abco AUTOMATION's Blog - Abco Automation

How Supply Chain Optimization Can Help You Beat Your Competition

Hi I am Cory Flemings from abco automation. I want to welcome you back to whiteboard insights. Today we’re going to talk about the supply chain optimization and why it matters. I heard a story one time about a Vice President of Distribution for a very well-known health and beauty aid manufacturer who gave this talk about when he took over as VP. He asked what is the cash to cash cycle line for a particular brand of shampoo?

What is the time from the point where we spend money on boxes bottles or whatever you need for the shampoo and the manufacturing process to the time you get the money back from Wal-Mart (their end customer). Guess how long that process was?

Really, write it down and make a commitment you might be surprised at the answer. Well despite the fact that I’m not Vanna White, here is the answer. 47 weeks, 47 weeks of time. From the time that they bought bottles of goop, and paint and to the time they got their money back from Wal-Mart.

Now the next question he asked was this of those 47 weeks how much time do you really take to add the value process?

That is to make the product. Surprise again. 90 minutes. So out of the 47 weeks of time they only spent 90 minutes actually producing the product, and the final question how much of the corporate attention was on the 90 minutes?

You got it 90%. What does this mean? This means, what the significance of those things, if you can reduce the time that you have to spend on the cash cycle by 50% you get your money and your profit twice as fast as you used to and that matters cause now you can take that money and you can pass it on to the customer and get market share by having a lower cost product or you can put your money in your pocket and make more money and apply to marketing and beat your competition. That what in either case supply chain optimization is critical to companies who both do the same thing and make basically the same product you can see one company or the other is going to win on the basis of the supply channel alone.

So if you’re not lying awake at night worrying about your supply chain maybe you should.

Filed Under: Supply Chain Optomization, video

The Distribution Center as a Competitive Advantage: Gilt Groupe

by Travis Baker

The Distribution Center as a Competitive Advantage: Gilt Groupe

Read the transcript of “The Distribution Center as a Competitive Advantage: Gilt Groupe”.

So what we have is an engine for production. We can get everything stored properly here and it makes order picking efficient and very cost-effective.

Gilt Groupe is a private sale, flash sales company founded back in 2007. We buy luxury items and sell them on a first-come first-served basis, so it creates a competitive shopping environment. The real challenge is the supply chain and logistics strategy on how we continue to scale that business and create a customer service environment that continues to stay best in the industry, so that customers are getting their product on time and in great condition.

We chose to work with abco automation, because instead of them coming in and saying, “what you should do is..” they asked us a lot of questions about our business model instead of just trying to sell us something. Which is really, really important and selling us what we needed instead of what they wanted to sell us. That was the really big difference between abco automation and some of the other players that were out their looking to get our business.

Jack Lehr: When we are called in to look at a distribution center or supply chain we just don’t starting throwing ideas at the customer. We want to find out as much as we can about their current operation, their business model; we want to get a good look at the data from their operation. Without a good grasp on the data I am not sure how you can design a solution that works for the client.

We do the Math that’s abco’s mantra.

Let’s take a tour of the distribution center and show you how all this works together to give Gilt Groupe the throughput and accuracy that they need to guarantee their exceptional customer service.

Gilt is primarily an apparel company so they have a very large receiving area. Associates place all non-GOH garments, flatpack, home goods, jewelry and shoes on gravity lines so an entire order is accumulated. Once a shipment is accumulated they verify it versus the P.O. and ensure that it is presentable for sale.

Then an associate transports it via a cart to a second set of lines, the sort area. This is where all the products are sorted into like, sellable units, placed in totes on the conveyor going to put-away. Every tote has a barcode and an ID so every SKU is active in the system down to the each level.

Part of ensuring great customer service is inventory accuracy. If you say you have something available for sale, you must be positive; and this system allows that certainty.

When the associate scans the item directly into the W.M.S. in receiving, the systems makes real-time decisions about where to send the product. It can go to one of six areas in the distribution center.

Bulk hold.

The Product-to-person area,

The GOH area,

The Pick Module,

Shoe storage,

Jewelry,

The path the product takes depends on how fast the item will be sold. One of the main benefits of this DC is that all the items are not treated the same. The system handles items differently based on product volume-etric characteristics. We know that not every item will move through the distribution center at the same rate. So we designed storage and picking to address the Pareto curve of individual items.

