Most distribution professionals understand that it is not enough to know how their company performs year over year; they must also continue to improve their performance in order to stay ahead of their competition. Today’s companies are in an environment where their customers continue to demand more – instant availability, error free service, and customized products – all at a lower cost. That is why many professionals look to adopt best practices as a way to drive improvement.
In the last column, the first in a four-part series, we looked at picking and packing. This time we’ll review key elements of the material handling and put-away processes. Material handling and the put-away function encompass all the processes that support the movement of material from the receiving area to the point of use or the storage location. We’ll highlight some of the common practices that best-in-class companies use within their warehouse to drive high productivity and lower costs.
Material handling — managing the movement of products throughout the warehouse — can be as basic as using lift trucks and pallet jacks and as complex as employing fully automated systems that are made up of customized conveyor systems, automated guided vehicle systems (AGVS) and automated storage systems.
Material handling can be enhanced when warehouse automation is used in line with a well thought out put-away processes. Best practice companies put in place flexible and efficient material handling processes that use appropriate automation and technology tools the meet the needs of their current and forecasted business. Common material handling automation includes radio frequency equipment in fork trucks and portable/hand held RF devices that direct warehouse personnel, automated conveyor systems with sorters and diverters and automated storage and retrieval systems (AS/RS). Let’s take a closer look at some of these automation options.
RF equipment: Employing RF terminals in lift trucks and portable RF devices, which can be carried by employees, will boost productivity while reducing data entry errors. These devices when integrated with the warehouse management system (WMS) can send employees product move tasks and give information about the product that needs to be moved. Typically, systems are designed to work with bar coded labels or RFID tags.
Automated conveyor systems: An automated conveyor system with sorters and diverters will route product to the appropriate put-away zones, reducing travel time and handling. Productivity and labor costs can be significantly improved by automation if the transit time from receiving areas to storage zones is considerable, or when product is moved and stored in case-size lots.
Automated storage/retrieval systems: AS/RS benefits might include maximized storage space, increased put-away productivity, reduced warehouse labor and improvements to put-away accuracy. AS/RS technology is especially effective when working with narrow aisles and extremely high racks found in some larger high volume distribution centers (DC). While AS/RS solutions are capital intensive, they can be tremendously cost effective in the correct applications.
Put-away is the process of moving material from the dock and transporting it to a warehouse’s storage, replenishment, or pick area. Best-practice companies manage the put-away area by calculating resource and space requirements based on expected receipts and current backlogs. Best practice is to put away product the same day it’s received, because not doing so affects space, causes congestion, increases transaction errors, and makes product more susceptible to damage. In a busy warehouse, it is easy to let product put-away fall behind other tasks such as picking, replenishment, shipping, and loading. But pulling away resources from put-away tasks can affect fill rates by not having product in pick racks. This can bring about congestion in staging areas that overflow into aisles. Delaying put-away may also result in product damage as the merchandise is moved, again and again, to make way for higher priority receipts. Proper staffing of the put-away team will support down stream processes of picking and shipping, and in the long run lead to better customer order fill rates.
The put-away process is typically managed by one of, or a mix of, the following methods; staging product from the receiving area, based on the purchase order, based on the part number, or based on a put-away zone or by using direct delivery (put-away) to the storage location. The most efficient practice is to put-away directly from receipt to its final location and is often the primary method used in best practice companies. This process uses the least space for staging and product is handled less and ready for use sooner. Direct put-away programs require a more sophisticated WMS system that has the ability to assign locations from an ASN or upon receipt to the dock. Assigning locations and using direct put-away can be optimized the by use of automated conveyor systems that are capable of sorting and diverting materials by zone and location.
Best practice companies also use their warehouse management system (WMS) to manage travel time from receiving to storage areas, pick locations and replenishment areas; so that the best put-away route can be selected. The end result is put-away travel paths that are sequenced based on the shortest route for the product in the load, with reduced aisle conflicts and congestion. Many WMS programs also support task interleaving; most best-practice companies make use of this capability in their warehouses to reduce non-productive travel time. The put-away process is critical and significantly affects overall warehouse efficiency.
Best-practice companies identify products using some form of barcoded or RFID label. Product identification labels, zone or location labels and pallet license plates should all be utilized in the put-away process. Both bar code and RFID can work equally as well to identify product, with barcode labels far more common in today’s warehouses. The advantage of RFID is that it works better in harsh environments, it has a fast read from almost any position, and the tag can hold a lot of information that can be changed as the product flows through the warehouse. Barcode labels however have been used for years, successfully, to identify and manage the flow of materials in the warehouse.
Many companies have some type of process to manage expedited materials once they have been received. In a manual process the product might be flagged as “hot” and placed in a special “expedite” staging area, so that the put-away team can move the product to the required location as quickly as possible. This can be a hit or miss arrangement and is less than effective. Best practice companies the cross-docking process is managed by the WMS system. Cross-docking, as it relates to put-away and material handling, is the process of moving specific products to support an open order or replenishment request, with minimal handling and delay. The WMS system flags the product for cross-docking by matching it to an open order or replenishment requirement, at the time of receipt, or when the advance ship notice (ASN) is received. The product may still end up in a special staging area but the system is keeping track of it and will prioritize it over other material. The task to move the material is sent to the lift truck or hand held RF device for movement directly to the point of use. This is a far more effective system to get priority product moved.
Good housekeeping must be part of any best-in-class warehouse, as best practice processes cannot succeed in a workplace that is cluttered, disorganized, or dirty. Poor workplace conditions lead to waste, product damage, and safety issues; such as extra motion to avoid obstacles, time spent searching for things, delays due to defects, machine failures, or accidents. Establishing basic workplace conditions is an essential first step in creating a safe and productive warehouse environment.
Kate Vitasek is managing partner of Bellevue, WA-based consultancy Supply Chain Visions.