1. Labor Shortages Will Continue

One of the biggest trends that remains for the warehousing industry in 2022 is labor shortages. This has been a concern for warehousing professionals for several years now, and it does not look like it will be resolved anytime soon. According to a recent survey from Modern Shipper, a whopping 73% of warehouse operators can’t find enough labor. This is up from 26% in 2021.

Naturally, a rise in the cost of labor accompanies the shortage. Faced with rising costs, warehouse operations must be creative to be considered an attractive employer. Integrating autonomous mobile robots (AMRs) can help attract, train and retain employees while reducing time to productivity. 6 River Systems’ AMR, Chuck uses system-directed picking which empowers associates to be more productive. Associates learn how to pick with Chuck in 15 minutes, increasing their time to productivity compared to a traditional cart picking and employee training comes at an overall lower cost.

2. E-Commerce Will See More Growth

In 2021, e-commerce sales grew 14.2% over 2020, with more total retail sales shifting to e-commerce. With higher order volumes, expedited shipping and less hands on the floor, operations need help getting orders out the door. 6RS’ Guaranteed SLA feature enables you to introduce flexibility into your operation and reduce complications for floor managers without the risk of compromising important shipping dates.

3. The Rise of Robotics
Various forms of robotics have been used in warehouses for several years now, and the adoption rate is accelerating. AMRs have seen spectacular growth, from $0.99 B in 2017 to a forecast of $6.97 B in 2022, a CAGR of 47.6%. AMRs help by reducing unnecessary walking, increasing fulfillment speed, and enabling associates to get more done in less time.In traditional warehouses, employees can easily reach exhaustion from walking over ten miles per day. Chuck’s system-directed picking eliminates long walking distances and time spent searching for items. Once picking or replenishment is complete, Chuck autonomously travels to the next pick location and the associate follows without having to push a heavy pick cart.

4. An Increasing Number of SKUs
Consumer expectations are driving a trend toward inventorying a larger number of SKUs. Warehouse managers worry if they don’t stock a slow-moving item, their customers will shift to a supplier who will. In addition, the pandemic-induced supply chain disruptions are causing a shift from striving for lean inventory to having extra items on hand, just in case. With shifting consumer behaviors and more SKUs on hand, there is a greater need for flexible and configurable fulfillment solutions that support mixed picking methods such as discrete, batch, cluster and zone. Whether you’re picking jeans or computer components, Chuck can be configured to pick and transport a variety of products.

5. Millennials Are Making Up a Larger Portion of the Workforce
Born between 1981 and 1996, millennials are rising into leadership positions in warehouses as the previous generation retires. Millennials grew up with the internet and smartphones, and they have different expectations than their predecessors. A 2020 Gallup poll indicated that, above all, millennials want an employer that cares about their well-being. In addition to more work-life balance, this new generation of leaders wants more purposeful work.Many warehouse tasks are dirty, dull, and potentially dangerous. Because the 6RS solution reduces the long walk and manual strain part of picking, associates are safer by reducing the risk of workplace injury allowing them to focus on value-added work. An element of gamification comes with a fulfillment automation solution. By creating some friendly competition through a daily picking competition, associates of all ages will be motivated to push the envelope if they have incentive.

6. Returns Handling and Replenishment Are Becoming Increasingly Important
Online sales are increasing, which in turn means product returns are on the rise. Under the best conditions, reverse logistics can be a complicated process. Every minute a returned product sits waiting to be received back in inventory, it loses value. With our Returns Putaway capability, it’s easier to get returns back on the shelves to maximize warehouse space and profitability. Processing replenishment should also be a top priority to keep inventory stocked. To avoid short picks, establish a replenishment process so products aren’t left at the dock door and orders can be filled correctly.

7. Risk Management is a Focus
The COVID-19 pandemic suddenly made warehouse operators aware just how vulnerable they were to unforeseen disruptions. Enormous difficulties in staffing, employee safety, and supply chain delays became the order of the day. As a result, risk management has risen in prominence. Risk management seeks to take preemptive action to minimize disruption to operations such as delays, product damage, and threats to employee safety. Then there is the question of economic shocks – and, of course – diseases. Despite labor shortages and unpredictable demand, operations need to fulfill orders quickly and correctly to meet delivery expectations. 6RS AMRs provide a system-directed approach which reduces risk and human error. By navigating the shortest path throughout the warehouse, employees are more productive pick to pick.

8. Omnichannel Fulfillment – Consumers Want It
The rise of e-commerce along with a global pandemic led to all kinds of new shopping habits over the last few years. We saw some customers shifting to buying online and picking up in store (BOPIS), with curbside pickup as an added bonus. Some in-store customers went online to look for deals and have products delivered to their homes or to order a different color or size from another store. Others expected the option to buy online and return in store. As we see e-commerce starting to slow, in-store shopping is seeing growth again with an increase of 8.2% in 2021 over the previous year.

As consumers demand more ways to shop, retailers are transforming their warehouses and expanding into dark stores or pop-up warehouses to accommodate omnichannel order fulfillment. With the shift from picking full cases and pallets to picking eaches for direct to consumer (D2C), warehouse managers need to equip their facilities and adjust their picking strategies accordingly. Ensuring inventory visibility across the entire organization will be the key to success for omnichannel fulfillment.

The Outlook

As we approach Q2 2022, it’s fair to say labor shortages will continue and supply chain disruptions will still be unpredictable. No matter what happens, versatility and risk mitigation should be top of mind for operations/warehouse managers. With a flexible fulfillment solution, you’ll be able to flex the labor you do have, increase productivity to accommodate shifting demand and support omnichannel fulfillment.

Ready to tackle your top fulfillment challenges? Set up some time to share your supply chain priorities and learn how 6 River Systems and Chuck can help your operations run more efficiently.

The post Eight Warehousing Trends Continuing in 2022: What You Need to Know appeared first on 6 River Systems.

Below we’ll take a closer look at why many techniques like prioritization and optimization fall short and how the 6 River Systems Guaranteed SLA (GSLA) solution helps operations meet more critical deadlines.

Prioritization and Optimization

Prioritization and Optimization are two approaches many operations use when deciding how to fulfill orders:

• Prioritization is how much a customer wants an order to ship next and usually based on a combination of the order’s SLA and allocation rules.
• Optimization is taking the order that will ship next and applying the most efficient technique to fulfill it.

When choosing an order for picking tasks, there is traditionally a tradeoff between strict SLA adherence or prioritization versus optimizing the work as much as possible (Note: this article assumes that SLAs are represented as “pick by” deadlines). Most optimization techniques work to get products out of the warehouse either as fast as possible or as cost effectively as possible, with some combination of the two being yet another option. These techniques, which are complimentary, seem compatible with meeting SLAs but are not the same and are often at odds. 

The graphic above illustrates how focusing mostly on optimization techniques can result in missed SLAs. Any time there is a missed SLA, the fulfillment center has to spend extra money on expedited shipping to compensate for the delay and deal with unhappy customers; neither or which is good.

The Common Solution

Historically, the industry uses techniques that focus on prioritization or optimization.  If the focus is on prioritization, it often comes at a large expense of throughput. If the focus is purely on optimization, it often comes at the expense of missing SLAs. Although there are some operations where one of these is acceptable, most need a bit of both. The solution many operations use is to fulfill orders in small waves, with the most demanding SLAs first. These waves are then internally optimized for throughput. Although this has some benefits, it does result in two problems:

1. From a management perspective, floor operators constantly monitor the state of work and drop pick waves when they see the previous one finishing up. They also have to manage wave sizes: too big and the SLAs might not be met, too small, and they cannot be optimized well. Determining how big the waves should be and when to release orders is often something learned over time and is “tribal knowledge” which can get lost if a key employee leaves and ultimately is subject to human error.
2. Due to enforcement of SLAs, wave sizes often severely limit what the optimization technique can do, which significantly limits the potential performance gains. The result is that, as a warehouse approaches its throughput capacity, especially during peaks, less work goes out the door. While current SLAs may be met, future SLAs are put in jeopardy which is less than ideal. This effectively robs long-term attainment to pay for short-term attainment.

Enter Guaranteed SLA by 6 River Systems

The 6 River Systems solution is an active and dynamic optimization technique that enforces hard SLAs while still making fulfillment operations as efficient as possible. Guaranteed SLA allows operators to drop off many fulfillment orders and associate each order with an SLA. Management burden for floor operators is reduced and 6 River Systems’ optimization algorithms are empowered to work with as many options as possible.

How does Guaranteed SLA work?

