DC Velocity - May 2019

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DC VELOCIT Y (ISSN 1543-3587) is published monthly by Agile Business Media, LLC, 500 E. Washington Street, North Attleboro, MA 02760. Periodical postage paid at North Attleboro, Massachusetts and additional mailing offices. Mitchell E.

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3324

Which DC metrics matter most in the age of e-commerce?

SOURCE: The annual DC metrics study is produced through a partnership between the Warehousing Education and Research Council (WERC) and DC VELOCITY. This year’s survey was conducted by Joe Tillman, a WERC researcher and founder of TSquared Logistics, and Drs. Donnie Williams and Karl Manrodt of Georgia College & State University. To see the full results of the survey, including performance and benchmarking data, go to www.werc.org.

Companies in the wholesale and distribution sector made up the largest percentage of respondents to this year’s survey, followed closely by manufacturers and third-party warehouses. Together, those three industry sectors accounted for nearly three-quarters of the respondents.

More than half of the survey respondents worked for companies that either serve the end consumer or supply a wholesaler/distributor.

Other 3.5%

Transportation service provider 0.9%

Utilities/Government 0.9%

Life sciences – Medical devices 2.6%

Life sciences – Pharmaceuticals 1.6%

Third-party warehouse 19.5%

tail

0%

Who is your customer?

Survey respondents by industry

Retail firm

23.8%

How are orders picked in your DC?

Partial-pallet picking 12.9%

In total, about two-thirds of respondents (64.4 percent) said that orders were picked by the case (either full or broken) in their DCs, while 35. 6 percent said they picked orders by the pallet (either partial or full).

Those figures are consistent with last year’s survey sample.

What type of software do you use to manage your warehouse operations?

WMS ( warehouse management system) 39.4% ERP (enterprise resource planning system) 20.2% Legacy software — homegro wn/developed over time 15.4% Excel/Data file 14.4% Do not use software 4.3% Cloud-based WMS 3.7% MRP (material requirements planning or manufacturing resource planning) software 2.6% Predictably enough, when survey-takers were asked about the software used to run their operations, warehouse management systems (WMS) emerged as the most common response. But the results also showed that ERP systems were used in a significant share of operations. That may be because many facilities are trying to integrate their data among different siloes and platforms, which is made easier by using an umbrella ERP platform that includes a WMS alongside other modules.

What technologies do you use or plan to use to move materials within your DC?

Planned or Not

Technology Use today implementing planned Conveyors 53.3% 24.9% 21.8% Cart-based picking 38.2% 15.2% 46.7% Driverless vehicles 23.6% 16.5% 60.0% Automated storage and retrieval systems (AS/RS) 22.7% 25.8% 51.5% Slotting systems (outside of WMS) 14.3% 15.6% 70.1% Carousels 12.9% 28.5% 58.7% Sortation systems 12.4% 11.1% 76.4% Robotics 12.1% 16.1% 71.9%

As warehouses pursue ever-greater accuracy, material handling technology plays a growing role. We asked respondents what technologies they used to move goods within the four walls of their DC and found that the trusty conveyor still rules in terms of installed systems. However, many respondents told us they plan to buy—or are already implementing—technologies ranging from AS/RS ( 25. 8 percent) to carousels ( 28. 5 percent) and even robots ( 16. 1 percent).

Note: Percentages may add up to more than 100 because of rounding.

Top 12 most commonly used metrics, 2019

“Order picking accuracy” rose to the top of the list of most commonly used warehouse performance metrics this year, while a related measure, “inventory count accuracy by location,” jumped from #10 to #5. That focus is a reaction to the small size and high frequency of orders in e-commerce fulfillment, said survey author Joe Tillman, who explained that picking mistakes take on great importance when an order may consist of a single item.

You can’t manage—or improve—what you don’t measure. That has long been the premise of our annual warehouse and DC metrics study. The survey, conducted among DC VELOCITY readers and members of the Warehousing Education and Research Council (WERC), asks respondents what metrics they use, how their operations are performing against those yardsticks, and what tools and technologies they use—or plan to use—in their DCs. Here are some highlights of the 16th annual study.

Metric (in 2019 rank order) 2018 rank 2017 rank

1. Order picking accuracy (% by order) 2 2

2. Average warehouse capacity used 1 1

3. Peak warehouse capacity used 3 4

4. On-time shipments 5 3

5. Inventory-count accuracy by location 10 10

6. of supplier orders received damage-free 11 11

7. Order fill rate 14 12

8. of supplier orders received with correct documents 13 14

9. Dock-to-stock cycle time, in hours 16 13

10. On-time ready to ship 12 8

11. Part-time work force to total work force 7 5

12. of cross-trained workers 8 9

40

news

13 \ newsworthy \

Industry growth slowed in March, according to Logistics Manager’s Index Slowing U.S. freight market to stay in positive territory through 2020, DAT says Trucking industry faces challenges in parking, safety, insurance Groundbreakers: who’s building a new DC?

Fortna acquired by private equity firm, plans growth in e-commerce and warehouse automation Last mile is the crucial mile, tech exec tells Home Delivery World Kroger, Ocado to build next CFC near Orlando Global Tranz sold to new private equity owner after just eight months Short takes Uber Freight expands brokerage service to Europe Quiet Logistics acquired by pair of real-estate developers Accolades: awards and recognition Rakuten acquires two Salt Lake City firms to boost e-comm capabilities Truckstop.com lands investment from venture capital firm

in every issue

1 \ inbound \

Boxes and briefs: Industry news at a glance

39 \ inPerson \

An industry insider looks at the supply chain

42 \ rollouts \

Spotlight on pallets, containers, and tracking systems

55 \ adindex \

How to reach our advertisers

voices

11 \ bigpicture \

No silver bullet \

DAVID MALONEY

56 \ outbound \

Catch a wave \

MITCH MAC DONALD

EDITORIAL ADVISORY BOARD

n Jim Bowes
Peach State Integrated
Technologies
n Earl Boyanton
Independent Consultant
n George Clopton
Polo/Ralph Lauren
n John White III
Fortna
n John A. Gentle
John A. Gentle & Associates, LLC
n Brian Gibson, Ph.D.

Auburn University
n Steve Inacker
Cardinal Health
n Richard Jackson
Mast Logistics
n C. John Langley Jr., Ph.D.

Penn State University
n Clifford Lynch
C.F. Lynch & Associates
n Karl Manrodt, Ph.D.

Georgia College & State University
n Scott Mc Williams
Geodis
n Christopher D. Norek, Ph.D.

Chain Connectors
n Richard H. Thompson
JLL
n Kate Vitasek
University of Tennessee

DC VELOCITY is committed to accuracy We are committed to accuracy and clarity in the delivery of important logistics and supply chain news and information. If you find anything in DC VELOCITY you feel is inaccurate or warrants further explanation, please contact Editorial Director David Maloney at dmaloney@dcvelocity.com.

inside

Hints: Carly Simon, Bob Seger, The Beach Boys Did you find the hidden rock/pop song title in this issue? To enter our monthly “DCV Rocks” challenge, e-mail your answer to dcvrocks@dcvelocity.com.