Archive for October, 2017

October 20, 2017

Back to Basics: Why Warehouses Need Pallet Racks

If you’ve been in the warehousing or supply chain industry for more than five minutes, you’ve been around pallets. They’ve become an international industry standard when it comes to storage and shipping. But how did pallets become such an integral part of our industry? What are the advantages of them? And what’s the best way to work with them inside your warehouse? Let’s get back to basics and look at one of the fundamental parts of any warehouse or distribution center environment.

All About Pallets

Pallets are the square wooden bases upon which products are stored. Most of the time, the items on the pallet are wrapped in plastic or another material to keep everything in place. Pallets have open slots around the base that allow a forklift or pallet jack to easily move them around.

The Benefits of Pallets

  • They can group a lot of inventory in a small space.
  • They are easy to move around, allowing you to move a large group of inventory in a single movement.
  • They are cheap because they are made from inexpensive wood.
  • They are reasonably durable for the price and inexpensive to replace if they break.

All About Pallet Racking

Because most warehouses store a large number of pallets, they need to utilize a pallet racking system. Pallet racking is a fundamental component that will enable you to maximize storage space, increase productivity and have an overall positive impact on your organization. Down to basics, a pallet rack system consists of upright frames connected by horizontal beams. A pallet rack system is to a warehouse as a skeleton is to a body: they both provide support and structure to a bigger entity. If any part of the inner workings isn’t fully functional, the entire system is impacted in a negative way. These massive structures keep your products organized, maximize your space from floor to ceiling and are key in getting your products out the door safely and efficiently.

What happens if you don’t use a pallet racking system?

If a warehouse doesn’t use a racking system, they are in danger of quickly becoming overcrowded as their pallets can only be stored on the ground. If they attempt to stack the pallets on top of each other, they’ll dramatically slow down their operation as they have to move pallets around to get to merchandise on the lower pallets. By not using a racking system, you aren’t utilizing the space above the ground properly. Using a pallet racking system allows you to maximize the space, store your palletized product, and keep it out of the way when you don’t need it.

What are the benefits of using a pallet racking system?

There are compelling reasons to support either a traditional rack system or even a sophisticated rack system at your facility as both can have a major impact on your company’s operations. The proper rack system can also be the driving force in any materials handling industry and represents your company’s ability to remain a force in the global marketplace. Knowing the many advantages of a good racking system is important:

  • One of the biggest and most obvious benefits of installing a pallet rack system is in the space you will save. For many types of businesses, the space you save installing a pallet rack system could very well increase your potential to store more products. By utilizing the vertical space in your warehouse, your stacking ability provides more floor space, which is invaluable. In some cases, storage can be doubled.
  • Pallet rack systems are designed for durability and are built to withstand the impacts from forklifts. The pallet rack system you decide to employ in your warehouse will hold excessive weights and will be resistant to abuse. It’s important to inspect your racking frequently in order to assess any forklift-related or other damage and fix the racking as soon as possible.
  • The high-quality materials used in your pallet rack system means the structure will employ optimal safety. After all, it is very important that these types of structures are built to minimize injury. The stronger and safer your racking is, the safer your employees and your inventory are, too.
  • Your pallet rack system will allow for easy access to your products. Easy access to your products means pallets can be picked up faster, thus increasing productivity levels. That means you can get orders out the door quicker than ever.
  • Lastly, your pallet rack system will provide you and your workers with convenience and efficiency. Your warehouse will run smoothly, and you will enjoy the increased production level. That’s a direct increase to your bottom line.

 

What Pallet Rack System is Right for Your Warehouse?

Generally, rack systems can be broken down into two fairly broad categories: low-density systems that enable easy access to your products, or high-density systems that offer better use of space but also limit access to stored products. Certainly, something you need to take into consideration before choosing a rack system for your facility is what kind of space you have, what you are storing, and how often you need to access those products. Once you’ve established these factors, it will be easier to determine which pallet racking system is going to be right for your warehouse.

Need help finding the right pallet racking system for your space? The DAK Equipment & Engineering team can help. We’d love to talk to you about the storage needs in your warehouse and help match you to the warehouse equipment that’s right for your space. Get in touch with our team today by giving us a call or contacting us through the form below.

