Design for Distribution

Early material-handling involvement in product development avoids costly hiccups down the line.

At the most basic level, products must fit through the customer's door, notes Michael Prince, who runs Beyond Design, Inc., an eight-person industrial design firm based in Chicago. Among other projects, he has worked on designs for the paint tinting, mixing and dispensing machines manufactured by Fluid Management, Inc. (Wheeling, Ill.).

"They'll be shipping these products to Europe, sometimes to South America, and the United States. You have to be able to fit through a standard door of 30 inches. Some of these machines are actually larger than 30 inches," says Prince. "So we have to figure out ways that it can be broken down on the site, sometimes by the shipping people, sometimes by the companies that are receiving it."

Package configurations must also meet the unique handling and merchandising needs of retail customers. When such customer requirements are known, they can be designed in, rather than accommodated after the fact. Prince recalls working on a set of plastic clothes hangers that were being sold to domestics merchandiser Bed Bath & Beyond (Union, N.J.). The product was picked up by some of the chain's stores, which currently number-more than 600, but distribution eventually plateaued. When he called the buyer to find out why, he discovered not all of the stores could handle the minimum requirement of 24 units. They reduced the box size to accommodate 12 units per box and picked up the remainder of Bed Bath & Beyond's distribution.

"When you talk about packaging, distribution and sales, sometimes it's a matter of understanding the customer's needs and the store requirements to make sure that you have the right count in your master pack," says Prince.

Such customer understanding accounts for a large part of the value provided by Brightpoint, Inc. (Plainfield, Ind.), which distributes wireless devices for manufacturers and telecommunication providers worldwide. While the $1.9-billion company doesn't design the actual products, it does manage product storage and shipping for OEMs such as Nokia, Samsung, Motorola and many others. Brightpoint must tailor product packaging to meet the unique requirements of every SKU, wireless operator and end customer, from the individual receiving a mobile phone in the mail, to the carton requirements of large retailers such as Best Buy, Circuit City and Sam's Club. Worldwide the company handled 27 million wireless devices in 2004.

On the front end, Brightpoint worked with Virgin Mobile (Warren, N.J.) on the design of the packaging for its pre-paid mobile phone.

"We got in early in the process and helped [Virgin Mobile] design the plastic," recalls Brightpoint vice president of North American operations Phil Sheingold. "Nobody had ever put a phone in a plastic clamshell and RF-sealed it. We did testing early on to make sure the phone actually functioned." Because of the company's expertise and early involvement, it was also able to reduce the labor required to assemble the packaging by half.

Based on their relationships with retailers, Brightpoint personnel know how the products move through their distribution centers and into the stores. They know how much product should go into a box; five units per master carton for Wal-Mart for example, compared to maybe 10 per master carton for Best Buy.

The company uses ultrasonic scanning to measure and store three dimensions plus weight for each wireless device, individual accessories and any collateral material down to the smallest items. Based on that information their system determines the appropriate size box when picking and shipping individual customer orders.

Brightpoint has negotiated with freight carriers how these standard-sized boxes are managed and handled. As new products are introduced, it takes this knowledge back to the manufacturers and works with them to modify the dimensions on their packaging so that boxes will not be overly large, or contain too much dead space, which would cost them more in freight.

"It's not just the original design of the plastic; and it's not just the end-user experience. It's knowing the complete supplychain channel, and being able to put that all together for a complete package," Sheingold adds. "When a new product launch comes or we find out something in the industry, we discuss this with them. We are actually coming with ideas to help them improve their process."

Early Involvement Is Everything
For material handling professionals to influence how successfully a new product moves through the distribution system, they must be involved from the beginning. This requires a company to have a formal product development process in which the goals and inputs of the various phases from concept development to pilot and production are clearly spelled out. That way the right people can be brought in at the appropriate stages. First, the physical and functional walls that separate the development people and the material handling people in many companies must be overcome.

"We found that if we bring in people from supply chain and logistics very early in the conceptualization stage of development, they get to at least register their votes and impart their knowledge to the development team," says Bob Hayes, vice president of product development for New Product Innovations (NPI), a Columbus, Ohio-based firm that helps companies design, develop and launch new products. The primary concern is always to make the product marketable, that it will perform and sell well. After that, other issues can be considered.

"In some cases it's the card that would be on the product at retail that's an inconvenient size or configuration to actually pack well. If we get those things identified early, before a decision has been made on concept, those considerations can be factored in," says Hayes. "Even though they may not win, they at least have been considered as part of the process."

At NPI, Hayes says most of the decisions that impact logistics, packaging and distribution have been made by the end of "Phase 2" in its step-by-step development process. This is when prototypes are created, different options are evaluated, a final concept is selected and product specifications are developed, before engineering lays out the detailed designs.

Following this process, the company worked with Maytag Corp. (Newton, Iowa) on the design of its Skybox personal can and bottle vending machine. At the start, they knew the product would be manufactured and shipped from overseas, but it also had to be shippable by UPS to the end customer. This forced certain size and weight limitations. Hayes says those requirements had a significant impact on the design in terms of what parts had to go on and come off easily.

"It always comes down to creating a greater understanding of everybody's role and responsibility in the process. The [supply-chain management] guys, the logistics guys, know what the development guys are up against, and the challenges that have to be met. Once everybody buys into that, early development kind of just happens," he adds.

Real Collaboration
Whenever there's talk about early involvement and cross-functional collaboration, everyone agrees that there should be more of it. Ask almost anyone how much they are actually doing however, and the answer is usually very little. What's often missing is a process for accomplishing it.

"It's really important to have people who are familiar with warranty, people who are familiar with distribution issues. Those people need to be involved in the design of a new product, very much in the up-front process when we're coming up with the concept or idea," agrees Mark Oakeson, a consultant with TBM Consulting Group (Durham, N.C.).

To get these people involved, as part of his firm's LeanSigma product development process, they gather cross-functional teams together at formal, weeklong meetings at different stages in the product development process. TBM calls these meetings "kaizen" events, a Japanese word that loosely translates as " continuous improvement." The process often begins with an event where the team works to identify customer needs, and then render those needs into design specifications. Because there are representatives on the team from all functional areas, these focused events cut down on what Oakeson calls "rework loops," when major changes have to be made at late stages because something important wasn't considered. Such changes add significantly to the time it takes to bring most new products to market.

"What's critical is that we get everybody's preconceived ideas from that team. Even the distribution guy may have a good idea of what is needed. He's had to interface a lot with the product, and the way it's packaged; [he's] had to deal with damage issues. He comes at it from a totally different perspective from the marketing guy who doesn't experience those problems," says Oakeson.

He notes that simply having and following a formal development process can improve the process dramatically. In a recent engagement with Marvair (Cordele, Ga.), which manufactures air conditioners and other environmental control products, TBM helped reduce the development time on a new product by 75%, from 2 years down to 6 months.

In terms of resources, product development is the second largest process within a manufacturing organization, after order fulfillment. Material handling professionals must be included for companies to ensure that these resources are effectively deployed, and the final product meets customer requirements.

In order for it to be shipped by UPS to the end customer, the Maytag Skybox had to be designed so that it could be disassembled into several pieces.

Industrial designers at Beyond Design Inc. (Chicago) were challenged to reduce the overall size of this cleaning product for Evercare (Alpharetta, Ga.) to minimize packaging and aid merchandising. They eventually arrived at a three-part handle with telescoping sections.

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