January 14 2014
By: Staci Cretu, M.S.
Marketing and Communications Manager
As many food and beverage distributors and manufacturers already know, food and beverage distribution is a high competitive business. Highlighted in the January issue of Modern Materials Handling Magazine, progress is being made to cut operational costs while improving customer service levels in effort to stay competitive in a consumer driven market. According to the article, “These initiatives are driving leaner approaches to inventories, staffing levels and fulfillment speeds while companies strive to achieve regulatory compliance.”
This article featured several discussion topics centered on key pain points for food and beverage manufacturers and distributors and the efforts being made to operations. Dan Labell, president Westfalia Technologies was featured in the topic surrounding storage. Automated Storage and Retrieval Systems (AS/RS), like the ones Westfalia offers, can help a such operations ensure the right product gets to the right place quickly while reducing required storage space.
At the very least, a facility accustomed to floor stacking should consider racking, says Dan Labell, president of Westfalia Technologies. With floor stacking, it might be necessary to move 12 pallets to get to the one you need in the back. Racking creates more discrete storage lanes, so that if stored four high and four deep, there are 16 pallets in one bay with access to four discrete lanes. Utilization and inventory accessibility are much better when racked, adds Labell. Floor stacking storage will result in utilization of about 75%, but creates a lot of rewarehousing, or unproductive moves. “A lot of money is spent trying to do more with the space than is practical,” he says. “The customer is trying to get from 75% to 85% utilization, but they pay a penalty in double or triple handling, or end up with aisle storage. They do get more inventory in the cube, but it comes at an operating cost. Customers are surprised all the time when they realize how many wasteful moves they’ve been making.”
With an AS/RS, on the other hand, it’s common to achieve 90% utilization, even in multiple deep configurations. Single deep systems average closer to 100%, says Labell. A case-handling AS/RS creates narrow aisles with high density and discretely handles each unit to reduce damage. Automation also provides easy tracking of first-in, first-out (FIFO) or first-expired, first-out (FEFO). As business grows, it is possible to expand automated storage systems with additional storage modules. Having already invested in the automation, additional storage locations are relatively inexpensive. Whether automated or not, if storage locations are linked with actual production and consumption rates, a warehouse does not need to be full just for the sake of utilization. Labell says, “The thinking is that more storage will result in more inventory, but that’s not necessarily the case if it’s well managed.”