Archives for June 2014

Distribution Center Design Rule #37B: “Top-Off Logic” and How it Can Improve Space Utilization

By Ian Hobkirk | 06/16/2014 | 9:25 AM

There are numerous “tips and tricks” for effective distribution center design; many of them are discussed in a paper we recently authored titled, “Confidently Committing to a Distribution Center Design, Part I.” One often-overlooked rule when companies design forward pick areas is that of “Top-Off Logic”. Paying due attention to this topic can improve space utilization and reduce replenishment intervals in the distribution center.

Most distribution center design tools are built to determine the optimal storage medium for a given SKU, based on the amount of product which needs to be stored. As an example, the company’s business rule may state that a 2-week supply of product is to be stored in the forward pick area. For SKU "x", this may mean 16 units, or 4 cases. The software may determine that the smallest storage medium which can accommodate this supply is a lane of carton flow rack (Figure 1), and it assigns the 4 cases to that bin type.

Figure 1: Slotting without top-off logic

Slotting without top off logic

However, there is a sizeable portion of the carton flow rack which is still unused. In the case of carton flow rack, it is not advisable to mix multiple SKUs in the same lane of rack. Therefore, in order to maximize the available space, greater than a 2-week supply must be stored in the lane.

An effective slotting system will calculate the available, un-used space in each bin and “top off” the product to be stored, even if this violates the target weeks-of-supply rule. This will reduce the amount of space required for overstock, and will also reduce the amount of labor required to replenish the forward pick area (Figure 2).

Figure 2: Slotting with top-off logic

Slotting with top off logic

While this concept may seem somewhat obvious, many slotting and planning tools to not take it into account. Factoring in top-off space can be especially valuable when designing a new distribution center. The tool must be savvy enough to understand that the 20 cases in the carton flow are actually more than enough supply. If the forecasted demand is flexed upward by 20%, for instance, no additional space is actually required in the forward pick area for this SKU.

Little things like topping off bins can add up across thousands of SKUs to have a sizeable impact on the design of a distribution center!

Carts, Conveyors, or Carousels? Knowing Which Pick Strategy is Best for Your Distribution Center

By Ian Hobkirk | 06/04/2014 | 12:45 PM

Companies designing a new distribution center or making changes to an existing one face a host of decisions about the proper role of automation in the facility. One of the most basic decisions, however, often comes down to the general pick strategy which will be employed. Distribution center pick strategies can be condensed into just a handful of basic concepts (not to be confused with pick methodologies – batch picking, zone picking, etc. - of which there are nearly two dozen).

The primary pick strategies available in a modern distribution center are:

  1. Vehicle-based picking
  2. Conveyor-based picking
  3. Goods-to-person picking


Figure 1: Three common pick strategies

Pick Strategies

Sources: Grainer, Kardex-Remstar

One of the first decisions on the distribution center design journey is which of these strategies is best suited for the operation at hand. A few guidelines for making this decision are listed below.


1.      Vehicle-Based Picking

Vehicle-based picking systems are among the most common in small to mid-sized distribution centers. This form of picking can take numerous forms, including picking small parts to rolling carts, or large cases to pallets on electric pallets jacks.

The advantages of vehicle-based picking are numerous. An obvious point in favor of vehicle-based picking is the fact that the equipment required is relatively inexpensive: even electric pallet-jacks are cheap compared to conveyors or goods-to-person systems. A vehicle-based picking operation can get up and running quickly, with minimal cost. These systems are also highly flexible. Carts and pallet trucks do not have a fixed travel path. A variety of pick methodologies can be tried, such as cluster picking or zone picking, without requiring a reconfiguration of the equipment. Additionally, during busy periods, the system is highly scalable, requiring only the addition of more vehicles and labor to meet demand. It is common to attain pick rates of 50 – 100 lines per hour in vehicle-based picking systems.

There are, of course, some disadvantages to vehicle-based picking systems. To begin with, picks rates often top-out at a lower level than with the other two strategies. There are some finite limitations to how fast a worker can push a cart or operate an electric pallet jack. Additionally, operator fatigue and ergonomic issues come into play to a greater extent with vehicle-based picking, resulting in lower overall productivity. Additionally, certain pick methodologies are more challenging to attempt with carts and pallets, such as pick-and-pass zone picking.

Another consideration to keep in mind with vehicle-based systems is that while the vehicle may be capable of allowing methodologies like cluster picking or batch picking, the company’s Warehouse Management System (WMS) may present some limitations in this regard. For example, some software systems don’t easily allow the picking of two orders at a time to a double-length electric pallet jack. Good research into WMS capabilities should accompany any vehicle-based picking design.

