{"id":1999,"date":"2015-10-05T19:44:50","date_gmt":"2015-10-06T00:44:50","guid":{"rendered":"http:\/\/flevy.com\/blog\/?p=1999"},"modified":"2015-10-01T20:54:30","modified_gmt":"2015-10-02T01:54:30","slug":"do-you-have-a-strategy-for-speed-start-by-conquering-the-10-plus-wastes","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/do-you-have-a-strategy-for-speed-start-by-conquering-the-10-plus-wastes\/","title":{"rendered":"Do You Have a “Strategy for Speed?” Start by Conquering the “10 Plus Wastes”"},"content":{"rendered":"

There is always much talk about the basic technology (and supplemental technology) solutions that are designed to optimize systems in an effort to work \u201csmarter\u201d in a distribution center or warehouse–to possess a \u201cstrategy for speed.\u201d<\/p>\n

Managers are now under more pressure than ever (and they should be) to carve out space and optimize throughput.\u00a0 In most cases, the goal is to maximize storage capacity and labor productivity within the same footprint–and do it without breaking the bank.<\/p>\n

Here, we describe some techniques, that hopefully you can use to not only get a better understanding of how to meet the pressure, but how to put specific solutions to work that maximize existing space (or new space) and bring labor efficiency to a whole new level!<\/p>\n

This, our latest article, spells out what you need to know, the 4 components<\/p>\n

    \n
  1. The “10 Plus Wastes to attack,”<\/li>\n
  2. “5 \u2013 potential \u201cdesign concepts\u201d you can employ,<\/li>\n
  3. the performance metrics to \u201cbaseline\u201d and continually measure your operations; and<\/li>\n
  4. \u201ca summary of the initial steps to take.”<\/li>\n<\/ol>\n

    Your overriding objective, I believe, is to implement (within 6-months) a strategy that has a handsome ROI and establishes a hard to beat competitive advantage, transforming your DC or warehouse from a cost center to a profit center–contributing to the bottom line.<\/p>\n

    \"blog_1\"
    Component #1 \u2013 The 10 Wastes to Identify Process Improvements<\/figcaption><\/figure>\n

    Henry Ford is quoted as saying; \u201cTime waste differs from material waste in that there can be no salvage. Wasted time does not litter the floor like wasted material.\u201d\u00a0In other words, once time passes, it cannot be retrieved.<\/p>\n

    I\u2019ll bet you that upwards of 60% of the activities you perform in your DC or warehouse add no value\u2026 it’s waste! Your processes and workflows are limited by these constraints. They limit your performance! So, it seems only logical that by identifying and eliminating these wastes, you can attain the greatest potential source of performance improvement. This is a basic \u201clean thinking\u201d principle.<\/p>\n

    The objective is an \u201cexpected outcome\u201d–in other words, obtaining consistent results at lowest cost.<\/p>\n

    Now, \u201cWaste 10.1\u201d (below) is just my way of elevating these constraints to the most frequently observed.<\/p>\n

    \"blog_2\"<\/p>\n

    These \u201c10.1 wastes\u201d allow me to continue this discussion\u2026<\/p>\n

    \"blog_3\"
    Component #2 \u2013 5 Potential DC\/Warehouse Design Concepts<\/figcaption><\/figure>\n
    \"blog_4\"
    Design Concept #1 \u2013 A \u201cHigh Velocity Pick Zone\u201d \u2013 \u201cHVPZ\u201d<\/figcaption><\/figure>\n

    I guess it\u2019s always best to start off with some \u201creal bang for the buck!\u201d\u00a0So, say hello to a \u201cHVPZ\u201d (high velocity pick zone).<\/p>\n

    First, through the utilization of flow racking and some conveyors, as you see pictured above, we can address a few design topics and their advantages.<\/p>\n

    Secondly, utilize the end-game of \u201cPareto\u2019s Law\u201d (the 80\/20 rule). Through basic Pareto ranking, most clients we work with are able to identify products with the highest number of \u201corder hits.\u201d I find that usually a minimum of 500 to 600 SKUs or more can be accommodated in a \u201cHVPZ.\u201d These represent upwards of 50% or more of the order hits experienced.<\/p>\n

    Thirdly, the utilization of conveyors (automated or gravity fed) eliminates a Picker having to walk, with the product picked, to a staging area.\u00a0 I still see this waste frequently. Why do we cause a Picker to traverse this distance when it\u2019s an accepted fact that 70% of a Picker\u2019s time is spent walking? With a \u201cHVPZ,\u201d the walking distance is dramatically reduced. When properly slotted, product stored in a \u201cHVPZ,\u201d and \u201ctaken away\u201d or moved by conveyor, can often result in up to a 50% increase in Picker productivity!<\/p>\n

    Additionally, flow-rack applications allow product to be re-stocked from the rear and picked from the front (gravity feeding of product to the Picker). Overstocks can be stored above, enabling a quicker and smoother bin replenishment process.<\/p>\n

