F. Curtis Barry & Company Blog

For many companies, trying to recruit and retain hourly workers is one of their biggest fulfillment challenges.  Automation and technology have evolved dramatically in the past five years.  In many solutions, the cost of technology has decreased below that of the average worker when you consider the fully loaded labor costs for benefits, taxes, training and recruitment. This is discussed later in this article.

With shipping volumes remaining at record levels, most all freight methods and carriers have struggled to keep up with the demand. This has led to skyrocketing prices on everything from inbound container loads to small parcel ground delivery. Managing these ever-increasing transportation costs and changes in service levels has become increasingly more complex – especially in the small parcel arena. First, we will discuss the rates increases. Then, how we can assist you in taking action.

In the cost per order, labor generally makes up more than 50% of the total costs (total costs being direct and indirect labor, total facility costs, shipping materials, etc.) excluding inbound and outbound shipping costs. As hourly wage rates continue to increase, overall warehouse productivity in many companies has remained flat.  As a result, the cost per order and units of work produced (i.e., shipped orders, returns, picked lines, and units, etc.) has increased. 

One of the most frequent themes we hear from clients when discussing layout and design projects is that space capacity is a concern in the current facility. If a new facility is not in the future for your company, how can you continue growing sales and inventory, knowing you only have the current space to work with. Let’s make the assumption that your company is already fine-tuning inventory forecasting and removing excess and aged inventory – what are the next steps? 

This article looks at some of the ways changes to the layout and design can help to improve capacity and extend the life expectancy of the current space.

As a basic principle, companies need to ensure that the operations are as efficient as possible, increasingthroughput as much as possible while maximizing the capacity and utilization of the space before opting to move to a new facility.  It is critical that the operations have truly taken advantage of the existing facility, due to the high cost of relocating distribution center operations.  

Relocating a facility can, at times, be inevitable, but the disruption of business and impacts on labor mean that you must at first be sure that you have maximized the existing facility. In addition, most major markets are at record levels of warehouse occupancy rates, and lease costs are at all-time highs.  New warehouses being built on speculation are large centers that may not be suitable for small to moderate-sized businesses. 

With the ongoing labor constraints and companies continually seeking various ways to implement automation to reduce their demand for labor, warehouse automation and technology has become more prevalent. 

One of the first areas that companies typically automate is their shipping department.  Shipping automation eliminates manual functions beginning in packing, all the way until packages are sorted down to the correct outbound lane, pallet, or truck. 

Shipping automation is also one of the first areas to be looked at since it can be justified from a cost standpoint by a wide range of companies – even those shipping as few as 1,500 to 2,000 shipments per day. 

It is not uncommon to see companies where the packer and/or shipper is responsible for selecting the proper shipping carton size, packing the items, inserting dunnage as well as packing slips and additional information, sealing the carton, weighing it, and applying a shipping label.  Typically, these tasks can add significant time to the overall pack-out and shipping process which increases the need for labor and drives up costs. Shipping automation can alleviate most of these steps. 

With shipping automation, companies can remove these manual steps – and at times, do it in phases as well.  Shipping automation usually consists of the following capabilities which can be implemented at the same time, or in a phased approach over time. 

Vince Lombardi, Green Bay Packers' legendary coach, excelled at winning football games because his teams mastered and executed the fundamentals of blocking, tackling, and passing and leading to the win.  Warehousing and distribution is very much the same, to be successful, we must execute on the fundamentals.  

Dock to Stock time is a KPI that measures the length of time from when a receipt lands on your dock until it is in a pickable (or bulk reserve) location. From an efficiency perspective, best-in-class companies achieve “dock to stock” in two to eight hours.  To help achieve this quick dock to stock time, larger e-commerce companies, retailers, and multichannel merchants generally implement EDI technology solutions and vendor compliance policies.  

This dramatically reduces manual effort, paperwork errors and allows for faster put-away. Because EDI integrates to the ERP and accounting back-office systems, it also provides a transparent system of record rather than different views of data in different systems.  An additional benefit is that merchant companies can resolve issues on an exception basis, this greatly reduces the total processing cost to companies.

In comparison, many small to moderate-sized businesses dock-to-stock may average 24 to 72 hours (or even longer) to clear receipts.  With dock to stock time, turnaround time is only one factor to evaluate.  Some receipts may sit for days awaiting resolution by the buyer and the vendor - or for some necessary rework in the warehouse.  This entire time, the merchandise is not available for sale. There is a very real cost your company absorbs in the warehouse, accounting, and purchasing (or buying) departments from these potential problems.

This article explains how to:

• Assess the dock-to-stock processes for improvement. 
• Identify problems in receiving through put-away. 
• Determine the costs of correcting vendor problems. 
• Propose solutions for process improvement.  

The dock-to-stock process involves aspects of the purchase order writing process; inbound transportation; dock receiving, staging, inspection, and put away.      

You are running out of fulfillment center space to meet your company’s strategic plan for storage, shipping, and returns processing.  As Director of Fulfillment, you have been assigned the project of finding warehouse space that will meet the company’s logistics requirements for the next 3 to 5 years.  But if you have never been tasked with evaluating new facilities, this can be a stressful undertaking. Below is a checklist of the major requirements you need to consider in evaluating an existing facility for use as a fulfillment and distribution center.