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David Hayward-Browne is taking part in the “Meet the Experts” in the AMHSA Pavilion at IMHX2013 at the NEC on 21st March. He giving a presentation on ‘The importance of a user requirement specification for a successful project’.
In this short overview, David will highlight the key points to consider and give invaluable advice for anyone planning a new system or an upgrade of their logistics operations.
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In this month’s article in the series from members of the Automated Materials Handling Systems Association (AMHSA), David Hayward-Browne, director of Logistics Planning Consultants International (LPC), discusses two areas that are fundamental to the successful operation of any automated system: System Understanding & Control, and Availability.
You have just brought your shiny new automated system. It has been installed and commissioned. In some respects, that was the easy part. There are challenges of course in doing so, but you have had a lot of expertise from the supplier and you have your own project team.
But the people who delivered the solution will move on. It is vital for the successful operation of the system that knowledge is gained and retained within the operations team, and that processes and teams are put in place to run and maintain the system. The easiest way to accomplish this is for key people to be part of the project team or work closely with them.
The majority of automated systems have some flexibility designed into their operation, though the degree varies from system to system. The control system will contain a number of parameters that can be configured by the operator. The greater the flexibility, the more parameters there are.
It is perfectly possible to mis-adjust some of these parameters so that the system will at best underperform, and at worst be throttled. Access to the parameter controls should be restricted to those with an understanding of the system.
A typical example of the issues that can occur with configuring parameters is the control of buffer size, e.g. the number of totes allowed into a pick zone. If a buffer parameter that allows totes onto a system is set higher than the physical buffer capacity, you will at some time cause the system to stop while the totes are processed and the buffer clears, or the totes are ‘recirculated’, occupying conveyancer or sortation space that could otherwise be utilised productively.
Remember, changing parameters to ‘open the tap’ on one part of the system can have unexpected implications on other parts, if other parameters are not altered or sufficient labour is not allocated.
Parameters are necessary, as without them you would have a ‘hard-wired’ system with no flexibility to respond to change. Over the life of the system, operational requirements will change as demand changes, whether it is through seasonality, order profile, changes in SKUs and so on. The correct use of the parameters enables the system performance to be optimised.
All systems have breakdowns, and you need to have personnel and plans to deal with that eventuality and to maintain the availability of the system. But there are steps that can be taken to minimise the occurrence and mitigate the impact.
The starting point is the preventative maintenance regime. The supplier will have provided a maintenance schedule, with the required inspections detailing the process and timings. Whether the maintenance is done in-house, is outsourced or is a mix, time should be made available for this to be done.
Some parts of a system are not used all the time and can be easily made available, whereas other parts are critical and maintenance can only be undertaken when the entire system is stopped. In busy periods, access for maintenance can be difficult, and therefore should be planned around the peaks with increased maintenance access beforehand.
There are two other points to consider. Firstly, make sure you collect data – recording downtime, reasons and so on – so that you know what is happening and can use facts to inform your planning. Secondly, you should focus on what availability means to you – for example, dispatch may be more important than inbound at the end of the day. You should focus resource effort accordingly, and prioritise actions.
To summarise, make sure your team understands the control system and the configuration to optimise performance. Collect, collate and analyse the data on KPIs such as throughputs, availability and downtime. Finally, make the system available for preventative maintenance and prepare for peak periods.
This article was originally published in ShD (Storage Handling Distribution) magazine in April 2012.
The shortage of spec built facilities has increased the focus on bespoke buildings to suit a client’s exact needs. LPC has extensive experience designing bespoke warehouse facilities to optimise the operation while still meeting institutional requirements to secure funding.
In a recent design study LPC produced and costed a range of concept designs working from the “inside out” that offered a reduced building footprint, improved material flows, and reduced operating costs over the developer’s offering.
Please contact David Hayward-Browne to discuss your DC requirements.
LPC are supporting this year’s symposium by the Automated Material Handling Association on 2nd May 2012 and will be represented by David Hayward-Browne at the event.
Please see link for further details – www.amhsa.co.uk/symposium.htm.
