Information And Tips
Top Three Considerations when Designing an Automotive Parts Distribution Center
By John T. Phelan, Jr., P.E.
From the outside perspective, an automotive parts distribution center might look like any other distribution center. Big rectangular building with high walls and dock doors for freight trucks, store delivery trucks and parcel carriers with a walk-in section for will call pick up are definitely not unusual for many warehouses. However, when stepping foot inside an auto parts warehouse for the first time, one might notice that there are some pretty big differences compared to warehouses in most other industries. Yes, inventory is received, put-away into storage, picked, packed and shipped just like any other distribution center. However, the variety of inventory items do not look alike at all. And there doesn’t seem to be a lot of high velocity SKUs being picked, but instead, order pickers scurry around their areas pulling from various storage locations and not seeming to return to the same one very often. Also, there is an area for returns that isn’t tucked away in an ugly corner away from the facility tour route. In fact, in order to compete for business in this $300B market to provide parts to the 254 million cars and trucks on the road today in the US, auto parts distributors must consider some critical and unique aspects about their industry when planning and designing a distribution center.
1. Variety of Storage Medium
The top priority when planning a distribution center for an aftermarket auto parts distributor is designing for the large variety of dimensions and weights of the inventory items. In addition to having a large variety in physical characteristics, the order profile is more uniform than exponential. In fact, it is common for auto parts distributors to have a large number of inventory items only turn once or twice a year. So coupling this unique order profile with a wide range in inventory item dimensions and weights is a distinct challenge that must be taken into consideration when designing proper storage equipment.
As emphasized by Dennis Gregory, Chief Operating Officer for Automotive Parts Headquarters (APH) based out of St. Cloud, Minnesota, “While all industries have variation, it seems the aftermarket auto parts industry has more extensive variation; from a small fastener to a heavy duty wheel drum, from a spark plug to an exhaust straight pipe. Width, length and weight create significant challenges with balancing storage media options with cubic space utilization.” Of course, cubic space utilization is extremely important, so slotting the SKUs to the appropriate storage equipment that allows for efficient order picking is critical to the effectiveness of the distribution center design.
Because of the large amount of slow moving SKUs and the wide range of SKU dimensions and weights, typical auto parts DCs have a combination of storage types that include industrial shelving, pallet rack, push back rack, pallet flow rack and carton flow rack. Additionally, the use of a vertical lift module (VLM) to keep accurate inventory and provide dense storage for those extremely small parts, such as hardware and fittings, is used since they effectively use the clear height over a small footprint and easily present the items to the picker with minimal wait time.
When designed and specified properly, shelving and pallet racking can both be used to create multi-level storage and picking platforms or pick modules. Within the multi-level pallet racking and shelving, carton flow can be used for the higher velocity picks, such as motor oil cases. Full pallet storage of these high velocity SKUs is commonly accomplished using push-back racking above the carton flow or selective rack on the opposite side of the carton flow replenishment aisle. Because pallet racking has a higher storage weight capacity, the heavier SKUs, such as rotors and drums, are also often stored in these locations. Additionally, since the beam width for pallet racking is normally 8 feet or more, the longer and bulkier items can be stored in the pallet racking.
Typically shelf bays are 36” to 48” wide and 18” to 24” deep and can be configured with 6 to 8 shelf levels. Since the bays are not wide or deep and there is not a lot of room between shelf levels, industrial shelving is ideal for those smaller, lighter weight, lower velocity SKUs which also comprises a large portion of the typical order profile of an auto parts distributor. Creating a multi-level shelving system can be accomplished with high capacity posts and using special deck planks to create the upper level walk aisles.
2. Efficient Order Picking
According to Ronnie Ransome, Vice President of Fulfillment Operations at Eckler’s Industries in Titusville, FL, “the automotive parts distribution industry is unique in that we need to keep a large inventory of slow moving items that can vary in physical attributes; consequently maximizing the available cubic space with the proper storage medium is critical for being able to store, pick and ship efficiently and meet customer needs. If we can’t provide that one part for our customer in a quick and efficient manner, they will go somewhere else, and we simply can’t have that!” Therefore, incorporating a means to fulfill orders quickly and accurately out of the various storage medium is critical to system design.
Forklift or order pickers are often used in the fulfillment process in warehouses of many industries, but not auto parts distribution. The reason being that the order profile is spread out such that there are not many high velocity SKUs that can be batch picked. Instead, the inventory is dominated by slow moving items. So using lift equipment to pick each item would result in wasted travel time and low productivity.