This is the bulk hold area and it performs two functions. It allows Gilt’s buyers the ability to buy large quantities of items that are not ready to be sold immediately. In addition, while Gilt is known primarily for apparel they also sell home goods and larger items that are not conveyable that can be stored and picked here.

Fast-moving items that will sell immediately go to the product-to-person system. Associates remove product from the totes and place it on one of the mobile shelves. While some items can go directly on the shelves other SKUs are placed in the smaller shelf bins if there is danger that they might fall while the robot is in motion.

There are approximately 50,000 storage locations in this area. Product-to-person is important in the Gilt distribution center because it eliminates the need for pickers to continually go to the same area to pick a fast-moving product. The product-to-person area enables Gilt to achieve an enviable amount of picks-per-minute and to support the fast-moving e-commerce business model.

The pick model is the medium to slow moving product storage area and has three levels.

Gilt stores its garment-on-hanger items on the first floor of the pick module. The G.O.H. area can accommodate approximately 50,000 pieces of product for Gilt.

The second and third levels are for “B” movers, the products that don’t move as fast as the ones in the product-to-person picking area. In addition this is where Gilt can store any remnant items from previous flash sales.

In front of the product-to-person area is the shoe storage area for the distribution center. Shoes are a very specific business for Gilt so we built a very specific storage and picking area for shoes. The shoe boxes fit perfectly in the storage area minimizing the space needed.

Gilt recently transitioned its jewelry business from their Brooklyn distribution center to Kentucky. Jewelry requires higher levels of accuracy and security and we adapted that to the Gilt process. By designing a secured area to receive, stock, pick and pack jewelry the DC handles the distribution of fine clothing alongside the distribution of fine jewelry.

When picking starts, the order tote can start in any area. This greatly increases efficiency, because a typical order only contains one or two different products. In addition if an item is not needed from a particular part of the DC the order tote bypasses that area.

The path for the order totes goes from the jewelry area, to shoes and then onto the product-to-person area. Then it continues to the GOH area on the first floor of the pick module, then to one of the upper-level picking areas, where there are 24 pick-zones.

After the order is picked it goes to the shipping area.

One area that we looked at very closely was the packing portion of it, as well as the manifesting. We decided to go a different way and the way that abco built this, is we separated the process.

Packing is a customer service function. And that’s where we ensure the order that our customer receives meets or exceeds their expectations.

It then goes over to another area unsealed, the Manifesting area which deals with the physical logistics of shipping. We weight it, we put the label on it, but we also have additional quality function there which allows the person shipping it out to verify that the correct contents are in the box. This leads to exceptional customer service.

The way this building was designed we can bring a multitude of merchandise in here at any given time and be able to scale it in the way we need to do it.

So what we have here is an engine for production we get everything stored properly here and it makes order picking efficient and very cost-effective.

This is the distribution system that abco automation designed and built for Gilt Groupe, so that even with their explosive growth they still maintain their high level of customer service and accuracy.

The Pareto Curve and How it Affects Distribution Center Design

by Travis Baker

The reason that a lot of distribution center design isn’t efficient or even fails completely can be summed up in one sentence.

If all you have is a hammer everything looks like a nail

Do you have a single-technology distribution center? Do you pick all your SKUs using the same method? If you do have a single technology distribution center you may be missing some huge opportunities for efficiency. Let’s explore why that is; and that means going to Italy.

The Italian economist Vilfredo Pareto first observed that 80% of the land in Italy was owned by 20% of the population. He also was able to apply it to the income in his country. Most of the money was controlled by a relatively small percent of the population.

Years later, business-management thinker, Joseph M. Juran, developed the 80/20 principle and named it after Pareto.

And this rings true across a great swath of the world: 20% of your customers account for 80% of your sales, 80% of your HR problems come from 20% of your workforce, etc. This also hold true in our world of distribution. In fact, there is a great deal of similarity between peas and your distribution center.

The 80/20 rule states that 20% of your SKU-base does 80% of your volume. That’s right: 80% of your volume is done by 20% of your SKUs. And conversely 80% of your SKUs do only 20% of your volume.

