November, 2007

In Depth: Material Handling

Advanced equipment and racking can help create efficiencies during a down market.

By Craig A. Shutt

The downturn in the residential housing market is making lumber and building material dealers more sensitive to every expense that reduces the bottom line. To that end, they are reviewing their forklift use and examining their storage layouts to ensure that they are as efficient and productive as possible. Manufacturers, in turn, are providing new products and more expertise to reach help dealers achieve those goals.

"Dealers are looking at every aspect of their operation to create efficiencies in the supply chain and in their deliveries to their customers,” says Patrick Keenan, product manager for Moffett truck-mounted forklifts at Hiab Inc. in Perrysburg, Ohio. "[Dealers] want to deliver products more efficiently or to a location at the site that their competition maybe can’t reach. That gives them a competitive edge.”

Those efficiencies also lie in wait for dealers who can better organize their storage layouts, rack manufacturers note, and a slowdown in sales offers an opportunity to turn lemons into lemonade. "Dealers are realizing that material-handling costs make up about 50% of their operating costs,” points out Mark Ritz, president of Auto-Stak Systems in Westwood, N.J. "They want to handle products as few times as possible so they can use their equipment and people less.”

Adds Jerry Ritz, vice president at Auto-Stak, "Dealers realize they’re selling many of the same products as their competition, and they’re buying them at about the same price. There’s too much good competition out there, especially right now. So they have to make money by being more efficient than the other guy, and that includes how they store their products. They are making their entire picking process more efficient.”

New Products Add Challenges

Efficiency has become more challenging as a wider array of hard to handle and store products have become more popular, marketers agree. "Engineered wood products are the dominant focus now because they’re longer, heavier, and more expensive and fragile than dimensional lumber,” explains Bill Pohl, general manager of Princeton Delivery Systems of Canal Winchester, Ohio, which makes the PiggyBack truck-mounted models. Fiber-cement siding likewise creates challenges due to its size and weight, he notes, and it too is becoming more popular today.

"Wall panels are a major, major trend, especially for big builders,” adds Hiab’s Keenan. "We’re also seeing growth in curtain-side delivery trucks and trailers to handle larger sizes of millwork, trusses, doors, and windows.”

Delivery to specific locations at sites is becoming more important for customers, whether they’re production builders, custom homebuilders, or remodelers—but those challenging sites vary with each customer. As a result, more four-way directional, long-fork, and heavier and lighter weight machines are being introduced.

"Sites are becoming more congested, especially with inner-city developments where parking can be restricted,” says Keenan. "Our goal is to create machines for each specific application that arises as new products and new situations are introduced. That means we have an ever-changing product lineup.”

Tommy Cadden, president of Combilift USA in Greensboro, N.C., agrees. "Size and maneuverability are very important in the handling of long loads, especially through tight areas such as doorways and aisles.” He points to the company’s versatile four-directional forklift as an option growing in popularity. "It’s something new and provides an improved way to handle loads in a safer manner, along with improved space utilization and enhanced productivity when compared to a conventional forklift.”

Capacity Options Expand

Manufacturers are also expanding at both ends of the capacity range. "The 6,000- to 8,000-pound capacities used to be the standard, but now it’s moving to 10,000 to 12,000 pounds,” says Dell White, sales manager for Sellick Equipment Ltd., based in Harrow, Ontario. "Engineered wood products, pressure-treated lumber, and other products are getting longer and heavier.”

In addition, companies are finding ways to move more and larger pallets at once, improving productivity by exploiting the forklifts’ capabilities. "You don’t have to sacrifice maneuverability in the higher-capacity machines, even though they are a little longer,” he notes.

Combilift emphasizes efficiency when using its four-directional capability to eliminate excess handling. "Being able to maneuver easily through doorways narrower than the load [the forklift] carries eliminates the unnecessary multiple handling of goods,” Cadden explains. "It offers the performance of a side-loader and a forklift in one machine.”

Smaller-size units, especially for truck-mounted machines, also are gaining popularity for delivery to small sites, especially remodeling projects, says Princeton’s Pohl. "Delivering to a large home site is different from delivering into a homeowner’s garage,” he points out. "The key to using the right equipment is analyzing the specific needs, such as the products to be handled, site locations, and terrain.

"Builders today are definitely asking for more services, including having the right materials delivered on time in the right spot without damage,” Pohl says. "And specs are saying the products have to be delivered to the site at a specific location. So dealers have to focus on job-site efficiency.”