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October 15, 2017

More Ways Drones Could be Good for Your Warehouse

We’ve written before about how drones are being put to work in the warehouse environment, replacing equipment such as conveyor belts to automate the warehouse environment. It’s looking more and more likely that drones are coming to a warehouse near you sometime soon. They are now in use in many warehouses around the world and they are doing more than just moving inventory. If they can prove their value in these warehouses, it could be just a few years before they are in your warehouse, too. The potential benefits of using drones are huge:

  • Reduction in costs. Not only will drones bring a reduction in unskilled labor costs, but once the drones are paid for, they are essentially free labor other than maintenance and repair costs.
  • Free up space. If you aren’t relying on bulky conveyor belts and other large warehouse equipment to move your inventory around, you are going to have a lot more floor space available. That space can be put to good use holding more inventory or as picking, packing, returns, or shipping areas.
  • Smaller, more efficient warehouse. If you don’t need as much space for equipment or your human labor force, then you might not need as big of a warehouse. That’s not only a reduction in operating costs, it could lead to a much more efficient warehouse environment.
  • Fewer worker’s compensation claims. When you aren’t relying on a human workforce for low-skill-but-high-risk work, you aren’t assuming the worker’s compensation costs that come with it. If a drone is hurt, it’s a matter of making some repairs and getting it back into action. It can also be immediately replaced by another drone. There is no recovery time, so there is no loss of productivity on the job.

While all of these sounds pretty good, what drones can actually do in the warehouse sounds even better.

How Drones Are Working in a Warehouse Near You

Delivery

We’ve all heard about how Amazon is utilizing drone technology to make deliveries. It’s going to become more and more common as online retailers grab for more of the market share among consumers who are lured in by the promises of fast delivery times. But delivering to the customer isn’t the only way drones can delivery. They can also be used for in-warehouse deliveries. Assembly lines can request products from the warehouse and have them delivered via drone in minutes. All the picking can be done by drones while their human teammates focus on packing and shipping. Drones will have a lower error rate and high efficiency because they won’t get tired.

Surveillance

Cameras are great. Cameras on drones are even better. Warehouse security will be better than ever when drones are on the job. Drones will be able to go into areas that could be hard to cover on the camera, or even get in close to monitor suspicious activity. Drones could even be used to monitor the delivery of inventory to ensure there is no activity of concern happening on the docks. Outside surveillance could be more efficient, too, since drones won’t care about the temperatures or what time of day or night they are making their rounds.

Inspections

Inspections are an everyday part of warehouse life. Pretty soon drones could be helping with warehouse equipment inspections, such as pallet racking and conveyor systems. High-definition cameras will give operators a clear view of potentially damaged areas and determine whether they need to be fixed or not. Drones are becoming more and more intelligent, too, so in the future drones could detect potential dangers while making their normal inspection rounds and report them.

Inventory Management

This is one area that should have warehouses especially excited. Inventory is a massive task for warehouses, and drones could play a big part in the management of inventory in the future. Drones could be launched to help perform counts on high up shelves or even trained to do counts on their own and report discrepancies based on comparisons with computer inventory. Drones could provide constant inventory monitoring so issues are spotted and dealt with before they cause an issue down the supply chain. Some inventory-counting drone manufacturers estimate that two drones could count an entire warehouse in the same amount of time it would take 100 people to do the same inventory count!

Concerns About Using Drones

It’s not all good news when it comes to incorporating drones into the warehouse environment. There are many valid concerns that arise when discussing this kind of automation.

  • Losing jobs. More drones will probably mean fewer workers. Industry experts say that while that might be true, it won’t be immediate. The number of workers who are replaced will probably be less than initially expected, but instead, it will simply make the warehouse more efficient and free up workers to devote their time to skilled projects.
  • Safety. Safety is the primary concern of any warehouse manager. So will drones be safe? Because they are becoming more common, there are more regulations coming out from the government about how, where, and when they can be used. While everyone will be concerned about safety, you can be assured that there will be growing pains as we figure out what the limitations are for drones.
  • It’s more fad than progress. Some warehouse managers are convinced that drones are more flash than actual innovation. That remains to be seen. There are a lot of advances in the area and more to come in the future. Once drones have been proven to work in warehouses where they are currently operating, there is a great chance they’ll experience wide-spread use.

Are you looking for ways to innovate and automate your warehouse equipment? Our team can help. Get in touch with DAK Equipment & Engineering today and let’s talk about how our team can help make your warehouse more efficient than ever. Give us a call or contact us through our website and we’ll get to work on an automation plan that works with your space, budget, and needs. Find out why so many Illinois businesses rely on DAK for all of their warehouse equipment needs!

