Storage Equipment (I) - Pallet Racking

Basically, racking is one of the equipments that contributes to the storage system of the distribution centre, ensuring it to be well-designed by making use of the volume available, providing proper access to the stored goods through facilitating the throughput of goods as well as minimizing the distance traveled. Furthermore, the use of this equipment will also minimize the risk of insecurities towards damage and deterioration of goods.

There are several choices of racking medium depending on the physical characteristics; risks of hazard, deterioration and hazard; values of the goods. Furthermore, the capital availability of users, characteristics of the available storage methods and equipment as well as the stock and throughput levels must be taken into consideration.

Below are elaborations of several types of racking used by most warehouses and distribution centres throughout the world.

Selective Pallet Racking
This pallet racking is most generally used. This is due to it easy access to every load and flexible choice providing 100% selectivity to every load. This equipment is mainly for the best access and high-demand product. Although it delivers maximum access to stored pallets, it requires numerous aisles and aisle space, resulting in lower storage density than other form of racking.

A type of a selective pallet racking is the boltless selective pallet, which in-demand due to its tool-free assembly, fast and affordable price. However, initial savings can be offset by high replacement and maintenance costs as it is found that the open-back roll formed columns don’t withstand the impacts of fork truck.

Drive-through Pallet Racking
This type of pallet racking is used for storing pallets of a similar stock-keeping unit (SKU) or goods. In this racking, loads are supported by rails attached to vertical frames, and lift trucks are driven between the frames to enter the rack from either side to pick up or pull out pallets as pallets can slide backwards on a continuous rail, open at both ends, which thus, allowing ‘first-in, first-out’ storage.

Drive-through pallet racking is used when there are seasonal items moving quickly out of the inventory and when there are large amount of similar items that can be stored in a single pallet position. It is not encouraged using this equipment when storing a wide variety of loads in the rack. Although selectivity is forgone, storage density is improved due to the ability to store a large amount of similar loads in a smaller area.

Push-back Pallet Racking
The objective of the push-back pallet racking is to minimize empty pick faces or honeycombing. The ideal appliance of the racking will be where all loads in a row are alike and not critically in a ‘first-in, first-out’ stock rotation.

This racking has the same storage density as the drive-through racks and up to 90% more product storage than selective pallet racking systems, but with greater selectivity of 4 times more than the drive-in pallet racking. Due to these factors, it improves the speed of pick rates. Besides offering a large target for loading and unloading, it also maximizes space through storing a range of SKUs on different levels of lanes for convenient access of goods.

Here’s how it operates:

Loads in each row lie on a cart by forklift on an inclined rail sloping gently toward the front. When a new load is deposited into a lane, it ‘pushes back’ the loads already at the face and those behind. When the load is picked, the forklift takes out the front pallet, allowing the pallets on carts behind it to roll gently to the front of the rack, showing a "push back" momentum. The nested carts of the racking make position and retrieval of loads convenient.

Storage Equipment (II) - Automated Storage and Retrieval Systems (AS/RS)

AS/RS is an array of computerized routines for automatically receiving and shipping materials from defined storage locations without manual labor, generally used in distribution centers and warehouses all over the world. It generally include machines moving up and down one or multiple parallel storage aisles, receiving and shipping products and materials for distribution to internal and external locations.

It's advantages:

• Grant users with increased tracking and inventory control, plus greater flexibility having room for changing business conditions.
• Specialized construction and installation systems, providing seismic and rack supported buildings.
• Feed-in and feed-out systems, very high tolerance racking, automatic fire protection strictly controlled weight checking and load sizing.
• Systems comprising modular subsystems easily substituted reducing downtime and expanding the life of the whole system.
• Produces key reserves in inventory storage costs, as greatly improved both vertically and horizontally warehouse space utilization creating larger storage density.
• Reduces labor costs, lowering essential labor force necessities, improving workplace safety, and eliminating staff from complex operational conditions.

However, there are the disadvantages of it as well;

• Requires significant investments of a company's capital; Particularly for maintenance and updating of different subsystems. Also, capital expenses can tempt some business owners to cut financial corners, buying "bargain" systems that are ill-equipped for extensive, long-term use à end up costing far more in the long run
• Not without occasional frustrations for maintaining highly integrated systems; Requires knowledge, skills and experience.

