Efficiency is critical while running a distribution center. Wasted time translates to wasted effort, unused space, and inefficiencies in labor. Considering that the core value added by a distribution center is holding material, time and effort become the most significant contributors to cost. Optimizing these two factors is the key to making the most of the distribution center. Time-related efficiency can be affected by several parameters like:
- Cost of unused duration
Maximizing holding time and minimizing material movement or handling are some of the primary objectives of any warehouse. A warehouse can only charge its customers or beneficiaries for the utilized duration. The duration for which the space is unused has a direct impact on the revenue. But that is not all. Operational expenses like utilities, rent, and labor continue to accrue while the space lies unused. It is a double whammy.
- Inefficiencies in storage and retrieval impacts throughput
Material or stock moving through the distribution center usually goes through a six-step process. Inward docking – unloading – storing – retrieving – loading – dispatch. Most of these stages contribute to what Lean Process Experts call a “Muda Waste.” This means that these processes are essential but are considered to contribute to inefficiency as they do not add value to the business. For example, a delay in inward docking can cause new arrivals bottlenecks. Timely docking and unloading can minimize wait times and the associated logistics costs.
- Unavailability of equipment
Equipment enables efficiency in material handling and material movement. Such equipment includes forklifts, ladders, scissor lifts, hoists, conveyors, drives, and other machinery that facilitate the transit between the dock and the storage space. If such equipment is unavailable, it brings material mobility to a grinding halt. “A faulty $100 barcode scanner can misplace consignments worth millions.” This is another example where the resulting idle time costs money to the distribution center and results in a loss of revenue.
Harnessing the power of technology to save time
Time is a critical resource that can affect the revenue and profitability of a distribution center. Thankfully, technology can drive efficiency that helps distribution centers make the best use of time in the various aspects of their operations. Different hardware, software, and process combinations can help minimize waste, improve utilization, and increase the throughput of the material handled in the center. Some of these are discussed here.
Inventory tracking
Tracking the arrival and consumption of inventory can help maintain continuity in the processes that depend on the warehouse for their operations. Reorder levels, and buffer quantities are essential to avoid delays due to unavailable stock. But maintaining too much buffer is expensive and comes with a lot of wasted space and costs associated with material handling. Inventory management solutions can help address this by providing information about the optimal reorder levels.
Asset management
As discussed earlier in this article, there are a lot of assets that are used in the distribution center. They include material handling equipment, power systems, storage racks, lighting equipment, cold storage equipment, and several others. Asset management solutions can track all such assets and establish a transparent chain of custody. This encourages users to surrender unused assets to be available for others who may need them. Asset management also ensures prompt maintenance that can prevent downtime due to unplanned outages or equipment failures. This ensures no time is wasted waiting for equipment to be returned or repaired. “After all, labor is valuable when it is busy on the production floor, not while in a queue waiting for equipment.”
Device management
The modern warehouse uses a lot of electronic devices for smooth operations. Supervisors and technicians use tablet PCs to update the status of the material. Tag printers and handheld scanners are used for digitizing material information for easy processing. These devices must be checked for proper usage, timely maintenance, and Over-The-Air (OTA) updates. Device management systems help track, monitor, maintain, and upgrade such devices remotely. Centralized device management helps cut idle time on the floor due to unavailable or malfunctioning electronic devices.
Interoperable Systems and Peripherals
Inventory management, asset management, and device management are enterprise-level technology applications that help reduce waste time in a distribution center. However, when they operate in silos, there is no flow of intelligence between different systems. This results in the loss of valuable information and insights that can still cause disruption to the flow of material. Moreover, peripherals like barcode printers, handheld scanners, keycards, tablet PCs, and workstations need to capture, digitize, and share information with the enterprise systems.
With dispersed warehouses or remote-control centers, it also becomes vital to have cloud-based connectivity. With so many moving parts and data custodians, there is no longer a single source of truth that provides accurate, real-time visibility to the center’s operations. Hence it is crucial to have a seamless solution consisting of enterprise systems, physical equipment, and cloud infrastructure to ensure an efficient distribution center.
An effortless way to accomplish this would be by working with a solution provider with end-to-end connectivity across all these systems. A case in point is IDS’s VendSafety solution. Between supply dispensers and lockers, VendSafety provides an easy, efficient inventory management solution. The cloud software iQ Technology connects all the disparate hardware that needs connectivity through common workflows tailored to the needs of each delivery center. Finally, reports and notifications can be viewed on any device using a simple web interface secured by administrators to allow access only to certain users. This combination of hardware, software, and reporting ensures an efficient distribution center.
Conclusion
Distribution centers form an integral part of the supply chain for several industries. Their efficiency has an impact on the efficiency of other businesses that are reliant on them. While several factors can affect the efficiency of such centers, technology can be used to address the factors that can cause delays or waste of time.
But the key to distribution center management success is the ability of different pieces of technology to interoperate rather than work in disparate silos. Our experts at IDS can consult with you to help build the right solution for your distribution center to help you make every minute count. Click here or talk to us at 1-866-853-1935 to know more.
