It is done. The new distribution system is in operation for a couple of weeks now. It passed the acceptance procedure and the supplier’s team has hit the road after a successful run-up. Was that all? What’s next?
Well, if you do it right, you can now start a phase in which you increase the profitability of the project far above your budget. We are talking about raising efficiency by 20 to 50%, compared to design specifications! By the way, these are not made-up numbers, but instead have been achieved in a variety of optimization projects with our customers.
A semi-automated distribution system has roughly 20 – 30 logistical parameters that you may adjust. This purposefully excludes the hundreds of technical adjustments, which are possible at the machines, even though they will indirectly influence the logistical functioning as well. This, by the way, is for an average, semi-automated installation, worth between 2 and 10 Million €. You could say this is still middle class, certainly not high-end, in terms of investment as well as in technical complexity.
And that’s not nearly all, because the logistical performance and efficiency of the distribution system is also significantly influenced by the organization of the business and the interaction with the ERP system and its associated processes.
Altogether, we are talking about a bunch of around 50 to 100 parameters that influence the profitability of your investment after the run-up of the system, and noteworthy so.
Now, how can you bring this treasure to the surface? The operating manager is already busy getting to know the new system, reducing the training deficit of his people and overcoming the typical disturbances a new facility tends to experience. The supplier’s experts have left and the maintenance mechanics are not seasoned logistics specialists.
With the experience from many successful optimization projects, we can give a crystal-clear recommendation here. What you need is an experienced logistics veteran who is deliberately not involved in the process organization. In the end, it doesn’t matter whether he or she comes from your own company, from the facility’s supplier or from a third party. A true expert with experience in logistics will leave no stone unturned when analyzing all the processes from goods-in to replenishments and order start all the way to personnel placement planning and the synchronization of functions, as well as control parameters of the installation. Particularly the analysis of error handling allows valuable insights about the process, the interfaces and the possible ways to optimize.
Such an overall optimization usually consists of a number of small adjustments and improvements. And now the good news: most of these steps require little or no additional investment. That’s because the lion share of the potential improvement can usually be realized from process or business organization.
Another finding from projects such as these is that it pays to involve the system supplier, especially when it was he who provided the material flow control or the warehouse management system as well. First, the supplier can give valuable data and detailed knowledge about the facility. Second, he will be needed when it comes to changing and adjusting parameters later. A good supplier will actively contribute to the success of this phase with his own constructive and pragmatic proposals.
4 Steps to Winning the Race of Order Fulfillment
Design factors
In a recent 
But what has ergonomics got to do with that? Good ergonomics is self-explanatory and simple. Ergonomics is certainly more than just going easy on joints and muscles. It is also about logic, easy to follow work steps and stress-free processes. In relation to a distribution centre, this means for example optimizing search and orientation tasks. Either there is just one removal position (which means there’s no need for orientation), as in a 
The year 2013 promises to become an exciting one, not just for the intralogistics sector. The general connection between the global economy and intralogistics has become almost commonplace. But in 2012, interesting new developments have been clearly foreseeable.
People who see a vertical lift storage system for the first time, usually think something like: “Ah, interesting. But they must be complicated and expensive, so why shouldn’t we continue storing our goods in conventional shelves?”
Ergonomics
Whether it’s in the warehouse or in the storage feed area – the future belongs to modular, autonomous agents. At least that what industry publications and research centres predict. It seems we’re witnessing the beginning of the end of conventional conveyor technology.
The good news first: most of the time, this is true. Modularity leads to more flexibility and faster implementation of a facility. Because the individual elements are either not physically connected at all or they are using a standardized interface (like the knops on Lego bricks) and may be combined in different ways. The same holds true for the connection of modules on the control level. This not only increases flexibility, it also reduces the amount of planning necessary to adjust the individual connections between elements of the facility.
How are we going to shop in the future? To generate some insights into the developments in retail, internet marketplace operator Ebay enlisted a number of experts to create a study called “The Future of Retail”. Even though the results are announced for the end of 2012, some of the theses were published in advance.
2. Single-piece order picking instead of pallet order picking
Welcome to part 3 of our series on success factors, challenges and pitfalls in logistics projects. Today we are going to talk about probably the most difficult phase in a project to automate a product warehouse: handing the facility over from the supplier to the operator.
We enjoy working in the intralogistics industry. Sometimes, we explain to others what kind of projects and products we’re working on day-to-day. Unfortunately, it then doesn’t take long, before we get to listen to the same statements over and over again. Actually, they are not so much statements as they are accusations. So that’s the reason we would like to discuss them in a small series.
But when a business is able to recognize the market’s signals and reduces its costs – for instance through an automatic distribution centre – it can escape this fate. So, in essence, a small number of jobs in the warehouse need to be sacrificed in order to make the other peoples’ jobs more secure. Is this fair?
