Big Picture: Materials handling comes out of the shadow
TranSystems: Managing SKU proliferation
Like mergers and acquisitions and the growth of multi-channel retailing, SKU proliferation is another fact of business life for retailers and wholesale distributors. “Everyone is trying to find the magic bullet to increase sales,” says Norm Saenz, senior vice president for the supply chain group at TranSystems. “The perception is that more product offerings, more styles and more colors give a competitive advantage.”
In the distribution center, that translates as too little storage space and too few pick positions to get the product out the door. “We had one client that was storing 8,000 SKUs in 500 pallet positions,” says Saenz. “They were reduced to putting as many as 20 different SKUs in one pallet position in their picking area. Instead of picking just from the lower levels, they were picking from all of the levels in the storage area.”
The solution was not complicated: Pallet rack was converted to static wide span shelving with three openings instead of one 6-foot pallet opening. In addition, the storage area was converted from 10-foot aisles to 4-foot wide narrow aisles. “We went from a conventional lift truck to a worker-assist vehicle that will work in a 3-foot aisle,” Saenz says.
“They have 8,000 pick locations today,” Saenz says. “They are much more efficient and there are far fewer errors.”
Witron: Designing for the workforce of the future
Despite the recession, labor availability remains one of the most persistent issues confronting warehouse and distribution center managers. Training and retaining experienced personnel is almost impossible when many facilities experience a 50% turnover in the workforce every year.
“We began hearing about this five or six years ago from Canadian clients as warehouse workers moved out west to work in the oil fields,” says Chris DeLisle, a senior engineer with Witron. “Today, it’s a universal issue, across all industries and regions, especially as the economy begins to improve.”
It’s not just the availability of labor. As the workforce ages, distribution centers are being forced to rethink labor intensive processes, such as manual palletizing or case picking.
As a result, DeLisle says, clients with sufficient scale and volume are taking a harder look at automation. “First and foremost, automation can reduce the number of people required to operate a facility,” DeLisle says. “But we also have an opportunity to make the manual processes as ergonomic as possible.”
The result, he adds, is that the employee retention rate in automated sites is generally higher than in conventional facilities. “One of the challenges to our industry is how do we enrich the job so that the associate isn’t bored after 10 minutes,” DeLisle says. “That’s why I think that automation is more attractive to younger workers. If we can offer them a solution that exposes them to technology and provides a path to grow in their careers, that’s attractive to them.”