Coping With Today's Warehousing Challenges

As the supply chain continues to evolve, so does the role and operation of the warehouse. Executives today are grappling with several challenges in warehousing as they go about their business of satisfying customer demands while remaining competitive. They range from shorter lead times and more demand for value-added services to labor management and keeping up with advances in technology and automation.

"But we're making progress," says Ken Ackerman, a consultant based in Columbus, OH. "The warehousing industry is healthier and stronger than it was five years ago. I don't see anything sliding backwards."

To determine the state of warehousing today, Food Logistics has put together a panel of experts. They include:

• Bob Spieth, president, contract logistics, Ozburn-Hessey Logistics (OH Logistics); Brentwood, TN;
• Dan Sanker, president and CEO, CaseStack Inc., Santa Monica, CA;
• Thompson Brockmann, director, Tompkins Associates, Raleigh, NC;
• Ken Ackerman, president, K.B. Ackerman Co.;
• Rick Underwood, vice president of contract logistics services in the Americas for APL Logistics, Oakland, CA.

What are the key challenges that companies and executives are facing today and how are they dealing with them?

Shorter Lead Times

Sanker: The industry is constantly trying to find ways to reduce lead time. Although many suppliers and service providers are concerned, moving to shorter lead times can be positive, even for logistics providers. The faster we all move product through the system, the better we utilize assets. That means less cost-not more.

The reason so many people grumble about shorter lead times is that they aren't prepared for the changes that are required.

CaseStack's systems are newer and they are designed to manage the issue. Every load goes through a transportation optimizer to find the ideal carrier (least expensive, highest service transportation method that will get the product there on-time).

In addition, we have consolidation programs where we collaborate with retailers to ship using full truckloads instead of less-than-truckload. Truckloads go point-to-point, not through LTL break-bulks, shaving days (and cost) out of the system. The same systems are linked into the warehouses, so they can respond immediately to orders which are fed electronically from stage-to-stage, sometimes even cross-docked for immediate delivery.

Logistics providers who embrace shorter lead times by applying technology, collaboration and communication will benefit from shorter leads times by improving asset-utilization. To put it bluntly: The faster you turn pallets over the same warehouse footprint, the more money you can make. The same goes for trucking; the faster you get in and out-the better off you are. It completely depends on having up-to-date systems, collaborating with retailers, and over-communicating.

Spieth: Our business model is based on flexibility and having integrated systems and control over the product throughout the supply chain. This allows us to offer additional flexibility to our clients needing shorter lead times.

We are able to accommodate shorter lead times for a major packaged food manufacturer in a variety of ways. First, cross-docking allows us to meet shorter lead times since we have implemented the ability to immediately fill orders from receipt and by-pass the allocation process. This contributes to a reduction in labor hours and allows those hours to be utilized for completing other fulfillment tasks.

Interleaving also supports our ability to work with shorter lead times. The elimination of empty travel within the DC allows us to better utilize the man power available and complete fulfillment in a shorter window. Interleaving is accomplished by assigning work or tasks to a user via the RF system, based on the user's location within the DC and the location of the closest task.

More broadly, integrated real time transportation and warehouse management systems allow us to adjust priorities quickly, so as to best respond to our clients' changing lead times.