reducing the time, labor, and complexity required to restock the shelves at the retail store,” says Ken Ruehrdanz,
market manager, distribution and warehouse systems for
Dematic, a material handling and logistics automation
company.
The reason behind this shift is simple math. Anything
that cuts labor costs at 100 stores will save big bucks, even if
it means higher labor costs at the DC that serves those
stores, says Lance Reese, technical solutions director for
Intelligrated, a provider of material handling solutions.
To be sure, the store-ready concept is not new. Consumer
packaged goods companies have been building mixed-case
pallets and loading trucks in reverse stop sequence (with
orders for the last stop on the truck’s route loaded first) for
years. But the practice is now spreading beyond grocery,
convenience, and drug stores to other kinds of retail establishments, like consumer electronics and club stores.
The store-ready trend is also deepening: In addition to
store-ready pallets, some companies are now asking for
store-ready cartons and totes. Others are experimenting
with store-ready packaging, a concept popular in Europe,
where products are packaged to go straight from the truck
to the shelf.
KEEP THE COST DOWN
All of this, of course, has the potential to add significant
costs to DC operations. For starters, there’s the additional
labor required to pick orders in a “store friendly” sequence
as well as the labor needed to break down full pallets and
build new, mixed-case loads. “The distribution center is
now going to cost more to operate,” Ruehrdanz says.
For managers whose sole focus up to now has been on
optimizing DC costs, that can be tough to accept, says Tom
Kozenski, vice president of product strategy at software
vendor RedPrairie. “I’ve been in meetings with senior exec-
utives of logistics who say, ‘I’m willing to do things to help
[the stores] but at relative cost,’” he says. “In other words,
they’re saying, ‘I’d love to pick these pretty packages for you,
but it costs me money to pick them in that order and to …
have my workers walk around instead of yours,’” he
explains.
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