In the business world, dollars are the bottom line—whether you're trying to save as much money as you can or finding ways to bring the dollars in faster. The company that can do both equally well is ahead of the game.
In the warehousing world, this translates to a different paradigm—-the conflict is between maximizing the storage space in a facility and trying to decrease the amount of time it takes employees to access and ship products. The more you can ship out, the more you can sell.
"It's a dilemma," says Kevin Curry, national accounts manager for Steel King, Stevens Point, WI. "If you want to expand your business, you need to get another account and how are you going to get them? By promising that you'll be in stock at all times."
Curry says that most companies do this with racks that are deeper and taller. This creates a product accessibility problem and to meet delivery dates companies may have to add extra shifts to keep their promises. "Do you want to become bigger, meaning you have to spend more money on racks and put an addition on your facility, or do you want to be the company that's 100 percent accurate with every order?"
Companies must make choices, with these two principals in mind, when it comes to determining their racking strategies.
Maximizing For Throughput
"It's about throughput, which takes into consideration how warehouses can optimize their costs based upon getting as much through their facility as quickly as they can with as little damage as possible," says Ray Chase, president and CEO of Twinload, South Bend, IN. He sites increasing pallet flow and being able to handle two or more pallets at a time as key ingredients in the solution.
For example, All Star Distributing, a beverage distributor located in Reading, PA, had Twinload install drive-in racking in its facility that was double-wide. "Our fork lifts can pick up two pallets at a time," says Mike Sadowski, All Star's vice president of operations. "That way we can drive into the racking and load up two pallets into it at a time."
This allows workers to load or unload trailers in half the time that it would take with a single fork lift. All Star uses the drive-in racking for fast-moving items like Coors Lite 30 packs, which it receives in trailer load quantities.
"I'd give myself more throughput capacity and sacrifice a little storage," says Dwight Dbeery, vice president of engineering services for Next Generation Logistics, a third-party logistics consulting group based in Inverness, IL. "The most important thing you can do in a warehouse is to provide for the outbound needs of the operation."
One way to do this is to increase picking rates and use single-deep selective racks.
"If they're trying to maximize their picking efficiency or putaway, having a single select gives them the best access. They don't have to worry about getting the product out from behind something else," says Brian Hudock, a partner at Tompkins Associates in Raleigh, NC.
"Single-deep selective rack is good for fast-moving low inventory SKUs where you've got 1,000 or 2,000 SKUs and many only move five to 20 cases a week," says Dbeery.
Another method of increasing throughput, Dbeery explains, is segregating all full pallet flow into a different section of the warehouse designed to be fast-in/fast-out. "Put them by themselves, sacrifice a little bit of storage capacity by using either two-deep selective racks or two-deep pushback racks back-to-back between aisles."
This will increase the number of aisles in a facility, but will also increase throughput.
Unfortunately, the proliferation of SKUs is adding unwanted complexity to today's racking systems, thereby slowing down product throughput.
"How many types of Slim Fast shakes are there?" Steel King's Curry asks. "Now they probably have 10." And they have to have a spot for everyone of them.
"Cold storage companies are going two-deep. They used to go 10-deep because they had massive amounts of product, but now, because there are so many variations of the same product, they have to have more selectivity. They're going with shorter depth systems now."