I read an article recently in DC Velocity by James Cooke, entitled “Broader look needed in DC automation decisions, study says”. In it, the author talks about how the recent findings of Dr. Raj Veeramani and Dr. Ananth Krishnamurthy from Wisconsin University seem to indicate that companies need to look at the broader impact on the supply chain when considering automation. Veeramani and Krishnamurthy argue that the current way of evaluating ROI, labor and cost calculation, are too limiting.
I could not agree more; in fact we have spoken about the different ways that ROI can be measured. The true cost of a decision can be difficult to forecast by only looking at raw numbers.
Let’s look at the “cost” of errors. Traditionally we would say, “If we have 10 errors per 100 and because of those errors we lose those 10 customers…. our loss is $1,000.” We can quantify that over a certain period of time and see whether it is a good ROI to replace our current system with one that lessens errors.
But that is simply moving numbers around a spreadsheet. Human beings are not spreadsheets and don’t act predictably all the time. Say that you have an error and lose the customer resulting in a net loss of $100. How much are you losing in future sales? What if that customer’s needs grow and you would have ended up with $500 orders instead of $100 orders?
Another factor missing in the spreadsheet is human nature. How many people will that customer tell that you can’t fulfill your promises? How much will that cost you? A quick rule of thumb is that for every one person who praises your company, 10 are criticizing.
Let me present an additional consideration. Let’s say that with automation you are able to reduce your headcount by %15. Now, all of your employees are not the same, correct? So you have the benefit of addition by selective subtraction. You don’t get rid of employees randomly; you keep your best employees, the ones who make the best team or the ones that cost you the least in missed work.
Engineering and Management need to evaluate a great deal of different factors in deciding whether to make the leap to automation. The ramifications affect many people who don’t have “distribution” or “supply chain” in their title.
Want to talk to us about how we can help drive the real cost saving with automation? Contact us here. And don’t forget to sign up for our Visionary Automation Newsletter.
The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.
What are the keys to drive a company towards automation? What are some telltale signs that mean you can’t try to squeeze a little bit more or hold on a little while longer to how you have been running your distribution center? The predominant sign is growth.
However, there are a variety of variables that can “grow”. Let’s take a look at some of them and see how they might influence the need to evaluate the workings of your distribution center.
SKU: If you have growth in your SKU count, you need more pick faces. Over a year if you have growth of 5-10% in your SKU count, automation could be a great avenue to pursue. Even if the growth is only seasonal, during those times you need the additional places to pick from.
In this instance, taking into account throughput and SKU dimensions, a Goods-to-Person system could be a good fit. With good planning, automation can be flexible and a great way to increase your storage capacity while remaining within the same footprint.
Business: Let’s look at growth in another way. Let’s say business is booming. In this instance, the growth is external and you have growth in customers, or your customers order profile changes, and they need more of your products. You will obviously, need more throughput. This kind of growth could also be a signal for automation. Person-to-Goods can only get you so high a rate before the inefficiency need for space and labor cost become untenable.
Errors: Another way to look at growth is in a negative light. Let’s say your errors are growing. For example if you are in the pharma industry, the goal is Six Sigma. This is 3 errors in a million. The typical standard in a manual DC is 97% accuracy, which is not going to ensure the Six Sigma Goal. Let’s say you have a grocery DC with 97% accuracy. If you are shipping out 130,000 cases a day that means you have an entire truckload of errors every day.
How much does it cost you to deal with all of those errors? The labor and the loss of customers alone add up to another reason to look at automation.
So while in most cases, growth can be a good thing, it is closely tied to the need to reevaluate how your company operates your supply chain. Have any other thoughts on aspects of growth we missed? Let us know by comment below.
And if you are attending the Modex Show in Atlanta please be sure to visit us at booth #4709. And don’t forget to download your Guide to Modex 2012.
The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.
This blog was initially conceived to serve as a comparison between earlier carousels and the latest generation. However, during my research I kept running into a problem. Everyone I spoke to said, “Well, there really is no comparison. They are too different.” Nevertheless I will persevere though the only similarity between the two seems to be the fact that they rotate and the name carousel. So here are four reasons why you should consider a new generation carousel in your distribution center.
Extractor: The newest generation of carousels is much more efficient with the combination of the extractor and workstation. In the earlier models product was picked directly from the carousel, which meant it was, in essence, a “person-to-product” system. However, with the extractor and workstation it becomes a true, “goods to person”, system. Also, the extractor functions to separate the carousel (storage) and the picker (retrieval), making it possible to buffer the products.
Faster: In the better carousels the extractor carries 2 loads at a time, so you are getting a true double cycle. One load is retrieved and one is stored every time the carousel stops. This results in higher throughput for the system.
