setting up a short line in the warehouse for that week’s specials. At the end of the week, the line can be torn down and
reset for the next week’s promotions.
MAN VS. MACHINE
While a change in slotting strategy can do much to promote
picking efficiency, it still leaves another part of the labor
problem unaddressed. Typically, creating store-ready pallets
requires breaking down single-SKU pallets and then
repacking the cases in a specific order on mixed-case pal-
lets. That can be a significant drag on efficiency. “You don’t
have full-throttle continuous movement any more [when
you’re building mixed-case pallets],” says Dan Labell, presi-
dent of Westfalia, a manufacturer of automated material
handling equipment. “Instead, products have to be married
up with other products coming from another part of the
warehouse.”
In some cases, the solution may be automation—whether
it’s the fully automated route or partial automation. An
example of a fully automated system would be a solution
that uses an automated storage and retrieval system
(AS/RS) for storing pallet loads of goods and a robot for
order picking. To fill an order, the robot would remove a
layer from the appropriate pallet and deposit the merchan-
dise (which may be further broken down into cases) onto a
conveyor for transport to an automated sequencing buffer
area. There, it would be married up with the other SKUs
required for the order.
In the more common, partially automated approach,
employees might pick cases to a conveyor belt. The order
would then either be automatically palletized or assembled
by workers using pallet lifts to make the process more efficient and ergonomic. Sometimes, companies will use robots
to build the layers for the mixed-case pallets, with workers
manually “topping off” the order with individual cases.
Because of the complexities involved, these automated
approaches require sophisticated IT support, whether it’s
slotting software or a warehouse control system to sequence
the orders. Indeed, the algorithms for mixed-pallet
sequencing can be quite complex, especially if products of
different sizes, shapes, and weights are being packed on the
same pallet, says Labell. Kozenski adds that performance
management software can be helpful in determining how
much labor is truly being saved at the store and how much
more is required at the DC.
A MENTAL SHIFT
In at least one corporation, the move to store-ready shipping is affecting more than just the operations at individual
DCs. It has led the company to rethink the way it runs its
distribution network. As part of a push to improve its
direct-to-store delivery process, Pepsi Beverages Co. is
piloting a two-tiered distribution network strategy. Under
this model, mixed-layer pallets are built by automated
equipment at a plant or centralized DC. These pallets are
then shipped in full truckloads to satellite DCs or cross-dock facilities, where the pallets are “topped off” with individual cases, said Tim Thornton, vice president of supply
chain - warehouse and logistics for Pepsi Beverages, during
a presentation at the 2010 Council of Supply Chain
Management Professionals’ annual conference.
The prospect of a network overhaul aside, for most companies, the biggest adjustment will be the change in mind-set required for store-ready shipping. After years of talking
about the need to optimize the overall supply chain and
the cost trade-offs it might entail, distribution professionals are learning what it’s like to take a hit for the team. “It’s
a real paradigm shift,” says Ruehrdanz, “and staff [mem-bers] are going to have to get used to a whole new way of
doing things.”
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