Copperberg’s editor Adrian Cirlig and content writer Radiana Pit discuss the importance of warehousing and your logistical networking and how ecommerce is changing what was once a straight-forward channel. 

Getting the right parts on time has always been critical for field service technicians, and for that purpose, warehouse and logistics design is essential. But many industry players are struggling to meet customer demands in the era of digital commerce. New delivery standards may require significant investments in staffing, facilities, and technology—and such an endeavor is not always an option for most businesses.

The Importance of Service Logistics

The rapid development of e-commerce has taken many organizations by surprise. Now, logistics companies are largely unprepared to adapt their operations to meet expectations in terms of quality, capacity, and speed.  

However, there is a solution to meeting delivery expectations at the lowest cost possible: optimal network and warehouse design. 

Logistics network and warehouse design is mainly concerned with delivering goods to customers and satisfying their needs with limited resources. This is why coming up with an optimal design holds great strategic value. But devising an optimal model is no easy feat, especially since most models stop short at minimizing costs. However, logistics professionals aim at optimizing their networks in a way that maximizes not only profit but also speed and sustainability. In order to achieve such objectives, comprehensive designs must take into account the number, location, role, and size of your facilities, which plant/vendor should produce which product, the raw materials and finished products that flow between facilities, and more. 

 

Location—the key issue in facilitating optimal design 

Determining the right number and size of your warehouses and/or plants is challenging enough, but getting the location wrong can be extremely detrimental. 

However, the secret to getting the location right is to think of it as the only way to close the gap between your company and your customers. The closer the location is to your clients, the faster your goods will be delivered—and that's what today's impatient society expects from you. 

So, start your design process by considering your location objectives and then identify the key factors that can make or break your network. 

 

So, what makes a warehouse great? 

 According to Rudolf Leuschner, Associate Professor at Rutgers Business School, what makes a warehouse great is: 

• Speed or the ability to ship out as much product as possible by ensuring the shortest distance between the product and the shipping dock; 
• Redundancy, which consists of multiple checks built into your distribution system to ensure that the right products are delivered to your customers; 
• Productivity or the ability to push out as much product as possible out of your distribution network. 

With these goals in mind, you can create a seamless warehouse flow process that consists of the following essential steps: 

Unloading → Storing → Picking → Packing → Staging → Loading  

Each step should be accurately timed with the help of a reliable warehouse management system. 

But beyond warehouse management software, you should also think FAST. If you're not already familiar with it, the FAST concept is a layout design solution that will help you to ensure that your locations are close enough to each other to enable seamless workflows. However, placing your activity-locations too closely can clutter your processes and result in highly inefficient outcomes. 

So, when it comes to FAST, you should focus on: 

• Flow to ensure a logical sequence of operations within your warehouse based on the location of each of your activities; 
• Accessibility to be able to receive and issue products in pallets, batches, or truckloads; 
• Space to make optimum use of the cubic capacity within your warehouse; 
• Throughput to reduce inventory risks such as bulk, security, compatibility, and more. 

These best practices for warehouse design will definitely help you come up with a proper layout that enables the rapid and seamless handling of products. But when it comes to network design, what are the most important aspects that ensure perfect order and superior performance? 

In other words, what makes a logistics network great? 

According to Edward Frazelle, President and CEO at RightChain Incorporated, an optimal network design/redesign process should consist of the following 10 steps: 

1. Evaluate your current network 
2. Design and populate your network optimization database;
3. Create network design alternatives, such as more or fewer hierarchies, multi-commodity flows, pooling opportunities, merge-in-transit, direct shipping, cross docking, and supply-flow optimization concepts; 
4. Develop your network optimization model; 
5. Choose the right network optimization tool; 
6. Implement your network model in the chosen tool; 
7. Consider alternative network designs; 
8. “Practicalize” recommended network structures; 
9. Compute reconfiguration costs; 
10. Make go/no-go decisions. 

To make the most out of this process, you should engage all stakeholders so that everyone is on the same page when you decide to jump-start your design initiatives. You should also enlist your stakeholders' help when looking for alternative network solutions, modeling transportation, comparing services and costs, and analyzing risks. 

Combining the efforts of those involved with data insights will help you accurately review model outputs and look at your options from a fresh perspective. 

Creating the perfect logistics network 

It goes without saying, but creating the perfect logistics network takes time and effort. However, you can set yourself up for success by aligning your logistics network with your business model and focusing on answering the following questions in a way that makes the most sense for your company: 

• How will a more responsive network enable growth? 
• Will network investments lower operating costs? 
• If operating costs increase, will the sales volume warrant the investment? 

