Software Optimized Beverage Distribution Key features: Minimal investment and short ROI.  Small to medium sized distribution locations cannot justify the cost associated with a fully automated solution. Therefore a software solution provides an attractive avenue to reducing cost and associated factors. The motivations for this application are many:

  • The operations are labor intensive. Any solution that reduces the labor requirement would be welcome.
  • Unpredictable order mix patterns (day to day variation)
  • Large product mix requires training and causes human errors
  • Lost revenue  due to damaged product
  • Cost and lost revenue resulting from wrong deliveries
  • Short delivery time (if it's not on shelf sale is lost)

The business process:  A beverage distribution location may have 500 or more different products available to retail establishments. Orders are received by the distributor from the retail customers and are scheduled for delivery on the next business day. The orders may consist of any number of different products and any quantity of each product.  The distributor assembles the products for a retail customer on one or more pallets for ease of delivery. Pallets are typically assembled as a manual operation by an operator. Some facilities may use mechanized equipment to place layers of homogeneous product if the quantity ordered is sufficient. All remaining product that is not ordered in sufficient quantity to form layers must be placed manually. Mechanized Layer Stacking Operators use a low lift pallet truck to move around in the distribution warehouse locating the products for an order and then stacking them on a pallet base to form a stable assembly. Realize that there could be as many as 500 different products, the operator will invariably be very inefficient in determining the shortest path to take in assembling the pallet.  It is not feasible to detail to an operator, using paper medium, the stacking sequence for the products to be stacked on a pallet. So the items are listed in a layer ordering detail only for products that form uniform layers. After that it is up to the operator to decide how they are to be placed. There are stacking rules that the operator must also be cognizant of in order to build a stable assembly. However, the large number of products makes this difficult even for the most experienced operators.  To summarize, the operator must remember where the product is located within the warehouse at all times, must keep track of which items have already been placed for the order and on the pallet, AND keep in mind how to properly stack the products so the pallet will not collapse. Not an easy task for anyone. Business Problem areas:

  • Short delivery cycle. Orders are received from retail customers to be delivered the next day. It is important to the distributor to have the product on the retail shelf or the customer will buy another brand (sale lost).
  • Associated with the short delivery cycle is an un-predictable order mix from day-to-day. Since products will be depleted at varying rates, not all products are consumed at same rate. So you really can't forecast delivery requirements.
  • Retail customers vary in size and product mix (different areas consume different flavors and there are different retail store types). The problem can be somewhat mitigated by categorization of retail establishments (grocery stores, convenience stores, etc.). But this does not help much since most retail customers have 'cross-over'. Grocery stores have coolers to serve individual items and convenience stores carry 'cartonized' products.
  • Large (and increasing) product mix. Retail shelves have less inventory space to allocate to each product since there are so many products. This results in the need for frequent ordering in smaller quantities.

Operations Problem Areas:

  • Manual labor, expensive, not predictable, error prone.
  • Large number of products compounds operator requirements: keeping track of where products are stored, which products are on order (order errors), stacking rules to remember to build stable pallet.
  • Varying order mix and size makes it hard to predict manual labor requirements.
  • Manual labor is volatile causing re-training of new operators.
  • Manual labor causes lost revenue due to product damage caused by collapsing pallets as a result of incorrect stacking.
  • Manual labor causes lost revenue due to wrong products placed on pallet.

Cost Reduction Opportunities Through Software:

  • Palletizing algorithm, increases efficiency of operator (no thinking involved), no experience required (no training or expertise), produces minimized number of pallets, minimizes damage by defining most stable stacking sequence, optimize operator utilization by eliminating potential re-building of pallet caused by unstable pallet stacking.
  • Pallet building sequence optimization. Minimizes the movement of bulk product by sequencing the building according to the current product available to the operator(s).
  • Mechanized layer stacking optimization. Minimizes the movement of bulk product by sequencing the pallets according to the current product available to the operator.
  • Minimize assembly time for pallet by minimizing travel required by operator to locate product. Software can determine the best next product to pick based on the operators current location.
  • Minimize assembly time by eliminating the need for operator to remember where the product is located. Software can direct operator to product location.
  • Minimize assembly time by eliminating any thinking on the part of operator as to where to place products on pallet. Using a wireless console, software can present 3D rendering of pallet and package placement instruction.
  • Minimize assembly time by eliminating time required for operator to keep track of order items and sequence compared to paper driven instructions. Software keeps track of which items have been placed so operator errors are minimized.
  • Minimize potential for unstable pallet stacking by providing visual position indication to operator for package placement (no thinking required of the operator). Elliminates the need for operator training and obviates the effects of increasing products.
  • Optimizing the assembly process through the positioning and movement of bulk product. This segregates high volume, homogeneous layer, assembly to a high speed mechanized assembly. The medium volume and mixed flavor layer to a separate area and the low volume products to a mechanical feed area.
  • Optimizing the assembly by providing audio and visual directions to the operators. This ensures correct order fulfillment by eliminating operator errors.

A solution to beverage distribution can be found here.

    Volume Segregated Assembly