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Warehouse Size: How Large Does Your Warehouse Need to Be?

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When it comes to building a new warehouse or distribution center for your order fulfillment or materials handling operation, there are a number of factors that must be considered. Location (where in the country you should build your new facility) is one of the factors that get the most attention.

But settling on location before settling on how big your new facility needs to be is a little like putting the cart before the horse: It doesn’t make a whole lot of sense.

Because the size of your warehouse or DC will inform countless parts of your design build strategy (including the types of technology you ultimately use, how much inventory you can realistically have on hand, the cost of land, etc.) it should realistically be one of the first things that you settle once you have decided to move ahead with a design build.

It is essential to make sure that you’re building the new facility to the appropriate size: Building too large can be a waste of capital that could potentially be put to better use; too small, and you risk quickly outgrowing the facility, prompting a costly redesign or expansion just a few years down the road.

Below, we offer some guidelines for how operations can appropriately choose a size for their next warehouse or DC.

How big is your current facility?

When you are determining the size of your new facility, it makes sense to use the size of your current facility as a starting point for the discussion. How much space do you currently have? Are you putting that space to use efficiently, or do you think there are optimizations that could be put in place to make better use of the space? Do you believe that your current facility has too much space, too little space, or just enough?

By understanding the successes or limitations of your current facility, you can extrapolate (roughly) whether your new facility should be of similar or different size. If you are constantly running out of space in your current facility, and your new facility will encounter similar throughputs and demand, then it makes sense to go larger; if you have a lot of wasted or empty space, it is possible that your new facility can be smaller and still be just as productive, saving you money in the form of taxes, property costs, utilities, etc.

It is important to keep in mind that this quick-and-dirty approach is not enough to settle on a final size—it should simply be used to ballpark the answer at the beginning of your discussions and planning.

How does product flow through your operation, and what processes are required for that?

In every operation, goods and product flow through a unique set of processes from the moment they arrive in the warehouse to when they are shipped as a part of an order to a customer. No operation handles its products in exactly the same way. But these processes will determine how a large portion of your new facility’s footprint is put to use (because it will determine which technologies such as conveyors and sorters are put in place) and for that reason, it is critical to understand flow before you settle on a layout or building size.

By firmly understanding your current flow of product, when designing your new facility it is possible that you can find more efficient ways of doing things that can reduce your total order cycle time and even the space that is required for your facility.

How much inventory so you typically have on hand at any given time? Is this inventory being stored efficiently?

This point is critical for obvious reasons. The amount of inventory that your operation must have on hand to stay in business will dictate how a large portion of your new facility’s space will be used.

Once you understand your current inventory needs, determine whether or not there are ways that you can make better use of the space that you have dedicated to inventory compared to what you are currently doing.

Automated Storage and Retrieval Systems (AS/RS) paired with a rack-supported structure, for example, may offer substantial space savings. Another example might be implementing a system of drop-shipping larger items so that you do not need to keep them in long-term inventory, reducing the amount of inventory space necessary to keep your operation moving.

How much do you plan to grow?

Chances are good that you are opening a new warehouse or DC to accommodate an increase in demand: Your business is growing, and you need another facility to deliver what your customers want.

It is important to keep business growth in mind when building your new facility, because if you aren’t careful, you may find yourself quickly outgrowing the new space, leading you to a costly redesign, expansion, or to build another new facility.

If there are strong indications that growth will be rapid, it may be in your best interest to preemptively build out the capacity of your facility. If growth will be slower, it may make more sense to do so incrementally as the increased demand arises.

The Bottom Line

When building a new DC or warehouse, settling on the size of your new facility is one of the most crucial steps in the process, as it will inform much of what comes later (the systems and technologies you put in place; the plot of land that you purchase and build on, how large of a workforce you can hire, etc.).

