The more we “touch” material in its journey through the warehouse, the more we are extending the total lead time.

In addition, as the travel distance increases, we also add to the total lead time. Both of these have a tremendous impact on the operational costs of the distribution center and could impact customer service metrics such as the perfect order index.

In today’s world of “mega” DC’s, it is even more important that distribution centers are properly zoned and slotted to ensure travel distance and touches are reduced as much as possible.

As the size of the warehouse increases, the effect of these wastes increases almost exponentially.

To minimize or reduce the impact, distribution centers should use “virtual” warehouses.

This practice replicates zones repeatedly across the footprint and in essence creates mini-warehouses within the overall footprint. The quantity of virtual zones is dependent upon a number of factors such as profile mix, warehouse design, WMS limitations, and storage type (floor stacked or racked).

To reduce the number of touches and travel distance, the operation should employ the use of task interleaving to the fullest extent possible. This practice reduces the amount of “empty” forklifts experienced within the warehouse and increases the overall utilization rate of the material handling equipment, reducing both the great wastes- travel distance and touches.

Since labor is such a large percentage of the overall operational cost, we should constantly be looking for ways to increase both the efficiency and utilization of our people and equipment.