President Obama’s recent State of the Union address focused on manufacturing in the United States – which everyone, no matter their political persuasion, can agree is a vital part of our economy. Countries that don’t make things aren’t world powers, period.

And the numbers, on the surface, can look dire. According to Forbes,  22 million manufacturing jobs were lost globally between 1995 and 2002. The U.S. has lost hundreds of thousands of manufacturing jobs in that timeframe.

The common belief is that these jobs were palletized and shipped east to China or south to Mexico. That has happened (we’ve seen it in our client base more than once) but it’s only part of the truth. The reality is more complicated, and may help us to understand why manufacturing output has increased in the U.S. even while jobs have been reduced. Manufacturing output didn’t just grow; it rocketed 30% since 1995. China – the supposed vampire of manufacturing employment – lost a whopping 16 million jobs in the sector.

In a word, the “culprit” (if you want to call it that) is automation. Robotics has become less expensive and significantly more capable – and continues to improve.

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Based on 5 Japanese words that begin with ‘S’, the 5S Philosophy hones in on effective work place organization and standardized work procedures. When correctly implemented, it reduces waste, increases efficiency, and overall work quality. You’ll also have a safer, more effective operation and employees who are more checked in than they were before. It simplifies work flow and helps you find inefficiency.  You may see things like empty flow racks, needless processes, over stocking, redundant operations,  looming maintenance problems, and more.

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The end of a manufacturing or distribution line is where the rubber meets the road for many operations. It’s potentially the last place where you have direct control of your product before it ships to retailers or direct customers. It’s where you can add a lot of value…or spoil a lot of value. The end of the line in many ways is more important to your company’s image as all its public relations, its websites, its brochures. It is often where your reputation can be made.

At the end of line, we package, we palletize, we stretch-wrap, we inspect, we ship. And we have the chance to add value.

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The American Small Manufacturers Coalition (ASMC) released the results of its 2011 Next Generation Manufacturing Study, identifying key trends affecting the industry and steps U.S. manufacturers can take now to be successful in the next generation. Some of the findings are fairly predictable, while others may surprise you. In particular, you have to consider people at all levels. Are your key players likely to retire or take other positions over the next decade or so? How can you prevent that? What can you do to further develop them?

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Retail distribution facilities have multiple options for shipping product to store locations. They can send full pallets which must be unwrapped, unloaded, and stocked at the store location. They can send packed carts that can easily be rolled onto store floors and stocked at the point of sale. What method works best?
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Especially as the economic recovery continues, it’s important to control costs in your operation. What are some warehousing cost-cutting methods you can employ that don’t require extensive investment or re-tooling? Most of the costs of warehousing operations fall into the following categories:

• People
• Real Estate, Utilities & other Fixed Costs
• Inventory
• Technology

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In this video, a Fanuc robot is executing mixed-load palletizing of beer cases at a distribution center.

In this operation, differently-sized beer cases are conveyed to the robot to fulfill a specific order. Since the cases vary by width, length, and height, their dimensional information is sent to the robot by the WMS (warehouse management system). The robot utilizes mixed-load palletizing software to determine the best pattern to build a pallet with the available products, achieving high density and stack stability with rapid speed.

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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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The Boyd Company has released a useful document on the comparative costs of operating a warehouse or distribution center around the United States, “Comparative Distribution Warehousing Industry Operating Costs”. It takes multiple factors into account and provides an annual operating cost for many cities and regions. The report bases these costs on a hypothetical 175,000 square foot facility with 75 nonexempt workers. This warehouse would ship over-the-road to a national U.S. market.

The factors taken into consideration include:

• Total annual labor costs
• Electric power costs
• Natural gas power costs
• Amortization costs
• Property and sales taxes
• Shipping costs

Some markets of interest and their annual operating costs:

• San Jose, CA (most expensive): $12,064,961
• Sioux Falls, SD (least expensive): $7,417,487
• Chicago, IL $10,351,816
• St. Louis, MO: $8,808,609
• Dallas/Ft. Worth, TX $8,430,605
• Oklahoma City, OK $8,119,512
• Tulsa, OK $8,089,925

Obviously these numbers won’t be an exact fit for every operation, but they can give you a good idea of costs in a given city or state.

The Integrated Systems and Controls (ISC) Council of Material Handling Industry of America has released a new report titled An Evaluation of Operational Performance in Warehousing, Distribution and Manufacturing., and it has some interesting information for those who operate warehouses, distribution centers, manufacturing, and commercial operations.

The key thing? You’re still being asked to squeeze more value from your operation – and you need to be able to do it with fewer resources.

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