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Bridging the Gap Between Warehouse and Office

February 13, 2013

The Gap Between Warehouse and Office

The warehouse. The office.

Sometimes it’s as if one doesn’t exist to the other. As one customer told us, “it’s like we have two companies here, and one doesn’t know what the other is up to.”

But when you’re trying to improve your operation, or even to operate well, it’s impossible to separate the two functions. Decisions can be made in one area that can impact the other severely, so communication and cooperation are vital. Too bad it doesn’t always work that way. How can you improve it?

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Section 179 Depreciation Extended for 2013

February 6, 2013

money for bonus deductionsSection 179 has been extended for 2012 and 2013 tax years, meaning that you can retroactively file for 2012 for qualifying capital equipment purchases and receive higher deduction limits. Certain types of equipment qualify for a 5-year depreciation period, while others may not.  If equipment isn’t considered “real property” (a permanent part of the structure), it can be classified as “tangible property” and depreciated under 179 for a five year period under the Modified Accelerated Cost Recovery System (MACRS).

Also, the following advantages extend to qualifying new 2013 equipment purchases: $500,000 deduction limit. $2,000,000 limit on capital purchases, and bonus depreciation of 50%. This means you can in essence deduct the full purchase price of qualifying equipment during this tax year.

Essentially, Section 179 tax code allows businesses to deduct the full purchase price of qualifying  products purchased during the tax year from your gross income. See Section179.org or the Govtrack.US web page for more information.

As always, your accountants and finance professionals should be involved in any decision regarding these issues.

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Safety and ROI for Industrial Operations

January 30, 2013

Kevin Gue

In a recent blog post, Auburn professor Dr. Kevin Gue, one of the bright minds in the country when it comes to the business of industrial distribution and plant operations, reflected on the reaction to his ProMat 2013 talk on “Designing a Worker-Centric Facility”.  Many salient points emerged:

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DCVelocity: The Top 12 Distribution Center Metrics

May 22, 2012

a picking operation with conveyors and carousels

This month’s DCVelocity magazine featured its annual report on DC Metrics – a great tool for benchmarking your warehouse operations. The survey was issued to the magazine’s readers and members of WERC, by researchers from Georgia Southern University and a consulting firm partner.
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Posted in Material Handling, News, Order Picking & Fulfillment, ROI, Supply Chain, Warehousing| No Comments »

Justifying AisleCop Forklift Safety Gate Systems

January 13, 2012

AisleCop warehouse pedestrian safety systemWe see two kinds of operations that have shown interest in, or implemented an AisleCop® forklift safety gate system. The first are those companies who have defined traffic plans and are looking to prevent possible accidents in high-risk, limited-visibility, or heavy-traffic aisles. They foresee potential accidents and are taking measures to prevent them. The second kind are companies who have had an incident, or a near-miss.

In both cases, the question has been “how can I justify this system?”

Aside from the fact that it could help save a life, or help prevent horrific injuries (the only kind that a forklift-pedestrian accidents seem to produce), AisleCop® can also save money in a variety of ways.

We have created a document, free for download, that you can use if you’re pitching a safety system to your management. It’s a short, but informative read.

Check it out here: “AisleCop®  return on investment” (PDF file)

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Posted in Manufacturing, Material Handling, News, Pallet Rack, ROI, Safety & Ergonomics, Warehousing| No Comments »

Improving (and proving) warehouse productivity

October 11, 2011

warehouse worker

In the last two decades, smart companies have identified the warehouse operation as a profit center, not a cost center. This is far from universal, but it inches toward that every day. No longer are warehouse managers considered box-hustlers – at least not in smart companies. Many are utilizing varying levels of automation. WMS is standard for larger operations and is making its way even to single-building, midsize and smaller ones.

Very few operations of any size rely completely on muscle, clipboards, carts, and spreadsheets these days; automation, at least in areas, has come into its own. But do you need to radically change your operation (and spend the capital that comes with that change) to boost warehouse productivity?

