Getting Lean and Going Green: Innovations in Warehouse Operations

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When warehouses and DCs explore innovative ways to optimize flow and reduce waste, the benefits can be bottom-line friendly and eco-friendly, too.

Self-improvement can be a daunting task—both for individuals and for business enterprises. Some warehouses and DCs want to streamline their processes; others may have a mandate to reduce their environmental impact.

Fortunately, lean and green solutions abound for every type of facility.

The concept of "lean" was introduced to U.S. manufacturing in the early 1980s. Companies have since expanded it into warehouses and DCs.

While some of the strategies are different, the philosophy is generally the same: Study a work process and determine how to do it more efficiently—using the least amount of time, expense, and space, while still maintaining quality.

More recently, companies have begun to embrace "green" initiatives. For some, it is an internal commitment to be better corporate citizens. For others, it is a marketing program designed to build goodwill among an ever-more environmentally conscious public.

In either case, companies are finding similar results: Not only are they improving the environment, but they are cutting costs.

Ready to get lean or go green? Here are four warehouse improvement strategies to help you get started.

Less is More: Lean Work Processes

Lean work processes offer many benefits to warehouses and DCs, including reducing the need to purchase and maintain equipment such as racks and conveyors.

"The purpose of a warehouse is to serve as a buffer between customers who order small quantities with frequent deliveries and suppliers who send large quantities with infrequent deliveries," says Quarterman Lee, president of Kansas City, Mo.-based Strategos Inc., a lean consulting firm.

Going lean comprises the following strategies:

Managing Inventory. Matching customer orders to warehouse stock and improving the timing of inbound and outbound shipments can reduce the volume of inventory a facility stores.

"Controlling inventory helps reduce the amount of equipment, racking, and shelving in the facility," Lee says. The ultimate example is cross-docking, where inbound shipments stay in the facility for only a few hours.

"Reducing inventory requires looking upstream to how you plan and schedule, whether you pull or push material, and where your suppliers are located," says H. Lee Hales, president of Marietta, Ga.-based Richard Muther and Associates, a plant, warehouse, office, and service facility management and engineering firm.

Controlling Materials Flow. Another important factor in making warehouses leaner is controlling the flow of materials through the facility.

"Activities are sometimes not performed in the best place, so forklift drivers set products down and pick them up multiple times to get them through a process," says Hales. "This activity requires additional equipment."

Warehouse structure may impose limits on setup choices. For example, keeping a large quantity of product in a small space creates high-density storage, which typically requires multiple touches.

Improving Materials Management Practices. Materials management and sourcing practices, rather than the methods used in the warehouse itself, often determine a facility's lean success.

"As often as possible, find out how the customer wants parts delivered," Hales suggests. "Then, work with suppliers to determine how to best package and label the parts, and how often and in what quantity they should deliver them."

When the warehouse receives a shipment that is properly packaged and labeled, it can move the materials directly to where they are needed.

Going lean doesn't require rebuilding the warehouse or DC from the ground up. Implementing any of these strategies results in a leaner warehouse.

Tag, You're It! RFID Tracking

Sturdy and versatile, pallets are a permanent fixture of warehouses and DCs. Now there's another reason for facilities to value their pallets: They can help track inventory. The more efficient workflow that results from this capability is a hallmark of lean logistics.

Diakinisis, an Athens, Greece-based 3PL, utilizes Radio Frequency Identification (RFID) tags and interrogators to track about 1,300 pallets each day at its distribution center. The technology provides 100-percent traceability from the time pallets arrive at the DC until they leave.

In November 2007, Business Effectiveness, an Athens-based RFID systems integrator, installed equipment supplied by Alien Technology, a Morgan Hill, Calif.-based provider of RFID products and services, at Diakinisis' facility.

Diakinisis uses the RFID technology for one of its clients, a global food and beverage company. The project represents one of Europe's first full-scale RFID installations in a fast-moving consumer goods DC environment.

"Diakinisis has devoted an entire DC specifically to this customer," states Scot Stelter, director of product marketing for Alien.

Diakinisis chose to implement cutting-edge RFID technology as a way to differentiate itself from competitors. The RFID system saves labor and time because workers no longer manually scan bar codes to identify pallets. The technology also provides the food company with greater and more accurate visibility of goods in transit.

How It Works

When a pallet enters Diakinisis' 1.2-million-square-foot DC, a worker scans the bar-code label that was applied by the food company. This label is then associated with an Alien Squiggle tag affixed to the pallet.

Next, a forklift outfitted with an RFID interrogator and computer picks up the pallet, capturing the tag's ID. The forklift's computer communicates with the warehouse management system (WMS), which directs the forklift operator where to move the pallet.

To ensure pallets are delivered to the correct place, each location is identified with either an Alien M tag glued to the concrete floor, or an Alien Squiggle tag applied to the rack.

"Most warehouses use the Squiggle tag," explains Stelter. "They use the M tag for difficult-to-tag items because it has a larger surface area."

The forklift reader captures the floor or rack tag data, and the computer then confirms the location and communicates back to the WMS that the pallet has been delivered.

In addition to improving speed and efficiency, the technology ensures accuracy. If the forklift operator attempts to place the pallet in the wrong location, the computer screen freezes, preventing the operator from proceeding to the next task.

Diakinisis has also affixed Alien RFID tags to the trucks that pick up pallets at the loading docks and deliver them either to other DCs or directly to stores.

An RFID portal designed for exposure to the elements reads the RFID tag number of every pallet as it is loaded onto a truck. This information is cross-referenced with the data in the WMS. In the event of a discrepancy, a light stack displays an alert and a siren sounds.