Companies with relatively low labor costs and a moderate number of SKUs that desire an inexpensive and flexible solution should consider vehicle-based picking.


2.      Conveyor-Based Picking

Conveyor-based picking is the backbone of many distribution centers involving high-volumes and low cube. Conveyors have been in use for decades, with numerous advances being made in recent years in flexibility, energy consumption, and ease of maintenance. A typical conveyor system usually involves several defined pick zones, connected by a conveyor which has the ability to route containers to zones where picks need to be made. The picking potion of the conveyor is usually connected to downstream functions like packing and shipping, where various zones may merge together. It is common to attain pick rates of 100 – 150 lines per hour in conveyor-based picking systems.

Conveyor-based picking offers numerous advantages. Where there are a large number of SKUs to be picked from, vehicle-based systems can become ineffective as travel time is significant. Conveyors present an attractive alternative. Conveyors lend themselves especially well to zone-based pick-and-pass systems, especially where there are a very high number of SKUs in the forward pick area. Orders which require picks in multiple zones do not have to have a human physically transport them over great distances from zone to zone. The conveyor does the “heavy lifting” of transportation, freeing humans up to walk smaller distances within a single zone and perform the pick functions. Furthermore, picks of slower moving SKUs can be grouped together and performed in just a few pick routes, and then consolidated with faster moving items from those orders, all facilitated relatively easily with conveyors. Additionally, conveyor systems are relatively flexible. Although conveyors travel on a fixed path that cannot easily be altered, the configuration of the storage mediums around the conveyor can be easily swapped-out if the initial system design accommodates this. Thus, as a company’s SKU mix evolves over time, the system can be adapted to handle this.

An obvious disadvantage to conveyor systems is their cost and complexity. A conveyor-based picking system of any size will usually costs hundreds of thousands of dollars to implement (if not millions), which is a limiting factor for some companies. Additionally, there is a significant amount of complexity required to properly execute daily workflows in a conveyor system. Efficient waves of orders must be created to maximize efficiency. Zone picking is a complicated art – picks in each zone must be timed properly to ensure that product arrives at packing and shipping in sync to prevent bottlenecks, judicious use of accumulation and other means of buffering must be used to ensure a smooth flow of goods. Not all companies have the software systems or management capabilities to make good use of a conveyor system.

Companies with large labor forces, a high percentage of conveyable SKUs, and a large overall SKU set should consider conveyor-based picking systems.


3.      Goods-to-Person Picking

Goods-to-person picking systems take many forms: carousels (both horizontal and vertical), crane-based mini-load systems, shuttle-based systems, robotic picking systems, and a host of different flavors of each of these. The basic concept is the same for all systems: product is transported from a storage system to a picking station, where orders are picked using a variety of methods including cluster picking, batch picking, and zone picking. Pick station technology can be employed to super-charge the pick rates, including pick and put lights, and technology to quickly change out pick and put totes.

There are two significant advantages of goods-to-person systems: pick rates and space utilization. Some of the highest pick rates in distribution can be attained with this technology. It is common to achieve pick rates of over 200 lines per hour, and in some cases as much as 400 lines per hour in a properly designed system. Additionally, goods-to-person systems are also very space effective, primarily because wasteful picking and travel aisles can be eliminated or significantly down-sized. Most technology can be designed to take full advantage of the available height in a building – by double or triple-stacking carousels, for instance, or by using floor-to-ceiling storage in a mini-load configuration in another example.

However, balancing out these advantages are two significant drawbacks: goods-to-person systems are very expensive, and rather inflexible as business needs change. The point of inflexibility is often seen in some of the aging carousel systems in use today. Carousels became feasible mechanically before they became efficient systemically; as a result, numerous systems were sold in the 1990’s and early 2000s that were not well-thought-out, and that did not evolve well as business needs changed. Replenishment became time-consuming, and the basic capabilities required to enable good rotational cluster picking did not exist in some cases (see our related blog on this topic: http://www.commonwealth-sca.com/carousel-systems/). Mini-load systems and shuttle based systems have fared better: this technology emerged later and has generally been coupled with more capable software to manage picking. Still, most goods-to-person systems will not feature the same level of flexibility that can be incorporated into a conveyor-based system, which can be adapted to accommodate pallet flow rack, carton flow rack, and shelving relatively easily.

Companies with very high labor levels, and a relatively consistent business model over time would be well served to consider goods-to-person systems, taking care to perform a robust analysis of needs and incorporating this into the system design.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.


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