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New Study Reveals Small WDs Outperform Large Ones


7/1/2003

 

That's a perfect warehouse?

Warehouses come in all shapes and sizes, but the best ones have certain factors in common. A new study conducted by Georgia Tech compares the performance of 212 warehouses in a variety of industries, highlighting the leaders in productivity, accuracy, cycle times, use of technology and quality.

The average facility in the study is 239,985-square-feet; has 57,735 SKUs; and ships 544,345 orders a year. Seventy-seven percent of the respondents use a warehouse management system.

Here are some of the surveys key findings:

  • Because of their efficiency and manageability, small warehouses perform better than large ones. Of the top 10 performers, only one comes in at more than 300,000-square-feet.
  • The greater the number of measurements used, the better the facilitys performance. Of the warehouses that use 11 to 15 measures, 66.9 percent are high performers. By contrast, 87 percent of the facilities with one to five measures are poor performers, and 74.6 percent of the warehouses with six to 10 measures are just average in terms of performance.
  • People and management are key to performance. Low turnover yields high quality. Facilities scoring high on the studys warehouse quality index (shipping accuracy multiplied by inventory accuracy) have a turnover rate of less than 5 percent; the lowest scorers on th

    e Warehouse Quarterly Index have turnover rates of 25 percent or more.

  • More SKU movement equals more productivity. The average survey respondent has 78.2 percent active SKUs; the median number is 85.1 percent. The study urges facilities to purge all dead SKUs frequently: "The average U.S. company goes five years without pruning."
  • The operator-to-supervisor ratio should be low. The best ratios are 12:1 for productivity and 8:1 for quality.

Putting all of the surveys findings together, the perfect warehouse would be 671 feet long, 447 feet wide, 30 feet clear, 300,000-square-feet in size and located inside a free trade zone with 24-hour delivery to U.S. zip codes. It would have 80 percent normal occupancy and 90 percent peak occupancy, boast a fully cross-trained workforce, maintain an operator-to-supervisor ratio of 12:1 and get more than 1,000 hits a year for its SKUs.

CHICAGO RAWHIDE NAMED TO NAPA 95 PERCENT CLUB FOR THIRD TIME
Elgin, IL Chicago Rawhide has been named to NAPAs 95 Percent Club for its performance as a supplier during 2002. This is the third year that Chicago Rawhide has been included in the club.

To qualify for the award, a supplier must consistently meet the minimum service level of 95 percent throughout the year, as established by NAPA. NAPA said Chicago Rawhide supplied NAPA Oil Seals, Oil Bath Seals, Bearings and Powerglide products at a shipping rate of 96.9 percent during 2002.

PARTS PLUS GROUP BUILDS ON WRENCHEAD PARTNERSHIP
Memphis Parts Plus Headquarters recently announced the endorsement of the Wrenchead suite of Shop Management Solutions, according to Alan Bostwick, executive vice president of Parts Plus.

"In addition to being our E-Commerce partner, Wrenchead and Parts Plus will now deliver solid Shop Management Solutions to a broad range of Parts Plus Customers including Car Care Centers, National Accounts and Preferred Customers," said Bostwick. "Through the Partners Plus brand, Parts Plus will begin promoting a suite of shop management solutions from web-based catalog and ordering applications to estimating and full-fledged shop management solutions including bay management, diagnostics, tire fitment and multi-store operations. More details regarding these products will be available in the coming weeks.

BOSCH ANNOUNCES "DREAM TV SWEEPSTAKES" PROMOTION
Broadview, IL Robert Bosch has launched a new national promotion offering a rebate on Bosch Platinum Spark Plugs, plus the chance to win a 42-inch Sony Dream TV.

Boschs Dream TV Sweepstakes, which runs through 2003, provides a $0.60 per plug rebate on up to 24 Bosch Platinum Spark Plugs. Each mail-in rebate/entry submission automatically qualifies for a sweepstakes entry to win the Sony Home Theater Dream System, valued at $10,000.

There is no purchase necessary to enter the sweepstakes. The winner will be selected in an independent drawing at the conclusion of the sweepstakes. Rebate/entry forms are available nationwide at participating auto parts stores selling Bosch Platinum Sparks Plugs. The form can also be downloaded online at: www.boschusa.com.

