How to Make Distribution Warehouses Smarter
Implementing new technologies can make warehouses more efficient, intelligent
HVACR distributors work long and hard to ensure their warehouses are efficient and mistake-free. While achieving this goal has traditionally been an arduous process, new technologies are helping distribution centers become more intelligent in ways many never dreamed possible.
“You have to have advanced technology in a warehouse, but it is equally important to have people who know how to use it,” said Christina Fennell, director of logistics, Johnstone Supply. “We have RF [radio frequency] scanning capabilities in each of our warehouses and have implemented advanced data structuring. Finding where everything in the warehouse is located, quickly, is key.”
WHAT’S BEING USED
Fennell mentioned that Johnstone Supply is utilizing RF scanning technology, which allows employees to use mobile barcode scanning units to indicate the location and number of items in a warehouse. The user then confirms a selection by scanning a bar code on the item. It’s a smart advancement for warehouse technology and one that US Air Conditioning Distributors has also implemented.
“We’ve employed the use of RF scanners,” said Jack Scarsi, vice president of operations and finance, US Air Conditioning Distributors. “Each warehouse associate has a scanner with a unique user ID attached to it. When an associate gets an order to pull, he scans the barcode and pulls the order. We track everything by bin, and the scanner helps to provide real-time information to the person pulling the order.”
Utilizing these scanners has reduced stockouts — a situation in which an item is out of stock — over the years, added Scarsi.
“We also incentivize warehouse staff to use scanners whenever they move a box or relocate product,” he said. “They get a point for each time they hit the scanner trigger. With that, we have an incentive program for getting the most clicks. We add up every time someone receives, relocates, or picks an item, and the scanner records the user’s ID. We rank people by action at the end of each quarter. The bonuses are small, but the competition is heated. People want to be No. 1 in each category. It also encourages use of the scanner. The byproduct of that is we get a really accurate inventory count.”
All the information in the scanners is part of the company’s Enterprise Resource Planning (ERP) system. If the scanners go down, someone in the warehouse could go to a computer and look up a part number and physically locate the bin and pull the item.
“We have a 215,000-square-foot warehouse, so it really is like a giant maze in there,” said Scarsi. “Physically looking through bins would be a long, tough process.”
Neuco Inc. has implemented the use of a conveyor belt system in its warehouses — a process that Jon Neustadt, vice president of Neuco Inc., said has helped productivity and efficiency.
“We didn’t do it for the sake of efficiency, but that’s what we got from it,” said Neustadt. “Our people were running back and forth doing a great job, but now, with the conveyor system, we can bring product to them much more easily. It allowed us to have a smarter vision of how to move product and where to move it to. We are in transition between warehouse managers, so this allows us to do a search, and the new manager can quickly and properly learn what we are doing. We are moving from an alphanumeric storage philosophy to slotting based on movement.”
One aspect of implementing new technologies that must be taken into account is the effect it can have on workers. There are, of course, the instant concerns for job security that crop up when things change, but Neustadt said things go over much smoother when management is clear and explanatory to employees.
“We met with employees before [we put in the conveyor belt system] and explained what we were doing and why,” he said. “We weren’t doing it to reduce our headcount. A lot of it was communication before, during, and after. We spent a lot of time in the warehouse when we went live with the system. You had to have eyes on it to make internal process changes and adjustments. You also need to reach a certain volume to have a payback. Luckily, the system caught on rather quickly. We told everyone in the warehouse that if they didn’t want it to work, then it wouldn’t. For the system to succeed, the users need to use it as intended. When we hit the mark, we want employees to tell us, but if something misses, then we want them to tell us that, too.”
Scarsi said there was definite trepidation when US Air Conditioning Distributors switched to the RF scanners.
“In the beginning, when we implemented the scanners, there was some apprehension,” he said. “Long-timers were a bit apprehensive, but the benefits became apparent quickly. People knew where to find stuff and could more easily locate obscure parts. You don’t need to pull out a book because the scanners give real-time info. They get a release and scan the barcode, which tells them where to find the item order in the warehouse.
“One example is that we recently brought a new person on board, trained them, and had them running in a much shorter window than it would have taken previously,” continued Scarsi. “Having what amounts to a hand-held computer at their disposal is a huge benefit.”
Fennell added that employee reception also depends on the presentation of the technology.
“You must demonstrate that we aren’t replacing old knowledge, but are instead enhancing it,” she said. “They [the employees] know they are useful and important.”
Implementing technologies like RF scanners and conveyor belt systems has clearly been beneficial for HVACR distributors, but they insist they’re persistently seeking tomorrow’s technologies.
“Our software vendor lets us know when newer versions of scanners come out and informs us of all the new things we can do with them,” said Scarsi. “The scanners we use are really mobile computers. They need to be able to withstand a fall from 15 feet and operate in the rain for a while, if necessary.”
Fennell believes that benchmarking, networking, and communication are crucial to staying on top of what is happening in the industry.
“I hold a warehouse conference every year to go over what we can do better, what is bothering our employees, and how can we streamline things,” she said. “We constantly pose questions to our workers, ‘How can we improve and be more efficient?’ HARDI conferences are also important, as is talking to people and seeing what is going on coast to coast. The great thing about our people is that they aren’t afraid to ask questions and are always looking for answers.”
Attending trade shows can also be a great way to see what is available now or just over the horizon. Neustadt said his team is particularly interested in these events.
“There is a warehouse automation show in Chicago each February, and it is fun taking members of our warehouse leadership team to that,” he said. “They’re like kids in a candy store. They look at a new ways to process packages and discover different ways to weigh them. Whether or not you go with the technology on display, it opens up everyone’s eyes on new ways to do things. It’s a lot of fun. As much as the office people will have ideas, it’s the warehouse guys who make it work. It allows them to take a fresh look at everything.”
As for what is on the technological horizon, it’s tough to know what exactly is coming next. Still, distributors know what is on their wish lists.
“When you look at Amazon warehouses, Wal-Mart warehouses, and any other major retailers, you can learn traffic analysis for where we should place items and what shelving location will improve response times,” said Scarsi. “Higher-moving items should be closer to the door. It would be great to have that technology to help tell us where to stock items. Maybe someday we’ll implement a GPS-type device in the items so we know exactly where they are, kind of like a ‘find-my-iPhone’ type of deal. I would also like to have some sort of RFID [radio-frequency identification] on each box, so we can do an instantaneous inventory count with the push of a button.”
Fennell would love to see scanners that can be more easily accessed and moved around.
“I would love to see hands-free scanners that are more affordable and can improve warehouse functionality,” she said. “That kind of thing may already exist, but it hasn’t trickled down to us yet, and I think that would be a great help.”
Publication date: 8/15/2016