The questions above can be used to help you determine what an appropriate size will be for your current needs and future growth but is not by any means a complete list of factors. The size of your new facility will ultimately be determined by these large notions as well as specifics, such as pallet size, aisle width, load-bearing capacity, and more. 

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Mondi partners with Heiber + Schröder to launch the new high-performance machine eComPack for automated packaging of its EnvelopeMailer for eCommerce

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Heiber + Schröder’s mechanical engineering combined with Mondi’s packaging and paper expertise enables eCommerce companies to automate the erecting, filling and closing packaging process using the EnvelopeMailer solution he state-of-the-art eComPack doubles output per hour, responding to demand for the automation of paper-based packaging solutions in eCommerce operations

The state-of-the-art eComPack doubles output per hour, responding to demand for the automation of paper-based packaging solutions in eCommerce operations

The new machine perfectly complements Mondi’s universal and fully recyclable corrugated EnvelopeMailer for maximum performance

Mondi, a global leader in packaging and paper, has worked on an innovative collaboration with German machine producer Heiber + Schröder to create a high-speed automated packaging machine that meets the process, efficiency and safety requirements of eCommerce fulfilment operations. The new eComPack machine is designed for mid to large size eCommerce operations seeking efficiency and reliability. It can process up to 500 parcels per hour thanks to an automated erecting, filling and closing process.

The technological expertise of paper and board packaging automation expert Heiber + Schröder forms a perfect synergy with Mondi’s innovative packaging solutions. The resulting high-output eComPack can automatically process a wide scope of goods using one height-adaptable packaging design that is available in different sizes. The equipment stands out for its compact floor space requirement and simplicity in operation and maintenance.

In the rapidly growing world of eCommerce, the combination of an excellent paper-based product and an efficient and economic automated packaging machine is a key differentiator for our customers. The successful introduction of Mondi’s EnvelopeMailer solution increased manual packaging output by 8% compared to standard C-folder packaging. With eComPack, we are now enabling our customers to double their output and optimise packing operations in fulfilment centres handling high volumes,

Tarik Aniba, Sales & Marketing Director, Mondi Corrugated Solutions

The eCommerce market has grown significantly in recent years, accounting for approximately 20% of global retail sales in 2021¹. This means a wider variety of goods is being distributed, which increases packing complexity and requires versatile packaging solutions of different sizes and shapes. At the same time, with the rising cost of labour, the desire for packing machines in eCommerce is more prominent than ever before. To help customers tackle these challenges, eComPack provides a solution dedicated to the automated packaging of Mondi’s corrugated eCommerce solution EnvelopeMailer.

Made to safely fit single or multiple items and rectangular as well as irregular shapes up to 7 cm in height, the EnvelopeMailer’s flexibility in the fulfilment process, efficiency in handling, and economical use of material and space have made it an all-around new standard in the market since its launch in 2020.

André Garmer, Managing Director Heiber + Schröder, adds: “Together with Mondi we developed the machine in a very dynamic co-creation process. The result is a robust, user-friendly machine with top-class usability. Through clever and responsible creation, we were able to synchronise packaging design and machine functionality into a solution that offers tremendous potential if combined with the right packaging solution.”

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Berkshire Grey Research Finds a Leading Cause of the Labor Shortage in Warehouses

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Berkshire Grey Research Finds 64% of Chief Supply Chain Officers Say Generation Gap is a Leading Cause of the Labor Shortage in Warehouses.

Nearly three-quarters of executives see robotics automation in warehouses as a solution for the growing gap in younger job applicants

Over half (51%) of executives confirmed they were in the process of adopting or planning to adopt robotics, and 78% expect order fulfillment cost savings of more than 10%

Berkshire Grey, Inc., (Nasdaq: BGRY) a leader in AI-enabled robotic solutions that automate supply chain processes, today announced their 2022 State of Retail & eCommerce Fulfillment Report. The research, conducted in partnership with Hanover Research, surveyed Chief Supply Chain Officers at retail and ecommerce businesses on topics including labor issues, costs, pain points, automation and predicted areas of industry growth to uncover how organizations are meeting increasing consumer demands in today’s always-on retail world. 

