July 24 2006 05:05 PM

Were past the idea that a warehouse is merely an afterthought, a place to store products when theres nowhere else to put them. Even companies that are reluctant to incorporate new technology have adopted methods for managing the storage and movement of products. Terms like automatic identification, supply chain management and warehouse management systems are now part of the warehousing vocabulary.


Often, a warehouse is called a distribution center when its primary function is to distribute products rather than merely store them. However, this article will stick to the traditional term of warehousing, even though some advanced concepts as well as equipment will be discussed.


Where the Action Is

To the experienced logistics manager, order fulfillment is the focus of both warehousing and distribution. Many would say that without accurate, cost-effective processes, a distribution center (DC) is just another warehouse, says Chris Heim, president and CEO of Highjump Software, writing in Competitive Edge magazine. The DC is the point where a companys efforts to satisfy the customer come to fruition, typically encompassing the final stage of receiving and fulfilling orders. Its where the most resources are applied, where the most investment in equipment and systems is made and where the most planning is focused. In short, its where the action is.


Or maybe it should be said, the distribution center or warehouse is where the action should be. Too often, crucial factors are ignored in the planning process, especially the amount of care that must be put into the building of the team responsible for the warehouse project. Ideally, a senior manager should head the team, which would be composed of representatives from every function: engineering, purchasing, operations as well as information technology (IT). However, team building has changed, for better or worse, along with the role of the warehouse for a number of reasons:

Downsizing has left many companies short of personnel

            to staff teams.

Companies are realizing that reliability and maintenance

            of equipment have to be considered in the planning stage;

            these functions must be represented on the teams.

As warehousing becomes more sophisticated, IT personnel

            are contributing more to the team efforts. Clients are much less programmable logic controller (PLC)-oriented and more personal computer-oriented, says James Tompkins, president of the consulting and systems integration firm of Tompkins Associates. The middleware has become so standardized that clients can reconfigure their applications without getting into the coding.


As an example, people can use the PC to run wave releases differently in slow seasons than in busy seasons, Tompkins explains. Back in the PLC environment, it was very difficult to make these changes, so many people didnt even try to learn how to do it.


Know Your SKU Velocity

The two most important things about planning a warehouse or distribution center are the velocity and the cube of each SKU, notes Tom Lagaly, vice president of Sales and Marketing at Real Time Solutions, an FKI Logistics company.


An SKU is a stock-keeping unit (used here to describe an individual part-numbered item in the warehouse). Velocity of an SKU describes how much the SKU moves in a given amount of time. Velocity information isnt too hard to find, explains Lagaly. Most companies that have significant IT departments can pull that information out of sales files. But getting the cube of an individual SKU is not as simple. However, more companies are realizing cube is an important factor and are keeping that information in an item master file (a file of every SKU or item in the warehouse). Companies keep an item master file in the host computer. Important information about the SKU is also kept: names of suppliers, location if its fixed, etc. If you cant locate the cube of an individual SKU, a cube scanner will provide it.


Individual SKUs may be located in various parts of the warehouse, thus making the task of calculating their velocity more difficult. You have to sift through there and reconcile these discrepancies, Lagaly explains. You need to make some sense out of that because the first pass through the information is probably not accurate. You need to go through a clean-up process. Its tedious work, but its important.


Velocity and cube of the SKUs is needed to select equipment for storage and handling in the warehouse. When you have the velocity and cubic feet data, notes Lagaly, you look at the average times you pick the item, the movement in a day. How many cubic feet of this item am I going to move in an average day? Thats the measure of the cubic movement of that item in your warehouse in a single day.


Lagaly draws on his experience in warehouse design to provide an example. Once we get that data, we start to draw some lines; lets say that we place every item that moves more than one cubic foot per day in a carton gravity flow rack. For really high movers that move more than 40 cubic feet per day, you need some pallet flow positions where the pickers pick individual items right off the pallet (this would be fed by a gravity flow rack designed for pallet loads). We draw that first line at anything that is more than a cubic foot but less than 40 cubic feet per day, adds Lagaly.