The software behind the system is also improved. It can calculate the most effective way to get to the needed totes with the least amount of movement, saving time and energy expended.
Energy consumption: The true double cycle also helps with the amount of energy that the carousel consumes. The energy consumption is lowered because there is less movement the carousel performs to make a pick or put.
In addition, the use of randomized storage also improves the energy consumption. With this system you can take any tote out that is needed at the workstation and replace it with any other tote. There is no need for the carousel to spin and the extractor to move to an assigned location for that particular tote.
Application: This is less of a function of the carousel and more a function of the supplier. A true “goods- to-person” system is the goal. In the past, carousels have been applied as a one size fits all application. This is, of course, incorrect. Carousels are better geared to your slower moving products; for instance your slower B’s and below.
So what are your thoughts on the carousel and its place in the industry? Are there any more benefits that I missed in a carousel system? If you would like to learn more about how a carousel system might be able to help solve your distribution problem, contact Schaefer Systems.
The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.
With the material handling tradeshow season right around the corner I started thinking about how attendees to these shows can maximize their investment. Even if there is no monetary cost to attend a show there is still an opportunity cost.
Your return can be maximized because of the singular opportunity to meet with a variety of companies and the chance of finding a great company to work with. This is especially true at the larger shows, for instance this year’s Modex 2012.
First, why do you go to tradeshows? Of course to see new products and services, but also to get a feel for a company and see how they operate. This is one of the few places that you can evaluate several potential partners side-by-side and see if a relationship might be profitable.
So how can you best evaluate a company and maximize your time at Modex?
Are they innovative? Do they have new concepts in picking systems or other solutions that can help you improve your process? Does it seem like they are taking strides forward and increasing their offering to the market? Or are they just trotting out the same old thing you have seen for the last 4 shows? Most people are looking for an innovative partner that shows continual improvement, as opposed to a company that is stagnant and focused on older technology
Do they fill a need? Is there a real need for what this company does in your supply chain? If there is a need how well do they present how they can fill it? Can they tell the story of their product? Are there case studies or do they have a compelling presentation on how their application can help your business? Even if the product is brand new they should have a compelling story why you should invest time finding out more about how it might be able to help you.
Do they seem like a good fit? How do you think this company will work with yours? Do they seem actively interested in helping you or can they not be bothered? Does their company culture seem to fit with yours?
The 3 above reasons are a quick way to judge a company on the show floor, but you can also do a few things before the show to maximize your return.
Keep an open mind. There are a lot of interesting companies on the tradeshow floor. Take a moment to research a few companies that you may not have on your radar and see what they have to say.
Do your research. Write down a list of potential companies that you want to talk to. Also see if you can make an appointment beforehand so you can use your time more efficiently.
Hope this helps you find the perfect material handling partner at the upcoming tradeshows.
If you are planning on coming to Modex in Atlanta please stop by Schaefer’s booth
4709 and see our Fulfillment Factory concept and system for yourself.
The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.
A Warehouse Management Solution or WMS seems complicated, but at the core is simply a tool for your distribution center. However, it is a vital one, especially when you move from a manual solution to an automated one.
The difficulty with buying a WMS is that it can be a challenge to ensure that you get the best ROI. When you buy a new conveyor system you can tell that it is in good shape and will work for the application. But you can’t pick up a WMS and hold it and look at it. So, in order to be prepared to enter the market, let’s arm you with some of the qualities that make up the best WMS’s.
1. A WMS tracks all aspects of inventory (items, quantities, attributes, etc.) and manages location utilization. Want to know where every widget is and how many you have in each color? Your WMS knows and can give you the information instantly.
2. A good WMS controls generation of work (movements, QC, VAS, etc.) using configurable strategies. In laymen’s terms, the WMS directs what needs to happen to get product out of or into the distribution center. Let’s say the WMS is told that 6 widgets need to go to A, it then translates that into the work to be done to meet that goal.
3. The WMS manages the delegation of work to a resource, be it a person or A-frame, crane or conveyor. An important note is that the WMS issues the work to not just the resource that can accomplish the task, but also the one that can accomplish the task most efficiently.
4. Your WMS manages the fulfillment of demand and execution of work by resources, using system processes that have been personalized by your specific requirements. The “resource” to do a job at one distribution center is rarely the same as one used at another DC, and even more rarely is it done in the exact same way. For the WMS to be the best tool possible, it needs to be customized to work with the labor and machines that it has at its disposal.
5. Your Warehouse Management System keeps historical data records of activity for auditing and planning use. Not only is your WMS a tool for “now” but a tool for “then”. With a good WMS, you can mine historical information by the minute, day week, or year, and use it in preparation for the future. Who or what touched this widget and why and when?
