State of the Art Refrigerated Warehouse

In the world of freezer warehouses, high rise warehouses are very common in Europe. This made H.M. de Jong Koel- en Vrieshuis, a cold storage company in The Netherlands think that a fully automated refrigerated high rise warehouse would be a good option for their business activities.

In a conventional refrigerated warehouse it is possible to store three pallets high, but a high rise warehouse would allow for at least six high. The energy needed to cool a high rise warehouse is also lower than for the conventional warehouse and the fully automated warehouse would only need 5 warehouse employees, much less than in the conventional warehouse. Calculations showed that the high rise option was more interesting than the conventional one.

The new building is 60 feet tall at its highest point and can hold up to 12,500 pallets. The company only uses one third of the surface of a conventional warehouse and is using 40% less energy to refrigerate their products because the warehouse is fully automated and doors remain closed. The warehouse consists of seven refrigerated units, each unit is divided into two compartments to enable products to be stored in fourteen different conditions if needed.

Pallets are put on carriers to transport them between the different areas in the building. The advantage of carriers over a conveyor system is that when a carrier breaks down, it can be pushed aside and the process can continue. When a conveyor system breaks down, everything stops.

Since pallets often have different dimensions, the company developed special standard units to transport pallets through the building: so called “slave boards”. These slave boards are equipped with RFID tags and each pallet is scanned to this tag with a unique barcode. That way the company can locate and follow its products throughout the warehouse. A spokesperson for the company says that they initially chose to work with conventional labels, but calculated that this would be very expensive in the long run. That’s why they decided to go with RFID.

The warehouse has now a capacity of 200 pallet handlings per hours (in or out) or combined 85 pallets in and 145 pallets out. Although the company says that it took a great effort to accomplish this state of the art warehouse, it is satisfied with the results. They expect that fine tuning of the system will continue for at least another year, but the company’s owner says he feels lucky his company is still small, so they can be flexible and make quick decisions: "That’s what’s needed in this process!"

Get expert business advice without paying high consulting fees!

Every business owner, CEO or manager needs a sounding board to reflect on the direction of their business or operation, to discuss new developments, to explore technological innovations, to help making difficult decisions or resolve issues with staff.

This sounding board is ideally an expert who listens, asks the right questions, analyses and gives constructive feedback and advice. This person is sometimes called a “sparring partner”: someone who you can discuss confidential issues with, who helps you to deal with day-to-day challenges and makes recommendations on potential improvements. He can make recommendations on how to motivate employees or give advice on new developments.

The expert can work with you on a one-on-one basis or be asked to participate in a group brainstorm session to share ideas and help to bring solutions to the table.

This fresh perspective from an outsider is extremely valuable and helps to improve your knowledge, skills and ability, making you a stronger leader. Equally important, while you and your sparring partner discuss a project or issue, new challenges and solutions, that would otherwise have been overlooked, can surface.

Logistics Advice offers the following services to business owners, CEO’s and managers in the fields of Logistics, Warehousing, Warehouse Staffing, Transportation, Supply Chain and Production:

Sparring Partner
Personal Coaching
Business Coaching
Training
Brainstorm Sessions

We offer these services mainly by telephone conversation, email messaging or (Skype) video conferencing but will be on-site in some cases, depending on the nature of the assignment.

Many of these assignments do not require a consultant to be on site, which (in combination with hourly billing) results in substantial savings. Not to mention the thousands of dollars that can be saved each time you speak with our consultants.

Contact us today to learn more about our first time customer introductory offer: a free 30-minute phone consultation – no strings attached!

Did you know that the UPC bars turned 35 this year?

The U.P.C (Universal Product Code) was originally designed in 1974 to speed up grocery checkouts. The first live scan actually took place at a Marsh Supermarket in Troy, Ohio, when a cashier scanned a 10-pack of Wrigley's chewing gum at checkout.

The now ubiquitous black and white bars celebrated their 35 anniversary this past June. GS1 US, developer and administrator of the U.P.C. in the USA, celebrated this milestone with a huge UPC bar code decorated cake.

Since that first scan in June of 1974, the UPC changed the world of commerce forever. Nowadays the code consists of 59 machine readable bars and 12 digits that identify the item and it's manufacturer. Over 25 industries have adopted the code as a standard and According to GS1 US there are about 5 billion scans a day.

How to improve warehouse productivity?

Do you measure your warehouse productivity? We find that companies often don't know how good or bad the performance of their operations really is and don't measure individual employee productivity or warehouse productivity in general. Before we explain how to measure your productivity, first we would like to stress why every company should do it.

The advantages of measuring warehouse productivity are huge. We have implemented the mesuring of warehouse productivity with almost all of our clients (it can be done within days!) and the changes were dramatic. Not only is the warehouse manager able to use the information to identify bottlenecks, it changes the mindset of the warehouse workers immediately.

People are much more aware of their actions and how they can improve their own performance. It works on both the good workers, who can finally show what they're worth and the bad ones, who are now forced to either comply with new targets or face the consequences. It also creates a healthy competition which adds to the increase in productivity. The implementation of a system that measures warehouse productivity can lead to savings of 25% or even higher on personnel costs.