6 River Systems’ algorithms take the machine rate plus the body of work and the number of Chucks in the system, to calculate how long the site would take to complete current work. If there is little to no capacity left, the system focuses resources on the work that needs to be done to meet the prioritized SLA. If there is spare capacity, then the system optimizes across all of the work, with only a slight preference towards jobs with closer SLAs. As work is fulfilled and new work is added the system actively updates these calculations to make sure that we are running as dynamic an operation as possible, while still hitting deadlines.

Above the graph shows a scenario where the site uses traditional picking for its three pull times: FedEx at 4pm, UPS at 5pm, DHL at 6pm.  This operation may wave each pull time separately, pick through to completion, then wave the next in. As shown in the graph, they picked FedEx to completion by 10:30am — an unnecessary early finish, then wave UPS and pick until 3:30pm and finally wave DHL but barely finish by the 6pm pull time. If you look at this operation’s rate information, they took a strong rate hit because the FedEx pool of work was small.

The graph above shows the difference when picking with 6 River Systems’ Guaranteed SLA feature. With Guaranteed SLA the system was able to identify with the current pick rate so none of the pull times were in danger of running late. The FedEx, UPS and DHL orders were picked together which optimized labor utilization. Guaranteed SLA helped the operation hit a higher pick rate and finish all pull times with more time to spare. If one of the pull times was in danger, the system would shift its focus on that pull time until it was back on track.

In the graph above, each column represents a different way of selecting which orders to fulfill. With Guaranteed SLA, the focus is on shipping all of today’s orders on time while performing better than the Strict SLA option. The Optimization Focused option is the most ideal selection but it will result in missing some SLAs.

What if SLAs still can’t be met?

Many times, during peaks, operations will surpass their maximum capacity and SLAs can’t be met. Unfortunately, no amount of prioritization can help when the system has more work than it can handle. GSLA will perform better or equal to strict SLA in this case.  Once GSLA determines that we are getting close to missing our deadlines it will act exactly like a strict SLA system will.  On the other hand, when there is some additional capacity it will result in a higher rate, reducing the chance to end up in a situation where SLAs can’t be met.  That being said, when SLAs can’t be met, the best actions to take are:

• For operators to use GSLA’s options to prioritize orders based on the following circumstances:
  • Closest to missing their deadline 
  • Running late and in danger of missing their deadlines
  • To prevent any missed deadlines in the future
•  To add more associates or get more Chucks to help with the workload. 

Summary

There is often a competition between meeting SLAs and running the most efficient operation. As SLA requirements get tighter, the competition intensifies.  6 River Systems’ GSLA function allows dynamic adjustments to provide as much optimization as possible, while honoring shipping dates. In some operations, the cost of missing SLAs is low and emphasis should be placed on being efficient; other operations are extremely sensitive to missing SLAs. In the former case, it is possible to turn off the GSLA feature to focus primarily on efficiency. For the majority of operations where missed SLAs are very costly, GSLA is a powerful feature which allows you to introduce flexibility into your operation and reduce complications for floor managers without the risk of compromising important shipping dates.

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Ask any pick-and-pack warehouse operator: there are pros and cons for each of the picking methodologies they choose for their fulfillment operations. Zone picking is ideal for very large operations where pickers must travel long distances to complete an order or for smaller sites with very high order volume where congestion is an issue. However, a common challenge associated with zone picking is predicting where your associates will need to be based on inventory slotting and the order pool for the day. Incorrectly predicting zones results in overworking some associates while others wait around with nothing to do.

Armed with knowledge of this challenge, we tackled the question: what if you could reap the benefits of zone picking without the challenge of analyzing inventory slotting, consumer demand and labor availability? Our solution: dynamic zoning.

First, let’s understand the methodology we consider behind using static zones within a warehouse.

Why are zones used?

In order to meet SLAs and maintain profitability, there is a constant pressure to keep a fulfillment operation running efficiently. Enabling associates to spend more time picking products and less time walking from one place to another is an area ripe for optimization. Although collaborative mobile robots eliminate long, unnecessary walks to deliver and receive work, they do not remove walking between picks. One technique to alleviate unnecessary walking is to break the picking area into zones and assign associates to stay within them. This can be especially effective if there are sparse picks over a large area.

What are the challenges of using zones?

There are two interrelated problems that often cause zones to be less effective than operators hope: defining zone areas and labor balancing.

Zone areas are set with the intent to evenly distribute work and ideally put common clusters of work in one area. The problem is that it is extraordinarily difficult to predict commonly clustered SKUs. Order profiles are constantly changing over time – from season to season and even over the course of the day. We often see warehouses that have been broken into zones based on physical size and then never adjusted again.

The second related problem is labor balancing. Over the course of a shift, an operator wants their associates to spend as much time as possible actively picking rather than traveling from one pick to the next or, even worse, idle. So, when utilizing a zone picking method, it’s best when the orders are evenly distributed across all zones so each associate is engaged. Unfortunately, this rarely happens – there are often drastically different work loads across zones. To mitigate this, managers need to constantly monitor order volumes and make adjustments to zone assignments on the fly. Although we have some operations that want to use zones, most of our operations decided that there were too many inefficiencies and overhead managing them to make them beneficial.

The Solution: Dynamic Zones

Analyzing our customers’ needs, we have devised an innovative solution that reaps all of the benefits of traditional zones with none of the drawbacks. We call this dynamic zoning; here’s how it works:

When an associate completes a pick and is preparing to travel to the next, 6 River Systems’ intelligent allocation system calculates how much time it will take for the associate to get to the new pick. It also calculates how long it will take the current associate to meet another robot and a new associate to meet the current robot. If it ever takes less time to do this handoff, it is performed and time is saved. It has exactly the same benefit as if a perfect zone was created for this batch of orders.

Figuring out ideal zone boundaries is no longer a problem; there are no fixed zone boundaries! The 6RS software effectively determines the perfect zone for each robot without any operator intervention.

There is no need for labor balancing – we do that automatically. With dynamic zones, there are never associates waiting for work. As soon as an associate completes work with a robot, it leaves for the new “zone” and the associate can meet the next waiting robot. We have already determined there is one that is available for them.

Summary

Traditional static zones can be an effective technique to increase productivity and it is a methodology that 6 River Systems has supported for years. However, it does have its shortcomings so we designed a superior solution: dynamic zoning, which is just one of many innovations that we offer to our customers.

The post How 6 River Systems is Solving the Challenges of Traditional Zoning Methods appeared first on 6 River Systems.

A question that often arises when teams research warehouse robots is understanding the differences between system-directed and swarm robots. Both of these technologies are types of collaborative mobile robots, ones that work closely alongside your associates. These types of systems attempt to increase productivity rates compared to manual cart picking by reducing unnecessary walking and manual labor, speeding up workflows and reducing training time. Both approaches can provide benefits over cart-based picking, but there are significant differences as well.

Before comparing and contrasting methodologies, let’s define each robotic approach.

System-directed robots

At its simplest, an associate meets a robot and is directed from pick to pick. This can be broken into traditional zones or utilize a more advanced technology like dynamic zoning, but the associates are generally performing a number of sequential picks with the same robot. This technology is typically used for order picks, batch picking, cycle counting and replenishment tasks. For ease of reference, we will refer to this method as “directed picking” throughout this piece.

Swarming robots

Swarming robots generally go to a specific pick location and wait for an associate to perform work. Once the work is completed, the swarm robot travels to the next pick location and the associate finds another swarm robot that has available work. This technology is typically used for order picks, cycle counting and replenishment tasks. For ease of reference, we will refer to this method as “swarming.”

When is it best to use directed picking over swarming?

The two robotic approaches exist because there are different circumstances when one is more effective than the other. Swarming robots can be effective in some operations, particularly in small, dense picking operations or ones with wide-aisle pallet picking. However, as an operation becomes more sophisticated, so do the number of significant advantages of directed picking robots. These include better scaling to large operations, better worker productivity and higher density warehouses.

Operation Scaling

In any operation, there is generally a direct relationship between the square footage of a warehouse and the number of pickers on the floor. So, as warehouses increase in size, you will typically see more pickers. However, the relationship of space to pickers and space to robots are not the same between directed picking and swarming designs.

With directed picking robots, the quantities of robots are indicated by the number of pickers at your operation. Directed picking robots typically use 1.5 robots for each picking associate which ensures that as robots autonomously travel to and from work areas within a warehouse, each picker on the floor is still engaged in work with a different robot. So, for example, a 50k square foot warehouse with 8 pickers might require 12 robots while a 500k square foot warehouse employing 24 pickers might need 36 robots. The robots lead associates through an optimized, directed workflow and manages dynamic zones in real time. This guarantees that the work associates are directed to complete is always in the most efficient way possible.

However, site designs using swarming robots recommend quantities of robots based on the square footage of a site rather than the number of pickers. Why is this?

