logistics consultants l


In this article by logistics consultant Nick Weetman, director, Davies & Robson, we learn about the kind of benefits that can be brought to a logistics business by hiring a consultant to look from a dispassionate point of view.


Make do and mend W


ith high inflation and price competition placing margins under increased pressure, optimising the


efficiency of warehousing operations has never been more essential. Business confidence remains low and even companies currently experiencing growth are hard pushed to justify expenditure on additional space to accommodate increased volumes. With uncertain times ahead, building a new warehouse is a massive gamble and even signing up to a five year lease carries more risk than most are prepared to accept.


By streamlining their warehousing operations and sweating their existing assets companies can drive out cost, drive up service levels and create capacity to accommodate sales growth.


In the worst case scenario, 60-70% of an operator’s time can be spent moving between locations.


At the same time however, market forces are placing warehousing operations under increasing pressure – to handle and store more items, to process higher numbers of smaller transactions and to process more returns, all in less time, with less errors, with a less-skilled workforce. Optimising warehouse performance is dependent on both design and layout and operational practices. A warehousing operation cannot perform efficiently unless it is both well planned and well run and companies must therefore consider both configuration and operational processes and systems.


40 ShD May 2011 www.PressOnShD.com


When it comes to warehouse design, the configuration and space utilisation must take proper account of the frequency and volume of stock movement.


Slow moving


stock lends itself to higher density storage where accessibility is not a priority, whilst fast moving lines demand ease of access and space for


the packing and marshalling of orders. Storage options


Storage options are either block or random access (racked) storage. Block storage works best with a smaller product range, limited variation between minimum and maximum stock levels and pallet loads that are able to be stacked with ease. Random access storage makes better use of height, provides a greater level of control for larger product ranges and variable stock levels and reduces the risk of product damage.


The design must also take account of workforce productivity – in the worst case scenario, 60-70% of an operator’s time can be spent moving between locations. However, this can be dramatically reduced, for example, by separating storage and picking areas and locating product based on frequency and volume of movement.


Stock control Of course, optimal design is only half


the battle and good stock and operational control is also critical. The first question to ask is why the need to hold stock and what are the benefits. In most cases, stock is held to address the mismatch between demand and supply to ensure a high level of product availability to fulfil customer orders. However, higher than necessary stock levels can often arise from the need to cover inefficiencies in sales or production with additional inventory.


Also to be taken into account are the operational and commercial implications of order quantities placed on suppliers. Handling full cartons or pallets is operationally and commercially more viable than single items, especially over extended supply distances. The challenge therefore is to optimise order quantities so as to meet the required level of availability whilst minimising the overall holding cost of a product. This requires good procurement practices and a proper understanding of operational costs in the end-to-end supply chain. Once in the warehouse, the next challenge is to ensure that product is received, put away, replenished, picked and dispatched in the most efficient way. Adopting the right approach and choosing the right systems is essential to maximising space utilisation whilst minimising resources. In addition to driving productivity, the right system also plays a fundamental role in maintaining stock accuracy and customer service.


The more inaccurate stock records are, the more inaccurate they become, resulting in more time spent checking and rectifying and pickers and FLT operators taking less care, in turn


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