stock requirements by eight units and saves 127,000 square feet of floor space by eliminating the need for a pick conveyor, pick module and associated racking.

Minimizing Gaps

For many DCs, sorter throughput is a pinch point that negatively affects order fulfillment efficiency. While modern sliding shoe sorters have reached the 600- to 650-foot-per-minute milestone, many existing sorter systems are limited to speeds equal to or, in some cases, significantly less than this benchmark. The physics of the divert angle limit existing systems, making it impossible to speed up the sorter without a major rebuild of the shipping system.