In order to be efficient, swarming robots need a high density of robots in the picking area. Otherwise, the walking time between robots increases and efficiency rapidly drops. As the warehouse expands, this problem intensifies. For example, a 500k square foot warehouse would need 10x more swarming robots than a 50k square foot warehouse to maintain the same worker efficiency.

For larger operations, the ROI can not usually justify the cost of such large fleets of swarming robots. In response, swarming robotics companies recommend operational changes. One method is to allocate jobs where picks are all within the same area and focus associates there. However, it is highly unlikely that all of the picks within an order contain SKUs located within the same few aisles. So, assuming they are not singles (which are often better picked in batches) a wave of picks that start as a densely-packed swarm of robots will eventually disperse throughout the warehouse, resulting in a drop in time between picks and a corresponding drop in efficiency. There are a number of ways that swarming robot providers try to address this, such as waving data across the warehouse and zone picking, but they don’t fundamentally address the density problem.

Another method is to sweep across the warehouse (pick everything from left to right or some other pattern). This can reduce robot density requirements a little bit, but it requires all of your associates to repeatedly walk the full length of the warehouse, causing inefficiency both in time and mistakes attributed to fatigue. To fix this problem you can organize associates into zones. However, this just leads us back to the original problem: either there are enough robots to maintain pick face density (and the resulting capital cost of that many robots) or the warehouse is split into zones plagued by unpredictable workloads – some zones will be very busy while others are very light – which leads to overworked and/or idle associates. Ultimately, it is very difficult to effectively deploy a very large number of swarming robots within a large operation.

Worker Productivity

One of the biggest advantages of a directed workflow is you can keep track of and directly influence the productivity of your associates. After removing “the long walk,” the next largest point of lost productivity is time between picks. As a result, this time between picks can be closely monitored and potentially mitigated.

In the graph above, the blue line represents associates walking with a robot from the place they met the robot to their first pick, and the yellow line is the associates walking from the last pick going to meet a new robot, which they do without a robot. As we can see in the chart above, when the associates are left to their own devices, they tend to be both less predictable and take a much longer time. In directed workflows, almost all of the associates movements are guided by the robot and keep them on track.

By comparison, with a swarming approach, the associates are never directed between tasks. The robot can indicate on its screen where the associate can find their next task, but much like what is illustrated by the yellow line in the graph above, associates are always left to pace themselves to that location. By being tasked to pace their own work, swarming robots fail to keep unsupervised associates engaged with the pick faces.

Warehouse Density and Aisle Size

In a warehouse, you are generally trying to maximize the use of floor space. Directed picking robots allow for significantly narrower aisles by utilizing one-way aisles when necessary. This is not surprising, as it is the way that most cart pick operations work to leverage floor density. Essentially, an aisle only needs to be slightly wider than the directed picking robot. For 6 River Systems’ Chuck, the minimum aisle width needed is 42 inches, which fits within most typical aisle layouts. Swarming robot vendors like to point out that Chuck needs wider aisles to pass each other, which is true, but this is not a real-world problem. They point this out to mask a significant shortcoming of swarming robots – large minimum aisle sizes.

Swarming robots, by their very nature, must be able to pass each other all the time or they get stuck. The swarming robot goes to a pick location to wait there for interaction with an associate. After the interaction is complete, it autonomously travels to its next task. If two robots end up in an aisle where they cannot pass each other, the system becomes deadlocked. The associate will complete a task on one robot, which will then seek to move in either direction down the aisle. However, its motion in one direction would be blocked by the next robot and in the other direction, the picker. This means that the minimum aisle size has to be much wider to ensure the robots can pass each other. Swarming robot vendors quote 60” as a minimum size, which is significantly wider than most high density picking aisles.

Carrying Capacity

“Can we put less on that robot?” asked no warehouse operator, ever. Although the size of a robot is not inherently linked to directed vs swarming methodologies, in practice it is much harder to make a large swarming robot since they must be able to pass each other in picking aisles. Due to this fact, swarming robots in the industry tend to be small and provide less carrying capacity. Directed picking robots tend to have a much higher carrying capacity. As a result, picking paths and work is much more efficient. 

For example, if a SKU is needed for 6 orders, the directed system will put all 6 of those orders onto the same robot and only visit its location once to retrieve all 6 items. Meanwhile these 6 orders in a swarming system will be allocated to 6 different robots and a picker will visit that same location 6 different times to pick them – increasing congestion on the floor and adding walking time for the associate.

In Conclusion

As volumes spike up and labor gets harder to find, collaborative robots are definitely an important tool for modern fulfillment centers. There are use cases for both Directed Picking and Swarming robots. For small sites that are pallet picking with wide aisles, swarming robots can be very effective. As sites get larger and pick faces density goes up, there are significant advantages of using directed picking robots. If you want more information on how 6 River Systems’ collaborative robots can help your operation, read our latest white paper outlining the business case for collaborative mobile robots.

The post What are the advantages of system-directed robots vs swarming robots? appeared first on 6 River Systems.

1. Collaborative mobile robots

Collaborative mobile robots are smart automation solutions designed to augment the work of humans. Studies have found out that collaborative effort between human and robot enhances productivity by 85% compared to robots or humans alone. The advantages of collaborative robots include ease of implementation and easy integration into existing warehouse layouts, requiring no costly or time-consuming warehouse infrastructure updates. Collaborative robots also offer lower and more flexible costs, thanks to the ability to rent additional units to accommodate demand spikes and return them when demand returns to baseline.

2. Electronic data interchange (EDI)

EDI is the concept of regular data transfer and synchronization between business partners and different verticals within a company. EDI helps to scale automation by automating transactions that happen regularly or according to rules or patterns. It helps to reduce mistakes and errors in transactions and eliminates the need for data validation.

These benefits help reduce the cost of doing business, increase the speed of processing and support omnichannel commerce. As a simple example of EDI in action, a factory can automatically decide to increase or decrease the rate of production according to the current stock levels in warehouses.

3. Mobile sort solutions

Sortation is a recurring and essential function in warehouses and distribution centers. Mobile sort solutions help increase productivity and reduce the errors often associated with manual sortation processes.

Mobile sort solutions work well with other innovative warehouse technologies like collaborative mobile robots. Collaborative robots guide associates through tasks, directing associates to pick batches into totes within a picking zone. After all items for a batch are collected, the collaborative robot transports batched totes to a Mobile Sort station at the take-off point, where associates sort items from totes into discrete orders. With an intuitive interface, 6 River Systems’ Mobile Sort solution uses lights, images and sensors to direct associates to the correct bins and alert them to incorrect puts, increasing speed and accuracy.

4. Automated picking solutions

Manual order picking is inefficient and is prone to error rates of 1% to 3%. These errors cause a delay in operations and an increase in returns from customers. Automated picking solutions eliminate such errors and help to streamline warehouse operations.

Automated picking makes use of robotic or semi-robotic technologies to enhance the work of human associates. Automated picking helps to reduce the walking time for warehouse order pickers and shorten picking routes. These solutions integrate well with warehouse management systems (WMS) and help improve picking and packing accuracy. Such solutions also reduce the fatigue experienced by warehouse employees, are easy to learn and help to reduce employee churn.

5. RFID

RFID stands for Radio-frequency Identification, which uses electromagnetic waves to track objects in real-time. RFID technology has been prevalent in many industries for a long time and is recently increasing in prominence in supply chain applications. An RFID tag is attached to a product or case and can be monitored through the entire product or case lifecycle from a central database with the help of electromagnetic signals.

The advantages of using RFID over other identification techniques such as barcodes are that there is no requirement for a scanner, and it doesn’t require proximity or line of sight to the object. This helps to monitor the position and movement of inventory in the warehouse from a central location. It also helps to improve the accuracy of operations, especially when coupled with other automated solutions such as automated picking and sorting.

6. Drones

Drones are futuristic devices that were once prominent only in science fiction. Today, drones are being used in a variety of applications, and the technology is finding its way to warehouses, too. In warehouse operations, drones are experimental and have shown significant potential for improving warehouse operations.

Drones can be used to manage inventory and, less frequently, to pick some types of products in a warehouse. They can be used in existing warehouses without significant modifications and thus help to reduce the capital costs required to implement new technology.

7. On-demand warehousing

The sharing economy has become mainstream among consumers with the advent of Uber, Doordash and other similar businesses. A similar idea in fulfillment is on-demand warehousing. The concept helps companies in need of storage capacity identify parties that have vacant warehouse space. Businesses with warehousing needs can find a cost-effective solution without the need to acquire or expand a warehouse facility. It’s a win-win for both parties involved.