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October 10, 2017

FAQ About FOB

If you’ve been in the supply chain business for very long, then you’ll have seen the term “FOB” on various invoices. While some people in the supply chain and warehousing industries might feel comfortable with their knowledge about what FOB means for them and their business, there are a lot of people who are confused by it. It becomes even more complicated when there are additional terms attached to it, such as “freight collect” and “freight prepaid.” Each of these terms means something slightly different but could have huge ramifications for your business and your customers. If you are confused by FOB, our warehouse consultants have put together this simple guide to help you understand what it is and why you should care about it.

Answers to Frequently Asked Questions About FOB

What Does FOB Mean?

FOB stands for “freight on board” or “free on board.” The two terms are used interchangeably, so don’t let that confuse you if you see it spelled out instead of abbreviated as FOB.

International versus Shipping the United States

While the abbreviation means the same thing, there are differences in what FOB implies in international shipping and what it means for shipments within the United States. Within the United States, FOB indicates at which point the seller is no longer responsible for the cost of shipping the items. They might cover the costs up to a certain point, after which a third party shipping company will take over and deliver the items the rest of the way at the buyer’s expense. In the international shipping industry, FOB is used to indicate where the risk and costs of delivering goods change from being the seller’s responsibility to the buyer’s responsibility.

Where Did the Term Come From?

The term actually originated hundreds of years ago when sailing ships were the primary means of transporting freight around the world. The rail of the ship was used to designate when the freight left the responsibility of the shipper and became the responsibility of the recipient. It’s been in common use since 1936 and is used as a shipping term around the world.

What Do These Additional Terms Mean?

The term might stand for “free on board” but there is nothing actually free about it. Someone is still paying for the shipment of the cargo. However, what FOB does is let all the parties involved understand who is paying for it and how they are paying for it. This is typically designated by an additional term that comes after FOB.

FOB port

In international shipping, you’ll see FOB followed by the name of a port. This port is where the responsibility and risk of the shipping transfer from the seller to the buyer. For instance, if you purchase something from China and it’s shipped FOB Seattle, then the seller is assuming the responsibility of shipping the item until it reaches Seattle. After that, you’ll assume the risk and responsibility of making sure the items make it the rest of the way.

FOB origin

In North American shipping, this means the responsibility of getting the goods shipped ends once the seller gets them onto the truck. The buyers will pay the costs of shipping the item from the point of origin.

FOB destination

In North American shipping, this means the responsibility of shipping the goods remains with the seller until it reaches the final destination. The sellers will pay for the shipping of the items to the final destination.

Why You Should Care About FOB

It might seem like a little thing on your purchase order or invoice, but the terms and conditions that are implied in these simple terms can have a big impact on your business. First and foremost, it means your business could have a legal responsibility for the goods that you are shipping. Depending on how your FOB terms are worded, if something happens along the way, you could be responsible for the risk and costs associated with the shipment. So if you are responsible, you’ll likely want to take out insurance on the shipment just in case something goes wrong along the way. Otherwise, you could be eating the costs of damaged merchandise and lost sales.

Knowing what you are responsible for and being prepared can help you mitigate the damage in a worst-case scenario. Additionally, not understanding the costs associated with FOB terms could dramatically raise the cost of your goods and decrease your bottom line. So knowing what you are paying for and what the seller is paying for will help you manage those costs now and in the future, since the cost of insuring FOB origin shipments will need to be factored into your selling price.

Who Can Help You Manage FOB

There are a number of third-party shipping companies who specialize in FOB shipments. If your seller is only responsible for the merchandise up to a certain point, then you’ll need to work with a company who can help you bring those items the rest of the way. Look for companies who have handled these arrangements in the past and are used to the process.

How to Lower the Costs of FOB Shipments

If you are covering the costs of a lot of shipments, it’s going to eat away at your profits. Insuring and paying for shipping costs isn’t cheap. There are a couple of ways you can try to lower these expenses:

  • Reduce the number of shipments. Ordering larger quantities can help you avoid paying insurance and shipping costs repeatedly.
  • Renegotiate your terms. If you are ordering a lot of merchandise from a company, then they may be willing to give you a break and assume some of the shipping costs up to a certain point. It’s worth talking to them or shopping around.

Confused About a Supply Chain Term?

Our warehouse consultants are here to help! Get in touch with our team and we’ll take the mystery out of whatever term you’ve been puzzling over. Simply give us a call or contact us through our website and let us know what term you’d like to know more about. We may feature your request in a future blog!

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