In this month’s article in the series from members of the Automated Material Handling Systems Association (AMHSA), David Hayward-Browne, Director of Logistics Planning Consultants International (LPC), explains how the process of acquiring automation can affect system selection.
When fitting out a warehouse and considering a mechanised or automated handling system as an alternative to a more conventional operation, the objective is always to achieve the optimal solution. However, the process of obtaining quotations, comparing the differing solutions and determining the optimal offer can affect the outcome. Any shortcomings in the process tend to have greater effect when comparing options involving differing levels of technology or complexity.
The tender conditions are a key part of the process – how you frame the tender in terms of what you ask for and when you ask for it impacts the answers you get. The first point to consider is how much time is allowed for the tender response. If the tender is large or complex, sufficient time should be allowed for the design work to enable the solution to be developed and costed accurately. Many suppliers are integrators of equipment from other companies as well as their own factories; they require sufficient time to complete the design and seek quotations. If time is short and the integrator cannot get fixed prices, cost estimates will be used. This will lead to an analysis of the risk involved, which in turn will be factored into the contingencies allowed, leading to higher prices in the tender return. If time is tight, it can be helpful to conduct a pre-tender exercise to ascertain the willingness of suppliers to bid and their capability to meet the programme, including the tender process.
When reviewing the potential solutions, the expected life of the investment should be considered. An automated system will generally have a longer life than forklift-based systems. A company policy to depreciate/write off equipment over a standard period of, say, eight years will favour conventional, less capital-intensive solutions over automated systems – which, when a whole life cost is considered, can deliver greater savings. As a general rule, conveyors and sorters can be expected to last 20 to 25 years. Cranes can last 25 to 30 years, though it should be noted that control systems generally require upgrading earlier.
The procurement of equipment can be complicated enough when only a client and a supplier are involved. However, when an operation is outsourced to a third-party logistics provider (3PL), there is another party and their interests to consider. If 3PLs are bidding for an outsourcing contract that includes the provision of a facility and fit-out, the type of solution will be affected by the length of the 3PL’s contract. Shorter contracts of 3 to 5 years favour lower capital and/or leased equipment solutions. These are typically conventional solutions with higher operating costs. The option to reduce the operating costs by investment in automation is not possible if the 3PL cannot achieve a return on the investment within the life of such a short contract. There is therefore a danger that a higher level of operating cost is built into an operation than could be achieved. An alternative to having a longer contract with a 3PL is for the client to procure the facility and fit it out and only tender the operation to a 3PL.
There will be a number of assumptions implicit in selecting the best solution. Some of these assumptions are applicable at the point of delivery or implementation – such as whether the floor and sub-structure are capable of supporting the loads applied by the preferred solution – and can be quantified and dealt with. Others are longer term and may have an asymmetric effect on the various potential options if they include different levels of technology and automation. A prime example of this is the cost and availability of labour. Higher labour costs and/or lack of supply in the labour market will have more impact on a conventional system, which typically has a higher manning level, than an automated system. These longer term assumptions are difficult to deal with, but should be considered given the typical life of an automated system is more than 15 years.
This article was originally published in ShD (Storage Handling Distribution) magazine in December 2011.
In this month’s article in the series from members of the Automated Material Handling Systems Association (AMHSA), David Hayward-Browne, Director of Logistics Planning Consultants International (LPC), explains how to acquire automation.
Let’s start with the easy bit – you don’t have to know what systems you want…at the start! Though it is a good idea to know at the end of the process, when you sign a contract. However, you should be clear on your objectives. These should focus on your requirements, such as reducing labour, improving productivity, reducing costs and managing growth. If you have a vision of a brave new world in your warehouse rather than focusing on your objectives, you should probably go and lie down until it goes away!
There are two approaches to the successful procurement of an automated system. The first is to partner with a supplier, and the second is to tender your requirements. The essential difference is that with partnering you choose a supplier and then work together to arrive at the solution, while with tendering you determine a concept design or a solution and then tender it to select a company to deliver it.