Productivity can be measured for any process or person. So how is warehouse productivity measured?

First of all one should look at the characteristics of their "warehouse production". The production can be measured in pallets, boxes or pick lines but also in individual items (e.g. books, sandwiches, lamps, etc.). Then it needs to be determined at what level you want to measure productivity: top level, process level or individual level. The productivity is measured as Production divided by Hours, and expressed in a production per person per hour. For example: A person receives 100 pallets in an 8-hour day. His/her individual productivity is 12.5 pallets per hour.

Once data is being collected it is easy to identify bottle necks, eliminate those and measure the effects in your warehouse performance (productivity). This is an ongoing effort leading to a more efficient and cost effective operation.

Every company requires a different way of measuring productivity depending on process, goods, level of automation, etc. In our opinion it is one of the most important tools a company should implement because it can truly cut costs significantly and make the operation perform better. In addition, it does not have to cost anything to start measuring your warehouse productivity.

If you need assistance setting up a system to measure your warehouse productivity, feel free to contact us.

WMS Directory

Last week Logistics Advice, Inc. introduced its new Warehouse Management System Directory or WMS Directory on their website. It is a quick reference guide that provides an overview of the available options for warehouse automation. The Warehouse Management System Directory is meant as a source of information for those who are looking to implement a new system and want to compare their options.

A related topic came up during a recent discussion, namely: Before deciding to implement a WMS you should first determine if you need one. Often ERP systems already provide basic warehouse management modules that can work as well for your specific company as a full blown WMS. That way you would not have to invest in a separate WMS.

Making a description of operations as a blueprint for further development of the system, as described in the article "Important tips for purchasing a WMS", is also extremely valuable when determining what system the company needs if any at all. That is why this step should be finalized before the purchase of a specific system.

The main purpose of installing a new WMS should be to improve productivity and quality levels throughout the operation and beyond. In addition it will give management and staff more visibility when implemented correctly and will make customer deliveries more accurate and timely.

We have started the WMS directory because there are many Warehouse Management Systems on the market, especially for small to midsized companies. Besides the directory we provide additional information and tips on WMS selection and implementations right here on our blog. We hope that the information will help our readers in their search for warehouse automation and improvement.

If you need assistance with your search for the right WMS, with creating a process description or with the implementation process, feel free to contact us.

Important tips for purchasing a WMS

It's no surprise that so many companies struggle to successfully implement a new WMS. One mistake many companies make is to underestimate the level of detail that goes into selecting the right software and adjusting this software to their needs. Logistics Advice, Inc. is an expert in managing Warehouse Management Systems implementations and has done many over the years. Here we offer some tips to take into consideration before purchasing a WMS.

The most important tip we can give someone who is about to upgrade to a new WMS is a simple one: before purchasing the software, create a process description of your current warehouse process and how you want it to be. This process description describes every step of your operation and becomes your starting point in discussions with the software company who you are purchasing the WMS from. This sounds easy but the process description is only valuable if it describes the operation accurately and if changes to the document are made every time you and your WMS supplier agree to a different process.

In addition to creating the process description, we also recommend not to sign the WMS purchase agreement until the process is outlined and both you and your WMS supplier can sign off on it. Software companies often include the cost for this process (system design or configuration) in their implementation cost and start the process after you signed the purchase agreement. However it is better to work with your supplier on this process before you commit to a system of which you don't know what it is capable of. If your supplier is not willing to invest the time before the contract is signed you can offer to pay him an hourly rate for the work until the process description is finalized. In the end you will save (potentially lots of) money!

There is an endless number of details like the ones above that will make the difference between a successful WMS implementation or a failed and very costly one. Make sure your project manager has the knowledge and time to successfully implement a new warehouse management system.

But before anything starts you have to select the software company you want to work with...and there are many. Work with a dedicated company that is motivated to deliver a good end product, not just motivated to make the sale.

And make sure that the WMS supplier's project manager (the one you will be working with on the project) has a good understanding of warehouse operations because this will make the discussion so much easier.

If you need assistance with your search for the right WMS, with creating a process description or with the implementation process, feel free to contact us.

Supply Chain Management vs. Logistics Management: The difference

There seems to be some confusion about the meaning of Supply Chain Management (SCM) and Logistics Management. Some people use both terms interchangeably to refer to the same activity, while others know there is a difference, but can’t quite explain it.

Someone posted the question "What is the difference between Supply Chain Management and Logistics Management" on a popular networking website recently and received many different answers. Some of which were:

1. SCM is Procurement, Production Scheduling, Inventory Management, Logistics, Warehouse Management and Demand Planning (and in the best of worlds customer service and order management)
2. Logistics is a subset of SCM and involves all of the activities required to move the product along any one point in the supply chain with a focus on meeting or exceeding the needs of that one specific "customer of the process".
3. Supply Chain is the broad group of fields. Logistics is probably the largest subset. Yes, Purchasing and even IT have described as Supply Chain activities.
4. I like the SCOR Model which simply reduces the "Supply Chain" to Plan-Buy-Make-Ship & Return. Additionally, there are 4 Supply Chains: Information, Documentation, Materials and Financial. Too often we do not focus on all of them.
5. This is the evolution of a profession. At first the term was Physical Distribution Management. It then evolved to Logistics which morphed into Supply Chain Management.
6. Supply Chain is cradle to the grave. Logistics is a generation in the SC life.