By taking your time to reach the right conclusions, you will be able to find the ideal strategy to derive the greatest business value from your design initiatives. 

Last but not least, you will also need accurate data to kick-start your initiative. So, before you start designing or redesigning your network, list all of your products, stock points and sources regarding customer locations, set customer service goals, order processing costs and patterns by frequency, size, season, and content, and establish transportation rates and warehousing expenses. 

Are you ready to kick-start the design process? 

Although your old logistics network design might still be reliable, over time, it will become fragmented. This usually happens because territories change and ordering patterns alternate, which causes the network to lose its efficiency. 

So, it's vital for your company to review your network periodically and ensure maximum service in the most cost-efficient manner.

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Further Reading: 

• Read more articles by Adrian Cirlig @ https://www.fieldservicenews.com/adrian+cirlig
• Read more about spare parts and logistics in service @ https://www.fieldservicenews.com/Spare+parts+and+logistics
• Read Edward Frazelle's article on an optimal network re-design/design process @ https://www.mhlnews.com/global-supply chain/article/22039647/how-to-design-a-logistics-network-in-10-steps
• Read Rudolf Leuschner's article on what makes the perfect warehouse @ https://www.coursera.org/lecture/supply-chain-logistics/how-much-inventory-do-we-need-eJIeU
• Read more about FAST from the Logistics Bureau @ https://www.logisticsbureau.com/warehouse-design-key-factors-to-consider/
• Read more about Copperberg and their events @ https://www.copperberg.com/field-service/

UK handling supplier, Midland Pallet Trucks, suggests warehousing processes are affecting staff skill sets.

Company announce blockchain-led service platform with warehouse features.

With this addition to its blockchain-based platform, Serve have created a new paradigm in smart logistics and complete customer satisfaction. Reducing the distance between the warehouse and end-user improves the order fulfillment experience for all participants by shortening delivery times and reducing costs.  Businesses can now expand their footprint without the added infrastructure. Integrating this technology into Serve’s award-winning platform furthers its goal of becoming a global engine for commerce and last-mile logistics.

 

"Our mobile warehousing system distinguishes Serve in the modern, on-demand delivery and logistics industries,” says Serve’s CEO Shahan Ohanessian. “With the increased efficiency and optimization this brings to our delivery processes, businesses will be able to provide big-box capabilities and order fulfillment services to customers everywhere.”

Moody Haulage, a Northumberland-based logistics, storage and warehouse business, has improved productivity across its fleet, after deploying a telematics solution from Masternaut.

Fleet managers at Moody Haulage are using Masternaut’s telematics system for vehicle tracking, and monitoring idling and fuel usage. Operating across its fleet of vehicles, ranging in capacity  from 3.5T, 7.5T 18T rigids to 44T artic curtain siders, Moody Haulage has reported a huge uplift in productivity since Masternaut’s telematics solution was installed.

Masternaut provides Moody Haulage with reports on idling and fuel usage to illustrate how fuel is being used, and wasted, across the fleet. This provides Moody Haulage with the tools to educate drivers on how to save fuel and be more efficient in future. Since implementation the firm has achieved double-digit fuel savings, as well as better vehicle utilisation.

 

The technology provides a real-time view of Moody Haulage’s fleet at any time, giving fleet managers full visibility of all vehicles. Fleet managers and customer service advisors are able to provide clients with precise updates on time of arrival, advise on delays, and find the closest driver to a job. The system is also used to prove a driver did attend a job should there be a dispute.

 

Providing powerful routing capabilities, the system is also helping drivers and fleet managers to find the fastest route to customer locations across the UK.

“In the logistics industry, it’s vitally important to ensure we are on time and give our customers the most accurate information possible, and Masternaut has provided a system that does all of the above and more. It’s been totally accepted and embraced by the drivers and is well used throughout the business,” commented Caroline Moody, Business Development Director, Moody Haulage.

“We’ve saved money by reducing the amount of fuel used and improving our scheduling and journey routing capabilities, a return which means the system pays for itself. The accuracy Masternaut provides is unparalleled and as a result, we’ve seen a huge uplift in productivity and efficiency among our fleet drivers.”

Steve Towe, Chief Operating Officer and UK Managing Director, added, “Offering products configured for HGV and Vans from the same platform and shared service has allowed Moody Haulage to make huge gains in productivity and efficiency. We are delighted to support them deliver significant service improvements to their customers.”

 

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