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
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.”
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.
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.
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.
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.”
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:
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Did you know that most lean manufacturing concepts were developed from the philosophies of Benjamin Franklin?
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…
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 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.
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.
To achieve this, levelized production takes into consideration both forecast and history.
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.
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.
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.