Old Manufacturing Hubs Find New Life in Warehousing

Over the past decade, millions of manufacturing jobs have disappeared from U.S. cities, while employment in warehousing and transportation has surged.

Internet retailers like Amazon, Walmart and Zulily are competing to deliver goods to the buyer’s doorstep as quickly as possible. The result has been a constellation of vast warehouses employing workers without college degrees. And it’s breathed new life into pockets of the country that had fallen economically behind.

In recent years, steel mills in Texas and Pennsylvania, shipyards in Louisiana and former military sites in Joliet, Ill., and Oakland, Calif., have all been reinvented as logistics hubs. In fact, redevelopment firms are finding that such endeavors are often more appealing to the local populations than breaking ground on new developments.

Resistance to Development

Take, for instance, the situation in Lehigh Valley, Penn., where developers are encountering significant residential backlash as warehouses gobble up real estate. Residents of several once-rural communities are not all thrilled about the area’s urbanization.

According to Becky Bradley, executive director of the Lehigh Valley Planning Commission, Lehigh residents have suffered “severe culture shock.” Big companies have rapidly moved in and started building over the past 10 years.

“Where there was once a wheat or corn field is now a warehouse, and people aren’t happy about that, so politically it’s a very sensitive issue,” Bradley said. “It was residential for 50-60 years, and now it’s different.”

About 62 municipalities span the two counties that make up Lehigh Valley (Lehigh and Northampton counties), and not all of them are in agreement about how much warehouse building should continue in the area.

Reinventing Old Factory Sites

Which makes the redevelopment of old manufacturing sites more appealing than gobbling up rural real estate. And the government has sweetened the deal by offering incentives, such as tax abatements and credits. These incentives allow companies that redevelop steel mill land to save hundreds of thousands on their tax bills over 10 years.

And the location is often ideal. “All these old-line industrial sites are on great real estate,” said Michael Moore, a former shipping and port executive. “The same things that make them great for manufacturing—the land, the water, the rail—make them great for logistics.”

Giant Warehouses = Lots of Workers

As Americans have grown more comfortable with online purchasing, the size of their orders has increased. Even bulky items like canoes and refrigerators are being bought over the internet. Which means warehouses have become gargantuan, doubling in size since 2010.

And while robots are controlling more and more of the distribution processes, it still takes a lot of bodies to move hundreds of thousands of boxes in and out of these buildings every day. As a result, warehouses serving the largest e-tailers typically employ more than 2,000 people. (See related article, “Warehouse Automation: How Far Should You Go?”)


In fact, since 2010, warehouses have been adding workers at four times the rate of overall job growth. According to Michael Mandel, chief economic strategist at the Progressive Policy Institute in Washington, this growth illustrates “a rather large transformation, and the humble warehouse is the leading edge of this.”

Goetz Wolff, a UCLA professor of urban planning, agrees. “The distribution system and warehouses offer employment, and so logistics is viewed as a kind of savior,” he said.

According to Mandel, “These fulfillment center jobs are not being created in the tech hubs that were growing before. We’ve broadened the winner’s circle.”

The New Winners

So who are “the winners”? They’re people like Ellen Gaugler of Bethlehem, Pennsylvania. She remembers driving her father to the now-closed Bethlehem Steel mill. These days she drives herself to the same location, only now it’s a Zulily warehouse.

 

The 54-year-old earns $13.50 an hour putting together shipments at the warehouse. (According to the U.S. Labor Department, the average warehouse worker earns $15.47 an hour, compared with $22.36 in the metals manufacturing industry.)

Gaugler says some folks in town are nostalgic for the time when the steel mill filled the sky with black smoke and the furnaces churned all day. But not her. “These are secure jobs,” she said. “With the steel, you didn’t know if you would have a job the next day.”


Sources:

New York Times

Wall Street Journal

Supply Chain Dive


Three Creepy Haunted Warehouse Stories

Think spirits and ghosts only haunt houses? Think again.

Just in time for Halloween, we offer three haunted warehouse stories for your reading pleasure…

Beware of the Dark Room

A 22-year-old Philadelphia resident, who goes by the name of “King K,” relayed the following harrowing tale:

As a Walmart employee, King sometimes must travel to the company’s warehouse, about an hour’s drive from the store. It’s a massive structure, full of pallets and merchandise. In the back of the warehouse is the Dark Room, so named because no one could ever get the lights to work in the room. And several of King’s co-workers (including his manager) said they felt an overwhelming sense of fear and dread whenever they worked around the room.

King had also heard stories about flickering lights throughout the warehouse and a dark creature with glowing red eyes that inhabited the Dark Room. He had always laughed off these tales.

 

One day while working at the warehouse, King took a break to visit the men’s room, a place he later described as “beyond creepy.” Although most of the room was lighted, the back two stalls were intensely dark. “Impossibly dark,” he said. Then King suddenly felt a cold chill flow through his body. His hair stood on end.

Later that day, King’s curiosity led him to investigate the Dark Room. His co-worker, Ray, reluctantly agreed to go along. At first, all they could barely make out in the darkness were some old tables and debris scattered around the room. “No demons or ghosts in here,” King said.

As he started to leave and was just yards away from the door, something huge squawked loudly and flew past him. “What was that?!” King screamed. As he and Ray looked up towards the ceiling, they could discern the outline of something birdlike, “like a raven, only impossibly huge.” He went on to describe it:

“It was like a shadow that had arisen from the ground and had become a shape itself. It’s eyes though—that’s what gave it away. They were red. But not so much glowing, just a glossy red. I could feel a pressure or a presence coming from the thing.”

