We know how to fix our DC's but we are 'boxed in" with no way out

Dear fellow warehouse practitioners,

We start this edition of our BLOG with a set of 4 questions.
DC stands for Distribution Center.

Please, answer the following 4 questions.

1. My DC is boxed-in with poor slotting, poor labor productivity
a. Yes
b. No

2. We know how to improve our performance. We don’t need any outside help.
a. Yes
b. No

3. But we cannot do anything, because we are in a jam.
a. Yes
b. No

4. We do not have any funding to make large scale layout changes
a. Yes
b. No

Just in case, you have answered “YES” to all the 4 questions,  join the vast majority of DC’s across the Logistics World that share your feelings.

We all know that a good layout and slotting cuts down travel time and increases productivity.

Where do we go now for more improvement? How can we improve our performance with ZERO capital funds available? We are assuming that you have some ‘operating funds” available

Do you have slotting situations like the 2 above pictures in your DC?
Picture on the left: an extreme case of bad slotting.
Picture on the right: Innovative use of reserve storage. Putting 3 small pallets one on top of the other.

In this graphic, the green color represents the CROSS BEAM.  The most common length of this cross beam is 96” and the vertical thickness is usually around 4” to 6” (in the US). But you can buy these cross beams in any length and thickness you want.

We will be discussing the rest of this article about these cross-beams and how they influence the vertical height of the slot (and the total cube of the slot).

When the DC was first constructed or when it was last remodeled, the location of these cross beams were assigned.

Flexible versus Optimum – which is better?

Designing Flexibility in a design comes with a cost. The rack design shown above [left most] is a Flexible design. You are able to fit a wide variety of products. Often such a slotting scheme will maintain a clearance of 60” in each level. But, you get only 3 levels.

Optimum design 

The rack design shown above [right most] can be considered as an efficient design, tailored to the needs of the current inventory. It has 7 levels. Compared to just 3 levels in the Flexible design.

Which is better?

We don’t know. We must examine different options and actually fit the existing inventory. Is that the design shown in the middle.

Karma Logistics is introducing a new technique to find the Best-fit slot openings for your DC and at the same time, maintain a degree of flexibility.  If you are interested in improving your cube efficiency and hence the picking productivity, please contact us.

Where do we start?

We first analyse your current slot openings.

Our analysis will prepare a list of all the slot openings you have. And this will be compared against the correct number and types of slot openings we need.

As we prepare the slot moves and the slot adjustments, we will emphasize FAST MOVERS located in a bad area plus slotted in a wrong slot size. But before that, we will work on your SLOW ITEMS occupying PREMIUM SLOTS. We will first move the SLOW movers. This will create empty slots. We then look at FAST movers and move them to the SLOTS of the correct size in the premium locations.

Before we conclude this BLOG, we want to restate an old axiom for DC's.

The picture below is an attempt to show a DC made up of ICE BLOCKS. Instead of having real products, pretend that they are all made up of similar sized ice blocks.

[See picture below]

Now pretend that it is a hot day in June and the outside temperature is over 90 degrees F.

And all the ice blocks have melted. And we carefully collected all the melted water and stored them over the warehouse floor.

Question:  How high will this water be, from the floor?

Answers:  1.  20 feet high.    2.   15 feet high    3.  10 feet high  4. 2 feet high   5.  11" high

The correct answer is closer to 11" high.  

Why look at CUBE efficiency?

We only pick cases. But our asset is really CUBEs.

Using the Karma Logistics technique, 

1.0  we will help you find the correct sizes and numbers of slots.

2.0  we will make sure that the available cases in the pick slots will support a certain days of sales demand.

3.0  this will reduce the number of 'mark outs' and 'partial picks'

4.0  will help organize and streamline the replenishment process

5.0  Plus of course, we will slot the item based on its movement and other characteristics.

Once we take your DC to that new and efficient configuration, we will help you maintain that high level of efficiency with a weekly slotting service.

See this link for Data Requirements and the process

https://sites.google.com/site/bringyourdcforatuneup/home

Contact:


Karma Logistics Inc
Ram.Krishnan@yahoo.com
Minnesota USA
Bangalore India

We offer a 4-point program to improve your DC facility's productivity - in space usage and product slotting. Based on our proven techniques, we have developed easy-to-install methods.

