5 Places in Your DC Where Opportunities for Optimization are Probably Hiding
If you work in distribution operations or in the design of fulfillment or materials handling systems, then you know that efficiency is the name of the game. By increasing the efficiency of your distribution center (DC) you can reduce waste and increase productivity—in effect, reducing the burden of overhead thereby driving up profits.
Sounds great, doesn’t it?
If you’re looking for some relatively easy places in your warehouse that you can optimize in order to see a boost in your operation’s efficiency, the list below offers some ideas of areas of focus to help you boost efficiency, reduce waste, and increase profit.
1. Product Storage
When it comes to your operation’s efficiency, few things have a more critical impact than poor product storage.
Product in the wrong type of storage can cause confusion and delay when orders are being picked, and can waste valuable floorspace within your facility. By choosing an appropriate type of storage that offers pickers easy and quick access to product—whether it be bins, racks, pallets, etc.—you can shave seconds off of your average order pick time, allowing your employees to pick and process more orders.
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Likewise, automated solutions in product storage and retrieval such as miniload ASRS, shuttles, and other goods-to-operator technologies allow you to reclaim vertical space in your warehouse by building up instead of out. This can free up valuable space within your facility that can be used for other important processes or on-hand inventory capacity.
2. Product Placement
Where product is placed within your facility is just as important as the type of storage you use to hold it.
Walking from product to product to pick orders is one of the most time-consuming parts of the entire order picking process. Product stored in the wrong location can reduce efficiency by increasing the number of footsteps that personnel must take to fill an order.
By pairing proper storage with an adequate slotting process that takes into account the natural flow of goods within your operation (including product affinity, individual item characteristics, high-demand product, etc.), you can drastically reduce travel time and make your workers more productive.
Having the right people, processes, and technology in place to aid in this ongoing management is critical to a system’s success, and includes all parts of your business. For example: It is important that marketing and operations are aligned so that, before SKUS are offered on promotion, the warehouse can be proactive by reslotting, double slotting, and staffing the areas where spikes in volume due to promoted SKUs can occur.
3. Order Processing
A common challenge for order fulfillment facilities, regardless of industry, is that average order profiles are constantly changing as customer desire and behaviors shift. What was considered the norm for your operation just five or ten years ago can be very different from what is considered normal today. If you do not take these shifts into account, it is very probable that your facility is not as efficient as it could be.
If your facility was built a decade or two ago, for example, it is very likely that it was built and optimized with larger order types (driven by shipments to retailers) in mind. Today you find yourself processing far more, but smaller, orders each day, and shipping them directly to consumers.
Note: In startup ecommerce operations where business models are not yet fully mature, these changes can changes can occur at a much faster interval, and changes to systems and processes can become necessary even sooner in order to maintain the same service level.
By identifying these shifts, it is possible for you to optimize your facility and processes by implementing new technologies and systems. A relatively small upgrade to your sorter so that it is better optimized to handle the smaller packages or polybags common in your orders today can have a huge payoff in productivity by reducing downtime caused by errant product falling into gaps and moving parts.
4. Maintenance Protocol
Optimizing your internal processes is just as important as optimizing the technology and systems used in your operation. Of these internal protocols, one stands out above all others (excluding workplace safety, which should of course be top of mind): Maintenance.
When you are working with a system consisting of a lot of moving components, like a sorter, it is almost a guarantee that you will eventually face some sort of mechanical issue. Though these issues cannot be prevented 100 percent of the time, proper maintenance of your systems can go a long way in reducing their likelihood, intensity, and duration of downtime with the associated loss of production.
That’s why it is important to have a comprehensive maintenance protocol for all systems in your facility. This protocol should ensure that:
- You have critical parts on hand so that you can quickly fix an issue if it arises
- You have a dedicated maintenance team who is properly trained to troubleshoot problems and keep your systems running, and who proactively identifies problems before they occur
- Regularly audit your systems so that issues can be resolved before they become an operations-halting headache
By having an adequate protocol in place, you will be able to limit your operation’s downtime, boosting productivity and, ultimately, your bottom line.
Appropriate leadership of your facility, people, and processes is critical to the success of your operation. That’s why it’s important that you have an excellent management team in place to ensure that the day-to-day activities of your personnel are always working towards your larger operational goals. After all, even the best of systems will not succeed if they are not managed well.
There are a number of things that you can do to optimize your organization’s leadership structure, including:
- Regularly measuring key performance indicators (KPIs) that are crucial to your operation and using this data to inform how you allocate resources
- Establishing a clear chain of command from top to bottom, including managers, team leaders, and shift workers to ensure accountability and proper communication
- Communicating business objectives to all personnel so that they can better understand how their roles contribute to the overall success of the company
- Staying humble so as to provide a voice for the team members on the floor who have the best visibility to where constraints exists and where improvements can be made
The Bottom Line
As you can see, many opportunities exist for optimizing your warehouse or DC. By turning a critical eye towards product placement and storage, your typical order profiles, your maintenance protocol, and your leadership structure, you can boost efficiency, decrease waste, and increase productivity.