As a result of using RFID tracking, Diakinisis has achieved 99-percent pallet traceability; a 25-percent improvement in pallet putaway speed; a 40-percent improvement in pallet pickup speed; a 20-percent reduction in overtime; and an 80-percent reduction in shipping errors.

Diakinisis is working to reduce shipping errors even further, but "human involvement creates the potential for error," Stelter explains.

In this situation, the pallets do not come into the DC pre-tagged. When they arrive, workers scan the bar codes and apply the RFID tags to the pallets.

"There is a chance that the wrong tag will be applied," Stelter says. "It is also possible for damage to occur to tags along the way, in which case employees might revert to manual or bar-code identification."

To further improve efficiency, Diakinisis recently removed a step. In the past, one forklift placed pallets in a spot where another lifted them to the racks. Now, forklifts take incoming pallets directly from the trucks to the racks.

It may be as simple as knowing where inventory is, but RFID is increasing efficiency, taking warehouses and distribution centers a long way toward becoming lean.

Tanking Up: Hydrogen Fuel Cell Forklifts

Forklifts are the key to keeping warehouses moving. But what keeps the lift trucks moving?

In a conventional electric forklift, the energy used to drive the truck is stored as electricity in a lead-acid battery. In a fuel cell-powered forklift, energy is stored as hydrogen gas and converted into electricity as needed.

Using fuel cells in high-throughput warehouse applications helps improve warehouse productivity, lower operating costs, and reduce waste products.

Hydrogen fuel cells offer greater productivity because they can be rapidly refueled—in several minutes versus several hours for electric forklifts—eliminating the need to change batteries.

In a three-shift operation, three batteries plus a charger may be needed per forklift, as well as room to store and maintain them.

Warehouses can reduce cost and labor by eliminating the need to purchase batteries and chargers. And because hydrogen is the most plentiful element in the universe, availability isn't a problem.

Another advantage to hydrogen fuel-powered forklifts is that the voltage delivered by a fuel cell remains constant. Unlike battery-powered forklifts, which slowly decrease in power as the battery weakens, fuel cell-powered vehicles do not experience performance degradation until the fuel runs out.

Lab Work

In early 2007, Greene, N.Y.-based forklift manufacturer Raymond Corporation was awarded a two-year $750,000 contract from the New York State Energy Research and Development Authority and New York Power Authority to research hydrogen fuel cell applications in electric forklifts.

Since then, Raymond has transformed its manufacturing facility into a working lab where the company operates and studies hydrogen fuel cell-powered trucks.

As part of the process, Raymond has developed the infrastructure for bringing fast-fill hydrogen refueling systems, which are traditionally installed outdoors, inside the facility.

The goal of the research program is to study how hydrogen fuel performs in electric forklifts and demonstrate the safety of a hydrogen-fueled forklift environment.

The research program involves three steps.

First, establish a working indoor refueling system that meets all required code and standard requirements. Next, operate four hydrogen fuel cell-powered lift trucks at the factory, running each truck 24 months. Finally, monitor the performance and hydrogen consumption of the trucks as they do real work in the facility.

Raymond has found that the fuel cell system is no more complicated than traditional electric forklifts. Both are computer-controlled and have monitoring equipment.

"For this technology to succeed, we need reliable fuel cell systems," explains Steve Medwin, Raymond's manager of advanced research. "We don't want fuel cell systems that will adversely impact the reliability of our trucks. If the fuel cell system goes down, it has to be pulled out and replaced with a battery. We are working to address these issues."

The Results Are In

By the end of 2007, Raymond had compiled some preliminary findings on performance, refueling time, and forklift design. For one, hydrogen fuel cell trucks maintain performance comparable to battery-powered trucks. For example, the braking distance and maximum travel and lift speeds are equivalent.

Refueling time is significantly reduced, however. It takes only two minutes to fill the hydrogen fuel-powered trucks, compared to the 20 minutes it takes to remove and replace a battery from the same truck model. In addition, drivers are pleased with the consistent performance of the fuel cell-powered trucks.

"We have made a lot of progress," says Medwin. "We have trucks running in the factory, which allows us to identify and troubleshoot issues that arise with the different units."

Raymond is continuing to research other areas, including hydrogen consumption and refueling frequency; operation of the hydrogen infrastructure; reliability, maintenance, and repairability of the fuel cell systems; and how the voltage delivered compares with the specifications for all the electrical components and options on a truck.

Efficient, plentiful, rechargeable, and clean, hydrogen fuel cells provide a jolt of green.

Making a Mark: Environmentally Friendly Labeling Inks

Warehouses with limited green budgets might consider using recycled and environmentally friendly supplies and packaging. One affordable and immediately rewarding option is replacing printing label ink with a green alternative.

One vendor offering "green ink" is Wood Dale, Ill.-based Videojet Technologies. Its variable data printing inks are made from environmentally friendly or benign fluids. Products include drop-on-demand ink jets, thermal-transfer overprinting, and laser marking systems.

"We have been offering green and sustainable inks for primary and secondary packaging for more than 10 years," reports Scott Prochaska, Videojet's product manager of supplies.

The inks, many of which are water-based, can be printed on kraft corrugate, the material used for most secondary packaging.

Variable data inks are comprised of three components: the colorant (what you see), the binder (which adheres the colorant to the surface), and the solvent (the fluid in which the colorant and binder are suspended).

Warehouse staff can also preserve the ink for recycling. The print heads of the larger-character printers used in secondary packaging are purged periodically for cleaning, but when an inefficient printing technology is used, ink can be lost during purging.

Frequency of purging depends on the environment, but under some conditions, such as printing on high-fiber corrugate, it may be necessary every few hours.

By using—and recycling—green printing inks, warehouses can reduce their impact on the environment without a lot of effort or expense.

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