One of the most common challenges we encounter with our third-party logistics (3PL) clients involves the ever-diminishing time expectation between when an end-user orders a product and when they think it should be at their door. To meet challenges associated with this trend, 3PL firms are consistently looking at ways to decrease pick time through storage and fulfillment processes.
For the uninitiated, the Material Handling Industry glossary defines a third-party logistics firm as “a business arrangement whereby logistics services, often including warehousing, are contracted to an independent business that specializes in such services and is not connected through direct ownership to the producer or factory requiring the service.”
Because a 3PL’s mission is to maintain profitable logistical operations of fulfillment within the facility – while not taking ownership of the products themselves – 3PL firms tend to prefer flexibility, scalability, and versatility. Typically, 3PLs are working on relatively short-term contracts with their clients (on average 1-5 years), so they want the ability to use the equipment for their current client on their next job.
3PLs are usually storing products for companies that fulfill small orders (for example, retail or e-commerce). This type of fulfillment is typically labor-intensive and costly, so finding the right mix of storage solutions is critical for optimizing operations. However, because their clients are frequently changing or renewing, 3PLs prefer standard solutions that can apply across various industries to allow these firms to be versatile in accommodating multiple pallets in multiple sizes if a client leaves or does not renew.
So, what are the standard storage solutions for 3PL? Let’s take a look:
Pallet rack is overwhelmingly the most common storage medium for 3PL firms. Traditionally, most of the industry will use a configuration of pallet rack at 54″ H x 40″ W x 48″ D with 2500-lb capacity beams, which covers most storage applications. That size is also ideal for shipping, as it allows shippers to be more efficient because they can optimally cube out a truck at that size with double-stacked pallets.
Small Parts Storage Solutions
To cover small parts storage, 3PLs rely on a massive amount of shelving and hand stack racks in their facilities. The products required to be most accessible will typically be at the floor-level, so sometimes those shelves are created by adding additional beam levels on the rack that currently exists (along with wire decking) to allow for optimal storage. If you do not have the racking above the shelving, you sacrifice valuable vertical storage space within the facility.
If more than one level of small parts storage is required, then we involve bin mezzanines. However, there are additional costs – both hard and soft — whenever other levels are constructed. Outside of the hard costs of the decking, lighting, sprinklers, etc., there is the soft cost of the additional travel time for the picker associated with the 2nd or 3rd level.
Vertical Reciprocating Conveyor (VRC)
When we introduce multiple levels within a 3PL facility, we typically enlist a vertical reciprocating conveyor (VRC) to assist with moving single-load products vertically for storage or for picking. They can carry pallets, carts, cartons, or products to pickers or for storage on different levels, saving travel time associated with walking up and down stairs. VRCs can be assembled using single or double masts, single or double rails, and even some models can travel on an incline/decline grade versus solely traveling perpendicularly to the floor.
Autonomous Mobile Robots (AMRs)
Because of the high cost and rigidity of traditional automation solutions, which are great for specialized, static retrieval and storage, most 3PLs avoid installing them. However, there are great on-demand automation solutions like autonomous mobile robots (AMRs) that can offer a great deal of support to 3PL facilities. AMR solutions are very portable, reconfigurable, and can be reprogrammed in a matter of hours versus the days or weeks it could take to disassemble and reconfigure some of the more extensive, static storage options. AMRs can improve pick speeds, lower labor costs, and provide other safety matters within most fulfillment operations. Plus, as needs change and the business grows over time, these solutions can scale and grow along with the organization.
Safety Solutions for Third-Party Logistics Firms
As with any installation, we recommend thinking through the safety of the employees, facility, and equipment within the design. After all, safety should be part of your operational philosophy, not just a mandate or requirement. When a project comes up, we provide warehouse safety solutions like mirrors, guard rails, signage, end-of-rack protectors, end-of-aisle protectors, and anything else that may be pertinent to operational safety. At the design and strategy stage, these can be afterthoughts, but we recommend getting everything you need when you begin designing storage solutions for 3PLs.
While most 3PLs utilize some combination of the storage solutions listed above, we still see operations that require more robust set-ups like traditional conveyors, drive-in racking, and pushback rack. The size of the investment is typically determined by the client paying for the equipment.
Our team has decades of combined experience working with 3PLs across the country to deliver better storage options, quicker fulfillment processes, and greater order accuracy. We know that finding the right answer usually involves finding scalable, flexible, and portable solutions, all while being cost-effective.
We take that approach to every aspect of the fulfillment process, from storage and racking to the facility’s flow. If your third-party logistics operations could use a tune-up, give us a call today and let one of our experts learn about the challenges you face and provide solutions designed around your business’s unique needs.