2011 was the most successful year for online retailers up to now and the trend is clear. More people are spending a larger share of their budget on the internet. So far, so simple. But unfortunately, an increase in orders usually leads to more returns as well. This in turn leads to higher costs for the retailer and reduces his earnings, sometimes considerably.
One idea is to send a shock data logger (also called acceleration logger, see picture) through your distribution centre. It is able to tell you how strong the outside forces are, that the package has to cope with. Then you’ll find out, where the technology or the staff treat the merchandise particularly roughly. Armed with this knowledge, you’ll be able to take countermeasures.
By this time, most people interested in order picking and dispatch operations will have come across the term “multi-channel distribution”. Some suppliers are already promoting these solutions at intralogistics trade shows. If you would like to get more information on this topic and learn why multi-channel distribution isn’t a short-term trend at all, then you’ve come to the right place.
Online retailers usually solve this problem by breaking up the pallets they receive into individual items. They then register each article into the computer, so that it can be order picked very easily. When customers return something, the product only needs to be scanned into the database and put back to a storage space. Keeping track is no problem at all, at least not for the computer.
In relation to storage space, shuttle systems cost at least twice as much as a small parts warehouse with a conventional ASRS. Nevertheless, shuttles are becoming more and more popular. Why is that? And why would anybody need such a high throughput and accept high costs in return?
Shuttle systems typically perform at 100 to 150 DC/h per 1000 storage positions. A conventional ASRS can only do 20 to 40 DC/h per 1000 storage positions. But the following number is much more striking: the Schaefer Carrousel System (SCS) achieves up to 250 DC/h per 1000 storage spaces. This means, it’s about 60% faster than a shuttle system!
Pick-by-Light seems like a really old chestnut, so why bother writing about it on the SSI Blog? Before we deal with a new, more economic approach to Pick-by-Light, let’s first take a quick look at the underlying principle.
Pick-by-Light has a reputation for being high-cost. First, all the shelves and picking places need to get connected to the Pick-by-Light displays and operating devices. Then it was necessary to have the supplier set up the superordinate IT system to configure and operate the system. This requires highly skilled personnel. Therefore, Pick-by-Light systems usually start with an investment of around 100.000 Euro and are part of an even larger (and more expensive) automated solution. In smaller facilities, there was no way that Pick-by-Light could be operated efficiently.
„Give a man a fish, and you feed him for a day. Teach him how to fish, and you feed him for a lifetime.“
Welcome to part 2 of our series on success factors, challenges and pitfalls of logistics projects. Like we mentioned in the first part (
The ability to deliver is an objective closely connected to the time required for shipping. Do you still remember when mail order catalogues offered delivery within 24 or 48 hours at a surcharge? By now, fast shipping without surcharge has become a matter of course. Then again, the enormous increase of medical costs forces us to reconsider shipping to pharmacies several times a day, for example. Shortening delivery intervals is not always a one way street. At the same time, the costs for faulty deliveries increase in almost every industry. Because you not just have to handle returns and make additional deliveries, you also run the risk of losing the customer to the competition.
You might have read the book “How to Drive Your Competition Crazy” by Guy Kawasaki. As American authors prefer to use lurid titles, they manage to reach quite a large audience.
In a series of articles throughout this year, we will talk about the challenges, pitfalls and success factors of logistics projects. In the first part, we take a look at the launch of these projects and the role a consultant should play in it.
Sure, it is difficult and therefore expansive to evaluate seemingly incomparable concepts and offers from different suppliers. But if you managed to outline your actual objectives in a smart, thorough and comprehensive way at the beginning, this apparently impossible task is not that tough after all. By the way, we are going to talk about identifying the “right” objectives in a separate post in this series.
The concept of logistics – moving and storing goods from acquisition to consumption – is fairly well known to businesses and their consumers. Logistics is how we make things happen, whether it’s in our businesses or in our personal lives. But what exactly does “
2011 was the year of CeMAT, the world’s largest intralogistics trade show. And because there’s only one CeMAT every three years, the exhibits shown there are a good indicator for the innovations we can expect in the months and years ahead. This time, the large variety of new concepts and solutions for intralogistics was particularly remarkable.
The 
What might keep a company from investing in efficient intralogistics solutions to gain an advantage over the competition? I think that there are often a lot of doubts about the right course of action. From an outsider’s point of view, the intralogistics industry can be confusing in many ways. There are plenty of different systems, processes and technologies available on the market. Some of them are complementary, others are mutually exclusive. This leads to uncertainty and hampers further actions, sometimes as far as consolidating the status quo.
Let’s assume you’d like to upgrade your intralogistics, or even buy something completely new. I suppose you would start like this: you do some research in industry magazines and online, maybe visit a trade fair for intralogistics. Eventually, you are going to contact one or several intralogistics suppliers. And then, what happens next?
