Home' MHD Supply Chain Solutions : MHD Nov-Dec 2015 Contents 11 STEPS TO
In the JRR Tolkein epic Lord of the Rings, the
Fellowship of the Ring was a nine-member
team that set out across Middle Earth to
the Fiery Mountain of Mordor, on a mission to
destroy the Ruling Ring of Power. Frodo was the
ring-bearer and he was supported by Gandalf,
Sam Gangee, Merry, Pippin, Gimli, Aragorn,
Legolas and Boromir. But there was actually a
tenth member. Who was it? Gollum?
No - guess again. It was 'Bill the donkey'.
After the party's horses were stolen in Bree, they
purchased Bill from a suspect trader who had
treated the beast with contempt. Unfortunately,
Bill was an underfed, stubborn, and belligerent
animal that most of the fellowship evaluated as
a burden to progress. However, Sam Gangee
befriended the beast, fed it, loved it and
nurtured it. Consequently it became happy,
served the travellers reliably, and became a
valuable member of the fellowship. For example,
after Frodo was stabbed by a Ringwraith, he
was carried over rocky terrain by Bill, who
did his best to provide smooth transport for
the ailing hobbit. Later Bill was relieved by
Glorfindel, who transported Frodo to Rivendell
on his white horse.
Whilst at Rivendell, Bill became acquainted
with elvish horses, and, to his advantage, made
it known that he wanted to carry supplies for
the Fellowship of the Ring on their journey from
Rivendell to Mordor. Unfortunately Bill had to be
released at the Mines of Moria, but he found his
way back to Bree, where he was nursed back to
health and reunited with Sam later on his return
journey to the shire.
Why this tale and what does it
have to do with the Supply Chain?
Bill was the fellowship's supply chain, carrying
all of their supplies so that the illustrious adventur-
ers were well supported and fed as they encoun-
tered evil, threats and mystery along the way.
So the moral is: even the worst appearances
and attitudes can be changed to provide a
reliable and smooth supply chain.
How does this relate to warehousing? Take
heart, the worst performing warehouses can
be redeemed. How? In this article I have briefly
outlined eleven steps to warehousing best
practice, and some lessons to be applied. At its
conclusion, you may like to test your operation
by answering eleven questions.
The steps are depicted (in no particular
order) in Figure 1.
Design, layout and flow
Critical to any distribution centre is that it is
well designed, well laid out, and flows properly.
Some basic rules of thumb are minimal touches
of goods and one-way flow. The impact of poor
layout is often overlooked by operators and can
be very costly in terms of inventory carrying,
operating and management costs. It is recom-
mended that biannual reviews are conducted to
check that design layout and flow are producing
the results you need.
Lesson: great layout, and flow, makes your life
easier, is more productive and reduces cost.
Related to design and layout, appropriate
materials handling equipment must be installed
in the distribution centre. This includes both
static and mobile (wheeled) equipment. But
what is appropriate? The answer to this is
subject to transactional velocity, spatial require-
ments and meeting desired service levels. Be
careful not to over-specify equipment, as this
will result in heavy capital outlays. Conversely,
underspending on equipment may cause
unusually high operating costs. There is a
balance! Finding it is best carried out by testing
the feasibility of various solutions, and then
ranking them in terms of payback and ongoing
Lesson: right equipment = right operation =
In Australia, like New Zealand, Europe, USA,
and South Africa, the cost of labour is high,
therefore enterprises are continuously seeking
new ways of reducing labour costs. Managers
are encouraged to review labour resources
in key processes such as receiving, picking,
storage, packing, dispatch and returns, and to
check that cost and performance rates for each
are comparable with other companies. Typical
measures may include order lines handled per
period, picking rates and overtime percentages.
However, don't forget about the lesson from the
story of Bill. Staff will respond positively to good
treatment and a worthy mission to follow.
Lesson: strive for labour efficiency, and
treat staff with respect.
Processes and systems
An essential part of any warehouse is that
properly conceived processes are in place for
staff to follow. Processes will define what has to
be done, by when and by whom. Information
systems facilitate the process and record all
necessary inputs, outputs and drive opera-
tors to perform tasks within the warehouse.
AND THE SUPPLY CHAIN
MHD SUPPLY CHAIN SOLUTIONS --- NOVEMBER / DECEMBER 2015
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