The good news is that, over recent years, operations inside the warehouse have become increasingly streamlined. The bad news is that there is now a considerable risk that the benefits delivered by new warehouse management procedures will be dissipated in the yard outside. Add this to the significant shortage of drivers and the looming Working Time Directive (WTD) and there should be no doubt that supply chain managers are facing new obstacles in the efficient running of their operations.
The question is, however, whether they are responding as effectively as they might to this challenge.
Of course, managers can recruit more drivers – if they can find them – but additional drivers, without dramatic change in transport and traffic procedures, will be no more than a very short-term solution. Recent independent reports have identified that on average drivers spend a clearly unacceptable 35% of their working hours loading and unloading. Merely employing more drivers to sit in a yard can hardly be the answer.
Instead, the emphasis must shift to increasing productive time within the transport process and this broadly breaks down into two issues. One – the requirement to reduce empty miles run – is slowly being tackled through the use of routeing and scheduling technologies as well as backhaul initiatives. The other area of concern, however, has yet to be addressed by many supply chain managers and this is the use of drivers’ time.
While acknowledging that there has to be a percentage of “down time” when drivers are preparing for a trip, clocking off and resting, vehicle turnaround time – the loading and unloading process – remains shockingly high and will be unsustainable once the WTD bites.
Until now, warehouse site managers have sought, where possible, to reduce vehicle turnaround time by investing in stand trailers and by using teams of warehouse staff to pre-load and unload. While this helps drivers make a quicker getaway, the cost of the extra trailers has to be weighed against the benefit of faster throughput. Furthermore, the approach is difficult to maintain on multi-user sites accommodating the trailers of a number of competing suppliers.
Fortunately, there is a further option. This is to design and manage the warehouse site to streamline turnaround processes – an obvious solution perhaps but one which has largely eluded managers without the tools to test alternative procedures in a risk-free environment and see for themselves the impact of one change on another.
There are three key factors driving turnaround time:-
lThe physical layout of the site – its road network, number of parking positions, refuelling and wash stations – and how these should be located in relation to one another to reduce congestion.
lThe phasing of activity to ensure that movements are as evenly spread through the day as possible.
lThe decision-making process that goes into scheduling vehicles onto docks.
The typically long, rectangular boxes with anything up to 100 bays that appear to be a trend in new-build warehouses, in theory prevent queues of vehicles waiting to unload. However, this potential benefit may be lost because the sheer size of the facility can mean that it takes much longer to put product away in the correct location. Meanwhile, the dock, of course, is not usable again until this has been completed. As a result, dock allocation decisions, based on the products carried by the vehicle as well as their destination in the warehouse, are increasingly becoming a critical factor for managers to handle.
There are some signs that more companies are beginning to recognise the importance and potential of driving down the turnaround time and the Warehouse Traffic Flow Module that we have developed as an extension to our CLASS simulation and modelling tool is now increasing in demand. As a decision support tool, simulation is unique, delivering the unparalleled advantage of being able to test any number of options in a risk-free, virtual environment as well as the power to clarify inter-dependencies of activity across the whole site.
Third-party logistics provider Exel is a long-standing user of the module, most recently on a composite site in the South-east when it was being prepared for a retail client. The infrastructure and layout of the site were already fixed but the question was the capacity that could be successfully handled there.
A three-day modelling project produced initial results strongly suggesting that the site simply could not cope with the number of vehicles necessary to carry the volumes planned. Further experimentation, testing options to remove certain product groups and use a number of the docks as temporary parking bays – both ideas that had seemed reasonable in theory – proved not to work once they were simulated. The number of vehicles on-site at peak times continued to exceed maximum capacity.
Through Exel’s work, the client, now alerted to the problem before the operation went live, had the opportunity to adjust its network and look for additional warehousing to support the operation. The possibility for Exel and its client to alter the operational parameters of the site in this case were clearly limited. Not so, however, when a major grocery multiple used the traffic flow modelling technology to help design a new warehousing centre on a greenfield site. There were several issues the company wished to trial. A recycling centre was to be key to the site but its location, access route and building form were in question. There were 300 staff on each shift, sufficient in themselves to create congestion around the gatehouse area during the handover periods, and the company needed to know that the parking spaces and docks it had planned would be able to handle projected traffic growth up to 2009.
The outcome of the Traffic Flow modelling would then form the basis of the warehouse design, its size and location within the site, enabling the company to make and justify a planning application for a development that it could be certain would work to optimum efficiency. In this instance, the exercise confirmed that, by and large, the site would cope with the volumes forecasted. Nevertheless, it also suggested that there was a strong likelihood that the number of docks would not be sufficient in the future and the warehouse was therefore designed with the potential to increase the number of docks without significant and costly re-engineering.
Sainsbury’s has also recently examined traffic flows into and around its major distribution centre at Rye Park, North London. Limited bay areas outside suggested insufficient capacity to cope with throughput once the operation inside was automated and it was critical that Rye Park could generate sufficient product flow for onward distribution to the company’s large new fulfilment centres.
There were four phases to the project. The first examined the flow of traffic arriving at the facility and the last assessed the implication of increased throughput on traffic flow around the building. Examining various options for handling supplier vehicles and its own fleet, Sainsbury’s identified the impact these would have on gatehouse queues, on-site congestion and parking. As a result, site bottlenecks were identified, minimum order quantities established, an optimum number of new trailers ordered and delivery schedules adapted to achieve a better balance of activity across the site.
In this case, Sainsbury’s understood that it was as important for traffic to get onto and out of the site efficiently as it was to generate maximum throughput in the warehouse and they used simulation to gain the complete picture across all activities.
However, in many cases, managers of large and busy distribution centres make assumptions about the physicality of the site, the management of traffic movements and the impact the developments in warehouse operations will have on the yard. These assumptions usually under-estimate the knock-on effect of change, delays and other factors in the supply chain. Already the price of this in terms of direct costs, vehicle use and customer service is considerable; the WTD may make it a price too high to pay. n
Chris Holmes is business development director of Cirrus Logistics. Tel: 01252 823154.