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Opinion: Think Inside the Box

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6/3/2011 8:00:00 AM

By David Frentzel
Vice President of Global Contract Logistics
APL Logistics

This Opinion piece appears in the May 30 print edition of Transport Topics. Click here to subscribe today.

Because transportation costs outweigh warehousing costs several times over and continue to rise, most companies think outside that big box called the warehouse when the topic is logistics and concentrate instead on how things get to their destination. But that doesn’t mean a company can afford to park its warehousing strategy and forget about it. A great deal of cost-efficiency can be gained simply by taking a careful look at warehouse procedures and asking some key questions:

• Is there room for formal improvement? Even the best-run warehouses have pockets of waste and inefficiency, and few things are more effective at removing them than formal quality-improvement programs such as Lean, Six Sigma and Just Do It. My company’s facilities began using these programs in 2007, and we’ve saved $20.2 million so far.

The great thing is that these programs don’t require a huge capital commitment. Your company can implement them using the same managers, supervisors, pickers, forklift operators and other personnel it uses to carry out its day-to-day operations, and participation won’t require much time away from the job

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. Plus, nobody will miss the unnecessary steps, work or expense they eliminate.

• Should we be pickier about our picking? One of a warehouse’s most important roles — delivering products with 100% accuracy — is also one of the most difficult to pull off, especially if a company’s supply chain involves pick lines. (For the uninitiated, a pick line is a row, or several rows, of products stored in open bins in a distribution center in such a way that individuals or machines can retrieve items quickly to fill individual orders.) That’s why it’s so important to consider revisiting, re-equipping or rearranging these work-intensive areas frequently.

For example, adding a layer-picking device could automatically double or triple your company’s picking productivity — and reduce related staffing demands. By the same token, the introduction of hands-free voice-picking technologies could improve your order-filling and recordkeeping accuracy and velocity significantly. Even something as simple as rearranging the order in which items are picked and where they are located in the warehouse could help make your pickers’ jobs faster and ergonomically safer.

© 2010, Transport Topics Publishing Group. All rights reserved.


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Emil Estafanous, CPA, CFF, CGMA