– Supply Chain Insight –
Bottlenecks… a burden on both workforce safety and productivity
A build up of congestion on the shipping / receiving dock (or anywhere else in your distribution operation, for that matter) is a cause for concern. Bottlenecks are one of the more costly, dangerous and, unfortunately, common process failures within a distribution operation.
Of course, during busier periods of time – especially for more seasonal operations – congestion is somewhat unavoidable. The busier your operation is, the more labor activities will be happening at once. When congestion becomes more consistent, however, or outright bottlenecks start to noticeably throttle productivity and cause safety concerns, the root-cause needs to be identified as it likely points to something more systemic as opposed to seasonal.
Let’s review some common causes of congestion and bottleneck formation and what you can do to avoid them.
Whether due to rapid growth in the business, low capacity utilization, or a facility reaching the end of its planned lifespan, capacity constraints are just a matter of time for most, if not all, fulfillment operations. Unfortunately, capacity constraints are also one of the main causes of congestion and bottleneck formation. There are ways, however, to mitigate constraints and improve capacity utilization in even the most constrained operation, and it all starts with understanding your requirements.
The planned lifetime for a new build or expansion is usually between 5 and 7 years but most operations will start running into capacity constraints far sooner than they expect – sometimes even within the first couple of years. Going for truth over harmony, this often happens either because operations are not planned properly based on their true handling requirements or there’s no process in place to effectively maintain the layout year-round through changes in SKU variety and shipping volumes.
Fortunately, in MOST operations, a simple data-driven evaluation (through a Strategic Opportunity Assessment) will reveal opportunities for increased space utilization, either through more strategic (and consistent) slotting maintenance or through more tactical slot type recommendations. Whether through an SOA, or otherwise, as soon as you start noticing capacity constraints, a full assessment of your requirements should be priority number one.
Low Labor Productivity
Low direct labor productivity is a symptom of capacity constraints but that’s not the only root-cause. If your direct labor – especially within your order selection or forklift processes – is lower than usual or consistently lower than average, you’re going to require more staff to hit your throughput targets than you would otherwise need. It’s simple math. This, unfortunately happens to a lot of operations during seasonal peaks, and it’s what happened to a lot of operations during the peak of COVID-19. Operations that couldn’t effectively scale as shipping volumes went up found that labor costs followed the same trajectory.
A recent warehousing labor productivity study that we did through the Food Industry Association revealed that when it came to order selection productivity (one of the more important leading indicators of overall performance) respondents in the top 10% were 31% more productive than their counterparts in the bottom 90%.
This means that the top 10% are able to pick 31% more orders than the bottom 90% with the same amount of labor.
Not only is scaling up labor costly, it can contribute to added congestion and even outright bottlenecks for certain operations.
If your productivity levels are low, or decreasing, find the root-cause before throwing more labor hours at the problem. You’ll needless reduce your margins and there’s no guarantee you’ll see an increase in throughput.
If you’re unsure where you stand with regards to your own labor productivity – top 10% or bottom 90% – reach out to us and we’ll be happy to give you a free opportunity estimate.
Build up of Direct Labor Activities
This one CAN be a product of low labor productivity but it doesn’t always HAVE to be. For example, if you’ve ever walked through a facility with a sub-optimal slotting process, you’ll likely notice that it’s more congested with both pallets and people than that of a facility with an effective slotting process.
Slotting optimization, simply put, is the process of ensuring each active item within a distribution operation is stored in it’s most productive and ergonomic pick slot — of course, with consideration to all storage rules and requirements.
While ergonomic rules and other storage requirements are usually consistent, the definition of productive can change based on the goals of the operation. While most operations use slotting optimization to maintain a tight pick path (minimizing unnecessary selection travel) some operations look more toward maximizing inbound pallet productivity.
This strategy is more tailored for operators who don’t have the time or resources to adjust an existing layout and would rather minimize activity spent on the receiving dock by calibrating their slotting process toward the elimination of unnecessary pallet putaways.
Whatever the strategy, reducing direct labor activities not only lowers cost, but also reduces labor traffic and minimizes areas of potential congestion.
If you are noticing a build up of congestion, or if this article has prompted you to be proactive in ensuring you do not encounter it unexpectedly, a Strategic Opportunity Assessment is a great first step.
After all, you can’t manage what you don’t measure.