The study found chief supply chain officers expect the labor shortage to continue to grow in their industry, with 64% noticing generational differences in employment preferences that will have a long-term impact on labor availability. Along with many warehouse laborers permanently leaving the field due to a multitude of factors including reskilling, pandemic-related illness and an aging workforce, the industry is also being hit with a combination of population forces: the lowest birth rate in U.S. history paired with Baby Boomers retiring out of the workforce, as well as a generational shift in what employees are looking for in their careers and workplaces.

“Labor issues across industries continue to vacillate, but unlike the temporary shortages seen in other industries, continued eCommerce growth and shifts in generational employment preferences are uniquely impacting the fulfillment industry and predicted to lead to long-term labor shortages that will only compound in the coming years,” said Steve Johnson, President and COO at Berkshire Grey. “In addition to compensation strategies, companies need to utilize robotics automation in order to stay ahead of this demographic shift. Not only is it a huge attractor for young talent due to the increased safety and specialized upskilling it enables, it is also a game changer in terms of cost reduction, throughput and ROI.”    

Robotics Automation Improves Talent Attraction and Retention, Closes Generational Gap

With more than half (57%) of executives believing labor shortages have hindered their ability to meet demand, it’s critical for supply chain decision makers to find a way to bridge the gap. 76% of executives believe they’ll need to raise wages and 63% believe they’ll need to increase bonuses to attract and retain workers. Executives also believe robotics automation is a promising talent attractor.

  • Nearly three-quarters (71%) of executives believe robotics automation is necessary to counter reduced applications from younger generations.
  • Although less than one quarter (13%) of executives say they are currently using robotic automation, they are keenly aware this is where the industry is headed, as evidenced by over half (51%) of executives being in the process of adopting or planning to adopt robotics.
  • Over half (51%) of executives believe implementing automation will increase employee satisfaction, and 43% believe it will lead to a decrease in employee turnover.

Consumer Demands and Expectations Are Rising

Rising consumer expectations and on-demand shopping resulting from the COVID-19 pandemic are requiring retail and eCommerce companies to greatly step up their throughput, with experts predicting the eCommerce market to increase from $3.3 trillion to $5.3 trillion by 2026.

Free returns are growing to be table stakes — nearly three-quarters (72%) of executives believe they would lose customers if they didn’t offer free returns.

More than two-thirds (68%) of executives believe they will need same day or faster delivery speeds within two years.

More than three-quarters (80%) of executives that saw an increase in return rates in 2020 have needed to increase headcount to accommodate the increase of returns.

Automation’s Impact on the Bottom Line

Since 2019, the percentage of executives who believe automation is mainstream has increased by nearly 43%. This rise in awareness and adoption is no surprise given the huge cost savings and throughput increases robotics automation is providing amidst supply chain challenges.

  • More than three-quarters (78%) of executives expect to save more than 10% on order fulfillment costs as a result of robotics automation.
  • Most executives (85%) currently using robotics are planning to increase their investment.
  • Executives are most likely to use automation to support packaging/labeling (62%), item sortation (59%), returns (58%) and goods retrieval (58%).

The results contained within the report are based on a survey of over 200 senior-level supply chain decision makers in the U.S. at eCommerce and retail businesses.

To learn more about Berkshire Grey, visit www.BerkshireGrey.com.

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A guide to the types of belt edge

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Guide to fire retardant conveyor belts for general use above ground

If a belt does not perform according to the manufacturer’s claims by wearing prematurely or ripping too easily for example, the risk to life is relatively small. But if a conveyor belt that is specified as being fire retardant catches fire but does not resist the fire the way that it should do then the consequences can be catastrophic.

