Opportunity Lies in Your Own Yard

Jan. 19, 2007
Less controversial than WalMart's recent decision to use a workforce scheduler to optimize store labor, yard management extends control over workforce

Less controversial than WalMart's recent decision to use a workforce scheduler to optimize store labor, yard management extends control over workforce scheduling, visibility and inventory management beyond the four walls of the distribution center. It could be the multifaceted nature of the tool or the multifunctional workforce that insulates users from controversy, but there still is no groundswell moving towards better yard management despite the benefits.

"Improving yard management is really about making execution more effective for the whole supply chain," says Wilson Rothschild, supply chain management solutions manager for Infor Global Solutions (Alpharetta, Ga. www.infor.com).

To appreciate the big-picture perspective, think of yard management as an extension of warehouse management. Yard moves aren't much different from warehouse store and retrieve operations, so minimizing travel times in the yard will have similar effects on productivity to improving the layout and task management in a warehouse.

Processing loads faster can help improve fill rates and speed product to the end customer, adds Rothschild. "All trailers are not equal," he continues. Certain loads will have a different priority. A hot load that will complete pending customer orders should be routed directly to a dock and have workers ready to unload and cross-dock those items. High-value loads can be directed to a dock rather than yard storage and thus reduce some of the risks of pilferage. Similarly, perishable loads can avoid delays and move right to a dock for unloading. Lower priority shipments can be held in the yard until a dock and labor are available to unload them.

More efficient receiving starting at the gate can reduce the number of times trailers have to be shifted around in the yard and improve labor productivity. Linking information on inbound and outbound shipments to carrier appointments can also lead to some self-directed yard or dock positioning. Drivers arriving at an appointed time to load or unload can proceed to a specific dock or yard storage location and perform a drop-and-hook operation with minimal supervision. Using gate checks to verify the identity of the driver and trailer provides the confirmation of what arrived or left the facility when and with whom.

A typical retail or grocery operation can have 50 dock doors and one-and-a-half to two times as many trailers, says Rothschild. Reducing the number of redundant yard moves can free people to perform other tasks and may lead to lower overtime costs.

Just as inbound shipments can have different priorities, trailers stored in the yard can shift priority. Identifying which trailers are approaching the end of their "free time" can help reduce detention charges by moving them up the schedule for unloading and directing a yard tractor driver to shift that trailer to a dock.

In today's cost-conscious environment, internal benefits of improved efficiency, productivity and lower labor costs are a plus. There are also external factors driving improved yard management. One of the top issues is hours-of-service rules for drivers. In this, the United States is not alone. Infor's Rothschild points out that Canada and Europe are also putting stricter limits on drivers. Fuel prices also come into play, along with a shortage of labor—especially drivers.

Drivers consider the time and effort required to pick up or deliver a load to a particular facility, says Rothschild. Given the regulatory constraints on their time and their rising operating costs, drivers don't want to sit in a queue or at a dock, so the efficiency of a distribution center will color their willingness to pick up or drop off a load. The worst offenders may find it difficult to find a driver.

Optimizing yard storage and improving distribution center flow are good starting points. According to Navis L.L.C. (Oakland, Calif. www.navis.com), more efficient yard management is a building block for an integrated high flow-through operation. Like many yard management solutions, they start with automated gate transactions, direct gate-to-door assignment and security seal management.

Linking to carrier appointments, Navis provides dynamic dock scheduling that looks at current conditions and helps warehouse managers schedule labor and position trailers. But going beyond the scheduling and equipment and labor matching, yard management systems start to become part of a broader inventory management strategy.

Transportation management systems work at the front end to provide advance shipment visibility, shipment status, estimated time of arrival and alerts when changes occur. Shippers are also pressing for more information about resolutions when problems occur. A study by Aberdeen Group indicated 56% of shippers want advanced shipment visibility.

To achieve greater visibility up the supply chain requires carrier collaboration—another goal the Aberdeen study indicated shippers value (53%). At a high level, collaboration with carriers gives both shipper and carrier a better sense of the tactical capacity that will be needed to support the shipper's goals. With some level of understanding and commitment on capacity, both shippers and carriers appear to want to establish appointment self scheduling and electronic tendering so shippers can easily book loads and carriers can arrange for pick up or delivery.

While carriers clearly want to optimize the use of their scarce resources, shippers also expressed an interest in warehouse labor productivity as one factor motivating them to use warehouse management systems. But bridging the gap between inbound freight, the yard and dock operations drifts lower on shippers' priority lists. Only 34% set inbound freight management as a priority for their transportation management systems and just 38% said integrating dock and yard management were a priority for warehouse management systems.

The gap in technology priorities is difficult to reconcile when shippers report supply chain visibility as a top priority (69%) in the Aberdeen study. Perhaps that's why Infor's Rothschild refers to yard management and building the bridge between the various execution systems as the last frontier. The yard is a black hole, he comments. Yet track and trace capability and supply chain visibility continue to rank high as concerns for shippers.

In Europe, Rothschild sees users installing warehouse management systems as much to know where things are as to improve productivity. Each step adds an element to supply chain visibility that has cost and productivity implications, but there are other issues to consider.

One is security. Inventory shrinkage can be reduced through better visibility, in part because it helps to identify and locate the problem along the supply chain. For materials that might be used in a terror attack, the chain of custody must be clearly modeled and managed and it is often desirable to process those goods quickly. Linking transportation management systems, yard management and warehouse management offers much of the visibility and control needed in those circumstances.

Another area that gets a quick mention is Sarbanes Oxley compliance. Accountability for what a company owns, where it is and other financial commitments (such as pipeline inventory) offer another argument for linking the various execution systems. Progress may appear to be slow, but for those who have moved to develop supply chain visibility and resolve issues over where gaps exist, the benefits have already started to accrue.

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