Steep rentals demand more efficient use of space - World trend to reducing 'touches'

ALAN PEAT
CHANGES IN warehousing are more evolutionary than revolutionary, according to Martin Bailey, one of the country’s leading logistics academics for a large number of years, and now MD of the international logistics operation, Industrial Logistics Systems (ILS). “In the warehousing business we often tend to happily operate ignoring the rapidly changing environment around us,” he told FTW. “This is probably because there tend to be very few step changes in our industry – and the changing environment often gradually happens around us.” However, although change tends to be more a tonal variation than a complete change of tune, the warehousing world is still evolving, and Bailey related a few thoughts on what is happening in the industry. “Less space and higher costs are the first things that come to mind,” he said. “Rentals have climbed massively in the past few years. Typically we are seeing a 30% plus annual building/rental increase. This means that rentals for good warehousing space are rapidly approaching R40-to-R50 per square metre per month. “Add big increases in rates, and our warehouses are starting to look like European environments.” What does this mean? “You need to make better use of the available space,” said Bailey. “This means smaller aisles; higher stacking; more multi-level operations; less staging; and using doors more efficiently (more turns per day).” From an equipment point-of-view, there are a few technologies that will reduce space. Bailey highlights turret trucks, which now allow stacking of pallets to well above 16-metres in aisles as low as 1.7.m; and mini-load systems which allow storage of many thousands of items in a small space. “Also,” he added, if you want to improve space utilisation and have lots of the same product – then radio shuttles for pallets allow storage of pallets as deep as you want, and are reasonably priced.” A second buzz-phrase in Bailey’s lexicon is “fewer touches”. “The core to any good operation is to ensure that one touches product as seldom as possible,” he said. “Every time one handles product it adds cost, time and potential theft and damage. “There is thus a world trend to reduce touches.” In achieving this there are a number of tactics that can be employed. Roll containers can be used, to continuously roll product from pick to customer (or even better from source to customer). There should be a reduction in intermediate handling steps (an example, said Bailey, is the cross dock). It would be beneficial to get supply direct from source to customer. Direct truck loading helps to eliminate staging. “Roll-in, roll-out is what fewer touches is all about,” said Bailey, “and simply working smarter.” As customers become more aware of choice, there has been a continuous growth in stock keeping units (SKU) in SA warehouses. “This means we need to create systems that can manage, store pick and dispatch product efficiently,” Bailey said. “And it would be typified by better warehouse management systems (WMS); and picking systems that provide better access to more products. “Product proliferation is always going to make warehousing more difficult.” At the same time, as customers become more demanding, they require faster and more accurate deliveries – often in smaller and smaller volumes. Typically this means: • Working longer hours (example: night-shift picking); • Better systems – allowing faster response; • More automation – creating faster response; • Less staging, checking and touches (no time for these operations); • Better warehouse management systems (WMS); • Better inventory management (to ensure availability). Despite his earlier reference to change in warehousing being evolutionary, Bailey still comes to the conclusion that there is a lot actually happening in the industry. “Every day we see new technology and new methods being implemented. “What is best for each operation will depend on many interleaving factors. But one thing is sure, we need to continually adapt to a changing world to ensure we are world-class, and can continue to be competitive.”