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Eliminating Warehouse Inefficiencies

Efforts to improve efficiency over the past century have often focused on the reduction of waste, defined as processes and resources that represent direct costs and opportunity costs but do not add any value.

Rugged PC's offer wireless solutions in the warehouse

A 15” Glacier Computer at a fixed location used for data collection and data retrieval. Glacier additionally offers 10” and 12” units.

Efforts to improve efficiency over the past century have often focused on the reduction of waste, defined as processes and resources that represent direct costs and opportunity costs but do not add any value.

The elimination of muda, the Japanese term for waste, is at the core of the Lean Manufacturing management philosophy promoted by Taiichi Ohno, the father of the Toyota Production System. He listed “the seven wastes” – defects, transportation, human motion, waiting, inventory, overprocessing and overproduction – and an eighth waste, underutilized skill, was later added to the list.  

Inefficient warehouse operations

At least the first four of these eight wastes are prevalent in current warehouse operations. “Many warehouse and distribution center operations continue to suffer from significant inefficiencies, as forklift operators waste time and resources hunting and digging, because they lack adequate information on the location of items and the optimal route for putaway, replenish and retrieval actions,” says Michael Giuliano, the President of Meridian Research and Development, LLC.

Giuliano has advised large consumer goods producers on the application of Lean Manufacturing principles to warehouse logistical operations. “We all know what it is like to lose your keys and have to search around the house for them. Imagine the inefficiencies and frustrations involved when forklift operators waste time searching around the warehouse. It is not unusual for our analysis to determine, for example, that 2.5 minutes are wasted during the average retrieval cycle, and that figure is multiplied by hundreds or thousands of cycles per week.”

On the opposite end of the efficiency spectrum, newly-constructed high tech warehouses are designed from the bottom up to automate most or all operations. Elaborate cranes, conveyor belts and robotic systems are coordinated to perform putaway and retrieval operations with little or no human intervention. These operations are highly efficient, but the high capital requirements make them cost-prohibitive for most types of warehouse operation.        

Equipping forklifts with PC’s

A GX-1200 Glacier Computer is forklift mounted with wireless network connectivity.

The more practical and affordable solution for many new and existing warehouses is to empower operators by installing an onboard computer on each forklift, making the location of items and empty storage space immediately visible. Rugged PC’s, with user-friendly touch-screen user interfaces, connect to a Warehouse Management Systems (WMS) via a wireless local area network. Some of the more sophisticated WMS systems can indicate not only the location to pick from, replenish from/to, and putaway to, but also the optimal sequence of these events.

The WMS is typically interfaced with an existing Enterprise Resource Planning system (ERP), or accounting package. This provides an integrated method of automatically tracking inventory, processing orders, and handling returns. WMS is frequently implemented with automatic data collection using barcode scanners and the increasingly common radio frequency identification (RFID) tags, now mandated by Wal-Mart and other retailers.

“The implementation of a WMS along with automated data collection will likely give you increases in accuracy, reduction in labor costs … and a greater ability to service the customer by reducing cycle times,” says Dave Piasecki of Inventory Operations Consulting LLC, author of Inventory Accuracy: People, Processes, & Technology (2003). For some warehouse and distribution center operations, the more efficient processes and better utilization of storage space will also result in inventory reduction and increased storage capacity.    

Time saving

Forklift operators can receive wireless requests from workstations in need of raw materials. The forklift operator also receives information regarding the location of the workstation and the specific materials that need to be delivered.

These benefits directly address the elimination of wastes at the core of Lean Manufacturing philosophy. Equipping forklifts with computers integrated with a warehouse management system immediately reduces the waste involved in transportation, human motion, and waiting.

Shorter, more direct routing reduces travel time and, therefore, the demand for forklifts and the associated labor, capitol, maintenance and energy costs. Travel time is reduced because operators always know their precise destination. After a putaway, a warehouse management system can direct a forklift to do a pick at the closest available location in situations where like items may be stored in several different areas.

By giving operators better information about the location of items, human motion is also reduced: operators no longer need to continually get on and off the forklift to check three or four labels before finding the location of the intended item.

The Japanese industrial engineer, Shigeo Shingo, famously explained that a bolt with fifteen threads on it cannot be tightened until the last turn, and therefore the other fourteen turns are wasted. This observation led to the development of fasteners, tools and methods designed for one turn, one-motion installation.

Similarly, the forklift operator provides a necessary function only when he or she picks the correct item. Any searching activity leading up to the locating and retrieval of that item represents a waste of time and resources – waste that should be eliminated.

Reduction of defects

Onboard computers connected to a WMS are mistake-proofing devices that dramatically reduce the incidence of retrieving and shipping the wrong item by matching the item with information on the item’s location. The use of automated data collection (barcodes and RFID) virtually eliminates such errors and significantly improves inventory accuracy.

And operators are happy to give up the tedious and error-prone task of searching for items and manually checking and recording ID numbers. Onboard computers, with barcode and RFID readers, remove guesswork and force better habits, allowing workers to achieve higher productivity.

WMS reduces defects in another way, by reducing the wasteful disposal of spoiled perishable goods. The WMS can automatically direct the operator to retrieve the particular units with the shortest remaining shelf-life, in a first-in first-out (FIFO) arrangement, without the operator having to engage in the time-consuming process of manually checking and comparing dates. Some companies shipping perishable goods will use FIFO for closer destinations and last-in first-out (LIFO) to overseas destinations with longer in-transit times.        

Quantifiable results

For these reasons, onboard forklift computers integrated with a warehouse management system provide a good return on investment for many traditional warehouse and distribution center operations. “These warehouse logistical systems produce results, especially in the area of labor savings, which are easily quantifiable and go directly to a company’s bottom line,” according to Giuliano. “Giving forklift operators access to useful information technology produces success stories for Lean Management and Six Sigma programs, but you do not have to have faith in any particular management theory to recognize the excellent payback that can be achieved.”