Distribution Centre Congestion: real-time business insights shine light on the true cost of vehicle downtime.

For decades freight company’s have been throwing extraordinary amounts of time and resource into developing systems that monitor the real-time delivery status of products and materials. This investment has provided the world’s leading enterprises with clear visibility into the volume, variety, location and delivery timeframes of goods.

The facilitates and companies that have invested in these systems have been able to utilise these business insights to significantly reduce their overhead expenses, with many transitioning to just-in-time delivery models rather than the traditional stockpiling approach.

Data-driven business decisions have enabled many companies to significantly reduce their overall business liabilities. This includes eliminating inefficient processes, consequently resulting in reduced staffing requirements and the better utilisation of assets, including vehicles, warehouses and real estate.

Not only are these changes good for business, they also result in a better end-user experience, with goods being delivered faster, more frequently and more reliably than before. This change also results in goods being delivered in better condition with fewer breakages and can result in goods being sold at a more competitive price, helping drive repeat purchase.

Often though, this focus on the backend of the supply chain can overlook the efficiency improvements also made at the front end – eg. transport, loading and unloading of the goods. In this area of the supply chain, we see a lot of movement of forklifts transporting goods around the warehouse, specialised staff operating the equipment, and by far, the highest concentration of people loading and unloading vehicles.

One of the most cost-intensive processes regarding staff resourcing is the constant loading and unloading of goods. In any given supply chain, it wouldn’t be unusual for an item to be handled well in excess of 20 times by the time it reaches the final consumer. An often-overlooked cost associated with this process is the cost of the transport provider sitting idle while the operation takes place. It is not uncommon for transport operators to spend more time sitting idle, waiting than they actually spend on the road, delivering goods.

This issue becomes exacerbated when you consider waiting times at the distribution centres and warehouses. Due to congestion, transport providers often wait for an available dock. This is a significant cost, and in conjunction with the high labour input inside the warehouse, this downtime contributes to the total cost of the supply chain in a material way. There is also the factor of opportunity cost to consider. Whilst the vehicles and staff sit idle, they are not being fully utilised.

New cargo handling Innovations lead to increased operational efficiency: reduced cargo handling times, reduced wait times and better truck utilization.

The competitive nature of the freight industry has driven businesses to find innovative solutions to address the challenges outlined above. How to load and unload product faster whilst eliminating unnecessary handling is a core focus in many supply chains.

Successful initiatives not only clear warehouse transit areas quickly and ensure resources are fully utilised, they also enable operations to be undertaken in a much safer manner. The resulting improvement in the utilisation and flexibility of the trucks and trailers is another clear, measurable improvement in time also, resulting in increased efficiency and lower cost.

Transport companies actively assessing and addressing operational efficiency have far higher vehicle utilisation rates and, therefore, can manage costs far more efficiently and move the goods faster to their final destination.

So not only can companies make the operational changes at the back end of the warehouse – what is coming, where it is, and where it needs to go – but significantly at the front end. This approach fundamentally changes the overall efficiency and costs of the entire supply chain, and that’s where companies are really making a difference.

Products such as Maxiloda Glide are making a significant impact on the industry. Speeding up loading and unloading times, resulting in higher resource utilisation and increased cargo handling rates. If you would like to explore this conversation further, feel free to contact the team at Maxiloda, we are solely focused on helping the entire supply chain maximise its operational efficiency.

Gary Stannard

Managing Director Maxiloda