The majority of distribution centers (DCs) are under 100,000 square feet, according to a survey by the Georgia Institute of Technology (www.gatech.edu). Getting more out of that space can postpone a move to a larger facility and help avoid potential disruptions that accompany such a move.
Doing a "white glove inspection" of inventory, John Hill, principal of consulting firm ESYNC (www.esync.com), often finds items in a particular pick face are dirty. That can mean the product is obsolete or slow moving. It also helps him identify when inventory has been slotted in the wrong area of the warehouse.
Slot by activity, Hill advises in the Warehousing Forum newsletter (www.warehousingforum.com). Put fast movers nearer the dock.
Reviewing order history and SKU activity is a more accurate "white glove" test of how velocity of a particular product might have changed. Former fast movers may be sapping productivity if they are still being allocated spaces near the dock that belong to a new up-and-comer.
Other simple areas to improve productivity and increase the life of a current facility include ergonomics and some process re-engineering. Frequently picked items should be in the "golden zone" between shoulder and waist and more efforts can be put into reducing handling - striving for a one-touch goal.
Space layout is governed by space and equipment needs as well as inventory management, Hill adds.
That sentiment is echoed by Bob Gaughan, group general manager of APL Logistics (www.apllogistics.com). One client of the thirdparty logistics provider (3PL) saw changes in its operations driven by some acquisitions that drove some accounting and operations improvements. Moving from a cycle that had pushed the bulk of shipments out of its facility in the last two weeks of the quarter to a more balanced flow, Gaughan says he saw he didn't need to have sit-down lift trucks doing the picking and could justify more automation.
The warehouse was originally laid out with 12-foot aisles served by conventional 5,000-pound-capacity, sit-down lift trucks. Gaughan started a transition from 12-foot racking to 16-foot racks in nine-foot aisles vs. 12-foot aisles. He added reach trucks so they could use doubledeep racking and eliminate some aisle space.
The transition started in an unused portion of the warehouse, and as installation was completed and operations begun, he was able to start converting other sections of the warehouse.
The original facility processed 800 orders per day. When the transition was finished three months later, it was handling roughly 5,500 orders per day.
Other operations have benefited from changes as simple as improving packaging. In one case, Gaughan says his group reengineered corrugated cartons to provide greater stacking strength. The added packaging cost was more than offset by handling improvements using a clamp truck and increasing storage capacity by stacking higher.
Despite the best efforts to keep a facility going, there comes a time when the best choice is to move. Gaughan, who manages multiple distribution operations for a number of customers, says, "I'm responsible for structural and roofing, so when a building gets to be 10 or 15 years old you might be looking at a $70,000 paint job or a $3 million or $4 million roof, depending on how your lease is written." In that case, shifting to new construction in a lowercost area can save on costs per square foot while providing improvements like increased ceiling height or better energy efficiency.