Industryweek 5276 Distributioncenter

How Distribution Centers Will Creep Across the Data Frontier

Sept. 17, 2013
Despite manufacturing heavies in the automotive and electronic sectors integrating robotic and automation into their assembly lines, machines aren’t replacing distribution center employees just yet. Humans add flexibility and valuable problem-solving acumen to many tasks.

Distribution centers’ newest tool isn’t a robot. It’s a data point. Despite manufacturing heavies in the automotive and electronic sectors integrating robotic and automation into their assembly lines, machines aren’t replacing distribution center employees just yet. Humans add flexibility and valuable problem-solving acumen to many tasks.

There is, however, an emergence of advanced software technologies that are helping distributors make the most of their human workforce though advanced planning and management capabilities.

The effects of the Cloud and Big Data on end-user-facing business operations are apparent all around us -- from sales and marketing techniques to retail planning and customer engagement. For distributors, who play a central role (literally and figuratively) in supply chains, the adoption and influence of these technologies has been less pronounced -- although not for long, as we’ll see.

Engineered Labor Standards (ELS) and Labor Measurement Systems (LMS) have been helping warehouse managers monitor and enforce productivity expectations for over 50 years. The early systems relied mostly on historical data and engineering to generate minimum expectations in the form of cases per hour or pallets per hour. As useful as they may have been, they lacked the ability to truly map the processes and to adapt to changes in the distribution environment (e.g., volume, product mix, re-slotting). Fast forward to today, where not only can we benefit from the advances in computational power, we can rely on fast and accurate real-time data capture.

The LMS of the 21st Century is anchored around discrete modeling capabilities as well as a real-time information loop. Through discrete modeling processes, the actual work methods and workflows can be modeled without compromising the integrity of the model. Enter real-time data collected via commonly used Radio Frequency (RF) technologies. The ability to collect data inputs as they’re being produced (from employee tasks and workflow) allows the LMS to not only improve its modeling accuracy but also provide timely information to the managers to better understand the state of their operations.

Dashboard Enables Fast Adjustments

Imagine, for example, that your warehouse productivity suffers a severe unexpected drop from one week to the next. There are dozens of decisions that could be to blame. Maybe it was due to a new staff addition, rearranging the machinery, or reassigning pick-up locations on the floor.

Either way, you, the manager, need to make some fast adjustments. But rather than manually reviewing and compiling each process’s information, what if you could access a dashboard that aggregated all of those data points for you? Further, what if this same program could alert you of below-average productivity before it devolves into a more serious problem? Herein lies the vast opportunity for distribution centers and data.

Distribution center leadership is realizing the need for such an automated information system. When combined with other technologies tools such as RF technology, these data processing programs can make distributors’ existing information significantly more powerful. More insight into your current workforce operations allows managers to make smarter decisions about products, warehouse configuration and staff assignments. Ultimately, a more intelligently crafted distribution center floor means higher human accuracy, quicker task-turnaround times, less overtime pay, fewer workers’ compensation claims, and a higher service level.

Over time, the benefits of a data processing program become even more pronounced. After numerous minor improvements to the floor layout or employee configuration, a distribution center could easily handle increased volumes with the same or fewer associates. From there, entire pieces of equipment might become unnecessary (again, reducing operating and maintenance costs), energy consumption could be lowered, and overall profitability increased.

In theory, years from now, a new crop of real-time, data-based engineered labor standards could translate into completely redesigned facilities. From building size to break room placement to parking lot layout, the distribution center of tomorrow could be radically different from today’s, while offering heightened efficiency. Further technological advancement, such as Heads-Up Display (HUD) glasses, will enhance the ability to communicate even more real-time information to the associates on the floor, improving their decision-making process and efficiency.

The global distribution industry is at a pivotal point, faced with numerous economic and labor challenges, technological opportunities and steady competition. Organizations that take small, data-driven steps now to ensure more scalable operations in the future will win the long-term competitive advantage. Given the proven power of business intelligence, where we’re going, humans will remain a crucial asset.

George Bishop is a director and industrial engineer in West Monroe Partners’ Operations Excellence practice.

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