MINNEAPOLIS -- Nash Finch Co. here will radically alter its warehouse layout and operations with new slotting software and will eventually integrate purchase orders with the system.
The wholesaler will begin piloting this year an automated slotting program at its Cedar Rapids, Iowa, warehouse and will ultimately roll it out to all its warehouses. The system organizes warehouse layout by analyzing product histories and grouping items by category, size, weight and movement.
Nash Finch eventually hopes, however, to integrate purchase orders, sent via electronic data interchange, into the system and move away from simply using historical data to determine slotting requirements.
"The idea is to come up with a better method of placing product within the facility before it comes in, rather than working in a panic when the truckload comes in," said Steven Lumsden, vice president of distribution and warehousing.
"We hope in the long term to make the slot move before we put the [arriving] product away," he said. "We will drive our purchase orders through the system."
The traditional concept of storing merchandise in stationary slots is flawed, Lumsden said. "If you're not continually making slot moves you've got the product in the wrong place," he said.
For example, a holiday-based item like canned pumpkin "basically sells four or five weeks out of the year, and typically 10 months out of the year it's a very slow-moving item
that you bury someplace in the back of the warehouse."
Without knowledge of upcoming orders, a warehouse could wind up with a huge order of such an item arriving at its docks, requiring special attention from employees and possibly lacking storage space to accommodate it.
With advance notice of purchase orders built into a slotting software program, however, Nash Finch will be able to anticipate when a product will surge in volume and reslot it accordingly.
"We could take the purchase order and feed it through the system in advance to say 'Look, it is now three weeks before Thanksgiving and we've got three trucks [of canned pumpkin] coming in,' " Lumsden added.
"We then have a week to get it moved so when the product comes in, the system knows it is now an item with velocity and we have also taken care of it physically in the warehouse as to where it belongs," he said.
The software, manufactured by Performance Analysis Corp., Research Triangle Park, N.C., and located at the warehouse level, will also enhance employee productivity by slotting together products of similar height and weight.
Nash Finch anticipates an overall labor productivity improvement of 20% once it rolls out the system, Lumsden said. One benefit of the system will be more logically designed order assignments for selectors, he added.
"If you go strictly by movement, you could have a case of spinach that weighs 40 pounds and a case of lightbulbs that weighs 6 pounds on the same pallet," Lumsden said. "What's the case selector going to do with the lightbulbs? Either balance them on his head or let the pallet get damaged."