6. The best WMS has a flexible integration to customer host systems, forming part of a customer’s larger supply chain execution strategy. It will interact with your other systems and can even be “plug and play” to ensure that there is as little disruption as possible to your supply chain.
7. In the best case, your WMS provides a platform for optimizing processes that increase efficiency and accuracy, thereby reducing costs. The WMS should manage and assign work and communicate with the rest of the system so that efficiencies are maximized and your automated distribution system works in the best way possible.
Bear in mind that a WCS (Warehouse Control System) can complete some of these functions, however only a robust WMS can complete all of them. Is there is anything we missed about what the best WMS should do? Let us know by commenting below.
The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.
Last week I wrote about how we define
Unconventional Distribution. This week I would like to explore the concept of
Total Distribution. Total distribution is controlling, and therefore maximizing, everything that goes in to your automated DC from soup to nuts. Or totes to robots.
You can’t use one technology in a distribution center. For instance, no distribution center is entirely composed of conveyor. No, you need the conveyor, the WMS, the cranes, the totes, the rack, and everything else that goes into making the distribution center to work as a whole. That’s the concept for total distribution.
Let’s talk about the advantages.
When you have one team with one concept designing and building the system you get a sum that is greater than the whole. This is similar to how Apple builds a product. They know every little piece that goes in it and how it will play with every other piece. They don’t go out and grab the cheapest or the most readily available part. They use components that they know will enhance the rest of the system. That’s the concept for total distribution, but instead of making great electronic gadgets this makes a great way to store and distribute electronic gadgets. Or say
distribute pharmaceuticals.
Another advantage is totes. Specifically standard sized totes vs. designing the automated system and then going back as an afterthought and saying, “Oh yeah, we need totes that are x by y by z.”
And the dismay of finding out that those size totes don’t exist.
Of course that size can be made, but it will cost much more than if you had planned to use standard totes in the first place. The same idea with standardized conveyors sizes. With total distribution you don’t run into fun (and expensive) little problems like that. You know your components from the initial design phase.
The key is to start with the end in mind. This is actually something we have been saying for a while. What kind of performance do you want to get out of your system? Great, let’s build the system from those requirements. That requires a hard look at the design and what components will go into it. A measure twice cut once philosophy can apply to distribution center design as well.
If you would like to learn more about Schaefer and our concept for total distribution contact us today. Also visit us at
Modex 2012 in booth 2105 where we will be sharing our thoughts on Total Distribution.
The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.
If you have been reading this blog, you know that we are advocates of unconventional distribution solutions. In fact, we believe that unconventional picking and storage solutions, increase distribution center efficiency and yield the best return on investment over traditional solutions.
But what does “unconventional” mean in regards to distribution and supply chain, and how does it help your return on investment? Well to us, unconventional means finding the most efficient and effective way to solve distribution center problems. Typical or standard distribution solutions don’t rely on finding the most efficient way to do something. Typical users rely on finding any system that will work and sticking with it. They don’t take the time to find the best way it will work.
That’s similar to the approach, “if it’s not broke, don’t fix it!” There’s wisdom in that approach for something simple, like a window or a child’s toy. But for a automated distribution center that has a multitude of moving parts that can be optimized, it’s not so black and white. Look at it like this; A unicycle is a form of transportation, but just because it works doesn’t mean it is the most efficient form of transportation.
To be clear, unconventional distribution systems are not different for difference sake. Unconventional is looking at a solution and saying, “Is that really the best way to do this? What if we did this? This is how we do it now but should we do it that way again?” Finding an unconventional solution means digging in and seeing what will work best. It also means applying past knowledge to a new problem, sometimes in a unique way.
So, how do we assure that we come up with the best design to a distribution center? It starts with a different approach. For instance, people ask why we request so much data, when others don’t. It‘s because we use all that data to really get to the heart of how a system needs to perform and what a company needs to get out of it. When we get into the data and break it down, we can determine where there are opportunities to make a solution better. We want to ensure that when we design a distribution solution it is the best it can be given the budget and requirements.
What are your thoughts on unconventional distribution? Do you agree that it worth the extra effort to come up with something that works the best vs. something that simply works? Comment below and let us know.
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The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.
Often in large corporations there is a desire to standardize everything company-wide. In some cases this is not limited to say, office supplies, but also to their distribution centers across the globe.
Companies think that this standardization will work as a way to control cost and ensure that everyone is on the same page. While standardization in one country or region can be a great idea, globally there are some pitfalls that could be avoided by non-standardization.
You lose flexibility: Let’s say you standardize and pick 10 components that work across all your distribution centers around the world. And then you add more DC’s in a different region. This new region may have different products, packaging requirements, Pareto curve from all your other distribution centers.
