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, customized products — at a lower cost. That is why many professionals look to adopt best practices as a way to drive improvement.
In my previous column, in the February issue, we looked at picking and packing (read article). This time we’ll review key elements of the material handling and put-away processes. Material handling and put-away 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 best practices to increase 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 made up of customized conveyor systems, automated guided vehicle systems (AGVS), and automated storage systems.
Warehouse automation used in line with well-thought-out put-away processes can enhance material handling. Best-practice companies put in place flexible and efficient processes that use appropriate automation and technology tools to meet the needs of their current and forecasted business.
Common material handling automation includes radio frequency (RF) 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 portable RF devices, which can be carried by employees, and RF terminals in lift trucks will boost productivity while reducing data entry errors. When integrated with the warehouse management system (WMS), these devices can transmit to employees instructions and information about products that need to be moved. Systems are typically designed to work with barcoded 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. If the transit time from your receiving areas to your storage zones is considerable, or your product is moved and stored in case-size lots, this sort of automation can improve productivity and labor costs significantly.
Automated storage/retrieval systems: AS/RS benefits can include maximized storage space, increased put-away productivity and accuracy, and reduced warehouse labor. AS/RS technology is especially effective in distribution centers with narrow aisles and extremely high racks. While AS/RS solutions are capital intensive, they can also be tremendously cost-effective in the correct applications.
Put-away practices refer to 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.
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 result in you not having product in pick racks, which in turn could reduce fill rates. It can also cause congestion in staging areas that overflow into aisles. Delaying put-away can result in product damage as well, as the merchandise is moved, again and again, to make way for higher-priority receipts.
The put-away process is typically managed by staging product from the receiving area, based on the purchase order, the part number, or a put-away zone or by delivering it directly from receipt to the storage location. Direct delivery is the most efficient practice and is often the primary method used in best-practice companies. The process uses the least space for staging, and product is handled less and ready for use sooner.
Direct put-away programs require a sophisticated WMS that can assign locations from an advance ship notice (ASN) or upon receipt at the dock. Assigning locations and using direct put-away can be optimized by use of automated conveyor systems that can sort and divert materials by zone and location.
Smart companies also use their 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 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 use this capability in their warehouses to reduce nonproductive travel time.
Leading merchants identify products using some form of barcoded or RFID label. Product identification labels, zone or location labels, and pallet license plates should all be used in the put-away process. Barcode and RFID can work equally 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. RFID is, however, more costly than barcoding.
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 it to the required location as quickly as possible. This can be a hit-or-miss arrangement and is less than effective. Best-practice companies instead use their WMS to manage the cross-docking process.
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 flags the product for cross-docking by matching it to an open order or replenishment requirement, at the time of receipt or when the 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.
Kate Vitasek is managing partner of Bellevue, WA-based consultancy Supply Chain Visions.