In my previous post, I introduced The Happy Flow and the positive effect it has on the bottom line. I also covered some of the questions and objections I get when talking about incorporating 3D load building in logistics and supply chain operations.
In this post I will talk about five examples from customers that have improved their supply chain operations with 3D load building, and the effect it has had on their warehousing operations.
Meanwhile at the Warehouse: Examples from the Real World #1
Luxury segment – Outsourced warehouse operations and item/carton pick and pack
This consumer goods company had one main aim of using 3D load building. They wanted to be able to order the exact required transportation capacity further in advance to lower the transportation cost. The company uses outsourced warehousing and had no intention of interfering in the warehousing operation of the logistics service provider.
In this case, the 3D calculations are not configured to minimize the number of cartons or pallets used. To be able to forecast the exact capacity needed the software is used to model the picking, packing and loading behavior in the warehouse. This way the company can predict the number of trucks needed per sales order that is sent to the warehouse.
Results: savings on transportation cost by better forecasting of required capacity. No more cost for excess transportation capacity that was ordered, and no more cost for trucks ordered last minute at expensive spot rates.
There was no impact on warehouse operations, although the data that has been collected does point to potential improvements in the warehouse operation that could be investigated.
Meanwhile at the Warehouse: Examples from the Real World #2
High Tech segment – Outsourced warehouse with carton pick
This high-tech company moves around 350.000 pallets a year. A small percentage of the pallets are single SKU stock pallets, but the majority are pick pallets. The company has contracted a logistics service provider to store, pick, and pack their goods. The LSP is paid for storing, picking, and packing, based on the speed with which it operates. The high-tech company pays for transportation costs. There is a long-term relationship between the company and the LSP.
In this case, there is a clash of priorities. The high-tech company wants to minimize the number of pallets, while the LSP wants to work as fast as possible. Maximizing the number of items on a pallet minimizes transportation cost but takes more time.
The high-tech company didn’t want to dictate how the LSP should work, so it looked into other ways to motivate the LSP. Together we found a solution. The LSP uploads the data for all the truckloads that they shipped to a cloud-based data lake, managed by ORTEC. 3D load building software is then used to calculate the number of pallets that would be needed to ship those orders. These results are compared with the actual number of pallets used. In the cases where more pallets are used, the LSP is asked to look into this and do root-cause analyses. The cause can be less than optimal pallet building by warehouse staff, but can also be customer requirements, package dimensions, product specifications, etc. The LSP takes responsibility for improving the warehouse operations, while the company reviews issues that they control, like package dimensions. They also talk to their customers to request changes to their requirements.
Result: Over the course of a couple of years this partnership between the company and the LSP has resulted in a pallet fill rate increase of over 15%, which translates in a 15% saving on transportation cost.
The LSP is still in full control of their own operation, the staff prides itself on matching or beating the 3d load building calculations, and the LSP does not lose revenue. The company saves big on transportation cost. A win-win situation.
Meanwhile at the Warehouse: Examples from the Real World #3
Retail segment – A large global retailer with item and carton pick
This global retailer’s main aim was a reduction in transportation cost by increasing the pallet fill rate. The retailer ships out box pallets filled with individual items and carton picks. This means that many different sized cartons need to be stacked in the box pallets.
3D load building software can be used in different ways. If you want to minimize the number of pallets used, the software can build optimal pallets, based on the orders that need to be shipped out. The downside is that boxes need to be placed on the pallet exactly as the software indicates. This takes a lot of time and significantly lowers the productivity of the packers. The saving in transportation cost is then offset by the increase in cost caused by lower productivity.
In this case, the load building software was used to estimate the number of cartons that would fit in the box pallet. The maximum fill rate was lowered, so the packers could decide for themselves how they would stack the boxes.
Result: the packers get the right number of packages for the box pallets and are able to build the pallets at speed. When the items don’t fit, the results can be analyzed, and the packer can be retrained accordingly.
After implementing load building software, the fill rate per box pallet is higher, while the productivity of pickers and packers is maintained.
Meanwhile at the Warehouse: Examples from the Real World #4
Retail segment – A global retailer that has moved into e-commerce
This retail company has branched into e-commerce several years ago. They see their e-commerce business double every 12 months. Given the large variety of products and quick changes in the product range, the challenge for this retailer is to minimize the cost of packing and shipping products. Most orders have multiple line items and consist mainly of single item picks.
One of the options in e-commerce operations is to pick straight into the shipping box, minimizing the number of times items are handled. In this case, this is not a feasible option, as the warehouse is laid out in picking zones. The picking cartons would have to be moved between zones, which would offset the time saved by picking straight into the box. The decision was made to pick into crates that would then move to a sorting area, where items from different zones are consolidated per order.
In this warehousing operation, 3D load building software is used to increase packer productivity. For each order, the software calculates what box is needed to pack the items. Packers don’t have to estimate the size of the box based on the items they see. They don’t have to repack, because the system tells them what carton to use. For the same reason, they no longer have to use excess filler material.
Result: Costs are saved by the increase of productivity of the packers. Also, less air shipped, which saves transportation cost. Finally, end customers are happier as well, as they don’t receive small items in big boxes.
Meanwhile at the Warehouse: Examples from the Real World #5
Building material segment – A large building material company with palletizing and truck loading
This large building material company wanted to improve the truck fill rate. On one side this would lower the transportation costs and on the other side, it would improve the loading process. They have a wide product range with products in many different shapes, weights, and sizes. This makes the efficient loading of a truck challenging.
In the old situation increasing the truck fill rate meant that forklift drivers would take a lot more time planning how the products would fit in the truck. They often used a piece of paper to make sketches of the various options. Then, if their idea didn’t work out, they had to unload the truck again and try it in a different way. Or worse: products had to stay behind and be shipped separately. This meant additional cost and unhappy customers.
Now Customer Service Agents use 3D Load Building at order entry. They check how an order fits a truck. Based on the truck fill they advise customers to increase, or maybe decrease, ordered quantities to get an optimal fill rate. Customers then get the lowest transportation cost per unit. Together with their customers, the agents started filling the trucks and containers to the max.
Contacting customers and discussing changes to the orders was time-consuming. The process was further improved by agreeing on allowed bandwidths for products for increasing and decreasing quantities to optimize the truck fill. This gave the agents the option to optimize truck- and container without having to consult people, increasing efficiency and saving both them and their customer a lot of time.
At the warehouse, the forklift drivers now get instructions on how they should load the trucks and containers, based on the loads calculated at order entry. No more planning time needed. Or sketches.
Results: improved truck fill rate, no more planning time for forklift drivers, reduced damages by reducing the number of times pallets are handled, time saved for forklift drivers by loading first time right, lower transportation costs, and a happier customer.
More Where That Came From
There are more ways to improve your logistics flows with 3D Load Building. These are just a few of the many examples I could tell you about. And if you want to know other ways to save money with 3D Load Building, then read my blog 13 Ways to Save Money with 3D Load Building or connect with me on LinkedIn and send me a message.