Only 20% of your SKUs make up 80% of your volume!

Ok great, so what does that have to do with your distribution center design? Well if you’re picking all of your SKUs the same way, then you are missing out on huge opportunities.

If you have a single-technology picking system you are assuming that every SKU that you add moves at the same rate as the last one you added. So you have a linear function on this curve, as demonstrated by the arrow to the right.

So proceeding with that thought as you add from 25% to 50% of your SKU base, you add from 25 to 50% more business volume.

You are assuming in your one-technology system that everything moves through the distribution center as the same rate.

But Pareto says 20% of my SKU base does 80% of my business volume. And it doesn’t really matter whether I measure my business volume in lines or pieces, however you want to metric your business volume, it really doesn’t matter…

Want to read the rest of the whitepaper? Download it here in less than 60 seconds!

Filed Under: distribution center design, Pareto Principle, S.A.L.T. Principle Tagged With: 80-20 Rule, distribution center design

The Secret to Distribution Center Design

by Travis Baker

One of the biggest frustrations in distribution center design starts like this. Your company needs a new distribution center. So you chose a partner to do the design and send them all the information and ….. then nothing for a month. Or 2,or 3. Then the designer comes back…

Designer…drum roll…“TA-DA! Here is your solution!!”

Customer: “This will never work. You forgot about ‘X'”

Designer: Stunned silence…. “We never heard about ‘X’. Was that important?”

Customer: “Yes.”

And then it is back to the drawing board, for another week or month increasing the time, aggravation and money.

Why does this happen? Well, we have narrowed it down to 3 main reasons:

Arrogance: Integrator or Manufacturer: “We know everything about distribution design. We will figure this out and blow your socks off with what we can do!”

Impatience: “This distribution center needs to be designed and up by the holiday season! So let’s just throw something together and hope it works.”

Salesman: “Well, all my company sells is ________. So we need to create a solution that uses ________ to sell to this client.”

Results? Fail.

You cannot design a distribution center in a vacuum! The best way to design a system is with customer collaboration, every step of the way. It’s all about partnership!

You, as the customer, know your business best, and we have been steeped in the knowledge of distribution center design. Shouldn’t we work together?

How do you ensure that you and your distribution-center design-partner are on the same page?

Expectations: When designing a distribution center the right way — by not implementing the easiest/quickest solution — it takes time to collect and analyze the empirical information. There simply are no shortcuts. You have to do the math. You have to analyze the processes. As the customer, you need to understand that you will have to be involved; it will take time and effort on your side as well. Frankly, the easiest way for a system integrator to design the system is to have you hand us all the information and allow us to come back to you in a couple of months with the “Grand Reveal.” But as we have mentioned, often that doesn’t work.
Information: There needs to be a steady flow of information back and forth between you and your design partners. The integrator will need a great deal of information about your company and processes. Information that will definitely be needed will be an item master file, order line data, purchase order data, growth rate estimates, shift schedules & labor-cost data, and ROI expectations. It is important to get the necessary labor and ROI picture so your designer doesn’t create a champagne system for a beer budget, and visa versa.
Communication: There needs to be a constant open communication. Designing a system is an iterative process. Sometimes even the data analysis is an iterative process. We worked on a design recently where moving SKU sets from one system to another changed all of the expected throughput and performance rates for half the system! We went through multiple iterations finding just the right SKU set that would go in system A as opposed to system B. This was a very important process. The integrator doing the design needs to be able to iterate results, and the customer needs to ensure that the designer is including everything that they need.

There also needs to be a point-person on each team. On the customer side, the point-person needs to have enough clout to go to different departments, gather system/process information and communicate it to the system integrator. On the integrator side, the point person should be the person who is driving the project: whether it is through engineering or through sales.

In conclusion, the best way to get a great distribution center design is with collaboration. Yes, what we learned in pre-school is still valuable. You need to ensure that you and the company doing the design are on the same page.

Want to learn more about distribution design? Download our whitepaper.