Then Ray placed his hand on King’s shoulder and yanked on his shirt. King finally “snapped out of it,” and they both ran out of the room.

The Woman in White

Our next haunted warehouse story is told by a California girl named Stephanie, whose father works at a car dealership in Vallejo, California. The dealership keeps a warehouse for overflow inventory on nearby Mare Island—a naval shipyard which is considered one of the most haunted places in the San Francisco Bay area.

Stephanie’s dad is quite friendly with the night-shift security guards at the warehouse, who would often relay stories to him of strange phenomena, such as flickering lights and mysterious loud, banging noises.

One day, after the warehouse had upgraded its security cameras, one of the security guards was testing the new cameras. He moved camera angles around and played back recorded footage to see how it looked.

Then, while viewing the different monitors, the guard suddenly froze.

There on the footage, staring back at him, was the figure of a woman dressed in white standing by one of the warehouse posts. The guard captured the image on his phone:

 

Is it a ghost? You be the judge.

An Old Houston Haunt

Our last haunted warehouse story involves a place that is not actually a warehouse anymore. But it did start out as one.

Spaghetti Warehouse in Houston was part of an Italian restaurant chain, headquartered in Dallas. (There’s also one in Syracuse.)

Built around 1912, the structure was originally the site of a fruit and vegetable warehouse. It later housed a pharmaceutical company. According to Preservation Houston, the building’s location was among a very busy row of warehouses that would line the street leading to the port.

After the building became the Spaghetti Warehouse in 1973, many signs of haunting were told over the years. Customers and staff alike relay stories of floating wine glasses, strange flickers of light, cold spots (even during heat waves), mysterious sounds, mysterious sightings, and voices in the night (sometimes calling people’s names).

Although some long-time staff refused to speak about their ghostly encounters, the restaurant managers willingly recounted the haunting tales and their history.

Apparently, it all began when the building served as a pharmacy in the early 1900’s. One day, one of the pharmacists was tragically killed by a freak accident after falling down the elevator shaft. Devastated by his death, the pharmacist’s wife died of a broken heart exactly one year later.

The pair of ghosts then began to roam the building—the wife primarily on the second floor, while the husband shuffled around in the men’s restroom. The ghost of the wife was said to rearrange furniture, leave the dishes and silverware in disarray, tap guests on their shoulders and pull their hair.

Waitress Patti Chapa told a reporter in 2009 that her shoelaces frequently and mysteriously came untied while she was working. Even when she would double- and triple-knot them.

Once, while waitressing a private party, a co-worker pointed to Patti’s shoelace, “which was stretched out straight and floating parallel to the ground.” Patti said to the co-worker, “I hope I don’t step on anyone,” referring to a presumed spirit. Immediately, the shoelace dropped.

According to the restaurant manager, voices of children were often heard running around the building, especially upstairs near an antique “urn cabinet.” The urn cabinet was a piece of furniture traditionally used in orphanages to hold the ashes of deceased children. They were particularly common in facilities that lacked adequate space to bury their dead charges.

Although nothing bad ever happened to her while working, Chapa says she never entered the building by herself.

“I’ve seen the [ghost] in the front window,” she said. “It’s just like you’d see in a comic. It never hurts us, but it lets us know it’s here.”

New Life

The Houston Spaghetti Warehouse was all but destroyed by Hurricane Harvey in 2017 and was forced to close after 44 years. Steve Tomlin, the new owner of the building, is fully restoring the historical structure, and plans to open it as a bar and restaurant that will be virtually flood proof.

He did note, however, that the first day he was on the property, he had the distinct feeling of being watched. “You know when you can tell someone is watching you? It’s something like that,” Tomlin said.


Sources:

Darkness Prevails

Houston Chronicle

Houston Business Journal

Houston Press


The Seven Biggest Factories on the Planet

It seems factories just keep getting bigger.

With thousands of worker bees deftly manipulating expensive machinery in round-the-clock shifts. Creating planes, cars, batteries. Efficient little cities of industry within four walls. All vast, sprawling production complexes.

Let’s take a look at the seven largest factories on the planet. (For some of the world’s largest warehouses, see related article, “Over-The-Top Mega Warehouses and Factories.”)

#7: Jean-Luc Lagardére Plant

It should come as no surprise that aircraft assembly plants are among some of the world’s largest factories. And this one is massive.


Located in Toulouse-Blagnac, France, the Jean-Luc Lagardére Plant assembles the pieces for the Airbus A380 – the world’s largest passenger airliner. The plane’s various components are crafted at diverse locations across Europe. The French facility then assembles and tests the final build in its 1.3-million-square-foot factory.

The entire complex also includes 49 acres of runway outside the plant, as well as company restaurants, and fluid and energy production plants.

#6: Rivia Automotive

The former Mitsubishi North America production plant in Normal, Illinois, was finally purchased by Rivia Automotive in January 2017.

The plant’s floor area of 2.4 million square feet will be used in the production of autonomous electric vehicles, scheduled to begin in the first quarter of 2019. Built in 1981, the mammoth facility includes manufacturing and office space, a paint shop, robotics, stamping machines and other production equipment. The 600-acre property also encompasses farmland, a test track, and several buildings located on individual plots.

