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At the close of 2011 we note that the world is changing in many different ways. To the extent this change is predictable, distribution center managers can anticipate and develop effective responses to these strategic challenges that will enable their operations to continue profitably serving their customers. As an example of predictable change we can cite demographic stats that show populations in most developed countries are growing and skewing older as people take actions to support living longer, healthier lives. Those who remember Mary Tyler Moore in prime time can recall a time when heavy smoking, drinking and unhealthy eating were fairly commonplace. Outside of the Frat House, that world has all but vanished.

More consumers are buying goods and services from trusted firms that demonstrate shared values such as environmental stewardship or social responsibility. As regions grow in affluence, the diet is also changing. According to the USDA Economic Research Service, global consumer spending in most foreign markets indicate that spending for staples such as wheat and rice is on the decline as spending grows on higher valued food items such as meat, dairy, fruits and vegetables.

To retain value, fresh food will need to move more rapidly from farm to fork. To ensure health and security, shipments will need to be traceable. Order errors and damaged goods must be eradicated. To extend the distance a driver can travel, trucks will need to be unloaded and loaded rapidly. Delays will incur penalties. The only other way to ensure food nutrition is uncompromised is through refrigeration and freezing. Steps must be made to make sure energy is used as efficiently as possible. Automated Storage and Retrieval Systems can use 70% less energy compared against manual operations using humans and forklift trucks. According to a recent presentation at CSCMP, the installation of LEDs to illuminate freezers yielded a 22% ROI for Walmart Canada.

It all stands to reason that investments to adopt automated order fulfillment systems or improvement to existing automated systems are superior because they can reduce operating costs as they improve the delivery of value to customers. This also enable firms to show measurable results, for example, reducing energy consumption which can help enhance the perception of value among consumers who purchase your goods.

Business Challenges

• To meet increasing customer demand a top 3PL(Third Party Logistics) refrigerated-service company needed to transfer processed chicken, through a blast freezer, 24-hours a day.
• The product material flow system needed to input over 140 pallets in a two-hour period, as well as move the pallets from zone to zone within 15 minutes, to ensure a proper freeze cycle.
• The customer needed to increase storage capacity, but was restricted to the cubic space allotted to the operation.
• Employee turnover and related training costs were increasing due to the difficult environmental conditions in the freezer and the customer wanted to keep labor requirements low.
• Full control over temperature, time, product and lot integrity must be maintained while moving from zone to zone.

Tomorrow is the annual Thanksgiving Breakfast here at Retrotech.  This will be my third year enjoying this feast so I thought it would be appropriate to ask the “founder” of the breakfast, Ted Thompson to guest post this week and provide us with the history behind the breakfast.   Read more »

One of the questions we here alot from potential or brand new clients is "What's so different about Retrotech, how will you assure us that all potential benefits have been explored, and the business results on which this investment is based will be achieved? 

At Retrotech we employ a multi-step process developed by the International Council on System Engineering (INCOSE - http://www.incose.org/practice/fellowsconsensus.aspx) with the acronym SIMILAR . This process was developed to guide the execution of complex, multi-discipline projects specifically by focusing on a thorough examination of the problem and potential solutions before committing to construction. Read more »

Warehouse automation is a complex and vast topic. There is no one technology or process that will guarantee success. As you now understand, the decision to automate a warehouse should be made only after a careful and comprehensive business process review and evaluation is completed. This process can take a long time. But it’s worth it. The optimization of warehousing activities can lead to drastic reductions in structural costs that can propel your firm’s distribution center front and center as a potential key to organizational success. Read more »

Now, it's time to gain consensus and financial support for your automation project. We won't cover a step-by-step account of how to sell your solution, but we want to give you the right framework to approach your executive team. 

First, don't forget strategy. Always start there. Demonstrate that your eye is on the same ball as theirs...... Read more »

...See what works and what does not...

You will not be able to solve every aspect of every problem that stakeholders want solved. So, how do you choose what to cut and what to fix? This is where understanding the corporate strategy comes in handy. Use it as a yardstick. If a problem can be directly tied to a strategic initiative, then you need to fix it if you can. If it's something that is not easily tied to delivering on a strategic goal and you can't easily solve it, then it's a good candidate for being left by the wayside. The nice thing about this approach is you can easily defend your choices. You're making decisions based on the company's commitment to its strategic initiatives. Read more »

Now that you have defined the problem, it’s time to develop a solution

By now you should have explored the following: a universal problem statement, a corporate strategy, any new strategic challenges, operational pressures and distribution- specific challenges. You now have a great perspective of the macro goals and issues facing the company, as well as  department- specific issues. You have defined the issues that pertain to distribution and you can view everything in the context of the company’s strategic initiatives.  It’s now time to innovate solutions – solutions that bridge the gap between operational reality and strategic intent.

Your goal here is to get as close as possible to solving all the problems you’ve identified. Gather a team of content experts.This option is often overlooked or skipped because the assumption is it’s your job to figure this out on your own. But, the truth is, it’s your job to manage the process of figuring this out. Read more »