It’s become easier to ensure customers purchase the proper machine for their needs, he adds, because dealers have become better buyers. "As more dealers have used truck-mounted forklifts for a longer time, they understand them better,” he says. "They’re more attuned the second or third time around to what their needs really are.” Adds Butch Hunter, Princeton’s national sales and marketing manager, "The key is to ensure they get the right equipment for their application and to help them determine which machine will meet their needs. What the equipment will have to handle is critical.”

Comfort a Key Feature

Dealers also are paying more attention to what their users are saying, says Sellick’s White. "Owners are seeing the benefits of providing operators with more comfort for an 8-hour shift,” he says. "It can enhance productivity and create efficiencies if the workers are comfortable. Many of the features that used to be optional now are standard. We’ve sold more cabs, and more air-conditioned cabs, than ever before.”

Princeton’s Pohl agrees. "Comfort is becoming more important as employees use these machines for longer times and want to add creature comforts to make the job easier.”

The larger size of people also is being acknowledged with bigger seats. Pohl says that Princeton makes a point of ensuring its seating is positioned in the center of the vehicle so operators don’t have to crane their necks. The company also offers a variety of suspension seats to absorb jolts, as well as cup holders and document clips to ensure orders are readily visible. Most recently, the company introduced tilt steering so operators of any size can adjust the steering wheel to the most comfortable position.

"Our mission never ends in providing anything that helps the operator, even small features like a document holder that can really make his day move smoother,” Pohl says. "The goal is to get inside their heads and give them what they need to do the job more efficiently.”

Those features extend beyond comfort to include safety, as well. "Safety is increasingly becoming a key concern for companies handling long material,” says Combilift’s Cadden. Ergonomics are a part of that, combining safety and comfort. "It’s important to provide the most comfortable operating machine and, in turn, help provide not only a safer but a better work environment. We feel the whole safety issue will receive more scrutiny. The area of safer material handling will become more tightly regulated to ensure safer practices are implemented but, more importantly, adhered to.”

All equipment makers meet the existing voluntary ANSI standards for stability and balance, as well as overhead protection, Pohl notes, plus meeting all OSHA requirements. "The real key to lowering the rate of incidents is wearing a seat belt,” he adds. Princeton’s models have an interlock, in which the parking brake can’t be released if the seat belt is not in place. "There is definitely a greater awareness of safety needs for both manufacturers and dealers.”

Truck-mounted units also are focusing on stability and safety because of the difficult terrain they can face, Sellick’s White notes. This is particularly important as capacities rise so these machines can handle prefabricated wall panels and trusses. "They need longer load centers to ensure they can handle the needs,” he says.

Environmental aspects come into play to some extent, Pohl notes. Although gas mileage isn’t a key concern, and all machines meet EPA standards, additional attributes add benefits. Using high-end hydraulics so there are no leaks—especially on homeowners’ driveways in remodeling situations—can be critical, and no-grease bearings and an auto-greasing system can make maintenance easier.

Manufacturer support also is gaining attention, Pohl says. "The support the company can provide for maintenance, repair, and answering questions makes a difference in which machine the dealer buys,” he says. "Capital equipment today is so sophisticated that it needs to be well supported. And dealers are able to ask better questions because they’re more familiar with the equipment.”

Racks Go Undercover

Dealers also are asking more questions about their racking systems, as they realize that efficiencies extend to where and how they store materials. "Dealers are really taking a serious look at loss and breakage and what they are having to write off in materials,” says Clint Darnell, vice president of sales for Sunbelt Racks in Alpharetta, Ga. "They’re now looking at the costs they incur for not having materials properly stored and covered, and it carries across all product categories.”

Those evaluations are brought on by the downturn in housing starts, and that gives dealers an opportunity to act on the results, says Rick Hogue, vice president of marketing for Krauter Storage Systems in Indianapolis. "Business had been so good that dealers didn’t think in terms of having to hold a lot of inventory and protect it,” he says. "But business is tougher now, and they see they have to do better to protect their products and get more organized for the next wave of business.”

Organization is also critical to maintaining profit margins when business tapers off, he adds. "You have to become even more efficient because labor is a critical factor when business goes down. You have to get leaner and protect both your labor and your products.” Being able to free up employees to handle other duties, rather than having the same number picking fewer products, can help improve productivity and avoid reducing staff who will have to be replaced when business turns upward again.”