Filed Under: distribution center design

Surprising Cost Difference between Automated Distribution Centers & Conventional

by Travis Baker

Transcript for: Surprising Cost Difference between Automated Distribution Centers & Conventional

Hi, I’m Cory Flemings from abco automation. Hey I want talk to you today about a story about concrete or about conventional buildings versus automated distribution centers. In a recent event in my life we were working with a client that wanted to build a conventional freezer. We said no you should consider automation. And she said OK, the CFO, we will consider automation, but it is really just a throwaway option.

I said, “Throwaway option? That’s not true!”

She said sure it is, “Automation is so expensive.”

That’s something that we in the automation field hear all the time.

I said well you are a CFO, pull out your calculator and let’s run some numbers. So she pulled out a calculator and we went to work.

I said the conventional facility for the operation that you want to do will be 500,000 ft.² and if you take 500,000 ft.² and multiply that by $120 a square foot what does that come out to?

She said that’s “$60 million”. I said that’s correct.

I said I am looking at an automated distribution center or automated storage and retrieval facility that is 117,000 ft.². Yes, a hundred and 117,000 ft.², compared to 500,000 ft.² but I said tell you what let’s add on another hundred thousand square feet for docks, workspace and so forth and we will give you a building that is 220,000 ft.².And if you multiply that by $120 a square foot. What do you get?

And she said, “Oh gosh my calculator must be wrong.” I said no, it’s not, wrong it is only $26.4 million.

She said, “That cannot be!”, I said yes that is true in the difference between these two is substantial.

But that’s not the end of this picture. If you have to go buy the land for this process then you have to spend even more money. A let me show you why.

When you build a building on a piece of property depending upon local codes and ordinances you cannot consume with your operation more than 50% of the land. So if you take 25% of the land and then add to it your concrete turnarounds, your waste-water basins, your easements and your parking lots all of those other pieces of the property shouldn’t add up to more than 40%. Because in the future you might want 10%, between 40 and 50% to build a new maintenance building or whatever. You don’t want to land lock yourself on day one.

So you only use 25% of the land you buy for your distribution center. So if you want to put in a building that is 500,000 ft.² you need to actually buy 46 acres of property to support that operation. And if land is $100,000 an acre that is $4.6 million more.

Over here for 220,000 ft.² I need 20 acres to support that operation. And 20 acres again at $100,000 a square acre is another $2 million.

So look at the substantial difference now between when you build a green field building a conventional building versus an automated distribution center.

You are looking at a difference of $64.6 million here and over here $28.4 million and I have a $36.6 million difference between these two. And that’s $36 million you can spend on automation to get a building that cost as much as a conventional building that is not racked, that doesn’t have rolling stock that doesn’t have a WMS, that doesn’t have an RF network with guns and so forth.

You are talking about a lot of automation and material handling equipment that you can invest in before you even turn the key and turn on it on, let alone the labor savings once it begins to run. So when people tell you automation is too expensive and you are going to build a green field distribution centers remember this tale of two distribution centers and how much difference this can make.

We have a white paper about this subject “Why You Should Go Up” I recommend you download it and it can be found here.

Filed Under: Return on Investment ROI, Space, video

abco automation Chosen to Design Material Handling Systems for National Retailer

by Travis Baker

Carlstadt, NJ, September, 2012 –A national furniture, home décor, housewares & gifts retailer recently selected abco automation from a group of 3 final vendors to design an automated material handling upgrade for their distribution center.

abco automation won the project by demonstrating the best return-on-investment, and boosting throughput with an innovative design that applied automation to improve process flow while maximizing the cube of the building.

The integrated system is supplied by the following major component suppliers: TGW mini-load cranes, Vocollect pick-to-voice, Dematic conveyor, and a private-label warehouse control system integrated by abco automation.

“We were selected because of our ability to thoroughly analyze their business and to mathematically quantify, in detail, the future facility requirements. This enabled us to engineer a solution that truly fit their needs,” said Jack Lehr President

Jack Lehr, President of abco automation

of abco automation. “The solution is a hybrid product-to-person order fulfillment system that is quickly scalable to handle the holiday peaks of this big box and e-commerce retailer, while dramatically increasing productivity in the order fulfillment process.”

Construction on the material handling system will begin in January 2013 and will be completed in June 1, 2013.

