April 2017 | How-To | Ten Tips

Optimizing Your Distribution Center Site

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Maximizing the efficiency of your distribution center (DC) site requires strategic planning and ongoing analysis. Stan Krawitz, executive vice president, founder, and head of Canada for real estate advisory firm Savills Studley, offers these tips to help you get started.

1. Select a site location with labor pool availability in mind. When selecting a DC site, it is critical to choose a location with a workforce that has the education and experience required to run your facility properly.

2. Align facility layout with inventory management operations. There should be a fluid flow from inbound inventory all the way to outbound staging and transportation. Consider the processes taking place within the facility when determining the location and proximity between areas.

3. Install the right lighting. Not all areas of a DC use light in the same way. Consider operations within the facility when selecting lighting systems. Cost-saving practices include installing timers that ensure lights are only used when needed, as well as using LED bulbs that minimize energy usage.

4. Ensure adequate space in staging bays. Take an organized approach to creating space for the outbound process. Allow for 50 feet of space from the dock to give employees enough room to stage for shipment.

5. Find and install proper racking. To maximize flow efficiency, the type, location, and density of racking should align with inventory carrying, pick practices, and order characteristics. Consider the product's needs and how you take it off the rack.

6. Refine pick strategy regularly. Business changes with each season and order. Being able to stay on top of order characteristics is critical to long-term efficiency. Conduct an inventory optimization study regularly and utilize data analytics.

7. Create transportation efficiencies. Schedule simultaneous outbound shipments to maximize your resources and utilize your transportation network efficiently. Increase visibility within a network and optimize the flow of goods by establishing advanced shipping notifications from the point that the purchase order is placed.

8. Consider crossdocking. Designate a particular area of the facility for staging or holding inventory based on your outbound requirements. Incorporate a strategic role for the crossdocking system to play within the warehouse ecosystem. This creates operational efficiencies inside the facility and increases speed to market.

9. Incorporate automation. Robotics and advanced retrieval systems can minimize labor costs and maximize work output. The supply of industrial robots will reach 400,000 units by 2018 and grow by a rate of 15 percent annually, according to the International Federation of Robotics.

10. Set up an area to test operations improvements. Before rolling out processes to improve operations, test the idea on a smaller scale to cultivate data and make necessary adjustments. When encountering issues such as quality control and returns, determining and executing solutions can be complex. Fine tuning strategies in a smaller designated area allows for maximizing efficiency before rolling out solutions across the entire facility.

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