Controlled chaos in the warehouse
March 1, 2015
by Joanie Spencer
In bakery operations, it’s all about keeping a multitude of moving parts from spinning out of control. One or two missteps, and a baker is left to deal with wasted product, customer complaints, increased labor and more.
While warehouse and distribution come at the end of a production cycle, they can still affect the process as a whole. Automation can give visibility to data that can identify — and relieve — various pain points. “Anyone from the warehouse to sales to top-level management would want to have access to this kind of data, because it will make their lives easier,” said Jennifer Grimley, sales manager, Pcdata, East Granby, CT.
But how does a baker know when it’s time to automate? There’s a tendency to think that size matters most, and some bakeries assume they’re too small to streamline operations. But in many cases, it’s more about the complexity of the system and the problems that need to be resolved that dictate if automation’s the answer.
The balancing act
Order fulfillment means nothing if the inventory is not managed properly. On a paper system, if there is a discrepancy between what’s tracked in staging, loading and delivery of an order, that can’t be reconciled until the driver returns from the day’s deliveries. “That doesn’t leave a lot of time to reconcile those numbers,” said Ken Boyd, marketing director, Supply Chain Services, Oakdale, MN. “It can throw off the whole system. If you don’t have the inventory right, how can you plan the next day’s production?”
Managing inventory is all about striking a balance between too little product, leading to out-of-stock problems, and too much product, leading to a higher stale percentage, according to Paul Hilton, field mobility manager, Quest Solution, Portland, OR.
Without automation, the quickest fix might be to overproduce to cover for any missed orders or prevent out-of-stock conditions, but that comes with a price. “If you have excess inventory, that costs money — not just in holding costs. If it gets thrown out, that costs money, too,” Mr. Boyd said.
Ms. Grimley agreed. “Nowadays, you don’t just get rid of that product; you’re losing raw material, labor, oven time, and now you have to pay someone to haul that product away,” she said. “The more accurate you can be in the warehouse, the more it will help you reduce waste.”
For Toolbox Software, Scottsdale, AZ, streamlining production starts with the relationship with sales and production. “Many issues come from a lack of communication between those departments,” said Ralf Ulmer, president. “A picking system makes the process more transparent because it begins with real production recording and the hand-over from production to the warehouse.” With those numbers being recorded in real-time, Mr. Ulmer said, shortages or delays can be proactively addressed.
In a system without automation, a bakery often finds itself reacting to the screams of drivers who claim they didn’t get the right product for delivery, Mr. Ulmer said. But with a picking system, “Processes get standardized, and certain jobs can be executed the same way by everyone. The process — down to dispatching — is streamlined and calmer. There’s less screaming, because everyone knows what to do,” he explained.
Pcdata’s Distrib software, which includes pick-to-light and put-to-light systems, helps bakers efficiently stage product and simplify the process. “Instead of using paper pick sheets or order sheets, they’re going to use the light system to either stage and ‘put’ items to the lights or ‘pick’ them by SKUs to move to another location for shipment,” she explained. The software takes the order information from the ERP system and includes exactly what product is to be staged, as well as data about any adds or cuts to specific orders. That way, the information is accurate through the life of production, and if a customer needs to adjust an order, there’s no disruption in flow.
Once orders leave the warehouse, Supply Chain Services’ rugged mobile devices, which automate direct-store-delivery (DSD) systems, help drivers accurately keep track of deliveries in real-tine, helping prepare the next production runs. “Drivers can scan product when it goes on the truck and scan it again as soon as it comes off,” Mr. Boyd said. The devices also enable drivers to invoice on the spot or take new orders. “An order for 100 new trays can go directly back to production planning for the next day instead of waiting for the trucks to come back. They can do it in real time and have those production runs for the next day, or even that day,” he explained.
In a DSD system, mobile solutions can “work the shelves directly and create efficiency on the spot,” said Mark Maraj, vice-president, sales and marketing, MiT Systems, Inc., Fullerton, CA. Through mobile solutions in a Quest Solution DSD system, one bakery was able to reduce stales of branded products by up to 10% with a one-year ROI, noted Jeff Gelb, DSD software manager, Quest Solution, in a Baking & Snack webinar, now archived on www.bakingbusiness.com.
Automation in other areas of the bakery, such as the in freezer storage and retrieval, can also protect against product loss. Workhorse Automation, Oxford, PA, offers an automated freezer distribution system that allows inventory to build up during peak production times, according to Kenneth Mentch, sales manager. The system automatically tracks inventory and shelf life, and it operates on-demand depending on shipping schedules.
Streamlining the workforce
In managing warehouse and distribution, sometimes it’s less about needing to reduce labor and more about getting the most out of the workforce you have. “A downward trend could be diminishing returns, where adding more labor to the shipping area causes problems such as workers getting in one another’s way or frequently finding themselves waiting for access to a basket or pallet,” Mr. Mentch suggested.
Pcdata’s Performance Manager feature uses “dashboards” with red, yellow and green lights to track when labor is trending behind, on or ahead of schedule, respectively. “Maybe there is someone in the corner office who wants to know dynamically how the bakery’s doing on order fulfillment on a particular day,” Ms. Grimley suggested. The feature can track those trends or identify top producers in that department.
Labor efficiency is something to consider on the road, too. Supply Chain Services offers route planning that can optimize delivery schedules. “The system can actually plan the route,” Mr. Boyd said. “The devices also have a GPS tracking system so management can ensure drivers are using the optimized route.” This can lead to savings in gas and truck maintenance, as well.
On top of traceability
Oftentimes, product goes out to a customer, and the trays don’t find their way home. Those replacement costs add up quickly. With a proof-of-delivery feature, Pcdata helps bakeries more easily identify where tray loss is happening and proactively keep track of them.
“It allows bakers to be more proactive about implementing different collection methods for specific customers,” Ms. Grimley explained. “Now that they know where they’re losing trays, they can decide what to do with the information. They may ask, ‘This is a good customer who spends a lot of money; do I just eat the cost of the tray loss?’ And with this system, they have the data to better answer that question.”
As the Food Safety Modernization Act looms on the horizon, traceability is on the minds of bakers, and being able to track product falls right into that mindset. “An automated system like this provides traceability into what batch something came from and where it went,” Mr. Boyd said.
As federal regulations increase for traceability in the food industry, warehouse and distribution automation can help a bakery capture vital information that helps comply with regulations now and be ready for more in the future. “Just one recall could pay for a system,” Ms. Grimley said.
A bakery may be moving per the status quo of paper systems in order fulfilment needs, but a deeper look into various areas of operations could reveal pressure points that can be alleviated by warehouse and distribution automation. When the status quo gets chaotic, visibility of data can keep that chaos under control.