Technology is rapidly changing how warehouses operate. Implementing proven technologies and new innovations helps warehouse operations improve cost-efficiency, accuracy and flexibility at the same time. Learn more about how technologies like collaborative mobile robots can give your operation the flexibility to meet increased demand and reduce costs by downloading our white paper, The Business Case for Collaborative Mobile Robotics.

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Optimizing your warehouse layout and implementing an effective inventory management strategy helps to:

• Improve warehouse organization
• Improve the accuracy of order picking
• Save time and money
• Enhance efficiency and productivity
• Ensure customer satisfaction

Warehouses come in many sizes and shapes, and many facilities serve specific functions. For instance, cold storage warehouses specialize in temperature-controlled storage for perishable products, so the processes and systems may be different from those of a warehouse that’s dedicated to a particular retail organization, a warehouse that exclusively stores electronic goods or a general storage warehouse. As such, there is no single standard warehouse layout optimization solution. Still, there are some common steps in the process and best practices to rely on.

Conduct a space assessment

The major purpose of a warehouse is to provide space for inventory, and it stands to reason that an assessment of available space should be one of the first steps taken in warehouse layout optimization. It is best to have a custom space built for the specific use case of the warehouse. But various constraints like time limitations and cost considerations mean that some companies settle for using an existing warehouse or repurposing another building for warehousing. Before any inventory is placed inside, companies should assess the building and surrounding space. The surrounding area should be surveyed to match it against the company’s requirements.

The type of HVAC employed by the building needs to be assessed if the warehouse needs to store vulnerable inventory such as food or pharmaceuticals. Even if the warehouse does not have any perishable or temperature-sensitive goods, the efficiency of the HVAC system has to be up to scratch since there will be workers in the space. A building with adequate heating, ventilation and air conditioning is a must for creating a comfortable working environment. On top of that, the existing lighting, doorways, loading bays and racks need to be assessed.

Assess your inventory

Once you’ve identified a suitable facility, the next step in warehouse layout optimization is to conduct a comprehensive inventory audit to identify specific storage requirements, such as items that require specialized racking or shelving, goods that require low-humidity or other climate considerations and the general space requirements for each type of inventory based on your typical inventory composition.

After auditing your inventory, you can then begin to establish zones or sections based on storage requirements to establish the appropriate storage locations for each type of inventory.

Divide and label warehouse storage locations

The average size of a modern warehouse is more than 180,000 square feet. It is an endless array of tall racks, shelves and bins that can be difficult for workers to navigate efficiently without proper warehouse layout optimization, organization and signage. Dividing the warehouse into levels or sections is a helpful starting point. Depending on the size of the warehouse and the number of aisles, break down each section into a set of aisles, bays, shelves, rows and bins.

Some sections may have different types of racks or storage to accommodate certain types of inventory. For instance, sections with drive-in pallet racking that can accommodate forklifts should be designated for storing pallets, while cantilever racks should be reserved for storing longer, heavier items. Consult your inventory audit to divide the warehouse into zones appropriately sized and with the proper climate conditions for your inventory.

Now the divided space needs to be labeled. The general convention is to give a number or letter identifier to the levels, aisles, bays, shelves, rows and bins. It provides more clarity if each of the subdivisions is labeled alternatively with alpha and numeric characters. For instance, 2B6F4D may indicate a location on the 2^nd level, aisle B, shelf 6, row 4 and bin D. Alternating numeric and alpha characters for location labels eliminates confusion and allows for easier and more efficient warehouse navigation.

Estimate traffic

In a warehouse, products don’t move at the same rate; some items will have higher turnover than others. If these high-velocity products are located far from the sorting station or packing station, warehouse associates will have to walk longer distances to pick items from these locations. Storing fast-moving inventory in proximity to sorting, packing and shipping stations reduces walking, saving considerable time and effort.

Similarly, estimating the turnover for all the products in the facility’s inventory allows you to allocate space for products according to velocity and optimizing the time required to pick the items. Don’t rely solely on inventory and supply chain data to estimate future product demand; marketing and sales data are important pieces of the demand planning puzzle. Integrating data from multiple sources provides meaningful insights and supports more accurate demand forecasting. This data can be leveraged to allocate space for inventory strategically to reduce the total walking distance and time required for order picking.

Implement inventory management software and analytics

Warehouses and distribution centers have to handle an increasing number of SKUs every year. Manually managing the inventory for a large warehouse with a significant number of SKUs leaves room for human error and leads to both inaccuracies and inefficiencies. Most warehouses today use some type of inventory management software. With the right software solution, you can map physical locations in the warehouse and the inventory each location is designated for. Doing so helps with order optimization and inventory replenishment processes to ensure forward pick locations have adequate inventory to meet demand.

Analytics can be used to identify if the current layout of products is optimal by factoring in the distance traveled and the frequency by which the products are ordered. The results of the analysis can be leveraged to change the layout to enhance efficiency. This helps to increase productivity, reduce the time required to fulfill orders and save on order picking and inventory replenishment costs.

Leveraging the right automation technologies is another way to optimize your warehouse. Collaborative mobile robots like Chuck by 6 River Systems prioritize work in real-time based on the current conditions on the warehouse floor and guide associates through each task to increase efficiency. They’re easy to integrate with your existing layout, requiring no costly or permanent infrastructure changes. Download our white paper, The Business Case for Collaborative Mobile Robotics, to learn how collaborative robots can transform your fulfillment operations with the flexibility to meet demand and reduce costs.

The post Warehouse layout optimization tips to increase production appeared first on 6 River Systems.

• Companies reconfiguring their supply chains to accommodate eCommerce growth
• An increase in shipping rates resulting from tight freight hauling capacity
• Federal and state regulations limiting driver hours of service
• Labor shortages that drove up wages for truck drivers and warehouse workers

Inventory carrying costs represented the largest portion of logistics cost growth in 2018, increasing by 14.8% to $493.7 billion, while transportation costs increased by 10.4% to $1.04 trillion and motor carrier costs rose 10.1% to $668.8 billion. Overall, logistics spending in 2018 reached 8% of U.S. Gross Domestic Product (GDP) in 2018, the highest level in a decade.

In 2020, the COVID-19 pandemic crisis caused unprecedented disruption in supply chains around the world. As logistics costs were already on the rise in 2018 and 2019, companies are now faced with supply shortages, stress on the U.S. transportation network and other logistics challenges. The full impact on logistics is yet to be realized, but an increase in logistics costs in some areas is likely. A shift to manufacturing critical goods like pharmaceuticals in the United States would lead to higher production costs, for instance. A reduction in oceanic transportation would necessitate changes to distribution routes. “This would increase the complexity of route planning and make more difficult the quest to eliminate empty back hauls as the number of shipping points increases and the number of shipments out of more rural locations increases,” explains Skip Berry in an article published by Clarkston Consulting. “All of this has the potential to drive up transportation cost noticeably.”

Importing foreign goods into the U.S. will also take longer and cost more, even after the worst of the COVID-19 crisis is over. Berry explains that imported goods may be subject to more active monitoring and testing or treatments designed to kill pathogens, increasing both processing time and costs.

With logistics costs on the rise and continued increases likely in the coming years, companies are under more pressure than ever to optimize logistics processes to increase efficiency and reduce costs. From investing in smart automation solutions like collaborative mobile robots to improve warehouse productivity to route and supplier optimization and outsourcing logistics to a 3PL, there are several strategies that can help companies by reducing logistics costs. To learn more about the most effective ways to reduce logistics costs, we reached out to a panel of logistics professionals and asked them to answer this question:

“What’s the #1 way to reduce logistics costs?”

Meet Our Panel of Logistics Professionals:

Read on to learn what our panel had to say about the best ways to reduce logistics costs.

Michael T Miller

@PenskeNews

Michael T Miller has been in a leadership role with Penske Logistics for 12 years. His current role as a Sr. Operations Manager consists of hiring Operation Managers, Operation Supervisors and Drivers to oversee and perform the transportation in Fortune 500 companies. He has worked with a variety of different customers over his career; some of the more notable accounts include WaWa, RaceTrac and Cardinal Health.

“The quickest way to reduce costs and increase the bottom line is through reduced turnover…”

At my company, the average cost to replace one person is $10,000. While this generally cannot be tracked to one specific GL, the cost ripples through different aspects of the company and is felt at the customer level. There are your typical costs, like recruiting and training, but there are some soft costs that are difficult to place a monetary value on as well. These include errors made by the new associates during their first weeks or lost time that’s taken by the manager to bring the new associate up to speed. Customers will also shoulder some of the turnover burdens in the form of late deliveries or mispicks. In a very extreme case, a company’s inability to keep consistent and knowledgeable employees may even lead to a reduction in customer retention rates.