Your distribution needs and SKU base say in the US vs. Bulgaria are very different. Therefore for maximum efficiency, standardization might not be the best idea.
Technology changes rapidly: Let’s continue with the earlier example and say you have the 10 standard components. Now some new product is released that totally revolutionizes a process.
Do you go back and add it to your list? Do even have that option or have you painted yourself into a corner? The fact is that as you build new DC’s across the world there will be new technologies that could help you. And you ignore those technologies and limit your efficiency or you embrace the new products and end up without the standardization that you wanted in the first place.
Different areas have different cost: It may be very cheap to get some parts in Europe for a DC. But how much is it to get the same parts in India? In some areas labor is cheap and plentiful and in others it’s not. If you choose components that require high labor or high automation and it is not available worldwide, or even worse, availability changes, where are you then?
Also you are limiting yourself to the lowest common denominator as far as systems are concerned. Let’s says that mobile rack will work everywhere (function and budget-wise), but it is not the best system anywhere. It is just the one that works everywhere.
Why not have the best and most cost-effective systems in each location? A highbay warehouse in Europe is ideal. But a highbay where land is cheap may not be the best solution.
Do you have thoughts on global distribution standardization? Please let us know what you think below. Also be sure to subscribe to our Visionary Automation Newsletter!
The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.
Ever look down a line of rack? What do you see? Lots of steel, lots of product on trays or pallets, and lots of…air. We spoke about the disadvantages of shipping air in cube utilization for pallets, so you probably know that storing air isn’t such a great plan either.
So what? It’s just a little empty space, right?
Then you come across a pallet with one or two cases on it. Where there should be 50. Then it matters a little more. But what other options are there? You have to build your rack for the highest possible product height? Otherwise you have products you can’t accommodate.
Well, what if the height of the products on the pallet (or tray or whatever your load unit) determines where the bottom of the next level begins? We call this Dynamic Storage.
In Dynamic Storage your load unit is supported by load arms that are not constrained by the height of product that can be stored in an opening. These load arms extend a short way from the rack upright. Because there is not horizontal fixed beam across the face of the rack, you can use the load arms you need to place your products, providing the densest storage possible. 
There are a variety of advantages for your distribution center with Dynamic Storage. The first and most obvious is that you save money by reducing your foot print. Without all the wasted space and standard dedicated pick faces for every load unit you optimize your storage. Dynamic storage helps you gain a 20% improvement in storage utilization.
In addition, to the space savings from having flexible storage areas there is also the advantage of no lost cube from fixed beam heights found in standard pallet rack.
You also have added flexibility. If packaging should change for an existing product in your distribution center, you can accommodate it. Even if your business changes, with Dynamic Storage your system can accommodate your new products. Your rack height change is as easy as taking one group of products out and putting them somewhere they fit better.
Interested in learning more about how Dynamic storage can help your company save money and improve storage? Contact SSI Schaefer and lets talk.
The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.
I heard an interesting story today about pallets recently. A client builds mixed case pallets and ship them to their customers. As a quality control measure, the initials of the person who constructs the pallet are attached in the event of any problems, comments, or concerns.
A few months ago one of their customers called raving about how good a job “A.C.P” was doing at constructing their pallets. “A.C.P.” made the best pallet, and all the other workers should emulate them.
That’s when the customer learned that “A.C.P.” wasn’t a person’s initials, but stood for Automated Case Picker.
The point is that better pallets seem like a small thing, but when you think about it there are a lot of advantages to having better made pallets.
By making more efficient pallets, you use fewer pallets. This translates into more time building pallets vs. switching them out, which has a positive effect on throughput and on labor savings.
Better pallets means you also spend less money in transportation. You are shipping more products and less air (empty space). Your cube utilization improves, so less trucks on the road and less money in gas and drivers.
If you build your more efficient pallets that are aisle-ready you can even reduce stocking time in the store.
And if you can’t quite justify robotic palletizers (your own A.C.P.), with the right software you can maximize your pallets with even manual palletization. The right software virtually builds the pallet before the cases arrive at the operator and displays the pallet pattern case by case on a screen as each one is delivered to the operator.
The software takes into consideration all of the factors needed to construct the “perfect” pallet. Information like crush class, pallet integrity, store ready (aisle-friendly) max weight, height and overhang are all handled by the software.
So while it may seem like only a way to get items out of your warehouse and to the end user or customer, the way you are building pallets could be saving (or costing) you money.
Want to learn more about how to save money from how you build your pallets? Contact Schaefer today and see what we can od to help.
The Automated Systems Division of SSI Schaefer US is headquartered in Charlotte, NC. Here we focus on Material Handling Systems built around product to person technology. Our warehouse automation experience and skills are what have made us the Number 1# rated System Integrator by Modern Material Handling 3 years in a row.