NEW SOLUTIONS ADDRESS EXCESS INVENTORY PROBLEM
Excess inventory has challenged the aftermarket supply chain for some time, but it is now a top priority.

The recently published Northwood Inventory Study detailed areas in which properly applied information technology should help alleviate some of the root causes. Custom Technology Solutions (CTS) has developed and implemented solutions based on the ASP (Application Service Provider) model that improve a supply chains ability to effectively manage and even reduce inventory levels without negatively impacting service levels.

The study recommends obtaining better information at the sku level as an initial step to more accurate forecasting based on customer demand. CTS demand forecasting tools, for example, enable users to quickly identify changes in business and identify sales trends. This allows the practice of variable pricing based on part popularity, which will lead to greater gross profit. SKU stratification within product line categories are identified as to their contribution to total line/category sales, and this is used to calculate the safety stock required to meet required service levels. This information helps the supply chain manufacture more precisely what needs to be inventoried and no more.

Another area the study suggests will help lower inventory and increase gross profit is performance measurement. CTS Inventory Performance Summaries simplify SKU management by breaking down large amounts of data into to smaller, manageable pieces. Users can analyze the trade off between cost for service level, handling and transportation (based on central and re-distribution decisions) and the benefit limit to variable pricing. Capital/investment decisions can be based on SKU stratifications contribution to sales.

Returns to manufacturers, which represent a significant part of excess inventory problems, are handled by the CTS virtual re-distribution tools. The companys "Virtual DC" analyzes excess inventory and order needs across all locations and allows internal transfers of products, tracks slow-moving parts and satisfies the aggregate needs of a distributors entire operation. A "Returns Approval List" for manufacturers provides an alert system between the distributor and the supplier to communicate sku-based reasons for potential returns. This establishes a basis for minimizing excess inventory throughout the industry by significantly reducing the number of parts being delivered up-channel.

BENDIX DEBUTS LINE OF HIGH-PERFORMANCE ROTORS
Troy, MI Bendix Brakes announced the launch of an all-new, high-performance rotor line, called Bendix Fleet HP. The new rotors are cross-drilled and slotted for enhanced driving performance.

Bendix Fleet HP rotors are designed to handle extreme driving conditions and temperatures often experienced by SUVs and fleet-type vehicles. Because of their radius-chamfered holes and drilled slots, these rotors provide superior performance for wet weather braking and high-speed environments. Manufactured with 30,000 psi-tensile-strength casting, Fleet HP rotors offer smoother, more durable braking, longer life, faster heat dissipation and reduced brake fade.

"The milled slots on our new rotors really maximize the circulation of air around the brake system, helping to keep temperatures at bay," said Jai Mistry, manager of aftermarket engineering for Bendix Brakes. "These are higher performing rotors that reduce warping and work extremely well in professional racing situations and demanding driving circumstances often experienced by police, taxi and ambulance drivers."

Utilizing leading ISO 9000-certified manufacturers, Bendixs premium rotors are engineered to OE design criteria, meeting or exceeding specifications for fit, form and function. Machined and balanced for quick installation, the rotors undergo stringent multi-point inspections for dimensional integrity, chemical composition, hardness, tensile strength, lateral, radial and circumferential run-out, brake surface finish, and static and motional balance.

They have been available for ordering since June. For more information, customers should contact their local Bendix sales representative or call 800-231-3726.

MELLING TOOL ANNOUNCES DISTRIBUTION CHANGES
Jackson, MI With the recent acquisition of Dynagear Oil Pumps, Inc., Melling has also acquired Dynagear Cylinder Sleeves.

During this time of transition, it has become necessary to consolidate much of the extended cylinder sleeve inventories. Effective on June 26, Melling Cylinder Sleeves will be available through selected Melling Factory DCs, including Maquoketa, IA. At this time cylinder sleeves will not be available from Jackson, MI. Current Melling and Dynagear Cylinder Sleeve customers may call Jackson, MI, directly at 517-787-8172, or Maquoketa, IA, directly at 563-652-6806 with any questions.















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