Some no-nonsense steps:

  • Evaluate warehouse processes. Is each part of the process logical? Process mapping can be done without expensive consultants, either by hand or with relatively inexpensive software. The discussions you’ll have with various department heads and people on the floor are often worthwhile by themselves. Look for gaps in the process you can plug. If packers point to picking issues that cause them problems, you have a place to start.
  • Create a plan – and stick to it. Identifying issues isn’t enough by a long shot, of course. Companies who identify issues and then fail to plan and execute based on them are only talking improvement. Execution is the key.
  • Be determined; bullheaded. Once you’ve identified, planned, and executed a process improvement, you should be able to understand its effect on the operation. If the result of our hypothetical issue between packers and pickers is that packers are better off, but order picking bogs down (or becomes less accurate), we haven’t achieved anything.

Spending money

But you can’t always attain significant increases without capital expense. You may need to implement robotic palletizing, enhanced WMS, etc. “Productivity gains” mean little to CFO’s or other upper level managers, though. They’re interested in dollars – how many were spent, how many were saved, and how fast the investment returns its value to the operation.

ROI isn’t simple math

Do you know your company’s definition for ROI? If you don’t know what it is, find out. It varies throughout companies and industries. A simple line item of my cost of $X saved $Y may not be good enough. In many firms (including Cisco-Eagle) the standard is to also compare that expenditure to what else could have been done with the money, including letting it drop to the bottom line. Prove your idea will pay off better than alternatives.

Can you show that a new conveyor system or picking system costing $600,000 will reduce labor costs enough to pay for itself within a reasonable time? Sometimes this is easier than others. If the system helps you reduce headcount by 10, and each person earned $30,000 per year, you get a rough idea of what you are faced with. But if the system simply allows you to keep up with growth, your justification scenario is easier. Can you also prove that your new idea is going to pay off better than, say, letting that money drop or better than an IT overhaul or other alternatives?

Posted in Automation, Robotics, ROI, Warehousing| No Comments »

Ten Reasons to Automate your Operation

June 10, 2011

automated robotic palletizer

In the not-too-distant past, most companies that weren’t running immense distribution operations, who didn’t have multiple facilities, who didn’t run 24-hour shifts, didn’t even consider automation. Too expensive, they’d say. Too much risk. Too little upside if things go wrong.  All valid in context, if we were in 1998. But the reality is this: While most costs—personnel, land, energy— have increased, automation costs have remained steady or declined across the board. The reality today is that the four guys stacking pallets at the end of a line, even for a single shift, even at low wages, are more expensive than a well configured palletizing system.

Those costs aren’t going to do anything but escalate, either. Listed are ten ways automation has become more relevant, even to mid-size operations:

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Posted in Automation, Conveyor, Manufacturing, Material Handling, Order Picking & Fulfillment, Robotics, ROI, Safety & Ergonomics, Warehousing| No Comments »

Use Propane in your Forklift? Tax Credits are Running Out

June 9, 2011

Forklift propane bottleA federal tax credit that could allow forklift users to recoup 50 cents of every gallon of propane purchased runs out August 1, 2011. If you run forklifts on propane, it’s nearly a no-brainer that your company should apply for this credit. To get in, you must have submitted your paperwork by the first of August. The credit is part of the Tax Relief, Unemployment Insurance Authorization, and Job Creation Act of 2010.  Propane is part of the alternative fuels classification, which also includes natural gas, bio-diesel, and ethanol.

After the deadline, the tax credit reverts to 30%. As always, see your tax professionals before undertaking any decisions based on this information.

Posted in Docks & Shipping, Material Handling, News, ROI, Sustainability, Warehousing| No Comments »

13 Best Practices for Warehouse Productivity

March 17, 2011

Improving a warehousing operation is a complex endeavor that can be approached from any number of angles.  Here are 13 common actions you can consider in any warehouse improvement effort:

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Posted in Automation, Material Handling, Order Picking & Fulfillment, ROI, Supply Chain, Warehousing| 10 Comments »

A Guide to Automated Stretchwrap Machinery

February 19, 2011

rotary tower stretchwrap machinesWe’ve recently posted a guide to stretchwrap machine specification and justification. For operations with the kind of throughput where automation makes sense, machine driven stretchwrappers can enhance quality as well as increase speed. They also offer ergonomic benefits and material savings.

Also, see: standard Stretchwrap Machine models and specs.

Posted in Automation, Cross Docking, Docks & Shipping, Material Handling, Order Picking & Fulfillment, ROI| No Comments »