Warehouse systems offer benefits upstream
July 23, 2013
by Charlotte Atchley, Baking & Snack
Warehouse management systems automate, organize and track a bakery’s warehouse and shipping, ensuring the right products get delivered to the right customers. But their effects are not limited to the warehouse and loading docks. Principles and information from the warehouse can trickle upstream to improve production efficiency and reduce changeovers, labor and costs.
Information is power, and the information bakers gain from warehouse management systems can cause a ripple effect that reaches all the way to ingredient handling. With a warehouse management system, bakers learn exactly how much they are producing in real time.
“That’s missing today because in the paper world that exists in many bakeries, they don’t get that information in real time,” said Marc Braun, president, US operations, Pcdata, East Granby, CT. “If production uses that information, it can reduce the amount of changeovers. It should be able to reduce the amount of ingredients that are used.”
However, most of the baking industry has been slow to automate its warehouse and distribution area while continuing to automate other parts of their operations. When bakers look to invest, they focus first on the bakery production lines, the apple of their eyes. “For the last 50 years, their focus was on production, production, production. How can we streamline and optimize production?” said Ralf Ulmer, executive vice-president, sales, ToolBox Software North America, Inc., St. Paul, MN. “If you walk around and look in the bakeries, production has a very high level of automation. Then you go through the door into the warehouse and shipping, and nothing has changed in the last 50 years.”
This seems to be shifting, though, as production, ingredient and labor costs go up and companies look for ways to save money. They then turn toward the warehouse, the part of the bakery that hasn’t changed in the past 50 to 100 years. What they find is that accurate orders and automated inventory tracking can have a substantial benefit beyond the warehouse and loading dock.
Getting immediate feedback
Bakeries still using paper trails to track inventory and fill orders have an interesting dilemma: They aren’t sure exactly how many units of finished product they are producing. “Automating the warehousing gives a very accurate inventory of a bakery’s products, so it allows them to schedule shipments based on this accurate inventory versus a manual system, which is not always the most precise in bakeries,” said Kenneth Mentch, Workhorse Automation, Oxford, PA.
Bakers often know how many batches they produce each day, and from that information, they know how much they should have produced. “But this number is typically not a real number,” Mr. Braun explained. “It’s an estimate.” This estimate can cause problems in the warehouse with orders coming up short or bakeries overproducing to prevent short orders. Automating the tracking gives bakeries a more precise inventory on which they can base all of their shipment schedules, order fulfillment and production runs.
Pcdata’s Distrib system scans each product as it comes off the packaging line, showing operators in real time what the bakery has produced. The system directs operators to place the product stacks under the correct light, thereby filling orders. Tracking this order progress can show warehouse managers exactly how much product they have and how much they need. “That allows them to scale their production and be more efficient with their inventory and ingredients and to produce more efficiently,” Mr. Braun explained.
Without this information being shared throughout the production line, however, bakers can waste time, money and product, overproducing to create a buffer so orders get filled. Communicating between the different crews in a bakery is crucial to streamlining production from ingredient handling to the loading dock. ToolBox’s system enables that level of communication between different crews with different agendas.
“We have a strong connective scheduling between truck departure, shipping and staging time, and all the production steps ahead of it,” Mr. Ulmer said. “Knowing what items are needed at what time, we can quite accurately know what is needed in production from packaging, cooling, baking and all the way down to the scaling of ingredients.”
Proper communication ensures the warehouse operators know what’s coming off the line. If warehouse workers expect 1,000 units to fill orders but only receive 800, they can be left wondering if they can expect more. By sharing information from production to the warehouse and vice versa, ToolBox’s warehouse system streamlines the operation and reduces waste.
Running production longer
Fewer changeovers and longer production runs mean more uptime, product and profits. Accurate order filling with a warehouse management system can prevent extra production runs as a result of misshipments and leave more time for producing current orders. Warehouse management systems in bakeries producing frozen, chilled or long-shelf-life products, however, can be the answer to keeping production moving and orders filled.
For bakeries making these products, time becomes less critical than a fresh bakery. “Bakers are not forced to produce today for tonight’s or tomorrow’s shipping,” Mr. Ulmer explained. “I can make the order to ship in a couple of days or, if it’s frozen, next week.”
Products with longer storage times enable bakeries to pull orders from a warehouse, with internal orders being made to the bakery whenever the warehouse needs to be replenished. Bakers no longer have to continually changeover for each product every day because the delivery trucks are loaded from a warehouse instead of the line. Without this pressure to fill daily orders, bakeries build longer production runs to meet the internal orders that may be a few days or a week out.
“Every time you have a changeover, you have down periods because machines have to be reset, pans have to be stacked, new pans have to be unstacked or you may need different characteristics in your oven and proofer,” Mr. Mentch said. “By allowing an automated system to store product in the freezer, bakers do minimal changeovers each day, so they actually become more productive.”
Accurate order filling
Automation minimizes, if not eliminates, human error in order fulfillment. Warehouses and shipping departments are the last places in bakeries before products reach the customer and consumer. Because these are finished goods, errors at this stage in the game are costly. “If I do something wrong in shipping, all the energy in this specific item is lost — all the labor is lost, all the ingredients are lost,” Mr. Ulmer said. “The later I do something wrong, the more money I’m losing.”
Pcdata’s Distrib system tracks inventory from the packaging line through staging of orders with a put-to-light system. If operators finish staging orders and have product left over or run out of product, they know immediately the counting was off.
Pcdata’s other Distrib modules can be added to track product from staging to the loading dock all the way through delivery. The Distrib Dock Management System’s wide-range scanners are mounted to loading dock doors and read the product stack label. If the wrong stack is being loaded onto a truck, an alarm will alert the operator. The Proof of Delivery module enables the delivery driver to scan the stack labels at the drop-off to ensure the right stack is delivered to the right location. This type of tracking ensures accuracy that will prevent the dreaded calls saying a customer did not receive the right order. “You’re not going to get some of those calls anymore because you know what they received and you can show them,” Mr. Braun said.
Greater cost savings
Automating an entire section of an operation undoubtedly leads to cost savings in time and labor. According to Mr. Braun, Pcdata can save 20% of labor costs in an already
smoothly run bakery operation, but in a bakery struggling in the warehouse, the company’s warehouse management system can reduce labor costs up to 50%.
On average, ToolBox provides 30% in labor savings in the picking process, according to Mr. Ulmer. “The return on investment is usually a year or a year and a half — certainly less than two years,” he said. “The payback is extremely high and quick.”
The ease an automated system brings to the picking process also makes it easier on bakeries when they need to ramp up production for seasonal promotions. Temporary workers can take too long filling orders using a paper-based system and make so many mistakes that they are no longer worth the cost of hiring and training. With an automated system, however, training is minimal. “With a system like ours, they don’t need to know anything else other than scan the product, follow the lights and confirm that they’re done,” Mr. Braun said.
Today’s marketplace forces bakers to find new ways to be competitive in price, and rising production costs keep them searching for the next place to save a buck. Automating the warehouse system not only can save money and time in filling orders
accurately and quickly but also make the rest of the bakery’s production more efficient.