About abco automation

abco automation is an American firm that specializes in designing and implementing American-built, capital-efficient distribution systems. A straight-speaking, flexible, fun-to-work-with American company, abco automation designs and installs the very best product-to-person (P2P^sm) picking systems at the most reasonable price.

abco automation specializes in identifying and applying the right technology for each speed products. We Do the Math. All of abco automation’s designs require examination of the customer’s solution through the proven lens of the Pareto Curve. abco automation designs capital-efficient systems that do more, in less space, with fewer people. Visit www.abcoAUTOMATION.us for more information.

Media Contact: Travis A. Baker, abco automation: marketing@abcoautomation.us.

Filed Under: News, Press Release, Return on Investment ROI, System integration

Infographic: S.A.LT. for Material Handling Design

by Travis Baker

The acronym, S.A.L.T., is a great jumping off point for looking at material handling design. It stands for Space, Accuracy, Labor and Throughput. It is also a good way to analyze your distribution center for improvements that might be made by transitioning to an automated material handling design from a manual one.

Let’s break down the infographic and look at the acronym of SALT.

Download the full-size .pdf of Infographic S.A.LT. for Material Handling Design here

Space. The first component is the space, or footprint, that your distribution center uses. With a one million square foot DC you actually need 50-60 acres of land when all is said and done. However, the great thing about land cost is that you only pay for the dirt, not the air above it. Therefore if you can go up and use a high-bay warehouse, which tops out at around 110 feet, you have around 3.6x as much storage space as a traditional 30 foot clear distribution center.

Accuracy: Accuracy is very important in a distribution center. Especially with the cost of returns and shipping, not to mention the cost of lost goods. Nearly 10% of all purchases in retail sales are returned. Much of that has to do with errors from the distribution center.

A 97% accuracy rate though it sounds great means that 3% of your shipments are wrong. On a low end that can mean $650,000 in errors assuming a 30 million orders a year and $.30 for shipping and return. That is also assuming no products were lost or damaged. The high end could be $13 million (or higher), which assumes higher shipping cost, higher cost of return and product that would be lost or damaged.

Labor: Labor is one of the most expensive parts of a distribution center. However, smart material handling design can lower the cost of labor. For instance, an automated material handling design can take a distribution center that needs 100 people and reduce labor by 60% by using technology. Technologies such as product-to-person (also known as goods-to-man) allow for selectors to fulfill orders quicker and more efficiently than an army of workers fanning through an enormous DC.

In many interviews we have had with distribution center executives they say that even with people who want to work in the distribution center, only 25% can pass a drug screen and background check. Therefore with less reliance on labor you can cherry-pick the best associates for your operation.

Throughput: Throughput is the distribution center’s reason for being. The peaks and valleys in distribution can be extreme, which is why you need a deep analysis of the numbers in your distribution center. Over the course of a year a child based retailer (IE a toy store) can have a throughput of X in July and 10 times that amount of throughput in December.

While obviously you can’t use every technology for every product, it is interesting to look at how different technologies can increase throughput dramatically. An A-frame for instance can perform up to 1600 picks per hour and Pick-by-Voice can average around 250.

Hopefully this article demonstrated the effect that the acronym S.A.L.T has on material handling design. If you need help with your material handling design contact abco automation.

Filed Under: Accuracy, Labor, S.A.L.T. Principle, Space, Throughput, Uncategorized

Why Smart Distribution Center Design Doesn’t Use a Single-Technology Solution

by Travis Baker

Hi I am Cory Flemings from abco automation. Do you have a single technology distribution center? Do you basically pick all your SKUs the same way? If that’s the case you may be missing some huge opportunities for efficiency and I would like to show you why.

In the 19th century there was an Italian guy named Vilfredo Pareto. And he is responsible for the Pareto Curve or the Pareto Principle. We know it today as the 80/20 rule, as we have applied it to business.

The 80/20 rule basically states that 20% of your SKU base does 80% of your volume. That’s right 80% of your volume is done by 20% of your SKU’s. And conversely 80% of your SKU’s do only 20% of your volume.

So what does that have to do with your distribution center design? Well if you’re picking all of your SKU’s the same way then you are forgetting this principle. You are assuming that every SKU that you add moves the same way as the last one you added. So you have a linear function on this curve. Well, kind of linear.