The Michigan-based electric vehicle startup has been in business since 2009. Like its rival Tesla, Rivian’s CEO is a high-caliber engineer (he holds a PhD in Mechanical Engineering) and visionary.

#5: Belvidere Assembly Plant

Also located in Illinois, this factory is owned by Fiat Chrysler (formerly known as Chrysler Corporation, then DaimlerChrysler, and then Chrysler Group LLC). The facility was constructed in 1965 and occupies a whopping 3.5 million square feet of space.

It sits on more than 280 acres of property, and employs more than 5,100 workers and 780 robots in the assembly of the Jeep Compass, Jeep Patriot and Dodge Dart. In fact, it was the first Chrysler plant to implement a completely robotic body shop. These robots are capable of making necessary tool changes automatically, within a 47-second cycle time.

#4: Boeing Everett Factory

When you build airplanes, you need clearance — as in lots of space. So it’s not surprising that the world’s largest building by volume (472 million cubic feet!) is the Boeing Factory in Everett, Washington. This is where the 747, 767, 777, and 787 Dreamliners are built.


The 4.2 million-square-foot plant covers nearly 100 acres and includes a museum, theater, 19 restaurants and a store. Built in 1966, this ginormous facility also boasts 2.33 miles of pedestrian tunnels underneath the factory floor, its own railway sidetrack, more than 1,000 bicycles for getting around the plant, and one of the world’s largest murals.

The factory employs more than 30,000 people, and staffs its own fire department, security team, daycare center and fitness center. Tours are available through Boeing’s Future of Flight Aviation Center.

#3: Tesla Factory

Coming in at #3 in our list of the world’s largest factories is Elon Musk’s bad boy, the Tesla Factory in Fremont, California. (Not to be confused with the battery-producing Tesla Gigafactory, currently under construction in the Nevada desert. When complete, Tesla expects the Gigafactory to be the biggest building in the world.)

The Fremont factory is one of the most advanced automotive plants in the world, focusing solely on the production of electric cars and electric power train components. At just under 5.5 million square feet, the plant uses more than 160 specialist robots, including ten of the largest robots in the world.


Tesla didn’t build this factory from the ground up; they purchased it from General Motors in 2010, and the first Tesla Model S rolled off the production line in June of 2012.  The plant currently produces more than 100,000 vehicles a year, including the Tesla Model S, Model 3, Model X and Roadster.

#2: Hyundai Motor Company Ulsan Factory

Getting down to the wire here in our countdown…

#2 is also one of the biggest automotive factories in the world. The Hyundai Motor Company factor in Ulsan, South Korea, occupies more than 54 million square feet. Needless to say, it’s the company’s primary production facility, rolling out one of its 14 different models every 12 seconds!

This five-building plant is spread over 1,225 acres of land. It’s so huge it has its own road network and infrastructure, including a hospital, fire services, shipping pier, and even a sewage treatment plant, for crying out loud! Some of the company’s 34,000 workers sleep in onsite dormitories.

Drum roll, please….
…And now… the Granddaddy of them all…the largest factory on the planet…

#1: Volkswagen Wolfsburg Plant

This manufacturing plant in Wolfsburg, Germany, employs a staff of more than 70,000 and occupies an astounding 70 million square feet of space. Which is why each floor worker is issued a bicycle for getting around the plant.

Churning out about 4,000 vehicles per day (four different Golf lines, the Touran, and the Tiguan), this factory handles everything from toolmaking to plastic production.

The plant’s state-of-the-art paint shop (the world’s largest) was the first to use eco-friendly water-based paint. And the press shop alone produces 1,500 metric tons of sheet metal every day.

Adjoining the factory are two impressive silo-like glass towers designed specifically for vehicle storage. The bigger one is about 160 feet tall, and stores about 400 cars.

Even more amazing is the technology which enables the factory employees to work on more than five different cars simultaneously, without compromising efficiency or quality. See for yourself:


Sources:

Popular Mechanics

Visual Capitalist

Inside EVs

The Richest

The Clever


Helping Hand: The Logistics of Disaster Relief

Last year’s hurricane season dealt a devastating blow to Texas, Florida and, most notably, Puerto Rico. Recovery efforts are still continuing, and will be for a long time.

But in the immediate aftermath of a natural disaster, ensuring that critical supplies reach affected populations is paramount. Food, water, medicine and other life-sustaining materials must be quickly transported, stored and distributed so as to do the most good. But how?

The Logistics Hurdle

In disaster relief operations, logistics is often the biggest hurdle. In fact, as much as 80 percent of disaster relief costs go toward transporting, warehousing, and distributing goods and services to affected communities.

It takes a coordinated effort between government agencies (such as FEMA), charitable organizations, non-governmental organizations (NGOs), disaster recovery companies and 3PLs. All these entities must mobilize behind the scenes to provide the necessary materials and help jump-start rescue and recovery operations.

And a clear organizational structure is critical for making decisions under extreme conditions. Without it, chaos quickly ensues.

For instance, right after Hurricane Katrina, there was simply no system in place to handle a relief effort of that magnitude, according to relief providers.  Shopping center parking lots were crowded with unneeded donated clothing, while essential shipping and handling services were scarce. As a result, many donated items never reached those most in need.

In an effort to prevent future logistical disasters such as those following Katrina, the American Logistics Aid Network (ALAN) was created. ALAN uses a web portal to match supply-chain businesses with relief agencies per their specifically stated needs. The businesses can simply browse the agency needs list and determine where they can help.

