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The Distribution Center Evolution Rolls Along

By Bill Elenbark on Feb 25, 2008 in Publish

In the November issue of Logistics Management, Gross & Associates senior engineer Maida Napolitano published an article concerning Value Added Services in warehousing operations. Don Derewecki, president of Gross & Associates, is featured in the article, which includes the results of the 2nd annual Warehouse Operations Survey. An excerpt appears below.

“Eighty percent of respondents are currently dealing with some form of value-added services (VAS) in their DCs,” observes Don Derewecki, president of Gross & Associates (G&A), a logistics consulting firm based in Woodbridge, N.J., and Logistics Management’s partner for the survey. VAS is a collection of specific requirements mandated by customers, involving additional processing of a product or an order, above and beyond the simple picking of the product for an order. The survey shows VAS is rapidly becoming the norm rather than exception. Case in point: Wal-Mart is requiring RFID tags on supplier pallets; Home Depot and Lowe’s are calling for special labels on their products; other mass merchandisers and groceries are demanding display-ready promotional packs. With the rise of VAS, small manufacturing cells are inevitably making their way into the layout of what were once pure storage and distribution operations. “To cope,” adds Derewecki, “warehouse managers have been forced to adopt ‘production tools’ specifically in areas of workstation design and labor planning/balancing.”

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    #9   Close out the merchandise. In many trade lines there are companies that specialize in buying close-out merchandise. They may resell by mail order, through off price stores or as 'special purchases'in full price stores. Look in trade journals, The Wall Street Journal and local newspapers to find who handles your class of product. Sometimes your present customers may be interested in a one time deal to use as a promotion. Do not overlook your employees as close-out customers. With luck, you may even find another outlet for your regular merchandise. You can use close-outs to sell raw material as well as finished goods.
    #45   Use computer directed putaway. If the inbound material does not require elaborate checking in procedures and a computer can assign empty locations for each pallet, the material can be put away directly into storage eliminating the need for receiving staging space. If the receipt contains less than full unit storage quantities, the computer can locate a partially filled location of the same product and direct the putaway to fill the location.
    #4   Sell to present users. Use your sales or warranty history to find the people who have bought the product. Let them know that you have more available for immediate delivery. Consider telling them that you are discontinuing the product and closing out the remaining inventory. Offer a discount because they are loyal customers. Offer owners of older versions the chance to upgrade at low cost.