Please read the attached file from Inbound Logistics on Distribution Centers and answer the following questions:

1. Re-tooling a distribution center to handle larger volumes of smaller orders as cited in the article is an example of what aspect of Creating an Effective Supply Chain?

a. Emerging Markets

b. Energy Costs

c. Dynamic Sales Volumes

d. Service/Product Proliferation

2. The use of goods to person technology is primarily affecting which Financial measure of Supply Chain performance?

a. Total Revenue

b. Operating Expenses

c. Cash Flow

d. Return Logistics

3. Warehouse Management Systems are affecting which measurement of Supply Chain Performance?

a. Average Aggregate Inventory Value

b. Cost of truck repair

c. Weeks of supply

d. a and c

4. On Demand Warehouses are primarily affecting which Financial Measure of Supply Chain Performance?

a. Total Revenue

b. Return On Assets

c. Cash Flow

d. Truck repair

5. Distribution Centers for e-commerce fulfillment may require:

a. The same number of people as a conventional bulk distribution warehouse

b. 3-10 Times the number of people as a bulk distribution center, which affects operating expenses

c. 3-10 Times the number of people as a bulk distribution center which has no effect on return on assets

d. 2 Times the number of people as a retail outlet and has no effect on operating expenses

TODAY'S DISTRIBUTION CENTER: YOU SAY YOU WANT AN EVOLUTION? Today's distribution centers provide far more than just short-term storage and cross-docking. By locating closer to urban areas, leveraging technology, and adding amenities to attract skilled workers, DCs are morphi to accommodate e-commerce demands and rapid delivery expectations. BY KAREN KROLL s businesses strive to accommodate customers' are focusing on enhancing and improving their distribution centers (DCs). "I see distribution centers taking on a more critical role," says Tracie Longpre, vice president, supply chain with Applied Industrial Technologies, a Cleveland-based distributor of MRO supplies, tools, and industrial equipment. "Industrial consumers have become conditioned to want only what they need, exactly when To meet this expectation, products have to be stationed closer to the customer. Applied Industrial continues to expand the breadth of products its distribution centers, and to process product through DCs more rapidly." Longpre says. That includes daily overnight deliveries from the DCs to local service centers. Companies with DCs that can move a greater range of they need it." 58 Inbound Logistics March 2019 Scanned with CamScanner products quickly and cost-effectively can create a competitive advantage," says Mike Marks, managing partner with Indian River Consulting Group. "They can make more profit at the same selling price." Retooling a distribution center is not easy, however. Not only must inventory move more quickly, but it moves in larger volumes of small orders- fewer pallets and more eaches -- which boosts complexity. Even five or 10 years ago, Intelligent technology directs a Raymond automated guided vehicle to move products between pickup and deposit points. more products in distribution centers that are near or in urban areas. This has the added benefit of providing access to larger numbers of potential DC employees. That solution runs headlong into another challenge: the lack of available land in many metro areas. To address that challenge, some companies are building up, rather than out, in multi- story DCs, says Bob Silverman, executive vice president, supply chain and logistics solutions with JLL, an investment management company specializing in real estate. In 2017, warehouse owner Prologis broke ground on a three-story fulfillment center near Seattle, the first of its kind in the United States. Trucks can access both the first and second levels, which are geared to fulfillment. The third level is for light manufacturing and laboratory work, among other functions. These types of facilities make up a tiny percentage of DCs within the United States, but their numbers are growing. That's especially true in metro areas, such as San Francisco and New York, that are surrounded by water. "Companies that can't find a location in the city wind up 90 minutes away," Silverman says. Along with metro areas, some DCs are opening near transportation hubs, such as the intersection of several interstates, says John Rosenberger, director of Global Telematics for Raymond. He points to the area around Pittston, Pennsylvania, which is home to numerous distribution centers. The closest metro areas are Wilkes-Barre Customer demand for quick and efficient e-commerce order fulfillment is driving many distribution centers to employ robots. distribution centers might house several thousand SKUs. Today, many hold tens of thousands There's pressure on DC operations to pick, process, fulfill, and ship orders quickly, even as the number of orders has grown," says Chris Merta, product manager with The Raymond Corporation, a warehouse solutions provider. One way to meet these goals is to locate and Scranton, with