ALAN’s disaster relief work is built on strong relationships among supply-chain businesses, relief organizations, and governments.

That Challenging Last Mile

When managing a supply chain under desperate conditions, the greatest logistics challenge is the notorious “last mile.”

Flooded roadways… devastated distribution centers… disabled communications.. Often all of these converge in the last mile of a relief effort. Critical medicine can be shipped thousands of miles only to spoil in the sun as relief workers tend to victims.

 

Frank Clary is a project director at global logistics provider Agility. He knows just how challenging that last mile can be. In his view, 3PLs are just one resource in the disaster relief tool kit – and not even the most important one. Clary has seen NGOs and voluntary organizations active in disaster (known as “VOADs”) perform feats that hardly seem possible. Under the worst possible conditions these organizations not only establish logistics, but also create medical and food relief infrastructure — within days.

“We couldn’t do it, but humanitarian aid groups do it all the time,” Clary said. “We learn a lot from them.”

Increasingly, Agility, ALAN, UPS and other logistics providers are utilizing new technologies to transform a once-grueling, labor-intensive process into something resembling a modern-day global supply chain.

Technological Advances

Here are just a few of the technological advances that are being utilized for disaster relief:

Demand Analysis.  Big Data is being used to model the demand for food, water, medicine and other necessities following a natural disaster. Using historical data from Enterprise Resource Planning (ERP), Warehouse Management System (WMS) and other supply chain management systems relief providers can incorporate the most likely scenarios.

Inventory control and management.  During the uncertainty of natural disasters, providers are relying on warehouse management software to maintain adequate inventory levels.  In many cases, inventory can be pre-positioned in locations close to potentially affected areas.  A comprehensive WMS provides enterprise-wide visibility for full inventory management across all facilities where goods are stored.

Continual communication.  Industrial-grade rugged mobile computers are used to empower relief agencies to share vital information in real time.  As a result, goods and assets arrive at the required location much faster.  Mobile computers also are used to document damage and human safety issues through photographs and video.  Most of these also include GPS tracking, another great safety feature for pinpointing and communicating information about affected areas in times of crises.

In addition, relief providers often use barcodes and scanners to streamline the data collection process, saving time and improving the accuracy of information needed by all parties. When communication systems fail, coordination and collaboration also often fail, as explained in the following video clip:

 


Sources:

Journal of Commerce

American Logistics Aid Network

Datex Corp

McKinsey & Company


Wow! 95% of Wood Pallets Now Being Recycled

Companies that rely on wood pallets to transport their wares now can feel even better about their choice.

The latest research from Virginia Tech indicates that a whopping 95% of all wood pallets are now being recycled. According to trade publication Environmental Leader, the two-year study showed that “wood pallets are increasingly being reused as long as possible, and then are being converted to mulch, animal bedding, or biofuel.”

Avoiding the Landfill

Both municipal solid waste (MSW) and construction and demolition (C&D) landfill facilities were surveyed. The study found that, over the last 20 years, the number of pallets entering landfills has dropped by 86%.

And  pallets that do end up there are often recycled by the waste facilities themselves. Several factors have contributed to this recyling trend at landfills, such as:

  • Environmental awareness,
  • Limited space, and
  • Desire to be more waste efficient

So now many waste facilities also sort and recover several different types of debris.

“Of those wooden pallets that arrive at landfills, both MSW and C&D facilities recycle even further. The results show that landfill facilities have increased their wood and wood pallet recovery areas over the past two decades. For MSW facilities, this number increased from 33% to 62% of facilities, while for C&D facilities, the number increased from 27% to 45%.” — Laszlo Horvath, assistant professor, Virginia Tech

Financial Incentives

Pallet recycling has become a rapidly growing segment of the pallet industry in recent decades. As perceptions have changed, pallet users have gravitated toward more sustainable solutions.

But they also have financial incentives for recycling. Savvy business owners know that reconditioned pallets are just as sturdy and dependable as the originals, and they’re typically offered at a substantially lower price than new pallets of similar quality.

 

According to the Virginia Tech researchers, U.S. businesses are particularly inclined to recycle their pallets when they are located within close proximity to a pallet recycler or a company that grinds pallets into mulch.

Proof Is in the Data

Members of the Virginia-based National Wooden Pallet and Container Association (NWPCA) were delighted (but not surprised) by the preliminary results of this most recent study.

“Data of this kind had not been collected since 1998,” according to Brad Gething, NWPCA director of science and technology integration. “The wood packaging sector has long been touting their recyclable efforts for decades, and now the data proves it.”

Larry Howell, NWPCA chair, echoed that sentiment. “Our industry is thrilled that the data proves the wood packaging sector, more than any other, is closing in on zero-waste,” Howell said. “Wood pallets are 100 percent recyclable, and the newest research from Virginia Tech shows that our industry has the highest recovery rate, at 95%, compared to other prevalent materials.”

The Virginia Tech research project was funded in part by the US Forest Service and The Pallet Foundation.


Sources:

Environmental Leader

Construction & Demolition Recycling

Packaging Revolution


3PL’s Continue to Adapt, Evolve

Remember when “Amazon” was a rain forest or a river, and a “tweet” was the sound a bird made? Just as the digital world has changed beyond recognition in the last 20 years, so too has third-party logistics (3PL).

Over the past several years, the 3PL industry has greatly expanded its global footprint. That trend is expected to grow. Why? More than 80% of all Fortune 500 companies currently use warehousing, distribution, software services, and domestic and international transportation management. And these services form the crux of the 3PL landscape.