However, interrupted AS/RS service extends from the measurable such as lost in manufacture and delivery revenue, increased labor costs for repair, to the intangible such as the shrinking workforce confidence in the company's operations as well as the client’ confidence.

Identification and Control Equipment (I) - Bar Code

Series of vertical bars and spaces representing numbers and other symbols; it is affixed to postal mail, retail store items and identification cards in order to identify a particular location, person or product number. The symbol usually consists of five parts: a quiet zone, a start character, data characters which include an optional check character, a stop character, and another quiet zone. Although there is no particular standard bar code, there are several different bar code standards (symbologies) serving different industries, geographic needs or uses. The most common bar code standards are; Code 39 (Code 3 of 9), serving in Identification, inventory, and tracking shipments; Interleaved 2 of 5, serving the shipping and warehouse industries; and Uniform Product Code (UPC) serving the Retail stores in sales checkout, inventory and such.

History traces back to its first patent for a bar code type product (US Patent #2,612,994), which was issued to inventors Joseph Woodland and Bernard Silver on October 7, 1952. This bar code was made up of a series of concentric circles described as a "bull's eye" symbol, and over time, has converted into today’s UPC bar code.

Bar code consists of information, called barcode data, or also point-of-sale (POS) data. It is automatically gathered as a consumer's purchases and place through a check-out. Massive volumes of such data is gathered every day by the POS terminals and processed before being very useful for marketing purposes, such as planning on pricing a particular product, or initiation of sales campaigns.

Barcode Reader

Bar code is read by a barcode reader, which is a stationary or hand-held input gadget used in capturing and reading information contained in it. Also called a price scanner or POS scanner, a barcode reader uses a laser beam sensitive to the reflections from the line and space thickness and variation before translating the reflected light into digital data transferred to a computer for immediate action or storage. A barcode reader consists of a scanner, a built-in or external decoder and a cable which is used to connect the reader with a computer.

Consisting of five basic types, the simplest barcode reader is the pen wand, which contains no moving parts. It is known for its durability and low cost. On the other hand, it can be challenging to the user, as it has to stay in direct contact with the bar code, held at a certain angle, and moved over the bar code at a certain speed.

Another type is the slot scanner which remains stationary when the item with the bar code on it is pulled by hand through the slot. It is normally used to scan bar codes on identification cards.

Also, there is the type of bar code reader, the CCD scanner, having a better read-range than the pen wand and is often used in retail stores. Normally, a CCD scanner has a "pistol" type interface and has to be held at most 2.5cm from the bar code. Although several readings are taken to reduce the possibility of errors every time the bar code is scanned, it cannot translate a bar code that is wider than its input face.

Furthermore, there is another type called the camera reader, or image scanner. It uses a small video camera capturing an image of the bar code before using sophisticated digital image processing techniques to translate the bar code. The camera reader can read a bar code from about 7.5cm to 23cm away and commonly costs less than a laser scanner.

Lastly, a laser scanner, either stationary or hand-held, does not have to be close to the bar code to do translate it. Regardless of orientation, it uses a system of mirrors and lenses allowing the scanner to translate the bar code, and can easily translate a bar code up to 61cm away. A laser scanning may perform up to 500 scans per second to reduce the possibility of errors. A specialized long-range laser scanner is capable of reading a bar code up to 0.9m away.

Identification & Control Equipment (ll) - Electronic Data Interchange

EDI stands for Electronic Data Interchange. It is the application to application transfer of business documents between computers. The transfer of files requires that the sender and receiver agree upon a standard document format for the document that is to be transmitted.

EDI is a new way of doing business. Many businesses are looking to EDI as a new, fast, inexpensive, and safe method of sending purchase orders, invoices, shipping notices, receiving advices, and other frequently used business documents. For example, Auto manufacturers use EDI to transmit large, complex engineering designs. Multinational firms use EDI to communicate between locations. And universities use EDI to exchange transcripts quickly.

EDI can also be used to transmit financial information and payment in electronic form. When used in this application, EDI is usually referred to as Financial EDI or Electronic Funds Transfer (EFT).

