Extending the Life and Productivity of Your Distribution Center

Facing any of these challenges in your distribution center (DC)?

• Rolled out e-commerce and struggling?
• Labor cost increases straining margins?
• Orders getting smaller and causing picking problems?
• Rapidly expanding SKU base?
• Returns volumes exploding?
• Service level deteriorating?

Issues like these are far from unique. While not all companies face each of them, DC around the world have similar challenges. And while the challenges are the same, the causes and potential solutions are particular to each company’s DC.

In this era of needing to do more with less, it’s not always possible or even advisable to build a new DC when these challenges emerge. There are ways to add functionality and efficiency to raise an existing DC to new levels of performance. The key is doing so smartly.

Often, when companies run into issues due to growth or another change in the business, they jump into solutions without performing the proper due diligence to determine the root causes of the issues they’re experiencing. Many times companies throw labor at the problem, bring in automation without an overarching strategy or add technologies without fully understanding what their impact will be on existing processes or other parts of the attempted solution.

Transitions in established procedures in a DC are difficult enough — transitions without effective planning can be worse than the initial issues they were meant to address. Companies must completely quantify and understand why there’s a need to change.

What’s the underlying issue or issues that are driving the pain being experienced? Only then can they confidently say, “Here’s the problem; here’s what it’s doing to us operationally; here’s what we can do to fix it; and here’s what it will get us in the long run.”

What’s more, many times the ideal solution can seem counterintuitive. For example, increasing inventory levels at one company in the current era of lean might make perfect sense, while in another company, widening aisles for improved traffic flow instead of moving to a narrow-aisle solution might be optimal.

This is where consulting experts in DC optimization and design become critical. This paper explores the many common and often interrelated issues distribution operations face today, and addresses solutions to regain productivity and deliver new levels of efficiency while effectively handling growth inside an existing DC.