Dr. Errord Jarrett BSc, MBA, D.Min

@JarrettMedtech

Errord Jarrett has worked in medical device product management and product development for nearly three decades. Product responsibilities have ranged from medical electrical equipment all the way down to a single wall hypodermic needle, each product with its own logistics and packaging issue. He now runs a Medical Device Consultancy.

“Logistics is a simple function, but it is difficult to execute well at volume because there are literally millions of moving parts…”

However, every time you touch a product, move it, scan it, open it, close it, label it, etc., you add labor costs to the product and the process. Now, this does not just come down to the staff in the warehouse. Sometimes the packaging is so badly designed that it creates work for the warehouse staff, which means they have to touch the product more than necessary, increasing the logistics cost. A product that comes into a warehouse on a pallet and leaves the warehouse on the same pallet, only having been scanned for location, is a warehouse manager’s dream. So, hands-off; it will save you money!

Jane Flanagan

@TacunaSystems

Jane Flanagan is the Lead Project Engineer at Tacuna Systems.

“Unless you are dealing with an Amazon-level amount of orders, the best way to reduce logistics costs is…”

To centralize your warehouse while outsourcing logistics.

Orders can come from various locations at various times. It is impossible for a small- to medium-sized company to have the warehouse and delivery resources to fulfill all orders themselves. With a central warehouse, you save the cost of warehouse maintenance in different locations.

Shriniket Deshmukh

@shriniket123

Shriniket works at Purplle.com as a Backend Engineer in the logistics and operations department.

“At Purplle, we significantly brought down our logistics costs by…”

1. Automating the logistics.

We have built a system to track orders that are on the way to a customer. We make sure that the entire process is updated into the system from time to time. Doing so makes us super vigilant and allows us to spot any errors in the process.

2. Efficient warehouse operations.

We follow a stringent procedure to organize inventory in our warehouses. As a result, picking and packaging orders becomes hassle-free and less time-consuming, helping us significantly reduce other costs.

Servando Sierra

Servando Sierra is the founder of Fresh Big Bang. Before he started his blog last year, he worked for 20 years in the construction business, where logistics and cost optimization play a very important role.

“The #1 way to reduce logistics costs is to optimize routes and transports…”

Every mile you can avoid in the route saves costs. Synchronization and timing of transports are also essential. Synchronization and transport timing can also help to avoid empty journeys. You don’t want idle resources; you want them producing.

Matt Scott

Matt Scott is the owner of Termite Survey.

“One of the greatest things businesses should do in general is to centralize their production to reduce expenses, difficulty and logistical problems…”

Often, firms have products in an unreasonably large number of warehouses. This makes product control even more difficult since stock from warehouses across the globe must be continuously handled and moved. In a big logistics center, such as Hong Kong, it is easier to have one delivery center that can cover a rather wide region or maybe even the whole world from one venue.

For starters, a business that produces in China would only deliver its products to a warehouse in Hong Kong. From there, the business can manage most, if not all, B2C and B2B deliveries worldwide easily and cost-effectively. This approach tends to lead to a quicker and easier supply chain with inventory in transit for only a few days compared to a month’s inventory in an ocean container, and then another two to three weeks to clear customs.

Carolyn Cairns

@CreationUAE

Carolyn Cairns is the marketing manager for Creation Business Consultants, business setup consultants who help assist entrepreneurs, small to medium enterprises and multinational corporations enter, expand and restructure in the United Arab Emirates and wider-GCC region.

“Automation is important for businesses to cut back on logistics costs…”

Regulating, automating and maximizing manual processes will minimize workforce demands, centralize manufacturing activities to low-cost areas and build a more efficient strategy for maintaining consumer loyalty, thus offering volume and cost control. An organization will introduce significant structural improvements in an integrated, cost-effective freight and distribution network to deliver exposure, minimize expenses and improve the quality of customer satisfaction. The introduction of cloud-based technologies has made this much easier and less expensive than before, so even small businesses can take advantage of it.

Holding the logistical service costs down per order requires keeping consumers satisfied. By keeping customers satisfied, businesses can stay current and therefore spread the cost of supporting logistics over a larger volume of orders and/or customers. Thanks to a strong link between consumer loyalty and total cost savings, customer care will also be taken into account in the calculation of improvements in logistics costs.

When the appropriate tools are in place for managing uncertainty and ensuring accessibility, institutions have excellent chances to continually generate productivity improvements, increase customer satisfaction and improve financial performance.

Thorsten Gerber

Thorsten Gerber is the CEO of Gerber Holding GmbH with headquarters in Germany. He and his companies have been successfully active in international trade with metals, such as stainless steel, for over 20 years. He is also active as a speaker, author and international consultant and crisis manager.

“Leave it to the experts, or you pay twice…”

We have transported more than 100,000 tons of stainless steel worldwide in recent years. From my experience as a trader, I can say that you should leave it to specialized experts in logistics to have your goods transported. That was and is the most effective way to save logistics costs in the long term.

For example, a specialist in the transport of food does not have the experience needed to transport metal products safely, and vice versa.

Even if a logistics expert may seem more expensive at first glance than a non-specialist carrier, in the worst-case scenario, you end up paying twice. Using an expert right from the start saves you expensive follow-up costs for any possible damage to the goods. You also avoid problems and unnecessary surprises during transport.

Rebecca White

@pranabrush

Rebecca White works with Prana Brush.

“One greater way to reduce logistics costs is to…”

Ensure that all your products are properly barcoded and scanned into your inventory management system upon arrival and then again upon departure when shipped out a customer. Dealing with inventory is a significant driver of logistics costs, so simplifying your inventory processes with barcoding is a great way to lower costs.

George Mouratidis

@stasherofficial

George Mouratidis is a Content Specialist at Stasher, the world’s first luggage storage network. After years of working as a content writer, he finally found his passion in helping people store their luggage safely and efficiently, enabling them to make the most out of their travels.

“The best ways to reduce logistics costs are to…”

1. Rethink the existing money-draining routes.

For companies that think they spend too much money on logistics, the best way to reduce costs is to rethink the existing route and better manage their resources. For instance, companies can increase profits by using automated route planning software, which can help overcome distribution problems faced daily in logistics.

2. Implement a vehicle tracking system.

Companies that want to save on logistics should consider using vehicle tracking software, which can help compare a planned route with the actual one and detect unplanned activities promptly, thus saving money.

3. Use the delivery space to the maximum.

Overspending can quickly happen if the storage space is not used to its full capacity when it comes to logistics. To save on logistics, companies should rethink how they store goods and optimize their routing.

Joseph Giranda

@cfrrinkens

Joseph Giranda is the Director of Commercial Relations at CFR Rinkens, a global leader in the shipping of commercial cargo, specializing in the containerized shipping of motor vehicles.

“The more you are able to move on rail and water…”

The lower the actual logistics costs of freight expenditures per mile will be because costs on energy and environmental impact are the lowest on those. Gearing your supply chain to rail and water while maintaining inventory costs and transit time is ideal.

Mike Allen

Mike has a master’s degree in management sciences with over 7 years of experience working as an operational manager for an online shop.

“Logistics costs depend heavily on suppliers, whether you believe it or not…”

Build a strong relationship with your suppliers and work with them to reduce your logistics costs. Ask them to facilitate bulk sales and quick deliveries when required. Through creating a group of buyers, you can supply only the products that are needed or products in bulk. It’s a foolproof way to reduce your logistics costs, especially transportation fuel.

Finn Cardiff

@Beachgoer

Finn Cardiff is the founder of Beachgoer. Established in 2017, the company is on track to hit $1MM in revenue in their third year. Beachgoer is an AI-assisted eCommerce startup that leverages big data to make profitable purchase decisions. Their software has now analyzed and collected over 40,000,000 points of retail data across multiple online channels.

“What has worked for our eCommerce business is…”

Hiring a third-party logistics service provider to take advantage of its scalability.

In addition, we’ve greatly benefited from the reduction in chargebacks since we worked with a 3PL for our logistical requirements.

Lynn Hope Thomas

@lynnhthomas

Lynn Hope Thomas is a Change Mentor & Business Analyst helping CEOs and leaders transform challenges into growth, an award-winning author and international speaker. Having overcome numerous adversities, Lynn loves to inspire change and get results.

“There are two logistical costs: inbound and outbound…”

Inbound costs are dependent upon the hauler or expediter you use, the distance traveled, whether it’s a full or partial load, the container types used and tariffs if applicable (and that applies to inbound and outbound). The key to reducing the costs is to:

• Know future demand. What is your company’s five-year plan as you need to meet demand?
• Product base. Gather information about your product and what materials you use, pack sizes and what container types are optimal.