The Operation of EDI
EDI starts with a trading agreement between you and your trading partner. You make joint decisions about the standard to be used, the information to be exchanged, how the information is to be sent, and when information will be sent. The information can be sent through a direct connection (Point-to-Point), or through a VAN.

To send a document, you use your EDI translation software to convert the document format into the agreed upon standard. The translator creates and wraps the document in an electronic envelope and puts the ID for your trading partner on it.

If the information is to be sent Point-to-Point, the communications software sends the document directly from your computer system to your partners computer system. If a VAN is used, the communications software dials the phone number for the network and transmits the envelope containing the document. The VAN reads the ID on the envelope and places it in the correct mailbox.

Your trading partner's modem calls the network and retrieves everything in the mailbox. The EDI translator opens the envelope and translates the data from the standard form to their application's format.

If you attempt to do EDI without translation, you run a great risk of transmitting data that your trading partner will not be able to read. Your trading partners may use business applications on computers that are different than yours. The translator ensures that the data you send is converted into a format that your trading partner can use.

EDI Standards
EDI consists of specific data interchange methods agreed upon by standards bodies. EDI messaging protocols help ensure that data arrive as expected, and that corrupted or incorrect data are automatically detected and reported.

Advantages:

• Save Money
  The cost of paper and paper processing is incredibly high compared to a properly implemented EDI program. RJR Nabisco estimates that processing a paper purchase order costs the company $70. Processing an EDI purchase order reduces the cost to a mere 93 cents.
  
• End Repetition
  If your trading partner wants a copy of a document, instead of calling you they simply check their mailbox. This results in a great time savings from not having to copy and fax/mail copies of business documents.
  
• Save Time
  EDI also saves time over paper processing since the transfer of information from computer to computer is automatic. There is no need to re key information with EDI. And the chance for error drops to near zero, with no data entry.
  
• Reduced Inventory Costs
  The Automotive Industry effectively implemented Just-In-Time (JIT) inventory concepts with their suppliers through the use of EDI. Through this JIT method a company keeps minimal inventory on hand and continually re-orders and replenishes -- sometime several times a day -- directly from the supplier. The order and order status are exchanged between trading partners through EDI. The implementation of JIT can greatly decrease an organization's cost of maintaining inventory stock by reducing (1) warehouse-floor-space cost, (2) warehouse-personnel cost and (3) the cost of maintaining idle inventory.
  
• Improve Customer Service
  The quick transfer of business documents and marked decrease in errors allow you to do business faster and more efficient. KMart is an example of a retailer that implements a Vendor Stock Replenishment (VSR) program. With VSR, the KMart warehouse sends stock as their EDI system reports it and automatically bills the client. It can cut weeks from the order fulfillment cycle and ensures that product is always on the shelf.
  
• Expand Your Customer Base
  Thus with improved customer service, you can ultimately expand your customer base. Many large manufacturers and retailers are ordering their suppliers to institute an EDI program. So, when evaluating a new product to carry or a new supplier to use, the ability to do EDI is a big plus.

General Benefits
Many industries have improved relationships with customers and suppliers during the EDI implementation process.

Many companies re-engineer and reorganize supporting administrative processes, departments, and functions to take advantage of EDI. The re-engineering often significantly reduces personnel and administrative costs.

A major effort is being made in the retail industry to collect and analyze point-of-sale data to project customer needs, wants, and buying habits. If Quick Response in the retail industry is any indicator, having the right product at the right place at the right time will significantly increase sales volume and profit for a company.

Disadvantages:

• Too Many Standards
  There are too many standards bodies developing standard documents formats for EDI. For example your company may be following the X12 standard format, while your trading partner follows the EDIFACT standard format.
  
• Changing Standards
  Each year, most standards bodies publish revisions to the standards. This poses a problem to EDI users. You may be using one version of the standard while your trading partners are still using older versions.
  
• EDI is Too Expensive
  Some companies are only doing business with others who use EDI. If a company wants to do business with these organizations, they have to implement an EDI program. This expense may be very costly for small companies.
  
• Limit Your Trading Partners
  Some large companies tend to stop doing business with companies who don't comply with EDI. For example Wal Mart is only doing business with other companies that use EDI. The result of this is a limited group of people you can do business with.

