"Secret" ROI in Automating your DC: A List
The only reason to implement change in your supply chain is because you believe you can get a return on investment (ROI).
So how should you calculate ROI? Labor savings? Space Savings? Sure, but there are others that don't spring as quickly to mind.
We call these the "Secret" ROI factors.
So here is a list of a few (48) that may or may not have occurred to you.
Tangible
• Reduce Cost Per Pallet Stored
• Employee Reduction at Picking/Lineside/Replenishment etc.
• Employee Reduction at Workstations
• Workman's Compensation Reduction
• Cube Utilization of transport
• Comparative Equipment Costs
• Comparative Building Costs
• System Availability
• D.I.O.H. reduction at lineside supply storage
• Distribution Center inventory reduction
• Reduced operations costs in lighting and HVAC
Intangible
• "Do Nothing" Costs
• Can New Revenue Opportunities be Created?
• Accuracy
• Overall order-cycle (increased delivery distance)
• Overall order-cycle (later order cut-off times for delivery)
• Overall order-cycle (Less Trailers)
• Reduced shorts
• Centralized De-trash
• Freight Reduction from Improved Order Fill Rates
• Reduction in Inventory Carry Cost
• Warehouse Personnel Productivity Improvements
• Reductions in Printer Supplies - Paper, Toner, Custom Forms
• Reduction in Returns Due to Accuracy Improvement
• Reduced Forklift fleet
Implementation of "Best Practices"
• Fewer touches per product
• Greater flexibility
• Less expediting
• Cleaner work environment
• Higher level of integration
• Less inefficient use of equipment
• Reduction in training requirements
• Real-time visibility of labor requirements
• Inherent Scheduling
Information Availability
• Improved management visibility
• Improved diagnostics
• Business partners/supply chain improvements
• Less paperwork
Employee Satisfaction
• Working more effectively
• Reduced need for supervision
• Less resistance to change
• Increased safety
• Working with better technology
Market Effect
• Sales value of illustrating use of technology
• Value of increased on-time deliveries
• Sales value of illustrating growth capacity
• Competitor Envy
• Better Customer Service
So these are our thoughts. Do you have any you can add or disagree about one? Let us know.
Schaefer Systems International, Inc., the North American subsidiary of the SSI SCHAEFER group of companies, established headquarters in Charlotte, North Carolina, in 1989.
SCHAEFER’s automation integrates to any existing system earning us an international reputation as the global leader in the material-handling industry for returnable packaging, static racking, and highly complex, automated distribution systems. With over 70 years of experience and a 100% commitment to quality behind every SSI Schafer system, we focus on providing our clients with unconventional picking and storage solutions delivering best value