The Secret to a Successful Yard Layout
Drive-thru warehouses support the key to successful operations: minimal handling.
Hartville Hardware, Hartville, Oh.
“We are all in a race, a race to become the lowest cost distributor of lumber and building materials in our market.”
This was the observation of a newspaper turnaround specialist who was hired to serve as CEO of an independent lumber chain that had been purchased by an investor group. Once all of that sinks in, you have to appreciate such an astute observation of an individual who had no experience in our industry.
The mission was to make their three locations as profitable and efficient as possible. On the retail side, that means increasing sales, margins and turns. That is done with a layout that places the right mix of products, in the right location in the store and at the right price. Studies have shown exactly what that looks like.
In the yard and warehouse the key is minimal handling, minimal forklift drive time to assemble a load, and minimal effort to load delivery trucks. Where products are located determine the labor time it takes to pull the order and place it in the out-going staging area.
Starting with receiving, the unload area must be close to the product home locations, with the highest volume product adjacent, the slowest moving products furthest away. The next filter is the way it is sold, full unit or by the piece. Obviously if sold by the piece it will have far more forklift trips to its location so it should be closer to the loading area.
The important filter “What does it frequently ship with” is the key! A word to describe the process is “clustering,” placing all
of the products that ship together in the same area. For example, the initial shipment to start a house; studs, treated sill, sheathing and underlayment would be located in one area.
Other clusters would include roofing, felt, flashing and nails; insulation, siding and wraps; Sheetrock, tape and joint compound; and so on.
In order to reduce the geography you must go up with the products that lend themselves to multi-level picking. Strategic use of racking, both cantilever and pallet racking enables you to increase the number of skus surrounding the clusters. The high volume product is ground stacked; the slower movers are in racks.
In two of their yards, a drive-thru warehouse was added as they each had a high level of customer pick up activity. The third yard was nearly all delivery so that investment was not necessary.
Why a drive-thru? In the clustering approach, products are intermixed and it would be confusing to customers trying to pick their own material. However, it is the intermixing that profoundly reduces pick time. It also expedites the process if customers are isolated in one area. Most experience a 20 to 30% reduction in operating costs, one client reported a 70% reduction!
If you have a storage problem, a racking company will do an excellent job. If you have a profit problem, you need to go through the process that will accomplish the dramatic savings you can expect from these concepts. After all, don’t you want to win the race?
– Ron Johnson is the founder of Johnson Design Services, Portland, Me., handling new site developments and renovations for 800 stores and 300 lumberyards since 1991. Reach him at email@example.com or (800) 862-5552.