DC Velocity - August 2011

Major integrators as well as software companies have
developed tools to help deal with the volume. Benefield
says enVista offers a tool that can automatically generate as
many as 7,500 charts and tables comparing the data in a
wide variety of ways. “We look for spikes during the year or
in lines per order, single line orders—we can break it out in
a variety of ways. We have tables that show how orders
break down, the percentage of As, ABs, and ABCs. That’s
one of the most valuable charts we generate.”
The detailed look at SKUs and orders can suggest cost
savings in the design through what Fortna calls a ware-
house within a warehouse—clustering the fastest-moving
goods in one segment of the warehouse, which could limit
the amount of automated equipment needed. “When you
go to do the design, you can better utilize your capital
investment,” Giangrande says.

He describes a project for a customer in the lawn and garden industry that could complete 71 percent of its orders from its A and B SKUs. The design consolidated those goods into a 10,000-square-foot area in the DC, making use of zone routing and a combination of static and flow storage. The company, he says, can now complete 70 percent of its orders in that area faster than it could with the previous layout, resulting in increased throughput and improved labor productivity. “It was not a radical change in how goods were stored, but a change in how the goods were grouped together, then adding appropriate material handling to that and ensuring we did not engineer in any bottlenecks,” he says.

Benefield adds that in existing facilities undergoing a retrofit, it often turns out that DCs can benefit from implementing tactical changes in processes. He cites one customer whose data analysis showed that half the firm’s orders were single-line, single-unit orders. By switching from discrete order picking to batch picking those orders in a single wave, the operation reduced travel time for order selectors dramatically, improving labor productivity. “When you are looking at the data, you can find opportunities,” he says.

DRAW THE MAP

With a full understanding of the requirements, it’s time to
move on to the design. Giangrande says the design should
incorporate four major areas: people, processes, systems,
and assets. He treats DC space as a separate issue, particu-
larly for retrofits in existing buildings. “Space is the Achilles
heel of a design,” he says. “You can have the best systems
and good media, but if you need 200,000 square feet and
you only have 150,000, things are going to suffer. Or if you
have 300,000 square feet, that’s going to be detrimental.”
During the design process, Benefield says, it is crucial for
the design engineers and the DC management to stay in
touch. “Communication is key,” he says. “You cannot work
in a vacuum.”

Ideally, he says, the designers will develop alternatives for DC managers to consider. They can guide customers through an economic analysis of each alternative, comparing crucial factors such as up-front investment costs, space utilization, labor costs, throughput, and expected return on investment. The analysis should also include an evaluation of such qualitative factors as flexibility, expandability, safety, security, integration, and ease of implementation, he says.

Ultimately, the design has to incorporate all of the pieces of the operation—receiving, storage, picking, areas for value-added services, shipping, etc. The decisions on storage media alone can be complicated, involving such considerations as cube utilization, level of automation, forward pick versus reserve requirements, and more. Those decisions will be dictated in large part by the order profiles and processes. “If you sell a million units, your storage media are going to look very different if you sell them one at a time than if you sell them 100,000 at a time,” Giangrande says.

The completed plan serves as the road map for the implementation—the selection of appropriate technology, material handling equipment, etc. Developing such a map requires time and effort, to be sure. But it’s the single best way to keep the journey from veering off course. ;