    Putting these three (3) attributes together allows a Picker to pick alternatively from one side to the other as they go down the aisle–placing product into plastic totes or cartons–as they make their way down to a packing or staging area (see below) for consolidation and delivery routing.<\/p>\n

    The “HVPZ\u201d concept is consistent with whether you pick one order at a time, or utilize zone or wave picking (discussed later).<\/p>\n

    \"blog_6\"
    Design Concept #2 \u2013 Narrow Aisle Storage – \u201cNAS\u201d<\/figcaption><\/figure>\n

    \"blog_5\"<\/p>\n

    Why do I still observe aisles in DC\u2019s or warehouses that are 11\u2019 to 12\u2019 wide or more? I know the answer: forklifts need to fit through and maneuver, right? Hasn\u2019t anyone heard of \u201cnarrow aisle stock pickers\u201d (see right)? You don\u2019t even have to buy this equipment. You can affordably lease it and then own it after 4 to 5 years. Companies I\u2019ve worked with often are able to store another 500 to 1,000 SKUs. More DCs and warehouses should be looking at this for space savings (5-1\/2 foot aisles) and particularly to accommodate higher velocity sku\u2019s (high order hits,) for products that don\u2019t fit in a \u201cHVPZ\u201d, because of size or other physical characteristics.<\/p>\n

    Narrow aisle storage, like flow-racking and conveyors, are a great example of a materials handling solution, not a computer system solution. Best of all, most likely you can continue to use your traditional pallet racking.<\/p>\n

    Additional Design Concepts<\/strong><\/p>\n

    For those of you who still process orders using \u201cdiscrete picking\u201d methods (one order at time), here\u2019s some other alternatives to consider. Of course you\u2019ll want to investigate whether your ERP\/WMS systems provide (or should provide) these features.<\/p>\n

    As I stated in this white paper\u2019s introduction:<\/p>\n

    Managers are now under more pressure than ever (and they should be) to carve out space and optimize throughput.\u00a0 In most cases, the goal is to maximize storage capacity and labor productivity within the same footprint \u2013 and do it without breaking the bank.<\/em><\/p><\/blockquote>\n

    So, these concepts are no longer a \u201cnice to have\u201d decision anymore. Having people move around a warehouse passing the same sku\u2019s, time after time, without considering alternative processes, is no longer an option, if you choose (as I hope you will) to transform your facility from a cost center to a profit center, as a \u201cstrategy for speed.\u201d<\/p>\n

    \"blog_7\"
    Design Concept #3 \u2013 Batch Picking<\/figcaption><\/figure>\n

    Batch picking can be a little \u201chairy\u201d–particularly, if you are still in the \u201cpaper mode\u201d and required to \u201cjuggle around\u201d multiple order picking companies have chosen to modify their systems to produce a paper-based \u201cconsolidated pick list\u201d (one document to pick from) and then break it down into individual orders after everything in the batch has been picked. Frankly, I rarely see this work all that well as it can become a potential for \u201corder mixing\u201d (errors!).<\/p>\n

    Some companies shy away from it, because it requires an accumulation of orders to get the benefits of the multiple picking opportunities and therefore is perceived as \u201cdelaying\u201d the order and\/or inconsistent with delivery commitments. Fortunately, there are mitigating solutions.<\/p>\n

    Bottom line, batch picking is best used in conjunction with \u201cZone Picking\u201d and\/or \u201cWave Picking\u201d which I will describe shortly.<\/p>\n

    \"blog_8\"
    Design Concept # 4 \u2013 Zone Picking<\/figcaption><\/figure>\n

    As we get to zone picking, here represents a major opportunity for additional productivity and performance improvement! As the picture above describes,\u00a0\u201ceverybody picks an order from their own assigned zones.\u201d\u00a0Everyone is limited to their specifically assigned picking area–\u201creducing pick travel time.\u201d<\/p>\n

    Because products in a specific zone may be easier or harder to pick than products from other zones, the type of storage media used, materials handling equipment, product flow, and manpower planning become more critical and mitigating factors. These need to be \u201cmatched\u201d to the requirements of the zone.<\/p>\n

    Zone picking does introduce the element of \u201cconsolidating orders,\u201d as everything is picked. Therefore, it\u2019s best conducted in a WMS\/RF environment where orders can be more easily tracked as to product staging location and degree of completeness, prior to routing and delivery scheduling.<\/p>\n

    \"Design
    Design Concept #5 \u2013 Wave Picking<\/figcaption><\/figure>\n

    As the picture above describes,\u00a0wave picking is often a combination of zone and batch picking. For the \u201ctypical\u201d wholesale distributor, this may be is as far as you\u2019ll get in terms of productivity and performance improvement before you \u201cmight\u201d consider \u201cpick-to-light,\u201d carousel picking, or other more exotic methods (and at a substantial cost).<\/p>\n

