July 18, 2017
The global supply chain is a highly complex and dynamic network. It’s comprised of numerous links that are impacted daily by the law of supply and demand. As with any chain, every link is critical. If one fails, the whole chain suffers.
One vitally important link in the supply chain is the warehouse or DC yard. Sometimes illogically referred to as the “missing” link or even a “veritable black hole” (as alluded to in a Logistics Management earlier this year), the yard can easily become a daily source of pain and frustration if not managed efficiently.
From our viewpoint, the warehouse or DC yard is an often highly misunderstood operation. For many companies, the yard is run and managed by a third party service. The yard operation gets bid out and in return, you get the best price possible at the best hourly rate. Everything seems good, at least on the surface. But along with that comes a heavy dose of yard operation confusion.
The importance of connecting the dots
For example, does this sound like any companies you know?
- A driver with a trailer approaches the yard gate where a clipboard-toting security guard manually writes down the trailer ID, driver name, cell number, and performs other security functions.
- The driver heads off to the shipping office, reports he has arrived to drop his empty trailer and pick up a loaded trailer, is told to go park the empty trailer somewhere, and then go find his full load out in the yard (“Where?” he asks, while the shipping clerk replies, “Not sure, somewhere out there.”).
- As a result, the shipping clerk has no idea where the empty trailer is, and the security guard didn’t even bother to ask if the driver was picking up a dropped trailer or a live load (an obvious disconnect between the gate and shipping office).
- Then, the company’s transportation office (tendering loads via a TMS) forwards its information into the mix, but the shipping clerk can’t figure it out which results in a complete mess.
So what’s the lesson here? All of the yard management dots need to be connected with the proper solution yard management solution so that everyone is communicating and efficiency measures are in place.
Often too, while warehouse management systems (WMS) are keeping warehouses and DCs running at peak efficiency, the company’s yard is languishing because YMS is often not viewed as a “must have” investment like WMS. However, putting up with enough lost trailers, incorrectly located loads and inaccurate data coming from the yard over a long enough period of time ultimately adds up to an operation that’s in dire need of improvement.
Integration makes it all run smoothly
The good news is that making an improvement in your yard operation is one that can be easily integrated with all of your other IS management technology, including WMS as well as TMS and ERP, that will result in a completely optimized and efficient system.
To ensure all components work together properly, you need an integrated and sophisticated YMS that goes well beyond a computer just handling trailer inventory. As a result, your yard won’t run the risk of being labeled a black hole.
According to a Peerless Research Group (PRG) study—referenced in the same Logistics Management article—participants were asked: “Which of the following software applications are currently in use in your warehousing and distribution environment?”
Only 8% responded with the answer “YMS” in 2016, compared with 9% who based their answer on the year 2015. However, what’s important to realize here is that, although YMS adoption rates have been limited, those PRG study respondents using YMS would undoubtedly disclose that incorporating YMS was a very smart move. What’s more, those respondents are the same YMS users who fully “get” and understand all of the far-reaching benefits that come with a YMS: two of which are operating at peak efficiency and saving money.
Simple math tells a compelling story
Effectively managing all yard inventory, providing visibility to all equipment that’s on site, and eliminating excess labor can all add up to substantial cost savings. For instance, very simple math in the following example conveys a compelling story about the value of a YMS, the value that the PRG study participants who use a YMS fully grasp:
- A manufacturing plant that operates five yard trucks needs to increase efficiency.
- $45/hr. worth of yard services x 5 trucks x 365 days/year x 24 hrs./day = ~$3 million alone annually just for yard labor services.
- With a best-in-class YMS and associated reduced labor needs, the company could easily save 15% (~$300,000) in its first year.
In addition, there’s a good chance that those same PRG study respondents who are fully embracing YMS are the types of companies who realize what it takes to advance the entire supply chain—including digital advancements such as robotic hardware instead of manually-driven forklifts.
These same companies have smartly figured out in the process that they could no longer ignore the yard as a black hole by relying on white boards, radios, along with yard spotters themselves making crucial and inefficient trailer and tractor locating decisions.
So, if you envision your warehouse or DC facility yard operating at peak efficiency instead of as a black hole or that missing link in the supply chain, and you want to save money in the long-run, 4SIGHT Logistics Solution can help.
Contact one of our 4SIGHT experts today at 866-691-1377 and we’ll help you better understand how your yard and an advanced YMS solution will work together better than you ever thought possible.