No conveyor belt is fire proof

The most important thing to bear in mind is that conveyor belts cannot be totally fire proof. The rubber used for the covers and the rubber skim between the fabric plies can be engineered to resist fire but the complete structure of the belt cannot be made fireproof. When choosing a fire retardant conveyor belt, deciding on the actual level of fire retardancy needed for a specific application or environment is of crucial importance.

Envıronments with inflammable dust and gas

The most basic electrical and flammability safety requirement for general use (not underground) is EN 12882 Category 1. For ATEX regulated areas where coal dust, gas, fertilizer, grain or other potentially combustible materials are involved, it is essential that the conveyor belt cannot create static elericity that could ignite the atmosphere. At Dunlop we decided some time ago that the safest approach was for all of our belts to be anti-static and conform to EN/ISO 284 inter-national standards. This means that they can all be used in ATEX 95 (94/9/EC Directive) classified zones.

Above-ground and general service applications

Because fire safety is such an important issue there are numerous safety classifications and international standards for which there are many different tests used to measure the self-extinguishing properties of conveyor belts. The basis of most tests for belting used in normal industrial applications is EN/ISO 340. This standard makes the distinction between fire resistance with covers (K) and fire resistance with or without covers (S). The relevance of “with or without covers” is that wear reduces the amount of fire resistant rubber that protects the flammable carcass. The best way to decide between ‘K’ and ‘S‘ grades is to consider the material being carried. For moderately abrasive materials, grain for example, the ‘K’ grade is usually perfectly adequate. However, if the material is abrasive and tends to wear the top cover quite rapidly, or if carry-ing biomass (which can self-combust) then the safest option is to choose the ‘S‘ (Class 2B) grade. In both ‘K’ and ‘S’ grades, the rubber skim that bonds the fabric layers of the carcass together must also be fire resistant. In the case of ‘S’ grade (fire resistant without covers), the rubber skim should be thicker than the skim used for ‘K’ grade.

Fire and wear resistant

The ingredients used to create a fire resistant rubber compound generally have an adverse effect on its wear resistant properties. As the thickness of the rubber reduces so does the level of protection. At Dunlop our rubber compound technicians have developed fire resistant rubber compounds that are extremely resistant to abrasion. Buyers should always request a technical datasheet that shows the level of abrasion (wear) and should demand an average of less than 150mm³

EN/ISO 340 testing EN/ISO

340 tests involve exposing 6 individual samples of belt to a naked flame causing them to burn. The source of the flame is then removed. A current of air is then applied to the test piece for a specified time after the removal of the flame. The time it takes for the belt sample to self-extinguish after the flame has been removed is then measured. The duration of continued burning (visible flame) should be less than 15 seconds for each sample with a maximum cumulative duration of 45 seconds for each group of six test samples. This determines how fire can be carried along a moving belt. Even if a manufacturer states that their fire resistant belt has passed the ISO 340 test, the buyer should still exercise caution. A typical conveyor belt can easily spread the fire more than 40 meters within 15 seconds. For this reason Dunlop’s required time limit standard is no more than one second, ideally 0 seconds. Buyers of fire resistant belts are recommended to ask to see copies of the test results and to check that the laboratory that has carried out the tests complies with EN ISO 17025 (chapter 5).

What standard of fire resıstance do I need?

For the vast majority of belts being used in the open air, Class 2A or 2B is perfectly adequate. Class 2A demands that the belt is able to pass the ISO 340 with the covers intact on the belt samples (‘K’ grade). Class 2B requires that the belt can also pass the ISO 340 test with the top and bottom cover rubber removed (‘S’ grade). The electrical conductivity of the belt also needs to fulfill the requirements of ISO 284.

Don’t play with fire

Although manufacturers and suppliers provide test certificates, in some cases the certificate may only relate to the belting that the manufacturer produced for test certification purposes. The actual belt delivered to site may well not be up to the required standard. For greater peace of mind we rec-ommend ordering an extra meter of belt for testing by an ac-credited testing authority or laboratory.

 

 

 

 

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