At Logistics Advice we like to use the following definitions:

Logistics Management is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers at the lowest cost possible.

Supply chain management involves coordinating and integrating Logistics Management (as described above) within and among companies that are part of the entire supply chain of a particular product.

We agree with the statement that Supply Chain Management involves all activities in the supply chain: procurement, manufacturing, inventory management, warehousing, distribution. All these activities need to be synchronized and optimized in order to bring down the costs of moving a product through the different stages of the supply chain. IT is an example of a tool to achieve that goal.

SCM must involve the entire supply chain - from processing raw materials to the end consumer - from the "cradle to the grave" - to be truly called "Supply Chain Management" where Logistics Management can be executed at a local level (manufacturer, distributor, etc.) as well.

First Internal Combustion Hybrid Lift Truck

Toyota Industries Corp (TICO) announced that it will launch the world's first internal combustion hybrid lift truck. Sales of the truck, know as the Geneo-Hybrid, will begin in Japan this December. Toyota's U.S. Material Handling subsidiary has yet to announce when the hybrid machine will be available in the U.S. market.

The lift truck is an 8,000 pound counterbalanced vehicle combining a 2.5 liter diesel engine with an electric motor and a nickel-metal hydride battery. The new hybrid will reportedly deliver the same operational performance as the conventional diesel-powered lift trucks while reducing fuel consumption and CO2 emissions by 50%.

The Geneo-Hybrid combines a Series Hybrid System for driving with a Parallel Hybrid System for load handling. With the Series Hybrid System, the lift truck's drive motor runs on electric energy from the engine-powered generator and battery. Load handling functions are powered by a Parallel Hybrid System with a hydraulic pump that receives mechanical energy from the diesel engine and generator, and electric energy from the battery. The nickel hydride battery is recharged by the engine's operation and does not require plug-in recharging.

This hybrid truck will reportedly provide both improved environmental performance and economic benefits for customers due to lower fuel costs.

To read more on the Geneo-Hybrid's news

Warehouse Logistics: How does the US compare to Europe

With a background in European warehouse logistics and plenty of experience in the same field on the US market, we are often asked to draw a comparison.

Working with companies in the United States, Logistics Advice, Inc. finds both similarities and differences. If you take a close look at warehouse operations on each side of the pond, you will find that European companies are generally better automated and organized. Obviously there are many US companies with top notch warehouse automation, automated picking systems, unmanned cranes, etc. But I would argue that this type of automation is more wide spread in Europe. It is not surprising that most material handling equipment is designed and manufactured by European (mainly German) companies.

The main reason for the difference is space, or better yet the lack of it! The shortage of space in most European countries has motivated people to find creative ways to use space efficiently. This does not simply mean to make aisles and forklift trucks narrower and buildings higher, it touches every single aspect of a warehouse operation and the company. From warehouse automation to inventory levels, from batch vs. single order picking to the implementation of procedures, it all needs to be optimized and synchronized. Even the way an order is processed by the Sales department has a big impact on the efficiency (or inefficiency) of a warehouse operation.

Even though many US companies are less confronted with the space issue, they should nevertheless actively work on identifying the same bottle-necks as if there was a lack of space. Once a company managed to cut back on the space it is using, it is not only able to profit from the empty space (by renting to another businesss or postponing their own move to a larger building), it will have created a smoother operation. It cut costs and therefore improved profits. The level of professionalism also increases the company's market share and results in additional revenue.

Anything that helps to increase warehouse productivity and inventory turnover will save space and costs. And analyzing the process and identifying those bottle necks definitely pays off!

Hiring a consultant during economic downturns is a smart business move

Savvy business owners know that if they are to survive our current economic crisis they must have a strategic advantage that puts them ahead of their competition.

Business owners can sometimes lose focus and even panic when they are faced with the possibility of having to lay off employees due to cash flow issues, while operational costs keep piling higher and higher. The decision to hire an outside consultant can often be a life saver for many companies. Outside consultants not only have the training and skills necessary to make suggestions that can have an instant positive impact, they also bring in a fresh set of eyes and ideas, which can ultimately be the strategic advantage that today’s businesses so desperately need.

It may seem illogical to hire someone who charges more per hour than a regular employee costs while your company deals with a difficult economy. But what if this person can make your operations more efficient, less costly, and save your company thousands of dollars each year?

This is the job of a consultant and there are many reasons to have a supply chain / logistics consultant take a look at your operations if there is money to save. And almost always there is! Even well organized companies miss great cost saving opportunities for many different reasons.

One advantage of having a highly experienced professional analyze your operations is that it provides you with fresh ideas. Improvements can often be accomplished by making small changes in the day to day operations. And a fresh approach is often needed to identify those potential savings.

Good advice from a professional is an investment and one that starts paying off immediately. In a downward economy it is important to cut costs wherever possible and that is exactly what a good consultant can do for your business.