    Wave picking in wholesale distribution is a doable option. Particularly, if you have your own fleet of delivery vehicles or ship primarily UPS or FedEx, etc., you have the basis to generate \u201cwaves\u201d of orders with common \u201cship via\u201d or delivery commitment timing.<\/p>\n

    For instance, let\u2019s say you have 6 of your own trucks that leave each day to make deliveries. Some may travel further distances than others. Most likely that may dictate which truck gets picked and loaded first. Each truck can then be considered a \u201cwave\u201d and those orders, for that truck, are \u201cdropped\u201d into the system for picking \u2013 using batch and zone picking methods.<\/p>\n

    Wave picking, because of its productivity potential, motivates many companies to move to a staggered shifts\/late shift or multi-shift\/night shift operation. The days of typical 7:30 a.m. to 5:00 p.m. working hours in today\u2019s DC\u2019s or warehouses may slowly be coming to an end as a way for companies to extend their \u201copen for business hours\u201d – and accommodate orders from customers up until 6:00 p.m. or later, as an example.<\/p>\n

    The increased productivity gained provides them this opportunity to extend their \u201cvalue\u201d to their customers.<\/p>\n

    What happens to the \u201cday shift?\u201d Well it\u2019s still pretty important! There\u2019s receiving, put-away, bin replenishment, cycle counting, counter orders, will calls, emergency orders, etc.<\/p>\n

    \"blog_9\"
    Component #3 – Productivity Measurement<\/figcaption><\/figure>\n

    As the old adage says: \u201cYou can\u2019t manage what you don\u2019t measure\u2026\u201d<\/p>\n

    I believe there are two important points to make here. First, productivity measurement fills the need to balance business analytics with anecdotal information. It maintains objectivity. Secondly, \u201cbaseline productivity measurement\u201d fills the need to know–where you are now<\/em>\u00a0before you begin your improvements. What is the ROI that results?<\/p>\n

    Of course, productivity measurement is ongoing, beyond the \u201cbaseline measurement.\u201d It needs to be developed, implemented, and reported on a regular basis.<\/p>\n

    The picture above is just an example of the type of data required. There is usually more needed to determine whether you are on the path to a \u201cstrategy for speed\u201d resulting in transforming your DC or warehouse from a cost center to a profit center.<\/p>\n

    \"blog_10\"
    Component #4 \u2013 The Initial Steps to Take<\/figcaption><\/figure>\n

    The picture above generally \u201csays it all:”<\/p>\n

      \n
    1. Uncover and understand the barriers and bottlenecks–the constraints–to overall DC or warehouse performance,<\/li>\n
    2. Learn more about available concepts and best practices; and<\/li>\n
    3. Measure, measure, measure your \u201cbaseline\u201d and the results of your continuous improvement.<\/li>\n<\/ol>\n

      Lastly, have a professional provide a \u201cto scale\u201d CAD (computer aided design) drawing of your facility as it is now. It will make it a lot easier to modify and incorporate your concept thinking as it evolves.<\/p>\n

      Finally…<\/strong><\/p>\n

      \"blog_11\"<\/p>\n

      Back in the early to mid-nineties, new warehouse concepts and technology really came into its own, but many let it pass by or marginally embraced it. Today, competition is intense; national competitors, regional competitors, E-commerce competitors in almost all the industrial supply verticals. It has only made it more imperative to embark on a wide range of warehouse and distribution process improvement initiatives.<\/p>\n

      This may be the last chance for many wholesale distributors that have historically \u201ckicked the can down the road\u201d; those that have hit the wall on productivity, those who possess a layer of WMS tools that they don\u2019t use, or have not been able to scale sufficiently to meet their drive for growth as well as positively impact distribution transaction costs.<\/p>\n

      But it\u2019s really more than just about your software. It\u2019s really about processes, lean thinking, developing a strategy for speed and transforming your DC or warehouse from a cost center to a profit center.<\/p>\n

      What\u2019s your new reality going to be? Let us know if we can help.<\/p>\n","protected":false},"excerpt":{"rendered":"

      There is always much talk about the basic technology (and supplemental technology) solutions that are designed to optimize systems in an effort to work \u201csmarter\u201d in a distribution center or warehouse–to possess a \u201cstrategy for speed.\u201d Managers are now under more pressure than ever (and they should be) to carve out space and optimize throughput.\u00a0… Do You Have a “Strategy for Speed?” Start by Conquering the “10 Plus Wastes”<\/span><\/a><\/p>\n","protected":false},"author":69,"featured_media":2006,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[82],"tags":[962,23,328,450,388,308,333],"class_list":["post-1999","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-operations","tag-distribution-center","tag-lean","tag-operational-excellence","tag-performance-management","tag-strategy-2","tag-warehouse","tag-waste"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/1999","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/69"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=1999"}],"version-history":[{"count":1,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/1999\/revisions"}],"predecessor-version":[{"id":2012,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/1999\/revisions\/2012"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/2006"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=1999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=1999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=1999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}