Logistics News: Understanding the Types of Non-Putaway Distribution Models

November 25, 2008 from Supply Chain Digest – “Picking costs and “product touches” are the largest drivers of distribution costs for most companies. So naturally, companies would like to minimize requirements in both areas if they can.
With that in mind, SCDigest thought it would be good to review the various models for low-touch/low-picking activity distribution processes…”

180 View (written by Lawrence Young) – Let’s face it – these are difficult economic times for everyone. Economists are telling us, and history has taught us, that with rare exception, this recession will take its toll on virtually every company in business. Regrettably, our clients are not likely to be an exception to this economic forecast.

Many of our clients are wholesale distributors, importers and manufacturers. But unlike the banks and automakers, they cannot merely ask the government to bail them out during difficult times. So what can they do to stay above water when sales are dropping and operating costs are rising?

The bad news is that some things are simply outside of the control of a company’s management team. But the good news is that there are plenty of steps that many companies can take to weather the storm, steps that simply involve eliminating waste in one or more operational areas of the company.

For example, distributors and manufacturers may be able to eliminate a significant portion of their material handling costs by deploying techniques that will reduce picking costs and product touches.

This article published in Supply Chain Digest reviews various proven models for ‘low touch/low picking activity’ material handling processes, such as Cross-Docking and Flow-Through.

Are these and other logistics models right for every distributor and manufacturer? Of course not! Unfortunately, there is no one silver bullet that applies to every type and size of company that handles material. And while putting these models to work in a warehouse or factory can yield appreciable benefits, there are tools and processes that are required to deploy these models.

Can these and other proven models help your company eliminate waste and slash material handling costs? Very possibly! The first step to finding out will require you, perhaps with the help of experts in the field, to examine your current material handling processes and tools. Who are your trading partners, and how do you transact business with them? Can your current physical layout, software and processes easily deploy models like cross-docking? If not, can they be adapted or upgraded to do so cost-effectively?

Getting the answers to these and other relevant questions may indeed reveal that your company can significantly reduce operating costs and save money that is now being wasted each and every day!