Electronic Data Interchange Diagram

An Executive Briefing on EDI

• Company-A reconciles the invoice with the internal system, and transfers the payment information to the EDI software mapping routines.
• Company-A's EDI software converts the payment information into a Payment Order / Remittance Advice X12 data stream and transmits to its bank by way of the VAN.
• The EDI software logs to whom and when the X12 transaction was sent. If it does not receive a functional acknowledgment within a predetermined amount of time, it will notify the EDI software operator that there may be a problem with the transmission.
• Company-A's bank receives the Payment Order / Remittance Advice from Company-A and issues an Electronic Funds Transfer to Company-B's bank.
• The invoice has been submitted and paid entirely electronically.
  

*Note*
X12 Standards
X12 is the inter-industry EDI standard in the United States of America.

Value Added Networks
VANs are large networks, usually international in nature, which transport EDI information among participating trading partners. VANs offer services such as EDI packet transportation, conversion between different EDI versions and standards, audit trails, security, trading partner identification, education, and consulting. VANs can greatly facilitate a company's entrance into the EDI arena.

Problem Scenario

We will take Company ABC as an example. Company ABC has a warehouse that supports high-end retail products (mostly formal wear). It wants to implement transport equipment in its warehouse to enable better movement of products through fixed routes during sortation. Now, Company ABC is fretting over whether to use overhead conveyors or belt conveyors for their warehouse.

Solutions:
The answer is quite obvious actually. From the information for the two types of conveyors given in this blog, it could be seen that overhead conveyors is more suitable.
It saves space and doesn’t obstruct movement of personnel and other equipment as it provide continuous movement of materials overhead, as opposed to standard floor conveying systems.

It also ensures that the clothes are in better condition without folding it, and making it less crumpled as compared to belt conveyors. Products are needed to be folded and put in boxes or in plastic packaging before placing it on the conveyor belt. If the clothes are not packed, they might get dirty or damaged by the belts of the conveyors with the grease from it, staining on the clothes. Further more, the clothes might get stuck in the belt causing disruption to the system.

Additionally, it is economical as it makes use of the height of the warehouse building where the ground can be used for other activities. Unlike the belt conveyor, it only makes use of the ground, causing limited activities to be carried out in the warehouse.

Hence, the ideal choice will be overhead conveyor.

Case Study- New Balance Athletic Shoes

New Balance Athletic Shoe, Inc. designs and develops innovative, highly functional and reliable shoes. Based in Boston, MA, New Balance has three North American warehouses (Ontario, CA, Compton, CA and Lawrence, MA) that process 26 million pairs of shoes per year.

Needing to maximize productivity in order to move the millions of athletic shoes sold annually, New Balance looked to Abel Womack to select just the right equipment for each of its various warehouse applications.

Solutions:

New equipment and systems acquired includes:

• Counterbalance trucks for receiving
• Wire-guided swing reach trucks and pallet trucks for pick and put away in narrow aisles
• Wire-guided orderpickers for case picking
  

Facilitator's Question

What are the constraints of crane and hoist in operations?

ANS:
The constraints of hoist is that there is a need take the weight usage into consideration. For example, package hoist is most suitable for light to moderate usage. When handling with heavy usage, we must use built-up hoist. There is also a need to minimise ratio of dead-weight to payload of the handling equipment.

The major constraint of jib crane is that it is stationary and cannot be moved easily from one work area to another. It is designed for positioning a work piece or tool, rather than for moving a product along in the work flow like an overhead crane.

It is also unsuitable to use when there is a need for precise locating of heavy loads, a large area of hook coverage, or frequent use for heavy loads. Another disadvantage is that the hook coverage is limited to the boom length (typically a maximum of 20 ft). The hook operates along a boom which rotates about a fixed point.

Whereas for bridge cranes or for all cranes, the constraint is the problems encountered when operating it. Problems such as crane travelling too far before stopping as electric motor brakes are being used, like most cranes, the brake pads haven't been replaced. They require replacing or adjusting every 3 months.

Other problems include bearings wearing out too soon, parts availability problems, and brakes wearing out or not working properly.