A research report from Global Markets Insight indicates that third-party logistics will be well over a $1 billion industry by 2022. That’s an annual increase of 4.4%.

These kinds of increases require continual evolution and adaptation. Let’s take a look at some of the major trends in 3PL’s:

In the Clouds

3PL providers are increasingly utilizing extensive cloud-based technologies. These systems enable businesses to store a massive influx of data. But they also allow clients to easily access their systems, and they improve the overall effectiveness of a company’s logistics.

In addition, the emergence of “big data” analytics, smart technology, and data sharing continues to help 3PL’s evolve. For example, increased data sharing is expected to help improve tracking services across the supply chain. And experts predict that the amount of big data will grow from 3.2 to 40 zettabytes by the year 2020. (See sidebar, “How Much Is a Zettabyte?”)

Also, with the increased use of mobile apps, customers will be able to track the details of their shipments and process freight shipments from anywhere. This will further fuel the industry trends.

Globalization

The business landscape of 3PL industry will grow increasingly complex as supply chain operations expand massively worldwide. So 3PL market players will need to stay on top of the game. They’ll have to understand international legal implications and regulatory compliance if they want to maintain their position.

The emergence of new markets, currency exchange, and international trade will serve as growth indicators for the 3PL’s of the future.

Automation

Experts expect that heavy deployment of automation will push 3PL industry size over the next few years. For one thing, automated warehouses use up about 40% less floor space than traditional warehouses. Increasingly, warehouse 3PL’s are relying on automated lifts and robotics to reduce the amount of space needed for storage. (See related article, “Warehouse Automation: How Far Should You Go?“)

On-road automation is another area where expansion is expected. Self-driving trucks are already undergoing extensive testing on U.S. roads. For instance, one San Francisco-based company (Otto) has been developing these trucks and testing them on California roadways since January 2016. Uber acquired the company in August 2016 for $680 million, and testing continues today:

Keeping It Green

Green logistics is increasing being adopted by prominent 3PL providers to address growing environmental concerns. High-impact partners like 3PL’s have found that they can make their clients feel good by doing good.

For instance, new innovations are making it more possible to limit the carbon impact of the carrier route. Amazon’s Prime Air is a case in point. The service’s drones could provide an energy-efficient alternative for those nooks and crannies that electric vehicles can’t reach. (See related article, “Delivery Drones: Coming Soon to a Warehouse Near You.”)

Route and load optimization and efficient packaging are some other measures undertaken as a part of the green logistics initiative.

Online Retail

The global growth of online retail is expected to generate lucrative avenue for 3PL’s. Did you know that Amazon has increased its distribution space by an astounding 1000% in the last 10 years?

In fact, retail giants such as Amazon are likely to transform into full-fledged 3PL providers. By the same token, companies operating in the core transportation sector are also expected to penetrate the global 3PL market. Which means current 3PL key players will need to brace themselves for additional challenges and continue to develop technologically advanced and upgraded services in order to sustain their business position.


Sources:

Global Markets Insight

3PL News

Third Party Logistics Study

Huffington Post

Transport Topics


Resolve to Make Your Workplace Greener in 2018

Did you know that any “green” changes you make in your workplace not only help the planet, but can improve your company’s efficiency?

The New Year is always a time for evaluating the past and looking towards the future. So this year, why not consider these five ways to make your workplace more eco-friendly in 2018:

Improve Waste Diversion

Pretty much every business could do more to reduce and divert its waste output. But you won’t know until you take a good look at what you’re currently discarding.

 

One way is to engage your staff in an interactive waste audit. This gets everyone involved in identifying what’s in the trash and what can be diverted away from landfills. (New York City and other communities actually impose fines on companies that fail to properly recycle.)

A waste audit helps you to measure the different types of waste generated at your business. The results will help you to figure out how much waste your creating and how effective your current recycling (or composting) programs are. It will also help identify opportunities for reducing the amount of waste you send to the landfill, and potentially save the company some money.

For a free downloadable guide on how to conduct a waste audit, Click Here.

Reduce Operational Costs

This is a highly underrated goal. Reducing your operating costs is like free money. Even if some changes cost a few dollars to implement, the payback can be substantial.

For instance, utility costs are typically thousands of dollars a month for large businesses. You can cut these costs significantly by changing out light fixtures to energy-efficient rated fixtures with LED light bulbs. LED bulbs can last around 20 years, use less energy to work, and provide a purer source of light.

Also, try making demand-driven decisions at your facility. Many companies are now choosing to run more slowly, in order to save energy without sacrificing customer service or output. Using real-time data provides the accurate visibility you need to accomplish this.

Time for a (Tax) Break

There are plenty of tax credits that businesses can take whenever they make efforts to improve their local environment. For instance, credits can be taken for:

  • Using solar energy,  fuel cells, wind turbines or geothermal systems
  • Reducing emissions
  • Utilizing high-efficiency interior lighting, HVAC or hot water systems
  • Investing in green building standards (if you’re building new or leasing a new space)

Here’s how a California frozen food warehouse is using 100,000 square feet of solar panels:


A quick search of “tax breaks for businesses going green” will provide a myriad of ideas on how to get a break on your business tax bill by going green.