Review your supply base for:

• Location — The further materials travel, the more costly, so ask whether they can be sourced locally. The ideal sourcing location will be a balance in terms of cost, quality and logistics cost.
• Too many suppliers — While you need alternative suppliers, often you can have too many. Rationalize the number.

Review haulers and expediters for:

• Cost comparison — Make sure you know who gives you the best value.
• Pick up point/weighbridge point — Is the distance too far? Do we change suppliers or haulers?
• Delivery KPIs — Are they on time or late?
• Returns — Are there damaged products?
• Capacity — Can they increase volumes for you?
• Safety record — How is their road safety? Are there losses?
• Leverage on overall costs — The information can then be used to decide who to drop and who to retain. Hold discussions with your management team on plans to negotiate contracts. You can get leverage out of passing more volume to one company. Again, the balance is ensuring you have coverage and competition.

Ruggero Loda

@runningshoesgur

Ruggero Loda is the Founder of Running Shoes Guru.

“My business disrupted its space by eliminating logistics costs in our retail model…”

Our situation was unique, but we did learn a lot. Someone else will handle your logistics for less money. In my experience, it’s best to leave logistics to logistics specialists.

The three most common ways to do that are:

1. Fulfillment services like FBA (Fulfilled by Amazon). These services take care of your fulfillment needs, usually within a single economic zone. They’re not comprehensive, but they do tend to save you money and improve efficiency.
2. Outsourcing internal operations (3PL). This approach outsources your internal operations, letting you benefit from established processes, economies of scale, etc.
3. Dropshipping. You can choose to completely “skip” logistics, letting someone else fulfill your orders instead. This is known as “dropshipping.” Although it has a bad reputation, it can help you fulfill your orders worldwide without you ever buying or shipping stock.

In my specific case, we decided to focus on our core business — generating sportswear leads — and letting Amazon do everything else. That’s how we ended up being Amazon Affiliates. Granted, our model won’t work in every niche, but it can benefit lots of different retailers.

What can you outsource?

Many retail businesses still work with the assumption they have to be a full-cycle retailer. I don’t believe this is true as of 2020. The more you can outsource, the more you can focus on what you’re best at — and turn it into a serious competitive edge.

Michael Jones

@houseofdotcom

Michael Jones is the Co-Founder of houseof.

“The number one way to reduce logistics costs is to avoid paying for logistics at all…”

This isn’t news to anyone running a successful dropshipping business, but the same results can be achieved with a more traditional supply chain. Delivering the right product, in the right quantity and the right condition, to the right place at the right time for the right customer at the right price is easier said than done… but it also leaves plenty of room for innovation. At houseof, all our products are manufactured in China, which means that every light we sell spends between 6 and 8 weeks sitting on the deck of a boat.

We operate a ‘sell on the water’ KPI, which simply means we start selling our lights as soon as they leave the dock, using our shipping container as storage as well as transport. The minute the shipment reaches our warehouse, the sold products are picked and dispatched directly from the container. This process eliminates entire pick faces from existence… and entire costs from our bottom line. By simply increasing the lead time on our product availability (within a window that is still appropriate to our product and customer), we have reduced the cost of sale across our entire range. The number one way to reduce logistics costs is to find innovative ways to avoid paying for logistics at all.

Allan Borch

@allan_borch

Allan Borch is the founder of Dotcom Dollar. He started his own online business and quit his job in 2015 to travel the world, which he achieved through eCommerce sales and affiliate SEO. He started Dotcom Dollar to help aspiring entrepreneurs create a successful online business while avoiding crucial mistakes along the way.

“The best way to reduce logistics costs is to partner with suppliers…”

Suppliers can sometimes absorb direct logistics costs. You can even create a consortium of buyers to purchase needed logistics supplies in greater quantities so you can reduce costs. For example, you can involve a client and several of their suppliers to buy transportation fuel. The idea is to purchase larger quantities than you would buy individually and then dividing the costs among consortium members. In doing so, you get the fuel you need but still get cost savings.

Alternatively, you can be bold and have a Supplier Day, where you bring in your main suppliers either by commodity or critical suppliers for the supply chain to discuss collaboration, cost reduction and quality improvement.

Bottom line: Partner with suppliers who can help absorb logistics costs.

David McHugh

@crediful

David McHugh is CMO of Crediful.com. Crediful offers objective advice on financial matters for making informed financial decisions.

“Consider a product source change…”

Sourcing and shipping products into your inventory may be siphoning too much out of your bottom line. Shop around and compare product pricing and shipping costs; imported products from certain countries right now are carrying a higher price tag and may no longer be worth the discount.

Companies supporting domestic job growth are more attractive to customers and would do well to bring logistics on board. A product source closer to home provides fodder for a great marketing campaign that customers in today’s economic climate will appreciate.

Stacey O’Neill

@NationWCS

Stacey O’Neill is a logistics expert at Nationwide Same Day Courier Service, the UK’s leading company in the same day delivery sector.

“Staying up to date with the latest and greatest in software and technology is such an important part of cutting costs…”

It’s important to realize that, although there may be an upfront cost to purchasing software, whether it’s custom or not, that cost could outweigh your cost of out-of-date technology.

For example, if you have a piece of machinery that’s been obsolete for years, it could be costing you money. It may be slow, inefficient and require regular maintenance, whereas a newer piece of equipment/machinery may be fast, energy-efficient and not need anyone to fix it every few months. In this scenario, you’d be paying less in the long run rather than paying out more and more each month.

The same principle goes for things like transportation because if you have out of date vehicles, you’ll be paying out a lot over time just as before.

Olusola David

@Holusholardavid

Olusola David is the founder and CEO of Torchbankz.com, an eCommerce entrepreneur and blogger with a keen interest in dropshipping. After starting his online business journey with eCommerce, he now shares his trial and error experience of many years with new aspiring entrepreneurs.

“The best way to reduce logistic cost is through automation…”

Improving all the manual logistics processes helps reduce costly errors and increase customer service. Through automation, staff requirements will be reduced and there will more room for scalability and speed, making the logistics process more accurate regardless of the volume. Automation also helps reduce unnecessary logistics costs by avoiding common errors, such as manual data entry mistakes that lead to paying shipping fees twice. Automating the majority of the logistics process with technological tools will definitely cut down on some costs and save a lot of money.

Glenn Gooding

@iDriveLogistics

Glenn has operational and business development oversight at iDrive Logistics. He has over 32 years of experience in the transportation and logistics industry, including over 21 years at UPS. For the last 11 years, Glenn has consulted with clients across a spectrum of industries, helping companies improve their businesses by reducing costs and improving customer satisfaction.

“The pandemic has been a catalyst for the direct to consumer channel…”

There has been no other way for a consumer to receive products during the shutdown. Direct to consumer orders are predominantly shipped via small parcel — the most complex and expensive logistics mode of transportation. The carrier networks have been strained, and subsequent surcharges have been imposed to offset operational cost increases.

Visibility, analytics and expertise are needed to effectively reduce small parcel logistics costs. A shipper must have visibility to and understand every aspect of the small parcel invoice. Over 30% of a shipper’s total small parcel expense consists of accessorials, surcharges and other complex billing methodologies. If you can’t measure it, you can’t manage it. Shippers must have good business intelligence capabilities to understand what they’re paying the carrier.

Deep industry expertise is required to devise a strategy that leverages your shipping characteristics to your advantage. FedEx and UPS are the only multi-model, national carriers in the US marketplace. The duopoly environment results in complex service agreements, laden with punitive performance language. A practitioner with extensive industry expertise will be able to successfully analyze a shipper’s package characteristics, understand the contractual complexities imposed by the duopoly market and position a shipper for substantial savings and a competitive edge.

Alisa Osipovich

@MilestimeInc

Alisa is the CEO of Milestime.

“The number one way to reduce logistics costs is to use a reputable and reliable logistics company…”

When a company doesn’t ship regularly or ships to and from different locations, the company can’t work with one dedicated carrier because you never know when and where the shipment may go. In this case, a freight forwarding company can help. Freight forwarding companies with a large network of carriers all over North America can offer always on-time deliveries to and from every point in the USA and Canada. There are several benefits to using a freight forwarding company:

1. This approach will allow you to take advantage of volume discounts, which enables a freight forwarding company to offer you better shipping rates compared to self-managed single shipments.
2. Volume discounts are one way to save, but utilizing shared warehousing facilities is another cost-saving strategy. When you work with a shared warehousing company, your business can move more products more efficiently and safely.
3. Save your business time, money and a lot of headaches when working with a freight brokerage company. You can use this time to develop your business, increase profits and onboard new clients while your shipment is under the management of an experienced company that knows all the details about the delivery process and your cargo.

