newsworthy
Shippers to 3PLs:
give us more!
3PLs to shippers:
then open the door!
Broader look needed
in DC automation
decisions, study says
TO HEAR SHIPPERS TELL IT, THIRD-PARTY LOGISTICS
service providers (3PLs) need to come to the table with
fresh and innovative ideas they could proactively imple-
ment to improve service levels, response times, and overall efficiencies.
A DIFFERENT VIEW
Not surprisingly, 3PLs take a different view. In a white paper issued late last year,
Scranton, Pa.-based Kane Is Able Inc. said 3PLs understand the consequences of
broad strategic decisions because of their experience working in and around the
customer’s business, yet shippers don’t capitalize on the insights the providers
can offer. Shippers “often don’t leverage this understanding, and limit 3PL
involvement to execution, not problem solving,” according to the Kane paper.
The paper cited an example of a large consumer goods company that designed
a point-of-purchase display that initially took 28 hours to assemble and was
inefficient to ship. The firm’s 3PL—which the paper did not identify— p. 24
When it comes to evaluating
distribution center (DC)
automation, companies should
go beyond mere labor cost calculations and take into account
the benefits of expanded supply chain capabilities.
That’s the view of Dr. Raj
Veeramani and Dr. Ananth
Krishnamurthy, two University
of Wisconsin professors who
recently conducted a study on
the impact of DC automation.
Although justification of
automation projects generally
revolves around labor cost
reductions in the warehouse,
that’s just part of the picture,
Veeramani said. To get a more
accurate assessment, companies should broaden their focus
to include automation’s impact
on their overall supply chain
operations.
For example, automation
sometimes can lead to higher
warehouse throughput with the
additional benefit of enabling
the facility to handle a wider
variety of products. “DC automa-
tion will impact your upstream
and downstream supply chain,”
said Veeramani. “DC automation
should be viewed in the context
of a supply chain strategy.”
The two professors noted
that DC automation has been
around since the 1970s.
However, recent technological
advancements, coupled with
demographic trends such as an
aging workforce, could make it
advisable for companies to
take another look at the poten-
tial benefits of automation. ;