It’s All in the Packaging

There are a variety of ways you can reduce order packaging waste. Work with your vendors to eliminate inbound freight packaging by sending their items as shelf-ready as possible. Also, set guidelines at the packing stations to limit the amount of waste sent with each order. For breakable items that require some extra packaging, use biodegradable (or edible) packing peanuts in lieu of plastic or Styrofoam products.

 

Switch to Electric

If you haven’t done it already, now’s the time to switch to electric forklifts. Not only do they eliminate the harmful tailpipe emissions produced by gas forklifts, but they’ll save you money in the long run.

In fact, by electrically powering a 5,000-pound-capacity forklift, used six hours a day, five days a week, you’d save about $26,000 in propane over a five-year period.

In addition, electric forklifts typically have tighter turning radius, which can increase storage capacity and reduce product damage. And electric trucks produce less noise during operation. Which amounts to a better, safer work environment for your workers.


Sources:

Green Tourism

Manufacturing Transformation

NYC Department of Sanitation

Factory Direct Promos

 


Warehouse Automation: How Far Should You Go?

Warehouse automation is everywhere these days. At Amazon and other online retailers, for instance, “pickers” work side-by-side with robots. (See related article “Warehouse Automation New Frontiers.”)

And with good reason. In many instances, warehouse automation has been shown to improve efficiency, speed, reliability, accuracy and (eventually) cost savings.

Is It Right for You?

But just because automation is so prevalent doesn’t mean it will solve every material-handling issue or be the right fit for your facility. Humans are still better at a lot of things. Indeed, even at Amazon — the mother of all robotic warehouses — machines are not quite ready to take over completely.

Take a look inside an Amazon fulfillment center:

15,000 amazon kiva robots drives eighth generation fulfillment center from designboom on Vimeo.

As you can see, the science of warehouse automation encompasses all kinds of methods to bring inventory directly to the worker, in order to minimize his or her movements within the facility. Some of the most popular systems are carousels, vertical lifts, automated storage and retrieval systems (AS/RS), mini-loads, and automated guided vehicles (AVGs). A separate category of automation includes conveyors that move and direct inventory to the next appropriate operation.

Let’s look at the some of  the most useful applications for the new technology.

Where It’s Useful…

First of all, successful deployment of automation requires close integration with a warehouse management system (WMS) to help direct, simplify and track all of the facilities transactions. (See sidebar for an explanation of WMS.)

Your particular WMS may employ either barcodes or radio frequency identification (RFID) for inventory management, but some type of WMS must be in place before a more advanced warehouse automation system can be implemented.

Secondly, in order for automation to be successful, there must be a sufficient volume of activity to justify the high up-front costs and the ongoing need for maintenance. It’s also important to remember that human labor is still more flexible when it comes to changing business conditions.

For example:  An automated carousel pod will limit the picking rate to whatever a single operator can accomplish. Late in the day, that rate may be insufficient to support the rush of orders. Fixed shelving or a flow rack, on the other hand, can be accessed by multiple workers during busy periods.

So the type of automation employed must always be weighed against the flexibility (and availability) of workers. Even Amazon, with its 45,000 robots across the globe, still relies on human hands in its 20 cavernous fulfillment centers.

…And Where It Isn’t Useful

Clearly, automation is not a one-size-fits-all solution to every facility’s needs. Individual companies must do their due diligence to determine if automation makes economic sense.

Case in point: A mid-sized industrial distributor made a $3 million investment in carousels linked with an active conveyor. Alas, the system’s performance and reliability were so poor that it was abandoned, at a significant loss to the company. But in hindsight, the owner realized that, even if the system had worked perfectly, it still would have been a really bad investment.

Why? Because even though the automation enabled him to cut his workforce in half (for a savings of $300,000 per year), the five-year return on his $3 million investment would still have been minus 19%.

Like all business decisions, the choice of whether to invest in automation boils down to a reasonable expectation of adequate ROI.

Before You Climb Aboard

You’ve decided to climb aboard the automation bandwagon. Great! Where do you start?

WMS expert David Allais suggests the following steps:

  1. Assign a specific person or team that will be responsible for selecting the functionality and handling the implementation. This team should then be involved in all aspects of the planning and creation process.
  2. Ensure that the team factors in all costs for the proposed automation, including long-term maintenance and repair costs, and the cost of potentially adjusting the floor layout to accommodate the new technology. Also, if the company plans to eventually expand, the team should choose a system that will accommodate these expansion needs.
  3. Put together a viable support plan that will provide adequate training and technical support to all staff. This will greatly facilitate the implementation process.
  4. Be sure that your chosen automation vendor works with the assigned team to thoroughly explain and map out the data migration to the new technology.

The decision to employ warehouse automation is not one that should be entered into lightly. But with sufficient due diligence, your facility can be well on its way to becoming a more efficient, reliable, and cost-effective enterprise.


Sources:

Industry Week

NPR.org

TechTarget Network

Wired.com

Wired.com


10 Most Common Workplace Injuries

Did you know that every day in America, 13 people go to work and never come home?

That’s right. In 2015 (the most recent statistical year) 4,836 workers were killed on the job.

Another 3.3 million people per year suffer a workplace injury from which they may never recover. No one wants to get hurt on the job. But best safety practices are often neglected because they take a little extra time and effort.

As a result, serious workplace injuries are far too common.

Here is a list of the top 10 reported worker’s compensation injuries, according to leading insurance companies:

#10 – Violent Acts

Serious physical injuries can ensue when office politics and other arguments erupt into physical confrontations. Many of these situations can be prevented by:

  • Defining and communicating a clear code of conduct, such as “zero tolerance with respect to moral harassment and other types of workplace violence.
  • Providing workplace violence training to all staff.
  • Diligently monitoring any suspicious activities.
  • Exercising dissuasion and enforcing sanctions for conduct violations.

