Cost Reduction in Logistics Management Helping You Save Up To 27%
Firstly, we identify the costly mistakes that your company might be making right now.
- Allowing the status quo to be accepted as best practice
- Not having effective production measures of operation
- Not minimising touches and non value added processes
- Ignoring mistakes, returns, slow moving and unsalable product
- Poor use of warehouse stock locations
- A lack of strong colour coded signage to communicate operations
See how much you could be saving on your logistics right now.
LITTLE KNOWN COST REDUCTION MEASURES
Our decades of experience and trusted relationships help you improve efficiency and reduce costs. Here’s how:
Don’t turn your back on the warehouse layout, review it regularly, depending on your business (6 to 12 months)
What to ask yourself:
- What are my fast moving stock lines?
- Where are they located, how far does the fork or picking trolley have to travel to access these products.
- Are the warehouse bays/ locations / transport areas CLEARLY labeled for any staff member to walk into your operation to understand?
- How are your orders picked?
- Do you prioritise country orders before metro?
- Do you pick 1 order at a time?
- Do you batch pick orders to increase efficiency?
- Do I have slow moving stock in a prime location e.g. close to production bottom bay, if yes consider relocating to a top bay and out of the main pick path area?
- What type of picking solution are you using and is it aligned to the profile of product?
- Pallet on a fork – driving up to bulk piles and loading pallet
- Trolley on wheels – various sizes
- Rolling cage trolley
- Pulling bulk pallets to a central area and bulk pick orders
- There are many different methods of picking and we suggest to question, explore, experiment and then measure each solution to find the most efficient solution for your operational profile.
- Physically follow the product from start to finish and ask yourself is there any touches, processes or movements that you can reduce or eliminate?
- Can you move the product between one processes to the next in a more efficient way?
- An example was loading a B double truck piece at a time which was being billed at an hourly rate.
- The $200k saving was generated by simply using cages to contain the product instead of loading every roll; the client now loaded double pallet cages.
GLOSSARIES / LIST OF CONFUSING TERMINOLOGY
- Travel – when a product is moving internally from a place that could be the pallet bay to a production machine then to a picking area to a dispatch area.
- Stock location – The place where your raw materials, finished product or completed order may be physically located in your warehouse but ideally an identifiable location system.
- Logistics – physical movement and handling of product encompassing point of origin to the point of consumption. However we can break it down into chunks and focus on each piece of physical movement.
- DC – Distribution centre
Cross dock – The practice of unloading materials from an incoming vehicle and re loading directly into another waiting vehicle and or consolidating with part B of the order then into the outbound vehicle.
- SFP – Shelf friendly packaging is packaging that allows product to be place directly onto a retail shelf in a salable presentation.
- Cost to serve – the total cost to receive, process order and prepare goods for dispatch
- BER– Beyond economic repair
- Bill of material – list of components , parts required to manufacture a product
- Pull model – To customer demand
- Push model – Estimated and forecasted then pushed through the supply chain
- WMS – Warehouse management system is software system to optimise the movement and storage of materials within a warehouse. The WMS is dependent on a set of rules that are created.
- Put away rules – A set of rules that dictate locations of material to be located in the most optimal way considering zones, travel distances, and bay heights, with additional rules such as a high turnover item is close to the manufacturing machine or dispatch dock.
See where you are wasting money with our bill and contract review
HOW TO EVALUATE YOUR INTERNAL LOGISTICS PROCESSES
From your draft drawing of the process mapping transfer to one of the following options:
B/ Long roll of butcher’s paper hung on the wall.
Select a mix of people including actual people involved in the process to sit in on a brainstorm session.
Nominate a writer to mark up all the ideas and questions.
Some examples, thought provokers below:
- Where is the product stored in relation to its frequency of use?
- Is it a fast moving item, raw material?
- If it is a fast moving item is it in close proximity and easy to access?
- Or is on a top level bay, long distance from the next step in the process?
- How is the product moved?
- Fork lift
- Pallet jack
Touches, movement, handling
- Is there touches and or movements that are not needed?
- Can you make or prepare the order at an earlier stage of the process, or batch prepare so as to eliminate extra sorting and handling close to the end of the process?
Agree on some or all of the reviewed process experiments.
- Go and try the suggested improvement and call them experiments and not improvements as staff may feel like they are being shown up for not thinking of these ideas. However people like experiments and it’s less threatening and doesn’t sound like a big change or permanent.
Measure and monitor
- Measure each step, the throughput, use stopwatch whatever it takes to accurately measure each step.
- Breakout it down into chunks so as you have clarity over each individual touch or process.
- Create a VISUAL process and share it with all staff who are involved, and display laminated A3 visual process cards at each section
HOW TO UNDERSTAND YOUR OPERATION AND PROCESS FLOW
Physically follow the product from start to finish draw a simple cell and stick model on A4 or A3 notepad.
Walk back through the process with some of the operations staff who are part of the process to ensure you have not missed steps.
HOW BENCHMARK COST SOLUTIONS CAN HELP YOU BUY BETTER
- We have had 20+ years experience in warehousing and operations
- Financial and operational improvements backed up
- Check and maintain good practices
- We aim to facilitate our client’s vision