Lagaly believes you can find an easy automation solution for picking the A items, which represent 20% to 30% of the SKU. But how do you go about picking, packing and incorporating the 70% of the items that represent only 10% of the picks? he asks. In Lagalys opinion, the solution to this problem determines the success or failure of the system.


In Lagalys next example, there are no SKUs that move more than 40 cubic feet per day, with X% of the items going into a pallet flow rack. The rest of the SKUs, which could be between 70% and 90%, are left in the warehouse. It is important to study both the positive and negative aspects of every piece of equipment. For example, bin storage in shelving should include the cost of a picker walking to each location, perhaps along with the cost of picking errors. You have to look at equipment, operating costs and productivity for each option.


How about a carousel? It doesnt use much floor space, and pickers can work in a single location with no walking around. Replenishment is the weakness of all carousels, Lagaly notes. You have a finite storage capacity in a carousel bin. Once thats picked, you dont have the opportunity to replenish it because that would impede the picking process. For carousels, Lagaly recommends you select the SKUs going into that carousel carefully, so that you have a 10 to 20 days supply in each bin.


The point is, if you have this database of velocity and cubic movement, you can really make some informed decisions about what you should be doing, Lagaly explains. When you select some technology or storage medium, know what its going to mean to you in terms of cost and operational impact.


Plan for Mezzanines

Youll get a better warehouse layout and lower installation costs if you incorporate a mezzanine into the initial planning of the installation. Mezzanines are an example of the basic material handling concept of using free rights for storage and order filling. Consider a custom mezzanine as part of the initial planning of the warehouse. If you wait until you run out of space, you will have no choice but to install a freestanding mezzanine.


By determining in advance which functions will be carried out on the mezzanines, you have a better chance of selecting the proper floor or decking. For example, you have a choice of steel or wood planks or steel grating for better heat and air conditioning circulation. You also have a choice of plastic, fiberglass or concrete decking. Although custom mezzanines are clearly preferable, the additional storage space can be achieved by the use of pre-engineered, freestanding mezzanines. These kits include components like uprights, framing and decking; some packages include other accessories like stairs.


Typically, loads are moved up to a mezzanine on pallets that can be lifted by forklift or vertical reciprocating conveyor (VRC), a platform that moves in guides. The VRC has two major advantages over forklifts. It can carry discrete items as well as pallet loads, and its a safer method of material handling.


Plan for Warehouse Ergonomics

Since lifting, bending, pushing and pulling are common warehouse functions, ergonomics must be a primary consideration in warehouse planning. The goal of ergonomics is to make the workplace safer and more comfortable for the worker and to make the job less strenuous. An ergonomics program must start with management support and worker training. Ergonomic-assist equipment is available for warehousing functions. Some examples include:

Conveyors that bring items or parcels to workers at a height that eliminates stretching or bending

Motorized hand trucks instead of models that require manual pushing

Stackers for empty pallets

Hoists, load balancers, vacuum lifters, industrial manipulators and workstation cranes that make it easier for workers to lift

Casters that roll easily and make hand trucks easy to push

Lift tables that adjust as load weight changes


The ultimate solution to any warehouses ergonomic problems is automation. Conveyor systems, combined with barcode scanning, can usually be justified to management by the increase in fulfillment accuracy as well as maintaining a competitive position in the marketplace. But citing the decrease in on-job injuries and workers compensation claims adds a major and quantifiable benefit to the investment.


There are associations to help you plan your warehouse and ergonomic solutions. You can get assistance in warehouse planning from the Association of Professional Material Handling Consultants of Charlotte, North Carolina. For practical ergonomics information, the Ergonomic Assist Systems and Equipment (EASE) product council of the Material Handling Industry of America offers an Ergonomics Toolbox. The Toolbox is a multimedia CD providing guidance in analyzing ergonomic problems as well as identifying solutions.


The careful study of every function of your warehouse or DC, and especially careful advance planning, is the key to efficient, safe material handling. And efficient, safe material handling is a key contributor to your companys bottom line!


Bernie Knill has been writing about warehousing and material handling logistics for more than 35 years. He has won the Jess H. Neal Editorial Achievement Award four times and has received more than 20 editorial excellence awards from the American Society of Business Press Editors. He can be reached by e-mail at bernknill@aol.com.