Question: What solutions are available to increase the speed of supply chain operations in the Middle East?
Making the investment in warehouse modernisation
Although the concept of supply chain management has traditionally been misunderstood by the business world, there has been a dramatic change in attitude recently, with more and more companies looking to optimise their logistics operations. Of course, success is never guaranteed, even for those with a multi-million dollar budget to modernise their warehouse. As a result, it’s imperative that companies understand their specific requirements and analyse the multitude of solutions that are available in the market. Does size matter for efficient supply chain operations?
The size of warehouse facilities in the Middle East has continued to increase, especially in industrial areas such as Jebel Ali Free Zone and Dubai Industrial City. At the same time, companies are normally focused on space utilisation when it comes to supply chain evaluation. This is perfectly understandable and helps to explain the growing popularity of high-density storage systems, which can assist in lowering the cost of warehouse operations. However, it’s important to remember that space is not the final frontier (excuse the pun!) – another factor that should be considered is time.
The battle between time and space in the logistics industry
The advantages of a faster supply chain will normally outweigh the benefits of space utilisation, especially at a time when speed-to-market has become essential in gaining a competitive advantage. This has created a strong market for dynamic storage (or ‘live storage’ as its sometimes termed) around the world, especially with medium-to-large sized businesses that handle the storage of date-sensitive items such as food, drink and pharmaceuticals.
Understanding the concept of dynamic storage systems
Companies are looking at dynamic storage systems to handle pallets and/or cartons in their warehouse. As a leading supplier with many years of experience in this field, Interroll has developed a product portfolio that includes First In First Out (FIFO) pallet flow systems and Last In First Out (LIFO) pushback systems. Most recently, we have launched our ‘Carton Flow Wheel Flow’ solution to help customers improve their stock rotation in a warehouse, with the ability to increase a client’s picking performance by 65% compared to the conventional style of racking systems.
Working out the relevance for your supply chain operations
The benefits of dynamic storage will depend on the items that are being stocked in the warehouse. A modern facility will normally feature a combination of different storage solutions, rather than a specific type, which means that some companies have decided to purchase dynamic solutions to work seamlessly with the existing systems in their warehouse facility.
The popularity of dynamic storage in the Middle East
The amount of time that can be saved with dynamic storage systems is very significant. Compared to the more traditional style of warehouse shelving, dynamic solutions can increase pick rates by factors of 4:1 or greater. That means companies are paying a quarter of their usual costs, which is obviously a great result. In bulk storage systems, using either roller pallet flow or a cart push-back system as opposed to adjustable pallet racking (APR), the quantity of trucks (and people of course) can be reduced by more than a third. These logistical savings are significant and a growing number of decision makers in the Middle East logistics industry have started to exploit the advantages of dynamic storage solutions, especially in the food, beverage and dairy sectors.
Taking into account the cost of modern warehouse solutions
During a time when the global recession has forced companies to reduce their warehousing budgets, it’s hard to avoid the fact that dynamic storage requires a much higher capital investment when compared to traditional storage systems. However, our research has shown that the return on investment in most cases is less than two years. After this time, the dynamic storage solution will be making money for the operator, as well as offering benefits in speed, FIFO, easier supervision, greater storage density and fewer stock losses.
Concluding the argument
Hopefully this column has put across a message that space is not the final frontier, time is! Of course, using this line from Star Trek is a little fun, but the underlying message for companies is actually quite serious. Ignoring the benefits of dynamic storage for your warehouse operations could have an impact on your market position.
This month’s article was written by Bulent Caliskan, key account manager at Interroll.
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