Elene Egiarte

@megaventory

Elene Egiarte works as a Marketing Assistant for Megaventory, the online inventory management system that can help businesses synchronize stock and manage purchases and sales over multiple stores.

“The logistics department, both when in-company or outsourced, is a clear cost center…”

And as one, there is always pressure to try to reduce costs. However, as with many other things, what might seem like huge savings in the short term can have disastrous consequences in the medium or long term. These consequences can take the shape of delays in deliveries, improper manipulation of goods or problems in the supply chain, which at the same time affect customer satisfaction.

Therefore, the #1 way to reduce inventory costs without compromising quality is to automate and optimize manual processes. It is important to note that this does not necessarily mean having to reduce staff and to replace them with cutting edge technology, but rather finding the best fit for the size and operations of the logistics department. However, even without having a one-size-fits-all approach, there are several aspects every company can work on:

• Invest in mapping out all the possible workflows your company goes through. Not only will this help you to think about the processes and whether they are carried out efficiently, but it will also allow you to see where costs and deviations arise.
• Ensure you have the software and hardware that covers those workflows in detail. Combining an inventory/order management software with the right hardware for fulfillment and picking will have a great impact on speed, efficiency and costs. What might be a considerable investment at the beginning will pay off both in a reduction of costs and headaches.
• Invest in training your staff. Put together documentation, tutorials, workshops, etc. so that every team member is trained to use the software and hardware. If your staff follows the same steps every time to go through these scenarios, there will be no time lost in deciding how to handle things, making it easier to make decisions that increase productivity and efficiency and reduce costs.

Companies that want to reduce logistics costs must evaluate every facet of their logistics operations, from warehousing and storage to transportation and implement strategies that eliminate bottlenecks, improve accuracy and boost efficiency. Collaborative mobile robots help companies transform fulfillment operations with the flexibility to meet increased demand and reduce costs. Learn more about how collaborative mobile robots address today’s top fulfillment challenges by downloading our white paper, The Business Case for Collaborative Mobile Robotics.

Interested in more? Let’s discuss the solution that’s right for you. Contact us today.

The post 23 logistics professionals share the #1 way to reduce logistics costs appeared first on 6 River Systems.

“It’s no secret that demand for flexible, accurate and nimble supply chain logistics is on the rise. As consumer and client bases continue to grow at rapid rates, supply chains will need to adapt to larger, more complex methods of information and product transportation,” explains Hunter Lowe in an article published on SelectHub. “However, there are many time-consuming processes that go along with managing a successful supply chain.”

Let’s look at a few essential strategies for optimizing your supply chain to increase quality and reduce risk.

Implement automation solutions that support accuracy and efficiency

Order picking is the most time-consuming activity for most warehouses, comprising 70% of the total time for all warehouse activities and 55% of a warehouse’s total operating costs. The typical warehouse wastes approximately 6.9 weeks every year on unnecessary walking and other motion, or about 265 million hours of labor for a cost of about $4.3 billion, making it an obvious focal point for warehouse operators looking to reduce waste and minimize operating costs. As a result, many logistics operators are turning to robotics to speed fulfillment processes.

In 2019, Material Handling & Logistics magazine estimated that nearly two-thirds (65%) of e-commerce operations would be leveraging automated robots to support fulfillment operations by 2020. The global robotics market is expected to reach $13 billion by 2025, with collaborative robots comprising 34% of robotics sales by the same year.

Collaborative mobile robots are a flexible automation solution that augments the work of human warehouse associates. Research has shown that human-robot teams are 85% more productive compared to robots or humans alone. For example, collaborative robots like Chuck by 6 River Systems increase the efficiency and accuracy of mundane tasks such as order picking and put-away, enabling warehouse operators to target the most time-consuming and costly warehouse processes. Leveraging machine learning and AI to optimize pick routes in real-time, collaborative robots reduce unnecessary walking while guiding associates through picking activities and related tasks to improve efficiency. Overall, warehouses that implement collaborative robots can realize a 2-3x increase in productivity.

Integrate quality control measures into order fulfillment processes

Quality control is everyone’s responsibility. While it’s sometimes viewed as a bottleneck, particularly when delivery speed is the main focus, effective quality control is vital to your warehouse operation’s success. It’s easy to skip quality control processes when you need to get shipments out the door quickly, but errors are more likely to occur in fast-moving workflows. Shipping the wrong products or defective products results in poor customer satisfaction, ultimately having a negative impact on your bottom line.

Implementing quality control measures during receiving, picking and packing processes with checkpoints at each stage during your shipping workflow can reduce fulfillment errors. Analyzing data can reveal the most common errors and where they occur within your workflows, so you can focus on implementing quality control measures where they’ll make the biggest impact.

For example, sortation is a tedious, manual task that’s inefficient and prone to human error. Sortation errors increase labor costs for non-value-added tasks, requiring associates to track down items routed to the wrong area and transport them to the proper locations. Warehouse operators can integrate quality control into the picking and sorting process with an all-in-one picking and sorting solution like Mobile Sort. With an intuitive interface that uses lights, images and sensors to direct associates to the correct bins and alert them to inaccurate puts, Mobile Sort improves sortation rates and improves accuracy.

Maintain a diverse base of suppliers and know their respective risk factors

As the world grapples with the COVID-19 pandemic, supply chain resiliency has become a primary focal point as companies evaluate their existing processes and consider the next steps that can help them weather supply chain disruptions of this magnitude in the future. According to Bain, companies with resilient supply chains are more flexible and can adapt readily to shifts in demand to meet customers’ needs. “They increase their perfect order rate by 20% to 40% and customer satisfaction by as much as 30%. Importantly, flexible supply chains cut costs and improve cash flow, in part through a 10% to 40% increase in inventory turns.”

One of the biggest takeaways is the need for a diverse supply chain, particularly geographically, which reduces supply-side risks from specific countries or regions. Multi-sourcing essential commodities and strategic components reduces your company’s reliance on a single supplier, meaning you can quickly turn to secondary suppliers when a primary supplier is experiencing delays or inventory shortages.

You should also get to know your suppliers’ business practices. Ask for an outline of your suppliers’ contingency plans and evaluate their preparedness to adapt to disruptions. Your company’s contingency plans should reflect any changes that will need to take place in the event of a disruption to work around these potential supply-side delays.

Improve supply chain visibility

Better supply chain visibility means not just more data, but clear and actionable insights from each data source. Companies with end-to-end supply chain visibility can make more accurate predictions to identify potential supply chain disruptions that can reduce quality.

Implement cloud-based supply chain software solutions that support seamless information sharing and improve supply chain visibility beyond your primary suppliers into second- and third-tier suppliers, as these secondary suppliers can swiftly disrupt production if you don’t have alternatives to fall back on.

Not only does high-quality supply chain data improve forecasting accuracy, but it also enables you to identify bottlenecks in your existing workflows and processes. With full visibility into supply chain activities from end to end, you can tap into artificial intelligence and machine learning to predict outcomes for various scenarios and recommend solutions. “Increasingly enabled by AI and automation, these scenarios [can] help prescribe rather than just predict,” according to KPMG. “By analyzing past events and hypothesizing future threats, organizations are able to identify strategic and concentrated supplies that are at risk, and most importantly, recognize when current internal risk capacities prove insufficient.”

Supply chain optimization is a multi-faceted and complex discipline. By diversifying your supplier base, implementing the right automation solutions to support efficiency and accuracy, integrating quality control measures into your existing workflows and building supply chain visibility from end to end, your company will be better equipped to improve quality and predict and mitigate risks that can impact your bottom line.

The post 4 ways to optimize your supply chain to increase quality and reduce risk appeared first on 6 River Systems.

How does 6RS Improve Training Time?

6 River Systems’ solution uses a system-directed workflow which self-trains an associate as they complete their picking, replenishment, or various other tasks in the warehouse. Our collaborative robot “Chuck” will guide associates to locations following a pre-planned path that can change dynamically, so they don’t have to know where products are stored or the fastest way to get there. Once at the location, Chuck offers simple and clear instructions on how to perform their picking work. Associates don’t need to learn complex WMS RF terminal sequences or, worse, fuss around with a piece of paper to record the activity later. Additionally, with Chuck’s built in scanner, use of product images and put-to-light system, it has a significant reduction on mispicks and other errors.

Related: See how Legend Valve relies on automation to free up their associates’ time to provide an industry-leading customer experience.

How much do we save in training a new employee?

Let’s analyze a typical new-hire scenario for a site using traditional pick carts versus a site using Chucks.