a combined population of about 120,000. However, Pittston sits astride several major highways, including Routes 81, 476, 84, and 380. Another shift that impacts both DC size and location is the growing number of workers needed to handle item- level picking. A distribution center for e-commerce fulfillment may require between three and 10 times the number of people needed in a DC that's moving pallets or other bulk quantities," says Rich Thompson, international director, supply chain and logistics solutions, with JLL. That translates to larger parking lots, break rooms, and other worker amenities. Many retailers are also considering whether to repurpose space in some stores as DCs or online fulfillment centers. By HITTING THE LOCKER ROOM In some metro areas, it's not unusual for delivery trucks to park for hours outside a single apartment or office building while the driver delivers packages. That ties up streets and alleyways. "Rethinking how to use the load/unload space is now necessary, says Barbara Ivanov, chief operating officer with the Supply Chain Transportation and Logistics Center at the University of Washington. Ivanov is working with the city of Seattle to design a common locker system-essentially a tiny distribution center-where a delivery truck pulls up and unload its packages into separate, secure lockers. The recipients would receive an alert and have a set amount of time to retrieve their packages. Early next year, Ivanov and her team plan to test common lockers within an eight-block area of Seattle. Previous testing has shown a locker can cut more than three-quarters of the time a delivery person otherwise would spend in a building. DC TECHNOLOGY olarious doing so, they can address the challenges inherent in last-mile delivery, as they'd "There's pressure on DC operations to pick, fulfill, and ship simply fill some orders from the DCS within their stores. In the end, most orders quickly, even as the number of orders has grown." ctailers likely will convert just a portion of their stores and maintain a brick-and- mortar presence. The result can triple prochuctivity. While some of this technology has existed for Even existing DC technology solutions a while, it has advanced even as its costs are providing more capabilities. For have dropped. instance, distribution centers can leverage To improve productivity within its Intler Group also uses goods to person today's warehouse management systems DCs, Applied has focused on developing technology:"Totes containing the SKUs (WMS) to make better decisions around a lean culture, as well as technological needed to complete different orders arrive how much inventory to allocate to opportunities that make financial sense. automatically at the workstation where sales channels, says Jeff Clark, executive cludes warehouse management order fulfillment will be completed. The vice president with ODW Logistics systems with advanced data man management workstation tells the operator what to pick socks needs to be divided Say a pallet of capabilities, logistics traceability, and between and where to place it, boosting accuracy. e-commerce fulfillment and analytics. Applied also is also investigating The finished totes are automatically moved capabilities can efficiently allocate the retail replenishment. Advanced WMS more progressive automated storage and so the next task can start. retrieval systems and sorting capabilities, inventory between the channels to more Currently, goods to person technology accurately meet demand, along with opportunities to digitize the makes up about 95 percent of the goods Over the past 10 years, box erectors, or supply chain to" market, says Paul Hermsen, director machines that convert packaging material "The benefits of having visibility to the entire network in real time are substantial," Longpre says. "Visibility helps significantly reduce delivery lead times and optimize freight and inventory management." Ryder System, Inc., a supply chain solutions ns company, is combining robotics, three of its fulfillment centers. "The drones, sensors, and wearables within Coal is to operate more productively and effectively,' says Alec Hicks group director For example, drones are able to complete a cycle count of an entire facility within three hours, rather than the customary two days, according to Ryder. And the use of smart glasses that project The growing number of workers needed to handle high-volume order fulfillment and shipping directions for order fulfillment within affects both the size and location of distribution centers. the user's field of view cuts five to seven to boxes more efficiently than humans with Inther Group. As more DCs and Seconds off the time required to scan each can, have increased in throughput and inventory item. warehouses deploy robots as pickers, and as accuracy, even as the cost to install them The use of "goods to person". the picking robots become more capable, that ratio will shift. has come down. "That makes the ROI technology-small mobile robots that One current obstacle to greater use much more appealing and palatable