The cubic conundrum

UK manufacturers face various dilemmas every day, on all manner of subjects. But one that is becoming more prevalent is the problem of how to make the most of existing warehouse space, while maintaining quick, easy access to raw materials, components or finished goods. This becomes a particular issue when product lines alter, new variants are introduced, or new supplier partnerships are forged – all changes that many businesses have encountered in the past couple of years. Manufacturing is no stranger to change; after all, continuous improvement is the bedrock of manufacturing. But can a long string of gradual changes in the warehouse eventually lead to problems? Yes, according to Nigel Bailey of logistics and supply chain consultancy Davies & Robson. "You set up the warehouse for one type of system. Over time things change, you add to it, there may be organic growth and then you reach a point where you have a warehouse that's designed for a totally different business environment than you now find yourself in. What was good initially can become stale and cause inefficiencies – you can find you are fighting the system instead of it supporting you." It's a point that is echoed by Frank Hasleden, project manager at Toyota Material Handling. "The culture of manufacturing is to make incremental changes, but in warehouses the law of diminishing returns sets in at some stage. The key is to identify the point at which you need to wipe the slate clean and start again – it's a question of risk and reward." It may be a decision that many manufacturing organisations push to one side, given that they would rather make more than store more. The warehouse is a storage cube with a certain capacity. Hasleden says there are two broad types of storage: you can put goods on the floor, but that's one dimensional and means missing out on the full cubic volume. "So everyone thinks in three dimensions with racking, shelving and so on, and within that you have selective or non-selective storage," he says. Non-selective is piling boxes on top of one another in a block stacking format. More sophisticated non-selective methods extend to high density storage, he says, but the goods are then harder to access. "The more you squeeze in, the harder it is to get out. It's about balancing the need for maximum density with maximum accessibility," he says. "Hit both and you have the ultimate warehouse." What if your warehouse is straining at the seams? Nigel Bailey says the adoption of certain technologies can uncover hidden space. "You could look at the area and think it's full because all the positions are occupied, but in terms of available space, it's far from full." The obvious way is to use the full height of the building, with minimal aisle space – narrow aisle, or very narrow aisle (VNA). "If you have a good system for swift and efficient replenishment, you can concentrate order picking locations in one area. Hold your reserve stock in narrow aisle racking, as high as possible within the building, for instance, and it can be retrieved when needed and put in the order picking area. Order picking areas don't use the space as efficiently, but do enable fast picking. It's all about balance." Earlier this year, biscuit and snack manufacturer United Biscuits went live with a significant upgrade at its distribution centre in Ashby de la Zouch. All products made at its 11 UK factories are now distributed from this main hub, which has concentrated 14 sites into one. Overall sales are up and product lines have increased, says logistics operations controller Mike Howells. The existing layout meant 40% of capacity was wasted in one area: "Over the last five years, there's been a significant uplift in sales... We had the challenge, as a business, to create as much space as possible within the Midland distribution centre by changing a section of wide aisle racking to VNA." The alternative, he says, was to take on additional outside storage, but this was too costly, both from a financial and environmental perspective. Linpac Storage Systems beat off six competitors to win the contract. The wide aisle racking with a maximum top beam height of 9.6m was woefully short of the 21m interior roof height. Linpac's proposition was to change the storage technology to maximise the cube within the roof height. That's been achieved – 5,000 additional pallets are now stored, with the top one at a height of 18.5m. With frames at 18.6m high, pallets stored 12 high and run lengths of 100m, the facility is now one of the tallest distribution centres in the UK. More importantly for United Biscuits, it means the business has been able to make best use of its existing space. Howells says the old racking had to be dismantled and the new racking erected while the centre continued normal operations. The timeframe was a 10-week window at the start of this year. "Linpac provided us with thorough and detailed racking schedules so that we knew exactly what was going to happen on a day by day basis. They worked well with other contractors and took a real team approach, working together to make the project happen within a very short timescale... without incident or accident." High racking is not the only way to use full building height. Vertical carousels, such as those manufactured and supplied by Kardex, for example, are proving popular and delivering real space-saving efficiency. Not only can they use the full building height, but they can also go down through floors if sited in a multi-storey building. Accessibility couldn't be much easier: contents are delivered to the hatch on demand and the units can be located line side to reduce time taken to deliver parts to production. There are also miniaturised automatic storage and retrieval systems (ASRS), the next step up from a vertical carousel, which enable a large range of stock to be available from one point. In WM June, for example, we saw how Kasto's Unitowers were being used by AESSEAL to deliver steel parts at the line. Nigel Bailey says there are often excellent opportunities for mechanisation and semi-automation. Toyota's Hasleden adds that manufacturers are more switched on to the possibilities of automation than their retail distribution counterparts. "They understand it; they understand the constraints it has in terms of speeding operations in one direction but limiting flexibility," he says. His recommendation is to consider islands of automation: "The right level of automation will give you speed without restricting flexibility." Hasleden advises customers on warehouse design and layout, incorporating not only Toyota's forklift trucks but other equipment including racking, laser-assisted trucks, shuttle systems and more besides. Cheltenham-based Spirax Sarco is in the somewhat unusual situation of being able to trial a new warehouse system off site. Back in August, when reporting its half-year results, the industrial steam system manufacturer said it had made good progress implementing a global manufacturing strategy which is expected to yield cost savings that will build to £4 million a year in 2012. In the UK, it is consolidating three manufacturing sites into one, an existing site which is undergoing refurbishment. To make way for this refurbishment, the global distribution operation moved to a temporary warehouse nearby, giving Spirax Sarco the opportunity to test a more efficient order picking system which, it hopes, will play a key role in the growth programme. Within three years, the operation will return to the consolidated site. The previous warehouse used a combination of carousels, silos and an old mobile racking system. The business had no stock visibility, no first-in-first-out storage and it relied upon random stock locations and picks. With product lines varying in size and weight, from a few grams to a tonne, the company needed a system which was more accurate, more efficient and, crucially, more flexible. Logistics manager Dave Chamberlain says he and his team went to the showroom of Nuneaton-based Bito Storage Systems, where its full range of storage products was on display. "We saw how the carton live system worked and set up a sample system which proved very successful," he says. Ergonomics was a key factor; with the old silos, pickers couldn't see the stock. With carton live, they can see products clearly and pick easily from the carton. "Having a supplier that could provide both racking and containers was absolutely critical. I didn't want to go to different manufacturers to say the carton live system isn't working because the bins aren't right." Products coming off the manufacturing line are now stored in the right size container or carton, all based on the Euro footprint. They are fed straight into the order picking system without any double handling. Small parts are held in the carton live system which is fed by flow shelves, replenished from the aisles behind – importantly, separating pickers from forklift trucks. Medium-sized products are held in Bito's XL plastic containers, which measure 800mm by 600mm. These containers are proving particularly beneficial: Spirax Sarco used a four-legged stillage previously, which was heavy, awkward to handle and which required specialist racking. The XL containers are stored on racks with meshed shelves either side of an aisle and are accessed by a man-up order picker. The standardised Euro footprint used throughout this facility means the shelves can also hold smaller boxes or full Euro pallets, giving more storage flexibility. Bito also installed conveyors at the site, to reduce the distance pickers have to walk. Gravity conveyors feed totes to the picking area; once complete, a powered conveyor takes it to despatch. Picking productivity is now up by 40%: "In our old system, it took 20 minutes to pick seven lines. With carton live, it takes only two minutes," says Chamberlain. The system has been up and running since February. "The project was well managed and well supported, resulting in Bito now designing our new warehouse and component store for the refurbished building," confirms Chamberlain. Financial backing for warehouse upgrades isn't always so forthcoming. But budgetary restrictions don't necessarily mean that storage and throughput efficiency can't be increased. Nigel Bailey says there are some key points that manufacturers must consider: "Think about the stock profile – the nature of the goods and how much you need to hold. Are there any particular requirements for what you're holding – for explosive materials, or special refrigerated products, for example? Think about the opportunities for mechanisation and consider stock turn. There are many technologies that are particularly suitable for manufacturers." It's not just about going higher or narrower, adds Bailey. "Take a step back and ask if you really need to hold so much stock. Some sites hold as little as one hour's stock of an item; others hold a year's stock, for good reason." Whichever end of that spectrum you fall, ensure you know what you want to hold and what you need to hold: "You might not need more space; you might need less stock." []