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Managing value-added processing in your operation

Value-added processing (VAP) is perhaps the toughest area to manage in most warehouses.
December 21, 2011

Value-added processing (VAP) is perhaps the toughest area to manage in most warehouses.  Here we are talking about non-mainstream special packaging, compliance labeling, “rainbow” pallet building and other activities that are customer or promotional campaign-driven. 

With the exception of labeling to comply with customer bar code or RFID mandates, value-added activities tend to be cyclical with wide swings in volume that, at the high end, often require the hiring of temporary workers. (On bar coding and RFID, go with the global standards and apply the labels or tags as far back in your operations as possible to facilitate internal processing and tighten process integrity.)

On other VAP, let’s look at the example of a consumer products company running a promotion on coffee pots that requires opening the original package, inserting a bag of filters, a coffee sample and a discount coupon, and, then, resealing and re-labeling the package.  How can the company efficiently and accurately ship 80,000 cartons on 1000 pallets within a week without disrupting regular operations, particularly if the task requires twenty or thirty temps who have never seen a warehouse before?  Will a solid layout, processes, data capture technology and a warehouse management system (WMS) help here?  The answer is “maybe”.  “Maybe” that is, if they are engineered and integrated to provide a framework that supports the disciplined flow of materials into and out of the VAP area and eliminates temporary worker multi-tasking – much like a straight line or “bucket brigade” light assembly operation. 

Further, your permanent workforce should be cross-trained on value-added activities.  Assign one or more of them plus a supervisor to the VAP line – and, hold them accountable for performance.  If you have a WMS, use it to record and reconcile component deliveries with finished pallet output as well as line performance measurement.  If not, use a member of your permanent workforce to do the accounting.  In the latter case, you will probably want to QC output with random sampling up to 100% checking, depending upon item value,

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