So as I add from 25 to 50% I am adding from 25 to 50% of my business volume. Whether I measure my business volume in lines, in pieces, in red ramzonics, however you want to metric your business volume it really doesn’t matter. You are assuming in a one technology system that everything gets picked the same. But Pareto says this, Pareto says 20% of my SKU base, does 80% of my business volume. And it looks like this.

You’ll notice that we wear really groovy shirts at abco automation that have the Pareto Curve built right into them. And that’s because we think you can really leverage the difference between this linear relationship in this Pareto curve. This Pareto curve, again, suggest that 20% of your products do 80% of your volume.

Why then would I take those SKU’s the same way that I take these SKU’s down near the end which I will say are my “D” SKUs, if I put letters on them. Or my ‘Dog” SKUs. These SKUs down at the end they might only do 4% of your business volume and with the “C’s” together somewhere between 10 to 15% of my whole business volume. Yet they are going to represent 50% of your SKU base.

And if you are a distribution center operations person you’re slapping your forehead saying “Why do we even bother carrying these things will well it doesn’t matter what products you carry, you will always have this Pareto effect.

So why’d you pick them all the same way?

These products that are down here at the end can have some technology applied to them these two things here in products that I call products-to-person technologies. They might be carousel systems or shuttles but they are technologies or vehicles that bring products to the picker. Instead of the picker going out and passing 80% of the SKUs in the warehouse to find the one that they need. These products or technologies bring them to the selector instead. (A distribution center design can realize) a huge benefit in the efficiency of picking these orders here.

Over here on the other end you have 20% of your products that are doing 80% of your volume. Why would you move these products around? These products need to be stationary or stay in one area and they can be picked. Often times the problem you are dealing with here is how is do you replenish them fast enough.

In both cases automation can be used to help select these and select these, differently. Do you have, as I asked earlier, a single technology warehouse? Well then you can see now there are some huge differences in efficiency that we can apply to help make your distribution center design more efficient.

Give us a call at abco automation 803-517-7537 we can help do the analysis and carve your Pareto curve up with the proper technologies. Because we do the math.

Filed Under: distribution center design, Pareto Principle, video Tagged With: 80-20 Rule

Maximize Your Distribution Center Efficiency with S.A.L.T.

by Cory Flemings

Distribution Center Efficiency

Hi, I am Cory Flemings from abco automation. Have you ever considered automating your warehouse? Have you ever thought about what would be required to justify putting in automated systems inside your distribution center?

I would like to point out the acronym, S.A.L.T., as a way to hang your thoughts together and think about what the issues might be as you consider automating your warehouse.

The first letter up here for S. A. L. T. stands for Space. Now space seems rather obvious doesn’t it? In warehouse operations we are always worried about having enough space. But the problem is once you realize that the walls are closing in and that the rivets on the walls are starting to pop it’s too late.

Because it takes anywhere from 9 to 18 months to build more space. To plan it, to get city permission, to get the approvals, to actually pour the concrete. And even in automated systems if you’re going to consider putting things up in the air with automatic storage and retrieval systems as an example. The data analysis the design, the engineering work is taking somewhere between 9 and 18 months to put those systems in.

So as you start to see your walls close in, give yourself about two years of planning time. Otherwise you’ll find yourself behind the eight ball.

Another place to consider for savings and return on investment for automation is Accuracy. This is one of my favorites.

I went through a warehouse one time and said, “Hey, how is your accuracy?”

And they said, “Oh it is really good.”

I said, “Oh really? How good is really good?”

They said, “It’s at 98%”. While not being the brightest bulb in the box I realized that’s only 2%, or 2% of their orders are going out incorrect.

“How many cases do you ship out a day?”

“Oh we ship about 65,000 cases per day.”

So I pulled out my calculator and realized 1300 cases per day were going out incorrectly. And at $40 a box which is an industry average cost of return logistics to get the product, ship it back to the distribution center, check it out, restock, then you are talking $13 million a year if you work 250 days a year.

$13 million.

And if you have a two-year return on investment your shiny new material handling system can cost $26 million and you will breakeven. In two years.

This is a great place to look, this accuracy, for return on investment in a material handling system as you consider automation.

Labor is the third one. Does your warehouse look like an ant farm? I was going through a warehouse in California. And there are people all over the place. It was like the Indianapolis 500 on the aisle with fork truck drivers going by.