#9 – Repetitive Stress Injuries

Repetitive Stress Injury, or RSI, is often less obvious than other types of injury, but it can be very harmful in the long run. Repetitive motions, such as a factory worker performing the same task over and over again, can strain muscles and tendons. The repeated activity doesn’t need to be strenuous to cause a problem.

The result is often back pain, joint problems, and carpal tunnel syndrome. To avoid RSI, workers should be sure to take adequate work breaks, perform stretching exercises, and vary their work tasks, whenever possible. For instance, workers can be cross trained and a job rotation schedule implemented.

#8 – Machine Entanglement

The modern factory relies heavily on automated systems and a nonstop production line. Sometimes a worker will get too close to a machine that slices, welds, compresses or crushes.  The machine is unable to differentiate between an inanimate object and a human body.

Extra precautions must be taken to ensure that clothing, shoes, fingers and hair are kept far away from moving parts. Use protective barriers.

According to OSHA, the best rule to remember is this: “Any machine part, function, or process which may cause injury must be safeguarded.”

Safeguards must prevent hands, arms, and any other part of a worker’s body from making contact with dangerous moving parts. A good safeguarding system eliminates the possibility of the operator or another worker placing parts of their bodies near hazardous moving parts.

#7 – Vehicle Accidents

Employees who drive for business purposes are often injured in vehicle accidents, some of which can be fatal.  Those vehicles include forklifts.

In fact, OSHA statistics indicate about 85 forklift fatalities and 34,900 serious forklift injuries occur each year. In 42% of those fatalities, the operator was crushed by a tipping vehicle.

The safest place for a forklift operator is strapped into the seat with a seat belt. Which is why employers are obligated to require operators to use seat belts or other restraining devices. In addition, operators must receive site-specific forklift training, including the use of any attachments.

The following video clip provides some excellent safety tips for forklift operators:

 
Refresher training for forklift operators should also be available whenever necessary.

#6 – “Walking Into” Injuries

This happens when a person accidentally walks into a hard-surface object such as a wall, door, machinery, etc. Head, knee, neck, and foot injuries are the common result of these accidents.

The best way to prevent “walking into” injuries is to maintain a neat and tidy workplace. Clearly mark any potential obstacles/hazards. And train employees to be diligent in their surroundings.

#5 – Falling Object Injuries

Objects that fall from shelves or are dropped by another person can cause very serious injuries. Head injuries are a common result of this type of accident.

Materials should be stored or stacked in a safe and secure manner, and signage should be used to indicate any areas where debris may fall. Of course, proper personal protection gear (such as a hard hat) is also key to worker safety.

#4 – Reaction Injuries

Reaction injuries occur when a person slips or trips but “catches himself” to keep from falling.  These incidents can cause muscle injuries, body trauma, and a variety of other medical issues.

Preventing this type of injury is difficult because of our bodies’ natural reflexive actions. The best prevention guideline is for employees to be aware of their surrounding environment at all times.

#3 – Falling from Heights

Falling from an elevated area (such as a roof, ladder or stairway) can be caused by a slip-and-fall or by faulty equipment.

To prevent these injuries, make sure employees use proper personal protection gear. Install guardrails and other engineered protection devices, and encourage and reward employee diligence.

#2 – Slipping/Tripping

Falls on slippery floors or trips over objects lying on the floor are the second most common type of workplace injury.

Train employees on the hazards of slips, trips, and falls, as well as the proper management of spills and clean up. Use non-slip rugs and signage to indicate potentially hazardous areas.

#1 – Overexertion Injuries

The most common type of workplace injury is overexertion. It’s also the most expensive.

This category includes injuries related to lifting, pushing, pulling, holding, carrying or throwing. It represents $12.75 billion in direct costs, more than 25% of the overall national burden.

According to industry experts, overexertion continues to be a problem because workers do not understand the risk.

Because everybody engages in lifting, pulling, pushing and carrying from the time they start walking to the time they join the work force, they naturally believe they can do it properly.

To address this issue, employers should provide hands-on training by observing workers performing the tasks, and offering guidance when they are doing it incorrectly. They should also incorporate a psychosocial process into the program in order to understand how stress can affect worker safety. Even properly trained employees can become distracted and modify their work practices when they feel undue stress.

The Bottom Line

Education, training, diligence and proper safety equipment are all necessary components of a complete workplace safety program. For a list of OSHA training and educational programs to help broaden worker and employer knowledge of safety hazards in the workplace, click here.

And be careful out there!


Sources:

Arbill Safety Blog

Occupational Health & Safety

The Seltzer Group


6 Key Lean Manufacturing Principles

Did you know that most lean manufacturing concepts were developed from the philosophies of Benjamin Franklin?

In his 1758 essay, “The Way to Wealth,” Franklin stated the following:

You call them goods; but, if you do not take care, they will prove evils to some of you. You expect they will be sold cheap, and, perhaps, they may [be bought] for less than they cost; but, if you have no occasion for them, they must be dear to you. 

And Henry Ford cited Franklin as a major influence on his own business practices, which included Just-in-Time manufacturing.

