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

Karma Logistics - consulting and service offering

Application of Karma Logistics techniques in different product sectors

During the last few months, we have discussed many aspects of warehousing productivity improvement techniques.  In the month of Jan 2012, we introduced our 3D technique to improve your warehouse slotting. You can scroll to the bottom of this BLOG, click on Older Posts and visit the earlier Blogs.

During this month Feb 2012, around 600 people from around the world have visited our Blog sites and many have downloaded our Demo Software showing the 3D technique. If you missed any of this and wish to see them, please email us at  Ram.krishnan@Karma-Logistics-Inc.com

Our technique

YouTube link that describes our techniques and the process;

http://www.youtube.com/watch?v=JHPV7_E8608

Note: A section of this video starting at 4:30 minutes has been intentionally blurred to protect our techniques.

In the next 5 Blogs, we propose to write project case histories. These will describe how we applied our techniques, describe the type of warehouse, size, type of layout and storage, the pilot effort, how we rolled out the software and its application to all the DC's in the company's network.

We will mention the product and DC type, but not the actual company names.

Here are the 5 case studies.

1.0  Hospital and Nursing homes product distribution.

       DC networks in this sector may be located in major metro cities, to offer local presence and speedy delivery. Based on the customer groups, same SKU's may be slotted in a full pallet rack, a case pick section from a hand-stack rack section, picking eaches from both carton flow racks and bin shelves.  After full installation at all DC's over a few years period in a Company in this sector, they increased picking productivity by 35%.

2.0  Paper, tissue, napkins etc sector

        Paper manufactures require lot of water. Hence, most of the companies in this sector are located next to large lakes, rivers or the oceans. Each production unit is in charge of producing a certain group of items only. Typically, DC's will be located attached to the manufacturing facilities. We may have 400 to 600 sku's. But lots of on-hand pallets stored directly on the floor. The DC's size may be in the range of 450,000 to 600,000 sq.feet. The stackability of the products becomes a key factor.

       Karma Logistics has created a special iterative algorithm to find the BEST combination of product storage. DC's in this sector end up wasting space due to 'honey combing'. Since the main DC is losing space due to honeycombing, often there may be 1 or 2 smaller outside rental storage areas. This only makes matter worse. Every day, there will be a transfer truck, bringing 'picked' products from the outside rental DC's to the Main DC, merge the orders and send the shipment. We have routinely saved 10 to 15% of the space, many times closed down the outside DC's.

3.0  Electric, Lighting, Utilities etc

This sector covers a wide range of DC types. There may be just 1 or 2 large DC's in USA. Or have around 12 DC's to cover US.  Often the DC's layouts will have everything - pallet racks, carton flow racks on 2 or 3 level mezzanines, an old Carousel to house thousands of small items, some bulk storage on the floor.

We have surprised few companies in the sector with 25 to 35% savings by reslotting the products.

4.0 Office Products

We developed unique Variable width slotting techniques for carton flow shelves. Plus, to avoid 'look-alike' picking errors, we introduced randomization of products to be slotted in nearby slots. Companies in this sector usually keep a DC in every large city.

5.0 Food manufacture

Companies in this group are somewhat like the Group 2 described above, except, they don't need lots of water. Hence, they can be located anywhere in the country. Decrease Honeycombing, slot products based on stackability' and maintain FIFO rotation.

We need your feedback at this time.

Of the 5 types of sectors listed above, which one do you want us to write first.

Karma Logistics

Warehouse slotting made easy; Do it visually using our 3D model techniques

Update on March 1, 2012

We appreciate your interest in the new 3D technology. The underlying algorithms and analysis is based on our slotting expertize built over many years and many installations.

1.0 Whether you already have a WMS/slotting system or have neither.

January 29, 2012

What do you mean visually?

Yes, we first create a 3D model of your facility, accurate to 1 inch. Then we populate your present products.  Shown below is such a model of a DC.


We think of this as a third generation technique.  Doing it visually.

First we used Excel sheets and updated them with product information everyday and did the analysis.
[we can accept your Excel sheets into our software]

Then you called in the consultants or accepted a slotting technique that you did not understand. And after a few months, slotting came to an end.

In this method, it is simple and visual and we want 'you to do it' again 'yourself'.

a 3D model showing slotting groups based on detailed profiling of the orders, inventory and customers

visually look at the fast movers (red), medium (blue) and slow (yellow)

You can walk thru an aisle, get slot and sku information for any slot

Put it on a Ipad, take it with you, with the Forklift Driver, with any one

How do you build the correct slotting groups?

We describe below the steps involved.

1.   Detailed Profiling

2.   Review of existing slotting and layout. 

Do these pictures remind you of your own DC? With various challenges

3.   Reduce travel time but not create congestion

We all know that almost 60% of picking time is 'travel' time

 

Study how different customer groups order their sku's

4.   Examine the available current slots and the type of products slotted

Does the current slot openings match the demand?

5.0  Examine ways to increase number of slot faces.

Using the above chart, look for opportunities to increase number of faces. You may be able to change a number of cross beams in the short term, to get some relief.
     

change pick levels and faces based on profiling results

 

6.   Connect with 3 databases that we need

Flow-chart showing the weekly (or daily) slotting process

7.   Our slotting techniques will initially start moving all the slow and dead items occupying premium slots.  We establish few KPI (key performance indicators) when we start the process as base line reference.

      Then we select the slot moves every time, based on the highest penalty cost

8.   Once we reach our slotting goals, we keep fine-tuning your DC, for new items, for dead items.

9.   Don't be surprised, if you obtain anywhere between 12 to 25 % improvement in your order picking labor productivity based on your initial conditions.  If we slot items for efficient picking, it will also make it easier to 'put away' the same top movers.  And we may ask you to install a form of batch picking in the slow item areas.

Get the most of your picking process

Are you ready? For more details - contact Karma Logistics Inc - Minnesota USA and Bangalore India
ram.krishnan@karma-logistics-inc.com