World Trade - December 2008 - (Page 47)

And, what does it really cost to run a warehouse without an automated system? A lot more than one might imagine, starting with shipping inaccuracies. “On average, we’ve found that warehouses that use a paper-based system have about a 90 to 91 percent shipping accuracy. But, it jumps up to about 99 percent with an automated system,” says Yim. Improving shipping accuracy also helps bring down labor costs, whether that means fewer trips up and down the aisles or not having to re-create shipping documents. It also means a warehouse is better able to identify consolidation opportunities, which means savings in time and fuel. Boosting shipping accuracy has other beneﬁts, too, says Yim. “Roughly 50 percent of the cost of running a warehouse is related to the picking process. So, when you pick the wrong item because of an error in the receiving process or because something was put away incorrectly, you are not using labor efﬁciently. Not to mention, sometimes there are different picking policies for different customers—last in, ﬁrst out, or ﬁrst in, ﬁrst out—and if those processes aren’t sorted out efﬁciently in an automated fashion, you’re just wasting labor resources.” Yim also says that a WMS can help reduce physical inventory. “Some companies perform a physical inventory once a year, or once a month, once a week, and some even once a day. They require the entire warehouse crew to go into the warehouse and count boxes. Naturally, it’s highly labor-intensive. But with a WMS, that is eliminated.” Choosing an on-demand solution such as that offered by SmartTurn versus running a server on company premises is another way to cut costs and run a greener operation. “It costs between $900 and $1400 per year just in electricity to run a single PC server in your warehouse,” says Yim. Aside from being more cost-effective, the other advantages of opting for an on-demand service supported by an enterprise-class server include improved visibility, superior backup ability, and a true mission-critical system, he adds. Meanwhile, Tom Wright, a consultant (www.sustainablebizness.com) who works with companies such as Whole Foods, takes a more holistic view when it comes to green strategies. He urges companies to adopt a cyclic principle, where there is no “away” (throwing something away is not an option), where there is no “end of life” (everything is a nutrient is a closed-loop system), and where everything has a “next life.” Wright observes, “We’re up against a culture that works on a linear system; it’s not a cyclic principle as is should be.” For instance, the ideal hierarchy, according to Wright is Redesign, Rethink, Reduce, Reuse, and ﬁnally, Recycle. “The simple idea is to redesign commerce so that it mimics a natural ecological cycle,” he explains. Adding that we need to move away from the cradle-to-grave mentality and replace it with a cyclical process: cradle-to-cradle. Companies need to ask themselves if the materials they use are safe and healthy for human and ecological systems. They also need to pay more attention to reverse logistics—do we know where this stuff comes from, where it goes, and how to get it back into a closedloop, zero-waste cycle? Although many companies see the green movement as more than a little daunting, the good news is there are more resources and information available today, and it’s only going to get better. WT For reprints of this article, please contact Cindy Williams at williamsc@bnpmedia.com or 610-436-4220 ext. 8516. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - SUPPLY CHAIN THER In transportation, it’s about more than linking point A to point B. It’s about linking possibilities to solutions. By using our innovative thinking, you receive unique solutions that the others just can’t put together. And as a member of the YRC Worldwide family, our expertise in delivering innovative solutions is even easier. 800.610.6500 myyellow.com © 2008 YRC Worldwide. All Rights Reserved. http://www.sustainablebizness.com http://www.sustainablebizness.com http://www.myyellow.com http://www.yrcw.com

Table of Contents Feed for the Digital Edition of World Trade - December 2008

World Trade - December 2008 Contents The Promise of Peril The Current Reality with IP in China Supply Chain Watch Tradewinds Performance Partners: Awards of Excellence Managing With Mobility What 2009 Bodes for the Supply Chain Small Business Takes to Export Green is Here for Good Fast Fashion

World Trade - December 2008

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