Logistics goes beyond highways as buildings play critical role

MexicoNow Staff Interview

If you build it, they will come.

Or will they?

Have you ever been tied up in city traffic when a semi tried to back into a loading dock area from a street designed a century ago?

Not good.

How about your manufacturing site? Does the design of your building allow productive material to get from Point A to Point B in the most efficient and safe manner?

Logistics goes beyond what you see on the highways. Logistical efficiency also has much to do with your building. Efficient logistics in a company can significantly improve its business operations.

Frank Bateman, Ryder Supply Chain Solutions director of customer logistics offered insights as to why location, location, location as in building, building, building must consider logistics, logistics, logistics.

How do you go about designing a building with logistics in mind?

It is important when you are looking at logistic-efficient buildings that you look at the entire network first. You have to look at where your supply base is located, where your density of freight is, so that you know that you are constructing your building in the right location.

From there you also have to understand how your product flow is, whether you are going to need a warehouse or a cross-dock or someplace where you are going to be trans- loading freight. It is always best to do the engineering from a high level and work your way down into the details as far as what you are going to do inside the warehouse.

You have to understand what your supply base is, what the density of freight is, how much freight is coming per supplier. In some cases there are going to be full truckloads of suppliers, they will ship a full truckload. You will not need to consolidate or deconsolidate that; that can go straight to your customer or straight to your production facility in the case of a maquiladora or an OEM.

In the case of some smaller suppliers you may have to do a little bit more work, consolidating that freight on multi-stop truckloads or milk runs, taking it to the cross dock and then sequencing those parts so that they can go to the correct docks for your customer.

What trends are you experiencing in distribution facilities?

In the past a lot of companies would have dedicated distribution centers where only one client would be located there, whether it is a warehouse or cross-dock. What we are finding now is a lot of customers are willing to share facilities or be located within a multi-client facility so they are able to share fixed costs, leverage those costs and reduce your costs in general. What we do is by having those types of facilities we are able to maximize the efficiency and minimize the costs.

A lot of customers are looking for cross-docking capabilities versus straight-up warehousing. Everybody is trying to go lean. Everybody is trying to go just in time, those facilities in and of themselves. We typically have to look to make sure there is enough space for 53-foot trailers versus 48-foot trailers. There are a lot of different things: Advancement in lighting that is more energy efficient and better lighting so there is less possibilities for incidents or accidents.

You look at the truck aprons around the facility to make sure there is enough maneuvering space for the truck drivers as they come in and out, especially since the conveyances, the 53-foot trailers are larger than they used to be. These are some of the things that we definitely have to look at.

There are also some interesting things that people are doing with racking: Some facilities code the racks with a special material and then they are about to apply labels so that eventually as the different configurations of the material change, they would peel those labels off and create new fixed locations for material. It is able to be more flexible, they can flex up or flex down as needed.

How do you optimize manufacturing and distribution?

When you are looking at the most optimal network, what you want is to go back to your production schedule. Look at your production schedule, you see what you are going to have to produce and from there you take it back to where the supply base is and these cross-docks and warehouses are kind of middlemen, in some case they are vendor-managed inventory, where they are metering freight off to the plants and in some cases they are not.

When you look at the design of the facility, whether it is a cross-dock or warehouse, you want to make sure that the processes within the facility are all in the right order, like the layout, so you have kitting in one area, returnable containers and cleaning in another area, storage in another area, outbound shipments. It is really important to make sure the flow in the facility is correct so you can minimize the amount of time it takes for the people within the facility to do the work.

How do you know if you have a lean operation?

When you are talking lean, you are also talking with the KPI’s and metrics and “measurables” so that you can look at yourself, look at your operation, see where the goals are and see where you stack up against those goals and create a plan to get to those goals.

KPI’s are Key Performance Indicators. You could have a Key Performance Indicator as far as what your planned cost should be, actual cost versus planned cost. You could look at your productivity per employee, you could look at the number of pallets or skids that you are loading or unloading. There are a lot of different KPI’s out there that you can have. In the end what you can do is show that you are adding value to your customers.

What you have to do is once you value stream map, you definitely want to ensure that your processes match up to the value stream map and in turn your work instructions for the people on the floor match up to those processes. What you have to do is ensure that your KPI’s are good measurables showing what it is that the people are doing and that your post them so that people understand where the operation is as far as being more productive, less productive, what you need to do to get there.

It is really good communication, not only just to show your customer but also a good communication tool to your employees so they understand where it is.

Your workers, your supervisors, there always has to be good communication with them, the processes have to be well defined. People make the difference in any business.

Something that we have to do is always ensure that our people are engaged, that they also participate in kaizen or what they call a thousand little ideas, all those different ideas that the people on the floor come up with tend to make the biggest differences in the total operation.