Store less, stage more

Even if you can't meet the new goal of zero inventory, try to find ways to flow more materials and products rather than stashing them away.

By -- Modern Materials Handling, 5/1/2000

"Storage" - is this a 7-letter word that should be banished from the current language of materials handling?

In some cases, one might think so. In a number of other instances, however, it's just not possible. Nor might it be practical or economical to not store materials.

Indeed, for some of the fledgling e-commerce companies the reverse is true, at least for now. That is, more storage is good, rather than less. Why? This extra inventory avoids stockouts and keeps shipments speeding on to customers and satisfying their needs for instant gratification.

Where one sits in the supply chain and the kind of business can determine the degree to which storage becomes your problem or someone else's concern as some examples will show.

"Reduce inventory, stock as little as possible." Surely, that's been a key business mantra for some time.

Moreover, the traditional one potato, two potato math of inventory management, suggests Pittiglio Rabin Todd & McGrath consultant Todd Bargman, now has been replaced by a new hot potato math.

The old math focused on counting and controlling inventory within a company's four walls. Trade-offs in lowering economic holding costs were balanced against limiting out-of-stock expenses and maintaining customer service levels, and the like, Bargman says.

The new, hot potato math says that companies "no longer have to have physical possession of their inventory to achieve the optimum balance that will maximize profitability," he notes. What results is "a dramatic shift of inventory upstream in the supply chain."

That's the point. Somewhere along the line, someone-perhaps it's your firm-catches this hot potato.

Major automakers and many companies in other industries can force their suppliers, through just-in-time practices and vendor-managed inventory arrangements, to hold the potato. Even so, a GM, Ford, or DaimlerChrysler will still have some point-of-use supply systems on the manufacturing floor to keep assembly lines humming productively.

Where feasible in warehousing and distribution, companies are encouraged to try flow-through and cross-docking techniques that emphasize staging.

Hot potato or one potato, two potato-or more likely somewhere in between-the emphasis today is to try to store less, stage more. Moving toward more staging then affects decisions on the equipment chosen to fulfill these goals.

Load sizes and velocities?

Stored or staged, or not stored at all, the kinds of loads and their sizes need to be determined before selecting materials handling systems that fit your specific needs.

Will you have unit loads on pallets or slip sheets? Or will items be handled as full cartons or cases? Will you store and stage as split cases or individual parts? Or will you deal with items in special ways due to unique sizes and shapes?

Next, analyze the mix of items for their throughput velocities. Differentiate the fast movers from the slower moving stockkeeping units (SKUs). Calculate their percentages in the total mix.

What about item selectivity? See if shelf-life factors require first-in/first-out (FIFO) handling or if last-in/first-out (LIFO) load management will suffice. If you can turn stocks fast enough, however, either practice can work.

With this kind of analysis briefly reviewed here, you can begin the decision making process of equipment selection.

Perhaps you won't need any equipment, just room for storage. Floor storage may be an option, a simple one, to be sure. It works if space isn't at a real premium. Or it applies if product can be stacked, with one unit on top of another without damage.

Consider how Lennox Industries stages the heating and air conditioning units it produces. They're packed in corrugated cartons in its Marshalltown, Iowa distribution center. Unit loads are stacked up to nine high in cartons designed for top handling (Basiloid Products, www.basiloid.com, 812-692-5511). Other home appliance manufacturers also use this means of handling.

Much more common, however, is rack storage and staging of unit loads. Depending upon the degree of load selectivity and velocity required, there are a number of options among which users can choose.

Single-deep selective pallet rack is the most commonly used storage system for unit loads. Individual loads are at pick faces on an aisle served by counterbalanced lift trucks for putaway, picking.

When cube utilization becomes important, choosing a system that reduces the aisle dimensions often works. Narrow-aisle and very-narrow-aisle storage racks make better use of floor space and building cube than do traditional racks. But NA and VNA systems require specialized vehicles to store and retrieve loads.

Storage density for unit loads also is increased with double-deep, drive-in, and push-back rack systems. They generally require LIFO rotation of product, however.

Gravity flow racks for unit loads (and for cases as well), in contrast, can provide FIFO product rotation. These systems stage SKUs in situations where this capability is needed along with high storage density.