Let’s take a look at some of the guiding principles for implementing a lean manufacturing protocol…

Waste Reduction

First and foremost is waste reduction/elimination. Historically, this is the foundation of modern-day lean manufacturing, identified by Toyota Production System in the 1990’s.

Many of the other principles revolve around this concept. There are seven basic types of waste in manufacturing:

  • Overproduction (production ahead of demand)
  • Unnecessary Motion (moving people or equipment more than is required to perform the task)
  • Excess Inventory (all components and finished product not being processed)
  • Production of Defects (leading to rework, salvage and scrap)
  • Waiting (i.e., waiting for the next production step or interruptions of production during shift change)
  • Transportation (moving products that are not actually required to perform the task)
  • Overprocessing (resulting from unnecessary work that adds no value)

Waste reduction/elimination involves reviewing all areas of your organization, determining the source of all non-value-added work, and reducing or eliminating it.

Continuous Improvement

Continuous improvement is sometimes referred to by the Japanese word “kaizen,” which literally means “change for the better.”

 

As the name implies, continuous improvement promotes constant, necessary change toward achievement of a desired state. The changes can be big or small, but they must lend themselves toward improvement.

To be effective, continuous improvement should be a mindset throughout the entire organization. Lean manufacturing experts suggest that you not get caught up in only trying to find the “big ideas,” as small ideas can often lead to big improvements.

For instance, at Toyota, the culture of continual aligned small improvements has yielded large results in overall improved productivity.

Respect for Humanity

The most valuable resource for any company is its people. Without them, the business simply will not succeed.

Staff Members

When employees do not feel respected, they tend to lose respect for their employer. This can become a major problem when a company is trying to implement lean manufacturing principles.

Most staff members want to perform well in their jobs. They’re not just earning a living; they’re also developing a sense of worth from their work.

Constant communication and praise for a job well done will go far to show people you respect them. But it’s also important to include them in upcoming changes and ideas, giving them an opportunity to provide their input. The more involved they are in decisions, the more the ideas become theirs. (And the more likely they are to accept the changes.)

The Supply Side

Implementing lean manufacturing processes requires the cooperation and participation from everyone in the company. But the respect for humanity principle goes so much deeper than the employee level.  You must also display respect for your customers and suppliers, as well as the environment.

Virtually every company is a supplier to someone else. If everyone throughout the supply chain treats their customers and suppliers with respect, working through issues becomes a whole lot easier.

Levelized Production

The basis of this principle is that the workload is the same (or level) every day. In a lean manufacturing facility, this type of standardization is very important.

The key ingredient for this lean manufacturing principle is utilization of a pull system. Components used in the manufacturing process are only replaced once they have been consumed. In this way, companies only make enough products to meet customer demand.

To achieve this, levelized production takes into consideration both forecast and history.

An Example

Your customer orders most likely fluctuate daily. Let’s say on Day 1, they want 10 black and five red parts. The next day, they want 12 red and seven black. On Day 3, they only require 13 parts.

Using levelized production:

  • On Day 1 you would set the level volume at 15 parts per day, and production would replenish the 15 parts that were ordered.
  • On the second day, the order is 19 parts (four parts higher than our levelized production volume). Production would still build 15 parts and the shipping area would take four parts from an inventory called “fluctuation stock.”
  • On the third day, the order was 13 parts, which is two less than the levelized volume. So two parts are put back into fluctuation stock.

Just-in-Time Production

The basis behind just-in-time production is to build what is required, when it is required and in the quantity required. In conjunction with levelized production, this principle works well with the pull system. It allows for movement and production of parts only when required.

The goal in lean manufacturing is to maintain finished product inventory at the lowest levels possible, while ensuring delivery does not suffer.  Of course, it is nearly impossible to carry zero inventory, particularly in facilities where short lead time is essential. So you will need to carry a store of parts to pull from when required.

Kanbans

To facilitate just-in-time production, companies typically employ a system of “kanbans.” A kanban is a hand-sized card that moves with the product or material. It signals when the product is to be built or when the material can be moved.

The kanban basically serves as a work order or pick list. But it also serves as a visual control, to identify the contents of each box. A third function of a kanban is inventory control, to determine the amount of finished product on hand.

Built-In Quality

The idea behind this principle is that quality is built into the manufacturing process. It’s built into the design of the part. It’s built into the packaging. From design to shipping, quality is a major consideration.

This means that your machines are capable of detecting abnormalities and your fixtures have mistake proofing to avoid misassembly.

Abnormality Detection

“Autonomation” pertains to a machine’s ability to judge good or bad conditions. When an abnormal condition is detected, the machine stops and triggers an alarm. A production worker then removes the parts and resets the machine. This keeps the suspect parts from continuing through the process.

Autonomation eliminates the need for a production worker to stand there and monitor each machine. It’s often referred to as “automation with a human touch.”

Mistake Proofing

The purpose of mistake proofing is to eliminate product defects by preventing, correcting, or drawing attention to human errors as they occur.

Mistake proofing can be implemented at any step of a manufacturing process where something can go wrong or an error can be made. For example, a fixture that holds components for processing might be modified to only allow those parts to be held in the correct orientation.

Presence sensors are another example. These sensors allow  only components that fit, and will trigger an alarm if the machine is cycled without all the components present.

Simulation Game

We’ve covered only six of the many lean manufacturing principles out there. If you’re thinking about employing these ideas and others, you may wish to check out the following Factory Business Game:


Sources:

Lean-manufacturing-junction.com

Lean Directions

Investopedia

Quality Digest

Lean Production