And the vice president of distribution pulled me aside and said, “Before you get too involved in the details, I am trying to figure out how I get something from the receiving dock into that pick face, where that man over there is picking, with as few people as I need to have.”

And that’s where automation can come in. Automatic storage and retrieval systems, automatic re-supply systems, AGV’s, there are a lot of different kinds of automation you can use to get by with less labor.

Additionally, as we move distribution centers further and further away from the population centers people are getting harder and harder to find. And if you find yourself in that position automation might be the way to do that.

For example, 50%, according to one grocery retailer, 50% of the people who apply for a warehouse job can pass a background check.

50%.

And that’s for the people who apply for the job. And in the Southeast he said only 25% can pass a background check and drug test. So people, if you’re having trouble finding them you might want to consider automation.

And finally the last bullet down here the T. stands for Throughput. There are wonderful technologies that are coming out these days that can help improve your throughput.

I’m talking to those who might say, “I just can’t get things out fast enough. No matter how much I try or how many people I throw at my distribution operation I can’t get things through the distribution center fast enough”.

Well, a couple of ideas. Automation, like A-frames. A-frames can do for small stackable products. Let’s spell this correctly, A-frames. They can do anywhere from 1200 to 1800 32 piece orders, an hour. That’s a lot of volume.

Product-to-person systems, P2P, I call them things like shuttle systems, carousels, things like that. These things can do 3x the speed in order lines as pick-to-light or pick-to-voice. That is somewhere between 600 and 1000 order lines per hour. So there are lots of opportunities for you to consider automation in your throughput.

And there is a lot of money available especially in accuracy to help justify the cost of some of these automated systems.

If you have any questions or would like us to take a look at some of your data and do some analysis for you here at abco we would be happy to help you out just give us a call.

Call 803-517-7534 and speak to Amy about scheduling an appointment with abco automation. If you liked our Whiteboard Insights and want to learn more download our supplemental whitepaper here.

Filed Under: Accuracy, Labor, S.A.L.T. Principle, Space, System integration, Throughput, video

How a Systems Integrator Can Increase Efficiency in Your Distribution Center

by Travis Baker

In the last piece “Do You Have Pickers or Walkers” we spoke about how many system integrators don’t know where to focus their attention. Instead of focusing on all of the other components of a job that a picker has, the focus should always be on picking. After all that is what pickers (or selectors) get paid to do.

So how does a good system integrator make sure your pickers are focused on picking? The most efficient way is employing technology to facilitate product-to-person picking. However, product-to-person picking only works with part of the SKU base.

That is where it gets fun: figuring out what SKU’s will work with product-to-person and what you should do with the other SKUs. This challenge is the difference between working with a good system integrator and a so-so system integrator.

For example, look at this recent solution we presented to a retail distribution center.

During the peak period of 2010 there were 12,000 active SKUs that needed to be selected. In the original system, these SKUs all have a permanent pick-face due to the use of only one technology throughout the distribution center.

Note: Always be aware of single technology solutions. If all you have is a hammer everything looks like a nail!

In our new system design, we have pick faces for 2,600+ SKUs in the forward pick area, and approximately 2,000 pick faces in the product-to-person system. This means that only 4,700 SKUs out of 12,000 (39%) have to be presented to the selectors at any given time. This is a 61% reduction in pick facings a selector must walk past to get to the items they need to select. This is a 61% reduction in travel distance.

What would be the effect on the operation? When you deliver the items to the pickers who used to walk to get them, you eliminate a significant amount of time; 61% in fact. You can also eliminate a significant amount of touches depending on what technologies you use. You touch it once during put away and once when it is on its way out the door. This increases efficiency and, of course, accuracy.

You can also eliminate a lot of wasted space. Depending on what types of technologies you use in your distribution center, many product-to-person technologies focus on getting SKUs off of the floor and up in the air inside the machine, as opposed to sitting in a rack on the floor.

What effect would a 61% reduction in travel distance have on your operation? How can you use product-to-person distribution in your DC to increase your efficiency and accuracy? Want to have a conversation about it? Contact abco automation and let’s sit down and see what we can do.

Filed Under: Pareto Principle, Product-to-Person

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