We know that most DC's were once upon a time were quite efficient and optimal. Over the years, through both internal strategic merchandising and distribution programs, that same DC is no longer efficient. To complicate matters, external changes like new competition, changes in demographics and methods of ordering, the situation has gotten worse.

In the slide below, we show the 8 most common symptoms that affect a warehouse (DC).

Spend a minute looking at the above 8 symptoms. Hope you don't conclude that we are describing your operations.

Our 4-point tune up program.

Step 1 How is the current layout?

There are hundreds of warehouse storage types. But we will speak of just 2 to make it simple.

Bulk storage :  Where pallets of products are stored directly on the floor. The verical storage is limited by the stackability of the product.

Rack storage : where each pallet of every SKU is stored on steel pallet racks. Here also, we have many, many types of racking designs and patterns.

Our discussion relates only to the layout, storage and space or cube usage.

Step 1.a  What is the problem with bulk storage?

In one word, it is called 'Honeycombing".

Products may be stored as 3-deep storage, or 4 deep etc. Unless the entire depth of 1 sku is shipped, we cannot use that space for another SKU. Based on the relative velocity, one such storage depth may take many weeks to empty out. We are forced to keep the partially empty space as empty. This is called "HoneyCombing".

The graph on the right is an estimate of space lost at various pallet depths of storage. At the higher end, if we use 12 deep storage, we can expect to lose 26% of the sq.feet of the DC size to honeycombing.

Step 1.b What is the main problem with Rack storage?

We are describing an existing warehouse rack layout.  Though we know how to examine the current layout and design a brand new layout, we don't change our layouts every week. It is not possible and does not make any practical sense. We are assuming that we are keeping the existing layout, keeping the same aisle widths, subject existing column spacing etc.

Hence, we are limited (in this discussion) to matching slot heights (cube) and product pallet heights (cube).

We look at each slot, the sku placed there, the relative velocity and determine the current cube usage. In the above bar-chart, we assess the value of each slot opening - how many slots are available versus how many slots are needed. We use this analysis to adjust slot sizes by modifying the cross beams.

Step 2.  How to find the BEST FIT for both Bulk and Rack storage.

Karma Logistics has developed field tested heuristics to analyse the customer's SKU and ORDER profiles and develop the best fit.

In the case of the Bulk storage, we find the BEST combination of pallet storage depths (to minimize the sq.feet space on the floor).

In the case of rack slots, we use heuristics to fine the best combination of slot sizes that will maximize Cube usage.

Step 3. How to get there? From your present layout to the BEST FIT layout?

We create a drawing showing how the current slots are used. In the drawing above, the colors are as follows:  RED - fast movers, BLUE - medium, YELLOW - slow movers. This is the starting point. We then create our placement groups. Each group indicates what collection of items need to be placed in which section of the layout.

The Excel report above shows 'slot moves' to change from current layout to the desired slotting. Often in the beginning for many weeks, we are moving 'slow' moving items for a prime slot to a non-prime slot. Such moves create room to place fast move items in the correct slots.

Step 4: How to keep the BEST-FIT forever?

Once we have constructed the placement groups and the 'slot move procedure' then we follow the above cycle.  (1) we download the current data from the customer's site. (2) Examine current product slotting against the slotting criteria.(3) Prioritized by HITS, we identify the most valuable slot moves, using our penalty costs. (4) customer physically implements the slot moves.

The slot moves are provided as both Excel and ASCII files. These can be uploaded to the customer's data sets.

We also provide a 3 dimensional model of your facility. This model allows you to visually monitor the moves (plus few other functions). You can use the new generation of Tablets like the IPad to view the model and product information.

Key benefits

Our application of these techniques will result in :

• Better use of the existing slots, without asking you to do a major layout change
• We will create the correct number of pick slots to support the required weekly demand.
• We will find the BEST-FIT slotting goals and help you migrate to that.
• Use your existing facility better. Delay or avoid costly capital investment.
• Improve your picking labor productivity

Testimonials

How to get started?
Send us this information:

• the sq.feet size of your warehouse
• total number of active SKU's slotted in this warehouse
• Number of warehouse staff (exclude clerical and admin)
• a plan view drawing of the warehouse
• your contact - email and telephone number

We can respond to you better once we know what your DC looks like.

When we wish to proceed with the full project, we will ask you for 3 databases. These are described in this link.   Data required  

Contact:
Ram.krishnan@yahoo.com
Senior warehouse consultant