Typically, it takes 4-5 days to train an associate at a cart pick operation. However, they won’t hit expected productivity, or standard rates, for 4-6 weeks. For this comparison, we are assuming that they are 80% of standard rate in four weeks. However, the associate doesn’t magically start producing at one point; their productivity follows an increasing curve within that time period then slowly levels off as they reach full productivity rates (shown in red).

By contrast, our data shows us that Chucks help an associate up to that 80% of standard rate on day one and then to full productivity in the following few days (shown in blue). Assuming 80 Units Per Hour (UPH) for a cart pick operation, the difference between a fully trained associate and the first six weeks of a new hire would amount to about 7000 units over the six weeks shown.

In terms of labor, these 7000 units represent 87 hours or about 12 days of associate work. Assuming a cost of $13/hr, this is well over $1,100 of unproductive labor for each newly hired employee. By contrast, Chuck, performing at 160 UPH, would only have 320 fewer picks, resulting in the equivalent of 2 lost hours or $26 of unproductive labor.

Related: See why everyone at MD Logistics Loves Chuck.

Fewer interruptions for your best employees

Another benefit of Chuck is that it enables an associate to self-train. When a new associate joins the team, there is often significant time spent by floor managers or sometimes your best associates to train up the newcomer. This means that not only are the new employees not producing a high output, they are slowing down some of your most important people. Usually a senior employee spends 2-3 hours for the first 4-5 days of training, and another half hour per day for the following four weeks. This ends up being about 23 hours of the floor manager’s time and at $15/hr would be an additional ~$350 of training costs. By comparison, with less than 15 minutes of training, the associates can be up and running with Chuck, allowing these valuable employees to focus on other fulfillment tasks and exception handling.

The impact of training during seasonal peaks

Rapid training has an even bigger impact on seasonal and other temporary labor. Let’s compare a seasonal associate with an expected productivity rate of 80 UPH (illustrated above with the green line) using a manual cart with a seasonal associate using Chuck. Assuming a typical 100% rate gain, the Chuck-enhanced associate (illustrated in blue) will reach full productivity at 160 UPH. As illustrated in the graph above, although the associate using carts to pick (the red line) is at their full UPH at the end of peak, their average rate over the entire period is only 57 UPH due to their slow ramp-up. The associate using Chuck, however, hits their stride very quickly and averages 152 UPH. In our last scenario, Chuck provided a 100% gain to your long term workforce. For seasonal workers, it provides a much greater gain: 166%!

Related: Learn how Ingram Micro prepared for a 10x increase in volume last holiday season.

The other option is to hire seasonal associates several weeks prior to peak to allow them adequate time to train. Let’s do a comparison assuming a typical 40 day peak schedule and a 20-day ramp-up time. In this scenario, you will pay labor for an extra 50% more time to train before peak. Even with this pre-training period, the average picking rate over 60 days would be 64 UPH, still giving Chucks a 138% rate advantage for these temporary workers.

Add more flexibility in your business

Possibly more important than cost savings is flexibility in your operation. The rapid training possibilities 6 River Systems provides allows for a much more agile business. For example, during the current COVID-19 crisis, many of our customers have seen unanticipated peaks as the demand on ecommerce spiked. They were able to rapidly add additional Chucks and temporary labor to adjust for this demand, far more quickly than otherwise possible. And in some cases, they picked up and moved Chucks across their different facilities to support regional spikes in volume. Temporary and portable capacity is something that no traditional automation can offer.

Related: See how keeping their automation solution flexible allowed DM Fulfillment Services to thrive in uncertain times.

Final Thoughts

Increasing productivity through rate gains is one of the largest benefits of 6 River Systems’ solution. It is important to realize that there are other factors that have significant monetary and non-monetary benefits. The advantages of a system directed approach using mobile collaborative robots that assists associates in the warehouse has a huge impact on training times. This not only translates directly into the bottom line, but also allows your business to be more nimble and adjust quickly to the rapidly changing world.

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There’s no universal warehouse floor plan that works for every warehouse operation. Extra-wide aisles may work for one facility that has a constant two-way flow of traffic consisting of both human associates and heavy equipment. For another facility, however, extra-wide aisles may take up much-needed floor space that would be better used for storage. While there’s no one-size-fits-all floor plan, there are a few best practices to keep in mind that will help you create a warehouse floor plan that maximizes efficiency.

Identify needs and current shortcomings

The first step in creating a warehouse floor plan to maximize efficiency is to consider your needs, such as the order fulfillment methods you plan to implement, space utilization and storage requirements. Consider the type of inventory you store, product sizes and other physical characteristics, how much stock you’ll store and where inventory arrives and departs the facility.

If you’re reorganizing an existing warehouse, identifying inefficiencies in your current design is a good starting point. For example, one common warehouse layout issue is poorly configured pick faces, leading associates to back-track to retrieve items instead of following more efficient pick routes. Even the most optimized pick routes should be reevaluated periodically, as product lines, storage organization and picking methods can change over time.

Another common issue is storing frequently picked items in bulk storage areas. If your associates are frequently retrieving products from bulk storage and moving them to replenish picking locations, moving those high-velocity items to the floor can reduce the number of touches – a key factor in efficient warehouse operations. Likewise, long rows of warehouse racks with few to no cross-aisles often means your associates are spending more time walking than necessary. Redesigning your warehouse floor plan to incorporate ample cross aisles helps to reduce the long walk.

Design your warehouse floor plan for uninterrupted flow

Warehouse blueprints that allow for the uninterrupted flow of people, materials, and equipment support efficiency by reducing heavy traffic congestion in aisles. Plan your warehouse floor plan so that sequential activities are located nearby. For example, plan space for sorting near packaging and shipping areas, so that products don’t have to travel across the facility for each subsequent step.

Visuals like warehouse floor plan schematics and design software are helpful for determining the best floor plan design for flow. Whether you use a software program or simple grid paper, drawing a schematic at scale will help you visualize workflows and determine the best locations for storage, receiving, sorting, packaging and shipping.

Allocate space for equipment and workstations

The type of warehouse equipment you use is a big consideration when creating a warehouse floor plan. Equipment such as conveyor systems take up a significant amount of space and are fixed in place. As a result, warehouses with conveyor systems often must plan their floor plan around the equipment, and making changes to the layout later to improve efficiency can prove challenging.

Warehouses that rely on more flexible automation technology, such as collaborative mobile robots, have greater design flexibility compared to traditional automation solutions like conveyor systems and automated storage and retrieval systems (AS/RS). They take up much less space compared to bulky conveyor systems, and they’re not fixed in place. Collaborative robots can easily navigate any type of warehouse layouts and require no changes to your infrastructure, making them a suitable choice for warehouses that need the flexibility to redesign their floor plans to accommodate new product lines or other changes.

Collaborative mobile robots like Chuck by 6 River Systems make decisions in real-time based on current work assignments and the status of the warehouse floor. Chuck leverages AI and machine learning to optimize pick routes and reduce unnecessary walking to help your associates do more in less time, solving several common warehouse challenges in one flexible solution.

When creating your warehouse floor plan, consider the type of equipment used, its space requirements, and other considerations such as the aisle width required for equipment access.

Ensure that all products and pallets are accessible

When creating a warehouse floor plan, design storage areas so that all products and pallets are accessible without the need to move other products out of the way. That means that pallet storage areas have aisles wide enough to accommodate forklifts and pallet jacks.

Other products should be stored strategically to maximize accessibility. Warehouses using traditional pick methods benefit from storing higher-velocity products in the most accessible areas and near sorting, packaging and shipping workstations. Warehouses that handle seasonal products should plan for reorganizing storage to place current seasonal products in the most accessible locations and moving out-of-season products to less-accessible or long-term storage areas.

Test your warehouse floor plan before implementation

If you have the luxury of working with an open warehouse space, you can test your floor plan design by marking key areas with tape and conducting mock workflows to ensure that processes and goods can flow smoothly after warehouse racks, shelves and equipment are on-site.

If you’re limited to a schematic, reconfirm all measurements and ensure that all areas and workstations have the appropriate space and aisles are sufficiently wide to accommodate traffic (both human and equipment). Keep workflows in mind and trace the flow of products from receiving to shipping to ensure that there are no unnecessary interruptions. Modern fulfillment operations use digital twin models of their site to simulate real-time layout changes using historical data.

Your warehouse floor plan and layout pattern can make or break your operation’s efficiency, so it’s worth taking the time to carefully evaluate every factor and weigh every consideration in the design process. Implementing more flexible automation solutions like collaborative mobile robots allows warehouse operators to reorganize floor plans to accommodate change without costly investments in infrastructure overhauls. When considering your floor plan design, keep not only your current needs in mind, but also the ability to adapt to future growth. Interested in more? Let’s discuss the solution that’s right for you. Contact us today.

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