Report reveals opportunities to improve productivity in distribution centers

Benchmark report says many DCs still rely on labor-intensive methods of picking and auditing orders

Corinne Kator, Modern Materials Handling -- Logistics Management, 4/1/2008

A surprising number of distribution centers rely on labor-intensive methods of order picking and quality assurance, according to Bruce Tompkins, executive director of the Supply Chain Consortium and author of the recent “2008 Core Benchmarks Report.” These companies could improve productivity, he says, by adopting labor-saving technology.

Order picking

The report reveals that discrete order picking is the most commonly used picking method among Supply Chain Consortium members, representing more than 25% of order lines picked. Tompkins says he was surprised to see so many companies fulfilling orders one by one.

“There are clearly some advantages to using some other methods,” he says. “Batch and zone picking are pretty easy to do, but for some reason a lot of people are still using a one-at-a-time approach.”

With so many DCs still relying on this simple but labor-intensive picking method, he says, the opportunities to improve productivity in the supply chain are significant.

Quality assurance auditing

Another area of potential improvement is in outbound quality assurance auditing. More than 90% of survey respondents report performing count checks in their DCs (i.e., counting the number of items in a completed order to ensure it matches the number of items ordered).

This is a labor-intensive form of auditing, says Tompkins, and in many cases could be replaced with automated weight checks. “Using weight checks means you only have to deal with exceptions,” he says, “and it really doesn’t cost that much.”

Perhaps the best way to reduce or eliminate quality auditing is to improve upstream processes. “Auditing is a non-value-added process,” Tompkins says. “It just means that your other processes are broken.” If a DC improves inventory and picking accuracy enough, he says, quality audits become unnecessary.