SUMMER 2012

10 THE DISTRIBUTOR’S

10 THE DISTRIBUTOR’S LINK Robert B. Footlik Robert B. Footlik is a licensed professional engineer. A graduate of Illinois Institute of Technology, he has worked extensively in the fields of material handling, plant layout, packaging and management systems. The firm of Footlik and Associates serves as staff warehousing and materials consultants to six trade associations. Footlik writes for 12 trade and professional journals. Footlik and Associates is located at 2521 Gross Point Road, Evanston, Illinois 60601; phone 847-328-5644. IF YOU REALLY TRUST THE WAREHOUSE (PART 1 of 2) Everyday your customers, staff and you trust the warehouse workers to be efficient, accurate and reliable. If this trust is real then every order is on time, filled properly and 100% perfect in every respect. Everything in a service business is built on this trust and generally it is not misplaced. But have you ever considered how this can be turned into a more efficient way to operate Follow the path of a typical “line” on an order. The picker travels to the stock location, removes the item from a shelf, places it on a cart, travels eventually to a checking station where the goods are examined for accuracy then the cart or product goes to a packing table where it is placed into a carton, paperwork is provided, the carton is sealed, labeled and UPS or FedEx shipping labels are added. All this is just for a case or box count item. For many Fastener Distributors it gets even worse if the materials have to be weigh counted. Under typical warehouse operating scenarios a bin is removed from the shelf, taken to a scale, counted and then returned (eventually) to the right location in the warehouse. The end result is that 90% to 95% of the time the picker is walking and the goods are being handled multiple times. While there exists materials handling equipment to move the product to the picker this equipment is expensive initially, complex to maintain and often inflexible in terms of throughput and cube utilization. Before investing in fancy solutions why not build on what you already have. Instead of all the steps involved today instituting “Pick-Pack” where the goods are removed from a shelf (preferably using a batched order scheme), placed in a box, sealed and shipped. The savings in time and effort can be enormous with a Return On Investment (ROI) measured in days not years. The concept seems simple, so why have so few Fastener Distributors embraced it The most common reason is that management just “doesn’t trust warehouse to get things right. The only way to eliminate this fear is to start with your beliefs and then develop the program a piece at a time. Trust But Verify One excellent approach is to use well proven statistical sampling techniques to “know” what is going on. For an academic understanding of how this works go to: http://en.wikipedia.org/ wiki/Acceptance_sampling. A more pragmatic approach is to accept that for most distribution operations a 4% sample of the finished, packed outbound orders will provide about a 97% level that what is observed is “truth.” This is done by cutting open random boxes at random times and verifying all possible problems. If an error is encountered in this initial sample then pull another order, possibly from the same person or team in the warehouse. Should another problem be encountered this is an indication that a higher level of sampling is required and you might go to a 5% or 6% sample until things level off through education and training. please turn to page 118