Manufacturers Spending the Most on Flexibility and Efficiency in 2017

on March 30, 2017

tpmModern Materials Handling (MMH) recently discussed the results of Peerless Research Group’s 2017 Warehouse/DC Equipment Survey. This survey polls industry professionals on the topics and issues that they spend their resources on, be it money, time, or intellect. This year’s results reflect the changes that manufactures have been forced to make since the birth of e-commerce.

Digital purchases are growing every year, even putting brick and mortar stores out of business. This means faster cycle times; smaller, more frequent orders; and labor pressures for a lot of companies. As a result, there’s a push to spend more on automated materials handling solutions & related software systems in order to keep up.

Norm Saenz, technology director at St. Onge Company, is quoted in the MMH article:

“Many of the retail industry DCs weren’t designed to deal with e-commerce-size orders, so you just can’t get those orders out of the building very effectively without investing in new material handling equipment of some kind, or in information technology systems.”

Survey respondents clearly agree with Saenz, as they spent more money or plan to spend money on material handling equipment and IS solutions. Almost half of those polled indicated that they have a pre-approved budget for materials handling for 2017. The average budget is over $422,000; 23% of respondents have budgets that top $1 million.

Implementing new equipment and systems is quite an investment. It’s important to look at the need through an organized understanding of what can be made more efficient without new equipment, and also how far-reaching efficiencies are with new equipment. By identifying the greatest opportunities for improvement, a company can spend wisely, yielding the most productivity and the best ROI.

Managers can get a complete, organized understanding of the workflow using a Lean strategy like Value Stream Mapping. Lean was a very popular methodology in the survey results. For best practices, respondents most listed:

  • Lean
  • Just-in-sequence production
  • Trading partner collaboration
  • Continuous improvement

For any company that is moving toward efficiencies to accommodate e-commerce demands, it is important to evaluate the entire process. Packaging is often overlooked in strategies to increase efficiency, though there is usually a huge opportunity for improvement. Does your packaging make it easy for your packers to quickly, consistently, and efficiently arrange contents? Is there an opportunity to reuse packaging? Consider product damage as it relates to the fill you use as well as the packaging itself. How often do you cover the cost of damaged goods? Is the fill the most economical choice for the product and the package? All of these questions can help you uncover opportunities to improve your packaging.

If you need help understanding whether your current packaging materials and structure are slowing you down or costing you money, talk to the experts at Packnet. We work with you to find the solution that is right for you. Request a free assessment or call us at 952-944-9124.