Changing your Distribution Center to Meet the New Retail Paradigm
The retail landscape is changing as more and more brick and mortar stores offer consumers the ability to order products on line; some even ship products on the same day. This boom in electronic commerce has squeezed distribution operations to the point that distribution networks must be revamped and expanded.
Current distribution models include:
- Traditional Distribution– Vendors ship products to retail distribution centers where the products are stored until orders need fulfilled. Orders are then picked and delivered to the stores.
- Crossdock Distribution Centers– Shipments from inbound suppliers are moved directly from the loading dock to outbound delivery trucks. Very little storage is needed, as products never touch a shelf or the floor.
- Vendor Direct to Store Delivery– Vendors ship goods directly from their own facilities to retail stores, by passing retailers distribution center.
- Hybrid Distribution– Mix of any of the above delivery methods.
- Direct to Consumer– Many small orders sent to many consumers every day.
However, even these distribution models are changing as most retailers today are faced with shipping smaller quantities more frequently, either direct to stores or direct to customers. Retailers that do not fully grasp this change and adjust their strategies will disappear, and the ones who do step up will see substantial value creation.
Shipping individual orders to customers or retail stores requires speed and accuracy. Distribution operations management has realized that they must add new technology in order to meet customer delivery demands and to bring customers’ real benefits and value. These technologies include high-speed conveyors, high-speed sortation systems, robotic palletizers, picking & packing solutions, etc.
Choosing the right equipment
There are an almost unlimited number of conveyor systems designed for the retail distribution center. Choosing the right conveyor based on the operation and volume is key to success.
Outside of the standard transportation conveyor, there are several types of conveyors that offer special features for retail distribution, including: combiners, merges, spiral conveyors, sortation conveyor, etc.
Handling and distributing retail apparel typically calls for specialized equipment, especially in the case of hanging garments. Called Garment On Hanger (GOH) systems, these specialized conveyors use overhead rail systems that move trolleys filled with apparel over great distances, through changing elevations, and along complex paths.
High-speed sortation systems
High-speed sortation systems are the key to the efficiency of state of the art retail distribution centers. Sorters can use pivot arms, diverters, pushers, etc. to sort the items on a conveyor. The right sortation solution depends on the product you’re moving and your need for speed. Sortation systems automatically sort products as they move through a facility. Sliding shoe sorters are designed to meet the growing demand for high shipping volume, increased accuracy and smaller order sizes. Sortation rates can go up to 450 cartons per minute. They reduce the manual labor needed to prepare for palletizing, packing, shipping and other industrial operations. Sortation systems can increase efficiency and provide more accurate fill rates, lower return rates and operating costs. All of these benefits add up to lower prices and faster delivery to the consumer.
Picking & Packing Equipment
Paperless picking & packing solutions can be either voice-directed or light directed. Pickers receive instructions via an audible voice system telling them which items to pick and where to put them. Voice-directed systems work best for slow-moving inventory and sequential transactions. Light-directed systems provide instructions via an illuminated light panel. These allow simultaneous transactions and work best for fast-moving inventory. Paperless picking & packing systems produce nearly 100% accuracy levels, increase productivity, lower distance travelled amounts, and reduce costs.
Use print-and-apply labeling systems that print labels on the fly, and offer in-motion weighing and manifesting, as well as semi-automated or automated sealing/taping stations, all of which eliminate touches.
Palletizers make the stacking of cartons much easier, reducing labor costs, and providing a safer work environment. Palletizers are available to handle different types of containers, including cases, totes, bales, trays, etc. Robotic palletizers perform precise, repeatable patterns in a variety of rates, such as 100 cases/minute.
Deploying this equipment in a distribution center requires a knowledgeable material handling systems integrator with years of experience in the retail environment. Typically, these integrators are non-biased about equipment and they know which works best in what environment. Look for an integrator that will perform needs assessments, systems design, engineering, installation, and support to meet the new retail landscape.
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”