This article aims to cover some of the points to consider and some of the pitfalls to avoid. But remember – the more you know, the better your position. If you don’t have experience of automation in house, you should consider bringing in some external support for the project, or elements of it. There needs to be a preferred solution, and this will be selected from a number of concept designs. The designs will depend on data – on sales/picking, storage and receipts/purchases for a peak and average period. A master data file containing details of each SKU including volumetrics (dimensions) will be essential, as well as projections on growth.
If you have a chosen partner, they will analyse the data and produce a range of concepts that will be narrowed down to a preferred option that meets the business objectives and allows a business case to be made for the investment. There can be an issue with the partnering approach in that it can conflict with an organisation’s procurement policy if it requires multiple quotations before placing an order.
With tendering, the companies invited to tender will analyse the data and respond, each with their preferred solution. There is a potential issue – suppliers might interpret the tender differently and offer a variety of solutions that are difficult to compare. Asking suppliers to quote against a concept design, as well as offering their own solution, provides a benchmark to assess their responses.
While there will always be a ‘debate’ about price and terms, it is important to remember that the contract will contain the testing procedures and criteria for acceptance, as well as warranties on availability and performance. The contract should be based on an appropriate format designed for mechanical and electrical installations such as MFI – do not go near a building contract such as JCT, as it will take much longer to negotiate and you will regret it. Remember the legal words are only there to support the schedules. They state what you are going to get, what it will do and the criteria for acceptance.
In the acceptance process, the supplier will demonstrate that the system specified in the contract has been delivered. He will produce a test procedure to demonstrate and prove the performance. The client will take control of the system after handover. It is important that you allocate staff to work alongside the supplier’s team in the later stages to achieve the knowledge transfer required to make the run up process smoother.
Now you have a shiny new system, you have to keep it in working order, which means holding spares and maintaining it. Whether you intend to have your own in-house team with training provided by the supplier or to outsource it to them, discuss it with the supplier when you undertake the original contract negotiations for the system – it is at this point that your leverage is greatest.
This article was originally published in ShD (Storage Handling Distribution) magazine in July 2011.
Retail giant Woolworths received a Platinum Award for distinction in Logistics for creating sustainable
supply chain excellence in centralised distribution.
The Woolworths supply chain faced significant challenges in 2004 due to aggressive store rollouts and the associated volume growth. The supply chain defragmented into five distribution centres in Gauteng, which did not support the business strategy of centralised distribution.
To read the rest of this article please download the PDFs from the links below.
Robert Williams, founder of LPC International Limited, interviewed at Warehousing Futures 2008 event, Hilton Coventry on Wednesday 10th September 2008.
Click on the link below to view the video on YouTube.
LPC International has been assisting clients to put in place operational systems and procedures for 25
years. These systems and techniques have enabled logistics businesses to survive previous downturns, and also helped them emerge stronger and fitter when the upturn arrives. Though this recession will bite deeper, recovery will come, and those businesses that have managed best will have an advantage in the upturn.
What then can be done to address the problem?
If you have sufficient resources and are confident enough to invest capital then develop new facilities and infrastructure for the future, if not, then planning for recession is about driving down costs to become “leaner and meaner” while maintaining a healthy customer base.
Aside from the administrative processes there are three fundamental areas in a logistics business where appropriate, and relatively straightforward, initiatives can be introduced, namely
Inventory Management
The challenge of inventory reduction comes to the fore and has a dual benefit in that it not only saves on the “direct” costs of ownership, but can also lower warehousing costs, due to the need for less space…
Warehousing Initiatives
Centralisation of stock can combine and rationalise order processing, inventory control, administrative, security and managerial resources. It also creates the opportunity for the prudent investment in appropriate advanced storage and materials handling systems can much improve productivity levels and “sweat the property asset” which are the main costs bases. This backed by a suitable warehouse computer management system additionally improves productivity, order accuracy and, again the use of space…
Network Planning and Transport Initiatives
Reductions in the number of warehouses in a network or any move towards centralisation will affect transport costs. As a norm, the more warehouses there are in a network, the greater the warehousing and inventory costs will be, and the lower the transport costs will be. It is therefore important to balance these to find the optimal network solution…
To read the rest of this article please download the PDF from the link below.