Pre-distribution valuable for supply chain operations
Activities must be defined to benefit pre-distribution efficiencies
Every segment in the beverage industry experiences constant change syndrome (CCS) at various times during product processing, packaging production, warehousing, pre-distribution and distribution as the supply chain unfolds each operating day.
In most production or distribution center facilities, these areas of production usually have been identified as cost centers for the primary purposes of monitoring and controlling required work-task magnitude and related expenses.
Historically, activities performed in the product processing, packaging production, warehousing and distribution areas have been reasonably well-documented and used as physical reference data for determining necessary work tasks and their costs. However, pre-distribution is a relatively new term that is used to identify and separate a major functional activity that heretofore has been included in either warehousing or distribution cost centers.
Realistically, pre-distribution includes all of the related activities involved in the movement of beverage cases, whether in an automated, semi-automated or manual operating environment, either after case warehousing (storing) or before case distribution (delivery). To inadvertently or intentionally include the cost of these activities in other cost centers can, and will, distort data integrity that was initially intended to provide management with analysis and control tools. For this reason, whether currently established as an entity or not, required pre-distribution activity performed in most beverage operating facilities is of sufficient magnitude in both work tasks and incurred costs that it should receive priority status and timely focus from management.
Past experience, recent investigations, on-site observations and studies have verified that what is now being referred to as pre-distribution generally has been included in other cost centers. Perhaps this can be viewed as acceptable, but it is not necessarily accurate.
In most beverage operations, with the advent of automated order picking, warehouse management systems, ordering criteria and other procedural/policy issues, the focus on pre-distribution is receiving deserved attention as it emphasizes the need to identify and separate activities that occur after storing and before distribution. Although these activities might not have been clearly defined before, they exist and cost money, thereby requiring management to focus on the pre-distribution area.
In certain markets, where SKU volume and mix have substantially increased, some beverage operations experiencing SKU growth have realized the importance of pre-distribution activity and have begun to make adjustments in the form of documented, detailed work-time assignments and expended time records for evaluating activity cost.
Whether through discussions or application reviews, the adjustments have resulted in recognizing activity and costs previously unattended or evaluated. It has emphasized that pre-distribution is an important area because there is no value added to the beverage cases being handled. Actions taken also have surfaced important issues that should be considered regardless of the operating conditions involved, such as what are the real-time tasks in a totally manual operation, who will perform them and how will they be evaluated? Other areas of question should take into account whether the tasks are different in a semi- or fully automated operation, are they similar or the same as manual, does it pose a significant problem? These two issues are a good starting point for defining pre-distribution activity.
There are many approaches that can be used to focus on the pre-distribution function; however, caution should be exercised when dealing with automated or manual warehouse operating conditions because there are varying degrees of personnel and machinery involvement. The caution pertains to machinery or system capacity/capability, and the manual tasks required for personnel related to the machinery or system. The separation is distinctive and vital when establishing machine and manual tasks, as well as the related time requirements or restraints.
Another caution is personnel; it is imperative to utilize competent, qualified and experienced personnel to create the beneficial bases (tasks) and controls (costs) for pre-distribution functions.
For example, in manual operations, pallet loads are moved from storage to vehicles or staging via fork lift and operator. Partial pallets are in staging with personnel. Tasks are repetitious, must be timed and documented until vehicles are loaded.
In semi- or fully automated operations, pallet loads or cases automatically are retrieved from rack system to discharge for forklift operator pick up. If it is cases, it is palletized at pick up; if it is a pallet load, it is directed to a stage area. In either case, machine time for case or pallet load units to pick up must be established for each machine’s capability.
In both examples, the focus on pre-distribution is simple: comprehensive task knowledge and execution cost — that is the focus. BI