Distributors applying technology such as radio frequency communications and pick-to-light systems to their materials-handling efforts are seeing marked efficiency improvements, ranging from faster lift moves to lower error rates.
At the same time, innovations in conventional materials-handling technology, such as ergonomically friendly pallet jacks and forklifts, may help reduce repetitive stress injuries that can affect distribution-center employees.
Not everyone is jumping on the technology bandwagon, especially in smaller or lower-volume DCs. But technology such as pick-to-belt systems is being used by some of these distributors for slower-moving items, primarily in the health and beauty care and general-merchandise categories.
At Price Chopper Supermarkets, Schenectady, N.Y., the size and configuration of the distribution center itself are helping provide greater efficiency, which has improved as ceiling heights have risen.
"Our top level is 321 inches, or 26.75 feet," said Thomas Bird, director of warehousing for Price Chopper. A facility the retailer acquired five years ago gave it the additional height. Prior to the acquisition, the top level for Price Chopper's warehouse was 21 feet, which meant less room for product.
Wholesalers and retailers are essentially going one load higher to achieve sought-after efficiencies, according to Ken Walker, consultant for Kurt Salmon Associates, Princeton, N.J.
"It's more economical to build vertically than horizontally," he told SN, adding that with more retailers and wholesalers seeking to grow vertically, a warehouse with a ceiling in the 28- to 30-foot range has a better resale value than one in the 24- to 26-foot range.
This vertical growth is only one aspect of Price Chopper's drive to improve materials-handling capabilities. Its implementation of a radio frequency system in September 1996 increased the retailer's lift moves, from 23.5 per hour to 25.5 per hour in a two-year period. The increase has resulted in a "significant savings," according to Bird, who added that Price Chopper is still "fine-tuning" pallet moves.
With the RF technology, "instead of a hard copy, the lift operator has a terminal that tells him the next best move as opposed to having a work list," he added.
RF has also helped Price Chopper reduce its mark-out or scratch-out rate, which refers to a product that can't be located in the warehouse in time for loading on an outbound truck.
Since introducing RF technology, Price Chopper has lowered its scratch-out rate to less than one case per 1,000, Bird told SN. He added that supermarket industry scratch-out rates can run as high as seven to nine cases per 1,000.
In addition, the retailer has also purchased several new ergonomically friendly forklifts and uplifts that have better arm positions.
"It's too early to call" on how effective the ergonomic equipment is, he noted, because the common injuries, such as tendinitis, usually occur over a long period of time. Wholesaler Core-Mark International, San Francisco, has also embraced advanced materials-handling technologies, including RF, pick-to-light technology and batch order selection. These have contributed to a companywide productivity increase of 25% over the past three years.
Batch order selection, for example, increases Core-Mark's efficiency because distribution-center employees are picking for a truck that will stop at as many as 50 stores instead of one, so workers pick by product rather than by customer order, according to Gene Wittau, operations manager for the company's 50,000-square-foot Spokane, Wash., facility.
Core-Mark will hold off on installing the RF and pick-to-light technology used at its other DCs at the Spokane distribution center, he added. The facility, which services about 640 supermarkets and has a 26-foot ceiling, will require remodeling or a move to a larger location by the year 2000, according to Wittau. The warehouse will get the new technology during the facility's upgrade, he added.
It's not cost-effective to introduce pick-to-light technology, which carries an installation cost of approximately $250,000, when a warehouse location may change within a year, said Wittau.
The wholesaler also has a stringent materials-handling safety policy, with all employees required to have eight hours of safety training. The Spokane facility currently has an Occupational Safety and Health Administration accident-frequency rating of 7, which is less than half of Core-Mark's acceptable level of 15.
Affiliated Foods Inc., Amarillo, Texas, also has an intensive materials-handling safety training program, according to Paul Siebenthal, manager of warehouse operations.
About six years ago, Affiliated implemented mandatory two-day safety training for all employees, as well as five days of training for fleet drivers, Siebenthal told SN. He added that the training includes such basics as stopping at aisle intersections.
Affiliated, which services about 650 stores, of which 346 are supermarkets, still relies on traditional materials-handling tools such as pallet jacks and forklifts to move products through the warehouse.
"Automated systems will not pay for themselves," Siebenthal said, though he noted that Affiliated does use automated technology -- a pick-to-belt system -- to move health and beauty care and general-merchandise products.
Kurt Salmon's Walker told SN that the use of automation in materials handling is dependent on the volume through the DC and employee wage rates. If both are high, the investment in automated equipment may be more cost-effective for a distributor.
Walker's sentiments are echoed by Laurel Grocery Co., London, Ky., which is sticking with traditional materials-handling equipment, according to Lloyd Fleenor, vice president of warehouse operations for the wholesaler. Laurel services 400 stores, of which 150 are supermarkets.
The company has tested a new lift, however, which allows operators to work about 45 inches off the floor, and has added high rise order selection for slow-moving items. Fleenor said Laurel did not have figures on how these moves have helped materials-handling efficiency.
The wholesaler had planned to install a warehouse management system to aid in materials handling, but with most of its technology resources aimed at correcting the Y2K problem, the system installation will have to wait until the second quarter of 1999, Fleenor said.