The chance to organize also provides an opportunity to reconsider ways to handle bulky, large products that might have previously been placed in poor locations or storage systems, he says. "Dealers start to look at how they’re handling products that they didn’t used to have. In the past, dimensional lumber needed a skilled driver in a forklift and a cantilevered rack. Today’s products, like engineered wood, composite siding, and doors and windows, are more of a challenge in weight and length to store.”

Protecting materials as they become more elaborate and larger also gains importance due to the investment and the difficulty in replacing specific pieces, notes Auto-Stak’s Mark Ritz. "More and more dealers are getting their spaces completely under cover,” he says. "We’re also doing more drive-through lumberyards all the time. It may be just a rack with a roof on it just for storing lumber, but dealers are trying to get their entire lumberyard under a roof.”

The trend toward just-in-time delivery hasn’t alleviated these organizational and protection needs for dealers—but it has extended them to distributors, adds Jerry Ritz. "Dealers will have dimensional lumber and similar products in stock, but hardwoods, like redwood or cedar and cabinet-grade plywood, will be ordered in half-pack or quarter-pack or even eighth-pack sizes. With deliveries no more than two days away, dealers can afford to have distributors carry products.” That means more racking for distributors, boosting rack company’s lines.

Good Design Boosts Efficiency

Manufacturers often provide layout help to dealers who have ideas about what they want but aren’t experienced at creating efficient designs, marketers say. "Good design and layout are definitely needed, but dealers don’t know as much about that as they do about selling products,” says Hogue. "They only do it once or twice in their career, and we have years of experience at it.”

Sunbelt’s Darnell agrees. "Dealers often have ideas for what they want, but sometimes they go off-track or haven’t considered everything they do and what’s available,” he says. "We talk them through it and make changes as needed. It’s better to ask questions to find out how they want it to function and what goals they have for the system. We have to give them what they need rather than just accept their plan for what they think they need.”

As new products create new needs and space requirements, dealers are becoming squeezed, he adds. "It’s hard for them to rebuild by expanding because the footprint usually can’t change,” he explains. "That means they have to make better use of the space.” That may require adding narrow-aisle buildings and using side-loading forklifts or mechanized storage systems. In some cases, Sunbelt’s designers have created typical layouts but have provided the capability to change to a narrow-aisle system in the future as needs dictate.

Auto-Stak’s approach to helping dealers plan is to get a list of materials to be stored, the yard configuration, and the available buildings and then go from there, says Mark Ritz. "We have to create an efficient system from both a space and a material-handling standpoint.” Using tight aisles creates efficient storage, points out Jerry Ritz, but if the picker has to lift the bundle, take it to the end of the aisle to pick the number of pieces, and then return down the aisle with the remainder of the bundle, the lost time eats up any efficiencies from the tighter space.

"We want to lay out the new building as efficiently as possible to get as much space as possible, but we have to keep in mind how the system is used,” he explains. "The goal is to make the entire picking process more efficient.” Some systems include a platform that allows the order picker to go up on the system to get the products, alleviating the need to pull out the bundle.

Some dealers make the mistake of not designing well for their combination of customers, Hogue notes. "If they have both DIY customers and contractors, they have to design their yard for both without alienating either,” he explains. Separate registers and a drive-through yard for DIY and remodeling customers will allow them to selectively pick their materials without getting in the way of contractors who want to get in and out with their ticket picked.

New Systems For New Products

Manufacturers also are producing rack systems designed to handle larger, heavier products, automating more aspects and allowing products to be loaded onto racks from narrower aisles.

"These products aren’t easy to handle, and they require more equipment to do it easily,” says Darnell. "More automation may allow the dealer to eliminate personnel from this activity so the systems can provide a quick payback.”

Automation also can help avoid injuries from employees trying to do too much, he adds.

New approaches are being introduced based on systems used in other industries, such as auto-making, notes Krauter’s Hogue. The racks also are providing wider spacing and support to ensure no deflection for long, thinner products. "We’re going to 8-ft. on-center spacing while beefing up the column arms to handle the weight of the popular products.”

Adds Mark Ritz, "As new products come online, we update our own products to ensure we can accommodate the new products. Composite materials, PVC siding, and engineered wood all took some adapting. Now we’re creating systems to handle pre-hung slab doors to improve storage density and accessibility as the SKU count rises.”

As new products gain popularity, both forklift and racking manufacturers are adapting to ensure dealers can handle them efficiently. Making efforts now to evaluate systems and designs can ensure orders still will be filled effectively when builders work through their inventory and start ordering in greater quantities again.