Finally there are high-density, dynamic storage (HDDS) systems for palletized products. These systems are designed so that loads of the same SKU-as many as 60 loads in some versions of the equipment-are all queued up in a single lane. Powered by gravity or by mechanical/electrical means, these systems provide a flow of product to a pick face (see sidebar below for how Royal Home Fashions uses the technology).

These HDDS systems offer FIFO (and also, sometimes, LIFO) load rotation and selection capabilities.

Many applications will require multiple technologies. Hewlett-Packard, for example, with its 3rd party logistics pro-vider, Exel Logistics, relies upon several kinds of storage or staging systems at its Lincoln, Calif., distribution center. There's narrow-aisle pallet load racking (Lodi Metal Tech, www.lodirack.com, 209-334-2500). There's also a picking module equipped with flow rack for both unit loads and cartons to help fill orders (Unarco, www.unarcorack.com, 615-384-3531). Fast movers go into the picking module at this DC where the motto is "out the door in 4 hrs." This facility also is a model for flow-through warehousing and thus limiting its queuing of SKUs only to the degree absolutely necessary.

Slow movers, however, might just as well be stored effectively rather than staged. That was the case at a mini-warehouse serving Lucent Technologies, Oklahoma City, Okla. Lucent packed 2,100 pallet positions into 9,300 sq ft by installing an 11 carriage, mobile rack system (Storax, www.storax.thomasregister.com, 813-882-8672 ). Moving the carriages opens up a single aisle at a time. A man-up turret truck stores or retrieves loads from the system. With this on-site system, moreover, Lucent gained efficiency not achieved in its previous, off-site storage of slow movers.

For its faster movers, Lucent relies upon separate automated storage/ retrieval systems. Both a mini-load and a unit load AS/RS store and stage items, depending upon their respective sizes.

AS/RS technology also stages entire sport utility vehicle and lighter duty truck bodies in a two-aisle system at a General Motors assembly plant near Dallas, Texas (Acco Systems, www.accosystems.com, 810-755-7500). Each bin in an eight-bin-high system temporarily holds a freshly painted GM body, sequencing it in proper order for further assembly.

An AS/RS for staging purposes helps keep aircraft flying on schedule for Northwest Airlines at its Minneapolis-St. Paul hub and at other hubs as well. This 3-aisle, dual shuttle mini-load system stores 60,000 small parts in totes for maintenance operations (Eskay, www.eskay.com, 801-359-9900.)

Northwest mechanics order parts from the AS/RS in a warehouse at Minneapolis-St. Paul. A stock clerk next bags picked parts and delivery personnel then pick up bagged items and take them to maintenance hangars. Items for other hubs go to shipping.

For high priority orders with a flight held up in an "aircraft on ground" status, the AS/RS system triggers a yellow light which stays on until the critical part is picked. In these AOG situations, the flight cannot be pushed back from the departure gate because of a minor malfunction.

Besides mini-load AS/RS units, parts storing and staging also can be accomplished with a variety of other materials handling technologies. Included are both automated and non-automated systems. Among the more automated equipment types are horizontal and vertical carousels as well as vertical-lift storage modules. Non-automated systems for parts start with basic shelving and modular drawer units, and progress toward flow carton rack and flow shelving systems.

Indeed, at workstations across the U.S. where autos, motorcycles, and other complex assemblies of components are put together, the materials handling element in common to all is a flowing supply of parts. In a future issue we'll explore these part staging equipment categories in greater depth.

Finally, back to that 7-letter word, storage. It need not be banned. But perhaps among materials handling professionals it has to take on a new meaning, a connotation more akin to staging, temporary storage.

Somewhere in the supply chain someone has to hold the "hot potatoes," if only for a far shorter time period than heretofore.

Racking up 9 million lbs. of metal

When you have to quickly pull customer orders for one-day service, it helps to have an efficient storage/staging system. And when those orders are for a wide variety of metal rods and bars in varied lengths and shapes, an ordinary rack structure won't do. Instead, a cantilever rack structure gives TW Metals the capability it needs to maintain high levels of customer service from its center in Cambridge, OH.

Slip sheets deliver a good night's rest

Growing pains at Royal Home Fashions have required this division of Croscill, Inc. to expand its Henderson, N.C. distribution center. More capacity was needed to store and stage its high volumes of comforters and pillows and easily send them to pick faces, says David Lane, industrial engineering team leader.