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The 5 Inefficiencies STEALing from Your Distribution Center

Jason Nowak | 05 March 2015

There are 5 common inefficiencies and resource wasters STEALing from distribution operations everywhere, but today’s goods-to-person technologies can turn those losses into profit in as little as 2 years. Let’s look at these five wastes and how goods-to-person systems are overcoming them.

  1. Space utilization: Inefficient utilization of a warehouse’s cubic space limits SKU growth and wastes overhead dollars spent annually on unused vertical space in the distribution center.
  2. Time wasters: Time is wasted by employees traveling to, or looking for products in a warehouse, adding no value to the order fulfillment process.
  3. Energy consumption: Inefficient use of energy adds significant operating costs and robs profit from the bottom line from distribution and manufacturing operations around the world.
  4. Accuracy of order fulfilment: Low pick accuracy leads to customers receiving the wrong products leading to lost customers and profits.
  5. Labor cost per line item picked: Rising labor costs and declining efficiency adds significant cost to each product shipped that customers are not willing to pay for.

Don’t let these inefficiencies STEAL from the bottom line of your distribution operation. Modern distribution centers are able to capitalize on the latest automation and software technologies which work together to solve all these issues by better utilizing the cubic space of your warehouse, removing the wasted time from the fulfillment process, reducing energy consumption, improving the accuracy of the picking process, and reducing overall labor costs.


Of the many space-saving technologies available in the market today, no other solution maximizes the cube of a distribution center as well as the AutoStore™ goods-to-person technology. This system is unique because there are no aisles of unutilized storage space as small, self guided vehicles operate on top of a dense cube of storage containers to automatically store and retrieve products. This method can reduce the square footage required for distribution centers to store product inventory by over 50%, allowing businesses to grow within the space they currently have.


Warehouse pickers wasting timeDid you know that pickers in a traditional warehouse spend an estimated 70% of their time traveling from one product to another? Implementing goods-to-person systems removes this wasted time because the products are automatically brought to the pick station. The trend toward shorter fulfilment times (even same-day delivery) to the customer requires e-fulfillment operations to evaluate and often times redesign their picking operations to remove all nonessential activities from the picking operation to meet the customer’s expectations.


Goods-to-person system save energyThe effects of energy consumption on the bottom line and our planet are well known to us now. Investments in energy-efficient technology can reduce a facilities overall energy usage dramatically. Goods-to-person automation uses less energy than traditional warehouse automation through the use of high-efficiency batteries or industrial capacitors that store energy created during the natural motion of the machine. Reducing energy consumption will have an immediate impact on the operating cost of any facility.


In general, removing all options for making the wrong choice is the most effective way to ensure the right pick is made. For many, this can be achieved through utilization of a goods-to-person system where there is only one SKU in the bin presented to the picker. When dealing with small parts where multiple SKUs are placed in a single bin, picking aids such as Bastian Solutions’ Lumipick™ can be used to illuminate the correct cell to be picked from, reducing the probability of a picking error and increasing customer satisfaction. Goods to person picking accuracy-2


In 2005, e-commerce sales accounted for only 2.5% of retail sales, by 2020 e-commerce is expected to grow almost exponentially to approximately 12% of all retail sales. This shift in consumer preference has forced the distribution model away from shipping pallet quantities of product to retail outlets toward a business model where small orders are being shipped directly to the customer’s home. Most distribution centers are struggling with this rapid change in distribution methodology and have survived by adding more labor to their process to keep up. Goods-to-person technologies like AutoStore™ have allowed many e-fulfilment operations to thrive in this new market due to their ability to efficiently fulfill multi-line, low quantity orders through the use of software and automation. Goods-to-person technologies can provide efficiencies through automation that result in labor cost reductions of up to 75% versus a traditional DC. Goods-to-person systems and ecommerce If these 5 inefficiencies and resource wasters are STEALing from your profit margin, contact Bastian Solutions and let us introduce you to today’s innovative technologies that are reinventing distribution operations, and returning these wasted dollars back to the bottom line. Bastian Solutions at ProMat 2015You can also visit us at ProMat booth #3953, March 23-26. AutoStore™ will be one of the technologies demonstrated in our booth, so we invite you to stop by, explore the system, and ask questions.

Author: Jason Nowak

Jason is a Bastian Solutions Senior Consultant based out of St. Louis, Missouri.  He has a Bachelor of Science in Mechanical Engineering from Missouri S&T and an MBA from St. Louis University.  Jason has been providing manufacturing and distribution design and integration leadership across various industries for Bastian Solutions’ clients for over 15 years, helping clients develop strategic initiatives and lead successful system implementations.    


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