Renew yourself
By Gary Forger, Editorial Director -- Modern Materials Handling, 4/1/2005
Yes, we have finally made it to April. For those of us in the Boston area, this has been a brutal winter with more than 90 inches of snow. And I won't even mention the cold. It's time for a little renewal.
Interestingly enough, there was a renewal theme running through a Manufacturing Town Hall at last month's National Manufacturing Week in (still cold) Chicago. The event was moderated by John Engler, president and CEO of the National Association of Manufacturers (NAM), and included representatives from the Department of Commerce.
Engler explained that 65% of NAM members now export, and "no longer think just across the state line." He also explained that NAM wants to: reduce the cost of production in the U.S., level the playing field, strengthen the work force of the future, and create a climate for innovation.
Building on that was Donald Wainwright, chairman of the Manufacturing Council of the Department of Commerce. He explained that renewal is the name of the game today in manufacturing. Wainwright said it is essential for companies to look at their markets, evaluate how they operate and then re-align the two to each company's advantage. Otherwise…
They both make great points, and it made me think of another great renewal story.
Take a look at the Warehousing/Distribution story on (Kirkland's new home) about home décor retailer Kirkland's. Here's a company that needed to do a better job of aligning its markets and how it served them.
From three warehouses in Tennessee, the company shipped to over 300 stores in 37 states. New stores continue to grow at 20% a year. But the warehouses were not sufficiently responsive to the stores. As a result, all stores had their own mini-warehouses to ensure there was enough inventory on hand from the three warehouses and directly from importers.
The solution is a new DC that has made the stores comfortable with just three weeks of stock on hand and only in their backrooms. Meanwhile, distribution productivity has increased considerably with throughput by shift rising 40% as the DC handles more inventory than ever. Unit costs at the DC also dropped 14% in last year's fourth quarter.
And as Todd Weier, vice president of logistics, explains, this is only the beginning. Crossdocking is now in the DC's future. Weier estimates that as many as 40% of receipts can be crossdocked, reducing inventory levels at the DC too.
In other words, Wainwright's recommended realignment of operations with markets is critical for both manufacturing and warehousing/distribution. The evidence is all around us. Are your materials handling operations in need of a little renewal of their own?


















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