bring containers or products to pickers of robots as pickers is variations in the to companies looking to reduce labor is growing within many DCs. The reason? products being picked. Robots today requirements," Clark adds. The workers picking orders can spend 70 Other traditional DC equipment, such to 80 percent of their time traveling and typically can handle rectangular cartons as lift trucks, can be outfitted with vision- that weigh less than one kilogram (about only 20 to 30 percent actually picking, 2.2 pounds). Products that are heavier, guided technology to automate some tasks. "Goods to person technology seeks to For instance, The Raymond Corporation greatly reduce or even eliminate the oddly shaped, or encased in plastic are more challenging integrates vision-guided technology in its distances workers travel." Silverman says. March 2019. Inbound Logistics 61 solutions design. Scanned with CamScanner automated lift trucks. The truck learns the operation it will be performing, such as moving a pallet of goods from one location to another, and then can replace manned vehicles for some tasks, leaving employees to handle more complicated jobs. The technology optimizes both labor and assets to be most efficient," Merta says. As the number of people needed in DCs continues to grow, while unemployment remains at record lows, DC managers are struggling to find workers. Finding labor is the biggest challenge today, Thompson notes. One solution is to provide a more welcoming environment. Everyone wants to work in a nice place, he says. Many DCs, however, have been little more than brick blocks with few amenities. That's changing. Thompson recently toured a DC in Japan that boasted of its human-centric design. It featured an on-site child care center and rock-climbing wall, as well as eating areas that rival some restaurants. "We'll see more of this in the United States," he predicts. Just as AirBnB and Uber upended the hospitality and rent-a-car industries, warehouse-on-demand firms aim to do the same for distribution centers and warehouses. On-demand warehouse companies don't own space, but match those looking for space with those that have access," Thompson say's. Our goal is to bring flexibility to supply chains, explains Dave Galgon, director of network development with Flexe, an on-demand warehouse firm that offers access to more than 1,000 warehouses in North America. Some retailers use Flexe to add capacity when the situation warrants it. Ace Hardware, for example, used Flexe to stock generators, box fans, and other larger items needed during weather emergencies in Florida, Georgia, and Texas. With this capacity in place, Ace was able to move shipments of these goods to areas affected by Hurricane Florence within 24 hours, on a Saturday. We enable companies to position products closer to the market and provide better service, Calgon says. Bio MARKETAS ENTERI WILL DCS REPLACE WAREHOUSES? While DCs play a more significant role within many supply chains, they're unlikely to eliminate the need for warehouses. Some products require long- term storage, perhaps because the raw materials are available only at specific UPS GETS IN THE BIKE LANE Some companies are thinking outside the distribution center when working to deliver products to customers quickly. For instance, electric bikes now power some of UPS's brown delivery vehicles. In the United States, UPS has launched eBike programs in Pittsburgh and Seattle; worldwide, THE GOAL: TO about 30 programs are up and running, says Kristen DELIVER PACKAGES Petrella, a UPS sustainability spokesperson. Trailers WHILE CONTRIBUTING and containers loaded with packages are attached to LESS CONGESTION, the pedal-assisted eBikes, which travel sidewalks and NOISE, AND CARBON bike lanes. Each eBike can hold up to 40 packages. EMISSIONS THAN To start their journeys, the eBike containers are TRADITIONAL attached to traditional UPS delivery trucks and TRUCKS.77 then dropped off in a city center. Cyclists secure a container to their e Bike, make deliveries, return the container when done, and attach the next container with packages ready for delivery. The same guarantees regarding package delivery apply whether packages are delivered via a cargo eBike or delivery truck. "We're finding interest for projects like this in cities across the country," times, or manufacturers need to produce in large quantities to capture economies of scale. At the same time, ever-shortening delivery windows mean distribution centers and the new technologies deployed within them will continue to play an increasing role within many supply chains. More distribution centers will use artificial intelligence (AI) to better predict demand, and thus reduce inventory carrying costs. If you have good demand information, you don't need lot of inventory," Marks says. For instance, AI tools can examine time- since-order (TSO) to determine trends in order placement, and then use this to fine- tune inventory levels. One thing that won't change is the DC's ability to speed order fulfillment and deliver products quickly. Petrella says