“If it ain’t broke, don’t fix it,” is one of my favorite quotations, attributed to an advisor to President Jimmy Carter. Some of the great horror stories in warehousing involves money spent on systems and/or equipment that was not really needed. For example, back in the ’90s, a failed e-commerce service provider spent $80 million to install conveyors in the hope that enough revenue would come to justify the investment. When consultants or managers want to fix a warehouse operation, they’re usually dealing with a shortage of space or inadequate handling productivity. When you contemplate such a change, start by defining your goals. What do you expect to achieve when the planned changes are implemented?
BENCHMARKING THE CURRENT STATE
Unless you have an accurate profile of current storage and handling costs, you cannot know whether the changes you contemplate are really worth doing. In the immortal words of Lewis Carroll, “If you don’t know where you’re going, then any road will get you there.”
When you know the current storage cost for each pallet stored in your warehouse, then you can compare the options of installing a single deep pallet rack, double deep rack, push-back rack, or carton clamps to eliminate pallets. Never overlook the option of doing nothing and retaining the system you have now.
The same principle applies with handling. Start by determining the current cost per unit for materials handling today. Then as options are considered, ask the vendor to predict the new cost when the suggested system is installed.
SAVING SPACE
Before buying a new rack, see if there are better ways to use the rack you have right now. A gravity flow rack can save both space and time, but don’t overlook the gravity flow attachments that can be installed into a standard pallet rack. If you cannot use some of the high bay storage space in your warehouse, the installation of a mezzanine is less costly than construction of new warehouses. Failure to isolate the slowest moving product can result in stumbling over inactive items while searching for the fast movers.
Some of our oldest warehouses are multistory buildings. One user spent over $1 million to rebuild freight elevators without investigating the much lower cost option of using vertical conveyors. Because conveyors are designed to handle only freight and not people, they are not subject to the stringent safety regulation required for conventional elevators.
SCARCITY OF DOCK DOORS
A chronic complaint of operations managers is that there are not enough doors to cope with today’s increased volume. Sometimes physical limitations of the building make it very expensive or impossible to provide additional dock doors. Often the real problem is ineffective usage of the existing doors. Here are a few examples. If one door is dedicated to placement of a trash bin, then it is not available for loading and unloading. Some waste systems do not require the use of a dock door. Other doors may be unusable because loaded or empty trailers have not been pulled away when loading is completed. Use of a shuttle tractor will allow the operator to place or remove trailers only when they are needed for loading or unloading. Then doors are never blocked by an idle trailer.
Another option is to increase the hours devoted to loading and unloading so that doors are in use for up to 24 hours per day.
COPING WITH INCREASED VOLUMES
The simplest way to move more products through the same warehouse is to increase work hours. Some managers are concerned about declining quality when they add a second and third work shift. Others have found that unconventional shift schedules, such as 4/10 or 3/12 are an effective way to attract workers to night shift, simply because the longer hours are compensated by a three- or four-day break at the end of the workweek instead of the conventional two day weekend.
A proven way to increase productivity is to eliminate the number of times that each unit is handled. Whenever you see product being staged, investigate whether such staging is really necessary. In earlier times, product was staged so that count could be checked by a supervisor who has more talent than the hourly workers. Today, the checking is accomplished with automatic identification such as barcode or voice recognition. Furthermore, the ancient assumption that freight handlers were folks with strong backs and weak minds is no longer valid.
Is time wasted while searching for misplaced items? Improved warehouse management systems make it easy to specify the location for inbound items and to police the locator system to be sure that it is accurate.
Often the greatest missed opportunity to handle more products in the same amount of time is the act of measurement. Current labor management systems make it easy to develop standard times for each element of materials handling. Sharing time study results with workers is always desirable. Everyone likes to be a winner, and the work crew will improve results when they realize that the company is measuring in order to achieve continuous improvement.
“WHERE’S THE BEEF?”
While the question was developed for a hamburger chain’s advertising campaign, it has its application in warehousing. When you are urged to purchase high-tech equipment, will the vendor provide a guarantee that the proposed improvement will actually be achieved? Is the proposed new system a must-have or merely a nice- to-have? Could you achieve similar results through more effective utilization of the people, the buildings, and the equipment you have right now?
Kenneth B. Ackerman is the president of The Ackerman Co. in Columbus, Ohio, and the founder of the Warehouse Education and Research Council (WERC). He has been active in logistics and warehousing management for his entire career. Before entering the consulting field, he was chief executive of Distribution Centers Inc., a public warehousing company which is now part of Exel Logistics USA. He is an author and publisher.
