Warehouse Efficiency is Key to Future of Food and Beverage Industry

posted on: Thursday January 16, 2014

DSC_6717Food and beverage distribution is undergoing significant changes. Inventory, production, and storage are all becoming leaner, and work is being pushed back to the warehouse. In a business of perishables, it makes great sense to cut waste and shorten the time between production and consumption. The biggest improvements for this industry rely on warehouses updating their systems, equipment, and technologies.

Josh Bond of Modern Materials Handling wrote an article addressing this issue: “Food and beverage distribution: A healthy part of a balanced chain.” Bond explores how the industry is reducing inventory and meeting the costumer demand for store-ready pallets of mixed SKUs. He points out, “…the ability to become nimble and process an order quickly relies on good information as well as effective materials handling solutions.”


The face of order processing has changed drastically in recent years. Software is so sophisticated now that it makes everything else seem obsolete and wasteful. Store-ready sequencing and just-in-time production also play major roles in cutting costs and increasing customer satisfaction. Advanced technologies support these initiatives in powerful ways.

Warehouse control systems (WCS), warehouse management systems (WMS), and enterprise resource planning  (ERP) systems can all share information back and forth with the right software. This is important for managing operations as well as building to order. Here are a few benefits of advanced software systems:

  • The software can give a picture of consumption trends in the stores. With a better understanding of what is happening here, the supply chain is successfully streamlined from production to shelf. Inventory can be cut and waste is reduced.
  • Inventory control is in real time. Daily inventory without proper software is a major challenge, and a time-consuming one at that. Real-time inventory makes lean and just-in-time manufacturing run more smoothly. It also assists in the face of disaster. Bond writes, “Real-time inventory control is also valuable for regulatory compliance, especially in the event of a recall. Software can instantaneously direct an automated system to not release a specific SKU, and the same software can locate a lot ID anywhere in the supply chain.”
  • Managing orders is completely revolutionized with the integration of the right software in the WCS and WMS. According to Bond, “software can enable distributed order management, allowing companies to fill or ship orders from anywhere in the supply chain, including the manufacturing facility, warehouse operation or retail store.”

The ability to share, store, and recall information with this level of intelligence changes the industry completely. The other half of the equation is materials handling.

Materials Handling: Automation

The sophistication of this software works well with automated storage systems. Improving storage allows more inventory in less space. This not only supports lean operations, but also postpones the need to add on to or move to a bigger building. Comparing old trends with new, Bond says, “Floor stacking storage will result in utilization of about 75%, but creates a lot of re-warehousing, or unproductive moves. With an (automated storage and retrieval system), on the other hand, it’s common to achieve 90% utilization, even in multiple deep configurations. Single deep systems average closer to 100%. Automation also provides easy tracking of first-in, first-out (FIFO) or first-expired, first-out (FEFO).”

Automated storage can prove to be cost-effective in many respects. Manual handling is doubled or tripled with floor stacking, which adds labor. Once an automated system is in place, additional storage modules can be cost-effectively added. However, these systems are typically limited to the bigger companies, as the investment is millions of dollars. In the future, however, these systems may be more accessible. John Barry, vice president of sales and marketing for ITW Warehouse Automation, is quoted in Bond’s article: “Right now, it might cost $8 million to $13 million to invest in case picking automation. But everyone has gotten so much better at smaller solutions. People are soon going to want to invest $1 million in a system and enjoy all the same benefits.”

The use of automated guided vehicles (AGVs) is also becoming more popular. They can be programed for a number of applications and run on their own, eliminating the need for labor.

Manual Materials Handling

Automation isn’t the only material handling solution, however. Bond’s article states, “At the very least, a facility accustomed to floor stacking should consider racking, says Dan Labell, president of Westfalia Technologies. With floor stacking, it might be necessary to move 12 pallets to get to the one you need in the back. Racking creates more discrete storage lanes, so that if stored four high and four deep, there are 16 pallets in one bay with access to four discrete lanes.”

When AGVs are not practical, power tugs can provide a labor-cutting substitute that will also increase productivity. These battery-operated walk-behind tugs, like Load Movers, can transport anywhere from 1,000 to 50,000 pounds, depending on the tug. Their attachments can be custom-made to fit any application. They are best utilized by connecting one to a train of carts. This allows for a lot of material to be moved in one trip by one person. The equipment is ergonomic; tugs reduce the risk of pushing and pulling injuries. They can also be operated by anyone. They are safer than forklifts. Another benefit they provide to lean operations is that they’re less likely to cause damage to product. Manufacturers are doing away with extra inventory; transporting product with a Load Mover can ensure there is no need for extra units to replace what may have been broken in transport by other equipment.

The food and beverage industry is a highly-competitive division. To stay on top, businesses need to efficiently cut costs, streamline, and meet the evolving needs of the customer. The most effective action is from the warehouses – by utilizing advanced software and technology as well as appropriate operational styles like lean. The industry will only continue to progress; operations need to progress with it.

For those who want more information about whether a power tug will benefit his or her business, search this site, email info@loadmoverinc.com, or call 952-767-1720. Our Load Mover experts are committed to quality equipment and customer service.