This step is much more complex than it seems at first. There are numerous aspects to consider when transferring the available data into a sustainable concept. In the end, the new system should not just match the current situation, but also offer options for a future expansion.
In parts 1 and 2 of this blog post, I wrote about the 
It is not just increasing your balance, it will also reduce your CO2 footprint, which helps to portray the business as environmentally friendly. If you would try instead to achieve this level of savings by other means (wall insulation, triple-glazed windows, etc.) you would soon realize the enormous potential of LSS warehouse organisation.
In the 
What are the advantages of a LSS?
A while back, I wrote a blog post about 
The warehouse is organised around the idea that items with similar characteristics should be stored together. This might lead to situations in which otherwise unrelated items, such as screws, o-rings and hose clamps share the same drawer (but not the same insert box). This increases the storage density and uses the available space more efficiently. Another feature of this kind of storage is that items are placed according to turnover. The more often a certain article is required, the closer it should be to goods issue. Those items, for which demand is highest, are then located within a radius of just 5 m.
Until recently, internal transportation of small parts, cartons and boxes was neatly divided into 3 segments. At the lower end of the throughput scale were forklifts; medium throughputs were the realm of automated guided vehicles (AGV) and belt conveyors were used for high throughputs. This troika of conveyor technology has now seen 2 new approaches, each working from a different angle.
But how does the AutoCruiser manage to find its destination without PLC or material flow computer? Every vehicle has a small pouch to insert destination cards. Whenever a vehicle receives a new load, it also gets a destination card, for example for “storage“ or “dispatch”. The information on the card is given as normal letters as well as barcode, making it readable for machines. At every junction of the track, e.g. a switch, a barcode scanner reads the card. The switch control “knows” about the track layout, because it has a table of information behind it. The switch will then direct the vehicle towards its destination. This is comparable to road signs at a crossing: go left to “Exampletown” or continue straight ahead to “Testcity”.
“Creative employees are the key to success” this management credo is almost general knowledge. Then why is it hardly reflected in distribution logistics and its workplaces? It is indeed rarely the case that workplaces and processes inside a warehouse are designed by the employees themselves.
First of all, what exactly is wastefulness? While I was doing some online research on LEAN Philosophy, I came across two interesting definitions of “wastefulness“.
Yes, it’s true. Most software projects finish behind schedule and above the budget. Experience shows that these delays originate at the connection between user and provider. It starts with a different “language” and ends with unfinished homework.
But there’s another area in which the implementation of a WMS also accomplishes more than commonly known. In order for a WMS to work properly, all the processes need to be clear and all the data has to be available. And that’s exactly where most WMS users derive large additional benefits. The data compiled by the WMS allows more accurate analysis and insights concerning the business, with regard to the stored goods as well as the procedures and thus the expenses.
“Biomimicry is based on 4 billion years of evolution and therefore superior to human inventions.” Simply put, this is the opinion of those in favour of biomimicry solutions.
Another approach tries to copy certain capabilities from humans and other advanced animals. The human hand in particular is almost indispensable in many areas of logistics. Biomimicry has lead to robot grippers mimicking the features of a human hand. Then again, there are robots, whose gripping mechanism is based on the suction cups of krakens. And several computer algorithms for machine vision are also derived from nature.
When a product remains unaltered for 50 years, it’s either ready to get displayed in a museum or it stood the test of time with flying colours.
Whether you’re visiting CeMAT in Hanover or doing online research on order picking systems, there’s a certain buzzword following you around: “1,000 picks per hour”. But not every system claiming to deliver 1,000 picks per hour is really able to do so in the real world.
Order picking at 5 cents per order line, and fully automatic – how does that work?
The 80-20 rule, also known as the Pareto principle, was discovered by Italian economist Vilfredo Pareto at the beginning of the 20th century. He observed that most causal relationships in economics – and in fact in life – follow a highly unequal distribution.
How can something be random on purpose? Well, Amazon, the world’s largest online retailer, stores its goods in a chaotic disorder. But only at first glance, because there’s order behind the apparent disarray. It’s called chaotic storage.
In the first week of May 2011, intralogistics professionals from all over the world gathered in Hanover, Germany, where the most important intralogistics trade show is hosted every three years. At this trade show, the current industry trends become more clearly visible than anywhere else.
Efficiency has always been a hot topic in intralogistics, however, the ecological perspective on this is rather new. Therefore it’s not really surprising that many companies are dragging behind when it comes to “green logistics”.
… it’s maybe because your conveyor technology is way too noisy.
Keep on writing, greаt jοb!
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about this. І wіll forwaгԁ thіѕ article to him.
Fairly ceгtain he will have a gοоd геad.
Thanκ you fοг ѕhагing!
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Τhanks