Instead of lift equipment, conveyors are used to transport totes or cases to the packing or shipping area. Since the storage system is often multi-level and order pickers are assigned to specific pick zones within the storage system, a tote conveyor system using zone routing to the appropriate pick zones is extremely efficient. Totes that have been assigned to an order and tracked along the conveyor system through barcode scanning and location tracking, can be automatically routed to the specific pick zones for the order. Once in a pick zone, the order picker assigned to the pick zone can hand scan the tote barcode, the pick sheet barcode inside the tote or simply read the pick sheet, in order to be directed to the appropriate pick locations and quantities. Once all picks in the zone are complete, the order picker would push the tote back on the conveyor system for its next stop on the route. In the event that that tote is full but the order is not picked complete, the order picker can close out the tote so that it goes directly to shipping, induct a new empty tote and assign the new tote to the incomplete order so that it is routed to the next appropriate pick zones. The conveyor route can easily navigate a multi-level storage system by using spiral conveyors with multiple level merges and discharges. Adding the functionality of zero pressure accumulation conveyor to the system would result in higher capacity fulfillment as well as facilitate an efficient pack and ship process by providing a queue of available product and not leaving the packing and shipping area stagnant and waiting.
Finally, a conveyor system that has multiple pick zones to route and destinations to sort will accommodate the various service level commitments that are common with automotive parts distribution. Priority orders for mid-day delivery, regular store replenishment orders with late afternoon cutoff times, will call orders, and direct to consumer orders for parcel shipment can all be fulfilled using the zone routed conveyor and sortation system as a common backbone.
In addition to order fulfillment, a major aspect of the auto parts industry is the handling of returns, to include cores, warranty items and regular items. According to APH’s Dennis Gregory, “Returns are a significant factor in the automotive aftermarket. The returns process from the customer to the store, the store to the distribution center and the distribution center to the supplier needs to be accurate, timely and efficient to avoid the considerable cost associated with the activity while providing a high level of customer service.” Therefore, an efficient material handling system design should take into consideration the restocking process, which is often accomplished using carts or pallet jacks. These carts or pallet jacks require a floor path not obstructed by the conveyor system in order to give restockers access to the appropriate storage locations, which can be done through lift gates or bridges. Having these conveyor lift gates or bridges designed with the conveyor system can also satisfy necessary personnel egress requirements.
3. Scalability and System Flexibility
There are approximately 500,000 businesses in the US auto care industry that includes independent manufacturers, distributors, repair shops and various retailers. Every year, the auto manufacturers continue to add to their product lines with new models or new styles of existing models. As a result, the market is always changing. Businesses add to their SKU counts, acquire competitors, increase existing sales channels or add new sales channels. The possibility of any or all of these changes must be considered when designing a new distribution center in this industry.
As Matt Jordan, CEO of Premier Performance Products, puts it “For fast growing companies like ours growing by expansion into new categories or acquisition, SKU counts can increase significantly and the warehouse demands can increase very quickly. In this kind of environment, we don’t think it’s helpful to forecast out more than 4 years or so because it can change so dramatically. As a result, we expect to move up to larger facilities, or expand existing facilities, every 4-6 years. We want a design that is flexible for that or, if we’re going to have to move, designs that ensure we’ll have a good payback within that time frame.”
In order to plan for expansion and flexibility, developing a material handling system that utilizes the entire available cubic space with the proper storage equipment along with a conveyor and sortation system is the first step. Accomplishing this also yields the upper limits of the system storage and material transportation capacity. The second step in the process is to calculate actual needed system based on current or near future requirements. It is likely that the calculations of the second step would yield less storage positions and material transportation requirements and thus, less picking zones to route conveyors to and from. The difference between the immediate need and the upper limit represents the available scalability for the system. This provides the flexibility needed so when SKU counts increase or volume rises, the single level pick module can become a two- or three-level pick module without major overhaul to the existing design or disruption to the existing operations.
In order to effectively design for the future and allow for scalability, there must also be some foresight in the system specifications. For example, an area in the warehouse that is dedicated to industrial steel shelf storage and picking might not easily expand to two or three levels if the initial shelf posts are not specified to the proper capacity or the baseplates are not sized to spread the weight of a two or three level load from the post to the floor. If that is the situation, then chaos reigns in the warehouse when making the shift from one-level to multiple-level shelving as all shelves must be emptied and the components changed.
In addition to the foresight in the equipment specifications for future planning, equipment layout is critical. Having a vision for future conveyor paths will help determine initial aisle widths. Knowing that additional sortation lanes will eventually be needed for more store’s pallet building positions or increased direct to consumer parcel pack and ship stations will govern the sortation system’s location and capacity.
In summary, although all distributors and warehouses have their own unique workings and intricacies, the automotive parts industry requires its distribution centers to overcome significant challenges that are not like most other industries. As such, expertise and experience in this market must be sought when planning and engineering the material handling system for a new distribution center.
John T. Phelan, Jr., P.E. is Chief Operating Officer of TriFactor, LLC, a material handling systems integrator based in Lakeland, Fla. He can be contacted at 863-577-2243 or firstname.lastname@example.org. For more information visit www.trifactor.com.